DEF 14A 1 d98472ddef14a.htm DEF 14A DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

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 under § 240.14a-12

Raymond James Financial, Inc.

 

(Name of Registrant as Specified in Its Charter)

 

      

 

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

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LOGO


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OUR VISION           OUR VALUES
 

Our vision is to be a financial services firm as unique as the people we serve, transforming lives, businesses and communities through the power of personal relationships and professional advice.

 

         

 

LOGO

  

We put clients first.

If we do what’s right for our clients, the firm will do well and we’ll all benefit.

         

 

LOGO

  

 

We act with integrity.

We put others above self, and what’s right above what’s easy. We believe doing well and doing good aren’t mutually exclusive.

 

OUR MISSION

 

Our business is people and their financial well-being.

 

We are committed to helping individuals, corporations and institutions achieve their unique goals, while also developing and supporting successful professionals, and helping our communities prosper.

 

          LOGO   

We value independence.

We respect autonomy, celebrate individuality and welcome diverse perspectives, while encouraging collaboration and innovation.

         

 

LOGO

  

 

We think long term.

We act responsibly, taking a conservative approach that translates into a strong, stable firm for clients, advisors, associates and shareholders.

 

 

RAYMOND JAMES 2021 PROXY STATEMENT


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LOGO

RAYMOND JAMES FINANCIAL, INC.

880 Carillon Parkway

St. Petersburg, Florida 33716

(727) 567-1000

January 8, 2021

Dear Fellow Shareholder,

I am pleased to invite you to our 2021 Annual Meeting of Shareholders.

After a strong start to fiscal 2020, the second half was difficult, as we faced the COVID-19 pandemic, global economic uncertainty and social unrest across the nation. Overall, and despite many challenges, Raymond James was able to achieve good financial results in fiscal 2020, including record net revenues of $7.99 billion. However, our net income declined 21%, largely due to higher provision for loan losses and interest rate cuts. We nevertheless continued our strong retention and recruiting of financial advisors, reaching records for the total number of advisors and year-end client assets. Meanwhile, our investment banking success in both underwriting and M&A, and a record year for fixed income brokerage revenues, helped us achieve record revenues in our Capital Markets segment.

Moving forward, we expect to face continued headwinds in 2021 from a full year of lower short-term interest rates, and there remains a high degree of uncertainty about the course of the COVID-19 pandemic and the transition to a new U.S. administration. However, we believe that Raymond James is well positioned for growth. Many of the recent changes we have made allow the company to continue to grow and make longer-term investments in the business, providing a platform for sustained growth. Each of these advances benefits our financial advisors and their clients, our associates, shareholders, and the broader communities in which we live and work.

In light of the public health impact of COVID-19, we have determined that our Annual Meeting this year will be a virtual meeting, conducted solely via audio webcast. You will be able to participate in the virtual meeting online, vote your shares electronically, and submit live questions by visiting www.virtualshareholdermeeting.com/RJF2021.

We are also making use this year of the SEC’s “notice and access” rules, which allow companies to furnish proxy materials to their shareholders over the Internet. We believe that this process will expedite affected shareholders’ receipt of our proxy materials and lower the costs—and reduce the environmental impact—of our Annual Meeting. Accordingly, we mailed to certain shareholders a Notice of Internet Availability of Proxy Materials (“Notice”). The Notice contains instructions on how to access our Proxy Statement, Annual Report and other soliciting materials, and on how to vote. The Notice also contains instructions on how you can request paper copies of these materials if you so desire.

On behalf of the Board of Directors and the management of Raymond James, I extend our appreciation for your continued support.

Yours sincerely,

 

 

LOGO

Paul C. Reilly

Chairman and Chief Executive Officer


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LOGO

Notice of 2021 Annual Meeting of Shareholders

 

DATE:    Thursday, February 18, 2021
TIME:    4:30 p.m. (local time)
PLACE:    The meeting will be a virtual-only meeting, conducted exclusively via live audio webcast at www.virtualshareholdermeeting.com/RJF2021. There will not be a physical location for the meeting, and you will not be able to attend the meeting in person. Shareholders will be able to attend, vote, and submit questions (both before, and during a portion of, the meeting) virtually.
AGENDA:   

The following proposals will be voted upon:

1.  To elect the thirteen (13) director nominees named in the Proxy Statement

2.  To hold an advisory vote on our executive compensation

3.  To ratify our independent registered public accounting firm for fiscal 2021

4.  To act on any other business that may properly come before the meeting

RECORD DATE:

 

  

December 21, 2020 (“Record Date”)

 

 

Who Can Vote:

  

 

Shareholders of record on the Record Date

Who Can Attend:   

 

All shareholders are invited to attend the Annual Meeting. To attend the meeting at www.virtual shareholdermeeting.com/RJF2021, you must enter the control number on your Notice of Internet Availability of Proxy Materials (“Notice”), proxy card or voting instruction form. The virtual meeting room will open at 4:15 p.m. (local time).

Date of Mailing:   

 

A Notice or the Proxy Statement, 2020 Annual Report to Shareholders, and form of proxy are first being sent to shareholders and participants in our Employee Stock Ownership Plan on or about January 8, 2021

Vote Recommendation:     The Board of Directors recommends a vote “FOR” All Proposals

 

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on February 18, 2021:

 

 

 

The Proxy Statement, 2020 Annual Report to Shareholders and the form of proxy card are available online at

www.raymondjames.com/investor-relations/news-and-events/shareholders-meeting.

 

Whether or not you are able to attend the virtual Annual Meeting, please complete, sign and return your proxy card by mail, or vote via the Internet or the toll-free telephone number.

 

  By Order of the Board of Directors,
  Jonathan N. Santelli, General Counsel and Company Secretary
January 8, 2021  


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Table of Contents

 

Letter from our Chairman and CEO

  

Notice of 2021 Annual Meeting of Shareholders

  

Our Company

     1  

Corporate Governance

     2  

Item 1. - Election of Directors

     2  

Our Directors

     2  

Director Independence

     2  

Board Structure and Governance Practices

     10  

Role of the Board

     10  

Corporate Governance Principles

     10  

The Board’s Role in Risk Oversight

     10  

Board Composition and Skills

     11  

Director Qualifications

     12  

Nominating Process and Succession Planning

     12  

Nominations by Shareholders

     12  

Election of Directors

     13  

Director Tenure

     13  

Board Leadership Structure

     13  

Lead Independent Director

     14  

Code of Ethics and Directors’ Code

     14  

Engagement with Shareholders

     14  

Executive Sessions

     15  

Committee Membership and Meetings

     15  

Audit and Risk Committee

     16  

Corporate Governance, Nominating and Compensation Committee

     17  

Securities Repurchase Committee

     17  

Securities Offerings Committee

     17  

Meeting Attendance

     17  

Management Succession Planning

     18  

Director Compensation

     19  

Director Compensation Table for 2020

     20  

Stock Ownership Policy for Directors and Executive Officers

     21  

Compensation Matters

     22  

Compensation Discussion and Analysis

     22  

Introduction

     22  

Objectives of our Compensation Program

     22  

Use of Equity Compensation

     22  

Performance RSU Vesting Based on ROE

     23  

Our Compensation Practices

     24  

Consideration of Prior ‘‘Say-on-Pay’’ Vote

     25  

Elements of Compensation

     26  

Fiscal 2020 Company Performance Highlights

     26  

Use of Compensation Consultants

     28  

Peer Group Comparisons

     28  

Changes to our Compensation Practices for 2020

     29  

2020 Compensation Decisions

     29  

 

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2020 Compensation Tables

     38  

Summary Compensation Table for Fiscal 2020

     38  

All Other Compensation Table for Fiscal 2020

     39  

Grants of Plan Based Awards for Fiscal 2020

     40  

Outstanding Equity Awards at Fiscal Year End for 2020

     41  

Option Exercises and Stock Vested for Fiscal 2020

     44  

Nonqualified Deferred Compensation for Fiscal 2020

     45  

Potential Payments Upon Termination or Change in Control for Fiscal 2020

     46  

2020 CEO Pay Ratio

     49  

Report of the Corporate Governance, Nominating and Compensation Committee

     50  

Item 2. - Advisory Vote on Executive Compensation (“Say on Pay”)

     51  

Relationships and Related Transactions

     52  

Related Person Transaction Policy

     54  

Equity Compensation Plan Information

     55  

Audit Matters

  

Item 3. - Ratify Appointment of Independent Registered Public Accounting Firm

     56  

Security Ownership Information

     58  

Security Ownership of Principal Shareholders

     58  

Stock Ownership Policy

     58  

Security Ownership of Management

     59  

Delinquent Section 16(a) Reports

     60  

Questions and Answers

     61  

Additional Information

     67  

Appendix A – Reconciliation of Non-GAAP Financial Measures

     A-1  

 

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Our Company

Raymond James Financial, Inc. is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and institutions. Our financial services activities include providing investment management services to retail and institutional clients, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products. We also provide corporate and retail banking and trust services.

Our mission is to help individuals, corporations and institutions achieve their unique goals, while also developing and supporting successful professionals, and helping our communities prosper.

Our vision is to be a financial services firm as unique as the people we serve, transforming lives, businesses and communities through the power of personal relationships and professional advice.

Among the keys to our success, our emphasis on putting the client first is at the core of our corporate values. We also believe in maintaining a conservative, long-term focus in all our decision making. We believe that this disciplined approach has helped us build a strong, stable financial services firm for our clients, advisors, associates and shareholders.

At Raymond James, corporate responsibility is one way we live out our mission and values, as well as fulfill our vision. Corporate responsibility includes our commitment to:

 

   

nurturing an inclusive and diverse environment that unleashes the power of perspectives to drive exceptional results

 

   

giving back to the communities in which we live and work, both through charitable contributions and volunteerism

 

   

maintaining our longstanding commitment to strong corporate governance, rooted in a conservative approach for long-term stability, and

 

   

making sustainable business and operational decisions for the benefit of clients, our firm and our society.

Our focus on sustainability means keeping an eye on the big picture and operating our business for the long term. Raymond James believes it is our duty to be good stewards of our resources and help clients build wealth responsibly for the future, which we accomplish through a variety of initiatives including but not limited to:

 

   

offering a sustainable investment platform tailored to meet clients’ individual impact goals

 

   

financing our clients’ essential environmental and community-minded projects, such as alternative energy infrastructure and affordable housing, and

 

   

taking responsibility for preserving the natural world and limiting the negative consequences of climate change by working to reduce our environmental impact.

Under the oversight of our Board, senior management has taken a number of steps recently to strengthen the formal governance and disclosure of environmental, social and governance (“ESG”) matters at Raymond James. The company considers ESG-related matters throughout the organization, with a focus on transparency and continuous improvement. In 2019, we hired a full-time Director of Corporate Social Responsibility to survey and coordinate a wide variety of ESG initiatives and activities. Under her coordination, we also commenced a formal ESG assessment to holistically catalogue our existing activities and to identify the issues that represent the most significant opportunities to enhance our ESG initiatives. With the support of management across key company functions and business units, the

 

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Director of Corporate Social Responsibility has also been actively engaged in assembling a comprehensive corporate responsibility report, which we hope to release on the company website in the course of 2021.

We are furnishing or making available this Proxy Statement to you in connection with the solicitation of proxies by the Company’s Board of Directors (“Board” or “Board of Directors”) for the virtual Annual Meeting of Shareholders to be held exclusively via audio webcast on February 18, 2021 (“Annual Meeting”). In this Proxy Statement, we may refer to Raymond James Financial, Inc. as “Raymond James,” “RJF,” the “company,” “we,” “us” or “our.”

Corporate Governance

Item 1. — Election of Directors

 

     

Proposal Snapshot — Item 1. Election of Directors  

 

        
    
 

What is being voted on: Election to our Board of 13 director nominees.

 

Board recommendation: After a review of the individual qualifications and experience of each of our director nominees and his or her contributions to our Board, our Board determined unanimously to recommend that shareholders vote FOR all of our director nominees.

 

 

Our Directors

The Board has nominated the thirteen (13) directors identified below as candidates for election at the Annual Meeting. All nominees are current directors of the company and were unanimously recommended for re-election by the Corporate Governance, Nominating and Compensation Committee (“CGN&C Committee”).

Director Independence

For a director to be considered independent under New York Stock Exchange (“NYSE”) rules, the Board must affirmatively determine that the director does not have any “material relationship” with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. A material relationship can include commercial, industrial, banking, consulting, legal, accounting, charitable and family relationships.

The Board has affirmatively determined that the following ten director candidates are independent under NYSE and U.S. Securities and Exchange Commission (“SEC”) rules: Charles G. von Arentschildt, Marlene Debel, Robert M. Dutkowsky, Jeffrey N. Edwards, Benjamin C. Esty, Anne Gates, Gordon L. Johnson, Roderick C. McGeary, Raj Seshadri and Susan N. Story.

Each candidate has indicated that he or she would serve if elected. We do not anticipate that any nominee would be unable to stand for election, but if that were to happen, the Board may reduce the size of the Board, designate a substitute nominee or leave a vacancy unfilled. If a substitute is designated, proxies voting on the original director candidate will be cast for the substituted candidate.

 

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LOGO

 

Charles G. von Arentschildt, 60

Non-Executive Director

 

 

Director Since: 2015

 

RJF Committees

•  Audit and Risk

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

KEY EXPERIENCE AND QUALIFICATIONS

 

  
           
     

 

•  Financial services management: Many years of broad financial services management experience

•  Derivatives and trading expertise: A wealth of specific knowledge in the derivatives and trading segments of the financial services industry

 

     

 

CAREER HIGHLIGHTS

•  Independent private investor across a variety of asset classes (since 2005)

•  Deutsche Bank Securities Inc., a provider of investment banking and security brokerage services

•  Chairman of Global Markets, North America (2004 – 2005)

•  Chief Executive Officer and Head of Global Markets, North America (2002 – 2004)

•  Global Head of Finance, Global Head of Securitization and Global Head of Commodities

•  Regional Executive Committee (1998 to 2005)

•  Global Markets Management Committee (1997 to 2005)

•  Managing Director and Global Head of Metals, Commodities, Morgan Stanley, Inc., a global financial services firm (1992 – 1997)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Former member, Gold and Silver Institute

•  Former member, New York Mercantile Exchange

•  Former Board Member and Treasurer, Boys and Girls Club of Greenwich, Connecticut (2003 –2008)

           

LOGO

 

Marlene Debel, 53

Non-Executive Director

 

 

Director Since: 2020

 

RJF Committees

•  Audit and Risk

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

KEY EXPERIENCE AND QUALIFICATIONS

 

  
           
     

 

•  Finance and risk management experience: Deep knowledge of finance and more than three decades of experience in financial, strategic and risk management

•  Financial services management and leadership: Proven business leader who has helped guide organizations through periods of significant growth and change

 

     

 

CAREER HIGHLIGHTS

•  MetLife, Inc., a leading global provider of insurance, annuities, employee benefits and asset management services

•  Executive Vice President and Chief Risk Officer (2019 – present)

•  Executive Vice President and Head of Retirement & Income Solutions (2018 – 2019)

•  Executive Vice President and Chief Financial Officer, U.S. Business (2016 – 2018)

•  Executive Vice President and Treasurer (2011 – 2016)

•  Global Head of Liquidity Risk Management and Rating Agency Relations, Bank of America (2009—2011)

•  Assistant Treasurer, Merrill Lynch & Co., Inc. (2007-2008)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Member, Board of Directors, Women’s Forum of New York

 

 

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LOGO

 

Robert M. Dutkowsky, 65

Non-Executive Director

 

 

Director Since: 2018

 

RJF Committees

•  CGN&C

 

Other Public Directorships

•  Current: U.S. Foods Holding Corp.; Pitney Bowes; The Hershey Company

•  Former (past 5 years): Tech Data Corporation (2006-2020)

     

KEY EXPERIENCE AND QUALIFICATIONS

 

  
      
     

 

•  Technology and technology risks: More than 40 years of experience in the information technology industry, including senior executive positions in sales, marketing and channel distribution with leading manufacturers and software publishers

•  Corporate governance and leadership: Valuable governance perspectives from substantial senior executive leadership roles and experience as a board member and chairman of several public and private companies

 

     

 

CAREER HIGHLIGHTS

•  Tech Data Corporation, a multinational IT products and services distribution company

•  Executive Chairman (2017 – 2020)

•  Chief Executive Officer (2006 – 2018)

•  President, Chief Executive Officer, and Chairman, Egenera, Inc., a multinational cloud manager and data center infrastructure automation company (2004 – 2006)

•  President, Chief Executive Officer and Chairman, J.D. Edwards & Co., Inc. an enterprise resource planning (ERP) software company (2002 – 2004)

•  President, Chief Executive Officer and Chairman, GenRad, Inc., a manufacturer of electronic automatic test equipment and related software (2000 – 2002)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Board of Directors, United Way Suncoast

•  Board of Directors, First Tee of Tampa Bay

•  Board of Directors, Moffitt Research Committee

•  Advisory Board, University of South Florida Business School

           

LOGO

 

Jeffrey N. Edwards, 59

Non-Executive Director

 

 

Director Since: 2014

 

RJF Committees

•  CGN&C

•  Securities Repurchase Committee

•  Securities Offerings Committee

 

Other Public Directorships

•  Current: American Water Works Company, Inc.

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
           
     

 

•  Financial services industry: More than two decades of capital markets and corporate finance experience at a global financial services firm

•  Review and preparation of financial statements: Experience as CFO of large financial services company provides valuable insights to our Board

 

     

 

CAREER HIGHLIGHTS

•  Chief Operating Officer, New Vernon Advisers, LP, a registered investment advisor (2009 – present)

•  Merrill Lynch & Co., Inc., a global financial services company

•  Vice Chairman (2007 – 2009)

•  Chief Financial Officer (2005 – 2007)

•  Head of Investment Banking for the Americas (2004 – 2005)

•  Head of Global Capital Markets and Financing (2003 – 2005)

•  Co-head of Global Equities (2001 – 2003)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Director, The NASDAQ Stock Market (2004 – 2006)

•  Director, Medusind, Inc., a medical billing company (2012 – 2019)

 

           

 

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LOGO

 

Benjamin C. Esty, 58

Non-Executive Director

 

 

Director Since: 2014

 

RJF Committees

•  Audit and Risk (Chair since 2014)

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
      
     

 

•  Finance, investment and risk management: Extensive knowledge of finance and deep experience in the mutual fund/investment management business, including evaluation of fund performance, investment strategies, valuation analysis, trading, and risk management

•  Financial services industry: Provides valuable insight to the company’s investment banking, commercial banking, and asset management businesses, as well as its own financing activities

•  Executive leadership development: Experience in leadership development assists Board in oversight of management succession

 

     

 

CAREER HIGHLIGHTS

•  Harvard University Graduate School of Business Administration

•  Professor of Business Administration (1993 – present) teaching corporate finance, corporate strategy and leadership

•  Roy and Elizabeth Simmons Professor of Business Administration (with tenure, 2005 – present)

•  Head of the Finance Department (2009 – 2014)

•  Founding faculty Chairman, General Management Program (GMP), a comprehensive leadership program for senior executives

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Director and Chairman of Audit Committee, Harvard Business Publishing, a not-for-profit education company

•  Eaton Vance family of mutual funds

•  Independent Trustee (2005 – 2013)

•  Chairman, Portfolio Management Committee (2008 – 2013)

•  Director, Harvard University Employees Credit Union (1995 – 2001)

•  Member, Finance Committee

•  Finance and Investment Committee, Deaconess Abundant Life Communities, a not-for-profit continuing care retirement community (2017 – present)

           

LOGO

 

Anne Gates, 60

Non-Executive Director

 

 

Director Since: 2018

 

RJF Committees

•  Audit and Risk

 

Other Public Directorships

•  Current: The Kroger Company; Tapestry, Inc.

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
           
     

 

•  Retail and consumer products insight: Over 25 years’ experience in retail and consumer products industry

•  International business and growth markets: Broad business background in finance, marketing, strategy and business development, including growing international businesses

 

     

 

CAREER HIGHLIGHTS

•  President, MGA Entertainment, Inc., a developer, manufacturer and marketer of toy and entertainment products for children (2014 – 2017)

•  The Walt Disney Company, a diversified multinational mass media and entertainment conglomerate (1991 – 2012)

•  Executive Vice President, Chief Financial Officer—Disney Consumer Products (2000 – 2007, 2009 – 2012)

•  Managing Director—Disney Consumer Products Europe and Emerging Markets (2007 – 2009)

•  Senior Vice President of Operations, Planning and Analysis (1998 – 2000)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Board of Directors, Cynosure (2020 – present)

•  Board of Trustees, University of California, Berkley Foundation (2016 – present)

•  Board of Directors, Salzburg Global Seminar (2018 – present)

•  Board of Directors, CADRE

•  Board of Trustees, PBS SoCal

           

 

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LOGO

 

Francis S. Godbold, 77

Director – Vice Chairman

 

 

Director Since: 1977

 

RJF Committees

•  Securities Offerings Committee (alternate)

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
      
     

 

•  Senior leadership experience: Over 50 years of experience at our company (15 years as President), including managing the company through multiple economic/business cycles; extensive experience acquiring and integrating businesses for the company

•  RJ Bank leadership: Active participation in the formation of RJ Bank and service on its board since inception

•  Investment management expertise: Broad capital markets transaction experience in both favorable and difficult markets; led the firm’s entry into several new business segments

•  Lifelong commitment: An enduring commitment to our company, with significant personal and family stock ownership

 

     

 

CAREER HIGHLIGHTS

•  Raymond James Financial, Inc.

•  Vice Chairman (2002 – present)

•  Director, Raymond James Bank, N.A. (1994 – present)

•  Various senior management positions (1969 – 2002)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Trustee Emeritus, Georgia Tech Foundation, Inc. (2011 – present)

•  Trustee, Georgia Tech Foundation, Inc. (2003 – 2011)

 

           

LOGO

 

Thomas A. James, 78

Director – Chairman Emeritus

 

 

Director Since: 1970

 

RJF Committees

•  Securities Repurchase Committee

•  Securities Offerings Committee

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
           
     

 

•  Engaged and motivating leader who embodies our firm’s culture: Former Chairman and Chief Executive Officer of our company, with a unique understanding of our businesses and the financial services industry

•  Entrepreneurial mindset: Perspective of an entrepreneur who led the growth of the company founded by his father

•  Lifelong commitment: A deep, personal commitment to our company, exemplified by more than 50 years of service

•  Shareholder advocate: His large stock ownership position ensures that his interests are strongly aligned with those of our other shareholders

 

     

 

CAREER HIGHLIGHTS

•  Raymond James Financial, Inc.

•  Chairman Emeritus (2017 – present)

•  Chairman of the Board (1983 – 2017)

•  Chief Executive Officer (1970 – 2010)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Financial Services Roundtable (2000 – present)

•  Chairman (2007)

•  Former Chairman, The Florida Council of 100

•  Former Chairman, Securities Industry and Financial Markets Association (SIFMA)

•  Certified Financial Planner (1978 – present)

•  Member, Board of Trustees, The Salvador Dalí Museum (1987 – present)

•  Founder and Chairman, The James Museum of Western and Wildlife Art (2018 – present)

•  Chairman, Chi Chi Rodriguez Youth Foundation (2006 – present)

•  Former Director, International Tennis Hall of Fame

           

 

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LOGO

 

Gordon L. Johnson, 63

Non-Executive Director

 

 

Director Since: 2010

 

RJF Committees

•  CGN&C (Chair since 2018)

•  Director of Raymond James Bank since 2007

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
      
     

 

•  Banking and financial services: Over 23 years of experience with unaffiliated banks

•  RJ Bank insights: Eleven years as a director of RJ Bank, a significant part of our business

•  Entrepreneurial experience: Perspective of an entrepreneur and consumer of business-related financial services

 

     

 

CAREER HIGHLIGHTS

•  President, Highway Safety Devices, Inc., a full service specialty contractor (2004 – present)

•  Bank of America Corporation, a multinational investment bank and financial services company

•  Various managerial and executive positions (1992 – 2002)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Director, Florida Transportation Builders Association (2007 – 2016)

•  Director, Santa Fe Healthcare (2008 – 2014)

 

           

LOGO

 

Roderick C. McGeary, 70

Non-Executive Director

 

 

Director Since: 2015

 

RJF Committees

•  Audit and Risk

 

Other Public Directorships

•  Current: Cisco Systems, Inc.; PACCAR Inc.

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
           
     

 

•  Review and preparation of financial statements: Deep accounting and auditing knowledge acquired through many years with public auditing firm

•  Leadership and governance: Decades of board and leadership experience involving multiple industries

•  Technology and technology risks: Leadership experience with global technology companies

 

     

 

CAREER HIGHLIGHTS

•  Chairman, Tegile Systems, Inc., a manufacturer of flash storage arrays (2010 – 2012)

•  BearingPoint, Inc., a multinational management and technology consulting firm

•  Chairman (2004 – 2009)

•  Interim Chief Executive Officer (2004 – 2005)

•  Co-President and Co-Chief Executive Officer (1999 – 2000)

•  Chief Executive Officer, Brience, Inc., a provider of software that enables companies to personalize customer experiences through broadband or wireless devices (2000 – 2002)

•  Managing Director, KPMG Consulting LLC, a management consulting firm (April – June 2000)

•  KPMG LLP, the U.S. member of a global network of professional firms providing audit, tax and advisory services

•  Co-Vice Chairman of Consulting (1997 – 1999)

•  Audit Partner for various technology clients (1980 – 1988)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Certified Public Accountant

           

 

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LOGO

 

Paul C. Reilly, 66

Chairman and Chief Executive Officer

 

 

Director Since: 2006

 

RJF Committees

•  Securities Repurchase Committee

•  Securities Offerings Committee

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
      
     

 

•  Strong leader, with prior public company CEO experience: Prior experience as chief executive officer of two complex, global organizations (one of which was a public company) brings a perspective to the Board beyond the financial services industry

•  Auditing and strategic consulting perspective: Background as a CPA and financial services consultant

•  Leadership continuity: Previous service on our Board provides continuity with prior senior management

 

     

 

CAREER HIGHLIGHTS

•  Raymond James Financial, Inc.

•  Chairman (2017 – present)

•  Chief Executive Officer (2010 – present)

•  President (2009 – 2010)

•  Non-executive Director (2006 – 2009)

•  Chair, Audit Committee (2008 – 2009)

•  Korn Ferry International, a global organizational consulting firm

•  Executive Chairman (2007 – 2009)

•  Chairman and Chief Executive Officer (2001 – 2007)

•  Chief Executive Officer, KPMG International, a global network of professional firms providing audit, tax and advisory services (1998 – 2001)

•  National Managing Partner, Financial Services, KPMG LLP, the U.S. member of a global network of professional firms providing audit, tax and advisory services (1995 – 1998)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Member, Board at Large, Securities Industry and Financial Markets Association (SIFMA)

•  Member, Board of Directors, American Securities Association

•  Member, Board of Directors, National Leadership Roundtable

•  Former Member, The Florida Council of 100

•  Former Member, Financial Services Roundtable

•  Former Director, United Way Suncoast

•  Cabinet Member and former Chairman, Tampa Heart Walk and Heart Ball for the American Heart Association

•  Member, The University of Notre Dame Business Advisory Council

•  Trustee, House of Prayer Foundation

           

 

LOGO

 

Raj Seshadri, 55

Non-Executive Director

 

 

Director Since: 2019

 

RJF Committees

•  Audit and Risk

 

Other Public Directorships

•  Current: None

•  Former (past 5 years): None

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
           
     

 

•  Financial services management: Brings to our Board a rare combination of skills and experience from her roles at global brands in marketing, sales, business strategy, asset management, wealth management, and business-to-business partnerships

 

     

 

CAREER HIGHLIGHTS

•  President, Data and Services, Mastercard Incorporated, a global payments and technology company (2020 – present)

•  President, U.S. Issuers, Mastercard Incorporated, a global payments and technology company (2016 – 2020)

•  BlackRock, Inc., a global asset manager

•  Managing Director, Head of iShares Wealth Advisory (2014 – 2015)

•  Managing Director, Global Chief Marketing Officer for iShares (2012 – 2013)

•  Citigroup, Inc., a global financial institution

•  Managing Director, Head of CitiBusiness for Citibank (2010 – 2012)

•  Managing Director, Global Head of Strategy (2008 – 2009)

•  Various positions at U.S. Trust Company, a private wealth advisory firm (2006 – 2008), McKinsey & Company, a global strategy consulting firm (1994 – 2006) and AT&T Bell Laboratories, a research and development organization (1992 – 1993)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Adjunct Professor, Columbia University Graduate School of Business (2012 – present)

•  Trustee, Mount Holyoke College (2017 – present)

•  Member, Management Board, Stanford Graduate School of Business (2017 – present)

•  Member, Global Board, American India Foundation (2019 – present)

•  Member, Advisory Board, SAYA (South Asia Youth Action) (2013 – present)

•  David Rockefeller Fellow (2017 – 2018)

 

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LOGO

 

Susan N. Story, 60

Lead Independent Director (since 2016)

 

 

Director Since: 2008

 

RJF Committees

•  CGN&C

•  Securities Repurchase Committee

•  Securities Offerings Committee

 

Other Public Directorships

•  Current: Dominion Energy, Inc.; Newmont Corporation

•  Former (past 5 years): American Water Works Company, Inc. (2014 – 2020)

     

 

KEY EXPERIENCE AND QUALIFICATIONS

  
      
     

 

•  Leadership and strategy: Leadership as former CEO of American Water Works Company, Inc., a $27 billion publicly traded company, has given her in-depth experience with addressing national economic challenges and regulatory and legislative issues

•  Experience managing highly-regulated industries: Her over six-year tenure as CEO (with prior experience as CFO) of the largest publicly-traded water and wastewater utility in the U.S., operating a highly-regulated utility business in 14 states and market-based businesses in 45 states, together with seven years as CEO of an electric utility in Florida, have provided extensive skills relating to interaction with state and federal regulators and managing complex organizations

•  Technology, cyber security and human capital management: Extensive experience developing and implementing technological advances, including artificial intelligence (AI) and machine learning; overseeing critical infrastructure cyber security protocols and working with the Department of Homeland Security, Department of Defense and state FUSION agencies; recruiting, hiring and training an evolving workforce population as well as pioneering strategic workforce planning based on operational technology disruption; and mitigating rising employee healthcare costs through innovative partnerships and programs

 

     

 

CAREER HIGHLIGHTS

•  American Water Works Company, Inc., a U.S. publicly traded water and wastewater utility company

•  President, Chief Executive Officer and director (2014 – 2020)

•  Chief Financial Officer (2013 – 2014)

•  The Southern Company, a transporter and producer of energy

•  Chief Executive Officer, Southern Company Services, Inc., Executive Vice President of Southern (2011 – 2013)

•  President and Chief Executive Officer, Gulf Power Company, Inc. (2003 – 2010)

•  Executive Vice President, Engineering and Construction (2001 – 2003)

•  Senior Vice President of Southern Power Company (2001 – 2003)

 

OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT

•  Board of Advisors, H. Lee Moffitt Cancer Center and Research Institute

•  National Council of Chief Executives

•  Advisor and founding member, NYSE Board Advisory Council

•  Financial co-sponsor, with American Water Works Company, of $1 million partnership with the Jacki Joyner-Kersee Winning in Life® program to extend opportunities in economically distressed communities

 

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Board Structure and Governance Practices

Role of the Board

Raymond James’ business and affairs are managed under the direction of the Board of Directors. The role of the Board is to oversee management of the company in its efforts to enhance shareholder value and conduct the company’s business in accordance with its mission statement. In this vein, the Board’s duties include assisting management to assess long-range strategies for the company and evaluating management performance.

Corporate Governance Principles

The Board has adopted Corporate Governance Principles, which are available in the Investor Relations section of the company’s website at www.raymondjames.com (the “company’s website”). This document describes the principles the Board follows with respect to, among other matters, the Board’s:

 

•   role and duties

  

•   size and composition

•   director responsibilities

  

•   leadership structure

•   committees

  

•   access to officers, employees and advisors

•   director compensation

  

•   confidentiality

•   annual performance self-evaluation

  

•   communications with shareholders

The Board’s Role in Risk Oversight

The Board exercises oversight responsibility with respect to management’s responsibilities to assess and manage our key risks, including market, credit, liquidity, funding, operational, compliance, compensation and reputational risk. The Board has delegated aspects of its oversight responsibility to each of the Audit and Risk Committee (“ARC”) and the CGN&C Committee.

The ARC is appointed by the Board to assist it in monitoring (i) the integrity of the Company’s financial reporting, (ii) the independent accountants’ qualifications, independence and performance, (iii) the Company’s systems of internal controls, (iv) the performance of the Company’s Internal Audit Department, (v) the Company’s Risk Governance Structure, and (vi) the Company’s Compliance Risk Management Framework and compliance with legal and regulatory requirements.

The CGN&C Committee’s risk oversight role is to review management’s evaluation of the relationship between our compensation policies and practices and risks arising for the company, and to take steps to prevent such policies and practices from encouraging unnecessary or excessive risk-taking. The CGN&C Committee also takes any action necessary to help the company comply with rules and regulations relating to compensation programs and their relationship to risk management.

 

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Board Composition and Skills

The Board currently consists of thirteen (13) directors. The Board does not consider individual directors to be responsible for particular areas of the Board’s focus or specific categories of issues that may come before it. Rather, the Board seeks to assemble a group of directors that, as a whole, represents a mix of experiences and skills that allows appropriate deliberation on all issues that the Board might be likely to consider.

Our directors have a diversity of experience and a variety of complementary skills, education, qualifications and viewpoints that strengthen the Board’s ability to carry out its oversight role. The table below summarizes the range of selected qualifications and experiences that each non-executive director brings to our Board. The skills included in this matrix are evaluated against our strategy so that the matrix can serve as an up-to-date tool for identifying non-executive director nominees who collectively have the complementary experience and skills to guide the company. This summary is not intended to be a complete description of all of the skills and attributes possessed by each director.

Additional information about each Board member’s background, business experience and other matters, as well as a description of how each individual’s experience qualifies him or her to serve as a director, is provided above under the heading Item 1. – Election of Directors – Our Directors.

 

             
    

Financial

Industry

Experience

 

Chairman &

CEO

Experience

 

Financial

Reporting

 

Corporate

Governance

 

Risk

Management

  Technology
   

Charles G. von Arentschildt

 

Fixed Income

           
   

Marlene Debel

 

Brokerage

           
   

Robert M. Dutkowsky

           
   

Jeffrey N. Edwards

 

Brokerage

           
   

Benjamin C. Esty

 

Asset Management

           
   

Anne Gates

             
   

Gordon L. Johnson

 

Banking

           
   

Roderick C. McGeary

           
   

Raj Seshadri

 

Strategy

         
   

Susan N. Story

             

 

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Director Qualifications

The Board believes there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position on the Board, including that such nominee:

 

•   demonstrate high standards of integrity and character

  

•   offer important perspectives on some aspect of the company’s business based on experience

•   may not be on the boards of more than three (3) other public companies

  

•   may not be subject to certain convictions or judgments of courts or regulatory authorities

Nominating Process and Succession Planning

The CGN&C Committee reviews the experience and qualifications of all potential nominees to the Board. In considering director candidates, the CGN&C Committee generally assembles all information regarding a candidate’s background and qualifications, evaluates his or her mix of skills and qualifications and determines the contribution that the candidate could be expected to make to the overall functioning of the Board, giving due consideration to the Board balance of diversity of perspectives, backgrounds and experiences. The CGN&C Committee routinely considers diversity as a part of its deliberations but does not have a formal policy regarding diversity. With respect to current directors, the CGN&C Committee considers the individual’s past participation in, and contributions to, the activities of the Board. The CGN&C Committee recommends director nominees to the Board based on its assessment of overall suitability to serve.

Illustrated below is an overview of the process to identify the desired skills and experience of candidates as well as evaluate potential candidates for the Board.

 

 

LOGO

Nominations by Shareholders

The CGN&C Committee will consider candidates recommended for nomination to the Board by shareholders under Florida law and our By-laws. Our By-laws contain advance notice and a number of other requirements applicable to any shareholder nomination, including a description of the information that must be included with any such proposal. The manner in which the committee evaluates candidates recommended by shareholders would be generally the same as any other candidate. However, the CGN&C Committee would also consider information concerning any

 

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relationship between a shareholder recommending a candidate and the candidate to determine if the candidate can represent the interests of all of the shareholders. The committee would not evaluate a candidate recommended by a shareholder unless, among the other requirements of our By-laws, the shareholder’s proposal contains all of the information necessary to conduct an evaluation. For information regarding shareholder proposal deadlines, please see below under “Additional Information — Shareholder Proposals for the 2022 Annual Meeting.”

Election of Directors

Each director is elected by shareholders at our annual meeting for a term of one (1) year (subject to extension until a successor is duly elected and qualified and subject to such director’s earlier resignation or removal). Under our By-laws, unless the election is contested, each director nominee must receive a majority vote to be elected. A “majority vote” means that the number of votes cast in favor of a nominee exceeds the number of votes cast against the nominee. In a contested election, directors are elected by a plurality of the votes cast. A “plurality vote” means that the nominee who receives more votes than any other nominee is elected.

In addition, each director nominee must tender an irrevocable conditional resignation to the company, to be effective only upon (i) the director’s failure to receive the required shareholder vote in an uncontested election, and (ii) Board acceptance of such resignation. If any nominee fails to receive the required vote, the CGN&C Committee will recommend that the Board accept the resignation unless it determines that the best interests of the company and its shareholders would not be served by doing so. Absent such determination, the Board will accept the resignation no later than 120 days from the certification of the shareholder vote, subject to maintaining compliance with NYSE or SEC rules. The Board will promptly disclose publicly its decision to accept or reject such resignation and the reasons therefor.

Director Tenure

We believe that non-executive directors (those directors who are not officers or employees of the company) who have longer-term experience with the company have gained a level of familiarity with its operations that enables them to make valuable contributions to Board deliberations. Nevertheless, our Corporate Governance Principles contemplate that directors are normally expected to serve no more than 12 years on the Board. The Board reserves the right, in extraordinary circumstances, to waive this limitation to allow a director—if elected by the shareholders—to serve up to three additional one-year terms. In this connection, the Board has determined (as it did previously in 2020) that the need for continuity of service of the company’s Lead Director Susan Story constitutes a sufficient basis for waiving the above tenure limitation to permit her to serve a further one-year term.

Board Leadership Structure

The Board believes it is in the company’s best interests to periodically evaluate its leadership structure and make a determination regarding whether to separate or combine the roles of Chairman and chief executive officer (“chief executive officer” or “CEO”) based on circumstances at the time of its evaluation. By retaining flexibility to adjust the company’s leadership structure, the Board believes that it is best able to provide for appropriate management and leadership of the company and address any circumstances the company may face. Since 2017, our chief executive officer, Mr. Paul Reilly, has also served as Chairman of the Board. The Board believes that a combined Chairman/chief executive officer structure provides the company with a single leader who communicates the firm’s business and strategy to our shareholders, clients, employees, regulators and the public, promoting accountability for the company’s performance. For these reasons, the Board believes that our existing board leadership structure continues to be the most appropriate one for the company. Nevertheless, the Board may reassess the appropriateness of this

 

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structure at any time, including following future changes in Board composition, in management, or in the character of the company’s business and operations.

Lead Independent Director

The Board also believes that independent leadership is important, and it has appointed an independent director, Susan N. Story, who has served as lead director (“Lead Director”) since 2016. Ms. Story’s knowledge of the company’s business and strategy from her years of service as a director, together with her significant executive leadership experience, contribute to her ability to effectively fulfill the role of Lead Director. The Board has structured the role of our Lead Director to strike an appropriate balance to the combined Chairman and CEO role and to fulfill the important requirements of independent leadership on the Board.

The Board has approved a Charter for the Lead Director, which provides that the Lead Director is elected by the independent directors for a renewable term of three years. The charter also sets forth the Lead Director’s specific responsibilities, including to:

 

 

preside at Board meetings in the absence of the Chairman, subject to the By-laws

 

 

review and approve Board meeting agendas and schedules

 

 

advise on information submitted to the Board

 

 

serve as liaison for communication between non-executive directors and shareholders

 

 

communicate individual performance feedback from board peer evaluations in private meetings with each director

 

preside over executive sessions of non-executive directors

 

 

recommend topics for Board consideration

 

 

serve as a liaison between non-executive directors and the Chairman

 

 

with the CGN&C Committee, facilitate the Board’s annual self-evaluation process

 

 

assist CGN&C Committee in conducting its performance evaluation of CEO and in CEO succession planning

 

 

The Charter of the Lead Director, which is available on the company’s website, provides a more detailed description of the role and responsibilities, qualifications, and the procedures for appointment of, the Lead Director.

Code of Ethics and Directors’ Code

As part of our ethics and compliance program, our Board has approved:

 

   

Code of Ethics for Senior Financial Officers (the “Code of Ethics”) which applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions, and

 

   

Code of Business Conduct and Ethics for Members of the Board of Directors (“Directors’ Code”) that applies to all members of the Board.

Both the Code of Ethics and the Directors’ Code are posted on our company’s website. We intend to satisfy the disclosure requirement regarding any amendment to, or waiver of, the Code of Ethics or the Directors’ Code by posting such information on our website. The company also maintains a reporting hotline (888-686-8351), where employees and individuals outside the company can anonymously submit a complaint or concern regarding compliance with applicable laws, rules or regulations, the Code of Ethics, as well as accounting, auditing, ethical or other concerns.

Engagement with Shareholders

The Board believes that fostering long-term relationships with shareholders and maintaining their trust and goodwill is a top priority for the company. Senior management conducts engagements with key shareholders throughout the

 

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year in order to ensure that our management and Board understand and address the issues that are important to our shareholders. These engagements cover a wide range of issues, such as strategy, financial performance, governance and other current matters. In addition to our quarterly earnings releases and related conference calls, we release monthly operating metrics. Our chief executive officer, chief financial officer and our head of investor relations generally attend several investor conferences each year and also participate in “roadshows” to meet with our investors. In addition, although we were not able in fiscal 2020 due to the COVID-19 pandemic, we typically host an annual Investor Day at which our senior executives make presentations concerning a wide variety of strategic and financial matters. Our chief financial officer and our head of investor relations also speak with analysts and investors throughout the year. Individual members of our Board may also be involved in appropriate cases. For information on how to contact members of our Board, please see the section below entitled “Additional Information—Communications with the Lead Director and Non-Executive Directors.”

Executive Sessions

The non-executive directors meet in executive session without management at least four times per year during a regularly-scheduled Board meeting. Ms. Susan Story, our Lead Director, presided at the regular executive sessions of the non-executive directors. In addition, the independent non-executive directors in each of the ARC and the CGN&C Committee generally meet in executive session in conjunction with the regularly-scheduled meetings of such committees.

Committee Membership and Meetings

The Board has delegated authority to committees to assist in overseeing the management of the company. The members and chair of each committee are appointed and removed by the Board. The committee chairs review and approve agendas for all meetings of their respective committees. The responsibilities of the ARC and the CGN&C Committee are defined in their respective charters, which incorporate the applicable requirements of the SEC and NYSE and are available at the company’s website at www.raymondjames.com/investor-relations/corporate-governance/charters.

 

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The following table identifies the Board’s committees, their respective members, and provides information about meetings during the fiscal year ended September 30, 2020 (“fiscal 2020”).

 

Director

  

Audit and

Risk Committee

   Corporate
Governance,
Nominating and
Compensation
Committee
  Securities
Repurchase
Committee
   Securities
Offerings
Committee

 

Charles G. von Arentschildt

  

 

M

  

 

 

 

  

 

Marlene Debel(1)

   M        

Robert M. Dutkowsky

      M(2)     

Jeffrey N. Edwards

      M   M    M

Benjamin C. Esty

   C        

Anne Gates

   M        

Gordon L. Johnson

      C     

Roderick C. McGeary

   M        

Raj Seshadri

   M        

Susan N. Story

      M   M    M

Thomas A. James

        M    M

Paul C. Reilly

        M    M

Francis S. Godbold

           AM
Fiscal 2020 Committee Meetings

 

Total Committee Meetings

  

 

8

  

 

5

 

 

    

  

 

    

 

 

M — Member, C — Chairman, AM — Alternate Member

 

  (1)

Appointed effective December 2, 2020.

  (2)

Reassigned from the Audit and Risk Committee to the CGN&C Committee effective August 26, 2020.

The Board has affirmatively determined that each member of the ARC and the CGN&C Committee is “independent” under NYSE and SEC rules. The Board has further determined that each member of the ARC is “financially literate” and that each of Ms. Debel, Ms. Gates and Messrs. Esty and McGeary qualifies as an “audit committee financial expert” and has “accounting or related financial management expertise” under applicable NYSE or SEC rules.

Audit and Risk Committee

The ARC’s responsibilities include:

 

   

oversight of the independent auditor, including annually reviewing the independent auditor’s report and evaluating its qualifications, performance and independence

 

   

reviewing and discussing with management and the independent auditor (i) the audited financial statements and related disclosures, (ii) earnings press releases, (iii) critical accounting policies, (iv) internal controls over financial reporting and disclosure controls and procedures, (v) use of non-GAAP financial measures, and (vi) any audit problems

 

   

oversight of the company’s internal audit function

 

   

oversight of management’s responsibilities to manage key risks, including the company’s enterprise risk management program

 

   

oversight of the company’s risk governance structure

 

   

reviewing reports from the chief compliance officer and general counsel

 

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The Audit and Risk Committee charter provides a more detailed description of the role and responsibilities of this committee.

Corporate Governance, Nominating and Compensation Committee

The CGN&C Committee’s responsibilities for compensation matters include:

 

   

annually approving senior management compensation structure

 

   

annually setting criteria for compensating the CEO, evaluating his or her performance and determining the amount of his or her compensation

 

   

approving and overseeing the administration of equity-based and other incentive compensation plans

 

   

annually recommending to the Board the amounts of company contributions to employee benefit plans, and

 

   

overseeing administration of other employee benefit plans.

The CGN&C Committee’s responsibilities for nominations and corporate governance include:

 

   

reviewing the qualifications and experience of potential director nominees and recommending them to the Board

 

   

reviewing succession planning for the CEO and other senior management positions

 

   

developing and monitoring compliance with corporate governance policies

 

   

leading the Board and its committees in annual reviews of their performance

 

   

periodically reviewing and assessing our codes of ethics and recommending changes to the Board

 

   

recommending reasonable director compensation to the Board, and

 

   

exercising sole authority to retain director candidate search firms, including determining their compensation and terms of engagement.

The CGN&C Committee charter provides a more detailed description of the role and responsibilities of this committee.

Securities Repurchase Committee

The Securities Repurchase Committee has authority (as determined by the Board) to approve certain purchases of our stock or notes from time to time. It does not have a separate charter or chairperson.

Securities Offerings Committee

The Securities Offerings Committee has authority (as determined by the Board) to approve the terms of securities offered by the company. It does not have a separate charter or chairperson.

Meeting Attendance

During fiscal 2020, the Board held four meetings (not including committee meetings). Each director nominated for re-election at the Annual Meeting attended at least seventy-five percent (75%) of the aggregate of the total number of meetings held by the Board and the total number of meetings held by all committees of the Board on which he or she served during fiscal 2020. The company’s executive committee also attends each regularly-scheduled Board meeting, as the Board believes that this direct exposure facilitates the deepest understanding and alignment of the firm’s strategy and also permits the Board to directly evaluate the performance of each executive committee

 

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member. It is the policy of the Board that all directors attend the annual shareholder meeting. All of our directors then in office attended the February 2020 annual meeting. In addition to formal meetings, the Board met informally on first a weekly, then a monthly, basis for much of fiscal 2020 to receive updates from the CEO, CFO, Chief Human Resources Officer, General Counsel and other members of executive management regarding the company’s response to the COVID-19 pandemic and its strategic, financial and employee health and safety implications, as well as social unrest and other general strategic matters.

