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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


SCHEDULE 14A


Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ☒

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Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a‑6(e)(2))

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Definitive Proxy Statement

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o

Definitive Additional Materials

☐

o

Soliciting Material under §240.14a‑12

Envestnet, Inc.

Envestnet, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Fee computed on table below per Exchange Act Rules 14a‑6(i)(1) and 0‑11.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0‑11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


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Picture 1April 8, 2020

May 1, 2017

Chicago, Illinois

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Dear Stockholder:

Fellow Shareholder:

It is with great pleasure that we invite you to our 20172020 Annual Meeting of Stockholders.Shareholders. The meeting will be held on JulyMay 13, 2017 at 35 East Wacker Drive, Suite 260, Chicago, Illinois2020 at 10:00 a.m. Central Time.

As part of our precautions regarding the COVID-19 pandemic, this year’s Annual Meeting will be a virtual-only meeting. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/241143720.

Our formal agenda for this year’s meeting is to vote on the election of directors; to vote, on an advisory basis, on 20162019 executive compensation; to vote, on an advisory basis, on the frequency of submitting the advisory vote on executive compensation to stockholders;and to ratify the selection of our independent auditorsregistered public accounting firm for 2017; and to approve our 2010 Long-Term Incentive Plan as amended through the Fourth Amendment.2020. In addition, we will report to you on the highlights of 20162019 and discuss the outlook for our business in 2017.

2020.


Whether or not you plan to attend the meeting,virtual Annual Meeting, your vote on these matters is important to us. StockholdersShareholders of record can vote their shares via the Internet, by using a toll‑freetoll-free telephone number or by requesting and completing a proxy card and mailing it in the return envelope provided. If you hold shares through your broker or other intermediary, that person or institution will provide you with instructions on how to vote your shares.


If you are a beneficial holder of our shares, we urge you to give voting instructions to your broker so that your vote can be counted. This is especially important since the New York Stock Exchange does not allow brokers to cast votes with respect to the election of directors or the advisory vote on executive compensation unless they have received instructions from the beneficial owner of shares.


We look forwardappreciate your continued support, and we hope that you and yours stay safe and healthy. We are closely monitoring developments with the COVID-19 pandemic and taking proactive measures to seeing you atensure business continuity. As part of our existing business continuity protocol, we created a pandemic steering committee that meets daily and regularly communicates new information or guidance to employees and customers. As the meeting.

situation evolves, we will continue to act to support our customers and the health and well-being of our employees and other stakeholders.

Sincerely,

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Sincerely,

Judson Bergman

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William Crager

Chairman and Chief Executive Officer


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NOTICE OF ANNUAL MEETING

May 1, 2017

April 8, 2020
Chicago, Illinois

TO THE STOCKHOLDERSSHAREHOLDERS OF ENVESTNET, INC.:

The 20172020 Annual Meeting of StockholdersShareholders of Envestnet, Inc. will be held on JulyMay 13, 2017,2020, at 10:00 a.m. Central Time at 35 East Wacker Drive, Suite 260, Chicago, Illinois,Time. This year’s Annual Meeting will be a virtual-only meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/241143720.

The Annual Meeting will be held for the following purposes:

1.

To elect one Class III director to hold office until the 2022 annual meeting and three Class II directors to hold office until the 2020 Annual Meeting2023 annual meeting or, in each case, until their successors arehis successor is duly elected and qualified;

qualified or until his earlier resignation, removal, death or incapacity;

2.

To vote,approve, on an advisory basis, on 20162019 executive compensation;

3.

To vote, on an advisory basis, on whether executive compensation should be submitted to stockholders for an advisory vote every one, two or three years;

4.

To ratify the appointment of KPMG LLP as Envestnet’s independent auditorsregistered public accounting firm for the fiscal year ending December 31, 2017;

2020; and

5.

4.

To approve Envestnet’s 2010 Long-Term Incentive Plan, as amended through the Fourth Amendment; and

6.

To transact such other business, if any, as lawfully may be brought before the meeting.

Only stockholdersshareholders of record as shown by the transfer books of Envestnet, at the close of business on April 3, 2017,March 16, 2020, are entitled to notice of, and to vote at, the virtual Annual Meeting.

WHETHER OR NOT YOU PLAN

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO ATTEND THEBE HELD ON MAY 13, 2020: THIS PROXY STATEMENT, FORM OF PROXY CARD AND OUR 2019 ANNUAL MEETING IN PERSON AND REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE VOTE AS PROMPTLY AS POSSIBLE VIA THE INTERNET OR BY TELEPHONE IN ACCORDANCE WITH THE INSTRUCTIONS IN YOUR PROXY MATERIALS. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT. FOR FURTHER INFORMATION CONCERNING THE INDIVIDUALS NOMINATED AS DIRECTORS, THE PROPOSALS BEING VOTED UPON, USE OF THE PROXY AND OTHER RELATED MATTERS, YOUREPORT ARE URGED TO READ THE ATTACHED PROXY STATEMENT.

AVAILABLE AT WWW.ENVESTNET.COM.

Whether or not you plan to attend the virtual Annual Meeting and regardless of the number of shares you own, please vote as promptly as possible via the internet or by telephone in accordance with the instructions in your proxy materials. If you later desire to revoke your proxy for any reason, you may do so in the manner described in the attached proxy statement. For further information concerning the individuals nominated as directors, the proposals being voted upon, use of the proxy and other related matters, you are urged to read the attached proxy statement.


By Order of the Board of Directors,

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Shelly O’Brien

Corporate Secretary


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TABLE OF CONTENTS

INFORMATIONPROXY STATEMENT SUMMARY
1
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

3
1

Why has this proxy statement been made availableavailable?

3
1

What proposals will be voted on at the Annual MeetingMeeting?

3
1

Are proxy materials available on the InternetInternet?

3
1

Who is entitled to votevote?

3
2

How many votes do I havehave?

4
2

What is the difference between holding shares as a stockholdershareholder of record and as a beneficial ownerowner?

4
2

How do I vote by proxy if I am a stockholdershareholder of recordrecord?

4
2

How do I give voting instructions if I am a beneficial ownerowner?

4
3

May I vote by telephone or via the InternetInternet?

4
3

May I revoke my proxy or my voting instructionsinstructions?

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3

How do I vote in personduring the virtual Annual Meeting?
5
Why are we holding the Annual Meeting virtually?
5
How can I ask questions at the virtual Annual MeetingMeeting?

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4

What do I do if I have technical problems during the virtual Annual Meeting?
6
Could emerging developments regarding the COVID-19 pandemic affect our ability to hold the Annual Meeting as planned?
6
What votes need to be present to hold the Annual MeetingMeeting?

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4

What vote is required to approve each proposalproposal?

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4

How are votes countedcounted?

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4

What is the effect of broker non-votes and abstentionsabstentions?

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5

Are there any voting agreements with respect to our common stock

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What areWho will pay the costs of soliciting these proxies and who will pay themfor the Annual Meeting?

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5

Where can I find the voting resultsresults?

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5

Will Envestnet’s independent auditorsregistered public accounting firm attend the Annual MeetingMeeting?

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5

Do directors attend the Annual MeetingMeeting?

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5

CanHow can a stockholder,shareholder, employee, or other interested party communicate directly with our Board If so, howBoard?

7
5

Whom should I call if I have any questionsquestions?

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6

CORPORATE GOVERNANCE

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Overview

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The Board of Directors

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Director Independence

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The Committees of the Board

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How are directors compensatedRestrictions on Short-term Speculative Transactions, Hedging and Pledging

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Director CompensationBoard Leadership Structure

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What is our Board leadership structureThe Board’s Oversight of Risk

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How does the Board oversee riskDirector Self-Evaluations

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How do directors evaluate their performanceDirector Nominations

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How are directors nominatedShareholder Recommendation and Nominations of Director Candidates

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Compensation Committee interlockRelated Party Transaction Policy and insider participationProcedures

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What is our Related Party transactions approval policy and what procedures do we use to implement itTransactions

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What Related Party transactions do we have

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Indemnification of Directors and Executive Officers

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Did our insiders comply withDelinquent Section 16(a) beneficial ownership reporting in 2016Reports

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DIRECTOR COMPENSATION
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Stock Ownership Guidelines - Non-employee Directors
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Director Compensation Table
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Outstanding Unvested Awards
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PROPOSAL NO. 1:  1: ELECTION OF DIRECTORS

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General

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Nominee for election for a term expiring in 2022 (Class III)
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Nominees for election for a term expiring in 20202023 (Class II)

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Directors whose terms of office will continue after this meeting

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Directors whose terms expire in 20182021 (Class I)

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Directors whose terms expire in 20192022 (Class III)

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INFORMATION ABOUT OUR COMMON SHARESECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

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How much stock is owned by directors and executive officersSecurity Ownership of Management

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Which stockholders own more than 5%Security Ownership of our common stockCertain Beneficial Owners

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EXECUTIVE COMPENSATION

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Compensation Discussion and Analysis (“CD&A”)

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23

Leadership Changes
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Highlights of 2019 and Long-Term Performance
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Financial Performance 2019 versus 2018
24
Strategic Accomplishments
25
5 Year Performance
25
Shareholder Engagement and 2019 Say-on-Pay Vote
25
Envestnet’s Compensation Philosophy and ObjectivesGuiding Principles

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23

Envestnet's Executive Compensation Program
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What We Do and What We Don’t Do
27
Role of Compensation Committee and Management

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24

Competitive Market ReviewPeer Group

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24

Our 2016 Executive Compensation ProgramDecisions Made in 2020 for 2019 Performance

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24

Supplemental Benefits and Perquisites

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Recoupment of earned awardsStock Ownership Guidelines - NEOs

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28

Regulatory limitationsEnvestnet, Inc. Clawback Policy

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28

2016Impact of Tax Treatments on Compensation
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2019 Summary Compensation Table

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20162019 Grants of Plan-Based Awards Table

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Narrative to 20162019 Summary Compensation Table and 20162019 Grants of Plan-Based Awards Table

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20162019 Outstanding Equity Awards at Fiscal Year-End

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20162019 Option Exercises and Stock Vested

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Nonqualified Deferred Compensation

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Potential Payments Upon Termination ofor Change of Control

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Compensation Committee ReportTermination Due to Death or Disability

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Termination Without Cause or for Good Reason
41
Termination Following Change of Control
41
Equity Compensation Plan Information
41
COMPENSATION COMMITTEE REPORT 
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CEO PAY RATIO
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PROPOSAL NO. 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
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AUDIT COMMITTEE REPORT

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PROPOSAL NO. 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION

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PROPOSAL NO. 3 ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

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PROPOSAL NO. 43: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSREGISTERED PUBLIC ACCOUNTING FIRM

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Independent AuditorRegistered Public Accounting Firm Fee Information

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Pre-Approval Policy of Audit and Non-Audit Services

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PROPOSAL NO. 5 APPROVAL OF THE 2010 LONG TERM INCENTIVE PLAN AS AMENDED THROUGH THE FOURTH AMENDMENTSHAREHOLDER PROPOSALS FOR 2021 ANNUAL MEETING

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Purpose

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Summary of the Fourth Amendment

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Background

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Shares Outstanding and Available

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Burn Rate

44

Plan Description

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United States Income Tax Considerations

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Authorized Securities under Equity Compensation Plans

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STOCKHOLDER PROPOSALS FOR 2018 ANNUAL MEETING

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How do I submit a proposal for inclusion in next year’s proxy material

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How do I submit a proposal or make a nomination at an annual meeting

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OTHER MATTERS

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EXHIBITAPPENDIX A  ENVESTNET, INC. 2010 LONG-TERM INCENTIVE PLAN (as amended through the Fourth Amendment)

A-1

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PROXY CARD
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ENVESTNET, INC.

35 East Wacker Drive

Suite 2400

Chicago, Illinois 60601

May 1, 2017

April 8, 2020

PROXY STATEMENT

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
References to the “Company,” “Envestnet,” “we,” “us,” or “our” in this proxy statement refer to Envestnet, Inc. and its subsidiaries.
Company Overview
Envestnet is a leading provider of intelligent systems for wealth management and financial wellness. Envestnet’s unified technology enhances advisor productivity and strengthens the wealth management process. Envestnet empowers enterprises and advisors to more fully understand their clients and deliver better outcomes.
Founded in 1999, Envestnet has been a leader in helping transform wealth management, working towards its goal of building a holistic financial wellness network that supports enterprises, advisors and their clients.
Through a combination of platform enhancements, partnerships and acquisitions, Envestnet uniquely provides a financial network connecting software, services, and data, delivering better intelligence and enabling its customers to drive better outcomes.
Leadership Changes
    Following the loss of our former Chairman and Chief Executive Officer and dear friend Judson Bergman (the “former
CEO”), our Board of Directors (the “Board”) appointed William Crager as interim Chief Executive Officer (the “interim CEO”)
and Ross Chapin, our lead independent director since 2015, as the interim Chairman of Envestnet’s Board of Directors (the “interim Chairman”). Effective March 30, 2020, the Board appointed Mr. Crager as Chief Executive Officer and as a member of the Board of Directors. Mr. Crager also continues as Chief Executive, Envestnet Wealth Solutions. Also effective March 30, 2020, the Board appointed Stuart DePina, Chief Executive, Envestnet Data & Analytics, as President of Envestnet. In addition, effective March 30, 2020, the Board appointed James Fox as Chairman of the Board and Charles Roame as Vice Chairman of the Board. With the appointment of Mr. Fox as a non-executive Chairman of the Board, Mr. Chapin no longer serves as lead independent director. References in this proxy statement to actions or responsibilities of the “CEO” refer to actions or responsibilities that were performed by the former CEO up until October 3, 2019 and that, beginning October 3, 2019, are currently being performed by Mr. Crager.
Annual Meeting Information
Date:May 13, 2020
Time:10:00 a.m., Central Time
Live Webcast Address:https://web.lumiagm.com/241143720
Record Date:March 16, 2020
This year’s Annual Meeting will be a virtual-only meeting via live webcast. You will not be able to attend the Annual Meeting in person.

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Proposals and Board Recommendations
Proposals:Board recommendation:For more information, see page:
1. Election of one Class III director and three Class II directors“FOR” each director nominee17
2. Approval, on an advisory basis, of executive compensation“FOR”45
3. Ratification of independent registered public accounting firm“FOR”47
Our Board of Directors
 
Board Committees:
 
DirectorAgeDirector SinceIndependentAuditCompensationNominating and GovernanceCompliance and Information Security CommitteeStrategy
Luis Aguilar*662016Y  üü 
Anil Arora592015N     
Ross Chapin*672001Yüü  ü
William Crager*562020N     
Gayle Crowell692016Y üüChair 
James Fox*682015YüChairü ü
Valerie Mosley602018Y  üü 
Charles Roame542011Yü ChairüChair
Gregory Smith562015YChairüü ü
*Director nominees for election at the 2020 Annual Meeting
Executive Compensation Highlights
üPay for performance by basing a substantial part of named executive officer (“NEO”) compensation on Company and individual performance, including Performance Share Units
üConduct annual outreach with investors
üAnnual say-on-pay advisory vote
üStrong emphasis on long-term equity compensation; majority of NEOs’ pay is in the form of equity compensation
üRetain an independent compensation consultant
üMaintain a Clawback Policy on incentive awards
üRequire stock ownership (as a multiple of base salary) for NEOs
Board and Corporate Governance Highlights
We are committed to good corporate governance in order to promote the long-term interests of our shareholders, strengthen Board and management accountability, and build public trust in our Company. Our governance framework is described throughout this proxy statement and includes the following highlights:
ü7 of 9 independent directorsüAll Board committees are independent
üDiverse board that provides a range of viewpointsüStock ownership requirements for directors and NEOs
üRegular board and committee meetingsüRegular executive sessions of independent directors
üAnnual board and committee self-evaluationsüProvide continuing education for directors
üRisk oversight by full Board and committeesüAnnual review of CEO succession planning
üDirectors not “over-boarded”üCode of Ethics and Conduct applicable to all directors, officers and employees
üDirector resignation policy if a majority of votes are “withheld” from a director in an uncontested election
Corporate Social Responsibility Highlights
Envestnet is committed to integrating sustainability into our everyday actions to help create long-term value for our shareholders and the communities in which we operate. We aim to operate the Company responsibly while managing risks and using our resources wisely. These principles are grounded in a single ultimate aspiration that guides us and inspires us to move forward: making financial wellness a reality for everyone, and building a company that strengthens the communities we serve for generations to come.

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In 2019, the Company endeavored to fulfill our commitment to Corporate Social Responsibility in many ways, including:
Focus AreaWhat We BelieveWhat We Do
CommunityEnvestnet is committed to strengthening our communities through empowering employees to make a positive impact in their communities, as well as through developing financial literacy and an understanding of the financial services industry.
• Envestnet Cares - our employee charitable initiative.
• Educational programs including:
  – Envestnet Institute in Classrooms
  – Envestnet Institute on Campus
  – Envestnet | MoneyGuide University Program
EnvironmentEnvestnet believes in being responsible citizens, as well as enabling access to sustainable investment products.
• Our platform offers access to sustainable products and services through Impact Investing Solutions.
• Reduce our impact through targeted initiatives.
EmployeesEnvestnet employees are valued members of our Company. We know our team works hard, and that is why we invest in them.
• Offer a comprehensive suite of benefits designed to ensure our employees are taken care of both professionally and personally.
• Promote diversity and inclusion and commit to protecting human rights through policies in our Code of Conduct.
• Women’s Initiative Network created in 2019.
Data & PrivacyEnvestnet has a responsibility to employ leading risk management and security measures for the handling of sensitive personal financial data.
• Protecting the personal information of those who use our services is a top priority for Envestnet.
• Envestnet adheres to leading industry practices for data security, regulatory compliance, and privacy.
Envestnet has exemplified its commitment in 2019 by practicing sustainability, advocating volunteerism and philanthropy and actively partnering with our employees, customers and partners on environmental, social and governance initiatives.
INFORMATIONAdditional information on our Corporate Social Responsibility practices is available on our website located at www.envestnet.com/CSR. Information contained on the website is not incorporated by reference into this proxy statement or any other report we file with the SEC.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Why has this proxy statement been made available?

Our board of directorsBoard is soliciting proxies for use at our Annual Meeting of StockholdersShareholders to be held on JulyMay 13, 2017,2020, and any adjournments or postponements of the meeting. The meeting will be held at 10:00 a.m. Central Time at 35 East Wacker Drive, Suite 260, Chicago, Illinois. and will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting https://web.lumiagm.com/241143720. The meeting password is envestnet2020 (case sensitive).
This proxy statement and the accompanying form of proxy are being mailed to stockholdersshareholders on or about MayApril 8, 2017.

2020. This proxy statement summarizesprovides the information you need to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote your shares.

What proposals will be voted on at the Annual Meeting?

The following proposals are scheduled to be voted on at the Annual Meeting:

·

The election ofElection of one Class III director and three Class II directors.

·

An advisory vote on 2016Approval, on an advisory basis, of 2019 executive compensation.

·

An advisory vote on the frequency of the submission of the advisory vote on executive compensation to stockholders.

Ratification of the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.

·

The ratification of the selection of KPMG LLP, an independent registered public accounting firm, as our independent auditors for the fiscal year ending December 31, 2017.

·

The approval of the Envestnet, Inc. 2010 Long-Term Incentive Plan (the “2010 Long-Term Incentive Plan”), as amended through the Fourth Amendment.

Envestnet’s Board recommends that you vote your shares “FOR”“FOR” each of the nominees to the Board, “FOR” the“FOR” approval, on an advisory vote onbasis, of executive compensation “FOR” submitting executive compensation to stockholders every year, “FOR”and “FOR” the ratification of the selection of KPMG LLP as our independent auditorsregistered public accounting firm for 2017 and “FOR” the approval of the 2010 Long-Term Incentive Plan, as amended through the Fourth Amendment.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting

To Be Held on July 13, 2017

2020.

Are proxy materials available on the Internet?

Yes. Our proxy statement for the 20172020 Annual Meeting, form of proxy card and 20162019 Annual Report are available at www.envestnet.com.

www.envestnet.com.

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Who is entitled to vote?

April 3, 2017 is the record date for the Annual Meeting. If you owned

Owners of our common stock at the close of business on April 3, 2017, youMarch 16, 2020, the record date for the Annual Meeting, are entitled to vote. On that date, we had 43,638,63653,195,798 shares of our common stock outstanding and entitled to vote at the Annual Meeting.vote. Our common stock is our only outstanding class of stock. The closing price

3

Table of our common stock on April 3, 2017 on the New York Stock Exchange was $32.50.

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How many votes do I have?

You have one vote for each share of our common stock that you owned at the close of business on April 3, 2017.

The proxy card indicates the number of shares of common stock you are entitled to vote.

March 16, 2020.

What is the difference between holding shares as a stockholdershareholder of record and as a beneficial owner?

Many of our stockholdersshareholders hold their shares through a stockbroker, bank, broker, or other nominee rather than directly in their own name. As summarized below, there are some differences between shares held of recorddirectly in your own name and those owned beneficially.

Stockholderbeneficially through a bank, broker, or other nominee. 

Shareholder of Record

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company,
LLC, you are considered, with respect to those shares, the stockholdershareholder of record and these proxy materials are being sent to you
directly. As the stockholdershareholder of record, you have the right to grant your voting proxy directly or to vote in person atduring the Annual Meeting. You may alsogrant your voting proxy in three ways: by mail using the enclosed proxy card, by telephone or by Internet. For information on how to vote by telephone or via the Internet, as described below undersee the heading “Information About the Annual Meeting and Voting—Maybelow “May I vote by telephone or via the Internet?” or you mayFor information on how to vote your proxy card by mail.

during the Annual Meeting, see the heading below “How do I vote during the virtual Annual Meeting?”

Beneficial Owner

If your shares are held in a brokerage account or by a bank, broker, or other nominee, you are considered the beneficial owner of shares held in “street name,” and our proxy materials are being forwarded to you by your bank, broker, or other nominee who is considered, with respect to those shares, the stockholdershareholder of record. As the beneficial owner, you have the right to direct your bank, broker, or other nominee on how to vote your shares and are also invited to attend the virtual Annual Meeting. However, sincebecause you are not the stockholdershareholder of record you may only vote theseyour shares in person atduring the Annual Meeting if your bank, broker or other nominee has provided a signed legal proxy giving you the right to vote those shares and you follow the other instructions described below under the heading “Information About the Annual Meeting and Voting—How“How do I vote in person atduring the virtual Annual Meeting?” andIf your broker or nominee has provided a voting instruction card for you to useshares are held in directing your broker or nominee as to how to vote your shares. Ifstreet name and you would like to vote by telephone or on theby Internet, you should read the information described below under the heading “Information About the Annual Meeting and Voting—May I vote by telephonewill need to contact your bank, broker, or via the Internet?”

other nominee for instructions.

How do I vote by proxy if I am a stockholdershareholder of record?

If you are a stockholdershareholder of record, you must properly submit your proxy card (by telephone, via the Internet or by mail) so that it is received by us in time to vote. Your “proxy” (one ofbefore the Annual Meeting. The individuals named on your proxy card)card will vote your shares as you have directed. If you sign the proxy card (including electronic signatures in the case of Internet or telephonic voting) but do not make specific choices, your proxyshares will vote your sharesbe voted as recommended by the Board:

·

“FOR” the election of each Class II director;

·

“FOR” the approval of the advisory vote on executive compensation;

·

“FOR” the submission of executive compensation to an advisory vote by stockholders every year;

2

“FOR” the election of each director nominee;

“FOR” the approval, on an advisory basis, of executive compensation; and

Table“FOR” the ratification of ContentsKPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.

·

“FOR” the ratification of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2017; and

·

“FOR” the approval of the Envestnet, Inc. 2010 Long-Term Incentive Plan, as amended through the Fourth Amendment.

If any other matter is presented at the Annual Meeting, your proxy will be voted in accordance with the best judgment of the individuals named on the proxy card. As of the date of printing this proxy statement, we knewknow of no other matters that needed to be acted on at the Annual Meeting, other than those discussed in this proxy statement.

Meeting.

How do I give voting instructions if I am a beneficial owner?

If you are a beneficial owner of shares, theyou will receive instructions from your bank, broker, will ask youor other nominee as to how you wantto vote your shares to be voted.shares. If you give instructions to your bank, broker, or other nominee, the bank, broker, instructions, the brokeror other nominee will vote your shares as you direct. If your broker does not receive instructions from you about how your shares are to be voted, one of two things can happen, depending on the type of proposal. Pursuant to rules of the New York Stock Exchange which we refer to as the NYSE,(the “NYSE”), brokers have discretionary power to vote your shares with respect to “routine” matters, but they do not have discretionary power to vote your shares onwith respect to “non‑routine” matters. BrokersThe election of directors and advisory approval of executive compensation are considered “non‑routine” matters and, as such, brokers holding shares beneficially owned by their clients do not have the ability to cast votes with respect to those matters unless the election of directors unless they havebroker has received instructions from the beneficial owner of the shares.
It is therefore important that you provide instructions to your broker if your shares are beneficially held by a broker so that your vote with respect to election of directors and on the advisory vote onto approve executive compensation, and any other matters treated as non‑routine by the NYSE, is counted.

May I vote by telephone or via the Internet?

Yes. If you are a stockholdershareholder of record, you have a choice of voting over the Internet, voting by telephone using a toll‑free telephone number, voting over the Internet, or voting by requesting and completing athe enclosed proxy card and mailing it in the return envelope provided. To vote by telephone or via the Internet, follow the instructions provided on the proxy card. We encourage you to vote by telephone or

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over the Internet because your vote is thenwill be tabulated faster than if you mailed it. Please note that there are separate telephone and Internet arrangements depending on whether you are a stockholder of record (that is, if you hold your stock in your own name), or whether you are a beneficial owner and hold your shares in “street name” (that is, if your stock is held in the name of your broker or bank).

If you are a stockholder of record, you may vote by telephone or electronically via the Internet, or by following the instructions provided on the proxy card.

If you are a beneficial owner and hold your shares in “street name,” you will need to contact your bank or broker to determine whether you will be able to vote by telephone or electronically through the Internet.

The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly. If you vote via the Internet, you may incur costs, such as usage charges from Internet access providers and telephone companies. You will be responsible for those costs.

If you are a beneficial owner and hold your shares in “street name”, you will need to contact your bank, broker, or other nominee to determine whether you will be able to vote by telephone or electronically through the Internet. 
Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote. Voting by telephone or over the Internet or returning your proxy card by mail will not affect your right to attend the virtual Annual Meeting and vote.

May I revoke my proxy or my voting instructions?

Yes. If you change your mind after you vote, if you are a stockholdershareholder of record, you may revoke your proxy by following any of the procedures described below. To revoke your proxy:

·

Send in another signed proxy with a later date or resubmit your vote by telephone or the Internet;

Send in another signed proxy with a later date or resubmit your vote by telephone or the Internet;

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Send a letter revoking your proxy to Envestnet’s Corporate Secretary at 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601; or
Attend the virtual Annual Meeting and vote during the meeting at https://web.lumiagm.com/241143720.

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·

Send a letter revoking your proxy to Envestnet’s Corporate Secretary at 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601; or

·

Attend the Annual Meeting and vote in person.

If you are a beneficial owner and hold your shares in “street name,” you will need to contact your bank, broker, or brokerother nominee to determine how to revoke your voting instructions.

If you wish to revoke your proxy or voting instructions, you must do so in sufficient time to permit the necessary examination and tabulation of the subsequent proxy or revocation before the vote is taken.

How do I vote in person atduring the virtual Annual Meeting?
You may attend the Annual Meeting?

You mayMeeting and vote your shares held directly in your name asat https://web.lumiagm.com/241143720 during the stockholdermeeting. Follow the instructions provided to vote.

If you are a shareholder of record, you will need the 11-digit control number found on your proxy card and the meeting password envestnet2020 (case sensitive).
If you are a beneficial owner and hold your shares in person at“street name,” you must first obtain a valid legal proxy from your bank, broker, or other nominee and then register in advance to attend the Annual Meeting. If you chooseFollow the instructions from your bank, broker, or other nominee included with these proxy materials, or contact your bank, broker, or other nominee to voterequest a legal proxy form. After obtaining a valid legal proxy from your shares in person atbank, broker, or other nominee, to then register to attend the Annual Meeting, please bringyou must submit proof of identification. Shares held in “street name” may be voted in person by you only if you obtain a signedyour legal proxy fromreflecting the stockholdernumber of record giving you the right to vote the shares. If your shares are held in thealong with your name of your broker, bankand email address to American Stock Transfer & Trust Company, LLC (“AST”). Requests for registration should be directed to proxy@astfinancial.com or other nominee, youto facsimile number 718-765-8730. Written requests can be mailed to:

American Stock Transfer & Trust Company LLC
Attn: Proxy Tabulation Department
6201 15thAvenue
Brooklyn, NY 11219

Requests for registration must bring to the Annual Meeting an account statement or letter from the broker, bank or other nominee indicating that you are the owner of the sharesbe labeled as “Legal Proxy” and a signed proxy from the stockholder of record giving you the right to vote the shares. The account statement or letter must show that you were the beneficial owner of the sharesbe received no later than 5:00 p.m., Eastern Time, on April 3, 2017.

Tuesday, May 5, 2020.


Even if you plan to attend the virtual Annual Meeting, Envestnet recommends that you vote your shares in advance as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.

Why are we holding the Annual Meeting virtually?
Our Board annually considers the appropriate format of our annual meeting of shareholders. As part of our effort to maintain a safe and healthy environment for our directors, members of management and shareholders who wish to attend the Annual Meeting, and in light of the COVID-19 pandemic, our Board believes that hosting a virtual Annual Meeting this year is in our best interest and the best interests of our shareholders.
How can I ask questions at the virtual Annual Meeting?
In order to submit a question at the virtual Annual Meeting, you will need your 11-digit control number and the meeting password envestnet2020 (case sensitive). If you are a shareholder of record, the control number can be found on your proxy card. If you are a beneficial owner and hold your shares in “street name,” you can obtain a control number from AST after you register to attend the Annual Meeting as described above under the heading “How do I vote during the virtual Annual Meeting?” You may

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log in 15 minutes before the start of the Annual Meeting and submit questions online. You will also be able to submit questions during the Annual Meeting.
What do I do if I have technical problems during the virtual Annual Meeting?
If you encounter any difficulties accessing the virtual Annual Meeting webcast, please call toll free (800) 937-5449 or email help@astfinancial.com.
Could emerging developments regarding the COVID-19 pandemic affect our ability to hold the Annual Meeting as planned?
We are closely monitoring developments with the COVID-19 pandemic. As of the date of this proxy statement, we plan to hold a virtual Annual Meeting as disclosed in this proxy statement. If we decide to change the location, date or time of the Annual Meeting, we will issue a press release announcing the change and will file the press release with the U.S. Securities and Exchange Commission (“SEC”) promptly after a decision is made and as soon as practicable prior to the meeting.
What votes need to be present to hold the Annual Meeting?

To have a quorum for our Annual Meeting, the holders of a majority of our shares of common stock outstanding as of April 3, 2017March 16, 2020 must be present in person or represented by proxy at the Annual Meeting.

The electronic presence of a shareholder at the virtual Annual Meeting will be counted as a shareholder present in person for purposes of determining a quorum.

What vote is required to approve each proposal?

Directors are elected by a plurality vote, which means that the three nominees for Class II directors receiving the most affirmative votes will be elected.elected, up to the number of directors to be chosen at the meeting. However, if the majority of the votes cast for a director are withheld, then, notwithstanding the valid election of such director, our by‑laws provide that such director will voluntarily tender his or her resignation for consideration by our Board of Directors (“Board”).Board. Our Board will determine whether to accept the resignation of such director. All other matters submitted for stockholdershareholder approval require the affirmative vote of the majority of shares present in person electronically or represented by proxy and entitled to vote.

How are votes counted?

In the election of Envestnet directors, your vote may be cast “FOR” all of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees. Your vote may be cast “FOR” or “AGAINST” or you may “ABSTAIN” with respect to the proposals relating to the advisory vote onto approve executive compensation and the ratification of Envestnet’s independent auditors and the approval of our 2010 Long-Term Incentive Plan, as amended through the Fourth Amendment. With respect to the advisory vote on the frequency of the submission of the advisory vote on executive compensation to stockholders, you may vote “FOR” every year, every two years or every three years, or you may “ABSTAIN” from voting. registered public accounting firm.
If you sign (including electronic signatures in the case of Internet or telephonic voting) your proxy card with no further instructions, your shares will be voted in accordance with the recommendations of the Board. If you sign (including electronic signatures in the case of Internet or telephonic voting) your broker voting instruction card with no further instructions, your shares will be voted in the broker’s discretion with respect to routine matters but will not be voted with respect to non‑routine matters. As described inunder the header “How do I give voting instructions if I am a beneficial holder?” the election of directors and the advisory vote onto approve executive compensation are considered non‑routine matters.
We will appoint one or more inspectors of election to count votes cast in person electronically or by proxy.

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What is the effect of broker non‑votes and abstentions?

A broker “non‑vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

owner as to how to vote.

Common stock owned by stockholdersshareholders electing to abstain from voting with respect to any proposal will be counted towards the presence of a quorum. Common stock that is beneficially owned and is voted by the beneficiarybeneficial holder through a broker or bank will be counted towards the presence of a quorum, even if there are broker non‑votes with respect to some proposals, as long as the broker votes on at least one proposal. Broker “non‑votes” will not be considered present and voting with respect to elections of directors or other matters to be voted upon at the Annual Meeting. Therefore, broker “non‑votes” will have no direct effect on the outcome of any of the proposals. Abstentions will be considered present and voting and will have the impacteffect of a vote against a proposal.

Are there any voting agreements with respect to our common stock?

No.

What are

Who will pay the costs of soliciting these proxies and who will pay them?

for the Annual Meeting?

Envestnet will pay all the costs of soliciting these proxies.proxies for the Annual Meeting. Our directors and employees may also solicit proxies by telephone, by fax or other electronic means of communication, or in person. We will reimburse banks, brokers, nominees and other fiduciariesnominees for the expenses they incur in forwarding the proxy materials to you.


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Where can I find the voting results?

We will publishreport the voting results in a Form 8‑K that we will file with the U.S. Securities and Exchange Commission (“SEC”),SEC within four business days after the Annual Meeting. You can find the Form 8‑K at www.sec.gov or on our website at www.envestnet.com.

Will Envestnet’s independent auditorsregistered public accounting firm attend the Annual Meeting?

Representatives of KPMG LLP (“KPMG”) will attend the virtual Annual Meeting and will have the opportunity to make a statement if they wish and will be available to respond to appropriate questions from stockholders.

shareholders.

Do directors attend the Annual Meeting?

Directors are encouraged to attend all meetings of stockholdersshareholders called by Envestnet. All seven of our independent directors, who were members of our Board at the time, attended the 20162019 Annual Meeting.

Can

How can a stockholder,shareholder, employee, or other interested party communicate directly with our Board? If so, how?

Our Board provides a process for stockholders,shareholders, employees or other interested parties to send communications to our Board. Stockholders,Shareholders, employees or other interested parties wanting to contact the Board, the independent directors, the Chairman of the Board, the chairmanchairperson of any Board committee, or any other director as to accounting or auditing matters or any other matters may send an email to corpsecy@envestnet.com. Alternatively, stockholders, employees or other interested parties may send written communications to the Board by email at corpsecy@envestnet.com or by mail at c/o Corporate Secretary, 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601, although mail is not as prompt as e‑mail.60601. Communication with the Board may be anonymous. The Secretary will forward all communications addressed to the Board, to the ChairmanChairperson of the Audit Committee or the ChairmanChairperson of the Nominating and Governance Committee, who will then determine when it is appropriate to distribute such communications to other members of the Board or to management.

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Whom should I call if I have any questions?

If you have any questions about the virtual Annual Meeting or voting, please contact Shelly O’Brien, our Corporate Secretary, at (312) 827‑2800 or at corpsecy@envestnet.com. If you have any questions about your ownership of Envestnet common stock, please contact Investor Relations at (312) 827‑3940 or by email at investor.relations@envestnet.com.

CORPORATE GOVERNANCE

Overview

In General

Our Board has maintained corporate governance policies since we became a public company following our 2010 initial public offering, which we refer to as our IPO. We have reviewed internally and with the Board the provisions of the Sarbanes‑Oxley Act of 2002, the rules of the SEC and the NYSE’s listing standards regarding corporate governance policies and processes and are in compliance with the rules and listing standards. We have adopted Corporate Governance Guidelines covering issues such as executive sessions of the Board, director qualification standards, including independence, director responsibilities and Board self‑evaluations. We have also adopted a Code of Business Conduct and Ethics for our employees and directors and charters for each of our Audit, Compensation, Nominating and Governance,  and Compliance and Information Security Committees. The full text of our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and each committee charter, are available on our website located at www.envestnet.com and you can view and print these documents by accessing our website, then clicking on “Investor Relations,” followed by “Corporate Governance.” In addition, you may request copies of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics and the committee charters by contacting our Corporate Secretary via:

Telephone    (312) 827‑2800
Facsimile     (312) 827‑2801
E‑mail          corpsecy@envestnet.com

Independent Director Meetings

Our independent directors meet at regularly scheduled executive sessions without the participation of management and our non‑employee directors also meet periodically at executive sessions without the participation of management. Ross Chapin, our lead independent director, is the presiding director for executive sessions of independent directors and non‑employee directors.

Other Corporate Governance Highlights

With the exception of two directors, our Board consists of all non‑employee, independent directors.

Only non‑employee, independent directors may serve on our Audit, Compensation,  Nominating and Governance, and Compliance and Information Security Committees.

Our Audit Committee hires, determines the compensation of and decides the scope of services performed by our independent auditors. It also has the authority to retain outside advisors.

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No member of our Audit Committee simultaneously serves on the audit committees of more than two public companies.

Our Compensation Committee has the authority to retain independent consultants to assist it. Our Compensation Committee evaluates the performance of the Chief Executive Officer, to whom we refer as our CEO, based on corporate goals and objectives and, with the other independent directors, sets his compensation based on this evaluation.

The Board and each committee of the Board performed the annual self‑evaluation required by the Corporate Governance Guidelines or the applicable committee charter.

We have adopted a Code of Business Conduct and Ethics applicable to all directors, officers and employees that sets forth basic principles to guide their day‑to‑day activities. The Code of Business Conduct and Ethics addresses, among other things, conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets, compliance with laws and regulations, including insider trading laws, and reporting illegal or unethical behavior.

In addition to Envestnet’s regular Board meetings that last approximately two days each, our Board has an annual business review meeting to assess specific areas of our operations and to learn about general trends affecting the wealth management industry. We also provide our directors with the opportunity to attend continuing education programs.

CORPORATE GOVERNANCE

Overview
We review annually, internally and with the Board, the provisions of the Sarbanes‑Oxley Act of 2002, the rules of the SEC and the NYSE’s listing standards regarding corporate governance policies and processes, and are in compliance with the rules and listing standards. We have adopted Corporate Governance Guidelines covering issues such as executive sessions of the Board, director qualification standards, including independence, director responsibilities, and Board self‑evaluations. We have also adopted a Code of Business Conduct and Ethics for our employees and directors and charters for each of our Audit, Compensation, Nominating and Governance, Compliance and Information Security and Strategy Committees. A copy of our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and each committee charter, is available on our website located at www.envestnet.com and you can view and print these documents by accessing our website, then clicking on “Investor Relations,” followed by “Corporate Governance.” In addition, you may request copies of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics and the committee charters by contacting our Corporate Secretary via telephone at (312) 827‑2800, facsimile at (312) 621-7091 or e‑mail at corpsecy@envestnet.com. Our website address is provided as an inactive textual reference only; the information provided on or accessible through our website is not part of this proxy statement.
Leadership Changes
Following the unexpected and sudden passing of our former Chairman and CEO Judson Bergman, our Board of Directors implemented Envestnet’s emergency succession plan. Effective October 3, 2019, our Board appointed William Crager as interim CEO and Ross Chapin, our lead independent director since 2015, as the interim Chairman of Envestnet’s Board of Directors.
Effective March 30, 2020, our Board appointed Mr. Crager as Envestnet’s Chief Executive Officer and as a member of
the Board of Directors. The Board’s decision was based on numerous factors, including Mr. Crager’s extensive experience in the financial services industry, including 20years with Envestnet, his demonstrated leadership and management qualities, his strong relationships with our customers as well as Mr. Crager’s performance as interim CEO since October 2019. Mr. Crager also continues as Chief Executive, Envestnet Wealth Solutions.

In addition, effective March 30, 2020, the Board appointed Stuart DePina, Chief Executive, Envestnet Data & Analytics, as President of Envestnet. Also effective March 30, 2020, the Board appointed James Fox as Chairman of the Board and Charles Roame as Vice Chairman of the Board. With the appointment of Mr. Fox as a non-executive Chairman of the Board, Mr. Chapin no longer serves as lead independent director.

Corporate Governance Highlights
Our independent directors meet at regularly scheduled executive sessions without the participation of management. James Fox, our Chairman, is the presiding director for executive sessions of independent directors.

Seven of our nine directors are independent. Mr. Crager is not considered an independent director because he is our CEO. Mr. Arora is not considered an independent director because he was an executive officer of the Company within the last three years.

Only independent directors may serve on the Audit and Compensation Committees. In addition, a majority of the directors that serve on the Nominating and Governance, Compliance and Information Security, and Strategy Committees must be independent. Currently, each committee of our Board is composed entirely of independent directors.
Our Audit Committee hires, determines the compensation of, and decides the scope of services performed by our independent registered public accounting firm. In addition, no member of our Audit Committee currently serves on the audit committees of more than two public companies (including Envestnet). Our Audit Committee charter provides that if a member of the Audit Committee simultaneously serves on the audit committees of more than three public companies, the Board will determine if such simultaneous service would impair the ability of such member to effectively serve on the Audit Committee.
Our Compensation Committee evaluates the performance of the CEO based on corporate goals and objectives and, with the other independent directors, sets the CEO’s compensation. The Compensation Committee also has responsibility for evaluating the performance of our senior management and determining executive compensation.
The Compensation Committee works with the Nominating and Governance Committee and the CEO on succession planning.
The Board and each committee of the Board performs an annual self‑evaluation.

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We have adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees that sets forth basic principles to guide their day‑to‑day activities. The Code of Business Conduct and Ethics addresses, among other things, conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets, compliance with laws and regulations, including insider trading laws, and reporting illegal or unethical behavior.
Envestnet holds regular Board meetings that last approximately two days each. In addition, our Board holds an annual business review meeting to assess specific areas of our operations and to learn about general trends affecting the wealth management industry. We also provide our directors with the opportunity to attend continuing education programs.
The Board of Directors

Our Board oversees our business and monitors the performance of management. The directors keep themselves up‑to‑date on the Company by discussing matters with the CEO, other key executives and our principal external advisors, such as outside legal counsel, outside auditors, investment bankers, and other consultants, by reading the reports and other materials that we send them regularly and by participating in Board and committee meetings.

The Board usually meets sixseven times per year in regularly scheduled meetings, but will meet more often if necessary. From time to time, the Board has telephonic information sessions on various topics. The Board met ninenineteen times, including these telephonic conferences,sessions, during 2016.2019. All of our directors attended at least 75% of the aggregate number of meetings of the Board and committees of the Board of which they were a member held while they were in office during the year ended December 31, 2016.

2019. 

Director Independence

In March 2017,February 2020, our Board determined that the following directors are independent under the listing standards of the NYSE: Luis Aguilar, Ross Chapin, Gayle Crowell, James Fox, James Johnson,Valerie Mosley, Charles Roame, and Gregory Smith. These independent directors constitute substantially more than a majority of Envestnet’s Board. In making its determination of independence, the Board applied the categorical standards for director independence set forth in the NYSE’s rules and therefore determined that no other material relationships existed between us and these directors. The Board also considered the other directorships held by the independent directors and determined that none of these directorships constituted a material relationship with us.

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In addition, our Board determined that Mr. Smith, Mr. Chapin, Mr. Fox, and Mr. Roame, the members of our Audit Committee, satisfy the audit committee independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and that Mr. Fox, Mr. Chapin, Ms. Crowell and Mr. Smith, the members of our Compensation Committee, satisfy the additional independence requirements for members of the compensation committee under the NYSE listing standards.


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The Committees of the Board

During 2016, we had

Our Board has five standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee. Beginning in April 2017, we also have a Compliance and Information Security Committee, a Nominating and Governance Committee, and a Strategy Committee.

The Audit Committee

The Audit Committee provides oversight of the integrity of our financial statements and financial reporting process, the system of internal controls, the audit process, the performance of our internal audit program and the performance, qualification and independence of the independent auditors.

The Audit Committee is composed entirely of directors who are independent of us and our management, as defined by the NYSE listing standards.

The members of the Audit Committee are currently Mr. Smith (Chairman), Mr. Chapin, Mr. Fox and Mr. Johnson.

The Board has determined that each member of the Audit Committee satisfies the financial literacy requirements of the NYSE and that Messrs. Chapin, Johnson, Fox and Smith are each audit committee financial experts, as that term is defined under SEC Rules. For additional information about the qualifications of the Audit Committee members, see their respective biographies set forth in “Proposal No. 1: Election of Directors.”

The Audit Committee held six meetings during 2016.

The Compensation Committee

The Compensation Committee has responsibility for evaluating the performance of the CEO and senior management and determining executive compensation in conjunction with the independent directors. The Compensation Committee also works with the Nominating and Governance Committee and the CEO on succession planning.

The Compensation Committee is composed entirely of directors who are independent of us and our management, as defined by the NYSE listing standards.

The members of the Compensation Committee are currently Mr. Fox (Chairman), Mr. Chapin and Ms. Crowell.

The Compensation Committee held seven meetings during 2016.

The Nominating and Governance Committee

The responsibilities of the Nominating and Governance Committee include identifying individuals qualified to become Board members, recommending director nominees to the Board and developing and recommending corporate governance guidelines. The Nominating and Governance Committee also has responsibility to review and make recommendations to the full Board regarding director compensation. In addition to general corporate governance matters, the Nominating and Governance Committee assists the Board and the Board committees in their self‑evaluations.

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The Audit Committee provides oversight of the integrity of our financial statements and financial reporting process, the system of internal controls, the audit process, the performance of our internal audit program, and the performance, qualification, and independence of the independent registered public accounting firm KPMG.

The Audit Committee is composed entirely of independent directors, as defined by the NYSE listing standards, who also satisfy the requirements of Rule 10A-3 under the Exchange Act.
The members of the Audit Committee are currently Mr. Smith (Chairperson), Mr. Chapin, Mr. Fox, and Mr. Roame.
The Board has determined that each member of the Audit Committee satisfies the financial literacy requirements of the NYSE and that each is an audit committee financial expert, as that term is defined under SEC rules. For additional information about the qualifications of the Audit Committee members, see their respective biographies set forth in “Proposal No. 1: Election of Directors”.
The Audit Committee held eight meetings during 2019. Audit Committee meetings are usually held in conjunction with the regularly scheduled meetings of the Board. At least quarterly, the Audit Committee met with management, KPMG, the Chief Financial Officer, the Chief Accounting Officer and the General Counsel to review, among other matters, the overall scope and plans for the independent audit, and the results of such audit; critical accounting estimates and policies; compliance with our conflict of interest and Code of Business Conduct and Ethics policies.
At least quarterly in 2019, the Audit Committee met in executive session (i.e., without management present) with representatives of KPMG to discuss the results of KPMG’s work.
The Compensation Committee
The Compensation Committee has responsibility for evaluating the performance of the CEO and senior management and determining executive compensation in conjunction with the independent directors. The Compensation Committee also works with the Nominating and Governance Committee and the CEO on succession planning.
The Compensation Committee is composed entirely of independent directors, as defined by the NYSE listing standards, who also satisfy the additional independence requirements specific to compensation committee members set forth in the NYSE listing standards.
The members of the Compensation Committee are currently Mr. Fox (Chairperson), Mr. Chapin, Ms. Crowell, and Mr. Smith.
The Compensation Committee held seven meetings during 2019.
The Compliance and Information Security Committee
The Compliance and Information Security Committee provides oversight of, and reviews, assesses and makes recommendations to our Board regarding, our regulatory compliance programs and information technology security framework.
The Compliance and Information Security Committee is composed entirely of independent directors, as defined by the NYSE listing standards.
The members of the Compliance and Information Security Committee are Ms. Crowell (Chairperson), Mr. Aguilar, Ms. Mosley and Mr. Roame.
The Compliance and Information Security Committee held four meetings during 2019.
The Nominating and Governance Committee
The responsibilities of the Nominating and Governance Committee include identifying individuals qualified to become Board members, recommending director nominees to the Board, and developing and recommending corporate governance guidelines. The Nominating and Governance Committee also has the responsibility to review and make recommendations to the full Board regarding director compensation. In addition to general corporate governance matters, the Nominating and Governance Committee assists the Board and its committees in their self‑evaluations. The Nominating and Governance Committee also works with the Compensation Committee and the CEO on succession planning.
The Nominating and Governance Committee is composed entirely of independent directors, as defined by the NYSE listing standards.

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The Nominating and Governance Committee is composed entirely of directors who are independent of us and our management, as defined by the NYSE listing standards.

The members of the Nominating and Governance Committee are Mr. Roame (Chairman), Mr. Aguilar, Mr. Fox, Mr. Johnson and Mr. Smith.

The Nominating and Governance Committee held five meetings during 2016.

The Compliance and Information Security Committee

Beginning with its first meeting in April 2017, the Compliance and Information Security Committee provides oversight of our regulatory compliance programs and information technology security framework and reviews, assesses and makes recommendations to our Board regarding such regulatory compliance programs and information technology security framework.

The Compliance and Information Security Committee is composed entirely of directors who are independent of us and our management, as defined by the NYSE listing standards.

The members of the Compliance and Information Security Committee are Ms. Crowell (Chairman), Mr. Aguilar, Mr. Roame and Mr. Smith.

How are directors compensated?

Each non-employee director receives an annual retainer of $100,000, a meeting attendance stipend of $5,000 for each board meeting attended in person, including all coinciding committee meetings and an additional meeting attendance stipend of $1,000 for each telephonic meeting, including all coinciding committee meetings. The chairperson of our Audit Committee receives an additional annual retainer of $25,000. The chairpersons of our other committees receive an additional annual retainer of $15,000. The lead independent director receives an additional annual retainer of $25,000. All non-chairperson committee members receive an additional annual retainer of $10,000 for each committee on which they serve. Directors receive twenty-five percent (25%) of such amounts in cash, twenty-five percent (25%) in options to acquire shares of our common stock, and fifty percent (50%) in restricted stock units. In order to align the interests of the non-employee members of the Nominating and Governance Committee are Mr. Roame (Chairperson), Mr. Aguilar, Ms. Crowell, Mr. Fox, Ms. Mosley and Mr. Smith.

The Nominating and Governance Committee held four meetings during 2019. 
The Strategy Committee
From time to time prior to December 2019, the Board with the long-term interestshad utilized an ad hoc strategy committee to provide oversight of the Corporation’s stockholders, all non-employee directors are expectedCompany’s overall business strategy and strategic initiatives. In December 2019, the Board made the Strategy Committee a standing committee of the Board. The Strategy Committee reviews and provides guidance to have an ownership level equivalent to $300,000 within 4 years of October 28, 2015.

Cash amounts paid to directors are paid quarterlythe management team and the Board with respect to the pro rataCompany’s overall business strategy and strategic initiatives. The Strategy Committee’s responsibilities include review with, and recommendations to, management and the Board regarding the development, adoption, modification, and implementation of the Company’s strategic plan. The Strategy Committee also has the responsibility to review and make recommendations to the Board regarding specific strategic initiatives, including acquisitions, divestitures, joint ventures, and strategic alliances. The Strategy Committee is composed entirely of independent directors, as defined by the NYSE listing standards.

The members of the Strategy Committee are Mr. Roame (Chairperson), Mr. Chapin, Mr. Fox and Mr. Smith.    
Restrictions on Short-term Speculative Transactions, Hedging and Pledging
Short-Term Speculative Transactions and Hedging
We consider it improper and inappropriate for directors, officers, employees, consultants and temporary contract workers (whom we refer to as “covered persons”) to engage in short-term or speculative transactions in our securities. Consequently, we have adopted a policy that prohibits covered persons from engaging in short sales of our securities (sales of securities that are not then owned), including “sales against the box” (sales with delayed delivery) and in transactions in publicly traded options on our securities (such as puts, calls and other derivative securities) on an exchange or in any other organized market. We also only allow “standing orders” for a brief period of time.
Furthermore, we believe that certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, may result in a misalignment of our interests and the interests of covered persons. Accordingly, we have adopted a policy that prohibits hedging transactions and all other similar forms of monetization transactions. For purposes of this policy, hedging includes the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or engaging in any other transaction, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities.
Margin Accounts and Pledging
Envestnet’s current policy permits covered persons to hold our securities in margin accounts and pledge our securities in limited circumstances to strike an appropriate balance between the ability of covered persons to manage their financial affairs with the potential adverse impact to shareholders and the Company that could result from the pledging of a significant number of Company securities by covered persons. Covered persons are prohibited from holding our securities in a margin account or pledging our securities as collateral for a loan unless the covered person clearly demonstrates the ability the repay any obligations arising under the margin account or any loan without resorting to the securities held in the margin account or pledged securities in the case of a loan. We believe that a complete ban on pledging could discourage our executive officers, directors and other covered persons from owning significant levels of Envestnet securities, which we believe would negatively affect shareholders.
Envestnet securities may constitute a significant portion of fees earned duringour officers’s and directors’s personal assets. As a result, situations may arise in which using Envestnet securities as collateral for his or her financial obligations or holding Envestnet securities in a margin account is an attractive means to obtain liquidity rather than achieving it through decreased security ownership. Absent the ability to pledge Envestnet securities in this manner, an officer or director may be forced to sell shares, which is not in our shareholders’ best interests. An absolute prohibition on pledging could create a disincentive for our officers and directors to hold substantial amounts of Envestnet securities for long periods. Although securities held in a margin account or pledged as collateral for a loan may be sold by the broker if a covered person fails to meet a margin call or by the lender in foreclosure if the covered person defaults on the loan, we believe that quarter. Equity amounts paidour policy’s requirement that the covered person demonstrate the ability to repay any obligations arising under the margin account or any loan both effectively mitigates the risk that forced sales of pledged shares could prompt a broader sell-off or further depress a declining stock price and provides our officers and directors are granted once a year no later than March 31with reasonable flexibility to use their Envestnet securities as collateral for the amounts earned during the previous year. With respectloans for needed liquidity and encourages them to equity awards granted in 2016:

·

Option grants vest monthly over a four year period, except that the options that would otherwise vest over the first 12 months do not vest until the first anniversary of the grant; and

·

Restricted stock units vest quarterly over a three-year period, except that restricted stock units that would otherwise vest over the first 12 months do not vest until the first anniversary of the grant.

In addition, all directors who joined the Board after July 29, 2010 received an initial equity grantretain substantial ownership of $100,000 of restricted stock units.

Each of the directors who joined the Board between July 29, 2010 and February 28, 2015 received a grant of 4,876 restricted stock units on February 29, 2016 which vests over a two-year period. Forty percent (40%) of the total amount

our securities.

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vested on February 29, 2016. Thirty percent (30%) of the total amount vested on February 28, 2017 and the remaining thirty percent (30%) vests on February 28, 2018. Each of the directors who joined the

Board on March 25, 2016, received a grant of 3,204 restricted stock units on April 26, 2016 which vests over a three-year period. Twenty-five percent (25%) of the total amount vested on April 26, 2016 and an additional twenty-five percent (25%) vested on April 26, 2017. The remaining unvested restricted stock units will vest in equal installments on each of the subsequent two anniversaries of the grant date. All equity grants to our non‑employee directors are made pursuant to our 2010 Long‑Term Incentive Plan. See “—Compensation Discussion and Analysis—2010 Long‑Term Incentive Plan.”

We also reimburse all of our directors for their reasonable expenses incurred in attending meetings of our Board or committees.

Director CompensationLeadership Structure

The following table sets forth our 2016 director compensation:

 

 

 

 

 

 

 

 

 

 

 

    

Fees Earned

    

Option

    

Stock

 

    

 

 

 

or Paid in Cash

 

Awards

 

Awards

 

 

Total

Name (1)

 

($)

 

($)(*)

 

($)(*)

 

 

($)

Luis Aguilar

 

25,276

 

 —

 

100,000

(2)

 

125,276

Cynthia Egan (3)

 

10,002

 

7,451

 

163,441

(4)

 

180,894

Ross Chapin

 

42,750

 

7,886

 

64,310

 

 

114,946

Gayle Crowell

 

25,276

 

 —

 

100,000

(2)

 

125,276

James Fox

 

41,600

 

6,799

 

157,577

(4)

 

205,976

James Johnson

 

37,167

 

7,461

 

74,334

 

 

118,962

Charles Roame

 

35,000

 

6,578

 

161,694

(4)

 

203,272

Gregory Smith

 

40,972

 

6,799

 

157,577

(4)

 

205,348

Yves Sisteron (5)

 

11,722

 

5,943

 

161,972

 

 

179,637

*Option and restricted stock unit awards were granted on February 29, 2016 with a fair market value of $20.51 in connection with 2015 service. The amounts reported represent the aggregate grant date fair value during the fiscal year, as calculated under the Financial Accounting Standards Board’s Accounting Codification Topic 718. Under ASC Topic 718, the grant date fair value is calculated using the closing market price of our Common Stock on the date of grant, which is then recognized, subject to market value changes, over the requisite service period of the award. 

(1)

Mr. Aguilar and Ms. Crowell were appointed to the Board in March 2016. Mr. Fox and Mr. Smith were appointed to the Board in February 2015. They received their first equity award in 2016.

(2)

Represents restricted stock units that were granted on April 26, 2016, with a fair market value of $31.21 per share in connection with the initial equity grant of $100,000 in connection with joining the Company’s Board.

(3)

Ms. Egan resigned from the Board on March 29, 2016.

(4)

Also includes restricted stock units that were granted on February 29, 2016, with a fair market value of $20.51 per share in connection with the initial equity grant of $100,000 in connection with joining the Company’s Board between the period of July 29, 2010 and February 28, 2015.

(5)

Mr. Sisteron did not stand for re-election and thus his last day as a Board member was May 11, 2016.

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Outstanding Unvested Awards

As of December 31, 2016, the following unvested awards were outstanding for each director.

Luis Aguilar

0

options

2,403

restricted stock units

Ross Chapin

8,815

options

769

restricted stock units

Gayle Crowell

0

options

2,403

restricted stock units

James Fox

5,210

options

3,589

restricted stock units

James Johnson

9,662

options

728

restricted stock units

Gregory Smith

5,210

options

3,589

restricted stock units

Charles Roame

8,662

options

3,567

restricted stock units

What is our Board leadership structure?

The Nominating and Governance Committee of our Board evaluates the Board’s leadership structure on a regular basis.

While

The Company’s By-laws and the Board doesCorporate Governance Guidelines do not have a policy with respect to combining or separatingrequire the separation of the positions of the Chairman and Chief Executive Officer positions, under the currentCEO. The Corporate Governance Guidelines permit the Board to determine the most appropriate leadership structure for the positionsCompany at any given time and give the Board the ability to choose a Chairman that it deems best for the Company.
Historically, the Board believed the combined role of CEO and Chairman under Mr. Bergman was the appropriate leadership structure for the Company. Combining the CEO and Chairman roles under Mr. Bergman provided efficient and effective decision-making and unified leadership for the Company, with a single person setting the tone for management of the Company. Mr. Bergman was well-suited to serve in the Chairman role because his familiarity with the Company’s business enabled him to effectively lead the Board in its discussion, consideration, and execution of the Company’s strategy. The Board also felt that the combined roles of Chairman and Chief Executive Officer are combined into one role.CEO were appropriately balanced by the designation of a lead independent director, Mr. Bergman has servedChapin. Mr. Chapin’s responsibilities as our Chairman and Chief Executive Officer since 1999. Effective as of November 19, 2015, Anil Arora was appointed Vice Chairman. Thelead independent directors of the Board have designated one lead director. The lead director’s responsibilities include,director included, among other things, presiding over all executive sessions of the non‑employee directors, where non‑employee directors meet outside the presence of the management directors, presiding at all other meetings of the Board at which the Chairman iswas not present, servesserving as a liaison between the Chairman and the independent directors discussesand discussing with the Chairman all information sent to the Board, including meeting agendas.
Following Mr. Bergman’s passing, the Board decided to separate the positions of interim CEO and discussesinterim Chairman and designated our lead independent director, Ross Chapin, who had served as our lead independent director since 2015, as our interim Chairman. The Board felt that separating the two positions at that time would allow the interim CEO to focus on the transition following Mr. Bergman’s passing while providing for a more engaged Board presence through an interim Chairman. Given the successful transition and effective management of the Company under the interim CEO and interim Chairman, the Board determined that separating the positions of CEO and Chairman at this time is the most appropriate leadership structure for the Company. Effective March 30, 2020, the Board appointed independent director James Fox as Chairman of the Board. The Chairman’s responsibilities include, among other things: presiding over all meetings of the Board and executive sessions of the independent directors; presiding over meetings of stockholders; serving as a liaison between management of the Company and the Board; and discussing with the Chairman the meetingCEO agendas offor Board meetings and information to be provided to the Board. The other responsibilities of the lead directorChairman are determined by the Board from time to time. Ross Chapin has been designated the lead director.

In considering its leadership structure, the Board takes a number

The Board’s Oversight of factors into account. Based on its most recent review of the leadership structure, the Board believes that the current structure is appropriate for our Company because it allows for effective evaluation and execution of our strategies and operations management. In addition, a number of Board and Committee processes and procedures, including regular executive sessions of non‑employee directors and annual performance evaluations, provide substantial independent oversight of our Chairman and Chief Executive Officer’s performance.

How does the Board oversee risk?

Risk

Envestnet’s policies and procedures relating to risk assessment and risk management are overseen by our Board. The Board takes an enterprise‑wide approach to risk management that is designed to support our business plans at a reasonable level of risk. A fundamental part of risk assessment and risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for our Company. The Board annually approves our business plan, giving consideration to risk management. The involvement of the Board in setting our business strategy is a key part of its assessment of management’s risk tolerance and also aits determination of what constitutes an appropriate level of risk for our Company.

Each committee of the Board oversees certain risks and the management of such risks. As described further below, however, the entire Board is regularly informed through committee reports and management presentations about such risks.

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The Audit Committee of the Board reviews our policies and practices with respect to risk assessment and risk management and discusses with management our major financial risk exposures and the steps that have been taken to monitor and control such exposures.

The Compensation Committee reviews compensation risk.

The Compensation Committee assesses our executive compensation programs to ascertain any potential material risks that may be created by the compensation program.

In conducting this assessment, the Compensation Committee focusedfocuses on our incentive compensation programs in order to identify any general areas of risk or potential for unintended consequences that exist in the design of our compensation programsprograms; and to evaluate our incentive plans relative to our enterprise risks to identify potential areas of concern, if any.

The Compensation Committee considered the findings of this assessment of compensation policies and practices and determined that our compensation programs are designed and administered with the appropriate balance of risk and reward in relation to our overall business strategy. Envestnet’sThe Company’s policies and practices are not structured to encourage executives to take unnecessary or excessive risks, and therefore do not create risks reasonably likely to have a material adverse effect on our Company.

The Nominating and Governance Committee manages risks associated with general corporate governance and succession planning.
The Compliance and Information Security Committee reviews potential risk related to regulatory compliance requirements and reviews and assesses our regulatory compliance programs. The Compliance and Information Security Committee also reviews

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potential risk related to our information technology systems, including cybersecurity risk, and reviews and assesses our information technology security framework.

How do directors evaluate their performance?

Director Self-Evaluations
The Board and each committee of the Board conduct a formal annual self‑evaluationsevaluation to assess the business skills, experience, and background represented on the Board and to determine whether the Board and its committees are functioning effectively. During the year, the Nominating and Governance Committee receives input on the Board’s performance from directors and discusses the input with the full Board and oversees the full Board’s review of its performance. Each committee also discusses the input with respect to the committee and the review of its performance.self-evaluation process. The self‑assessments focusevaluation focuses on whether the Board is operating effectively and on areas in which the Board or management believes that the Board or any of its committees could improve.

How The self-evaluation may be in the form of written or oral questionnaires or interviews and may be conducted by a third party. Each year the Nominating and Governance Committee discusses and considers the appropriate approach and approves the form of the self-evaluation.

The results of the self-evaluation are directors nominated?reviewed by the Nominating and Governance Committee and summarized for the full Board. Any recommendations for improvement are reviewed by the full Board and appropriate plans are initiated by the Board to address such recommendations.

Director Nominations
In accordance with its charter, the Nominating and Governance Committee identifies potential nominees for directors from various sources. TheWhen reviewing candidate’s qualifications, the Nominating and Governance Committee reviewsconsiders the qualificationsrelevance of these persons to determine whether they might be a good candidate for membership on the Board. The Nominatingtheir experience and Governance Committee includes a review of the person’sbackground as well as their independence, judgment, experience, independence, understanding of our business or other related industries and such other factors as the Nominating and Governance Committee determines are relevant in light of the needs of the Board and our Company. The Nominating and Governance Committee will select qualified candidates and review its recommendations with the Board, which will decide whether to nominate the person for election to the BoardBoard. Elections typically occur at anour annual meeting. Between annual meetings, the Board,meeting but, upon the recommendation of the Nominating and Governance Committee, canthe Board may approve additions to the Board.

Envestnet does not have a formal Board diversity policy. However,between annual meetings.

The Board believes that it is important that the Board considers diversity in professional experience and professional training in recommending nominees.members represent a diverse mix of viewpoints. The Nominating and Governance Committee works with the Board on an annual basis to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members.members in light of the needs of the Board, including the extent to which the current composition of the Board reflects a diverse mix of knowledge, experience, skills and backgrounds. The skills and backgrounds collectively represented on the Board should reflect the diverse nature of the business environment in which the Company operates. In evaluating the suitability of individual Board members, the Board and the Nominating and Governance Committee take into account numerous factors such as the individual’s general understanding of marketing, finance and other disciplines relevant to the success of a publicly traded company; performance as a member of the Board; understanding of ourthe Company’s business; education and professional background, including current employment and other Board memberships; reputation for integrity; gender; race and any other factors they consider to be relevant. The Board evaluates each

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individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuateadvance the success of the Company’s business, and represent stockholder interestshareholder interests through the exercise of sound judgment, using its diversity of experience. Any search firm engaged to assist the Board or the Nominating and Governance Committee in identifying candidates for appointment to the Board is specifically directed to include diverse candidates. In determining whether to recommend a director for re‑election, the Nominating and Governance Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board. The Nominating and Governance Committee annually reviews its own performance.

In connection with suchits self‑evaluation described above under “Director Self-Evaluations,” the Nominating and Governance Committee assesses whether it effectively nominates candidates for director in accordance with the above described standards specified by the corporate governance guidelines.Company’s Corporate Governance Guidelines. See each nominee’s and director’s biography appearing later in this proxy statement for a description of the specific experiences that each such individual brings to our Board.

Shareholder Recommendations and Nominations of Director Candidates
The Nominating and Governance Committee will consider a stockholder’sshareholder’s recommendation for directors by following substantially the same process and applying substantially the same criteria as for candidates recommended by other sources, but the Nominating and Governance Committee has no obligation to recommend such candidates for nomination by the Board. Assuming that appropriate biographical and background material is provided for candidates recommendedTo have a director recommendation evaluated by stockholders, the Nominating and Governance Committee, will evaluate those candidates by following substantiallya shareholder should provide timely notice of its recommendation with the same processbiographical and applying substantially the same criteria asbackground materials set forth in Section 5.2 of our by-laws related to director nominations. Shareholder recommendations for candidates recommended by other sources. If a stockholder has a suggestion for candidates for election, the stockholderdirectors should mail itbe mailed to: Corporate Secretary, Envestnet, Inc., 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601. No person recommended by a stockholdershareholder will become a nominee for director and be included in a proxy statement unless the Nominating and Governance Committee recommends, and the Board approves, such person.


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If a stockholdershareholder desires to nominate a person for election as director at a stockholders’shareholders’ meeting, that stockholdershareholder must comply with Section 5.2 of our By‑by‑laws, which requires, among other things, notice not more than 120 days nor less than 90 days in advance of the anniversary of the date of the proxy statement provided in connection with the previous year’s annual meeting of stockholders. This time period has passed with respect toshareholders. For more information, see the 2017section entitled “Shareholder Proposals for 2021 Annual Meeting. With respect to the 2018 Annual Meeting, Envestnet must receive such written notice between January 1, 2018 and January 31, 2018. Such notice must describe the nomination in sufficient detail to be summarized on the agenda for the meeting and must set forth:

·

As to each person whom the stockholder proposes to nominate for election or re‑election as a director:

·

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

·

The principal occupation or employment of the person;

·

The class, series and number of shares of Envestnet common stock that are owned beneficially by the person;

·

Any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the Exchange Act; and

·

The nominee’s written consent to serve, if elected.

·

As to the stockholder giving the notice:

·

The name and record address of the stockholder;

·

The number of shares of Envestnet common stock that are owned beneficially by the stockholder; and

·

A description of all arrangements or understandings between such stockholder and each person the stockholder proposes for election or reelection as a director pursuant to which such proposed nomination is being made.

”

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Compensation Committee interlock and insider participation

The Compensation Committee of Envestnet’s Board has responsibility for determining the compensation of our executive officers. None of the members of the Compensation Committee is a current or former officer or employee of our Company. None of our executive officers serves on the compensation committee of any company that employs any member of the Compensation Committee.

What is our Related Party transactions approval policyTransaction Policy and what procedures do we use to implement it?

Procedures

Our Board has adopted a written Related Party transactions policy. This policy applies to any transaction, arrangement or relationship which we refer to as a Related Party Transaction, in which we (including any of our subsidiaries) were, are, or will be a participant, the amount involved exceeds $120,000 annually and in which any director, officer, 5% or greater stockholdershareholder or certain other related parties or entities each of which we refer to as(each, a Related Party,“Related Party”), has a direct or indirect material interest. We refer to these transactions as Related“Related Party Transactions.” Under the policy, the Audit Committee considers all of the relevant facts and circumstances in determining whether to approve a Related Party Transaction, including:

·

The benefits to us of the proposed Related Party Transaction;

·

The impact on a director’s independence in the event the Related Party is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder or executive officer;

·

The creation of an actual or apparent conflict of interest;

·

The availability of other sources for comparable products or services;

·

The terms of the proposed Related Party Transaction;

·

The Related Party’s interest in the transaction; and

·

The terms available to unrelated third parties or to employees generally.

The Audit Committee will approve only those Related Party Transactions that are in, or are not inconsistent with, the best interests of our Company and our stockholders,shareholders, as the Audit Committee determines in good faith.

The following types of transactions do not require approval or ratification under this policy:

·

Transactions involving the purchase or sale of products or services in the ordinary course of business, not exceeding $120,000;

·

Transactions in which the Related Party’s interest derives solely from his or her service as a director of another corporation or organization that is a party to the transaction;

·

Transactions in which the Related Party’s interest derives solely from his or her ownership of less than 10% of the equity interest in another person (other than a general partnership interest) which is a party to the transaction;

·

Transactions in which the Related Party’s interest derives solely from his or her service as a director, trustee or officer (or similar position) of a not‑for‑profit organization or charity that receives donations from us;

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·

Compensation arrangements of any executive officer (other than an individual who is an immediate family member of a Related Party) that have been approved by the Compensation Committee of our Board and that are reported in our annual meeting proxy statement or would be reported if the executed officer were a named executive officer; and

·

Director compensation arrangements that have been approved by our Board and that are reported in our annual meeting proxy statement.

What Related Party transactions do we have?

Registration Rights

On March 22, 2004, we entered into a registration rights agreement with certain holders of our common stock, or the registration rights agreement, pursuant to which these holders of our common stock are entitled to demand registration rights, Form S‑3 registration rights and piggyback registration rights with respect to the registration of their shares of our common stock under the Securities Act of 1933, as amended, or the Securities Act. We refer to shares of our common stock that are subject to the registration rights agreement as “registrable securities.”

In connection with our IPO, The EnvestNet Group, Inc., Envestnet’s 41% shareholder prior to the IPO (the “Envestnet Shareholder”), merged with and into Envestnet, with Envestnet being the surviving entity. Upon consummation of the merger of the Envestnet Shareholder with and into Envestnet, certain stockholders of the Envestnet Shareholder are entitled to become a party to the registration rights agreement and to receive eachtransaction;

Transactions in which the Related Party’s interest derives solely from his or her ownership of less than 10% of the registration rights described below.

Demand Registration Rights. The holders of registrable securities have rights, at their request, to have their shares registered for resale under the Securities Act. Holders of at least 50% of registrable securities may demand the registration of their shares on up to two occasions within any 12‑month period if the gross proceeds from the registration of their shares would exceed $15,000,000.

Registration on Form S‑3. In addition to the demand registration rights discussed above, holders of at least 20% of the registrable securities may require that we register their shares of our common stock for public resale on Form S‑3 or similar short‑form registration statement if the gross proceeds from the registration of their shares of our common stock would exceed $5,000,000 and our Companyequity interest in another person (other than a general partnership interest) which is eligible to use Form S‑3.

Piggyback Registration Rights. The holders of approximately 2.5 million shares of registrable securities have rights to have their shares of our common stock registered for resale under the Securities Act if we register any of our securities, either for our own account or for the account of other stockholders, subject to the right of the underwriters involved in any such transaction to limit the number of shares of our common stock included in an underwritten offering.

The following Related Parties are currentlya party to the registration rights agreement: Judson Bergman (our Chairman and Chief Executive Officer and onetransaction;

Transactions in which the Related Party’s interest derives solely from his or her service as a director, trustee or officer (or similar position) of a not‑for‑profit organization or charity that receives donations from us;
Compensation arrangements of any executive officer (other than an individual who is an immediate family member of a Related Party) that have been approved by the Compensation Committee of our directors), William Crager (our President), Scott Grinis (our Chief Technology Officer), Brandon Thomas (our Chief Investment Officer),Board and James Johnson,that are reported in our annual meeting proxy statement or would be reported if the executive officer were a current director. Holders ofnamed executive officer; and
Director compensation arrangements that have been approved by our registrable securitiesBoard and that are entitled to the registration rights described above. Collectively, these reported in our annual meeting proxy statement.
Related Parties hold approximately 1.3 million shares covered by the registration rights agreement as of April 3, 2017.

Party Transactions

Since January 1, 2019, we have had no Related Party Transactions.
Indemnification of Directors and Executive Officers

We have entered into agreements to indemnify our directors and certain of our officers in addition to the right to indemnification provided to such persons in our certificate of incorporation and by‑laws. These agreements will, among other things, require us to indemnify these individuals to the fullest extent permitted under Delaware law, including for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by such person in any action or proceeding, including any action by or in our right, on account of services by any such person as a director or officer of our Company or as a director or officer of any of our subsidiaries, or as a director or officer of any other

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company or enterprise if any such person serves in such capacity at our request. We also intend to enter into indemnification agreements with our future directors and executive officers.

Did our insiders comply with

Delinquent Section 16(a) beneficial ownership reporting in 2016?

Reports

Our executive officers and directors are subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. Except as disclosed in the next sentence, we believe that all of our executive officers and directors complied with all filing requirements imposed by Section 16(a) of the Exchange Act on a timely basis during fiscal year 2016. One Form 4 was filed late for Mr. D’Arrigo with respect2019. Due to the transfer of stock from a joint account to his own name. Two Form 4s for each ofan administrative error, (1) Messrs. Arora, Grinis, Mayer and Thomas and Ms. O’Brien were filedeach late one in 2016filing a Form 4 to report our withholding of shares of common stock to satisfy their tax withholding obligations

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in connection with a vesting of restricted stock units and one(2) Mr. Arora was late in 2017,filing an additional Form 4 to report the forfeiture of restricted stock units in connection with his stepping down as our Vice Chairman and Chief Executive of Envestnet | Yodlee.
DIRECTOR COMPENSATION
Our non-employee directors receive an annual retainer of $190,000. Directors receive $50,000 of the annual retainer in cash and the remaining $140,000 in restricted stock units. The Chairperson of our Audit Committee receives an additional annual retainer of $25,000. The Chairpersons of our other committees receive an additional annual retainer of $20,000. The former lead independent director received an additional annual retainer of $30,000 for his service as lead independent director in 2019. All non-Chairperson committee members receive an additional annual retainer of $10,000 for each committee on which they serve. Any such additional annual retainer amounts paid to a director for serving on a committee as a Chairperson or as a member are paid 25% in cash and 75% in restricted stock units.
Anil Arora stepped down as Vice Chairman of Envestnet and Chief Executive of Envestnet | Yodlee effective March 1, 2019 and continues to serve as a director on our Board. Mr. Arora became entitled to compensation as a non-employee director beginning April 1, 2020.
Cash amounts paid to directors are paid quarterly with respect to the vestingpro rata portion of fees earned during that quarter. Equity amounts paid to directors are granted once a year no later than March 31st for the amounts earned during the previous year. With respect to equity awards granted in 2019, restricted stock units fully vest on the first anniversary of the grant.
In addition, all directors who join the Board receive an initial equity grant of $100,000 of restricted stock units.

