Preliminary Proxy Statement
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    

Filed by a Party other than the Registrant    

Check the appropriate box:

 

   Preliminary Proxy Statement

 

       Confidential,for Use of the Commission Only

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

   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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Fee paid previously with preliminary materials.

 

 

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

 

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Table of Contents

 

 

 

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NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

 

DATE:

Thursday, April 25, 2019

TIME:

4:30 P.M. (Pacific Time)

LOCATION:

3005 Tasman Drive

 

Santa Clara, California 95054

Dear Stockholders:

We are pleased to invite you to attend SVB Financial Group’s 2019 Annual Meeting of Stockholders. At this year’s meeting, you will be asked to take the following actions, as more fully described in the Proxy Statement:

 

  1.

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

  2.

Approve the Company’s Amended and Restated Certificate of Incorporation to eliminate cumulative voting;

  3.

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

  4.

Approve our 2006 Equity Incentive Plan, as amended and restated, to reserve an additional 2,500,000 shares of common stock for issuance thereunder and extend the plan expiration date to April 24, 2029;

  5.

Ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2019; and

  6.

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

Your vote is very important. To assure your representation at the meeting, you are encouraged to vote your shares as soon as possible. This Notice and the Proxy Statement provide instructions on how you can vote your shares online or by telephone, or if you have received a printed copy of the proxy materials and a proxy card, by mail. You may attend the meeting and vote in person even if you have previously voted by proxy.

You are entitled to vote at this year’s meeting (or any postponement or adjournment thereof) if you are a stockholder of record at the close of business on February 25, 2019.

Thank you for your continued support of SVB Financial Group.

BY ORDER OF THE BOARD OF DIRECTORS,

Roger F. Dunbar

Chairman of the Board

Santa Clara, California

March     , 2019

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

 

 


Table of Contents

PROXY STATEMENT—TABLE OF CONTENTS

 

     Page  

2018 PERFORMANCE AND PROXY STATEMENT SUMMARY

  

COMPANY AND PROXY STATEMENT INFORMATION

  

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  

Proposal No. 1 — Election of Directors

     2  

Corporate Governance and Board Matters

     14  

Board Committees

     19  

Audit Committee Report

     21  

Compensation Committee Report

     22  

Compensation Committee Interlocks and Insider Participation

     22  

Compensation for Directors

     23  

Certain Relationships and Related Transactions

     25  

Section 16(a) Beneficial Ownership Reporting Compliance

     26  

Proposal No.  2 — Approval of the Company’s Amended and Restated Certification of Incorporation

     27  

EXECUTIVE OFFICERS AND COMPENSATION

  

Information on Executive Officers

     29  

Proposal No.  3 — Advisory Approval of our Executive Compensation

     32  

Compensation Discussion and Analysis

     33  

Compensation for Named Executive Officers

     46  

CEO Pay Ratio

     54  

Proposal No.  4 — Approval of 2006 Equity Incentive Plan, amended and restated

     55  

SECURITY OWNERSHIP INFORMATION

  

Security Ownership of Directors and Executive Officers

     62  

Security Ownership of Principal Stockholders

     63  

INDEPENDENT AUDITOR MATTERS

  

Proposal No.  5 — Ratification of Appointment of Independent Registered Public Accounting Firm

     64  

Principal Audit Fees and Services

     64  

MEETING AND OTHER INFORMATION

  

Information About Voting and Proxy Solicitation

     65  

Stockholder Proposals and Director Nominations

     67  

Company Documents and Other Matters

     68  

APPENDICES

  

Amended and Restated Certificate of Incorporation

     A-1  

2006 Equity Incentive Plan, as Amended and Restated

     B-1  

 

 

Indicates matters to be voted on at the Annual Meeting

 

 

 

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Table of Contents
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  2018 PERFORMANCE AND PROXY STATEMENT SUMMARY

 

 

This summary highlights our 2018 performance, as well as information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review this entire Proxy Statement, as well as our Annual Report on Form 10-K, for the year ended December 31, 2018.

 

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  2018 PERFORMANCE HIGHLIGHTS

 

 

2018 FINANCIAL PERFORMANCE HIGHLIGHTS

We are proud of our financial performance for 2018:

 

 

Nearly doubled our diluted earnings per share (“EPS”) and total net income;

 

Return on average equity (“ROE”) was notably 20.57%, a 66% year-over-year increase; and

 

Maintained steady multi-year growth of our average total assets, loans (net of unearned income), and client funds (deposits and client investment funds).

 

 

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SELECTED 2018 BUSINESS HIGHLIGHTS

2018 reflected another year of robust business activities and healthy growth, focusing on our mission to serve the innovation economy. Selected 2018 business highlights include:

 

 

We joined the S&P 500 Index in March 2018.

 

We acquired Leerink Partners, a life science and healthcare investment banking firm (closed January 4, 2019).

 

We implemented a $500 million stock repurchase program (completing $147 million in repurchases by year-end).

 

We continued to gain market share, adding nearly 5,000 core commercial clients.

 

We further extended our global reach, opening our lending branch in Germany. We expect to open our lending branch in Canada in Q1 2019.

 

We continued to grow our fee income business, achieving a year-over-year increase of 36% in core fee income driven by our foreign exchange and client investment businesses.

 

 

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2019 PROXY STATEMENT

 

 


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ANNUAL MEETING AND PROXY STATEMENT INFORMATION

Annual Meeting

 

Time and Date:    4:30 p.m. (Pacific Time), April 25, 2019    Record Date:    February 25, 2019
Place:   

SVB Financial Group – Corporate Headquarters

3005 Tasman Drive, Santa Clara, California 95054

   Voting:    Stockholders as of the record date are entitled to vote

Proposals and Voting Recommendations

 

 
  Proposal   Board Recommendation   Page Reference

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

  For all nominees   2

  Proposal No.  2 — Approval of Amended and Restated Certificate of Incorporation

  For   27

  Proposal No.  3 — Advisory (Non-Binding) Vote on Executive Compensation

  For   32

  Proposal No.  4 — Approval of 2006 Equity Incentive Plan, as Amended and Restated

  For   55

  Proposal No.  5 — Ratification of KPMG LLP as Auditors for 2019

  For   64

Director Nominees

We are seeking your election of the eleven (11) directors described below, all of whom are current incumbent directors.

 

                     

 

  LOGO  

  Committee Membership*
  Name   Age     Year First
Elected By
 Stockholders 
  Principal Occupation     LOGO       LOGO       LOGO       LOGO       LOGO       LOGO  
   

  Greg W. Becker

 

   

 

51

 

 

 

  2011

 

 

President and Chief Executive Officer, SVB Financial Group

 

 

 

             
   

  Eric A. Benhamou

 

   

 

63

 

 

 

  2005

 

 

Chairman and Chief Executive Officer, Benhamou Global Ventures, LLC

 

  2

 

        X

 

  C

 

  X

 

 

  John S. Clendening

 

 

 

 

 

 

56

 

 

 

 

 

 

2018

 

 

 

President and CEO, Blucora, Inc.

 

 

 

1

 

   

 

X

 

 

 

X

 

       
   

  Roger F. Dunbar

 

   

 

73

 

 

 

  2005

 

 

Board Chairman SVB Financial Group;
Former Global Vice Chairman, Ernst & Young, LLP

 

 

 

  X

 

      X

 

  X

 

  C

 

   

  Joel P. Friedman

 

   

 

71

 

 

 

  2005

 

 

Former President, Business Process Outsourcing, Accenture

 

 

 

        C

 

  X

 

  X

 

 

  Kimberly A. Jabal

 

 

 

 

 

 

50

 

 

 

 

 

 

2018

 

 

 

Chief Financial Officer, Unity Technologies ApS

 

 

 

1

 

 

 

X

 

           

 

  Jeffrey N. Maggioncalda

 

 

 

 

 

 

50

 

 

 

 

 

 

2012

 

 

 

Chief Executive Officer, Coursera Inc.

 

 

 

 

   

 

X

 

 

 

X

 

       
   

  Mary J. Miller

 

   

 

63

 

 

 

  2016

 

 

Former Under Secretary for Domestic Finance, U.S. Department of Treasury

 

 

 

 

 

 

X

 

     

 

X

 

     
   

 

  Kate D. Mitchell

 

 

 

 

 

 

60

 

 

 

 

 

 

2010

 

 

 

Co-Founder and Partner, Scale Venture Partners

 

 

 

1

 

     

 

C

 

   

 

X

 

 

 

X

 

   

  John F. Robinson

 

   

 

72

 

 

 

  2011

 

 

Former Deputy Comptroller of the Currency and former Executive Vice President, Washington Mutual Bank

 

 

 

  C

 

  X

 

  X

 

      X

 

 

  Garen K. Staglin

 

 

 

 

 

 

74

 

 

 

 

 

 

2012

 

 

 

Proprietor, Staglin Family Vineyard

 

 

 

1

 

     

 

C

 

         

 

X

 

 

 

X

 

 

* “C” denotes committee chairperson; all memberships are as of the date of this Proxy Statement.

 

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2019 PROXY STATEMENT

 

 

 


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Board and Corporate Governance Highlights

 

  Board Composition       Board Accountability

  Total of 11 current directors — all independent directors, except for CEO director

 

  Separate Board Chairperson and CEO roles

 

  Independent Board Chairperson

 

  Independent chairpersons and members of all Board committees

 

  Seasoned Board with diverse experience, including innovation economy industries, banking/financial services, global, finance/accounting, risk oversight/management and Government/Regulatory

 

  Limited public company directorships outside of the Company (no director “overboarding” concerns)

 

    

 

  Annual election of directors

 

  New majority voting standard with director resignation policy

 

  Annual Board and committee evaluations

 

  Regularly-held executive sessions of non-management directors

 

  Robust executive and director equity ownership guidelines

 

  Independent Board evaluation of CEO performance

 

  Independent Board approval of CEO compensation

 

  Ongoing director nominee identification and selection process

 

  Limit on director compensation under equity plan

 

 

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 Director Qualifications

Our directors reflect an effective and diverse mix of skills and experience:

 

 

LOGO

 

  Stockholder Interests       Risk Management

  Active stockholder engagement practices

 

  Annual Say on Pay vote

 

  New proxy access under Bylaws

 

  Stockholders may act by written consent

 

  Eliminated supermajority voting requirements under Bylaws

 

  One single voting class — common stock class

 

  No poison pill

 

    


 

  Board and individual committee oversight of risk

 

  Separate Board Risk Committee focused on enterprise-wide risk management framework

 

  Risk Committee comprised of the chairpersons of the Board and all six Board committees

 

  Risk management guided by Risk Appetite Statement (reviewed on an annual basis by the full Board)

 

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2019 PROXY STATEMENT

 

 

 


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2019 Organizational Documents Review; Proposed Elimination of Cumulative Voting

In 2018, in light of the Company joining the S&P 500 Index, the Governance Committee conducted a review of the Company’s governance practices under its organizational documents. As a result, the Board has proposed for stockholder approval the elimination of cumulative voting in the election of directors from the Company’s Certificate of incorporation, as further discussed under “Proposal No. 2 – Approval of the Company’s Amended and Restated Certificate of Incorporation to Eliminate Cumulative Voting for Director Elections.” The Board believes that cumulative voting is inconsistent with the practices of other S&P 500 companies and views cumulative voting as incompatible with a majority vote standard and not a corporate governance best practice.

The Board also adopted various changes to the Company’s Bylaws in February 2019, including, among other changes, the implementation of proxy access rights, the adoption of a majority vote standard for director elections (in uncontested election); and the elimination of a “supermajority” voting threshold for stockholder bylaw amendments. For more information, see “Corporate Governance and Board Matters.”

Independent Auditor Matters

As a matter of good corporate practice, we are seeking your ratification of KPMG LLP as our independent registered public accounting firm for the 2019 fiscal year. If our stockholders do not ratify the selection of KPMG LLP, the Audit Committee may reconsider its selection.

For 2018, the total fees for services provided by KPMG LLP were $10,435,207, of which 93.6% represented audit and audit-related fees. (For more information, see “Independent Auditor Matters”.)

Executive Compensation

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

CD&A Executive Summary

For a summary of the highlights of our 2018 executive compensation and key features of our executive compensation governance and practices, please refer to the Executive Summary of the “Compensation Discussion and Analysis” section of this Proxy Statement.

Equity Plan Amendment

The Board has also proposed for stockholder approval the Company’s 2006 Equity Incentive Plan, as amended and restated, to reserve an additional 2,500,000 shares of common stock for issuance thereunder and extend the plan expiration date to April 24, 2029. The plan was previously approved by stockholders in 2014, which included the plan’s last increase in shares reserved for issuance.

Important Dates for 2020 Annual Meeting

Stockholder proposals for inclusion in our 2020 proxy statement pursuant to SEC Rule 14a-8 must be received by us by November 12, 2019. Notice of stockholder proposals for the 2020 annual meeting outside of SEC Rule 14a-8 must be received by us no earlier than December 27, 2019 and no later than January 26, 2020.

* * * *

 

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2019 PROXY STATEMENT

 

 

 


Table of Contents
LOGO  

  COMPANY AND PROXY STATEMENT INFORMATION

 

 

ABOUT SVB FINANCIAL GROUP

For more than 35 years, SVB Financial Group (NASDAQ: SIVB) and its subsidiaries have helped innovative companies and their investors move bold ideas forward, fast. SVB Financial Group’s businesses, including Silicon Valley Bank, offer commercial, investment and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life science and healthcare, private equity and venture capital, and premium wine industries. Headquartered in Santa Clara, California, SVB Financial Group operates in centers of innovation around the world.

PROXY STATEMENT

General Information

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”) to be voted at our 2019 Annual Meeting of Stockholders and any adjournments or postponements of that meeting (the “Annual Meeting”). The Annual Meeting will be held at our offices located at 3005 Tasman Drive, Santa Clara, California 95054, on Thursday, April 25, 2019 at 4:30 p.m., Pacific Time. For directions to attend the Annual Meeting in person, please visit our website at http://www.svb.com/locations.aspx. The proxies may also be voted at any adjournments or postponements of the meeting.

All properly executed written proxies and all properly completed proxies submitted by telephone or internet that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting.

We are first furnishing the proxy materials to stockholders on or about March     , 2019.

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.

Record Date

Only stockholders of record as of the close of business on February 25, 2019 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements of the meeting. At the close of business on the Record Date, there were 52,644,043 shares of our common stock, $0.001 par value (“Common Stock”), outstanding.

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

This Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2018 are available electronically at www.svb.com/proxy. The contents of our website are not incorporated herein by reference and any reference to our website address provided throughout this Proxy Statement is intended to be an inactive textual reference only. See also “Information about Voting and Proxy Solicitation—Delivery of Proxy Materials” below.

 

       
 

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2019 PROXY STATEMENT

 


Table of Contents
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  BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

 

 

LOGO

 

 

  PROPOSAL NO. 1 – ELECTION OF DIRECTORS

 

 

 

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

DIRECTOR ELECTION, QUALIFICATIONS AND OTHER INFORMATION

Our Directors; Annual Election of Directors

Upon the recommendation of the Governance Committee, we are pleased to propose eleven (11) director nominees for election this year. We believe that our director nominees, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to maintain an effective Board to serve the best interests of the Company and its stockholders. All nominees are deemed independent, except for our CEO.

Our directors are elected on an annual basis to hold office for a one-year term expiring at the 2020 Annual Meeting. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation or removal.

Director Qualifications

The Board recognizes that it is of utmost importance to assemble a body of directors that, taken together, has the skills, qualifications, experience and attributes appropriate for functioning as a board and working productively with management. The Governance Committee of the Board is responsible for maintaining a well-rounded and diverse board that has the requisite diversity 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, qualifications and attributes typically sought by the Governance Committee in director candidates include, but are not limited to, the following primary areas:

 

LOGO    

Leadership - Experience holding significant leadership positions, including as a CEO or head of a significant business, to help us drive business strategy, growth and performance.

    

Other key attributes deemed important for directors to possess include:

 

  Strong strategic sense

 

  Critical and innovative thinking

 

  Sound business judgment

 

  High ethical standards and integrity

 

  Collegial spirit

 

  Ability to debate and challenge constructively

 

  Professionalism

 

  Ability to generate confidence

 

  Availability and commitment to serve

 

 

LOGO

 

 

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

 
LOGO  

 

 

Banking/Financial Services - Experience with the banking or financial services industry, to help support and grow our core business.

 

 
LOGO  

 

 

Global - Experience working outside of the United States or with multinational companies, to help facilitate our global expansion.

 

 
LOGO  

 

 

Finance/Accounting - Experience with finance, accounting or financial reporting processes, to help drive financial performance.

 

 
LOGO  

 

 

Risk Oversight/Management - Experience with key risk oversight or risk management functions, to help oversee the dynamic risks we face.

 

 
LOGO  

 

Government/Regulatory - Experience working with or in governmental and regulatory organizations to oversee our highly regulated business that is affected by governmental actions.

    

 

       
 

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New Majority Vote Standard

As discussed under “Corporate Governance and Board Matters”, in light of the Company joining the S&P 500 Index, the Governance Committee conducted a review during 2018 of the Company’s governance practices under its organizational documents, taking into consideration market trends and practices relevant to other S&P 500 companies and larger financial institutions. Among other things, as a result of that review, in February 2019, we amended our Bylaws to provide for a majority voting standard for director elections. Under this standard, our directors will be elected by the vote of the majority of the votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares “against” such nominee) in uncontested director elections. In contested elections (where the number of nominees to serve as directors exceeds the number of directors to be elected), directors will be elected by a plurality of the votes cast (meaning the nominees with the greatest number of shares voted “for” will be elected). A plurality voting standard also will apply to the extent our Certificate of Incorporation authorizes cumulative voting in director elections and a stockholder gives notice to cumulate his or her votes. At the Annual Meeting, stockholders are being asked to approve the elimination of cumulative voting, which the Board views as incompatible with a majority vote standard and not a corporate governance best practice, from our Certificate of Incorporation. (See “Proposal No. 2 – Approval of the Company’s Amended and Restated Certificate of Incorporation to Eliminate Cumulative Voting.”)

Under our director resignation policy, if a director does not receive a majority vote in an uncontested election (or a plurality of the votes cast in a contested election), he or she shall promptly offer his or her resignation to the Board for consideration. The Governance Committee will act within ninety (90) days after certification of the stockholder vote to determine whether to accept the director’s resignation, and thereafter submit its recommendation to the Board for consideration at the Board’s next scheduled meeting, unless failure to act sooner would cause the Company to not comply with any applicable NASDAQ or SEC requirement, in which case the Governance Committee shall take action as promptly as practicable. Any director whose resignation is under consideration will abstain from participating in any decision or deliberation regarding that resignation. We will disclose any decision made by the Board with respect to any tendered resignation.

