Toggle SGML Header (+)


Section 1: DEF 14A (DEF 14A)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

Filed by the Registrant x

 

Filed by a Party other than the Registrant ¨

 

Check the appropriate box:

 

¨ Preliminary Proxy Statement   ¨ Confidential, for use of the Commission  
x Definitive Proxy Statement     Only (as permitted by Rule 14(a)-6(e)(2))
¨ Definitive Additional Materials      
¨ Soliciting Material Pursuant to Section 240.14a-12      

 

SEACOAST BANKING CORPORATION OF FLORIDA

 

(Name of Registrant as Specified in its Charter)

 

 

 

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

 

Payment of Filing Fee (check the appropriate box):

 

x No fee required

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:

 

 

 

 

 

 

(LOGO) 

 

Proxy Statement 
2020

 

 

 

 
 

 

 (LOGO) 815 Colorado Avenue
Stuart, Florida 34994

 

NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS

 

Wednesday, May 27, 2020
10:00 a.m. Eastern Time

 

Seacoast Banking Corporation of Florida (“Seacoast”, or the “Company”) intends to hold its 2020 Annual Meeting of Shareholders (the “Annual Meeting”) at the Hutchinson Shores Resort, 3793 NE Ocean Blvd, Jensen Beach, FL 34957, on Wednesday, May 27, 2020 at 10:00 a.m. Eastern Time. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials have and may continue to issue in light of the evolving coronavirus (COVID-19) pandemic. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website www.proxyvote.com, and we encourage you to check this website prior to the meeting if you plan to attend.

 

 

ITEMS OF BUSINESS

 

The purpose of the Annual Meeting is to vote on the following proposals:

 

1.Election of Directors. To elect four Class III directors (“Proposal 1”);

 

2.Ratification of Appointment of Independent Auditor. To ratify the appointment of Crowe LLP as independent auditors for Seacoast for the fiscal year ending December 31, 2020 (“Proposal 2”);

 

3.Advisory (Non-binding) Vote to Approve Compensation of Named Executive Officers. To hold an advisory vote to approve the compensation of the Company’s named executive officers as disclosed in this proxy statement (“Proposal 3”); and

 

4.Other Business. To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

 

RECORD DATE

 

You are eligible to vote if you were a shareholder of record on the close of business on March 30, 2020, which is the record date for the Annual Meeting. This Notice of the 2020 Annual Meeting of Shareholders and the accompanying proxy statement are sent by order of the Company’s Board of Directors.

 

YOUR VOTE IS IMPORTANT

 

Please review the voting instructions described in this proxy statement, as well as in the notice you received in the mail or by e-mail. By voting prior to the Annual Meeting, you will help ensure that we have a quorum and that your preferences will be expressed on the matters that are being considered.

 

   (SIGNATURE)
  Dennis S. Hudson, III
Chairman & Chief Executive Officer

 

April 10, 2020 

 

 

 

 
 

 

SHAREHOLDER LETTER

 

To our fellow shareholders, customers, partners and friends:

 

Seacoast delivered record-breaking financial performance in 2019, propelled by our balanced growth strategy. Solid organic growth, disciplined acquisitions, and careful cost controls enabled us to outperform our peers. Our outlook for 2020, as with all businesses in the country and around the world, must be framed within the context of COVID-19. Our approach to address the pandemic thus far has been to carefully adjust our operations to protect the health of our associates and customers, while continuing to offer digital banking products and services that can be accessed anywhere. We are closely monitoring the results of these operational adjustments and will continue to fine tune them in the weeks ahead in order to minimize risk and maximize the bank’s performance.

 

In 2019, the bank produced net revenue of $300.4 million, an increase of 15 percent from 2018, and achieved $98.7 million in net income, up 47 percent from the prior year. Adjusted net revenue1 in 2019 was $298.2 million, an increase of 14 percent from 2018, and adjusted net income1 was $104.6 million, up 32 percent from the prior year. We achieved $1.90 in diluted earnings per share, 38 percent higher than 2018, and $2.01 in adjusted earnings per share1, a rise of 24 percent from 2018 returns. In 2019, we also increased tangible book value per share to $14.76 from $12.33, an improvement of 20 percent for a key indicator of improved shareholder value. Other 2019 highlights include:

 

Loans totaled $5.2 billion at December 31, 2019, an increase of $0.4 billion, or 8 percent, from December 31, 2018. Seacoast ended the year with record originations of $1.8 billion, attributed to continued innovation in customer analytics and our continued expansion into the fast-growing markets of Tampa, Orlando, and South Florida.

Assets at year’s end totaled $7.1 billion, up from $6.7 billion at year’s end 2018. This reflects the 2018 acquisition of First Green Bancorp, Inc., which expanded our presence in the attractive Orlando, Daytona and Fort Lauderdale markets.

Total deposits were $5.6 billion as of December 31, 2019, an increase of $408 million, or 8 percent, from the prior year. Interest bearing deposits increased year-over-year by $127 million, or 5 percent, to $2.8 billion. Noninterest bearing demand deposits increased 1 percent, and certificates of deposit increased 28 percent.

Seacoast consolidated three banking center locations in 2019, achieving the Vision 2020 objective of reducing the Bank’s footprint by 20 percent to meet evolving customer needs. Successful M&A and the repositioning of the banking center network in strategic growth markets helped us achieve this goal ahead of plan.

 

As customer needs continue to evolve and operational efficiencies are created, so does our commitment to continual investments in our people, processes, and technology. These important investments enable future growth and scalability. Key investments in 2019 include:

 

The implementation of a digital loan origination platform across all business banking units, an initiative that began in late 2018. In the fourth quarter of 2019, this platform enabled record loan originations by the commercial banking team. We expect further gains in operational efficiency and banker productivity in 2020 and beyond.

Enhancements to the interactive voice response (IVR) system in the Florida-based Customer Support Center. The system provides customers with secure, self-serve options, and expedites call routing processes. This investment will continue to improve scalability and elevate the customer experience.

Exceptional customer service is a critically important part of our value proposition. In 2019, Seacoast partnered with a leading consumer insights firm to capture and analyze feedback from customers. We will leverage these insights to improve the customer service experience in 2020 and beyond.

 

Looking ahead, the economy will continue to be affected by the social distancing measures necessary to contain the COVID-19 virus. However, we are encouraged by the relief bill passed by the U.S. Congress in an effort to blunt the effects of the virus. And, as an SBA preferred lender, our focus for the second and third quarters will be operationalizing the Paycheck Protection Program (PPP) and helping our customers take advantage of the program until and after the pandemic is contained.

 

In 2020, Seacoast will continue to seek to drive long-term value for shareholders with value-creating, disciplined acquisitions as an accelerant. We were proud to be named Best M&A Strategy by Bank Director magazine as part of their 2020 RankingBanking study. The acquisition of First Bank of the Palm Beaches in the first quarter of 2020 increases Seacoast’s market share as the #1 community bank in the attractive Palm Beach market. In January 2020, Seacoast announced the proposed acquisition of Fourth Street Banking Company (Fourth Street), the holding company for Freedom Bank of St. Petersburg. The transaction will be Seacoast’s third in the last three years in the Tampa-St. Petersburg metropolitan statistical area (MSA), the second largest and one of the fastest growing MSAs in Florida.

 

1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

 

 

 

 
 

 

We have a deep and highly talented management team and a board with the right skills and background to help us adapt to the current economic environment and refine and implement our strategy. Our team and board jointly have been the architects of our highly successful business model, which continues to evolve. As we seek to maximize our business model we remain committed to top-tier performance and will maintain our risk profile and discipline.

 

While the economic effects of COVID-19 may alter our pace in the second and third quarters of 2020, we are confident our strategy will continue to create shareholder value now and in the years ahead.

 

Sincerely,

 

(SIGNATURE) 

Dennis S. Hudson, III

Chairman and Chief Executive Officer

 

 

 

 
 

 

TABLE OF CONTENTS  

 

VOTING INFORMATION 1
How to Cast Your Vote 1
How to View Proxy Materials Online 1
PROXY SUMMARY 2
2019 Performance Highlights 2
Strategic Execution Framework 3
Value Creation for our Shareholders 4
Executive Compensation Program Highlights 5
Summary of Proposals and Board Recommendations 5
Our Director Nominees 6
Director Nomination Process 6
Shareholder Engagement and Board Responsiveness 7
Board and Governance Highlights 8
Board Composition 8
Skills and Qualifications Mix 9
Our Corporate Governance Framework 10
CORPORATE GOVERNANCE AT SEACOAST 11
The Board’s Role in Strategy and Risk Oversight 11
Corporate Governance Principles and Practices 11
Governance Policies 11
Board Independence 12
Board Evaluation Process 12
Board Leadership Structure 12
Chairman and CEO Roles 12
Lead Independent Director 12
Board Leadership Structure - Definition of Roles 13
Non-Management Executive Sessions 14
Management Succession Planning and Development 14
Committee Structure and Other Matters 14
Board Meetings and Committees 15
Board Meeting Attendance 15
Annual Meeting Attendance 15
Board Committees 15
Board Committee Membership and 2019 Committee Meetings 15
Key Committee Responsibilities 16
Audit Committee Report 17
Ownership of our Common Stock 18
Director, Executive Officers and Certain Beneficial Stock Ownership 18
Executive Officers 19
EXECUTIVE COMPENSATION 21
COMPENSATION DISCUSSION & ANALYSIS 21
Executive Summary 21
2019 Performance Considerations 21
Say on Pay Results 21
Our Executive Compensation Design Priorities and Prohibitions 21
2019 NEO Pay 22
Summary of Compensation Decisions in 2019 22
Base Salary 22
Equity Awards 23
2019 Performance Stock Unit Awards 23
Time-Based Restricted Stock Awards 24
Other Considerations Involving 2019 Equity Awards 24
Overview of Executive Compensation 24
Role of the CGC 24
Role and Independence of the Compensation Consultant 24
Benchmarking and Peer Group 24
Executive Compensation Framework Highlights 26
2019 Executive Compensation Actions 27
2019 Pay Outcomes 27
Key Influences in Compensation Decisions 27
Other Elements of the 2019 Compensation Program for Executive Officers 28
Change in Control Severance Benefits 28
Retirement and Employee Welfare Benefits 29
Executive Perquisites 29
Risk Analysis of Incentive Compensation Plans 29
Clawback Policy 29
Hedging & Pledging Policy 30
Stock Ownership Guidelines 30
Impact of Deduction Limit 30
Strategies to Ensure that Incentive Compensation is Sensitive to Risk Considerations 31
Compensation and Governance Committee Report 31
EXECUTIVE COMPENSATION TABLES 32
2019 Summary Compensation Table 32
2019 Components of All Other Compensation 33
2019 Grants of Plan-Based Awards 33
Employment and Change in Control Agreements 34
Outstanding Equity Awards at Fiscal Year-End 2019 35
2019 Option Exercises and Stock Vested 36
Executive Deferred Compensation Plan 37
2019 Nonqualified Deferred Compensation 37
2019 Other Potential Post-Employment Payments 38
CEO Pay Ratio 39
PROPOSAL 1: ELECTION OF DIRECTORS 40
General 40
Manner for Voting Proxies 40
Nominees for Re-election at the Annual Meeting 41
Director Terms Extended Beyond the Annual Meeting 42
DIRECTOR COMPENSATION 45
Non-Employee Director Compensation Structure 45
Lead Independent Director Compensation 45
Director Stock Ownership Policy 45
2019 Director Compensation Table 46
Stock Awards and Options Granted to Directors In 2019 47
Directors’ Deferred Compensation Plan 47


i

 

 

 
 

 

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR 48
Relationship with Independent Registered Public Accounting Firm 48
Independent Registered Public Accounting Firm’s Fees 48
Pre-Approval Policy 48
PROPOSAL 3: ADVISORY (NON-BINDING) VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS (SAY-ON-PAY) 49
OTHER INFORMATION 50
Certain Transactions and Business Relationships 50
Related Party Transactions 50
Other Matters 51
Shareholder Proposals for 2021 51
ADDITIONAL VOTING INFORMATION 52
APPENDIX A: INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES A-1


 

ii

 

 

 
 

 

VOTING INFORMATION

 

How to Cast Your Vote

 

You may vote if you were a shareholder as of the close of business on March 30, 2020.

 

ONLINE: 

www.proxyvote.com 

   

MAIL: 

Complete, sign, date and return your proxy card in the envelope provided. 

         
 

PHONE: 

Call the number on your proxy card or voting instruction form. 

   

IN PERSON: 

Vote by ballot in person at the Annual Meeting 

 

For telephone and internet voting, you will need the 16-digit control number included in your notice, proxy card or voting instructions that accompanied your proxy materials. For shares held in employee plans, we must receive your voting instructions no later than 11:59 p.m. Eastern Time on May 20, 2020 (the “cut-off date”) to be counted. Otherwise, you may vote up until 11:59 P.M. Eastern Time the day before the meeting date.

 

Street Name Holders: If your shares of Seacoast common stock are held in a bank, brokerage or other institutional account (which is commonly referred to as holding shares in “street name”), you are a beneficial owner of these shares, but you are not the record holder. If your shares are held in street name, you are invited to attend the Annual Meeting; however, to vote your shares in person at the meeting, you must request and obtain a power of attorney or other authority from the bank, broker or other nominee who holds your shares and bring it with you to submit with your ballot at the meeting. In addition, you may vote your shares before the meeting by phone or over the Internet by following the instructions set forth below or, if you received a voting instruction form from your brokerage firm, by mail by completing, signing and returning the form you received. Your voting instruction form will set forth whether Internet or telephone voting is available to you.

 

If you are able to attend the Annual Meeting, you may vote your shares in person, even if you have previously voted by another means by revoking your proxy vote at any time prior to the meeting, pursuant to the procedures specified in “Revocation of Proxies”. If you hold your shares in street name, you must obtain a proxy from the record holder in order to vote in person.

 

If Seacoast determines that the Annual Meeting will be held by remote-means only due to public safety and health concerns resulting from the ongoing COVID-19 global pandemic, you will be able to vote your shares by any of the means outlined herein other than in-person.

 

How to View Proxy Materials Online

 

Important Notice Regarding the Availability of Proxy Materials for the 2020 Shareholder Meeting

 

Our 2020 proxy statement and 2019 Annual Report on Form 10-K (referred to collectively as the “proxy materials”) are available online at: www.proxyvote.com or at www.SeacoastBanking.com/CustomPage/Index?keyGenPage=1073754500.

 

We have mailed to certain shareholders a notice of internet availability of proxy materials on or about April 10, 2020. This notice contains instructions on how to access and review the proxy materials on the internet. The notice also contains instructions on how to submit your proxy on the internet or by phone, or, if you prefer, to obtain a paper or email copy of the proxy materials.

 

 1

 

 

 
 

 

PROXY SUMMARY

 

Introduction

 

We believe our balanced growth strategy, which is focused on organic growth and disciplined acquisitions in growing markets, is delivering value for our shareholders.

 

In this section, we summarize 2019 performance highlights and other information contained elsewhere in this proxy statement. Please carefully review the information included throughout this proxy statement and as provided in the 2019 Annual Report on Form 10-K before you vote.

 

2019 Performance Highlights

 

Value Creation for our Shareholders

 

Seacoast continued to drive positive momentum in performance metrics, leading to sustained outperformance in total shareholder returns.

 

 

 

*Total return combines share price appreciation and dividends paid to show the total return to the shareholder expressed as an annualized percentage.

 

Execution of our strategy in 2019 produced outstanding results year over year:

 

For the year ended December 31, 2019, the Company reported $98.7 million in net income, or $1.90 per share, an increase of 47% year-over-year. Net revenue for the same period was $300.4 million, an increase of 15% year-over-year. The Company continued to see positive performance reflected in its ratios, with a return on average tangible assets of 1.56%, return on average tangible shareholders’ equity of 14.7% and an efficiency ratio of 51.7%.

 

 

 

Our balanced growth strategy combines organic growth and select strategic M&A along with prudent risk management, leading to strong results. We transformed our integrated data analytics and marketing automation beginning in late 2014, and have seen success in deepening existing customer relationships and achieving incremental organic growth among existing tenured customers.

 

4th   #1   20%   204,041
Largest Florida bank   Florida headquartered   Average IRR   Customers served
    bank in Orlando MSA   acquisition execution    

 

1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

 

 2

 

 

 
 

 

Our performance and future growth are driven by a differentiated strategy consisting of six key themes:

 

                 

Comprehensive Organic 

Growth Model 

  Focused
on Controls
  Track Record of Value Creating
Acquisitions
           
Multi-channel distribution system Skilled underwriting team Enabled expansion in attractive Florida
Attracts customers from larger Well-defined portfolio limits and   markets
  competitors   monitoring 9 acquisitions successfully completed
Mixes modern convenience and Balanced loan sizes and concentrations   since 2014
  community bank service Credit culture is reinforced in organization Furthered expansion along Florida’s
Deepens relationships       I-4 corridor
Innovates our business model        
Drives growth        
                 
  Well-Positioned to Benefit
From Florida Market
  Advanced Analytical & Digital
Capabilities
  Experienced Board &
Management Team
           
Projected 17th largest economy in the Creates value for our customers and Refreshed its Board of Directors
  world based on World Bank ratings   shareholders 7 key members added since 2013
Florida’s economy surpassed $1 trillion Recognized leader amongst community Lead Director refreshment in 2018
  in 2018   banks Strong Executive talent added in
Diversified, with continued growth Recipient of numerous awards   key areas
  opportunity        
Limited Florida based headquarters        
  increasing Seacoast’s scarcity value        

 

Strategic Execution Framework

 

Seacoast meets customer needs profitably through an evolving distribution network.

 

 

 

 

 3

 

 

 
 

 

Value Creation for our Shareholders

 

Our Balanced Growth Strategy is Driving Strong Earnings Performance

   
YE Total Assets YE Market Capitalization Adjusted
($ in Billions) ($ in Billions) FY EPS1
     
     

 

Adjusted FY Return on Tangible Adjusted FY Return on Tangible Adjusted FY
Equity1 Assets1 Efficiency Ratio1
     
     

 

1  Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

 

 4

 

 

 
 

  

Executive Compensation Program Highlights

 

The Compensation and Governance Committee (“CGC”) is committed to aligning our compensation strategies with our evolving business strategy, good governance and effective risk management practices, and efforts to generate superior long-term returns for our shareholders. To this end, we emphasize pay-for-performance in our executive compensation programs. Our executive compensation strategy strongly aligns our CEO and other executives with long-term shareholder interests. In 2019, the CGC redesigned the compensation structure to better align compensation decisions relative to the peer group.

 

The following table summarizes the primary elements of our executive compensation for 2019:

 

Base Salary

 

Recognize performance of job responsibilities and attract and retain individuals with superior talent.

 

Reflects the CGC’s assessment of the executive’s experience, skills and value to Seacoast.

 

Our CEO’s base salary did not increase in 2019. Base salaries for our other named executive officers remained unchanged in 2019, except for adjustments made in recognition of Mr. Shaffer’s promotion to COO (23% salary increase) and Ms. Kleffel’s expanded role as the Central Florida Market President (8% salary increase).

Performance Share Units (“PSUs”)

 

Align compensation with our business strategy and long-term shareholder value while providing a strong retention element.

 

The number of PSUs granted was determined by the CGC after consideration of each executive’s performance scorecard. The number of PSUs that may be earned is based on the level of achievement of goals established by the CGC for a three-year performance period. Value realized upon vesting varies based on stock price performance over the vesting period.

PSUs granted in 2019 vest based on the level of achievement of goals relating to average annual EPS growth and return on average tangible common equity over a three-year period (2019-2021) relative to a peer group. PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service.

Restricted Stock Awards (“RSAs”)

 

Provide a strong retention element and align executive and shareholder interests.

 

The amount of RSAs granted is determined by the CGC after consideration of each executive’s performance scorecard. The realized value of RSAs is based on stock price performance over the vesting period.

RSAs granted in 2019 vest in equal installments over three years.

 

  

Please refer to the Compensation Discussion and Analysis and The Executive Compensation Tables in this proxy statement for additional details about our compensation programs.

 

Summary of Proposals and Board Recommendations

 

Item Proposal Board Voting Recommendation Vote Required

1

Election of Three Class III Directors

FOR ALL

Plurality vote*

2

Ratification of Appointment of Crowe LLP as Independent Auditor for 2020

FOR

Affirmative vote of a majority of votes cast

3

Advisory (Non-binding) Vote to Approve Executive Compensation (Say on Pay)

FOR

Affirmative vote of a majority of votes cast

 

* More fully described in Proposal 1 - Election of Directors, Manner of Voting Proxies

 

 5

 

 

 
 

 

Our Director Nominees

 

You are being asked to, among other proposals, elect three Class III directors of Seacoast. All of the nominees are presently directors of Seacoast. All of the nominees also serve as members of the board of directors of Seacoast’s principal banking subsidiary, Seacoast National Bank (the “Bank”). If elected, each director nominee will serve a three year term expiring at the 2023 Annual Meeting and until their successors have been elected and qualified. Detailed information about each nominee’s background, skills and expertise can be found in Proposal I – Election of Directors.

 

Name Age Director Since Current Occupation Independent No. of Other Public Boards

Julie H. Daum

65

2013

Senior director of national executive and board search firm

0

Dennis S. Hudson, III

64

1984

Chairman of Company and Bank

 

1

Alvaro J. Monserrat

51

2017

Independent advisor of business strategy and execution for CEOs of technology start-up companies

0

 

Director Nomination Process

 

The CGC serves as the nominating committee of the Company. The committee annually reviews and makes recommendations to the full Board of Directors regarding the composition and size of the Board of Directors and its committees, and if determined necessary, recommends potential candidates to the Board for nomination for election to the Board by the Company’s shareholders. The CGC’s goal is to ensure that the Board of Directors consists of a diverse group of members with the relevant expertise, skills, personal attributes and professional backgrounds who, individually and collectively, are appropriate to achieve the Company’s strategic vision and business objectives, and best serve the Company’s and shareholders’ long-term interests.

 

As part of the assessment process, the CGC evaluates whether the addition of a director or directors with particular attributes, experience, or skill sets could enhance the Board’s effectiveness. The CGC identifies director candidates through business, civic and legal contacts, and may consult with other directors and senior officers of the Company. The CGC may also utilize a search firm to help it identify, evaluate and conduct due diligence on potential director candidates. Once a candidate has been identified, the CGC confirms that the candidate meets the minimum qualifications for director nominees, and gathers information about the candidate through interviews, questionnaires, background checks, or any other means that the CGC deems to be helpful in the evaluation process. Director candidates are interviewed by the Chair of the CGC and at least one other member of the committee. Each member of the committee participates in the review and discussion of director candidates. Where appropriate, directors who are not on the CGC are encouraged to meet with and evaluate the suitability of potential candidates. The CGC then evaluates the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board in relation to the Company’s strategic goals, and recommends nominees to the Board. The full Board formally nominates candidates to be included in the slate of directors presented for shareholder vote based upon the recommendations of the CGC following this process.

 

Given the evolving needs and business strategy of the Company, the CGC believes that the Board of Directors as a whole should have diversity of thought and experience, which may, at any one or more times, include differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. However, the CGC does not assign specific weights to any particular criteria. Its goal is to identify nominees that, considered as a group, will possess the talents and characteristics necessary for the Board of Directors to fulfill its responsibilities and advance our strategic mission. In addition, each director must have the qualifications set forth in the Company’s Bylaws, as well as the personal characteristics and core competencies described below as our Director Eligibility Guidelines:

 

Director Eligibility Guidelines
Personal Characteristics Core Competencies

•      the highest ethical character

•      a personal and professional reputation consistent with Seacoast’s values as reflected in its Code of Conduct

•      the ability to exercise sound business judgment

•      a willingness to listen to differing points of view and work in a mutually respectful manner

•      substantial business or professional experience and ability to offer meaningful advice and guidance to the Company’s management based on that experience

•      professional achievement through service as a principal executive of a major company, partner in a law or accounting firm, successful entrepreneur, prominent academic or similar position of significant responsibility

 

 6

 

 

 
 

 

The CGC also considers numerous other qualities, skills and characteristics when evaluating director nominees, such as a candidate’s:

 

understanding of and experience in the financial services industry, as well as accounting, finance, legal, real estate, corporate governance and technology expertise;

leadership experience with public companies or other major organizations, as well as civic and community relationships;

availability and commitment to carry out the responsibilities as a director;

knowledge, experience and skills that enhance the mix of the Board’s core competencies and provide a different perspective;

the absence of any real or perceived conflict of interest that would impair the director’s ability to act in the interest of shareholders; and

qualification as an independent director.

 

In addition to nominations by the CGC, any Company shareholder entitled to vote generally on the election of directors may recommend a candidate for nomination as a director by providing advance notice of such proposed nomination to the Corporate Secretary at the Company’s principal offices. The written submission must comply with the applicable provision in the Company’s Articles of Incorporation. To be considered, recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days nor more than 90 days prior to the anniversary of the Company’s last annual meeting of shareholders (or, if the date of the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that the Company mails or otherwise gives notice of the date of the annual meeting to shareholders), and recommendations with respect to an election of directors to be held at a special meeting called for that purpose must be received by the 10th day following the date on which notice of the special meeting was first mailed to shareholders. Recommendations meeting these requirements will be brought to the attention of the Company’s CGC. Candidates for director recommended by shareholders in compliance with these provisions and who satisfy the Director Eligibility Guidelines will be afforded the same consideration as candidates for director identified by Company directors, executive officers or search firms, if any, employed by the Company. For our 2020 Shareholder Meeting, no shareholder nominee recommendations were received.

 

Shareholder Engagement and Board Responsiveness

 

The Company engages with our shareholders to ensure that the Board and management are aware of and address issues of importance to our investors. We regularly meet with various institutional shareholders and welcome feedback from other shareholders, which is considered by the Board or appropriate Board committee.

 

Since 2009 the Company has annually included in its proxy statement a separate advisory vote on the compensation paid to its executives, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related proxy disclosure, commonly known as a “say-on-pay” proposal. Independent surveys have shown that an annual vote is the preferred frequency of most institutional investors. Our shareholders also have expressed a preference for an annual vote. Our Board also endorses an annual vote as we believe it gives shareholders an opportunity to voice their concerns with respect to executive compensation. Shareholder support of our say-on-pay proposal at our 2019 annual meeting increased compared to the prior year. (See “Outcome of our 2019 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election at the 2019 annual meeting also increased compared to the prior year. Below are highlights of the feedback we have received from shareholders and our Board’s response:

 

What We Heard Our Board’s Response
Continue to deliver industry leading financial results and achieve Vision 2020 goals

Delivered Promised Results. Delivered 2019 earnings of $1.90 diluted EPS and $2.01 diluted adjusted EPS1. Improved efficiency ratio from 62.4% in fourth quarter of 2016 to 48.4% in fourth quarter 2019 and adjusted efficiency ratio1 from 60.8% in fourth quarter 2016 to 47.5% in the fourth quarter of 2019. 

Continue to emphasize stock ownership by management and directors Increased the percentage of PSU Awards under the long-term incentive plan (“LTIP”) paid to executive officers for achievement of performance objectives in 2019. All of our directors are paid a stock retainer; some defer a portion or all of their cash compensation into our director deferred compensation plan.
Outcome of our 2019 Say- On-Pay vote

At our 2019 annual meeting of shareholders, our say-on-pay proposal received the support of 99.7% of the votes cast. Our CGC considered the vote in relation to: 1) the alignment of our compensation program with the long-term interests of our shareholders, 2) the evolution of our business strategy with emerging opportunities and in fulfilling customer demand for innovative products and services, and 3) the relationship between risk-taking and the incentive compensation provided to our executives. The CGC will continue to evaluate and refine our executive compensation programs and welcomes input from our shareholders. 

 

The Company’s Corporate Governance Guidelines provide for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group, or other individual directors. Shareholders who wish to communicate with the Board of Directors, a Board committee, the Lead Independent Director, other directors or an individual director may do so by sending written communications addressed to the Board of Directors, a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of Florida, 815 Colorado Avenue, P.O. Box 9012, Stuart, Florida 34995. All communications will be compiled by the Company’s Secretary and submitted to the Board of Directors, a committee of the Board of Directors or the group of directors or individual director, as appropriate, at the next regular meeting of the Board.

 

1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

 

 7

 

 

 
 

 

Board and Governance Highlights

 

Board Composition

 

Over the past years, we have continually recruited new talent to our Board to increase diversity of thought and experience and to better align overall Board capability with our strategic focus. During this time, our Chairman/CEO and Compensation and Governance Committee have focused considerable attention on Board refreshment, and we have added seven new directors with skill sets needed to help navigate the fast-changing environment impacting our business. As a result, our overall Board composition has been significantly altered across a number of important aspects creating a vibrant Board culture and focus on creating shareholder value over the long term. Seacoast continues to build a diverse Board with experience aligned with our strategic mission to ensure a balanced mix of directors with a deep knowledge of Seacoast and its markets, as well as new members with fresh perspectives.

 

Board Refreshment and Characteristics (Non-Executive Directors)

 

   

 

 

 

 

 8

 

 

 
 

 

Skills and Qualification Mix

 

We have revitalized our Board to align with our balanced growth strategy. Below are the mix of skills and qualifications of our Board as of the Annual Meeting date: 

 

Skills and Qualifications Dennis J. Arczynski Jacqueline L. Bradley H. Gilbert Culbreth, Jr. Julie H. Daum Christopher E. Fogal Maryann Goebel Dennis S. Hudson, III Robert J. Lipstein Herbert A. Lurie Alvaro J. Monserrat Thomas E. Rossin
  Accounting experience is important in overseeing our financial reporting and internal controls and M&A ✔        ✔    ✔  ✔  ✔  ✔  ✔ 
  Banking / Investments experience is important to guide product evolution and lead investment initiatives ✔  ✔      ✔    ✔  ✔  ✔  ✔  ✔ 
  Executive Leadership experience is important to monitor strategy and performance ✔  ✔  ✔  ✔  ✔  ✔  ✔  ✔  ✔  ✔  ✔ 
  Financial Services experience is important to manage our business model and revenue generating services ✔  ✔    ✔  ✔  ✔  ✔  ✔ 
  Governance / Legal experience is important to conduct decision-making and validate implementation ✔      ✔       ✔ ✔  ✔  ✔  ✔ 
  Data Analytics experience is important for innovation and strengthening profitability and understanding customers ✔          ✔      ✔   
  Local Community experience and stature is important in understanding the customer segments in markets served ✔  ✔    ✔     ✔     ✔  ✔ 
  Marketing / Digital experience is important to assess brand loyalty, customer experiences and create valuable customer relationships and long-term profitability ✔            ✔      ✔   
  Regulatory / Compliance experience is important to monitor compliance and regulatory requirements ✔          ✔ 
  Risk Management experience is important in overseeing the risks throughout the organization ✔         ✔  ✔ ✔  ✔  ✔ 
  Technology / Information Security experience is important to assess tools to enhance business operations, customer service and cyber and information security ✔           ✔  ✔ ✔    ✔   
  Human Capital Management experience is important to assess compensation practices, diversity mix, talent, training programs and corporate culture within the company ✔   ✔      ✔    ✔  

 

 9

 

 

 
 

 

Our Corporate Governance Framework

 

Board Independence

 

•    A total of 10 of our 11 directors, or over 75% are considered independent.

•    Our CEO is the only member of management who serves as a director.

Board Refreshment & Diversity

 

•    We seek a board that, considered as a group, will possess a diversity of experience and differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. 

•    We have a mix of new and longer tenured directors to help ensure fresh perspectives as well as continuity and experience. The average tenure of our non-management directors is 8.5 years. 

Board Committees

 

•    We have four standing Board committees—Audit; Compensation and Governance (“CGC”); Enterprise Risk Management (“ERMC”); and Strategy and Innovation (“S&I”). 

•    The Audit Committee and CGC consist entirely of independent, non-management directors. 

•    Chairs of the committees shape the agenda and information presented to their committees. 

Lead Independent Director

 

•    Our independent directors elect a lead independent director. 

•    Our lead independent director chairs regularly scheduled executive sessions, without management present, at which directors can discuss management performance, succession planning, board informational needs, board effectiveness or any other matter. 

Board Oversight of Strategy & Risk

 

•    Our Board has ultimate oversight responsibility for strategy and risk management. 

•    Our Board directly advises management on development and execution of the Company’s strategy and provides oversight through regular updates. 

•    The S&I Committee helps ensure that the strategic vision for the Company is fulfilled by challenging, proposing, reviewing, and monitoring strategic initiatives of the Company relating to M&A activity, capital allocation and planning, business model transformation, innovation, and shareholder relations. 

•    Through an integrated enterprise risk management process, key risks, including those related to privacy and cybersecurity are reviewed and evaluated by the ERMC before they are reviewed by the Board. 

•    The ERMC oversees the integration of risk management at Seacoast, monitors the risk framework and makes recommendations to the Board regarding the Company’s risk appetite. 

•    The Audit Committee oversees the Company’s financial risk management process. 

•    The CGC oversees risks and exposures related to the Company’s corporate governance, director succession planning, and compensation practices to ensure that they do not encourage imprudent or excessive risk-taking, and assists with its leadership assessment and CEO succession planning. 

Accountability

 

•    We have a plurality vote standard for the election of directors, with a director resignation policy for uncontested elections. 

•    Each common share is entitled to one vote. 

•    We have a process by which all shareholders may communicate with our Board, a Board committee or non-management directors as a group, or other individual directors. 

Director Stock Ownership

•    A minimum stock holding of three times the annual base retainer is required for each director, to be acquired within four years of joining the Board.

Succession Planning

•    CEO and management succession planning is one of the Board’s highest priorities. Our Board ensures that appropriate attention is given to identifying and developing talented leaders.

Board Effectiveness

 

•    The Board meets in a director-only session prior to each regular meeting to discuss the Company’s business condition. Each regular meeting is followed by an executive session of non-management directors led by the lead independent director.

•    The Board and its independent committees annually evaluate their performance.

Open Communication

 

•    Our Board receives regular updates from business leaders regarding their area of expertise.

•    Our directors have access to all management and employees on a confidential basis.

•    Our Board and its committees are authorized to hire outside consultants at their discretion and at the Company’s expense.

  

 10

 

 

 
 

 

CORPORATE GOVERNANCE AT SEACOAST

 

Our goal is to maintain a corporate governance framework that supports an engaged, independent board with diverse perspectives and judgment that is committed to representing the long-term interests of our shareholders. We believe our directors should possess the highest personal and professional standards for ethics, integrity and values, as well as practical wisdom and mature judgment. Therefore, our Board, with the assistance of management and the CGC, regularly reviews our corporate governance principles and practices.

 

The Board’s Role in Strategy and Risk Oversight

 

The Board of Directors actively reviews our long-term strategy and the plans and programs that management develops to implement our strategy. While the Board meets formally at least once every year to consider overall long-term strategy, it generally reviews various elements of strategy, and our progress towards implementation, at every regular meeting. Our directors are active in our strategic planning process and exercise robust oversight of and challenges both our strategies and our implementation of such strategies.

 

The Board believes that strategic risk is an exceptionally important risk element among a number of risks that the Company faces and works to ensure that this risk is appropriately managed in the context of the rapidly changing environment in which the Company and its customers operate. The Board does not believe this risk can be delegated and the Board as a whole regularly spends a significant amount of its time engaged with management and in executive session discussing our long term strategy, the effectiveness of our plans to implement such strategy, and our progress against those plans.

 

The Board believes that an integral part of managing strategic risk is ensuring that the Board’s views are considered as our strategy evolves. The Board strongly believes that having active and engaged committee chairs and a lead independent director better ensures that the Board as a whole can serve as a credible challenge to management’s plans and programs and increases transparency into the fast-paced changes management is implementing.

 

The Board’s committees also work to ensure that we have the right alignment to support our long-term strategic direction including: (i) an active Board recruitment process focused on developing or acquiring the skill, experience and attributes of both individuals and the Board as a whole needed to support our strategy, (ii) ensuring an appropriate link is established between our compensation design and our long-term strategy to encourage and reward the achievement of our long-term goals and protect shareholder value by discouraging excessive risk, and (iii) ensuring that our risk management structure can effectively manage the inherent risks that underlie our strategy.

 

Other types of risks that the Company faces include:

 

Macro-economic risks, such as inflation, interest rate fluctuations, reductions in economic growth, or recession;

Political or regulatory risks, such as restriction on access to markets;

Event risks, such as global pandemics, including COVID-19, natural disasters or cybersecurity breaches; and

Business-specific risks related to financial reporting, credit, asset/liability management, market, operational execution (corporate governance, legal and regulatory compliance), and reputation.

 

Our Enterprise Risk Management Committee (“ERMC”) regularly assesses our overall risk profile and oversees our risk management programs which are implemented by our chief risk officer. Information security is a significant operational risk for financial institutions, and includes the risk of losses resulting from cyber-attacks. Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, and employees, and information security risk. In light of these risks, the Board also assesses the risks and changes in the cyber environment through presentations and reports provided to our ERMC.

 

Our Board also recognizes the importance to operate in a responsible and sustainable manner aligned with our mission, vision and values. Workforce inclusion and development, social impact and environmental sustainability are critical components in the Company’s culture and business practice. Our Compensation and Governance Committee (“CGC”) will continue to monitor ESG efforts in the communities where we operate.

 

Corporate Governance Principles and Practices

 

Governance Policies

 

Important elements of our corporate governance framework are our governance policies, which include:

 

our Corporate Governance Guidelines

our Code of Conduct (applicable to all directors, officers and employees)

our Code of Ethics for Financial Professionals (applicable to, among others, our chief executive officer and chief financial officer)

charters for each of our Board Committees

 

You may view these and other corporate governance documents on the investor relations page on our website located at www.SeacoastBanking.com, or request a copy, without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995. Information included on our website, other than the proxy statement and form of proxy, is not a part of the proxy soliciting material.

 

 11

 

 

 
 

 

Board Independence

 

The Company’s common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBCF”. Nasdaq requires that a majority of the Company’s directors be “independent,” as defined by the Nasdaq rules. Generally, a director does not qualify as an independent director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors has determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s independent directors in 2019 were: Dennis J. Arczynski, Stephen E. Bohner, Jacqueline L. Bradley, H. Gilbert Culbreth, Jr., Julie H. Daum, Christopher E. Fogal, Maryann Goebel, Timothy S. Huval, Robert J. Lipstein, Herbert A. Lurie, Alvaro J. Monserrat and Thomas E. Rossin. Mr. Bohner passed away in January 2019, and Mr. Huval resigned from the Board in April 2019 due to an extended illness. Mr. Lurie is a senior advisor of Guggenheim Securities that, from time to time, provides financial advisory services to Seacoast. The Board considered this relationship when assessing Mr. Lurie’s independence. Our governance principles provide that a substantial majority of our directors will meet the criteria for independence required by Nasdaq. Over 75% of our Board meets our criteria for independence.

 

Board Evaluation Process

 

Periodically, our Board and each Board committee evaluate their performance and effectiveness, along with processes and structure, to identify areas for enhancement. The process is described below.

 

Element Description
Corporate Governance Review and Investor Feedback The CGC reviews corporate governance principles with consideration given to generally accepted practices and feedback from investors and makes recommendations for Board changes. This committee also oversees the process for annual board evaluations.
Annual Board & Committee Self-Evaluations The Board and committee evaluations for 2018 were formally conducted by legal counsel through one-on-one discussions with each director. In 2019, Board and committee evaluations were individually conducted in written format to assess the effectiveness of the Board and committees of the Board.
Summary and Review For the 2019 Board and committee evaluations, responses were compiled and summarized, including comments, which were reviewed by the Chairman and Lead Independent Director, and together presented summary results to the full Board. The committee evaluations were reviewed by the respective committee chairs, who then discussed the results with their respective committees and the full Board.
Actions As a result of the Board evaluation process, the Board gained insight as to committee structure, implemented process improvements to facilitate broader engagement around governance matters and examined possible enhancements to Board orientation and continued education.

 

Board Leadership Structure

 

At least annually, our Board, in coordination with our Compensation and Governance Committee, discusses and deliberates the appropriate Board leadership structure. Based on its assessment, the Board leadership framework is provided through: 1) a combined Chairman and CEO role, 2) a clearly defined lead independent director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded. At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.

 

Chairman and CEO Roles

 

The Board of Directors periodically assesses who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, with appropriate consideration of current facts and circumstances. We believe that Seacoast and our shareholders benefit from an executive Chairman with deep experience and knowledge of the financial services industry, the Company, its businesses, and leadership that helps drive growth and revenue to deliver strong financial returns to shareholders.

 

The Company’s current Chief Executive Officer, Dennis S. Hudson, III, also serves as the Chairman of the Board of Directors. He has held the post of Chief Executive Officer for the past 22 years, Chairman for the past 15 years, President for the 12 years prior to being named Chairman, and has also served as Chief Executive Officer of the Bank for the past 27 years. During this time, Mr. Hudson has led the Company through its growth from a local community bank to the fourth largest Florida bank with $7.1 billion in assets and 48 full-service branches in 15 counties and a group of commercial banking centers throughout the footprint as of year-end 2019. In light of Mr. Hudson’s significant leadership tenure with the organization, his breadth of knowledge of the Company and his relationship with the institutional investor community, as well as the efficiencies, accountability, unified leadership and cohesive corporate culture that this structure provides, the Board of Directors believes it is appropriate that he serve as both Chief Executive Officer and Chairman.

 

Lead Independent Director

 

To further strengthen our corporate governance, our independent directors annually select a Lead Director from the independent directors if the positions of Chairman and Chief Executive Officer are held by the same person or if the Chairman of the Board is not an independent director. Our Board believes that the Lead Director serves an important corporate governance function by providing separate leadership for the non-management and independent directors. In January 2020, the Board re-elected Christopher E. Fogal to serve as Lead Independent Director. Additional information of the role of our lead director is outlined in the following chart.

  

 12

 

 

 
 

 

Board Leadership Structure - Definition of Roles

 

Lead Independent Director Role Chair/CEO Role
Full Board Meetings

•    Participates in Board meetings

•    Acts as Chairperson of the Board in situations where the Chairperson/ CEO is unable to serve in that capacity, including chairing meetings of the Board in the absence of the Chairperson/ CEO

•    Has the authority to call meetings of the Board of Directors

•    Chairs Board meetings and meetings of shareholders

•    Facilitates productive Board meetings by encouraging Board director engagement

Executive Session Responsibilities

•    Has the authority to call meetings of the non-management directors or independent directors

•    Chairs executive sessions of the non-management directors and independent directors

•    Sets the agenda for executive sessions

•    Meets with the Chair/CEO after executive sessions to review the matters discussed during the executive sessions

•    Receives full feedback from Lead Independent Director on the matters discussed in executive sessions and required follow-up
Board Communications Responsibilities

•    Facilitates communication among the non-management directors and independent directors on key issues and concerns

•    Serves as the principal, but non-exclusive, liaison and intermediary between the Chair/CEO and the non-management directors regarding views, concerns, and issues of the non-management directors and independent directors

•    Functions as a resource to the Chair/CEO on Board issues and other matters affecting the Company 

•    Communicates with all directors on key issues and concerns outside of Board meetings

•    Expected to inform the Lead Independent Director of all significant issues facing the Company

Board Agenda and Information Responsibilities

•    Collaborates with the Chair/CEO to set the Board meeting agendas and communicates Board information to other Board members

•    Seeks Board meeting agenda input from other directors and reviews meeting schedule to ensure sufficient time for discussion of all agenda items

•    Drafts the Board meeting agendas and works with Lead Independent Director to ensure that the requisite agendas and information are provided to the Board in a timely manner for it to fulfill its duties
External Shareholder Responsibilities

•    Reviews responses to direct shareholder communications with the Board

•    If requested by major shareholder or the Chair/CEO, is available for consultation and direct communication

•    Represents the Company and interacts with external shareholders and employees
Strategy and Execution Responsibilities

•     Collaborates with the Board and the Chair/CEO to establish and support appropriate short term and long term strategies, objectives, goals, and programs that support sustainable growth and profitability

 

•    Leads the management team to establish and support the development of appropriate short term and long term strategies

•    Leads the development of overall corporate and business unit objectives and goals

•    Develops and implements programs, and drives overall execution to achieve desired objectives and goals

Company Operations Responsibilities

•    Has no role in managing Company operations

•    Officers and employees report to the CEO, not to the Lead Independent Director

•    Leads Company operations

•    Officers and employees report to the CEO

  

 13

 

 

 
 

 

Non-Management Executive Sessions

 

In order to give a significant voice to our non-management directors, our Corporate Governance Guidelines provide for executive sessions of our non-management and independent directors. Our Board believes this is an important governance practice that enables the Board to discuss matters without management present.

 

Our non-management directors generally meet in executive session following each regularly scheduled Board meeting. Our independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Our Lead Independent Director presides at all executive sessions of the independent directors and non-management directors and sets the agenda for such executive sessions. Any independent director may call an executive session of independent directors at any time. The independent directors met two times in executive session in 2019.

 

Management Succession Planning and Development

 

Our Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention is given to identifying and developing talented leaders. Consequently, we have a robust management succession and development plan which is reviewed and updated annually. The Board maintains oversight responsibility for succession planning with respect to the position of CEO and monitors and advises management regarding succession planning for other executive officers. The Board’s goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also has short-term contingency plans in place for emergency and unexpected occurrences, such as the sudden departure, death, or disability of our CEO or other executive officers.

 

The CGC, working with the CEO, annually evaluates succession planning at the senior levels of management and reports the results of such evaluation to the Board, along with recommendations on management development and succession planning. The updated succession plan is reviewed and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review of the CEO succession planning includes a review of specific individuals identified as active CEO succession candidates, and each of those individuals is reviewed with respect to progress in his or her current job position and progress toward meeting his or her defined leadership development plan. The Company’s CEO and senior management are similarly responsible for supporting “next generation” leadership development by: identifying core talent, skills and capabilities of future leaders within the Company; assessing the individuals against leadership capabilities; identifying talent and skill gaps and development needs; assisting with internal candidate development; and identifying significant external hiring needs.

 

The Board and individual Board members may advise, meet with and assist CEO succession candidates and become familiar with other senior and future leaders within the Company. Directors are encouraged to become sufficiently familiar with the Company’s executive officers to be able to provide perspective on the experience, capabilities and performance of potential CEO candidates. The Board encourages senior management, as well as other members of management who have future leadership potential within the Company, to attend and present at Board meetings so that each can be given appropriate exposure to the Board. The Board may contact and meet with any employee of the Company at any time, and are encouraged to make site visits, to meet with management, and to attend Company, industry and other events.

 

Committee Structure and Other Matters

 

Oversight is also provided through the extensive work of the Board’s committees – Audit Committee; Compensation and Governance Committee (“CGC”); Enterprise Risk Management Committee (“ERMC”); and Strategy and Innovation (“S&I”) Committee – in key areas such as financial reporting, internal controls, compliance, corporate governance, succession planning, compensation programs, strategic planning and risk management. The Audit Committee and the CGC consist entirely of independent, non-management directors.

 

In addition, at the end of each year, the Board and each of its committees review a schedule of agenda topics to be considered in the coming year. Each Board and committee member may raise subjects that are not on the agenda at any meeting and suggest items for inclusion in future agendas. The Company believes that the foregoing structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion, evaluation of decisions and direction from the Board of Directors.

 

 14

 

 

 
 

 

BOARD MEETINGS AND COMMITTEES

Board Meeting Attendance

The Board of Directors held five regular meetings and four special meetings during 2019. Each of the directors attended at least 75% of the total number of meetings of the Board of Directors and committees on which they served.

 

Annual Meeting Attendance

Five of the 14 then-incumbent Directors attended the Company’s 2019 annual shareholders’ meeting. The Company encourages all of its directors to attend its shareholders’ meetings but understands that situations may arise that prevent such attendance.

 

Board Committees

The Company’s Board of Directors has four standing permanent committees. These committees serve the same functions for the Company and the Bank. The current composition of each Company committee and the number of meetings held in 2019 are set forth in the table:

 

Board Committee Membership and 2019 Committee Meetings

 

Director Name Audit Compensation & Governance Enterprise Risk Management Strategy &
Innovation
Dennis J. Arczynski (1)      ✔ (2)
Jacqueline L. Bradley (1)      
H. Gilbert Culbreth, Jr. (1)      
Julie H. Daum (1)      
Christopher E. Fogal (1)(3)      
Maryann Goebel (1)    ✔ (2)  
Dennis S. Hudson, III (4)      
Robert J. Lipstein (1)   ✔ (2)    
Herbert A. Lurie (1)      
Alvaro J. Monserrat (1)  
Thomas E. Rossin (1)        ✔ (2)
TOTAL MEETINGS HELD IN 2019 9 11 6 7

(1) Independent Director

(2) Committee Chair

(3) Lead Independent Director

(4) Chairman of the Board

 

Each committee has a charter specifying such committee’s responsibilities and duties. Each committee charter, including the Audit Committee and Compensation and Governance Committee charters, are reviewed annually. These charters are available on the Company’s website at www.SeacoastBanking.com or upon written request.

 15

 

 
 

Key Committee Responsibilities

 

AUDIT COMMITTEE COMPENSATION AND GOVERNANCE COMMITTEE
Key Responsibilities Key Responsibilities

•      reviews Seacoast’s and its subsidiaries’ financial statements and internal accounting controls, and reviews reports of regulatory authorities and determines that all audits and examinations required by law are performed

•      appoints the independent auditors, reviews their audit plan, and reviews with the independent auditors the results of the audit and management’s response thereto

•       reviews the procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and changes to the Company’s Code of Conduct, and approves related party transactions

•      reviews the adequacy of the internal audit budget and personnel, the internal audit plan and schedule, and results of audits performed by the internal audit staff and those outsourced to a third party; oversees the audit function and appraises the effectiveness of internal and external audit efforts

•      determines the compensation of the Company’s and the Bank’s key executive officers

•      recommends director compensation for Board approval

•      administers the Company’s incentive compensation plans and other employee benefits plans

•      oversees the preparation of the “Compensation Discussion and Analysis” section of this proxy statement

•      identifies and recommends to the Board qualified individuals to serve as members of the Boards of Directors of the Company and/ or the Bank

•      oversees efforts to create a diverse workforce that fosters and supports an inclusive culture

•      takes a leadership role in shaping corporate governance policies, practices, and guidelines, and oversees the Board’s governance processes

•       proposes recommendations to the Board of Directors concerning management development and succession planning activities at the senior levels of management

Independence / Qualifications Independence / Qualifications

•      all committee members are independent under Nasdaq and SEC rules and each member is able to read and understand financial statements

•      at least one committee member is an “audit committee financial expert” as defined by Item 407 of Regulation S K; the Board has determined that Christopher E. Fogal and Robert J. Lipstein are such financial experts

•      the Audit Committee met one time in private session with our independent auditor, and one time in private session without members of management present, following meetings in 2019

•      all committee members are independent under Nasdaq and SEC rules

•      no member of the committee is a former or current officer or employee of the company or any of its subsidiaries

•      no member has any interlocking relationship with the Company requiring disclosure under the rules of the SEC

ENTERPRISE RISK MANAGEMENT COMMITTEE STRATEGY AND INNOVATION COMMITTEE
Key Responsibilities Key Responsibilities

•      monitors the risk framework to assist the Board in identifying, considering, and overseeing critical issues and opportunities

•      evaluates strategic opportunities from a risk perspective, highlights key risk considerations embedded in such strategic opportunities, and makes recommendations on courses of action to the Board based on such evaluation

•      provides oversight of the risk management monitoring and reporting functions to help ensure these functions are independent of business line or risk-taking processes

•      makes recommendations to the Board regarding the Company’s risk appetite, limits and policies and reviewing the strategic plan to help ensure it aligns with the Board-approved risk appetite

•      reviews key management, systems, processes and decisions, and assesses the integrity and adequacy of the risk management function to help build risk assessment data into critical business systems

•      recommends to the Board the capital policy consistent with the Company’s risk appetite and reviews capital adequacy and its allocation to each line of business

•      supports, sources and/or challenges M&A activities related to banks and non-bank entities as pertinent to the Company’s stated strategic objectives

•      oversees business model transformation activities including investments in technology and/or partners

•      reviews capital allocations and planning to ensure an acceptable return on capital while ensuring timely exits from businesses that do not provide an acceptable return or have limited growth prospects

•     ensures that the Company actively promotes and rewards a culture of innovation in a manner that benefits customers and shareholders

•      makes inquiries of management that appropriate strategic metrics and modeling capabilities are used in order to assess the strength of existing strategies and potential investments, aligned with the Company’s stated strategic objectives

•      ensures that management is effectively and consistently communicating with shareholders in a manner that is consistent with the Company’s broader strategic vision

 16

 

 

 
 

 

AUDIT COMMITTEE REPORT

 

The Audit Committee is currently comprised of five directors: Dennis J. Arczynski, Christopher E. Fogal, Maryann Goebel, Robert J. Lipstein (Chair) and Alvaro J. Monserrat.

 

The purpose of the Audit Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Seacoast Banking Corporation of Florida (the “Company”) in its general oversight of the Company’s accounting, auditing and financial reporting practices. Management is primarily responsible for the Company’s financial statements, systems of internal controls and compliance with applicable legal and regulatory requirements. The Company’s independent registered public accounting firm, Crowe LLP, for the year ended December 31, 2019 is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion (pursuant to Section 404 of the Sarbanes-Oxley Act of 2002) on the effectiveness of internal control over financial reporting.

 

The members of the Committee are not professional auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm, nor can the Committee certify that the Company’s registered public accounting firm is “independent” under applicable rules. The Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the independent registered public accounting firm, and the experience of the Committee’s members in business, financial and accounting matters. To carry out its responsibilities, the Committee held nine meetings in 2019.

 

In the performance of its oversight responsibilities, the Committee has reviewed and discussed with management and Crowe LLP the audited financial statements of the Company for the year ended December 31, 2019. Management represented to the Committee that all financial statements were prepared in accordance with accounting principles generally accepted in the United States and that these statements fairly present the financial condition and results of operations of the Company at the dates and for the periods described. The Committee has relied upon this representation without any independent verification, except for the work of Crowe LLP. The Committee also discussed these statements with Crowe LLP, both with and without management present, and has relied upon their reported opinion on these financial statements. The Committee’s review included discussion with Crowe LLP of the matters required to be discussed under Public Company Accounting Oversight Board standards.

 

With respect to the Company’s independent registered public accounting firm, the Committee, among other things, discussed with Crowe LLP matters relating to its independence and received from Crowe LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence.

 

On the basis of these reviews and discussions, and subject to the limitations of its role, the Committee recommended that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the Securities and Exchange Commission.

 

The Audit Committee:

 

Robert J. Lipstein, Chair

Dennis J. Arczynski

Christopher E. Fogal

Maryann Goebel

Alvaro J. Monserrat

February 27, 2020

 17

 

 

 
 

 

OWNERSHIP OF OUR COMMON STOCK

 

The tables below provide information regarding the beneficial ownership of our common stock as determined in accordance with SEC rules and regulations as of the Record Date by (i) each of the Company’s directors, (ii) each of the executive officers named in the Summary Compensation Table, (iii) all current directors and executive officers as a group, and (iv) each beneficial owner of more than 5%. As of the Record Date, 52,706,857 shares of common stock were outstanding. Unless otherwise indicated, and subject to community property laws where applicable, the Company believes that each of the shareholders named in the table below has sole voting and investment power with respect to the shares indicated as beneficially owned.

 

Director, Executive Officers and Certain Beneficial Stock Ownership

As of the Record Date, based on available information, all directors, director nominees and executive officers of Seacoast as a group (15 persons) beneficially owned approximately 1,559,616 outstanding shares of common stock, constituting 3.0% of the total number of shares of common stock outstanding at that date as set forth in the table below. In addition, as of the Record Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 39,790 outstanding shares, or 0.1% of the outstanding shares, of Seacoast common stock, including shares held as trustee or agent of various Seacoast employee benefit and stock purchase plans.

 

The following table also sets forth information regarding the number and percentage of shares of common stock held by all persons and entities, or principal shareholders, known by the Company to beneficially own 5% or more of the Company’s outstanding common stock, exclusive of directors and officers. The information regarding beneficial ownership of common stock by the entities identified below are included in reliance on reports filed by the entities with the SEC, except that the ownership percentage is based on the Company’s calculations.

 

Name of Beneficial Owner

Directors and Executive Officers

Amount and Nature of

Beneficial Ownership

Percentage of

Outstanding Shares

Dennis J. Arczynski 50,776 (1) *
Jacqueline L. Bradley 25,489 (2) *
H. Gilbert Culbreth, Jr. 79,071 (3) *
Julie H. Daum 57,424 (4) *
Christopher E. Fogal 43,559 (5) *
Maryann Goebel 25,521 (6) *
Dennis S. Hudson, III 770,268 (7)   1.5%
Robert J. Lipstein   3,112 (8) *
Herbert A. Lurie 38,511 (9) *
Alvaro J. Monserrat   13,448 (10) *
Thomas E. Rossin   22,395 (11) *
Charles K. Cross, Jr. 120,472 (12) *
David D. Houdeshell 113,503 (13) *
Juliette P. Kleffel   46,489 (14) *
Charles M. Shaffer 149,578 (15) *
All directors and executive officers as a group (15 persons) 1,559,616           3.0%

Name of Beneficial Owner

Certain Other Beneficial Owners

Amount and Nature of

Beneficial Ownership

Percentage of

Outstanding Shares

BlackRock, Inc.

55 East 52nd Street, New York, NY 10055

7,270,865 (16)

14.1%

T. Rowe Price Associates, Inc.
100 E.  Pratt  Street, Baltimore, MD 21202

4,556,598 (17)

8.8%

The Vanguard Group
100 Vanguard Blvd.,
Malvern, PA 19355

3,154,072 (18)

6.1%

Capital World Investors
333 South Hope Street, Los Angeles, CA 90071

3,031,901 (19)

5.8%

*Less than 1%

 

 18

 

 

 
 

 

(1)Includes 1,672 shares held in a limited liability company, as to which shares Mr. Arczynski has sole voting and investment power. Also includes 9,110 shares held jointly with his wife, as to which shares Mr. Arczynski may be deemed to share both voting and investment power. Also includes 30,433 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Arczynski has no voting or dispositive power. Also includes 5,561 shares that Mr. Arczynski has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(2)Includes 11,491 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Ms. Bradley has no voting or dispositive power. Also includes 6,998 shares that Ms. Bradley has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(3)Includes 10,000 shares held in an IRA, 26,000 shares held in a family limited liability company, and 8,200 shares held in a family sub-S corporation, as to which shares Mr. Culbreth has sole voting and investment power. Also includes 1,000 shares held jointly with Mr. Culbreth’s children and 10,328 shares held jointly with his wife, as to which shares Mr. Culbreth may be deemed to share both voting and investment power. Also includes 19,729 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Culbreth has no voting or dispositive power. Also includes 2,142 shares that Mr. Culbreth has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(4)Includes 21,867 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Ms. Daum has no voting or dispositive power. Also includes 8,138 shares that Ms. Daum has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(5)Includes 4,490 shares held jointly with Mr. Fogal’s wife and 4,688 shares held by Mr. Fogal’s wife, as to which shares Mr. Fogal may be deemed to share both voting and investment power. Also includes 14,882 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Fogal has no voting or dispositive power. Also includes 8,138 shares that Mr. Fogal has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(6)Includes 13,960 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Ms. Goebel has no voting or dispositive power. Also includes 5,561 shares that Ms. Goebel has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(7)Includes 224,356 shares held by Sherwood Partners Ltd, of which Mr. Hudson is the general partner. Mr. Hudson may be deemed to share voting and investment power with respect to such shares, but disclaims beneficial ownership, except to the extent of his 48.0% interest in Sherwood Partners. Also includes 18,104 shares held jointly with Mr. Hudson’s wife. Also includes 31,252 shares held in the Company’s Retirement Savings Plan, and 247,713 shares that Mr. Hudson has the right to acquire by exercising options that are exercisable within 60 days after the Record Date. Also includes 31,282 shares held by Mr. Hudson’s wife as to which shares Mr. Hudson may be deemed to share both voting and investment power. Includes 53,106 shares held by The Dennis S. Hudson, Jr. Revocable Trust dated October 2, 1996 and as amended on October 28, 2010 (the”Trust”), of which Mr. Hudson serves as Trustee, and may be deemed to have voting and investment power. Mr. Hudson and certain members of his family are among the beneficiaries of the trust, of which Mr. Hudson disclaims beneficial ownership, except to the extent of his 25% beneficial interest in the trust. Also includes 14,256 shares held for Dennis S. Hudson, Jr. in the Bank’s Directors’ Deferred Compensation Plan, 37,424 shares held in IRA for Dennis S. Hudson, Jr. Mr. Hudson is executor of Dennis S. Hudson, Jr.’s estate and disclaims beneficial ownership of such shares, except to the extent of his beneficial interest in the estate.

(8)Includes 800 shares held jointly with Mr. Lipstein’s wife.
(9)Includes 12,694 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Lurie has no voting or dispositive power and 5,817 shares that Mr. Lurie has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(10)Includes 6,875 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Monserrat has no voting or dispositive power and 3,573 shares that Mr. Monserrat has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(11)Includes 72 shares held jointly with Mr. Rossin’s wife. Also includes 14,256 shares held in the Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares has been deferred, and as to which shares Mr. Rossin has no voting or dispositive power.
(12)Includes 67,058 shares that Mr. Cross has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(13)Includes 72,324 shares that Mr. Houdeshell has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(14)Includes 31,101 shares that Ms. Kleffel has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(15)Includes 994 shares held in the Company’s Retirement Savings Plan and 3,689 shares held in the Company’s Employee Stock Purchase Plan. Also includes 95,282 shares that Mr. Shaffer has the right to acquire by exercising options that are exercisable within 60 days after the Record Date.
(16)According to a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on February 4, 2020 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2019, BlackRock, Inc. has sole voting power with respect to 7,152,002 shares of Seacoast common stock and sole dispositive power with respect to 7,270,865 shares of Seacoast common stock. The Schedule 13G/A provides that BlackRock is a parent holding company and that the shares of common stock listed on the Schedule 13G/A are owned by various subsidiaries of BlackRock. In addition, BlackRock reported that various persons have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that one such person, iShares Core S&P Small-Cap ETF, is known to have more than 5% of Seacoast common stock.
(17)According to a Schedule 13G/A filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”) and T. Rowe Price Funds on February 14, 2020 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2019, Price Associates has sole voting power with respect to 962,568 shares of Seacoast common stock and sole dispositive power with respect to 4,556,598 shares of Seacoast common stock. The Schedule 13G/A provides that Price Associates is an investment advisor and not more than 5% of Seacoast common stock is owned by any one client subject to the investment advice of Price Association. The schedule further provides that the shares of common stock listed on the Schedule 13G/A are owned by various subsidiaries of Price Associates. In addition, Price Associates reported that in respect to securities owned by any one of the T. Rowe Funds, only the custodian has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock.
(18)According to a Schedule 13G filed by The Vanguard Group on February 12, 2020 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2019, The Vanguard Group has sole voting power with respect to 59,851 shares of Seacoast common stock and shared aggregate dispositive power with respect to 3,154,072 shares of Seacoast common stock, of which 5,428 shares have shared dispositive voting power. The Schedule 13G provides that The Vanguard Group is an investment advisor and that the shares of common stock listed on the Schedule 13G are owned by various subsidiaries of The Vanguard Group, the parent holding company. In addition, The Vanguard Group reported that no one person is known to have more than 5% of Seacoast common stock.
(19)According to a Schedule 13G filed by Capital World Investors, a division of Capital Research and Management Company (“CRMC”), and Capital International Limited, collectively, on February 14, 2020 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2019, Capital World Investors has sole voting power with respect to 3,031,901 shares of Seacoast common stock and sole dispositive power with respect to 3,031,901 shares of Seacoast common stock. The Schedule 13G provides that Capital World Investors is an investment advisor and that the shares of common stock listed on the Schedule 13G is owned on behalf of one client subject to the investment advice of Capital World Investors. In addition, Capital World Investors reported that various persons have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that one such person, SMALLCAP World Fund, Inc., is known to have more than 5% of Seacoast common stock.

 

Executive Officers

Executive officers are appointed annually at the organizational meetings of the respective Boards of Directors of Seacoast and the Bank, to serve until the next annual meeting and until successors are chosen and qualified.

 

 19

 

 

 
 

 

 

Dennis S. Hudson, III

Chairman and CEO

 

Age: 64                 Education: MBA, Florida State University                Tenure: 43 years

 

SELECT PRIOR EXPERIENCE: 

●     Chairman of Seacoast since July 2005 and CEO since 1998 

●     Chairman and CEO of the Bank since 1992 

●     Director of Seacoast since 1984 

●     Over 40 years of banking experience with Seacoast 

OTHER AFFILIATIONS/CERTIFICATIONS: 

●     Chesapeake Utilities Corporation, member of board, audit and compensation committees 

●     PENN Capital Funds, a mutual fund group managed by PENN Capital Management, independent director 

●     Miami Branch of Federal Reserve Bank of Atlanta Board from 2005 to 2010 

   

 

Charles M. Shaffer

EVP, COO and CFO

 

Age: 46                 Education: MBA, University of Central Florida                  Tenure: 22 years

 

SELECT PRIOR EXPERIENCE:

●     EVP and Community Banking Executive from October 2013 to March 2017

●     SVP and Controller of Bank from 2005 to 2013

●     Diverse experience from multiple roles including strategy, corporate finance, traditional sales, and alternative sales platforms

OTHER AFFILIATIONS/CERTIFICATIONS:

●     CPA licensed in Florida

●     Chartered Global Management Accountant

●     Board Member, United Way of Martin County

●     Board Member, Florida Bankers Association, BancServ

●     Board Member, Armellini Express Lines

   

 

Juliette P. Kleffel

EVP, Community Banking
and Central Florida
Market President

 

Age: 49                 Education: The Stonier Graduate School of Banking                 Tenure: 4 years

 

SELECT PRIOR EXPERIENCE:

●     EVP and Small Business Banking Sales Leader at Seacoast from October 2014 to January 2017

●     EVP and Commercial Sales Leader for BankFIRST prior to acquisition by Seacoast in October 2014

●     Held various positions managing Government Lending/SBA, Treasury Sales, Marketing, as well as Commercial Lending with BankFIRST since November 2000

●      Over 20 years of retail and business banking experience in the Orlando market

OTHER AFFILIATIONS/CERTIFICATIONS:

●     Executive Director for the National Entrepreneur Center

●     Director for the West Orange County Chamber of Commerce

●     Vice President and Executive Board Member for The Gardens of DePugh Nursing Home

●     Board Member and Finance Committee member for the Central Florida YMCA

●     Executive Board Member and Treasurer of the Garden Theatre

●     Board Member of Edgewood Children’s Ranch

●     Certified Lender Business Banker

   

 

David D. Houdeshell

EVP and Chief
Credit Officer

 

Age: 59                 Education: MBA, The Stonier Graduate School of Banking                  Tenure: 10 years

 

SELECT PRIOR EXPERIENCE:

●     EVP and Chief Risk Officer of Seacoast and Bank from May 2015 to March 2019

●     EVP and Chief Credit Officer of Seacoast and Bank from June 2010 to May 2015

●     EVP and Credit Administrative Executive for The South Financial Group in Greenville, SC for 3 years

●     Chief Credit Officer of Bombardier Capital, a financial services entity of a global transportation manufacturer, for 4 years

●     Over 30 years of credit and risk management experience

●     Various credit risk positions with Bank of America and Barnett Bank

OTHER AFFILIATIONS/CERTIFICATIONS:

●     Member of the Risk Management Association Community Bank Council

●     Member of the DiCOM Software Advisory Board

●     Former member of audit & compliance committee of Martin Health System, Stuart, FL

   

 

Charles K. Cross, Jr.

EVP and South Florida
Market President

Age: 62                 Education: BSA, University of Florida                 Tenure: 8 years

 

SELECT PRIOR EXPERIENCE:

●     SVP, Commercial Market Executive for Palm Beach County from March 2012 to July 2013

●     Over 40 years of banking experience in Palm Beach and Broward County markets

●     Market leader for EverBank in Palm Beach County, FL from August 2010 to March 2012

OTHER AFFILIATIONS/CERTIFICATIONS:

●     Former Chairman, District Board of Trustees of Palm Beach State College

●     Past board member of Florida Atlantic University College of Business Dean’s Council, Economic Council of Palm Beach County, West Palm Beach Chamber of Commerce, Business Development Board of Palm Beach County and Black Business Investment Corporation

 

 20

 

 

 
 

 

EXECUTIVE COMPENSATION

 

Compensation Discussion & Analysis

 

Executive Summary

 

2019 Performance Considerations

 

Our strategic plan for 2019 continued to focus on shareholder value creation, and the CGC used average annual earnings per share (“EPS”) growth and average return on average tangible common equity (“ROATE”) as key indicators that management is on the right path to produce sustainable long-term value. EPS provides a direct link to value creation at the shareholder level, and ROATE provides a measure of risk-adjusted returns that illustrates the health of the Company. The CGC determined the amount of annual and long-term incentives to award to our named executive officers (“NEOs”) for 2019 using a qualitative assessment of management’s performance in 2018, taking into account both growth and return with consideration to our risk framework. The assessment process included scorecards that identified shared and individual goals for the year in the areas of operations, technology, innovation, risk, talent, and business transformation, with our average annual EPS growth and average annual ROATE serving as the primary considerations for long-term incentive awards granted in 2019. Grants made in 2019 were based on the scorecard assessment of performance in the prior year. The incentive awards issued based on 2019 qualitative performance considerations will be granted in 2020, and disclosed as part of the 2021 proxy filing.

 

Say on Pay Results

 

In 2019, our “Say on Pay” proposal received 99.7% support, an improvement from 97.2% in 2018; indicating plan design and governance are well aligned with our shareholders. While our historical results indicate strong support for Seacoast’s NEO compensation, the CGC continues to review our executive compensation structure to increase its effectiveness and further align with stockholder interests in light of changing industry dynamics.

 

Our Executive Compensation Design Priorities and Prohibitions

 

Design Priorities (what we do) Design Prohibitions (what we don’t do)

   Manage our executive compensation programs to have a strong pay-for-performance orientation.

 

   Link performance-based incentive awards to enterprise-wide and individual performance goals.

 

   Grant our NEOs equity-based awards based on Company and individual performance.

 

   Emphasize long-term stock-based awards in our executive compensation and total incentive strategies.

 

   Set meaningful performance goals that align management with shareholder interests.

 

   Require Tier 1 Capital compliance thresholds be met in order for any portion of the PSUs to vest.

 

  Ensure that incentives are sensitive to risk considerations.

 

  Provide minimal executive benefits and perquisites.

 

   Maintain executive stock ownership requirements, and require post-settlement holding periods or mandatory deferral of certain performance-based awards.

 

   Provide reasonable executive post-employment and change-in-control protections.

 

   Require “clawback” provisions for certain incentive-based compensation to ensure accountability.

 

   Engage with shareholders on their concerns or priorities for our director and executive compensation programs. 

û    No repricing of stock options without shareholder approval.

 

û    No incentives that encourage improper risk taking.

 

û    No excise tax gross-ups upon a change in control.

 

û    No single trigger vesting acceleration on unvested equity in connection with a change-in-control for awards granted since 2014.

 

û    No hedging, and limited pledging, of our common shares by our directors and executive officers.

 

 21

 

 

 
 

 

2019 NEO Pay

 

Cumulative base salaries for our NEOs were unchanged for 2019 other than adjustments made in recognition of Mr. Shaffer’s promotion to COO (23% salary increase) and Ms. Kleffel’s expanded role as the Central Florida Market President (8% salary increase).

In 2019, our NEOs received awards of Performance Share Units (“PSUs”) in quantities that vest based on the level of achievement of goals relating to average annual growth in EPS and average annual ROATE over a three-year period relative to the performance of a selected Peer Group. PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service.

In 2019, our NEOs received awards of time-based Restricted Stock Awards (“RSAs”) that vest over a three-year period.

The number of PSUs and RSAs granted in 2019 was determined by the CGC based upon the scorecard assessment of 2018 performance. Awards granted based upon 2019 scorecard performance will be granted in 2020. The CGC will use the grant date value of the PSUs or RSAs for purposes of calculating any potential severance benefits that are based upon prior year bonuses.

 

Summary of Compensation Decisions in 2019

 

The committee structures the compensation program for executive management with an emphasis on long-term performance-based compensation. For planning purposes, the CGC focuses on the sum of annual base salary and the values it considers and approves for equity awards, which are granted in the subsequent year based on annual scorecard performance. We refer to this planning value as Total Direct Compensation or “TDC”. The CGC considered this TDC in its decision process when determining the value of the total incentive award value granted in 2019. The following chart illustrates the relative emphasis of each pay element in relation to TDC, as disclosed in our 2019 Summary Compensation Table (“SCT”).

 

 

 

2019 NEO Mix of Total Direct Compensation

 

In general, the CGC closely aligns the compensation of our executives with the creation of both short-term profitability and long-term value for our shareholders by structuring a substantial portion of TDC as “at risk” incentive pay. The CGC relies on this structure to ensure that both short-term and long-term incentive awards are fully reflective of performance for the year in which cash bonuses are earned and new target award values are determined and that performance-based equity serves as our primary form of incentive compensation.

 

Base Salary

 

All of our named executive officers receive a base salary that reflects the CGC’s assessment of the NEO’s skills and value to Seacoast. It is the CGC’s philosophy to keep salaries within a competitive market range and increase base salaries in response to increases in the size, scope or complexity of an executive’s job, in connection with a promotion or other forms of recognition that appropriately reflect value considerations, or to maintain the desired level of internal relative value. In 2019, Mr. Shaffer was promoted as Chief Operating Officer (“COO”) with additional responsibilities incorporated into his duties in addition to those as CFO of the Company. Ms. Kleffel also expanded the scope of her role in the Community Banking line of business with added responsibilities in 2019. The 2019 annualized base salary actions for our named executive officers are summarized in the following table. No other changes to base salary were made for the other NEOs.

 

1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

 

 22

 

 

 
 

 

2019 Annualized Base Salary Actions

 

Named Executive Officer 2018 2019 % Change
Dennis S. Hudson, III $600,000 $600,000
Charles M. Shaffer $365,000 $450,000 23%
Juliette P. Kleffel $300,000 $325,000 8%
David D. Houdeshell $300,000 $300,000
Charles K. Cross, Jr. $330,000 $330,000

 

Equity Awards

 

Seacoast’s equity strategy has evolved in order to increase the alignment of equity recipients with shareholder interests, revitalize our retention strategies, and elevate our visibility and appeal as an employer of choice for highly skilled talent. The following tables summarize the evolution and emphasis of our equity strategies since 2016.

 

Evolution of Seacoast’s Performance-based Equity Strategies

 

Grant Cycle Type of
Equity
Performance Period / Payout Range /
Option Vesting Period
Performance Objective(s)

2016

(Feb.)

PSUs

●   4-year Performance Period with catch-up

●   Payout as % of Target (0-175%)

●    Cumulative Adjusted Earnings

●    Adjusted Return on Average Tangible Common Equity

●    Tier 1 Capital Compliance

Options ●   4-year monthly vesting, starting when stock price closes above exercise price of 120%

●    Stock Price Appreciation

●    Tier 1 Capital Compliance

2017

(Apr.)

PSUs

●   3-year Performance Period

●   Payout as a % of Target (0-200%)

●    Adjusted EPS

●    Adjusted Return on Average Tangible Common Equity

●    Tier 1 Capital Compliance

Options

●   3-year ratable vesting

●   Exercise price set at 120% of grant date fair market value of the underlying shares

 

●    Stock Price Appreciation above 120% of exercise price

2018

(Apr.)

PSUs

●   3-year Performance Period

●   Payout as a % of Target (0-200%)

●    Adjusted EPS

●    Adjusted Return on Average Tangible Common Equity

●    Tier 1 Capital Compliance

Options

●   3-year ratable vesting

●   Exercise price set at 120% of grant date fair market value of the underlying shares

●    Stock Price Appreciation above 120% of exercise price

2019

(Dec.)

PSUs

●   75% of 2019 LTI Award performance-based

●   3-year Performance Period (2019-2021), with additional service required through the end of 2022

●   Payout as a % of Target (0-225%)

●    Relative Average Annual EPS Growth (50%)

●    Relative Average Annual ROATE (50%)

●    Tier 1 Capital Compliance

●    50% post-vesting holding period requirement

 

2019 Performance Stock Unit (“PSU”) Awards

 

2019 PSUs represent stock-settled incentive awards where payout can vary from 0% to 225% of the target number of shares granted. One-half of the PSUs will be earned based on Seacoast’s three-year (2019-2021) average annual growth in EPS (“EPS PSUs”) relative to the Peer Group. The remaining one-half of the PSUs will be earned based on Seacoast’s three-year (2019-2021) average annual return on average tangible common equity (“ROATE PSUs”) relative to the Peer Group. PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service. The CGC selected EPS and ROATE given their importance in our strategic plan and significant influence on our stock price performance over sustained periods of time. In each case, the number of PSUs actually earned will be determined by our performance as compared to the median Peer Group performance as approved by the CGC at the time of grant, subject to an absolute performance payout cap. PSU payouts will be capped at 100% of the target number of shares granted in the event that certain absolute Company performance hurdles are not met, irrespective of performance relative to the Peer Group. The PSUs also include a risk-based condition (meet or exceed minimum requirements for Tier 1 Regulatory Capital) that must be met in order for the awards to vest.

 

 23

 

 

 
 

 

Time-Based Restricted Stock Awards (“RSA”)

 

Our pay-for-performance stock incentive strategy is balanced with the use of time-based RSAs to enhance holding power, retention and recruitment. The CGC granted RSAs to the NEOs as part of the LTIP. The RSAs granted in 2019 were issued in relation to 2018 performance, and vest ratably over a three-year period.

 

Other Considerations Involving 2019 Equity Awards

 

Our NEOs are also subject to stock ownership requirements and holding periods in connection with stock-settled incentive awards. In addition, we introduced a mandatory deferral feature on PSUs so that settlement of 50% of any shares earned will be delayed an additional 12 months starting with the 2017 grant cycle.

 

As noted above, in 2019, the CGC redesigned the compensation structure to place greater emphasis on performance metrics in order to better align the award structure relative to peers. Based on the new long-term incentive plan award structure, no stock options were granted in 2019.

 

Overview of Executive Compensation

 

Role of the CGC

 

The CGC is responsible for establishing our compensation philosophy and for overseeing our executive compensation policies and programs generally. As part of this responsibility, the CGC:

 

regularly interacts with our executives in order to make informed decisions on performance, potential, developmental needs and their value to Seacoast;

approves our executive compensation programs, including construction of our peer group, issuance of equity awards, and certification of results;

evaluates the performance of the CEO and determines the CEO’s compensation;

reviews the performance of other members of executive management and approves their compensation based on recommendations made by the CEO; and

assesses our incentive strategies from a risk perspective, ensuring that earnings opportunities strike the right balance between risk and reward and that our executives are not motivated to take excessive risks.

 

Role and Independence of the Compensation Consultant

 

The CGC is comprised solely of independent directors and met eleven times in 2019. The Committee engaged Alvarez and Marsal, LLC (“A&M”) as its independent compensation consultant to advise the CGC in 2019. A&M periodically attended CGC meetings, including executive sessions, and provided information and advice independent of management and, at the direction of the CGC Chairperson, assisted management with various activities that support Seacoast’s executive compensation program. The CGC discussed these considerations pursuant to SEC and NASDAQ rules and concluded that the engagement of A&M, and the services it provided did not raise any conflict of interest.

 

Benchmarking and Peer Group

 

The CGC relies on market pay data and related research to inform its decision on the construction and expected outcomes of our director and executive compensation programs. In considering comparator group construction, the CGC recognizes that Seacoast competes for executive talent against a wide variety of financial services organizations and companies in other industries that rely on or want to acquire the skill sets that our executives offer. As a result, the CGC relies substantially on information developed from a size-appropriate, high-performing core bank industry compensation comparator group in its decision process. It also considers, to a lesser extent, the pay strategies employed by large, most admired or innovative financial services companies, and high-performing customer service and technology companies. In terms of assessing the effect of the CGC’s decisions on how we position pay vis-à-vis market, we rely exclusively on pay and performance data developed using our core bank industry compensation comparator group or, as needed, from the McLagan Regional Bank Survey. The CGC does not identify a specific target level or percentile of base salary, incentive cash, or stock-based awards for our NEOs. Instead, pay outcomes, which include the target value of stock awards to be earned for future performance, initially are determined by internal performance and talent considerations. The CGC then compares contemplated NEO pay actions against market pay levels for reasonableness with the market assessments serving as key points of reference and validation in the CGC’s process.

 

 24

 

 

 
 

 

In 2019, the CGC evaluated and selected a new peer group for determining relative performance (the “Peer Group”). To better align a relevant peer group mix, the Peer Group was selected from comparable banks, primarily southeast companies, with market caps between $1-$3 billion and total assets above $5 billion. Other selection criteria that the CGC considered included type of ownership, focused solely on publicly traded company status, geography and size considerations, as defined by market cap and assets. This change reflected the CGC’s desire to incorporate an important relative performance dimension that is critical to our efforts to continue to grow the value of Seacoast. The CGC sees this approach as appropriate given its expectations for performance and growth.

 

The CGC reviews the Peer Group annually to ensure continued appropriateness, and makes changes when it believes warranted. Our 2019 Peer Group was comprised of:

 

2019 PEER GROUP
Ameris Bancorp (ABCB) FB Financial Corp.(FBK) ServisFirst Bankshares (SFBS)
Atlantic Union Bankshares (AUB) First BanCorp (FBNC) Simmons First National (SFNC)
BancFirst Corp. (BANF) First Busey Corp (BUSE) South State Corp. (SSB)
BancorpSouth Bank (BXS) Heritage Financial (HFWA) Tompkins Financial (TMP)
Brookline Bancorp (BRKL) Pacific Premier Bancorp (PPBI) TowneBank (TOWN)
CenterState Bank Corp. (CSFL) Renasant Corp. (RNST) Trustmark Corporation (TRMK)
Eagle Bancorp (EGBN) S&T Bancorp, Inc. (STBA) United Community (UCBI)
Enterprise Financial (EFSC) Sandy Spring Bancorp (SASR) WesBanco Inc. (WSBC)

  

 25

 

 

 
 

 

Executive Compensation Framework Highlights

 

Structure

Reasoning

COMPENSATION COMPARATOR GROUP:

 

A comparator group of banks of similar size, business model and financial performance.

 

 

 

Our business model requires us to compete with these groups for executive talent in order to achieve our business objectives related to growth, innovation and profitability. 

COMPENSATION PHILOSOPHY:

 

•    No specific target level or percentile of pay relative to comparable positions

•    Pay decisions reflect the performance of the Company and each executive in relation to prior year pay and performance, planning considerations, and relationship to market pay levels and practices of peer group

•    Actual pay relative to the market data will vary based on performance in terms of the calibration of total incentive awards and amounts ultimately earned from our LTIP

 

 

•    Improve pay for performance linkage

•    Align pay with overall value of each individual to Seacoast

•    Ensure reasonableness of pay relative to industry peers and market data

•    Ensure a significant portion of pay is “at-risk”, consistent with philosophy and comparator group practices

•    To understand potential payments assuming various Company performance outcomes and understand how potential performance extremes are reflected in pay; which is a component of our compensation risk assessment

EQUITY:

 

•    Mix of time-based and performance-based structure with a long-term emphasis weighted more heavily toward PSUs (75%)

•    Meaningful stock-based award opportunities “right-sized” for company and individual performance considerations and needs

•    A substantial portion of TDC for our named executive officers delivered as performance-based pay

•    Annual award cycles

•    3-year PSU performance period aligning program design with typical industry practices. A 50% mandatory 12-month deferral requirement on the settlement of any shares earned ensures sensitivity to risk considerations and additional holding power

•    Risk considerations serve as an additional vesting requirement on PSUs

 

 

•    PSUs allow for upside in underlying shares, providing direct linkage between potential award payouts and management’s success at driving earnings growth and improving returns without inappropriate risk taking

•    RSAs provide a key retentive component to our overall compensation package whereby enhancing retention of the management team

•    Provide more compensation contingent upon achievement of performance goals or our stock’s performance

•    Aligns more closely with the shareholder interests

•    Continuously recalibrate performance expectations and promote consistent improvement

•    Enhance long-term performance accountability

•    Augment alignment with shareholder interests

•    Provide executives with an economic incentive to deliver sustainable results within a risk appropriate framework

PERFORMANCE SCORECARDS:

 

•    Performance scorecards serve as the basis for time-based RSAs; and the target value of PSUs granted in the subsequent year

 

 

 

•    Establish clear expectations for individual goals as well as link with enterprise-wide growth, return and risk management objectives

•    To understand important context that may impact the evaluation of each executive such as; experience, skills and scope of responsibilities, individual performance and succession planning

  

 26

 

 

 
 

 

2019 EXECUTIVE COMPENSATION ACTIONS

 

The CGC and our CEO rely on qualitative assessments of the performance of our NEOs and other members of senior management team given our accelerated growth, the rapid evolution of business, and the changing demands on our executives. The assessment process relies on scorecards that are approved at the start of each year, establishing performance guidelines against which results are compared at the end of the year. Performance ratings are then developed for each NEO, which are used to inform the CGC’s decision regarding pay actions. The CGC believes that qualitative assessments of NEO performance for the purpose of compensation, development and advancement continue to serve the best interests of our shareholders.

 

Our CEO works closely with the CGC in establishing executive compensation and overall bonus and incentive payments each year. The CEO evaluates the performance of each NEO and other senior executives, and, based on these performance evaluations, market compensation surveys, and other data, he will then make qualitative assessments and recommendations to the CGC. The CEO also presents incentive compensation payment recommendations for the Committee’s consideration. The CGC evaluates and makes a qualitative assessment of the CEO’s performance and determines his compensation without the CEO present.

 

Performance and time-based equity granted in 2019 were issued in relation to 2018 performance scorecard evaluations. Equity awards relating to 2019 performance scorecard evaluations will be granted in 2020.

 

2019 Pay Outcomes

 

  Dennis S. Hudson, III
Chairman / CEO
Charles M. Shaffer
EVP / COO / CFO
Juliette P. Kleffel
EVP / Community Banking and Central Florida Market President
David D. Houdeshell
EVP / CCO
Charles K. Cross, Jr.
EVP / South Florida Market President
Base Salary $600,000 $450,000 $325,000 $300,000 $330,000
RSA* $175,000 $100,000 $68,750 $43,750 $62,500
PSU* $525,000 $300,000 $206,250 $131,250 $187,500

 

*Grant date value

 

Key Influences in Compensation Decisions

 

Performance Metrics

 

The components of our executive compensation program demonstrate alignment with long-term shareholder value creation. The CGC considers performance metrics for both the CEO and each NEO, collectively. In 2019, the CGC evaluated performance metrics and made the following LTIP element changes: 1) the use of relative rather than absolute measures for performance metrics, 2) remove “premium” options, and 3) overall LTIP mix to 25% time-based RSAs and 75% performance-based PSUs split evenly between EPS and ROATE. One-half of the performance-based stock units (the “EPS Growth Units”) shall be eligible to vest based on the Company’s Average Annual EPS Growth for the three-year performance period (2019-2021), relative to the average ratio of the Peer Group, and one-half of the performance-based stock units (the “ROATE Units”) shall be eligible to vest based on the Company’s Average Annual ROATE for the same performance period, relative to the average ratio of the Peer Group. PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service.

 

In 2019, senior executives were assessed on the following performance:

 

 

Component What it Measures Why it is Used

Average Annual EPS Growth

Earnings per share (EPS) is the portion of the Company’s profit allocated to each share of common stock. A broadly used indicator of profitability, useful for tracking performance over time or in comparison to benchmarks.

Average Annual ROATE

Net income as a percentage of average shareholders’ equity, excluding intangible assets. Adjustments are made to net income to facilitate analysis of performance trends.

A broadly used indicator of effective utilization of capital, useful for tracking performance over time or in comparison to benchmarks.

 

 27

 

 

 
 

 

Individual Contributions

 

The CGC also considers roles and responsibilities of the CEO and each NEO and links most of the pay for senior executives to long-term business strategies and key priorities. Considerations for 2019 awards included the following items.

 

Dennis S. Hudson, III, Chairman of the Board and Chief Executive Officer

 Strengthening of the executive team and other improvements in key operating areas
 Strong credit quality and advances in enterprise risk management framework
 Significant upgrades and oversight of our risk management capabilities across the Company
 Attainment of growth and strategic initiatives measured by growth, accretive acquisitions, increased percentages of new accounts and loans originated through alternative channels, and a lower fixed cost structure

 Implementation of plan to improve operating leverage and customer experience via channel optimization
 Maintain strong associate engagement and enterprise-wide alignment with the business strategy

Charles M. Shaffer, Executive Vice President, Chief Operating Officer and Chief Financial Officer

 Ongoing leadership and contributions to our business transformation and strategy efforts
 Expansion to include oversight of line of business operating units

 Corporate development including the successful acquisition and integration of First Green and First Bank of the Palm Beaches
 Continued talent upgrading across the enterprise

 Improvements in external communications and deeper engagement with Shareholders

Juliette P. Kleffel, Executive Vice President, Community Banking and Central Florida Market President

 Contributions to enterprise-wide business transformation efforts
 Substantial year-over-year productivity gains in organizational units
 Executive role model and champion of the customer experience
 Expansion of responsibilities across Central Florida including Customer Service Center

David D. Houdeshell, Executive Vice President, Chief Credit Officer

 Contributions to enterprise-wide business transformation efforts
 Effective partnering with other functions in the development and launch of new products and services

 Continues to maintain credit quality metrics in a rapid growth environment
 Effective deployment of digital origination platform for commercial banking

  Successful implementation of Current Expected Credit Losses (“CECL”) modeling, analysis and processes

Charles K. Cross, Executive Vice President, South Florida Market President

 Collaboration and leadership across the organization leading to substantial improvements in end-to-end business unit performance
 Improvements in sales function

 Build-out of emerging markets in South Florida
 Effective deployment of digital origination platform for commercial banking

 

Other Elements of the 2019 Compensation Program for Executive Officers

 

Change in Control Severance Benefits

 

We provide change in control severance benefits to the named executive officers to encourage them to consider the best interests of shareholders by stabilizing any concerns about their own personal financial well-being in the face of a potential change in control of the Company. These agreements are described under “Employment and Change in Control Agreements”, and detailed information is provided under “2019 Other Potential Post-Employment Payments.”

  

 28

 

 

 
 

 

Retirement and Employee Welfare Benefits

 

We sponsor a retirement savings plan for employees of the Company and its affiliates (the “Retirement Savings Plan”) and a nonqualified deferred compensation plan for certain executive officers (the “Executive Deferred Compensation Plan”). We offer these plans, and make contributions to them, to provide employees with tax-advantaged savings vehicles and to encourage them to save money for their retirement. The Executive Deferred Compensation Plan is described under “Executive Compensation–Nonqualified Deferred Compensation.”

 

In addition to our retirement programs, we provide employees with welfare benefits, including hospitalization, major medical, disability and group life insurance plans and paid vacation. We also maintain a Section 125 cafeteria plan that allows our employees to set aside pre-tax dollars to pay for certain benefits. All of the full-time employees of the Company and the Bank, including the named executive officers, are eligible to participate in the Retirement Savings Plan and our welfare plans, subject to the terms of those plans.

 

The Bank provides supplemental disability insurance to certain members of executive management, including the named executive officers, in excess of the maximum benefit of $15,000 per month provided under the group plan for all employees. The supplemental insurance provides a benefit up to 70% of the executive’s monthly pre-disability income based on the executive’s base salary and annual incentive compensation not to exceed $17,500. