SVB Financial Group
SVB FINANCIAL GROUP (Form: DEF 14A, Received: 03/06/2014 16:42:04)
Table of Contents

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     x

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¨           Preliminary Proxy Statement

 

¨       Confidential,for Use of the Commission Only

(as permitted by Rule 14a-6(e)(2))

x           Definitive Proxy Statement

 

¨           Definitive Additional Materials

 

¨           Soliciting Material Pursuant to § 240.14a-12

 

SVB FINANCIAL GROUP

 

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

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Table of Contents

 

LOGO

Notice of Annual Meeting of Stockholders

Thursday, April 24, 2014

4:30 P.M.

TO THE STOCKHOLDERS:

I am pleased to invite you to attend the 2014 Annual Meeting of Stockholders of SVB Financial Group, a Delaware corporation (the “ Company ”), which will be held at our offices located at 3005 Tasman Drive, Santa Clara, California 95054, on Thursday, April 24, 2014 at 4:30 p.m., Pacific Time. The purposes of the meeting are to:

 

  1.

Elect eleven (11) directors to serve for the ensuing year and until their successors are elected;

 

  2.

Approve our 2006 Equity Incentive Plan, as amended and restated, to reserve an additional 2,000,000 shares of common stock for issuance thereunder;

 

  3.

Ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2014;

 

  4.

Approve, on an advisory basis, our executive compensation (“ Say on Pay ”); and

 

  5.

Transact such other business as may properly come before the meeting.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. To assure your representation at the meeting, you are encouraged to vote your shares as soon as possible. Voting instructions are included in: (i) for those stockholders receiving printed proxy materials, the enclosed Proxy Card, and (ii) for all other stockholders, the Notice Regarding the Availability of Proxy Materials (as further described in the Proxy Statement). Any stockholder attending the meeting may vote in person even if such stockholder has previously voted by proxy.

Only stockholders of record at the close of business on February 25, 2014 may vote at the meeting or any postponement or adjournment thereof.

 

BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Roger F. Dunbar
Roger F. Dunbar
Chairman of the Board

Santa Clara, California

March 6, 2014

 

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, OR VOTE OVER THE TELEPHONE OR THE INTERNET AS PROMPTLY AS POSSIBLE, IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. IF YOU HAVE RECEIVED PRINTED PROXY MATERIALS, A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR YOUR CONVENIENCE. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. WE ENCOURAGE YOU TO VOTE: (I) FOR THE ELECTION OF ALL ELEVEN (11) NOMINEES FOR DIRECTOR, AND (II) IN FAVOR OF THE ABOVE REMAINING PROPOSALS.


Table of Contents

PROXY STATEMENT—TABLE OF CONTENTS

 

     Page  

SUMMARY INFORMATION

  

PROXY STATEMENT GENERAL INFORMATION

  

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  

¡ Proposal No. 1 – Election of Directors

     2   

Corporate Governance Principles and Board Matters

     13   

Board Committees

     16   

Audit Committee Report

     18   

Compensation Committee Report

     19   

Compensation Committee Interlocks and Insider Participation

     19   

Compensation for Directors

     20   

Certain Relationships and Related Transactions

     22   

Section 16(a) Beneficial Ownership Reporting Compliance

     23   

EXECUTIVE OFFICERS AND COMPENSATION

  

Information on Executive Officers

     24   

Compensation Discussion and Analysis

     28   

Compensation for Named Executive Officers

     43   

SECURITY OWNERSHIP INFORMATION

  

Security Ownership of Directors and Executive Officers

     55   

Security Ownership of Principal Stockholders

     56   

OTHER PROXY PROPOSALS

  

¡ Proposal No. 2 – Approval of the Amended and Restated 2006 Equity Incentive Plan

     57   

¡ Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm

     65   

Principal Audit Fees and Services

     65   

¡ Proposal No. 4 – Advisory Approval of the Company’s Executive Compensation

     66   

MEETING AND OTHER INFORMATION

  

Information About Voting and Proxy Solicitation

     67   

Stockholder Proposals and Director Nominations

     70   

Copy of Bylaw Provisions

     71   

2013 Annual Report

     71   

Other Matters

     71   

Appendices

     A-1   

 

 

¡

Indicates matters to be voted on at the Annual Meeting.

 

i

 


Table of Contents

SUMMARY PERFORMANCE AND PROXY INFORMATION

This summary highlights our 2013 performance, as well as information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review this entire Proxy Statement and our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2014.

2013 Financial Performance

2013 marked another year of strong financial performance for us: (as compared to 2012)

 

Continued

GROWTH

 

 

•   All-time high of $23.2 billion in average total assets (up 9.0%).

•   Outstanding loan growth, reaching all-time high average loan balances of $9.4 billion (up 23.7%).

•   Higher average deposit balances of $19.6 billion (up 9.6%).

•   Higher off balance sheet average client investment funds of $24.2 billion (up 19.8%).

 

Continued

PROFITABILITY

 

 

•   Earnings per diluted common share (“ EPS ”) of $4.70 (up 20.2%) and consolidated net income available to common stockholders of $215.9 million (up 23.3%).

•   All-time high net interest income of $697.3 million (up 12.8%).

•   Strong net gains on investment securities of $419.4 million (and net of noncontrolling interests (non-GAAP), $77.3 million * ), and net gains on equity warrant assets of $46.1 million.

 

Focus on

STOCKHOLDER

Interests

 

 

•   Higher return on average equity (“ ROE ”) performance of 11.2% as compared to 10.1% in 2012.

•   2013 total stockholder return (“ TSR ”) of 81.9%, exceeded the one-year average of 45.9% of our Performance Peer Group. Our 2013 three-year TSR of 27.3% also exceeded the three-year average TSR of 15.4% of our Performance Peer Group. (For a list of those peer companies, see “Compensation Discussion and Analysis --- Competitive Benchmarking Against Peers”)

 

Maintained

DISCIPLINE

 

 

•   Disciplined credit underwriting, with net charge offs of 0.33% of average total gross loans and non-performing assets of 0.20% of total assets for 2013.

•   Continued strong capital and liquidity levels.

 

* This is a non-GAAP financial metric; see Appendix A for reconciliation.

 

LOGO   LOGO   LOGO

 

 

2013 Business Performance

Our 2013 business performance was driven by one single objective… to be the bank of the global innovation economy. We stayed focused on our long-term growth strategy and on our mission to help our clients. Our key 2013 highlights include:

 

  Increased our client market share, targeting strong, performing clients in the innovation space
  ¡     We added more than 2,000 early stage clients.
  ¡     We grew the number of our larger clients (with annual revenue over $75 million), which added over $600 million in new outstanding loans.
  ¡     Approximately 64% of U.S. venture-backed technology and life science companies that went public in 2013 were our clients.

 

  Continued growth of our business model globally
  ¡     We continued to grow our U.K. bank branch, which was again named service provider of the year at the European Investor AllStars. We also continued to make progress building out our joint venture bank in China.

 

  Continued focus on client experience
  ¡     We continued to expand our products and services to simplify our clients’ banking experience, including mobile deposit solution, client onboarding systems, and online banking enhancements.

 

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Table of Contents

ANNUAL MEETING

 

Time and Date:

 

4:30 p.m. (Pacific Time), April 24, 2014

 

Place:

 

SVB Financial Group – Corporate Headquarters

Kellogg Auditorium

3005 Tasman Drive

Santa Clara, California 95054

 

Record Date:

 

February 25, 2014

 

Voting:

 

Stockholders as of record date are entitled to vote

PROPOSALS AND VOTING RECOMMENDATIONS

 

Proposal

  

Board Recommendation

   Page Reference

Proposal No. 1 – Election of Eleven (11) Directors

   For      2
Proposal No. 2 – Approval of 2006 Equity Incentive Plan to reserve an additional 2,000,000 shares for issuance    For    57
Proposal No. 3 – Ratification of KPMG LLP as our Independent Auditors for Fiscal Year 2014    For    65

Proposal No. 4 – Advisory Approval of Executive Compensation

   For    66

DIRECTOR NOMINEES

We are seeking your vote FOR all of the director nominees listed below:

 

Name

  Age   Year First
Elected By
Stockholders
 

Principal Occupation

  Independent     Board Committee Membership*  
          Audit     Compensation     Credit     Finance     Governance  

 Greg W. Becker

  46   2011   President and Chief Executive Officer, SVB Financial Group and Silicon Valley Bank     No             

 Eric A. Benhamou

  58   2005   Chairman and Chief Executive Officer, Benhamou Global Ventures, LLC     Yes              X        C   

 David M. Clapper

  62   2005   Chief Executive Officer, Minerva Surgical, Inc.     Yes        X          C       

 Roger F. Dunbar

  68   2005  

Board Chairman SVB Financial Group;

Retired, Former Global Vice Chairman, Ernst & Young, LLP

    Yes        C            X        X   

 Joel P. Friedman

  66   2005   Retired, Former President, Business Process Outsourcing, Accenture     Yes              C        X   

 C. Richard Kramlich

  78   2005   Chairman and Co-Founder New Enterprise Associates     Yes          X          X     

 Lata Krishnan

  53   2008   Chief Financial Officer, Shah Capital Partners     Yes        X            X     

 Jeffrey N. Maggioncalda

  45   2012   Chief Executive Officer, Financial Engines     Yes          X        X       

 Kate D. Mitchell

  55   2010   Co-Founder and Managing Director, Scale Venture Partners     Yes        X        C         

 John F. Robinson

  67   2011   Former Deputy Comptroller of the Currency and former Executive Vice President, Washington Mutual Bank     Yes        X        X        X       

 Garen K. Staglin

  69   2012   Proprietor, Staglin Family Vineyard     Yes            X          X   

 

* “C” denotes committee chairperson

 

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CORPORATE GOVERNANCE HIGHLIGHTS

 

•All independent directors, except for CEO director

•Seasoned Board with diverse experience

•Separate Board Chairperson and CEO roles

•Annual election of directors

•Majority voting standard in uncontested director elections**

•Board (and individual committee) oversight of risk management

•Annual Board and committee evaluations

 

•Regularly-held executive sessions of non-management directors

•Executive and director equity ownership guidelines

•Active stockholder engagement practices

•Annual Say on Pay vote

•Independent Board approval of CEO compensation

•No renewal of poison pill (expired January 2014)**

 

** New highlights effected in 2013 or 2014, as applicable

EQUITY PLAN INCREASE PROPOSAL

We are seeking stockholder approval of an increase of 2,000,000 shares to reserve for issuance under our 2006 Equity Incentive Plan. We continue to be subject to our annual equity burn rate of 2.5%. For 2013, we maintained a burn rate of 2.18%. Equity is a very important component of our compensation program, especially our executive compensation program. We believe equity awards help align our executives and other employees with stockholder interests and help drive our Company performance. We further believe our equity plan includes sound governance features as further described under “Proposal No. 2 – Approval of the 2006 Equity Incentive Plan, as Amended and Restated.”

AUDITOR MATTERS

As a matter of good corporate practice, we are seeking your ratification of KPMG LLP (“ KPMG ”) as our independent registered public accounting firm for the 2014 fiscal year. The following table summarizes the fees billed or expected to be billed by KPMG for 2013 and 2012:

 

     2013      2012  

Audit fees

   $ 4,771,482       $ 4,361,548   

Audit-related fees (1)

     223,031         191,993   

Tax fees (2)

     609,361         557,412   

All other fees (3)

     120,000         398,985   
  

 

 

    

 

 

 

Total

   $ 5,723,874       $ 5,509,938   
  

 

 

    

 

 

 

 

  (1)

Consists principally of fees billed or expected to be billed related to reviews of internal controls for selected information systems and business units (SSAE 16 audits), and services related to proposed accounting standards.

 
  (2)

Represents fees for services provided in connection with the Company’s tax compliance and advice.

 
  (3)

Represents fees for advisory services relating to the Company’s global banking initiatives, analysis of certain accounting standards and processes, and analysis of outsourcing initiatives.

 

EXECUTIVE COMPENSATION/SAY ON PAY

Consistent with our Board’s recommendation and our stockholders’ preference, we submit an advisory vote to approve our executive compensation (otherwise known as “ Say on Pay ”) on an annual basis. Accordingly, we are seeking your approval, on an advisory basis, of the compensation of our Named Executive Officers, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement. For highlights of our 2013 executive compensation and a summary of key features of our executive compensation programs, please refer to the “ Compensation Discussion and Analysis – Executive Summary ” section.

Say on Pay

At our 2013 Annual Meeting, we received 94% of the votes cast in approval of our 2012 executive compensation program.

IMPORTANT DATES FOR 2015 ANNUAL MEETING

Stockholder proposals for inclusion in our 2015 proxy statement pursuant to SEC Rule 14a-8 must be received by us by November 14, 2014. Notice of stockholder proposals for the 2015 annual meeting outside of SEC Rule 14a-8 must be received by us no earlier than December 24, 2014 and no later than January 24, 2015.

* * * *

 

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Table of Contents

Mailed to Stockholders on or about March 14, 2014

 

 

PROXY STATEMENT

OF

SVB FINANCIAL GROUP

3003 Tasman Drive

Santa Clara, California 95054

 

 

PROXY STATEMENT GENERAL INFORMATION

General

This Proxy Statement is furnished in connection with the solicitation of proxies by, and on behalf of, the Board of Directors (the “ Board ”) of SVB Financial Group (the “ Company ”) for use at our 2014 Annual Meeting of Stockholders to be held at our offices located at 3005 Tasman Drive, Santa Clara, California 95054 in the Kellogg Auditorium, on Thursday, April 24, 2014 at 4:30 p.m., Pacific Time, and at all postponements or adjournments thereof (the “ Meeting ”). (For directions to attend the Meeting in person, please contact us at the telephone number below.)

Record Date

Only stockholders of record on February 25, 2014 (the “ Record Date ”) will be entitled to vote at the Meeting. At the close of business on the Record Date, there were 45,863,496 shares of our Common Stock, $0.001 par value (the “ Common Stock ”), outstanding.

Principal Executive Offices

The Company is a Delaware corporation and financial holding company for Silicon Valley Bank (the “ Bank ”) and its affiliates. Our principal executive offices are located at 3003 Tasman Drive, Santa Clara, California 95054, and our telephone number at that location is (408) 654-7400.

Important Notice Regarding the Availability of Proxy Materials for the Meeting

This Proxy Statement and our 2013 Annual Report on Form 10-K are available electronically at www.svb.com/proxy . See also “ Information About Voting and Proxy Solicitation – Delivery of Proxy Materials ” below.

 

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LOGO      PROXY STATEMENT INFORMATION


Table of Contents

Proposal No. 1

ELECTION OF DIRECTORS

The Board of Directors Recommends a Vote “For” All Nominees

Pursuant to our bylaws, the Board of Directors (the “ Board ”) shall consist of at least eight (8), but no more than thirteen (13) members, with the exact number to be fixed by the Board of Directors. As of the Record Date, the number of directors authorized by the Board is fixed at eleven (11).

Outside Directors. ” Under our bylaws, the Board shall not have more than two directors who do not meet the definition of an “Outside Director.” An Outside Director is any director who meets the independence and experience requirements of the SEC and Nasdaq and who, in the opinion of the Board, has the ability to exercise independent judgment in carrying out the responsibilities of a director of the Company. All of our current directors, except for our Chief Executive Officer, are considered Outside Directors.

Majority Voting Policy . In 2013, in an effort to continually strengthen our corporate governance processes, the Governance Committee of our Board adopted a majority voting policy applicable to uncontested director elections (i.e., elections where the number of nominees is not greater than the number of directors to be elected). Under this policy, any of our director nominees in an uncontested election who receives a greater number of votes “withheld” his or her election than votes “for” such election shall, promptly following certification of the stockholder vote, offer his or her resignation to the Board for consideration. The Governance Committee will act within 90 days after certification of the stockholder vote to determine whether to accept the director’s resignation, and thereafter submit such resignation and its recommendation to the Board for consideration at its next scheduled meeting. The Board expects that the director whose resignation is under consideration abstain from participating in any decision or deliberation regarding that resignation. Following the Board’s decision, we will publicly disclose the decision made with respect to any resignation.

 

Director Qualifications

The Board recognizes that it is of utmost importance to assemble a body of directors that, taken together, has the skills, qualifications, experience and attributes appropriate for functioning effectively as a board. The Governance Committee of the Board is responsible for maintaining a well-rounded and diverse board that has the requisite range of skills and qualifications to oversee the Company effectively. The Governance Committee has not formally established any minimum qualifications for director candidates. However, in light of our business, the primary areas of experience and qualifications sought by the Governance Committee in director candidates include, but are not limited to , the primary areas identified on the right.

The Board believes that our incumbent directors, as a whole, have these areas of experience and each possesses particular attributes which qualify him or her to serve on the Board, as further noted in his or her respective biography below. (For each director, we have highlighted certain key areas of qualifications. The fact that an area is not highlighted does not mean that the director does not possess such qualification.)

 
PRIMARY AREAS OF DIRECTOR QUALIFICATIONS

 

•       Client Industry – Experience with our key client industries --- technology, life science, venture capital/private equity and premium wine --- to help deepen our knowledge of the innovation markets we do business in.

 

•       Banking/Financial Services – Experience with the banking or financial services industry, including regulatory experience, to support and grow our core business.

 

•       Global – Experience working outside of the United States and/or with global companies, to help the expansion of our global presence.

 

•       Leadership – Experience from holding significant leadership positions, including as a CEO of a successful company or a head of a significant business, to help us drive growth and performance.

 

•       Finance – Experience with finance and/or financial reporting processes to help drive operating and financial performance.

 

•       Risk Management – Experience with key risk management functions to help oversee the risks we face.

 

 

Moreover, the Board believes, and expects, that all of our directors demonstrate strong strategic and/or innovative thinking, and also possess the following attributes enabling the Board to function effectively as a collective body: integrity, collegial spirit, sound business judgment, professionalism, ability to generate public confidence, ability to act independently, and availability and commitment to serve. (For more information, see “ Corporate Governance Principles and Board Matters –Consideration of Director Nominees ” below.)

 

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Nominees for Director

All proxies will be voted “FOR” the election of the following eleven (11) nominees recommended by the Board for a term of one year, unless authority to vote for the election of directors (or for any particular nominee) is withheld. All of the nominees served as directors of the Company since the last annual meeting of stockholders in April 2013. All of our incumbent directors are nominees for re-election to the Board and were recommended by the Governance Committee.

If any of the nominees should unexpectedly decline or be unable to act as a director, the proxies may be voted for a substitute nominee designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to or in lieu of those listed below. Our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, resignation or removal.

Director Biographies

The biographical information for each of the director nominees is as follows:

 

Greg W. Becker   Board Committees:    Independent:
    N/A    No

Mr. Becker, age 46, was appointed the President and Chief Executive Officer of the Company and the Bank in April 2011. He first joined us in 1993 as part of the Northern California Technology Division, and since then, has served in a number of executive and senior management positions, including Division Manager of Venture Capital (1999-2002), Chief Banking Officer (2002-2003), Chief Operating Officer (2003-2008) and President of Silicon Valley Bank (since 2008). Mr. Becker has served as a director of the Company since 2011.

Private

Directorships:

 

•  Vice Chairman, Silicon Valley Leadership Group, a non-profit organization with an emphasis on issues of importance to employers, employees and residents of Silicon Valley (since 2011)

•  Bay Area Council, a public policy advocacy organization (since 2011) (as director and executive committee member)

Other Prior

Experience:

 

•  President, Board of Trustees, Silicon Valley and Monterey Bay Area Chapter of the Leukemia & Lymphoma Society (2004-2011)

Education:  

•  Bachelor’s degree in Finance from Indiana University

 

Skills/

Qualifications:

 

In particular, Mr. Becker’s key areas of skills/qualifications include, but are not limited to:

 

•   Leadership – current role as the Company’s CEO, as well as held other prior leadership roles within the Company

•   Client Industry and Banking/Financial Services - extensive experience with the Company and within the banking industry working with public and private technology, life science and venture capital clients

 

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Eric A. Benhamou   Board Committees:    Independent:
   

•    Governance, Chair

•    Finance

   Yes

Mr. Benhamou, age 58, is Chairman and CEO of Benhamou Global Ventures, LLC, which he founded in 2003. Benhamou Global Ventures, LLC invests and plays an active role in innovative high tech firms throughout the world. He also sits on various public and private technology company boards, and serves a variety of educational and philanthropic organizations. Mr. Benhamou has served as a director of the Company since 2005.

Public

Directorships:

 

•  Chairman, Cypress Semiconductor, a semiconductor company (since 1993)

•  Finjan Corporation, a global provider of proactive web security solutions (since 2006)

Private

Directorships:

 

•  Load Dynamix (formerly SwiftTest, Inc.), a commercial IP network testing tool developer (since 2010)

•  Purewave, Inc., a developer of outdoor compact base stations for the 4G marketplace (since 2010)

•  ConteXtream, a carrier equipment vendor for intellectual property based media services (since 2007)

•  Qubell, an application deployment and configuration management platform (since 2014)

Other

Experience:

 

•  Executive committee member, Stanford University School of Engineering (since 1996)

•  Chairman of the Israel Venture Network, a venture philanthropy organization for a stronger Israeli society (since 2000)

Prior

Directorships:

 

•  RealNetworks, Inc., creator of digital media services and software (2003-2012)

•  Chairman, 3Com Corporation, a public networking solutions provider (1990-2010)

•  Voltaire Ltd., a public grid computing network solutions company (2007-2011)

•  Dasient, a security company that provides malware detection and prevention solutions (2010-2011)

•  Chairman of the Board of Directors of Palm, Inc., a public mobile products provider (1999-2007)

•  Other private directorships: Atrica, Go Networks, WisdomArk (various dates from 2000-2008)

Other Prior

Experience:

 

•  Executive committee member, Ben Gurion University of Negev (2000-2013)

•  Visiting professor, INSEAD Business School (2003-2012)

•  Interim Chief Executive Officer of Palm, Inc. (2001-2003)

•  Chief Executive Officer, 3Com Corporation (1990-2000), and other various senior management positions

•  Executive committee member, Computer Science and Telecommunications Board (CSTB) (2003-2008)

•  Member, US-Israel Science and Technology Commission (2003)

•  Executive committee member, TechNet

Co-founder and Vice President of Engineering, Bridge Communications (1981-1987)

Education:  

•  Engineering degree from l’École Nationale Supérieure d’Arts et Métiers in Paris, France

•  Master’s degree in Science from the School of Engineering at Stanford University

•  Several honorary doctorates

 

Skills/

Qualifications:

 

In particular, Mr. Benhamou’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry – in-depth experience with both public and private technology companies (as part of management and/or as a director and venture capital investor); current role as Chairman and CEO of Benhamou Global Ventures

•   Global – strategic and operational experience in the global markets, particularly in Europe and Israel

•   Leadership – held a variety of key executive positions, including Chairman and CEO roles of 3Com Corporation and Palm, Inc.

 

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David M. Clapper   Board Committees:    Independent:
   

•     Credit, Chair

•     Audit

   Yes

Mr. Clapper, age 62, has been the Chief Executive Officer of Minerva Surgical, a medical device company, since May 2011. He has had an extensive career in the healthcare and medical device industries, including serving as the President and Chief Executive Officer (2005-2008) of SurgRx, Inc., a privately held medical device manufacturer, until its acquisition by Ethicon Endo-Surgery in 2008, as well as a variety of public and private company directorships. Mr. Clapper has served as a director of the Company since 2005.

 

Private

  Arqos Surgical, Inc., a technology holding company (since 2011)

Directorships:

  IOGYN, Inc., a medical device company (since 2011)
   

CORRX, Inc., a medical device company (since 2011)

   

Corinth Medical, a medical device company (since 2011)

   

RELIGN Corporation, a medical device company (since 2011)

   

MOSIAX, Inc., a medical device company (since 2011)

 

Prior
Directorships:

  Neomend, a designer of surgical sealants and adhesion prevention products (acquired by CR Bard) (2010-2012)
   

Baxano, a private medical device manufacturer (2009-2011)

   

Dfine, Inc., a private electrosurgical system developer (2007-2011)

   

Sierra Surgical Technologies, a private surgical device company (2007-2011)

   

Other directorships completed prior to 2008 include: Pulmonx, a private medical device company (2003-2006); Conor Medsystems, a public developer of drug delivery technology (acquired by Johnson and Johnson) (2004-2007); St. Francis Medical Technology, a private medical device manufacturer (acquired by Kyphon/ Medtronic) (2006); Novacept, a private medical device company (acquired by Cytyc/Hologic) (1999-2004); Focal, Inc., a public company developer of surgical sealants (acquired by Genzyme/Sanofi) (1994-1999)

 

Other Prior

  President and Chief Executive Officer, Novacept (1999-2004)

Experience:

  President and Chief Executive Officer, Focal, Inc. (1994 to 1999)
   

Various management positions at Johnson & Johnson, a public company provider of professional consumer health care products and services (1977-1993)

 

Education:

  Bachelor’s degree in Marketing from Bowling Green State University

 

 

 

Skills/

In particular, Mr. Clapper’s key areas of skills/qualifications include, but are not limited to:

Qualifications:

  Client Industry – deep experience with both a variety of public and private life science companies (as part of management and/or as a director)
   

Leadership – current role as CEO of Minerva Surgical, as well as held other prior CEO positions of other life science companies

 

 

 

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Roger F. Dunbar   Board Committees:    Independent:
   

•    Audit, Chair

•    Finance

•    Governance

   Yes

Mr. Dunbar, age 68, is our current Chairman of the Board of Directors, and subject to his election, he is expected to continue to serve as our Board Chairman during the 2014-2015 director term. Mr. Dunbar retired from Ernst and Young in 2004, where he served in a variety of positions since 1974, including key leadership positions. Mr. Dunbar has served as a director of the Company since 2005.

Private

Directorships:

 

•  Desert Mountain Property, Inc. (since 2009)

•  Desert Mountain Club, Inc. (since 2009)

Prior

Experience

with Ernst & Young:

 

•  Global Vice Chairman, Strategic Growth Markets and Venture Capital (2000-2004)

•  Member, Global Practice Council, London, United Kingdom (2000-2004)

•  Member, Global Management Committee, London, United Kingdom (2000-2004)

•  Member of US Area Managing Partners Leadership Group (1992-2000)

•  Client Service Partner and other key positions, including Partner-in-Charge and Area Managing Partner, Silicon Valley and the Pacific Northwest Area (1974-2000)

Prior

Directorships:

 

•  Advisory Board Member, SVB Financial Group and Silicon Valley Bank (2001-2004)

Other Prior

Experience:

 

•  Teacher, Santa Clara University’s Graduate School of Business

•  Teacher, Ernst & Young’s National Education Program

•  Advisory Boards, Santa Clara University and Cal Poly San Luis Obispo

•  Joint Venture Silicon Valley’s 21 st Century Education Board

•  U.S. Naval Officer (1967-1980)

Education:

 

•  Bachelor’s degree in Business from San Francisco State University

•  Master’s degree in Business Administration from Santa Clara University

•  Certified public accountant, inactive, and a member of the California State Board of Accountancy and the AICPA

 

Skills/ Qualifications:  

In particular, Mr. Dunbar’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry and Global – deep experience working with both public and private companies and venture capital firms through Ernst & Young, as well as in the global markets, particularly in United Kingdom and Israel

•   Leadership – held a variety of key executive positions, including Global Vice Chairman of Ernst & Young

•   Finance and Risk Management – extensive domestic and international capital markets, finance, accounting and audit experience with Ernst & Young

 

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Joel P. Friedman   Board Committees:    Independent:
   

•    Finance, Chair

•    Governance

   Yes

Mr. Friedman, age 66, retired from Accenture, a public company global management consulting firm in 2005, where he held the position of President of the Business Process Outsourcing (“BPO”) organization. Over the course of his 34-year career with Accenture, Mr. Friedman held a variety of senior leadership roles. Mr. Friedman has served as a director of the Company since 2005.

Public

Directorships:

 

•  NeuStar, a provider of essential clearinghouse services to the communications industry (since 2006)

Private

Directorships:

 

•  Advisory Director, FTV Capital (formerly Financial Technology Ventures), (since 2005)

•  Advisory Director, Community Gatepath, a non-profit organization dedicated to enabling persons with disabilities to live as fully integrated members of the community (since 2013; director from 1991-2012)

Prior

Experience

with

Accenture:

 

•  President of the BPO organization

•  Managing Partner, Banking and Capital Markets

•  Managing General Partner, Accenture Technology Ventures

•  Founder, Accenture strategy consulting practice

Prior

Directorships:

 

•  EXL Service (Advisory Director), a provider of offshore business process outsourcing solutions (2008-2011)

•  Endeca Technologies, Inc., a provider of enterprise search solutions (2006-2011) (acquired by Oracle)

•  Junior Achievement of Northern California, a non-profit organization that assists young people understand the economics of life (2004-2010)

•  Other directorships completed prior to 2008 include: Accenture, a global management consulting firm (2001-2005); Seisint, Inc.; Calico Commerce, Inc.; Rivio Inc.; and TheBrain Technologies.

Other Prior

Experience:

 

•  Dean’s Advisory Council for Stanford Graduate School of Business (1998-2004)

Education:  

•  Bachelor’s degree in Economics from Yale University

•  Master’s degree in Business Administration from Stanford University

 

Skills/

Qualifications:

 

In particular, Mr. Friedman’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry and Banking/Financial Services – extensive experience working with venture capital firms and within the banking industry through Accenture

•   Leadership – held a variety of key executive positions, including President of the Business Process Outsourcing organization within Accenture

•   Finance – deep experience with corporate finance and capital markets through Accenture

 

 

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C. Richard Kramlich   Board Committees:    Independent:
   

•    Compensation

•    Finance

   Yes

Mr. Kramlich, age 78, is Chairman and Co-Founder of New Enterprise Associates (“NEA”), a venture capital firm founded in 1978. Prior to founding NEA, Mr. Kramlich held a variety of senior management positions with financial services firms. Mr. Kramlich has served as a director of the Company since 2005.

Public

Directorships:

 

•  Zhone Technologies, provider of broadband access equipment (since 1999)

•  Sierra Monitor Corporation, provider of hazardous gas detection systems (since 1984)

Private

Directorships:

 

•  Kramlich Investment Co., an investment company (since 2013)

•  KIC – Co-Investment Co., an investment company (since 2013)

•  Tabula, a semiconductor company (since 2005)

•  Visual Edge Technologies, an imaging solutions company (since 2002)

•  Xoom, a money transfer company (since 2004)

•  TriAlpha Energy, a nuclear fusion research company (since 2006)

•  Movius, a messaging, collaboration and mobile media solutions company (since 2007)

Prior

Directorships:

 

•  Financial Engines, an investment advisory firm (1997-2011)

•  Kor Technology, an aerospace defense technology company (acquired by Mercury Computer) (2006-2011)

•  Force10 Networks (acquired by Dell Inc.) (2000-2011)

•  Other directorships completed prior to 2008 include: Silicon Graphics; 3Com Corporation (acquired by Hewlett-Packard); Healtheon/WebMD; Immunex (acquired by Amgen); Juniper Networks; Macromedia (acquired by Adobe); Semiconductor Manufacturing International; Celetronix (acquired by Jabil); Decru (acquired by NetApp); Chalone Wine Group (acquired by Diageo); Ascend Communications (acquired by Lucent Technologies); Dallas Semiconductor (acquired by Maxim Integrated Products); Foveon (acquired by Sigma Corporation); InfoGear (acquired by Cisco Systems); NetSolve (acquired by Cisco Systems); NEXT HOP (acquired by U4EA Technologies); MaxiScale Technology; Fabric7 Systems; Informative (acquired by Satmetrix, Inc.)

Other Prior

Experience:

 

•  General Partner, Arthur Rock & Associates (1969-1977)

•  Executive Vice President, Gardner & Preston Moss (1964-1969)

•  Chairman and President, National Venture Capital Association

Education:

 

•  Bachelor’s degree in History from Northwestern University

•  Master’s degree in Business Administration from Harvard University

 

Skills/

Qualifications:

 

In particular, Mr. Kramlich’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry – deep experience and knowledge of the venture capital industry and innovation companies (as a venture capital investor and/or a director); current role as chairman and co-founder of NEA

•   Global – strategic and operational experience in the global markets, particularly in China

 

 

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Lata Krishnan   Board Committees:    Independent:
   

•    Audit

•    Finance

   Yes

Ms. Krishnan, age 53, is the Chief Financial Officer of Shah Capital Partners (“Shah Capital”), a leading mid-market technology private equity fund that she joined upon its inception in 2003. Prior to joining Shah Capital, Ms. Krishnan held various corporate accounting and finance positions with leading financial firms. Ms. Krishnan has served as a director of the Company since 2008.

Private

Directorships:

 

•  Chair, American India Foundation, an organization dedicated to accelerating social and economic development in India (since 2001)

•  The Commonwealth Club, a public affairs forum (since 2004)

Other

Experience:

 

•  Fellow, American Leadership Forum (since 1998)

Prior

Directorships:

 

•  Enlighted, Inc., an information technology consulting firm (2010-2013)

•  TiE, a non-profit global network of entrepreneurs and professionals

•  Global Heritage Fund, an international heritage conservancy (2009-2011)

•  CEO Women, an organization to create economic opportunities for low-income immigrant and refugee women (2009-2011)

•  America’s Foundation for Chess, a foundation committed to children’s education (2003-2011)

•  Global Philanthropy Forum, a council on world affairs (2006-2011)

•  Narika, a shelter for abused women in the Asian community (1998-2011)

Other Prior

Experience:

 

•  Co-Founder and Chief Financial Officer, SMART Modular Technologies, Inc., a manufacturer of computer memory modules (1989-1999)

•  Various corporate accounting and finance positions with Montgomery Services

•  Various corporate accounting and finance positions with Arthur Andersen & Company LLP

•  Various corporate accounting and finance positions with Hill Vellacott & Company in London

Education:  

•  Bachelor’s degree with honors from the London School of Economics

•  Member of the Institute of Chartered Accountants in England and Wales

 

Skills/

Qualifications:

 

In particular, Ms. Krishnan’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry and Finance – served as co-founder and chief financial officer of a technology company; experience with a leading technology private equity fund; served in a variety of accounting/finance positions

•   Global – deep experience in global markets, particularly in India and the United Kingdom

 

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Jeffrey N. Maggioncalda   Board Committees:    Independent:
   

•    Compensation

•    Credit

   Yes

Mr. Maggioncalda, age 45, is the Chief Executive Officer of Financial Engines, an independent investment advisory firm. Mr. Maggioncalda has served in this role since Financial Engines’s inception in 1996. Mr. Maggioncalda has served as a director of the Company since 2011.

Public

Directorships:

 

•  Financial Engines, an independent investment advisory firm (since 1997)

Prior

Directorships:

 

•  Affinity Circles, a social networking developer

Other Prior

Experience:

 

•  Associate, Cornerstone Research, an economic and financial consulting firm (1991-1994)

Education:  

•  Bachelor’s degree in Economics and English from Stanford University

•  Master’s degree in Business Administration from Stanford University

 

Skills/

Qualifications:

 

In particular, Mr. Maggioncalda’s key areas of skills/qualifications include, but are not limited to:

 

•   Leadership – current role as CEO and director of Financial Engines

•   Banking/Financial Services – extensive experience in the investment advisory industry

 

Kate D. Mitchell   Board Committees:    Independent:
   

•    Compensation, Chair

•    Audit

   Yes

Ms. Mitchell, age 55, is Managing Partner and Co-Founder of Scale Venture Partners (“Scale”), a venture capital firm where she leads investments in software and business services and is instrumental in building the firm’s team and strategic direction. Prior to founding Scale in 1996, Ms. Mitchell held a variety of senior management positions with Bank of America. Ms. Mitchell has served as a director of the Company since 2010.