Nominees for Director

All proxies will be voted “for” the election of the following eleven (11) nominees, as recommended by the Governance Committee and approved for nomination for election by the Board, unless authority to vote for the election of directors (or for any particular nominee) is withheld. If any of the nominees unexpectedly declines or becomes unable to act as a director, the proxies may be voted for a substitute nominee designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to, or in lieu of, those listed below. Our directors serve until the next annual meeting of stockholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal.

Pursuant to our amended Bylaws as described above, election of directors at the Annual Meeting is subject to a majority vote standard. This means that the eleven (11) nominees who receive a majority of the votes cast will be elected.

Our Board of Directors recommends that stockholders vote “FOR” all director nominees.

 

       
 

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BIOGRAPHIES OF DIRECTOR NOMINEES

The biographies of each of our director nominees are set forth below:

 

GREG W. BECKER

   DIRECTOR SINCe 2011      

LOGO

 

Mr. Becker, age 51, was appointed the President and Chief Executive Officer of the Company 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 roles, including Division Manager of Venture Capital (1999-2002), Chief Banking Officer (2002-2003), Chief Operating Officer (2003-2008) and President of the Bank (2008-2017).

 

  Committees: N/A

   Independent: No  

 

BUSINESS EXPERIENCE

 

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

-  Class A Director, Federal Reserve Bank of San Francisco (since 2019)

-  Silicon Valley Leadership Group, a non-profit organization with an emphasis on issues of importance to employers, employees and residents of Silicon Valley (member since 2011; Chairman 2015-2017)

-  Executive Council, TechNet (since 2016)

-  Advisory Council Member, Alliance for Southern California Innovation (since 2017)

PRIOR DIRECTORSHIPS:

  -  

Director and executive committee member, Bay Area Council, a public policy advocacy organization (2011-2015)

OTHER PRIOR EXPERIENCE:

  -  

Member, U.S. Department Digital Economy Board of Advisors (2016-2017)

  -  

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

EDUCATION:

  -  

Bachelor’s degree in Business from Indiana University

QUALIFICATIONS

 

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Leadership — Based on his current position as CEO, as well as other prior leadership roles within the Company

 

 

LOGO

 

 

Client Industry — Extensive experience with the Company, working with public and private technology, life science, venture capital/private equity and premium wine clients

 

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Banking/Financial Services — Career-long experience within the banking industry

 

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Global — Extensive global experience through the Company’s international expansion efforts

 

 

 

       
 

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ERIC A. BENHAMOU

   DIRECTOR SINCE 2005         

 

LOGO

 

 

 

Mr. Benhamou, age 63, is Chairman and Chief Executive Officer of Benhamou Global Ventures, LLC (“Benhamou Global Ventures”), which he founded in 2003. Benhamou Global Ventures invests and plays an active role in innovative high-tech firms throughout the world. Mr. Benhamou is also President and Chief Financial Officer of ChaSerg Technology Acquisition Corp., a technology-focused special purpose acquisition company, sits on various public and private technology company boards, and serves various educational and philanthropic organizations.

 

  Committees: Governance (Chair), Finance and Risk

   Independent: Yes  

BUSINESS EXPERIENCE

CURRENT PUBLIC DIRECTORSHIPS:

 

  -  

Finjan Holdings, Inc., a global provider of proactive web security solutions (since 2006)

  -  

ChaSerg Technology Acquisition Corp, a technology-focused special purpose acquisition company (since 2018)

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

  -  

Chairman, Totango, a customer success and data platform (since 2016)

  -  

Chairman, Ayehu, a developer of IT process automation products (since 2015)

  -  

Grid Dynamics, a provider of commerce technology solutions for retailers (since 2015)

  -  

Secret Double Octopus Ltd., a multi-factor authentication technology company (since 2017)

  -  

6D Bytes, Inc., a robotics-driven food company (since 2017)

  -  

Virtual Instruments, an infrastructure performance analytics company (since 2016)

  -  

Advisory Board, Hyundai Motor Company, an automotive manufacturer (since 2018)

  -  

Chairman, Israel Venture Network, a philanthropic organization for a stronger Israeli society (since 2000)

PRIOR DIRECTORSHIPS:

  -  

Chairman, Cypress Semiconductor Corporation, a semiconductor company (1993-2017)

  -  

Qubell, a private application deployment and configuration management platform (acquired) (2014-2015)

  -  

ConteXtream, a private carrier equipment vendor for intellectual property based media services (acquired) (2007-2015)

  -  

Load DynamiX, a private intellectual property network testing tool developer (acquired) (2010-2014)

  -  

PureWave Networks, Inc., a private developer of outdoor compact base stations for the 4G marketplace (2010-2014)

  -  

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

  -  

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

  -  

Dasient, Inc., a private security company that provides malware detection and prevention solutions (2010-2011) (acquired by Twitter, Inc. in 2012)

  -  

Chairman, 3Com Corporation, a public networking solutions provider (1990-2010) (acquired by HP, Inc.)

  -  

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

  -  

Other prior private directorships: Atrica Inc. (acquired by Nokia Siemens Networks in 2008), GO Networks Inc., WisdomArk, Inc. (various dates from 2000-2008)

OTHER PRIOR EXPERIENCE:

  -  

Executive committee member, Stanford University School of Engineering (1996-2015)

  -  

Visiting professor, IDC Business School (2001-2015)

  -  

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

  -  

Visiting professor, INSEAD Business School (2003-2012)

  -  

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

  -  

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

  -  

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

  -  

Executive committee member, TechNet (2005)

  -  

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

  -  

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

EDUCATION:

  -  

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

  -  

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

  -  

Several honorary doctorates

QUALIFICATIONS

 

 

LOGO

 

 

Leadership — Held a variety of key executive positions, including Chairman/CEO roles at 3Com Corporation and Palm, Inc.

LOGO

 

 

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 Chief Executive Officer of Benhamou Global Ventures

 

LOGO

 

Global — Strategic and operational experience in the global markets, particularly in Europe and Israel

 

 

 

 

       
 

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2019 PROXY STATEMENT

 


Table of Contents

JOHN S. CLENDENING

   DIRECTOR SINCE 2017        

 

LOGO

 

 

 

Mr. Clendening, age 56, has been President and CEO of Blucora, Inc., a provider of online financial services, since 2016. Mr. Clendening previously served in various executive management roles at The Charles Schwab Corporation (“Charles Schwab”) from 2004-2015, most recently as Executive Vice President and Co-Head, Retail Business.

 

 

  Committees: Compensation and Credit

 

   Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PUBLIC DIRECTORSHIPS:

  -  

Blucora, Inc., a provider of multi-channel financial and tax preparation services (since 2016)

PRIOR DIRECTORSHIPS:

  -  

Betterment Holdings, Inc., an online investment services company (2016-2017)

OTHER PRIOR EXPERIENCE:

  -  

Executive Vice President, The Charles Schwab Corporation, a financial services and banking company (2004-2015)

  -  

President and Founder, Restaurant Business Services, eMac Digital (2001-2004)

  -  

Senior Vice President, Web, Marketing and Technology, Living.com (2000-2000)

  -  

Chief Marketing Officer and Senior Vice President, Consumer Banking Group, First Union Corporation (1998-2000)

  -  

Various management positions at The Coca-Cola Company, Frito-Lay, SEARS Specialty Merchandising Group and Booz-Allen & Hamilton, Inc.

EDUCATION:

  -  

Bachelor’s degree in Economics from Northwestern University

  -  

Master’s degree in Business Administration from Harvard University

 

QUALIFICATIONS

 

 

LOGO

 

  

Leadership — Current role as President and CEO of Blucora, Inc. and prior executive management roles at Charles Schwab

 

 

LOGO

 

  

Banking/Financial Services — Extensive experience with banks and financial services companies through current role at Blucora, Inc., as well as prior roles at Betterment Holdings, Inc., Charles Schwab and First Union Corporation

 

 

 

       
 

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2019 PROXY STATEMENT

 


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ROGER F. DUNBAR

   DIRECTOR SINCE 2004        

 

LOGO

 

 

 

Mr. Dunbar, age 73, 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 2019-2020 director term. Mr. Dunbar retired from Ernst & Young LLP (“Ernst & Young”) in 2004, where he served in a variety of positions since 1974, including key leadership positions.

 

 

  Committees: Risk (Chair), Audit, Finance and Governance

 

   Independent: Yes

 

 

BUSINESS EXPERIENCE

PRIOR EXPERIENCE WITH ERNST & YOUNG:

  -  

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

  -  

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

  -  

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

  -  

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

  -  

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

PRIOR DIRECTORSHIPS:

  -  

Desert Mountain Club, Inc. (2010-2015)

  -  

Desert Mountain Property, Inc. (2009-2010)

OTHER PRIOR EXPERIENCE:

  -  

Various positions within 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, US Area Managing Partners Leadership Group (1992-2000); and other key positions, including Client Service Partner, Partner-in-Charge and Area Managing Partner, Silicon Valley and the Pacific Northwest Area (1974-2000), and Instructor for the National Education Program.

  -  

Instructor, Santa Clara University’s Graduate School of Business

  -  

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

  -  

Member, Joint Venture Silicon Valley’s 21st Century Education Board

  -  

U.S. Naval Officer (1967-1980)

EDUCATION:

  -  

Bachelor’s degree in Business from San Francisco State University

  -  

Master’s degree in Business Administration from Santa Clara University

  -  

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

QUALIFICATIONS

 

 

LOGO

 

  

Leadership — Held a variety of key executive positions, including Global Vice Chairman of Ernst & Young

 

LOGO

  

Client Industry — 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 the United Kingdom and Israel

 

 

LOGO

  

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 the United Kingdom and Israel

 

LOGO

 

  

Finance/Accounting - Extensive domestic and international capital markets, finance, accounting and audit experience with Ernst & Young

 

 

LOGO

 

  

Risk Oversight/Management — Deep experience auditing risk management controls through his roles at Ernst & Young

 

 

 

       
 

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2019 PROXY STATEMENT

 


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JOEL P. FRIEDMAN

   DIRECTOR SINCE 2004        

 

LOGO

 

 

 

Mr. Friedman, age 71, retired from Accenture PLC (“Accenture”), a public company global management-consulting firm, in 2005, where he held the position of President of the Business Process Outsourcing organization. Over the course of his 34-year career with Accenture, Mr. Friedman held a variety of senior leadership roles.

 

 

 

  Committees: Finance (Chair), Governance and Risk

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

  -  

Advisory Director, Stanford Institute for Economic Policy Research (since 2019)

  -  

Advisory Director, Currency Capital, an equipment financing, lending & technology investment company (since 2018)

  -  

Advisory Director, Community Gatepath, a non-profit organization (since 2013; director from 1991-2012)

  -  

Financial Advisory Committee (Member), Town of Hillsborough, CA (since 2018)

PRIOR DIRECTORSHIPS:

  -  

Advisory Director, FTV Capital (formerly Financial Technology Ventures) (2005-2018)

  -  

NeuStar, Inc., a provider of essential clearinghouse services to the communications industry (2006-2017) (acquired)

  -  

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

  -  

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

  -  

Junior Achievement of Northern California, a non-profit organization (2004-2010)

  -  

Other directorships completed prior to 2009 include Accenture, a global management-consulting firm (2001-2005); Seisint, Inc.; Calico Commerce, Inc.; Rivio Inc.; and The Brain Technologies.

OTHER PRIOR EXPERIENCE:

  -  

Various roles within Accenture: President of the Business Process Outsourcing organization; Managing Partner, Banking and Capital Markets; Managing General Partner, Accenture Technology Ventures; and Founder, Accenture strategy consulting practice

  -  

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

 

QUALIFICATIONS

LOGO

 

Leadership — Held a variety of key executive positions, including President of the Business Process Outsourcing organization within Accenture

 

LOGO

 

Client Industry — Extensive experience working with venture capital firms through Accenture

LOGO

 

Banking/Financial Services — Extensive experience working within the banking industry through Accenture

LOGO

 

Finance/Accounting — Deep experience with corporate finance and capital markets through Accenture

 

 

       
 

8

 

 

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2019 PROXY STATEMENT

 


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KIMBERLY A. JABAL

   DIRECTOR SINCE 2018        

 

LOGO

 

 

 

Ms. Jabal, age 50, is currently the Chief Financial Officer of Unity Technologies ApS, a provider of real-time 3D software development tools. Prior to joining Unity Technologies in 2019, Ms. Jabal previously served as Chief Financial Officer at Weebly, Inc., a provider of web-hosting and development tools, from 2015-2018, Chief Financial Officer of Path, Inc., a social networking technology company, from 2013-2015, and as Vice President of Finance at Lytro, Inc., an early stage technology company, from 2011-2012.

 

 

  Committees: Audit

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PUBLIC DIRECTORSHIPS:

 

  -  

FedEx Corporation, a multinational transportation and delivery service company (2013-present)

PRIOR DIRECTORSHIPS:

  -  

Bring Change 2 Mind, a non-profit mental health organization (2014-2018)

  -  

Menlo Park Atherton Education Foundation, a non-profit education organization (2011-2013)

OTHER PRIOR EXPERIENCE:

  -  

Various roles at Google (2003-2011), including Director of Engineering Finance, Director of Investor Relations, and Director of Sales Finance

  -  

Various technology-related roles at Goldman Sachs and Anderson Consulting (now Accenture)

EDUCATION:

  -  

Bachelor’s degree in Engineering from University of Illinois at Urbana-Champaign

  -  

Master’s degree in Business Administration from Harvard University

 

QUALIFICATIONS

LOGO

 

Finance/Accounting — Deep experience with corporate finance and accounting through current and prior roles as Chief Financial Officer of Unity Technologies ApS and Weebly, Inc. and Path, Inc., respectively

LOGO

 

Client Industry — Extensive experience serving in leadership roles in early-stage technology companies Path, Inc. and Lytro, Inc., later-stage technology companies Unity Technologies and Weebly, Inc., and established technology company Google, Inc. as well as technology banking and internet/technology consulting experience

 

 

 

JEFFREY N. MAGGIONCALDA

   DIRECTOR SINCE 2012         LOGO  

Mr. Maggioncalda, age 50, is currently the Chief Executive Officer of Coursera, Inc. (“Coursera”), an online education company. He previously served as the founding Chief Executive Officer of Financial Engines, Inc. (“Financial Engines”), an independent investment advisory firm, since its inception in 1996 until 2014. He also served as a director of Financial Engines from 2011 to 2014. Subsequent to his tenure at Financial Engines, Mr. Maggioncalda served as a senior advisor to McKinsey & Company, a global management-consulting firm.

 

 

  Committees: Credit and Compensation

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

PRIOR DIRECTORSHIPS:

  -  

Financial Engines, an independent investment advisory firm (2011-2014)

  -  

Affinity Circles, a social networking developer

OTHER PRIOR EXPERIENCE:

  -  

Senior Adviser, McKinsey & Co., a strategy consulting firm (2017)

  -  

Chief Executive Officer, Financial Engines (1996-2014)

  -  

Summer Associate, McKinsey & Co., a strategy consulting firm (1995)

  -  

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

EDUCATION:

  -  

Bachelor’s degree in Economics and English from Stanford University

  -  

Master’s degree in Business Administration from Stanford University

 

QUALIFICATIONS

LOGO

 

Leadership — Current and former roles as CEO of Coursera and Financial Engines, respectively

LOGO

 

Banking/Financial Services — Extensive experience in the investment advisory industry

 

 

 

       
 

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2019 PROXY STATEMENT

 


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MARY J. MILLER

   DIRECTOR SINCE 2015         LOGO  

Ms. Miller, age 63, is the former Under Secretary for Domestic Finance for the U.S. Department of the Treasury (“U.S. Treasury”), a position that she held following her confirmation by the U.S. Senate from March 2012 until September 2014. Ms. Miller also served as Assistant Secretary of the Treasury for Financial Markets following her confirmation by the U.S. Senate in February 2010 until March 2012. Prior to joining the U.S. Treasury, Ms. Miller held various positions with T. Rowe Price Group, Inc. from 1983 to 2009.

 

 

  Committees: Audit and Finance

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

  -  

The Jeffrey Company, an investment company (since 2016)

  -  

Trustee, Cornell University, a higher education institution (since 2015)

  -  

Trustee, The Urban Institute, a non-profit research organization (since 2014)

  -  

Baltimore Neighborhood Impact Investment Fund, a non-profit organization (since 2018)

  -  

Johns Hopkins University Technology Ventures, IDEA Board (since 2018)

  -  

Johns Hopkins University 21st Century Cities Initiative, Senior Fellow (since 2017)

OTHER PRIOR EXPERIENCE:

  -  

ICE Benchmark Administration, a unit of the Intercontinental Exchange (2014-2018)

  -  

Director, Fixed Income Division, T. Rowe Price Group, Inc., a global investment management firm (2004-2009)

  -  

Various investment management positions with T. Rowe Price Group (1983-2004)

EDUCATION:

  -  

Bachelor’s degree in Government from Cornell University

  -  

Master’s degree in City and Regional Planning, University of North Carolina at Chapel Hill

  -  

Chartered Financial Analyst (CFA)

 

QUALIFICATIONS

LOGO

 

Leadership — Held key leadership positions within the U.S. Treasury and T. Rowe Price Group

LOGO

 

Banking/Financial Services — Extensive experience in financial markets, including regulatory experience; deep experience in the investment advisory industry

LOGO

 

Finance/Accounting — Extensive experience in financial roles, including within the U.S. Treasury

LOGO

 

Government/Regulatory — Served in key positions within the U.S. Treasury

 

 

 

       
 

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2019 PROXY STATEMENT

 


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KATE D. MITCHELL

   DIRECTOR SINCE 2010         LOGO  

Ms. Mitchell, age 60, is a Partner and Co-Founder of Scale Venture Partners (“Scale Venture”), a venture capital firm that invests in enterprise software companies, and is instrumental in building the firm’s team and strategic direction. Prior to founding Scale Venture in 1996, Ms. Mitchell held a variety of senior management positions with Bank of America.

