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Section 1: DEF 14A (DEF 14A)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.     )
Filed by the Registrant  x              
Filed by a Party other than the Registrant  ¨
Check the appropriate box:
¨
Preliminary Proxy Statement
 
 
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
 
x
Definitive Proxy Statement
 
 
¨
Definitive Additional Materials
 
 
¨
Soliciting Material Pursuant to § 240.14a-12
Boston Private Financial Holdings, Inc.
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):
x
No fee required.
 
 
 
¨
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:
 
 
 
¨
Fee paid previously with preliminary materials.
 
 
 
¨
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
(2)
Form, Schedule or Registration Statement No.:
 
(3)
Filing Party:
 
(4)
Date Filed:
 
 
 











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2020 PROXY STATEMENT































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LETTER TO OUR
SHAREHOLDERS
 

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10 Post Office Square
Boston, Massachusetts 02109

Dear Fellow Shareholders:
On behalf of the Board of Directors and the management of Boston Private Financial Holdings, Inc., you are invited to attend the 2020 Annual Meeting of Shareholders. The annual meeting will be held on Thursday, April 23, 2020 at 10:00 a.m., Eastern Time, at 10 Post Office Square, 2nd Floor, Boston, Massachusetts 02109.
The attached Notice of 2020 Annual Meeting of Shareholders and Proxy Statement describe the formal business to be conducted at the annual meeting. Please refer to the Proxy Statement for detailed information on each of the proposals. Only shareholders of record at the close of business on March 2, 2020 may vote at the annual meeting or any postponements or adjournments of the annual meeting.
On behalf of the Board of Directors and all employees of Boston Private Financial Holdings, Inc., I thank you for your continued support of our company.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the annual meeting, please vote in order to ensure the presence of a quorum.
 
 
 
Sincerely,
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Anthony DeChellis
Chief Executive Officer and President
 
Boston, Massachusetts
Dated: March 16, 2020





NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS
 

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You are invited to attend the 2020 Annual Meeting of Shareholders (the "Meeting") of Boston Private Financial Holdings, Inc. (the "Company" or "Boston Private"). This page contains important information about the Meeting.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DATE:
 
 
TIME:
 
 
LOCATION:
 
 
April 23, 2020
 
 
10:00 a.m.
 
 
Boston Private Headquarters
 
 
 
 
Eastern Time
 
 
10 Post Office Square, 2nd Floor
 
 
 
 
 
 
 
Boston, MA 02109
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AGENDA
 
 
 
 
 
 
 
(1)
To elect the nine director nominees named in the Proxy Statement to serve until the 2021 annual meeting and until their successors are duly elected and qualified.
 
(2)
To approve an advisory, non-binding resolution on the compensation of the named executive officers as disclosed in the Proxy Statement.
 
(3)
To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2020.
 
(4)
To approve the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan.
 
(5)
To transact any other business that may properly come before the Meeting.
 
 
 
 
 
 
Record Date: Only shareholders of record at the close of business on March 2, 2020 may vote at the Meeting or any postponements or adjournments of the Meeting.
Your vote is very important. Please complete, date, sign and return the accompanying proxy card or vote electronically via the internet or by telephone. The enclosed return envelope requires no additional postage if mailed in the United States. For specific instructions on how to vote your shares, please refer to the section in the Proxy Statement entitled “Voting Options.”
We look forward to your attendance in person or by proxy.

By Order of the Board of Directors,


CHRISTOPHER A. COOPER
Corporate Secretary
Boston, Massachusetts
Dated: March 16, 2020




Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on April 23, 2020.  The Proxy Statement and our 2019 Annual Report are available at: http://www.viewproxy.com/bostonprivate/2020



TABLE OF CONTENTS
PROXY OVERVIEW
 
Summary of Voting Items
CORPORATE GOVERNANCE
 
Proposal 1: Election of Directors
CORPORATE GOVERNANCE OVERVIEW
Policy on Hedging
Code of Conduct and Ethics
Dignity in the Workplace
Related Party Transactions
Corporate Responsibility and Sustainability
EXECUTIVE COMPENSATION
 
Proposal 2: Advisory (Non-Binding) Vote on Executive Compensation
COMPENSATION DISCUSSION & ANALYSIS
Executive Summary
Summary of 2019 Compensation Actions
     Approach to Pay
   Compensation Philosophy
    Compensation Elements
   Base Salary
   Annual Executive Short-Term Incentive Plan (STI)
   Equity Based Long-term Incentives (LTI)
    Other Compensation Topics
   Equity Grant Policy
   Employment Agreements
   Executive Deferred Compensation Plan
   Say on Pay Shareholder Approval Levels for 2019
   Tax, Regulatory and Accounting Implications
EXECUTIVE COMPENSATION TABLES
AUDIT
 
EQUITY COMPENSATION PLAN
 
Proposal 4: Approval of the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan
Summary of Material Features of the Plan
Rationale for New Plan
Summary of the Plan
New Plan Benefits
Tax Aspects Under the Code
Equity Compensation Plan Information
 
 



SHARE OWNERSHIP
 
     Ownership of Certain Beneficial Owners and Management
Delinquent Section 16(a) Reports
SHAREHOLDER MATTERS
 
Submission of Shareholder Proposals for 2021 Annual Meeting
EXHIBITS
 
Exhibit A: Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan
Exhibit B: Proxy Card
 
 




PROXY OVERVIEW

SUMMARY OF VOTING ITEMS
 
 
 
 
 
 
 
 
BOARD
VOTING ITEM
 
 
 
 
RECOMMENDATION
PROPOSAL
 
1
 
ELECTION OF DIRECTORS (page 4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Elect the nine director nominees named in this Proxy Statement to serve until the 2021 annual meeting of shareholders and until their successors are duly elected and qualified.

Each director nominee must receive the affirmative vote of a majority of votes cast as to such nominee by shareholders in order to be elected.
 
FOR

Each Director Nominee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPOSAL
 
2

 
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION (SAY ON PAY) (page 20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Approve an advisory, non-binding resolution on the compensation of the named executive officers of Boston Private Financial Holdings, Inc. (the "Company" or "Boston Private").

Approval requires the affirmative vote of a majority of the votes cast at the meeting.
 
FOR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPOSAL
 
3

 
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (page 46)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2020.

Ratification requires the affirmative vote of a majority of votes cast at the meeting.
 
FOR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPOSAL
 
4

 
EQUITY COMPENSATION PLAN (page 49)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Approve the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan.

Approval requires the affirmative vote of a majority of the votes cast at the meeting.
 
FOR
 
 
 
 
 
 
 
 
 
 

Abstentions and broker non-votes will have no effect on the outcome of the election of the nominees or the other proposals put forth for a vote at the meeting.

 
 
 
1 - 2020 PROXY STATEMENT



The Company’s Board of Directors (the “Board” or "Board of Directors") is making this Proxy Statement available to you in connection with the solicitation of proxies by the Board for the 2020 Annual Meeting of Shareholders (the “Meeting”). The Meeting will be held on Thursday, April 23, 2020 at 10:00 a.m., Eastern Time, at 10 Post Office Square, 2nd Floor, Boston, Massachusetts 02109.
Record Date. The record date for the Meeting is March 2, 2020 (the “Record Date”). At the close of business on the Record Date, there were 83,264,326 shares of the Company’s common stock entitled to be voted at the Meeting, and there were 785 shareholders of record. There are no other outstanding shares eligible to vote. _________________________________________________________________
Voting Your Proxy. Only shareholders of record at the close of business on the Record Date are entitled to vote at the Meeting. Each outstanding share of common stock is entitled to one vote on each matter before the Meeting.
Quorum. A quorum of the common stock must be present at the Meeting for any business to be conducted. The presence, in person or by proxy, of the holders of a majority of the votes entitled to be cast on a matter for each voting group constitutes a quorum. Abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present. If a quorum is not present, the Meeting will be adjourned until a quorum is obtained.
We are first sending this Proxy Statement and the accompanying materials to shareholders on or about March 16, 2020.
VOTING OPTIONS
Your vote is very important. Even if you plan to attend the Meeting in person, please cast your vote as soon as possible by:
MAIL




 
TELEPHONE or INTERNET

 
IN PERSON

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The accompanying proxy card, if properly completed, signed, dated and returned in the enclosed envelope, will be voted in accordance with your instructions. The enclosed envelope requires no additional postage if mailed in the United States.

 
If you hold your shares of common stock directly and not in street name, you may vote by telephone or internet by following the instructions included on your proxy card. If you vote by telephone or internet, you do not have to mail in your proxy card. Telephone and internet voting are available 24 hours a day. For participants in the Company’s 401(k) Plan and Employee Stock Purchase Plan, telephone and internet voting are available through April 20, 2020 at 11:59 p.m., Eastern Time. For all other holders, telephone and internet voting are available through April 22, 2020 at 11:59 p.m., Eastern Time.
 
If you are a registered shareholder as of the Record Date and attend the Meeting, you may deliver your completed proxy card in person. Additionally, we will have ballots available for those registered shareholders as of the Record Date who wish to vote in person at the Meeting
 
A shareholder of record may revoke a proxy any time before the polls close by submitting a later dated vote by telephone, internet, or mail, by filing a written revocation with the Corporate Secretary before the Meeting or by appearing in person at the Meeting and specifically withdrawing any previously voted proxy.

 
 
 
PROXY OVERVIEW - 2




VOTING MATTERS AND VOTING RECOMMENDATIONS
By submitting your proxy by one of the methods listed above, you authorize Christopher A. Cooper, Senior Vice President, Assistant General Counsel and Corporate Secretary, and Steven M. Gaven, Executive Vice President and Chief Financial Officer (collectively, the “Proxy Holders”), to represent you and vote your shares at the Meeting in accordance with your instructions. If a properly executed proxy is submitted and no instructions are given, the proxy will be voted in accordance with the Board’s recommendations as outlined above on page 1.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware of any other matters to be considered at the Meeting. If any other matters properly come before the Meeting, the proxies will be voted at the discretion of the Proxy Holders.
ANNUAL REPORT
All shareholders of record are being sent a copy of the Company’s 2019 Annual Report to Shareholders and the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (which contains audited financial statements of the Company for the fiscal years ended December 31, 2019, 2018 and 2017), as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020. These reports, however, are not part of the proxy soliciting material.
A copy of the Company’s Annual Report on Form 10-K filed with the SEC (the Annual Report), including all exhibits, may be obtained free of charge by writing to Boston Private Financial Holdings, Inc., 10 Post Office Square, Boston, Massachusetts 02109, Attention: Investor Relations, or by accessing the Company’s website at www.bostonprivate.com, selecting the “Investor Relations” link at the bottom of the page, and then selecting “Annual Reports” under “Financial Information.” [


 
 
 
3 - 2020 PROXY STATEMENT



CORPORATE GOVERNANCE


PROPOSAL 1:
 

ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of nine members.
At the Meeting, shareholders will be asked to elect nine directors, each of whom is currently serving as a director of the Company. Each of the nine director nominees has consented to serve as a director if elected at the Meeting. Each nominee elected as a director will serve until the next annual meeting and until his or her successor has been duly elected and qualified. If any nominee is unable to serve as a director at the Meeting, the Board may reduce the number of directors to be elected at the Meeting.
At the Meeting, because the number of director nominees is not greater than the number of directors that shareholders will be asked to elect, director nominees must receive a majority of the votes cast as to such nominee by shareholders in order to be elected.
The biographical description below for each nominee includes the specific experience, qualifications, attributes and skills that led to the conclusion by the Board of Directors that such person would be a good candidate to serve as a director of the Company. In addition to the information presented below, the Board also believes that all of the directors have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company.
The Board has determined that each nominee, except Mr. DeChellis, qualifies as an independent director under The Nasdaq Stock Market (“Nasdaq”) listing standards.
If any of the nominees shall become unavailable for any reason, all proxies will be voted FOR the election of such other person as the Board of Directors may nominate and recommend.

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The Board of Directors unanimously recommends a vote FOR each of its nine director nominees.
 





 
 
 
CORPORATE GOVERNANCE - 4





INFORMATION REGARDING DIRECTOR NOMINEES
The following table sets forth certain information regarding the nominees for election at the Meeting, based on information furnished by them to the Company:
 
Age
 
Director 
Since
 
Independent
BOARD NOMINEES
 
 
 
 
 
Anthony DeChellis
57
 
2018
 
NO
Mark F. Furlong
62
 
2016
 
YES
Joseph C. Guyaux
69
 
2016
 
YES
Deborah F. Kuenstner
61
 
2007
 
YES
Gloria C. Larson
69
 
2015
 
YES
Kimberly S. Stevenson
57
 
2015
 
YES
Luis Antonio Ubiñas
57
 
2017
 
YES
Stephen M. Waters, Chair of the Board
73
 
2004
 
YES
Lizabeth H. Zlatkus
61
 
2015
 
YES
 
 
 
 
 
 
 
Director Nominee Qualifications
This section provides information as of the date of this Proxy Statement about each nominee standing for re-election at the Meeting. It is expected that each nominee, if elected, will also be appointed to the board of directors of Boston Private Bank & Trust Company (the “Bank”), a wholly-owned subsidiary of the Company. Each nominee is currently a member of the board of directors of the Bank. For more information see “Corporate Governance.


