Toggle SGML Header (+)


Section 1: DEF 14A (DEF 14A)


Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

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

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

PACWEST BANCORP

(Name of Registrant as Specified In Its Charter)

 

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

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

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

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

Table of Contents

LOGO

9701 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212

 






NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
Monday, May 13, 2019
10:30 a.m. Pacific Time



 

Place:

Montage Beverly Hills Hotel, 225 North Canon Drive, First Floor Library, Beverly Hills, California 90210

Items of Business:

Other Business:

As of the date of this notice, the Board knows of no other matters that may be brought before stockholders at the Annual Meeting.


Table of Contents

Who May Vote:

You may vote if you were a stockholder of record on the close of business on March 18, 2019.

YOUR VOTE IS IMPORTANT.

We appreciate you taking the time to vote promptly. After reading the Proxy Statement, please vote at your earliest convenience by telephone, internet, or, if you received printed proxy materials, by completing, signing and returning by mail a proxy card. If you decide to attend the Annual Meeting and would prefer to vote by ballot, your proxy will be revoked automatically and only your vote at the Annual Meeting will be counted. YOUR SHARES CANNOT BE VOTED UNLESS YOU VOTE BY: (1) TELEPHONE, (2) INTERNET, (3) COMPLETING, SIGNING AND RETURNING BY MAIL A PAPER PROXY CARD IF YOU RECEIVED PRINTED PROXY MATERIALS, OR (4) ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON. Please note that all votes cast via telephone or the internet must be cast prior to 11:59 p.m., Eastern Time, on May 12, 2019.

Whether or not you plan to attend the Annual Meeting, please vote as soon as possible to make sure that your shares are represented at the Annual Meeting. Voting by proxy will not prevent you from voting in person if you choose to attend the Annual Meeting.

If you plan to attend the Annual Meeting, please note that admission will be on a first come, first served basis. You may obtain directions to the Montage Beverly Hills Hotel, 225 North Canon Drive, First Floor Library, Beverly Hills, California 90210 by calling the Montage Beverly Hills Hotel directly at (855) 691-1162. Each stockholder who attends may be asked to present valid picture identification such as a driver's license or passport. Stockholders holding stock in brokerage accounts ("street name" holders) will also need to bring a copy of a brokerage account statement reflecting stock ownership as of the March 18, 2019 record date. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting.

Thank you in advance for your cooperation and continued support. We look forward to seeing you at the Annual Meeting.

  By Order of the Board of Directors,

 

   

  /s/ KORI L. OGROSKY

Kori L. Ogrosky, Executive Vice President, General Counsel and Corporate Secretary

Beverly Hills, California
March 28, 2019


Table of Contents


TABLE OF CONTENTS

PROXY SUMMARY

  1

PROXY STATEMENT

  6

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

  6

CORPORATE GOVERNANCE

  11

Governance Framework

  11

Board Leadership Structure

  11

Board Attendance

  12

Independent Director Information

  12

Board Committees

  13

Board's Role in Risk Oversight

  17

Certain Relationships and Related-Party Transactions

  18

Family Relationships

  19

Compensation Committee Interlocks and Insider Participation

  19

PROPOSAL 1: ELECTION OF DIRECTORS

  20

Nominees

  20

2018 Annual Meeting Director Nominee Vote

  20

Director Core Competencies

  21

Vote Required

  21

Director Compensation

  21

Stock Ownership Guidelines for Non-Employee Directors

  22

Director Nominees

  23

COMPENSATION DISCUSSION AND ANALYSIS

  31

Executive Summary

  32

Compensation Overview

  33

Compensation Philosophy and Objectives

  33

Principal Elements of Compensation

  34

2018 Executive Compensation Decisions—Pay Mix

  35

2018 Executive Compensation Decisions

  35

Equity Compensation

  38

Decision Making Process

  40

Peer Group

  42

Best Practices Compensation Matters

  42

Tax Deductibility of Compensation

  44

Calculation of Non-GAAP Financial Measures

  45

COMPENSATION COMMITTEE REPORT

  46

Potential Payments on Termination and Change in Control

  51

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

  55

CEO Pay Ratio

  55

AUDIT COMMITTEE REPORT

  58

Independent Auditor

  59

Independent Auditor Fees

  59

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS

  60

OWNERS OF MORE THAN FIVE PERCENT

  61

OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

  62

EXECUTIVE OFFICERS

  64

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

  68

"HOUSEHOLDING" OF PROXY MATERIALS

  70

OTHER BUSINESS

  70

Stockholder Proposals

  70

Director Nominations

  71

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

  71

INCORPORATION BY REFERENCE

  72

Table of Contents

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. The Board of Directors of PacWest Bancorp is referred to in this Proxy Statement as the "Board of Directors", the "Board" or "Board". PacWest Bancorp is referred to in this Proxy Statement as "PacWest", the "Company", "we" or "our". Pacific Western Bank is referred to in this Proxy Statement as the "Bank".

This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding the Company's 2018 performance, please review the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (the "Annual Report").

VOTING AND MEETING INFORMATION

Please carefully review the proxy materials for the 2019 Annual Meeting of Stockholders (the "Annual Meeting") that will be held on May 13, 2019 at 10:30 a.m., Pacific Time, at the Montage Beverly Hills Hotel and follow the instructions below to cast your vote on all of the voting matters.

Who is Eligible to Vote

You are entitled to vote at the Annual Meeting if you were a stockholder of record at the close of business on March 18, 2019 (the "Record Date"). On the Record Date, there were 119,849,670 shares of common stock outstanding and entitled to vote at the Annual Meeting.

Advance Voting Methods

Even if you plan to attend the Annual Meeting in person, please vote right away using one of the following advance voting methods (see page 6 for additional details).

You can vote in advance in one of three ways:

Attending and Voting at the Annual Meeting

All stockholders of record as of the Record Date may vote in person at the Annual Meeting. Beneficial owners of shares held in "street name" may vote in person at the Annual Meeting if they have a legal proxy, as described in the response to question 2 on page 6.

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

Unless you previously elected to receive paper copies of our proxy materials, we are sending our stockholders a Notice Regarding the Availability of Proxy Materials for the Annual Meeting (the "Notice") that will instruct you on how to access the proxy materials and proxy card to vote your

1


Table of Contents

shares by telephone or over the internet. If you would like to receive a paper copy of our proxy materials free of charge, please follow the instructions included in the Notice.

It is anticipated that the Notice will be mailed to stockholders on or before April 3, 2019.

This Proxy Statement and our Annual Report are available at our website at www.pacwestbancorp.com/FinancialDocs under the section "Stockholder Meeting Documents".

Ballot Items

Stockholders are being asked to vote on the following proposals at the Annual Meeting:

            Board
Recommendation
   
​     PROPOSAL 1. Election of Directors (page 20)      
    To elect twelve (12) directors.       FOR    
​     PROPOSAL 2. Advisory Vote on Executive Compensation (page 55)      
    To approve, on an advisory basis (non-binding), the compensation of the Company's named executive officers.       FOR    
​     PROPOSAL 3. Ratification of the Appointment of Independent Auditors (page 60)      
    To ratify the appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2019.       FOR    

Director Nominees(page 23)

The following table provides summary information about each director nominee:

 

 

Name

  Age(1)   Independent   Director
Since
  Committee
Memberships(2)
   

​  

 

Tanya M. Acker

  48   Yes   2016   R  

 

 

Paul R. Burke

  56   Yes   2015   A, ALM (Chair), CNG, E    

​  

 

Craig A. Carlson

  68   Yes   2010   A, E, R (Chair)  

 

 

John M. Eggemeyer, III

  73   Yes   2000   E (Chair)    

​  

 

C. William Hosler

  55   Yes   2014   A, CNG, E  

 

 

Susan E. Lester

  62   Yes   2003   A (Chair), ALM, E, R    

​  

 

Roger H. Molvar

  63   Yes   2014   A, CNG, R  

 

 

James J. Pieczynski

  56   No   2014   ALM, R    

​  

 

Daniel B. Platt

  72   Yes   2003   ALM, R  

 

 

Robert A. Stine

  72   Yes   2000   CNG (Chair), E    

​  

 

Matthew P. Wagner

  62   No   2000   ALM, E, R  

 

 

Mark T. Yung

  45   Yes   2017   A, R    
(1)
As of the Record Date

(2)
A = Audit Committee; ALM = Asset/Liability Management Committee; CNG = Compensation, Nominating and Governance Committee; E = Executive Committee; R = Risk Committee

2


Table of Contents

Compensation Matters—Executive Summary(page 32)

The Compensation Discussion and Analysis ("CD&A") provides information about our executive compensation philosophy and objectives and the process governing our named executive officers, ("NEOs") 2018 total compensation. The Company's compensation disclosures in this Proxy Statement include the following NEOs (the Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and the three highest paid other executive officers).

We assess executive officer performance by analyzing specific, achieved Company financial goals. The Company's executive compensation program balances short and long-term Company performance with stockholder value creation. We align executive compensation to the success of the Company and the interests of our stockholders by making annual cash incentive bonus payments to executive officers based on Company achievement of pre-established performance measures that are directly tied to Company performance. Executive officers are only entitled to target or above-target annual cash incentive bonus payments if the Company delivers target or above-target performance with respect to these performance measures.

In addition, the Company's long-term incentive compensation plan ties a meaningful portion of executive officer compensation to Company performance. Specifically, 50% of an executive officer's long-term incentive compensation is granted in the form of performance-based restricted stock units ("PRSUs") that vest only upon the attainment of key Company financial performance metrics measured over a three-year period. The other 50% of an executive officer's long-term incentive compensation is time-based restricted stock awards ("TRSAs") that vest ratably over four years. The Company believes this long-term incentive compensation grant structure appropriately aligns Company performance with stockholder interests.

Details of our executive compensation philosophy, objectives, process and decisions can be found under the CD&A section of this Proxy Statement.

Corporate Governance(page 11)

The Company is committed to maintaining strong governance practices, and the Board regularly reviews its governance procedures to ensure compliance with laws, rules and regulations. Our website at www.pacwestbancorp.com includes important information about our policies and Board committee charters, including the Company's Corporate Governance Guidelines (the "Guidelines"), our Code of Business Conduct and Ethics and certain Company U.S. Securities and Exchange Commission ("SEC") filings and press releases. Examples of our corporate governance practices are

3


Table of Contents

set forth in the "Corporate Governance" section of this Proxy Statement, and certain governance practices are highlighted below:

    Stockholder Rights   ​ ​  

Annual "say-on-pay" stockholder vote

  ​ ​
​       ​ ​  

Annual election of all directors

  ​ ​
​       ​ ​  

Majority vote standard in uncontested director elections

  ​ ​
​       ​ ​  

No stockholder rights plan ("poison pill")

  ​ ​
​       ​ ​  

Active stockholder engagement

  ​ ​
       
    Strong Governance      

Anti-hedging and anti-pledging policy

   
           

Annual Board and Committee self-assessments and evaluations

   
           

Annual review of director skill sets and experience

   
           

Director refreshment, succession planning and diversity

   
           

Stock ownership guidelines for all executive officers and directors

   
​     Executive Compensation Program   ​ ​  

Pay for performance

  ​ ​
​       ​ ​  

Strong link between pay philosophy and strategic objectives

  ​ ​
​       ​ ​  

Maximum payout caps for incentive compensation

  ​ ​
​       ​ ​  

Independent compensation consultant and peer review

  ​ ​
​       ​ ​  

Double trigger equity award provisions in the event of a change in control

  ​ ​
​       ​ ​  

Clawback of incentive compensation for executives

  ​ ​

In 2018, one of our directors did not receive a majority of votes cast at the 2018 Annual Meeting of Stockholders (the "2018 Annual Meeting"), and she tendered her resignation to the Board for consideration. As more fully described on page 20, the Board ultimately rejected the director's resignation and reaffirmed the appointment of the director to the Board. In response to the vote, the Board took action to ensure attendance by Board members of at least 75% of all Board and committee meetings, including ensuring that the Board's calendar accommodated the schedules of all Board members. In addition, the General Counsel reviewed Board attendance throughout the year to ensure attendance compliance.

Stockholder Engagement

Throughout 2018, we solicited stockholder input on a number of Company matters, including corporate strategy, and operational, financial, corporate governance and executive compensation matters to ensure that our actions are informed by the viewpoints of our stockholders.

As a result of these conversations, we made certain governance enhancements to address feedback we received, including the following:

In addition, we regularly review and improve our pay practices to ensure they are aligned with stockholder interests. Our 2018 "say-on-pay" 96% approval vote confirmed that our stockholders concur with our compensation principles and process.

Stockholders are urged to read the CD&A section and other information in this Proxy Statement to better understand how the Company's executive compensation program engages and aligns with the

4


Table of Contents

Company's short- and long-term performance and creates long-term stockholder value. In addition, the compensation program provides incentives needed to attract, reward, motivate and retain key executives who are critical to executing the Company's strategy for long-term success.

Information About the Annual Meeting and Voting(page 6)

Please see the Information About the Annual Meeting and Voting section beginning on page 6 for important information about the Annual Meeting. The deadlines to submit stockholder proposals for the 2020 Annual Meeting of Stockholders can be found in the "Other Business" section on page 70.

5


Table of Contents

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors to be used at our Annual Meeting and at any postponements or adjournments thereof.

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

1.  Who is entitled to vote? How many votes am I entitled to?

Only stockholders of record as of the Record Date may vote at the Annual Meeting. According to our transfer agent, EQ Shareowner Services, as of the Record Date, there were 119,849,670 shares of common stock outstanding held by approximately 1,772 stockholders, excluding 1,288,190 shares of unvested, time-based restricted stock.

Each holder of the Company's common stock is entitled to one vote for each share recorded in his or her name on the books of the Company as of the close of business on the Record Date on any matter submitted to the stockholders for a vote, except that stockholders may vote their shares cumulatively for the election of director nominees if certain conditions are met at the Annual Meeting. Cumulative voting may only be exercised at the Annual Meeting if: (i) the name of the candidate or candidates is placed in nomination prior to voting and (ii) at least one stockholder has given advance notice of his or her intention to cumulate his or her votes.

Cumulative voting provides each stockholder with a number of votes equal to the number of directors to be elected multiplied by the number of shares held by such stockholder, which such stockholder can then vote in favor of one or more director nominees. For example, if you held 100 shares as of the Record Date, you would be entitled to 1,200 votes which you could then distribute among one or more director nominees since there are twelve (12) directors to be elected. As of the date of this Proxy Statement, we have not received written notice from any stockholder that he or she intends to vote his or her shares cumulatively.

2.  What different methods can I use to vote?

By Telephone or the Internet—Stockholders can vote their shares via telephone or the internet as instructed in the Notice. The telephone and internet procedures are designed to authenticate a stockholder's identity, to allow stockholders to vote their shares and to confirm a stockholder's instructions have been properly recorded. The telephone and internet voting facilities will close at 11:59 p.m., Eastern Time, on May 12, 2019.

By Mail—Stockholders that receive a paper proxy card may vote by completing, signing and dating the proxy card and mailing it in the pre-addressed envelope that accompanies the delivery of the proxy card. Proxy cards submitted by mail must be received by us prior to the Annual Meeting. If your shares are held in "street name", you should check with your bank, broker or other agent and follow the voting procedures required by your bank, broker or other agent to vote your shares.

In Person—Shares held in your name as the stockholder of record may be voted by you in person at the Annual Meeting. Each stockholder who attends the Annual Meeting may be asked to present valid picture identification such as a driver's license or passport. Stockholders holding stock in brokerage accounts ("street name" holders) will also need to bring a copy of a brokerage account statement reflecting stock ownership as of the Record Date.

6


Table of Contents

3.  How many shares must be represented at the Annual Meeting to constitute a "quorum"?

A majority of the Company's outstanding shares of common stock must be present at the Annual Meeting, either in person or by proxy, to constitute a quorum, and there must be a quorum for the Annual Meeting to be held. If you return a signed proxy card, you will be counted as being present even if you abstain from voting. Broker non-votes (i.e., proxies from banks, brokers or other nominees indicating that such entities have not received instructions from the beneficial owners or other persons entitled to vote as to a matter which such bank, broker, or other nominee does not have discretionary power to vote) will also be counted as being present for purposes of determining a quorum.

4.  What is the vote necessary to approve each of the proposals being considered at the Annual Meeting?

The election of director nominees proposal requires the affirmative vote of a majority of the votes cast with respect to such director in an uncontested election (meaning the number of shares voted "for" a nominee must exceed the number of shares voted "against" such nominee). As of the date of this Proxy Statement, none of the director nominees is being contested, but in a contested election (where the number of director nominees exceeds the number of director nominees to be elected) the standard for election of director nominees is a plurality of the votes cast such that the 12 director nominees receiving the greatest numbers of votes "for" would be elected as directors without regard to the number of shares voted against such director nominees. The director nominee proposal and the other proposals being considered at the Annual Meeting are set forth below.

    Proposals   Votes
Required
  Effect of
Abstentions
   
    1. Election of Directors   Majority of votes cast   No effect  
    2. Advisory Vote on Executive Compensation   Majority of shares present and entitled to vote   Vote Against    
​     3. Ratification of the Appointment of Independent Auditors   Majority of shares present and entitled to vote   Vote Against  

Broker non-votes will not have an impact on the vote on any proposal.

5.  If I hold shares of PacWest common stock pursuant to the PacWest 401(k) Plan, will I be able to vote?

Yes. You will receive a proxy card for the shares held in your 401(k) plan account that you should return as instructed on the proxy card.

6.  Why did I receive a Notice Regarding the Availability of Proxy Materials for the Annual Meeting instead of paper copies of the proxy materials?

We sent our stockholders by mail or email a Notice containing instructions on how to access our proxy materials over the internet and vote online. This Notice is not a proxy card and cannot be used to vote your shares. If you received a Notice, you will not receive paper copies of the proxy

7


Table of Contents

materials unless you request the materials by following the instructions on the Notice or on the website referred to in the Notice.

We provided some of our stockholders with paper copies of the proxy materials instead of the Notice. If you received paper copies of the Notice or proxy materials, we encourage you to help us save money and the environment by signing up to receive all future proxy materials electronically as described below under "How can I receive my proxy materials electronically in the future?".

7.  What is the difference between a stockholder of record and a beneficial owner of shares held in "street name"?

Stockholder of Record.    If your shares are registered directly in your name with our transfer agent, you are considered a stockholder of record with respect to those shares and the Notice is sent directly by the Company to you. If you requested printed copies of the proxy materials by mail, you will also receive a proxy card.

Beneficial Owner of Shares Held in Street Name.    If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are a beneficial owner of shares held in "street name" and the Notice will be forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct that organization how to vote the shares held in your account.

8.  Why did I receive more than one Notice or multiple proxy cards?

You may receive more than one Notice or multiple proxy cards if you hold your shares in different ways (i.e., joint tenancy, in trust, or in custodial accounts). You should vote each proxy that you receive.

9.  How can I receive my proxy materials electronically in the future?

To receive proxy materials electronically by email, follow the instructions described below or in the Notice.

If you received proxy materials by mail and you would like to sign up to receive future materials electronically, please have your proxy card available and register by going to: (i) www.proxyvote.com and follow the instructions for requesting meeting materials, (ii) call 1-800-579-1639, or (iii) contact your brokerage firm, bank, or other similar organization that holds your shares.

If you previously agreed to electronic delivery of our proxy materials and desire to receive paper copies of these materials for the Annual Meeting or for future meetings, please follow the instructions on the website referred to in the Notice.

10.  What do I have to do to vote?

If your shares are registered in your own name with our transfer agent, you may vote by internet or by telephone as indicated on the proxy card. If you received a paper proxy card, you may also vote by mail by completing, signing and dating the proxy card and returning it in the enclosed postage-paid envelope.

If you mark the proxy card to show how you wish to vote, then your shares will be voted as you direct. If you return a signed proxy card but do not mark the proxy card to show how you wish to vote, your shares will be voted as follows:

8


Table of Contents

11.  May I revoke or change my vote?

You may change or revoke your vote at any time before it is counted at the Annual Meeting by:

Attending the Annual Meeting will not automatically revoke your prior proxy. You must comply with one of the methods indicated above in order to revoke your proxy.

If you hold your shares in "street name", you should receive a proxy card from your bank or brokerage firm asking you how you want to vote your shares. If you do not receive a proxy card, then you should contact the bank or brokerage firm in whose name your shares are registered and obtain a proxy card from them. Please refer to the information in the materials provided by your bank or brokerage firm for an explanation of: (i) how to vote, (ii) how to change or revoke your vote and (iii) the effect of not indicating a vote.

12.  How will voting on any other business be conducted?

Although we do not know of any business to be considered at the Annual Meeting other than the proposals listed in this Proxy Statement, if any other business is properly presented at the Annual Meeting, a submitted proxy gives authority to any of the persons named on the proxy card as your designated proxies, and each of them, to vote on such matters in his or her discretion.

13.  Who pays the cost of soliciting proxies on behalf of the Company?

The Company pays the cost of preparing, assembling and mailing the proxy materials and soliciting proxies for the Annual Meeting. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, officers and employees of the Company or its subsidiaries telephonically, electronically, or by other means of communication. These directors, officers and employees receive no additional compensation for their services. We will reimburse brokers and other nominees for costs incurred by them in mailing proxy materials in accordance with applicable laws.

14.  How do I get more information about the Company?

The Notice provides internet instructions on how to access and review the proxy materials, including our Annual Report, that contains our consolidated financial statements. Our Annual Report includes a list of exhibits filed with the SEC, but it does not include the exhibits.

9


Table of Contents

If you wish to receive copies of the exhibits, please write to the following address:

Investor Relations
PacWest Bancorp
9701 Wilshire Blvd, Suite 700
Beverly Hills, California 90212

You may also send your request by email to [email protected].

The Company's Annual Report is included with the proxy materials.

15.  What is "householding" and how does it affect me?

Stockholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of the Notice unless we are notified that one or more of these stockholders wishes to receive individual copies. This "householding" procedure will reduce our printing costs and postage fees.

Stockholders who participate in householding will continue to receive separate proxy cards. If you are eligible for householding and you and other stockholders of record with whom you share an address receive multiple copies of the Notice and any accompanying documents, or if you hold Company stock in more than one account and, in either case, you wish to receive only a single copy of each of these documents for your household, please contact our transfer agent, EQ Shareowner Services, P.O. Box 64874, St. Paul, Minnesota 55164-0874 or by telephone at 1-800-468-9716.

If you participate in householding and wish to receive a separate copy of the Notice and any accompanying documents, or, if you do not wish to continue to participate in householding and prefer to receive separate copies of these documents in the future, please contact EQ Shareowner Services as indicated above. Requests will be responded to promptly.

If you are a beneficial owner, you can request information about householding from your broker, bank or other holder of record.

10


Table of Contents

CORPORATE GOVERNANCE

Governance Framework

The Company is committed to a robust governance framework and we have adopted the following corporate governance best practices:

Board Leadership Structure

Each year, the Board evaluates the Company's board leadership structure to ensure that it remains an appropriate structure for our Company and stockholders. Our current structure provides for separate roles of the Chairman of the Board ("Chairman") and CEO, a lead independent director ("Lead Independent Director") and active, independent directors. We believe this structure provides for open communication between the Board and management and provides the oversight and safeguards necessary to operate our business successfully.

 
   
   
   
   
​  
        Board Leadership Structure        
                •    Chairman of the Board: John M. Eggemeyer, III        
                •    CEO: Matthew P. Wagner        
                •    Lead Independent Director: C. William Hosler        
                •    All Committees chaired by independent directors        
​  

In Mr. Eggemeyer's role as Chairman, he has responsibility for, among other things:

11


Table of Contents

In Mr. Hosler's role as Lead Independent Director, he has considerable authority and responsibility, including the following:

Board Attendance

The CNG Committee regularly considers the composition of our Board to ensure there is a proper combination of skills and viewpoints.

During 2018, the Board met nine times. The independent directors met four times in executive session during 2018, and Mr. Hosler, the Lead Independent Director, presided over these sessions. In 2018, each director attended at least 75% of the meetings of the Company's Board and the committees on which he or she served.

Directors are encouraged, but not required, to attend the Annual Meeting. Five directors attended the 2018 Annual Meeting. The Company assists in making arrangements for directors that attend the Annual Meeting and reimburses directors for reasonable expenses in connection with his or her attendance.

Independent Director Information

In 2018, independent directors comprised a majority of the Board in accordance with the Company's Guidelines. At least annually, the Board, with the assistance of the CNG Committee, evaluates director independence based on the Nasdaq listing standards and applicable SEC rules and regulations.

In February 2019, the Board affirmatively determined, upon the recommendation of the CNG Committee, that each director nominee, with the exceptions of Messrs. Pieczynski and Wagner, met the independence requirements of the Nasdaq listing standards and applicable SEC rules and regulations, including the independence requirements for committee membership. In making such determinations, the Board evaluated banking, commercial, service, familial, or other transactions

12


Table of Contents

involving each director or immediate family member and their related interests, on the one hand, and the Company, on the other hand, if any.

In identifying and recommending director nominees, the CNG Committee places emphasis on the "Selection of Directors" criteria in our Guidelines, namely: (i) personal qualities and characteristics, accomplishments and professional reputation; (ii) current knowledge and contacts in the communities in which the Company does business and in the banking industry or other industries relevant to the Company's business; (iii) ability and willingness to commit adequate time to Board and committee matters; (iv) the fit of the skills and personality of director nominees with those of other directors in creating a Board that is effective, collegial and responsive to the needs of the Company; (v) diversity of viewpoints, backgrounds, experience and geographical location; and (vi) ability and skill set as well as other relevant experience.

The CNG Committee does not set specific, minimum qualifications that a director nominee must meet in order for the CNG Committee to recommend the director nominee to the Board. The CNG Committee believes that each director nominee should be evaluated based on his or her individual merits taking into account the needs of the Company and the composition of the Board. The CNG Committee evaluates the composition of the Board, including whether the diversity of the Board members is appropriate to advise the Company on its risks and opportunities, through its annual Board self-evaluation process.

The CNG Committee members may seek input from other Board members in identifying possible director nominee candidates and may, at its discretion, engage one or more search firms to assist in the recruitment of director nominee candidates. The CNG Committee will consider candidates recommended by stockholders against the same criteria as director nominees not proposed by stockholders. Stockholders who wish to submit director nominees for consideration by the CNG Committee for election at the 2020 Annual Meeting of Stockholders (the "2020 Annual Meeting") should follow the process detailed in the section entitled "—Other Business—Director Nominations" on page 71.

Board Committees

The Board delegates authority to the Risk Committee to oversee specific, risk-related issues while facilitating Board comprehension of the Company's overall risk tolerance and enterprise-wide risk management activities and their effectiveness. The Risk Committee approves and periodically reviews the Company's enterprise-wide risk management policies and oversees the implementation of the Company's enterprise-wide risk management framework, including the strategies, policies, procedures and systems established by management to identify, assess, measure and manage the Company's material risk categories, including credit and liquidity risk.

The Risk Committee also serves as a resource to management and its committees including, but not limited to, the Enterprise Risk Management Steering Committee, the Credit Committees, the Model Governance Committee and the Capital Committee in overseeing risk across the Company. The responsibilities of the Risk Committee include, among other things:

13


Table of Contents

The Company's CRO, CCO, CFO and Executive Vice President, Operations & Systems Administration report on a quarterly basis to the Risk Committee, or more frequently as needed, regarding areas within their supervision that pertain to the Company's risk profile. The Risk Committee also receives reports from the Company's external credit review consultants.

A copy of our Risk Committee charter, last approved by the Board in February 2019, may be obtained on the Company's website at www.pacwestbancorp.com under the section titled "Corporate Governance". During 2018, the Risk Committee met four times.

The ALM Committee monitors the asset and liability strategies of the Company to ensure compliance with all applicable regulatory and reporting requirements and Company policies. The objective of the Company's ALM policy is: (i) to manage balance sheet and off-balance sheet assets and liabilities in an effort to maximize the spread between interest earned on our interest-earning assets and interest paid on our interest-bearing liabilities, (ii) to maintain acceptable levels of interest rate risk and (iii) to ensure that the Company has the ability to pay liabilities as they come due and fund continued asset growth. The Company's ALM activities are typically discussed monthly by the executive management members responsible for managing ALM activities. The responsibilities of the ALM Committee include, among other things:

14


Table of Contents

A copy of our ALM Committee charter, last approved by the Board in February 2019, may be obtained on the Company's website at www.pacwestbancorp.com under the section titled "Corporate Governance". During 2018, the ALM Committee met four times.

The Audit Committee assists the Board in its oversight responsibilities for: (i) the quality and integrity of the Company's financial statements, (ii) the Company's compliance with legal and regulatory requirements, (iii) the independent auditors' qualifications and independence, (iv) the performance of the independent auditors and the Company's internal audit function and (v) in conjunction with the Company's Risk Committee, the Company's risk management functions.

The responsibilities of the Audit Committee include, among other things:

Management is responsible for the preparation, presentation and integrity of the Company's financial statements and the effectiveness of internal control over financial reporting. Management is responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for planning and carrying out an audit of the Company's annual financial statements, reviewing the Company's quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, annually reporting on the effectiveness of the Company's internal control over financial reporting and other procedures. Our independent auditors, KPMG LLP and its team members have extensive, long-term knowledge of the Company and the banking industry.

15


Table of Contents

The Board determined that the following nominees to the Audit Committee are financially literate and that each of Ms. Lester and Messrs. Burke, Carlson, Hosler, Molvar and Yung is qualified as an audit committee financial expert with accounting or related financial management expertise, in each case in accordance with the SEC rules and the NASDAQ listing standards. The biographies of each director nominee, including the background and experience of Ms. Lester and each of Messrs. Burke, Carlson, Hosler, Molvar and Yung, are under the section titled "Proposal 1: Election of Directors" beginning on page 20. Information regarding the functions performed by the Audit Committee can be found in the "Audit Committee Report" included in this Proxy Statement and in the Audit Committee charter.

A copy of our Audit Committee charter, last approved by the Board in February 2019, may be obtained on the Company's website at www.pacwestbancorp.com under the section titled "Corporate Governance". During 2018, the Audit Committee met 15 times.

The CNG Committee reviews, approves and makes recommendations to the Board on matters concerning the compensation and benefits, including equity compensation, of the Company's executive officers, directors and employees. The CNG Committee is responsible for the creation of compensation principles and processes that are designed to balance risk and reward in a way that does not encourage unnecessary risk taking by our employees. The CNG Committee also ensures that our compensation programs are competitive and aligned with our stockholders' long-term interests. The responsibilities of the CNG Committee include, among other things:

The CNG Committee assists the Board in promoting the best interests of the Company and its stockholders through the implementation of sound corporate governance principles and practices, which helps to frame our organization-wide risk management policies, including oversight of the Company's Stock Ownership and Clawback Policy (the "Stock Ownership Policy").

For further information with respect to the Company's processes and procedures in the consideration and determination of director compensation, please see the section titled "Director Compensation" on page 21. For further information with respect to the Company's processes and procedures in the

16


Table of Contents

consideration and determination of executive compensation, please see the CD&A section beginning on page 31.

A copy of our CNG Committee charter, last approved by the Board in February 2019, may be obtained on the Company's website at www.pacwestbancorp.com under the section titled "Corporate Governance". During 2018, the CNG Committee met five times.

The primary purpose of the Executive Committee is to meet when it is impractical for the full Board to meet and act on behalf of the Board, subject to such limitations as the Board, the Executive Committee charter and applicable law may impose. In addition, the Executive Committee is a forum to review other significant matters, including strategic opportunities, not addressed by the other Board committees and to make appropriate recommendations to the Board.

A copy of our Executive Committee charter, last approved by the Board in February 2019, may be obtained on the Company's website at www.pacwestbancorp.com under the section titled "Corporate Governance". During 2018, the Executive Committee met once.

Board's Role in Risk Oversight

We believe that effective risk management is of primary importance to the success of our Company because our business exposes us to credit, interest rate and price, liquidity, operations, information technology, compliance, strategic, reputation, human resources and capital risks. As a result, we have a comprehensive enterprise-wide risk management process that monitors, measures, evaluates and manages these risks.

The Board is responsible for overseeing the Company's risk management processes and effectively challenging management's strategic initiatives. The Board's risk management oversight is managed through the responsibilities of the following Board standing committees: (i) the Risk Committee, (ii) the ALM Committee, (iii) the Audit Committee and (iv) the CNG Committee. Each of these committees is responsible for monitoring risks within their areas of responsibility as well as Company risks. Each committee reports to the Board and has the responsibility for ensuring that overall risk awareness and risk management is appropriate. Our RAS establishes the Company's risk appetite and tolerance for each of our core risk pillars referenced above as well as it details the policies and procedures for assessing, measuring and controlling these risks. Management has identified several key risk and performance indicators that are tracked quarterly and reported to the Board through a risk dashboard.

The Board engages in regular risk-management discussions with the CEO; CFO; CCO; CRO; CAE; Executive Vice President, Operations & Systems Administration; Executive Vice President, Human Resources; Executive Vice President, General Counsel; and other Company officers as the Board may deem appropriate.

As a general matter, except for cases in which a particular committee may choose to meet in executive session, all Board members are invited (but not required) to attend the regular meetings of all Board committees. We believe that this open and collaborative structure provides for a more informed Board and helps the Board understand and monitor internal and external risks.

Company management is responsible for day-to-day risk management. Our Internal Audit, Risk Management, Information Technology, Human Resources, Legal, Accounting, Finance and Treasury departments, among others, monitor compliance with Company-wide policies and procedures and the day-to-day risk management of the Company. We believe that this approach to risk management adequately addresses the Company risks.

17


Table of Contents

Certain Relationships and Related-Party Transactions

The RPT Policy prohibits Related-Party Transactions unless they are approved or ratified by the Audit Committee. The Board-approved RPT Policy governs the approval of a related-party transaction ("RPT"). A RPT includes any transaction involving:

These transactions need to be disclosed under Item 404(a) of Regulation S-K promulgated by the SEC. Such transactions do not include, however, indemnification payments or compensation paid to directors and executive officers for their services as directors and executive officers.

Our General Counsel, in consultation with management and outside counsel, analyzes all potential RPTs to determine whether a transaction constitutes a RPT. If a transaction is a RPT, the Audit Committee will review the transaction to determine whether to approve the transaction. In making its determination, the Audit Committee considers several factors including, but not limited to:

Any member of the Audit Committee that has an interest in a transaction under review must abstain from voting on the RPT, but may, if the Audit Committee Chairperson requests, participate in the Audit Committee's discussion of the transaction.

During 2018, the Bank provided a revolving line of credit, with a limit of $5 million, to an entity in which Mr. Yung is the executive chairman and has an ownership interest of approximately 3%. Interest income and fees associated with this revolving line of credit were $192,874 for the year ended December 31, 2018. The principal balance of this revolving line of credit varied in 2018 and was $2,709,560 as of December 31, 2018.

18


Table of Contents

Family Relationships

There are no family relationships among any of the directors or executive officers of the Company.

Compensation Committee Interlocks and Insider Participation

During 2018, Messrs. Burke, Hosler, Molvar and Stine served on the CNG Committee. None of these current directors was formerly, or during 2018, an officer or employee of the Company or any of its subsidiaries.

No executive officer of the Company serves on the board of directors of any other company that has one or more executive officers serving as a member of the CNG Committee. In addition, no executive officer of the Company serves as a member of the compensation committee of the board of any other company that has one or more executive officers serving as a member of the Board of Directors or the CNG Committee. No such interlocking relationships existed during 2018.

19


Table of Contents

PROPOSAL 1: ELECTION OF DIRECTORS

Nominees

The Board is currently composed of 12 directors, of which 11 directors were elected at the 2018 Annual Meeting.

2018 Annual Meeting Director Nominee Vote

One director, Ms. Tanya Acker, did not receive a majority of votes cast at the 2018 Annual Meeting.

The Company's Amended and Restated Bylaws and Corporate Governance Guidelines each provides that any nominee for director who receives a greater number of "against" votes than "for" votes shall promptly tender his or her resignation following certification of the vote for consideration by the CNG Committee. At the 2018 Annual Meeting, Ms. Acker received a greater number of "against" votes than "for" votes and, accordingly, she tendered her resignation to the Board on May 15, 2018, following certification of the vote.

The CNG Committee promptly considered Ms. Acker's tendered resignation and recommended to the Board not to accept the resignation. In considering whether to recommend that the Board accept or reject Ms. Acker's tendered resignation, the CNG Committee evaluated the best interests of stockholders and the Company and considered all factors it believed relevant, including, without limitation: (a) the reasons Ms. Acker did not receive the required vote and whether the underlying cause or causes were curable; (b) the expertise Ms. Acker brings to the Board through her experience as an attorney and arbitrator and as a director of several nonprofit organizations and particularly in the areas of legal and regulatory matters, risk management and strategic planning; and (c) feedback the Company received from a number of its stockholders as a result of the Company's outreach to stockholders in respect of this matter. In addition, the CNG Committee considered that over 48% of the votes cast by stockholders were for Ms. Acker to remain on the Board.

The CNG Committee determined that the primary factor that led to the negative vote for Ms. Acker was the negative recommendation by Institutional Shareholder Services based upon Ms. Acker's failure to attend at least 75% of the 2017 Board meetings. Ms. Acker's failure to meet the 75% standard was excused due to her inability to attend some of the meetings due to prior commitments that could not be rescheduled as well as certain meetings that were scheduled on short notice. Ms. Acker, however, attended all in-person meetings. In addition, Ms. Acker missed the 75% standard by 2 percentage points (having attended 73% of the Board meetings). During 2018, Ms. Acker attended 100% of the Board meetings.

The Board acted on the recommendation of the CNG Committee and rejected Ms. Acker's resignation and reaffirmed her appointment as a director. As a result, Ms. Acker continued to serve as a director in 2018.

Ms. Acker did not participate in the deliberations by the CNG Committee or the Board with regard to her tendered resignation.

In response to the vote, the Board took action to ensure attendance by Board members of at least 75% of all Board and committee meetings including ensuring that the Company's Board calendar accommodated the schedules of all Board members. In addition, the General Counsel reviewed Board attendance throughout the year to ensure attendance compliance.

20


Table of Contents

The 12 director nominees have been recommended by the CNG Committee and approved by the Board as nominees for election to serve as directors of the Company until the 2020 Annual Meeting or until their successors are duly elected and qualified. All director nominees are current directors.

Director Core Competencies

Our Board members represent a mix of experience, tenure, diversity, leadership, skills and qualifications in areas of importance to our Company. The CNG Committee believes the following director qualifications are the most important to oversee the interests of our Company:

GRAPHIC

Vote Required

In an uncontested election, a director must be elected by a majority of the votes cast with respect to him or her (meaning the number of shares voted "for" a nominee must exceed the number of shares voted "against" such nominee). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the votes cast such that the nominees receiving the greatest number of votes "for" will be elected as directors without regard to the number of shares voted "against" such nominee.

A director who does not receive a majority of the votes cast in an uncontested election must tender his or her resignation to the Board. The CNG Committee will consider the resignation and make a recommendation to the Board whether to accept or reject the resignation or whether other action should be taken. The Board will act on the CNG Committee's recommendation and publicly disclose its decision and the rationale within 90 days from the date the election results are certified. A director who failed to receive a majority of the votes cast will not participate in the Board's decision.

With respect to the election of directors, absent any specific instruction in the proxies solicited by the Board, the proxies will be voted in the sole discretion of the proxy holders to effect the election of all 12 of the Board's nominees. In the event that any of the Board's nominees are unable to serve as directors, it is intended that each proxy will be voted for the election of such substitute nominees, if any, as shall be designated by the Board. The Company has no reason to believe that any of the nominees will be unable to serve as directors.

The PacWest Board of Directors recommends a vote "FOR" all of the director nominees listed below.

Director Compensation

The CNG Committee evaluates director compensation and compares the Company's director compensation to that offered by peer companies. The CNG Committee recommends to the Board non-employee director compensation and the Board determines director compensation for each fiscal year. The compensation is designed to attract and retain qualified directors and to compensate them for the time and risk associated with being a director. The Company reimburses its directors for reasonable travel, lodging, food and other expenses incurred in connection with their service on the

21


Table of Contents

Board and Board committees. In 2018, the CNG Committee engaged an independent compensation consultant, Pearl Meyer, to perform a competitive assessment with respect to total non-employee director compensation, including Lead Independent Director compensation and Chairman of the Board compensation, equity grant levels, and non-employee director stock ownership guidelines. Based on Pearl Meyer's recommendations, the CNG Committee did not increase director cash retainers or annual equity grants. 2018 director compensation was as follows:

Stock Ownership Guidelines for Non-Employee Directors

In an effort to ensure that the interests of our non-employee directors are aligned with our stockholders, the Company established non-employee director stock ownership guidelines that require non-employee directors to own shares equal to five times their annual cash retainer. Executive officers, including those serving as directors, are subject to stock ownership guidelines as more particularly described below. Non-employee directors are expected to meet this requirement within five years of the later of May 16, 2016 or the date of their election or appointment to the Board. If the compliance date were the Record Date, other than the two directors who joined the Board in 2016 and 2017, all of the non-employee director nominees meet the stock ownership guidelines for non-employee directors.

The table below presents all compensation paid to Company non-employee directors who served during 2018:


2018 Non-Employee Director Compensation Table

Name
  Fees
Earned
or Paid
in Cash
($)
  Stock
Awards
($)(1)
  All Other
Compensation
($)
  Total
($)
 

John M. Eggemeyer, III, Chairman

  $172,000   $113,977   $6,000 (2) $291,977  

Tanya M. Acker

    $86,000     $56,988         $142,988  

Paul R. Burke

  $126,000   $56,988     $182,988  

Craig A. Carlson

    $126,000     $56,988         $182,988  

C. William Hosler

  $126,000   $56,988     $182,988  

Susan E. Lester

    $126,000     $56,988         $182,988  

Roger H. Molvar

  $86,000   $56,988     $142,988  

James J. Pieczynski(3)

                 

Daniel B. Platt

  $86,000   $56,988     $142,988  

Robert A. Stine

    $126,000     $56,988         $182,988  

Matthew P. Wagner(3)

         

Mark T. Yung

    $86,000     $56,988         $142,988  

(1)
Amounts shown are based on the market value of the underlying stock on the date of grant. For further information, see Note 17. Stock-Based Compensation, to the Company's audited financial statements for the year ended December 31, 2018 included in the Company's Annual Report.

(2)
Represents life insurance premiums paid by the Company.

(3)
No compensation received for service on the Company's Board because individual is an employee director.

22


Table of Contents

Director Nominees

The skills, qualities, attributes and experience of the members of the Board provide the Company with a diverse range of perspectives to effectively address the Company's strategic objectives and represent our stockholders' best interests. The biographies below describe the skills, qualities, attributes and experience of the Board nominees.

  Tanya M. Acker
Independent Director

Age: 48
Director Since:
2016


Committees:
Risk
      Background: Ms. Acker has served as a director of the Company since 2016 and she is currently a member of the Risk Committee. Ms. Acker has served as a director of Rainbow Services, a nonprofit organization that provides assistance to victims of domestic violence since March 2017. Ms. Acker is an attorney and arbitrator who has served as one of three judges on a syndicated television court program since 2014. Ms. Acker has served as a trustee and as a member of various committees of the Board of Trustees of Pacific Battleship Center, a nonprofit organization that operates the Battleship IOWA museum since 2015. Ms. Acker has served on the board of Public Counsel since 2008, an organization that provides free legal services and she is a member of the Douglas Dinner, Executive and Nominating Committees. Ms. Acker is also Of Counsel at Progress, LLP where her practice focuses on business counseling and litigation. Ms. Acker has served as a director, member of the Executive Committee and legal counsel for the Western Los Angeles County Council of the Boy Scouts of America since 2013. Ms. Acker has served on the Executive Board of the Western Region of the Boy Scouts of America since 2018, and she serves on the Boy Scouts of America board where she is on the National Executive Board and Diversity Committee. Ms. Acker has served as a trustee of the Boy Scouts of America Foundation since 2018. Ms. Acker has served as a director of the Western Justice Center, a nonprofit organization that promotes alternative dispute resolution since 2011 and she is a member of the Program Committee. Ms. Acker is also the owner, president and chief executive officer of Free Eagle Ventures, Inc., a California loan-out company. Ms. Acker operated her own private law practice from 2005 until 2013, after which she joined the firm Goldberg, Lowenstein and Weatherwax.    
                      
          Board Qualifications: Legal and Regulatory, Risk Management, Strategic Planning    

23


Table of Contents

  Paul R. Burke
Independent Director

Age: 56
Director Since:
2015

Committees:
ALM (Chairperson)
Audit
CNG
Executive
      Background: Mr. Burke has served as a director of the Company since 2015 and he is currently chairperson of the ALM Committee and a member of the Audit, CNG and Executive Committees. Mr. Burke is an officer and director of Northaven Management, Inc., a privately owned investment management firm that he co-founded in 1995 that focuses exclusively on equity investments in the financial services industry. Mr. Burke is also managing director and serves on the board of directors for Kilowatt Labs, Inc., a company that designs, manufactures and sells energy storage and power management solutions. Mr. Burke has served as a director of Optisure Risk Holdings, Inc., formerly known as Kinloch Holdings, Inc., a private insurance brokerage firm since 2009 and he has served as its chairman and president since 2015 and he previously served as acting chief executive officer. Mr. Burke served as director of Square 1 Financial, Inc., a publicly-traded financial services company that the Company acquired on October 6, 2015, where he served as chairman of the Compensation Committee and as a member of the Audit, Asset Liability and various other Committees from 2010 to 2015. He also served as a director of Square 1 Bank from 2012 until 2015. Mr. Burke served as a director of Eastern Insurance Holdings, Inc., a publicly-traded property and casualty insurer, from 2001 to 2014, where he chaired the Audit Committee and served as a member of various other committees.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    


  Craig A. Carlson
Independent Director

Age: 68
Director Since:
2010

Committees:
Audit
Executive
Risk (Chairperson)
      Background: Mr. Carlson has served as a director of the Company since 2010 and he is currently chairperson of the Risk Committee and member of the Audit and Executive Committees. Mr. Carlson is currently a self-employed, financial institution consultant and California real estate broker. He was formerly a bank regulator for 36 years and has over 26 years of experience supervising a bank examination staff of over 125 individuals. Mr. Carlson was senior deputy commissioner and chief examiner of the Banking Program for the California Department of Financial Institutions ("DFI"), currently known as the California Department of Business Oversight, from March 2007 until his retirement in June 2010. In this position, he was responsible for the supervision and regulation of all state chartered commercial and industrial banks as well as other institutions and he served as a key advisor to the Commissioner of the DFI. Previously, he held positions for the DFI as senior deputy commissioner and deputy commissioner for the San Diego/Orange County Region for the DFI. Mr. Carlson has been a faculty member of the California Banking School and is an active member of the Conference of State Bank Supervisors where he presently serves as a member of its Accreditation Review team.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Legal and Regulatory, Risk Management    

24


Table of Contents

  John M. Eggemeyer, III
Chairman of the Board

Age: 73
Director Since:
2000

Committees:
Executive (Chairperson)
      Background: Mr. Eggemeyer is Chairman of the Board of the Company, a position he has held since 2000 when the Company was founded and he is currently the chairperson of the Executive Committee. Mr. Eggemeyer has been an investor, executive and financial advisor in the field of commercial banking for over 30 years. Mr. Eggemeyer is founder and managing principal of Castle Creek Capital LLC, a private equity firm founded in 1990 that specializes in the financial services industry. Mr. Eggemeyer has served as a director of The Bancorp, Inc. since December 2016. Mr. Eggemeyer currently serves as a trustee of Northwestern University where he serves on the Finance and Innovation and Entrepreneurship Committees. Mr. Eggemeyer served as a director of Guaranty Bancorp from 2004 until 2018 and Heritage Commerce Corp. from August 2010 to December 2016.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

 

  C. William Hosler
Lead Independent Director

Age: 55
Director Since: 2014

Committees:
Audit
CNG
Executive
      Background: Mr. Hosler is the Lead Independent Director and has served as a director of the Company since 2014 and he is currently a member of the Audit, CNG and Executive Committees. Mr. Hosler is the chief financial officer and member of the board of directors of Catellus Acquisition Company, LLC, a commercial real estate property ownership, management and development company. Mr. Hosler also serves as a director of Fantex, Inc., a Delaware brand building company, where he chairs the Audit Committee and is a member of the Conflicts Committee. Mr. Hosler also serves as a director of the Claremont Country Club where he is the treasurer and is a member of the Building and Finance Committees. Mr. Hosler also serves as chair of the City of Piedmont Budget Advisory and Financial Planning Committee. Mr. Hosler served as a director of CapitalSource Inc. from 2007 until 2014. Mr. Hosler previously served on the board of directors, Audit Committee and Corporate Governance and Nominating Committee of Parkway Properties, Inc., a self-administered, real estate investment trust.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

25


Table of Contents

  Susan E. Lester
Independent Director

Age: 62
Director Since:
2003

Committees:
ALM
Audit
(Chairperson)
Executive
Risk
      Background: Ms. Lester has served as a director of the Company since 2003 and she is currently the chairperson of the Audit Committee and member of the ALM, Risk and Executive Committees. Ms. Lester has served as a public director for The Options Clearing Corporation, an equity derivatives clearing organization where she chairs the Audit Committee and is a member of the Governance and Nominating Committee since April 2016. Ms. Lester is also a trustee of the Francis Parker School where she serves as the chair of the Finance Committee and she is a member of the Compensation and Executive Committees. Ms. Lester served as a director of Arctic Cat, Inc., a publicly traded company, from 2004 to March 2017 where she chaired the Audit Committee and was a member of the Governance Committee. Ms. Lester served as a director from December 2010 until January 2014, where she was a member of the Audit, Governance and Risk and Compliance Committees of Lender Processing Services, Inc. Ms. Lester is a former trustee and treasurer of Hazeltine National Golf Club and a former chair of the Board of Trustees of the College of St. Benedict.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

 

  Roger H. Molvar
Independent Director

Age: 63
Director Since:
2014

Committees:
Audit
CNG
Risk
      Background: Mr. Molvar has served as a director of the Company since 2014 and he is currently a member of the Audit, CNG and Risk Committees. Mr. Molvar is currently a private investor. Mr. Molvar has served on the board of directors of First Financial Northwest, Inc., First Financial Northwest Bank and First Financial Diversified Corporation (collectively, "First Financial") since 2015 and he has served as the chairman of the board of all three First Financial entities since June 2017. As a board member of First Financial, Mr. Molvar is a member of the Compensation and Awards Committee and he chairs the Audit/Compliance/Risk Committee. Mr. Molvar is the chair of the SEC and Financial Reporting Institute at the University of Southern California and is a member of the Audit Committee Network. Mr. Molvar served as a director of CapitalSource Bank from its formation in 2008 until its merger with Pacific Western Bank in 2014 and he previously served as a director and a member of the Audit Committee of Farmers and Merchants Bank of Long Beach, California.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

26


Table of Contents

  James J. Pieczynski
Director

Age: 56
Director Since:
2014

Committees:
ALM
Risk
      Background: Mr. Pieczynski has served as a director of the Company since 2014, where he serves as a member of the ALM and Risk Committees. Mr. Pieczynski is also a director of Pacific Western Bank. Mr. Pieczynski has served as Executive Vice President, Vice Chairman of the Company and Pacific Western Bank since June 2018. Mr. Pieczynski was Executive Vice President of the Company and President of the CapitalSource Division of Pacific Western Bank from April 2014 to June 2018. Mr. Pieczynski served as a director of CapitalSource Inc. from January 2010 to April 2014 and as chief executive officer of CapitalSource Inc. from January 2012 to April 2014. Mr. Pieczynski also served as president of CapitalSource Bank from January 2012 to April 2014 and he was a member of the board of directors of CapitalSource Bank from January 2013 to April 2014. Mr. Pieczynski also serves on the board of directors, chairs the Nominating and Corporate Governance Committee and is a member of the Audit and Compensation Committees of LTC Properties, Inc., a self-administered real estate investment trust. Mr. Pieczynski also serves as a director for the Conejo Teen Organization, Inc. and Sherwood Cares, both of which are nonprofit organizations.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

 

  Daniel B. Platt
Independent Director

Age: 72
Director Since:
2003

Committees:
ALM
Risk
      Background: Mr. Platt has served as a director of the Company since 2003 and he is currently a member of the ALM and Risk Committees. Mr. Platt is a former executive vice president of the Company and he oversaw the Special Assets Group of Pacific Western Bank from November 2009 until his retirement in April 2014. Mr. Platt served as a director of Pacific Western Bank from November 2009 until April 2014. Mr. Platt serves as a director for a number of charitable organizations including: (i) A Step Beyond where he serves as chairman and was previously treasurer, (ii) The Barnabus Group where he also serves as treasurer and (iii) the Rancho Santa Fe Foundation where he serves as treasurer and chairman of the Finance Committee.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

27


Table of Contents

  Robert A. Stine
Independent Director

Age: 72
Director Since:
2000

Committees:
CNG
(Chairperson)
Executive
      Background: Mr. Stine has served as a director of the Company since 2000 when the Company was founded and he is currently the chairperson of the CNG Committee and member of the Executive Committee. Mr. Stine has served as a director of Bolthouse Properties, LLC, a privately held real estate development and land management company based in Kern County, California since 2015. Mr. Stine is also a director of Rancho Santa Fe Foundation where he chairs the Governance, Nominating and Compensation Committee. Mr. Stine is the former president and chief executive officer of Tejon Ranch Co., a publicly traded real estate development and agri business company, which positions he held from May 1996 until his retirement in December 2013. Mr. Stine also served as a director of Tejon Ranch Co. from 1996 until May 2015. He was also a founding director of Valley Republic Bank, a community bank located in Kern County, California, a position he held from 2008 until May 2015.    
                      
          Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

 

  Matthew P. Wagner
Director

Age: 62
      Background: Mr. Wagner has been the President and CEO of PacWest Bancorp and Pacific Western Bank and a director of the Company since 2000. He is currently a member of the ALM, Risk and Executive Committees. Mr. Wagner also serves on Pacific Western Bank's Board of Directors.    
  Director Since:
2000

Committees:
ALM
Executive
Risk
      Board Qualifications: Audit/Financial Reporting, Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Legal and Regulatory, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

28


Table of Contents

  Mark T. Yung
Independent Director

Age: 45
Director Since:
2017

Committees:
Audit
Risk
      Background: Mr. Yung has served as a director of the Company since 2017 and he is currently a member of the Audit and Risk Committees. Mr. Yung is co-founder and managing principal of OCV Management, LLC, an investor, owner and operator of technology and life science companies based in Los Angeles since 2016. Mr. Yung served as managing director of Orchard Capital Corp. ("Orchard Capital"), a firm he joined in 2006. Mr. Yung serves in various senior capacities including, among others, as chairman and chief executive officer of Presbia PLC, an ophthalmic device company, executive chairman of the board of directors of Environmental Solutions Worldwide, Inc., a clean technology company focused on the reduction of diesel emissions, chief financial officer and director of Polymer Plainfield Holdings, Inc., an OEM automotive supplier with operations in the United States, Canada, Mexico and the Caribbean, chairman of the board of Vantage Surgical Systems, Inc., director of Red Carpet Cinema Corporation and as a director and/or officer of Coreolis Holdings and Tradewinds Holdings. Prior to joining Orchard Capital, Mr. Yung served as a senior vice president in the Corporate Strategy and Merger and Acquisitions groups of Citigroup in New York and ABN AMRO in Amsterdam, Netherlands. Prior to his corporate strategy roles, Mr. Yung served as an investment professional at JPMorgan Partners ("JPMP"). At JPMP, Mr. Yung focused on venture capital, growth equity and buyout transactions in Latin America and served as a board member for various emerging companies in the region. Mr. Yung began his career in 1996 at Chase Securities, Inc., focusing on leveraged finance for cross border buyouts and privatizations.    
                      
          Board Qualifications: Business Operations, Corporate and Investment Banking, Financial Services Experience, Leadership Experience of Highly-Regulated Business, Mergers and Acquisitions, Public Company Board Service, Risk Management, Strategic Planning    

29


Table of Contents

  COMPENSATION MATTERS   LOGO

 

In this section, you will find:

 

 

 

Compensation Discussion and Analysis

Best Practices Compensation Matters

NEO Summary Compensation Table

 

 

 

       

 

       

 

       

 

       

30


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis ("CD&A") provides information about our executive compensation principles and the process governing our Named Executive Officers' ("NEOs") 2018 total compensation. The philosophy and objectives of the CNG Committee are intended to closely align executive compensation with the Company's performance and the creation of long-term stockholder value. The Company's compensation disclosures in this Proxy Statement include the following NEOs:

Name
   
  Title

Matthew P. Wagner

    CEO and President of the Company and the Bank

Patrick J. Rusnak

      Executive Vice President and CFO of the Company and the Bank

James J. Pieczynski(1)

    Executive Vice President, Vice Chairman of the Company and the Bank

Bryan M. Corsini

      Executive Vice President and CCO of the Company and Executive Vice President of the Bank

Laird M. Boulden(2)

    Executive Vice President of the Company and President of the National Lending Group of the Company and the Bank
    

(1)
Mr. Pieczynski became EVP, Vice Chairman of the Company on June 1, 2018.

(2)
Mr. Boulden was promoted to this position on June 1, 2018.

31


Table of Contents

EXECUTIVE SUMMARY

In 2018, the Company continued its solid operating performance in key financial areas. Our financial performance below highlights the growth and continued success of our Company in the last five years.

GRAPHIC


(1)
For more information regarding the calculation of these non-GAAP financial measures, please refer to the "Calculation of Non-GAAP Financial Measures" section below in this CD&A.

Additional 2018 financial and non-financial highlights are as follows:

Best Practices—Governance Practices and Policies

Our governance approach has evolved over time to ensure alignment with Company performance and continued stockholder value creation, including the following:

32


Table of Contents

In 2018, we received a 96% "say-on-pay" approval vote evidencing stockholder concurrence with our compensation principles and process. Continued enhancements to the Company's compensation program demonstrate our commitment to ensuring that our executive compensation program aligns executive compensation with the Company's short-term and long-term performance and stockholder interests. At the same time, we are providing the compensation and incentives needed to attract, reward, motivate and retain key executives.

Compensation Decisions

Over the last several years, we made changes to our executive compensation program to ensure that our NEO's base salaries, annual incentives (annual cash bonus) and equity compensation continues to be aligned with Company performance. Below is a summary of 2018 NEO compensation decisions:

COMPENSATION OVERVIEW

Compensation Philosophy and Objectives

The CNG Committee administers the Company's compensation program and incentive plans, including the EIC Plan. The EIC Plan is designed to: (i) align executive compensation with the Company's short-term and long-term performance, (ii) enhance and reinforce the Company's goals of profitable growth, (iii) continue sound overall financial practices and (iv) continue creating stockholder value.

The CNG Committee reviews executive compensation levels paid by peer companies across a range of asset sizes based on available data. Key elements of NEO and other executive officer compensation include pay out following the achievement of pre-determined financial and non-financial objectives. The CNG Committee intends to pay at the high end of the range among its peer group for total compensation only if the Company performs at the high end of the range among its peers.

33


Table of Contents

Our compensation program is best supported by the following philosophy and objectives:

    Compensation Program Philosophy and Objectives       How Philosophy and Objectives are Achieved    
​     Executives Should be Engaged and Aligned with Stockholders Through Equity Compensation    

Long term incentive awards are equity based.

A material portion of executive compensation is equity based.

 
​        

All NEOs are subject to stock ownership requirements.

 
    Attract, Retain, Motivate and Reward our Highly Talented Executives      

Competitive compensation and material stock awards.

   
           

Executives are only rewarded with above target compensation if above target goals are exceeded.

   
           

A significant portion of NEO long-term incentive awards are subject to key financial metrics.

   
​     Pay for Performance    

Awards are based upon Company financial and non-financial goals.

 
​        

If performance goals are below the minimum threshold, there are no bonus payouts and awards will be forfeited.

 
    Balance Risk      

Payments of certain long-term incentive equity awards are deferred through vesting requirements.

   
           

The Company's Clawback Policy applies to all awards, including long-term incentive awards.

   
​     Competition    

Performance objectives are aligned with financial and non-financial goals.

 
​        

Compensation program provides incentives for executives to exceed Company goals.

 

Principal Elements of Compensation

The Company's executive compensation program components are listed below. In allocating total compensation, we seek to provide competitive levels of fixed compensation (base salary) and, through annual and long-term incentives, provide for increased total compensation when performance objectives are exceeded and appropriate downward adjustment if performance objectives are not met.

Compensation Component
  Form   Principal Objectives
Base Salary  

Cash

 

Market and internal performance

Annual Cash Incentive Bonus  

Cash

 

Pay for performance

Market and internal performance

Reward profitability, targeted growth and risk and credit management

Equity Compensation  

Time-Based Restricted Stock Awards ("TRSAs")

Performance-Based Restricted Stock Units ("PRSUs")


 

Pay for performance

Align management and stockholder interests

Market and internal performance

Balance short and long-term objectives

34


Table of Contents

2018 Executive Compensation Decisions—Pay Mix

As highlighted below, a material portion of the total compensation opportunity for each of our executives, including our NEOs, is directly tied to financial performance factors that measure our success relative to compensation plan performance goals and peers. Accordingly, approximately half of executive compensation is at risk depending on Company performance. The Company believes that its executive compensation program balances risk and financial results in a manner that does not encourage imprudent risk-taking.

CEO TARGET PAY MIX   OTHER NEO TARGET PAY MIX

GRAPHIC

 

GRAPHIC

2018 Executive Compensation Decisions

NEO base salaries are set at levels that are intended to reflect the competitive marketplace in attracting, retaining, motivating and rewarding high performing executives. In determining base salaries, the CNG Committee considers the following elements: (i) individual performance based on experience and scope of responsibility, (ii) non-financial performance indicators including strategic developments for which an executive has responsibility and managerial performance, (iii) structure and complexity of the Company, (iv) compensation paid by peers, (v) functionality of the executive management team, (vi) economic conditions in the Company's market areas and (vii) analyses or guidance from consultants during the annual review process.

With the exception of Mr. Wagner, whose base salary is determined by the Board, the CNG Committee is responsible for setting the NEOs' base salaries. The base salaries are intended to compensate the NEOs for the day-to-day services performed for the Company.

35


Table of Contents

Below are changes to NEO base salaries from 2017 to 2018.

NEOs
  2017 Base
Pay(1)
  2018 Base
Pay(1)
  % Change

Matthew P. Wagner

  $1,000,000   $1,000,000   0%

Patrick J. Rusnak

  $600,000   $600,000   0%

James J. Pieczynski

  $800,000   $480,000 (2) (40%)

Bryan M. Corsini

  $500,000   $500,000   0%

Laird M. Boulden(3)

  $500,000   $550,000   10%

(1)
Amounts in table represent NEO base salaries at the end of the period presented.

(2)
On April 27, 2018, the CNG Committee approved an amendment to Mr. Pieczynski's employment arrangement to adjust his salary, and he is no longer a participant in the EIC Plan. Accordingly, Mr. Pieczynski did not receive a 2018 annual incentive bonus under the EIC Plan terms.

(3)
Mr. Boulden was promoted to Executive Vice President and President of the National Lending Group of the Company and the Bank on June 1, 2018, and he was not an NEO in 2016 or 2017.

Annual cash incentive bonuses are granted under the EIC Plan based solely on the achievement of certain pre-established performance targets. The EIC Plan performance targets generally represent an increase in the performance target over the previous fiscal year, a significant achievement in a given economic environment, or meaningful goals that balance the performance of the Company and return to stockholders with prudent risk management. Financial performance targets corresponding to achievement of a payout equal to a participant's target incentive are set at levels equal to the Company's budgeted financial performance for the current fiscal year.

The performance measures and corresponding award opportunities are not determined by the CNG Committee based on any set formula or pre-determined methodology, but, instead, reflect the CNG Committee's review of data and, in some cases, recommendations from its independent compensation consultant as well as subjective determinations made by the CNG Committee with respect to the appropriate incentives to encourage management to focus on the profitability, targeted growth and Company risk management. It is possible that not all NEOs and other EIC participants will receive an annual cash incentive bonus.

In February 2018, the CNG Committee, and the Board in the case of Mr. Wagner, established the 2018 Company performance measures, required achievement levels and corresponding award opportunities for each executive officer eligible under the EIC Plan. The CNG Committee and the Board reviewed and monitored these measures and levels throughout 2018. The target award opportunities are determined based upon the executive officer's position, responsibilities and historical and expected contributions to the Company and are equal to a percentage of that executive officer's base salary earned at year end. Below are the EIC Plan target award opportunities for 2018:

Participant
  Target Award Opportunities

CEO

  150% of Base Salary

Other Executive Officers

  100% of Base Salary

The CNG Committee confirmed the required Earnings Per Share ("EPS") performance levels and pay outs and the ranges for average core deposit and average net loan growth were appropriate and properly aligned executive incentive compensation to stockholder interests. In addition, these

36


Table of Contents

metrics were critical in assessing Company success. Below are the approved 2018 Company executive officer target performance measures, weights and corresponding award opportunities:

 
   
  Performance Requirement (% of Budget) /
Payout Opportunity (% of Target)(1)
Performance Measures   Weight   Threshold   Target   Maximum

Earnings Per Share

  65.0 % 80%/50%   100%/100%   125%/150%

Average Core Deposit Growth

    17.5 % 50%/50%   100%/100%   150%/150%

Average Net Loan Growth

  17.5 % 50%/50%   100%/100%   150%/150%

(1)
Pay outs interpolated between threshold/target and target/maximum.

Below are the 2018 EIC Plan results:

Performance Measures   Target   Actual   Percentage of
Target Achieved
 

EPS(1)

  $ 3.47   $ 3.73   107.5%  

Average Core Deposit Growth(2)

  $ 318,550,000   $ (230,595,000 )   0%  

Average Net Loan Growth(3)

  $ 493,178,000   $ (125,254,000 ) 0%  

(1)
Excludes unbudgeted merger related expenses.

(2)
This amount represents the fiscal year 2018 actual average core deposit balance less the actual average balance for November and December 2017.

(3)
This amount represents the fiscal year 2018 actual average net loan balance excluding held for sale loans ("HFS Loans") less the December 31, 2017 ending net loan balance excluding HFS Loans.

The CNG Committee determined that no negative discretion needed to be exercised with respect to the 2018 EIC Plan results in connection with the Company's regulatory compliance ratings.

The table below discloses the target and maximum award opportunities for each of the NEOs under the 2018 EIC Plan and the actual cash incentive award paid to such NEO based on the level of achievement of the Company's performance metrics during 2018.

 
  Cash Incentive Opportunity
Based Upon:
   
 
 
  Actual Cash Incentive
Paid Based on 2018
Performance ($)(3)
 
NEOs
  Target ($)(1)   Maximum ($)(2)  

Matthew P. Wagner

  $ 1,500,000   $ 2,250,000   $ 1,121,250  

Patrick J. Rusnak

  $ 600,000   $ 900,000   $ 448,500  

James J. Pieczynski(4)

  $ 0   $ 0   $ 0  

Bryan M. Corsini

  $ 500,000   $ 750,000   $ 373,750  

Laird M. Boulden

  $ 550,000   $ 825,000   $ 411,125  

(1)
Assuming performance at target level for each performance metric.

(2)
Assuming performance at maximum level for each performance metric.

(3)
We paid each of our NEOs (other than Mr. Pieczynski) annual cash incentive bonuses equal to 74.8% of their respective target award opportunities.

(4)
On April 27, 2018, the CNG Committee approved an amendment to Mr. Pieczynski's employment arrangement to adjust his salary, and he is no longer a participant in the EIC Plan. Accordingly, Mr. Pieczynski did not receive a 2018 annual incentive bonus under the EIC Plan.

37


Table of Contents

Equity Compensation

Long-Term Incentive ("LTI") Compensation Plan Overview

We provide a meaningful portion of NEO compensation in the form of long-term, equity incentive compensation. The CNG Committee grants PRSUs and TRSAs to align NEO performance with Company objectives to create long-term stockholder value. Equity awards granted to Company executive officers may be granted from time to time at the discretion of the CNG Committee, and equity awards granted to the CEO are based on the recommendation of the CNG Committee and approval of the Board. The timing and amount of equity awards is based on the Company's performance, the executive officer's position and the executive officer's experience in that role. In considering whether to approve the grant of an equity award and the value of the grant to be awarded, the CNG Committee considers, among other things, with respect to the executive officer, the salary level and the executive's expected contributions toward the strategic growth, financial strength, risk management and profitability of the Company.

The LTI program provides for 50% of an executive's annual equity compensation to be in the form of PRSUs and the other 50% of an executive's annual equity compensation to be in the form of TRSAs. The CEO, CFO and other executive officer's target equity compensation is 300%, 200% and 150%, respectively of their respective base salaries. The Company did not make changes to its PRSU or TRSA grant structure in 2018. The Company concluded that the PRSU and TRSA grants continued to align executive compensation with the Company's long-term market and financial performance and creation of long-term stockholder value. TRSAs vest ratably over four years from the date of grant, and PRSUs will vest only if performance goals with respect to Relative TSR, EPS growth, or ROAA (defined below) are met over the performance period beginning January 1, 2018 and ending December 31, 2020 (the "2018 Performance Period").

Form of Award   Percentage of
Total Target
Equity Award
Value
  Performance Measures(1)   Earned and Vesting Periods
PRSU   50%   ROAA (37.5% weighting), EPS growth (37.5% weighting) and Relative TSR (25% weighting)   At the conclusion of the three-year performance cycle, payouts will range from 0% to 150% of the target based on average ROAA and EPS growth and from 0% to 200% of the target based on Relative TSR(2) (with linear interpolation between performance levels).
TRSA   50%   N/A   Vests ratably on the first, second, third and fourth year anniversaries of the grant date

(1)
The weightings may be slightly higher or lower depending on the closing price of the Company's stock price on the grant date and, with respect to Relative TSR, the fair value per PRSU. Accordingly, the grant date award amounts will equal 50% of the total award value, but the number of shares may vary.

(2)
Relative TSR will be subject to a 100% maximum if absolute TSR is negative.

Unvested PRSUs will participate with common stock in any dividends declared and paid only on the shares which ultimately vest, if any, at the end of the 2018 Performance Period. Unvested TRSAs are entitled to receive any dividends on a current basis. In paying dividends on unvested TRSAs, the CNG Committee and the Board determined that such payments are consistent with the Company's overall goals of tying executive compensation to the performance of the Company and aligning management interests with those of the Company's stockholders. For many of the Company's key executives, the dividends represent a meaningful component of their compensation. Further, such dividends are evaluated in connection with the granting of TRSAs and determination of an executive officer's overall compensation.

38


Table of Contents

The TRSAs and PRSUs granted to the Company's NEOs in 2018 were as follows:

Named Executive Officer
  Grant
Date
  TRSAs(1)(2)   PRSUs(3)   Total
Equity
Grant
 

Matthew P. Wagner

  2/14/2018   27,290   25,646   52,936  

Patrick J. Rusnak

    2/14/2018     11,101     10,432     21,533  

James J. Pieczynski

  2/14/2018   18,501   17,386   35,887  

Bryan M. Corsini

    2/14/2018     6,938     6,520     13,458  

Laird M. Boulden(4)

  5/15/2018   11,161     11,161  

(1)
The number of TRSAs granted to each executive officer (other than Mr. Boulden) was based on the closing price of the Company's common stock on February 14, 2018, or $54.05.

(2)
The number of TRSAs granted to Mr. Boulden was based on the closing price of the Company's common stock on May 15, 2018, or $53.76.

(3)
The number of PRSUs granted to each executive officer (other than Mr. Boulden) was (i) with respect to the portion of the PRSUs that vest based on achievement of Relative TSR goals, based on the fair value of $71.22 per PRSU, and (ii) with respect to the portion of the PRSUs that vest based on achievement of EPS growth and ROAA goals, based on the closing price of the Company's common stock on February 14, 2018, or $54.05.

(4)
Mr. Boulden was not an executive officer in February 2018 and did not receive a PRSU award in 2018.

2018 PRSU Grants

In February 2018, the CNG Committee set performance targets for a three-year performance cycle for the 2018 PRSU grants. The 2018 PRSU grants are for the 2018 Performance Period. At the end of the 2018 Performance Period, PRSUs will only vest if Company results meet or exceed the performance thresholds set at the beginning of the 2018 Performance Period. The number of shares vested by an executive depends on the achievement of three financial metrics:

The CNG Committee considers these performance metrics to be key measures of the Company's financial performance based on analysis of the correlation of these financial metrics to TSR, noting the metrics are consistent with those metrics used by peers. The following tables reflect the key financial measures, weightings and performance standards that the CNG Committee set for the 2018 Performance Period.

ROAA

Performance Level
  Achievement of Performance Metrics   Percentage of PRSUs Earned(1)
Maximum   120% of Target   150%
Target   100% of Target   100%
Threshold   80% of Target   50%
Below Threshold   <80% of Target   0%

39


Table of Contents

EPS Growth

Performance Level
  Achievement of Performance Metrics   Percentage of PRSUs Earned(1)
Maximum   130% of Target   150%
Target   100% of Target   100%
Threshold   70% of Target   50%
Below Threshold   <70% of Target   0%

Relative TSR(2)

Performance Level
  Achievement of Performance Metrics   Percentage of PRSUs Earned(1)
Maximum   90th Percentile of Peer Group TSR   200%
Target   50th Percentile of Peer Group TSR   100%
Threshold   30th Percentile of Peer Group TSR   50%
Below Threshold   Below 30th percentile of Peer Group TSR   0%

(1)
With linear interpolation between performance levels.

(2)
Payout associated with Relative TSR will not exceed target if absolute TSR over the period is negative regardless of relative results.

2016 PRSU Grants—Achievement of Performance Objectives

The 2016 PRSUs granted to the NEOs (other than Mr. Boulden) on February 10, 2016 were based on a performance period beginning January 1, 2016 through December 31, 2018 (the "2016 Performance Period"). The table below details the 2016 PRSU performance measures, weightings, targets, results, percentage of target achieved and percentage of 2016 PRSUs earned:

2016-2018 Performance Measures   Weightings   2016-2018
Performance Period
Targets
  Actual Results   Percentage of
Target Achieved
  Percentage of
PRSUs Earned
ROAA   37.5%   1.52%   1.72%   113%   133%
EPS Growth   37.5%   9.00%   10.85%   121%   135%
Relative TSR   25%   50th percentile of Peer Group   Below threshold   N/A   0%

Based on the weightings of the performance measures and 2016 Performance Period results, each NEO (other than Mr. Boulden) earned PRSUs equal to 92% of the total number of PRSUs granted to each NEO. As a result, on February 10, 2019, Messrs. Wagner, Rusnak, Pieczynski and Corsini vested in 42,719, 18,985, 31,642 and 11,867, respectively, shares of common stock. In addition, each of Messrs. Wagner, Rusnak, Pieczynski and Corsini each earned cumulative dividends on the vested shares equal to $269,130, $119,606, $199,345 and $74,762, respectively.

Decision Making Process

The CNG Committee oversees the NEO executive compensation program and is comprised of independent, non-employee members of the Board. The CNG Committee works closely with its independent compensation consultant and senior management to examine the effectiveness of the Company's NEO executive compensation program throughout the year. As discussed above, details about the CNG Committee can be found in "—Board Committees—Compensation, Nominating and Governance Committee" on page 16.

40


Table of Contents

The CNG Committee has not established a policy or target for the allocation between cash and non-cash or short-term and long-term compensation. Rather, the CNG Committee undertakes a subjective analysis in light of the philosophy and objectives described in this CD&A and, in connection with its analysis, reviews and considers information provided by its independent compensation consultant and surveys to determine the appropriate level and mix of base compensation, performance-based pay and other elements of compensation.

The CNG Committee makes all final NEO compensation and equity award decisions except for the CEO, whose compensation is determined by the independent members of the Board based upon the recommendation of the CNG Committee.

Members of our senior management team attend regular meetings in which executive compensation, Company performance, individual performance and competitive compensation levels and practices are discussed and evaluated. Only the CNG Committee members can vote on decisions regarding NEO compensation. The CEO does not participate in the deliberations of the CNG Committee with respect to his compensation.

The CEO, CFO, CRO, General Counsel and Executive Vice President, Human Resources comprise the Incentive Plan Compensation Committee ("IPC"). The IPC is responsible for evaluating all incentive-based compensation plans as they pertain to certain Company employee groups. The IPC regularly reviews Company performance, our compensation philosophy and objectives, trends, regulatory developments and other topics. IPC's review confirmed that our incentive compensation plans encourage behavior that is within the Company's risk tolerance, are compatible with effective controls and risk management and are supported by strong corporate governance.

The CNG Committee has the authority to engage and retain an independent compensation consultant to provide independent counsel and advice. The CNG Committee engages an independent compensation consultant no less than once every three years, when there is a significant change in the Company or when meaningful changes to compensation or the Company's compensation program are proposed. The CNG Committee reviews both compensation and performance of peer companies as just one among several factors to inform its decision-making process so it can set total compensation levels commensurate with the Company's performance and strategic initiatives.

In 2018, the CNG Committee engaged Pearl Meyer as the independent compensation consultant after an extensive review process conducted by the CNG Committee. The CNG Committee engaged Pearl Meyer to review the Company's peer group and executive officer compensation programs, including its short- and long-term incentive programs to ensure that each program, among other things, continued to be aligned with stockholder interests. Pearl Meyer reviewed: (i) a peer group of 19 publicly-traded financial institutions generally representing banks with assets between $20 billion to $43 billion (shown below) and (ii) published survey data.

In addition, at the request of the CNG Committee, Pearl Meyer met with members of management to gather information with respect to management proposals and recommendations to be presented to the CNG Committee.

In addition, the CNG Committee assessed the independence of Pearl Meyer in 2018 as required under NYSE listing rules. The CNG Committee considered and assessed all relevant factors including, but not limited to, those factors set forth in Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that could give rise to a

41


Table of Contents

potential conflict of interest with respect to the compensation consultant described above. Based on this review, we are not aware of any conflict of interest raised by the work performed by Pearl Meyer that would prevent the consultant from serving as an independent compensation consultant to the CNG Committee.

Peer Group

Each year, we review our peer group to ensure our compensation is being benchmarked to comparable companies considering industry, financial and operational similarities. In late 2017, upon review of the 2017 peer group, the CNG Committee determined no changes were required to the 19 publicly-traded companies to serve as the peer group for the purposes of setting compensation for 2018. The 2018 peer group included the following companies:

Bank of Hawaii Corporation
Bank of the Ozarks, Inc.
BankUnited
BOK Financial Corporation
Commerce Bancshares, Inc.
Cullen/Frost Bankers, Inc.
East West Bancorp
Hancock Whitney Company
Investors Bancorp
MB Financial, Inc.
  Prosperity Bancshares, Inc.
Signature Bank
SVB Financial Group
TCF Financial Corporation
UMB Financial
Umpqua Holdings Corporation
Valley National Bancorp
Webster Financial Corporation
Western Alliance Bancorporation

The companies comprising the peer group generally have similar business models and are within comparable size ranges (i.e, total assets, market capitalization, revenue). In June 2018, Pearl Meyer conducted a comprehensive review of the Company's prior compensation peer group and proposed adjustments for consideration by the CNG Committee and management. Following this review, it was determined that for purposes of setting compensation for 2019, four of the prior peers would be replaced with companies that were determined to be more relevant from size and business model perspectives:

Best Practices Compensation Matters

Our executive compensation programs incorporate many best practices, including the ones described below.

If we restate our financial statements, or a financial statement or the calculation of a performance goal or metric is materially inaccurate, the CNG Committee, in its sole discretion, may require recoupment from our executive officers, including our NEOs, of the portion of any annual or long-term cash or equity-based incentive or bonus compensation paid, provided, or awarded to any executive officer on or after December 11, 2014 that represents the excess over what would have been paid if such event had not occurred.

42


Table of Contents

Our executive Stock Ownership Policy require the CEO and our executive officers to accumulate a meaningful position in Company shares. Our stock ownership requirement for our CEO and our executive officers is tied to a multiple of base salary as noted below:

Position
  Minimum Ownership of
Common Stock
(multiple of base salary)

CEO

  5.0

Other Executive Officers

  3.0

An executive officer is required to achieve the stock ownership necessary to meet the requirements within five years of the later of December 11, 2014 or the date of becoming subject to the requirements. As of the Record Date, the CEO and seven other executive officers satisfied these requirements. Four executive officers have not yet satisfied these requirements but are expected to be in compliance with the Stock Ownership Policy by his or her applicable compliance date. We believe that the Stock Ownership Policy results in significant common stock ownership by our executive officers and aligns their interests with our stockholders.

Stock ownership is determined from the totals on Table 1 of Form 4 "Statement of Changes in Beneficial Ownership of Securities" as filed by the Company with the SEC on behalf of the Company's executive officers. Unvested TRSAs and outstanding stock options and stock appreciation rights (whether or not vested) are not included in the total number of shares to determine stock ownership under the Stock Ownership Policy. The value of an executive officer's shares of common stock is determined by multiplying his or her total number of shares by the highest Company share price in the preceding 52-week period. The Stock Ownership Policy may be waived in the discretion of the CNG Committee based upon bona fide personal financial need or hardship, other special circumstances, or if compliance would prevent an executive officer from complying with law, regulation or a court order. Compliance with the Stock Ownership Policy is determined annually by the CNG Committee.

Our Executive Severance Pay Plan (the "Severance Pay Plan") prohibits excise tax gross-up payments. Specifically, payments made in connection with the Severance Pay Plan, as amended, will be cut back to amounts that do not exceed the safe harbor provisions of Section 280G of the Internal Revenue Code (the "Code").

In the event of a change of control, equity awards will vest if within two years after the change in control, the recipient of the award is terminated from employment without cause or terminates employment for good reason (i.e., if his or her job duties have been significantly diminished) ("double-trigger" vesting). The terms of our equity awards granted prior to 2014 provided that the awards would vest immediately upon a change in control ("single-trigger" vesting).

Our executive officers do not have employment contracts and are "at-will" employees who may be terminated at our discretion, subject to compliance with the Severance Pay Plan, if applicable. We believe this provides greater flexibility in our employment arrangements with our executive officers.

43


Table of Contents

The Company's Insider Trading Policy prohibits all directors, executive officers and certain other employees (collectively, an "Insider") from purchasing financial instruments designed to hedge or offset any decrease in the market value of the Company's shares. We believe that these instruments result in the Insider no longer being exposed to the full risks of ownership.

We have chosen not to provide our executive officers with retirement benefits such as supplemental executive retirement plans or deferred compensation arrangements.

Our 401(k) Plan allows executives and other participants to defer a portion of their compensation and, in 2018, the Company provided participants a match of 50% of contributions up to 6% of their base salaries, subject to IRS limitations. We currently have no tax-deferred compensation plans for our executive officers other than our 401(k) Plan.

Our compensation process focuses our executives on goals and objectives that are in the best interests of the Company and stockholders. Other than certain perquisites to our executive officers such as an automobile allowance or use of a company vehicle, reimbursement of relocation expenses, reimbursement of club dues for clubs that are used frequently for business purposes and life, disability and long- term care insurance, the Company does not provide any other compensation benefits. In 2018, the Company provided limited use of an aircraft to Mr. Wagner for personal reasons. This service was afforded to Mr. Wagner to reduce travel time and related disruptions and to provide additional security to Mr. Wagner, thereby increasing his availability, efficiency and productivity. Income related to this benefit is imputed to Mr. Wagner for income tax purposes and he is not provided a tax reimbursement.

In 2018, Messrs. Wagner and Rusnak received certain benefits to compensate them for relocating to the Company's Greenwood Village, Colorado office. These benefits are paid under the terms of the Company's Relocation Allowance Policy (the "Relocation Policy"), including the costs of selling existing housing or exiting an existing lease, moving expenses, temporary living expenses and other expenses detailed in the Relocation Policy.

Tax Deductibility of Compensation

Section 162(m) of the Code generally limits the deductibility of compensation paid to certain executive officers in excess of $1 million during a year. The exemption from Section 162(m)'s deduction limit for performance-based compensation was (for the Company's case) repealed with the adoption of the Tax Cuts and Jobs Act, effective for years beginning after December 31, 2017, and the group of covered executive officers has been expanded to include the CFO (as well as any individual that was a covered executive officer for any taxable year after December 31, 2016). Therefore, compensation (including performance-based compensation) paid to covered executive officers in excess of $1 million in calendar year 2018 and subsequent calendar years generally will not be deductible unless it qualifies for transition relief. The CNG Committee continues to consider the tax consequences when determining NEO compensation, including in light of the changes to Section 162(m).

44


Table of Contents

Calculation of Non-GAAP Financial Measures

We use tangible book value per share and return on tangible equity, non-GAAP financial measures, to provide meaningful supplemental information regarding the Company's financial performance and to enhance investor's overall understanding of such financial performance. These non-GAAP financial measures exclude certain intangible assets. These non-GAAP financial measures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP financial measures that may be presented by other companies. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the following tables.

 
  December 31,  
Tangible Book Value Per
Share
  2018   2017   2016   2015   2014  
 
  (Dollars in thousands, except per share data)
 

Stockholders' equity

  $ 4,825,588   $ 4,977,598   $ 4,479,055   $ 4,397,691   $ 3,506,230  

Less: Intangible assets

    2,605,790     2,628,296     2,210,315     2,229,511     1,737,683  

Tangible common equity

  $ 2,219,798   $ 2,349,302   $ 2,268,740   $ 2,168,180   $ 1,768,547  

Book value per share

  $ 39.17   $ 38.65   $ 36.93   $ 36.22   $ 34.03  

Tangible book value per share(1)

  $ 18.02   $ 18.24   $ 18.71   $ 17.86   $ 17.17  

Shares outstanding

    123,189,833     128,782,878     121,283,669     121,413,727     103,022,017  

(1)
Tangible common equity divided by shares outstanding.


 
  Year Ended December 31,  
Return on Average Tangible Equity
  2018   2017   2016   2015   2014  
 
  (Dollars in thousands)
 

Net earnings

  $ 465,339   $ 357,818   $ 352,166   $ 299,619   $ 168,905  

Average stockholders' equity

  $ 4,809,667   $ 4,641,495   $ 4,488,862   $ 3,751,995   $ 2,763,726  

Less: Average intangible assets

  2,616,820   2,279,010   2,219,756   1,850,988   1,342,286  

Average tangible common equity

  $ 2,192,847   $ 2,362,485   $ 2,269,106   $ 1,901,007   $ 1,421,440  

Return on average equity(1)

  9.68 % 7.71 % 7.85 % 7.99 % 6.11 %

Return on average tangible equity(2)

    21.22 %   15.15 %   15.52 %   15.76 %   11.88 %

(1)
Net earnings divided by average stockholders' equity.

(2)
Net earnings divided by average tangible common equity.

45


Table of Contents

COMPENSATION COMMITTEE REPORT

The CNG Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K promulgated by the SEC and, based on review and discussions, the CNG Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

  COMPENSATION, NOMINATING AND
GOVERNANCE COMMITTEE

 

Robert A. Stine, Chairperson
Paul R. Burke
C. William Hosler
Roger H. Molvar

46


Table of Contents


2018 NEO SUMMARY COMPENSATION TABLE

Name and Principal Position
  Year   Salary
($)
  Bonus
($)
  Stock
Awards
($)(1)
  Option
Awards
($)
  Non-Equity
Incentive
Plan
Compensation
($)
  Change in
Pension Value
and
Non-statutory
Deferred
Compensation
Earnings
($)
  All Other
Compensation
($)(2)
  Total
($)
 

Matthew P. Wagner

  2018   $1,000,000     $2,950,097     $1,121,250     $1,167,213   $6,238,560  

CEO and President of the Company

    2017     $979,167         $2,950,007         $1,356,076         $323,168     $5,608,418  

and the Bank

    2016     $879,167         $2,597,159         $1,374,300         $348,974     $5,199,599  

Patrick J. Rusnak

  2018   $600,000     $1,200,019     $448,500     $183,863   $2,432,382  

Executive Vice President and

    2017     $600,000         $1,200,005         $542,430         $157,407     $2,499,842  

CFO of the Company and the Bank

    2016     $579,167         $1,154,279         $610,800         $166,152     $2,510,397  

James J. Pieczynski

  2018   $626,657     $1,999,959         $181,014   $2,807,630  

Executive Vice President,

    2017     $800,000         $2,000,029         $904,051         $158,327     $3,862,407  

Vice Chairman of the Company

    2016     $779,832         $1,923,787         $1,018,000         $171,422     $3,893,041  

and the Bank

                                                       

Bryan M. Corsini

  2018   $500,000     $750,001     $373,750     $106,906   $1,730,657  

Executive Vice President and

    2017     $500,000         $750,041         $452,025         $117,895     $1,819,961  

CCO of the Company and Executive

    2016     $490,249         $721,432         $509,000         $133,451     $1,854,132  

Vice President of the Bank

                                                       

Laird M. Boulden(3)

  2018   $527,083     $600,015     $411,125     $120,428   $1,658,651  

Executive Vice President and President of the National Lending Group of the Company and the Bank

                                                       

(1)
With respect to TRSAs, the amounts disclosed represent the aggregate grant date fair value of the Company's common stock underlying such awards. With respect to PRSUs, the amounts disclosed represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 at the target level of payout. The value of the 2018 PRSUs based on the maximum performance as of the grant date was: Mr. Wagner: $2,396,997; Mr. Rusnak: $975,009; Mr. Pieczynski: $1,624,961; Mr. Corsini: $609,365; and Mr. Boulden: $0. For further information, see Note 17. Stock-Based Compensation, to the Company's audited financial statements for the year ended December 31, 2018 included in the Company's Annual Report. Unvested PRSUs will participate with common stock in any dividends declared and paid only on the shares which ultimately vest, if any, at the end of the three-year performance period. At the time of vesting, the vested shares are entitled to receive cumulative dividends declared and paid during the three-year performance period. Unvested TRSAs are entitled to receive any dividends on a current basis.