All equity grants to our non‑employee directors are made pursuant to our 2010 Long‑Term Incentive Plan.
We also reimburse all of our directors for their reasonable expenses incurred in attending meetings of our Board or committees.
Stock Ownership Guidelines - Non-employee Directors
To align the interests of the non-employee members of our Board with the long-term interests of our shareholders, all non-employee directors must maintain an ownership level in our common stock equal to or greater than $300,000. Directors have four years to come into compliance with the ownership guidelines.
Director Compensation Table
The following table sets forth the compensation paid to our non-employee directors, except Mr. Arora, in 2019. Mr. Arora was an NEO for 2019 and his 2019 compensation is presented in the summary compensation tables included elsewhere in this proxy statement. 
Name 
Fees Earned
or Paid in Cash
($)
 
Option
Awards
($)(*)
 
Stock
Awards
($)(*)
 
Total
($)
Luis Aguilar 58,000
 —
 140,237
 198,237
Ross Chapin 66,920
 —
 167,254
 234,174
Gayle Crowell 63,000
 —
 148,527
 211,527
James Fox 64,420
 —
 156,754
 221,174
Valerie Mosley 57,750
 —
 24,437
 82,187
Charles Roame 64,590
 —
 152,886
 217,476
Gregory Smith 66,545
 —
 163,508
 230,053
*Restricted stock unit awards were granted on March 4, 2019 with a fair market value of $61.40. The amounts reported represent the aggregate grant date fair value during the fiscal year, as calculated under the Financial Accounting Standards Board’s Accounting Codification Topic 718 (“ASC 718”). Under ASC 718, the grant date fair value is calculated using the closing market price of our common stock on the date of grant, which is then recognized, subject to market value changes, over the requisite service period of the award.



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Outstanding Unvested Awards
As of December 31, 2019, the following unvested awards were outstanding for each non-employee director, except Mr. Arora whose outstanding unvested awards are set forth in the 2019 Outstanding Equity Awards at Fiscal Year-End table included elsewhere in this proxy statement:
Luis Aguilar146
options
2,417
restricted stock units
Ross Chapin488
options
2,949
restricted stock units
Gayle Crowell146
options
2,552
restricted stock units
James Fox458
options
2,772
restricted stock units
Valerie Mosley—
options
1,299
restricted stock units
Gregory Smith454
options
2,879
restricted stock units
Charles Roame438
options
2,675
restricted stock units

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

General

Our by‑laws divide our Board is divided into three classes with the terms of office of each class ending in successive years. Our by‑laws provide for a minimum of 5 and a maximum of 11 directors and empower our Board to fix the exact number of directors and appoint persons to fill any vacancies on the Board until the next Annual Meeting.

annual meeting.

Following the recommendation of the Nominating and Governance Committee, our Board has nominated William Crager to serve a two-year term to expire at the annual meeting in 2022 and Luis Aguilar, Ross Chapin, and James Fox as directors of Envestnet to each serve a three‑yearthree-year term to expire at the Annual Meetingannual meeting in 20202023 or, in each case, until their respective successors shall have beenhis successor is duly elected and shall have qualified.qualified or until his earlier resignation, removal, death or incapacity. Each nominee is currently serving as a director of Envestnet. Our Nominating and Governance Committee has been working with our directors and management over the last few years to identify qualified individuals to serve on our Board. Ms. Crowell and Messrs. Aguilar, Fox, Roame and Smith were identified through this process. Mr. Johnson has informed us of his desire to retire from the Board, which may occur prior to the expiration of his term.


THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THESE NOMINEESEACH NOMINEE AS DIRECTORSA DIRECTOR OF ENVESTNET.

It is the intention of the persons named as proxies, subject to

If any direction to the contrary, to vote in favor of the candidates nominated by the Board. We know of no reason why any nominee may be unable to serve as a director. If anydirector nominee is unable to serve, yourthe individuals named as proxy may vote for another nominee proposed by the Board, or the Board may reduce the number of directors to be elected. We know of no reason why any nominee may be unable to serve as a director. If any director resigns, dies, or is otherwise unable to serve out his or her term, or the Board increases the number of directors, the Board may fill the vacancy until the Annual Meeting.

We have setnext annual meeting of shareholders.

Set forth below is information with respect to the nominees for election as directors and the other directors whose terms of office as directors will continue after the Annual Meeting. There are no arrangements or understandings between any director and any other person pursuant to which any director was or is selected as a director or nominee.

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Nominee for election for a term expiring in 2022 (Class III)

Nominees for election for term expiring in 2020 (Class II)

William Crager

Mr. Crager, age 56, serves as our Chief Executive Officer. Previously, Mr. Crager served as our Interim Chief Executive Officer between October 2019 and March 2020, Chief Executive of Envestnet Wealth Solutions since January 2019, and President of Envestnet since 2002. Prior to joining us, Mr. Crager served as Managing Director of Marketing and Client Services at Rittenhouse Financial Services, Inc., an investment management firm affiliated with Nuveen Investments. Mr. Crager received an MA from Boston University and a BA from Fairfield University, with a dual major in economics and English.
Mr. Crager’s qualifications to serve on our Board include his extensive familiarity with the financial services industry acquired through his 20 years with the Company and his prior work experience.

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Nominees for election for a term expiring in 2023 (Class II)
Luis Aguilar

Mr. Aguilar, age 63, was appointed to the Company’s66, has served as a member of our Board effectivesince March 29, 2016. Mr. Aguilar is Principal in Falcon Cyber Investments, an investment fund exclusively focused on cyber security investment and was a Commissioner at the U.S. Securities and Exchange Commission from July 2008 through December 2015. Prior to his appointment as an SEC Commissioner, Mr. Aguilar was a partner with the international law firm of McKenna Long & Aldridge, LLP (subsequently merged with Dentons US LLP), specializing in corporate and securities law. Mr. Aguilar'sAguilar’s previous experience includes serving as the general counsel, head of compliance, executive vice president,Executive Vice President and corporate secretaryCorporate Secretary of Invesco, Inc. with responsibility for all legal and compliance matters regarding Invesco Institutional. While at Invesco, in the 1990’s, he was also managing directorManaging Director for Latin America and president of one of Invesco’s broker-dealers. His career also includes tenure as a partner at several prominent national law firms: Alston & Bird LLP; Kilpatrick Townsend & Stockton LLP; and Powell Goldstein Frazer & Murphy LLP (subsequently merged with Bryan Cave LLP). He began his legal career as an attorney at the U.S. Securities and Exchange Commission.

Mr. Aguilar represented the Commission as its liaison to both the North American Securities Administrators Association and to the Council of Securities Regulators of the Americas. He also served as the sponsor of the SEC'sSEC’s first Investor Advisory Committee.

Mr. Aguilar serves as a director of Donnelley Financial Solutions, Inc. and MiMedx Group, Inc.

He has been a Principal in Falcon Cyber Investments, an investment firm exclusively focused on cyber security investment, since January 2016.

Mr. Aguilar is a graduate of the University of Georgia School of Law, and also received a master of laws degree in taxation from Emory University. He had earlier earned a bachelor'san undergraduate degree from Georgia Southern University.

Mr. Aguilar’s qualifications to serve on our Board include his experience as an SEC Commissioner and his extensive experience in corporate, securities and compliance matters, especially as they apply to investment advisers,advisors, investment companies and broker-dealers, contribute to his qualifications to serve on our Board.

broker-dealers.

Ross Chapin

Mr. Chapin, age 64,67, has served as a directormember of our CompanyBoard since 2001. In October 2018, Mr. Chapin isretired as a Managing Director of Parametric Portfolio Associates LLC, a provider of structured portfolio management, which he joined as a senior executive in October 2005. Prior to Parametric, Mr. Chapin co‑founded Orca Bay Partners, a private equity firm, in 1998. Mr. Chapin received an MBA from Columbia University in finance and accounting, and has an undergraduate degree from Denison University.

Mr. Chapin hasqualifications to serve on our Board include his broad knowledge of the financial services industry and financial products acquired through his experience at Parametric. In addition, the Board benefits from Mr. Chapin’s experience with a broad range of companies and industries acquired as a result of the review and analysis of investments by Orca Bay Partners and his education in finance and accounting.

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James Fox

Mr. Fox, age 65,68, has served as a directormember of our CompanyBoard since 2015.2015 and Chairman of the Board since March 2020. Mr. Fox most recently retired as Non ExecutiveNon-Executive Chairman of FundQuest, Inc., upon its acquisition by the Company, effective December 2011 after serving in that role since September 2010 and, prior to that, as President and Chief Executive Officer starting in October 2005. Mr. Fox has over 30 years of senior executive experience with The BISYS Group, Inc. and First Data Corporation starting in 1989 and currently1989. He serves on two additional boards in different industries. He isas a Director and Chairmandirector of the Audit Committee for kgb,of Madison CF (UK) Limited, Brinker Capital Holdings, Inc. and a Director of Ultimus Fund Solutions, LLC. Mr. Fox has previously served as a board member of several public and private companies.

He

Mr. Fox participated in the Advanced Management Program at the Wharton School of the University of Pennsylvania. He earned his MBA in Finance from Suffolk University and his BAundergraduate degree in Economicseconomics from the State University of New York.

Mr. Fox’s qualifications to serve on our Board include his extensive experience in the business and financial services industry, financial reporting, and his knowledge gained from service on the boards of various other companies.

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Directors whose terms of office will continue after this meeting

Directors whose terms expire in 2018 (Class I)

James Johnson

Mr. Johnson,

Directors whose terms expire in 2021 (Class I) 
Valerie MosleyMs. Mosley, age 79,60, has served as a directormember of our CompanyBoard since 2000. Mr. JohnsonOctober 2018. Ms. Mosley is CEO of Valmo Ventures, a General Partnercompany that creates, collaborates, and Founder of Apex Venture Partners, LLC or Apex, a private equity firm, which he foundedinvests in 1988. Priorcompanies, assets, and efforts that have significant potential to founding Apex, Mr. Johnsongrow, profit and add value to society. Ms. Mosley was one of three founding partners of Knightsbridge Partners, Inc., a private investment firm. Prior to Knightsbridge, Mr. Johnson served in senior management roles with Beatrice Foods Co., including corporate Chief Financial Officer and Senior Vice President, Partner, Portfolio Manager and Investment Strategist at Wellington Management Company, LLP, a $1.2 trillion global money management firm. Ms. Mosley also chaired the firm’s Industry Strategy Group, which took a long-term perspective to identify trends, headwinds, and tailwinds impacting various industries. As a member of its $6 billion U.S. Foods subsidiary. Mr. Johnsonseveral investment strategy groups, Ms. Mosley helped establish investment parameters to which team portfolio managers adhered. Ms. Mosley serves as a board member at Groupon, Inc., Dynex Capital, Inc., and Eaton Vance Funds. Ms. Mosley received anher MBA from Northwesternthe University of Pennsylvania and a BSan undergraduate degree from LoyolaDuke University.

Mr. Johnson has experience with a broad range of companies and industries acquired as a result of

Ms. Mosley’s qualifications to serve on the review and analysis of investments by Apex and Knightsbridge Partners. The Board also benefits from Mr. Johnson’sinclude her experience in senior financial andthe wealth management roles at Beatrice Foods and his education in business administration.

business.

Charles Roame

Mr. Roame, age 51,54, has served as a directormember of our CompanyBoard since 2011.2011 and Vice Chairman of the Board since March 2020. Mr. Roame is a private investor and advisor to dozens of worldwide CEOs in the financial services and fintech markets. Mr. Roame also serves as a board member at Edelman Financial Services, LLCEngines (and the related affiliates of Hellman & Friedman, which ownsown the majority of Edelman Financial Services)Engines), as a board member of FacetWealth and as a trustee for the SA Funds (wherewhere he chairs the Nominating & Governance Committee and serves on the Audit and Nominating & Governance committees).  Committee. Mr. Roame has also served as the Managing Partner of Tiburon Strategic Advisors, LLC, a provider of research, strategy consulting, and other related services primarily to financial services firms, and the Tiburon Partners Fund, since 1998. Tiburon has published over 1,9002,400 industry research papers, served hundreds of financial services companies and hosts the semi-annual Tiburon CEO Summits. Mr. Roame received his MBA from the University of Michigan and a BAan undergraduate degree from Michigan State University.

Mr. Roame’s qualifications to serve on our Board are primarily based oninclude his experience as an advisor in the wealth management and fintech industry, experience.

including in the area of corporate strategy.

Gregory Smith

Mr. Smith, age 53,56, has served as a directormember of our CompanyBoard since 2015. Mr. Smith currently is an Executive‑in‑Residence and Lecturer at the University of Wisconsin‑Milwaukee’s Lubar School of Business, as well as Managing Partner of Barnett Management Advisors, LLC.Business. Prior to joining the University of Wisconsin‑Milwaukee, Mr. Smith served as Senior Vice President and Chief Financial Officer of the Marshall & Ilsley Corporation and M&I Bank from 2006 until the company’s sale to BMO Harris Bank in 2011. Prior to joining Marshall & Ilsley, Mr. Smith held progressively senior roles during a 16 year16-year Wall Street investment banking career, including six years as a Managing Director. He is currently a Director and Vice Chairman of the Church Mutual Insurance Company and its subsidiary CM Vantage Specialty Insurance Company. He is also a board member of the University School of Milwaukee and the Milwaukee Symphony Orchestra. He served as a Trustee of the Milwaukee County Pension Fund in 2014 and 2015. Mr. Smith is an honors graduate of both Princeton University, where he received a BAan undergraduate degree, and The University of Chicago where he received an MBA. More recently, he has been recognized as a Board Leadership Fellow by the National Association of Corporate Directors.

Mr. Smith’s qualifications to serve on our Board include his extensive experience in accounting, liquidity, budgeting and forecasting, treasury, capital management, tax and mergers and acquisitions and his knowledge gained from service on the boards of various other companies contribute to his qualifications to serve on our Board.

acquisitions.

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Directors whose terms expire in 2019 (Class III)


Judson Bergman

Mr. Bergman, age 60, is the founder of our Company and has served as our Chairman, Chief Executive Officer and a director since 1999. Since founding the Company, he has focused on guiding the company’s strategy and overseeing its organizational and business development. Prior to founding our Company, Mr. Bergman was the Managing Director for Mutual Funds at Nuveen Investments, where he was responsible for the profitable growth of the firm’s mutual fund business and also served on the firm’s Investment Management Committee. He also directed Nuveen’s product and corporate development activity where he helped build the firm’s closed-end fund business, led the development and growth of Nuveen’s separately managed accounts business and helped guide the firm’s expansion into asset classes beyond municipal investments. Mr. Bergman received his MBA in finance and accounting from Columbia University and received a BA from Wheaton College.

Mr. Bergman has extensive familiarity with the financial services industry acquired through his years with the Company and his experience at Nuveen as well as his educationDirectors whose terms expire in finance and accounting.

2022 (Class III)

Anil Arora

Mr. Arora, age 56,59, has served as a director andmember of our Board since November 2015. He served as Vice Chairman of our Company, and Chief Executive of Envestnet | Yodlee sincefrom November 2015. Prior to then, he was2015 until February 2019. He previously served as President and Chief Executive Officer and a director of Yodlee, Inc. since February 2000. Mr. Arora served as the Chairman of the board of directors of Yodlee, Inc. from March 2014 through November 2015. Prior to joining Yodlee, from June 1998 to February 2000, Mr. Arora served in various positions with Gateway, Inc., a computer hardware manufacturer which was acquired by Acer Inc. in October 2007, most recently as senior vice president,Senior Vice President, Gateway Internet and prior to that as chief marketing officerChief Marketing Officer with global responsibility for Gateway. From April 1995 to May 1998, Mr. Arora served in various positions for The Pillsbury Company, a subsidiary of General Mills, Inc. a manufacturer and marketer of branded consumer foods, including as vice president,Vice President, strategy and marketing for North America and vice president, general manager for Progresso. From June 1984 to April 1995, Mr. Arora served in various brand management and corporate strategy and operations roles for Kraft Foods Group, Inc., a manufacturer and marketer of leading branded consumer foods. Mr. Arora currently serves on the board of directors of Conagra Brands, Inc., a manufacturer of food products. Mr. Arora holds ana MBA from the University of Michigan and a BSan undergraduate degree in business administration from Rockford College.

Mr. Arora’s qualifications to serve on our Board include his experience in the technology industry and the operational insight and expertise he accumulated as President and Chief executive officerExecutive Officer of Yodlee, Inc.

Gayle Crowell

Ms. Crowell, age 66, was appointed to the Company’s Board effective March 29, 2016.Prior to that she69, has served as lead independent directora member of Yodlee, Inc. fromour Board since March 2014 and2016. She served as a member of the Yodlee, Inc. board of directors from July 2002 until November 19, 2015, when Yodlee, Inc. was acquired by the Company.Company, and as lead independent director of Yodlee, Inc. between March 2014 and November 2015. Ms. Crowell has served as an operational business consultant for Warburg Pincus LLC, a private equity firm, sincefrom June 2001.2001 to January 2019. From January 2000 to June 2001, Ms. Crowell served as president of Epiphany, Inc., a developer of customer relationship management software which was acquired by SSA Global Technologies, Inc. in September 2005. Ms. Crowell currently serves on the boardboards of directors of MercuryGate International, Inc.,Pliant Therapeutics, a cloud-based transportation management system technology provider, as well as Dude Solutions Inc.,biotechnology company developing therapies for fibrotic diseases and Hercules Capital, a provider of facilities maintenance software.specialty finance company. Ms. Crowell received a BSan undergraduate degree in education from the University of Nevada at Reno.

Ms. Crowell’s qualifications to serve on our Board include her experience as a senior executive and director of a public company and her experience in the technology industries.

industry.


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INFORMATION ABOUT OUR COMMON SHARE

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

How much stock is owned by directors and executive officers? 

Security Ownership of Management
The following table sets forth, information, as of April 3, 2017, regardingMarch 16, 2020, the beneficial ownership of our common stock by our current directors, our Named Executive Officers (as defined in “Executive Compensation - Compensation Discussion and executive officers whose compensation is reported in the compensation tables that appear later in this proxy statement, to whom we refer as our named executive officers,Analysis”) and by our directors and executive officers as a group. Unless otherwise indicated, the named individual has sole voting and investment power over the common stock under the column “Shares Held.” Directors, executive officers and employees are prohibited from engaging in any short sales involving our securities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

  

Unvested

  

 

  

 

 

 

 

 

 

Options

 

RSUs

 

 

 

 

 

 

 

 

 

Exercisable

 

Vesting

 

Total

 

Beneficial

 

 

 

 

 

within

 

within

 

Beneficial

 

Ownership

 

Name

  

Shares Held

 

60 Days (1)

 

60 Days (2)

 

Ownership

 

Percentages

 

Jud Bergman (3)

 

666,259

 

488,313

 

42,410

 

1,196,982

 

2.71

%

Bill Crager (4)

 

145,970

 

266,231

 

17,153

 

429,354

 

*

 

Scott Grinis

 

215,467

 

110,742

 

3,185

 

329,394

 

*

 

Pete D’Arrigo

 

5,343

 

312,996

 

10,353

 

328,692

 

*

 

Anil Arora (5)

 

73,892

 

6,666

 

 —

 

80,558

 

*

 

Ross Chapin

 

37,694

 

22,238

 

64

 

59,996

 

*

 

Charles Roame (6)

 

12,374

 

16,693

 

53

 

29,120

 

*

 

James Johnson

 

2,016

 

25,711

 

60

 

27,787

 

*

 

Gayle Crowell (7)

 

10,498

 

 —

 

801

 

11,299

 

*

 

Gregory Smith

 

5,634

 

1,626

 

55

 

7,315

 

*

 

James Fox

 

3,634

 

1,626

 

55

 

5,315

 

*

 

Luis Aguilar

 

801

 

 —

 

801

 

1,602

 

*

 

All Directors and Executive Officers as a Group

 

1,179,582

 

1,252,842

 

74,990

 

2,507,414

 

5.58

%

Name Shares Held 
Options
Exercisable
within
60 Days (1)
 
Unvested
RSUs
Vesting
within
60 Days
 
Total
Beneficial
Ownership
 
Beneficial
Ownership
Percentages
Judson Bergman (2) —
 —
 —
 —
 —
William Crager (3) (4) 251,299
 107,365
 1,434
 360,098
 *
Scott Grinis 37,901
 17,667
 559
 56,127
 *
Peter D’Arrigo 61,291
 55,130
 963
 117,384
 *
Anil Arora (5) 27,441
 20,000
 —
 47,441
 *
Ross Chapin 47,020
 30,517
 225
 77,762
 *
Charles Roame (6) 17,255
 24,940
 185
 42,380
 *
Gayle Crowell (7) 8,775
 1,745
 133
 10,653
 *
Gregory Smith 18,106
 8,038
 216
 26,360
 *
James Fox 15,725
 8,082
 219
 24,026
 *
Luis Aguilar 11,532
 1,745
 133
 13,410
 *
Valerie Mosley 4,362
 —
 —
 4,362
 *
Stuart DePina 80,453
 1,565
 938
 82,956
 *
Josh Mayer 22,462
 30,085
 559
 53,106
 *
All Directors and Executive Officers as a Group 914,461
 389,111
 6,404
 1,309,976
 2.44%
*Denotes beneficial ownership of less than one percent. Beneficial ownership percentages are based on 53,195,798

shares of our common stock outstanding as of March 16, 2020.

(1)

Includes options vested and exercisable within 60 days of April 3, 2017.

March 16, 2020.

(2)

Includes restricted stock units vesting within 60 days of April 3, 2017, which includes 41,666 performance shares, 16,666 performance shares, and 10,000 performance shares for Mr. Bergman Mr. Crager and Mr. D’Arrigo respectively.

passed away before March 16, 2020, the determination date for this table.

(3)

Includes 132,500 shares held as security in a margin account.

(4)

Includes 100 shares indirectly held by Mr. Crager’s wife.

(5)

(4)

Includes 100,000 shares held as security in a margin account.

(5)Includes 272 shares held by a trust for the benefit of each of Mr. Arora’s children oftwo trusts in which Mr. Arora is a trustee.

(6)

Includes 8,95213,038 shares held by a trust in which Mr. Roame is the trustee and 3,146 shares indirectly held by Tiburon Strategic Advisors, LLC, of which Mr. Roame is Managing Partner.

trustee.

(7)

All 10,498Includes 3,852 shares are held by a trust in which Ms. Crowell is a trustee and beneficial owner.


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Which stockholders own more than 5%

Security Ownership of our common stock? 

Certain Beneficial Owners 

The following table showssets forth, as of March 16, 2020,  all persons we know to be direct or indirect owners of more than 5% of our common stock as of the close of business on April 3, 2017, unless otherwise indicated. Our information is based on reports filed with the SEC by each of the firms listed in the table below. You may obtain these reports from the SEC.

 

 

 

 

 

 

 

    

Number of

    

 

 

 

 

Shares

 

 

 

 

 

Beneficially

 

Percent of

 

Name and Address of Beneficial Owner

    

Owned

    

Class

  

Wellington Management Group LLP (fka Wellington Management Company, LLP) (1)

 

4,235,752

 

9.71

%

 280 Congress Street

 

 

 

 

 

 Boston, MA 02210

 

 

 

 

 

Wells Fargo & Company (2)

 

3,885,235

 

8.90

%

 420 Montgomery Street

 

 

 

 

 

 San Francisco, CA 94104

 

 

 

 

 

Janus Capital Management LLC (3)

 

3,465,055

 

7.94

%

 151 Detroit Street

 

 

 

 

 

 Denver, CO 80206

 

 

 

 

 

The Vanguard Group (4)

 

3,115,552

 

7.14

%

 100 Vanguard Blvd.

 

 

 

 

 

 Malvern, PA 19355

 

 

 

 

 

BlackRock Inc. (5)

 

2,527,196

 

5.79

%

 55 East 52nd Street

 

 

 

 

 

 New York, NY 10022

 

 

 

 

 

Name and Address of Beneficial Owner 
Number of
Shares
Beneficially
Owned
 
Percent of
Class
BlackRock Inc. (1) 6,114,301
 11.5%
55 East 52nd Street    
New York, NY 10055    
The Vanguard Group (2) 4,728,634
 8.9%
100 Vanguard Blvd.    
Malvern, PA 19355    
Janus Henderson Group PLC (3) 3,777,457
 7.1%
201 Bishopsgate    
EC2M 3AE, United Kingdom    
Wells Fargo & Company (4) 3,580,362
 6.7%
420 Montgomery Street    
San Francisco, CA 94163    

(1)

Based on Amendment #8#4 to Schedule 13G filed by Wellington Management Group, LLP (fka Wellington Management Company, LLP)BlackRock, Inc. (“Blackrock”) on February 9, 201710, 2020, reporting the amount of securities beneficially owned as of December 31, 2016, Wellington reports2019. BlackRock reported sole voting power with respect to 6,030,153 shares and sole dispositive power with respect to 6,114,301 shares.

(2)Based on Amendment #5 to Schedule 13G filed by The Vanguard Group (“Vanguard”) on February 12, 2020, reporting the amount of securities beneficially owned as of December 31, 2019. Vanguard reported sole voting power with respect to 103,158 shares, shared voting power with respect to 3,664,81012,434 shares, sole dispositive power with respect to 4,619,930 shares, and shared dispositive power with respect to 4,235,752108,704 shares.

(2)

(3)

Based on Amendment #3#2 to Schedule 13G filed by Janus Henderson Group PLC (“Janus Henderson Group”) on February 13, 2020, reporting the amount of securities beneficially owned as of December 31, 2019. Janus Henderson Group reported shared voting and shared dispositive powers with respect to 3,777,457 shares.

(4)Based on Amendment #8 to Schedule 13G filed by Wells Fargo & Company and certain of its subsidiaries ("(“Wells Fargo"Fargo”) on January 10, 2017,February 4, 2020, reporting the amount of securities beneficially owned as of December 31, 2016,2019. Wells Fargo reportsreported sole voting power with respect to 50,047165,054 shares, shared voting power with respect to 432,337428,109 shares, sole dispositive power with respect to 50,047165,054 shares, and shared dispositive power with respect to 432,3373,415,308 shares.

(3)

Based on Amendment #1 to Schedule 13G filed by Janus Capital Management LLC on February 13, 2017 reporting the amount of securities beneficially owned as of December 31, 2016, Janus Capital Management reported sole voting and dispositive power with respect to 3,465,055 shares.

(4)

Based on Amendment #2 to Schedule 13G filed by The Vanguard Group on February 9, 2017 reporting the amount of securities beneficially owned as of December 31, 2016, Vanguard reports sole voting power with respect to 82,280 shares, shared voting power with respect to 5,047 shares, sole dispositive power with respect to 3,030,152 shares and shared dispositive power with respect to 85,400 shares.

(5)

Based on Schedule 13G filed by BlackRock, Inc. on January 30, 2017 reporting the amount of securities beneficially owned as of December 31, 2016, BlackRock reported sole voting power with respect to 2,444,951 shares and sole dispositive power with respect to 2,444,951 shares.


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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (“CD&A”)
This section describes the compensation program for the 2019 Named Executive Officers (“NEOs”) and the compensation changes implemented by the Compensation Committee for fiscal year 2019. The NEOs for 2019 include:

Named Executive Officers for 2019    
NameTitle*
Judson BergmanFormer Chief Executive Officer (“CEO”) and Chairman of the Board
Anil AroraFormer Chief Executive, Envestnet | Yodlee
William CragerInterim Chief Executive Officer, President, and Chief Executive, Envestnet Wealth Solutions
Peter D’ArrigoChief Financial Officer (“CFO”)
Scott GrinisChief Technology Officer
Stuart DePinaChief Executive, Envestnet Data & Analytics
Joshua MayerChief Operating Officer
*The titles in the table above reflect positions held by the NEOs as of the end of 2019.
Leadership Changes
On January 9, 2019, William Crager, President of Envestnet assumed the position of Chief Executive, Envestnet Wealth Solutions, which includes Envestnet Enterprise, Envestnet | Tamarac, Envestnet Retirement Solutions and Envestnet | MoneyGuide. Stuart DePina assumed the role of Chief Executive, Envestnet Data & Analytics, which includes Envestnet | Yodlee. Concurrent with this reorganization, Anil Arora stepped down as Vice Chairman of Envestnet and Chief Executive of Envestnet | Yodlee, effective February 28, 2019. Mr. Arora continues to serve as a director of Envestnet and is entitled to compensation as a non-employee director of Envestnet beginning April 1, 2020.
Following the unexpected and sudden passing of Judson Bergman, our Chairman and Chief Executive Officer, on October 3, 2019, the Board implemented Envestnet’s emergency succession plan. Effective October 3, 2019, William Crager, President of Envestnet at the time and Chief Executive, Envestnet Wealth Solutions, was appointed as interim Chief Executive Officer. Effective March 30, 2020, Mr. Crager was appointed as Chief Executive Officer and continues in his role of Chief Executive, Envestnet Wealth Solutions, and Stuart DePina, the Chief Executive, Envestnet Data & Analytics, was appointed as President of Envestnet. Mr. Crager had served as President of Envestnet since 2002.
Highlights of 2019 and Long-Term Performance
Overall Envestnet achieved solid performance in 2019 demonstrated by growth in revenue of 11%. GAAP net loss was
$17.2 million and GAAP net loss per diluted share was $0.33. Adjusted EBITDA and adjusted net income per diluted share (“adjusted EPS”) grew at 23% and 12%, respectively. These results improved from 2018 due to revenue growth, management of operating expenses, and acquisition activity. Revenue, adjusted EBITDA, and adjusted EPS are important value drivers for our business as we look to grow while maintaining profitability.
Financial Performance 2019 versus 2018
 a1yrperf.jpg
Adjusted EBITDA and adjusted net income per diluted share are non-GAAP measures. Please see

Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure. 


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Strategic Accomplishments 
Wealth platform advisors increased by 5,403 representing a 5.6% year-over-year increase.
Wealth platform accounts increased by more than 1.0 million representing a 9.7% year-over-year increase.
Wealth platform assets increased by almost $1.0 trillion representing a 36.2% year-over-year increase.
Signed and onboarded new enterprise customers.
Completed the acquisition of MoneyGuide - the leading goals-based financial planning application used by financial advisors.
Completed the acquisition of PortfolioCenter - Schwab Performance Technologies’ portfolio management and reporting technology solution for independent registered investment advisors (RIAs).
5 Year Performance
In 2019, we continued to build on our proven record of innovation and growth. We operateexperienced robust revenue growth, and increased our market share in the growing $20 trillion advisor marketplace. We now serve roughly one in three advisors, including 40% of large RIAs (those with over $1 billion in assets under management). Envestnet’s 2019 performance continues to demonstrate our ability to build sustained core growth across all our key metrics and to achieve our long-term strategic goals. Additionally, our cumulative total shareholder return for the last 5 years was 41.7% and has exceeded that of the Russell 2000 Index of 38.7%.
While our GAAP net income (loss) varied from year-to-year, our non-GAAP performance, which adjusts primarily for non-cash and non-recurring expenses, was strong and continued to improve, as illustrated below.
  2014 ($) 2015 ($) 2016 ($) 2017 ($) 2018 ($) 2019 ($)
GAAP Net Income (Loss) in Thousands 13,979
 4,436
 (55,567) (3,280) 4,010
 (17,202)
GAAP Net Income (Loss) per Share attributable to Envestnet 0.38 0.12 (1.30) (0.08) 0.12 (0.33)
a5yrperfjpga01.jpg
Adjusted EBITDA and adjusted net income per diluted share are non-GAAP measures. Please see Appendix A for a highly competitive environmentdiscussion and reconciliation to the most directly comparable GAAP measure.
Shareholder Engagement and 2019 Say-on-Pay Vote
Envestnet’s current executive compensation program reflects a comprehensive evaluation by the Compensation Committee and management, and includes the feedback and perspectives of shareholders. In 2019, Envestnet’s compensation program received support from approximately 98% of votes cast. Due to the strong level of support, we maintained our existing executive compensation program for 2019 in response to this vote. However, Envestnet has continued to regularly solicit feedback from shareholders regarding our executive compensation program.
In the last year, we contacted shareholders representing approximately 92% of our outstanding shares, and received feedback from shareholders representing approximately 20% of our outstanding shares. Each discussion with our shareholders was interactive and constructive. We also engaged with proxy advisory firms to gain insight into their views on our executive compensation programs. Our Committee and management will continue to reach out to our shareholders on an annual basis.

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Discussions in 2019 and 2020 continue to indicate that shareholders are generally supportive of our current approach to executive compensation. Shareholders expressed a range of views on potential performance metrics, although there is widespread support for the current metrics. The Committee will continue to keep this, and all aspects of the program under review.
The Compensation Committee is committed to engaging with shareholders on executive compensation and making changes that are directly responsive to shareholder feedback and that enhance alignment of our executive compensation program with the Envestnet business strategy.
Envestnet’s Compensation Philosophy and Guiding Principles
Our Company’s philosophy is designed to attract and retain talented executives who can executemotivate employees and provide them with competitive, performance-based compensation that encourages achievement of results that create long-term shareholder value. Our total rewards practices are aligned with the market, consistent with our strategy.risk profile and reflective of solid governance practices. The discussion below describes the material elements of the 2016 compensation program for our named executive officers and the manner in which compensation decisions were made.

Philosophy and Objectives

Our executive compensation philosophy, as established by our Compensation Committee, is designed to:

·

Attract and retain skilled executive officers;

·

Support our business strategy and objectives; and

·

Align the interests of our executive officers with those of our stockholders through a pay‑for‑performance philosophy.

We have established a set of guiding principles that have provided the foundation for all compensation programs for executive officers and all other employees. These guidingfollowing principles are as follows:

·

Pay for performance in such a way as to drive our business strategy and objectives and create shareholder value, consistent with an acceptable risk profile and through legal and ethical means;

·

The amount of overall total compensation should be attractive to executive officers, affordable for the company, proportional to the executive officer’s contribution, and fair to shareholders and employees, while providing payouts that are clearly aligned with actual performance;

·

Compensation should be transparent, understandable and effectively communicated to shareholders and employees; and

·

Avoid controversial pay practices.

We are committed to providing a comprehensive total rewards program to attract, retain, and reward highly qualified, diverse and productive employees. The total rewards program emphasizes alignment of employee efforts to support our corporate strategies. The components of the program include compensation, benefits, learning and development opportunities and recognition of employee performance. We strive to remain externally competitive in relevant labor markets while maintaining internal equity. The program also promotes fiscally responsible pay decisions, encourages efficient use of our resources and ensures compliance with applicable legal and contractual requirements.

To our employees, our compensation philosophy means fair pay based on their role in the company, a subjective determination of the market value of their job and their performance in that position. In addition, there is opportunity for additional rewards when we meet or exceed business objectives. Performance rewards provide employees with the opportunity to earn additional compensation beyond their base salary.

Compensationbasis for our executive officers consists of three primary elements: A base salarycompensation program and align pay with performance and shareholder interests:

Compensation is based on clearly articulated goals and results.
We reward performance consistent with our long-term business strategy and aligned with long-term shareholder value creation.
Envestnet’s Executive Compensation Program
As noted, our guiding principles form the basis for our executive compensation program which is paidstructured as follows.
Compensation ComponentPurposeKey Design Features
Base SalaryAttracts and retains NEOs with a market competitive level of fixed compensation• Level set with reference to market, to reflect role scope, criticality, individual experience, and individual performance.
Annual Incentive Plan (“AIP”)Aligns compensation with annual company results
• Short-term variable compensation
• Maximum value capped at 125% of target
• Earned based on performance in four areas: revenue (35%), adjusted EBITDA (20%), adjusted EPS (20%) and individual/team performance (25%)
• Subject to the Clawback Policy
Restricted Stock Units (“RSUs”)Provides employees with company stock to maintain retention while aligning with shareholder interests of sustainable value creation
• Long-term variable compensation
• Represents 50% of the target value of long-term equity-based compensation
• Awards vest over three years, with one-third vesting on the first anniversary of grant and one-twelfth vesting on each three-month anniversary for the following two years
• Subject to the Clawback Policy
Performance Stock Units (“PSUs”)Aligns compensation to the long-term business objectives designed to create shareholder value.
• Long-term variable compensation
• Represents 50% of the target value of long-term equity-based compensation
• Maximum vesting capped at 150% of target
• Performance measured over three years
• Earned based on performance in four equally weighted areas: revenue growth, adjusted EBITDA growth, adjusted EPS growth and relative TSR
• Awards accrue dividends
• Subject to the Clawback Policy
The performance metrics used in semi‑monthly cash installments, an annual incentive‑based cash payment, which is typically paid in February of the subsequent year or in quarterly installments and an annual grant of restricted stock units and stock options. For details regarding why we pay each element and how the amounts are determined, see “—Our 2016 Executive Compensation Program—Base Salary,” “—Our 2016 Executive Compensation Program—Annual Incentive‑Based Cash Compensation,” and “—Our 2016 Executive Compensation Program—Equity Awards.” Although these sections discuss our practices employed in 2016, generally we plan to continue these practices in future years.

incentive plans have been selected given their clear alignment with our strategic priorities.

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MetricWhy It Matters
RevenueRevenue is an important measure of top-line results.
Adjusted EBITDAAdjusted EBITDA is an important measure of bottom-line results.
Adjusted EPSThe inclusion of adjusted EPS as a performance metric may prevent growing either revenue or adjusted EBITDA solely through acquisitions that might otherwise be dilutive on a per-share basis.
Individual/Team PerformanceIndividual and team performance are measured based on established goals and metrics. These outcomes have a direct impact on our economic results and the success of our organization.
Relative TSRRelative Total Shareholder Return was selected for its alignment with shareholders.


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The majority of target pay, defined as salary paid in the year, target bonus and the approved target equity value, for our Named Executive Officers in 2019 was delivered in variable, at-risk compensation.

envexecutivecompensation.jpg
(1) Other NEOs is an average of target compensation for Messrs. D’Arrigo, Grinis, DePina, and Mayer.
What We do not have a specific policyDo and What We Don’t Do
Our Compensation Committee believes that governs the allocation ofour compensation between cashpractices are key to furthering our compensation principles and non‑cash compensation or between long‑term or current compensation. The allocations are driven primarily through a desire to pay what we view as competitive compensation, as determined solely by us based on our review of broad‑based third party surveys and other generally available information, which we have historically used to obtain a general understanding of market compensationensuring sound governance practices.

What We Do
What We Don’t Do
• Pay for performance by basing a substantial part of NEO’s compensation on Company and individual performance, including PSUs
• Conduct annual outreach with investors and an annual say-on-pay advisory vote
• Strong emphasis on long-term equity compensation; majority of NEO’s pay is in the form of equity compensation
• Retain an independent compensation consultant
• Maintain a Clawback Policy on incentive awards
• Require stock ownership (as a multiple of base salary) for NEOs
• No single trigger vesting of equity awards following a change in-control
• No excise-tax “gross-ups”
• No Supplemental Executive Retirement Plan (“SERP”)
• No re-pricing of underwater stock options
• No excessive perquisites
• No hedging of Company’s securities by employees
Role of Compensation Committee and Management

The Compensation Committee consists of three independent non‑employee members of our Board. The Compensation Committee reviews and, as it deems appropriate, recommends to the Board policies, practices and procedures relating to the compensation of officers and other managerial employees and the establishment and administration of employee benefit plans.