Management Succession Planning

The Board believes that effective management succession planning, particularly for the CEO role, is important for the continued success of the company. Among the responsibilities of the CGN&C Committee is the review of succession planning for the CEO and other senior management positions. Consequently, our CEO and chief human resources officer regularly make detailed presentations to the CGN&C Committee and the Board on senior management succession plans and individual development plans for identified successors. This information is compiled through an organization-wide process designed to identify potential successors, evaluate the “readiness” of internal candidates and identify situations where the company may need to consider external talent. The Board discusses the development plans of succession candidates, particularly for the CEO role, and monitors such candidates’ progress. High potential leaders are also given exposure to all Board members through formal presentations and informal events, which provide directors with opportunities to personally assess the candidates’ skills and leadership capabilities.

 

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Director Compensation

The CGN&C Committee reviews and determines the compensation paid to non-executive directors at least every three years. We also reimburse each of our non-executive directors for their travel expenses incurred in connection with attendance at Board and committee meetings. Directors who are Raymond James employees (Messrs. Godbold, James and Reilly) do not receive any additional compensation for their services as directors. In determining non-executive director compensation, the committee considers, among other things, the following principles:

 

   

that the compensation should fairly pay for the work, time commitment and effort required from directors of an organization with the size and scope of business activities similar to the company, including service on committees,

 

   

that a component of compensation should be designed to align the directors’ interests with the long-term interests of shareholders, and

 

   

that director independence may be impaired if director compensation exceeds customary levels.

As a part of its review, the committee has engaged Pay Governance LLC as a third-party consultant to report on comparable non-executive director compensation practices and levels. No executive officer of the company is involved in determining or recommending non-executive director compensation levels.

The CGN&C Committee recommended, and the Board approved, the annual fees for non-executive directors described in the table below. All annual cash fees are paid in quarterly installments in arrears for the period of service between regularly-scheduled Board meetings. The company does not pay meeting attendance fees.

 

  Director Fee Type    Description    Amount  
     
  Annual Retainer    Cash retainer    $ 100,000  
     
  Shares Fee    Restricted stock unit (“RSU”) award vesting on 1st anniversary of grant    $ 150,000  
     
  Lead Director Fee    Supplemental cash fee for board leadership role    $ 40,000  
     
  ARC Chair Fee    Supplemental cash fee for committee leadership role    $ 60,000  
     
  CGN&C Committee Chair Fee    Supplemental cash fee for committee leadership role    $ 30,000  

We have also entered into indemnification agreements with each of our non-executive (and executive) directors, which provide for indemnification, to the fullest extent permitted by applicable law, with respect to all expenses and claims that a director incurs in connection with any event or occurrence related to the fact that the director was serving as a director, officer, fiduciary, employee, agent or advisor of Raymond James or any of our affiliates. Pursuant to the agreements, directors may also obtain advancement of certain expenses in connection with indemnified claims. (A copy of the form of indemnification agreement is exhibit 10.10 to our 2020 Annual Report to Shareholders, as filed with the SEC.)

We encourage our directors to attend educational programs that assist them in the performance of their duties, and we reimburse reasonable costs of such attendance where approved in advance by the company.

 

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Director Compensation Table for 2020

The following table sets forth the compensation paid to our non-executive directors for services during fiscal 2020.

 

         

Name(1)

 

  

 

Fees Paid
in Cash(2)

 

   

 

Stock
Awards(3)

 

   

 

All Other
Compensation(4)

 

  

Total

 

 
   

Charles G. von Arentschildt

   $ 100,000     $ 149,966     $2,487    $ 252,453  
   

Shelley G. Broader(5)

   $ 50,000     $        —     $2,487    $ 52,487  
   

Robert M. Dutkowsky

   $ 100,000     $ 149,966     $3,387    $ 253,353  
   

Jeffrey N. Edwards

   $ 100,000     $ 149,966     $2,487    $ 252,453  
   

Benjamin C. Esty

   $ 160,000     $ 149,966     $2,487    $ 312,453  
   

Anne T. Gates

   $ 100,000     $ 149,966     $2,487    $ 252,453  
   

Gordon L. Johnson

   $ 178,000 (6)    $ 174,876 (7)    $4,096    $ 356,972  
   

Roderick C. McGeary

   $ 100,000     $ 149,966     $2,487    $ 252,453  
   

Raj Seshadri

   $ 100,000     $ 149,966     $1,934    $ 251,900  
   

Susan N. Story

   $ 140,000     $ 149,966     $2,487    $ 292,453  

 

 

 

  (1)

Mr. Godbold, our Vice Chairman, is an employee who does not receive any additional compensation for services as a director. Please see the section below entitled “Relationships and Related Transactions” for information regarding his compensation as an employee.

 

  (2)

Includes the annual retainer and, as applicable, Lead Director and committee chair fees.

 

  (3)

The amounts shown in this column represent the aggregate grant date fair value of RSUs granted to our directors who are not Named Executive Officers in fiscal year 2020. The grant date fair value per share of the RSUs granted to each of the directors in fiscal year 2020 under Accounting Standards Codification (ASC) Topic 718 (“ASC Topic 718”) was $101.26. Awards vest on the first anniversary of the grant.

 

  (4)

All other compensation represents accrued dividend equivalents on unvested RSUs as of September 30, 2020.

 

  (5)

Ms. Broader did not stand for re-election in 2020 and her term ended in February 2020.

 

  (6)

The fees paid in cash to Mr. Johnson include $48,000 paid to him by RJ Bank for his service as a director.

 

  (7)

Includes 246 RSUs awarded to Mr. Johnson for service as a director of RJ Bank.

The aggregate number of share awards outstanding, as of September 30, 2020, for each of our non-executive directors was as follows:

 

   
Name    Restricted
Stock Units
Outstanding
(#)
 
   
Charles G. von Arentschildt      1,481  
   
Robert M. Dutkowsky      1,481  
   
Jeffrey N. Edwards      1,481  
   
Benjamin C. Esty      1,481  
   
Anne Gates      1,481  
   
Gordon L. Johnson      1,907  
   
Roderick C. McGeary      1,481  
   
Raj Seshadri      1,481  
   
Susan N. Story      1,481  

Director Marlene Debel, who was appointed to the Board on December 2, 2020, will participate in the standard fee arrangements for non-executive directors, described above. Consistent with such arrangements, effective upon public announcement of her appointment to the Board, Ms. Debel was granted an award of restricted stock units with a prorated value of $37,500, which units will vest in full at the first anniversary of the grant date.

 

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Stock Ownership Policy for Directors and Executive Officers

The Board maintains a Directors and Executive Officers Stock Ownership Policy that stipulates the following ownership levels of shares of our common stock that non-executive directors and executive officers are required to attain within five years of their election or the policy’s most recent adoption / revision (November 21, 2019).

 

Title   Holding requirement   Valuation   What counts?
       

Non-executive director

  5X annual retainer   Average of NYSE closing price during 60 days prior to measurement  

•  Shares owned directly or jointly with family members

•  Shares owned indirectly

•  Unvested time-based restricted stock and RSUs

 

Chief Executive Officer

 

7X annual salary

Executive Officers

 

3X annual salary

An individual’s compliance with the policy is tested annually as of the last trading day of each fiscal year. Until the required ownership level is achieved, each individual must retain 100% of the net shares (after deductions for taxes or option exercise price) obtained through the company’s share incentive plans.

The following table shows, as of September 30, 2020, the progress of our non-executive directors towards meeting the requirements of the policy.

 

Name    Year Service
Commenced
   Shares of
Stock Held
(#)
   Restricted Stock
Units Held
(#)
   Total Shares
Held
(#)
   Share
Ownership
Goal  Met (1)

 

Charles G. von Arentschildt

 

  

 

2015

 

  

 

  8,948

 

  

 

1,481

 

  

 

10,429

 

  

 

 

 

Robert M. Dutkowsky

 

  

 

2018

 

  

 

  2,451

 

  

 

1,481

 

  

 

  3,932

 

  

 

 

 

Jeffrey N. Edwards

 

  

 

2014

 

  

 

14,070

 

  

 

1,481

 

  

 

15,551

 

  

 

 

 

Benjamin C. Esty

 

  

 

2014

 

  

 

13,370

 

  

 

1,481

 

  

 

14,851

 

  

 

 

 

Anne Gates

 

  

 

2018

 

  

 

  3,406

 

  

 

1,481

 

  

 

  4,887

 

  

 

 

 

Gordon L. Johnson

 

  

 

2010

 

  

 

20,719

 

  

 

1,907

 

  

 

22,626

 

  

 

 

 

Roderick C. McGeary

 

 

  

 

2015

 

  

 

  8,410

 

  

 

1,481

 

  

 

  9,891

 

  

 

 

Raj Seshadri

 

  

 

2019

 

  

 

  1,362

 

  

 

1,481

 

  

 

  2,843

 

  

 

 

 

Susan N. Story

 

  

 

2008

 

  

 

26,927

 

  

 

1,481

 

  

 

28,408

 

  

 

 

 

 

 

  (1)

Based on our current compensation practices, it is anticipated that Ms. Debel, Mr. Dutkowsky, Ms. Gates and Ms. Seshadri will attain their share ownership goals within the time period prescribed by the policy.

 

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COMPENSATION MATTERS

Compensation Discussion and Analysis

Introduction

This section presents a discussion and analysis of the philosophy and objectives of the CGN&C Committee (“Committee”) in designing and implementing compensation programs for our executive officers. We describe the compensation decisions relating to our chief executive officer, chief financial officer, former chief financial officer, and our next three most highly-compensated executive officers (collectively, “named executive officers” or “NEOs”), who for 2020 were:

 

Name   Title
   
Paul C. Reilly   Chairman and Chief Executive Officer
   
  Paul M. Shoukry   Chief Financial Officer (CFO) and Treasurer
   
Jeffrey P. Julien   Executive Vice President (EVP) — Finance (former CFO)
   
James E. Bunn   President — Global Equities and Investment Banking
   
John C. Carson, Jr.   President
   
Bella Loykhter Allaire   EVP — Technology and Operations

Objectives of our Compensation Program

We compete for talent with other large financial services firms throughout the United States, Canada, the United Kingdom and Europe, and our ability to sustain or improve our position in this highly competitive environment depends substantially on our ability to continue to attract and retain the most qualified employees. We thus strive to maintain compensation policies that enable us to attract, motivate and retain high-quality executive officers and ensure that their individual interests are aligned with those of our shareholders. Our goal is to reward executive officers for the achievement of near-term and long-term strategic and operational goals, while at the same time avoiding excessive risk-taking. We therefore structure our incentive awards to include vesting, deferred payment, and cancellation and claw-back provisions that protect the company.

Our executive compensation program emphasizes discretionary variable annual performance compensation and long-term incentive compensation, a portion of which will be received by the executive only upon our attainment of specific financial targets. We adjust dollar amounts of annual grants to reward achievement of the company’s financial and strategic objectives. In addition, a portion of long-term incentive compensation serves shareholders’ interests by conditioning vesting upon future performance that executes on the Company’s long-term business strategy. Our NEOs participate on the same basis as other employees in health and welfare, and paid time-off benefits.

Use of Equity Compensation

We deliver a substantial portion of incentive compensation in the form of equity awards — generally restricted stock units (“RSUs”) — a portion of which will vest based on future return on equity (“ROE”) performance and are subject to cancellation and claw-back over a multi-year period. The Committee believes that delivering equity aligns employee interests with those of shareholders and helps motivate executives to achieve financial and strategic goals within the bounds of the Company’s risk tolerance levels.

 

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Awards to CEO. The annual bonus for our CEO is delivered 50% in cash and 50% in the form of RSUs. 60% of the portion paid in RSUs will vest on the third anniversary of the grant only if the company attains certain defined adjusted average after-tax ROE(1) levels over a 3-year measurement period (“performance RSUs”). The remaining 40% of the portion paid in RSUs will vest on the third anniversary of grant.

Awards to Other Executive Officers. Where the annual bonus of one of our other executive officers (including NEOs) exceeds $275,000, a variable portion of the amount over $250,000 is similarly delivered in RSUs. The proportion of bonus delivered in RSUs increases with the size of the bonus. Specifically, for each portion of the bonus that falls within the dollar parameters set forth in the following table, the indicated percentage is delivered in RSUs, with the balance delivered in cash:

 

Segment of Annual Bonus            Portion in RSUs                    Portion in  Cash        
     
$250,000 – $500,000    10%   90%
     
$500,001 – $1,000,000    15%   85%
     
$1,000,001 – $2,000,000        20%   80%
     
$2,000,001 – $3,000,000        25%   75%
     
Above $3,000,000    50%   50%

Of the RSUs delivered to such other executive officers, 50% are performance RSUs that will vest on the third anniversary of the grant only if the company attains certain defined ROE levels. The remaining 50% of these RSUs vest on the third anniversary of grant.

Performance RSU Vesting Based on ROE. The Committee has chosen ROE because it believes it is an appropriate indicator of the return the company is delivering on shareholders’ equity, since it reflects both bottom-line profitability and the manner in which the company is managing shareholders’ equity to generate such profitability. The Committee believes that ROE is particularly relevant for the financial services industry in light of the capital-intensive nature of many of our businesses, making it a useful measure of relative performance across many financial services firms. The Committee uses adjusted ROE(1) as presented in our quarterly earnings releases, which excludes certain material items that are not indicative of our core operating results.

The Committee determines the appropriate ROE vesting scale for the grant of each year’s performance RSUs. The performance RSUs will vest — if at all — in an amount that falls between 50% and 150% of the stated target for the award, depending on the company’s ROE for the applicable measurement period. From time to time, the Committee may positively or negatively adjust the vesting scale for a particular year of grants in order to reflect equity, interest rate and credit market conditions, as well as other factors outside the control of the company, and to ensure that vesting of these awards remains a challenge but is reasonably attainable considering our Board’s commitment to maintaining conservative capital levels.

 

(1) Adjusted ROE is a non-GAAP measure. Please refer to Appendix A for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.

 

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For grants made in respect of fiscal 2020 performance, the Committee determined the following vesting formula (with results to be interpolated as necessary):

 

 

LOGO

Our Compensation Practices

What We Do

LOGO Pay for performance. We award annual variable compensation based on the performance of the company and the individual. The great majority of our executive officers’ compensation is variable and not guaranteed.

LOGO Use deferred compensation. Variable compensation for our executive officers also includes a deferred component, in that a portion of annual bonuses (“stock bonus awards”) is delivered in the form of both time-based and performance-based RSUs.

LOGO Performance-based equity awards. The vesting of sixty percent (60%) for our CEO, and fifty percent (50%) for our other NEOs, of the RSUs awarded to our executive officers as stock bonus awards is tied to the achievement of defined adjusted ROE(1) levels over a three-year measurement period (“performance vesting”).

LOGO Long vesting periods. Both the time-vesting and performance-vesting portions of our stock bonus awards generally vest on a cliff basis three years after the grant date. Both our outstanding legacy stock options and the retention RSUs with which we have replaced them generally vest 60% on the 3rd anniversary, and 20% on each of the 4th and 5th anniversaries, of their grant dates. In addition, each award under our Long-Term Incentive Plan (“LTIP”), a non-qualified retention plan for highly compensated employees, cliff vests at the end of a five-year period.

LOGO “Claw-back” policy. We maintain a robust compensation recoupment policy, which permits the company to recover compensation in the event of a financial restatement, inaccurate performance measures, and serious misconduct or materially imprudent judgment that results in material financial or reputational harm to the company.

LOGO Stock ownership guidelines. We maintain stock ownership requirements for our executive officers, creating a further link between management interests, company performance and shareholder value. All of our NEOs have reached or exceeded the ownership requirements.

 

(1) Adjusted ROE is a non-GAAP measure. Please refer to Appendix A for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.