 
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ANTHONY DECHELLIS
 
 
Mr. DeChellis is the Chief Executive Officer and President of the Company and the Bank. He has over 30 years of experience in the financial services industry, holding executive level positions at OurCrowd Venture Capital, Credit Suisse, UBS and Merrill Lynch. At Credit Suisse, he oversaw a private banking and wealth management business in North and South America . At Merrill Lynch, he launched a private wealth management business in the United States. Mr. DeChellis has a deep knowledge of all aspects of the industry, including the provision of services to high net worth clients.
 
 
 
Director since 2018
 
CAREER EXPERIENCE
 
SKILLS / QUALIFICATIONS
 
 
 
Boston Private Financial Holdings, Inc.
 
  Risk Management and Controls
 
Not Independent
 
Chief Executive Officer and President (2018-present)
 
Corporate Governance
 
 
 
OurCrowd Venture Capital
 
Financial Services
 
Committees:
 
President (2015 - 2016)
 
Strategic Planning
 
None
 
Credit Suisse Private Banking - Americas
 
 
 
 
 
Chief Executive Officer (2006 - 2013)
 
 
 
 
 
UBS
 
 
 
 
 
     Head of Private Wealth Management (2003 - 2006)
 
 
 
 
 
Merrill Lynch
 
 
 
 
 
 
Head of International Private Banking for Merrill Lynch Europe (1987-2003)
 
 
 




 
 
 
5 - 2020 PROXY STATEMENT



 
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MARK F. FURLONG
 
 
Mr. Furlong retired as President and Chief Executive Officer of BMO Harris Bank in June 2015, a role he assumed upon the close of the acquisition of Marshall & Ilsley by BMO Financial Group in 2011. Prior to its acquisition, he served in a variety of senior executive roles, including as Chairman, Chief Executive Officer, President and Chief Financial Officer of Marshall & Ilsley. His prior experience also includes service as an audit partner with Deloitte & Touche. With his significant background in the banking industry, Mr. Furlong brings unique insight to the Board concerning capital allocation strategies and banking issues, in addition to his overall management and financial expertise.

 
 
 
 
Director since 2016
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
BMO Harris Bank, N.A.
 
Kforce, Inc. (current)
Independent
 
President & CEO (2011-2015)
 
Heska Corporation (current)
 
 
Marshall & Ilsley
 
 
 
Committees:
 
     Chair (2010-2011)
 
SKILLS / QUALIFICATIONS
Audit and Finance (Chair)
 
     Chief Executive Officer (2007-2010)
 
Public Company
 
Governance and Executive
 
     President (2004-2007)
 
Finance, Accounting & Audit
 
 
     Chief Financial Officer (2001-2004)
 
Financial Services
 
 
 
 
 
Corporate Governance
 

 
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JOSEPH C. GUYAUX
 
 
Mr. Guyaux retired in 2016 from PNC Financial Services Group, where he worked for 44 years and served as President, responsible for leading its bank’s consumer and business banking, wealth management and brokerage divisions. Mr. Guyaux held several other senior leadership positions at PNC Financial Services Group, including Chief Risk Officer and President and CEO of PNC Mortgage.  Mr. Guyaux brings to the Board extensive experience in the financial services industry and risk management expertise.
 
 
 
Director since 2016
 
CAREER EXPERIENCE
 
SKILLS / QUALIFICATIONS
 
 
PNC Financial Services Group, Inc.
 
Risk Management and Controls
 
Independent
 
President & CEO of PNC Mortgage (2015-2016)
 
Financial Services
 
 
 
Chief Risk Officer (2012-2015)
 
Mergers & Acquisitions
 
Committees:
 
President (2002-2012)
 
Strategic Planning
 
Risk Management (Chair)
 
 
 
 
 
Compensation
 
 
 
 
 

 
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DEBORAH F. KUENSTNER
 
 
Ms. Kuenstner is the Chief Investment Officer of Wellesley College. Before joining Wellesley College, Ms. Kuenstner was Chief Investment Officer and Vice President of Investment Management at Brandeis University, a Managing Director of Research for Fidelity Management & Research Company, and the Chief Investment Officer, Global Value, at Putnam Investments, as well as an Economist at the Federal Reserve Bank of New York. Ms. Kuenstner brings to the Board valuable experience and knowledge about the financial services industry generally and, in particular, the investment management arena. In addition, her economic and risk management expertise make her an excellent nominee for the Board.
 
 
 
 
Director since 2007
 
CAREER EXPERIENCE
 
SKILLS / QUALIFICATIONS
 
 
Wellesley College
 
Risk Management and Controls
 
Independent
 
 Chief Investment Officer (2009-present)
 
Corporate Governance
 
 
 
Brandeis University
 
Finance, Accounting & Audit
 
 
 
    Chief Investment Officer, Vice President of Investment Management (2007-2009)
 
Executive Compensation
 
Committees:
 
Fidelity Management & Research Company
 
 
 
Risk Management
 
     Managing Director (2005-2006)
 
 
 
Compensation (Vice Chair)
 
Putnam Investments
 
 
 
 
 
     Chief Investment Officer, Global Value (2000-2004)
 
 
 


 
 
 
CORPORATE GOVERNANCE - 6




 
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GLORIA C. LARSON
 
 
Ms. Larson was the President of Bentley University from 2007 to 2018. Prior to her tenure at Bentley, she held numerous leadership positions in the legal, public policy and business fields, including serving as the Co-Chair of the Government Strategies Group at the law firm of Foley Hoag LLP and as the Secretary of Economic Affairs and the Secretary of Consumer Affairs and Business Regulation for the Commonwealth of Massachusetts. She is a board or advisory council member of several prominent professional, charitable and civic organizations. Ms. Larson's deep ties in the Massachusetts community, as well as her expertise in the regulatory oversight of banking and the financial services industry, bring great value to the Board's oversight of the Company.

 
 
 
 
Director since 2015
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
Harvard University Graduate School of Education
Unum Group (current)
 
Independent
 
President in Residence (2018-2019)
 
 
 
 
 
Bentley University
 
SKILLS / QUALIFICATIONS
 
 
President (2007-2018)
 
Corporate Governance
 
 
 
Foley Hoag LLP
 
Regulatory
 
Committees:
 
Partner and Co-Chair of Governmental
 
Public Company
 
Risk Management
 
Practices Group (1996-2007)
 
Financial Services
 
Governance and Executive (Chair)
 
 
 
 

 
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KIMBERLY S. STEVENSON
 
 
Ms. Stevenson is the Senior Vice President and General Manager of Foundational Data Services at NetApp. Prior to joining NetApp in January 2020, Ms. Stevenson was a venture partner at RIDGE-LANE Limited Partners, a strategic advisory and venture development firm that advises companies seeking to accelerate growth through the use of technology. Formerly, she held senior positions at Lenovo, Intel and HP Enterprise Services. With the financial services industry increasingly reliant on technology, Ms. Stevenson’s deep operational and technology experience serves to enhance the Board’s overall composition.

 
 
 
 
Director since 2015
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
NetApp
 
Skyworks Solutions, Inc. (current)
 
Independent
 
Senior Vice President and General Manager (2020-present)
 
Cloudera, Inc. (past five years)
 
 
RIDGE-LANE Limited Partners
 
 
 
 
Venture Partner (2018 to 2019)
 
SKILLS / QUALIFICATIONS
 
 
Lenovo
 
Risk Management and Controls
Committees:
 
     Senior Vice President (2017-2018)
 
Technology/Cybersecurity
 
Risk Management (Vice Chair)
 
Intel Corporation
 
Public Company
 
Governance and Executive
 
     Executive Officer, Corporate Vice President (2009-2017)
 
Finance, Accounting & Audit
 

 
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LUIS A. UBIÑAS
 
 
Mr. Ubiñas served as President of the Ford Foundation from 2008 to 2013 where he oversaw more than $12 billion in assets and over $500 million in annual giving. Prior to joining the Ford Foundation, he spent 18 years with McKinsey & Company, where he held various positions, including Senior Partner of the firm’s West Coast media practice working with technology, telecommunications and media companies. Along with his expertise in governance-related matters, Mr. Ubiñas has extensive private company investment and board experience as well as a deep knowledge in the marketing and media arenas.
 
 
 
 
Director since 2017
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
PanAmerican Development Foundation
 
Electronic Arts Inc. (current)
 
Independent
 
President of Board of Trustees (2015-present)
 
Tanger Factory Outlet Centers, Inc. (current)
 
 
Ford Foundation
 
 
 
 
     President (2008-2013)
 
SKILLS / QUALIFICATIONS
 
 
 
 
Technology/Cybersecurity
 
Committees:
 
 
 
Corporate Governance
 
Audit and Finance
 
 
 
Finance, Accounting & Audit
 
Governance and Executive (Vice Chair)
 
 
Strategic Planning
 


 
 
 
7 - 2020 PROXY STATEMENT



 
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STEPHEN M. WATERS
 
 
Mr. Waters is the Chair of the Company and the Bank, and the managing partner of Compass Partners Capital LLC and its investment subsidiaries. Previously, he held numerous executive positions at Morgan Stanley, including as Co-Chief Executive Officer of Morgan Stanley, Europe, member of Morgan Stanley’s worldwide 12-person Operating Committee and Co-Director of the firm’s Mergers and Acquisitions Department. He also previously served as a director of Duty Free International. Mr. Waters brings over 40 years of specific and relevant financial services experience to the Board, along with a deep understanding and practical knowledge of the investment management business.
 
 
 
 
Director since 2004
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
Compass Partners Capital LLC
 
Valero Energy Corporation (current)
 
Independent, Chair
 
Founder, Managing Partner (1996 to present)
 
 
 
 
Morgan Stanley
 
 
 
 
    Co-Chief Executive Officer, Europe (1992-1996)
 
SKILLS / QUALIFICATIONS
 
 
    Co-Head, M&A (1988-1992)
 
Corporate Governance
 
 
 
Shearson Lehman Brothers
 
Public Company
 
Committees:
 
     Co-Director, M&A (1985-1988)
 
Financial Services
 
Compensation
 
 
 
Strategic Planning
 
Governance and Executive
 
 
 
 
 
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LIZABETH H. ZLATKUS
 
 
Ms. Zlatkus held many senior leadership positions at The Hartford Financial Services Group, including Chief Financial Officer, Chief Risk Officer and Co-President of Hartford Life Insurance Companies.  Since her retirement from The Hartford in 2011, she has served as a director on several public company, private company and non-profit boards. Ms. Zlatkus’ extensive experience in the financial services arena, where she has deep expertise in risk and finance, regulation, governance, and operations, makes her an excellent nominee for the Board.
 
 
 
 
 
Director since 2015
 
CAREER EXPERIENCE
 
PUBLIC COMPANY BOARD EXPERIENCE
 
 
The Hartford Financial Services Group
 
Axis Capital Holdings Limited (current)
Independent
 
Chief Risk Officer (2010-2011)
 
Computer Sciences Corporation (past five years)
 
 
 Chief Financial Officer (2008-2010)
 
 
 
 
     Co-President of Hartford Life (2007-2008)
 
SKILLS / QUALIFICATIONS
 
 
 
 
Risk Management and Controls
Committees:
 
 
 
Public Company
 
Audit and Finance (Vice Chair)
 
Finance, Accounting & Audit
 
Compensation (Chair)
 
 
 
Strategic Planning
 

 
 
 
CORPORATE GOVERNANCE - 8




CORPORATE GOVERNANCE OVERVIEW
 
The business of the Company is managed under the direction of the Company’s Board of Directors in accordance with the Massachusetts General Laws, the Company’s Restated Articles of Organization, as amended, and the Company’s Amended and Restated Bylaws (the "Bylaws").
The Board of Directors provides oversight of the Company’s activities for the benefit of its shareholders.
The table below lists many of the Company's governance practices.
 
Majority Voting for Directors in Uncontested Elections
Yes
Annual Election of All Directors
Yes
Diverse Board (as to Gender, Composition, Skills, Experience, etc.)*
Yes
Annual Board and Committee Self-Evaluation
Yes
Separate Chair of the Board and CEO
Yes
Independent Directors Meet Without Management at Regularly Scheduled Board Meetings
Yes
Annual Independent Director Evaluation of CEO
Yes
Focus on Environmental, Social, and Governance (ESG)
Yes
Code of Conduct and Ethics for Directors
Yes
Board Level Risk Management Committee
Yes
Size of Board*
9
Number of Independent Directors*
8
Average Director Age*
63
Average Director Tenure (in Years)*
6.3
Annual Equity Grant to Directors
Yes
Disclosure Committee for Financial Reporting
Yes
Director Stock Ownership Policy
Yes
Term and Age Limit Guidance for Directors
Yes
 
 
*Based on the nine director nominees named in this Proxy Statement.
 
CORPORATE GOVERNANCE GUIDELINES
The Board of Directors has adopted the Corporate Governance Guidelines which, among other things, describe the most important corporate governance practices and address issues such as director qualification standards, director responsibilities, board composition and structure, performance evaluation and succession planning. Under the Company’s Corporate Governance Guidelines, a director who reaches the age of 74 or a term of 20 years while serving as director is required to offer his or her resignation from the Board of Directors as of the next annual meeting of shareholders.
BOARD LEADERSHIP STRUCTURE
In accordance with the Company’s Bylaws, the Board of Directors elects the Chair of the Board and appoints the President, who also serves as Chief Executive Officer (“CEO”). The Board of Directors has adopted a policy that provides for separation of the roles of Chair of the Board and CEO.
The Governance and Executive Committee has established a Statement of Roles and Responsibilities (“Statement”) for the non-executive Chair of the Board of Directors (“non-executive Chair”). The Statement provides that the non-executive Chair may only be a member of the Board of Directors who meets the definition of "independence" under Nasdaq listing standards. The non-executive Chair is elected by the Company’s Board of Directors annually and may be removed at any time with or without cause. The non-executive Chair is responsible for the management, development and effective functioning of the Board of Directors and provides leadership in every aspect of the

 
 
 
9 - 2020 PROXY STATEMENT



Board’s oversight of the Company. The non-executive Chair acts in an advisory capacity to the CEO and other executive officers in matters concerning the interests of the organization and the Board, as well as serving as the liaison between management and the Board of Directors.
The duties of the Chair of the Board include the following:
setting agendas for Board meetings in consultation with the CEO;
chairing Board meetings and ensuring that Board functions are effectively carried out;
chairing executive sessions of independent directors and providing feedback to the CEO, as appropriate;
serving as liaison for chairs of subsidiary company boards, as needed;
facilitating the Board’s efforts to create and maintain practices that respond to feedback from shareholders and other stakeholders;
representing the Board at meetings with major shareholders and other stakeholder groups on governance-related matters, as may be requested from time to time;
facilitating effective communication between directors and management, both inside and outside of meetings of the Board;
providing advice to the CEO on major issues, including strategic initiatives; and
working with the CEO to ensure management strategies, plans and performance are appropriately risk assessed and represented to the Board.
The Governance and Executive Committee conducts a periodic review of the role and responsibilities of the non-executive Chair and this review is then presented to the full Board of Directors.
BOARD COMMITTEE STRUCTURE
The Board of Directors currently has four standing committees:
COMMITTEES
 
 
 
 
 
 
 
Audit and Finance
 
Compensation
 
Governance and Executive
 
Risk Management

Each committee is comprised solely of members of the Board of Directors who have been determined to meet the definition of an independent director in accordance with Nasdaq listing standards. All committees have adopted charters that provide a statement of the respective committee’s roles and responsibilities.
RISK OVERSIGHT
The Board of Directors and its committees play an important role in the risk oversight of the Company and its management, and exercise direct decision-making authority with respect to significant matters, including the development of limits and specific risk tolerances. The Board of Directors and its committees also are each directly responsible for considering and overseeing risks in specified areas. In light of the Company’s overall business and market, the extensive regulatory schemes under which the Company and its affiliates operate, and the complexities of the Company’s operations as a whole, the Board has established a Risk Management Committee that is tasked with specific responsibility for direct oversight of all of the risks inherent in the Company’s business, along with management of the enterprise-wide risk management program.
The Risk Management Committee consults with management and outside experts, and provides regular, detailed reporting and recommendations on risk-related actions to the full Board. The Risk Management Committee also monitors the risk management function, reviews risk assessments and other risk reporting for all of the Company’s business segments and operations, and adopts and directs the implementation of risk management policies that relate to both the Company and its subsidiaries, including the Bank.

 
 
 
CORPORATE GOVERNANCE - 10




In addition to the Risk Management Committee, the Board of Directors administers its risk oversight function through:
the review and discussion of periodic reports to the Board of Directors and its committees on topics relating to risks that the Company faces, including, among others, credit risk, interest rate risk, operational risks (including cybersecurity and technology-related risks), and compliance and regulatory risk;
monitoring the level and trend of such risks relative to pre-approved levels and the ability to manage and mitigate such risks;
the required approval by the Board of Directors (or a committee thereof) of significant transactions and other decisions, including final budgets, material uses of capital, strategic direction, and executive management hiring and promotions;
the direct oversight of specific areas of the Company’s business by the Risk Management Committee, the Audit and Finance Committee, the Compensation Committee and the Governance and Executive Committee; and
regular periodic reports from the Company’s internal and external auditors and other third party consultants regarding areas of potential risk, including, among others, those relating to the Company’s internal controls and financial reporting.
The Board of Directors also relies on management to bring significant matters impacting the Company and its subsidiaries to the Board of Directors’ attention.
RISK REVIEW AND ANALYSIS OF INCENTIVE COMPENSATION ARRANGEMENTS
The Company’s compensation program is designed to offer competitive pay for performance, aligning with the Company’s short- and long-term business strategies, risk appetite and shareholder interests. The Board oversees the Company’s incentive compensation programs, primarily though the Compensation Committee, with additional input from the Company’s Chief Risk Officer, Chief Human Resources Officer, General Counsel, and Chief Financial Officer.
The Compensation, Governance and Executive Committee (the predecessor to the current Compensation Committee) conducted a detailed review of the Company’s incentive compensation arrangements in 2018. This review focused on:
the compensation plans of the persons identified as named executive officers to ensure that such plans do not encourage the named executive officers to take unnecessary or excessive risks that threaten the value of the Company;
employee compensation plans in light of the risks posed to the Company by such plans and how to limit these risks; and
employee compensation plans to ensure these plans do not encourage the manipulation of reported earnings to enhance compensation.
During the most recent review, the incentive compensation plans reviewed were categorized as moderate risk. Named executive officer compensation plans are described in detail in “Compensation Discussion & Analysis.” The Compensation Committee has determined to conduct future incentive compensation reviews on a biennial basis, with interim reviews if material changes occur. The next regular incentive compensation review is expected to occur in 2020.
The Compensation Committee believes that appropriate controls are in place to minimize the risk of unnecessary and inappropriate risk-taking as a result of the incentive plans and to discourage the manipulation of earnings to enhance compensation. Such controls include mechanisms to clawback equity compensation in certain circumstances, governance processes for compensation reviews and on-going monitoring of employee compensation that may trigger additional individual or plan reviews. These additional reviews included annual market analyses, both internal and third-party.
The Compensation Committee believes that the balance of base compensation and variable short- and long-term incentives awarded based on Company and individual performance, is designed to discourage excessive or unnecessary risk-taking. The Company-based performance factors for the various incentive plans are also weighted accordingly, requiring attainment of different aspects of financial and strategic goals for payouts. Further, the Compensation Committee believes that the long-term equity components of compensation encourage the Company’s

 
 
 
11 - 2020 PROXY STATEMENT



executives to focus on elements of the Company’s performance to influence long-term value creation and share price appreciation. In addition, the Compensation Committee may exercise negative discretion for a variety of reasons, including inappropriate risk-taking, to reduce variable short-term incentive awards.
COMMITTEES OF THE BOARD AND RELATED MATTERS
The following table sets forth membership on the committees that were in place during 2019 and the number of meetings held during 2019.
Name
 
Audit 
and
Finance
 
Compensation (1)
 
Risk
Management
 
Governance and Executive (1)
 
 
 
 
 
 
 
 
 
Mark F. Furlong (2), (3)
 
Chair (8)
 
 
 
 
 
X
Joseph C. Guyaux (2)
 
 
 
X
 
Chair (8)
 
 
Deborah F. Kuenstner (2), (3), (4)
 
 
 
X
 
X
 
 
Gloria C. Larson (2)
 
 
 
 
 
X
 
Chair (8)
Kimberly S. Stevenson (2), (3), (5)
 
 
 
 
 
X
 
X
Luis Antonio Ubiñas (2), (3), (6)
 
X
 
 
 
 
 
X
Stephen M. Waters (2), (3)
 
 
 
X
 
 
 
X
Lizabeth H. Zlatkus (2), (3), (7)
 
X
 
Chair (8)
 
 
 
 
Number of Committee Meetings Held in 2019
 
8
 
8
 
9
 
3
(1)
In January 2019, the Board of Directors split the Compensation, Governance and Executive Committee into two separate committees, the Compensation Committee and the Governance and Executive Committee.
(2)
The Board of Directors has determined that this member is an "independent" director under Nasdaq listing standards.
(3)
The Board of Directors has determined that this member is an “audit committee financial expert” under SEC regulations.
(4)
Deborah F. Kuenstner joined the Risk Management Committee in January 2019.
(5)
Kimberly S. Stevenson joined the Governance and Executive Committee in January 2019.
(6)
Luis Antonio Ubiñas joined the Governance and Executive Committee in January 2019.
(7)
Lizabeth H. Zlatkus joined the Compensation Committee in January 2019.
(8)
Indicates Chair as of December 31, 2019.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS AND THE ANNUAL MEETING
The Board of Directors held seven meetings of the full Board during 2019. In 2019, each of the directors attended at least 75% of the aggregate number of meetings of the full Board of Directors and relevant committees held during the time such person was a director. The Company does not have a policy of requiring directors to attend the annual meeting of shareholders. The Company does, however, typically schedule a meeting of its Board of Directors the day before or close to the annual meeting of shareholders to facilitate each director’s attendance at the annual meeting. Three of the Company’s non-executive directors attended the 2019 annual meeting.
EXECUTIVE SESSIONS WITHOUT MANAGEMENT
To promote candid discussion among the non-management directors, the Board of Directors schedules regular executive sessions in which non-management directors meet without management’s participation. Such sessions typically occur at every regularly scheduled Board and committee meeting. The Chair of the Board or the respective committee chairperson is the presiding director at these executive sessions.
AUDIT AND FINANCE COMMITTEE
All members of the Audit and Finance Committee are “audit committee financial experts” as defined in SEC regulations and are "independent" as defined under Nasdaq listing standards. Pursuant to the Audit and Finance Committee’s charter, the Audit and Finance Committee assists the Board in its oversight of:
the process of reporting the Company’s financial statements;
the system of internal controls as it relates to financial reporting;
the audit process;
the Company's internal audit function;

 
 
 
CORPORATE GOVERNANCE - 12




the Company’s process for monitoring compliance with laws and regulations and the Code of Conduct and Ethics;
the review and approval of the Company’s declaration of dividends; and
the qualifications, independence and performance of the Company’s independent registered public accounting firm in accordance with SEC regulations.
The Audit and Finance Committee is solely responsible for retaining the Company’s independent registered public accounting firm. The Audit and Finance Committee also conducts analysis and makes recommendations to the Board and management regarding the Company’s financial planning, capital structure, capital raising, proposed acquisitions, mergers and divestitures, overall strategic planning, and financial performance, as relevant. Shareholders may access the Audit and Finance Committee’s charter by accessing the Company’s website at www.bostonprivate.com, selecting the “Investor Relations” link at the bottom of the page, and then selecting “Corporate Governance” under “Governance.”
RISK MANAGEMENT COMMITTEE
The Risk Management Committee’s responsibilities are described above under “Risk Oversight.
COMPENSATION COMMITTEE
All members of the Compensation Committee are independent as defined under Nasdaq listing standards.
The Compensation Committee makes recommendations to the Board of Directors, where necessary, on certain matters including, but not limited to, changes to compensation plans and adoption of new plans, and changes to the CEO’s compensation and to Board compensation programs. The Compensation Committee has been delegated the authority by the Board of Directors to approve compensation matters for all executive officers other than the CEO. Compensation decisions relating to the CEO are also reviewed and approved by the entire Board. For additional information on the Compensation Committee’s process for consideration and determination of executive officer and director compensation, please see “Compensation Discussion & Analysis.” Shareholders may access the Compensation Committee’s charter by accessing the Company’s website at www.bostonprivate.com, selecting the “Investor Relations” link at the bottom of the page, and then selecting “Corporate Governance” under “Governance.”
GOVERNANCE AND EXECUTIVE COMMITTEE
The Governance and Executive Committee periodically reviews the overall governance of the Company by the Board of Directors and its committees and, among other things, assists the Board of Directors by evaluating the performance of the Board and its committees, identifies individuals qualified to become members of the Board, recommends the slate of candidates to be nominated for election to the Board of Directors and the board of the Bank, recommends the members and the chairs of the committees of the Board, adopts and implements governance practices and policies applicable to both the Company and its subsidiaries, and reviews and assesses the charters of all committees of the Board. In addition, the Governance and Executive Committee serves as the Executive Committee of the Bank’s board of directors. Shareholders may access the Governance and Executive Committee’s charter by accessing the Company’s website at www.bostonprivate.com, selecting the “Investor Relations” link at the bottom of the page, and then selecting “Corporate Governance” under “Governance.”
CONSIDERATION OF DIRECTOR NOMINEES
The Governance and Executive Committee is responsible for identifying, assessing and recommending the slate of candidates to be nominated for election to the Board of Directors. The Governance and Executive Committee uses a variety of methods for identifying and evaluating nominees for director, and assesses the mix of skills and the performance of the Board of Directors as a whole on an annual basis. In the course of establishing the slate of nominees for director each year, the Governance and Executive Committee will consider whether vacancies on the Board are expected due to retirement or otherwise, the skills represented by retiring and continuing directors, and additional skills highlighted during the annual Board self-assessment process that could improve the overall quality and ability of the Board to carry out its responsibilities. Candidates may come to the attention of the Governance and Executive Committee through business and other networks of the existing members of the Board or from management. The Governance and Executive Committee may also solicit recommendations for director nominees from independent search firms or any other source it deems appropriate, and has most recently sourced non-incumbent candidates through retention of such independent search firms. The Governance and Executive

 
 
 
13 - 2020 PROXY STATEMENT



Committee reviews the performance, skills and characteristics of all incumbent directors prior to making a determination to recommend that the full Board nominate the incumbent director for re-election.
The Governance and Executive Committee requires all nominees and candidates to possess the highest personal and professional ethics, integrity and values; to be committed to representing the long-term interests of the Company's shareholders; to be able to devote consistently an appropriate amount of time to be informed about the Company’s business and strategy; to bring a balanced perspective and strong business and financial acumen; and an ability to approach all decision making with a high level of confidence and independence. In addition to reviewing a candidate’s background and accomplishments, candidates are reviewed in the context of the current composition of the Board of Directors and the Company’s evolving needs.
Pursuant to the Company's Corporate Governance Guidelines established by the Board, no more than two members of the Board may be executive members, and all others must meet the definition of an “independent" director under Nasdaq listing standards. Under the Company's Corporate Governance Guidelines, the CEO is required to be a member of the Board. Currently, the CEO is the only member of the Board who is not independent. On an annual basis, the Governance and Executive Committee reviews the independence status of each member of the Board to determine whether any relationship is inconsistent with a determination that the director is independent. The most recent review was undertaken in January 2020 and, as a result, the Board, after such review, determined that each of the Company’s non-executive directors (Mses. Kuenstner, Larson, Stevenson, and Zlatkus, and Messrs. Furlong, Guyaux, Ubiñas and Waters) meets the qualifications for independence in accordance with Nasdaq listing standards.
Directors of the Company are nominated in accordance with the Company’s Bylaws, which provide that directors may be nominated (1) by a majority of the Board of Directors, or (2) by any holder of record of any shares of the capital stock of the Company entitled to vote at the annual meeting of shareholders. While the Governance and Executive Committee does not have a formal policy regarding consideration of any director candidates recommended by shareholders, such candidates are evaluated on the same basis as candidates recommended from other sources. A shareholder wishing to nominate a director separately from the slate of directors nominated by the Company for the 2021 annual meeting should follow the procedures described in this Proxy Statement under the heading “Submission of Shareholder Proposals for 2021 Annual Meeting.” Any shareholder who seeks to make such a nomination for the 2021 annual meeting must be present in person at such annual meeting.
POLICY ON HEDGING
Special trading procedures for insiders are reviewed annually by the Board. These procedures prohibit directors, executive officers and certain other employees who, in the ordinary course of the performance of their duties, have access to material, non-public information regarding the Company, from engaging in short sales and derivative transactions involving securities of the Company.
CODE OF CONDUCT AND ETHICS
The Company has adopted a Code of Conduct and Ethics which applies to the Company’s and its subsidiaries’ employees, officers, and directors. In addition, the Company maintains procedures for the confidential, anonymous submission of any complaints or concerns about the Company, including complaints regarding accounting, internal accounting controls or auditing matters. Shareholders may access the Code of Conduct and Ethics by accessing the Company’s website at www.bostonprivate.com, selecting the “Investor Relations” link at the bottom of the page, and then selecting “Corporate Governance” under “Governance."
DIGNITY IN THE WORKPLACE
The Company is committed to treating its employees with dignity and respect. This includes a commitment to provide a working environment that is free from harassment and discrimination on account of race, ethnicity, creed, ancestry, color, national origin, religion, age, sex, gender, gender identity, gender expression, marital status, sexual orientation, military or veteran status, application for military status, pregnancy, family and medical leave status, genetic information, the pursuit of workers’ compensation benefits, medical condition, mental or physical disability, or any other category protected by federal or state law.
To reinforce this commitment to a harassment and discrimination-free working environment, the Company has adopted, and its Board of Directors has approved, a policy against harassment and discrimination and a reporting procedure for

 
 
 
CORPORATE GOVERNANCE - 14




employees who have been subjected to or witnessed such behaviors. This policy applies to all work-related settings and activities, whether inside or outside the workplace, and includes business trips and business-related social events.
RELATED PARTY TRANSACTIONS
The Company sends out annual questionnaires to its directors and executive officers regarding related party transactions. If there are any affirmative responses, the Board, which is responsible for the oversight of such transactions, reviews any such affirmative responses and considers their terms and conditions.
There were no related party transactions reported in 2019.
SHAREHOLDERS' COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Shareholders wishing to communicate with the Company’s Board of Directors should email the Company’s investor relations department at [email protected], call 888-666-1363 or mail the Company’s main address at 10 Post Office Square, Boston, Massachusetts 02109, Attention: Investor Relations. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication.” All such letters should clearly state whether the intended recipients are all members of the Board or specified individual directors. All communications will be reviewed by the Company’s investor relations department, which will determine whether the communication will be relayed to the Board or the director. Except for resumes, sales and marketing communications or notices regarding seminars or conferences, summaries of all shareholder communications will be provided to the Board.
INFORMATION REGARDING EXECUTIVE OFFICERS
The following table lists the name, age and current position of each executive officer of the Company. 
Name
 
Age
 
Current Position
Maura S. Almy
 
64
 
Executive Vice President and Chief Operating and Platform Officer
James C. Brown
 
54
 
Executive Vice President and President of Commercial Banking
Anthony DeChellis
 
57
 
Chief Executive Officer and President
Steven M. Gaven
 
40
 
Executive Vice President and Chief Financial Officer
Colleen A. Graham
 
54
 
Executive Vice President and General Counsel
John T. Longley
 
57
 
Executive Vice President and Head of West Coast
W. Timothy MacDonald
 
61
 
Executive Vice President and Chief Risk Officer
Joy C. McCune
 
52
 
Executive Vice President and Chief Human Resources Officer
Paul M. Simons
 
54
 
Executive Vice President and President of Private Banking, Wealth & Trust
William I. Woodson
 
54
 
Executive Vice President and Head of Wealth Advisory and Family Office Services
Pursuant to the Bylaws of the Company, the President, Treasurer and Secretary of the Company hold office until the first meeting of the Board of Directors following the annual meeting of shareholders. Other officers shall hold office for the same term described above, unless a shorter term is specified in the vote electing or appointing them.


 
 
 
15 - 2020 PROXY STATEMENT





MAURA S. ALMY
403309825_bostonprivatemauraalmy2019.jpg
 
Ms. Almy joined the Company in February 2019 as Executive Vice President and Chief Operating and Platform Officer. Prior to joining the Company, from January 2014 to July 2018, Ms. Almy was a Senior Vice President and Chief Operating Officer of Santander Securities LLC USA, where she led the operations, information technology, project management, vendor management and business continuity planning functions. In addition, as a member of Santander's executive team, she was directly responsible for the income statement for its Private Banking Wealth business. Ms. Almy has over 35 years of experience in roles spanning retail trading, client relationship management, sales, operations and technology, with positions held at Credit Suisse, Fidelity Investments, Barber & Bronson, Bear Stearns & Co. Inc., and Dean Whitter/Morgan Stanley, among others.
JAMES C. BROWN
403309825_jbrown20181205hra02.jpg
 
Mr. Brown joined the Bank in December of 1999 and has held numerous positions throughout his tenure. In March 2019, he was named Executive Vice President and President of Commercial Banking of the Company.  Prior to his current role, he served as Executive Vice President and President - Commercial Banking of the Bank from 2010 to 2019, and Executive Vice President and Chief Lending Officer of the Bank from 2003 to 2010, after several other roles at the Bank. Mr. Brown has over 32 years of banking experience, beginning his career at Shawmut Bank and State Street Corporation.  Mr. Brown serves on the board of directors of the Bank.
STEVEN M. GAVEN
403309825_sgaven20180724highres.jpg
 
Mr. Gaven joined the Company in November 2011 as Vice President, Corporate Finance and Director of Investor Relations of the Company. In February 2016, he was named Chief Financial Officer of Boston Private Wealth LLC ("BPW"), a wholly-owned subsidiary of the Bank. He became Executive Vice President and Chief Financial Officer of the Company in January 2018 while also continuing in his role as Chief Financial Officer of BPW. Prior to joining the Company, Mr. Gaven was a member of the U.S. Industrials equity research team at Susquehanna International Group after holding several corporate finance roles at Investor Financial Services Corp. Mr. Gaven serves on the board of directors of the Bank.
COLLEEN A. GRAHAM
403309825_colleengrahamv2.jpg
 
Ms. Graham joined the Company in April 2019 as Executive Vice President and General Counsel, with responsibility for Legal, Compliance and administrative oversight of Internal Audit. From August 2018 to April 2019, Ms. Graham served as Chief Executive Officer and founder of NextGen Compliance LLC, where she assisted in compliance investigations and designed proactive and preventative compliance solutions. Prior to that time, Ms. Graham worked for 21 years in senior leadership positions at Credit Suisse and its affiliates. From February 2016 to July 2017, she was a co-founder, board member, and the Chief Supervisory Officer of Signac, a Fintech joint venture between Credit Suisse and Palantir Technologies. Among other roles, Ms. Graham served as Managing Director and Credit Suisse’s Head of Compliance Americas, Head of Business Risk Management for the Private Bank Americas and Global Chief Control and Operational Risk Officer for the investment bank. Ms. Graham also co-chaired the Credit Suisse Investment Bank’s Operational Risk Committee. 

 
 
 
CORPORATE GOVERNANCE - 16




JOHN T. LONGLEY
403309825_johnlongleyv2.jpg
 
John Longley joined the Company in August 2019 as Executive Vice President and Head of West Coast. Previously, he served as the co-founder and Chief Executive Officer of Dobot, Inc., a Fintech company, from May 2014 to May 2018. Prior to launching Dobot, Inc., Mr. Longley served as Managing Director and Head of Private Wealth with BlackRock/iShares for three years. His additional Wall Street experience includes a cumulative 17 years with Smith Barney and subsequently Citigroup (via acquisition), where he held several executive roles.
W. TIMOTHY MACDONALD
403309825_tmacdonald20181205hr.jpg
 
Mr. MacDonald is Executive Vice President and Chief Risk Officer, responsible for overseeing the Company’s enterprise risk management program and relationships with key regulators. Mr. MacDonald joined the Company in 2009. First serving as Senior Vice President, Deputy Chief Risk Officer, he was named Executive Vice President and Chief Risk Officer of the Bank in 2011 and was elected Executive Vice President and Chief Risk Officer of the Company in 2013. Prior to joining the Company, he held key positions at GE Capital and worked at KPMG LLP, the Federal Reserve System and Shawmut Bank.
JOY MCCUNE
403309825_joy.jpg
 
Ms. McCune joined the Company in August 2018 as Executive Vice President and Chief Human Resources Officer. Previously, Ms. McCune was the Chief Human Resources Officer at Boston Financial Data Services from 2015 to 2017. From 1997 to 2015, she served as a Senior Vice President at State Street Corporation, where she was responsible for providing strategic support to the State Street management committee and their global lines of business and led efforts in support of succession planning, new business line launches, and human resources matters in mergers and acquisitions.  Her early experience also includes various human resources roles at other financial services and technology companies. Ms. McCune serves on the board of directors of the Bank.
PAUL M. SIMONS
403309825_psimons20181205highres.jpg
 
Mr. Simons joined the Company in December 2018 as Executive Vice President and Chief of Corporate Strategy and Development.  In March 2019, he became President of Private Banking, Wealth & Trust, while continuing to serve in his role as Executive Vice President. From May 2017 to November 2018, Mr. Simons was a Managing Director of Seaport Global Holdings, an institutional securities firm, where he developed and launched Seaport Global Asset Management. Prior to joining Seaport, from December 2014 to October 2016, he served as provisional CEO for a start-up financial information and technology company. With over 30 years of experience in the financial services sector, including senior level positions at Credit Suisse and Merrill Lynch, he has demonstrated expertise and leadership in many aspects of financial services, including asset management, wealth management, financial technology, private banking, investment banking, family office and client relationship management.  Mr. Simons serves on the boards of directors of the Bank and Dalton, Greiner, Hartman, Maher & Co., LLC, an affiliate of the Company.

 
 
 
17 - 2020 PROXY STATEMENT



WILLIAM I. WOODSON
403309825_billwoodson.jpg
 
Mr. Woodson joined the Company in May 2019 as Executive Vice President and Head of Wealth Advisory and Family Office Services. He has more than 25 years of experience within the financial services industry and joined the Company from Citigroup where he was a Managing Director and head of the Family Office Group for Citi Private Bank in North America from May 2014 to May 2019. Prior to joining Citi Private Bank, Mr. Woodson held senior private banking and family office positions at Credit Suisse and Merrill Lynch, where, among other responsibilities, he ran a multi-family office business and managed ultra high net worth and family office clients. Mr. Woodson began his career in a Big Four public accounting firm as a tax professional, where he spent almost a decade providing domestic and international tax advice to ultra high net worth individuals, families and closely-held businesses.
For biographical information regarding Anthony DeChellis see “Information Regarding Director Nominees.”

 
 
 
CORPORATE GOVERNANCE - 18




CORPORATE RESPONSIBILITY AND SUSTAINABILITY
The Company recognizes its responsibility to the environment and the communities in which it operates. Its commitment to socially responsible and sustainable practices is an integral part of how the Company does business. In addition to supporting the environment and our communities, the Company's approach benefits its employees, clients, vendors and stockholders. How the Company fulfills this responsibility is highlighted below.
ENVIRONMENTAL
The Company seeks to minimize its impact on the environment with effective recycling programs and energy-saving technology, equipment and materials. The Company offers environmentally friendly investment strategies to clients as part of a broader custom approach to Environmental, Social, and Governance ("ESG") issues. See the “Social” section below for further details.

Environmental Sustainability Team
The Company recently formed an Environmental Sustainability Team that will oversee and direct improvements in sustainability initiatives. Projects may include using environmentally friendly office products, going paperless, encouraging green commuting and participating in environmental clean-up days.

The Company has installed filtered water refill stations where employees can dispense clean, filtered water into reusable water bottles and glasses as an environmentally friendly alternative to single-use plastic water bottles.

The Company has removed plastic straws from circulation in its kitchens and will examine options to reduce use of plastic utensils, plates and cups.

In order to decrease the Company’s carbon footprint, the Environmental Sustainability Team will assess areas where energy consumption can be reduced and consider purchasing cleaner renewable energy where feasible.

Employee and Community Engagement
The Company supports organizations, such as the American Lung Association, that focus on eliminating tobacco use and related lung disease and improving overall air quality.
SOCIAL
The Company strives to be socially responsible by contributing to the communities in which it operates and supporting the professional development and well-being of its employees.

Community Investment
The Bank has an ‘Outstanding’ Community Reinvestment Act rating from federal and state regulators, and has invested approximately $1.5 billion in its Community Investment initiatives in the last five years.

Staff volunteer for services and participate on boards and committees of nonprofit organizations that are engaged in improving the lives of low- and moderate-income people and neighborhoods in local communities. Special focus is on affordable housing, financial education, first-time homebuyer counseling, economic development, youth programs, domestic violence, homelessness, health, education, substance abuse treatment and crime prevention.

The Company regularly offers nonprofit organizations free training programs through its Community Investment seminars. These seminars are designed to build the capacity of nonprofit organizations to thrive in their communities and to further their missions. Topics range from corporate governance best practices to fraud prevention and updates on federal and state laws affecting nonprofits.

Philanthropic Initiatives

 
 
 
19 - 2020 PROXY STATEMENT



The Company maintains a philanthropic giving program that assists nonprofit organizations, primarily serving low- and moderate-income people and places with flexible funds for operating, program and capital investment purposes.

In 2019, the Company made contributions to a local children’s hospital, a foundation dedicated to improving the lives of homeless children and their families, and a national breast cancer research organization. The Company donates more than $1,000,000 to charitable organizations annually.

The Company was recognized in 2019 by the Boston Business Journal and Silicon Valley Business Journal as one of the regions’ largest corporate charitable contributors.

The Company supports its employees as they give back to the communities in which they live and work, including encouragement of employee volunteerism. Each employee is granted eight hours of time for volunteering and community service. On average, Company employees volunteer 5,000 hours annually.

Employee Engagement
The Company actively monitors employee engagement through annual and pulse surveys and recently commenced an Engagement Council focused on maintaining ongoing employee satisfaction.

Diversity & Inclusion
The Company is an equal opportunity employer and maintains hiring practices and policies that foster and promote an inclusive and diverse workforce.

The Company is committed to gender diversity at all levels of the organization:

Four directors on the Board are female, representing 50% of the non-executive members of the Board.

As of December 31, 2019, women constituted 30% of the Company's executive officers and 57% of the Company's employee base.
      
As of December 31, 2019, 50% of millennials (employees between the ages of 26 and 40) in the Company's workforce were female.

Client Engagement
The Company is committed to meeting the evolving needs and expectations of its clients. The Company surveys clients annually to measure satisfaction and ensure a consistently high level of service. In 2019, the Company achieved a 91% customer satisfaction score.

ESG Investment Strategies
The Company offers clients access to investment screening strategies that:

exclude companies and industries associated with tobacco, alcohol, weapons or fossil fuels; or

focus on investing in companies that support renewable energy, or partake in sustainable business practices or other ESG causes.
GOVERNANCE
In furtherance of the robust control environment described elsewhere in this Proxy Statement, the Company believes in the importance of sound and effective corporate governance.

Culture
The Company believes in treating clients with exceptional care through understanding their lives, not just their financial needs. To inspire employees to accomplish this purpose, we have created a corporate culture built on trust, respect, listening and an overreaching desire to do the right thing. With an uncompromising commitment to this culture, the Company adds value for its customers, shareholders,

 
 
 
CORPORATE GOVERNANCE - 20




bankers and the communities it serves. For more information regarding the Company's core values, please visit the Company website at www.bostonprivate.com and select "Values" at the bottom of the page.

 
 
 
21 - 2020 PROXY STATEMENT



EXECUTIVE COMPENSATION

PROPOSAL 2:
 

ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION

The Board of Directors is providing shareholders the opportunity to approve, on an advisory basis, the compensation paid to the Company’s named executive officers as described in this Proxy Statement, as required by Section 14A of the Exchange Act. At the 2017 annual meeting of shareholders, the shareholders of the Company voted to hold an advisory vote on executive compensation annually, and the Board of Directors approved this choice. The next shareholder vote on the frequency of advisory votes on executive compensation is expected to occur at the Company's 2023 annual meeting of shareholders.
The vote on the compensation of the named executive officers will not have any binding legal effect, regardless of whether or not it is approved, and may not be construed as overruling a decision by the Company or the Board of Directors or creating or implying any change to the fiduciary duties of the Board. Furthermore, because this proposal relates primarily to compensation that has already been paid or committed for the Company’s named executive officers, there is generally no opportunity for the Board to revisit those decisions. However, the Compensation Committee intends to take the results of the vote on this proposal into account in its future decisions regarding the compensation of the Company’s named executive officers.
The Company’s compensation program is designed to attract, motivate and retain the named executive officers who are critical to the Company’s success by offering a combination of base salary and annual and long-term incentives that are closely aligned with the Company’s annual and long-term performance objectives. Please see the section titled “Compensation Discussion & Analysis” for additional information about the Company’s executive compensation programs.
We believe that the effectiveness of the Company's compensation programs is demonstrated by the accomplishments of management over the last fiscal year as detailed in the section titled Compensation Discussion & Analysis.
403309825_checka03.jpg
 
The Board of Directors unanimously recommends that shareholders vote FOR the following resolution to approve the compensation of the Company's named executive officers:
RESOLVED, that the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including in the Compensation Discussion & Analysis, the compensation tables and narrative discussion, be approved.






 
 
 
EXECUTIVE COMPENSATION - 22





COMPENSATION DISCUSSION & ANALYSIS
 



EXECUTIVE SUMMARY

This Compensation Discussion & Analysis provides a detailed description of the compensation of the following named executive officers:
Named Executive Officer
Title
Start Date
Anthony DeChellis
Chief Executive Officer and President
11/26/2018
Steven M. Gaven
Executive Vice President and Chief Financial Officer
1/1/20181
John T. Longley
Executive Vice President and Head of West Coast
8/31/2019
Paul M. Simons
Executive Vice President and President of Private Banking, Wealth & Trust
3/15/20191
William I. Woodson
Executive Vice President and Head of Wealth Advisory & Family Office Services
5/28/2019
Corey A. Griffin
Former Executive Vice President and CEO, Private Clients Group
1/1/20182
(1) Represents effective date of current title.
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019.
 
As of January 1, 2020, the named executive officers with continuing employment relationships with the Company were Messrs. DeChellis, Gaven, Longley, Simons, and Woodson.
OUR BUSINESS
The Company is a leading provider of integrated wealth management, trust, and banking services to high net worth individuals, families, businesses, and non-profits. The Company's value proposition to clients is comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The Company delivers the full-service capabilities of a large firm in a boutique environment.
BACKGROUND AND STRATEGY
In November 2018, Anthony DeChellis was named the Company's President and Chief Executive Officer. In May 2019, Mr. DeChellis and the Company's management team announced an ambitious three-year strategy to improve meaningfully profitability of the Company through growth of its wealth management business, while also increasing operating efficiencies.
In order to achieve the Company's growth goals, the management team's strategic priorities include:
Improving client value proposition for high net worth and ultra high net worth clients by attracting and retaining high caliber talent with deep subject matter expertise to advise clients;
Building upon the Company's capabilities for serving the unique financial objectives of wealthy families, family offices, and their advisors;
Increasing Boston Private's market share in the existing markets of Boston, California, Florida, and New York; and
Delivering progress against key strategic initiatives critical to better position the Company to achieve these strategic priorities (additional details found beginning on page 28).


 
 
 
23 - 2020 PROXY STATEMENT



2019 OPERATIONAL AND FINANCIAL HIGHLIGHTS

Talent Attraction:
During 2019, Mr. DeChellis reorganized the management team by recruiting executives with experience at the world's largest wealth management and financial services firms to build upon the Company's existing foundation. The named executive officers hired by Mr. DeChellis and some of their previous experience is set forth in the table below:
Named Executive Officer
 
Previous Firm
 
Role
John T. Longley
 
BlackRock iShares
 
Head of Private Wealth
 
 
Citi Private Bank North America
 
Chief Executive Officer
Paul M. Simons
 
Credit Suisse
 
Co-Head of Private Banking USA
 
 
Merrill Lynch
 
Managing Director
William I. Woodson
 
Citi Private Bank
 
Head of Family Office Group
 
 
Credit Suisse
 
Managing Director
In addition to the named executive officers in this Proxy Statement, in 2019, Mr. DeChellis made critical and strategic hires in the Company's technology and risk management areas, including Maura S. Almy who serves as Chief Operating and Platform Officer and Colleen A. Graham who serves as General Counsel.

Affiliate Integration:
In September 2019, the Company combined two wholly-owned registered investment advisors, KLS Professional Advisors Group LLC and Boston Private Wealth, LLC into a single firm, managing $12.8 billion of client assets as of September 1, 2019, making it one of the largest registered investment advisors focused on high net worth individuals in the United States. The combined business enables the delivery of a more complete set of client solutions and reflects the continued simplification of the Company's business model, moving away from an affiliate model to an integrated wealth management, trust, and private banking model.
2019 Financial Highlights:
DILUTED EARNINGS PER SHARE
 
RETURN ON AVERAGE COMMON EQUITY
 
TOTAL
ASSETS UNDER MANAGEMENT / ADVISORY
 
OPERATING EARNINGS RETURNED TO SHAREHOLDERS
$0.97
 
10.0%
 
$16.8 billion
 (as of December 31, 2019)
 
59%
 
 
 
 
5% increase year-over-year
 
 
Asset Quality:
Disciplined risk management and maintaining a low risk balance sheet are central elements of the Company's strategy. The Company targets top quartile credit metrics relative to the KBW Regional Banking Index ("KRX").
Nonperforming assets as a percentage of total assets were 0.26% at December 31, 2019, compared to the KRX median of 0.45%. The Company ranked in the 86th percentile relative to the KRX.
Total loans recovered exceeded total loans charged-off during 2019. Total net loans recovered as a percentage of loans was 0.02%, while the industry experienced net charge-offs (KRX median of 0.12%). The Company ranked in the 94th percentile relative to the KRX.
Total Shareholder Return ("TSR"):
The Company delivered a TSR of 18.8% during 2019. For further details of fiscal 2019 financial results, please see the Annual Report on Form 10-K.

 
 
 
EXECUTIVE COMPENSATION - 24




COMPENSATION PROGRAM
The Compensation Committee (the "Committee") has adopted an integrated executive compensation program that is intended to align the named executive officers' interests with those of the Company's shareholders and to promote the creation of shareholder value without encouraging excessive or unnecessary risk taking. The Committee has tied a majority of the named executive officers' compensation to a number of key performance measures that contribute to or reflect shareholder value creation. Total compensation for the named executive officers includes annual short-term incentive compensation (“STI”) that is tied to specific pre-determined financial metrics and strategic initiatives, as well as annual long-term incentive compensation (“LTI”), consisting of restricted stock units (“RSUs”), performance stock units (“PSUs”) and non-qualified stock options (“NQSOs”).
In 2018, the Company reintroduced NQSOs as an additional and critical component of the Company's LTI program. The significant upside opportunities provided by NQSOs aid in attracting and retaining talent. In addition, this compensation component incentivizes shareholder value creation as NQSOs only have value if there is an increase in the Company’s stock price from the date of the grant of the NQSO.
In order to recruit the high-caliber talent referenced above, the Company has granted new hire inducement equity awards to the named executive officers that joined the Company since Mr. DeChellis was hired as CEO. Reflecting the Committee’s commitment to align pay with shareholder outcomes, awards provided were comprised of RSUs and/or NQSOs, with various vesting criteria. Specific details of each award are included in the Executive Compensation Tables beginning on page 36.
SUMMARY OF 2019 COMPENSATION ACTIONS
BASE SALARY:
 
SHORT-TERM INCENTIVE
(% of target):
 
LONG-TERM INCENTIVE
PSUs (% of target):
0%
 
Initial Funding = 83%

Final Funding = 70%
 
81%
No base salary increases for any named executive officer since 2016

(other than one increase made in connection with a promotion)
 
The Committee exercised negative discretion to reduce funding by 13 percentage points.
 