The Compensation Committee determines, and recommends to the Board for approval, the Chief Executive Officer’s compensation without the participation of the Chief Executive Officer. The Compensation Committee is also responsible for reviewing the performance of the Chief Executive Officer. Our Chief Executive Officer is the only executive officer that has a role in determining the compensation of our named executive officers other than himself. The Chief Executive Officer will provide the Compensation Committee with recommendations, which the Committee has the discretionresponsibility to approve or disapprove, for (a) changes to base salary, (b) distribution of annual incentive‑based cash compensationoversee and (c) restricted stock and stock option grants.

Competitive Market Review 

In 2015, the Compensation Committee retained an independent third party compensation specialist, Compensation Advisory Partners (“CAP”), to assist in identifying and facilitating certain changes to our compensation and employee retention programs, including the amounts of compensation paid to our senior management, including the named executive officers, and advice regarding employment agreements. As a result of this analysis, in 2016 employment agreements were implemented for key executive officers and additional market adjustments were made as needed and approved by the Compensation Committee.

Our 2016 Executive Compensation Program

Our 2016approve executive compensation program had three primary components: base salary, annual incentive‑based cash compensation and equity awards.

Base Salary. Base salaries are intended to provide our executives with a degree of financial certainty and stability that does not depend on company performance. In determining the base salaries for our Chief Executive Officer and the other named executive officers, the Compensation Committee,programs at the beginning of each year, reviews the overall scope of each executive officer’s responsibilities while taking into account the base salaries paid by companies with which we compete for talent. For 2016, base salary adjustments were based on a subjective determination of competitive market rates, individual performance, changes in job duties and responsibilities and our overall financial performance. We did not follow a specific formula or set of criteria in determining base salary adjustments in 2016.

Market data, such as the base salary of comparable jobs at comparable companies, were reviewed to provide guidance as to what constitutes competitive base salaries. In addition, individual performance of the executive’s duties and responsibilities is also considered. If the executive has performed his or her duties above expectations, then an increase in the base salary may be justified. Similarly, if the executive is given different duties or responsibilities or if they have changed jobs within the company, then their base salary may be increased or decreased accordingly.

In all cases where base salaries may be changed, the overall compensation budget must be sufficient for such changes. In certain extreme cases, our financial results and performance may lead to reductions in base salaries as a cost cutting measure.

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Annual Incentive‑Based Cash Compensation. We maintain an annual incentive‑based cash compensation program comprising two elements: the Annual Incentive Program, which is intended to reward executives and eligible employees based on our revenue growth and profitability; and Incentive Compensation, which is intended to reward executives and employees for gross sales from expanding existing client relationships and developing new client relationships.

Beginning in 2015, the Compensation Committee established a two part process for paying annual incentive-based cash compensation to its executive officers. For the first step, in order for the payment of the incentive-based cash compensation to qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code, the Compensation Committee established a performance goal based on performance metrics pursuant to the 2010 Long-Term Incentive Plan. If the performance goal is not met, no annual incentive-based cash compensation will be paid to executive officers for such year. If the performance goal is met, for the second step, a cash bonus pool is established pursuant to which payments can be made to the executive officers as described below for the Annual Incentive Program and Incentive Compensation subject to the applicable limits contained in the 2010 Long-Term Incentive Plan.

Annual Incentive Program. Under the Annual Incentive Program, a predetermined percentage of the revenues and profits from the preceding year are distributed to employees, including our executive officers.Envestnet. At the beginning of each year, the Compensation Committee approves the calculation methodology, or formula, which will be used atcomponents of compensation for the NEOs, the individual performance goals for the Chief Executive Officer (“CEO”), and sets the performance goals for any related compensation programs.

At the end of the year, to determine the amount of the annual incentive distribution. The formula includes the distribution amount as a percentage of revenues and EBITDA, as adjusted for certain items as defined by the Compensation Committee as well as a stretch incentive targetconducts an in-depth review of overall Company results and a minimum threshold. The distribution percentage, as determined by the Compensation Committee, is generally derived by (a) investigating the annual compensation practices of comparable financial services firms and (b) considering the resulting aggregate incentive for management and employees to meet or exceed the firm’s financial expectations.

In calculating the amount to be paid under the Annual Incentive Program, the Compensation Committee utilizes revenues and adjusted EBITDA, which is priorCEO’s performance relative to the payment of any amount paid pursuant to the Annual Incentive Program and certain extraordinary non‑cash or non‑recurring general and administrative expenses.identified goals. The Compensation Committee may exercise its discretion to adjust for revenues and expenses attributable to acquisitions, as well as extraordinary or non‑recurring gains or losses. The amounts paid for 2016 under the Annual Incentive Program were based on our financial performance during the 12‑month period ending December 31, 2016. The Compensation Committee established a minimum threshold amount of revenue and adjusted EBITDA, defined as described above, of $459.5 million and $69.2 million, respectively. Performance above either or bothCEO provides an overview of the minimum threshold amounts would result in an aggregate annual incentive pool amountperformance of 0.25% of total revenue for revenue equal to or in excesseach of the threshold amount plus 0.25% of total revenue for each incremental $5.8 million of revenue between $459.5 million and $494.4 million plus 1.65% of the excess revenue above $494.4 million plus 3.30% of the incremental revenue above $552.5 million plus 5.12% of incremental revenue above $581.6 million plus 3.30% of incremental revenue above $639.8 million and 4.25% of threshold adjusted EBITDA if the threshold amount has been achieved plus 13.4% of the excess adjusted EBITDA above the threshold amount plus 23.4% of incremental adjusted EBITDA above $115.3 million. The Compensation Committee has final authority to exercise its discretion in setting compensation amounts or awards for the company as a whole and for individuals and is not bound by the formula or by recommendations of Mr. Bergman nor of any consultant. For the amount to be earned in 2016, the Compensation Committee agreed with management’s recommendation and approved the amount to be paid under the Annual Incentive Program of approximately $19.5 million.

At the end of each year, an allocation of the Annual Incentive Program to each eligible employee, including executive officers, is made. The CEO recommendsother NEOs to the Compensation Committee the distribution amounts for each executive officer, including himself, based on a subjective analysis of his or her performance. For the named executive officers, the CEO subjectively assesses their performance broadly with consideration given to four general categories: integrity, intelligence/business knowledge, qualitative considerations and effectiveness. No quantitative criteria are used. The CEO’s analysis is based on his sole and absolute discretion when assessing performance. Similarly, the amounts he recommends for individual Annual Incentive Program recommendations are based on his sole and absolute discretion. The CEO presents his recommendations to the Compensation Committee for their consideration along with his

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individual Annual Incentive Program distributioncompensation recommendations. The Compensation Committee reviewsexercises its discretion to make changes to any recommendations made by the CEO and makes the final approval for annual incentive distributionsapproves all compensation decisions for the named executive officers,NEOs with the objective of ensuring that compensation delivered is aligned with the achieved performance results. Compensation decisions for the CEO, including the CEO. For the year ending December 31, 2016, the Compensation Committee chose to accept the individual annual bonus distribution recommendations which it received from the CEO. Distributions of the Annual Incentive Program earned for a fiscal yearinterim CEO, are paid in the subsequent fiscal year, generally within the first two months.

Incentive Compensation. We maintain a compensation program with amounts paid to eligible employees as incentive compensation based on a target percentage of gross sales, though the total amount of incentive compensation is not an exact percentage of gross sales. The target percentage is revised annually. For the purposes of determining the total amount available for incentive compensation, we estimate our new fee revenue based on gross sales. We do thismade by calculating the average fee paid on all of our products, taking into account differing fee rates on the various products we sell and various fee schedules related to different client programs. The average will also vary by region due to the mix of clients and products within each region. In 2016, we targeted 12.0% of such estimated fee revenue to be used for total incentive compensation, with discretion to award total incentive compensation of up to an additional 1.5% of estimated fee revenue. Incentive Compensation amounts are calculated quarterly and paid out in 20.0% installments over the subsequent five quarters. Incentive Compensation payments are not guaranteed. The recipient must still be employed at the time of payment. Incentive Compensation payments are allocated among sales and service personnel and sales management, and the allocation of the incentive compensation payments is approved at the discretion of Mr. Bergman and Mr. Crager. In exercising their discretion, these officers annually establish a framework of percentages of the total available amount that is to be paid to different categories of employees, but there is no predetermined formula. The amount of the Incentive Compensation payments may also be adjusted based on our overall performance. In 2016, approximately $13.6 million in incentive compensation was earned by eligible employees, of which Mr. Crager received $182,000. Mr. Crager is the only executive officer who receives Incentive Compensation. The amount of Mr. Crager’s Incentive Compensation was based on our total gross sales and the CEO’s subjective assessment of his leadership and overall results of the sales organization.

Equity Awards. We grant stock options and restricted stock units to our current and newly hired executive officers to enable them to share in our success and to reinforce a corporate culture that aligns employee interests with the interests of our stockholders. All equity grants to our executive officers to date have been awarded under the Envestnet Asset Management Group, Inc. 2004 Stock Incentive Plan, the Envestnet, Inc. 2015 Acquisition Equity Award Plan, or the 2010 Long‑Term Incentive Plan (the “Equity Plans”). It has been our practice to annually grant equity awards to employees, including executives, in recognition of performance and as an incentive for retention, as well as to align their interests with the interests of our stockholders. The size of these grants is based on a number of factors, including our subjective analysis of competitive practices, individual performance as determined in the discretion of the Compensation Committee, changes in the scope of the individual’s position, internal equity and retention potential. Ultimately, all amounts were determined in the sole and absolute discretion of the Compensation Committee based on its conclusions as to what was appropriateassessment of Company results and necessary after considerationhis individual performance.

In 2018 and the first half of these factors. The2019, the Compensation Committee uses a formula similarretained Compensation Advisory Partners (“CAP”) to assist the revenue componentCompensation Committee with the review of the Annual Incentive Program described above. The grants made in 2016 were based on our financial performance duringexecutive compensation programs. CAP worked with the 12‑month period ending December 31, 2015. The Compensation Committee established a minimum threshold amountto develop the peer group used in the 2017 and 2018 compensation decisions and provided the data on executive compensation design practices and pay levels among those peer companies.
In the second half of revenue, defined as described above, of $342.8 million. Performance above2019, the minimum threshold amounts would resultCompensation Committee retained Willis Towers Watson to advise the Compensation Committee on matters including the peer group used in an aggregate annual stock option pool amount of 0.22% of shares outstanding for revenue equal to or in excess of the threshold amount plus 0.22% of total shares outstanding for each $4.3 million of incremental revenue between $342.8 million2019 compensation decisions and $364.2 million plus 0.019% of shares outstanding for revenue above $364.2 million plus 0.038% of shares outstanding for each $4.3 million of incremental revenue above $407.1 million plus 0.061% of shares outstanding for each $4.3 million of incremental revenue above $428.5 million plus 0.038% of shares outstanding for each $4.3 million of incremental revenue above $471.4 million. The value of the options is estimated using the Black Scholes methodology described below in footnote 2 of the 2016 Grants of Plan‑Based Awards table. The value of restricted stock units results in a dollar‑for‑dollar offset to the value of the annual stock option pool amount. Historically, vesting for equity award grants occurs annually on the anniversary of the grant date with one‑third vesting on each of the first three anniversaries. In 2015, stock options were granted that vest over three years, with one third (1/3) of the award vesting on the first anniversary of the grant date and one-twelfth (1/12) of the option award vesting on each three-month anniversary for the following two years, and restricted stock units were granted with one-twelfth (1/12) of the restricted stock unit award vesting on each three-month anniversary for the following three years. In 2016, stock options and restricted stock units were granted that vest over three years, with one third (1/3) of the award vesting on the first anniversary of the grant date and one twelfth (1/12) of the option award vesting on each three-month anniversary

executive compensation.

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Peer Group
The Compensation Committee should have a full understanding of competitive practices with respect to both pay levels and pay design to inform decision making. In 2017, the Compensation Committee adopted a peer group to provide these insights. Selection criteria used to identify peers included industry, size and the extent to which they were a competitor for business, talent, and investment.
The peer group for 2017- 2018 compensation decisions comprised the following companies:    
2017-2018 Peer Company Group (1)
Blucora, Inc.MarketAxess Holdings Inc.SS&C Technologies Holdings, Inc.
Cornerstone OnDemand, Inc.Morningstar, Inc.The Ultimate Software Group, Inc. (2)
FactSet Research Systems Inc.MSCI Inc.WageWorks, Inc. (3)
Fair Isaac CorporationSEI Investments CoWorkday, Inc.
(1) DST Systems and Financial Engines, Inc. previously removed following their respective acquisitions during 2018.
(2) Acquired in February 2019 by private equity.
(3) Acquired in August 2019 by HealthEquity.
Envestnet’s Compensation Committee took into account revenue and market capitalization when reviewing compensation levels for NEOs. To supplement this peer group information, the Compensation Committee also reviewed data from third party surveys, particularly technology firms, to obtain a broad view of the competitive marketplace for talent. Total direct compensation for the NEOs was positioned between the 25th percentile and median of this peer group, consistent with our relative size.
In light of the fast-paced nature of our industry, and the reduction of the peer group to 12 following two years. In keepingacquisitions of peer group companies in 2019, in the third quarter of 2019 the Compensation Committee engaged its independent compensation consultant to conduct a review of the peer group. The goal was to ensure the group was more robust in terms of size, while remaining relevant and appropriate for Envestnet. As with the 2017 review, foundational criteria were established to identify potential peers:
Listed companies in the application software industry that conduct business similar to Envestnet
Companies with revenues and market capitalization within a reasonable range of Envestnet
Companies that consider Envestnet a peer
Companies considered peers of Envestnet by other third parties
Having established a list based on these criteria, judgment was applied as to the relevance of potential peers based on the extent to which they are perceived by Envestnet to be competitors for talent. As a result of the review the following 16 company peer group was approved and used for 2019 compensation decisions:
2019 Peer Group
Retained CompaniesNew Companies
Blucora, Inc.Morningstar, Inc.ACI Worldwide
Cornerstone OnDemand, Inc.MSCI Inc.AssetMark Financial Holdings
FactSet Research Systems Inc.SEI Investments CoBottomline Technologies
Fair Isaac CorporationSS&C TechnologiesGuideware Software
MarketAxess Holdings Inc.New Relic
RealPage
Zendesk
Three companies were removed from the peer group:
Ultimate Software and WageWorks in light of their respective acquisitions, and
Workday given it is significantly larger than Envestnet, and has limited relevance given its business mix
Relative to this new peer group, Envestnet ranked at median on revenue and around the 20th percentile on market capitalization. Market data from this group, as well as broader contextual information, was taken into account in establishing any compensation changes for 2020.

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Compensation Decisions Made in 2020 for 2019 Performance
In the first quarter of each year, the Compensation Committee and management consider the performance for the prior fiscal year when determining annual practice of issuingcash bonuses as well as equity grantsawards for the NEOs. The equity awards granted in the first quarter of each year are made for performance in the company’s fiscalprior year and therefore the equity awards granted in 2020 are considered part of 2019 compensation.
Overall, Envestnet performance was strong in 2019 as reflected in our above expectations revenue and adjusted EBITDA performance relative to our long-term strategic plan, underpinned by the significant individual contributions by each of our NEOs. Incentive compensation decisions for 2019 are reflective of strong corporate performance and significant individual contributions.
Based on this process, the Committee approved the following compensation decisions in 2020 for 2019 performance. This table reflects how the Compensation Committee authorized equity grants equalmakes compensation decisions and is not intended to 1.10%replace the Summary Compensation Table information provided on page 33:
Name 2019 AIP and Bonus (Paid in 2020) 
Number of RSUs
Granted in 2020
(for 2019 performance)
 
Number of PSUs Granted in 2020
(for 2019 performance)
 Total Number of Units (1)
William Crager 500,000  31,797
  31,797
  63,594
 
Stuart DePina 463,989  18,349
  10,400
  28,749
 
Peter D’Arrigo 310,000  11,924
  11,924
  23,848
 
Scott Grinis 210,000  2,981
  2,981
  5,962
 
Joshua Mayer 210,000  4,637
  4,637
  9,274
 
(1)Grant date values: Mr. Crager $4,800,000; Mr. DePina $2,170,000; Mr. D’Arrigo $1,800,000; Mr. Grinis $450,000; Mr. Mayer $700,000.
These decisions and payments were made before the full global extent of our outstanding numberCOVID-19 became apparent. The Compensation Committee will consider the business and financial impact to Envestnet, Inc. in evaluating 2020 performance in early 2021.
Base Salary. In 2019, Mr. DePina received an increase following his change in position as Chief Executive of sharesEnvestnet Data & Analytics. NEO base salaries will be reviewed as of December 31, 2015. Consistent with our executive compensation philosophy and to better align the interests of our employees with those of our stockholders through pay‑for‑performance, the number of shares of each award was made 50% in restricted stock units and 50% in stock options.

Additionally, in 2016, in connection with entering into new employment agreements, and pursuant to the 2010 Long-Term Incentive Plan, Mr. Bergman, Mr. Crager and Mr. D’Arrigo each received a one-time performance-based restricted stock unit award in 2016 (the “PSU Awards”), Mr. Bergman received a one-time stock option grant, and Mr. Grinis received a one-time restricted stock unit award (the “RSU Award”). Subject to the termspart of the PSU Award and the plan, the executive will earn a percentage of his PSU Award based on the Company’s Adjusted EBITDA for the relevant performance period. To the extent the Adjusted EBITDA during the performance period is less than sixty percent (60%) of the applicable goal, then no PSUs shall be earned. To the extent that the performance measure is satisfied following the end of each of the performance periods, a number equal to the total number of PSUs multiplied by an applicable performance percentage shall be earned and become “Banked Units.” To the extent any units are settled, they will no longer be considered Banked Units. Subject to the executive’s continued employment, the executive shall become vested ratablyannual compensation process in his outstanding Banked Units on each of the first three anniversaries of the grant date determined as follows: one-third (1/3) of the Banked Units following the first performance period shall become vested on the first anniversary of the grant date; one-half (1/2) of the outstanding Banked Units following the second performance period shall become vested on the second anniversary of the grant date; and all of the remaining Banked Units following the third and final performance period shall become vested on the third anniversary of the grant date (such percentage of vesting referred to as the vested percentage)early 2020.

Annual Incentive Program (“AIP”). The stock option grant to Mr. Bergman will vest as follows: one-third (1/3) of the stock options shall become vested on the first anniversary of the grant date and one twelfth (1/12) of the stock options shall become vested on each quarterly anniversary of the grant date thereafter. The RSU Award to Mr. Grinis will vest as follows: one-third (1/3) of the RSU Award shall become vested on the first anniversary of the grant date and one twelfth (1/12) of the RSU Award shall become vested on each quarterly anniversary of the grant date thereafter

Our CEO, with the help of his management team, recommended toIn 2018, the Compensation Committee individuals who should receive equity awards, the componentsapproved an Annual Incentive Plan for NEOs and other executives to encourage achievement of the award and the size of each individual award.our near-term objectives. The individual component and distribution amounts that were recommended wereplan rewards executives based on a combination of Company and individual goals. Company performance is measured based on revenue, adjusted EBITDA, and adjusted EPS. Individual and team performance assessment included achievement of strategic objectives, financial performance, and other goals specific to roles.

To determine payments made in 2020 for 2019 performance under the CEO’s subjective review of each individual’sAIP, the Committee evaluated Company performance within his or her role in our against the pre-established financial goals (as described below).
Company sinceperformance comprises 75% and individual/team performance comprises 25% under the previous year’s grant, as well as a subjectiveannual incentive plan.
  Metric Weighting Threshold ($) Target ($) Maximum ($) 
2019
Actual ($)
 Payout by Metric*
Revenue ($mil.) 35% 815.00 850.00 - 885.00 930.00 909.40 85%
Adjusted EBITDA ($mil.) 20% 157.50 169.00 - 175.00 185.00 193.30 85%
Adjusted EPS 20% 1.92 1.93 - 2.11 2.21 2.15 82.5%
Individual/Team Performance Evaluation 25% Based on Individual Assessment
Payout as % of Target   50% 90% - 110% 125%    
*For the determination of the competitive practices necessarypercentage for the payout by metric, the 2019 actual results were adjusted to retain key employees. This recommendation was submittedexclude amounts attributable to the acquisition of MoneyGuide.
For each NEO, the Compensation Committee evaluated their individual and team performance against their respective pre-defined metrics. The performance percentage for its considerationsuch metric assigned to each executive was between 80% and approval. As noted above,125% based on such assessment, which, when combined with the Compensation Committee has final authority to exercise its discretion in setting compensation amounts or awards, and the components of those amounts or awards and is not bound by the use of any formula or recommendationsresults of the CEO norfinancial metrics, resulted in the payments noted in the table below.

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Table of any consultant. In its discretion,Contents

Based on 2019 Company performance and NEO accomplishments, the Compensation Committee approved the recommendationsfollowing AIP and bonus payments.
  Target AIP ($) AIP Payout ($) Payout as % of Target Additional Payment ($) Total AIP and Bonus Payment ($)
William Crager 588,000
 500,000
 85% —
 500,000
Stuart DePina 480,000
 453,989
 97% 10,000
 463,989
Peter D’Arrigo 375,000
 310,000
 83% —
 310,000
Scott Grinis 245,000
 210,000
 86% —
 210,000
Joshua Mayer 235,000
 210,000
 89% —
 210,000
Equity Awards. Equity awards are granted annually to eligible employees, including NEOs, to recognize performance, to align equity participants with the interests of our shareholders and to retain top talent. Long-term equity incentive awards represent a significant portion of the NEO’s total compensation.
Consistent with recent years, NEOs’ 2019 equity awards were made in the form of PSUs and RSUs, under the Envestnet shareholder-approved plans.
Performance Share Units (PSUs)
Introduced in 2018

Account for 50% of the equity mix unless otherwise noted

Vest subject to performance measured over three years

Consistent with 2018, 2019 awards subject to four equally weighted measures: revenue growth, adjusted EBITDA growth, adjusted EPS growth and relative TSR
Awards accrue dividends that are paid to the extent the award is earned

Awards subject to Clawback Policy
Revenue growth, adjusted EBITDA growth, and adjusted EPS growth were selected for the PSU program as submitted.they are important measures of top-line and bottom-line results. While some of the metrics overlap with the Annual Incentive Plan, the PSUs are measured based on growth over a three-year period, focusing executives on sustained multi-year results, and requiring year-over-year growth in order to reach the target goals. Relative TSR was selected for its alignment with shareholder interests. No PSUs will be earned if achievement is below the threshold level. The equity grants to our named executive officers on February 29, 2016following performance goals were as follows:

 

 

 

 

 

 

 

 

 

    

Number of Shares

    

 

    

 

 

 

 

Underlying 2016

 

Number of Shares

 

Total Number of Shares

 

 

 

Restricted Stock

    

Underlying 2016

    

Underlying February 2016

 

Name

 

Awards

 

Options

 

Equity Award Grants

 

Judson Bergman

 

8,932

 

8,932

 

17,864

 

Anil Arora

 

 —

 

 —

 

 —

 

William Crager

 

5,852

 

5,852

 

11,704

 

Peter D’Arrigo

 

4,235

 

4,235

 

8,470

 

Scott Grinis

 

3,234

 

3,234

 

6,468

 

approved for the 2019 PSUs granted in 2020:

27

Metric Metric Weighting Threshold Target Maximum
Revenue Growth (CAGR*) 25% 8% 14% 20%
Adjusted EBITDA Growth (CAGR) 25% 10% 16% 22%
Adjusted EPS Growth (CAGR) 25% 10% 16% 22%
Relative TSR compared to Russell 2000 Index Constituents 25% 35th Percentile Median 75th Percentile
Payout as % of Target   50% 100% 150%
* Compound Annual Growth Rate

Restricted Stock Units (RSUs)
Account for 50% of the equity mix

Vest over three years, with one-third vesting on the first anniversary of grant and one twelfth (1/12) vesting on each three-month anniversary for the following two years

Awards subject to Clawback Policy

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Additionally, as noted above, Mr. Bergman, Mr. Crager and Mr. D’Arrigo received

The Committee approved the following PSU Awards on May 12, 2016,awards in 2020 in respect of performance for 2019:
Name Target Equity Value ($) PSUs Awarded Weight of PSUs RSUs Awarded Weight of RSUs
William Crager 4,800,000
 31,797
 50% 31,797
 50%
Stuart DePina (1) 2,170,000
 10,400
 50% 10,400
 50%
Peter D’Arrigo 1,800,000
 11,924
 50% 11,924
 50%
Scott Grinis 450,000
 2,981
 50% 2,981
 50%
Joshua Mayer 700,000
 4,637
 50% 4,637
 50%
(1)In addition to the grants made in the table for Mr. DePina for his performance in 2019, Mr. DePina also received a grant of 7,949 RSUs as an additional retention grant as part of the consideration for his agreement to enter into a new employment agreement in July of 2019.    
The Committee determined to continue using PSUs for the 2020-2022 performance period and Mr. Grinis receivedretained the following RSU Award on August 2, 2016weighting of PSUs to 50% of total long-term incentives granted in consideration for entering into employment agreements with the Company. Mr. Bergman also received the following one-time Option Grant on May 12, 2016.

2020 to NEOs.

 

 

 

 

 

 

 

 

 

 

 

Number of Shares

 

Number of Shares

 

 

 

Total Number 

 

 

Underlying 2016

 

Underlying 2016

 

Number of Shares

 

of Shares

 

 

One-Time

 

One-Time

 

Underlying 2016

 

Underlying 2016 

 

 

Performance Stock

 

Restricted Stock

 

One-Time

 

One-Time

Name

    

Unit Awards

    

Unit Awards

    

Option Grants

    

Equity Award Grants

Judson Bergman

 

125,000

 

 —

 

25,000

 

150,000

Anil Arora

 

 —

 

 —

 

 —

 

 —

William Crager

 

50,000

 

 —

 

—

 

50,000

Peter D’Arrigo

 

30,000

 

 —

 

—

 

30,000

Scott Grinis

 

 —

 

35,000

 

—

 

35,000

Supplemental Benefits

Benefits and Perquisites
We provide the following benefits to our executives on the same basis as provided to all of our employees:

·

Health, dental and vision insurance;

·

Life insurance;

·

Medical and dependent care flexible spending account;

·

Short‑ and long‑termShort and long-term disability, accidental death and dismemberment;

·

A 401(k) plan, with company match; and

·

A college scholarship plan for employees’ children.

We believe theseour benefits arepackage is consistent with companies with which we compete for talent.

 In addition to the benefits described above, our NEOs receive certain limited perquisites. Perquisites available to NEOs include an allowance for parking and for a car and an allowance for health and wellness activities.

Recoupment
Stock Ownership Guidelines - NEOs
The Company believes that requiring executive ownership in our common stock creates alignment between executives and shareholders and encourages executives to act to increase shareholder value. The stock ownership guidelines for NEOs are as follows:
CEO - equity in the Company worth 6x base salary
All other NEOs - equity in the Company worth 3x base salary
​    These guidelines must be met within five years of earnedbecoming the CEO or other NEO and are reviewed annually by the Board.
NEOs are required to hold exercised option shares and other stock awards

We do until ownership requirements are met. NEOs who fail to achieve these ownership levels will not currently havebe eligible to sell shares until they comply with the guidelines.

Shares owned directly by the NEO (including those held as a formal policy requiringjoint tenant or as tenant in common), RSUs (vested and unvested), shares owned in a fixed courseself-directed IRA and certain shares owned or held for the benefit of actiona spouse or minor children are counted toward meeting the guidelines. Stock options (whether vested or unvested) and performance share awards are not counted toward meeting the ownership guidelines.    
As of December 31, 2019, all NEOs were in compliance with respectthe guidelines.
Envestnet, Inc. Clawback Policy
In January 2018, the Compensation Committee adopted the Envestnet, Inc. Clawback Policy (the “Clawback Policy”), which provides that in the event a “covered person” engages in fraud or other intentional misconduct that is materially related to compensation adjustments following later restatementsa restatement of our financial results. Under those circumstances,statements or that results in material financial or reputational harm to the Board orCompany (a “clawback event”), the Compensation Committee would evaluatedetermine, in its discretion, whether compensation adjustments were appropriate,any unsettled incentive awards held by the covered person would be forfeited or any previously settled incentive awards held by such person would be required under applicable law, based onto be repaid to the facts and circumstances relating to any such restatement.

Regulatory limitations

Section 162(m)Company. For purposes of the Internal Revenue Clawback Policy, a “covered person” is any person who is an “officer” (as that term is defined in Section 16 of the Exchange Act), as well as any other officer of the Company designated by the Compensation Committee.


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Covered persons that cease to be employed by the Company or are no longer “officers” under Section 16 of the Exchange Act continue to be subject to the Clawback Policy with respect to their covered awards, provided that the Compensation Committee has discretion to remove an individual’s designation as a covered person. The Clawback Policy applies to all incentive compensation (including cash bonuses and equity awards) from the Company that is awarded, earned, vested or settled during or after the fiscal year in which a clawback event occurs or is either outstanding during or has a performance period that relates to the fiscal year in which the clawback event occurs (“covered awards”). The entirety of covered awards is subject to forfeiture or recoupment, in the discretion of the Compensation Committee, under the Clawback Policy.
Impact of Tax Treatments on Compensation
Code generallySection 162(m) limits the deductibility for federal income tax purposes of annual compensation in excess of $1 million paid to “covered employees” (as defined by Code) of the Company, unless the compensation satisfied an exception, such as the exception for performance-based compensation. Performance-based compensation generally includes only payments that are contingent on achievement of performance objectives, and excludes fixed or guaranteed payments. 
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other things, repealed the performance-based compensation exception and expanded the definition of covered employee. The changes to Section 162(m) are effective for taxable years beginning after December 31, 2017. The Act includes a transition rule so that these changes do not apply to compensation paid pursuant to a “binding written contract” that was in effect on November 2, 2017 and that was not materially modified on or after such date. 
Because of the performance-based compensation exception repeal, amounts paid pursuant to a contract effective after November 2, 2017 will not be deductible as performance-based compensation, and the Compensation Committee will not need to consider the requirements of the performance-based compensation exception when considering the design of any such future contracts as part of our compensation program. For amounts paid under contracts in effect on November 2, 2017 that were intended to constitute performance-based compensation, the Compensation Committee will continue to consider the performance-based compensation exception when making determinations of performance under those contracts. 
The Act also expands the definition of covered employee. For 2017, our covered employees included the CEO and other NEOs (but not the CFO) who were executive officers as of the last day of our fiscal year. For 2018 and after, our covered employees will generally include anyone who (i) was the CEO or CFO at any time during the year, (ii) was one of the other NEOs who was an executive officer as of the last day of the fiscal year and (iii) was a covered employee for any previous year after 2017. 
As with prior years, although the Compensation Committee will consider deductibility under Section 162(m) with respect to the chief executive officer or any of the next three most highly paidcompensation arrangements for executive officers, deductibility will not be the sole factor used in determining levels or methods of a publicly held corporation (other thancompensation. Since our compensation objectives may not always be consistent with the Chief Financial Officer). We expect that on an ongoing basisrequirements for full deductibility, we will generally consider whether a form ofand our subsidiaries may enter into compensation willarrangements under which payments would not be deductible under Section 162(m) in determining executive compensation, though other factors will also be considered. However, we may authorize compensation payments that do not comply with the exemptions under Section 162(m) when we believe that such payments are appropriate to attract and retain executive talent.

.

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In light of the strong shareholder support on our say‑on‑pay proposal in 2016, we made no significant changes to the executive compensation program based on concerns or issues raised by our shareholders. We continue to desire feedback from our shareholders on our executive compensation program and will consider the views of our shareholders as we evaluate our compensation program in 2017.

2016

2019 Summary Compensation

 Table

The following table contains compensation information for our former Chief Executive Officer, our Chief Executive Officer, our Chief Financial Officer, and the three other most highly compensated executive officers. officers who were serving as executive officers at the end of 2019, and one additional executive officer who was one of our most highly compensated executive officers in 2019 but who was not serving as an executive officer at the end of 2019.
We refer to these individuals as our “named executive officers” or NEOs in other parts of this proxy statement. The information included in this table reflects compensation paid to our NEOs for services rendered to us.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Awards (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Option

 

All Other

 

 

 

Name and

 

 

 

Salary

 

Bonus

 

Units

 

Awards

 

Compensation

 

Total

Principal Position

    

Year

    

($)

    

($)(1)

    

($)

    

($)

    

($)(3)

    

($)

Judson Bergman

 

2016

 

 

600,000

 

 

440,000

 

 

4,061,945

 

 

409,415

 

 

25,160

 

 

5,536,520

Chief Executive Officer

 

2015

 

 

444,000

 

 

340,000

 

 

625,008

 

 

366,637

 

 

16,160

 

 

1,791,805

 

 

2014

 

 

450,000

 

 

400,000

 

 

527,184

 

 

341,342

 

 

16,060

 

 

1,734,586

Anil Arora

 

2016

 

 

425,000

 

 

381,543

 

 

 —

 

 

 —

 

 

14,300

 

 

820,843

CEO Envestnet | Yodlee

 

2015

 

 

425,000

 

 

375,000

 

 

3,246,000

 

 

265,167

 

 

 —

 

 

4,311,167

William Crager

 

2016

 

 

375,000

 

 

240,000

 

 

1,671,525

 

 

51,050

 

 

196,516

 

 

2,534,090

President

 

2015

 

 

344,000

 

 

 —

 

 

409,488

 

 

240,210

 

 

327,549

 

 

1,321,247

 

 

2014

 

 

344,500

 

 

100,000

 

 

372,376

 

 

237,090

 

 

150,000

 

 

1,203,966

Peter D’Arrigo

 

2016

 

 

325,000

 

 

295,000

 

 

1,017,760

 

 

36,944

 

 

14,960

 

 

1,689,664

Chief Financial Officer

 

2015

 

 

313,788

 

 

242,000

 

 

296,340

 

 

173,836

 

 

5,960

 

 

1,031,925

 

 

2014

 

 

305,000

 

 

275,000

 

 

276,144

 

 

178,238

 

 

5,860

 

 

1,040,242

Scott Grinis

 

2016

 

 

300,000

 

 

220,000

 

 

1,398,079

 

 

28,212

 

 

10,450

 

 

1,956,741

Chief Technology Officer

 

2015

 

 

239,000

 

 

180,000

 

 

215,520

 

 

126,426

 

 

5,300

 

 

766,246

 

 

2014

 

 

239,500

 

 

200,000

 

 

167,360

 

 

104,252

 

 

5,200

 

 

716,312

        Equity Awards (1)      
Name and Title Year Salary ($) 
Bonus
($)(2)
 
Stock Units
($)
 
Option
Awards
($)
 Non-Equity Incentive Comp ($)(3) 
All Other
Comp
($)(4)
 Total ($)
Judson Bergman
Former CEO & Chairman of the Board
 2019 490,646 493,287
 2,994,319
 —
 —
 17,364
 3,995,616
 2018 600,000 57,100
 2,869,369
 —
 642,900
 30,997
 4,200,366
 2017 600,000 600,000
 1,095,362
 167,126
 —
 26,065
 2,488,553
William Crager
CEO, Chief Executive, Envestnet Wealth Solutions & former President (5)
 2019 375,000 —
 2,002,939
 —
 500,000
 24,047
 2,901,986
 2018 375,000 14,250
 1,771,560
 —
 535,750
 17,285
 2,713,845
 2017 375,000 500,000
 545,240
 83,186
 —
 16,576
 1,520,002
Peter D’Arrigo
Chief Financial Officer
 2019 325,000 —
 1,088,763
 —
 310,000
 20,361
 1,744,124
 2018 325,000 —
 981,599
 —
 375,000
 19,104
 1,700,703
 2017 325,000 350,000
 366,135
 55,864
 —
 18,389
 1,115,388
Stuart DePina
President & Chief Executive, Envestnet Data & Analytics
 2019 480,000 10,000
 5,915,411
 —
 453,989
 142,101
 7,001,501
Scott Grinis
Chief Technology Officer
 2019 300,000 —
 559,234
 —
 210,000
 10,705
 1,079,939
 2018 300,000 —
 536,136
 —
 248,050
 93,274
 1,177,460
 2017 300,000 242,000
 212,390
 32,401
 —
 10,313
 797,104
Joshua Mayer
Chief Operating Officer

2019 333,193 —
 451,949
 —
 210,000
 20,810
 1,015,952
Anil Arora
Former Chief Executive,
Envestnet | Yodlee
 2019 73,012 —
 —
 —
 —
 1,993,665
 2,066,677
 2018 437,750 —
 1,569,613
 —
 —
 14,331
 2,021,694
 2017 437,750 433,373
 634,000
 —
 —
 13,739
 1,518,862

(1)

Bonuses earned for a fiscal year are paid in the subsequent fiscal year, generally within the first two months (e.g. the bonuses earned for 2016 were paid in February 2017). The amounts disclosed in the Bonus column relate to amounts paid under our Annual Incentive Program.

(2)

Amounts disclosed in the Equity Awards column relate to grants of restricted stock units, performance stock units, and stock options in the identified year, including, with respect to 2016, as described previously, the receipt of one-time grants of equity awards in consideration for executive officers entering into employment agreements with the Company, including the following awards: 125,000 PSU Awards and 25,000 stock options for Mr. Bergman, 50,000 PSU Awards for Mr. Crager, 30,000 PSU Awards for Mr. D’Arrigo, and 35,000 RSU Awards for Mr. Grinis.year. With respect to each equity grant, the amounts disclosed reflect the full grant date fair value in accordance with Financial Accounting Standards Board Accounting Standards Codification TopicASC 718. Our assumptions

(2)Prior to 2018, amounts paid under our AIP were disclosed in the Bonus column. Bonuses earned for a fiscal year were paid in the subsequent fiscal year, generally within the first two months (e.g., the amounts earned for 2018 were paid in February 2019). In addition, with regardrespect to determiningMr. Crager, $231,750 was earned for 2017 as a result of his participation in a short-term incentive compensation program pursuant to which eligible participants may receive awards from a pool amount based on Envestnet’s gross sales. A portion of his short-term incentive compensation was paid in the 2016 stock option values are set forthyear following the year in note 2which it was earned. Mr. Bergman and Mr. Crager each received discretionary bonus payments for 2018 and Mr. Arora received a discretionary bonus payment for 2019 in the amounts noted above in addition to the 2016 GrantsAIP amounts for 2018 and 2019 respectively described in Note 3 below. For Mr. Bergman, following his death on October 3, 2019, Mr. Bergman’s estate was entitled to a payment of Plan Based Awards table.

a pro-rata portion of his 2019 annual bonus payment in an amount equal to $493,287.

(3)

Beginning in 2018, amounts paid under our AIP are disclosed in the Non-Equity Incentive Compensation column. Non-Equity Incentive Compensation payments are based on fiscal performance and are paid in the subsequent fiscal year, generally within the first two months (e.g., the amounts earned for 2018 were paid in the February 2019). For more information, see “Executive Compensation - Compensation Decisions Made in 2020 for 2019 Performance - Annual Incentive Program.”

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Table of Contents

(4)
For Mr. Bergman, the amountsamount disclosed reflectreflects a parking and car allowance of $10,860$8,964, and matching contributions to his 401(k) account of $5,300$8,400 in 2016, $5,3002019; $8,250 in 2015 and $5,2002018; $8,100 in 2014.2017. For Mr. Crager,Arora, the amountsamount disclosed reflect $182,216 earned as incentive compensationreflects his severance payment in 2016, $322,249 earned as incentive compensation2019 in 2015, and $144,800 earned as incentive compensation in 2014,an amount equal to $1,990,000, a health-related stipend of $2,024, and matching contributions to his 401(k) account of $5,300$1,642 in 2016, $5,3002019; $8,250 in 2015, and $5,2002018; $8,100 in 2014.2017. For Mr. D’Arrigo,Crager, the amountsamount disclosed reflectreflects a parking allowancehealth-related stipend of $660,$15,646 and matching contributions to his 401(k) account of $5,300$8,400 in 2016, $5,3002019; $8,250 in 2015,2018; $8,100 in 2017. For Mr. D’Arrigo, the amount disclosed reflects a health-related stipend of $11,241, parking allowance of $720 and $5,200 in 2014. For Messrs. Grinis and Arora the amounts disclosed reflect matching contributions to theirhis 401(k) accounts. Beginningaccount of $8,400 in 2016 amounts2019; $8,250 in 2018; $8,100 in 2017.For Mr. Grinis, the amount disclosed includereflects a $9,000 annual expensehealth-related stipend program which can be spent by each NEOof $10,704 and matching contributions to his 401(k) account of $8,400 in 2019; $8,250 in 2018; $8,100 in 2017. For Mr. DePina, the amount disclosed reflects a housing allowance of $120,000 for temporary housing in the San Francisco area, a health-related stipend of $13,701 and matching contributions to his 401(k) account of $8,400 in 2019. For Mr. Mayer, the amount disclosed reflects health-related stipend of $12,410 and matching contributions to his 401(k) account of $8,400 in 2019.
(5)Mr. Crager was appointed interim Chief Executive Officer on health related activities such as gym memberships.

October 3, 2019 and Chief Executive Officer on March 30, 2020.

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Table of Contents

20162019 Grants of Plan‑Based Awards 

Table

The following table contains information concerning grants of plan‑based awards made in 20162019 to our NEOs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

All

 

All

    

 

 

    

 

 

 

 

 

 

 

 

 

 

Other

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Option

 

Exercise

 

Grant

 

 

 

 

Estimated Future

 

Awards:

 

Awards:

 

or Base

 

Date Fair

 

 

 

 

Payouts under Equity

 

Number of

 

Number of

 

Price of

 

Value of

 

 

 

 

Incentive Plan

 

Shares of

 

Securities

 

Option

 

Stock and

 

 

Grant

 

Awards (2)

 

Stock or

 

Underlying

 

Awards

 

Option

Name

    

Date (1)

    

Threshold

    

Maximum

    

Units (#)

    

Options (#)

    

($/Share)

    

Awards (3)

Judson Bergman

 

2/29/2016

 

 —

 

 —

 

8,932

 

8,932

 

$

20.51

 

$

261,113

 

 

5/12/2016

 

75,000

 

125,000

 

 —

 

25,000

 

 

31.03

 

 

4,210,247

Anil Arora

 

 —

 

 —

 

 —

 

 —

 

 —

 

 

 —

 

 

 —

William Crager

 

2/29/2016

 

 —

 

 —

 

5,852

 

5,852

 

 

20.51

 

 

171,074

 

 

5/12/2016

 

30,000

 

50,000

 

 —

 

 —

 

 

 —

 

 

1,551,500

Peter D’Arrigo

 

2/29/2016

 

 —

 

 —

 

4,235

 

4,235

 

 

20.51

 

 

123,804

 

 

5/12/2016

 

18,000

 

30,000

 

 —

 

 —

 

 

 —

 

 

930,900

Scott Grinis

 

2/29/2016

 

 —

 

 —

 

3,234

 

3,234

 

 

20.51

 

 

94,541

 

 

8/2/2016

 

 —

 

 —

 

35,000

 

 —

 

 

 —

 

 

1,331,750

    
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)
 
Fair Value of
RSUs and PSUs
on Grant Date
($/Share)
 
Grant Date Fair
Value of Stock
and Option
Awards
(3) ($)
Name 
Grant Date
(1)
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
(Shares)
 
Target
(Shares)
 
Maximum
(Shares)
   
Judson Bergman 2/28/2019 350,000
 700,000 875,000 11,946
 23,891
 35,837
 —
 64.32 1,536,669
 2/28/2019 —
 —
 —
 —
 —
 —
 23,891
 61.01 1,457,590
William Crager 2/28/2019 294,000
 588,000
 735,000 7,991
 15,981
 23,972
 —
 64.32 1,027,898
 2/28/2019 —
 —
 —
 —
 —
 —
 15,981
 61.01 975,001
Peter D’Arrigo
 2/28/2019 187,500
 375,000 468,750 4,334
 8,687
 13,031
 —
 64.32 558,748
 2/28/2019 —
 —
 —
 —
 —
 —
 8,687
 61.01 529,994
Stuart DePina 2/28/2019 240,000
 480,000
 600,000 5,942
 11,883
 17,825
 —
 64.32 764,315
 2/28/2019 —
 —
 —
 —
 —
 —
 11,883
 61.01 724,982
  6/11/2019 —
 —
 —
 15,776
 31,552
 47,328
 —
 72.93 2,301,087
  6/11/2019 —
 —
 —
 —
 —
 —
 31,552
 67.35 2,125,027
Scott
Grinis
 2/28/2019 122,500
 245,000
 306,250 2,231
 4,462
 6,693
 —
 64.32 286,996
 2/28/2019 —
 —
 —
 —
 —
 —
 4,462
 61.01 272,227
Joshua Mayer 2/28/2019 117,500
 235,000
 293,750 1,803
 3,606
 5,409
 —
 64.32 231,938
 2/28/2019 —
 —
 —
 —
 —
 —
 3,606
 61.01 220,002

(1)

On February 28, 2019, the Compensation Committee granted non-equity incentive compensation awards. The actual cash value was paid in 2020 based on financial metrics and individual factors as described above AIP section of the CD&A on page 29 above. Each of the financial metrics has a threshold target that must be hit in order to receive a payment equal to 50% of the target value. The threshold value listed in the table above assumes that the threshold amount was hit for each of individual financial metrics and individual factors, but it is possible that a lower amount could be paid out for each executive if the threshold targets are not hit for one or more of the financial metrics.

(2)On February 28, 2019 and June 11, 2019, the Board granted performance-based restricted stock unit awards or PSUs. The actual number of PSUs that will become vested is based on financial metrics described above in the Equity Awards section of the CD&A on page 30 above. Each of the financial metrics has a threshold target that must be hit in order to receive a payment equal to 50% of the target value. The threshold value listed in the table above assumes that the threshold amount was hit for each of individual financial metrics, but it is possible that a lower amount could become vested if the threshold targets are not hit for one or more of the financial metrics. The grants made June 11, 2019 to Mr. DePina were in consideration for his agreement to enter into a new employment agreement.
(3)On February 28, 2019, the Compensation Committee granted restricted stock units. All restricted stock units and stock option grants were approved by the Compensation Committee and the Board on their respective grant dates.


(2)

The PSU Awards granted to Mr. Bergman, Mr. Crager and Mr. D’Arrigo were subject to a performance goal based on Adjusted EBITDA during 2016. Such performance goal was met as certified by the Compensation Committee in 2017, the applicable performance percentage was determined to be equal to one-hundred percent (100%), and a number equal to the total number of PSUs listed in the maximum column became “Banked Units” as of such certification. The Banked Units remain subject to service-based vesting conditions and will vest as follows: one-third (1/3) of the Banked Units following the first performance period shall become vested on the first anniversary of the grant date; one-half (1/2) of the outstanding Banked Units following the second performance period shall become vested on the second anniversary of the grant date; and all of the remaining Banked Units following the third and final performance period shall become vested on the third anniversary of the grant date (such percentage of vesting referred to as the vested percentage).

34

(3)

The fair value of stock options granted was determined using the Black Scholes model as of the grant date. The model for the February 29, 2016 grant assumes: (i) the stock option would be exercised 6 years after grant date, (ii) expected stock price volatility of 42.13%, (iii) a risk free yield equal to 1.57% and (iv) our dividend yield (0%) would remain constant from grant date to exercise date. The model for the May 12, 2016 grant assumes: (i) the stock option would be exercised 6 years after grant date, (ii) expected stock price volatility of 42.42%, (iii) a risk free yield equal to 1.41% and (iv) our dividend yield (0%) would remain constant from grant date to exercise date.


Table of Contents

Narrative to 20162019 Summary Compensation Table and 20162019 Grants of Plan‑Based Awards

Table

See “—“Executive Compensation - Compensation Discussion and Analysis”Analysis” above for a complete descriptionmore detailed discussion of the compensation plans pursuant to which the amounts listed under the 20162019 Summary Compensation tableTable and 20162019 Grants of Plan‑Based Awards tableTable were paid or awarded, and the criteria on which such payments were based. The Compensation Discussion and Analysis also describes certain grants of stock options to our NEOs.

30


35


Table of Contents

2016

2019 Outstanding Equity Awards at Fiscal Year‑End 

The following table lists all outstanding equity awards held by our NEOs as of December 31, 2016:

2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Option Awards (1)

 

Stock Awards (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 Plan Awards:

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

Incentive

 

Market or

 

 

 

 

 

 

Incentive Plan

 

 

 

 

 

 

 

 

 

 

Plan Awards:

 

Payout

 

 

 

 

 

 

Awards:

 

 

 

 

 

 

 

 

Market

 

Number of

 

Value of

 

 

Number of

 

Number of

 

Number of

 

 

 

 

 

 

Number of

 

Value of

 

Unearned

 

Unearned

 

 

Securities

 

Securities

 

Securities

 

 

 

 

 

 

Shares or

 

Shares or

 

Shares, Units

 

Shares, Units

 

 

Underlying

 

Underlying

 

Underlying

 

 

 

 

 

 

Units of

 

Units of

 

or Other

 

or Other

 

 

Unexercised

 

Unexercised

 

Unexercised

 

Option

 

Option

 

Stock that

 

Stock That

 

Rights That

 

Rights That

 

 

Options (#)

 

Options (#)

 

Unearned

 

Exercise

 

Expiration

 

have not

 

Have Not

 

Have Not

 

Have Not

Name

    

Exercisable

    

Unexercisable

    

Options (#)

    

Price ($)

    

Date

    

Vested (#)

    

Yet Vested ($)

    

Vested (#)

    

Vested ($)

Judson Bergman

 

36,000

 

 —

 

 —

 

 

7.50

 

4/30/2018

 

 —

 

 —

 

 —

 

 —

 

 

15,000

 

 —

 

 —

 

 

7.15

 

5/15/2019

 

 —

 

 —

 

 —

 

 —

 

 

376,000

 

 —

 

 —

 

 

9.00

 

7/28/2020

 

 —

 

 —

 

 —

 

 —

 

 

10,000

 

 —

 

 —

 

 

12.55

 

2/28/2021

 

 —

 

 —

 

 —

 

 —

 

 

7,951

 

 —

 

 —

 

 

12.45

 

2/28/2022

 

 —

 

 —

 

 —

 

 —

 

 

9,408

 

 —

 

 —

 

 

15.34

 

2/28/2023

 

 —

 

 —

 

 —

 

 —

 

 

13,533

 

6,767

 

 —

 

 

41.84

 

2/28/2024

 

4,200

 

148,050

 

 —

 

 —

 

 

5,800

 

11,600

 

 —

 

 

53.88

 

2/27/2025

 

7,734

 

272,624

 

 —

 

 —

 

 

 —

 

8,932

 

 —

 

 

20.51

 

2/29/2026

 

8,932

 

314,853

 

 —

 

 —

 

 

 —

 

25,000

 

 —

 

 

31.03

 

5/12/2026

 

 —

 

 —

 

125,000

 

4,406,250

Anil Arora

 

5,000

 

15,000

 

 —

 

 

32.46

 

12/7/2025

 

66,668

 

2,350,047

 

 —

 

 —

William Crager

 

34,852

 

 —

 

 —

 

 

7.50

 

4/26/2017

 

 —

 

 —

 

 —

 

 —

 

 

14,000

 

 —

 

 —

 

 

7.50

 

4/30/2018

 

 —

 

 —

 

 —

 

 —

 

 

12,000

 

 —

 

 —

 

 

7.15

 

5/15/2019

 

 —

 

 —

 

 —

 

 —

 

 

164,000

 

 —

 

 —

 

 

9.00

 

7/28/2020

 

 —

 

 —

 

 —

 

 —

 

 

25,000

 

 —

 

 —

 

 

12.55

 

2/28/2021

 

 —

 

 —

 

 —

 

 —

 

 

13,594

 

 —

 

 —

 

 

12.45

 

2/28/2022

 

 —

 

 —

 

 —

 

 —

 

 

13,500

 

 —

 

 —

 

 

15.34

 

2/28/2023

 

 —

 

 —

 

 —

 

 —

 

 

9,400

 

4,700

 

 —

 

 

41.84

 

2/28/2024

 

2,967

 

104,587

 

 —

 

 —

 

 

3,800

 

7,600

 

 —

 

 

53.88

 

2/27/2025

 

5,067

 

178,612

 

 —

 

 —

 

 

 —

 

5,852

 

 —

 

 

20.51

 

2/29/2026

 

5,852

 

206,283

 

 —

 

 —

 

 

 —

 

 —

 

 —

 

 

—  

 

5/12/2026

 

 —

 

 —

 

50,000

 

1,762,500

Peter D’Arrigo

 

180,937

 

 —

 

 —

 

 

7.50

 

6/16/2018

 

 —

 

 —

 

 —

 

 —

 

 

86,000

 

 —

 

 —

 

 

9.00

 

7/28/2020

 

 —

 

 —

 

 —

 

 —

 

 

10,000

 

 —

 

 —

 

 

12.55

 

2/28/2021

 

 —

 

 —

 

 —

 

 —

 

 

10,195

 

 —

 

 —

 

 

12.45

 

2/28/2022

 

 —

 

 —

 

 —

 

 —

 

 

8,000

 

 —

 

 —

 

 

15.34

 

2/28/2023

 

 —

 

 —

 

 —

 

 —

 

 

7,066

 

3,534

 

 —

 

 

41.84

 

2/28/2024

 

2,200

 

77,550

 

 —

 

 —

 

 

2,750

 

5,500

 

 —

 

 

53.88

 

2/27/2025

 

3,667

 

129,262

 

 —

 

 —

 

 

 —

 

4,235

 

 —

 

 

20.51

 

2/29/2026

 

4,235

 

149,284

 

 —

 

 —

 

 

 —

 

 —

 

 —

 

 

—  

 

5/12/2026

 

 —

 

 —

 

30,000

 

1,057,500

Scott Grinis

 

9,000

 

 —

 

 —

 

 

7.50

 

4/30/2018

 

 —

 

 —

 

 —

 

 —

 

 

6,000

 

 —

 

 —

 

 

7.15

 

5/15/2019

 

 —

 

 —

 

 —

 

 —

 

 

56,000

 

 —

 

 —

 

 

9.00

 

7/28/2020

 

 —

 

 —

 

 —

 

 —

 

 

10,000

 

 —

 

 —

 

 

12.55

 

2/28/2021

 

 —

 

 —

 

 —

 

 —

 

 

10,195

 

 —

 

 —

 

 

12.45

 

2/28/2022

 

 —

 

 —

 

 —

 

 —

 

 

8,000

 

 —

 

 —

 

 

15.34

 

2/28/2023

 

 —

 

 —

 

 —

 

 —

 

 

4,133

 

2,067

 

 —

 

 

41.84

 

2/28/2024

 

1,334

 

47,024

 

 —

 

 —

 

 

2,000

 

4,000

 

 —

 

 

53.88

 

2/27/2025

 

2,667

 

94,012

 

 —

 

 —

 

 

 —

 

3,234

 

 —

 

 

20.51

 

2/29/2026

 

3,234

 

113,999

 

 —

 

 —

 

 

 —

 

 —

 

 —

 

 

—  

 

8/2/2026

 

32,084

 

1,130,961

 

 —

 

 —

    Option Awards (1) Stock Awards (2)
Name Grant
Date		 
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 
Option
Exercise
Price  ($)
 
Option
Expiration
Date
 
Number of
Shares or
Units of
Stock that
have not
Vested (#)
 
Market
Value of
Shares or
Units of
Stock That
Have Not
Yet Vested ($)
Judson Bergman 3/15/2018 —
 —
 —
 —
 6,559
 456,703
  2/28/2019 —
 —
 —
 —
 4,735
 329,698
William Crager 7/28/2010 45,468
 —
 9.00
 7/28/2020
 —
 —
  2/28/2011 25,000
 —
 12.55
 2/28/2021
 —
 —
  2/29/2012 13,594
 —
 12.45
 2/28/2022
 —
 —
  2/28/2013 13,500
 —
 15.34
 2/28/2023
 —
 —
  2/28/2014 14,100
 —
 41.84
 2/28/2024
 —
 —
  2/27/2015 11,400
 —
 53.88
 2/27/2025
 —
 —
  2/29/2016 5,852
 —
 20.51
 2/28/2026
 —
 —
  3/28/2017 5,255
 478
 31.70
 3/28/2027
 1,434
 99,849
  2/28/2018 —
 —
 —
 —
 8,335
 580,366
  3/15/2018 —
 —
 —
 —
 6,667
 464,223
  7/31/2018 —
 —
 —
 —
 4,266
 297,042
  2/28/2019 —
 —
 —
 —
 15,981
 1,112,757
  2/28/2019 —
 —
 —
 —
 15,981
 1,112,757
Peter D’Arrigo
 7/28/2010 18,000
 —
 9.00
 7/28/2020
 —
 —
  2/28/2011 10,000
 —
 12.55
 2/28/2021
 —
 —
  2/29/2012 10,195
 —
 12.45
 2/28/2022
 —
 —
  2/28/2013 8,000
 —
 15.34
 2/28/2023
 —
 —
  2/28/2014 10,600
 —
 41.84
 2/28/2024
 —
 —
  2/27/2015 8,250
 —
 53.88
 2/27/2025
 —
 —
  2/29/2016 4,235
 —
 20.51
 2/28/2026
 —
 —
  3/28/2017 3,529
 321
 31.70
 3/28/2027
 963
 67,054
  2/28/2018 —
 —
 —
 —
 5,419
 377,325
  3/15/2018 —
 —
 —
 —
 4,333
 301,707
  2/28/2019 —
 —
 —
 —
 8,687
 604,876
  2/28/2019 —
 —
 —
 —
 8,687
 604,876
Stuart DePina 3/28/2017 1,252
 313
 31.70
 3/28/2027
 938
 65,313
  2/28/2018 —
 —
 —
 —
 5,835
 406,291
  7/31/2018 —
 —
 —
 —
 8,532
 594,083
  2/28/2019 —
 —
 —
 —
 11,883
 827,413
  2/28/2019 —
 —
 —
 —
 11,883
 827,413
  6/11/2019 —
 —
 —
 —
 31,552
 2,196,966
  6/11/2019 —
 —
 —
 —
 31,552
 2,196,966
Scott Grinis 2/28/2014 6,200
  —
 41.84
 2/28/2024
  —
 —
  2/27/2015 6,000
 —
 53.88
 2/27/2025
 —
 —
  2/29/2016 3,234
 —
 20.51
 2/28/2026
 —
 —
  3/28/2017 2,046
 187
 31.70
 3/28/2027
 559
 38,923
  2/28/2018 —
 —
 —
 —
 2,918
 203,180
  3/15/2018 —
 —
 —
 —
 2,457
 171,081
  2/28/2019 —
 —
 —
 —
 4,462
 310,689
  2/28/2019 —
 —
 —
 —
 4,462
 310,689
Joshua Mayer 2/29/2012 4,418
 —
 12.45
 2/28/2022
 —
 —
  2/28/2013 8,000
 —
 15.34
 2/28/2023
 —
 —
  2/28/2014 6,200
 —
 41.84
 2/28/2024
 —
 —
  2/27/2015 6,000
 —
 53.88
 2/27/2025
 —
 —
  2/29/2016 3,234
 —
 20.51
 2/28/2026
 —
 —
  3/28/2017 2,046
 187
 31.70
 3/28/2027
 559
 38,923
  2/28/2018 —
 —
 —
 —
 2,918
 203,180
  2/28/2019 —
 —
 —
 —
 3,606
 251,086
  2/28/2019 —
 —
 —
 —
 3,606
 251,086
Anil Arora 12/7/2015 20,000
 —
 32.46
 12/7/2025
 —
 —
  7/31/2018 —
 —
 —
 —
 4,496
 313,056

36

Table of Contents

(1)

Except as otherwise noted,No stock options were granted to NEOs in 2019. Vesting for all other stock options occurs with one-third (1/3) of the grant award vesting for stock option grants that expire February 28, 2024, February 28, 2025 and February 29, 2026 occurs annually on the anniversary of the grant date where one third vestsand one-twelfth (1/12) vesting every quarter thereafter.


(2)Vesting for all RSUs occurs with one-third (1/3) of the grant award vesting on the first anniversary one third vests onof the second anniversarygrant date and the remainder vests on the third anniversary. Vesting for Mr. Bergman’s 25,000 stock option grants that expire May 12, 2026 occurs on the first anniversary for one third of those stock option grants, and one twelfthone-twelfth (1/12) vesting every quarter thereafter.

(2)

All of Mr. Bergman’s 4,200 restricted shares vested on February 28, 2017, one half of his 7,734 restricted shares vested on February 28, 2017 and the remainder vest on February 28, 2018. One third of his 8,932 restricted shares vested on February 28, 2017, and the remainder vest one twelfth every quarter thereafter. One third of his 125,000 equity incentive plan awards vest on May 12 of each of 2017, 2018 and 2019.

AllFinally, for the PSUs granted in 2018 and 2019 to all of Mr. Crager’s 2,967 restrictedthe named executive officers, vesting is subject to satisfaction of performance goals during a three-year performance period. The performance goals are based on four equally weighted metrics (revenue growth, adjusted EBITDA growth, adjusted EPS growth, and relative TSR compared to Russell 2000 Index Constituents). The final number of shares vestedearned under the grants, if any, will vary based on February 28, 2017, one halfthe degree of his 5,067 restricted shares vestedachievement on February 28, 2017 andeach metric. The maximum number of PSUs that can be earned will be 150% of the remaindertarget award. The PSUs will cliff vest on February 28, 2018. One thirdthe three-year anniversary of his 5,852 restricted shares vested on February 28, 2017, and the remainder vest one twelfth every quarter thereafter. One thirddate of his 50,000 equity incentive plan awards vest on May 12 of each of 2017, 2018 and 2019.

One eighth of Mr. Arora’s 66,668 restricted shares vested on March 3, 2017 with an additional one eighth vesting every quarter thereafter.

grant.

31

Table of Contents

All of Mr. D’Arrigo’s 2,200 restricted shares vested on February 28, 2017, one half of his 3,667 restricted shares vested on February 28, 2017 and the remainder vest February 28, 2018. One third of his 4,235 restricted shares vested on February 28, 2017, and the remainder vest one twelfth every quarter thereafter. One third of his 30,000 equity incentive plan awards vest on May 12 of each of 2017, 2018 and 2019.

All of Mr. Grinis’ 1,334 restricted shares vested on February 28, 2017, one half of his 2,667 restricted shares vested on February 28, 2017 and the remainder vest on February 28, 2018. One third of his 3,234 restricted shares vested on February 28, 2017, and the remainder vest one twelfth every quarter thereafter. One eleventh of his 32,084 restricted shares vested on February 28, 2017 with an additional one twelfth vesting every quarter thereafter.

20162019 Option Exercises and Stock Vested

  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
($)
Judson Bergman 155,000
 9,360,186
 118,703
 8,095,694
William Crager 118,532
 5,946,089
 34,555
 2,275,594
Peter D’Arrigo 68,000
 4,054,404
 21,786
 1,432,456
Stuart DePina 12,803
 246,655
 23,572
 1,512,089
Scott Grinis 84,195
 4,794,085
 15,337
 986,099
Joshua Mayer —
 —
 17,836
 1,148,034
Anil Arora —
 —
 17,749
 1,132,271

 

 

 

 

 

 

 

 

 

 

 

 

Option Awards

 

Stock Awards

 

 

Number of shares

 

Value realized on

 

Number of shares

 

Value realized on

 

 

acquired on exercise

 

exercise

 

acquired on vesting

 

vesting

Name

    

(#)

    

($)

    

(#)

    

($)

Judson Bergman

 

175,000

 

 

4,996,524

 

9,278

 

212,281

Anil Arora

 

 —

 

 

 —

 

33,332

 

1,127,372

William Crager

 

67,954

 

 

2,009,301

 

7,380

 

168,854

Peter D’Arrigo

 

6,000

 

 

168,954

 

5,073

 

116,070

Scott Grinis

 

12,000

 

 

379,726

 

6,622

 

182,771

Nonqualified Deferred Compensation

On February 9, 2015, the Board adopted the Envestnet, Inc. Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), and the Deferred Compensation Plan became effective March 1, 2015. The Deferred Compensation Plan is an unfunded deferred compensation plan that is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

amended (the “Code”). 

Persons eligible to participate in the Deferred Benefit Plan are called “Participants.”

Under the Deferred Compensation Plan, Participants have the opportunity to elect to defer receipt of up to 90% of their base salary and bonus. Under the Deferred Compensation Plan, Participants have the right to elect to receive distributions on a specified payment date in the future, or in a lump sum or annual installment payments following the termination of employment. Certain revisions to the distribution election may be made if done in accordance with the Deferred Compensation Plan.

Amounts deferred by a Participant under the Deferred Compensation Plan will be credited to a deferral account that will be used to determine the amounts to be paid to the Participant under the Deferred Compensation Plan. Amounts deferred will be credited or debited with a hypothetical rate of return based on the performance of the available measurement funds selected by the Participant among those made available by the Company under the Deferred Compensation Plan. The deferral account represents an unfunded, unsecured promise by the companyCompany to pay such amounts in the future, and does not represent ownership of, or any ownership interest in, any particular assets of the Company. Participants will at all times be fully vested in all deferral contributions and earnings thereon.

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The following table sets forth information concerning nonqualified deferred compensation of our NEOs who participated in the Deferred Compensation Plan in 2016.2019. The amounts set forth in this table include only contributions made and earnings received during 20162019 and do not include contribution and earnings with respect to the 20162019 bonus paid in 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive

 

Registrant

 

Aggregate

 

Aggregate

 

Aggregate

 

 

 

Contributions

 

Contributions

 

Withdrawals/

 

Earnings

 

Balance

 

Name

    

in Last FY (1)

    

in Last FY

    

Distributions

    

in Last FY

    

at Last FYE

 

Jud Bergman

 

$

112,200

 

 —

 

 —

 

$

26,284

 

$

138,484

 

Scott Grinis

 

$

380,000

 

 —

 

 —

 

$

41,267

 

$

599,164

 

2020.
Name 
Executive
Contributions
in Last FY (1)
 
Registrant
Contributions
in Last FY
 
Aggregate
Withdrawals/
Distributions
 
Aggregate
Earnings
in Last FY
 
Aggregate
Balance
at Last FYE
Judson Bergman $48,333
 —
 559,687
 $62,712
 $—
Stuart DePina —
 —
 —
 17,050
 92,420
Scott Grinis 388,929
 —
 —
 184,518
 1,824,105
Anil Arora —
 —
 208,587
 24,363
 —

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(1)

The amounts in this column are also included in the Summary Compensation tableTable as follows: the $112,500$48,333 listed for Mr. Bergman is included in the Salary column for 2019 and in part in the Bonus column, for 2016, and the $380,000 listed$388,929 for Mr. Grinis is included in part in the Salary column for 2016 ($218,000 of the total)2019 and in part in the Bonus column for 2016 ($162,000 of the total).

column.

The measurement funds available to Participants and the returns earned by those measurement funds in 20162019 were:

Return On

Fund Name

Return On
Investment

ClearBridge Variable Small Cap Growth Fund (Class 1)

5.80

%

32.95

Delaware VIP REIT Series (Standard Class)

5.87

%

26.81

Delaware VIP Small Cap Value Series (Standard Class)

31.41

%

28.14

Delaware VIP Value Series (Standard Class)

14.65

%

19.97

Fidelity VIP Freedom 2020 SM (Service Class)

6.04

%

20.01

Fidelity VIP Freedom 2030 SM (Service Class)

6.52

%

24.37

Fidelity VIP Freedom 2040 SM (Service Class)

6.75

%

28.39

Fidelity VIP Freedom 2050 SM (Service Class)

6.75

%

28.39

Fidelity VIP Investment Grade Bond Portfolio (Service Class)

4.63

%

9.58

Fidelity VIP Overseas Portfolio (Service Class)

(5.12)

%

27.67

Lincoln VIP Money Market Fund (Standard Class)

0.03

%

1.79

LVIP Delaware Special Opportunities Fund (Standard Class)

20.28

%

30.43

LVIP J.P. Morgan High Yield Fund (Standard Class)

13.26

%

12.98

LVIP S&P 500 Index Fund (Standard Class)

11.76

%

31.2

PIMCO VIT Commodity Real Return Strategy Portfolio-AdminCls

15.16

%

11.43

PIMCO VIT Total Return (Administrative Class)

2.68

%

8.36

Potential Payments Upon Termination of Change of Control

Employment Agreements. EachExcept for Mr. Bergman, whose employment agreement terminated upon his death, and Mr. Arora, whose employment with the Company terminated effective March 1, 2019, as discussed below, each of the NEOs is a party to an individual employment agreement with the Company (the “Employment Agreements”). With the exception of Mr. Arora’s Employment Agreement, theThe Employment Agreements have a three-year term, with an automatic one-year renewal unless either party provides advance written notice of non-renewal. Subject to the signing of a release and compliance with the terms of the Employment Agreements, in the event of a termination of the executive’s employment either without cause or for good reason, the executive will be entitled to (i) “Severance Pay” equal to two (2) multiplied by the sum of his (a) base salary plus (b) an amount equal to the average of his most recent two annual bonuses (paid in equal installments on regular payment dates over two (2) years), (ii) a “Pro-Rata Bonus for Year of Termination” equal to the average of his most recent two annual bonuses multiplied by a fraction, the numerator of which equals the number of days during the calendar year prior to the termination date and the denominator of which equals 365 (paid on the sixty-day anniversary of the termination date), and (iii) a “Health Care Continuation” lump sum cash payment equal to the applicable percentage of the monthly COBRA coverage in connection with his termination multiplied by eighteen months (with the applicable percentage equal to the percentage of the executive’s health care premium costs covered by the Company as of the termination date) (paid on the sixty-day anniversary of the termination date). Mr. Arora’s Employment Agreement does not have a term and upon termination without cause or for good reason, and subject to the signing of a release, Mr. Arora will be entitled to (i) “Severance Pay” equal to (a) twelve months of his base salary plus (b) the average of the

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annual cash bonus amounts paid in relation to the two years prior to the year in which termination occurs, and (ii) a “Health Care Continuation” payment equal to twelve months of the monthly COBRA premium cost applicable to Mr. Arora and his dependents (paid on the sixty-day anniversary of the termination date).

Under the terms of the Employment Agreements (with the exception of Mr. Arora’sDePina’s and Mr. Grinis’s Employment Agreements), the executive is subject to an ongoing confidentiality obligation, a 24-month non-competition covenant, a 24-month non-solicitation of employees of the Company covenant (including former employees or consultants within the 12-month period prior to the executive’s termination date), and a 24-month non-solicitation of customers of the Company covenant (including prospective customers within the 12-month period prior to the executive’s termination date). Mr. Arora is not subject to restrictive covenant provisions pursuant to his Employment Agreement. The restrictive covenant provisions of Mr. DePina’s Employment Agreement are the Grinissame as described in the previous sentence but with a 12-month period for the non-competition and non-solicitation provisions. The restrictive covenant provisions of Mr. Grinis’s Employment Agreement have been adapted to comply with local California law and include an ongoing confidentiality obligation, ongoing restrictions on the use of certain Company confidential information (including methods of doing business, business plans, customer contact and relationship information and other valuable proprietary information concerning the Company and its affiliates), and a 24-month non-solicitation of employees of the Company covenant (including former employees or consultants within the 12-month period prior to Mr. Grinis’s termination date).

In the event that any payments made contingent upon a change in control of the Company would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, (with the exception of Mr. Arora’s Employment Agreement), then the amount of payments pursuant to the Employment Agreement would be reduced to the maximum amount that will cause the total amounts of the payment not to be subject to the excise tax,

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but only if the amount of such payments, after such reduction and after payment of all applicable taxes on the reduced amount, is equal to or greater than the amount of such payments the executive would otherwise be entitled to retain without such a reduction after the payment of all applicable taxes, including the excise tax. The Company also reserves the right to adopt a policy regarding recoupment of excess compensation applicable to its executives, including the executives. Such a policy would control over any inconsistent provision of the Employment Agreement and be binding on the executives.

Severance Agreement with Mr. Arora. Pursuant to the terms of a severance agreement and general release entered into on February 26, 2019 between Envestnet Financial Technologies, Inc. and Mr. Arora (the “Separation Agreement”), Mr. Arora’s employment with Envestnet terminated effective March 1, 2019. Under the terms of the Separation Agreement, Mr. Arora is entitled to certain severance benefits following his termination in exchange for signing and not revoking a release of claims against Envestnet and its affiliates and in exchange for compliance with certain non-competition, non-solicitation, confidentiality, and non-disparagement obligations. Such severance benefits included a lump-sum cash payment of $1,990,000. Additionally, Mr. Arora has the right to continue to exercise certain stock options and the right to continue to vest in previously granted equity grants pursuant to the Envestnet Inc. 2010 Long-Term Incentive Plan, as described below.
First, Mr. Arora’s 2015 grant of stock options, which previously became fully vested, shall remain exercisable until the earlier of (i) the end of the term of such options and (ii) the 90-day anniversary of the date that he ceases to serve as a non-employee director of Envestnet. Additionally, Mr. Arora’s 2017 and 2018 grants of restricted stock units continued to vest and be distributed through the one-year anniversary of his termination date as if he remained employed during such year, with final distribution of the shares having occurred on February 28, 2020. Finally, a pro-rata portion (determined as if Mr. Arora had remained employed through the one-year anniversary of his termination date) of Mr. Arora’s 2018 grant of performance stock units may become vested following his termination date subject to satisfaction of the applicable performance goals as of the last day of the applicable performance period. Mr. Arora’s awards under the 2010 Long-Term Incentive Plan are subject to forfeiture and/or clawback in the event Mr. Arora violates the terms of certain covenants, such as his non-competition, non-solicitation, confidentiality and non-disparagement obligations, and such awards remain subject to the terms of the Clawback Policy.
Equity Incentive Plans.Plans. We currently maintain equity‑based incentive plans—plans - the 2004 Stock Incentive Plan, the 2010 Long‑Term Incentive Plan, and the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (MIP)(“MIP”) and the Envestnet, Inc. 2015 Acquisition Equity Award Plan. No new awards are being made under the 2004 Stock Incentive Plan, the Envestnet, Inc. 2015 Acquisition Equity Award Plan or the MIP. We established the 2010 Long‑Term Incentive Plan to (i) attract and retain key employees and other persons providing services to us and our related companies; (ii) motivate plan participants by means of appropriate incentive to achieve long‑range goals; (iii) provide incentive compensation opportunities that are competitive with those of other similar corporations; and (iv) further align plan participants’ interests with those of our stockholders.shareholders. Under the 2010 Long‑Term Incentive Plan, we may issue stock options, stock appreciation rights, restricted stock, restricted stock units and other full value awards, as well as cash incentive awards.

In the event that (a) a Participant’s employment or service, as applicable, is terminated by us, our successor or one of our related companies that is the Participant’s employer for reasons other than cause (as defined in the 2010 Long‑Term Incentive Plan) within 24 months following a change in control (as defined in the 2010 Long‑Term Incentive Plan) or (b) the 2010 Long‑Term Incentive Plan is terminated by us or our successor following a change in control without provision for the continuation of outstanding awards under the 2010 Long‑Term Incentive Plan, all stock options and related awards which have not otherwise expired will become immediately exercisable and all other awards will become fully vested provided that the extent to which any award becomes vested based on the satisfaction of applicable performance goals or targets on or after a change in control, the Compensation Committee may make such determination either based on the determination of the satisfaction of the applicable performance goal based on actual performance through the date of such change in control or based on assumed performance at the target level through the date of such change in control. Awards outstanding under the 2004 Stock Incentive Plan will become fully vested and exercisable and all forfeiture restrictions on the awards will lapse if a change in control (as defined in the 2004 Stock Incentive Plan) occurs and the Participant’s awards are not converted, assumed or replaced, by awards of the surviving or successor entity or one of its affiliates.

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Table of Contents

Under our equity compensation plans, outstanding and unvested stock options may become fully vested and exercisable, and outstanding and unvested restricted stock units may become fully vested and be distributed upon a participant’s death, disability, or involuntary termination as determined by the Compensation Committee in its discretion. These provisions apply to all employees who participate in the Company’s equity plans. The outstanding equity awards held by the NEOs as of December 31, 20162019 are described above under “2016“2019 Outstanding Equity Awards at Fiscal Year‑End.”

With respect to the PSU Awards for Messrs. Bergman, Cragergranted in 2018 and D’Arrigo,2019, except as otherwise provided below, any portion of the PSU Award that is not vested upon the executive’s termination of employment will be forfeited. If the executive’s employment is terminated without “cause”, for “good reason”, or upon death or “permanent disability”, and subject to the execution of a release, the executive shall become vestedremain eligible to vest in alla pro-rata portion of the Banked UnitsPSUs on the applicable distribution dates.dates based on actual performance. In the event of a change in control, the applicable performance measures for the PSU Awards will be determined as

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Table of Contents

if target performance had been satisfied but subject to continued service vesting; provided, that the Compensation Committee may decide to accelerate vesting at the time of such change in control.

Transferability. Awards under the 2010 Long‑Term Incentive Plan are not transferable except as designated by the Participant by will or by laws of descent and distribution or, to the extent provided by the Compensation Committee, pursuant to a qualified domestic relations order or to or for the benefit of the Participant’s family (including, without limitation, to a trust or partnership for the benefit of a Participant’s family).

Withholding.All awards and other payments under the 2010 Long‑Term Incentive Plan are subject to withholding of all applicable taxes. With the consent of the Compensation Committee, withholding obligations may be satisfied with previously‑owned shares of common stock or shares of common stock to which the Participant is otherwise entitled under the 2010 Long‑Term Incentive Plan. The amount withheld in the form of such shares may not exceed the maximum individual tax rate for the Participant in applicable jurisdictions for such Participant (based on the applicable rates of the relevant tax authorities (for example, federal, state and local)), including the Participant’s share of payroll or similar taxes, as provided in law, regulations or the authority’s administrative practices, not to exceed the highest statutory rate in that jurisdiction, even if that rate exceeds the highest rate that may be applicable to the specific Participant.