 

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LOGO “Double triggers.” Our award agreements for RSUs generally maintain the requirement of “double triggers” on the accelerated vesting of awards in the event of a change in control, meaning that an executive must actually be terminated following the change in control before vesting will be accelerated.

LOGO Limited perquisites. We provide very limited perquisites that provide a demonstrable benefit to the company’s business.

What We Don’t Do

LOGO No long-term employment agreements. Our executive officers, including our CEO and other NEOs, are employed by us on an “at will” basis and do not have any special arrangements for severance payments following termination.

LOGO No dividends on unearned performance-based awards. We do not pay dividends or dividend equivalents on performance-based awards during the vesting period. Rather, dividends are deferred and paid only based on performance achieved, with no premiums.

LOGO No “gross ups.” We do not generally provide excise tax “gross ups,” other than in the case of certain relocation expenses, consistent with our relocation policy.

LOGO No pledging by insiders. The company maintains a policy under which our directors and executive officers are prohibited from pledging our common stock, subject to any exception granted for a non-margin pledge upon special application.

LOGO No short selling or hedging by insiders. Our directors and executive officers are generally prohibited from engaging in short sales, transacting in publicly traded or private options and engaging in hedging or monetization transactions with respect to our common stock.

LOGO No option re-pricing. Our equity incentive plans contain certain provisions prohibiting option re-pricing absent approval of our shareholders.

LOGO No option backdating or “spring-loading.” We do not backdate options or grant options retroactively. In addition, we do not coordinate grants of options so that they are made before announcement of favorable information, or after announcement of unfavorable information. Options for our stock are granted at fair market value on a fixed date or event, with all required approvals obtained in advance of or on the actual grant date.

Consideration of Prior “Say on Pay” Vote

We hold an advisory vote of our shareholders on executive compensation annually. At the 2020 annual shareholders meeting, 94.82% of the votes cast were in favor of the advisory proposal to approve our NEOs’ compensation (the “Say-on-Pay” proposal). We believe that the 2020 vote approving the Say-on-Pay proposal once again conveyed our shareholders’ strong support of the Committee’s decisions and our existing executive compensation programs. Based on this feedback, the Committee determined to continue our current compensation practices as described herein.

 

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Elements of Compensation

The Committee utilizes the following balanced mix of compensation elements for executive officers, with total compensation weighted heavily towards variable elements that reward longer-term performance.

 

     
Type   Pay Element & Purpose   How Amount Is  Determined
     

LOGO

 

 

 

Base Salary - Provides base level of pay

   

Internal and external market factors

   

 

   

Reviewed annually, with adjustments - if any - effective at beginning of calendar year

     

LOGO

 

 

 

Annual Bonus - Cash
Provides competitive incentive opportunity

   

Based on company’s annual financial results and progress against strategic objectives

 

 

   

Funded from a pool not exceeding 6% of consolidated pre-tax income, with no individual bonus exceeding 3%

 

 

   

For CEO, bonus is delivered 50% in cash and 50% in equity awards

   

 

   

For other NEOs, a variable portion of bonus is delivered in equity awards

     

LOGO

 

 

 

Annual Bonus - Equity
Aligns executive with shareholder interests

   

For CEO, 50% of bonus delivered in RSUs, with 60% of RSUs performance-vesting and 40% time-vesting

 

 

 

Encourages retention by vesting at end of 3-year period

   

For other NEOs, a variable portion of bonus is delivered in RSUs, with equity proportion increasing with size of bonus

 

 

 

 

   

For other NEOs, 50% of RSUs vest on 3rd anniversary of grant, and remaining 50% vest, if at all, on 3rd anniversary of grant conditional on company performance

 

 

 

Performance vesting awards depend on company’s achievement of ROE thresholds, thus further aligning executive with long-term shareholder interests

 

 

Performance vesting requires company to attain defined adjusted (non-GAAP) average after-tax return on equity levels over a three-year vesting period (“ROE”)

   

 

   

Depending on ROE achieved, performance vesting RSUs may vest from 0% to 150% of stated target amount

     

LOGO

 

 

 

Retention Awards - RSUs
Aligns executive with shareholder interests

   

Annual time-vesting RSU grants to executives for retention purposes

   

 

 

Encourages retention by longer vesting period

   

Vests 60% on 3rd anniversary, and 20% on each of 4th and 5th anniversaries of grant

     

LOGO

 

 

 

Retirement Plan Contributions -
Profit Sharing, ESOP and LTIP align executive with shareholder interests since contributions are based on company financial results

 

 

   

 

   

Profit Sharing Plan

   

Contributions to Profit Sharing, ESOP and LTIP determined annually based on company performance

   

Employee Stock Ownership Plan (ESOP)

   

Profit Sharing and ESOP are qualified retirement plans covering all associates

   

Long Term Incentive Plan (LTIP) - Encourages retention by vesting at end of five-year period

   

LTIP is a non-qualified retention plan for highly compensated employees which relates to earnings in excess of qualified plan compensation limits

   

401(k) Plan - Facilitates tax-
advantaged retirement savings

   

Modest matching of employee contributions into 401(k) Plan

Fiscal 2020 Company Performance Highlights

Strategic Execution. Despite the unprecedented challenges to our business in fiscal year 2020, including the COVID-19 pandemic and the associated measures taken to prevent the spread of the virus, economic uncertainty, and social unrest, the firm successfully executed several strategic initiatives during the year. In the Private Client Group segment, fiscal 2020 was a strong year for client asset growth, financial advisor recruiting, and retention of advisors. In the Capital Markets segment, we achieved record brokerage and investment banking results and continued to make

 

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investments to expand and strengthen our platforms. The Asset Management segment continued to benefit from increased utilization of fee-based accounts by our Private Client Group clients. Raymond James Bank faced challenges due to the decline in short-term interest rates and higher loan loss provisions associated with pandemic-induced economic deterioration but continued to grow its assets through loans to Private Client Group clients and purchases of agency-backed securities.

Significantly, the firm also remained focused on improving operational efficiency while continuing to invest in service delivery and enhanced capabilities for our advisors and their clients. Most importantly, we successfully implemented these strategic initiatives while maintaining our unique, client-focused culture.

Financial Performance. Our company generated record net revenues of $7.99 billion in fiscal 2020, although lower short-term interest rates and higher loan loss reserves caused net income to decline to $818 million, or $5.83 per diluted share. On a non-GAAP basis, adjusted net income was $858 million, (1) or $6.11 per diluted share. (1) Our other financial results during the year included:

 

   

Net revenues increased 3% and earnings per diluted share decreased 19% compared to fiscal 2019,

 

   

Adjusted earnings per diluted share of $6.11(1) decreased 17% from $7.40(1) in fiscal 2019,

 

   

Our ROE for the fiscal year was 11.9%, or 12.5%(1) on an adjusted basis, representing a solid result, particularly in view of our prudent capital position throughout fiscal 2020,

 

   

The company repurchased 3.35 million shares of common stock for $263 million, at an average price of approximately $78.50 per share, and

 

   

The ratio of the firm’s total capital to risk-weighted assets remained above 25% throughout the year, well above regulatory requirements.

The firm’s solid performance in fiscal 2020 was driven by record revenues in the Private Client Group, Capital Markets and Asset Management segments. Additionally, the Capital Markets and Asset Management segments generated record annual pre-tax income as both segments generated significant operating leverage during the fiscal year. Pre-tax income declined in both the Private Client Group and Raymond James Bank segments due to lower short-term interest rates and higher loan loss provisions for Raymond James Bank.

 

   

Private Client Group — Record net revenues of $5.55 billion increased 4%, and pre-tax income of $539 million decreased 7%, compared to fiscal 2019. Record net revenues were driven by strong growth in assets in fee-based accounts and a solid net increase in the number of financial advisors to a record of more than 8,200, partially offset by the negative impact of lower short-term interest rates. Private Client Group assets under administration ended the fiscal year at a record $883.3 billion, representing 11% growth over September 30, 2019.

 

   

Capital Markets — Record net revenues of $1.29 billion increased 19%, and record pre-tax income of $225 million increased 105%, over fiscal 2019 levels. Results in the Capital Markets segment were driven by record fixed income brokerage revenues and record investment banking revenues due to broad-based strength in underwriting and M&A activity.

 

(1) Adjusted net income, adjusted earnings per diluted share, and adjusted ROE are non-GAAP measures. Please refer to Appendix A for reconciliations of these measures to the most directly comparable GAAP measures and other important disclosures.

 

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Asset Management — Record net revenues of $715 million increased 3%, and record pre-tax income of $284 million increased 12%, over fiscal 2019. Record net revenues were driven by growth in financial assets under management, which rose 7% to $153.1 billion at the end of the fiscal year. The annual growth in financial assets under management was attributable to strong net inflows in fee-based accounts in the Private Client Group and to equity market appreciation, which more than offset net outflows for Carillon Tower Advisers.

 

   

Raymond James Bank — Net revenues of $765 million decreased 10%, and pre-tax income of $196 million decreased 62%, compared to fiscal 2019. Net loans grew 1% to end the fiscal year at $21.2 billion, as lending to clients of the Private Client Group was partially offset by a decline in corporate loans due to the sale of nearly $700 million of loans in sectors believed to be most vulnerable to the COVID-19 pandemic. Net interest income declined primarily due to the decrease in short-term interest rates, which caused the Bank’s net interest margin to decline 69 basis points to 2.63% in fiscal 2020 from 3.32% in fiscal 2019. Despite relatively low nonperforming assets of 0.10%, the annual bank loan loss provision increased to $233 million in response to the rapid and widespread economic deterioration caused by COVID-19.

Use of Compensation Consultants

In making compensation decisions, the Committee considers numerous factors of company and individual performance, as well as market data regarding compensation levels for comparable industry positions. The Committee does not attempt to rank or assign relative weight to any particular factor, however. The Committee does not rely on any factor as a substitute for its own judgment, but rather applies its independent discretion to consider them in their entirety. Although the Committee did not “benchmark” compensation against a peer group, it did engage an outside compensation consultant, Pay Governance LLC, to provide market data in connection with its 2020 compensation determinations for executive officers, including our NEOs. The Committee uses such data as a reference to assist it in maintaining a general awareness of industry compensation standards and trends. The market data does not formulaically determine the Committee’s compensation decisions for any particular executive officer, however. Similarly, the Committee does not target a particular percentile of any peer group with respect to total pay packages or any individual component of pay.

Peer Group Comparisons

For 2020, the Committee used the following peer groups for the indicated NEOs:

 

Peer Group for Mr. Reilly — Chairman and CEO, and Messrs. Shoukry and Julien, — CFO*

 

     

Affiliated Managers Group

 

Invesco Ltd.

 

State Street Corp.

     

Ameriprise Financial Inc.

 

Jefferies Financial Group

 

Stifel Financial Corp.

     

Charles Schwab Corp.

 

Lazard Ltd.

 

T. Rowe Price Group Inc.

     

E*TRADE Financial Corp.

 

Legg Mason, Inc.

 

TD Ameritrade Holding Corp.

     

Edward Jones

 

LPL Financial Holdings Inc.

   
     

Franklin Resources Inc.

 

Northern Trust Corp.

   

 

 

  *

Peer group used for Mr. Shoukry and Mr. Julien excluded T. Rowe Price Group, Inc.

 

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Peer Group for Mr. Bunn
Head of Investment Banking Role   Head of Equities Role
   

Jefferies

 

Lazard Freres & Co.

   

JMP Securities

 

KeyCorp.

   

Moelis & Company Group LP

 

JMP Securities

   

Nomura Securities

 

Leerink Partners

   

Robert W. Baird & Co.

 

Nomura Securities

   

William Blair & Company

 

Piper Jaffray

   

Piper Sandler

 

Truist

   

Greenhill

 

William Blair & Company

   

Houlihan Lokey

 

Robert W. Baird & Co

 

Peer Group for Mr. Carson — President

 

     

Northern Trust Corporation

 

Robert W. Baird & Co.

 

Wells Fargo

     

PNC Bank

 

Truist

   
     

Regions Financial Corporation

 

U.S. Bancorp

   

 

Peer Group for Ms. Loykhter Allaire — EVP Technology and Operations
     

Citizens Financial Group

 

Franklin Templeton

 

Royal Bank of Canada

     

Comerica

 

Invesco Ltd.

 

Truist

     

Fidelity Investments

 

Legg Mason & Co.

 

William Blair & Company

     

Fifth Third Bank

 

LPL Financial Services

   

Changes to our Compensation Practices for 2020

We made no significant changes to our compensation practices for 2020.

2020 Compensation Decisions

In November 2020, our chairman and chief executive officer, Mr. Reilly, evaluated the performance of the company and the individual performance of each executive officer, including the NEOs, against previously-determined individual goals. Mr. Reilly made recommendations to the Committee as to the amounts of annual bonus and retention RSUs to be awarded each executive officer (other than himself). The Committee reviewed and discussed such recommendations, as well as market data provided by its compensation consultant. The Committee evaluated the performance of Mr. Reilly and each of our other NEOs in light of all the above information. It then reviewed such information with the other non-executive directors and approved the compensation described below.

Target Compensation for 2020

The Committee sets annual compensation targets for our executive officers. The 2020 compensation targets were based upon historical compensation, financial industry surveys and fiscal 2020 budget projections. In setting these targets, the Committee also stipulated that annual bonuses would be funded from a pool equal to 6% of consolidated pre-tax income, with no individual bonus to exceed 3% of such measure.

 

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Individual Performance for 2020

Set forth below is a summary of the material accomplishments of each NEO and other important factors relevant to fiscal 2020, grouped by the areas of focus determined by the Committee at the beginning of the fiscal year, which the Committee considered in exercising its discretion to award compensation for 2020.

Our NEOs faced unprecedented challenges in managing our business during fiscal 2020, including the ongoing COVID-19 pandemic and the associated measures taken to prevent the spread of the virus, global economic uncertainty, and notable social unrest. Nevertheless, the firm successfully executed several strategic initiatives and generated record net revenues during the year. Notwithstanding these achievements, however, the company’s fiscal 2020 financial performance was significantly impacted by the pandemic, which drove increases in bank loan loss provisions, and headwinds from a near-zero short-term interest rate environment. Despite a year-over-year increase of 3% in fiscal 2020 net revenues, to a record of $7.99 billion, the firm’s net income decreased 21%, and adjusted net income(1) decreased 20%, from fiscal 2019. The company’s earnings per diluted share declined 19% from prior-year levels, and return on equity for the fiscal year was also negatively affected, declining from the 16.2% achieved in fiscal 2019 to 11.9%. In light of these shortfalls, and the continued high degree of economic uncertainty associated with the ongoing COVID-19 pandemic, the Committee determined to significantly reduce annual bonuses paid to certain of our NEOs from fiscal 2019 levels.

After considering the fiscal 2020 performance of the company described above and the individual performance factors outlined below, the Committee awarded each named executive officer the bonus and other compensation in the amounts indicated.

Paul C. Reilly, Chairman and CEO

2020 Contributions include:

 

   

Led the company to achieve record net revenues of $7.99 billion

 

   

Guided the company through the serious challenges posed by low interest rates and the COVID-19 pandemic, which resulted in significant declines in net income, earnings per diluted share, and return on equity

 

   

Continued successful financial advisor recruiting and retention

 

   

Demonstrated resilient leadership and execution of the firm’s response to the COVID-19 pandemic

 

   

Exercised strong expense management through a company-wide program to reduce non-interest expenses

 

   

Continued progress towards achieving greater diversity across the firm and implementing the company-wide commitment to the black community

 

   

Continued to invest in the development of rising key leaders and executed several leadership changes during the year

Compensation: The Committee approved an annual bonus for 2020 of $9,400,000.

Paul M. Shoukry, CFO and Treasurer

2020 Contributions include:

 

   

Promoted to CFO in January 2020

 

   

Supported the company in achieving record net revenues

 

   

Exercised strong leadership over the firm’s expense management initiatives

 

(1) Adjusted net income, adjusted earnings per diluted share, and adjusted ROE are non-GAAP measures. Please refer to Appendix A for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.