 

 

 

  Committees: Credit (Chair), Governance and Risk

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PUBLIC DIRECTORSHIPS:

  -  

Fortive Corporation, a worldwide provider of professional instrumentation and industrial technologies (since 2016)

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

  -  

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

  -  

Founding Co-Chair and Member, NVCA Inclusion and Diversity Task Force (now “Venture Forward”), a forum to increase opportunities for women and minorities in venture capital and entrepreneurship (since 2014)

  -  

Silicon Valley Community Foundation, a non-profit organization (since 2015)

  -  

Kauffman Fellows, Mentor (since 2016)

  -  

Member, GP/LP Roundtable, Institutional Limited Partners Association, a trade association for private equity limited partners (since 2016)

  -  

Meals on Wheels San Francisco (since 2019)

  -  

Advisory Director, Tuck School of Business, Dartmouth College (since 2019)

PRIOR DIRECTORSHIPS:

  -  

National Venture Capital Association (“NVCA”), a trade association focused on regulatory and economic policy impacting the venture industry and the companies that are funded by venture capital (2007-2011 and 2014-2016)

  -  

PeopleMatter (PMW Technologies, Inc.), a provider of human resource management solutions (2014-2016)

  -  

mBlox, Inc., a mobile transaction network provider (acquired by CLX Communications) (2010-2016)

  -  

New Century Hospice, a provider of hospice services for patients, families and healthcare providers (2014-2015)

  -  

Jaspersoft, Inc., a manufacturer of business intelligence software (2009-2014)

  -  

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

  -  

Wayport, Inc. (2000-2008)

  -  

Other directorships completed prior to 2009 include: Songbird Medical (1998-2005); Acusphere, Inc. (1999-2005); Tonic Software, Inc. (2000-2005); and 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

 

QUALIFICATIONS

LOGO

 

Leadership — Based on her role as managing partner and co-founder of Scale Venture

 

LOGO

 

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 managing partner of Scale Venture

LOGO

 

Banking/Financial Services - Held a variety of key executive positions at Bank of America, a large global bank

LOGO

 

Finance/Accounting — Extensive finance and asset/liability management experience at Bank of America and Bank of California

 

 

 

       
 

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2019 PROXY STATEMENT

 


Table of Contents

JOHN F. ROBINSON

   DIRECTOR SINCE 2010        

 

  

 

 

 

   

 

LOGO

 

 

 

Mr. Robinson, age 72, is a former Executive Vice President, Corporate Risk Management of Washington Mutual Bank, a financial lending institution. Prior to his position with Washington Mutual, Mr. Robinson served with the Office of the Comptroller of the Currency as a Deputy Comptroller.

 

 

 

 

 

  Committees: Audit (Chair), Compensation, Credit and Risk

 

  

 

Independent: Yes

 

   

BUSINESS EXPERIENCE

PRIOR DIRECTORSHIPS:

  -  

Federal Home Loan Bank of San Francisco (2004-2005, 2007-2008, and 2011-2018)

  -  

Vogogo, Inc., a Canadian based provider of verification tools for risk management and payment processing (2015-2016)

  -  

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

  -  

Long Beach Mortgage Corporation and Long Beach Securities Corporation, both wholly-owned subsidiaries of Washington Mutual Bank (2004-2006)

OTHER PRIOR EXPERIENCE:

  -  

National Outdoor Leadership School Advisory Committee (2007-2016)

  -  

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

  -  

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

EDUCATION:

  -  

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

  -  

Master’s degree in Business Administration from Harvard University

  -  

Chartered Financial Analyst (CFA)

 

QUALIFICATIONS

LOGO    

 

Banking/Financial Services — Extensive experience within the banking industry, including his roles at Washington Mutual Bank, a nationally recognized financial lending institution, and as a banking regulator at the Office of the Comptroller of the Currency

LOGO

 

Risk Oversight/Management — Held a variety of executive risk management positions at Washington Mutual Bank

LOGO

 

Government/Regulatory — Served in a key function at the Office of the Comptroller of the Currency

 

 

 

       
 

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2019 PROXY STATEMENT

 


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GAREN K. STAGLIN

   DIRECTOR SINCE 2011        

 

LOGO

 

 

 

Mr. Staglin, age 74, 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 services and insurance industries.

 

 

 

 

  Committees: Compensation (Chair), Governance and Risk

 

  

 

Independent: Yes

 

 

BUSINESS EXPERIENCE

CURRENT PUBLIC DIRECTORSHIPS:

  -  

Chairman, ExlService Holdings, Inc., a provider of outsourcing services to global companies (since 2005)

CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE:

  -  

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, Nvoicepay, Inc., an electronic payment services provider (since 2010)

  -  

Founder and Co-Chairman, One Mind, a non-profit organization devoted to accelerating cures and treatments for all brain disorders (since 1995)

PRIOR DIRECTORSHIPS:

  -  

Advisory Director, Specialized Bicycle, a manufacturer of cycling equipment (1995-2014)

  -  

Chairman, Free Run Technologies, an internet and technology services company (2003-2014)

  -  

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

  -  

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

  -  

Solera Holdings, Inc., a public automotive insurance software service provider (2005-2011)

  -  

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

  -  

Other directorships completed prior to 2009 include: First Data Corporation, a payment solutions provider (1992-2003); Quick Response Services, a public retail management and supply chain services company (1991-2001); CyberCash, Inc., a public micro-payments and platform company (1996-2000); Chairman, Safelite Auto Glass, a private national auto glass provider (1993-1999)

OTHER PRIOR EXPERIENCE:

  -  

Founder and President, Bring Change 2 Mind, an organization devoted to removing the stigma associated with mental illness (2009-2014)

EDUCATION:

  -  

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

  -  

Master’s degree in Business Administration, Finance and Systems Analysis from Stanford University

 

QUALIFICATIONS

LOGO    

 

Leadership — Held a variety of leadership roles, including board positions, as well as other founder and president roles with various non-profit organizations

LOGO

 

Client Industry — Extensive experience working within the premium wine and transaction/payment processing industries, as well as experience working with innovation companies as a director

LOGO

 

Banking/Financial Services — Extensive experience working within transaction/payment processing industries

 

 

 

       
 

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2019 PROXY STATEMENT

 


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LOGO

 

 

  CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

CORPORATE GOVERNANCE

We are committed to having sound corporate governance practices, as governed by our organizational documents, as well as our Corporate Governance Guidelines and other applicable policies. Our practices are important to how we manage our business and to maintain our integrity in the marketplace. In setting our practices, we balance our corporate and stockholder interests, as well as applicable market practices and trends.

Our Corporate Governance Guidelines set forth a framework for our Company with respect to specific corporate governance practices. The guidelines are reviewed at least annually by the Governance Committee, as well as amended from time to time to continue evolving our practices. A copy of our guidelines is available at www.svb.com under “About Us—Investor Relations—Corporate Governance.”

2019 Organizational Documents Review

In 2018, in light of the Company joining the S&P 500 Index, the Governance Committee conducted a review of the Company’s governance practices under its organizational documents, taking into consideration market trends and practices relevant to other S&P 500 companies and larger financial institutions. As a result of that review and based on the Governance Committee’s recommendation, the Board adopted various changes to the Company’s Bylaws in February 2019, including, among other changes:

 

 

Implementation of proxy access to enable three percent stockholders or stockholder groups to nominate director nominees;

 

 

Adoption of majority vote standard for director elections (in uncontested elections); and

 

 

Elimination of a “supermajority” voting threshold for stockholder bylaw amendments.

In addition, as discussed under “Proposal No. 2 – Approval of the Company’s Amended and Restated Certificate of Incorporation to Eliminate Cumulative Voting for Director Elections,” the Board is proposing the elimination of cumulative voting in the election of directors from the Company’s Certificate of Incorporation for stockholder approval. As further discussed under the proposal, cumulative voting is inconsistent with the practices of other S&P 500 companies and the Board views cumulative voting as incompatible with a majority vote standard and not a corporate governance best practice.

BOARD INDEPENDENCE AND LEADERSHIP

The Board has determined that, with the exception of Mr. Becker, our President and CEO, all of our current directors are “independent” within the meaning of the director independence standards set by The NASDAQ Stock Market LLC (“NASDAQ”) and the Securities Exchange Commission (the “SEC”).

Separate Chairperson and CEO Roles

 

The Board has determined that it is in the best interests of the Company to continue to maintain the Board chairperson and CEO positions separately. We believe that having an outside, independent director serve as chairperson is the most appropriate leadership structure for the Board at this time, as it enhances the Board’s independent oversight of management and strategic planning, reinforces the Board’s ability to exercise its independent judgment to represent stockholder interests and strengthens the objectivity and integrity of the Board. Moreover, we believe an independent chairperson can more effectively lead the Board in objectively evaluating the performance of management, including the CEO, and guide the Board through appropriate governance processes. The Board periodically reviews the Company’s leadership structure and may modify the structure as it deems appropriate given the specific circumstances then facing the Company.

   

 

Independence and

Leadership Structure

 

•  Separation of Chairperson and CEO roles

 

•  All non-employee directors are independent under applicable stock exchange and SEC rules

 

•  Independent Committee Chairs

 

•  Regularly scheduled executive sessions

 

The Board has determined that Mr. Dunbar, our current Chairman of the Board, is independent within the meaning of the director independence standards described above. Subject to his election, Mr. Dunbar is expected to serve as the Board’s Chairman for the 2019-2020 director term.

Executive Sessions

The Company’s independent directors meet in regularly scheduled executive sessions at which only independent directors are present.

 

       
 

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BOARD RISK OVERSIGHT AND RISK COMMITTEE

Oversight of the Company’s risk management is one of the Board’s key priorities and is carried out by the Board as a whole, as well as by each of its various committees. The committees routinely report back to the Board about key risk-related matters.

The Risk Committee of the Board focuses primarily on the Company’s risk management. The Risk Committee has primary oversight responsibility of the Company’s enterprise-wide risk management framework, including the oversight of risk management policies, and the monitoring of the Company’s risk profile. To allow cross-committee coordination of risk management, the Risk Committee is comprised of the chairpersons of each of the Board and the Audit, Compensation, Credit, Finance and Governance Committees. The Chief Risk Officer of the Company reports to both the Risk Committee and the Chief Executive Officer.

Each of the other Board committees is engaged in overseeing the Company’s risks as they relate to that committee’s respective areas of oversight. For example, the Audit Committee regularly oversees our risks relating to our accounting and financial reporting, as well as legal, information technology and cybersecurity and other security-related risks. The Compensation Committee engages in periodic risk assessments to review and evaluate risks in relation to our compensation programs. The Finance Committee actively oversees our capital and liquidity management and the associated risks (whether as an ongoing matter or as it relates specifically to a transaction, such as an equity or debt securities offering). Our Governance Committee oversees our compliance functions and routinely reviews our compliance risks. Moreover, the Credit Committee routinely oversees our management of credit risks. Each committee chairperson regularly reports to both the Risk Committee and the full Board on its risk oversight activities. In addition, the Board routinely engages in discussions with management about the Company’s risk profile.

Risk Appetite Statement

The Board oversees, and approves on at least an annual basis, the Company’s Risk Appetite Statement, which sets forth the tolerance levels with respect to the amount and types of key risks underlying the Company’s business. The Risk Committee is responsible for recommending changes to the Risk Appetite Statement for approval by the Board, as well as overseeing the Company’s compliance with the statement. Our other Board committees also share responsibility for the Risk Appetite Statement by overseeing and approving applicable risk metrics, including risk limits and thresholds, for each of their relevant areas of responsibility.

ANNUAL BOARD EVALUATIONS

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

OVERSIGHT OF CEO AND EXECUTIVES

Annual CEO Performance Evaluations

The independent members of the Board evaluate the performance of our CEO on an annual basis. Each year, the Governance Committee approves a process to solicit feedback from each individual independent director. Our Chairman of the Board, together with the chairpersons of the Governance and Compensation Committees, then lead discussions with the Board (without the CEO present) to evaluate the CEO’s performance, both generally as well as against predetermined annual goals.

CEO and Executive Succession Planning

As a matter of sound governance, the Board, as a whole or from time to time through a special committee, reviews and discusses the Company’s contingency or long-term plans for CEO and executive succession. These efforts involve seeking input from our current CEO and our Chief Human Resources Officer, as well as external advisors, as the Board deems appropriate.    Succession plans are reviewed and discussed by the Board on at least an annual basis.

 

       
 

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DIRECTOR MATTERS

Outside Directorships

We encourage all directors to carefully consider the number of other company boards of directors on which they serve, taking into account the time required for board attendance, conflicts of interests, participation, and effectiveness on these boards. Directors are asked to report all directorships, including advisory positions, accepted, as well as to notify the Governance Committee in advance of accepting any invitation to serve on another public company board.

Director Education and Orientation

The Board believes that ongoing director education is important for maintaining a current and effective Board. Accordingly, the Board encourages directors to be continually educated on matters pertinent to their respective service on the Board. It is the Board’s view that continuing education may be achieved in various ways as appropriate for each individual director, including, among other things, participation in formal education programs, conferences or seminars (the reasonable expenses of which are reimbursable by the Company) or through independent study or outside reading. In addition, from time to time, management may also bring education opportunities to the Board through management presentations, additional education materials or outside speakers.

New directors joining the Board also participate in a director orientation program, which involves a variety of informational sessions about our business, strategy and governance with Board members and members of executive and senior management. New directors typically join at least one Board committee upon joining the Board and are also invited to participate as a guest director at the meetings of the other Board committees.

MEETING ATTENDANCE

Board and Committee Meetings; Annual Meeting of Stockholders

 

The Board and its standing committees held a total of sixty-eight (68) meetings during 2018. The Board itself held ten (10) meetings during the year, including a two-day annual session focused on strategic planning. Each director attended in person or via teleconference 75% or more of the total number of meetings of the Board and the committees on which he or she served during 2018.

It is the Board’s policy that each director employs his or her best efforts to attend our annual stockholder meetings. Ten (10) of our incumbent Board members attended our 2018 Annual Meeting of Stockholders.

 

   
     2018 Meetings
   

    Board

  10
   

    Audit

  16
   

    Compensation

  11
   

    Credit

  5
   

    Finance

  16
   

    Governance

  5
   

    Risk

  5
 

 

BOARD REFRESHMENT; CONSIDERATION OF DIRECTOR NOMINEES

Board Refreshment

The Governance Committee primarily oversees the refreshment of Board membership. Board succession planning takes into account the importance of balancing the appropriate representation of experience and skills on the Board, with the benefits of Board refreshment. Identification of possible director candidates that possess the appropriate qualifications, desire to serve on a financial services public company board and to complement our existing Board can be a lengthy process. As such and as an ongoing matter, the Governance Committee discusses recruiting strategies and actively considers potential director candidates, whether or not there is an immediate vacancy on the Board to fill. It may from time to time use outside recruiters to assist with identifying potential candidates. The Governance Committee also reports to, and discusses director succession planning with, the full Board.

Board Diversity; Selection and Evaluation of Director Candidates

While the Board has not formally adopted a policy governing board diversity, it is focused on assembling a well-rounded, diverse body of directors. The Governance Committee, with the participation of the full Board, is primarily responsible for reviewing the composition of the Board and identifying candidates for membership on the Board in light of our ongoing requirements, the committee’s assessment of the Board’s performance and any input received from stockholders or other key constituencies. The Governance Committee makes determinations as to whether to recommend directors for re-election or director candidates for nomination to the Board based on such individual’s skills, character, judgment and business experience, as well as his or her ability to diversify and add to the Board’s existing strengths. Overall, the Governance Committee typically seeks an appropriate mix of individuals with diverse backgrounds and skills complementary to our business and strategic direction. Please see the description under “Director Qualifications” above for additional information.

 

       
 

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Stockholder Nominees and Proxy Access

The Governance Committee considers director candidates it identifies, but will also consider Board nominees proposed by stockholders. The Governance Committee has no formal policy with regard to stockholder nominees and considers all nominees on their merits, as discussed below. Any stockholder nominations proposed for consideration by the Governance Committee should include the nominee’s name and qualifications for Board membership, and should be addressed to: SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, Attn: Corporate Secretary, Facsimile: (408) 969-6500.

In addition, our Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting, provided such stockholders and the nominees satisfy the requirements specified in our Bylaws.

In February 2019, we amended our Bylaws to also permit eligible stockholders with a significant long-term interest in the Company to include their own director nominees in our annual proxy materials. Under the proxy access bylaw, a stockholder, or a group of up to twenty stockholders, owning three percent or more of the Company’s outstanding stock continuously for at least three years, may nominate and include in our annual proxy director nominees constituting the greater of two and twenty percent of the Board, so long as the stockholder(s) and the nominee(s) satisfy the requirements specified in our Bylaws.

For a description of the process for nominating directors in accordance with the Bylaws, including proxy access, please see “Stockholder Proposals and Director Nominations” below.

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 Chairperson of the Board and shared with the full Board as appropriate.

CODE OF ETHICS

We maintain a Code of Ethics for the Principal Executive Officer and Senior Financial Officers (the “Code of Ethics”) that applies to our CEO, Chief Financial Officer, Chief Accounting Officer and other senior members of the Finance staff. A copy of the Code of Ethics is available on our website at www.svb.com under “About Us—Investor Relations—Corporate Governance,” or can be obtained without charge by any person requesting it. To request a copy of our Code of Ethics, please contact: Corporate Secretary, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, or by telephone (408) 654-7400. We intend to disclose any waivers from, or changes to, our Code of Ethics by posting such information on our website. No waivers or substantive changes were made during fiscal year 2018.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

We are committed to excellence in our environmental, social and governance (“ESG”) practices, with our Governance Committee assuming primary oversight of our efforts in ESG matters. We both continually assess our practices to ensure we are meeting or exceeding industry and peer standards and continually seek opportunities to enhance the communities where we operate through corporate giving, employee volunteering, workforce development, participating in the political and public policy process, and environmental sustainability programs.

Our efforts have been recognized, including through our inclusion in: (i) the Bloomberg Gender-Equality Index, which qualifies companies based on their efforts to promote gender equality internally, engagement with their communities, and products and services, and (ii) the Goldman Sachs’ JUST US Large Cap Equity ETF, a fund focused on companies that demonstrate just business behavior recognized by JUST Capital. We have also been recognized as one of Forbes’ Global 2000: World’s Best Employers, Barron’s 100 Most Sustainable U.S. Companies 2019 and a Top Corporate Philanthropist by the Bay Area Business Journals.

We recognize that understanding our efforts to improve ESG practices is increasingly important to our stockholders, customers and associates and have included some highlights below to share our ongoing commitments in these areas.

 

 

Community Development Lending – As a financial institution focused on supporting innovation and entrepreneurship, we have contributed to community development by collaborating with local organizations to offer lending solutions for small businesses in our communities, including collaborating with the Opportunity Fund, which provides microloans, along with education and support, to underserved small business owners, and partnering with Grameen America, which provides microloans and education to low-income female entrepreneurs. In addition, we have contributed funds and provided lending support to affordable housing efforts, including those of the Housing Trust Silicon Valley and various developers of affordable housing for very-low and low-income families, seniors, veterans and formerly homeless individuals in the San Francisco Bay Area. We also finance affordable housing in the San Francisco Bay Area as part of our commitment to the Community Reinvestment Act.