Amendment and Termination. The Board may, at any time, amend or terminate the 2010 Long‑Term Incentive Plan, and the Board or the Compensation Committee may amend any award, provided that no amendment or termination may adversely affect the rights of any Participant without the Participant’s written consent. Adjustments to the 2010 Long‑Term Incentive Plan and awards on account of business transactions are not subject to the foregoing prohibition. The provisions of the 2010 Long‑Term Incentive Plan that prohibit repricing of stock options and stock appreciation rights cannot be amended unless the amendment is approved by our stockholders.shareholders. The 2010 Long‑Term Incentive Plan also permits the Board to amend the 2010 Long‑Term Incentive Plan and any awards that are subject to Section 409A of the Internal Revenue Code (relating to nonqualified deferred compensation) as it deems necessary to conform to Section 409A.

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Table of Contents

Potential Payments onUpon Termination or Change of Control

The following tables quantify the potential payments upon termination that our NEOs other than Mr. Bergman and Mr. Arora would receive assuming that the relevant termination event had occurred on December 31, 2016.2019. The last table quantifies potential payments upon an involuntary termination without cause and a change of control that our executive officers would receive assuming that both the termination without cause and change in control had occurred on December 31, 2016.

2019.

For Mr. Bergman, following his death on October 3, 2019, Mr. Bergman’s estate was entitled to a payment of a pro-rata portion of his 2019 annual bonus payment in an amount equal to $493,287. Additionally, the Compensation Committee decided to vest all of his unvested RSUs and stock options that would have otherwise been forfeited on his death.
For Mr. Arora, as described above, Mr. Arora’s employment was terminated effective March 1, 2019. He received the severance payment, and his previously granted equity awards were treated, in each case, as summarized above in the Section titled “Severance Agreement with Mr. Arora.”
Termination Due to Death or Disability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

    

Health Care 

    

Unvested Stock 

    

 

    

 

    

 

 

Severance Pay

    

Pro-Rata Bonus

 

Continuation

 

Options

 

Unvested RSUs 

 

Unvested PSUs

 

Total

Name

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 
Severance Pay
($)
 
Pro-Rata Bonus
($)
 
Health Care
Continuation
($)
 
Unvested Stock
Options
($)
 
Unvested RSUs
($)
 
Unvested PSUs
($)
 
Total
($)

Judson Bergman

 

 —

 

370,000

 

 —

 

105,500

 

 —

 

4,406,250

 

4,881,750

William Crager

 

 —

 

262,500

 

 —

 

 —

 

 —

 

1,762,500

 

2,025,000

 —
 525,000
 —
 —
 —
 729,342
 1,254,342

Anil Arora

 

 —

 

375,000

 

 —

 

41,850

 

2,350,047

 

 —

 

2,766,897

Peter D’Arrigo

 

 —

 

258,500

 

 —

 

 —

 

 —

 

1,057,500

 

1,316,000

 —
 342,500
 —
 —
 —
 344,355
 686,855
Stuart DePina —
 375,000
 —
 —
 —
 902,201
 1,277,201

Scott Grinis

 

 —

 

190,000

 

 —

 

 —

 

1,233,750

 

 —

 

1,423,750

 —
 229,025
 —
 —
 —
 186,220
 415,245
Joshua Mayer
—

222,500

—

—

—

70,304

292,804

There is no severance or health care continuation payable to any of the NEOs as a result of a termination due to death or disability. The pro-rata bonus is calculated as the average bonus for the executive officer paid with respect to the two calendar years preceding the date of termination multiplied by a fraction, the numerator of which equals the number of day so the year worked prior to the termination and the denominator of which equals 365. Because the assumed termination date is the last day of the year, the pro-rata bonus amounts listed above equal the average bonus paid for FY 2015during 2019 and 20142018 for the applicable executive officers. For Mr. Arora,Additionally, the bonusPSUs granted to the NEOs in 2018 and 2019 would remain eligible to vest at the end of the performance period in an amount listed is equal to the average bonus fornumber of PSUs granted multiplied by the executive officer paid with respect toperformance percentage determined based on the two calendar years precedingactual performance of the Company during the performance period further multiplied by a pro-rata fraction based on the number of days worked between the grant date and the date of termination without multiplicationdivided by 1095. Because the pro-rata fraction. The unvested equity awards held byperformance percentage is not yet known, the NEOs that wereamount in the table estimates the value of the PSUs granted in 2016 in consideration for the execution of employment agreements2018 and for retention purposes would vest on a termination due to death or permanent disability. Additionally, the unvested equity awards granted to Mr. Arora for retention purposes following the acquisition of Yodlee, Inc. and the unvested restricted stock awards granted to Mr. Arora pursuant to the Envestnet, Inc. 2015 Acquisition Equity Plan held2019 that would become vested on such a termination dueassuming vesting with a performance percentage equal to death or permanent disability.100% and a pro-rata fraction determined based on a

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termination date of December 31, 2019. All other equity awards held by the NEOs would be forfeited on termination. The value of the equity awards for the table above and the following tables was calculated using a stock price per share of $35.25,$69.63, which is equal to the closing price of one share on the last trading day of the year on December 30, 2016.

31, 2019.

Termination Without Cause or for Good Reason

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Health Care 

    

Unvested Stock 

    

 

    

 

    

 

 

 

Severance Pay

 

Pro-Rata Bonus

 

Continuation

 

Options

 

Unvested RSUs 

 

Unvested PSUs

 

Total

Name

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

Judson Bergman

 

1,940,000

 

370,000

 

34,578

 

105,500

 

 —

 

4,406,250

 

6,856,328

William Crager

 

1,274,110

 

262,500

 

34,578

 

 —

 

 —

 

1,762,500

 

3,333,688

Anil Arora

 

425,000

 

375,000

 

23,052

 

41,850

 

2,350,047

 

 —

 

3,214,949

Peter D’Arrigo

 

1,167,000

 

258,500

 

34,578

 

 —

 

 —

 

1,057,500

 

2,517,578

Scott Grinis

 

980,000

 

190,000

 

34,578

 

 —

 

1,233,750

 

 —

 

2,438,328

Name Severance Pay
($)		 Pro-Rata Bonus
($)		 Health Care
Continuation
($)		 Unvested Stock
Options
($)		 Unvested RSUs
($)		 Unvested PSUs
($)		 Total
($)
William Crager 1,800,000
 525,000
 34,578
 —
 —
 729,342
 3,088,920
Peter D’Arrigo 1,335,000
 342,500
 34,578
 —
 —
 344,355
 2,056,433
Stuart DePina 1,710,000
 375,000
 34,578
 —
 —
 902,201
 3,021,779
Scott Grinis 1,088,050
 229,025
 34,578
 —
 —
 186,220
 1,537,873
Joshua Mayer
1,112,876

222,500

34,578

—

—

70,304

1,440,258
Subject to the signing of a release and compliance with the terms of the Employment Agreements, in the event of a termination of the executive’s employment either without cause or for good reason, the executive will be entitled to (i) “Severance Pay” equal to two (2) multiplied by the sum of his (a) base salary plus (b) an amount equal to the average of his most recent two annual bonuses (paid in equal installments on regular payment dates over two (2) years), (ii) a “Pro-Rata Bonus for Year of Termination” equal to the average of his most recent two annual bonuses multiplied by a fraction, the numerator of which equals the number of days during the calendar year prior to the termination date and the denominator of which equals 365 (paid on the sixty-day anniversary of the termination date), and (iii) a “Health Care Continuation” lump sum cash payment equal to the applicable percentage of the monthly COBRA coverage in connection with his termination multiplied by eighteen months (with the applicable percentage equal to the percentage of the executive’s health care premium costs covered by the company as of the termination date) (paid on the sixty-day

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anniversary of the termination date). Mr. Arora’s Employment Agreement does not have a term and upon termination without cause or for good reason, and subject

The PSUs granted to the signing of a release, Mr. Arora will be entitledNEOs in 2018 and 2019 would remain eligible to (i) “Severance Pay” equal to (a) twelve months of his base salary plus (b)vest at the averageend of the annual cash bonus amounts paidperformance period in relation to the two years prior to the year in which termination occurs, and (ii) a “Health Care Continuation” payment equal to twelve months of the monthly COBRA premium cost applicable to Mr. Arora and his dependents (paid on the sixty-day anniversary of the termination date). The Health Care Continuation amounts were determined for each executive assuming a monthly COBRA premiuman amount equal to $1,921, which would equal the highest potential cost which could be less dependingnumber of PSUs granted multiplied by the performance percentage determined based on the actual elections madeperformance of the Company during the performance period further multiplied by a pro-rata fraction based on the individual executive. 

The unvested equity awards heldnumber of days worked between the grant date and the date of termination divided by 1095. Because the NEOs that wereperformance percentage is not yet known, the amount in the table estimates the value of the PSUs granted in 2016 in consideration for the execution of employment agreements2018 and for retention purposes would vest on a termination due without cause or for good reason. Additionally, the unvested equity awards granted to Mr. Arora as for retention purposes following the acquisition of Yodlee, Inc. and the unvested restricted stock awards granted pursuant to the Envestnet, Inc. 2015 Acquisition Equity Plan held by Mr. Arora2019 that would become vested on such a termination without cause or for good reason.assuming vesting with a performance percentage equal to 100% and a pro-rata fraction determined based on a termination date of December 31, 2019. All other equity awards held by the NEOs would be forfeited on such termination (unless such termination were within twenty-four months following a change in control as described below).

Termination Following Change of Control

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Health Care 

    

Unvested Stock 

    

 

    

 

    

 

 

 

Severance Pay

 

Pro-Rata Bonus

 

Continuation

 

Options

 

Unvested RSUs 

 

Unvested PSUs

 

Total

Name

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

Judson Bergman

 

1,940,000

 

370,000

 

34,578

 

237,158

 

735,527

 

4,406,250

 

7,723,512

William Crager

 

1,274,110

 

262,500

 

34,578

 

86,258

 

489,482

 

1,762,500

 

3,909,428

Anil Arora

 

800,000

 

 —

 

23,052

 

41,850

 

2,350,047

 

 —

 

3,214,949

Peter D’Arrigo

 

1,167,000

 

258,500

 

34,578

 

62,424

 

356,096

 

1,057,500

 

2,936,097

Scott Grinis

 

980,000

 

190,000

 

34,578

 

47,669

 

1,385,995

 

 —

 

2,638,242

Name Severance Pay
($)		 Pro-Rata Bonus
($)		 Health Care
Continuation
($)		 Unvested Stock
Options
($)		 Unvested RSUs
($)		 Unvested PSUs
($)		 Total
($)
William Crager 1,800,000
 525,000
 34,578
 18,131
 1,792,973
 1,874,022
 6,044,704
Peter D’Arrigo 1,335,000
 342,500
 34,578
 12,176
 1,049,254
 906,583
 3,680,091
Stuart DePina 1,710,000
 375,000
 34,578
 11,872
 3,495,938
 3,618,462
 9,245,850
Scott Grinis 1,088,050
 229,025
 34,578
 7,093
 552,793
 481,770
 2,393,309
Joshua Mayer
1,112,876

222,500

34,578

7,093

493,189

251,086

2,121,322
The severance amounts payable for a termination without cause or for good reason following a change in control would be the same for all NEOs as a termination without cause or for good reason described above. All outstanding unvested equity awards held by the NEOs would become vested for a termination without cause within twenty-four months following a change in control (but not all equity would become vested on a termination for good reason as that would only apply to certain equity awards as described in the previous table for a termination with good reason).

Equity Compensation Committee ReportPlan Information
The following table summarizes, as of December 31, 2019, the equity compensation plans under which we may issue equity securities of the Company. Those plans include a 2004 stock incentive plan, the 2010 Long-Term Incentive Plan, the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”), and the Envestnet, Inc. 2019 Acquisition Equity Incentive Plan (the “2019 Equity Plan”).

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Plan Category
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
Weighted-average exercise price of outstanding options, warrants and rights (b)
Number of securities remaining available for future issuance under equity compensation plans (c), excluding securities referenced in column (a)
Equity compensation plans approved by security holders
1,148,586
$25.69

2,031,743
Equity compensation plans not approved by security holders (1)
2,000
$12.51

216,929
Total
1,150,586
$25.66

2,248,672
(1)As a result of a merger in 2012, the Company adopted the 2012 Plan. The 2012 Plan provides for the grant of restricted common stock, stock options and the purchase of common stock for certain Envestnet | Tamarac employees. The 2012 Plan provides for the grant of up to 559,551 shares of common stock (“Target Incentive Awards”). The Target Incentive Awards vest based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition. The Company measured the cost of these awards based on the estimated fair value of the award as of the market closing price on the day before the acquisition closed. As of December 31, 2017, all 559,551 shares of restricted stock had vested.
As a result of the Company’s acquisition of PIEtech Inc. in 2019, the Company adopted the 2019 Equity Plan in order to make inducement grants to certain legacy PIEtech employees who joined Envestnet | MoneyGuide. Envestnet agreed to grant at future dates, not earlier than the sixty day anniversary of the PIEtech acquisition, up to 301,469 shares of Envestnet common stock in the form of RSUs and PSUs pursuant to the 2019 Equity Plan. The RSUs vest over time and the PSUs vest upon the achievement of meeting certain performance conditions as well as a subsequent service condition. The Company is recognizing the estimated expense on a graded-vesting method over a requisite service period of three to five years, which is the estimated vesting period.

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COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s 2019 Annual Report on Form 10-K and in this proxy statement.

The foregoing report has been approved by the following members of the Compensation Committee.

ame

James Fox, Chairman
Chairperson
Ross Chapin

Gayle Crowell

Gregory Smith

37


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CEO PAY RATIO
We are committed to providing a comprehensive total rewards program to attract, retain, and reward highly qualified, diverse, and productive employees. The total rewards program emphasizes alignment of employee efforts to support our corporate strategies. The components of the program include compensation, benefits, learning and development opportunities and recognition of employee performance. We strive to remain externally competitive in relevant labor markets while maintaining internal equity and rewarding performance. As of December 31, 2019, we had 4,190 employees, including employees in operations, research and development, engineering and systems, executive and corporate functions, sales and marketing and investment management and research. Of these, 1,643 employees were located in the United States, 2,532 were located in India, and 15 were located in other international locations.
In accordance with applicable SEC rules, we are providing the ratio of the total annual compensation of Mr. Bergman, our CEO during part of 2019 who served in that position on the date the Company selected to identify the median employee, to the annual compensation of an identified median employee of the Company. For purposes of this 2019 pay ratio disclosure, we used the same median employee that we identified in 2017 since we believe that there has been no change in our employee population or employee compensation arrangements that would result in a significant change in our pay ratio disclosure. We identified the median employee by examining the base salary as of December 31, 2017 (the “determination date”) for all employees, excluding the CEO, who were employed by us on December 31, 2017. We included all employees, whether employed on a full-time, part-time, or seasonal basis. For full-time employees hired in 2017, an annualized salary was used. However, compensation for part-time employees was not annualized. We did not make any other assumptions, adjustments, or estimates with respect to base salaries other than converting all base salaries to U.S. dollars on the determination date. After identifying the median employee, the median employee’s total annual compensation was calculated in accordance with the requirements of the Summary Compensation Table.
With respect to Mr. Bergman, we adjusted the amount reported in the “Total” column of our 2019 Summary Compensation Table included in this proxy statement by annualizing his base salary to account for the fact that he ceased employment with us on October 3, 2019.
The 2019 annual total compensation of the median employee, identified based on the methodology described above and converted from Indian rupees to U.S. dollars based on the conversion rate in effect on December 31, 2019, who was located in India, was $23,240. The 2019 annual total compensation of our CEO was $4,104,970. As a result, the ratio of the annual total compensation of our CEO to our median employee was 177 to 1.
The SEC’s rules requiring pay ratio disclosure allow companies to exercise a significant amount of flexibility in making a determination as to who is the median employee and does not mandate that each public company use the same method. In addition, our compensation philosophy means fair pay based on a person’s role in the Company, a subjective determination of the market value of that person’s job and that person’s performance in that position. As a result, the annual total compensation of our median employee is unique to that person and is not a good indicator of the annual total compensation of any of our other employees and is not comparable to the annual total compensation of employees at other companies. Similarly, we would not expect that the ratio of the annual total compensation of our CEO to our median employee to be a number that can be compared to the ratio determined by other companies in any meaningful fashion.


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PROPOSAL NO. 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION 
In accordance with SEC rules, we are asking our shareholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our NEOs as disclosed in this proxy statement.
Envestnet believes compensation should be transparent, understandable and effectively communicated, consistent with our risk profile and reflect good governance practices. Our executive compensation program is designed to attract and retain skilled executives and to be fiscally responsible to our shareholders. Envestnet offers an attractive compensation program and seeks to pay executives for company and individual performance, align the pay of executives with shareholders’ interests and long-term value creation and award executives for their achievement of goals set for that performance year or period. The Compensation Committee regularly reviews the compensation programs for our NEOs to ensure that they are achieving the desired goals it sets. Please read the “Compensation Discussion and Analysis” discussion for additional details about our executive compensation programs, including information about the fiscal year 2019 compensation of our NEOs.
We believe that our executive compensation programs are structured in the best manner possible to support the Company and our business objectives. We are asking our shareholders to indicate their support for our NEO compensation as described in the section of this proxy statement entitled “Compensation Discussion and Analysis” and in the compensation tables and related narrative discussion. This proposal, commonly known as a “say‑on‑pay” proposal, gives our shareholders the opportunity to express their views on our NEOs’ compensation. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation of the NEOs, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion, is hereby APPROVED.”
The say‑on‑pay vote is advisory, and therefore not binding on the Company, the Compensation Committee, or the Board. However, the Board and the Compensation Committee value the opinions of our shareholders and will review the voting results carefully.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF EXECUTIVE COMPENSATION.


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AUDIT COMMITTEE REPORT

The Audit Committee consists of four members of the Board. Each Audit Committee member is independent, within the meaning of the NYSE listing standards, of Envestnet and its management and has been determined by the Board to be financially literate, as contemplated by the NYSE listing standards. In addition, the Board has determined that Messrs. Smith, Chapin, Fox and Johnson are each audit committee financial experts within the meaning of the rules of the SEC.

The Audit Committee operates under a written charter approved by the Board, a copy of which is available on our website. As more fully described in the charter, the primary purpose of the Audit Committee is to assist the Board in its oversight of the integrity of our financial statements and financial reporting process, the system of internal controls, the audit process, the performance of our internal audit process and the performance, qualification and independence of our independent auditors, KPMG LLP (“KPMG”).

Our management prepares our consolidated financial statements in accordance with U.S. GAAP and is responsible for the financial reporting process that generates these statements. The Audit Committee has reviewed and discussed our audited financial statements with management. Management is also responsible for establishing and maintaining adequate internal control over financial reporting and for performing an assessment of the effectiveness of internal control. KPMG is responsible for auditing those financial statements and expressing an opinion as to their conformity with generally accepted accounting principles,U.S. GAAP, and annually attesting to the effectiveness of our internal control over financial reporting. The Audit Committee, on behalf of the Board, monitors and reviews these processes, acting in an oversight capacity relying on the information provided to it and on the representations made to it by our management, KPMG and other advisors.

The Audit Committee held six meetings in 2016. Audit Committee meetings are usually held in conjunction with the regularly scheduled meetings of the Board. At least quarterly, the Audit Committee met with management, KPMG (see “Proposal No. 4: Ratification of Appointment of Independent Auditors”), the Chief Financial Officer, the Chief Accounting Officer and the General Counsel to review, among other matters, the overall scope and plans for the independent audit, and the results of such audit; critical accounting estimates and policies; compliance with our conflict of interest and Code of Business Conduct and Ethics policies.

At least quarterly in 2016, the Audit Committee met in executive session (i.e., without management present) with representatives of KPMG to discuss the results of their work.

In connection with its audit of our financial statements for the year ended December 31, 2016,2019, KPMG presented to and reviewed with the Audit Committee the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 16.(“PCAOB”) and the SEC. The Audit Committee has also discussed with KPMG their independence from Envestnet, including a review of audit and non‑audit fees, and has reviewed in that context the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence.

Based on the review and discussions referred to above, and in reliance on the information, opinions, reports or statements presented to the Audit Committee by our management and KPMG, the Audit Committee recommended to the Board that the December 31, 20162019 audited consolidated financial statements be included in Envestnet’s Annual Report on Form 10‑K.

The foregoing report has been approved by all members of the Audit Committee.

Gregory Smith, Chairman
Chairperson
Ross Chapin
James Fox
James Johnson

Charles Roame


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PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the rules of the Securities and Exchange Commission, we are asking our stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our NEOs as disclosed in this proxy statement.

As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation program is designed to attract, motivate, and retain talented executives who possess the skills required to formulate and drive our strategic direction and achieve annual and long‑term performance goals necessary to create stockholder value. The program seeks to align executive compensation with stockholder value on an annual and long‑term basis through a combination of base pay, annual incentives and long‑term incentives. The Compensation Committee continually reviews the compensation programs for our NEOs to ensure they achieve the desired goals of aligning our executive compensation structure with our stockholders’ interests and current market practices. Please read the “Compensation Discussion and Analysis” discussion for additional details about our executive compensation programs, including information about the fiscal year 2016 compensation of our NEOs.

We believe that our executive compensation programs are structured in the best manner possible to support the Company and our business objectives. We are asking our stockholders to indicate their support for our NEO compensation as described on pages 23-37 of this proxy statement, which include the “Compensation Discussion and Analysis” section and the compensation tables and related narrative disclosure. This proposal, commonly known as a “say‑on‑pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation. 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. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“Resolved, that the stockholders approve the compensation of the NEOs, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and related narrative discussion.”

The say‑on‑pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. However, the Board and the Compensation Committee value the opinions of our stockholders and will review the voting results carefully.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF EXECUTIVE COMPENSATION.


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PROPOSAL NO. 3: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Pursuant to Rule 14a-21 under the Securities Exchange Act of 1934, we are required to submit to stockholders an advisory, non-binding vote asking them to indicate how frequently we should seek an advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Proposal No. 2 of this proxy statement. By voting on this Proposal No. 3, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years.

The advisory vote by the stockholders on frequency is distinct from the advisory vote on the compensation of our NEOs. This proposal deals with the issue of how frequently an advisory vote on compensation should be presented to our stockholders and, in this regard, we are soliciting your advice on the following resolution:

“Resolved that the compensation of our named executive officers be submitted to stockholders for an advisory vote:

1)

every year;

2)

every two years; or

3)

every three years.”

You may vote for one of these three alternatives or you may abstain from making a choice.

After careful consideration of the Proposal, the Board of Directors has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for the Company, and therefore the Board of Directors recommends that you vote for a one-year interval for the advisory vote on executive compensation.

In formulating its recommendation, the Board of Directors considered that submitting executive compensation on an annual basis gives stockholders a more meaningful voice on the Company’s executive compensation practices. The Board also considered the publicly expressed views of the institutional investor community, the practices of other companies and the Company’s current practice of having an annual vote.

The option of one year, two years or three years that receives the highest number of voices cast by stockholders will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. Although the vote is non-binding the Compensation Committee and the Board of Directors value the opinions of the stockholders and will consider the outcome of the vote when determining the frequency of the stockholder vote on executive compensation. However, because this vote is advisory and not binding on the Board of Directors in any way, the Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR A FREQUENCY OF “ONE YEAR” FOR FUTURE NON-BINDING STOCKHOLDER VOTES ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

Note: Stockholders are not voting to approve or disapprove the recommendation of the Board of Directors regarding Proposal No. 2.

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PROPOSAL NO. 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

REGISTERED PUBLIC ACCOUNTING FIRM

Typically, the appointment of our independent auditorsregistered public accounting firm is approved annually by the Audit Committee and ratified by our stockholders.shareholders. The Audit Committee reviews both the audit scope and estimated fees for professional services for the coming year. The Audit Committee has appointed subject to ratification by our stockholders, KPMG as our independent auditorregistered public accounting firm for the year ending December 31, 2017.

2020. If the Company’s shareholders do not ratify the appointment of KPMG, the Audit Committee will reconsider the appointment and may affirm the appointment or retain another independent accounting firm. Even if the appointment is ratified, the Audit Committee may in the future replace KPMG as our independent registered public accounting firm if it is determined that it is in the Company’s best interests to do so.

Our audited financial statements for the year ended December 31, 2016,2019 will be presented at the Annual Meeting. Representatives of KPMG will attend the Annual Meeting and will have an opportunity to make a statement if they wish. They will also be available to answer appropriate questions at the meeting.

Independent AuditorRegistered Public Accounting Firm Fee Information

The following table sets forth the approximate aggregate fees for professional services rendered by KPMG for 20152018 and 2016: 

 

 

 

 

 

 

 

 

    

2015

    

2016

Audit fees (1)

 

$

2,649,000

 

$

4,904,000

Audit-related fees (2)

 

 

130,500

 

 

114,000

Tax fees 

 

 

 —

 

 

 —

All other fees

 

 

 —

 

 

 —

Total

 

$

2,757,000

 

$

5,018,000

2019:
  2018 2019
Audit fees (1) $5,278,000
 $4,866,000
Audit-related fees (2) 315,000
 115,500
Tax fees  —
 —
All other fees —
 —
Total $5,593,000
 $4,981,500

(1)

Audit fees include:

*the audits of our consolidated financial statements and internal control over financial reporting (including audit work performed over acquisitions);

*reviews of quarterly consolidated financial statements;

*the statutory audit of one of our subsidiaries;

*consents issued in conjunction with the filing of registration statements in 2015; and

*comfort letters issued in conjunction with the filing of registration statements in 2015.

(2)

Audit‑related fees include:

*services to issue Statement on Standards for Attestation Engagements (SSAE) No. 16 reports.

(3)

This amount represents a $966,500 net increase from the amount we reported in our 2015 proxy statement, as billing for the services had not been finalized at the time of our filing.

consolidated financial statements and internal control over financial reporting (including audit work performed over acquisitions);
*reviews of quarterly consolidated financial statements;
*the statutory audits of two of our subsidiaries;
*consent and comfort letter issued in conjunction with the filing of registration statements;
(2) Audit‑related fees include:

*services to issue Service Organization Controls (SOC1) reports;
*services related to due diligence support for a potential acquisition


Pre‑Approval Policy of Audit and Non‑Audit Services

The Audit Committee pre‑approved all of the services associated with the fees described above. The Audit Committee has adopted policies and procedures for the pre‑approval of all audit and permissible non‑audit services provided by our independent auditor.registered public accounting firm. The Audit Committee provides a general pre‑approval of certain audit and non‑audit services on an annual basis. The types of services that may be covered by a general pre‑approval include other audit services, audit‑related services and permissible non‑audit services. If a type of service is not covered by the Audit Committee’s general pre‑approval, the Audit Committee must review the service on a specific case by case basis and pre‑approve it if such service is to be provided by the independent auditor.registered public accounting firm. Annual audit services, engagement terms, and fees require specific pre‑approval of the Audit Committee. Any proposed services exceeding the pre‑approved fees also require specific pre‑approval by the Audit Committee. For both types of pre‑approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence. The Audit Committee may delegate either type of pre‑approval authority to one or more of its members.

THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT AUDITORS.

REGISTERED PUBLIC ACCOUNTING FIRM.

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47



SHAREHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
PROPOSAL NO. 5: APPROVAL OF THE 2010 LONG‑TERM INCENTIVE PLAN AS AMENDED THROUGH THE FOURTH AMENDMENT

A

Any proposal will be presented at the 2017 Annual Meeting of Shareholders (the “2017 Annual Meeting”) to approve the Envestnet, Inc. Long‑Term Incentive Plan (the “LTIP”) as amended through the fourth amendment (the “Fourth Amendment”) (the LTIP as amended through the Fourth Amendment is referred to as the “Plan”).

Purpose

The Company believes in the merits of linking executives’ overall compensation opportunities to the enhancement of long‑term shareholder return and uses equity‑based compensation, such as options and other stock‑related awards, as key elements of its executives’ compensation packages. Because the Company believes it is important for the employees and directors of the Company and its subsidiaries to have an equity interest in the Company so that their interests are aligned with shareholder interests, and to be eligible to receive cash incentive awards, the Board of Directors has approved the Plan, and is recommending that shareholders approve the Plan. Approval of the Plan will help to achieve this goal and is necessary in order for the Company to continue making equity awards to employees and directors at competitive levels.

To achieve these objectives, the Plan provides for the grant of non‑qualified and incentive stock options, stock appreciation rights, which we refer to as “SARs”, full value awards, which include awards such as restricted stock or restricted stock units, and cash incentive awards. The Company has proposed the approval of the Plan primarily to increase the number of shares of stock available at this time due to the lower number of shares of stock available for issuance. Additionally, to preserve a tax deduction for compensation and expenses, the Company is submitting the Plan for approval by the shareholders to satisfy the requirement that the performance goals be periodically approved by shareholders as a condition of satisfying the performance‑based compensation exception to the $1 million limits on US tax‑deductible compensation. If stockholders do not approve the Plan, it will continue in its current form (including the changes made by the First through Third Amendments as described below); however, the increase in reserved shares, made by the Fourth Amendment will not take effect.

Summary of the Fourth Amendment

On April 26, 2017, the Board adopted the Fourth Amendment to the LTIP, subject to stockholder approval. The Fourth Amendment will increase the number of common shares of the Company (“Stock”) reserved for delivery under the Plan by 3,525,000 shares of Stock.

Under New York Stock Exchange rules, stockholder approval is required for increases to the number of shares reserved under the Plan. Additionally, to enable the Company to grant performance‑based compensation that is exempt from the $1 million limit on tax deductible compensation, the performance goals of the Plan must be periodically resubmitted to and approved by the stockholders.

The Fourth Amendment will become effective upon stockholder approval. Stockholder approval of the Plan will constitute approval of the performance measurement criteria set forth in the plan for purposes of Section 162(m).

A summary of the material provisions of the Plan, including the changes being made by the Fourth Amendment, is set forth below, and a copy of the Plan is set forth in Exhibit A.

Background

The LTIP originally became effective on July 28, 2010 and will continue in effect until terminated by the Board; provided, however, that if the Plan is approved by stockholders at the 2017 Annual Meeting, no awards may be granted under the Plan on or after the ten‑year anniversary of the date of such approval. Any awards that are outstanding after termination of the Plan shall remain subject to the terms of the Plan.

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In 2010, prior to the IPO, the Board and stockholders approved the LTIP. The LTIP was reapproved by the stockholders at the 2014 Annual Meeting of Shareholders for purposes of Section 162(m), but no changes to the Plan were made at that time. On March 18, 2015, the Board previously adopted the first amendment to the LTIP (the “First Amendment”). The First Amendment added restrictions to the LTIP that are favorable to shareholders, including provisions that: (a) require a minimum vesting period for performance shares of at least one year; (b) prohibit the grant of the right to receive dividend or dividend equivalents with respect to full value awards subject to vesting based on the satisfaction of performance objectives prior to the date that such full value award (or applicable portion thereof) becomes vested and is settled; (c) prohibit the grant of the right to receive dividend equivalents for awards of options or stock appreciation rights; (d) remove liberal share counting language for purposes of counting shares of Stock as available for use under the LTIP for awards granted under the LTIP; and (e) to make certain other technical and clarifying changes. The Second Amendment was approved by the shareholders at the 2015 Annual Meeting of Shareholders and (a) increased the number of shares of Stock reserved for delivery under the Plan by 2,700,000 shares of Stock, (b) added a provision which prohibited the surrender of underwater stock options or stock appreciation rights for a cash payment or for the grant of any other award under the Plan except as approved by the Company’s stock holders, (c) adjusted the individual limits on the number of shares of Stock which can be issued in settlement of certain types of awards, and (d) reapproved the Plan for purposes of Section 162(m). The Third Amendment was approved by the Board on April 26, 2017 and added provisions favorable to shareholders, including: (a) requiring a minimum vesting period for all awards (including awards to non-employee directors) of at least one year (provided that a small number of awards may be granted not subjectshareholder wishes to such minimum vesting requirementsinclude in an aggregate amount up to 5% of shares of Stock authorized to be issued pursuant to the Plan), (b) prohibiting the grant of the right to receive dividend or dividend equivalents with respect to all full value awards prior to the date that such full value award (or applicable portion thereof) becomes vested and is settled (i.e., bringing the provisions for full value awards with time-based vesting in line with those with performance-based vesting), (c) revising tax withholding language to reflect recently modified accounting rules, (d) providing that in the case of performance-based awards which vest upon a change of control, the Compensation Committee may determine satisfaction of the applicable performance goal either based on actual performance through the date of the change in control or based on assumed target performance, and (e) making certain other technical and clarifying changes.

Shares Outstanding and Available

The following table sets forth information regarding our outstanding equity awards as of April 3, 2017 under the Plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Weighted

 

 

 

 

 

Average 

 

Average

Plan Category

 

Outstanding

 

 

Exercise Price

 

Remaining Term

Total stock options/SARs

    

2,879,283

 

    

$

17.20

    

4.46

Full value awards

 

2,220,020

 

 

$

 —

 

9.31

Total shares subject to outstanding equity awards

 

5,099,303

 

 

 

 —

 

 —

Shares available for grant

 

404,967

(1)

 

 

 —

 

 —

(1)

The shares available for grant are the remaining shares available under the LTIP as of April 3, 2017. No additional shares are available and no additional grants will be made pursuant to the 2004 Stock Incentive Plan, the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (MIP), or the Envestnet, Inc. 2015 Acquisition Equity Award Plan.

All grants made previously to the CEO and executive officers pursuant to the Plan have been subject to a minimum of a three‑year ratable vesting period.

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Burn Rate

The following table sets forth information regarding equity awards granted and earned, and the burn rate for each of the last three fiscal years.

 

 

 

 

 

 

 

 

 

 

 

Burn Rate

 

 

 

Fiscal Year 2014

 

Fiscal Year 2015

 

 

Fiscal Year 2016

 

Stock Options Granted

 

214,253

 

358,087

 

  

163,864

 

Time-Based Restricted Stock Unit Awards Granted

 

360,834

 

457,031

(1)

 

804,661

 

Actual Performance-Based Restricted Stock Unit Earned

 

290,544

(2)

87,382

(2)

 

205,000

(3)

Weighted Average Common Shares Outstanding at Fiscal Year End

 

34,559,558

 

36,500,843

 

 

42,814,222

 

Burn Rate

 

4.39

%

3.96

%  

 

5.10

%

(1)

This number excludes the 1,051,765 time-based restricted stock and restricted stock unit awards granted pursuant to the Envestnet, Inc. 2015 Acquisition Equity Award Plan in order to assume certain unvested equity awards previously granted pursuant to applicable Yodlee, Inc. equity plans as part of the Company’s acquisition of Yodlee, Inc. and to convert such awards in to equity awards of the Company.

(2)

The 290,544 and 87,382 shares listed as performance-based restricted stock units for fiscal years 2014 and 2015, respectively, include awards granted pursuant to the MIP for which the applicable performance goals were satisfied with respect to such fiscal year. The service-based vesting requirements for such awards have all now been satisfied and no additional awards will be granted with respect to the MIP.

(3)

This number represents the 205,000 PSU Awards granted to Mr. Bergman, Mr. Crager and Mr. D’Arrigo for which the Adjusted EBIDTA goal for fiscal year 2016 was satisfied as certified by the Compensation Committee in early 2017. These awards remain subject to service-based vesting requirements on each of the first three anniversaries of the date of grant.

Plan Description

Description of the Envestnet, Inc. 2010 Long‑Term Incentive Plan as Amended through the Fourth Amendment

Purpose. We established the LTIP to: (a) attract and retain key employees and other persons providing services to us and our related companies (as defined below); (b) motivate participants by means of appropriate incentives to achieve long‑range goals; (c) provide incentive compensation opportunities that are competitive with those of other similar corporations; and (d) further align participants’ interests with those of our stockholders through compensation that is based on our Stock, and thereby to promote our and our related companies’ long‑term financial interests, including the growth in value of our equity and enhancement of long‑term stockholder return.

Approval and Shares Reserved. The LTIP was adopted by our Board on June 22, 2010 and was approved by our stockholders prior to the IPO. The LTIP became effective as of the date of the initial public offering of Stock of the Company on July 28, 2010. The LTIP was reapproved again at the 2014 Annual Meeting for purposes of Section 162(m) and again at the 2015 Annual Meeting to approve the Second Amendment and for purposes of Section 162(m).

The shares with respect to which awards may be made under the Plan are shares of Stock currently authorized but unissued or, as permitted by applicable law, currently held or acquired by us as treasury shares, including shares purchased in the open market or in private transactions. At the discretion of the Compensation Committee, an award under the Plan may be settled in cash rather than shares of Stock.

The maximum number of shares of Stock that may be delivered under the Plan is equal to the sum of (a) 8,925,000 shares, plus (b) the number of shares of Stock that are subject to outstanding awards under Envestnet’s 2004 Stock Incentive Plan which are forfeited, expire or are cancelled after the IPO without delivery of the shares or which result in the forfeiture of the shares of Stock back to us to the extent that such shares would have been added back to the shares reserved under Envestnet’s 2004 Stock Incentive Plan. Shares of Stock with respect to an award under the Plan will be treated as delivered for purposes of the previous sentence, subject to the following: (i) any shares of Stock that are not

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delivered to a participant or beneficiary because the award is forfeited or canceled, such shares are not deemed to have been delivered; and (ii) the total number of shares covered by an award will be treated as delivered for purposes of the previous sentence to the extent payments or benefits are delivered to the participant with respect to such shares (i.e., (A) if shares covered by an award are withheld or tendered to satisfy the applicable tax withholding obligation, the number of shares held back by the Company or tendered by the Participant to satisfy such withholding obligation shall be considered to have been delivered; (B) if the exercise price of any option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation (including shares of Stock that would otherwise be distributable upon the exercise of the option)), the number of shares tendered to satisfy such exercise price shall be considered to have been delivered; and (C) if shares of Stock are withheld in settlement of the exercise of an SAR, the total number of shares with respect to which such SAR is exercised shall be deemed delivered). Shares of Stock that we issue in connection with awards that are assumed or substituted in connection with a merger, acquisition or other corporate transaction will not be counted against the number of shares of Stock that may be issued with respect to awards under the Plan.