 

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Managed the firm’s capital and liquidity risk, including overseeing the firm’s share repurchase program, which repurchased approximately 3.35 million shares for $263 million during the fiscal year

 

   

Led effort to issue $500 million 10-year senior notes during the onset of the COVID-19 crisis in March 2020

Compensation: Mr. Reilly recommended, and the Committee approved, an annual bonus for 2020 of $1,600,000.

Jeffrey P. Julien, EVP, Finance

2020 Contributions include:

 

   

Served as CFO during first quarter of fiscal year 2020 and successfully transitioned responsibilities to his successor, Mr. Shoukry, in January 2020

 

   

As its chairman, led Raymond James Bank to evaluate and proactively manage risk in the corporate loan portfolio in response to the COVID-19 pandemic

 

   

Provided valuable contributions on Raymond James Bank’s Loan Committee, RJF’s Disclosure Committee, and the Asset/Liability Committee

Compensation: Mr. Reilly recommended, and the Committee approved, an annual bonus for 2020 of $1,425,000.

James E. Bunn, President of Global Equities and Investment Banking

2020 Contributions include:

 

   

Led Global Equities and Investment Banking business unit to record annual net revenues, including record investment banking revenues

 

   

Oversaw continued progress in optimizing revenue sources and investments in the research, sales and trading businesses

 

   

Continued to make strategic additions to the team with the hiring of several managing directors while continuing to evaluate several potential acquisition opportunities

Compensation: Mr. Reilly recommended, and the Committee approved, an annual bonus for 2020 of $3,650,000.

John C. Carson, Jr., President

2020 Contributions include:

 

   

Led the Fixed Income business to achieve record net revenues and pre-tax income

 

   

Prudently managed fixed income inventory levels during the heightened uncertainty and volatility beginning with the onset of the COVID-19 pandemic

 

   

Successfully mentored rising leaders and transitioned critical leadership roles in Fixed Income

 

   

Led the corporate development function’s evaluation of several potential acquisition opportunities throughout the year

Compensation: Mr. Reilly recommended, and the Committee approved, an annual bonus for 2020 of $3,000,000.

Bella Loykhter Allaire, Executive Vice President of Technology and Operations

2020 Contributions include:

 

   

Enabled the firm to recruit and retain financial advisors by providing Technology and Operations tools and services required to serve their clients

 

   

Successfully led her team to overcome significant challenges during the onset of the COVID-19 pandemic to ensure that our advisors and associates could work remotely and continue providing uninterrupted service to clients

 

   

Maintained strong cost discipline in both the Technology and Operations functions

Compensation: Mr. Reilly recommended, and the Committee approved, an annual bonus for 2020 of $2,350,000.

 

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The following charts present the mix of compensation elements actually received for 2020 performance by our CEO and our other named executive officers (average) (excluding retirement plan contributions):

Components of Total Direct Compensation — 2020 Actual

 

CEO   Other NEOs - Average
LOGO   LOGO

Annual Direct Compensation for 2020

After assessing the company’s financial and strategic performance for fiscal 2020 and evaluating the individual performance of our NEOs, the Committee exercised its discretion to award annual direct compensation for 2020 as set forth in the following table.

This Annual Direct Compensation Table differs from the Summary Compensation Table (“SCT”) on page 38 required by SEC rules, and is not a substitute for the SCT. There are two main differences:

 

   

We grant annual bonuses (cash and equity components) after our fiscal year has ended. Equity awards granted in fiscal 2021 to reward fiscal 2020 performance are therefore shown as 2020 compensation in this Annual Direct Compensation Table. The SCT, however, reports equity awards in the year they are granted, irrespective of the year they were earned.

 

   

The SCT contains a column reporting “All Other Compensation,” which amounts are not part of the Committee’s compensation determinations and are thus not shown in this Annual Direct Compensation Table.

 

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Name and Principal Position

 

Year

    Annual Direct Compensation  
 

Salary

    Incentive Compensation    

Total

 
  Cash Bonus     Time
Vesting
Stock Bonus
Awards(1)(2)
    Performance
Vesting
Stock Bonus
Awards(1)(2)(3)
    Time
Vesting
Stock
Retention
Awards(2)(4)
 

Paul C. Reilly

    2020     $ 500,000     $ 4,700,054     $ 1,879,960     $ 2,819,986 (5)    $ 1,231,100     $ 11,131,100  

Chairman and Chief

    2019     $ 500,000     $ 5,875,040     $ 2,349,984     $ 3,524,976 (6)    $ 1,101,875     $ 13,351,875  

Executive Officer

    2018     $ 500,000     $ 5,500,043     $ 2,199,983     $ 3,299,974 (7)    $ 953,375     $ 12,453,375  

Paul M. Shoukry

    2020     $ 281,250     $ 1,380,039     $ 110,026     $ 109,935 (5)    $ 741,490     $ 2,622,740  

Chief Financial Officer and

Treasurer

                                                       

Jeffrey P. Julien

    2020     $ 300,000     $ 1,240,068     $ 92,466     $ 92,466 (5)    $ 284,100     $ 2,009,100  

Executive VP, Finance

    2019     $ 300,000     $ 2,412,554     $ 268,723     $ 268,723 (6)    $ 443,570 (8)    $ 3,693,570  
    2018     $ 295,000     $ 2,262,508     $ 243,746     $ 243,746 (7)    $ 381,350     $ 3,426,350  

James E. Bunn

    2020     $ 300,000     $ 2,775,002     $ 437,545     $ 437,453 (5)    $ 473,500     $ 4,423,500  

President

    2019     $ 300,000     $ 3,100,074     $ 599,963     $ 599,963 (6)    $ 440,750     $ 5,040,750  

Global Equities and

Investment Banking

    2018     $ 281,250     $ 2,825,052     $ 462,474     $ 462,474 (7)    $ 381,350     $ 4,412,600  

John C. Carson, Jr.

President

    2020     $ 300,000     $ 2,450,051     $ 275,020     $ 274,929 (5)    $ 473,500     $ 3,773,500  

Bella Loykhter Allaire

Executive VP

Technology and

Operations

    2020     $ 300,000     $ 1,962,576     $ 193,712     $ 193,712 (5)    $ 473,500     $ 3,123,500  
    2019     $ 300,000     $ 2,262,513     $ 243,789     $ 243,698 (6)    $ 440,750     $ 3,490,750  
                         
                                                       

 

 

  (1)

Other than with respect to Mr. Reilly’s bonuses, represents the applicable portion of any annual bonus that exceeds $275,000 for each NEO that is delivered in the form of RSUs. The proportion delivered in RSUs varies with the size of the annual bonus according to the formula presented on page 23 hereof. Of Mr. Reilly’s total bonuses, 50% was delivered in cash and 50% in RSUs. Of the RSUs, 40% were subject to time-vesting and 60% were subject to performance vesting. Each RSU vests, if at all, on the third anniversary of the grant date.

 

  (2)

Each RSU represents a contingent right to receive (i) one share of common stock and (ii) non-preferential dividend equivalents equal to the sum of any dividends on the shares of common stock underlying the RSU that were actually paid during the vesting period.

 

  (3)

Represents the aggregate number of RSUs delivered as annual bonus, computed as described in footnote (1) to this table. RSUs reported in this column vest, if at all, contingent upon the company achieving certain defined adjusted ROE levels over a 3-year measurement period, in accordance with the formula presented in footnote 19 to the Outstanding Equity Awards at Fiscal Year End for 2020 table. See footnote 9 below.

 

  (4)

Stock retention awards delivered in the form of RSUs. Other than with respect to Mr. Julien’s 2019 stock retention award, the RSUs vest 60% on the third, and 20% on each of the fourth and fifth anniversaries of the grant date.

 

  (5)

RSUs granted in fiscal 2021 vest contingent upon the company achieving adjusted ROE over a vesting period consisting of fiscal years 2021 - 2023, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2021 for fiscal year 2020 performance: Mr. Reilly $4,229,979, Mr. Shoukry $164,903, Mr. Julien $138,699, Mr. Bunn $656,180, Mr. Carson $412,394, and Ms. Loykhter Allaire $290,568.

 

  (6)

RSUs granted in fiscal 2020 vest contingent upon the company achieving adjusted ROE over a vesting period consisting of fiscal years 2020 - 2022, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2020 for fiscal year 2019 performance: Mr. Reilly $5,287,464, Mr. Julien $403,085, Mr. Bunn $899,945, and Ms. Loykhter Allaire $365,547.

 

  (7)

RSUs granted in fiscal year 2019 vest contingent upon the Company achieving adjusted ROE over a vesting period consisting of fiscal years 2019 - 2021, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2019 for fiscal year 2018 performance: Mr. Reilly $4,949,961, Mr. Julien $365,619 and Mr. Bunn $693,711.

 

  (8)

Mr. Julien’s 2019 stock retention award includes 2,000 RSUs that vest 100% on the third anniversary of the grant date and 3,000 RSUs that vest 60% on the third, and 20% on each of the fourth and fifth anniversaries of the grant date.

 

  (9)

Adjusted ROE is a non-GAAP measure. Please refer to Appendix A for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.

 

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Alignment of CEO Compensation with Total Shareholder Return. The following graph shows the total return on $100 invested in the company’s stock on September 30, 2015, compared to total annual direct compensation of our CEO for each year represented. We believe this demonstrates that our CEO’s total compensation is highly correlated to total shareholder return over these time periods. (As previously disclosed, in making its 2015 compensation decisions, the Committee approved an upward adjustment to better align CEO compensation with the Corporate Peers group.)

 

 

LOGO

Hedging Policy

The company maintains a written Insider Trading Policy (“Policy”) that is designed to prohibit company personnel from violating insider trading laws and prevent even the appearance of improper conduct. The Policy applies to directors, officers, employees and other associates of the company, together with certain of their family members and controlled entities (“Covered Persons”). The Policy imposes the following restrictions on trading in securities issued by the company (including our common stock), whether or not the Covered Person is aware of material nonpublic information concerning the company.

Directors and Executive Officers. Under the Policy, members of the Company’s Board and its executive officers (the “Pre-Clearance Group”) may not, in connection with our securities:

 

   

engage in transactions in publicly traded or private options or other derivative securities

 

   

hold such securities in a margin account unless such securities have been exempted from any security interest of the broker

 

   

pledge such securities as collateral for a loan, unless the person (i) has demonstrated the financial capacity to repay the loan without selling any pledged securities, and (ii) has submitted in advance a written approval request to the Legal Department, or

 

   

utilize standing orders for longer than one business day (other than employee stock option limit orders or approved Rule 10b5-1 trading plans).

All Covered Persons. In addition, no Covered Person (including the Pre-Clearance Group) may, in connection with our securities:

 

   

engage in short sales

 

   

transact in publicly traded or private options; except that non-Pre-Clearance Group members may sell covered call options, and/or buy protective put options in non-speculative, bona fide transactions against an existing, non-restricted long position (with certain exceptions)

 

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enter into, modify or cancel a standing order when subject to a trading “blackout”

 

   

allow any financial advisor to purchase or sell such securities within a discretionary account, or

 

   

engage in hedging or monetization transactions.

The Policy permits Covered Persons to request limited exceptions to these restrictions from time to time from the Legal Department.

Compensation Recoupment Policy

The company maintains a Compensation Recoupment Policy that is intended to reduce potential risks associated with our compensation plans, and thus better align the long-term interests of our NEOs and our shareholders. The policy contains three triggers that could result in “claw-back” of compensation: (i) instances of financial statement restatement, (ii) discovery of a materially inaccurate performance measure that resulted in an inappropriate award or vesting of incentive compensation, and (iii) serious misconduct or materially imprudent judgment that caused the company material financial or reputational harm. (Incentive compensation is defined to include any compensation other than base salary, and it thus includes cash, shares of stock, restricted shares, RSUs and stock options.) The third trigger gives the Committee authority to require forfeiture of the employee’s unvested incentive compensation awards and/or reimbursement of the most recently-received annual bonus. It applies to all executive officers and to any other employee whose annual incentive compensation exceeds 50% of total annual compensation, with the exception of Private Client Group financial advisors and branch managers.

Compensation and Risk

The Board, with the assistance of the Committee, has evaluated our compensation policies and practices for all employees. Specifically:

 

   

At the direction of the Committee, an independent compensation consultant partners with our Enterprise Risk Management and Human Resources functions to conduct an independent assessment of the material incentive compensation plans across the organization every other year.

 

   

This process begins with an objective evaluation of job functions, assessing the level of risk influence across six specific categories: credit, liquidity, market, operational, legal & compliance and reputational.

 

   

Incentive plans for job functions that were identified as having the potential to expose the company to the highest level of risk are further reviewed across a consistent framework to identify potential operational plan risks of the incentive design.

 

   

The incentive design evaluation focuses on key elements of the plan design, including: (i) performance measures, (ii) funding, (iii) performance period and pay mix, (iv) goal setting, (v) leverage, and (vi) controls and processes.

 

   

In alternating years, Human Resources conducts a high level updating review with a focus on:

 

   

Any material changes to executive and associate incentive plans

 

   

Adoption of any new incentive plans or inclusion of new roles therein

 

   

Review of any acquired company compensation plans and roles.

The most recent bi-annual review noted that our practices of requiring deferral of a portion of bonus amounts into a mix of time- and — in the case of executive officers — performance-vesting equity awards, our robust share ownership guidelines, our compensation recoupment policy and our prohibition on hedging by executives all serve to further mitigate risk in our compensation plans.

 

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The review concluded that none of the company’s incentive plans were likely to motivate behavior that would result in a material adverse impact to the company. The potential residual risks identified through the process were determined to be effectively mitigated through established risk controls, leadership oversight, and our culture of proactive risk management.

After reviewing an update to the above review, our Board has concluded that our compensation policies in general, and our incentive programs in particular, remain well aligned with the interests of our shareholders and do not create risks that are reasonably likely to result in a material adverse effect on the company.

Annual Compensation Framework & Process

Pay-Setting Process. Following recommendation by our chairman and CEO, the Committee sets performance priorities at the beginning of each fiscal year to guide its evaluation of company and individual executive officer performance throughout the year. These performance priorities are a directional assessment and their attainment or non-attainment does not correspond to any specific compensation decision or amount of compensation. At such time, the Committee also stipulates that annual bonuses will be funded from a pool not to exceed 6% of consolidated pre-tax income, with no individual bonus to exceed 3% of such measure.

Following completion of a fiscal year, our chairman and CEO reviews the performance of the company and evaluates the individual performance of each executive officer, including the NEOs, against previously-determined individual goals. Our CEO then makes recommendations to the Committee as to the respective amounts of annual bonus and retention RSUs to be awarded to each NEO (other than himself). Similarly, the Committee (in the absence of the CEO) reviews the performance of the CEO and determines the appropriate amounts of his annual bonus and retention RSU grants. In the course of its deliberations, the Committee also discusses these recommendations with the other non-executive directors.

To inform its use of discretion in determining compensation, the Committee evaluates both company and individual performance. The Committee does not utilize formulaic financial performance goals or targets, and performance metrics are not assigned any specific weighting for purposes of determining the compensation awarded to the CEO or other NEOs. Since market conditions — and the macroeconomic environment — strongly affect the financial services industry and can change dramatically during the course of a year, the Committee assesses financial performance at the end of the year in light of the most recent facts and circumstances. No single financial or performance metric controls compensation decisions. Rather, such data are used to help the Committee better understand company and individual performance. After evaluating the performance of our CEO and each of our other NEOs for the relevant fiscal year, the Committee applies its discretion to determine the compensation for each.

Income Deduction Limitations under Section 162(m). Section 162(m) of the Internal Revenue Code (“§162(m)”) generally sets a limit of $1 million on the amount of compensation that the company may deduct for federal income tax purposes in any given year with respect to the compensation of “covered employees,” which currently includes our principal executive officer, our principal financial officer and the three most highly compensated executive officers (as well as individuals in these categories in certain prior years). Historically, compensation that qualified as “performance-based compensation” under §162(m) could be excluded from this $1 million limit. This exception was repealed effective for taxable years beginning after 2017, with certain transition relief. The Committee’s general intent prior to repeal was to structure our executive compensation programs so that some payments could qualify as

 

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“performance-based compensation.” However, the Committee may have decided from time to time to grant compensation that would not qualify as “performance-based compensation” if appropriate to achieve the objectives of the company’s compensation program. The Committee continues to believe that the tax deduction limitation should not compromise its ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that, in certain cases, is not deductible for federal income tax purposes, and it is possible that awards intended to qualify as “performance-based compensation” under the transition relief may not so qualify.

Based on the factors discussed under “2020 Compensation Decisions” above, in fiscal 2020 the company paid, and in fiscal 2021 the Committee expects the Company to pay, certain NEOs compensation, including a base salary, annual bonus and retention RSUs that, in the aggregate, exceeds $1 million in value. The Committee believes that this compensation is necessary in order to maintain the competitiveness of the total compensation package and, as a result, has determined that it is appropriate, regardless of whether certain amounts of such compensation are ultimately deductible for federal income tax purposes.

 

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2020 COMPENSATION TABLES

Summary Compensation Table for Fiscal 2020

The following table sets forth information about compensation earned by our named executive officers during fiscal 2018, 2019 and 2020 in accordance with SEC rules. The information presented below may be different from compensation information presented in this Proxy Statement under the caption “Compensation Discussion and Analysis,” since that section describes compensation decisions made with respect to the indicated fiscal year, regardless of when the compensation was actually paid or granted. For a more detailed explanation of the differences between the presentation in the Compensation Discussion and Analysis and the table below, please see the note on page 32.

 

 

Name

 

  

 

Year

 

  

 

Salary

 

  

 

Bonus(1)

 

  

 

Stock Awards(2)

 

 

 

All Other
Compensation(3)

 

  

 

Total

 

 

Paul C. Reilly

Chairman and CEO

    

 

 

 

2020

 

    

 

$

 

500,000

 

    

 

$

 

4,700,054

 

    

$

6,976,835

(4)

 
   

 

$

 

272,470

 

    

 

$

 

12,449,359

 

       2019      $ 500,000      $ 5,875,040      $ 6,453,332     $ 262,022      $ 13,090,394
       2018      $ 500,000      $ 5,500,043      $ 4,903,694     $ 219,906      $ 11,123,643

Paul M. Shoukry

Chief Financial Officer and Treasurer

       2020      $ 281,250      $ 1,380,039      $ 765,615 (5)      $ 57,081      $ 2,483,985
                              

Jeffrey P. Julien

EVP, Finance

       2020      $ 300,000      $ 1,240,068      $ 981,016 (6)      $ 123,153      $ 2,644,237
       2019      $ 300,000      $ 2,412,554      $ 868,842     $ 114,831      $ 3,696,227
       2018      $ 295,000      $ 2,262,508      $ 841,430     $ 141,690      $ 3,540,628

James E. Bunn

President, Global Equities and Investment Banking

       2020      $ 300,000      $ 2,775,002      $ 1,640,676 (7)      $ 112,806      $ 4,828,484
       2019      $ 300,000      $ 3,100,074      $ 1,306,298     $ 115,385      $ 4,821,757
       2018      $ 281,250      $ 2,825,052      $ 1,484,167     $ 153,176      $ 4,743,645

John C. Carson, Jr.

President

       2020      $ 300,000      $ 2,450,051      $ 865,720 (8)      $ 103,911      $ 3,719,682
                              

Bella Loykhter Allaire

EVP, Technology and Operations

       2020      $ 300,000      $ 1,962,576      $ 928,237 (9)      $ 482,469      $ 3,673,282
       2019      $ 300,000      $ 2,262,513      $ 831,278     $ 317,148      $ 3,710,939
                                                                

 

 

  (1)

The amounts disclosed in the Bonus column represent the annual cash bonus, as described in the CD&A, awarded to the NEOs.

 

  (2)

The amounts shown in the Stock Awards column represent the grant date fair value of equity awards granted to the NEOs in the fiscal year shown. For a description of the assumptions used in calculating the fair value of equity awards under ASC Topic 718, see Note 2 to our financial statements in our Form 10-K report for the year ended September 30, 2020. For more information, see the Grants of Plan Based Awards for Fiscal 2020 table below.

 

  (3)

See the All Other Compensation table below for a breakdown of these amounts.

 

  (4)

Includes 38,324 RSUs that vest over time and 38,736 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Reilly is $5,287,464.

 

  (5)

Includes 8,625 RSUs that vest over time.

 

  (6)

Includes 7,953 RSUs that vest over time and 2,953 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Julien is $403,085.

 

  (7)

Includes 11,593 RSUs that vest over time and 6,593 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Bunn is $899,945.

 

  (8)

Includes 7,335 RSUs that vest over time and 2,335 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Carson is $318,728.

 

  (9)

Includes 7,679 RSUs that vest over time and 2,678 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Ms. Loykhter Allaire is $365,547.

 

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All Other Compensation Table for Fiscal 2020

The following table sets forth more detailed information concerning the items included in the “All Other Compensation” column of the Summary Compensation Table above.

 

 

Name

 

 

 

Employee
Stock
Ownership
Plan
Contribution

 

 

 

Profit

Sharing
Contribution(1)

 

 

 

401(k)
Company
Match

 

 

 

Deferred
Compensation
Plan
Contribution(2)

 

 

 

Deferred
Compensation
Plan Gain(2)

 

 

 

Accrued
Dividends(3)

 

 

 

Commissions

 

 

 

Perquisites

 

 

 

Total

All Other 
Compensation 

 

   

 

Paul C. Reilly

   

 

$

 

4,200

 

   

 

$

 

10,897

 

   

 

$

 

1,000

 

   

 

$

 

30,000

 

   

 

$

 

13,929

 

   

 

$

 

175,564

 

   

 

$

 

 

   

 

$

 

36,880

 

(4)

 
   

 

$

 

272,470

 

   

Paul M. Shoukry

    $ 4,200     $ 10,842     $ 1,000     $ 30,000     $ 2,543     $ 8,496     $     $     $ 57,081
   

Jeffrey P. Julien

    $ 4,200     $ 12,331     $ 1,000     $ 30,000     $ 44,261     $ 31,361     $     $     $ 123,153
   

James E. Bunn

    $ 4,200     $ 11,228     $ 1,000     $ 30,000     $ 43,853     $ 22,525     $     $     $ 112,806
   

John C. Carson, Jr.

    $ 4,200     $ 11,724     $ 1,000     $ 30,000     $ 13,929     $ 43,058     $     $     $ 103,911
   

Bella Loykhter Allaire

    $ 4,200     $ 10,787     $ 1,000     $ 30,000     $ 399,731     $ 36,751     $     $     $ 482,469

 

 

 

  (1)

The employer-funded profit sharing contribution is based on the length of service and fiscal-year compensation, capped at the IRS annual compensation limit.

 

  (2)

See Nonqualified Deferred Compensation table for more information.

 

  (3)

Includes accrued dividend equivalents on unvested RSUs as of September 30, 2020.

 

  (4)

Includes company-paid travel, hotel and meal related expenses for spouse in conjunction with company-sponsored off-site business meetings, personal use of chartered aircraft for the executive officer and family members, and personal security services. The Board authorized the personal use of company-paid aircraft by Mr. Reilly in response to and during the personal health risks posed by the COVID-19 pandemic. The aggregate incremental cost of personal use of aircraft was approximately $29,424. The aggregate incremental cost of personal use of aircraft was determined based on actual costs paid by the company to third party providers.

 

Raymond James Financial, Inc.    2021 Proxy Statement  |  39


Table of Contents

 

 

Grants of Plan Based Awards for Fiscal 2020

The following table contains information concerning plan-based awards granted to each of the NEOs during fiscal 2020.

 

           

 

Estimated Future Payouts Under Equity
Incentive Plan Awards  (1)(2)

 

          

 

Name

 

  

 

Grant Date

 

  

 

Threshold(3)

 

  

 

Target(4)

 

  

 

Maximum(5)

 

  

 

All Other 

Stock 

Awards: 

Number of 

Units(2) 

 

 

 

Grant Date Fair 
Value of Stock 

Awards ($)(6) 

 

   

Paul C. Reilly

       12/13/2019        19,368        38,736        58,104          $ 3,524,976
         12/13/2019                       25,824 (7)      $ 2,349,984
         11/22/2019                       12,500 (8)      $ 1,101,875

Paul M. Shoukry

       12/13/2019                       625 (7)      $ 56,875
         12/12/2019                       3,000 (8)      $ 267,990
         11/22/2019                       5,000 (8)      $ 440,750

Jeffrey P. Julien

       12/13/2019        1,477        2,953        4,430          $ 268,723
         12/13/2019                       2,953 (7)      $ 268,723
         11/26/2019                       2,000 (9)      $ 179,120
         11/22/2019                       3,000 (8)      $ 264,450

James E. Bunn

       12/13/2019        3,297        6,593        9,890          $ 599,963
         12/13/2019                       6,593 (7)      $ 599,963
         11/22/2019                       5,000 (8)      $ 440,750

John C. Carson, Jr.

       12/13/2019        1,168        2,335        3,503          $ 212,485
         12/13/2019                       2,335 (7)      $ 212,485
         11/22/2019                       5,000 (8)      $ 440,750

Bella Loykhter Allaire

       12/13/2019        1,339        2,678        4,017          $ 243,698
         12/13/2019                       2,679 (7)      $ 243,789
         11/22/2019                                         5,000 (8)      $ 440,750

 

 

  (1)

The “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the minimum, target and maximum number of shares that could be received by each listed officer upon the vesting of RSUs, excluding dividend equivalents. RSUs vest based on the Company’s adjusted three-year average ROE for fiscal years 2020, 2021 and 2022. See footnote 19 to the Outstanding Equity Awards at Fiscal Year End for 2020 table hereof for more information. See footnote 10.

 

  (2)

Each RSU represents a contingent right to receive (i) one share of common stock and (ii) non-preferential dividend equivalents equal to the sum of any dividends on the shares of common stock underlying the RSUs that were actually paid during the vesting period.

 

  (3)

Threshold is 50 percent of awarded RSUs if the adjusted three-year average ROE is at least equal to 7 percent.

 

  (4)

Target is 100 percent of awarded RSUs if the adjusted three-year average ROE is equal to 13 percent.

 

  (5)

Maximum is 150 percent of awarded RSUs if the adjusted three-year average ROE is 19 percent or more.

 

  (6)

Reflects the grant date fair value of each equity award computed in accordance with ASC Topic 718. For a description of the assumptions used in calculating the fair value of equity awards under ASC Topic 718, see Note 2 of our financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

 

  (7)

We deliver a portion of the annual bonus awarded to highly compensated employees in the form of RSUs (see the CD&A for more information). These RSUs vest approximately three years from the date of grant.

 

  (8)

We grant stock retention awards in the form of RSUs. These RSUs vest 60% on the third, and 20% on each of the fourth and fifth, anniversaries of the grant date.

 

  (9)

Stock retention award in the form of RSUs granted to Mr. Julien. This grant vests approximately three years from the date of grant.

 

  (10)

Adjusted ROE is a non-GAAP measure. Please refer to Appendix A for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.

 

40  |  Raymond James Financial, Inc.    2021 Proxy Statement


Table of Contents

 

 

Outstanding Equity Awards at Fiscal Year End for 2020

The following table contains information as of September 30, 2020 about the outstanding equity awards held by our named executive officers.

 

       
  

 

  Option Awards              Stock Awards  
   

Name

  Number of
Securities
Underlying
Unexercised
Options
Exercisable
    Number of
Securities
Underlying
Unexercised
Options
Unexercisable
    Option
Exercise
Price
    Option
Expiration
Date
      

 

   

Number of
Units of
Stock That
Have Not
Vested

    Market
Value of
Units of
Stock That
Have  Not
Vested(1)
   

Equity Incentive
Plan Awards:
Number of

Unearned
Units That
Have Not
Vested(2)

    Equity Incentive
Plan Awards:
Market Value of
Unearned
Units That
Have Not
Vested(1)
 
   

Paul C. Reilly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,000 (3)    $ 145,520       32,894 (4)    $ 2,393,367  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    21,930 (5)    $ 1,595,627       65,493 (6)    $ 4,765,271  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    4,000 (7)    $ 291,040       58,104 (8)    $ 4,227,647  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    29,108 (9)    $ 2,117,898    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    12,500 (10)    $ 909,500    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    25,824 (11)    $ 1,878,954    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    12,500 (12)     $ 909,500    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    12,500 (13)    $ 909,500    

 

 

 

 

 

 

 

 

   

Paul M. Shoukry

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    600 (14)    $ 43,656    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    96 (5)    $ 6,985    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    1,200 (7)    $ 87,312    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    477 (9)    $ 34,707    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3,000 (15)    $ 218,280    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    625 (11)     $ 45,475    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3,000 (12)    $ 218,280    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (13)     $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3,000 (16)    $ 218,280    

 

 

 

 

 

 

 

 

   

Jeffrey P. Julien

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    1,000 (3)    $ 72,760       3,462 (4)    $ 251,895  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,308 (5)    $ 167,930       4,838 (6)    $ 352,013  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,000 (7)    $ 145,520       4,430 (8)    $ 322,327  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3,225 (9)    $ 234,651    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,000 (17)     $ 145,520    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (10)    $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,953 (11)     $ 214,860    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (12)    $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    3,000 (13)    $ 218,280    

 

 

 

 

 

 

 

 

   

James E. Bunn

    2,000    

 

 

 

  $ 55.49       11/20/21 (18)   

 

 

 

    280 (14)    $ 20,373       9,179 (6)    $ 667,864  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    8,977 (5)    $ 653,167       9,890 (8)    $ 719,596  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    1,200 (7)    $ 87,312    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    6,119 (9)    $ 445,218    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    8,000 (10)    $ 582,080    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    6,593 (11)    $ 479,707    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (12)     $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    5,000 (13)    $ 363,800      

 

 

 

 

 

   

 

 

 

 

 

 

Raymond James Financial, Inc.    2021 Proxy Statement  |  41


Table of Contents

 

 

       
  

 

  Option Awards              Stock Awards  
   

Name

  Number of
Securities
Underlying
Unexercised
Options
Exercisable
    Number of
Securities
Underlying
Unexercised
Options
Unexercisable
    Option
Exercise
Price
    Option
Expiration
Date
      

 

   

Number of
Units of
Stock That
Have Not
Vested

    Market
Value of
Units of
Stock That
Have  Not
Vested(1)
   

Equity Incentive
Plan Awards:
Number of

Unearned
Units That
Have Not
Vested(2)

    Equity Incentive
Plan Awards:
Market Value of
Unearned
Units That
Have Not
Vested(1)
 
   

John C. Carson, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    1,000 (3)    $ 72,760       4,004 (4)    $ 291,331  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,669 (5)    $ 194,196       3,473 (6)    $ 252,695  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,000 (7)    $ 145,520       3,503 (8)    $ 254,878  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,315 (9)    $ 168,439    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (10)    $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,335 (11)    $ 169,895    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (12)     $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (13)    $ 363,800    

 

 

 

 

 

 

 

 

   

Bella Loykhter Allaire

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    1,500 (3)    $ 109,140       3,246 (4)    $ 236,179  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,164 (5)    $ 157,453       4,464 (6)    $ 324,801  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,800 (7)    $ 203,728       4,017 (8)    $ 292,277  
   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,977 (9)    $ 216,607    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (10)    $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2,679 (11)     $ 194,924    

 

 

 

 

 

 

 

 

   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    5,000 (12)    $ 363,800    

 

 

 

 

 

 

 

 

   
 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    5,000 (13)    $ 363,800      

 

 

 

 

 

   

 

 

 

 

 

 

 

  (1)

The market value of stock awards is based on the closing market price of our common stock on the NYSE on September 30, 2020, which was $72.76.

 

  (2)

The number of units reported assumes that the award received by each NEO upon vesting is based upon achieving an adjusted average ROE based on the thresholds disclosed in footnote (19) to this table. Please refer to Appendix A for a reconciliation of GAAP financial measures to non-GAAP measures for fiscal years 2018, 2019 and 2020.

 

  (3)

The RSU award was granted on November 18, 2015. The unvested RSUs vest in five years from the date of grant.

 

  (4)

The RSU award was granted on December 15, 2017 and vests three years from that date based on the company’s three-year adjusted average ROE for fiscal years 2018, 2019 and 2020. Represents the maximum of 150 percent of awarded RSUs given the estimated adjusted average ROE for fiscal years 2018, 2019 and 2020.

 

  (5)

The RSU award was granted on December 15, 2017 and cliff vests three years from that date.

 

  (6)

The RSU award was granted on December 14, 2018 and vests three years from that date based on the company’s three-year adjusted average ROE for fiscal years 2019, 2020 and 2021. Represents the maximum of 150 percent of awarded RSUs given the estimated adjusted average ROE for fiscal years 2019 and 2020.

 

  (7)

The RSU award was granted on November 30, 2016. The unvested RSUs vest 50% in four years and 50% in five years from the date of grant.

 

  (8)

The RSU award was granted on December 13, 2019 and vests three years from that date based on the company’s three-year adjusted average ROE for fiscal years 2020, 2021 and 2022. Represents the maximum of 150 percent of awarded RSUs given the estimated adjusted average ROE for fiscal year 2020.

 

  (9)

The RSU award was granted on December 14, 2018 and cliff vests three years from that date.

 

  (10)

The RSU award was granted on November 30, 2017 and vests 60% three years, 20% four years and 20% five years from grant date.

 

  (11)

The RSU award was granted on December 13, 2019 and cliff vests three years from that date.

 

  (12)

The RSU award was granted on November 29, 2018 and vests 60% three years, 20% four years and 20% five years from grant date.

 

  (13)

The RSU award was granted on November 22, 2019 and vests 60% three years, 20% four years and 20% five years from grant date.

 

  (14)

The RSU award was granted on November 19, 2015. The unvested RSUs vest in five years from the date of grant.

 

  (15)

The RSU award was granted on November 22, 2017 and vests 60% three years, 20% four years and 20% five years from grant date.

 

  (16)

The RSU award was granted on December 12, 2019 and vests 60% three years, 20% four years and 20% five years from grant date.

 

  (17)

The RSU award was granted on November 26, 2019 and cliff vests three years from that date.

 

  (18)

The 5,000 option award was granted seven years prior to the option expiration date.

 

42  |  Raymond James Financial, Inc.    2021 Proxy Statement


Table of Contents

 

 

  (19)

Certain RSUs granted since fiscal year 2018 vest on the 3rd anniversary of the grant only if the company attains certain adjusted average ROE levels over a 3-year vesting period. The vesting formulas are as follows, with results to be interpolated:

Awards Granted in Fiscal Year 2021

 

  Adjusted 3-Year Average ROE    RSU Vesting
Percentage
 

³17%

     150

14%

     125

12%

     100

8%

     75

5%

     50

<5%

     0

Awards Granted in Fiscal Years 2019 and 2020

 

  Adjusted 3-Year Average ROE    RSU Vesting
Percentage
 

³19%

     150

16%

     125

13%

     100

10%

     75

7%

     50

<7%

     0

Awards Granted in Fiscal Year 2018

 

  Adjusted 3-Year Average ROE    RSU Vesting
Percentage
 

³18%

     150

15%

     125

12%

     100

9%

     75

6%

     50

<6%

     0

 

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Option Exercises and Stock Vested for Fiscal 2020

The following table provides information about stock options exercised by the NEOs during fiscal 2020 and RSU awards held by our NEOs that vested in fiscal 2020.

 

      Option Awards      Stock Awards  
Name    Number of Shares
Acquired on Exercise(1)
    Value Realized
On Exercise(2)
     Number of Shares
Acquired on Vesting(3)
    Value Realized
On Vesting(4)
 

 

Paul C. Reilly

  

 

 

 

2,500

 

(5) 

 

 

$

 

41,425

 

 

  

 

 

 

52,085

 

(6) 

 

 

$

 

4,721,681(7)

 

 

Paul M. Shoukry

     500     $ 17,210        2,400 (8)    $ 215,226(9)  

Jeffrey P. Julien

     2,500     $ 88,225        9,150     $ 826,633(10)  

James E. Bunn

     800     $ 19,000        6,677 (11)    $ 604,441(12)  

John C. Carson, Jr.

     5,000     $ 167,400        12,652 (13)    $ 1,144,691(14)  

Bella Loykhter Allaire

     4,574 (15)    $ 186,004        10,644 (16)    $ 960,427(17)  

 

 

  (1)

Total number of shares underlying the options exercised during fiscal year 2020.

 

  (2)

Amounts in this column reflect the difference between the market price on the date of exercise and the exercise price of the options exercised, multiplied by the number of options exercised.

 

  (3)

Total number of RSUs that vested during fiscal 2020.

 

  (4)

The value of the shares on each respective vesting date using the closing market price for our common stock.

 

  (5)

After disposition of a portion of the shares subject to the award back to the company to cover exercise price and/or taxes, the net number of shares issued was 515.

 

  (6)

After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 34,278.

 

  (7)

2,000 shares vested on November 18, 2019 when the closing price of our common stock was $89.44. 6,000 shares vested on November 30, 2019 when the closing price of our common stock was $89.82. 18,446 shares vested on December 15, 2019 when the closing price of our common stock was $90.88. 25,639 shares vested on January 2, 2020 when the closing price of our common stock was $90.78.

 

  (8)

After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 1,819.

 

  (9)

600 shares vested on November 19, 2019 when the closing price of our common stock was $89.25. 1,800 shares vested on November 30, 2019 when the closing price of our common stock was $89.82.

 

  (10)

1,000 shares vested on November 18, 2019 when the closing price of our common stock was $89.44. 3,000 shares vested on November 30, 2019 when the closing price of our common stock was $89.82. 2,155 shares vested on December 15, 2019 when the closing price of our common stock was $90.88. 2,995 shares vested on January 2, 2020 when the closing price of our common stock was $90.78.

 

  (11)

After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 4,363.

 

  (12)

280 shares vested on November 19, 2019 when the closing price of our common stock was $89.25. 1,800 shares vested on November 30, 2019 when the closing price of our common stock was $89.82. 4,597 shares vested on December 15, 2019 when the closing price of our common stock was $90.88.

 

  (13)

After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 9,233.

 

  (14)

1,000 shares vested on November 18, 2019 when the closing price of our common stock was $89.44. 3,000 shares vested on November 30, 2019 when the closing price of our common stock was $89.82. 3,620 shares vested on December 15, 2019 when the closing price of our common stock was $90.88. 5,032 shares vested on January 2, 2020 when the closing price of our common stock was $90.78.

 

  (15)

After disposition of a portion of the shares subject to the award back to the company to cover exercise price and/or taxes, the net number of shares issued was 1,922.

 

  (16)

After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 7,860.

 

  (17)

1,500 shares vested on November 18, 2019 when the closing price of our common stock was $89.44. 4,200 shares vested on November 30, 2019 when the closing price of our common stock was $89.82. 2,069 shares vested on December 15, 2019 when the closing price of our common stock was $90.88. 2,875 shares vested on January 2, 2020 when the closing price of our common stock was $90.78.

 

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Nonqualified Deferred Compensation for Fiscal 2020

The following table provides information regarding our deferred compensation plans for our NEOs, which include the Long Term Incentive Plan (LTIP), Deferred Management Bonus Plan (“DMBP”), and the Voluntary Deferred Compensation Plan (“VDCP”).

 

Name    Executive
Contributions in
Last Fiscal Year
    Registrant
Contributions in
Last Fiscal
Year(3)(4)
    

Aggregate

Earnings(Losses)
In Last Fiscal
Year

     Aggregate
Withdrawals/
Distributions
     Aggregate
Balance at Last
Fiscal Year-end
(2020)
 

Paul C. Reilly

              $ 251,956  

LTIP

     $ 30,000      $ 13,929      $ 51,535      $ 251,956 (5) 

Paul M. Shoukry

              $ 63,932  

LTIP

     $ 30,000      $ 2,543      $      $ 63,932 (5)  

Jeffrey P. Julien

              $ 1,435,894  

LTIP

     $ 30,000      $ 41,690      $ 51,535      $ 732,278 (5) 

DMBP

     $      $ 28      $      $ 281,315 (6) 

VDCP

   $     $      $ 2,543      $      $ 422,301 (7) 

James E. Bunn

              $ 750,748  

LTIP

     $ 30,000      $ 27,724      $      $ 505,273 (5) 

VDCP

   $ 15,000 (1)    $      $ 16,129      $      $ 245,475 (7) 

John C. Carson, Jr.

              $ 251,956  

LTIP

     $ 30,000      $ 13,929      $ 51,535      $ 251,956 (5) 

Bella Loykhter Allaire

              $ 3,751,330  

LTIP

     $ 30,000      $ 13,929      $ 51,535      $ 251,956 (5) 

VDCP

   $ 500,000 (2)             $ 385,802      $      $ 3,499,374 (7) 

 

 

  (1)

The amounts presented are included in the Salary column of the Summary Compensation Table and represents salary deferred in January 2020 through September 2020.

 

  (2)

The amounts presented are included in the Bonus column of the Summary Compensation Table and represents amounts earned with respect to the 2020 fiscal year but paid in December 2020.

 

  (3)

The amounts presented in these columns are included in the All Other Compensation table located below the footnotes to the Summary Compensation Table.

 

  (4)

Represents amounts earned with respect to the 2020 fiscal year but contributed in December 2020.

 

  (5)

The amounts presented include previously and currently reported compensation with respect to LTIP contributions made by us. The following amounts represent vested balances at September 30, 2020: Mr. Reilly $57,340, Mr. Shourky $0, Mr. Julien $537,662, Mr. Bunn $310,657, Mr. Carson $57,340 and Ms. Loykhter Allaire $57,340.

 

  (6)

The amounts presented include previously and currently reported compensation with respect to DMBP contributions made by us. The following amounts represent vested balances at September 30, 2020: Mr. Julien $281,315.

 

  (7)

The amount presented includes currently reported compensation with respect to VDCP contributions made by Mr. Julien, Mr. Bunn and Ms. Loykhter Allaire. The entire balance is vested as of September 30, 2020.

Long Term Incentive Plan. Our LTIP, originally adopted effective October 1, 2000, is a deferred compensation plan benefiting key management and other highly-compensated employees. Under the LTIP, we determine each year which employees will be participants for that plan year and then establish an account for such year for each participant. Although we can elect to use other allocation formulas, historically, the allocations under the LTIP have been made based upon the individual participant’s level of compensation above a minimum, and not in excess of a maximum (for fiscal 2020, these amounts were $280,000 and $880,000, respectively). The Committee or its designee then determines the percentage, if any, by which that compensation is multiplied to determine the contribution credited to each participant’s account for the particular plan year. Each account is thereafter credited (or debited),

 

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based upon the allocable share of the return that would have been earned (including any negative return) had all accounts been invested in a group of unaffiliated mutual funds and managed accounts. Senior management selects those mutual funds and managed accounts, pursuant to authority delegated by the Committee. Annual allocations and their deemed earnings vest after five years, subject to earlier vesting in the case of death or disability. We pay the vested account balance in a cash lump sum after five years of credited service, subject to earlier payment in the case of death or disability, and subject to certain deferral rights that must be exercised at least 12 months in advance of the account balance vesting. Because the account balances are unfunded, they represent unsecured claims against the Company.

Deferred Management Bonus Plan. Our DMBP, originally adopted effective October 1, 1989, preceded the LTIP. The DMBP remains in effect to administer certain amounts credited prior to the adoption of the LTIP. The last bonus allocation that was made to the DMBP was with respect to fiscal year 1999. Since that time, additional amounts credited to the DMBP accounts have been based on a deemed interest return on the amounts in the respective DMBP accounts. Like the LTIP, the DMBP is an unfunded plan that was established to benefit key management and other highly compensated employees. For fiscal years 1990 through 1999, each participant’s account was credited with a contribution, if any, determined by us in a manner similar to the LTIP. During such period and thereafter, participants’ accounts have been credited with a deemed interest return, based upon the average annual interest rate payable by our broker-dealer affiliate on brokerage client account funds. Annual amounts credited to a participant’s account and the deemed interest vest ratably over an eight-year period, subject to earlier vesting in the case of death, disability, attaining age 65 or a qualified early retirement. We pay the vested account balance as soon as practical following death or disability and, in the case of normal retirement, as soon as practical after the end of the plan year in which retirement occurs following the participant’s attaining the age of 65. Other provisions apply in the case of early retirement. Because the account balances are unfunded, they represent only unsecured claims against the company.

Voluntary Deferred Compensation Plan. The VDCP was established effective January 1, 2013, for the purpose of offering a voluntary, pre-tax capital accumulation opportunity for a select group of highly compensated employees and independent contractors to defer compensation. The VDCP allows participants with annual calendar year compensation of $300,000 or more to defer up to 75% of base salary, bonuses and commissions, subject to certain minimums and maximums, and permits the company to make contributions at any time in its sole discretion. Balances of participants are deemed to be invested, at the election of the participant, in funds selected by the participant from a list chosen by the committee that administers the plan. Each year participants may elect to have that year’s deferrals distributed as a scheduled in-service withdrawal or upon retirement. All plan balances (deferrals, company contributions and earnings thereon) are unsecured liabilities of the company. (The Amended & Restated VDCP was filed as exhibit 10.14 to the company’s Annual Report on Form 10-K filed with the SEC on November 22, 2016.)

Potential Payments Upon Termination or Change in Control for Fiscal 2020

Except as described below, none of the NEOs is a party to any agreement or arrangement with us providing for payments in connection with any termination, including resignation, severance or retirement, a change in such officer’s responsibilities, or a change in control of the company. The following tables summarize the estimated payments to be made under each agreement, plan or arrangement in effect as of September 30, 2020, which provides for payments to an NEO at, following or in connection with a termination of employment or a change in control. However, in accordance with SEC regulations, we do not report any amount to be provided to an NEO under any arrangement which does not discriminate in scope, terms or operation in favor of our NEOs and which is available

 

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generally to all salaried employees. In accordance with SEC regulations, this analysis assumes that the NEOs’ date of termination is September 30, 2020, and the price per share of our common stock on the date of termination is the closing price of our common stock on the NYSE as of that date, which was $72.76.

Paul C. Reilly

 

Benefit and Payments

Upon Termination

  

Voluntary
Termination
without
Good
Reason

($)

    

Termination by
Executive for
Good Reason
or Involuntary

Termination by
the Company
without Cause

($)

    

Involuntary
Termination
for Cause

($)

    

Retirement

($)(1)

    

Death or
Disability

($)

    

Change in
Control

($)

    

Qualified
  Termination  
Following
Change in
Control

($)

 
   

Salary Continuation

                                                
   

Annual Cash Bonus

                                                
   

Severance Payment

                                                
   

Share Awards

     15,366,112        15,366,112               15,366,112        16,348,372               16,348,372  
   

Stock Options

                                                
   

Welfare Benefits

                                                

 

 

  (1)

Mr. Reilly’s RSU stock bonus awards and retention awards granted in November and December 2017 and 2018 under the 2012 Plan contain an additional definition of “retirement” in order to conform with a definition used under the 2007 Stock Bonus Plan, which was in effect when Mr. Reilly was hired. Pursuant to such provision, “retirement” is defined as ending service after age 60 with 5 years of service.

Paul M. Shoukry

 

Benefit and Payments

Upon Termination

  

Voluntary
Termination
without
Good
Reason

($)

    

Termination by
Executive for
Good Reason
or Involuntary

Termination by
the Company
without Cause

($)

    

Involuntary
Termination
for Cause

($)

     Retirement
($)
    

Death or
Disability

($)

    

Change in
Control

($)

    

Qualified
  Termination  
Following
Change in
Control

($)

 
   

Salary Continuation

                                                
   

Annual Cash Bonus

                                                
   

Severance Payment

                                                
   

Share Awards

            87,166                      1,236,774               1,236,774  
   

Stock Options

                                                
   

Welfare Benefits

                                                

 

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