(2)
Includes: (i) dividends on unvested TRSAs, (ii) Company matching contributions to the 401(k) plan, (iii) personal use of Company-owned automobiles, airplane or cash automobile allowance, (iv) reimbursement of relocation expenses and club dues, and (v) life, medical, long-term care and disability insurance premiums paid by the Company. Dividends on TRSAs are paid at the same rate as dividends paid on the Company's outstanding common stock. See table below that provides the detail of these amounts.

(3)
Mr. Boulden was promoted to this position on June 1, 2018. Amounts in the table are for the full year 2018.

47


Table of Contents


2018 ALL OTHER NEO COMPENSATION TABLE

The table below summarizes the components of "All Other Compensation" for the NEOs.

Named Executive Officer
  Dividends
on
Unvested
TRSAs
  Travel
Expense
  Relocation
Expense
  401(k)
Contribution(1)
  Club
Dues
  Life,
Medical,
Long-term
Care and
Disability
Insurance
Premiums
  Total  

Matthew P. Wagner

                             

2018

    $177,446     $57,819 (2)   $892,539 (3)       $11,417     $27,992     $1,167,213  

2017

    $203,778     $79,446 (2)           $13,212     $26,732     $323,168  

2016

    $243,214     $66,794 (2)           $12,767     $26,199     $348,974  

Patrick J. Rusnak

                             

2018

    $97,987     $12,000 (4)   $26,259 (3)   $8,250         $39,367     $183,863  

2017

    $99,550     $12,000 (4)       $8,100         $37,757     $157,407  

2016

    $110,015     $12,000 (4)       $7,210         $36,927     $166,152  

James J. Pieczynski

                             

2018

    $111,452             $8,126     $20,000     $41,436     $181,014  

2017

    $94,237             $6,000     $14,860     $43,230     $158,327  

2016

    $121,305             $7,950     $13,865     $28,302     $171,422  

Bryan M. Corsini

                             

2018

    $47,419             $7,031     $8,615     $43,841     $106,906  

2017

    $59,089             $6,820     $6,350     $45,636     $117,895  

2016

    $74,239             $7,950     $6,515     $44,747     $133,451  

Laird M. Boulden(5)

                             

2018

    $90,916             $8,002         $21,510     $120,428  

(1)
Represents Company matching contributions to the 401(k) plan.

(2)
Amounts include $45,819, $67,446 and $54,794 for 2018, 2017 and 2016, representing 100% of the costs associated with an aircraft flight membership service provided to Mr. Wagner for his personal use and amounts attributable for personal use of a Company owned automobile or cash automobile allowance.

(3)
Messrs. Wagner and Rusnak relocated to the Company's Greenwood Village, Colorado office in 2018 in connection with the Company's market expansion. Relocation expenses are capped at $500,000 plus any tax gross ups for allowable expenses in accordance with the Relocation Policy.

(4)
Represents either personal use of Company owned automobile or cash automobile allowance.

(5)
Mr. Boulden was promoted to Executive Vice President and President of the National Lending Group of the Company and the Bank on June 1, 2018. Amounts in the table are for the full year 2018.

48


Table of Contents


2018 Grants of Plan-Based Awards

 
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(3)
(#)

   
   
   
 
   
   
   
  Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)
  Estimated Future
Payouts Under Equity
Incentive Plan Awards(2)
   
  Grant Date
Fair Value
of Stock
and
Option Awards(4)
($)

   
 
  Named Executive Officer
   
  Grant
Date

   
  Threshold
($)

   
  Target
($)

   
  Maximum
($)

   
  Threshold
(#)

   
  Target
(#)

   
  Maximum
(#)

   
   
   
    Mathew P. Wagner     2/14/2018—ROAA                     10,234     15,351         $553,148  
              2/14/2018—EPS                                               10,234         15,351                   $553,148    
              2/14/2018—TSR                                               5,178         10,356                   $368,776    
              2/14/2018—TRSAs                                                                     27,290         $1,475,025    
                              $1,500,000         $2,250,000                                                      
​     Patrick J. Rusnak     2/14/2018—ROAA                     4,163     6,245         $225,010  
              2/14/2018—EPS                                               4,163         6,245                   $225,010    
              2/14/2018—TSR                                               2,106         4,212                   $149,990    
              2/14/2018—TRSAs                                                                     11,101         $600,009    
                              $600,000         $900,000                                                      
​     James J. Pieczynski     2/14/2018—ROAA                     6,938     10,407         $374,999  
              2/14/2018—EPS                                               6,938         10,407                   $374,999    
              2/14/2018—TSR                                               3,510         7,020                   $249,982    
              2/14/2018—TRSAs                                                                     18,501         $999,979    
                                                                                           
​     Bryan M. Corsini     2/14/2018—ROAA                     2,602     3,903         $140,638  
              2/14/2018—EPS                                               2,602         3,903                   $140,638    
              2/14/2018—TSR                                               1,316         2,632                   $93,726    
              2/14/2018—TRSAs                                                                     6,938         $374,999    
                              $500,000         $750,000                                                      
​     Laird M. Boulden     5/15/2018—TRSAs                             11,161     $600,015  
                              $550,000         $825,000                                                      

(1)
Amounts indicated represent potential incentive cash bonuses under the provisions of the Company's formula-based EIC Plan. Additional information regarding the EIC Plan is discussed in the section "Compensation Discussion and Analysis—2018 Executive Compensation Decisions". The actual payments received are based upon performance attained and are included in the "Non-Equity Incentive Plan Compensation" column in the "2018 NEO Summary Compensation Table" above.

(2)
PRSUs granted under the 2017 Stock Incentive Plan ("2017 SIP") in 2018 will vest only if performance goals with respect to certain financial metrics are met over a three-year performance period. PRSUs are granted at a target number. The number of units that will ultimately vest based on the Company's actual performance will range from zero to a maximum of either 150% (for the portion of the PRSUs that vest based on achievement of EPS growth and ROAA goals) or 200% (for the portion of the PRSUs that vest based on achievement of Relative TSR goals) of target. Unvested PRSUs will participate with common stock in any dividends declared and paid only on the shares which ultimately vest, if any, at the end of the three-year performance period. At the time of vesting, the vested shares are entitled to receive cumulative dividends declared and paid during the three-year performance period. PRSUs accelerate vesting and vest in full with performance deemed achieved at target level with respect to all open performance periods if death occurs during the performance period, and deemed achieved at the actual performance level if death occurs after the end of the performance period and before the vesting date.

(3)
TRSAs granted in 2018 pursuant to the 2017 SIP vest in equal annual installments over 4 years. Dividends are paid on unvested TRSAs at the same rate as dividends are paid to stockholders on the Company's common stock. Restrictions on all shares of unvested TRSAs lapse, and shares accelerate vesting, upon the death of the individual.

(4)
With respect to PRSUs issued under the 2017 SIP, the grant date fair value is based on the target number of shares, which the Company currently estimates as the probable outcome of the market-based performance conditions. Depending on whether or to what extent the respective performance conditions are met, the number of shares for which the performance units are ultimately settled will range from zero to a maximum of either 150% (for the portion of the PRSUs that vest based on achievement of EPS growth and ROAA goals) or 200% of (for the portion of the PRSUs that vest based on achievement of Relative TSR goals) of target. The grant date fair value of PRSUs that vest based on achievement of Relative TSR goals is based on a fair value of $71.22 per PRSU. The grant date fair value of PRSUs that vest based on the achievement of EPS growth and ROAA goals is based on the closing price of the Company's common stock on February 14, 2018, or $54.05.

49


Table of Contents


Outstanding Equity Awards at December 31, 2018

 
  Stock Awards  
Named Executive Officer
  Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(1)
  Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)(2)
  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
($)(3)
  Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights That
Have Not
Vested
($)(2)
 

Matthew P. Wagner

  68,091   $ 2,266,068   97,309   $ 3,238,444  

Patrick J. Rusnak

    39,611   $ 1,318,254     41,320   $ 1,375,130  

James J. Pieczynski

  47,497   $ 1,580,700   68,867   $ 2,291,894  

Bryan M. Corsini

    17,811   $ 592,750     25,826   $ 859,489  

Laird M. Boulden

  39,129   $ 1,302,213      

(1)
Represents TRSAs that vest in equal annual installments over 4 years. Dividends are paid on unvested TRSAs at the same rate as dividends paid to stockholders generally on the Company's common stock. Restrictions on all shares of unvested TRSAs lapse, and shares accelerate vesting, upon the death of the individual.

(2)
Market value is determined using the December 31, 2018 closing price of the Company's common stock of $33.28 per share.

(3)
Represents grants of PRSUs at target performance. PRSUs will vest only if performance goals with respect to certain financial metrics are met over a three-year performance period. PRSUs are granted at a target number. The number of units that will ultimately vest based on the Company's actual performance will range from zero to a maximum of either 150% (for the portion of the PRSUs that vest based on achievement of EPS growth and ROAA goals) or 200% (for the portion of the PRSUs that vest based on achievement of Relative TSR goals) of target. Unvested PRSUs will participate with common stock in any dividends declared and paid only on the shares which ultimately vest, if any, at the end of the three-year performance period. At the time of vesting, the vested shares are entitled to receive cumulative dividends declared and paid during the three-year performance period. PRSUs accelerate vesting and vest in full with performance deemed achieved at target level with respect to all open performance periods if death occurs during the performance period, and deemed achieved at the actual performance level if death occurs after the end of the performance period and before the vesting date.


2018 Stock Vested Table

 
  Stock Awards  
Named Executive Officer
  Number of Shares
Acquired on
Vesting
(#)
  Value
Realized
on Vesting
($)(1)
 

Matthew P. Wagner

  52,299   $ 2,764,022  

Patrick J. Rusnak

    18,487   $ 974,920  

James J. Pieczynski

  12,289   $ 636,498  

Bryan M. Corsini

    15,859   $ 839,019  

Laird M. Boulden

  13,000   $ 693,680  

(1)
Value is determined using the closing market price of the Company's common stock on the vesting date.

For more information, see "Compensation Discussion and Analysis—2018 Executive Compensation Decisions" beginning on page 35.

50


Table of Contents

Potential Payments on Termination and Change in Control

The Company has a Severance Pay Plan in which the NEOs participate. The Severance Pay Plan is a "double trigger" plan that provides severance to participants on a termination of employment by a participant for Good Reason (defined below) or by the Company other than for Just Cause (defined below) on or within two years of a Change in Control (defined below). Under those circumstances, each NEO is entitled to: (i) his or her accrued base salary and benefits through termination, (ii) the pro rata target annual incentive for the year in which the termination occurs, (iii) a designated multiple (three times for Mr. Wagner and two times for the other NEOs) of the NEOs annual compensation (annual base salary plus annual target incentive, automobile allowance and club dues) and (iv) continued medical, dental and vision coverage for the NEO and his or her dependents for the number of years corresponding to the participant's severance multiple, unless the participant obtains other health coverage.

Our Severance Pay Plan prohibits excise tax gross-up payments and provides that payments made in connection with the plan will be cut back to amounts that do not exceed the safe harbor provisions of Section 280G of the Code. In consideration for the severance, a participant will be subject to a non-solicitation covenant following any termination of his or her employment for the number of years corresponding to the participant's severance multiple. The Severance Pay Plan is administered by the Company's CNG Committee.

The relevant definitions under the Severance Pay Plan are summarized as follows:

In addition, all unvested TRSA and PRSU awards are subject to "double-trigger", accelerated vesting upon the occurrence of a "change-in-control" and the NEO's termination of employment by the Company without "Just Cause" or by the NEO for "Good Reason", in each case, on or before the second anniversary of the change in control. In the TRSA and PRSU award agreements, "change-in-control" generally means: (i) the consummation of a plan of dissolution or liquidation of the Company; (ii) the incumbent board members cease to constitute at least two-thirds of the Company's Board; (iii) the consummation of a plan of reorganization, merger or consolidation involving the Company, if the Company's stockholders do not hold at least 70% of the combined

51


Table of Contents

voting power of the resulting company of the i