The following additional limits apply to awards under the Plan: (a) no more than 8,925,000 shares of Stock may be subject to incentive stock options granted under the Plan; (b) the maximum number of shares of Stock that may be covered by stock options and stock appreciation rights granted to any one participant in any one calendar year may not exceed 500,000 shares of Stock; (c) with respect to Full Value Awards (as defined below) that are intended to be performance‑based compensation, the maximum number of shares of Stock that may be delivered pursuant to any such award granted to any one participant during any calendar year, regardless of whether settlement of the award is to occur prior to, at the time of, or after the time of vesting, may not exceed 500,000 shares of Stock; (d) the maximum number of shares of Stock that may be covered by stock options and stock appreciation rights granted to any one participant who is a member of the Board, but who is not an employee of the Company or a related Company during any one calendar‑year period, may not exceed 25,000 shares, and the maximum number of shares of Stock that may be covered by Full Value Awards granted to any one participant who is a member of the Board, but who is not an employee of the Company or a related Company during any one calendar‑year period, may not exceed 25,000 shares; and (e) in the case of cash incentive awards (described below) that are intended to be performance‑based compensation, the maximum amount payable to any one participant with respect to any performance period of twelve months (prorated for performance periods of greater or lesser than 12 months) is $3,000,000. In the case of Full Value Awards and cash incentive awards that are intended to be performance‑based compensation, if the award is denominated in shares but an equivalent amount of cash is delivered (or vice versa), the foregoing limitations will be applied based on the methodology used by the Compensation Committee to convert shares of Stock to cash (or vice versa). If delivery of cash or shares of Stock is deferred until after the cash or shares of Stock are earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the cash or shares of Stock are earned will be disregarded.

In the event of a corporate transaction involving us, the Compensation Committee shall adjust awards when an equitable adjustment is required to preserve the benefits or potential benefits of awards. The Compensation Committee may adjust awards in other situations (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, amalgamation, consolidation, split‑up, spin‑off, sale of assets or subsidiaries, combination or exchange of shares of Stock). Action by the Compensation Committee may include: (a) adjustment of the number and kind of shares which may be delivered under the Plan (including adjustments to the individual limitations described above); (b) adjustment of the number and kind of shares subject to outstanding awards; (c) adjustment of the exercise price of outstanding stock options and stock appreciation rights; and (d) any other adjustments that the Compensation Committee determines to be equitable, which may include, without limitation, (i) replacement of awards with other awards which the Compensation Committee determines have comparable value and which are based on stock of a Company resulting from the transaction and (ii) cancellation of the award in return for cash payment of the current value of the award, determined as though the award is fully vested at the time of payment, provided that in the case of a stock option or stock appreciation right, the amount of such payment may be the excess of the value of the shares of Stock subject to the stock option or stock appreciation right at the time of the transaction over the exercise price.

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Administration. The authority to control and manage the operation and administration of the Plan is vested in the Compensation Committee. However, in the case of awards to non‑employee directors, such control and management is vested in the Board. The Board may, in its discretion, take any action under the Plan that would otherwise be the responsibility of the Compensation Committee. Subject to stock exchange rules and applicable law, the Compensation Committee may delegate all or any portion of its responsibilities or powers under the Plan to persons selected by it.

Eligibility. All of our employees and directors, all employees and directors of our related companies and service providers to us and our related companies are eligible to receive awards under the Plan and thereby become participants, except that incentive stock options can be awarded only to our employees and employees of certain of our related companies. A company is a “related company” if it is one of our subsidiaries in which we own (directly or indirectly) a controlling interest and any other business venture that is designated by the Compensation Committee in which we have (directly or indirectly) a significant interest. The Compensation Committee selects who will receive awards, the types of awards to be granted and the applicable terms, conditions, performance criteria, restrictions and other provisions of such awards.

Types of Awards. The Plan provides for the grant of nonqualified stock options, incentive stock options, stock appreciation rights, Full Value Awards, and cash incentive awards.

Stock Options. The Compensation Committee may grant incentive stock options or nonqualified stock options to purchase shares of Stock, at an exercise price that is no less than the fair market value of a share of Stock on the date the stock option is granted. No dividend equivalents (current or deferred) with respect to any stock options will be granted under the Plan. Incentive stock options may only be granted to our employees and employees of certain related companies. Except for reductions approved by our stockholders or adjustment for business combinations, the exercise price of a stock option may not be decreased after the date of grant nor may a stock option be surrendered to us as consideration for the grant of a replacement stock option with a lower exercise price. Except as approved by our stockholders, stock options granted under the Plan may not be surrendered to the Company in consideration for a cash payment or grant of any other award if, at the time of such surrender, the exercise price of the option is greater than the then current fair market value of the share. Stock options will be exercisable in accordance with the terms established by the Compensation Committee provided that no stock option granted to an employee will be exercisable prior to the first anniversary of the grant date (subject to acceleration of exercisability and vesting, to the extent permitted by the Compensation Committee, in the event of the participant’s death, disability, involuntary termination, or in connection with a change in control (as defined in the Plan)). The full purchase price of each share of Stock purchased upon the exercise of any stock option must be paid at the time of exercise of the stock option (except if the exercise price is payable through the use of cash equivalents, the exercise price may be paid as soon as practicable after exercise). Subject to applicable law, the purchase price of a stock option may be payable in cash or cash equivalents, shares of Stock, including shares of Stock that would otherwise be distributable upon the exercise of the stock option (valued at fair market value as of the day of exercise), or a combination thereof. The Compensation Committee, in its discretion, may impose such conditions, restrictions, and contingencies on the shares of Stock acquired pursuant to the exercise of a stock option as the Compensation Committee determines to be desirable. Except as provided by the Compensation Committee at the time of grant, a stock option will expire on the earliest to occur of the following: (a) the ten‑year anniversary of the grant date; (b) the six‑month anniversary after the participant’s employment or service terminates for death or disability (as defined in the Plan); (c) the three‑month anniversary after the participant’s employment or service terminates other than for death, disability or cause (as defined in the Plan); or (d) the date the participant’s employment or service terminates for cause (as defined in the Plan). In no event will a stock option expire after the ten‑year anniversary of the grant date.

Stock Appreciation Rights. A stock appreciation right entitles the participant to receive the amount (in cash or shares of Stock) by which the fair market value of a specified number of shares of Stock on the exercise date exceeds an exercise price established by the Compensation Committee, which exercise price may not be less than the fair market value of the shares of Stock at the time the stock appreciation right is granted. The Compensation Committee may grant a stock appreciation right independent of or in tandem with any stock option grant. The exercise price of a tandem stock option and stock appreciation right will be the same and the exercise of one will cancel the other. No dividend equivalents (current or deferred) with respect to any stock appreciation rights will be granted under the Plan. Except for reductions approved by our stockholders or adjustment for business combinations, the exercise price of a stock appreciation right may not be decreased after the date of grant nor may a stock appreciation right be surrendered to us as consideration for the grant of a

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replacement stock appreciation right with a lower exercise price. Except as approved by our stockholders, stock appreciation rights granted under the Plan may not be surrendered to the Company in consideration for a cash payment or grant of any other award if, at the time of such surrender, the exercise price of the stock appreciation right is greater than the then current fair market value of the share. Generally, a stock appreciation right will be exercisable in accordance with the terms established by the Compensation Committee provided that no stock appreciation right granted to an employee will be exercisable prior to the first anniversary of the grant date (subject to acceleration of exercisability and vesting, to the extent permitted by the Compensation Committee, in the event of the participant’s death, disability, involuntary termination or in connection with a change in control). The Compensation Committee, in its discretion, may impose such conditions, restrictions, and contingencies on shares of Stock acquired pursuant to the exercise of a stock appreciation right as the Compensation Committee determines to be desirable. The expiration date of a stock appreciation right is subject to the same provisions as a stock option, as discussed above.

Full Value Awards. A “Full Value Award” is the grant of one or more shares of Stock or a right to receive one or more shares of Stock in the future, subject to one or more of the following as determined by the Compensation Committee:

·

The Compensation Committee may grant Full Value Awards in consideration of a participant’s previously performed services or in return for the participant surrendering other compensation that may be due.

·

The Compensation Committee may grant Full Value Awards that are contingent on the achievement of performance or other objectives during a specified period.

·

The Compensation Committee may grant Full Value Awards subject to a risk of forfeiture or other restrictions that lapse upon the achievement of one or more goals relating to completion of service by the participant, or the achievement of performance or other objectives.

Any Full Value Awards will be subject to such other conditions, restrictions and contingencies as the Compensation Committee determines; provided, however that no dividend or dividend equivalents granted in relation to Full Value Awards will be settled prior to the date that such Full Value Award (or applicable portion thereof) becomes vested and is settled. If a Full Value Award is made to a participant and the participant’s right to vesting of this Full Value Award is conditioned on the completion of a specified period of service with us or our related companies, without achievement of performance measures (as described below) or other performance objectives being required as a condition of vesting, and without it being granted in lieu of other compensation, then the required period of service for full vesting will not be less than three years (subject, to the extent provided by the Compensation Committee, to prorated vesting over the course of such three‑year period (provided that no portion of such pro rated Full Value Award shall become vested prior to the first anniversary of the date on which it is granted) and to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control). If a Full Value Award is made to a participant and the participant’s right to vesting of this Full Value Award is conditioned on the achievement of performance measures (as described below) or other performance objectives, then the required performance period for determining the achievement of such performance targets or other performance objectives for vesting will be not less than one year (subject, to the extent provided by the Compensation Committee, to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control). If a non-employee director’s right to become vested in any Full Value Award is conditioned either on completion of a specified period of service or the achievement of performance targets or other performance objectives, then the required period of service or performance period for determining the achievement of such performance targets or other performance objectives for vesting will not be less than one year (subject, to the extent provided by the Compensation Committee, to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control).

Cash Incentive Awards. A “Cash Incentive Award” is the grant of a right to receive a payment of cash (or, in the discretion of the Compensation Committee, shares of Stock having an equivalent value to the cash otherwise payable) that is contingent on achievement of performance objectives over a period established by the Compensation Committee. The grant of Cash Incentive Awards may also be subject to such other conditions, restrictions and contingencies as determined by the Compensation Committee. If a Cash Incentive Award is made to a participant and the participant’s right to vesting of this Cash Incentive Award is conditioned on the completion of a specified period of service with us or our related companies, without achievement of performance measures (as described below) or other performance objectives being

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required as a condition of vesting, and without it being granted in lieu of other compensation, then the required period of service for full vesting will not be less than three years (subject, to the extent provided by the Compensation Committee, to prorated vesting over the course of such three-year period and to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control). If a Cash Incentive Award is made to a participant and the participant’s right to vesting of this Cash Incentive Award is conditioned on the achievement of performance measures (as described below) or other performance objectives, then the required performance period for determining the achievement of such performance targets or other performance objectives for vesting will be not less than one year (subject, to the extent provided by the Compensation Committee, to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control). If a non-employee director’s right to become vested in any Full Value Award is conditioned either on completion of a specified period of service or the achievement of performance targets or other performance objectives, then the required period of service or performance period for determining the achievement of such performance targets or other performance objectives for vesting will not be less than one year (subject, to the extent provided by the Compensation Committee, to accelerated vesting in the event of the participant’s death, disability or involuntary termination or a change in control).

Minimum Vesting Exception. The Compensation Committee may grant awards that are not subject to the minimum vesting limitations with respect to options, stock appreciation rights, Full Value Awards or Cash Incentive Awards, provided that the aggregate number of shares of Stock subject to such awards may not exceed five percent (5%) of the limits on shares of Stock granted under the Plan.

Change in Control. In the event that (a) a participant’s employment or service, as applicable, is terminated by us, our successor or one of our related companies that is the participant’s employer for reasons other than cause (as defined in the Plan) within 24 months following a change in control (as defined in the Plan) or (b) the Plan is terminated by us or our successor following a change in control without provision for the continuation of outstanding awards under the Plan, all stock options, stock appreciation rights and related awards which have not otherwise expired will become immediately exercisable and all other awards will become fully vested provided that the extent to which any award becomes vested based on the satisfaction of applicable performance goals or targets on or after a change in control, the Compensation Committee may make such determination either based on the determination of the satisfaction of the applicable performance goal based on actual performance through the date of such change in control or based on assumed performance at the target level through the date of such change in control.

Performance Criteria. The Plan is intended to permit the grant of performance‑based compensation within the meaning of Section 162(m) of the Code, which generally limits the deduction that we may take for compensation of our Chief Executive Officer, and the next three most highly compensated NEOs (other than the Chief Financial Officer). Under Section 162(m), certain compensation, including compensation based on the attainment of performance goals, will not be subject to this limitation if certain requirements are met. The exercisability or payment of awards that are intended to qualify as performance‑based compensation may be based upon one or more of the following business criteria as established by the Compensation Committee: (i) earnings including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items) or net earnings; (ii) pre‑tax income or after‑tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment (including cash flow return on investment), return on capital (including return on total capital or return on invested capital), or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow (before or after dividends), free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, cash flow in excess of cost of capital or cash flow per share (before or after dividends); (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) stock price or total stockholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance targets, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; (xix) funds from operations

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(FFO) or funds available for distribution (FAD); (xx) economic value added (or an equivalent metric); (xxi) stock price performance; (xxii) improvement in or attainment of expense levels or working capital levels; (xxiii) adjusted EBITDA; (xxiv) adjusted operating income; (xxv) adjusted net income or (xxvi) any combination of, or a specified increase in, any of the foregoing. Where applicable, the performance targets may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company, a related company, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Compensation Committee. The performance targets may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). Each of the foregoing performance targets shall be determined in accordance with generally accepted accounting principles and shall be subject to certification by the Compensation Committee; provided that the Compensation Committee shall have the authority to exclude, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non‑recurring events and the cumulative effects of tax or accounting principles and identified in financial statements, notes to financial statements, management’s discussion and analysis or other SEC filings.

Transferability. Awards under the Plan are not transferable except as designated by the participant by will or by laws of descent and distribution or, to the extent provided by the Compensation Committee, pursuant to a qualified domestic relations order or to or for the benefit of the participant’s family (including, without limitation, to a trust or partnership for the benefit of a participant’s family).

Withholding. All awards and other payments under the Plan are subject to withholding of all applicable taxes. With the consent of the Compensation Committee, withholding obligations may be satisfied with previously‑owned shares of Stock or shares of Stock to which the Participant is otherwise entitled under the Plan. The amount withheld in the form of such shares may not exceed the maximum individual tax rate for the Participant in applicable jurisdictions for such Participant (based on the applicable rates of the relevant tax authorities (for example, federal, state and local)), including the Participant’s share of payroll or similar taxes, as provided in law, regulations, or the authority’s administrative practices, not to exceed the highest statutory rate in that jurisdiction, even if that rate exceeds the highest rate that may be applicable to the specific Participant.

Amendment and Termination. The Board may, at any time, amend or terminate the Plan, and the Board or the Compensation Committee may amend any award, provided that no amendment or termination may adversely affect the rights of any participant without the participant’s written consent. Adjustments to the 2010 Plan and awards on account of business transactions (as described above) are not subject to the foregoing prohibition. The provisions of the Plan that prohibit repricing of stock options and stock appreciation rights cannot be amended unless the amendment is approved by our stockholders. The Plan also permits the Board to amend the Plan and any awards that are subject to Section 409A of the Internal Revenue Code (relating to nonqualified deferred compensation) as it deems necessary to conform to Section 409A.

United States Income Tax Considerations

The following is a brief description of the U.S. federal income tax treatment that will generally apply to awards under the Plan based on current U.S. income taxation with respect to participants who are subject to U.S. income tax.

Non Qualified Options

The grant of a non‑qualified option will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares of stock acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

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The exercise of a non‑qualified option through the delivery of previously acquired shares will generally be treated as a non‑taxable, like‑kind exchange as to the number of shares surrendered and the identical number of shares received under the option. That number of shares will take the same basis and, for capital gains purposes, the same holding period as the shares that are given up. The value of the shares received upon such an exchange that are in excess of the number given up will be includible as ordinary income to the participant at the time of the exercise. The excess shares will have a new holding period for capital gain purposes and a basis equal to the value of such shares of Stock determined at the time of exercise.

Neither the participant nor the transferee will realize taxable income at the time of a non arms’ length transfer of a non‑qualified option as a gift. Upon the subsequent exercise of the option by the transferee, the participant will realize ordinary income in an amount equal to the excess of the fair market value of the shares of Stock on the date of exercise over the option price. Upon a subsequent disposition of the shares of Stock by the transferee, the transferee will generally realize short‑term or long‑term capital gain or loss, with the basis for computing such gain or loss equal to the fair market value of the shares at the time of exercise. If a participant makes a gift of an option, and surrenders all dominion and control of the option, the gift should be complete for U.S. gift tax purposes at the time of transfer and should be valued at that time or, if later, at the time the option becomes vested. For gift and estate tax purposes, the gift of an option would generally cause the option and the shares of Stock acquired by exercise to be excluded from the participant’s estate. Special rules may apply if the participant makes a gift of an award to a charity or to a “living trust” under which the participant retains the right to revoke the trust or substantially alter its terms.

Incentive Stock Options

The grant of an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise or ending one year prior to the date of exercise if the participant is disabled, as that term is defined in the Code.

The excess of the fair market value of the shares of Stock at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the incentive stock option is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of disposition of the shares of Stock acquired pursuant to the incentive stock option exercise, the participant will have a basis in those shares equal to the fair market value of the shares at the time of exercise.

If the participant does not sell or otherwise dispose of the Stock within two years from the date of the grant of the incentive stock option or within one year after receiving the transfer of such shares of Stock, then, upon disposition of such shares of stock, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and the Company will not be entitled to any deduction. A capital loss will be recognized to the extent that the amount realized is less than the exercise price.

If the foregoing holding period requirements are not met, the participant will generally realize ordinary income, and a corresponding deduction will be allowed to the Company, at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess of the fair market value of the shares of Stock on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price. If the amount realized exceeds the value of the shares on the date of exercise, any additional amount will be capital gain. If the amount realized is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.

The exercise of an incentive stock option through the exchange of previously acquired shares of Stock will generally be treated in the same manner as such an exchange would be treated in connection with the exercise of a non‑qualified option; that is, as a non‑taxable, like‑kind exchange as to the number of shares given up and the identical number of shares received under the option. That number of shares will take the same basis and, for capital gain purposes, the same holding period as the shares that are given up. However, such holding period will not be credited for purposes of

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the one‑year holding period required for the new shares to receive incentive stock option treatment. Shares received in excess of the number of shares given up will have a new holding period and will have a basis of zero or, if any cash was paid as part of the exercise price, the excess shares received will have a basis equal to the amount of the cash. If a disqualifying disposition, which is a disposition before the end of the applicable holding period, occurs with respect to any of the shares received from the exchange, it will be treated as a disqualifying disposition of the shares with the lowest basis.

If the exercise price of an incentive stock option is paid with shares of Stock acquired through a prior exercise of an incentive stock option, gain will be realized on the shares given up and will be taxed as ordinary income if those shares have not been held for the minimum incentive stock option holding period, which holding period is two years from the date of grant and one year from the date of transfer, but the exchange will not affect the tax treatment, as described in the immediately preceding paragraph, of the shares received.

Stock Appreciation Rights

The grant of an SAR will not result in taxable income to the participant. Upon exercise of an SAR, the amount of cash or the fair market value of shares of Stock received will be taxable to the participant as ordinary income, and a corresponding deduction will be allowed to the Company. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

Full Value Awards

A participant who has been granted a full value award will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time, if the grant is subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of other objectives, assuming that the restrictions constitute a “substantial risk of forfeiture” for U.S. income tax purposes. Upon the vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares, and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting. Dividends paid to the holder during the restriction period will also be compensation income to the participant and deductible as such by the Company.

Cash Incentive Awards

A participant will realize taxable income at the time the cash incentive award is distributed, and the Company will be entitled to a corresponding deduction.

Withholding of Taxes

Pursuant to the Plan, the Company may deduct, from any payment or distribution of shares under the Plan, the amount of any tax required by law to be withheld with respect to such payment, or may require the participant to pay such amount to the Company prior to, and as a condition of, making such payment or distribution. Subject to rules and limitations established by the Compensation Committee, a participant may elect to satisfy the withholding required, in whole or in part, either by having the Company withhold shares of Stock from any payment under the Plan or by the participant delivering shares of the Company to the Company. However, the number of such shares used to satisfy the withholding obligation with respect to the exercise of a stock option may not be more than the number required to satisfy the Company’s minimum statutory withholding obligation based on minimum statutory withholding rates for U.S. federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income. Any election must be made in writing on or before the date when the amount of taxes to be withheld is determined. The portion of the withholding that is satisfied with shares will be determined using the fair market value shares of shares of Stock on the date when the amount of taxes to be withheld is determined.

The use of shares of Stock to satisfy any withholding requirement will be treated, for U.S. income tax purposes, as a sale of such shares for an amount equal to the fair market value of the shares on the date when the amount of taxes to be

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withheld is determined. If previously‑owned shares of Stock of the Company are delivered by a participant to satisfy a withholding requirement, the disposition of such shares would result in the recognition of gain or loss by the participant for tax purposes, depending on whether the basis in the delivered shares is less than or greater than the fair market value of the shares at the time of disposition.

Change In Control

Any acceleration of the vesting or payment of awards under the Plan in the event of a change in control in the Company may cause part or all of the consideration involved to be treated as an “excess parachute payment” under the Code, which may subject the participant to a 20% excise tax and preclude deduction by a subsidiary.

Deferred Compensation.

Awards granted pursuant to the Plan are generally not intended to constitute “deferred compensation” subject to Section 409A of the Code. If an award does constitute “deferred compensation,” it is intended to comply with Section 409A of the Code. A violation of Section 409A of the Code may subject a participant to immediate taxation of an award plus a 20 percent excise tax and interest.

Tax Advice

The preceding discussion is based on U.S. tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the Plan. A participant may also be subject to state and local taxes, or taxes in other jurisdictions, in connection with the grant of awards under the Plan. The Company suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules to the awards granted to them in their personal circumstances.

Authorized Securities under Equity Compensation Plans

The following table presents securities authorized for issuance under equity compensation plans at April 3, 2017:

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Number of

 

 

Number of securities

 

Weighted-average

 

securities

 

 

to be issued upon

 

exercise price of

 

remaining available

 

 

exercise of

 

outstanding

 

for future issuance

 

 

outstanding options,

 

options, warrants,

 

under equity

Plan Category

 

warrants, and rights

 

and rights

 

compensation plans

Equity compensation plans approved by security holders (1)

 

5,099,303

 

$

9.71

 

404,967

Total

 

5,099,303

 

 

 —

 

404,967

(1)These totals include securities available for future issuance under the following plans:

i.Envestnet, Inc. 2010 Equity Incentive Plan

This summary of the Plan is qualified in its entirety by the full text of the Plan, a copy of which is attached as Exhibit A.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE 2010 LONG‑TERM INCENTIVE PLAN AS AMENDED THROUGH THE FOURTH AMENDMENT.

52

Table of Contents

STOCKHOLDER PROPOSALS FOR 2018 ANNUAL MEETING

How do I submit a proposal for inclusion in next year’s proxy material?

If you wish to submit a proposal to be considered for inclusion in the proxy materialmaterials for the next annual meeting please send it to the Corporate Secretary, Envestnet, Inc., 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601. Under the rules of the SEC, proposals must be received at the following address no later than January 1, 2018December 9, 2020 and otherwise comply with the requirements of the SEC to be eligible for inclusion in Envestnet’s 2018 Annual Meeting2021 annual meeting proxy statement and form of proxy.

How do Iproxy: Corporate Secretary, Envestnet, Inc., 35 East Wacker Drive, Suite 2400, Chicago, Illinois, 60601.

To submit a shareholder proposal that is not eligible for inclusion in the proxy materials for our next annual meeting, or to make a nomination at an annual meeting?

A stockholder proposal not included in our proxy statement for the 2018 Annual Meeting of Stockholders will be ineligible for presentationone or more directors at the 2018 Annual Meeting of Stockholders unless the stockholder givesannual meeting, a shareholder must give timely notice of the proposal or nomination in writing to our secretaryCorporate Secretary at our principal executive offices. Underoffices and comply with the other requirements set forth in our by‑laws, in order for a matter toby-laws. To be deemed properly presented by a stockholder, timely, notice must be delivered to or mailedthe Corporate Secretary at the address noted above between December 9, 2020 and received by, us not less than 90 nor more than 120 days prior to the next annual meeting of stockholders;January 8, 2021; provided, however, that in the event that if we did not hold an annual meeting in the prior year or if the date of the annual meeting is more than 30 days before or after the anniversary date of the prior year’s annual meeting, we must receive the stockholder’sshareholder’s notice by the close of business on the later of 90 days prior to the annual meeting and the 10th day10 days after the day we provided suchprovide public disclosure of the meeting date. The notice must set forth, as to each proposed matter, the information required by Section 4.1 (for shareholder proposals) or Section 5.2 (for director nominations) of our by-laws which includes the following: (a) for shareholder proposals, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend our by‑laws, the language of the proposed amendment), and reasons for conducting such business at the meeting;meeting or, for director nominations, certain biographical and background information about each nominee; (b) the name and record address of the stockholdershareholder proposing such business or director nominee and the beneficial owner, if any, on whose behalf the proposal or nomination is made; (c) the number of shares of our common stock that are owned beneficially and of record by the stockholdershareholder and beneficial owner; (d) for shareholder proposals, any material interest of the stockholdershareholder in such business;business or, for director nominations, a description of all arrangements or understandings between such shareholder and each person the shareholder proposes for election or reelection as a director; and (e) any other information that is required to be provided by such stockholdershareholder pursuant to proxy proposal submission rules of the SEC.

Exchange Act or applicable SEC rules.

OTHER MATTERS

The Board of Envestnet does

We do not know of any matters which may be presented at the Annual Meeting other than those specifically set forth in the Notice of Annual Meeting. If any other matters come before the meeting or any adjournment thereof, the persons named in the accompanying form of proxy and acting thereunder will vote in accordance with their best judgment with respect to such matters.

By Order

The Company has made available to you its Annual Report on Form 10-K which you may access at www.envestnet.com. We will furnish without charge to each person whose proxy is being solicited, upon the written request of any such person, a copy of our Annual Report on Form 10-K for the Boardfiscal year ended December 31, 2019, as filed with the SEC, including the financial statements and schedules thereto. Requests for copies of Directors,

Picture 5

Shelly O’Brien

such report should be directed to Envestnet’s Corporate Secretary

at 35 East Wacker Drive, Suite 2400, Chicago, IL 60601.

53

Exhibit A

ENVESTNET, INC.
2010 LONG-TERM INCENTIVE PLAN

(as amended by the First, Second, Third and Fourth Amendment)

SECTION 1

GENERAL

By Order of the Board of Directors,
def14ag004.jpg
Shelly O’Brien
Corporate Secretary

1.1Purpose. Envestnet, Inc., a Delaware corporation (the “Company”), has established the Plan to:

(a)

attract and retain key employees and other persons providing services to the Company and the Related Companies;

(b)

motivate Participants by means of appropriate incentives to achieve long-range goals;

(c)

provide incentive compensation opportunities that are competitive with those of other similar corporations; and

(d)

further align Participants’ interests with those of the Company’s stockholders through compensation that is based on the Company’s common stock,

and thereby to promote the long-term financial interest of the Company and the Related Companies, including the growth in value of the Company’s equity and enhancement of long-term stockholder return.

1.2Defined Terms. The meaning of capitalized terms used in the Plan are set forth in Section 7.

1.3Participation. For purposes of the Plan, a “Participant” is any Eligible Individual to whom an Award is granted under the Plan. Subject to the terms and conditions of the Plan, the Committee shall determine and designate, from time to time, from among the Eligible Individuals those persons who will be granted one or more Awards under the Plan and, subject to the terms and conditions of the Plan, a Participant may be granted any Award permitted under the provisions of the Plan and more than one Award may be granted to a Participant. Except as otherwise agreed by the Company and the Participant, or except as otherwise provided in the Plan, an Award under the Plan shall not affect any previous Award under the Plan or an award under any other plan maintained by the Company or the Related Companies.

SECTION 2

OPTIONS

2.1Definitions.

(a)

The grant of an “Option” under the Plan entitles the Participant to purchase shares of Stock at an Exercise Price fixed by the Committee at the time the Option is granted. Options granted under this Section 2 may be either Incentive Stock Options or Non-Qualified Stock Options, as determined in the discretion of the Committee. Options granted to Participants who are not employees of the Company and its Subsidiaries shall be Non-Qualified Stock Options. To the extent that an Option that is intended to constitute an Incentive Stock Option does not satisfy the requirements of section 422 of the Code, such Option shall be treated as a Non-Qualified Stock Option.

A-1


48


(b)

A grant of a “stock appreciation right” or “SAR” entitles the Participant to receive, in cash or shares of Stock (as determined in accordance with the terms of the Plan) value equal to the excess of: (i) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (ii) the Exercise Price established by the Committee at the time of grant.


(c)

An Option may but need not be in tandem with an SAR, and an SAR may but need not be in tandem with an Option (in either case, regardless of whether the original award was granted under this Plan or another plan or arrangement.) If an Option is in tandem with an SAR, the exercise price of both the Option and SAR shall be the same, and the exercise of the Option or SAR with respect to a share of Stock shall cancel the corresponding tandem SAR or Option right with respect to such share. If an SAR is in tandem with an Option but is granted after the grant of the Option, or if an Option is in tandem with an SAR but is granted after the grant of the SAR, the later granted tandem Award shall have the same exercise price as the earlier granted Award, but in no event less than the Fair Market Value of a share of Stock at the time of such grant.

APPENDIX A

2.2Eligibility. The Committee shall designate the Participants to whom Options or SARs are to be granted under this Section 2 and shall determine the number of shares of Stock subject to each such Option or SAR and the other terms and conditions thereof, not inconsistent with the Plan. No dividend equivalents (current or deferred) with respect to any Option or SAR shall be granted under the Plan. 

DEFINITIONS AND RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES

2.3Exercise PriceIn addition to reporting results according to U.S. GAAP, we also disclose certain non-GAAP financial measures to enhance the understanding of our operating performance. Those measures include “adjusted EBITDA” and “adjusted net income per diluted share” (“adjusted EPS”). The “Exercise Price” of an Option or SAR shall be established by the Committee at the time the Option or SAR is granted; provided, however, that in no event shall such price be less than 100% of the Fair Market Value of a share of Stock on such date (or, if greater, the par value of a share of Stock on such date).

2.4Exercise/Vesting. Except as otherwise expressly provided in the Plan, an Option or SAR granted under the Plan shall be exercisable in accordance with the following:

“Adjusted EBITDA” represents net income (loss) before deferred revenue fair value adjustment, interest income, interest expense, imputed interest expense on contingent consideration, accretion on contingent consideration and purchase liability, income tax provision (benefit), depreciation and amortization, non‑cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, litigation related expense, foreign currency, non-income tax expense adjustment, loss allocation from equity method investment, impairment of equity method investment and loss attributable to non‑controlling interest.

(a)

The terms and conditions relating to exercise and vesting of an Option or SAR shall be established by the Committee to the extent not inconsistent with the Plan, and may include, without limitation, conditions relating to completion of a specified period of service, achievement of performance standards prior to exercise or the achievement of Stock ownership objectives by the Participant. Notwithstanding the foregoing, and subject to subsection 5.3(b), in no event shall an Option or SAR granted to any Participant become exercisable or vested prior to the first anniversary of the date on which it is granted (subject to acceleration of exercisability and vesting, to the extent permitted by the Committee, in the event of the Participant’s death, Disability, Change in Control or involuntary termination).

“Adjusted net income” represents net income (loss) before deferred revenue fair value adjustment, accretion on contingent consideration and purchase liability, non‑cash interest expense, non‑cash compensation expense, restructuring charges and transaction costs, severance, amortization of acquired intangibles and fair value adjustment to property and equipment, net, fair‑market value adjustment on contingent consideration liability, litigation related expense, foreign currency, non-income tax expense adjustment, loss allocation from equity method investment, impairment of equity method investment and loss attributable to non‑controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.

(b)

No Option or SAR may be exercised by a Participant after the Expiration Date applicable to that Option or SAR.

“Adjusted EPS” represents adjusted net income attributable to common shareholders divided by the diluted number of weighted‑average shares outstanding.

2.5Payment of Exercise Price. The payment of the Exercise Price of an Option granted under this Section 2 shall be subject to the following:

Our Board and our management use adjusted EBITDA and adjusted net income per share:

(a)

Subject to the following provisions of this subsection 2.5, the full Exercise Price of each share of Stock purchased upon the exercise of any Option shall be paid at the time of such exercise (except that, in the case of an exercise through the use of cash equivalents, payment may be made as soon as practicable after the exercise) and, as soon as practicable thereafter, a certificate representing the shares of Stock so purchased shall be delivered to the person entitled thereto.

As measures of operating performance;

(b)

Subject to applicable law, the Exercise Price shall be payable in cash or cash equivalents, by tendering, by actual delivery or by attestation, shares of Stock (including shares of Stock that would otherwise be distributable upon the exercise of the Option) valued at Fair Market Value as of the day of exercise or by a combination thereof, as approved by the Committee.

For planning purposes, including the preparation of annual budgets;

A-2

To allocate resources to enhance the financial performance of our business;

To evaluate the effectiveness of our business strategies; and
In communications with our Board concerning our financial performance.
Our Compensation Committee, Board and our management may also consider adjusted EBITDA, among other factors, when determining management’s incentive compensation.
We also present adjusted EBITDA and adjusted EPS as supplemental performance measures because we believe that they provide our Board, management and investors with additional information to assess our performance. Adjusted EBITDA provide comparisons from period to period by excluding potential differences caused by variations in the age and book depreciation of fixed assets affecting relative depreciation expense and amortization of internally developed software, amortization of acquired intangible assets, litigation‑related expense, foreign currency, income tax provision (benefit), restructuring charges and transaction costs, accretion on contingent consideration and purchase liability, fair market value adjustments on contingent consideration liability, non-income tax expense, severance, loss allocation from equity method investment, impairment of equity method investment, loss attributable to non‑controlling interest, and changes in interest expense and interest income that are influenced by capital structure decisions and capital market conditions. Our management also believes it is useful to exclude non‑cash stock‑based compensation expense from adjusted EBITDA and adjusted net income because non‑cash equity grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time.
We believe adjusted EBITDA and adjusted EPS are useful to investors in evaluating our operating performance because securities analysts use adjusted EBITDA and adjusted EPS as supplemental measures to evaluate the overall performance of companies, and we anticipate that our investor and analyst presentations will include adjusted EBITDA and adjusted EPS.
Adjusted EBITDA and adjusted EPS are not measurements of our financial performance under U.S. GAAP and should not be considered as an alternative to revenues, net income, operating income or any other performance measures derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities as a measure of our profitability or liquidity.
We understand that, although adjusted EBITDA and adjusted EPS are frequently used by securities analysts and others in their evaluation of companies, these measures have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for an analysis of our results as reported under U.S. GAAP. In particular you should consider:
Adjusted EBITDA and adjusted EPS do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

49


(c)

Subject to applicable law, the Committee may permit a Participant to elect to pay the Exercise Price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise.


2.6Post-Exercise Limitations. The Committee, in its discretion, may impose such restrictions on shares of Stock acquired pursuant to the exercise of an Option as it determines to be desirable, including, without limitation, restrictions relating to disposition of the shares and forfeiture restrictions based on service, performance, Stock ownership by the Participant and such other factors as the Committee determines to be appropriate.

Adjusted EBITDA and adjusted EPS do not reflect changes in, or cash requirements for, our working capital needs;

2.7No Repricing. Except for either adjustments pursuant to subsection 4.3 (relating to the adjustment of shares), or reductions of the Exercise Price approved by the Company’s stockholders, the Exercise Price for any outstanding Option or SAR may not be decreased after the date of grant nor may an outstanding Option or SAR granted under the Plan be surrendered to the Company as consideration for the grant of a replacement Option or SAR with a lower exercise price. Except as approved by the Company’s stockholders, in no event shall any Option or SAR granted under the Plan be surrendered to the Company in consideration for a cash payment or the grant of any other Award if, at the time of such surrender, the exercise price of the Option or SAR is greater than the then current Fair Market Value of a share.  In addition, no repricing of an Option or SAR shall be permitted without the approval of the Company’s stockholders if such approval is required under the rules of any stock exchange on which Stock is listed.

Adjusted EBITDA and adjusted EPS do not reflect non‑cash components of employee compensation;

2.8Tandem Grants of Options and SARs. An Option may but need not be in tandem with an SAR, and an SAR may but need not be in tandem with an Option (in either case, regardless of whether the original award was granted under this Plan or another plan or arrangement). If an Option is in tandem with an SAR, the exercise price of both the Option and SAR shall be the same, and the corresponding tandem SAR or Option shall cancel the corresponding tandem SAR or Option right with respect to such share.

Although depreciation and amortization are non‑cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements;

2.9Expiration Date. The “Expiration Date” with respect to an Option or SAR means the date established as the Expiration Date by the Committee at the time of the grant; provided, however, that unless determined otherwise by the Committee at the time of grant, the Expiration Date with respect to any Option or SAR shall not be later than the earliest to occur of:

Due to either net losses before income tax expense or the use of federal and state net operating loss carryforwards in 2019, 2018 and 2017, we paid net cash of $8,119, $5,531, and $3,261 in the years ended December 31, 2019, 2018 and 2017, respectively. In the event that we begin to generate taxable income and our existing net operating loss carryforwards for federal and state income taxes have been fully utilized or have expired, income tax payments will be higher; and

(a)

the ten-year anniversary of the date on which the Option or SAR is granted;

Other companies in our industry may calculate adjusted EBITDA and adjusted EPS differently than we do, limiting their usefulness as a comparative measure.

(b)

if the Participant’s Termination Date occurs by reason of death or Disability, the six-month year anniversary of such Termination Date;

Management compensates for the inherent limitations associated with using adjusted EBITDA and adjusted EPS through disclosure of such limitations, presentation of our financial statements in accordance with U.S. GAAP and reconciliation of adjusted EBITDA and adjusted EPS to net income and net income per share, the most directly comparable U.S. GAAP measure. Further, our management also reviews U.S. GAAP measures and evaluates individual measures that are not included in some or all of our non‑U.S. GAAP financial measures, such as our level of capital expenditures and interest income, among other measures.    

(c)

if the Participant’s Termination Date occurs for reasons of Cause, such Termination Date; and

(d)

if the Participant’s Termination Date occurs for reasons other than death, Disability or Cause, the three-month anniversary of such Termination Date.

In no event shall the Expiration Date of an Option or SAR be later than the ten-year anniversary of the date on which the Option or SAR is granted. Any Option or SAR that is not vested on the Participant’s Termination Date shall be forfeited and shall not thereafter be exercisable.

A-3


50


SECTION 3

FULL VALUE AWARDS AND CASH INCENTIVE AWARDS


3.1The following table sets forth the reconciliation of net income (loss) to adjusted EBITDA based on our historical results:Definitions.

(a)

A “Full Value Award” is a grant of one or more shares of Stock or a right to receive one or more shares of Stock in the future, with such grant subject to one or more of the following, as determined by the Committee:

(i)

The grant shall be in consideration of a Participant’s previously performed services, or surrender of other compensation that may be due.

(ii)

The grant shall be contingent on the achievement of performance or other objectives during a specified period.

(iii)

The grant shall be subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the Participant or achievement of performance or other objectives.