 

       
 

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Education Initiatives – In 2017, we launched our Access to Innovation program, which seeks to increase access to the innovation economy for underserved and underrepresented individuals by providing career training and mentoring programs, including internships in information technology and related areas. Through our Access to Innovation program, we have partnered with Year Up, an organization providing intensive, one-year programs for young adults, and Career Ready, an organization in the UK that links schools and colleges with employers to help young people prepare for the working world. In addition to our Access to Innovation program, we host the SVB Trek, an annual four-day program inviting entrepreneurially minded college students from across the world to travel to Silicon Valley to meet top entrepreneurs, investors and technology industry leaders for talks, interviews and workshops to help launch promising young leaders to the next stage in their career development. We have also created a financial literacy online course for students, United and Counting, which has reached thousands of low- and moderate-income students in the San Francisco Bay Area, helping the next generation learn the principles of saving, banking, credit card use and other basic financial skills.

 

 

Giving Programs – We believe strongly in giving back to our communities, both by community service and monetary gifts. In 2018, we joined the Pledge 1% movement and committed to give 1% of our time to charitable causes. We have also partnered with TUGG (Technology Underwriting Greater Good) since 2011 to sponsor and expand participation in Tech Gives Back, the tech industry’s largest single day of community service spanning events across the country. Since 2004, we have partnered with Best Buddies International, an organization dedicated to building community with those with intellectual and developmental disabilities, raising funds through active events across the country and hiring members of the Best Buddies jobs program at SVB.

 

 

Diversity and Inclusion – As recognized by our inclusion in the Bloomberg Gender Equality Index, we have focused on fostering diversity and promoting inclusion at the company and beyond. We have accomplished this through corporate-wide initiatives, including hosting trainings and workshops on unconscious bias, sponsoring leading conferences focused on professional development for women, and serving as founding partner and global sponsor to theBoardlist, a resource designed to help recruit women for corporate board positions. In 2018, we joined Paradigm for Parity, a coalition of business leaders seeking to achieve corporate gender parity by 2030, and helped launch All Raise, a movement to double the percentage of women in venture capital partner roles over the next decade and grow funding for female founders to 25% in the next five years, as a founding partner and sponsor. Our UK branch has also promoted diversity in the innovation sector by sponsoring Backstage Capital’s accelerator program, a program that supports underrepresented founders throughout the world, and sponsored Diversity VC, a group of UK venture capitalists that focus on helping change the ratio at both venture capital firms and the companies they invest in, and is a member of Stonewall, an organization that helps employers make LGBTQ employees feel included at work.

 

 

Political Activities – Our corporate responsibility includes participating in the political and public policy process, specifically in areas that impact the innovation economy and the banking industry, as well as our clients, stockholders, employees, communities, and business. It is important that we engage with legislators and policymakers, where appropriate, or support initiatives to advocate constructively for the long term interests of SVB and our key constituents. Our political activities are subject to the oversight of our Governance Committee, who recognize the importance of appropriate governance and risk management of our corporate political activities, and reviews our activities for alignment with SVB’s business, strategy, reputation and mission, as well as compliance with applicable laws and regulations. Political contributions are made primarily through a federal political action committee. Political contributions utilizing corporate funds are limited and subject to restrictions and disclosure pursuant to our policies.

 

 

Environmental Sustainability – As recognized by our inclusion in Barron’s list of 100 Most Sustainable U.S. Companies 2019, we have also invested in environmental sustainability both by implementing energy efficiencies internally that have significantly reduced carbon emissions and promoting sustainable practices in certain of our workplaces and by supporting companies that are developing energy and resource efficiency solutions. For example, our headquarters in Santa Clara has sustainable food sourcing, reduces waste by using compostable materials and gives back to the community through a food donation program. In addition, our Salt Lake City, Utah office utilizes carpets made of 100 percent recycled materials, while our San Francisco office incorporates bio-walls that actively reduce indoor air pollution. In addition, we support sustainability by financing companies that are developing energy and resource efficiency solutions, including Crop Enhancement, which is providing environmentally-friendly biodegradable crop protectants, and OhmConnect, whose software encourages consumers to reduce electricity consumption and find cleaner sources.

For further information regarding our ESG practices, please see our website under “About Us—Living Our Values.”

 

       
 

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  BOARD COMMITTEES

 

 

We believe our Board has created a sound committee structure designed to help the Board carry out its responsibilities in an effective and efficient manner. While the Board may form from time to time ad hoc or other special purpose committees, there are six (6) core standing Board committees: Audit, Compensation, Credit, Finance, Governance and Risk.

COMMITTEE INDEPENDENCE AND AUDIT COMMITTEE FINANCIAL EXPERTS

The Board has determined that each of the current members of the Audit Committee, Compensation Committee, Credit Committee, Governance Committee and Risk Committee are “independent” within the meaning of applicable SEC rules, NASDAQ director independence standards and other regulatory requirements, to the extent applicable.

In addition, the Board has determined that each of Messrs. Robinson and Dunbar and Ms. Jabal are “audit committee financial experts,” as defined under SEC rules, and possess “financial sophistication” as defined under the rules of NASDAQ.    

COMMITTEE GOVERNANCE

Committee Charters

Each committee is governed by a charter that is approved by the Board, which sets forth each committee’s purpose and responsibilities. The Board reviews the committees’ charters, and each committee reviews its own charter, on at least an annual basis, to assess the charters’ content and sufficiency, with final approval of any proposed changes required by the full Board. The charters of each committee are available on our website, www.svb.com under “About Us—Investor Relations—Corporate Governance.”

The charters provide that each committee have adequate resources and authority to discharge its responsibilities, including appropriate funding for the retention of external consultants or advisers, as the committee deems necessary or appropriate.

Annual Committee Evaluations

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

COMMITTEE CHAIRPERSONS/MEMBERSHIP, RESPONSIBILITIES AND MEETINGS

All chairpersons of our six standing committees are independent and appointed annually by the Board of Directors. Each chairperson presides over committee meetings; oversees meeting agendas; serves as liaison between the committee members and the Board, as well as between committee members and management; and works actively and closely with executive and senior management on all committee matters, as appropriate.

Each committee meets regularly, at least on a quarterly basis. The committees, typically through their committee chairpersons, routinely report their actions to, and discuss their recommendations with, the full Board. In addition, certain committees periodically hold extended meetings dedicated to discussing key strategic matters or other business items that are relevant or subject to the committee’s oversight responsibilities on a more in-depth basis.

 

       
 

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The names of the members (chairpersons’ names in bold) and highlights of some of the key oversight responsibilities of the Board Committees are set forth below:

Audit CommitteeJohn Robinson, Roger Dunbar, Kim Jabal and Mary Miller

 

 

Quality and integrity of our financial statements, including internal controls over financial reporting.

 

 

Independent auditor of the Company, including its qualification, independence, engagement, compensation and performance.

 

 

Internal audit function of the Company, as well as other key areas including information technology, security (including cybersecurity), litigation and regulatory enforcement matters.

Compensation CommitteeGaren Staglin, John Clendening, Jeff Maggioncalda and John Robinson

 

 

Overall compensation strategies, plans, policies and programs.

 

 

Executive and director compensation approval.

 

 

Compensation risk management, including annual compensation-related risk assessments.

Credit CommitteeKate Mitchell, John Clendening, Jeff Maggioncalda and John Robinson

 

 

Credit and lending strategies, objectives and risks, primarily of the Bank.

 

 

Credit risk management, including reviewing internal credit policies and establishing portfolio limits.

 

 

Quality and performance of the credit portfolio.

Finance CommitteeJoel Friedman, Eric Benhamou, Roger Dunbar and Mary Miller

 

 

Financial strategies, objectives and risks relating to capital and liquidity management, investments, derivative activities, and funds management.

 

 

Annual budget of the Company, and recommendation to the Board for approval.

 

 

Compliance with certain applicable financial regulatory requirements, including capital adequacy/planning.

 

 

Material corporate development matters that may result in a significant financial impact.

Governance CommitteeEric Benhamou, Roger Dunbar, Joel Friedman, Kate Mitchell and Garen Staglin

 

 

Corporate governance practices, including our Corporate Governance Guidelines.

 

 

Annual performance evaluation processes of our Board and its committees and the CEO.

 

 

Identification and nomination of director candidates.

 

 

Regulatory compliance function of the Company, including financial crimes risk management.

Risk CommitteeRoger Dunbar, Eric Benhamou, Joel Friedman, Kate Mitchell, John Robinson and Garen Staglin

 

 

Enterprise-wide risk management policies of the Company.

 

 

Operation of our enterprise-wide risk management framework.

 

 

Risk Appetite Statement of the Company, including recommendations to the Board regarding any changes.

 

 

Overall risk profile of the Company.

 

       
 

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AUDIT COMMITTEE REPORT

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.

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. All members of the Audit Committee are “independent” as defined by NASDAQ and the requirements of the Exchange Act and meet the applicable heightened independence criteria under SEC rules. In addition, Messrs. Robinson and Dunbar and Ms. Jabal meet the “audit committee financial expert” requirement as defined in Regulation S-K under the Exchange Act, and possess “financial sophistication” as defined under the rules of NASDAQ.

Responsibilities of the Audit Committee

The primary responsibility of the Audit Committee is to act on behalf of the Board in fulfilling the Board’s responsibility with respect to overseeing our accounting and reporting practices, the quality and integrity of our financial statements and reports and our internal control over financial reporting. The committee is responsible for the appointment (or reappointment) and the compensation of our independent registered public accounting firm, as well as for the review of the qualifications, independence and performance of the registered public accounting firm engaged as our independent auditors. Specifically, in reappointing KPMG LLP as the Company’s independent registered public accounting firm for 2019, the Audit Committee considered, among other factors: KPMG LLP’s performance on prior audits; the quality, efficiency and cost of KPMG LLP’s services; KPMG LLP’s knowledge of the Company’s business and the banking industry; and overall relationship with the Audit Committee and management. (See “Proposal No. 5 — Ratification of Appointment of Independent Registered Public Accounting Firm—Principal Audit Fees and Services” for more information about the Audit Committee’s oversight of KPMG LLP’s audit and permissible non-audit fees.)

In addition, the Audit Committee oversees our Internal Audit function, as well as other management functions including information technology and security (including cybersecurity). To the extent applicable, the committee also oversees the Company’s material litigation matters, regulatory enforcement actions, and other legal proceedings.

The Audit Committee meets regularly in executive session with our independent auditor and our Head of Internal Audit (both separately and together), as appropriate.

Responsibilities of Management, Independent Auditor and Internal Audit

Management has the primary responsibility over the Company’s financial statements and the reporting process, as well as our internal controls. Our independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion on the conformity of our audited financial statements with U.S. generally accepted accounting principles, as well as an opinion on the effectiveness of our internal control over financial reporting in accordance with the requirements promulgated by the Public Company Accounting Oversight Board (the “PCAOB”). KPMG LLP has served as our independent auditor since 1994.

Our Head of Internal Audit reports directly to the Audit Committee (and administratively to the CEO). Under his direction, our Internal Audit function is responsible for preparing an annual audit plan and conducting internal audits intended to evaluate the Company’s internal control structure and compliance with applicable regulatory requirements.

Financial Reporting for 2018

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, 2018, which it made using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control — Integrated Framework (2013).” The committee also has reviewed and discussed with KPMG LLP its review and report on our internal control over financial reporting.

Moreover, the Audit Committee has reviewed and discussed with management and the independent auditors the audited consolidated financial statements as of and for the year ended December 31, 2018. The Audit Committee discussed with the independent auditor the matters required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees. In addition, the Audit Committee received from the independent auditors the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, including Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditor the auditor’s independence from us and our management.

 

       
 

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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, 2018, for filing with the SEC.

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

AUDIT COMMITTEE

 

John Robinson

(Chair)

  Roger Dunbar   Kim Jabal    Mary Miller

 

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 ended December 31, 2018 and this Proxy Statement.

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

COMPENSATION COMMITTEE

 

Garen Staglin

(Chair)

  John Clendening   Jeff Maggioncalda    John Robinson

 

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  COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

 

During 2018, the Compensation Committee performed all executive compensation-related functions of the Board, except for the approval of CEO compensation, which was approved by the independent members of the Board based on the Compensation Committee’s recommendation. See discussion above under “Board Committees—Committee Chairpersons/Membership, Responsibilities and Meetings” for additional information on the Compensation Committee. Mr. Becker does not participate in any of the Board or Compensation Committee discussions related to the evaluation of his performance or the recommendation or determination of his compensation. See descriptions of related transactions between us and each of the members of the Compensation Committee, if any, under “Certain Relationships and Related Transactions” below.

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

 

       
 

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  COMPENSATION FOR DIRECTORS

 

 

OVERVIEW

Our compensation for our non-employee directors is designed to be competitive with other financial institutions that are similar in size, complexities or business models. In addition, our director compensation is designed to be tied to business performance and stockholder returns, and to align director and stockholder interests through director ownership of the Company’s stock. The Compensation Committee oversees and approves our director compensation. In doing so, the Compensation Committee reports to and, as appropriate, consults with, the full Board on all relevant matters. Our CEO, the only employee director on the Board, does not receive any payment for his services as a director.

2018 Director Compensation Highlights

In May 2018, the Compensation Committee reviewed the director compensation structure for the 2018-2019 director term and made certain changes to better align with its peer and S&P 500 index company practices and pay levels. Those changes included:

 

 

Elimination of Committee Meeting Fees – replaced committee meeting fees with annual committee member retainer fees (Board meeting fees were previously eliminated in 2017), as described in the Schedule of Director Fees below;

 

 

Retainer Adjustments – adjusted each director’s annual equity and cash retainer awards as follows:

 

  ¡   

Equity Award Value (had not changed in over 10 years) - increased from $100,000 to $125,000 (except Board Chair); and

 

  ¡   

Cash Retainer - increased from $60,000 to $70,000.

 

 

Equity Award Calculation Methodology – to align with the methodology for determining executives’ equity grants, the determination of the number of shares to be granted to directors based on their equity award value was changed to be based on the 30-day average stock price from date of grant, instead of the grant date stock price.

2018 director compensation reflected not only the adjustments in retainer amounts, but also: (i) partial-year payments of committee meeting fees (under the prior compensation framework applicable to the 2017-2018 director term) and payment of committee member retainer fees for the full 2018-2019 director term; and (ii) the impact of the actual value of equity granted due to the volatility of our stock price, which resulted in a 30-day average stock price of $254.00 (as compared to the grant date closing stock price of $305.46). No further material changes are expected for the 2019-2020 director term.

Compensation also reflects compensation for each director’s memberships for their various Board committee assignments. The Director’s Compensation Table below sets forth the current committee membership assignments, as well as the amounts earned or paid to each non-employee member of our Board of Directors during the year ended December 31, 2018.

 

    Board Committee Membership                     

Name

 

 

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Fees Earned or
Paid in Cash  ($)

 

    

Stock Awards
(1)($)

 

    

Total ($)

 

 

 

Roger F. Dunbar (Board Chair)

  X       X   X   C              247,500                240,397                487,897  

Eric A. Benhamou

        X   C   X      122,000        150,286        272,286  

David M. Clapper(2)

                 13,500        -        13,500  

John S. Clendening

    X   X            87,674        150,286        237,960  

Joel P. Friedman

        C   X   X      125,000        150,286        275,286  

Kimberly A. Jabal

  X                95,000        150,286        245,286  

Lata Krishnan(2)

                 6,500        -        6,500  

Jeffrey N. Maggioncalda

    X   X            98,250        150,286        248,536  

Mary J. Miller

  X       X          117,500        150,286        267,786  

Kate D. Mitchell

      C     X   X      117,250        150,286        267,536  

John F. Robinson

  C   X   X       X      161,750        150,286        312,036  

Garen K. Staglin

    C       X   X      124,250        150,286        274,536  

 

C – denotes Committee Chairperson

(1)

Values indicated for annual director equity awards reflect the fair value of restricted stock units based on the grant date closing stock price of $305.46, rather than the equity award calculation methodology, at the time of grant for the 2018-2019 director term.

(2)

Retired from the Board of Directors in April 2018 after 2017-2018 director term.

 

       
 

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Elements of Director Compensation

 

Compensation for our non-employee directors
reflects a combination of cash (annual retainer fees
and committee retainer fees) and equity (annual
restricted stock unit awards), as outlined in the
Schedule of Director Fees to the right. The
chairpersons of the Board and each committee are
also entitled to annual chairperson fees.

 

Additionally, directors are 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.

 

 

Schedule of Director Fees

(Effective May 2018)

 

  Annual Director Retainer Fee   $70,000
  Annual Chairperson Fee  

$90,000, Board

$20,000, Audit Committee

$15,000, Compensation, Finance and Risk Committees

$12,000, Credit and Governance Committees

  Annual Committee Member Fees  

$25,000, Audit Committee

$12,000, Compensation and Finance Committees

$8,000, Credit, Governance and Risk Committees

  Annual Equity Retainer Award  

Grant of restricted stock units subject to annual vesting with a total value of $200,000 and $125,000 for the Board Chair and each of the other non-employee directors, respectively. See “Equity Award Calculation Methodology” above for more information.

 

Director Equity Compensation; Deferral Election

Our annual equity retainer awards are typically granted to directors in the form of restricted stock units. The awards are approved by the Compensation Committee and are granted shortly after the Company’s annual meeting of stockholders. The awards vest in full upon the completion of the annual director term on the date of the next annual meeting. For 2018, the Board Chair and each other director were each granted 787 and 492 shares, respectively, of our Common Stock on May 1, 2018. As noted above, the number of shares granted was based on the 30-day average stock price of $254.00.

Non-employee directors may elect an irrevocable deferral of the settlement of restricted stock unit awards until the earliest of: (i) a specific future settlement date that meets the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (ii) separation from service, (iii) the date of a change in control, (iv) death or (v) the date of disability. Ms. Mitchell and Mr. Staglin have elected to defer the settlement of their 2018 equity grants.

Equity Plan Limits Applicable to Directors

Equity grants to directors are subject to the terms of our 2006 Equity Incentive Plan, as amended and restated, including the following limitations (as provided under the plan):

 

 

No non-employee director may be granted, in any fiscal year, awards covering shares having an initial value greater than $500,000.

 

 

Annual director grants may become fully vested no earlier than the last day of the director’s then current annual term of service, subject to certain limited exceptions as provided under the plan.

Determination of Director Compensation

Each year, the Compensation Committee, together with its independent compensation consultant, conducts a comprehensive review of director compensation, taking into consideration our overall compensation philosophy, as well as competitive compensation data from the Company’s Peer Group for the applicable year and other relevant and comparable market data and trends. The committee reviews, on at least an annual basis, each of the various pay components, the form and amount of payment, as well as the cash/equity compensation mix. Based on such review and any recommendations from its independent compensation consultant, the Compensation Committee may make changes to director compensation to the extent it deems appropriate.

DIRECTOR EQUITY OWNERSHIP GUIDELINES

Under the current equity ownership guidelines for our non-employee directors, each non-employee member of the Board of Directors is expected to hold, within five years of becoming a director, shares of our Common Stock that have a minimum value equivalent to 600% of his or her annual retainer fee. The Compensation Committee is responsible for setting and periodically reviewing the equity ownership guidelines. Equity ownership requirements for directors are established based upon a competitive review and subsequent recommendations by the committee’s independent compensation consultant. The Governance Committee is responsible for overseeing director compliance with these guideline and reviews directors’ holdings on a quarterly basis. Any exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.

As of December 31, 2018, all non-employee directors had attained the applicable ownership requirements or otherwise remained on target to meet such requirements within the established compliance time frame.    

 

       
 

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  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

 

RELATED PARTY TRANSACTIONS POLICY

Our policy on related party transactions (“Related Party Policy”) governs transactions involving us and certain related persons that are required to be disclosed under Item 404 of SEC Regulation S-K. We regularly monitor our business dealings and those of our directors and executive officers, as appropriate, to determine whether any such dealings would constitute a related party transaction under the Related Party Policy. Generally, under the policy, any transaction, arrangement or relationship will be considered an interested transaction subject to the review or approval of the Audit Committee if: (i) we are a participant in the transaction; (ii) the aggregate transaction amount involved will or may be expected to exceed $120,000 in any calendar year; and (iii) a related person or party has or will have a direct or indirect material interest in the transaction. The following persons are considered “Related Parties” under the Related Party Policy: (i) any director or executive officer of the Company; (ii) any nominee for director of the Company; (iii) any holder of more than 5% of our Common Stock; and (iv) any immediate family member of any of the above.

We have implemented a framework to help identify potential related party transactions, which may include, from time to time, loan transactions by the Company or the Bank, investment transactions, compensation arrangements, or other business transactions involving us or our subsidiaries. Under this framework, we have processes in place that are designed to identify, review and escalate, as appropriate, proposed transactions involving a potential Related Party. Employees are also expected to escalate any transaction involving potential conflicts of interests pursuant to our Code of Conduct.

The Audit Committee has primary responsibility for reviewing these transactions, as well as certain related party loan transactions as described below, for potential conflicts of interest and approving them (or denying approval, as the case may be). Under the Related Party Policy, the Audit Committee’s approval may be granted in advance, ratified or based on certain standing approvals previously authorized by resolution. The Audit Committee may delegate its approval authority under the Related Party Policy to the committee chairperson. Additionally, the Governance Committee takes into consideration related party transactions involving our directors as part of its annual director independence review.

INSIDER LOAN POLICY

We also have in place a policy that permits the Bank to make loans (“Insider Loans”) to directors, executive officers and principal stockholders of the Bank or its affiliates and the related interests of those Insiders (“Insiders”), pursuant to the applicable requirements of Regulation O of the Federal Reserve Act (“Regulation O”). Insider Loans qualify for an exemption from Section 402 of the Sarbanes-Oxley Act of 2002, as they are made by the Bank and subject to Regulation O.

Pursuant to Regulation O, our Insider Loan policy authorizes the Bank to make Insider Loans if such Insider Loans: (i) are approved in advance by a majority of the Board of Directors of the Bank, if the aggregate amount of all outstanding extensions of credit to the Insider and to all related interests of the Insider exceeds $500,000; (ii) are extended under substantially the same terms and conditions and rates as those prevailing at the time of the Insider Loan for comparable transactions with non-Insider Bank clients; and (iii) do not have more than a normal risk of failure of repayment to the Bank or other unfavorable features. The Insider whose credit extension is subject to Board approval may not participate either directly or indirectly in the voting to approve such extension of credit.

RELATED PARTY TRANSACTIONS

Ordinary Course Loan Transactions

Except as described below, during 2018, the Bank made loans to Related Parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of 10% or more of the equity securities of such companies, that were (i) in the ordinary course of business, (ii) on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and (iii) not involving more than the normal risk of collectability or present other unfavorable features.

Employee Matters

SVB maintains a series of employee-funded investment funds known as Qualified Investors Funds (“QIFs”), which invest employees’ own capital in certain funds, including certain SVB Capital funds. We pass on the cost of external expenses to the QIF participants and do not charge a management fee. Participating employees must meet certain eligibility qualifications pursuant to applicable regulatory requirements. Of our executive officers, Messrs. Beck, Becker, Cadieux, China, Cox, Descheneaux, Dreyer and Zuckert and Ms. Draper have each made commitments to QIFs in aggregate commitment amounts ranging from $50,000 to $1,025,000 depending on the number of QIF funds they participate in.

 

       
 

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Vendor Arrangements

Cachematrix, a cash management platform provider for the Bank’s Cash Sweep Program, is controlled by BlackRock, Inc., which, together with its affiliates, is a greater than 5% owner of our outstanding voting securities. In 2018, we paid fees totaling approximately $670 thousand to Cachematrix. Additionally, we offer certain BlackRock investment funds, among other third party investment funds, under our Cash Sweep Program. In connection with offering BlackRock funds in our Cash Sweep Program, we earned approximately $16.8 million in fee sharing and related revenue for 2018. Client investments in the Cash Sweep Program are initiated and directed by clients themselves.

In addition, we have engaged The Vanguard Group, which, together with its affiliates, is a greater than 5% owner of our outstanding securities, as the record-keeper and trustee of our 401(k) and Employee Stock Ownership Plan, as well as the record-keeper of our Deferred Compensation Plan. We paid The Vanguard Group approximately $254 thousand in fees relating to these services rendered in 2018.

 

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  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 2018 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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PROPOSAL NO. 2 – APPROVAL OF THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE CUMULATIVE VOTING FOR DIRECTOR ELECTIONS

 

 

        The Board of Directors Recommends a Vote “FOR” the approval of our Amended and Restated Certificate of Incorporation

PROPOSAL FOR APPROVAL

We are asking our stockholders to approve the Company’s Amended and Restated Certificate of Incorporation to eliminate cumulative voting in director elections. The Board has approved the amendment, subject to approval from our stockholders at the Annual Meeting.    

Summary of Amendment and Background

The Fifth Article of our Certificate of Incorporation currently requires cumulative voting in director elections if any stockholder requests it. Cumulative voting enables a stockholder to concentrate his or her voting power by allocating to one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares entitled to vote held by such stockholder, or to distribute those votes among two or more nominees using the same principle. As a result, a stockholder or group of stockholders holding a relatively small number of shares may be able to elect one or more directors by cumulating votes, even if a majority of stockholders oppose their election. Under Delaware law, stockholders do not have the right to vote their shares cumulatively in any election of directors unless a company’s certificate of incorporation provides otherwise.

The amendment would eliminate cumulative voting in elections of directors by deleting the relevant provision in the Fifth Article. A copy of the proposed Amended and Restated Certificate of Incorporation, as amended and restated (the “Amended and Restated Certificate of Incorporation”), is included as Appendix A to this Proxy Statement, marked with strike-outs to show the relevant deletions. If the Amended and Restated Certificate of Incorporation is approved by our stockholders, all director elections would be conducted using a standard voting method in which stockholders may cast only one vote per share per nominee, and directors would be elected using a majority voting standard, as described below.

Reasons for Amendment

The Board has determined that it is in the best interests of the Company and its stockholders to eliminate cumulative voting in all director elections for the following reasons:

 

 

Cumulative Voting is Not Standard Practice. After joining the S&P 500, the Governance Committee conducted a review of the Company’s governance practices under its organizational documents against market trends and practices of other S&P 500 companies, determining that cumulative voting is not standard market practice. Extremely few S&P 500 companies currently provide for cumulative voting, and none of our peer group of 18 other companies has cumulative voting.

 

 

Incompatible with Majority Voting. In February 2019 our Board amended our Bylaws to, among other changes aimed at enhancing our corporate governance practices, provide for a majority voting standard in uncontested director elections. Under a majority voting standard, nominees need to receive more “for” votes than “against” votes to be elected. Cumulative voting is incompatible with a majority voting standard and requires the use of a plurality voting standard. Cumulative voting is also fundamentally at odds with the objective of majority voting because it allows a relatively small number of stockholders to elect directors who may not be supported by a majority of the Company’s stockholder base. A voting method in which each share entitles its holder to one vote “for” or “against” a nominee promotes a democratic election of directors for all stockholders.

 

 

Directors Should Represent All Stockholders. Cumulative voting increases the chances that certain directors may be focused on the special interests of those minority stockholders who cumulated votes to elect them, which could impair the Board’s ability to operate effectively. The Company and the Board believe that each director should represent the interests of all stockholders rather than the interests of a minority stockholder or a special constituency.

 

 

Part of Our Corporate Governance Enhancements. As part of our continuous efforts to review and improve the Company’s corporate governance practices, in February 2019, the Board adopted amendments to our Bylaws. In addition to adopting a majority voting standard in director elections as described above, the amendments provide enhancements to the rights of our stockholders, including giving stockholders a proxy access right and eliminating supermajority requirements for our stockholders to amend certain sections of the Bylaws. The Board believes that the removal of cumulative voting, which brings the Company in line with its peers and the vast majority of other large U.S. public companies, is appropriate and complementary with these recent changes.

 

       
 

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In light of the recent enhancements enacted by the Company to protect stockholder rights and the adverse consequences cumulative voting could produce, the Board believes this proposal to eliminate cumulative voting is in the best interests of the Company and our stockholders. If stockholders approve this Proposal No. 2, the Company’s Amended and Restated Certificate of Incorporation will become effective upon its filing with the Delaware Secretary of State, which we anticipate doing as soon as practicable following stockholder approval.

Our Board of Directors recommends that stockholders vote “FOR” the approval of the Company’s Amended and Restated Certificate of Incorporation to eliminate cumulative voting for director elections.

 

       
 

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  EXECUTIVE OFFICERS AND COMPENSATION

 

 

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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

   51    President and Chief Executive Officer

Dan J. Beck

   46    Chief Financial Officer

Marc C. Cadieux

   52    Chief Credit Officer

John D. China

   53    Head of Technology Banking

Philip C. Cox*

   52    Head EMEA and President of the UK Branch

Michael R. Descheneaux

   51    President, Silicon Valley Bank

Michelle A. Draper

   51    Chief Marketing Officer

Michael L. Dreyer*

   55    Chief Operations Officer

Christopher D. Edmonds-Waters

   56    Chief Human Resources Officer

Laura H. Izurieta

   58    Chief Risk Officer

Michael S. Zuckert

   60    General Counsel

 

  *

Mr. Dreyer will retire as Chief Operations Officer of the Company in April 2019; thereafter, Mr. Cox will succeed Mr. Dreyer as the new Chief Operations Officer.

EXECUTIVE BIOGRAPHIES

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

 

 

Dan J. Beck, Chief Financial Officer, joined us in June 2017 and is responsible for our finance, treasury and accounting functions. Before joining the Company in 2017, Mr. Beck served as the Chief Financial Officer for Bank of the West, a subsidiary of BNP Paribas Group, from June 2015 to May 2017 and as Executive Vice President and Corporate Controller from June 2008 to June 2015. Prior to his tenure at Bank of the West, Mr. Beck held various finance and accounting roles with Wells Fargo Bank, the Federal Home Loan Mortgage Corporation, E*TRADE Financial Corporation and Deloitte & Touche LLP. Mr. Beck holds a Bachelor’s degree in Accounting from Virginia Commonwealth University and a Bachelor’s degree in Biology from Virginia Polytechnic Institute and State University.

 

 

Marc C. Cadieux, Chief Credit Officer, oversees our credit administration function. Mr. Cadieux joined us in 1992 and has held a variety of positions of increasing responsibility in the areas of credit administration, business development and relationship management during his tenure with the Company. Mr. Cadieux was previously the Division Risk Manager for SVB’s Eastern Division, where he was responsible for overseeing our commercial lending activities in the United States, Canada, the United Kingdom and Israel. Mr. Cadieux was appointed as Assistant Chief Credit Officer in 2009 and was later appointed as Chief Credit Officer in 2013. Prior to joining the Company, Mr. Cadieux held several credit-related positions with Pacific Western Bank and Bank of New England. Mr. Cadieux holds a Bachelor’s degree in Economics from Colby College.

 

 

 

       
 

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John D. China, Head of Technology Banking, oversees the growth of our technology banking business. Mr. China joined us in 1996 as Senior Relationship Manager and has since held a variety of positions with the Company, including Head of Venture Capital Management and Head of Venture Capital and Private Equity division. Mr. China was appointed as the Head of Relationship Management in 2010, Head of Relationship Banking in 2014, and Head of Technology Banking in 2017. Mr. China is a member of the boards of DEMO; H2 Global, a digital industry leadership network; BUILD, a nonprofit organization dedicated to educating under-resourced youth through entrepreneurship, and Meals on Wheels San Francisco; and the advisory boards of Alpha Club, a networking community of founders, CEOs and technology influencers, and York Butter Factory, an Australian coworking and startup incubator space. Mr. China holds a Bachelor’s degree in Industrial Engineering from Stanford University.

 

 

Philip C. Cox, Head of Europe, Middle East and Africa; President of the UK Branch, is focused on the international development of our business and is responsible for our UK branch. Mr. Cox joined us in 2009 as Head of UK, Europe & Israel, where he was responsible for the overall strategic direction of the Company in the UK, Europe and Israel, as well as the establishment of our UK Branch banking business, prior to his appointment to his current role in 2012. Prior to joining the Company, Mr. Cox was Head of Commercial Banking at the Bank of Scotland in London, a division of Lloyds Banking Group (2008-2009) and the Chief Executive Officer of Torex Retail PLC (2005-2008). Prior to his tenure at Torex Retail PLC, Mr. Cox spent approximately 23 years with NatWest/RBS Group in a variety of positions, including Managing Director of Transport and Infrastructure Finance, Regional Managing Director of the North of England Region and the same position for the South West and Wales business. Mr. Cox is a member of the Chartered Institute of Bankers (UK) and the Association of Corporate Treasurers (UK).

 

 

Michael R. Descheneaux, President, Silicon Valley Bank, oversees the Company’s global commercial bank, private bank and funds management businesses, as well as credit administration. Mr. Descheneaux joined us in 2006 as Managing Director of Accounting and Financial Reporting, and was appointed as Chief Financial Officer in 2007, where he was responsible for all our finance, treasury, accounting and legal functions, as well as our funds management business until he assumed his current role in 2017. Prior to joining the Company, Mr. Descheneaux was a managing director of Navigant Consulting (2004-2006) and held various leadership positions with Arthur Andersen (1995-2002). Mr. Descheneaux holds a Bachelor’s degree in Business Administration from Texas A&M University. He is also a certified public accountant, as well as a member of the Texas State Board of Public Accountancy.

 

 

Michelle A. Draper, Chief Marketing Officer, is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us in 2013, Ms. Draper held various senior-level marketing positions at Charles Schwab & Co. from 1992-2013, including as Senior Vice President of Institutional Services Marketing, where she oversaw advertising, brand management and other key marketing strategies. Prior to that, Ms. Draper also served as a director of Investor Services Segment Marketing and Vice President of Advisor Services Marketing Programs, developing marketing strategies for both the retail and institutional sides of the Charles Schwab business. Ms. Draper holds a Bachelor’s degree in Journalism from California Polytechnic State University – San Luis Obispo, as well as Series 7 General Securities Representative and Series 24 General Securities Principal licenses.

 

 

Michael L. Dreyer, Chief Operations Officer, is responsible for the Company’s global technology and infrastructure functions. Prior to joining us in 2015, Mr. Dreyer served as the Chief Operations Officer and President of the Americas for Monitise, where he was responsible for the design, build and operations of Monitise’s technology globally, as well as its Americas business (2014-2015). Prior to that, Mr. Dreyer was the Chief Information Officer at Visa Inc., where he was responsible for company’s systems and technology platforms (1998-2014). Mr. Dreyer has also held various senior level positions at American Express, Prime Financial, Inc., the Federal Deposit Insurance Corporation (FDIC) and Bank of America. He has been on the board of directors of Finisar Corporation since 2015, and F5 Networks Inc., since 2012, and joined the Board of Deep Labs as an independent director in 2018. Mr. Dreyer holds a Bachelor’s degree in Psychology and a Master’s degree in Business Administration from Washington State University.

 

 

Christopher D. Edmonds-Waters, Chief Human Resources Officer, oversees our human resources function, which includes our compensation, global mobility, recruiting and learning and development functions. Mr. Edmonds-Waters joined us in 2003 as Director of Organization Effectiveness and was appointed to his current role in 2007. Prior to joining the Company, Mr. Edmonds-Waters held various senior-level human resources positions at Charles Schwab & Co. from 1996–2003 and began his career at Macy’s California where he held various merchandising as well human resources roles. Mr. Edmonds-Waters holds a Bachelor’s degree in Intercultural Communications from Arizona State University and a Master’s degree in Human Resources and Organization Development from the University of San Francisco.

 

 

 

       
 

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Laura H. Izurieta, Chief Risk Officer, is responsible for leading our enterprise-wide risk management, corporate compliance and regulatory functions. From 2000 until joining the Company in 2016, Ms. Izurieta held various roles of increasing responsibility at Capital One, including Vice President of Corporate Reputation and Governance, Vice President of Capital One Home Loans and Vice President of Information Technology, and most recently Executive Vice President and Chief Risk Officer, Retail and Direct Bank. Prior to her tenure at Capital One, Ms. Izurieta also held positions at Freddie Mac and Bank of America. Ms. Izurieta holds a Bachelor’s degree in Business Administration from Towson University and a Master’s degree in Applied Behavioral Science from John Hopkins School of Business.

 

 

Michael S. Zuckert, General Counsel, is responsible for all our legal and government affairs matters. Prior to joining the Company in 2014, he served in a wide range of legal positions within the financial services industry. Most recently, he served as Deputy General Counsel of Citigroup (2009-2014), where he served as general counsel for the company’s non-core assets business, Citi Holdings, and focused on mergers and acquisitions. Prior to his time at Citigroup, Mr. Zuckert held various senior-level positions at Morgan Stanley & Co. Inc. and was Vice President and General Counsel at TheStreet.com, Inc., an online financial news provider. Mr. Zuckert is a director of the Law Foundation of Silicon Valley and the Global EIR Coalition, a member of the leadership council of Tech:NYC and a member of the Investment Committee of Waterman Ventures as well as an advisory member of the Board of the Silicon Valley Directors’ Exchange. He holds Bachelor’s degrees in History and Law and Society from Brown University and a Juris Doctor from New York University School of Law.

 

 

 

       
 

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  PROPOSAL NO. 3 – ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

 

 

The Board of Directors Recommends a Vote “FOR” the Approval of the Compensation of our Named Executive Officers, as Disclosed in this Proxy Statement

Our advisory vote on executive compensation (otherwise known as “Say on Pay”) is held annually. This vote provides our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our Named Executive Officers (“NEOs”) as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement, including the accompanying compensation tables and narrative discussion therein. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement.

We ask our stockholders to indicate their support for our executive compensation program for our NEOs and vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Because your vote is advisory, it will not be binding upon the Board or the Compensation Committee and may not be construed as overruling any decision by the Board or the Compensation Committee. However, the Board and Compensation Committee value the opinion of our stakeholders and will take into consideration the outcome of this advisory vote when considering future executive compensation arrangements.

Stockholders are encouraged to carefully review the following “Compensation Discussion and Analysis” and “Compensation for Named Executive Officers” sections for a detailed discussion of our executive compensation program for our NEOs.

Approval, on an advisory basis, of our executive compensation requires the affirmative vote of the holders of a majority of the Common Stock represented and entitled to vote at the Annual Meeting.

Our Board of Directors recommends that stockholders vote “FOR” the approval of the Company’s executive compensation.

 

       
 

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  COMPENSATION DISCUSSION AND ANALYSIS

 

 

This Compensation Discussion and Analysis (“CD&A”) discusses our 2018 executive compensation program, primarily as it relates to our “named executive officers” (“NEOs”).

 

 

  CD&A EXECUTIVE SUMMARY

 

       

 

Message from the Compensation Committee...

 

We, as the Compensation Committee of the Board of Directors (“Compensation Committee”), have the delegated responsibility of primary oversight over the design and execution of the Company’s executive compensation program. In designing our 2018 executive compensation program, we stayed consistent with our core compensation strategy and philosophy. We continued to focus on:

        
        
   

Committee Members

 

Garen Staglin, Chair

John Clendening

Jeff Maggioncalda

John Robinson

 

    

•  Performance – Setting challenging performance metrics aligned with our strategic business and growth objectives, as well as stockholder interests;

•  Risk – Establishing a compensation framework that incents consistent and sustainable long-term performance, but without encouraging undue risk-taking; and

•  Talent – Setting appropriate compensation to attract and retain the executive talent critical to our business.

 

While we did not make any material changes to our executive compensation program for 2018, we continued to make enhancements to evolve our program, as appropriate. Specific highlights of our 2018 program include:

 

¡  Adopted an executive recoupment (or clawback) policy

¡  Introduced a new PRSU performance metric to drive our strategic business objectives

¡  Continued focus on competitive pay-for-performance framework

¡  Balanced pay mix with an emphasis on long-term, performance-based pay

 

Overall, we were pleased to see another year of strong performance delivered by the Company. Our pay decisions reflected that performance, taking into account the Company’s pace of ongoing growth and increasing global business and regulatory complexities. In 2019, we will continue our focus and commitment to setting a compensation framework to effectively drive the Company’s sustainable, long-term global growth and strategy.

 

    

 

 Executive Compensation Elements At-A-Glance

 

CASH

 

 

EQUITY

 

              

 

 

 Base Salary 

 

 

 

 

ICP

 

 

 

 

PRSUs

 

 

 

 

Stock Options

 

 

 

 

RSUs

 

 

 

------------------------- Short-Term Emphasis ----------------

 

 

------------------------------------------------ Long-Term Emphasis --------------------------------------------------

 

 

Ongoing

 

 

 

 

1-Year

Performance Period

 

 

 

3-Year

Performance Period

 

 

 

4-Year

Vesting Period

 

 

 

Fixed

 

 

 

 

 

Performance-Based

 

 

 

 

 

 

 

Fixed^

 

 

 

 

 

----------------------------------------------------------------------------- Applicable Performance Metrics*-------------------------------------------------------

 

 

                   ROE  

 

TSR

 Strategic Business Objectives 

 

 

 

 

Stock Price Appreciation^

 

 

  * 

ICP and PRSU performance are determined based on Compensation Committee judgment and where applicable, formulaically.

 
  ^ 

Any incremental value realized above the grant value of stock options and RSUs, as well as earned PRSUs, is based on stock price appreciation.

 

 

Glossary of CD&A Terms

 

   

2018 NEOs

 

DCP –  Deferred Compensation Plan

EPS –   Earnings Per Share

ERM – Enterprise-wide Risk Management

ICP –    Incentive Compensation Plan

NEO – Named Executive Officer

 

PRSU – Performance-Based

              Restricted Stock Unit

ROE –   Return on Average Equity

RSU –   Restricted Stock Unit

TSR –    Total Stockholder Return

   

Greg Becker, President and Chief Executive Officer

Dan Beck, Chief Financial Officer

Michael Descheneaux, President, Silicon Valley Bank

John China, Head of Technology Banking

Michael Dreyer, Chief Operations Officer

 

       
 

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2018 CEO COMPENSATION HIGHLIGHTS

2018 Company Performance

The Compensation Committee considers a variety of factors on a formulaic, as well as discretionary, basis, in funding and determining actual CEO and executive compensation. As further detailed in the Proxy Summary Information section at the beginning of this Proxy Statement, the Company delivered outstanding performance in 2018.

In particular, EPS and total net income nearly doubled, reflecting increases of 97% and 99%, respectively, compared to the prior year of 2017. The Company’s annual ROE for 2018 was 20.57%, reflecting a 66% year-over-year increase.

 

 

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Total

Stockholder

Return

 

Ranked #2 among applicable peer group

 

(for purposes of determining the 2016-2018 PRSU awards)

2018 CEO Pay Summary

 

Recognizing the Company’s strong multi-year performance over the recent years (including 2018), solid core business fundamentals, and overall growth, the Board awarded Mr. Becker total compensation of $7.6 million for 2018, which represented a year-over-year increase of approximately 25%. Based on SEC-reported total compensation (as set forth in the Summary Compensation Table), primary factors driving the increase include:

 

•  Target Pay - increases in target ICP and long-term equity compensation of approximately 10% each; and

 

•  Actual Pay – above-target ICP award, commensurate with the Company’s outstanding above-target performance.

  

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CEO Target Pay Design - Continued Emphasis on Long-Term, Performance-Based Pay

 

2018 CEO Target Pay Mix   Short-Term/Long-Term CEO Target Pay   Fixed/Performance-Based CEO Target Pay
  (Compared to 2018 Peer Group*)
 

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  LOGO   LOGO
84% Total Pay At-Risk  

Short-Term Pay:

Base Salary, ICP 

 

Long-Term Pay:

PRSUs, RSUs, Stock Options

 

Fixed Pay:            

Base Salary, RSUs

 

Performance-Based Pay: 

ICP, PRSUs, Stock Options

 

  *

Based on 2017 peer proxy compensation data.



 

       
 

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EXECUTIVE COMPENSATION AND PRACTICES - SUMMARY

Highlights of our executive compensation program and practices are set forth below: (details are further discussed in this CD&A section)

 

    Compensation Oversight and Governance

 

    

Focus on Stockholder Interests

 

 

  Independent Board* oversight of CEO compensation (based on the Compensation Committee’s recommendations)

 

  Independent Compensation Committee oversight of non-CEO executive compensation

 

  Independent compensation consultant to the Compensation Committee

 

  Active Compensation Committee engagement (held 11 meetings in 2018)

 

    

 

  Say on Pay vote on an annual basis (Say on Pay approval rate of 96.6% of votes cast in 2018)

 

  Robust executive equity ownership guidelines

 

  Continuing stockholder outreach to solicit feedback and to discuss our business and practices (throughout the year)

 

  Performance metrics focused on stockholder return (including TSR and ROE)

    Compensation Risk Management

 

    

Other Executive Compensation Practices

 

 

  Recoupment (or clawback) policy applicable to executives

 

  Compensation risk management (including annual risk assessment, and internal audit and ERM involvement)

 

  Minimums/maximums applied to incentive awards (minimum performance thresholds and maximum funding limits)

 

  No hedging or pledging (executives not permitted to hedge ownership of our securities through selling puts or shorts, or to pledge our securities to secure personal obligations)

    

 

  Competitive benchmarking against peers (both compensation and performance)

 

  Double trigger change in control severance (under our executive Change in Control Plan)

 

  No 280G excise tax gross-ups (under our executive Change in Control Plan)

 

  No individual employment agreements for executives (unless required by law)

 

  No executive perquisite/benefit programs

 

  No special executive retirement benefits; no pension or SERP plans

                              

 

* Independent members acting as a committee, without CEO participation

 

 

EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES

 

The key compensation philosophy and objectives of our executive compensation program and practices are as follows:

 

•  Aligning the interests of our stockholders, our Company and employees;

 

•  Linking pay to Company and individual performance through appropriate performance metrics and consideration of market and business environment dynamics;

 

•  Maintaining an appropriate pay mix, with an emphasis on performance-based pay and long-term incentive compensation;

 

•  Paying competitively based on external market standards, while considering internal parity;

 

•  Recruiting and maintaining a cohesive, top-talent executive management team; and

 

•  Focusing on strong governance and risk management practices.

 

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

 

 

       
 

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COMPENSATION GOVERNANCE AND RISK MANAGEMENT

Role of Compensation Committee; Compensation Committee Meetings

All members of the Compensation Committee are “independent” under applicable NASDAQ rules. The Compensation Committee has primary oversight of 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. More specifically, the committee determines compensation strategy, chooses and sets applicable performance metrics, selects forms of compensation, determines the overall pay mix, sets target pay levels, and approves final executive compensation awards. In the case of the CEO, however, the Compensation Committee makes recommendations about CEO pay decisions for approval by the independent members of the full Board, and in the case of the Chief Risk Officer (“CRO”), the Risk Committee also approves CRO pay decisions. The committee reviews and approves the compensation of all other non-CEO executive and Section 16 officers. In carrying out its oversight responsibilities, the committee regularly reports to the Board on the actions it has taken, as well as confers with the Board on compensation matters, as necessary. The Compensation Committee also makes recommendations for all other compensation-related matters that require full Board approval. (In this CD&A section, where we note any compensation decisions made by the Compensation Committee, the Board decides as it pertains to the CEO.)

The Compensation Committee is also focused on monitoring performance against set goals and approving funding accruals, as well as other aspects of the compensation program, including, among other things, peer group review, compensation risk review, and monitoring market and governance trends impacting compensation.

The Compensation Committee meets on a regular basis, and routinely meets in executive session without management present. During 2018, the committee held 11 meetings.

Role of the Independent Board Members

Subject to the recommendation of the Compensation Committee, all of the independent directors of the Board (all Board members except the CEO, acting as a committee) review and approve the compensation for the CEO. Such review and approval are conducted during the executive sessions, where neither the CEO nor any other member of management is present.

Role of Chief Executive Officer

At the Compensation Committee’s request, our CEO will attend portions of the Compensation Committee’s meetings and executive sessions to discuss the Company’s performance and compensation-related matters, as well as his input and recommendations for compensation for the executive officers of the Company (excluding himself). He does not participate in any deliberations relating to his own compensation. The committee considers the CEO’s input and recommendations, but retains full discretion to approve all non-CEO executive compensation.

Role of Compensation Committee Consultant

The Compensation Committee 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 Compensation Committee in its sole discretion selects the consultant and determines its compensation and the scope of its responsibilities.

In 2018, Pay Governance assisted the Compensation Committee with: advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on director and executive compensation levels and practices, including review and recommendations on director, CEO and other executive compensation and evaluation of CEO pay and Company performance; assessment of realizable pay and performance; advice on the Company’s peer group; guidance on the design of our compensation plans and policies, including recoupment policy and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Compensation Committee’s annual review of potential risks associated with our compensation programs; recommendations regarding our 2006 Equity Incentive Plan; and periodic reports to the Compensation Committee on market and industry compensation trends and regulatory developments.

Pay Governance provides services only to the Compensation Committee, and not to the Company, and did not provide any additional services to the committee outside of executive and director compensation consulting during 2018. In addition, the Compensation Committee does not believe there were any potential conflicts of interest that arose from any work performed by Pay Governance during 2018.

 

       
 

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Compensation Risk Management

A primary area of focus of the Compensation Committee is compensation risk management. The committee, together with its compensation consultant, conducts annual risk assessments of our compensation program, which include process, tone and culture. Our compensation risk management processes also includes involvement from our Internal Audit and ERM functions. Based on these various steps, we do not believe that our compensation program creates risks that are reasonably likely to have a material adverse effect on the Company.

Moreover, our compensation programs and risks are routinely discussed at the Board level, both with and without the CEO present. In particular, the chairperson of our Compensation Committee reports to and discusses compensation risk issues with the full Board and the Risk Committee. The chairperson of the Compensation Committee and one other member of the committee (who also serves as the chairperson of the Audit Committee) are members of the Risk Committee of the Board of Directors. Additionally, certain compensation matters are also reviewed with the Audit Committee, specifically as it relates to exclusions under our ICP funding.

ANNUAL SAY ON PAY; FOCUS ON STOCKHOLDERS

Say on Pay Annual Frequency

We submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual basis. Our Board of Directors values the opinions of our stockholders and believes an annual advisory vote allows our stockholders to provide us with their input on our executive compensation program.

In 2018, over 96.6% of the votes cast approved our 2017 executive compensation program (as described in our 2018 proxy statement). In light of the strong voting support and the extent of other feedback we have solicited from our stockholders, the Compensation Committee remained consistent with our executive compensation philosophy, policies or overall program, and did not make any material changes. Nevertheless, we continue to carry out our executive compensation program based on our key philosophy and objectives as described above. The Compensation Committee will continue to consider changes to the program on an ongoing basis, as appropriate, in light of evolving factors such as our corporate strategy, the business environment and competition for talent, as well as stockholder feedback.

Stockholder Focus and Outreach

We are focused on the interests of our stockholders. Our two primary performance metrics selected for our performance-based incentive awards that measure stockholder return are: (i) TSR (for our executives’ PRSUs); and (ii) ROE (for our annual incentive compensation awards). We measure performance against our own goals and/or relative to our peer performance. Additionally, we conduct active investor outreach activities throughout the year to engage with our stockholders. Additionally, as part of our annual proxy statement preparation process, we routinely and proactively reach out to our key stockholders to invite their feedback, including their view about our executive compensation program. We did not receive any feedback from stockholders in 2018 that prompted any material changes to our compensation program.

COMPENSATION DECISION CONSIDERATIONS

As further discussed below, in making compensation decisions, the Compensation Committee considers a variety of factors and data, including peer benchmarking and other industry data, performance considerations, and application of committee discretion, if and as necessary.

Competitive Benchmarking Against Peers

For 2018, the Compensation Committee benchmarked and compared our compensation and performance with our peer companies, in a manner consistent with prior years.    Our 2018 Peer Group companies remained the same as 2017 and are listed below.

The Compensation Committee, with its compensation consultant and management, reviews on at least an annual basis, the composition of the peer group. In determining the composition, the Compensation Committee considers various factors and characteristics including, among other things, industry, business model, complexity of the business, geography, market capitalization, asset size, assets under management, number of employees, performance on financial and market-based measures, and extent they compete with us for talent.

It is important to note that in determining executive compensation, the Compensation Committee does not solely rely on comparative data from the 2018 Peer Group. Such comparative data provides helpful market information about our peer companies, but the Compensation Committee does not target any specific positioning or percentile, nor does it use a formulaic

 

       
 

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approach, in determining executive pay levels. The Compensation Committee also utilizes other resources, including published compensation surveys (from Towers Watson and McLagan) and other available proxy and compensation data. All such comparative peer data and supplemental resources are considered, along with the Company’s pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and the Compensation Committee does not place any particular weighting on any one factor.

 

2018 Peer Group

Associated Banc-Corp

BOK Financial Corporation

Comerica Incorporated

Commerce Bancshares, Inc.

Cullen/Frost Bankers, Inc.

E*TRADE Financial Corporation

 

 

  

East West Bancorp, Inc.

First Republic Bancorp

Huntington Bancshares

KeyCorp

M&T Bank Corporation

New York Community Bancorp Inc.

 

 

  

Northern Trust Corporation

Regions Financial Corporation

Signature Bank

Umpqua Holdings Corporation

Webster Financial Corp.

Zions Bancorporation

 

 

Performance

One of the primary areas of focus of the Compensation Committee is on the design of performance-based compensation, including selecting and setting appropriate performance metrics and measuring actual performance against those metrics. The committee devotes much of their meeting time throughout the year on monitoring performance of current year performance-based awards, as well as designing and planning performance metrics for the following and future years. In designing performance metrics, the committee reviews market and peer practices, as well as seeks the input of the CEO to take into account key areas of strategic and business focus. As further discussed in this CD&A section, specific performance metrics for annual and long-term incentive awards include ROE, TSR, selected fee income (for long-term performance-based awards granted prior to 2018), and relative performance against peers. For 2018, the Compensation Committee introduced an additional PRSU performance metric to drive our strategic business objectives, focusing on improving our future operating leverage through transforming key business processes and implementation of scalable solutions.

Individual Performance

In making compensation decisions or recommendations for individual executives, the Compensation Committee takes into consideration the performance reviews conducted for each executive officer, which includes the executive’s self-review of the prior year’s performance. The committee meets and discusses with the CEO his assessment of the performance of the other executive officers, based on such self-reviews and the CEO’s own evaluation. The independent members of the Board meet and discuss, without the CEO present, their collective performance assessment of the CEO, taking into consideration his self-review and the individual evaluation provided by each Board member.

Executives are evaluated based on individual performance and overall contributions, in addition to Company performance against the broader corporate performance metrics discussed above. Specifically, individual evaluation criteria may include, among other things: skills and expertise, demonstrated leadership, development of strategy, span of responsibility, achievement of corporate and personal goals, risk management, talent management, regulatory compliance, and alignment with the Company’s core values. The overall performance assessment by the Compensation Committee (or the Board) of each individual executive is also taken into consideration in setting his or her total target compensation for the following year.

Committee Decisions

The performance metrics utilized for executive compensation, where applicable, are largely used for funding determination purposes. Subject to that funding, the determination of actual awards to executive officers are decided by the Compensation Committee (or in the case of the CEO, the independent members of the Board), based on its discretion. We believe that discretion is a vital part of our compensation decision processes, as it allows the Compensation Committee (or in the case of the CEO, the Board) to better link executive pay to actual performance. Discretion, both positive and negative, allows directors to make appropriate pay decisions based on their informed business judgment, particularly in circumstances where there may be other relevant performance factors or unforeseen circumstances that should be considered beyond the actual performance metrics. With that said, discretion is carefully considered and judiciously applied. For example, the Compensation Committee (or the Board) exercises discretionary judgment in determining items to be excluded from ICP funding (see “Annual Cash Incentives (ICP) – ICP Funding Methodology” below), which in 2018, resulted in the reduction of overall ICP funding. Or, despite having the discretion to adjust awards, the Compensation Committee has (since inception of the 3-year design) followed the formulaic funding design in determining the performance-based vesting of the PRSU awards. The Compensation Committee continues to believe that a balanced utilization of performance metrics and committee discretion leads to appropriately calibrated compensation for executives.

 

       
 

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ELEMENTS OF EXECUTIVE COMPENSATION

In designing compensation for our executives, the Compensation Committee (and in the case of the CEO, the Board) reviews each executive’s total target compensation package holistically, balancing long-term and short-term pay, cash and equity compensation, and performance- and non-performance-based pay, and taking into account market competitiveness and internal parity. The primary elements of executive compensation are discussed below:

Base Salary

 

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

 

 

NEO

 

  

 

Year-Over-
Year Increase (%)

 

    

 

    2018 Annual    

Base Salary ($)

 

 
 

 

Greg Becker

  

 

 

 

—         

 

 

  

 

 

 

  950,000     

 

 

 

 

Dan Beck

  

 

 

 

4.8         

 

 

  

 

 

 

550,000     

 

 

 

 

Michael Descheneaux

  

 

 

 

3.6         

 

 

  

 

 

 

725,000     

 

 

 

 

John China

  

 

 

 

6.7         

 

 

  

 

 

 

560,000     

 

 

 

 

Michael Dreyer

 

  

 

 

 

5.0         

 

 

  

 

 

 

 

525,000     

 

 

 

 

       

In 2018, each NEO, except the CEO, received merit increase adjustments to their base salaries based on individual performance, salary market positioning relative to peers, and internal parity, as applicable.

Annual Cash Incentives (ICP)

 

     

 

(% of Annual Salary)

 

  

Our NEOs, as well as other executives and employees, participate
in the Company’s ICP, our annual cash incentive plan that rewards
based on individual and Company performance. Each executive
participant is assigned an incentive target, stated as a percentage
of the individual’s annual base salary. Executive incentive targets
are set by the Compensation Committee based on the objective
of balancing overall total target pay mix with an appropriate
allocation of at-risk compensation, as well as comparative peer
and market compensation data for their respective positions.

 

In 2018, the Compensation Committee adjusted Mr. Becker’s
incentive target based on market compensation data. No changes
were made to the other NEOs’ incentive targets.

 

  NEO

 

  

 

Year-Over-
Year Increase (%)

 

  

 

    2018 Annual    

ICP Target (%)

 

 

  Greg Becker

  

 

10.0

  

 

110

 

  Dan Beck

  

 

     —

  

 

  70

 

  Michael Descheneaux

  

 

     —

  

 

  90

 

  John China

 

  

 

     —

 

  

 

  80

 

  Michael Dreyer

 

 

        —

 

 

     80

 

 

ICP Funding Methodology

Each year, the Compensation Committee establishes metric(s) that it will use to measure Company performance for ICP funding purposes, on an absolute basis, as well as relative to peers. For 2018, the Compensation Committee stayed consistent with its methodology for funding the ICP, utilizing ROE as the primary performance metric on an absolute and relative basis. The committee believes that it continues to be an appropriate indicator of financial performance that drives stockholder value.

 

  ROE Performance Against Annual Budget (Two-Thirds (2/3) of Pool) – Two-thirds (2/3) of the total incentive pool is funded based on the Company’s ROE performance (as adjusted for the exclusions discussed below) relative to our Board-approved annual target (budget) ROE, as illustrated by the graph below to the left. There is a funding maximum of 200% of target (for achievement of 150% or over of our target ROE). Additionally, the funding slope applicable to the sub-pool for executives is steeper below target than the general broad-based pool, where there is no formulaic funding for executives if the Company meets less than 90% of its annual target ROE (compared to 80% of the target for employees).

  

 

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Exclusions/Adjustments

 

The Compensation Committee retains discretion to determine the extent to which the Company met its budgeted ROE performance target. It may adjust for out of the ordinary or non-recurring items, or other items that are subject to factors beyond management’s control, such as investment securities gains and losses or interest rate changes. Adjustments are determined by the Compensation Committee, in coordination with the Audit Committee, who assesses the adjustments based on impact to the Company’s financials. Similar to prior years, for 2018, excluded items included the impact from: (i) certain changes in Federal Reserve interest rates (not otherwise included in the annual budget); (ii) certain gains or losses from the Company’s investment securities (including non-marketable securities, warrant securities and available-for-sale securities), largely because performance of such securities are subject to market performance beyond the Company’s control; (iii) certain tax-related adjustments; and (iv) other items relating to one-time events or out-of-period adjustments. The net impact of all 2018 exclusions resulted in a lower adjusted ROE that reduced the overall funding of the 2018 ICP pool.

   

2018 exclusions

determined by the

Compensation

Committee

resulted in a

reduction

in overall ICP

funding

 

  ROE Performance Against 2018 Peer Group (One-Third (1/3) of Pool) – The other one-third (1/3) of the total incentive pool is funded based on the Company’s actual (unadjusted) ROE performance of 20.57% relative to the 2018 Peer Group, as illustrated in the graph to the right. There is no payout if our performance falls in the bottom five positions, and a payout maximum if our performance falls in the top four positions. The extent of funding earned is subject to straight-line interpolation based on ROE performance between the fifth and fourteenth ranked companies.

 

While the Compensation Committee retains discretion to fund a portion of the ICP pool if performance thresholds are not achieved, this discretion was not exercised in 2018.

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2018 ICP Pool Funding

For 2018, the Compensation Committee approved the funding of the total ICP pool at 167% of total target, based on:

 

 

Budget Performance – the Company achieved annual ROE (as adjusted) of 19.71% against the annual target ROE of 15.73%, resulting in the funding of 151% for 2/3 of the total pool; and

 

Relative Peer Performance – the Company ranked in the first position against our 2018 Peer Group, resulting in the maximum funding of 200% for 1/3 of the pool.

 

2018 NEO ICP Awards

 

The Compensation Committee (or in the case of the CEO, the independent members of the Board) determines actual annual cash incentive awards for the NEOs based upon the individual’s target incentive level, the Company’s performance, and the NEO’s individual performance. ICP awards for NEOs may be at, above, or below the target incentive. For 2018, each NEO was awarded the ICP amounts set forth in the table to the right.

 

    

 

 

 

  NEO

 

  

 

 

 

 

  2018 ICP Award  

 

 

($)   

 

 

  Greg Becker

 

    

 

1,745,000  

 

 

 

 

  Dan Beck

 

    

 

700,000  

 

 

 

 

  Michael Descheneaux

 

    

 

1,100,000  

 

 

 

 

  John China

 

    

 

750,000  

 

 

 

 

  Michael Dreyer

 

 

    

 

 

675,000  

 

 

 

 

 

In determining 2018 awards, the independent members of the Board (with respect to Mr. Becker) and the Compensation Committee (with respect to the other NEOs) considered a variety of factors that they believed to be relevant, including: (i) the overall strong performance of the Company and the respective areas of oversight of each NEO in 2018, and (ii) each NEO’s contributions to our business and financial results, execution of our 2018 corporate initiatives, corporate risk management, and broader leadership within the organization. Based on strong Company and individual performance, the NEOs received ICP awards between 161% to 182% of their applicable ICP targets, most of whom were at or close to the ICP funding percentage of 167%.

 

       
 

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Specifically for Mr. Becker, key factors considered included:

 

 

Strong financial performance and growth in 2018:

 

   Annual EPS increase by 97%

   Annual net income increase by 99%

   Annual ROE increase by 66%

   Average total asset growth by 14%

   Average total loan balances (net of unearned income) increase by 21%

 

  

 Average total client funds (deposits and total client investment funds) balance growth by 31%

   Core fee income growth of 36%1

   Continued stable credit performance (net loan charge-offs were 0.22% of total gross loans)

   Strong overall capital and liquidity management

 

 

Strong execution of the Company’s strategy

 

Continued focus on the growth of the core banking business domestically and internationally, including the opening of our German branch and continued progress to open our Canada branch

 

Acquisition of Leerink Partners, a life science and healthcare investment banking firm

 

Strengthening of the corporate brand and steadfast focus on client satisfaction, including net promoter scores

 

Continued focus on risk management and regulatory compliance

 

Continued focus on employee engagement and diversity and inclusion initiatives

 

Ongoing development and succession planning of executive and non-executive leadership

Key factors considered by the Compensation Committee for the other NEOs, included: (i) for Mr. Beck, excellence in execution of overall financial management and outstanding leadership in the Leerink acquisition and key initiatives to improve our operating leverage; (ii) for Mr. Descheneaux, his exceptional leadership of our core banking business (including business growth, global expansion and strategic execution), as well as the expansion of the SVB Capital platform; (iii) for Mr. China, his effective leadership of our Technology Banking business, and continued focus on client relationships and strategic partnerships for the bank; and (iv) for Mr. Dreyer, his strong leadership in the continued strengthening of the Company’s operations, technology and infrastructure to enable scalable growth and to increase efficiencies.

Long-Term Equity Incentives

 

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Allocation of Total Target Equity Award

  

The Company believes that equity-based awards, particularly in combination with the Company’s equity ownership guidelines as discussed below, tie each of the NEOs’ compensation to the Company’s long-term financial performance and align the interests of the NEOs and our stockholders. The Compensation Committee typically makes equity awards to each NEO at the time the individual is hired or promoted, and annually thereafter. The size of the awards reflects the overall number of shares available to the Company under our equity incentive plan, the Compensation Committee’s determination of an appropriate annual equity burn rate (the percentage of total shares outstanding that the Company has issued during the year in the form of equity compensation), the NEO’s role and performance, and the market compensation data for the NEO’s external peers.

 

In 2018, the Compensation Committee continued to focus on long-term, performance-based equity compensation, keeping consistent with the equity mix from the prior year. The committee determined a target equity award total value for each NEO based on peer benchmarking comparisons, and granted a mix of 50% PRSUs, and 25% each of stock options and time-based vesting RSUs. For information about the actual grants made in 2018, see the “Grants of Plan-Based Awards” under “Compensation for Named Executive Officers.”

Stock Options and Restricted Stock Units (RSUs)

Stock options and RSUs are subject to annual vesting over a 4-year period. The stock options have a maximum term of 7 years. No performance-based criteria is associated with stock options and RSUs, as the increase in the value of these stock options, and the value of the RSUs, are inherently tied to the future performance of the our Common Stock. 2018 annual stock option and RSU grants were effective as of May 1, 2018.

 

1   

Core Fee Income is comprised of our foreign exchange fees, credit card fees, deposit service charges, lending related fees, client investment fees and letters of credit fees — each of which are components of our noninterest income. Please see a reconciliation of Core Fee Income, a non-GAAP financial measure to the most closely related GAAP financial measure on page 52 of our Annual Report on Form 10-K for the year ended December 31, 2018.

 

       
 

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Performance-based Restricted Stock Units (PRSUs)

PRSUs are earned based on the achievement of certain performance metrics, as determined by the Compensation Committee. These metrics typically measure the Company’s performance on an absolute basis, as well as relative to peers. After the end of the specified performance period, the committee will determine whether (and to what extent) the NEOs earned the PRSUs, subject to a maximum total payout of 150% of target award.

For 2018 and as further described below, the Compensation Committee applied two performance metrics for the PRSUs: (i) to TSR relative to peers (same as prior years), and (ii) certain strategic business objectives. The NEOs were granted, effective as of May 1, 2018, PRSUs that were subject to performance-based vesting over a 3-year period (from 2018 through 2020) based on the performance criteria described below. To the extent earned, these awards are subject to additional time-based vesting through January 29, 2021. 2018 represents the first year of a 3-year performance period, hence none of the PRSUs granted in 2018 have been earned yet. The performance metrics for the 2018 PRSUs are as follows:

 

  Relative TSR Against 2018 Peer Group (50% of Award). 50% of the PRSU award is funded at a maximum payout of 150% of target, and can become eligible to vest based on the Company’s TSR2 performance over a 3-year performance period as ranked against the 2018 Peer Group (“Relative TSR”). The committee selected Relative TSR as a key PRSU performance metric because it correlates directly with the Company’s stock price performance, which aligns with stockholder interests. No payout is made if the Company ranks in any of the bottom five positions.

 

    Other than limiting maximum payout to the top four positions (in lieu of top five positions as in the prior year) and adjusting the corresponding payout percentages, this performance metric was the same as the 2017-2019 PRSUs granted in 2017.

   TSR Ranking Against Peer Group (Three-Year Performance Period - 2018-2020)

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Strategic Business Objectives (50% of Award). The other 50% of the PRSU award is funded at a maximum payout of 150% of target and can become eligible to vest based on the Company’s achievement against certain strategic business objectives (“Strategic Business Objectives”), as determined by the Compensation Committee in its discretion. While the Compensation Committee may take into account other considerations, the committee will primarily focus on objectives to improve the Company’s future operating leverage through the transformation of key business processes and the implementation of scalable solutions. In assessing these objectives, the Compensation Committee will look to evaluate three key areas: (i) scalable growth – evaluating our underlying financial fundamentals relative to operating expense growth, which will be weighted 50%; (ii) client experience – evaluating continual improvement in overall client satisfaction around our products and services (including net promoter scores), which will be weighted 25%; and (iii) employee enablement – evaluating our efforts to enhance processes and tools to make it easier for employees to perform their job responsibilities, which will be weighted 25%. These multi-year efforts include initiatives to streamline our global client onboarding processes, enhance our data infrastructure (including digitization and governance), implement employee enablement tools, and build out our Digital Bank. At the end of the 3-year period, the Compensation Committee will grade performance against the various objectives in order to determine the level of achievement of the objectives. The Compensation Committee may consider other qualitative factors that could increase or decrease the actual payout amount relative to achievement of the performance objectives.

Previously Granted PRSU Awards for Performance Period Ended in 2018

In 2016, Messrs. Becker, Descheneaux and China were granted PRSU awards subject to performance over a 3-year performance period (2016-2018). (Messrs. Beck and Dreyer did not participate in this grant.) The 2016 PRSUs were subject to the following performance metrics: (i) 50% of the award was subject to the Company’s TSR performance relative to peers (similar to the 2018 PRSU awards), and (ii) 50% of the award was subject to the Company’s ROE (funding threshold) and foreign exchange and credit card fee income (“Selected Fee Income”) performance.

Upon completion of the 3-year performance period, the Compensation Committee (and in the case of the CEO, the Board) determined that: (i) the Company’s relative TSR performance ranked in the second position against the applicable 2016 peer

 

2 TSR is measured based on the average closing stock price for the last two months of the applicable performance period and the average closing stock price for the two months immediately preceding the start of the performance period, with dividends reinvested.

 

       
 

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group (15 companies), and (ii) the 5% minimum average annual ROE funding threshold was met, and the Company achieved 98%, 95%, and 109% of its Selected Fee Income target for 2016, 2017 and 2018, respectively. Consequently, the committee determined that 126% of the target PRSU awards were earned. The awards were also subject to a brief time-based vesting requirement, and were fully vested as of January 30, 2019. Messrs. Becker, Descheneaux and China each received 20,999, 8,128 and 5,080 shares, respectively, of our Common Stock upon vesting.

Other Equity Compensation for Executive

In 2018, Mr. Beck, our Chief Financial Officer, also received an additional incremental long-term equity incentive award of a target value of $500,000. Similar to the NEOs’ PRSUs described above, the additional award will be subject to performance-based vesting for the 2018-2020 performance period, as well as additional time-based vesting through January 29, 2021; however, the award will be earned solely based on the Strategic Business Objectives described above, as determined by the Compensation Committee in its sole discretion. While the achievement of the Strategic Business Objectives will broadly involve management efforts across the organization, including the executive leadership team, Mr. Beck is leading and principally responsible for driving and managing the overall Company-wide efforts.

EXECUTIVE BENEFITS AND OTHER EXECUTIVE COMPENSATION-RELATED MATTERS

Executive Benefits    

Employee Retirement Benefits

Our NEOs are eligible to participate in our SVB Financial Group 401(k) (“401(k) Plan”) and Employee Stock Ownership Plan (“ESOP”), our combined qualified retirement and profit sharing plan that is generally available to all of the Company’s U.S. employees. Our NEOs participate in the plan on the same terms as all other eligible employees. Other than our 401(k) Plan, we do not provide any pension, excess retirement or supplemental executive retirement (“SERP”) to our NEOs.

Under our 401(k) Plan, our U.S. employees, including our NEOs, may make voluntary pre-tax and/or traditional/Roth post-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 a profit sharing component. Under the ESOP, we may make discretionary annual contributions for U.S. employees, as determined by the Compensation Committee. ESOP contributions may be in the form of cash, Common Stock or a combination of both, and are subject to certain vesting conditions. Contributions are determined based on the Company’s performance and are not adjusted to reflect individual performance.

Similar to 2017, for 2018, the Compensation Committee established performance criteria based on the Company’s adjusted ROE against budget (same as the calculation of 2/3 of the total ICP pool) to fund the ESOP contribution, and set the funding level to 1.25% of eligible compensation based on target ROE performance. Despite a higher allowable maximum under the ESOP, the Compensation Committee has committed to a funding maximum of 5%. Based on the Company’s 2018 above-target ROE performance, the Compensation Committee approved a contribution of 1.89% of eligible compensation in cash (50%) and Common Stock (50%) for all eligible participants.

Deferred Compensation

We do not provide NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity 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 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. See “Compensation for Named Executive Officers—Non-Qualified Deferred Compensation” below.

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

 

       
 

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Health and Welfare Benefits/Time Away From Work

Our NEOs are eligible to participate in our standard health and welfare benefits program, which provides medical, dental, life, accident and disability coverage to all of our eligible U.S.-based employees. We do not provide executives with any health and welfare benefits that are not generally available to other Company employees. Additionally, under our “time away from work” policy, U.S. exempt employees, including our NEOs, do not accrue vacation benefits. Rather, such employees are expected to manage their time away from work, subject to the demands and needs of their jobs. Non-exempt U.S. employees and other non-U.S. employees continue to accrue vacation benefits formulaically.

Executive Termination Benefits

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

Perquisites

We do not have any executive perquisite programs. Other than our executive Change in Control Plan, we do not have any special executive programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are generally available to our employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan. From time to time and on a limited basis, we may provide individual benefits deemed to be perquisites, which we generally believe serve, or are related to, a reasonable business-related or employment purpose.

Stock Option and Other Equity Practices

Grant Practices for Executive Officers

The Compensation Committee approved all equity grants in 2018 made to executive officers of the Company, except that the independent members of the Board approved equity grants made to the Chief Executive Officer based on the Compensation Committee’s recommendation. Similar to prior years, 2018 annual equity compensation grants to executives were made effective during the second quarter of the year. Grants are typically made effective during an open trading window pursuant to our Insider Trading Policy, with limited exceptions. Actual equity grants are determined based on the equity compensation dollar value awarded to executives, divided by the 30-day average (from date of grant) stock price. The exercise price for stock option grants is equal to the closing market price on the grant’s effective date and time-based grants typically have an annual vesting period of 4 years, subject to continued employment or service. All 2018 grants to our NEOs were made in accordance with this practice.

For newly-hired executive officers, the Compensation Committee approves an equity grant amount prior to, or shortly after, the executive’s start of employment, and the effective grant date is typically set during an open trading window after they commence employment.

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 Chairman of our Board. The Equity Awards Committee may not make equity grants to executives. 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 and RSUs made by the Equity Awards Committee must be made (or become effective) on the first Monday of the month following approval or, where the first Monday is a Company-observed U.S. holiday, on the first Tuesday of such month. The Equity Awards Committee approves grants on a quarterly basis, and must approve all grants in writing on or before the date of grant, subject to the respective employee remaining an employee as of the date of grant. Finally, management updates the Compensation Committee regarding all grants made by the Equity Awards Committee on a regular basis. Any grant that does not meet the requirements established for the Equity Awards Committee must be made by the Board, the Compensation Committee or other authorized committee.

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

 

       
 

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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, our executive officers from pledging, or using as collateral, our securities to secure personal loans or other obligations.

Employment Agreements

Except for our at-will offer letters or as required by law, we do not have any individual employment agreements for our executives. None of our NEOs have an employment agreement.

Compensation Recovery Policy

In October 2018, our Compensation Committee adopted a recoupment (or clawback) policy, which is applicable to the Company’s executive and Section 16 officers. Under the policy, subject to the determination of the Board or (in the case of any non-CEO executive officer) the Compensation Committee, the Company may recover or adjust any cash or equity-based incentive compensation paid or payable to any such officer, including our NEOs, in the event of a material financial restatement or a material miscalculation of a financial metric used to determine the payment of a bonus or incentive award to such officer, to the extent permitted by applicable law.

Tax Considerations

Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), compensation paid to our covered executive officers (including our CEO) will not be deductible to the extent it exceeds $1,000,000. In 2018, the Compensation Committee considered the potential future effects of Section 162(m) when determining NEO compensation and the Compensation Committee is expected to consider the potential future effects of Section 162(m) when determining future NEO compensation.

Equity Ownership Guidelines for Executive Officers

 

The Company maintains stock ownership guidelines for the Company’s
executive officers, including the NEOs. These stock ownership guidelines
reflect the Board’s belief in the importance of aligning the economic
interests of stockholders and management. The Compensation
Committee is responsible for setting and periodically reviewing the
guidelines. Guidelines for each executive position are determined based
on factors including the executive role, scope of responsibilities, base
salary levels, Company stock price performance and market data. The
current equity ownership guidelines applicable to executive officers are
based on the value of the Company’s common stock as a percentage of
annual base salary, as set forth in the table on the right.

 

There were no changes to the guidelines in 2018, other than removing
the position of Chief Information Officer from the guidelines, as the
position is no longer an executive officer position.

 

All executive officers have 5 years from the date on which they become
an executive officer to attain the minimum level of ownership.

Executive Position

 

 

Stock Value as
Percentage of
    Annual Base Salary    

 

 

  Chief Executive Officer

 

 

600%

 

 

  President of Silicon Valley Bank

 

 

400%

 

 

  Chief Credit Officer

  Chief Financial Officer

  Chief Operations Officer

  Chief Risk Officer

  Head of EMEA/President UK Branch

  Head of Technology Banking

 

 

300%

 

 

  Chief Human Resources Officer

  Chief Marketing Officer

  General Counsel

 

 

 

200%

 

 

    

 

The Governance Committee monitors compliance with these guidelines and reviews executive equity holdings on a quarterly basis. In evaluating whether executives are meeting the ownership guidelines, the Governance Committee considers the following as shares owned: (1) shares actually held, (2) shares owned through investment in the Company’s stock fund in the SVB Financial Group 401(k) and Employee Stock Ownership Plan, and (3) earned but unvested awards of restricted stock awards and restricted stock units (subject to either time-based or performance-based vesting). Neither vested nor unvested stock options count towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.

As of December 31, 2018, all of our NEOs were in compliance with the applicable ownership guidelines or otherwise expected to achieve the requisite ownership levels within the designated 5 year time-frame.

 

       
 

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  COMPENSATION FOR NAMED EXECUTIVE OFFICERS

 

 

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2018, 2017 and 2016, respectively:

 

 Name and Principal Position     Year       Salary
      ($)      
    Bonus
  ($) (1)  
    Stock
Awards
    ($) (2)    
    Stock
Option
Awards
  ($) (2)  
    Non-Equity
Incentive Plan
Compensation
        ($) (3)        
    All Other
Compensation
        ($) (4)        
    Total
       ($)       
 

 

Greg Becker

 

 

 

 

2018

 

 

 

 

 

 

953,654

 

 

 

 

 

 

2,500

 

 

 

 

 

 

3,611,759

 

 

 

 

 

 

1,312,805

 

 

 

 

 

 

1,745,000

 

 

 

 

 

 

22,858

 

 

 

 

 

 

7,648,576

 

 

President & Chief Executive Officer

 

 

 

 

2017

 

 

 

 

 

 

945,673

 

 

 

 

 

 

 

 

 

 

 

 

2,774,296

 

 

 

 

 

 

926,248

 

 

 

 

 

 

1,435,000

 

 

 

 

 

 

25,494

 

 

 

 

 

 

6,106,711

 

 

 

 

 

 

2016

 

 

 

 

 

 

925,904

 

 

 

 

 

 

 

 

 

 

 

 

2,225,746

 

 

 

 

 

 

807,501

 

 

 

 

 

 

1,148,750

 

 

 

 

 

 

17,879

 

 

 

 

 

 

5,125,780

 

 

 

Dan Beck

 

 

 

 

2018

 

 

 

 

 

 

547,789

 

 

 

 

 

 

10,000

 

 

 

 

 

 

1,277,433

 

 

 

 

 

 

245,753

 

 

 

 

 

 

700,000

 

 

 

 

 

 

23,729

 

 

 

 

 

 

2,804,704

 

 

Chief Financial Officer

 

 

 

 

2017

 

 

 

 

 

 

302,885

 

 

 

 

 

 

300,000

 

 

 

 

 

 

749,654

 

 

 

 

 

 

161,829

 

 

 

 

 

 

325,000

 

 

 

 

 

 

4,938

 

 

 

 

 

 

1,844,306

 

 

 

Michael Descheneaux

 

 

 

 

2018

 

 

 

 

 

 

723,462

 

 

 

 

 

 

 

 

 

 

 

 

1,578,006

 

 

 

 

 

 

573,635

 

 

 

 

 

 

1,100,000

 

 

 

 

 

 

19,111

 

 

 

 

 

 

3,994,214

 

 

President of Silicon Valley Bank

 

 

 

 

2017

 

 

 

 

 

 

682,692

 

 

 

 

 

 

 

 

 

 

 

 

1,155,820

 

 

 

 

 

 

385,917

 

 

 

 

 

 

965,000

 

 

 

 

 

 

18,559

 

 

 

 

 

 

3,207,988

 

 

 

 

 

 

2016

 

 

 

 

 

 

602,308

 

 

 

 

 

 

 

 

 

 

 

 

861,541

 

 

 

 

 

 

312,566

 

 

 

 

 

 

625,000

 

 

 

 

 

 

53,977

 

 

 

 

 

 

2,455,392

 

 

 

John China

 

 

 

 

2018

 

 

 

 

 

 

556,096

 

 

 

 

 

 

 

 

 

 

 

 

901,718

 

 

 

 

 

 

327,776

 

 

 

 

 

 

750,000

 

 

 

 

 

 

22,430

 

 

 

 

 

 

2,558,020

 

 

Head of Technology Banking

 

 

 

 

2017

 

 

 

 

 

 

520,673

 

 

 

 

 

 

 

 

 

 

 

 

693,529

 

 

 

 

 

 

231,562

 

 

 

 

 

 

650,000

 

 

 

 

 

 

19,597

 

 

 

 

 

 

2,115,361

 

 

 

 

 

 

2016

 

 

 

 

 

 

498,385

 

 

 

 

 

 

 

 

 

 

 

 

538,395

 

 

 

 

 

 

195,346

 

 

 

 

 

 

525,000

 

 

 

 

 

 

19,424

 

 

 

 

 

 

1,776,550

 

 

 

Michael Dreyer

 

 

 

 

2018

 

 

 

 

 

 

522,692

 

 

 

 

 

 

 

 

 

 

 

 

766,400

 

 

 

 

 

 

278,583

 

 

 

 

 

 

675,000

 

 

 

 

 

 

19,433

 

 

 

 

 

 

2,262,108

 

 

Chief Operations Officer

 

 

 

 

2017

 

 

 

 

 

 

491,346

 

 

 

 

 

 

 

 

 

 

 

 

616,331

 

 

 

 

 

 

205,788

 

 

 

 

 

 

575,000

 

 

 

 

 

 

19,181

 

 

 

 

 

 

1,907,646

 

 

 

(1)     For Mr. Becker, the amount reflects the value of our standard cash gift card for employees reaching 25 years of service. For Mr. Beck, the 2018 amount reflects a cash bonus and the 2017 amount reflects a signing bonus paid following his hire in 2017.

(2)     Values indicated for equity awards reflect the fair value of grants made during the fiscal year. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation” in our audited financial statements included in our Annual Report on Form 10-K for the applicable year. The amounts disclosed under the “Stock Awards” column also include the fair value of grants of certain performance-based restricted stock unit awards reported based on achievement at target level. The aggregate maximum fair value of such awards, assuming the highest level of achievement of the performance conditions, is 150% of the target level. For details of 2018 grants, see “Grants of Plan-Based Awards” below.

(3)     Non-Equity Incentive Plan Compensation is comprised of ICP Payments for each executive.

(4)     The following table provides the amounts of other compensation, including perquisites, paid to, or on behalf of, our NEOs during 2018 included in the “All Other Compensation” column. Perquisites and other personal benefits are valued on the basis of the aggregate incremental cost to the Company.

 

  Greg
Becker
Dan
Beck
Michael
Descheneaux
John
China
Michael
Dreyer

Bonus Tax Reimbursement

$ 2,458   $ 5,286   $ –   $ –   $ –  

Imputed Income Tax Reimbursement (a)

  1,543     –     –     3,341     360  

ESOP

  5,198     5,198     5,198     5,198     5,198  

401(k) Match

  13,659     13,245     13,913     13,891     13,875  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$   22,858   $   23,729   $   19,111   $   22,430   $   19,433  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (a)

Amounts represent reimbursement payments of income taxes incurred by our NEOs on imputed income. For 2018, 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.

 

       
 

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GRANTS OF PLAN-BASED AWARDS

The following table sets forth all plan-based awards, including equity awards and non-equity incentive awards, made to our NEOs during the year ended December 31, 2018.

 

  Name   Grant Date  

Compensation

Committee or

Board

Approval Date

 

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards

(1)

    Estimated Future Payouts
Under Equity Incentive Plan
Awards (2)
   

All Other

Stock

Awards;

Number of

Shares of

Stock or

Units (3)

   

All Other

Option

Awards;

Number of

Securities

Underlying

Options

   

Exercise

or Base

Price of

Option

Awards
($)

   

Grant Date

Fair Value

of Stock

and Option

Awards (4)
($)

 
 

 

Threshold

($)

   

 

Target ($)

   

 

Maximum

($)

   

 

Threshold

(#)

   

 

Target

(#)

   

 

Maximum

(#)

 

  Greg Becker

  January 25, 2018   January 25, 2018           1,045,000                                                  
  May 1, 2018   April 26, 2018                       3,941       7,883       11,824                         2,407,941  
  May 1, 2018   April 26, 2018                                         3,941                   1,203,818  
  May 1, 2018   April 26, 2018                                               12,356       305.46       1,312,805  

  Dan Beck

  January 24, 2018   January 24, 2018           385,000                                                  
  May 1, 2018   April 25, 2018                       1,722       3,444       5,166                         1,052,004  
  May 1, 2018   April 25, 2018                                         738                   225,429  
  May 1, 2018   April 25, 2018                                               2,313       305.46       245,753  

  Michael Descheneaux

  January 31, 2018   January 31, 2018           652,500                                                  
  May 1, 2018   April 25, 2018                       1,722       3,444       5,166                         1,052,004  
  May 1, 2018   April 25, 2018                                         1,722                   526,002  
  May 1, 2018   April 25, 2018                                               5,399       305.46       573,635  

  John China

  January 24, 2018   January 24, 2018           448,000                                                  
  May 1, 2018   April 25, 2018                       984       1,968       2,952                         601,145  
  May 1, 2018   April 25, 2018                                         984                   300,573  
  May 1, 2018   April 25, 2018                                               3,085       305.46       327,776  

  Michael Dreyer

  January 24, 2018   January 24, 2018           420,000                                                  
  May 1, 2018   April 25, 2018                       836       1,673       2,509                         511,035  
  May 1, 2018   April 25, 2018                                         836                   255,365  
  May 1, 2018   April 25, 2018                                               2,622       305.46       278,583  

 

(1)

The ICP amounts represent target levels. There are no individual thresholds or maximum amounts.

(2)

For the performance-based restricted stock unit grants to the NEOs made in 2018, the performance achievement will be determined as of December 31, 2020 for the 2018-2020 performance period based upon the performance criteria presented under “Compensation Discussion and Analysis—Equity Incentives” above.

(3)

The stock awards reported reflect restricted stock unit awards granted to each NEO.

(4)

The fair values reported above are also reported in the “Summary Compensation Table” under the “Stock Awards” and “Stock Option Awards” columns. Amounts shown represent the grant date fair values of stock options and stock awards granted in the fiscal year indicated, which were computed in accordance with ASC Topic 718. The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation” of our audited financial statements included in our Annual Report on 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 stock) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2018, 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

     14,000          3,459,789        19,166          5,046,685  

  Dan Beck

                   1,107        352,801  

  Michael Descheneaux

     19,325        4,115,237        7,703        2,029,619  

  John China

                   4,285        1,132,579  

  Michael Dreyer

                   3,049        807,612  

 

       
 

47

 

 

LOGO

 

  

2019 PROXY STATEMENT

 


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, 2018. The exercise price for each of the stock option grants reported below is equal to the closing market price on the applicable grant date. The vesting schedule for each outstanding equity award is provided in the footnotes to the table below. Outstanding stock awards are valued based upon the closing market price of our stock as of December 31, 2018, which was $189.92 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

    14,828         –           –        71.11         April 30, 2020       –        –        1,342      (1)     254,873  
    24,343         –           –        107.98         April 29, 2021       –        –        3,655      (2)     694,158  
    12,178         4,059   (1)        –        129.81         May 1, 2022       –        –        3,708      (3)     704,223  
    12,476         12,475   (2)        –        105.18         May 2, 2023       –        –        3,941      (4)     748,475  
    3,980         11,940   (3)        –        178.39         May 2, 2024       –        –        24,999      (5)             4,747,810  
    –         12,356   (4)        –        305.46         May 1, 2025       –        –        15,168      (6)     2,880,707  
                    11,824      (7)     2,245,614  

Dan Beck

    735         2,204   (8)        –        169.49         June 5, 2024       –        –        2,053      (8)     389,906  
    –         2,313   (4)        –        305.46         May 1, 2025       –        –        1,263      (8)     239,869  
                    738      (4)     140,161  
                    5,166      (7)     981,127  

Michael Descheneaux

    6,711         –           –        107.98         April 29, 2021       –        –        537      (1)     101,987  
    2,872         1,623   (1)        –        129.81         May 1, 2022       –        –        1,414      (2)     268,547  
    2,830         4,828   (2)        –        105.18         May 2, 2023       –        –        1,545      (3)     293,426  
    1,659         4,974   (3)        –        178.39         May 2, 2024       –        –        1,722      (4)     327,042  
    –         5,399   (4)        –        305.46         May 1, 2025       –        –        9,676      (5)     1,837,666  
                    6,319      (6)     1,200,104  
                    5,166      (7)     981,127  

John China

    6,600         –           –        64.37         May 1, 2019       –        –        292      (1)     55,457  
    8,600         –           –        71.11         April 30, 2020       –        –        884      (2)     167,889  
    5,842         –           –        107.98         April 29, 2021       –        –        927      (3)     176,056  
    2,657         885   (1)        –        129.81         May 1, 2022       –        –        984      (4)     186,881  
    3,018         3,018   (2)        –                105.18         May 2, 2023       –        –        6,048      (5)     1,148,636  
    995         2,985   (3)        –        178.39         May 2, 2024       –        –        3,792      (6)     720,177  
    –         3,085   (4)        –        305.46         May 1, 2025       –        –        2,952      (7)     560,644  

Michael Dreyer

    885         2,652   (3)        –        178.39         May 2, 2024       –        –        2,016      (9)     382,879  
    –         2,622   (4)        –        305.46         May 1, 2025       –        –        1,514      (10)     287,539  
                    823      (3)     156,304  
                    836      (4)     158,773  
                    3,370      (6)     640,030  
                    2,509      (7)     476,509  

 

  (1)

Options and awards scheduled to vest on May 1, 2019.

  (2)

Options and awards scheduled to vest with respect to one-half of the underlying shares on each of May 2, 2019 and 2020, respectively.

  (3)

Options and awards scheduled to vest with respect to one-third of the underlying shares on each of May 2, 2019, 2020 and 2021, respectively.

  (4)

Options and awards scheduled to vest with respect to one-fourth of the underlying shares on each of May 1, 2019, 2020, 2021 and 2022, respectively.

<
  (5)

Reflects performance-based restricted stock units scheduled to vest on January 30, 2019, assuming a maximum award at 150% of target. Following the fiscal year-end, the actual shares earned pursuant to these awards were determined to be 126% of target.