Private

Directorships:

 

•  Jaspersoft, Inc., a manufacturer of business intelligence software (since 2009)

•  mBlox, Inc., a mobile transaction network provider (since 2010)

Other

Experience:

 

•  Member, Steering Committee, Private Equity Women Investor Network, a forum for senior women in private equity (since 2010)

Prior

Directorships:

 

•  Wayport, Inc. (2000-2008)

•  Friends of the San Francisco Public Library (2007-2010)

•  Chairman, National Venture Capital Association (2010-2011)

•  Member of National Venture Capital Association Executive Committee (2007-2011)

•  Other directorships completed prior to 2008 include: Songbird Medical (1998-2005); Acusphere, Inc., a public pharmaceutical company (1999-2005); Tonic Software, Inc. (2000-2005); Pavilion Technologies, Inc. (2004-2007)

Other Prior

Experience:

 

•  Silicon Valley Bank Venture Capital Advisory Board (2008 - 2013)

•  Various senior management positions in finance and technology (including Senior Vice President), Bank of America

•  Various finance and lending positions at Bank of California (now Union Bank of California)

Education:  

•  Bachelor’s degree in Political Science from Stanford University

•  Master’s degree in Business Administration from Golden Gate University

 

Skills/

Qualifications:

 

In particular, Ms. Mitchell’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry – deep experience and knowledge of the venture capital industry and innovation companies (as a venture capital investor and/or a director); current role as co-founder and partner of Scale Ventures

•   Banking/Financial Services – held a variety of key executive positions at a large global bank

•   Finance – extensive finance and asset/liability management experience at two nationally-recognized banks

 

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John F. Robinson   Board Committees:    Independent:
   

•    Audit

•    Compensation

•    Credit

   Yes

Mr. Robinson, age 67, is a former Executive Vice President of Washington Mutual Bank, a financial lending institution. Prior to his position with Washington Mutual, Mr. Robinson served with the Office of the Comptroller of the Currency as a Deputy Comptroller. Mr. Robinson has served as a director of the Company since 2010.

Private

Directorships:

 

•  Federal Home Loan Bank of San Francisco (since 2011)

Other

Experience:

 

•  National Outdoor Leadership School Advisory Committee (since 2007)

Prior

Directorships:

 

•  Operation HOPE, a non-profit organization focusing on economic improvements for poverty-stricken people in America (2004-2013)

•  Federal Home Loan Bank of San Francisco (2004-2005 and 2007-2008)

•  Long Beach Mortgage Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006)

•  Long Beach Securities Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006)

Other Prior

Experience:

 

•  Executive Vice President, Washington Mutual Bank, a financial lending institution (2002-2008)

•  Deputy Comptroller, Office of the Comptroller of the Currency (1997-2002)

Education:  

•  Bachelor’s degree in Business Administration from Washington University in St. Louis

•  Master’s degree in Business Administration from Harvard University

•  Chartered Financial Analyst (CFA)

 

Skills/

Qualifications:

 

In particular, Mr. Robinson’s key areas of skills/qualifications include, but are not limited to:

 

•   Banking/Financial Services – deep banking and regulatory experience, especially as a former bank regulator

•   Risk Management – held a variety of executive risk management positions at a nationally-recognized bank

 

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Garen K. Staglin   Board Committees:    Independent:
   

•    Credit

•    Governance

   Yes

Mr. Staglin, age 69, is the founder and proprietor of Staglin Family Vineyard, founded in 1985 in the Rutherford region of Napa Valley. Over the past 40 years, Mr. Staglin has also held a variety of positions in the financial and insurance services industries. Mr. Staglin has served as a director of the Company since 2011.

Public

Directorships:

 

•  Lead Director, EXL Services, a provider of outsourcing services to global companies (since 2005)

Private

Directorships:

 

•  Advisory Director, Specialized Bicycle, a manufacturer of cycling equipment (since 1995)

•  Chairman, Free Run Technologies, an internet and technology services company (since 2003)

•  Senior Advisor and Advisory Director, FTV Capital (formerly Financial Technology Ventures), (since 2004)

•  Vice Chairman, Profit Velocity Solutions, a manufacturing analytics firm (since 2007)

•  Chairman, Nvoice Payments, an electronic payment service provider (since 2010)

Other

Experience:

 

•  Founder and President, International Mental Health Research Organization, devoted to raising awareness and funding research to find a cure for major mental illnesses (since 1995)

•  Founder and President, Bring Change 2 Mind, an organization devoted to removing the stigma associated with mental illness (since 2009)

•  Founder and Co-Chairman, One Mind 4 Research, a non-profit organization devoted to accelerating cures and treatments for all brain disorders (since 2010)

Prior

Directorships:

 

•  Bottomline Technologies, a provider of payment and invoice automation software and services (2007-2012)

•  Advisory Board, Blaze Mobile, a mobile payments company (2006-2011)

•  Global Document Solutions, a document processing outsourcing company (2005-2010)

•  Solera Holdings, Inc., an automotive insurance software service provider (2005-2011)

•  Other directorships completed prior to 2008 include: First Data Corporation, a payment solutions provider (1992-2003); Quick Response Services, a retail management and supply chain services company (1991-2001); CyberCash, Inc., a micro-payments and platform company (1996-2000); Chairman, Safelite Auto Glass, a national auto glass provider (1993-1999)

Education:  

•  Bachelor’s degree in Engineering-Electrical and Nuclear from the University of California, Los Angeles

•  Master’s degree in Business Administration, Finance and Systems Analysis from Stanford University Graduate School of Business

 

Skills/

Qualifications:

 

In particular, Mr. Staglin’s key areas of skills/qualifications include, but are not limited to:

 

•   Client Industry and Banking/Financial Services – extensive experience working within the wine and transaction/payment processing industries, as well as experience working with innovation companies (as a director)

•   Leadership – held a variety of leadership roles, including his current lead director role with EXL Services as well as other founder and president roles with various non-profit organizations

Vote Required

Any nominee who receives a greater number of votes cast “for” his or her election than votes cast “withheld” his or her election will be elected.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

We are committed to having sound corporate governance principles. These principles are important to the way in which we manage our business and to maintaining our integrity in the marketplace. Our Corporate Governance Guidelines and the charters of the Audit Committee, Compensation Committee, Credit Committee, Finance Committee and Governance Committee of our Board are available at www.svb.com under “Corporate Governance.” The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.

Board Independence, Leadership and Risk Oversight

The Board has determined that, with the exception of Mr. Becker, our President and Chief Executive Officer, all of our current directors and director nominees, are “independent” within the meaning of the director independence standards set by the Nasdaq Stock Market, Inc. (“ Nasdaq ”) and the SEC, as currently in effect.

Board Leadership – Separate Chairperson/CEO Roles

The Board has determined that it is in the best interests of the Company to maintain the Board chairperson and chief executive officer positions separately. It believes that having an outside, independent director serve as chairperson is the most appropriate leadership structure for the Board, as it enhances the Board’s independent oversight of management and our strategic planning, reinforces the Board’s ability to exercise its independent judgment to represent stockholder interests, and strengthens the objectivity and integrity of the Board. Moreover, an independent chairperson can more effectively lead the Board in objectively evaluating the performance of management, including the chief executive officer, and guide it through appropriate Board governance processes.

Mr. Dunbar, our current Chairman of the Board, is independent within the meaning of the director independence standards described above. Subject to his election, Mr. Dunbar is expected to serve as the Board’s Chairman for the 2014-2015 term.

Risk Oversight

Oversight of risks to the Company is carried out by the Board as a whole and by each of its various committees. The Board receives periodic reports from management on our risk management, including, on at least an annual basis, an assessment of our key risks.

The Board has expressly delegated to the Governance Committee the primary oversight responsibility for the Company’s enterprise-wide risk management (“ EWRM ”) function, which is responsible for managing, on an enterprise-wide basis, our credit, market/liquidity, operational, legal/regulatory, strategic/reputation and other risks. On at least a quarterly basis, our Chief Risk Officer reports to the Governance Committee on the EWRM function, including risk assessment and risk management. Based on management’s reports, the chairman of the Governance Committee reports to the Board any material changes or updates to our risk profile. The Chief Risk Officer also conducts a risk review with the full Board on at least an annual basis.

Additionally, each Board committee is engaged in overseeing the Company’s risks in its respective areas of oversight. For example, the Audit Committee regularly oversees our risks relating to our accounting and financial reporting. The Compensation Committee engages in periodic risk assessments to review and evaluate our compensation programs in relation to our risks. The Finance Committee actively oversees our capital, liquidity and financial management and the associated risks (whether as an ongoing matter or as it relates specifically to a transaction, such as an equity or debt securities offering). Moreover, the Credit Committee routinely oversees our management of credit risks. Each committee regularly reports back to the full Board on its risk oversight activities, and the Board routinely engages in discussions with management about our risks.

Executive Sessions

The Company’s independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Mr. Becker, our President and Chief Executive Officer, is generally not present at these executive sessions, but will from time to time, at the Board’s discretion, meet with the independent directors without other members of management present.

Committee Independence and Audit Committee Financial Experts

The Board has determined that each of the current members of the Audit Committee, Compensation Committee and Governance Committee are “independent” under Nasdaq director independence standards.

 

 

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In addition, the Board has determined that Mr. Dunbar and Ms. Krishnan meet all of the attributes of an “audit committee financial expert,” as those meanings are defined for purposes of audit committee members by the applicable rules and regulations of the SEC and Nasdaq.

Board Evaluation

The Governance Committee of the Board conducts, in coordination with the full Board, an evaluation of the Board’s performance and effectiveness, either the Board as a whole and/or on an individual director basis. The Governance Committee develops and implements a process for such evaluation and review, which may involve outside consultants or advisers and may include a review of how certain attributes affect Board effectiveness, such as Board size, meeting frequency, quality and timing of information provided to the Board, director communication, director education, director skills and qualifications, director independence and Board strategy sessions. The results of the evaluation are discussed with the Board. The Governance Committee also leads an evaluation of the performance and effectiveness of each of the Board’s committees. All Board and committee evaluations are typically conducted on an annual basis. See “ Board Committees—Committee Governance ” below.

Meeting Attendance

Board and Committee Meetings

The Board held eight (8) meetings during fiscal year 2013. For the number of committee meetings held in 2013, see “ Board Committees – Committee Responsibilities and Meetings ” below. Each director attended in person or via teleconference 75% or more of the total number of meetings of the Board, and of the committees on which he or she served, which were held during the period for which he or she was a director or committee member.

Stockholder Meetings

It is the Board’s policy that each director employs his or her best efforts to attend each of our annual stockholder meetings. Ten of our twelve then-serving Board members attended our 2013 Annual Meeting of Stockholders.

Consideration of Director Nominees

Stockholder Nominees

The Governance Committee will consider Board nominees proposed by stockholders. The Governance Committee has no formal policy with regard to stockholder nominees as it considers all nominees on their merits, as discussed below. Any stockholder nominations proposed for consideration by the Governance Committee should include the nominee’s name and qualifications for Board membership and should be addressed to:

SVB Financial Group

3003 Tasman Drive

Santa Clara, California 95054

Attn: General Counsel and Corporate Secretary

Facsimile: (408) 969-6500

In addition, our bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting. For a description of the process for nominating directors in accordance with the bylaws, please see “ Stockholder Proposals and Director Nominations ” below.

Board Diversity; Selection and Evaluation of Director Candidates

While the Board has not formally adopted a policy governing board diversity, it recognizes the importance of assembling a well-rounded, diverse body of directors. The Governance Committee, with the participation of the full Board, is primarily responsible for reviewing the composition of the Board and for identifying candidates for membership on the Board, all in light of our ongoing requirements, its assessment of the Board’s performance and any input received from stockholders or other key constituencies. The Governance Committee makes determinations as to whether to recommend directors for re-election or director candidates’ nomination to the Board based on their skills, character, judgment and business experience, as well as their ability to diversify and add to the Board’s existing strengths. The Governance Committee typically seeks an appropriate mix of individuals with diverse

 

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backgrounds and skills complementary to our business and strategic direction. This assessment typically includes areas of expertise in industries important to us (such as technology, life sciences, premium wine and venture capital/private equity), functional expertise in areas such as banking/financial services, global markets, legal/regulatory, accounting, finance, operations, information technology and risk management, and an assessment of an individual’s abilities to work constructively with the other Board members and management. The Governance Committee also seeks certain characteristics common to all Board members, such as integrity, strong professional reputation, proven leadership, record of achievement, collegiality and ability and commitment to devote sufficient time and energy to Board service.

Communications with the Board

Individuals who wish to communicate with our Board may do so by sending an e-mail to our Board at bod@svb.com . Any communications intended for non-management directors should be sent to the e-mail address above to the attention of the Board Chairman. Board-related communications are reviewed by the Chairman of the Board and shared with the full Board as he determines appropriate.

Code of Ethics

We have a Code of Ethics that applies to our principal executive officer and our senior financial officers, including our principal financial officer and principal accounting officer. A copy of this Code of Ethics is available on our website at www.svb.com under “Corporate Governance,” or can be obtained without charge by any person requesting it. To request a copy of our Code of Ethics, please contact: Kristi Gilbaugh, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, or by telephone (408) 654-7400.

We intend to disclose any waivers from or changes to our Code of Ethics by posting such information on our website. No waivers or substantive changes were made during fiscal year 2013.

 

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BOARD COMMITTEES

Our Board has the following committees, each of which meets on a regular basis: (1) Audit Committee, (2) Compensation Committee, (3) Credit Committee, (4) Finance Committee and (5) Governance Committee.

Committee Members

As of the date of this Proxy Statement, the members of each of our Board committees are as follows:

 

                             
    Audit             Compensation             Credit             Finance             Governance     
   

Roger Dunbar,  Chair

Dave Clapper

Lata Krishnan

Kate Mitchell

John Robinson

             

Kate Mitchell,  Chair

Dick Kramlich

Jeff Maggioncalda

John Robinson

             

Dave Clapper,  Chair

Jeff Maggioncalda

John Robinson

Garen Staglin

             

Joel Friedman,  Chair

Eric Benhamou

Roger Dunbar

Dick Kramlich

Lata Krishnan

             

Eric Benhamou,  Chair

Roger Dunbar

Joel Friedman

Garen Staglin

    

Committee Governance

Committee Charters

Each committee is governed by a charter that is approved by the Board, which sets forth each committee’s purpose and responsibilities. The Board reviews the committee’s charters, and each committee reviews its own charter, on at least an annual basis, to assess the charters’ content and sufficiency, with final approval of any proposed changes required by the full Board. Stockholders and other interested persons may view a copy of each committee’s charter on our website, www.svb.com under “ Corporate Governance.

Committee Evaluations

The Governance Committee, in coordination with the Board, implements and develops a process to conduct an assessment of committee performance and effectiveness. Typically, the assessments are conducted on annual basis, and include a self-assessment by each committee, as well as a performance review of each committee by non-committee members. The review includes an evaluation of various areas that may include committee sizes, committee composition, committee performance, committee coordination with one another and committee involvement of the full Board. The results of the committee performance assessments are reviewed by each committee, as well as by the Governance Committee, and discussed with the full Board.

Committee Responsibilities and Meetings

The key oversight responsibilities of the Board’s committees, and the number of meetings held by each committee during 2013, are as follows:

 

Audit Committee

     Number of meetings held in 2013:    12    

 

   

Our corporate accounting and financial reporting processes and the quality and integrity of our financial statements and reports.

 

   

The selection, engagement and termination of our independent auditors.

 

   

The qualification, independence and performance of our independent auditors.

 

   

Our internal auditing function and other functions, including information technology, security, legal and regulatory matters.

 

Compensation Committee

     Number of meetings held in 2013:    8    

 

   

Our overall compensation strategies, plans, policies and programs.

 

   

The approval of director and executive compensation.

 

   

The assessment of compensation-related risks.

 

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Credit Committee

     Number of meetings held in 2013:    6    

 

   

The credit and lending strategies, objectives and risks of the Company and the Bank.

 

   

The credit management and lending practices of the Company and the Bank, including reviewing internal credit policies and establishing portfolio limits.

 

   

The quality and performance of the credit portfolio of the Company and the Bank.

 

Finance Committee

     Number of meetings held in 2013:    6    

 

   

The financial strategies and objectives of the Company and the Bank.

 

   

The financial risk management of the Company and the Bank.

 

   

The capital and liquidity management of the Company and the Bank.

 

   

The review of the Company and Bank’s financial performance and compliance with applicable financial regulatory requirements.

 

   

The review of certain corporate development matters, such as proposed mergers and acquisitions.

 

Governance Committee

     Number of meetings held in 2013:    6    

 

   

Our general corporate governance practices, including review of our Corporate Governance Guidelines.

 

   

The annual performance evaluation of our Board and its committees.

 

   

The identification and nomination of director candidates.

 

   

Our key risk control functions, including regulatory compliance and enterprise-wide risk management.

 

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD

The Report of the Audit Committee of the Board shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Act”), or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts.

Our Audit Committee has prepared the following report for inclusion in this Proxy Statement. The Audit Committee is governed by a Board-adopted charter, a copy of which is available on our website at www.svb.com. The charter specifies, among other things, the scope of the committee’s responsibilities and how those responsibilities are performed. The Audit Committee members are “independent” as defined by Nasdaq, the listing standard applicable to us.

The primary responsibility of the Audit Committee is to act on behalf of the Board in fulfilling the Board’s responsibility with respect to overseeing our accounting and reporting practices and the quality and integrity of our financial statements and reports, and our internal control over financial reporting. The committee also reviews the qualifications, independence, and performance of the registered public accounting firm engaged as our independent auditors. Management has the primary responsibility for the financial statements and the reporting process, as well as for our internal controls. Our independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion on the conformity of our audited financial statements with U.S. generally accepted accounting principles, as well as an opinion on the effectiveness of our internal control over financial reporting. In addition, the Audit Committee oversees our internal audit function, which is responsible for reviewing and evaluating the effectiveness of our internal controls.

The Audit Committee has reviewed and discussed with management its assessment and report on the effectiveness of our internal control over financial reporting as of December 31, 2013, which it made using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework (1992).” The committee also has reviewed and discussed with KPMG LLP its review and report on our internal control over financial reporting.

Moreover, the Audit Committee has reviewed and discussed with management and the independent auditors the audited financial statements. The Audit Committee discussed with the independent auditors the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees . In addition, the Audit Committee received from the independent auditors the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, including Rule 3526, Communication with Audit Committees Concerning Independence , and has discussed with the independent auditors the auditors’ independence from us and our management.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for filing with the SEC.

This report is included herein at the direction of the members of the Audit Committee.

AUDIT COMMITTEE

Roger Dunbar (Chair)

David Clapper

Lata Krishnan

Kate Mitchell

John Robinson

 

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COMPENSATION COMMITTEE REPORT

This Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Act or the Exchange Act, except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on this review and these discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ending December 31, 2013 and this Proxy Statement.

This report is included herein at the direction of the members of the Compensation Committee.

COMPENSATION COMMITTEE

Kate Mitchell (Chair)

C. Richard Kramlich

Jeff Maggioncalda

John Robinson

Compensation Committee Interlocks and Insider Participation

During 2013, the Compensation Committee performed all compensation functions of the Board, except for the approval of CEO compensation, which was approved by the independent members of the Board based on the Compensation Committee’s recommendation. (See discussion above under “ Board Committees – Committee Responsibilities ” for additional information on the Compensation Committee.) None of the members of the Compensation Committee has ever been one of our officers or employees. Mr. Becker does not participate in any of the Board or Compensation Committee discussions related to the evaluation of his performance or the recommendation/determination of his compensation. See descriptions of related transactions between us and each of the members of the Compensation Committee, if any, under “ Certain Relationships and Related Transactions ” below.

None of our executive officers serves, or in the past fiscal year served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on our Board or the Compensation Committee.

 

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COMPENSATION FOR DIRECTORS

The following table sets forth the amounts earned or paid to each non-employee member of our Board of Directors during the year ended December 31, 2013.

 

Name

  Fees
Earned or
Paid in
      Cash      
    Stock Awards
($) (1)
     Option
Awards
($)
    Non-Equity
Incentive Plan
 Compensation 
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
    All Other
 Compensation 
    Total  

Roger F. Dunbar

    $197,500       $ 200,003        $       $       $       $       $     397,503    

Eric A. Benhamou

    73,750        100,001                                     173,751    

David M. Clapper

    81,500        100,001                                     181,501    

Joel P. Friedman

    73,750        100,001                                     173,751    

C. Richard Kramlich

    63,250        100,001                                     163,251    

Lata Krishnan

    73,750        100,001                                     173,751    

Jeffrey N. Maggioncalda

    63,750        100,001                                     163,751    

Kate D. Mitchell

    96,000        100,001                                     196,001    

John F. Robinson

    90,750        100,001                                     190,751    

Garen K. Staglin

    60,750        100,001                                     160,751    

Kyung H. Yoon (2)

    10,750                                            10,750    

 

(1)

Values indicated for equity awards reflect the fair value of grants made during the fiscal year. These stock awards represent annual equity grants of restricted stock units made to directors for the 2013-2014 director term. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “ Share-Based Compensation ” in our audited financial statements included in our 2013 Annual Report on Form 10-K. For more information about the annual director equity grant, see “ Equity ” below.

 

(2)

Ms. Yoon’s directorship ended as of April 25, 2013, and did not have any awards outstanding at December 31, 2013.

The Compensation Committee establishes the compensation arrangement for directors, using a combination of annual retainer fees, meeting fees and annual equity awards.

The current annual term for directors began on April 25, 2013, following their election by stockholders at our Annual Meeting on that date. For the 2013 fiscal year, we paid a total of $2.0 million in compensation to our non-employee directors, as compared to $2.1 million for the 2012 fiscal year.

Elements of Director Compensation

The elements of compensation paid to each non-employee director for 2013 are as follows:

Fees

Each of our non-employee directors received:

 

   

An annual retainer fee of $35,000;

 

   

A fee of $1,000 for each Board meeting attended in person and a fee of $500 for each Board meeting held by telephone; and

 

   

A fee for each Board strategic planning meeting of $3,000 per day (which is typically held annually over two days).

In addition to the above:

 

   

The chairperson of the Board received an additional annual fee of $90,000;

 

   

The chairperson of the Audit Committee received an additional annual fee of $20,000, the chairperson of the Compensation Committee received an additional annual fee of $15,000, and the chairpersons of each of the Credit Committee, Finance Committee and Governance Committee received an additional annual fee of $10,000;

 

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Each member of the Audit Committee received a fee of $2,500 for each Audit Committee meeting attended in person, and $1,250 for each Audit Committee meeting held by telephone;

 

   

For members of all other committees, each committee member received a fee of $1,500 for each committee meeting attended in person and $750 for each committee meeting held entirely by telephone; and

 

   

Audit Committee members and all other committee members received a fee for each committee strategic planning meeting held, if any, of $5,000 and $3,000 per day, respectively.

The members of the Board are also eligible for reimbursement for their reasonable expenses incurred in connection with attendance at meetings or the performance of their director duties in accordance with Company policy.

Equity

Each year, the Chairman of the Board and the other non-employee directors receive annual equity awards with a total grant value of approximately $200,000 and $100,000, respectively, which are scheduled to vest in full upon the completion of their director term. For the 2013-2014 director term, we granted on May 22, 2013, 2,698 restricted stock units to the Chairman of the Board and 1,349 restricted stock units to each of the other non-employee directors elected at our annual stockholder’s meeting. These awards are currently expected to vest on April 24, 2014.

The Compensation Committee previously approved a voluntary deferral arrangement and form of agreement under the 2006 Equity Incentive Plan which allows non-employee directors to elect an irrevocable deferral of the receipt of restricted stock unit awards until the earliest of: (a) a specific future settlement date that meets the requirements of Internal Revenue Code 409A, (b) separation from service, (c) the date of a change in control, (d) death, or (e) date of disability. Elections will apply to restricted stock unit awards received during 2013. Ms. Krishnan and Ms. Mitchell elected to defer the receipt of their 2013 equity grants.

Director Equity Ownership Guidelines

Under our equity ownership guidelines for our non-employee directors, as adopted by the Compensation Committee, within five years of assuming the role, the Chairperson of the Board is expected to own a minimum of 12,000 shares of our common stock, and that other non-employee directors are each expected to own a minimum of 3,000 shares of our common stock.

As of December 31, 2013, all directors met the guidelines, by ownership of the requisite number of shares or having served less than five years either on the Board or as Board Chairperson.

Compliance with these guidelines is reviewed by the Governance Committee on a quarterly basis. These levels are based upon a competitive review and subsequent recommendations of stock ownership guidelines performed by Pay Governance, the Compensation Committee’s independent compensation consultant.

 

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions Policy

We currently have in place a written policy on related party transactions (“ Related Party Policy ”), which governs the transactions involving us and certain related persons that are required to be disclosed under Item 404 of Regulation S-K (“ S-K 404 ”). Under the Related Party Policy, any transaction, arrangement or relationship in which:

 

   

we are a participant;

 

   

the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year; and

 

   

a related person has or will have a direct or indirect material interest,

will be considered an interested transaction and will be required to be approved by the Audit Committee of the Board of Directors. Transactions not required to be disclosed under S-K 404 are excluded from this policy. Any of the following persons is considered a related person under the Related Party Policy:

 

   

Any director or executive officer of the Company;

 

   

Any nominee for director of the Company;

 

   

Any holder of more than 5% of our Common Stock; and

 

   

Any immediate family member of any of the above.

Our management has primary responsibility for identifying such related party transactions, which may include, from time to time, loan transactions by the Company or the Bank, investments through SVB Capital, or other business transactions involving us or our subsidiaries. The Audit Committee has responsibility for reviewing these transactions for potential conflicts of interests and approving them (or denying approval, as the case may be). The Credit Committee also reviews related party loan transactions. Under the Related Party Policy, the Audit Committee’s approval may be granted in advance, ratified, or based on certain standing approvals previously authorized by resolution. The Audit Committee may delegate its approval authority under the Related Party Policy to the committee chairperson.

Insider Loan Policy

The Bank has in place a policy, as approved by the Credit Committee, which permits the Bank to make loans to directors, executive officers and principal stockholders (“ Insiders ”) and the related interests of those Insiders (“ Insider Loans ”). The Insider Loan policy is designed to comply with Regulation O of the Federal Reserve Act. Insider Loans qualify for an exemption from Section 402 of the Sarbanes-Oxley Act of 2002 as they are made by the Bank and subject to the insider lending restrictions of Section 22(h) of the Federal Reserve Act.

Pursuant to Regulation O, the Insider Loan policy authorizes the Bank to make Insider Loans if such Insider Loans: (a) are approved in advance by a majority of the Board of Directors of the Bank for Insider Loans where the aggregate amount of all outstanding extensions of credit exceeds $500,000; (b) are extended under the same terms and conditions and rates as those prevailing at the time of the Insider Loan for comparable transactions with other Bank clients; and (c) do not have more than a normal risk of failure of repayment to the Bank or other unfavorable features. The Insider whose credit extension is subject to Board approval must not participate either directly or indirectly in the voting to approve such extension of credit. Prior approval of the Board of Directors of the Bank is not required for an extension of credit made pursuant to a line of credit that was approved by the Board of Directors within 14 months of the date of the extension.

The Insider Loan policy also limits the aggregate amount of all loans to any Insider and his or her related interests. The Insider Loan policy also prohibits the Bank from paying an overdraft on a personal bank account of an Insider except if the overdraft is inadvertent, the aggregated amount of all overdrafts to the Insider at any time is $1,000 or less and the overdraft is outstanding for less than five business days.

Loan Transactions

Additionally, during 2013, the Bank made loans to related parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of ten percent or more of the equity securities of such companies. Such loans: (a) were made in the ordinary course of business; (b) were made on substantially the same terms, including interest rates and

 

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collateral, as those prevailing at the time for comparable transactions with other persons; and (c) did not involve more than the normal risk of collectibility or present other unfavorable features.

Prior to their respective appointments as executive officers, each of Mr. China and Mr. Cox received a mortgage loan through the Bank’s Employee Home Ownership Program (“EHOP”), an employee benefit program whereby eligible employees of the Bank and its affiliates receive preferential terms on mortgage loans. Mr. China’s EHOP mortgage loan amount was $1,176,000, with a principal balance of $1,026,719 as of December 31, 2013. Mr. China’s loan matures April 1, 2016. Mr. Cox’s EHOP mortgage loan amount was $310,533, with a principal balance of $269,209 as of December 31, 2013. Mr. Cox’s loan matures October 1, 2018.

Fund Investments

Managed Funds

In 2000, we formed Silicon Valley BancVentures, LP (“ SVBV ”). The fund is managed by its general partners, which is a subsidiary of the Company and holds an interest in the fund. Mr. Kramlich invested in the fund ($1.0 million) and holds a noncontrolling interest.

In 2006, we created SVB India Capital Partners I, LP (“ SICP ”), a $53.9 million direct equity investment fund that invests in privately-held companies in India. SICP is managed by its general partner, which is a subsidiary of the Company and holds an interest in the fund. Certain of our directors have invested in SICP and hold a noncontrolling interest as a limited partner: Messrs. Benhamou (through Benhamou Global Ventures) ($0.3 million), and Friedman (through his family trust) ($0.1 million) and Ms. Krishnan (through her family trust) ($0.3 million).

Employee Funds

In 2000, we created SVB Qualified Investors Fund, LLC (“ QIF ”), a $7.6 million investment fund of funds for employees that met certain eligibility requirements. QIF invests capital provided by current or former SVB employees into venture capital funds, most of which are managed by us or our affiliates. All employee participants are required to invest in this fund with their own money, but we manage the fund and pay all administrative costs associated with the fund. The following executive officers participated in QIF, each with individual commitment amounts ranging between $50 thousand and $0.5 million: Messrs. Becker, Jones, Kellogg and Verissimo, and Ms. Parsons. QIF is also a limited partner of, and holds an interest in, SVBV ($2.0 million).

In 2005, we formed SVB Qualified Investors Fund II, LLC (“ QIF II ”), a $5.1 million investment fund of funds following the same strategy as QIF. The following current and former executive officers participate in QIF II, each with individual commitment amounts ranging between $50 thousand and $0.3 million: Messrs. Becker, Jones, Kellogg and Verissimo, Ms. Parsons and our former General Counsel, Mary Dent.

In 2013, we formed SVB Qualified Investors Fund III, LLC (“ QIF III ”), a $4.0 million investment fund for employees meeting certain eligibility requirements, including those that were directly engaged in providing services to our funds business. QIF III’s principal purpose is to invest in a select number of venture capital funds managed by us or third parties. Certain of our current and former executive officers participate in QIF III, each with commitment amounts ranging between $50 thousand and $0.5 million: Messrs. Becker, China, Descheneaux, Jones, Verissimo and Wallace and Ms. Parsons.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

We believe, based on a review of Forms 3, 4 and 5 and amendments thereto filed with the SEC and other information known to us, that during fiscal year 2013 our directors, officers (as defined in the rules under Section 16 of the Exchange Act), and any greater than 10% stockholders have complied with all Section 16(a) filing requirements in a timely manner.

 

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INFORMATION ON EXECUTIVE OFFICERS

Our executive officers perform policy-making functions for us within the meaning of applicable SEC rules. They may also serve as officers of the Bank and/or our other subsidiaries. There are no family relationships among our directors or executive officers.

The following information outlines the name and age of each of our executive officers (as of the date of this Proxy Statement) and his or her principal occupation with the Company, followed by biographical information of each such executive officer:

 

Name

   Age     

Principal Occupation

Greg W. Becker

     46       President and Chief Executive Officer

Marc C. Cadieux

     47       Chief Credit Officer

John D. China

     48       Head of Relationship Banking

Philip C. Cox

     47       Head EMEA and India and President of the UK Branch

Michael R. Descheneaux

     46       Chief Financial Officer

Michelle A. Draper

     46       Chief Marketing Officer

Christopher D. Edmonds-Waters

     51       Head of Human Resources

Joan S. Parsons

     55       Head of Specialty Banking

Marc J. Verissimo

     58       Chief Risk Officer

Bruce E. Wallace

     49       Chief Operations Officer

Michael S. Zuckert *

     55       General Counsel

 

* Joined March 3, 2014

 

 

Executive Biographies

Mr. Greg W. Becker’s biography can be found under “ Proposal No. 1—Election of Directors ” above.

 

 

Mr. John D. China joined us in 1996 as a Senior Relationship Manager and has held a variety of positions with the Company, including Head of Venture Capital Group and Head of Private Equity Group. Mr. China was appointed the Head of Relationship Management in 2010. In 2014, Mr. China was appointed the Head of Relationship Banking, where he is responsible for overseeing all aspects of our relationships within the venture capital and private equity, private bank and commercial bank communities.

 

Other Experience:

  Director, California Israel Chamber of Commerce (“ CICC ”), a non-profit organization dedicated to strengthening business and trade relations between California and Israel (since 2011)
   

Advisory Board Member, DEMO, an organization dedicated to emerging technology development (since 2010)

   

Director, Astia.org, a not-for-profit organization dedicated to the success of women-led, high-growth ventures (since 2009)

   

Advisory Council, Advancing Science in America (“ ARCS ”), a non-profit organization dedicated to advancing science and technology in the United States (since 2013)

 

Other Prior Experience:

  Director, Executive Council of New York City, a global community of senior executives (2001-2003)

 

 

Education/
Other:

  Bachelor’s degree in Industrial Engineering from Stanford University

 

 

 

 

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Mr. Marc C. Cadieux joined us in 1992 as an Assistant Vice President and has held a variety of positions with us, including Division Risk Manager for the Company’s Eastern Division, where he was responsible for overseeing our commercial lending activities in the eastern United States, eastern Canada, the United Kingdom and Israel. Mr. Cadieux was appointed Assistant Chief Credit Officer in 2009 and was later appointed as Chief Credit Officer in 2013, where he currently oversees our credit administration function.

 

Other Prior

  Loan Workout Officer, Pacific Western Bank (1990-1992)

Experience:

  Various credit positions with Bank of New England (1988-1990)

 

Education/ Other:

  Bachelor’s degree in economics from Colby College

 

 

 

Mr. Philip C. Cox joined us in 2009 as Head of UK, Europe & Israel, where he was responsible for the overall strategic direction of the Company in the UK, Europe and Israel, as well as the establishment of our UK Branch banking business. He was appointed as Head EMEA and India and President of the UK Branch in 2012, where he is focused on the international development of our business and is responsible for our UK branch.

 

Private Directorships:

  Entrepreneur First, an organization devoted to developing high-growth tech startups in London (since 2011)

 

Other Prior

  Head of Commercial Banking, Bank of Scotland (2008-2009)

Experience:

  Chief Executive Officer, European Business, Torex Retail PLC, a manufacturing and industrial software company (2005-2008)

 

Education/

  Associate of the Association of Corporate Treasurers, UK

Other:

  Member of the Chartered Institute of Bankers, UK

 

 

Mr. Michael R. Descheneaux joined us in 2006 as the Managing Director of Accounting and Financial Reporting, and was appointed as Chief Financial Officer in 2007, where he is responsible for all our finance, treasury and accounting functions, as well as our funds management business. He also plays a key role in our global strategy and growth.

 

Private Directorships:

  Director, SPD Silicon Valley Bank, our joint venture bank in China (since 2012)

 

Other Prior

  Managing Director, Navigant Consulting, a business consulting firm (2004-2006)

Experience:

  Independent consultant (2002-2004)
   

Various leadership positions with Arthur Andersen for the Central and Eastern Europe Region (1995-2002)

  ¡    

Lead Partner of financial services practice

  ¡    

Lead audit partner of telecommunications/high-tech practice

   

Technical expert on U.S. GAAP and generally accepted auditing standards matters

 

Education/

  Bachelor’s degree in Business Administration from Texas A&M University

Other:

  Certified public accountant
   

Member of the Texas State Board of Public Accountancy and the American Institute of Certified Public Accountants

   

Associate member of the Association of Certified Fraud Examiners

 

 

 

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Ms. Michelle A. Draper joined us in 2013 as Chief Marketing Officer, where she is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us, she was Senior Vice President of Institutional Services Marketing at Charles Schwab & Co. (“Schwab”).

 

Other Prior Experience:

  Various senior-level marketing positions at Charles Schwab & Co., overseeing advertising, brand marketing and other key marketing strategies (1992-2013)

 

Education/ Other:

  Bachelor’s degree in journalism from California Polytechnic State University – San Luis Obispo

 

 

 

Mr. Christopher D. Edmonds-Waters joined us in 2003 as Director of Organization Effectiveness, and in 2007, was appointed to his current role as Head of Human Resources, where he oversees our human resources function, which includes our compensation, global mobility, recruiting and learning and development functions.

 

Other Prior Experience:

  Various senior-level positions at Charles Schwab & Co. (1996-2003), launching the company’s online training system
   

Various leadership roles with Macy’s California, managing corporate training programs

 

Education/

  Bachelor’s degree in Intercultural Communications from Arizona State University

Other:

  Master’s degree in Human Resources and Organization Development from the University of San Francisco

 

 

Ms. Joan S. Parsons joined us in 1994 and has served in a variety of leadership positions throughout the Company, including Eastern Division Manager and Chief Banking Officer. Ms. Parsons was appointed Head of U.S. Banking in 2008, and was appointed Head of Specialty Banking in 2014, where she is responsible for all specialty debt products, sponsor finance, mezzanine finance, our life science and Energy/Resource Innovation practices, loan syndications, non-credit product sales and SVB Analytics.

 

Private

  Director, Leukemia & Lymphoma Society (since 2011)

Directorships:

  Director, Planstrong Investment Management (since 2005)

 

Other Prior

  Vice President of Corporate Banking, Fleet Bank of Massachusetts (1992-1994)

Experience:

  Vice President, Barclays Bank PLC (1984-1992)
   

Banking Officer, Mellon Bank (1981-1983)

 

Education/
Other:

  Bachelor’s degree in Economics and Art History from Wheaton College

 

 

Mr. Marc J. Verissimo joined us in 1993 and has served in a variety of leadership positions throughout the Company, including Manager of our Corporate Finance Group and our Risk Management Group. Mr. Verissimo was named Chief Strategy Officer in 2002. He is currently the Chief Risk Officer, where he is responsible for overseeing our credit, enterprise-wide risk management, corporate compliance and security functions.

 

Prior
Directorships:

  Entrepreneurs Foundation, a non-profit organization dedicated to strengthening the ties between entrepreneurial companies in the Bay Area and the communities in which they operate and their employees reside (2005-2012)
   

High Street Partners, Inc., a cross-border finance and administrative services firm (2009-2010)

 

Education/

  Bachelor’s degree in Agricultural Economics from the University of California, Davis

Other:

  Master’s degree in Business Administration from Harvard University

 

 

 

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Mr. Bruce E. Wallace joined us in 2008 as the Head of Global Services, where he was responsible for our operations, product management, global transaction banking and service delivery. He was later appointed Chief Operations Officer in 2011, where he is responsible for leading all bank and non-bank operations and information technology services.

 

Private
Directorships:

  Director, SPD Silicon Valley Bank, our joint venture bank in China (since 2012)

 

Other Prior Experience:

  Senior Vice President and Manager of Treasury Management Operations, Wells Fargo & Company (2005-2008)
   

Various senior management positions in banking operations, Wells Fargo & Company (1987-2005)

 

Education/
Other:

  Bachelor’s degree in Accounting from California State University, Sacramento

 

 

 

Mr. Michael S. Zuckert joined us in 2014 as General Counsel, where he is responsible for all our legal matters. Prior to joining us, he served in a wide range of legal positions within the financial services industry. Most recently, he served as Deputy General Counsel of Citigroup from 2009-2014, where he served as general counsel for its non-core assets business, Citi Holdings, and also focused on mergers and acquisitions.

 

Other Prior

  Various senior-level legal positions at Citigroup Inc. (2002-2014)

Experience:

  Various senior-level positions at Morgan Stanley & Co. Inc. (2000-2002 and 1987-1999)
   

Vice President and General Counsel, TheStreet.com, Inc., an online financial news provider (1999-2000)

 

Education/

  Bachelor’s degree in History and Law and Society from Brown University

Other:

  Juris Doctor degree from New York University School of Law

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“ CD&A ”) discusses our 2013 executive compensation program, as it relates to our five “named executive officers” that are currently serving as executive officers (each, an “ NEO ”): (i)  Greg Becker , President and Chief Executive Officer (“ CEO ”), (ii)  Michael Descheneaux , Chief Financial Officer (“ CFO ”), (iii)  John China , Head of Relationship Banking, (iv)  Joan Parsons , Head of Specialty Banking, and (v)  Bruce Wallace , Chief Operations Officer. We also discuss 2013 compensation for David Jones . Mr. Jones served as our Chief Credit Officer until September 1, 2013. He has since relocated to China, where he has assumed the position of President of Asia and is leading and expanding our Asia strategy and building out our Chinese joint venture bank.

 

 

Executive Summary

 

Our executive compensation program is based on our philosophy that pay should be aligned with our business objectives and stockholder interests and that incentive compensation should be based on company and individual performance without encouraging undue risk-taking. Under the primary oversight of our Board’s Compensation Committee (the “ Committee ”), our program is designed to attract, incent and retain talented individuals to lead our corporate growth and to deliver sustained strong performance over the long term.

 

As discussed under “2013 Company Performance Highlights” of the Summary Information section at the beginning of this Proxy Statement, we continued to deliver strong performance in 2013, focusing on the long-term global growth of our franchise. As further discussed in this CD&A, our NEOs were compensated to reflect that strong performance.

 

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2013 Executive Compensation Highlights

 

         
   

H I G H L I G H T S

 

¿ Strong 2013 Company Financial Performance ¿ Performance in Excess of Incentive Plan Targets ¿

Continued Pay for Performance Alignment ¿ Continued Emphasis of Performance-Based and Long-Term Pay ¿

Strong Support for 2013 Say on Pay Vote

   
         

 

   

Continued pay for performance --- strong incentive compensation and performance alignment.   In 2013, the key elements of our executive incentive compensation continued to be tied to: (i) annual return on average equity (“ ROE ”) and annual total stockholder return (“ TSR ”), and (ii) our company stock price.

 

 

Element of Incentive

Compensation

  Earnings Opportunity   Relevant Performance
Metric
  2013 Outcomes
           
Cash   Annual Cash Incentives (“ICP”)  

Executive pool subject to

maximum aggregate funding of 200% of corporate target

__________________

 

Actual payout dependent on company/individual performance

 

ROE

against our corporate

target and against peer

performance

 

151% of executive pool

funded based on ROE

performance

________________

 

Individual payouts

varied

 

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Above-Target Performance

           
Equity   Performance-Based Restricted Stock Units (“PRSUs”)*   0% to 150% of target award  

TSR

against peer performance

Company stock price **

 

150% of target award

earned based on TSR

performance

 

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Above-Target Performance

  Restricted-Stock Units (“RSUs”)*   Fixed award   Company stock price **  

Value subject to

company stock price

performance

 

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87% Increase

in Stock Price in One Year (2013)

   

Stock Options*

 

       

 

*   Subject to multi-year vesting

** Earnings opportunity is generally based on economic benefit derived from Company stock price performance

 

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Correlated relationship between CEO pay and Company performance.   The graphs below illustrate the general directional relationship between our CEO’s total compensation (as reported in our 2013 Summary Compensation Table) and two of our key financial performance measures, earnings per share (“EPS”) and ROE.

 

 

LOGO   LOGO   LOGO

 

  *

Excludes a special one-time equity grant for the CEO for his promotion to that position in 2011, which was then valued at $1.1 million.

 

   

Continued emphasis of target performance-based pay and balance of short-term/long-term pay amongst our CEO and other NEOs.   As compared to our Compensation Peer Group, we generally allocate more target pay on performance-based and long-term pay for our CEO and our other NEOs.

 

 

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  *

Based on estimated average target pay mix of Compensation Peer Group. Other NEOs do not include Mr. Jones.

 

Performance-Based:

Annual cash incentives, PRSUs and
stock options

  Fixed Pay:

Base salary and
RSUs

  Long-Term Pay:

PRSUs, RSUs and stock options

  Short-Term Pay:

Base salary and annual cash
incentives

 

   

Refinement of Incentive Payout Formula.   We refined the payout formulas for our ICP and PRSU awards relative to peer performance. These payout formulas are based on our corporate performance ranking within four quartile or five quintile groups of our peers. In 2013, we continued to cap payouts for ranking within the top group and to withhold any payouts for falling within the bottom group, but we modified the payout formula for the middle groups on a more linear basis to incentivize incremental performance.

 

 

   

Continued emphasis of long-term incentives on equity-based awards.   To align with stockholder interests, we have continued to grant long-term incentives in the form of equity awards.

 

 

   

Strong stockholder support of 2013 Say on Pay vote.   We received 94% of the votes cast in approval of our 2012 executive compensation program (as described in last year’s proxy statement). We submit an advisory Say on Pay vote to our stockholders on an annual basis.

 

Executive Compensation Governance and Practices

 

   

Independent oversight of executive compensation.   Our Board of Directors (comprised of all independent directors except for our CEO) oversees and approves the compensation of our CEO. (Our CEO does not participate in the Board’s discussions or decisions regarding his compensation.) Our Compensation Committee (comprised of all independent directors) makes recommendations to the Board about our CEO’s compensation, and oversees and approves the compensation of all other executive officers.

 

 

   

Our incentives are subject to certain minimums and maximum limits. 1   We establish minimum thresholds for certain incentives where awards/payouts may not be earned or made unless actual performance meets or exceeds thresholds,

 

 

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such as our PRSUs. We also establish maximum limits, such as for our executive PRSU awards, our annual cash incentives and our broad-based profit sharing plan.

 

   

Our executives’ equity awards are made under our equity plan and have the following features/practices:

 

 

  ¡     No evergreen provision
  ¡     No repricing without stockholder approval
  ¡     Annual burn rate maximum of 2.5%
  ¡     Each full value award share counted as 2 shares
  ¡     Minimum 100% fair market value exercise price for options
  ¡     Minimum 3 year time-based vesting for full value awards  
  ¡     Minimum 1 year vesting for performance-based full value awards  
  ¡     Additional 2 year time-based vesting requirement on earned performance-based equity awards for NEOs  
  ¡     Maximum seven-year term for options  
 

 

   

Robust executive equity ownership guidelines.   Our executives are subject to robust equity ownership guidelines. The minimum requirement applicable to the CEO was established based on a multiple of over five (5) times his annual base salary at the time the standard was adopted.

 

 

   

No hedging or pledging.   Pursuant to our Insider Trading Policy, our directors, executive officers (including our NEOs) and employees are not permitted to “hedge” ownership by selling puts in or selling short any of our publicly-traded securities at any time. Additionally, we have not permitted any of our executive officers to pledge, or use as collateral, our securities to secure personal loans or other obligations.

 

 

   

No employment agreements.   We do not have any individual employment contracts with any of our executive officers.

 

 

   

Competitive benchmarking against peers.   In making compensation decisions, we consider compensation and performance data from our benchmarking reference peer groups and routinely review the composition of the companies within the peer groups. To enhance our peer benchmarking, we have separate compensation and performance peer groups.

 

 

   

Compensation risk management.   The Committee, together with its compensation consultant and our Chief Risk Officer, conduct annual compensation risk assessments. Based on those assessments, we do not believe that our compensation program creates risks that are reasonably likely to have a material adverse effect on the Company. In addition, our compensation program is regularly reviewed as part of our enterprise-wide risk management and internal audit programs.

 

 

   

Double trigger change in control severance.   Our executive Change in Control Plan encourages continued commitment and alignment with stockholders’ interests through a potential change in control event.

 

 

   

No 280G excise tax gross-ups. In 2012, we eliminated a Section 280G excise tax gross-up provision under our Change in Control Plan for executives and as a result, no executives are entitled to any such gross-ups.

 

 

   

No executive perquisite program.   We do not have any executive perquisite programs or special executive benefits. As typical for global companies, we provided certain benefits to Mr. Jones primarily relating to his international assignment and relocation to China, which may be deemed perquisites for purposes of disclosure under the Summary Compensation Table under the “Compensation for Named Executive Officers” section.

 

 

   

No executive benefit programs.   We do not have any programs that offer benefits exclusively to our executives, except our executive Change in Control Plan. Our executives receive the same retirement, health, welfare and other benefits that are generally available to our employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan.

 

 

   

No pensions or SERPs .  We do not provide any pension, excess retirement, or supplemental executive retirement (“SERP”) plans to any executive. Executives are eligible to participate in our broadly-available 401(k) plan.

 

 

   

Active stockholder engagement.   As part of our proxy statement preparation process, we routinely and proactively reach out to our larger stockholders to solicit their feedback about our executive compensation program, including our equity incentive plan.

 

 

   

I ndependent compensation consultant to the Committee.   The Committee utilizes an independent compensation consulting firm that does not provide any other services to the Company.

 

*  *  *  *

 

1 Subject to the Committee’s sole discretion.

 

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EXECUTIVE COMPENSATION PHILOSOPHY

Our executive compensation practices continue to be grounded by our overarching compensation philosophy, the key principles of which are:

 

   

Align compensation with business objectives and stockholder interests . Our executive compensation plans are designed to:

 

 

  ¡    

Tie pay to Company and individual performance through appropriate performance metrics.

 
  ¡    

Provide for executive equity ownership to align economic interests with stockholders.

 
  ¡    

Provide the opportunity for compensation based upon stockholder returns and key financial measures.

 
  ¡    

Take into account the dynamics of the market and business environment within which the Company and management operate.

 

 

   

Establish an appropriate mix of pay between performance-based and non-performance-based pay, as well as long-term and short-term compensation, with emphases on performance-based pay and long-term incentive compensation.

 

 

   

Design incentive compensation on Company and individual performance without encouraging undue risk-taking .

 

 

   

Pay competitively , relying primarily on external market standards while also considering internal parity and the importance of recruiting and maintaining a cohesive, top-talent executive management team.

 

 

   

Maintain strong governance practices over our program, including independent Board-level oversight.

 

Our compensation philosophy and program take into consideration our business objectives, the relative complexity this business diversity represents in an organization of our size, stockholder interests, appropriate risk management practices, emerging trends in executive compensation (particularly for financial institutions), applicable regulatory requirements, and market practices.

Compensation Governance

The Company’s executive compensation program is supported by strong corporate governance and Board oversight:

 

   

Role of Compensation Committee.   All members of the Committee are “independent” under applicable Nasdaq rules. The Committee has primary oversight of our executive compensation program as provided in its charter, including the design and administration of executive compensation plans in a manner consistent with the executive compensation philosophy described above. The Committee reviews and approves the compensation of all executive officers (except for the CEO), and recommends the compensation of the CEO for the approval of the independent members of the Board. In carrying out its oversight responsibilities, the Committee routinely reports to the Board on the actions it has taken, as well as confers with the Board on compensation matters, as necessary. The Committee also makes recommendations for all other compensation-related matters that require Board approval. During 2013, the Board did not reject or modify in any material way any action of or recommendation by the Committee.

Committee members hold meetings on a regular basis (8 meetings in 2013), and routinely meet in executive session without management present.

 

   

Role of the Board.   All members of the Board, except the CEO, are “independent” under applicable Nasdaq rules. Subject to the recommendation of the Committee, the Board (except for the CEO) reviews and approves the compensation for the CEO. Such review and approval are typically conducted during the executive session portion of the Board’s meetings, where neither the CEO nor any other member of management is present.

 

   

Role of Compensation Committee Consultant.   The Committee has retained Pay Governance LLC, an independent executive compensation consultant, to provide advice and recommendations on all compensation matters under its oversight responsibilities as defined in the Committee’s charter. The Committee in its sole discretion selects the consultant, and determines its compensation and the scope of its responsibilities.

In 2013, Pay Governance assisted the Committee with advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on executive and director compensation levels and practices, including

 

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review and recommendations on CEO compensation and evaluation of CEO pay and realizable pay and Company performance; advice on the Company’s Compensation and Performance Peer Groups; guidance on the design of our compensation plans and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Committee’s periodic review of potential risks associated with our compensation programs; analysis of Company equity utilization; recommendations regarding our equity incentive plan; and periodic reports to the Committee on market and industry compensation trends and regulatory developments. The Committee did not engage Pay Governance for any additional services outside of executive and director compensation consulting during 2013. In addition, the Committee does not believe there were any potential conflicts of interest that arose from any work performed by Pay Governance during 2013.

 

   

Role of Chief Executive Officer.   At the Committee’s request, our CEO will attend portions of the Committee’s meetings and executive sessions to discuss the Company’s performance and compensation-related matters. While he does not participate in any deliberations relating to his own compensation, he shares his performance reviews for the other executive officers with the Committee. Based on these reviews and the Company’s overall performance, our CEO makes recommendations to the Committee on any compensation changes for the other executive officers. The Committee considers the CEO’s recommendations, as well as data and analyses provided by management, but retains full discretion to approve or recommend for the independent members of the Board to approve all executive compensation.

 

 

 

2013 Advisory Vote on 2012 Executive Compensation (Say on Pay)

We submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual basis. In 2013, we received 94% of the votes cast in approval of our 2012 executive compensation program (as described in our 2013 proxy statement). (This level of support was consistent with the prior two years, where we received 94% and 95% of the votes cast in 2012 and 2011, respectively.) In light of the strong support and other feedback we solicited from our stockholders last year, the Committee made no material changes to our compensation philosophy, policies or overall program. Nevertheless, the Committee continues to pursue its pay-for-performance approach in determining executive compensation. The Committee will continue to consider changes to the program on an ongoing basis, as appropriate, in light of evolving factors such as business environment and competition for talent.

 

 

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Competitive Benchmarking Against Peers

Consistent with 2012, the Committee continued to utilize two peer benchmarking groups to compare our compensation and performance to the market:

 

   

In making compensation decisions, the Committee considers competitive compensation data from its Compensation Peer Group , which includes companies that are similarly-sized, have some business model similarities and compete with us for our talent.

   

In measuring performance for purposes of compensation decisions, the Committee considers performance data from its Performance Peer Group , which includes companies with similar business models and some larger companies.

   

We measure our relative performance against our peers for funding our Incentive Compensation Plan and PRSU awards. (See “ Annual Cash Incentives – ICP Funding – ROE Against Performance Peer Group ” and “ Equity Incentive – TSR Against Compensation Peer Group .”

The Committee, with the Committee’s compensation consultant and management, reviews on at least an annual basis, the composition of companies for both peer groups. In determining the composition of each peer group, the Committee considers various factors and characteristics including market capitalization, asset size, assets under management, number of employees, business model and complexity of the platform, and performance on financial and market-based measures. For 2013, they determined that the named companies continued to be appropriate and did not make any changes to either group.

 

Company

  Peer Group
  Compensation   Performance

Associated Banc-Corp

  ü   ü

Bank of Hawaii Corp

  ü   ü

BOK Financial Corp

  ü   ü

CapitalSource Inc.

  ü    

City National Corporation

  ü   ü

Comerica Incorporated

      ü

Commerce Bancshares, Inc.

  ü   ü

Cullen/Frost Bankers, Inc.

  ü   ü

CVB Financial Corp.

  ü    

East West Bancorp, Inc.

  ü   ü

First Citizens Bancshares, Inc.

  ü    

FirstMerit Corporation

  ü   ü

First Republic Bancorp

  ü   ü

Huntington Bancshares

      ü

Investors Bancorp, Inc.

  ü    

MB Financial, Inc.

  ü   ü

Prosperity Bancshares, Inc.

  ü   ü

Raymond James Financial, Inc.

  ü    

Signature Bank

  ü   ü

TCF Financial Corporation

  ü   ü

UMB Financial Corporation

  ü   ü

Umpqua Holdings Corporation

  ü   ü

Valley National Bancorp

  ü   ü

Webster Financial Corp.

  ü   ü

Zions Bancorporation

      ü

 

Total Companies

 

 

 

22

 

 

 

20

 

 

 

 

It is important to note that in determining executive compensation, the Committee does not solely rely on comparative data from these peer groups. The Committee also utilizes other resources, including published compensation surveys and proxy data. All such comparative peer data and supplemental resources are considered, along with the Company’s pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and the Committee does not place any particular weighting on any one factor.

 

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2013 Executive Compensation

Summary of 2013 Executive Compensation Components

 

      Component and Purpose   2013 Key Highlights
Annual Cash Compensation  

Base Salary

Provides ongoing fixed cash pay.

 

 

•  Each NEO received a limited merit increase.

 

•  Mr. Jones received a merit increase and a promotion increase in connection with his new role as President of Asia.

 

 

Annual Cash Incentives

Provides short-term (annual) performance-based cash incentive compensation opportunity under our ICP.

 

Funding of 2013 ICP Pool

•  Funding of our annual ICP pool is determined and approved by the Committee and is subject to:

¡    ROE performance against our annual target ROE (2/3 of the pool); and

¡    Relative ROE performance against Performance Peer Group performance (1/3 of the pool)

 

•  Annual ICP funding accruals are made and monitored by the Committee on a quarterly basis, and adjusted for non-recurring or other extraordinary items, to the extent determined by the Committee (in consultation with the Audit Committee).

 

•  Based on the Company’s ROE performance above its annual target and within the fourth quintile of the Performance Peer Group, 151% of the 2013 executive incentive pool was funded. This funding is also based on the Company’s overall performance in 2013.

 

Individual 2013 ICP Awards

•  Individual ICP awards were determined subject to the extent of pool funding, and overall Company and individual performance.

 

•  For 2013, each NEO and Mr. Jones received between 157% to 180% of his or her target payout.

 

Long-Term Equity Incentive Compensation  

Stock Options

Provides incentives for long-term creation of stockholder value over a four-year period.

 

 

•  No material changes in our executive equity compensation practices from prior year.

 

•  Continued to emphasize long-term incentives on equity to align executives with stockholder interests.

 

•  Continued to use a mix of equity awards which included PRSUs, RSUs, and stock options.

 

•  2013 PRSUs were subject to TSR performance relative to peer performance. Based on the Company’s 2013 TSR ranking within the top quartile of the Compensation Peer Group, the Committee deemed 150% of the PRSUs earned, which then are subject to further time-based vesting through December 20, 2015.

 

Performance-Based Restricted Stock Units (“PRSUs”)

Provides incentives to motivate and retain executives and to reward for our TSR performance relative to peer performance.

 

 
 

Restricted Stock Units (“RSUs”)

Provides incentives for retention and long-term creation of stockholder value over a four-year period.

 

 
Benefits / Perks  

Health/Welfare and Retirement Programs; Perquisites

As further discussed below, executives receive health, welfare and retirement benefits that are generally available to employees. (See also “Other Post-Employment Benefits” below.)

 

We do not have any executive perquisite programs or special executive benefits.

 

 

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Elements of Compensation

Base Salary

We provide base salaries in order to provide executives with a reasonable level of fixed short-term compensation. Executive base salary levels are typically reviewed at least annually by the Committee and adjusted as appropriate. When determining any base salary increases, the Committee considers an individual’s total compensation package, his or her performance, Company performance, comparative peer and market compensation data, internal parity, and other relevant factors, including the scope of the executive’s responsibilities relative to peers and other executives, and retention concerns.

In 2013, each NEO received merit increase adjustments to their base salaries based on individual performance, salary market positioning relative to peers, and internal parity, as appropriate. None of Messrs. Becker, Descheneaux and Jones and Ms. Parsons had any changes to base salary during the prior year 2012. Moreover, half of the increase to Mr. Jones’s salary reflected his promotion to the President of Asia position in September 2013.

  NEO/Other Executive

  Percentage
    Increase    
  2013 Annual
Base Salary
  Greg Becker *   5.0%   $  840,000
  Michael Descheneaux*   3.1       500,000
  John China   7.1       375,000
  Joan Parsons *   3.9       400,000
  Bruce Wallace   6.7       400,000
  David Jones*   12.5         450,000

 

* No base salary increases were made in 2012.

 

 

Annual Cash Incentives

Our executives participate in the Company’s Incentive Compensation Plan (“ICP”), an annual cash incentive plan that rewards performance against individual and Company objectives.

  NEO/Other Executive

         Annual  ICP Target      
  Greg Becker*    70%
  Michael Descheneaux**    50
  John China*    80
  Joan Parsons**    50
  Bruce Wallace*    50
  David Jones**    50

 

* No changes were made in 2013 or 2012.

** No changes were made in 2012.

Each executive participant is assigned an incentive target, stated as a percentage of the individual’s annual base salary. In 2013, annual ICP targets for Messrs. Descheneaux and Jones increased from 40% to 50%, and Ms. Parsons increased from 45% to 50%. These increases were made in order to align targets with their scope of job responsibilities and to maintain internal parity among the executive team, as appropriate.

 

ICP Funding

Each year, the Committee establishes one or more metrics that it will use to measure Company performance for ICP funding purposes. Based on those metrics and overall Company performance, the Committee will also determine the extent to which the Company will fund the incentive pool. For 2013, the Committee continues to believe that ROE is an appropriate indicator of financial performance that is directly related to the creation of stockholder value, especially if the Company measures performance against its own objectives as well as peer performance. Accordingly, the Committee established the following two performance metrics:

 

  ¡    

ROE Against our Annual Target ROE (Two-Thirds (2/3) of Pool) - Similar to prior years, for 2013, the Committee established ROE relative to our Board-approved annual target ROE as an ICP performance metric. Two-thirds (2/3) of the total incentive pool is funded based on performance against this metric. The graph below illustrates the relationship in 2013 between (i) achieved ROE as a percentage of the annual plan, and (ii) the percentage of the target incentive pool accrued for the NEOs. There is a maximum funding amount of 200% of target payment for achievement of 150% or over of our target ROE under our annual plan.

The Committee retains discretion to fund up to 50% of the target ICP pool for performance below the 90% threshold, if and when it believes that making partial ICP payments are in the Company’s interests. The Committee decides whether and to what extent it will fund or spend the provisional pool and in no way does this pool represent a form of guaranteed

 

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incentive payments. The Committee did not approve any provisional funding pool for 2013 because of the Company’s above-target ROE performance.

In addition, the Committee retains discretion to determine the extent to which the Company met its ICP performance target, including discretion to consider adjustments for certain out of the ordinary items, such as non-recurring accounting items. During 2013, per management’s recommendation and in consultation with the Audit Committee, the Committee continued to make adjustments, as appropriate. For 2013 and consistent with prior years, the Committee excluded 50% of the gains on non-marketable securities over budget (net of noncontrolling interests) and the sale of certain available-for-sale securities.

 

  ¡    

ROE Against Performance Peer Group (One-Third (1/3) of Pool) - For 2013, the Committee also established ROE relative to the Performance Peer Group as an additional ICP performance metric to fund 1/3 of the total pool. As illustrated in the graph below, there is no payout if our performance falls in the bottom quintile and a payout maximum in the top quintile. In 2013, the Committee modified the payout formula for the middle groups on a more linear basis to incentivize incremental performance.

 

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For 2013, the Committee determined that: (i) 2/3 of the executive ICP pool would be funded at 151% of target, based on the Company’s ROE performance, as adjusted, after taking into account the adjustments as discussed above; and (ii) 1/3 of the executive ICP pool would be funded at 150% of target, based on the Company’s relative ROE performance, ranking within the fourth quintile of the Performance Peer Group. In addition to these two ROE metrics, the Committee took into consideration the overall strong performance of the Company and the executive team in 2013. In particular, they took into consideration: overall strong executive leadership as a team, outstanding annual financial performance, strong progress towards global expansion efforts, significant efforts towards long-term strategic planning, and continued focus on risk management. As a result, the Committee approved funding the overall executive ICP pool at 151% of total target.

2013 NEO ICP Awards

The Committee determines actual annual cash incentive awards for the NEOs based upon the individual’s target incentive level, the Company’s performance, and the NEO’s individual performance. ICP awards for NEOs may be at, above, or below the target incentive and are determined by the Committee (or in the case of the CEO, by the Board).

In determining each NEO’s performance, the Committee considered a variety of factors that it believed to be relevant, including each NEO’s contributions to (i) the Company’s business and financial results, (ii) the Company’s successful execution of its 2013 corporate initiatives, and (iii) broader leadership within the organization. For Mr. Becker, the Committee considered the performance assessment conducted by the independent members of the Board. For the other NEOs, the Committee considered the performance assessments conducted by Mr. Becker. In addition to these management assessments, the Committee considered its direct observations and assessments of each NEO’s performance, with input from the Board.

The independent members of the Board had determined that the CEO, and the Committee determined that the other NEOs, had earned the following incentive awards for 2013:

 

 

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Greg Becker   ICP Amount: $925,000

Primary factors considered in determining award:

•  Profitable 2013:

¡      Earnings per diluted common share of $4.70 (up 20.2% from 2012)

¡      Annual consolidated net income available to common stockholders of $215.9 million (up 23.3% from 2012)

¡      Strong fee income growth

•  Continued Company growth

¡      All-time high average total assets of $23.2 billion

¡      All-time high average loan, deposit and total client investment fund balances

•  Continued strong credit quality --- disciplined credit underwriting and loan portfolio management

•  Growth in market share; positive client satisfaction survey results

•  Continued global focus, including the growth of our U.K. branch and the progress of our joint venture bank in China

•  Business growth, including our Private Bank, our new wealth management business and our payments initiative

•  Continued focus on enterprise-wide risk management, including regulatory compliance

•  Development and recruitment of strong executive team

•  Being named by a nationally-recognized financial publication as a top 10 bank in the U.S.

 

 

Michael Descheneaux   ICP Amount: $450,000

Primary factors considered in determining award:

•  Excellent execution of our overall financial management, including continued strong capital and liquidity

•  Strong leadership in capital stress testing initiative

•  Effective management of our available-for-sale investment portfolio

•  Continued enhancements of finance operations to increase efficiencies

•  Proactive management of relations with investors, credit ratings agencies and other key constituents

•  Significant contribution towards long-term strategic planning

•  Strong global expansion efforts

•  Joint oversight of SVB Capital operations

 

 

John China   ICP Amount: $475,000

Primary factors considered in determining award:

•  Strong leadership of our Private Bank, including outstanding Private Bank loan growth and formation of new wealth advisory business

•  Strengthening of client relationships, especially within our venture capital and private equity client base

•  Continued expansion of our private equity services practice

•  Continued focus on SVB Capital, including on profitability and fundraising

•  Significant contribution towards long-term strategic planning and global expansion efforts

 

 

Joan Parsons   ICP Amount: $350,000

Primary factors considered in determining award:

•  Continued growth in market share

•  Strong loan and deposit growth

•  Positive client satisfaction survey results

•  Continued focus on improving client experience

•  Effective cross–selling; growth in core fee income

•  Significant contribution towards long-term strategic planning and global expansion efforts

 

 

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Bruce Wallace   ICP Amount: $350,000

Primary factors considered in determining award:

•  Growth in core fee income

•  Expanded products and services, including mobile deposit solution, client onboarding systems, and online banking enhancements

•  Outstanding leadership of our payments initiative

•  Enhancements of our global treasury capabilities

•  Effective oversight of our information technology function

•  Significant contribution towards long-term strategic planning and global expansion efforts

 

 

David Jones   ICP Amount: $375,000

Primary factors considered in determining award:

•  Strong credit quality and maintenance of our disciplined credit underwriting and loan portfolio management*

•  Growth in loan portfolio*

•  Significant contribution towards long-term strategic planning and global expansion efforts

•  Strong start in his new position as President of Asia and progress made thus far on our Asia strategy and the continued buildout of our Chinese joint venture bank (from September 1, 2013)

 

* Through September 1, 2013

 

 

 

Equity Incentives

The Company believes that equity-based awards, particularly in combination with the Company’s equity ownership guidelines as discussed below, tie each of the NEOs’ compensation to the Company’s long-term financial performance and align the interests of the NEOs and our stockholders.

 

 

 

NEO/Other

Executive

  Allocation of Total Long-Term Equity Award
 

Restricted

Stock Units

 

Performance-

Based Restricted

Stock Units

(Target)

 

  Stock Options
CEO   27%   31%   42%
Other NEOs*   29%   30%   41%

 

* Excluding Mr. Jones

In 2013, the Committee continued to focus on long-term, sustainable performance and alignment with stockholders. As a result, it continued its emphasis on long-term equity compensation. The Committee determined a target equity award total value for each NEO, and granted a mix of performance-based and non-performance based equity awards based on the allocation as set forth to the left. Grants were made effective as of April 30, 2013. See “ Compensation for Named Executive Officers – Outstanding Equity Awards at Fiscal Year End .”

 
   

The stock options and restricted stock units (RSUs) are subject to annual vesting over a four-year period. The stock options have a maximum term of seven years. The Committee did not establish performance-based criteria, as the value of these stock options, and any increase in the value of the RSUs, are inherently tied to the future performance of the Company’s common stock.

 

   

The performance-based restricted stock units (PRSUs) are subject to performance-based vesting over a one-year period and to the extent earned, additional time-based vesting.

The Committee determines the performance conditions upon which the awards are earned, which for 2013 was the Company’s TSR performance as measured against the Compensation Peer Group (“ Relative TSR ”).

 

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Relative TSR

Performance (Against

Peer Group)

 

Bottom Quartile

(0-25% of 2013
Compensation Peer
Group Performance)

 

Second Quartile

(26-50% of 2013
Compensation Peer
Group Performance)

 

Third Quartile

(51-75% of 2013
Compensation Peer
Group Performance)

 

Top Quartile

(>75% of 2013
Compensation Peer

Group Performance)

Extent of PRSUs Earned

  0% of Target  

50% to 100%

of Target

 

110% to 130%

of Target

 

150% of Target

(Maximum)

After the end of the year, the Committee determined whether (and to what extent) the NEOs had earned the PRSUs, based on the Company’s Relative TSR.

For 2013, as calculated for purposes of the PRSUs, the Company’s TSR 1 ranked within the top quartile of the Compensation Peer Group. Accordingly, the Board and the Committee did not exercise any discretion, and approved the actual performance which resulted in the CEO and the other NEOs, respectively, earning 150% of their respective target PRSUs. The earned PRSUs are subject to additional time-based vesting and will all vest on December 20, 2015, subject to each respective NEO’s continued employment or other service to the Company.

The Committee typically makes equity awards to each NEO at the time the individual is hired or promoted, and annually thereafter. The size of the awards reflects the overall number of shares available to the Company under our equity incentive plan, the Committee’s determination of an appropriate annual equity burn rate (the percentage of total shares outstanding that the Company has issued during the year in the form of equity compensation), the NEO’s role and performance, and the market compensation data for the NEO’s external peers.

Long-Term Cash Retention Award for John China

In 2010, the Company awarded Mr. China a special one-time long-term cash retention program. He received a target award of $500,000 to be earned over a three-year performance period from 2011 through 2013. Payouts under the award were not guaranteed and were made at the discretion of the Company. At the time Mr. China was granted the award in 2010, he was not an executive officer of the Company.

The award is funded based on two performance metrics over a three-year period. Of the award: (i) 50% is measured by the extent of achievement of the Company’s annual book value targets established for the 2011-2013 Performance Period, and (ii) 50% is measured by the Company’s total shareholder return as compared to the total shareholder return of the Compensation Peer Group. The Company established the following payout range, based on the extent achievement of two performance metrics.

 

      Award Payment
   75% of Target Award    100% of Target Award   

125% of Target Award

(Maximum Payment)

Book Value Growth* (50%)

  

90% of Book Value Growth

Target

   100% of Book Value Growth Target    110% of Book Value Growth Target

Relative Company TSR (50%)

   Lower 35% of Compensation Peer Group TSR    Middle 30% of Compensation Peer Group TSR    Upper 35% of Compensation Peer Group TSR

 

* Based on the average annual book value growth rate over the three year performance period; the calculation of the actual award is intended to be calculated on a linear basis based on the achievement against established book value goals.

To the extent deemed earned based on our performance of those metrics and on Mr. China’s individual performance, payouts are made after the performance period.

The Company: (i) achieved 99% of its average annual book value target over the three year performance period, and (ii) ranked within the upper 35% of the Compensation Peer Group. Based on that, and on its review of Mr. China’s individual performance, the Committee decided to award Mr. China a payment of $597,500 (120% of his target award.)

 

1 Based on the differential between the average daily closing stock prices over the last two months of each of years 2012 and 2013.

 

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Executive Benefits

Deferred Compensation

We do not provide NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity to tax-defer a portion of their income, beyond what is allowed to be deferred in the Company’s qualified retirement plan. Specifically, under our Deferred Compensation Plan (“ DCP ”), each individual may defer 5% to 50% of their base pay and 5% to 100% of eligible incentive payments during each plan year. The DCP is an unfunded plan, and participating executives bear the risk of forfeiture in the event that we cannot fund DCP liabilities. We do not match executive deferrals to the DCP, nor do we make any other contributions to the DCP. See “ Compensation for Named Executive Officers—Non-Qualified Deferred Compensation ” below.

We establish and maintain a bookkeeping account for each participant which reflects compensation deferrals made by the executive along with any associated earnings, expenses, gains and losses. The amount in a participant’s account is adjusted for hypothetical investment earnings or losses in an amount equivalent to the gains or losses reported by the investment options selected by the participant from among the investment options designated for this purpose by the Company. A participant may, in accordance with rules and procedures we establish, change the investments to be used for the purpose of calculating future hypothetical investment adjustments to the participant’s account. The account of each participant is adjusted each business day to reflect: (a) the hypothetical investment earnings and/or losses described above; (b) participant deferrals; and (c) distributions or withdrawals from the account. Distributions or withdrawals from the DCP shall be made in full accordance with the requirements of Internal Revenue Code Section 409A.

No NEOs participated in the DCP in 2013. Among the NEOs, only Mr. Becker holds a balance due to deferrals made under the plan in 2005.

Employee Retirement Benefits

Our NEOs are eligible to participate in our SVB Financial Group 401(k) and Employee Stock Ownership Plan, our qualified retirement plan that is generally available to all of the Company’s U.S. employees. Our NEOs participate in the plan on the same terms as all other eligible employees. Other than our 401(k) plan, SVB Financial Group does not provide any pension, excess retirement, or SERPs to our NEOs.

Under our 401(k) plan, our U.S. employees, including our NEOs, may make voluntary pre-tax deferrals up to the maximum provided for by IRS regulations. The Company provides dollar-for-dollar matching contributions up to a maximum of 5% of cash compensation or the Internal Revenue Section 401(a) compensation limit, whichever is less. Company 401(k) matching contributions vest immediately upon deposit into the individual’s 401(k) account.

The plan also includes an Employee Stock Ownership Plan (“ ESOP ”). Under the plan, we may make discretionary annual contributions for U.S. employees, as determined by the Committee. ESOP contributions may be in the form of cash, the Company’s common stock, or a combination of both, and are subject to certain vesting conditions. Contributions are determined based on the Company’s performance and are not adjusted to reflect individual performance.

For 2013, the Committee established performance criteria based on the Company’s ROE, similar to the ICP, to fund the ESOP contribution, and set the funding level to a 2.5% (of eligible compensation) funding level based on target ROE performance, up to a maximum funding of 5%. Based on the Company’s 2013 above-target ROE performance, the Committee approved a contribution of 3.78% of eligible compensation in cash (50%) and the Company’s common stock (50%).

Health and Welfare Benefits

Our U.S. employees, including our NEOs, are eligible to participate in our standard health and welfare benefits program, which provides insured medical, dental, life, accident, and disability coverage to all of our eligible U.S.-based employees. We do not provide executives with any health and welfare benefits that are not generally available to other Company employees.

Time Away From Work

Under our “time away from work” policy, exempt employees, including our NEOs, do not accrue vacation benefits. Rather, such employees are expected to manage their time away from work, subject to the demands and needs of their jobs. Non-exempt employees continue to accrue vacation, sick and other paid time off benefits formulaically.

Executive Termination Benefits

See “ Compensation for Named Executive Officers—Other Post-Employment Payments ” below.

 

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Perquisites

We do not have any executive perquisite programs. From time to time, on a limited or exception basis, we may provide other benefits that we believe are related to a business purpose that may otherwise be considered perquisites, and we disclose those benefits as required by applicable rules.

Stock Option and Other Equity Grant Practices

Grant Practices for Executive Officers

The Committee approved all equity grants in 2013 made to executive officers of the Company, except that the independent members of the Board approved equity grants made to the Chief Executive Officer. Typically, annual equity compensation grants to executives are approved during the second quarter of the year, and grants are made effective during an open trading window pursuant to our Insider Trading Policy. The exercise price for stock option grants is equal to the closing market price on the grant’s effective date and grants typically have an annual vesting period of four years, subject to continued employment or service. All 2013 grants to our NEOs were made in accordance with this practice.

For newly-hired executive officers, the Committee approves an equity grant amount prior to, or shortly after, the executive’s start of employment, and the effective grant date is typically set during an open trading window after they commence employment. This approach ensures that the exercise price of stock options reflects a fair market price, since the exercise price for stock option grants is equal to the closing market price on the grant’s effective date.

Grant Practices for Other Employees

The Board has delegated authority to the Equity Awards Committee to make equity grants to non-executive employees under our 2006 Equity Incentive Plan. The Equity Awards Committee is a committee of two, comprised of our Chief Executive Officer and the Chair of our Board. The Equity Awards Committee may not make equity grants to executives or any non-executive employee that reports directly to the Chief Executive Officer.

The Equity Awards Committee may make grants only within established individual employee and aggregate share limits and in accordance with established requirements regarding the term, vesting period, exercise price and other terms and conditions for the grant. In addition, all grants of stock options, stock appreciation rights, and restricted stock units made by the Equity Awards Committee must be made (or become effective) on the first Monday of each month or, where the first Monday is a Company-observed U.S. holiday, on the first Tuesday of such month. The Equity Awards Committee must approve all grants in writing on or before the date of grant, subject to the respective employee remaining an employee as of the date of grant. Finally, management updates the Committee regarding all grants made by the Equity Awards Committee on a regular basis. Any grant that does not meet the requirements established for the Equity Awards Committee must be made by the Board, the Committee or other authorized committee.

The Committee typically approves annual grants to all eligible employees, as well as any other grants that the Equity Awards Committee is not authorized to approved.

Prohibitions Against Hedging

Pursuant to our Insider Trading Policy, our directors, executive officers (including our NEOs) and employees are not permitted to “hedge” ownership by selling puts in or selling short any of the Company’s publicly-traded securities at any time. Additionally, we discourage, and have not permitted, any of our executive officers to pledge, or use as collateral, our securities to secure personal loans or other obligations.

 

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Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”) limits our deductibility of compensation paid to our CEO and each of the next three most highly compensated executive officers (excluding the Chief Financial Officer) in excess of $1,000,000, but excludes “performance-based compensation” from this limit. Stock options qualify for this tax deductibility. However, in order to maintain flexibility and promote simplicity in the Committee’s administration of and oversight over executive compensation arrangements, other compensation arrangements, such as time-based restricted stock units that vest based solely on continued service, and performance-based restricted stock units that vest solely upon achievement of performance goals (as determined by the Committee), and ICP payments, do not qualify for tax deductibility. This design allows the Committee to balance tax deductibility with other business priorities that affect stockholder value.

Equity Ownership Guidelines for Executive Officers

The Company maintains stock ownership guidelines for the Company’s executive officers, including the NEOs. These stock ownership guidelines reflect the Board’s belief in the importance of aligning the economic interests of stockholders and management.

The Compensation Committee is responsible for setting and periodically reviewing, at least on an annual basis, the guidelines. Guidelines for each executive position are determined based on factors including the executive role, scope of responsibilities, base salary levels, Company stock price performance and market data. The guidelines are as follows:

 

    Minimum Equity Ownership of SIVB shares*

Chief Executive Officer

  80,000 shares

Chief Financial Officer

Chief Credit Officer

General Counsel

Head of U.S. Banking

  20,000 shares

Chief Operations Officer

Chief Risk Officer

Head of Relationship Management

  14,000 shares

Head of Marketing

Head of Human Resources

Head EMEA India & President UK Branch

  9,500 shares

 

* The minimum equity ownership standards for executive officers under these guidelines are based on a position-specific multiple of current salary, calculated using a trailing twelve-month average share price. For example, the 80,000 shares requirement applicable for the Chief Executive Officer is based on a multiple of over 5 times his annual base salary at the time the standards were adopted.

Under the revised guidelines, if any current executive officer (as of the date of adoption) has not yet attained the minimum requirement, he or she is expected to attain the minimum level of ownership by May 23, 2017. New executive officers will be expected to attain the minimum level of ownership by the fifth anniversary of the date of his or her assumption of the applicable position.

The Governance Committee monitors compliance with these guidelines and reviews executive equity holdings on a quarterly basis. In evaluating whether executives are meeting the ownership guidelines, the Governance Committee considers the following as shares owned: (1) shares privately held, (2) shares owned through investment in the Company’s stock fund in the SVB Financial Group 401(k) and Employee Stock Ownership Plan, and (3) earned but unvested awards of restricted stock and restricted stock units. The Committee does not count vested or unvested stock options towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.

As of December 31, 2013, all of our NEOs were in compliance with the applicable ownership guidelines or have made significant progress towards meeting the guidelines, as determined by the Governance Committee.

 

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COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2011, 2012 and 2013.

 

Name and Principal Position

  Year     Salary
        ($) (1)        
    Bonus
         ($) (2)          
    Stock
Awards
          ($) (3)           
    Stock
Option
Awards
($) (3)
    Non-Equity
Incentive Plan
Compensation
($)
    Changes in
Pension
Value and
Nonqualified
Deferred Plan
Compensation
($) (4)
    All Other
Compensation
        ($) (5)        
    Total
($)
 

Greg Becker,

    2013        835,613         925,000         1,336,868         867,018        -          -          22,389   (6)      3,986,889    

    President and Chief

    Executive Officer

   
 
2012
2011
  
  
   

 

932,713  

781,696  

(7) 

(10) 

   

 

820,119  

1,183,780  

(8) 

(11) 

   

 

901,180  

1,992,210  

  

(12) 

   
 
766,556
618,929
  
  
   
 
-  
-  
  
  
   
 
-  
-  
  
  
   

 

27,699  

24,500  

(9) 

(13) 

   
 
3,448,267 
4,601,115 
  
  

Michael Descheneaux,

    2013        499,780         450,000         739,544         474,665        -          -          23,094   (14)      2,187,083    

    Chief Financial Officer

    2012        576,198   (15)      335,907   (16)      540,708         474,664        -          -          25,608   (17)      1,953,085    
    2011        488,749         532,340   (18)      543,330         412,619        -          -          24,500   (19)      2,001,538    

John China,

    2013        373,113         1,072,500   (20)      412,438         235,961        -          -          23,028   (21)      2,117,040    

    Head of Relationship

    2012        404,109   (22)      375,000         205,984         180,045        -          -          61,063   (23)      1,226,201    

    Banking

    2011        325,013         500,000         131,030         60,034        -          -          121,563   (24)      1,137,640    

Joan Parsons,

    2013        399,780         350,000         405,327         257,910        -          -          22,389   (25)      1,435,407    

    Head of Specialty

    2012        443,146   (26)      332,548   (27)      296,102         250,972        -          -          27,047   (28)      1,349,814    

    Banking

    2011        380,640         454,450   (29)      301,850         180,521        -          -          24,500   (30)      1,341,961    

Bruce Wallace,

    2013        398,113         350,000         398,216         257,910        -          -          22,389   (31)      1,426,629    

    Chief Operations

    2012        403,017   (32)      230,000         276,791         245,516        -          -          54,335   (33)      1,209,659    

    Officer

    2011        338,450          400,000          181,110          154,732        -          -          121,773   (34)      1,196,066    

David Jones,

    2013        431,447          375,000          504,881          323,760        -          -          187,501   (35)      1,822,589    

    President of Asia

    2012        466,547   (36)      334,750   (37)      379,783          324,627        -          -          56,764   (38)      1,562,471    
    2011        404,631          445,000   (39)      362,220          257,887        -          -          24,500   (40)      1,494,238    

 

(1)

Includes charitable donations of vacation time. Also includes for 2012, one-time payouts for unused and accrued vacation time in light of the adoption of our time away from work policy and our elimination of vacation accruals for exempt employees ( “Accrued Vacation Payout” ). See “Executive Benefits – Time Away From Work” below.

 

(2)

We have reflected values for the Company’s ICP, Long-Term Cash Retention Award and Long-Term Cash incentive ( “Cash LTIP” ) programs under the “Bonus” column because these programs provide for the Committee’s discretion to make final determinations on individual incentive payments. We therefore have reported these payments as part of a discretionary incentive plan under “Bonus” (as opposed to “Non-Equity Incentive Plan Compensation”). See “Elements of Compensation – Annual Cash Incentives” under “Compensation Discussion and Analysis” above. Our Cash LTIP was a long-term cash incentive plan for executives, which was terminated in early 2013. Only Mr. China received a Long-Term Cash Retention Award in 2013.

 

(3)

Values indicated for equity awards reflect the fair value of grants made during the fiscal year. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-Based Compensation” in our audited financial statements included in our Annual Report on Form 10-K for the applicable year.

 

(4)

We do not provide NEOs with any Company-funded deferred compensation benefits but do offer each NEO the opportunity to tax-defer a portion of their income. Among the NEOs, only Mr. Becker participates in the Deferred Compensation Plan. There was no above-market or preferential earnings on compensation deferred by Mr. Becker under the Deferred Compensation Plan during 2011, 2012 or 2013. Amounts previously reported in our past proxy statements (2012 and earlier) under this table were actual changes in value of the underlying assets and not required to be disclosed in the Summary Compensation Tables. For more information about the Deferred Compensation Plan, see “Executive Benefits – Deferred Compensation” under “Compensation Discussion and Analysis” above and the table below entitled “Non-Qualified Deferred Compensation.”

 

(5)

Included in this column for 2013 are reimbursement payments of income taxes incurred by the NEOs on imputed income ( “Imputed Income Tax Reimbursements” ). For 2013, such imputed income was primarily associated with spousal travel and attendance to our business events where our NEOs’ spouses or significant others were invited, and expected to, attend.

 

(6)

Other compensation for Mr. Becker in 2013 is comprised of: (a) ESOP contribution of $9,639; and (b) 401(k) plan matching contribution of $12,750.

 

(7)

Salary compensation for Mr. Becker in 2012 includes a one-time Accrued Vacation Payout of $124,615.

 

(8)

Bonus compensation for Mr. Becker in 2012 is comprised of: (a) Cash LTIP payment of $120,119; and (b) ICP payment of $700,000.

 

(9)

Other compensation for Mr. Becker in 2012 is comprised of: (a) ESOP contribution of $12,500; (b) 401(k) plan matching contribution of $12,500; and (c) an Imputed Income Tax Reimbursement of $2,699.

 

(10)

Salary compensation for Mr. Becker in 2011 includes his salary increase in connection with his promotion to CEO.

 

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(11)

Bonus compensation for Mr. Becker in 2011 is comprised of: (a) Cash LTIP payment of $63,780; and (b) ICP payment of $1,120,000.

 

(12)

Stock compensation for Mr. Becker in 2011 includes his one-time CEO promotional grant of 19,000 restricted stock units (subject to four-year cliff vesting).

 

(13)

Other compensation for Mr. Becker in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) plan matching contribution of $12,250.

 

(14)

Other compensation for Mr. Descheneaux in 2013 includes: (a) ESOP contribution of $9,639; (b) 401(k) plan matching contribution of $12,750; and (c) an Imputed Income Tax Reimbursement of $336.

 

(15)

Salary compensation for Mr. Descheneaux in 2012 includes a one-time Accrued Vacation Payout of $70,283.

 

(16)

Bonus compensation for Mr. Descheneaux in 2012 is comprised of: (a) Cash LTIP payment of $60,907; and (b) ICP payment of $275,000.

 

(17)

Other compensation for Mr. Descheneaux in 2012 is comprised of: (a) ESOP contribution of $12,500; (b) 401(k) plan matching contribution of $12,500; and (c) an Imputed Income Tax Reimbursement of $608.

 

(18)

Bonus compensation for Mr. Descheneaux in 2011 is comprised of: (a) Cash LTIP payment of $32,340; and (b) ICP payment of $500,000.

 

(19)

Other compensation for Mr. Descheneaux in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) plan matching contribution of $12,250.

 

(20)

Bonus compensation for Mr. China in 2013 is comprised of: (a) Cash long-term retention program payment of $597,500; and (b) ICP payment of $475,000.

 

(21)

Other compensation for Mr. China in 2013 includes: (a) ESOP contribution of $9,639; (b) 401(k) Savings Plan matching contribution of $12,750; and (c) an Imputed Income Tax Reimbursement of $240.

 

(22)

Salary compensation for Mr. China in 2012 includes a one-time Accrued Vacation Payout of $57,885.

 

(23)

Other compensation for Mr. China in 2012 is comprised of: (a) Retention Plan ( “RP” ) payment of $34,815 (Mr. China is no longer a participant under the RP); (b) ESOP contribution of $12,500; (c) 401(k) plan matching contribution of $12,500; and (d) an Imputed Income Tax Reimbursement of $1,248.

 

(24)

Other compensation for Mr. China in 2011 is comprised of: (a) RP payment of $46,193; (b) special retention program payment of $50,000; (c) ESOP contribution of $12,250; (d) 401(k) plan matching contribution of $12,250; and (e) a business referral bonus of $870.

 

(25)

Other compensation for Ms. Parsons in 2013 is comprised of: (a) ESOP contribution of $9,639; and (b) 401(k) plan matching contribution of $12,750.

 

(26)

Salary compensation for Ms. Parsons in 2012 includes a one-time Accrued Vacation Payout of $66,638.

 

(27)

Bonus compensation for Ms. Parsons in 2012 is comprised of: (a) Cash LTIP payment of $102,548; and (b) ICP payment of $230,000.

 

(28)

Other compensation for Ms. Parsons in 2012 is comprised of: (a) ESOP contribution of $12,500; and (b) 401(k) plan matching contribution of $12,500; and (c) an Imputed Income Tax Reimbursement of $2,047.

 

(29)

Bonus compensation for Ms. Parsons in 2011 is comprised of: (a) Cash LTIP payment of $54,450; and (b) ICP payment of $400,000.

 

(30)

Other compensation for Ms. Parsons in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) plan matching contribution of $12,250.

 

(31)

Other compensation for Mr. Wallace in 2013 is comprised of: (a) ESOP contribution of $9,639; and (b) 401(k) plan matching contribution of $12,750.

 

(32)

Salary compensation for Mr. Wallace in 2012 includes a one-time Accrued Vacation Payout of $34,484.

 

(33)

Other compensation for Mr. Wallace in 2012 is comprised of: (a) RP payment of $29,182 (Mr. Wallace is no longer a participant under the RP); (b) ESOP contribution of $12,500; (c) 401(k) plan matching contribution of $12,500; and (d) an Imputed Income Tax Reimbursement of $153.

 

(34)

Other compensation for Mr. Wallace in 2011 is comprised of: (a) RP payment of $32,273; (b) special retention program payment of $65,000; (c) ESOP contribution of $12,250; and (d) 401(k) plan matching contribution of $12,250.

 

(35)

Other compensation for Mr. Jones in 2013 includes: (a) ESOP contribution of $9,639; and (b) 401(k) plan matching contribution of $12,750. In addition, other compensation includes costs of $165,112, primarily associated with his assignment to China, comprised of (i) $99,418 associated with housing; (ii) $52,448 primarily associated with relocation and (iii) an Imputed Income Tax Reimbursement of $13,245.

 

(36)

Salary compensation for Mr. Jones in 2012 includes a one-time Accrued Vacation Payout of $66,154.

 

(37)

Bonus compensation for Mr. Jones in 2012 includes: (a) Cash LTIP payment of $84,750; and (b) ICP payment of $250,000.

 

(38)

Other compensation for Mr. Jones in 2012 includes: (a) ESOP contribution of $12,500; and (b) 401(k) plan matching contribution of $12,500. In addition, other compensation includes $31,764, representing: (i) $21,266 in costs primarily associated with spousal travel and attendance to our business events or for business trips, where Mr. Jones’s spouse was invited, and expected to, attend, and (ii) an Imputed Income Tax Reimbursement of $10,498.

 

(39)

Bonus compensation for Mr. Jones in 2011 is comprised of: (a) Cash LTIP payment of $45,000; and (b) ICP payment of $400,000.

 

(40)

Other compensation for Mr. Jones in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) plan matching contribution of $12,250.

 

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Table of Contents

Grants of Plan-Based Awards

The following table sets forth all plan-based awards, including both equity awards and non-equity incentive awards under plans, made to our NEOs during the year ended December 31, 2013.

 

    Grant Date     Compensation
Committee or
Board
Approval Date
    Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
  Estimated Future Payouts
Under Equity Incentive Plan
Awards (1)
  All Other
Stock
Awards;
Number
of Shares
of Stock
or Units
(2)
    All Other
Option
Awards;
Number of
Securities
Underlying
Options
    Exercise
or Base
Price of
Option
Awards
(3)
    Grant Date Fair
Value of Stock
and Option
Awards (4)
 

Name

      Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)
       

Greg Becker

    April 30, 2013        April 25, 2013                    15,000             $      $ 1,066,650    

Greg Becker

    April 30, 2013        April 25, 2013                    8,800                      625,768    

Greg Becker

    April 30, 2013        April 25, 2013                           31,600        71.11        867,018    

Michael Descheneaux

    April 30, 2013        April 24, 2013                    8,250                      586,658    

Michael Descheneaux

    April 30, 2013        April 24, 2013                    4,900                      348,439    

Michael Descheneaux

    April 30, 2013        April 24, 2013                           17,300        71.11        474,665    

John China

    April 30, 2013        April 24, 2013                    4,050                      287,996    

John China

    April 30, 2013        April 24, 2013                    3,100                      220,441    

John China

    April 30, 2013        April 24, 2013                           8,600        71.11        235,961    

Joan Parsons

    April 30, 2013        April 24, 2013                    4,500                      319,995    

Joan Parsons

    April 30, 2013        April 24, 2013                    2,700                      191,997    

Joan Parsons

    April 30, 2013        April 24, 2013                           9,400        71.11        257,910    

Bruce Wallace

    April 30, 2013        April 24, 2013                    4,500                      319,995    

Bruce Wallace

    April 30, 2013        April 24, 2013                    2,600                      184,886    

Bruce Wallace

    April 30, 2013        April 24, 2013                           9,400        71.11        257,910    

David Jones

    April 30, 2013        April 24, 2013                    5,550                      394,661    

David Jones

    April 30, 2013        April 24, 2013                    3,400                      241,774    

David Jones

    April 30, 2013        April 24, 2013                           11,800        71.11        323,760    

 

(1)

For the performance-based restricted stock unit grants to the NEOs made in 2013, the performance achievement was determined as of December 31, 2013 based upon the performance criteria presented under “ Compensation Discussion and Analysis – Equity Incentives ” above. Since the achievement under this performance-based restricted stock grant was determined as of December 31, 2013, there are no estimated future payouts to be disclosed in the table above. See “Compensation Discussion and Analysis – Equity Incentives” above.

 

(2)

The stock awards reported above reflect performance-based restricted stock unit awards granted to each NEO. The Committee determined in January 2014 that 150% of the target for these awards had been earned for 2013. The target payout of the awards to Mr. Becker, Mr. Descheneaux, Mr. China, Ms. Parsons, Mr. Wallace and Mr. Jones were 10,000, 5,500, 2,700, 3,000, 3,000 and 3,700 shares, respectively. The achievement resulted in a 150% payout of target, which is subject to further time-based vesting until December 20, 2015.

 

(3)

Only the exercise price of the stock option awards is reported in the table above.

 

(4)

The fair values reported above are also reported in the “Summary Compensation Table” under the “Stock Awards” and “Stock Option Awards” columns, except that performance-based restricted stock unit awards are reported at 150% of target. Amounts shown represent the grant date fair values of awards of stock options and stock awards granted in the fiscal year indicated which were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation (“ ASC Topic 718 ”). The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “ Stockholders’ Equity ” of our audited financial statements included in our Annual Report on Form 10-K for the applicable year.

Option Exercises and Stock Vested

The following table sets forth the number of securities underlying equity awards that vested (in the case of restricted shares) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2013, and the value realized upon such vesting or exercise.

 

     OPTION AWARDS      STOCK AWARDS  

Name

   Number of
Shares
Acquired on
Exercise
     Value Realized
on Exercise
     Number of
Shares
Acquired on
Vesting
     Value Realized
on Vesting
 

Greg Becker

     32,066       $ 1,439,844         7,050       $ 646,895   

Michael Descheneaux

     28,950         1,223,073         4,525         418,994   

John China

     1,750         26,985         1,363         109,018   

Joan Parsons

     4,830         140,128         4,056         347,059   

Bruce Wallace

     7,000         234,639         2,480         208,477   

David Jones

     31,544         1,181,954         3,050         281,638   

 

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Table of Contents

Outstanding Equity Awards at Fiscal Year End

The following tables set forth all outstanding equity awards to the NEOs as of December 31, 2013. The exercise price for each of the stock option grants reported below is equal to the closing market price on the grant date. The vesting schedule for each outstanding equity award is provided in the footnotes to the tables below. Outstanding stock awards are valued based upon the closing market price of our stock as of December 31, 2013, which was $104.86 per share.

 

    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

Greg Becker

    16,450        -                $ 48.76        April 29, 2015           
    4,450        -                  27.84        May 12, 2016           
    12,784        4,261   (1)             45.19        July 27, 2017           
    12,000        12,000   (2)             60.37        April 27, 2018           
    7,025        21,075   (3)             64.37        May 1, 2019           
           31,600   (4)             71.11        April 30, 2020           
                  2,500   (5)    $ 262,150   
                  19,000   (6)      1,992,340   
                  3,900   (7)      408,954   
                  8,800   (8)      922,768   
                  8,800   (9)      922,768   
                  15,000   (10)      1,572,900   

 

(1)

4,261 options will vest on July 27, 2014.

 

(2)

6,000 options will vest on April 27, 2014; and 6,000 options will vest on April 27, 2015.

 

(3)

7,025 options will vest on May 1, 2014; 7,025 options will vest on May 1, 2015; and 7,025 options will vest on May 1, 2016.

 

(4)

7,900 options will vest on April 30, 2014; 7,900 options will vest on April 30, 2015; 7,900 options will vest on April 30, 2016; and 7,900 options will vest on April 30, 2017.

 

(5)

1,250 restricted stock units will vest on April 27, 2014; and 1,250 restricted stock units will vest on April 27, 2015.

 

(6)

19,000 restricted stock units will vest on April 27, 2015.

 

(7)

1,300 restricted stock units will vest on May 1, 2014; 1,300 restricted stock units will vest on May 1, 2015; and 1,300 restricted stock units will vest on May 1, 2016.

 

(8)

2,200 restricted stock units will vest on April 30, 2014; 2,200 restricted stock units will vest on April 30, 2015; 2,200 restricted stock units will vest on April 30, 2016; and 2,200 restricted stock units will vest on April 30, 2017.

 

(9)

8,800 performance-based restricted stock units will vest on December 20, 2014.

 

(10)

15,000 performance-based restricted stock units will vest on December 20, 2015.

 

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Table of Contents
    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

Michael Descheneaux

    2,000        -                $ 48.76        April 29, 2015           
    6,400        -                  27.84        May 12, 2016           
    5,301        3,267   (1)             45.19        July 27, 2017           
    8,000        8,000   (2)             60.37        April 27, 2018           
    4,350        13,050   (3)             64.37        May 1, 2019           
           17,300   (4)             71.11        April 30, 2020           
                  1,500   (5)    $   157,290   
                  2,325   (6)      243,800   
                  4,900   (7)      513,814   
                  5,300   (8)      555,758   
                  8,250   (9)      865,095   

 

(1)

3,267 options will vest on July 27, 2014.

 

(2)

4,000 options will vest on April 27, 2014; and 4,000 options will vest on April 27, 2015.

 

(3)

4,350 options will vest on May 1, 2014; 4,350 options will vest on May 1, 2015; and 4,350 options will vest on May 1, 2016.

 

(4)

4,325 options will vest on April 30, 2014; 4,325 options will vest on April 30, 2015; 4,325 options will vest on April 30, 2016; and 4,325 options will vest on April 30, 2017.

 

(5)

750 restricted stock units will vest on April 27, 2014; and 750 restricted stock units will vest on April 27, 2015.

 

(6)

775 restricted stock units will vest on May 1, 2014; 775 restricted stock units will vest on May 1, 2015; and 775 restricted stock units will vest on May 1, 2016.

 

(7)

1,225 restricted stock units will vest on April 30, 2014; 1,225 restricted stock units will vest on April 30, 2015; 1,225 restricted stock units will vest on April 30, 2016; and 1,225 restricted stock units will vest on April 30, 2017.

 

(8)

5,300 performance-based restricted stock units will vest on December 20, 2014.

 

(9)

8,250 performance-based restricted stock units will vest on December 20, 2015.

 

    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

John China

    2,000        -                $ 48.15        April 2, 2014           
    1,890        -                  48.76        April 29, 2015           
    174        -                  45.11        July 7, 2015           
    3,704        -                  19.48        April 28, 2016           
    1,875        625   (1)             49.18        April 30, 2017           
    152        -                  54.88        January 3, 2018           
    1,108        1,260   (2)             54.88        January 3, 2018           
    1,650        4,950   (3)             64.37        May 1, 2019           
           8,600   (4)             71.11        April 30, 2020           
                  250   (5)    $ 26,215   
                  624   (6)      65,433   
                  900   (7)      94,374   
                  3,100   (8)      325,066   
                  2,000   (9)      209,720   
                  4,050   (10)        424,683   

 

(1)

625 options will vest on April 30, 2014.

 

(2)

630 options vested on January 3, 2014; and 630 options will vest on January 3, 2015.

 

(3)

1,650 options will vest on May 1, 2014; 1,650 options will vest on May 1, 2015; and 1,650 options will vest on May 1, 2016.

 

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Table of Contents
(4)

2,150 options will vest on April 30, 2014; 2,150 options will vest on April 30, 2015; 2,150 options will vest on April 30, 2016; and 2,150 options will vest on April 30, 2017.

 

(5)

250 restricted stock units will vest on April 30, 2014.

 

(6)

312 restricted stock units vested on January 3, 2014; and 312 restricted stock units will vest on January 3, 2015.

 

(7)

300 restricted stock units will vest on May 1, 2014; 300 restricted stock units will vest on May 1, 2015; and 300 restricted stock units will vest on May 1, 2016.

 

(8)

775 restricted stock units will vest on April 30, 2014; 775 restricted stock units will vest on April 30, 2015; 775 restricted stock units will vest on April 30, 2016; and 775 restricted stock units will vest on April 30, 2017.

 

(9)

2,000 performance-based restricted stock units will vest on December 20, 2014.

 

(10)

4,050 performance-based restricted stock units will vest on December 20, 2015.

 

    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

Joan Parsons

    920          -           -         $ 48.15         April 2, 2014            
    1,926          -           -           48.76         April 29, 2015            
    824          -           -           48.76         April 29, 2015            
    624          -           -           23.16         January 27, 2016            
    1,876          -           -           23.16         January 27, 2016            
    2,625          -           -           19.48         April 28, 2016            
    1,206          -           -           42.45         October 27, 2016            
    1,294          -           -           42.45         October 27, 2016            
    2,727          -           -           49.18         April 30, 2017            
    1,023          1,250   (1)      -           49.18         April 30, 2017            
    511          -           -           43.53         October 26, 2017            
    1          170   (2)      -           43.53         October 26, 2017            
    3,500          3,500   (3)      -           60.37         April 27, 2018            
    2,300          6,900   (4)      -           64.37         May 1, 2019            
    -           9,400   (5)      -           71.11         April 30, 2020            
                  500   (6)    $ 52,430   
                  194   (7)      20,343   
                  1,000   (8)      104,860   
                  1,275   (9)      133,697   
                  2,700   (10)      283,122   
                  2,900   (11)      304,094   
                  4,500   (12)      471,870   

 

(1)

1,250 options will vest on April 30, 2014.

 

(2)

170 options will vest on October 26, 2014.

 

(3)

1,750 options will vest on April 27, 2014; and 1,750 options will vest on April 27, 2015.

 

(4)

2,300 options will vest on May 1, 2014; 2,300 options will vest on May 1, 2015; and 2,300 options will vest on May 1, 2016.

 

(5)

2,350 options will vest on April 30, 2014; 2,350 options will vest on April 30, 2015; 2,350 options will vest on April 30, 2016; and 2,350 options will vest on April 30, 2017.

 

(6)

500 restricted stock units will vest on April 30, 2014.

 

(7)

194 restricted stock units will vest on October 26, 2014.

 

(8)

500 restricted stock units will vest on April 27, 2014; and 500 restricted stock units will vest on April 27, 2015.

 

(9)

425 restricted stock units will vest on May 1, 2014; 425 restricted stock units will vest on May 1, 2015; and 425 restricted stock units will vest on May 1, 2016.

 

(10)

675 restricted stock units will vest on April 30, 2014; 675 restricted stock units will vest on April 30, 2015; 675 restricted stock units will vest on April 30, 2016; and 675 restricted stock units will vest on April 30, 2017.

 

(11)

2,900 performance-based restricted stock units will vest on December 20, 2014.

 

(12)

4,500 performance-based restricted stock units will vest on December 20, 2015.

 

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Table of Contents
    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

Bruce Wallace

    525          -           -        $ 19.48          April 28, 2016            
    1,025          1,000   (1)      -          49.18          April 30, 2017            
    1,500          3,000   (2)      -          60.37          April 27, 2018            
    2,250          6,750   (3)      -          64.37          May 1, 2019            
    -           9,400  (4)      -          71.11          April 30, 2020            
                  437   (5)    $ 45,824   
                  500   (6)      52,430   
                  1,200   (7)      125,832   
                  2,600   (8)      272,636   
                  2,700   (9)      283,122   
                  4,500   (10)      471,870   

 

(1)

1,000 options will vest on April 30, 2014.

 

(2)

1,500 options will vest on April 27, 2014; and 1,500 options will vest on April 27, 2015.

 

(3)

2,250 options will vest on May 1, 2014; 2,250 options will vest on May 1, 2015; and 2,250 options will vest on May 1, 2016.

 

(4)

2,350 options will vest on April 30, 2014; 2,350 options will vest on April 30, 2015; 2,350 options will vest on April 30, 2016; and 2,350 options will vest on April 30, 2017.

 

(5)

437 restricted stock units will vest on April 30, 2014.

 

(6)

250 restricted stock units will vest on April 27, 2014; and 250 restricted stock units will vest on April 27, 2015.

 

(7)

400 restricted stock units will vest on May 1, 2014; 400 restricted stock units will vest on May 1, 2015; and 400 restricted stock units will vest on May 1, 2016.

 

(8)

650 restricted stock units will vest on April 30, 2014; 650 restricted stock units will vest on April 30, 2015; 650 restricted stock units will vest on April 30, 2016; and 650 restricted stock units will vest on April 30, 2017.

 

(9)

2,700 performance-based restricted stock units will vest on December 20, 2014.

 

(10)

4,500 performance-based restricted stock units will vest on December 20, 2015.

 

    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
  Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
  Option
Exercise
Price
(per option)
    Option
Expiration Date
    Number of
Shares or
Units of
Stock
That Have
Not
Vested
  Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
  Equity
Incentive
Plan Awards;
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
    Equity Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares, Units, or
Other Rights
That Have
Not Vested
 

David Jones

      2,272   (1)      $ 45.19        July 27, 2017           
      5,000   (2)        60.37        April 27, 2018           
      8,925   (3)        64.37        May 1, 2019           
      11,800   (4)        71.11        April 30, 2020           
                  1,000   (5)    $   104,860   
                  1,650   (6)      173,019