(iv)

The grant of Full Value Awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Committee, including provisions relating to dividend or dividend equivalent rights and deferred payment or settlement; provided, however, that no dividend or dividend equivalents granted in relation to Full Value Awards shall be settled prior to the date that such Full Value Award (or applicable portion thereof) becomes vested and is settled.

(b)

A Cash Incentive Award is the grant of a right to receive a payment of cash (or in the discretion of the Committee, shares of Stock having value equivalent to the cash otherwise payable) that is contingent on achievement of performance objectives over a specified period established by the Committee. The grant of Cash Incentive Awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Committee, including provisions relating to deferred payment.

3.2Special Vesting Rules.  

(a)

Subject to subsection 5.3(b), if a Participant’s right to become vested in a Full Value Award (other than a Full Value Award held by an Outside Director) is conditioned on the completion of a specified period of service with the Company or the Related Companies, without achievement of performance targets or other performance objectives (whether or not related to performance measures) being required as a condition of vesting, and without it being granted in lieu of other compensation, then the required period of service for full vesting shall be not less than three years (subject, to the extent provided by the Committee, to pro rated vesting over the course of such three year period (provided that no portion of such pro rated Full Value Award shall become vested prior to the first anniversary of the date on which it is granted) and to acceleration of vesting in the event of the Participant���s death, Disability, Change in Control or involuntary termination). The foregoing requirements shall not apply to grants that are a form of payment of earned performance awards or other incentive compensation.

(b)

Subject to subsections 5.3(b), if a Participant’s right to become vested in a Full Value Award or Cash Incentive Award (other than a Full Value Award or Cash Incentive Award held by an Outside Director) is conditioned on the achievement of performance targets or other performance objectives (whether or not related to performance measures and whether or not such Full Value Award is designated as “Performance-Based Compensation”), then the required performance period for determining the achievement of such performance targets or other performance objectives for vesting shall be not less than one year (subject, to the extent provided by the Committee, to acceleration of

A-4

 Years ended December 31
(in millions)2014 2015 2016 2017 2018 2019
Net income (loss)$13.98
 $4.44
 $(55.57) $(3.28) $4.01
 $(17.20)
Deferred revenue fair value adjustment—
 0.32
 1.27
 0.13
 0.12
 9.27
Interest income(0.14) (0.34) (0.04) (0.20) (2.36) (3.35)
Interest expense0.63
 10.27
 16.60
 16.35
 25.20
 32.52
Imputed interest expense on contingent consideration1.47
 —
 —
 —
 —
 —
Accretion on contingent consideration and purchase liability—
 0.89
 0.15
 0.51
 0.22
 1.77
Income tax provision (benefit)8.53
 4.55
 15.08
 1.59
 (13.17) (30.89)
Depreciation and amortization18.65
 27.96
 64.00
 62.82
 77.63
 101.27
Non-cash compensation expense11.42
 15.16
 33.28
 31.33
 40.25
 60.44
Restructuring charges and transaction costs2.67
 13.50
 5.78
 13.67
 15.58
 26.56
Severance0.74
 1.70
 4.34
 2.32
 8.32
 15.37
Fair market value adjustment on contingent consideration liability(1.43) (4.15) 1.59
 —
 —
 (8.13)
Litigation related expense0.02
 0.07
 5.59
 1.03
 —
 2.88
Foreign currency—
 —
 (0.72) 0.49
 (0.59) (0.07)
Non-income tax expense adjustment—
 —
 6.23
 0.35
 (0.59) 0.37
Loss allocation from equity method investment—
 —
 1.42
 1.47
 1.15
 2.36
Impairment of equity method investment—
 —
 0.73
 —
 —
 —
Other(1.83) 0.07
 (1.38) —
 —
 —
Loss attributable to non-controlling interest1.23
 1.64
 1.08
 0.32
 1.79
 0.11
Adjusted EBITDA$55.94
 $76.07
 $99.44
 $128.89
 $157.55
 $193.29

Note: Numbers may not sum due to rounding

51


vesting in the event of the Participant’s death, Disability, Change in Control or involuntary termination).


(c)

Notwithstanding subsections 3.2(a) and (b), if an Outside Director’s right to become vested in any Full Value Award or Cash Incentive Award is conditioned either on completion of a specified period of service or the achievement of performance targets or other performance objectives, then the required period of service or performance period for determining the achievement of such performance targets or other performance objectives for vesting shall be not less than one year (subject, to the extent provided by the Committee, to acceleration of vesting in the event of the Participant’s death, Disability, Change in Control or involuntary termination).

The following table sets forth the reconciliation of net income (loss) to adjusted net income and adjusted EPS based on our historical results: 

3.3Performance-Based Compensation. The Committee may designate a Full Value Award or Cash Incentive Award granted to any Participant as “Performance-Based Compensation” within the meaning of section 162(m) of the Code and regulations thereunder. To the extent required by section 162(m) of the Code, any Full Value Award or Cash Incentive Award so designated shall be conditioned on the achievement of one or more performance targets as determined by the Committee and the following additional requirements shall apply:

(a)

The performance targets established for the performance period established by the Committee shall be objective (as that term is described in regulations under section 162(m) of the Code), and shall be established in writing by the Committee not later than 90 days after the beginning of the performance period (but in no event after 25% of the performance period has elapsed), and while the outcome as to the performance targets is substantially uncertain. The performance targets established by the Committee may be with respect to corporate performance, operating group or sub-group performance, individual company performance, other group or individual performance, or division performance, and shall be based on one or more of the Performance Criteria.

(b)

A Participant otherwise entitled to receive a Full Value Award or Cash Incentive Award for any performance period shall not receive a settlement or payment of the Award until the Committee has determined that the applicable performance target(s) have been attained. To the extent that the Committee exercises discretion in making the determination required by this subsection 3.3(b), such exercise of discretion may not result in an increase in the amount of the payment.

(c)

If a Participant’s employment terminates because of death or Disability, or if a Change in Control occurs prior to the Participant’s Termination Date, the Committee may provide that the Participant’s Full Value Award or Cash Incentive Award shall become vested without regard to whether the Full Value Award or Cash Incentive Award would be Performance-Based Compensation; provided, however, that the extent to which any such Full Value Award or Cash Incentive Award becomes vested based on the satisfaction of the applicable performance goals or targets on or after such Change in Control, the Committee may make such determination either based on the determination of the satisfaction of the applicable performance goal based on actual performance through the date of such Change in Control or based on assumed performance at the target level through the date of such Change in Control. 

Nothing in this Section 3 shall preclude the Committee from granting Full Value Awards or Cash Incentive Awards under the Plan or the Committee, the Company or any Related Company from granting any Cash Incentive Awards outside of the Plan that are not intended to be Performance-Based Compensation; provided, however, that, at the time of grant of Full Value Awards or Cash Incentive Awards by the Committee, the Committee shall designate whether such Awards are intended to constitute Performance-Based Compensation. To the extent that the provisions of this Section 3 reflect the requirements applicable to Performance-Based Compensation, such provisions shall not apply to the portion of the Award, if any, that is not intended to constitute Performance-Based Compensation.

A-5

 Years ended December 31
(in millions except per share amounts)2014 2015 2016 2017 2018 2019
Net income (loss)$13.98
 $4.44
 $(55.57) $(3.28) $4.01
 $(17.20)
Income tax provision (benefit)8.53
 4.55
 15.08
 1.59
 (13.17) (30.89)
Income (loss) before income tax provision22.51
 8.99
 (40.49) (1.69) (9.16) (48.09)
Deferred revenue fair value adjustment—
 0.32
 1.27
 0.13
 0.12
 9.27
Accretion on contingent consideration and purchase liability1.47
 0.89
 0.15
 0.51
 0.22
 1.77
Non-cash interest expense0.33
 6.39
 8.24
 8.99
 13.91
 18.74
Non-cash compensation expense11.42
 15.16
 33.28
 31.33
 40.25
 60.44
Restructuring charges and transaction costs2.67
 13.50
 5.78
 13.67
 15.58
 26.56
Severance0.74
 1.70
 4.34
 2.32
 8.32
 15.37
Amortization of acquired intangible assets and fair value adjustment to property and equipment, net10.64
 17.64
 45.52
 42.13
 53.86
 70.68
Fair market value adjustment on contingent consideration liability(1.43) (4.15) 1.59
 —
 —
 (8.13)
Litigation related expense0.02
 0.07
 5.59
 1.03
 —
 2.88
Foreign currency—
 —
 (0.72) 0.49
 (0.59) (0.07)
Non-income tax expense adjustment—
 —
 6.23
 0.35
 (0.59) 0.37
Loss allocation from equity method investment—
 —
 1.42
 1.47
 1.15
 2.36
Impairment of equity method investment—
 —
 0.73
 —
 —
 —
Other(1.83) 0.07
 (1.38) —
 —
 —
Loss attributable to non-controlling interest1.23
 1.64
 1.08
 0.32
 1.79
 0.11
Adjusted net income before income tax effect47.77
 62.20
 72.63
 101.05
 124.84
 152.26
Income tax effect(18.23) (24.51) (29.05) (40.42) (33.71) (38.83)
Adjusted net income$29.54
 $37.70
 $43.58
 $60.63
 $91.14
 $113.44
            
Diluted number of weighted-average shares outstanding36.88
 38.39
 44.58
 46.15
 47.38
 52.68
            
Adjusted EPS$0.80
 $0.98
 $0.98
 $1.31
 $1.92
 $2.15
Note: Numbers may not sum due to rounding.

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SECTION 4

OPERATION AND ADMINISTRATION


4.1Effective Date. The Plan became effective as of the date of the initial public offering of Stock of the Company on July 28, 2010 (the “Effective Date”).  The Plan has been amended by the First, Second and Third Amendment to the Plan.  The Fourth Amendment, which increases the shares of Stock reserved under the Plan and makes certain other revisions, is contingent on shareholder approval by the Company’s shareholders at the 2017 annual meeting.  To the extent not prohibited by applicable law or the applicable rules of any stock exchange, Awards which are to use shares of Stock reserved under the Plan that are contingent on the approval by the Company’s shareholders may be granted prior to that meeting contingent on such approval. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any Awards under it are outstanding; provided, however, that no Awards may be granted under the Plan after the ten-year anniversary of July 13, 2017, which is the date on which the shareholders approved the Plan as amended by the Fourth Amendment to increase the reserved shares of Stock.

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4.2Stock and Other Amounts Subject to the Plan. The shares of Stock for which Awards may be granted under the Plan shall be subject to the following:

(a)

The shares of Stock with respect to which Awards may be made under the Plan shall be shares currently authorized but unissued or currently held or subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions.

(b)

Subject to the provisions of subsection 4.3, the number of shares of Stock which may be issued with respect to Awards under the Plan shall be equal to (i) 8,925,000 shares of Stock (which number includes all shares available for delivery under this clause (i) since the establishment of the Plan in 2010, determined in accordance with the terms of the Plan); and (ii) any shares of Stock that are represented by awards granted under the Envestnet Asset Management Group, Inc. 2004 Stock Incentive Plan (the “Prior Plan”) that are forfeited, expire or are canceled after the Effective Date without delivery of shares of Stock or which result in the forfeiture of the shares of Stock back to the Company to the extent that such shares would have been added back to the reserve under the terms of the applicable Prior Plan. Shares of Stock issued by the Company in connection with awards that are assumed or substituted in connection with a merger, acquisition or other corporate transaction shall not be counted against the number of shares of Stock that may be issued with respect to Awards under the Plan.

(c)

Shares of Stock with respect to an Award will be treated as delivered for purposes of the determination under paragraph (b) above subject to the following:

(i)

To the extent any shares of Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, such shares shall not be deemed to have been delivered for purposes of the determination under paragraph (b) above.

(ii)

Subject to the provisions of paragraph (i) above, the total number of shares covered by an Award will be treated as delivered for purposes of paragraph (b) above to the extent payments or benefits are delivered to the Participant with respect to such shares.  Accordingly (A) if shares covered by an Award are withheld or tendered to satisfy the applicable tax withholding obligation, the number of shares held back by the Company or tendered by the Participant to satisfy such withholding obligation shall be considered to have been delivered; (B) if the exercise price of any Option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation (including shares of Stock that would otherwise be distributable upon the exercise of the Option)), the number of shares tendered to satisfy such exercise price shall be considered to have been delivered; and (C) if shares of Stock are withheld in settlement of the exercise of an SAR, the total number of shares with respect to which such SAR is exercised shall be deemed delivered.

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(d)

Except as expressly provided by the terms of this Plan, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property or for labor or services, either upon direct sale, upon the exercise of rights or warrants to subscribe therefor or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof, shall be made with respect to Awards then outstanding hereunder.


(e)

To the extent provided by the Committee, any Award may be settled in cash rather than in shares.

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(f)

Subject to the following provisions of this subsection 4.2, the maximum number of shares of Stock that may be delivered to Participants and their Beneficiaries with respect to Incentive Stock Options under the Plan shall be 8,925,000; provided, however, that to the extent that shares not delivered must be counted against this limit as a condition of satisfying the rules applicable to Incentive Stock Options, such rules shall apply to the limit on Incentive Stock Options granted under the Plan.

(g)

The maximum number of shares that may be covered by Awards granted to any one Participant during any one calendar-year period pursuant to Section 2 (relating to Options and SARs) shall be 500,000 shares. For purposes of this subsection 4.2(g), if an Option is in tandem with an SAR, such that the exercise of the Option or SAR with respect to a share of Stock cancels the tandem SAR or Option right, respectively, with respect to such share, the tandem Option and SAR rights with respect to each share of Stock shall be counted as covering but one share of Stock for purposes of applying the limitations of this subsection 4.2(g).

(h)

The maximum number of shares that may be covered by Awards granted to any one Participant who is a member of the Board but who is not an employee of the Company or a Related Company during any one calendar-year period pursuant to Section 2 (relating to Options and SARs) shall be 25,000 shares.  The maximum number of shares that may be covered by Full Value Awards granted to any one Participant who is a member of the Board but who is not an employee of the Company or a Related Company during any one calendar-year period shall be 25,000 shares. 

(i)

For Full Value Awards that are intended to be Performance-Based Compensation, no more than 500,000 shares of Stock may be delivered pursuant to such Awards granted to any one Participant during any one-calendar-year period (regardless of whether settlement of the Award is to occur prior to, at the time of, or after the time of vesting); provided that Awards described in this 4.2(i) that are intended to be Performance-Based Compensation shall be subject to the following:

(i)

If the Awards are denominated in shares of Stock but an equivalent amount of cash is delivered in lieu of delivery of shares of Stock, the foregoing limit shall be applied based on the methodology used by the Committee to convert the number of shares of Stock into cash.

(ii)

If delivery of shares of Stock or cash is deferred until after shares of Stock have been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the shares are earned shall be disregarded.

(j)

For Cash Incentive Value Awards that are intended to be Performance-Based Compensation, the maximum amount payable to any Participant with respect to any twelve month performance period shall equal $3,000,000 (pro rated for performance periods that are greater or lesser than twelve months); provided that Awards described in this subsection 4.2(j) that are intended to be Performance-Based Compensation, shall be subject to the following:

(i)

If the Awards are denominated in cash but an equivalent amount of shares of Stock is delivered in lieu of delivery of cash, the foregoing limit shall be applied to the cash based on the methodology used by the Committee to convert the cash into shares of Stock.

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(ii)

If delivery of shares of Stock or cash is deferred until after cash has been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the cash is earned shall be disregarded.


4.3Adjustments to Shares. In the event of a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, amalgamation, consolidation, split-up, spin-off, sale of assets or subsidiaries, combination or exchange of shares), the Committee shall, in the manner it determines equitable in its sole discretion, adjust Awards to reflect the transactions. Action by the Committee may include, in its sole discretion: (a) adjustment of the number and kind of shares which may be delivered under the Plan (including adjustments to the number and kind of shares that may be granted to an individual during any specified time as described in subsection 4.2); (b) adjustment of the number and kind of shares subject to outstanding Awards; (c) adjustment of the Exercise Price of outstanding Options and SARs; and (d) any other adjustments that the Committee determines to be equitable (which may include, without limitation, (i) replacement of Awards with other Awards which the Committee determines have comparable value and which are based on stock of a company resulting from the transaction, and (ii) cancellation of the Award in return for cash payment of the current value of the Award, determined as though the Award is fully vested at the time of payment, provided that in the case of an Option or SAR, the amount of such payment may be the excess of value of the shares of Stock subject to the Option or SAR at the time of the transaction over the exercise price).

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4.4Change in Control.  

(a)

In the event that (a) a Participant’s employment or service, as applicable, is terminated by the Company or the successor to the Company (or a Related Company which is his or her employer) for reasons other than Cause within 24 months following a Change in Control, or (b) the Plan is terminated by the Company or its successor following a Change in Control without provision for the continuation of outstanding Awards hereunder, all Options, SARs and related Awards which have not otherwise expired shall become immediately exercisable and all other Awards shall become fully vested.  If a Participant’s right to become vested in an Award following a Change in Control as described in the prior sentence is conditioned on the achievement of performance targets or other performance objectives (whether or not related to performance measures and whether or not such Award is designated as “Performance-Based Compensation”), the Committee may make such determination either based on the determination of the satisfaction of the applicable performance goal based on actual performance through the date of such Change in Control or based on assumed performance at the target level through the date of such Change in Control.

(b)

If, upon a Change in Control, awards in other shares or securities are substituted for outstanding Awards pursuant to subsection 4.3, and immediately following the Change in Control the Participant becomes employed (if the Participant was an employee immediately prior to the Change in Control) or a board member (if the Participant was an Outside Director immediately prior to the Change in Control) of the entity into which the Company merged, or the purchaser of substantially all of the assets of the Company, or a successor to such entity or purchaser, the Participant shall not be treated as having terminated employment or service for purposes of this subsection 4.4(b) until such time as the Participant terminates employment or service with the merged entity or purchaser (or successor), as applicable.

4.5Limit on Distribution. Distribution of shares of Stock or other amounts under the Plan shall be subject to the following:

(a)

Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity.

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(b)

In the case of a Participant who is subject to Section 16(a) and 16(b) of the Exchange Act, the Committee may, at any time, add such conditions and limitations to any Award to such Participant, or any feature of any such Award, as the Committee, in its sole discretion, deems necessary or desirable to comply with Section 16(a) or 16(b) and the rules and regulations thereunder or to obtain any exemption therefrom.

(c)

To the extent that the Plan provides for issuance of certificates to reflect the transfer of shares of Stock, the transfer of such shares of Stock may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

4.6Liability for Cash Payments. Subject to the provisions of this Section 4, each Related Company shall be liable for payment of cash due under the Plan with respect to any Participant to the extent that such benefits are attributable to the service rendered for that Related Company by the Participant. Any disputes relating to liability of a Related Company for cash payments shall be resolved by the Committee.

4.7Withholding. All Awards and other payments under the Plan are subject to withholding of all applicable taxes, which withholding obligations may be satisfied, with the consent of the Committee, through the surrender of shares of Stock which the Participant already owns or to which a Participant is otherwise entitled under the Plan; provided, however, that the amount withheld in the form of previously-owned shares of Stock that have been held by the Participant or shares of Stock to which the Participant is entitled under the Plan may not exceed the maximum individual tax rate for the Participant in applicable jurisdictions for such Participant (based on the applicable rates of the relevant tax authorities (for example, federal, state and local), including the Participant’s share of payroll or similar taxes, as provided in tax law, regulations, or the authority’s administrative practices, not to exceed the highest statutory rate in that jurisdiction, even if that rate exceeds the highest rate that may be applicable to the specific Participant. 

4.8Transferability. Awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution or, to the extent provided by the Committee, pursuant to a qualified domestic relations order (within the meaning of the Code and applicable rules thereunder). To the extent that the Participant who receives an Award under the Plan has the right to exercise such Award, the Award may be exercised during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing provisions of this subsection 4.8, the Committee may permit Awards under the Plan to be transferred to or for the benefit of the Participant’s family (including, without limitation, to a trust or partnership for the benefit of a Participant’s family), subject to such procedures as the Committee may establish. In no event shall an Incentive Stock Option be transferable to the extent that such transferability would violate the requirements applicable to such option under section 422 of the Code.

4.9Notices. Any notice or document required to be filed with the Committee under the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid, to the Committee, in care of the Company or the Related Company, as applicable, at its principal executive offices. The Committee may, by advance written notice to affected persons, revise such notice procedure from time to time. Any notice required under the Plan (other than a notice of election) may be waived by the person entitled to notice.

4.10Form and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be in writing filed with the applicable Committee at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require.

4.11Agreement With the Company or Related Company. At the time of an Award to a Participant under the Plan, the Committee may require a Participant to enter into an agreement with the Company or the Related Company, as applicable (the “Agreement”), in a form specified by the Committee, agreeing to the terms and conditions of the Plan and to such additional terms and conditions, not inconsistent with the Plan, as the Committee may, in its sole discretion, prescribe.

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4.12Limitation of Implied Rights.

(a)

Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of the Company or any Related Company whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Related Company, in its sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the amounts, if any, payable under the Plan, unsecured by any assets of the Company and any Related Company. Nothing contained in the Plan shall constitute a guarantee by the Company or any Related Company that the assets of such companies shall be sufficient to pay any benefits to any person.

(b)

The Plan does not constitute a contract of employment or continued service, and selection as a Participant will not give any employee the right to be retained in the employ or service of the Company or any Related Company, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the holder thereof any right as a stockholder of the Company prior to the date on which he fulfills all service requirements and other conditions for receipt of such rights and shares of Stock are registered in his name.

4.13Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.

4.14Action by the Company or Related Company. Any action required or permitted to be taken by the Company or any Related Company shall be by resolution of its board of directors, as applicable, or by action of one or more members of the board (including a committee of the board) who are duly authorized to act for the board or (except to the extent prohibited by applicable law or the rules of any stock exchange) by a duly authorized officer of the Company.

4.15Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular.

4.16Applicable Law. The provisions of the Plan shall be construed in accordance with the laws of the State of Delaware, without giving effect to choice of law principles.

4.17Foreign Employees. Notwithstanding any other provision of the Plan to the contrary, the Committee may grant Awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan. In furtherance of such purposes, the Committee may make such modifications, amendments, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or a Related Company operates or has employees.

SECTION 5

COMMITTEE

5.1Administration. The authority to control and manage the operation and administration of the Plan shall be vested in the Compensation Committee of the Board (the “Committee”) unless otherwise provided by the Board. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.

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5.2Selection of Committee. So long as the Company is subject to Section 16 of the Exchange Act, the Committee shall be selected by the Board and shall consist of not fewer than two members of the Board or such greater number as may be required for compliance with Rule 16b-3 issued under the Exchange Act and shall be comprised of persons who are independent for purposes of applicable stock exchange listing requirements. Any Award granted under the Plan which is intended to constitute Performance-Based Compensation (including Options and SARs) shall be granted by a Committee consisting solely of two or more “outside directors” within the meaning of section 162(m) of the Code and applicable regulations. Notwithstanding any other provision of the Plan to the contrary, with respect to any Awards to Outside Directors, the Committee shall be the Board.

5.3Powers of Committee. The authority to manage and control the operation and administration of the Plan shall be vested in the Committee, subject to the following:

(a)

Subject to the provisions of the Plan, the Committee will have the authority and discretion to select individuals who shall be Eligible Individuals and who, therefore are eligible to receive Awards under the Plan. The Committee shall have the authority to determine the time or times of receipt, to determine the types of Awards and the number of shares of Stock covered by the Awards, to establish the terms, conditions, performance targets, restrictions, and other provisions of such Awards, to cancel or suspend Awards, and to accelerate the exercisability or vesting of any Award under circumstances designated by it. In making such Award determinations, the Committee may take into account the nature of services rendered by the respective employee, the individual’s present and potential contribution to the Company’s or a Related Company’s success and such other factors as the Committee deems relevant.

(b)

Notwithstanding the provisions of subsections 2.4(a), 3.2(a) and 3.2(b) of the Plan, the Committee may grant Awards that are not subject to the minimum vesting limitations of subsection 2.4(a) (with respect to Options and SARs) and of subsections 3.2(a) and 3.2(b) (with respect to Full Value Awards); provided, however, that the aggregate number of shares of Stock subject to Options, SARs and Full Value Awards granted pursuant to the Plan that are not subject to the minimum vesting limitations of subsections 2.4(a), 3.2(a) and 3.2(b) (excluding any such Awards to the extent that they have been forfeited or cancelled) may not exceed 5% of the limit imposed by subsection 4.2(b) (relating to the limit on shares of Stock granted under the Plan).

(c)

Subject to the provisions of the Plan, the Committee will have the authority and discretion to determine the extent to which Awards under the Plan will be structured to conform to the requirements applicable to Performance-Based Compensation, and to take such action, establish such procedures, and impose such restrictions at the time such Awards are granted as the Committee determines to be necessary or appropriate to conform to such requirements.

(d)

Subject to the provisions of the Plan, the Committee will have the authority and discretion to conclusively interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan and to make all other determinations that may be necessary or advisable for the administration of the Plan.

(e)

Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.

(f)

Except as otherwise expressly provided in the Plan, where the Committee is authorized to make a determination with respect to any Award, such determination shall be made at the time the Award is made, except that the Committee may reserve the authority to have such determination made by the Committee in the future (but only if such reservation is made at the time the Award is granted is expressly stated in the Agreement reflecting the Award and is permitted by applicable law).

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Without limiting the generality of the foregoing, it is the intention of the Company that, to the extent that any provisions of this Plan or any Awards granted hereunder are subject to section 409A of the Code, the Plan and the Awards comply with the requirements of section 409A of the Code and that the Plan and Awards be administered in accordance with such requirements and the Committee shall have the authority to amend any outstanding Awards to conform to the requirements of section 409A.

5.4Delegation by Committee. Except to the extent prohibited by applicable law or the rules of any stock exchange or NASDAQ (if appropriate), the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.

5.5Information to be Furnished to Committee. The Company and the Related Companies shall furnish the Committee such data and information as may be required for it to discharge its duties. The records of the Company and the Related Companies as to an employee’s or Participant’s employment or provision of services, termination of employment or cessation of the provision of services, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee consider desirable to carry out the terms of the Plan.

5.6Liability and Indemnification of Committee. No member or authorized delegate of the Committee shall be liable to any person for any action taken or omitted in connection with the administration of the Plan unless attributable to his own fraud or willful misconduct; nor shall the Company or any Related Company be liable to any person for any such action unless attributable to fraud or willful misconduct on the part of a director or employee of the Company or Related Company. The Committee, the individual members thereof, and persons acting as the authorized delegates of the Committee under the Plan, shall be indemnified by the Company against any and all liabilities, losses, costs and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Committee or its members or authorized delegates by reason of the performance of a Committee function if the Committee or its members or authorized delegates did not act dishonestly or in willful violation of the law or regulation under which such liability, loss, cost or expense arises. This indemnification shall not duplicate but may supplement any coverage available under any applicable insurance.

SECTION 6

AMENDMENT AND TERMINATION

The Board may, at any time, amend or terminate the Plan, and the Board or the Committee may amend any Award Agreement, provided that no amendment or termination may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected Beneficiary), adversely affect the rights of any Participant or Beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board (or the Committee, if applicable); and further provided that adjustments pursuant to subsection 4.3 shall not be subject to the foregoing limitations of this Section 6; and further provided that the provisions of subsection 2.7 (relating to Option and SAR repricing) cannot be amended unless the amendment is approved by the Company’s stockholders. It is the intention of the Company that, to the extent that any provisions of this Plan or any Awards granted hereunder are subject to section 409A of the Code, the Plan and the Awards comply with the requirements of section 409A of the Code and that the Board shall have the authority to amend the Plan as it deems necessary to conform to section 409A.

SECTION 7

DEFINED TERMS

(a)

“Agreement” has the meaning set forth in subsection 4.11.

(b)

“Approval Date” means the date on which the Plan is approved by the Company’s stockholders.

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(c)

“Award” means any award described in Section 2 or 3 of the Plan.

(d)

“Beneficiary” means the person or persons the Participant designates to receive the balance of his or her benefits under the Plan in the event the Participant’s Termination Date occurs on account of death. Any designation of a Beneficiary shall be in writing, signed by the Participant and filed with the Committee prior to the Participant’s death. A Beneficiary designation shall be effective when filed with the Committee in accordance with the preceding sentence. If more than one Beneficiary has been designated, the balance of the Participant’s benefits under the Plan shall be distributed to each such Beneficiary per capita. In the absence of a Beneficiary designation or if no Beneficiary survives the Participant, the Beneficiary shall be the Participant’s estate.

(e)

“Board” means the Board of Directors of the Company.

(f)

“Cause” shall mean, in the reasonable judgment of the Committee (i) the willful and continued failure by the Participant to substantially perform his duties with the Company or any Related Company (other than any such failure resulting from the Participant’s Disability), (ii) the willful engaging by the Participant in conduct which is demonstrably injurious to the Company or any Related Company, monetarily or otherwise, (iii) the engaging by the Participant in egregious misconduct involving moral turpitude to the extent that the Participant’s credibility and reputation no longer conform to the standard for employees, directors or service providers, as applicable, of the Company and Related Companies, or (iv) the Participant is convicted of a felony. For purposes hereof, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that such action was in the best interest of the Company or Related Company.

(g)

“Change in Control” means the first to occur of any of the following:

(i)

the purchase or other acquisition by any person, entity or group of persons (within the meaning of section 13(d) or 14(d) of the Exchange Act or any comparable successor provisions, other than an acquisition by a trustee or other fiduciary holding securities under an employee benefit plan or similar plan of the Company or a Related Company), of “beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the outstanding shares of Stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally;

(ii)

the consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which persons who were stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding securities;

(iii)

a liquidation or dissolution of the Company or the sale of substantially all of the Company’s assets; or

(iv)

at any time during any period of two consecutive years, individuals who at the beginning of such period were members of the Board cease for any reason to constitute at least a majority thereof (unless the election, or the nomination for election by the Company’s stockholders, of each new director was approved by a vote of at least two-thirds of the directors still in office at the time of such election or nomination who were directors at the beginning of such period).

(h)

“Code” means the Internal Revenue Code of 1986, as amended.

(i)

“Committee” has the meaning set forth in subsection 5.1

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(j)

“Disability” means, except as otherwise provided by the Committee, the Participant’s inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days.

(k)

“Eligible Individual” means any employee or director of, or other service provider to, the Company or a Related Company, including any member of the Board who is not an employee of the Company or a Related Company.

(l)

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m)

“Expiration Date” has the meaning set forth in subsection 2.10.

(n)

“Fair Market Value” of a share of Stock means, as of any date, the value determined in accordance with the following rules:

(i)

If the Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value shall be the closing price per share on such date on the principal exchange on which the Stock is then listed or admitted to trading or, if no such sale is reported on that date, on the last preceding date on which a sale was so reported.

(ii)

If the Stock is not at the time listed or admitted to trading on a stock exchange, the Fair Market Value shall be the closing price of a share on such date in the over-the-counter market, as such prices are reported in a publication of general circulation selected by the Committee and regularly reporting the market price of the Stock in such market.

(iii)

If the Stock is not listed or admitted to trading on any stock exchange or traded in the over-the-counter market, the Fair Market Value shall be as determined by the Committee in good faith by reasonable application of a reasonable valuation method.

(iv)

For purposes of determining the Fair Market Value of Stock that is sold pursuant to a cashless exercise program, Fair Market Value shall be the price at which such Stock is sold.

(o)

“Full Value Award” has the meaning set forth in Section 3.1

(p)

“Incentive Stock Option” means an Option that is intended to satisfy the requirements applicable to an “incentive stock option” described in section 422 of the Code.

(q)

“Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.

(r)

“Option” has the meaning set forth in subsection 2.1(a).

(s)

“Outside Director” means a director of the Company who is not an officer or employee of the Company or the Related Companies.

(t)

“Participant” shall have the meaning set forth in subsection 1.3.

(u)

“Performance-Based Compensation” shall have the meaning sect forth in subsection 3.3.

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(v)

“Performance Criteria” means performance targets based on one or more of the following criteria (i) earnings including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items) or net earnings; (ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment (including cash flow return on investment), return on capital (including return on total capital or return on invested capital), or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow (before or after dividends), free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, cash flow in excess of cost of capital or cash flow per share (before or after dividends); (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) stock price or total stockholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance targets, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; (xix) funds from operations (FFO) or funds available for distribution (FAD); (xx) economic value added (or an equivalent metric); (xxi) stock price performance; (xxii) improvement in or attainment of expense levels or working capital levels; (xxiii) adjusted EBITDA, (xxiv) adjusted operating income, (xxv) adjusted net income or (xxvi) any combination of, or a specified increase in, any of the foregoing. Where applicable, the performance targets may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company, a Related Company, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The performance targets may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). Each of the foregoing performance targets shall be determined in accordance with generally accepted accounting principles and shall be subject to certification by the Committee; provided that the Committee shall have the authority to exclude, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring events and the cumulative effects of tax or accounting principles and identified in financial statements, notes to financial statements, management’s discussion and analysis or other SEC filings.

(w)

“Related Company” means any corporation, partnership, joint venture or other entity during any period in which a controlling interest in such entity is owned, directly or indirectly, by the Company (or by any entity that is a successor to the Company), and any other business venture designated by the Committee in which the Company (or any entity that is a successor to the Company) has, directly or indirectly, a significant interest (whether through the ownership of securities or otherwise), as determined in the discretion of the Committee.

(x)

“SAR” or “Stock Appreciation Right” has the meaning set forth in subsection 2.1(b).

(y)

“Stock” means share of common stock, $0.005 par value, of the Company.

(z)

“Subsidiary” means a subsidiary corporation within the meaning of section 424(f) of the Code.

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(aa)

“Termination Date” means the date on which a Participant both ceases to be an employee of the Company and the Related Companies and ceases to perform material services for the Company and the Related Companies (whether as a director or otherwise), regardless of the reason for the cessation; provided that a “Termination Date” shall not be considered to have occurred during the period in which the reason for the cessation of services is a leave of absence approved by the Company or the Related Company which was the recipient of the Participant’s services; and provided, further that, with respect to an Outside Director, “Termination Date” means date on which the Outside Director’s service as an Outside Director terminates for any reason. If, as a result of a sale or other transaction, the entity for which the Participant performs services ceases to be a Related Company (and such entity is or becomes an entity separate from the Company), the occurrence of such transaction shall be the Participant’s Termination Date.

SECTION 8

Notwithstanding any other provision of the Plan to the contrary, to the extent that any Award under the Plan (or any payment or benefit under any Award) is subject to section 409A of the Code, the following shall apply unless otherwise provided in an Award Agreement:

(a)

if any payment or benefit under such Award is to be paid on account of the Participant’s Termination Date (or other separation from service or termination of employment) and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s separation from service; and

(b)

the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

All Awards under the Plan which are subject to section 409A of the Code are intended to comply with section 409A of the Code and will be interpreted and administered accordingly.

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ANNUAL MEETING OF STOCKHOLDERS OF ENVESTNET, July 13, 2017 INC. INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON - You may vote your shares in person by attending the Annual Meeting. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20330403030000001000 8 071317 2. The approval, on an advisory basis, on 2016 executive O Luis A. Aguilar FOR ALL NOMINEES 3. The approval, on an advisory basis, on whether executive 4. The ratification of KPMG LLP as the independent auditors for the changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF PROPOSALS 1, 2, 4 AND 5 AND FOR “1 yEAR” ON PROPOSAL 3. PLEASE SIGN, DATE AND RETURN PROMPTLy IN THE ENCLOSED ENVELOPE. PLEASE MARK yOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. The election as director of the nominees listed below (except as marked to the contrary below): NOMINEES: O Ross Chapin WITHHOLD AUTHORITYO James Fox FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN compensation. 1 year 2 years 3 years ABSTAIN compensation should be submitted to stockholders for an advisory vote every one, two or three years. FOR AGAINST ABSTAIN fiscal year ending December 31, 2017. FOR AGAINST ABSTAIN 5. The approval of the 2010 Long-Term Incentive Plan as amended through the Fourth Amendment. MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Stockholder Date: Signature of StockholderDate: NOTICE OF INTERNET AVAILABILITy OF PROXy MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at www.envestnet.com COMPANy NUMBER ACCOUNT NUMBER PROXy VOTING INSTRUCTIONS

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ANNUAL MEETING OF STOCKHOLDERS OF ENVESTNET, INC. July 13, 2017 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. NOTICE OF INTERNET AVAILABILITy OF PROXy MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at www.envestnet.com Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20330403030000001000 8 071317 2. The approval, on an advisory basis, on 2016 executive 3. The approval, on an advisory basis, on whether executive 4. The ratification of KPMG LLP as the independent auditors for the changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF PROPOSALS 1, 2, 4 AND 5 AND FOR “1 yEAR” ON PROPOSAL 3. PLEASE SIGN, DATE AND RETURN PROMPTLy IN THE ENCLOSED ENVELOPE. PLEASE MARK yOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. The election as director of the nominees listed below (except as marked to the contrary below): NOMINEES: FOR ALL NOMINEESO Luis A. Aguilar O Ross Chapin WITHHOLD AUTHORITYO James Fox FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN compensation. 1 year 2 years 3 years ABSTAIN compensation should be submitted to stockholders for an advisory vote every one, two or three years. FOR AGAINST ABSTAIN fiscal year ending December 31, 2017. FOR AGAINST ABSTAIN 5. The approval of the 2010 Long-Term Incentive Plan as amended through the Fourth Amendment. MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Stockholder Date: Signature of StockholderDate:

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ENVESTNET, INC. 2017 Annual Meeting of Stockholders The Annual Meeting of Stockholders of Envestnet, Inc. will be held on Thursday, July 13, 2017 at 10:00 a.m. Central Time at 35 East Wacker Drive, Suite 260, Chicago, Illinois. Registration will open at 9:30 a.m. Central Time and the meeting will start promptly at 10:00 a.m. The meeting is expected to last about 30 minutes. IMPORTANT: 1. 2. If you are planning to attend the meeting, please check the box on the proxy on the reverse side. This letter is your admission ticket to the meeting and must be presented to the registration desk on the day of the meeting. - 0 ENVESTNET, INC. THIS PROXy IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ENVESTNET, INC. The undersigned stockholder(s) of Envestnet, Inc. (the "Company") hereby appoints Judson Bergman or Peter D'Arrigo, or either of them, with full power of substitution, as attorneys and proxies of the undersigned, with the powers the undersigned would possess if personally present, and with full power of substitution, to vote all shares of common stock of the Company at the Annual Meeting of Stockholders of the Company to be held on Thursday, July 13, 2017, at 10:00 a.m., Central Time, at 35 E. Wacker Drive, Suite 260, Chicago, IL 60601, and at any postponements, continuations or adjournments thereof, upon all subjects that may properly come before the meeting, including the matters described in the Proxy Statement furnished herewith, subject to any directions indicated below. I hereby vote my shares of Envestnet, Inc. common stock as specified on the reverse side of this card. (Continued and to be signed on the reverse side.) 14475 1.1