3-year average PSU payout:

Payouts for the last three PSU cycles have averaged 87% of target
Despite the operational and financial outcomes described above that better position the Company for future success, 2019 was a challenging year for the Company and its shareholders, and the compensation outcomes reflect those challenges.
In 2019, the Company underperformed on its two core financial performance metrics: Return on Average Common Equity ("ROACE") and Pre-tax, Pre-Provision ("PTPP") Income Growth. However, with respect to its newest measure, Progress Against Strategic Initiatives ("PASI"), the Company exceeded its targets. These factors resulted in an initial STI Scorecard funding level of 83% of target.  In addition, the discretionary modifiers that had been established in previous years showed the following results: top quartile performance related to credit quality, offset by below target average deposit growth and net new assets, and TSR below the 50th percentile of the KRX.
It is the Committee’s view that significant progress has been attained by the new management team.  Strategic initiatives are being achieved, and operational advancements and technological enhancements are clearly evident.  However, the continued stagnant performance of the Company's stock price, coupled with below target results for three of the four discretionary modifiers, are clearly not the intended direction of the Company. Through its discussions, the Committee is focused on striking a balance between the positive progress on the strategic initiatives combined with disappointing financial and shareholder results.
Therefore, the Committee felt it important to reduce the 2019 funded STI payout by 13 percentage points to 70%. This action further reinforces our commitment to aligning pay with performance and ensuring our pay outcomes reflect the shareholder experience.

 
 
 
25 - 2020 PROXY STATEMENT



HISTORICAL PAY FOR PERFORMANCE ALIGNMENT
The following chart illustrates the actual STI and performance share payouts (percent of target awards) relative to the target and maximum payouts that could have been earned based on limits defined in the executive compensation program.

403309825_sti-psua01.jpg
____________
(1) Although the scorecard-calculated STI funding for executives/senior leaders of the Company was 143%, the Committee exercised negative discretion to reduce the funding amount to 125% of target.
(2) Although the scorecard-calculated STI funding for executives/senior leaders of the Company was 69%, the Committee exercised negative discretion to reduce the funding amount to 65% of target.
(3) Although the scorecard-calculated STI funding for executives/senior leaders of the Company was 83%, the Committee exercised negative discretion to reduce the funding amount to 70% of target.

APPROACH TO PAY
____________________________________________________

COMPENSATION PHILOSOPHY
As referenced above, we have set forth ambitious growth goals. In support of this mandate, we have made changes to the Company's compensation plans and programs to ensure they are competitive, align directly with the organizational growth goals set forth in the strategic plan and recognize employee performance. These compensation enhancements provide an opportunity to strengthen alignment with the Company’s goals around shareholder and client value.
The Company's executive compensation practices support the needs of the business, drive performance, and ensure alignment with the short- and long-term interests of the Company's shareholders.
The key objectives of the Company's executive compensation philosophy are to:
Attract, retain and motivate exceptional leaders dedicated to the success of the organization;
Maximize individual and Company performance; and
Align compensation with performance.

 
 
 
EXECUTIVE COMPENSATION - 26




In furtherance of these objectives, the Company has adopted the following practices:
 
 
 
 
 
WHAT WE DO
 
Directly link pay with Company performance through a mix of short- and long-term incentive compensation
 
 
Offer market competitive compensation opportunities, targeting median total direct compensation
 
 
Clawbacks for equity compensation in the event of material financial restatements
 
 
Promote ownership and long-term engagement in the Company through stock-based compensation and a robust stock ownership policy
 
 
Use double-trigger for severance following a change of control
 
 
Engage an independent compensation consultant
 
 
Provide caps on incentive compensation
 
 
 
 
 
 
 
 
 
WHAT WE DON'T DO
 
Provide tax gross-ups related to a change of control, perquisites or benefits
 
 
Provide employment agreements, except for Mr. DeChellis
 
 
Permit repricing of underwater stock options without shareholder approval
 
 
Grant stock options with exercise prices below 100% of fair market value
 
 
Pay dividends or dividend equivalents on unvested equity awards
 
 
Permit hedging transactions, pledging activity or use of margin accounts
 
 
Reward executives for taking excessive risk
 
 
 
 
The Company continues to emphasize performance-based, variable pay in its executive compensation programs. For example, cash incentives under the annual STI plan can range from 0% to 200% of target based on performance that is typically measured over a one-year period. Equity incentives under the annual equity-based LTI plan consist of a combination of RSUs and NQSOs, each designated at 20% of the targeted equity compensation award made in 2019, and PSUs designated at 60% of the targeted equity compensation award made in 2019. PSUs vest only if and to the extent they are earned based on the achievement of three-year, forward-looking metrics.
In addition to receiving direct compensation, the named executive officers also participate in various employee benefit programs, as described in the “Executive Benefits and Perquisites” section of this Compensation Discussion & Analysis.
TARGET ANNUAL COMPENSATION MIX
The following chart illustrates, for 2019, the distribution of value among the three elements of direct compensation for the Company's CEO and for the other named executive officers. The annual LTI component of this illustration is based on the grant value of the annual long-term incentive awards approved by the Committee in 2019 (see “Equity-Based Long-Term Incentives" beginning on page 30.) As a percentage of total annual compensation, 72% of the CEO’s compensation and, on average, 68% of the other named executive officers' compensation, was variable, either because it was subject to performance goals, fluctuations in the Company's stock price, or both.
403309825_ceootherneo.jpg

 
 
 
27 - 2020 PROXY STATEMENT



_____________________________________________________________________________________________________________________
(1) Includes the full STI and LTI targets for Mr. Griffin for 2019. Mr. Griffin's employment with the Company ended on April 30, 2019 and his consulting arrangement with the Company ended on May 31, 2019. Accordingly, Mr. Griffin received a pro-rated STI bonus through May 31, 2019 and did not receive any LTI awards in 2019.
PEER GROUP AND TOTAL COMPENSATION MARKET BENCHMARKING
2019 COMPENSATION DECISIONS
When reviewing compensation programs for, and setting the compensation of, the named executive officers, the Committee considers the compensation practices of specific peer companies as well as market data from third-party financial services industry published surveys. For this purpose, the Committee obtains assistance from its independent compensation consultant, Frederic W. Cook & Co. (“FW Cook”). FW Cook also provides other relevant market reference points such as broader financial services industry compensation survey data covering companies of similar size to augment this peer group data, when appropriate. The Committee reviews this peer group on an annual basis and modifies it as circumstances warrant. In setting the compensation of the named executive officers, the Committee evaluates each named executive officer's compensation against the median market data for the respective position. However, the Committee does not solely tie target compensation to any one type of peer group or survey data, but instead considers all of the sources described above in determining the appropriate level of compensation for each named executive officer.
The peer group used for 2019 compensation decisions included 17 banks that were selected based on the following characteristics:
 
CHARACTERISTIC
 
RANGE
 
CRITERIA
 
 
 
 
 
 
 
SIZE
 
Companies approximately 1/3 to 3 times the size of Boston Private
 
Total Assets of $4 billion to $28 billion
 
 
Market Capitalization of $700 million to $4 billion
 
 
 
 
 
 
 
 
 
 
 
 
 
BUSINESS MIX
 
Companies with a similar business mix to Boston Private
 
Fees as a percent of total revenue of at least 20%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER RELEVANT CHARACTERSITCS
 
 
 
Companies headquartered in major metropolitan areas
 
 
Companies with which Boston Private competes for executive talent
 
 
 
 
 
 
The peer group approved by the Committee for purposes of setting 2019 compensation consisted of:
Berkshire Hills Bancorp, Inc.
NBT Bancorp, Inc.
Brookline Bancorp, Inc.
Pinnacle Financial Partners, Inc.
Bryn Mawr Bank Corp.
Sandy Spring Bancorp, Inc.
CoBiz Financial Inc.
UMB Financial Corporation
Columbia Banking System, Inc.
Washington Trust Bancorp, Inc.
Community Bank System, Inc.
Webster Financial Corporation
First Commonwealth Financial Corp.
Wintrust Financial Corporation
Independent Bank Corp.
WSFS Financial Corporation
MB Financial, Inc.
 
For long-term incentive compensation matrices, the Company used the KRX to measure the Company’s relative ROACE performance. The Committee believes the KRX provides a more consistent benchmark for purposes of measuring performance over a three-year time horizon to normalize any anomalies given the larger number of comparator banks in the KRX.

 
 
 
EXECUTIVE COMPENSATION - 28




2020 COMPENSATION DECISIONS
During July 2019, consistent with previous practice, the Committee, with the assistance of FW Cook, reviewed and updated the Company's peer group for purposes of setting 2020 compensation. Based on FW Cook's assessment and detailed analysis, the Committee approved the removal of three peer group companies from the aforementioned list and the addition of three new companies. Two peer companies, CoBiz Financial Inc. and MB Financial, Inc. were acquired and, as a result, were removed from the group. Additionally, Wintrust Financial Corporation became significantly larger as compared to the Company and the other current peer companies, and therefore is no longer a relevant comparison. The three additions to the peer group were: Camden National Corporation, Cathay General Bancorp, and National Bank Holdings Corp. The inclusion of these three companies provides better alignment with other banks considering the Company as a peer for compensation purposes. As a result of these modifications, the peer group will remain at 17 companies for 2020 compensation decisions.
COMPENSATION ELEMENTS
____________________________________________________

The Committee focuses on total compensation for the named executive officers. Total compensation includes three major components: base salary, performance-based annual STI compensation, and annual equity-based LTI compensation, all of which are designed to work together to drive a complementary set of behaviors and outcomes.
BASE SALARY
The Committee reviews the base salaries of its named executive officers each year, with salary increases, if any, typically taking effect in February. Salary decisions are generally based on an executive’s performance within specific areas of accountability, external market competitiveness and/or internal budget considerations.
For the three named executive officers employed at the beginning of the year, there were no base salary increases in 2019.
Named Executive Officer
Start Date
January 1, 2019
Salary ($)
December 31, 2019
Salary ($)
Change ($)
Anthony DeChellis
11/26/2018
700,000
700,000

Steven M. Gaven
1/1/20181
300,000
300,000

John T. Longley
8/31/2019
NA

350,000
NA

Paul M. Simons
3/15/20191
350,000
350,000

Williams I. Woodson
5/28/2019
NA

350,000
NA

Corey A. Griffin
1/1/20182
400,000

NA
NA

(1) Represents effective date of current title.
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019.
ANNUAL EXECUTIVE SHORT-TERM INCENTIVE PLAN (STI)
Performance-based annual cash bonuses are designed to focus the named executive officers on pre-set objectives each year and drive specific behaviors that foster short-term and long-term growth and profitability.
Following its usual practice, the Committee established a 2019 annual incentive target under the STI for each of the named executive officers stated as a percentage of base salary. STI target amounts are reviewed annually and adjusted as appropriate to consider market competitiveness, the desired mix of annual and long-term incentives and based on each executive’s role, organization level, impact on annual performance and competitive considerations. Executives can earn from 0% to 200% of target based on Company and individual performance. There were no increases to annual incentive plan targets for any named executive officer for 2019.
In 2019, the Committee used one set of objectives as the primary driver for funding all executive bonuses - this is referred to as the executive Scorecard. In order to reflect the new management team's strategic priorities outlined in

 
 
 
29 - 2020 PROXY STATEMENT



May 2019, the Company introduced PASI as a core metric in the Scorecard for evaluating STI performance, weighted at 25%. This newly introduced metric complements ROACE and PTPP Income Growth, which both measure Company operating performance during 2019 and are each weighted at 37.5%.
The Committee approved this change because it believes that it is incumbent upon the executive team to pivot seamlessly to an enhanced strategy while delivering on profitability objectives. The strategic initiatives are critical to move the Company forward and best position it for success, and combined with ROACE and PTPP Income Growth, most closely correlate with the Company's stock price performance and, as a result, are most closely aligned with shareholder interest.
2019 SCORECARD:

 
 
Weighting
Metric
Type
2018
2019
ROACE
Quantitative
50.0%
37.5%
PTPP Income Growth
Quantitative
50.0%
37.5%
PASI
Qualitative
—%
25.0%
 
 
100.0%
100.0%
Components of the strategic initiatives being tracked by the Committee as part of the PASI metric include:
Introduction of a new relationship management model that includes identification and hiring of talent;
Establishment and retention of an experienced executive leadership team;
Execution of a digital technology roadmap ensuring a premier client experience; and
Continued enhancements in the Company's infrastructure.
Since 2017, the STI Scorecard has included discretionary modifiers allowing the Committee discretion to adjust the calculated Scorecard funding up or down by 20 percentage points based on a holistic evaluation of Company and shareholder performance. The Committee has full discretion to go beyond the 20 percentage point modifier guideline as it feels appropriate in any given year, based on the facts and circumstances, subject, in all cases to the cap of 200% of target.
For 2019, the Committee focused on the following performance metrics, established at the beginning of the year, to inform whether it would apply discretion to the calculated Scorecard outcome:
Relative Credit Quality,
Average Deposit Growth,
TSR as measured against the KRX, and
Assets under Management - Net New Assets.
Details of this performance-based framework, associated financial metrics, strategic initiatives target, as well as the Company’s achievement of these metrics and the Committee’s determination with respect to overall performance for

 
 
 
EXECUTIVE COMPENSATION - 30




the consolidated Company are described in the scorecard below.
($ in millions)
2019 Targeted
Performance Levels
 
2019 Actual Performance
Levels and Weighted Funding 
 
Target 
 
Result (1)
 
Weighted
Funding
ROACE
10.75%
 
10.10%
 
33%
PTPP Income Growth (2)
$106
 
$100.1
 
23%
PASI
Described above
 
Exceeded - 110%
 
27%
Final funding level
 
 
 
 
83%
(1) Presented on an operating basis.
(2) $ in millions.
Due to the Company's under-performance relative to the Scorecard targets for ROACE and PTPP Income Growth, despite over-achievement of the PASI metric, Scorecard funding and resulting Scorecard bonus payouts were less than target for the executive team, including the named executive officers. Additionally, as noted above under “Summary of 2019 Compensation Actions”, the Committee exercised its negative discretion to further reduce the bonus pool from 83% to 70% of target. The decision to reduce the funding was made to align bonus outcomes with the Company’s performance and shareholder experience in 2019. The 2019 metrics and related performance considered in the discretionary modification included the following:
Metric
Performance Level
Relative credit quality
Top quartile of the KRX
Year-over-year average deposit growth
Below target
Net new assets
Below target
TSR (versus KRX)
Below 50th percentile
The Scorecard results, including negative discretion, fund an initial STI pool to be allocated among the executive team, including the named executive officers. In February 2020, the Committee, with input from the CEO, approved actual bonus payments for each executive (other than the CEO) based on the adjusted Scorecard funding of 70% of target. The Committee and CEO considered the individual performance of each named executive officer, when making incentive compensation decisions. As such, while the funded pool is established based on Scorecard outcomes as adjusted by Committee discretion, the actual allocation of bonuses may result in certain individuals receiving more than the funded pool percentage of target and others receiving less. It should be noted that Messrs. Longley and Woodson received a bonus based on negotiations at the time of their respective hires. The CEO’s bonus was determined by the Committee in executive session and recommended for approval, and approved, by the full Board in February 2020.


 
 
 
31 - 2020 PROXY STATEMENT



The aggregate amount payable to executives was capped based on the bonus pool funding at 70%. To recognize significant efforts in a year of critical transition, the CEO determined it was appropriate to recognize certain executives, including the named executive officers, above their funded level. To ensure the newly-established management team remains motivated through the Company's strategic transformation, in deliberations with the Committee, Mr. DeChellis requested that a portion of his funded bonus ($100,000) be available for reallocation to the executive team. The Committee, recognizing the need to acknowledge significant individual effort put forth by the CEO and his management team in 2019 to position the Company for the successful transformation of the business, approved Mr. DeChellis' request. As a result, the actual payout to Mr. DeChellis for 2019 performance was below the funded Scorecard level (i.e. Mr. DeChellis' funded bonus = $490,000 [$700,000 * 70%] - $100,000 = $390,000 actual payout or 56% of target).
The following table outlines the STI targets for 2019 and the actual STI bonus received by each named executive officer for 2019.
TARGET AND ACTUAL STI DETAILS
Executive
 
Annual Base
Salary ($)
 
Target
Bonus ($)
 
Actual
Bonus ($)
 
A. DeChellis
 
700,000

 
700,000

 
390,000

 
S. Gaven
 
300,000

 
225,000

 
175,000

 
J. Longley1
 
350,000

 
475,000

 
158,334

 
P. Simons
 
350,000

 
425,000

 
300,000

 
W. Woodson1
 
350,000

 
425,000

 
400,000

 
C. Griffin2
 
400,000

 
400,000

 
116,667

 
(1) Mr. Longley's and Mr. Woodson's employment with the Company commenced on August 31, 2019 and May 28, 2019, respectively. Their 2019 STI bonus amounts were based on negotiations at the time of their respective hires.
 
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019. He received a pro-rated portion of his 2019 STI bonus through May 31, 2019.
 
EQUITY-BASED LONG-TERM INCENTIVES (LTI)
The Committee considers long-term equity-based compensation to be an integral part of the Company’s compensation program and grants equity each year, typically in May. LTI is designed to align the interests of the named executive officers with the interests of the Company's shareholders in long-term growth, reward executives for shareholder value creation, recognize executives for their contribution to the Company, and promote retention.
Design changes were made to the LTI award mix and vesting schedules in 2019. These changes were implemented in order to incentivize further the named executive officers to achieve strategic and financial performance goals that are consistent with the execution of the Company’s business strategy and accelerated growth phase of the Company’s initiatives. For 2019, the Company introduced NQSOs with a four-year vesting schedule, which replaced 50% of the time based RSUs that were granted under the prior LTI award design. NQSOs, which only have value if the Company's stock price increases from the stock price on the grant date, were introduced to emphasize further the achievement of the Company’s business strategy resulting in stock price growth. The Company continues to calibrate performance goals with LTI payouts to ensure a strong pay-for-performance correlation in the overall design of the long-term incentive plan.

 
 
 
EXECUTIVE COMPENSATION - 32




Award Type
 
2018
 
2019
 
 
%
of Total
Summary
 
%
of Total
Summary
PSU
 
60%
3-year vesting (absolute ROACE target and relative ROACE percentile ranking against KRX)
 
60%
3-year vesting (absolute ROACE target and relative ROACE percentile ranking against KRX)
RSU
 
40%
3-year cliff vesting
 
20%
3 equal annual installments
NQSO
 
NA
 
 
20%
4 equal annual installments
PSUs continue to comprise 60% of the annual LTI grant. In addition, the funding matrix continues to be based on relative and absolute ROACE performance. Target ROACE for full target LTI payout aligns with above median performance.
The Committee reviews this mix of grant forms annually. PSUs are earned and vest at the end of the three-year performance period only if and to the extent results are achieved within the acceptable performance range (threshold to significant over-achievement) as determined by the Committee. PSUs are subject to forfeiture in the event that pre-established performance goals are not achieved. In 2019, the Company changed the vesting schedule for RSUs from three-year cliff vesting to ratable vesting in three equal annual installments from the date of grant, subject to the executive’s continued employment through each vesting date. NQSOs vest ratably in four equal annual installments from the date of grant, subject to the executive’s continued employment through each vesting date.
VESTING OF PERFORMANCE SHARE AWARDS FOR THE 2017-2019 PERFORMANCE PERIOD
Messrs. Gaven and Griffin were the only active named executive officers having a performance share award for the 2017-2019 performance period, with Mr. Griffin's award pro-rated to reflect his period of service during the performance period. The performance shares vested at 81% of target based on ROACE performance for the 2017 to 2019 performance period. The Company’s three-year average ROACE for the 2017 to 2019 performance period was 9.84% versus a target goal of 11.0% and a threshold goal of 4.4% for the performance period. The funding also reflects the Company’s performance relative to the constituents in the KRX. The Company’s three-year average ROACE ranked in the 44th percentile of the peer data set. The following table outlines the awards earned:
Executive 
 
Grant Date 
 
Target Number of Shares
 
Performance
Metric
Achieved
 
Total Shares
Vested Based
upon
Performance
S. Gaven
 
5/15/2017
 
1,680

 
81%
 
1,361

C. Griffin1
 
5/15/2017
 
9,988

 
81%
 
8,090

(1) The target number of shares indicated for Mr. Griffin represents the pro-rated portion of Mr. Griffin's performance share awards that remained eligible for vesting at the end of the performance period based upon achievement of the performance metrics.
2019 EQUITY AWARDS
In 2019, the Company granted LTI awards under the Company’s 2009 Amended and Restated Stock Option and Incentive Plan (the "2009 Plan") to the three named executive officers employed by the Company for all of 2019, and made new hire awards of RSUs and/or NQSOs under the 2009 Plan to each of Messrs. Simons (who joined the Company in late 2018), Longley and Woodson following the commencement of their employment with the Company. Messrs. Longley and Woodson did not receive 2019 LTI awards as they were not yet employed by the Company on the date the awards were granted. Mr. Griffin's employment with the Company terminated on April 30, 2019 and, accordingly, he did not receive any 2019 LTI awards.

 
 
 
33 - 2020 PROXY STATEMENT



GRANT DATE FAIR VALUE OF AWARDS
May 2019 LTI Awards
Mr. DeChellis received an LTI award with an aggregate value of $1,100,000, consistent with his employment agreement, Mr. Gaven received an LTI award with an aggregate value of $300,000, and Mr. Simons received an LTI award with an aggregate value of $250,000. Sixty percent of the grant date fair value of each award was delivered in the form of PSUs, 20% of the grant date fair value of each award was delivered in the form of RSUs, and 20% of the grant date fair value was delivered in the form of NQSOs. The approved values converted to a fixed number of RSUs and PSUs using the closing price on the grant date of $11.08 per share and the target level of PSUs. A binomial lattice option value of $3.08 per share was utilized to convert the approved values to a fixed number of shares underlying the NQSOs.
 
 
2019 Awards 
 
 
 
 
 
Non-Qualified Stock Options
 
Time-Based
Restricted Stock Units (RSUs)
 
Performance-Based Restricted Stock Units (PSUs)
 
Name
 
Grant Date 
 
Number of Shares Underlying Options Granted (#)
 
Number
of Stock
Units (#)
 
Target Number of Units Granted (#)
 
A. DeChellis
 
5/15/2019
 
71,429

 
19,856

 
59,567

 
S. Gaven
 
5/15/2019
 
19,481

 
5,415

 
16,245

 
P. Simons
 
5/15/2019
 
16,234

 
4,513

 
13,538

 


The 2019 PSUs will be earned or forfeited based on the Company’s performance for the January 1, 2019 to December 31, 2021 period, following the conclusion of such performance period, with 0% to 200% of the units earned tied to the Company’s ROACE performance utilizing a matrix approach, as follows:
1.    Absolute Measure: Three-year average ROACE targeted at 12% over the 2019-2021 time frame:
Threshold
Low Target
Target
Maximum
8.0%
11.0%
12.0%
13.5%
2.    Relative Measure: Three-year average ROACE relative to the KRX targeted at the 50th percentile:
Threshold
Target
Outperform
25th percentile
50th percentile
75th percentile
2019 New Hire Awards to Executives
In 2019, as previously mentioned, Messrs. Longley, Simons, and Woodson were each granted RSUs and/or NQSOs. These sign-on awards were necessary to replace compensation forfeited by each individual upon leaving his respective employer and to induce their employment at Boston Private.
As such, Messrs. Longley and Woodson received a combination of RSUs and NQSOs intended to provide foundational equity ownership in Boston Private through RSUs and incent long-term shareholder appreciation through the NQSOs. The approved values converted to a fixed number of RSUs for Mr. Woodson on August 15, 2019 using the closing share price of $10.36, while the NQSOs utilized a binomial lattice option value of $2.73 per share. The approved values converted to a fixed number of RSUs for Mr. Longley on November 15, 2019 using the closing price of $11.55, while the NQSOs utilized a binomial lattice option value of $3.08 per share. Mr. Simons received RSUs on February 15, 2019 using the closing share price of $11.98.

 
 
 
EXECUTIVE COMPENSATION - 34




 
 
 
 
Time-Based
Restricted Stock Units (RSUs)

 
Non-Qualified Stock Options (NQSOs)
Executive
 
Grant Date
 
Number of Stock Units (#)
 
Number of Shares Underlying Options Granted (#)
J. Longley
 
11/15/2019
 
43,290

(1)
 
100,000

(1)
P. Simons
 
2/15/2019
 
29,215

(2)
 
N/A

(2)
W. Woodson
 
8/15/2019
 
96,525

(3)
 
100,000

(3)
(1)
Awards granted on November 15, 2019 utilized a closing share price of $11.55 and a binomial lattice option value of $3.08 per share to convert the approved value to a fixed number of shares underlying the NQSO.
(2)
Awards granted on February 15, 2019 utilized a closing share price of $11.98.
(3)
Awards granted on August 15, 2019 utilized a closing share price of $10.36 and a binomial lattice option value of $2.73 per share to convert the approved value to a fixed number of shares underlying the NQSO.

OTHER COMPENSATION TOPICS
____________________________________________________
EQUITY GRANT POLICY
The Company maintains an equity grant policy to ensure that its equity grant practices are administered in strict compliance with the Company’s equity plans, policies and all applicable laws, and specifically to prevent backdating of any equity grant, or changing of the timing of equity grants in relation to public release of material information with the intent of benefiting a grantee under an equity award. The Company’s policy is that equity grants occur on a pre-established day during each calendar quarter after the Company’s financial results for the prior quarter have been publicly disclosed. Accordingly, the grant date for all equity grants is generally the 15th day of the month (or the last business day before the 15th day of the month) following the quarterly Board meeting, unless another date is approved by the Committee. The grant date will not precede the date the grant was authorized by the Committee, and the grant date for any new hire will not precede the employee’s date of hire. In addition, the equity grant policy provides that all executive awards and award terms are approved by the Committee in advance of the grant date. The Company's executives do not have an ability to select a grant date, and the option exercise price is the closing price of the underlying stock on the date of grant.

EXECUTIVE OFFICER STOCK OWNERSHIP POLICY
The Committee reviews executive officer stock holdings against the Board and Executive Officer Ownership Policy at least annually. The following table shows the named executive officers' required stock ownership levels under the Board and Executive Officer Stock Ownership Policy as of December 31, 2019:
Name
Level (multiple of salary)
Mr. DeChellis
6 x Base Salary
Mr. Gaven
3 x Base Salary
Mr. Longley
3 x Base Salary
Mr. Simons
3 x Base Salary
Mr. Woodson
3 x Base Salary

Executives are expected to attain their respective ownership level within five years of becoming subject to the policy. However, consideration will be given if an executive has a significant change in role and/or compensation that impacts their ownership level.  The policy has also been enhanced in 2019 to require notification by the Insider Trading Compliance Officer any time a participant’s request to sell shares would result in his or her holdings falling below 110% of the applicable ownership level. In addition, executives must hold all of their shares (excluding shares withheld or sold to cover exercise or vesting costs, such as exercise prices and income taxes) following the exercise

 
 
 
35 - 2020 PROXY STATEMENT



of stock options or the vesting of equity awards until the ownership levels reflected above are met. The Committee reviews hardships on an individual basis, if needed. Each of the named executive officers meets his respective minimum ownership level or is within the five-year phase-in period under the Board and Executive Officer Stock Ownership Policy.
ROLE OF COMPENSATION COMMITTEE, OUTSIDE ADVISERS AND MANAGEMENT IN COMPENSATION DECISIONS
The Committee, pursuant to its charter, provides management and the Board with guidance on matters of executive and director compensation and related benefits. The Committee meets in executive sessions when discussing both CEO and executive officer performance and specific actions related to CEO and executive officer compensation. The Committee determines all compensation actions with respect to the Company’s CEO, and recommends these actions to the Board of Directors. The Board of Directors then reviews and approves such CEO compensation actions. The Committee determines and approves all compensation actions for the Company’s other executive officers after reviewing the recommendations of the CEO. The Committee works closely with both its independent compensation consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year.
The Committee retains full authority to engage independent third-party advisers, and currently retains FW Cook to conduct independent studies and provide objective advice on executive and director compensation. FW Cook’s primary role with the Company is as adviser to the Committee on executive compensation matters, although it is possible that FW Cook could provide certain advice to the Company generally. In 2019, FW Cook’s services wholly related to Committee matters. The Committee assessed the independence of FW Cook consistent with Nasdaq listing standards and no conflicts of interest were noted.

The Company also retains Goodwin Procter LLP for legal services on executive compensation matters, including drafting of legal plan documents. The Company may use other firms from time to time in the normal course of business.
EXECUTIVE BENEFITS AND PERQUISITES
Named executive officers are entitled to a flexible benefit amount to be used for financial products and services, including life insurance premiums, financial planning, long-term care insurance, child care, fitness fees and other health and wellness benefits that enable the executives to manage better and balance their personal lives given the amount of time spent at work. The flexible amount is a fixed maximum annual benefit of $20,000. Named executive officers are also eligible for an annual physical examination. The full value of all perquisites is reported as income to the individuals and, accordingly, is taxable. The flexible benefit may not be used for any type of personal luxury or entertainment expenditures.

Named executive officers are also eligible for Company-sponsored benefit programs available broadly to Company employees on the same terms as other employees, including health care, dental and vision benefits, short-term and long-term disability, life insurance, a 401(k) profit sharing plan and the Company’s Employee Stock Purchase Plan.
EMPLOYMENT AGREEMENTS
Mr. DeChellis is the only named executive officer who has an employment agreement with the Company. Pursuant to the terms of his employment agreement, Mr. DeChellis has an initial base salary of $700,000 per year, which is re-determined annually by the Board or the Committee.

Mr. DeChellis is eligible to receive annual bonuses based on the attainment of Company and/or individual performance metrics established by the Committee. He may elect to receive his annual bonus in the form of Company stock. Mr. DeChellis also is eligible to receive annual equity incentive grants under the Company’s stock incentive plans, determined at the discretion of the Board or the Committee. Additionally, the Company will provide Mr. DeChellis with prompt reimbursement of all reasonable expenses incurred while performing the services specified in his employment agreement.

 
 
 
EXECUTIVE COMPENSATION - 36





In addition, pursuant to the terms of his employment agreement, Mr. DeChellis is eligible to receive certain severance payments and benefits upon qualifying terminations of employment, which are described below under the heading “Potential Payments Upon Termination or Change in Control."
EXECUTIVE DEFERRED COMPENSATION PLAN
The Company offers a deferred compensation plan that enables certain executives, including each of the named executive officers, to defer a portion of their income. Amounts deferred are excluded from an executive’s taxable income and are not deductible by the Company until paid. Executives select from a number of mutual funds and the deferred amounts are increased or decreased to correspond to changes in the market value of these underlying mutual fund investments. Any increase in value is recognized as compensation expense. The Company maintains a rabbi trust with respect to these obligations. During 2019, Mr. DeChellis was the only named executive officer who participated in the deferred compensation plan.
SAY ON PAY SHAREHOLDER APPROVAL LEVELS FOR 2019
The Company’s shareholders approved the “say on pay” resolution included in the Company’s 2019 Proxy Statement with 96% of the votes cast in favor of the resolution. The Company believes this vote strongly affirms shareholder support of its approach to executive compensation.
We continue to seek ways to maintain a compensation program that is responsive to both shareholder concerns and the Company's Board-approved business objectives. We engage with many of the Company's shareholders throughout the year, including in advance of and following the annual meeting of shareholders. We believe that accountability to, and engagement with, shareholders is a cornerstone of good corporate governance, and we continue to invest in a comprehensive and ongoing shareholder engagement program to communicate and discuss performance results and corporate governance matters. The Board believes that the views of shareholders have been, and should continue to be, an important factor to be taken into consideration in making decisions with respect to executive compensation.
TAX, REGULATORY AND ACCOUNTING IMPLICATIONS
The Company believes it complies with all tax, regulatory and accounting standards. Furthermore, the Committee will continue to review each element of compensation and take appropriate steps to ensure tax deductibility to the extent permitted under applicable law and to the extent this can be accomplished without sacrificing flexibility and other important objectives of the overall compensation program for its executives.
COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion & Analysis required by Item 402(b) of Regulation S-K promulgated under the Securities Act of 1933, as amended, with management and, based on this review and these discussions, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in the Company’s Proxy Statement.

Submitted by the Compensation Committee of the Board:

Lizabeth H. Zlatkus, Chair
Deborah F. Kuenstner, Vice Chair
Joseph C. Guyaux
Stephen M. Waters




 
 
 
37 - 2020 PROXY STATEMENT




EXECUTIVE COMPENSATION TABLES
 
The following tables and footnote disclosures set forth information concerning the compensation paid to or earned by the named executive officers, including the CEO, the Chief Financial Officer and the next four most highly compensated executive officers of the Company, who served in such capacities during 2019.

SUMMARY COMPENSATION TABLE
Name and
Principal Position
 
Year  
 
Salary
($) 
 
Bonus
($)
 
Stock Awards
($)
 
Option Awards ($)
 
Non-Equity
Incentive Plan
Compensation
($)(7)
 
All Other
Compensation
($)(8)
 
Total ($)
Anthony DeChellis
 
2019
 
700,000

 
 

 
 
880,007

(4) (5)
 
220,001

(6
)
 
390,000

 
 
28,400

 
 
2,218,408

CEO and President
 
2018
 
51,154

(4)
 

 
 
750,000

(4)
 
1,750,000

(7
)
 

 
 
25,799

(8)
 
2,576,953

Steven M. Gaven
 
2019
 
300,000

 
 

 
 
239,993

(4) (5)
 
60,001

(6
)
 
175,000

 
 
28,400

 
 
803,394

Executive Vice President and Chief Financial Officer
 
2018
 
297,346

(3)
 

 
 
202,503

(5)(6)
 

 
 
186,000

 
 
12,836

(8)
 
698,685

John T. Longley
Executive Vice President and Head of West Coast

 
2019
 
106,346

(1
)
 

 
 
500,000

(4)
 
308,000

(6
)
 
158,334

 
 
21,212

 
 
1,093,892

Paul M. Simons
Executive Vice President and President of Private Banking, Wealth & Trust

 
2019
 
350,000

 
 

 
 
550,001

(4) (5)
 
50,001

(6
)
 
300,000

 
 
28,400

 
 
1,278,402

William I. Woodson
Executive Vice President and Head of Wealth Advisory & Family Office Services

 
2019
 
199,231

(2
)
 

 
 
999,999

(4)
 
273,000

(6
)
 
400,000

 
 
19,846

 
 
1,892,076

Corey A. Griffin
 
2019
 
138,462

(3
)
 

 
 

 
 

 
 
116,667

 
 
895,101

 
 
1,150,230

Former Executive Vice President and CEO Private Client Group
 
2018
 
400,000

 
 

 
 
360,004

 
 

 
 
240,000

 
 
70,942

 
 
1,070,946

 
2017
 
400,000

 
 

 
 
381,186

 
 

 
 
500,000

 
 
42,092

 
 
1,323,278

 
 
 
 
 
 
 
 
 
 
(1)
Mr. Longley's employment with the Company commenced on August 31, 2019. His annualized base salary for 2019 was $350,000.
 
 
 
 
 
 
 
 
 
 
(2)
Mr. Woodson's employment with the Company commenced on May 28, 2019. His annualized base salary for 2019 was $350,000.
 
 
 
 
 
 
 
 
 
 
(3)
Mr. Griffin's employment with the Company terminated on April 30, 2019. Accordingly, the amount reported represents base salary earned through April 30, 2019.
 
 
 
 
 
 
 
 
 
 
(4)
Amounts reflect the grant date fair value of the equity awards granted pursuant to the 2009 Plan in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("ASC 718"), disregarding any estimates of service-based forfeitures. Information about the assumptions used to value these awards can be found in Part II. Item 8 "Financial Statements and Supplementary Date - Note 18: "Employee Benefits" of the Company's 2019 Annual Report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
(5)
The amount reported includes the grant date fair value of PSUs based upon the probable outcome of the performance conditions. The value of the 2019 PSUs at the grant date assuming the highest level of the performance condition will be achieved is set forth in the table below:
 
 
 
 
 
 
 
 
 
 
 
 
 
Name
 
Target Number of PSUs Granted (#)
 
Maximum Number of PSUs Potentially Earned (#)
 
Grant Date Fair Value Assuming Target Performance ($)
 
Grant Date Fair Value Assuming Maximum Performance ($)
Anthony DeChellis
 
59,567

 
119,134

 
660,002

 
1,320,005

Steven M. Gaven
 
16,245

 
32,490

 
179,995

 
359,989

John T. Longley
 

 

 

 

Paul M. Simons
 
13,538

 
27,076

 
150,001

 
300,002

William I. Woodson
 

 

 

 

Corey A. Griffin
 

 

 

 

 
 
 
 
 
 
 
 
 
 

 
 
 
EXECUTIVE COMPENSATION - 38




(6)
This amount reflects the grant date fair value of stock options granted under the 2009 Plan calculated in accordance with ASC 718, disregarding any estimates of service-based forfeitures. Information about the assumptions used to value these awards can be found in Part II. Item 8 "Financial Statements and Supplementary Date - Note 18: "Employee Benefits" of the Company's 2019 Annual Report on Form 10-K.
 
(7)
The amounts in this column reflect the annual STI awards to the named individuals under the 2017, 2018, and 2019 STI.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(8)
All Other Compensation for 2019 is composed of the following amounts:
Compensation item
 
Anthony DeChellis ($)
 
Steven M. Gaven ($)
 
John Longley ($)
 
Paul M. Simons ($)
 
William I. Woodson ($)
 
Corey A. Griffin ($)
 
Matching Contribution to 401(k) Plan
 
8,400

 
8,400

 
1,212

 
8,400

 
4,846

 
8,400

 
Dividends Paid on Vested Stock Grants
 

 

 

 

 

 
50,939

 
Flexible Perquisite Allowance
 
20,000

 
20,000

 
20,000

 
20,000

 
15,000

 
20,000

 
Consulting Fees1
 

 

 

 

 

 
40,000

 
Payments Related to Severance2:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Severance
 

 

 

 

 

 
400,000

 
Accelerated Vesting of Equity
 

 

 

 

 

 
280,461

 
Dividends Paid on Vested Stock Grants (due to acceleration of vesting)
 

 

 

 

 

 
43,078

 
Benefits Continuation
 

 

 

 

 

 
32,223

 
         Fringe Benefits (maximum annual cap)
 

 

 

 

 

 
20,000

 
Total All Other Compensation
 
28,400


28,400


21,212


28,400


19,846

 
895,101

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Mr. Griffin served as a consultant to the Company from May 1, 2019 to May 31, 2019 and continued to receive his base salary and benefits during that time as payment for his consulting services.
 
 
 
 
(2) The amount reported for Mr. Griffin represents his severance pay package pursuant to the Company's Executive Vice President Severance Pay Plan, including the treatment of outstanding equity upon termination "without cause" per standard equity award agreements as previously disclosed in prior proxy statements. This is described under the heading "Potential Payments upon a Termination or Change in Control".
 
 
 
 

GRANTS OF PLAN-BASED AWARDS
 
 
 
 
 
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) 
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
 
All
Other
Stock 
Awards:
Number
of
Shares 
of
Stock or
Units
#
 
All
Other
Option
Awards
Number of
Securities
Underlying
Options # 
 
Exercise
or Base
Price of
Option
Awards
($/unit)
 
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(3)
Name
 
Grant
Date
 
Target
$
 
Maximum
$
 
Target
#
 
Maximum
#
 
 
 
 
Anthony DeChellis
 
5/15/2019
 

 

 
59,567

 
119,134

 

 

 

 
660,002

 
5/15/2019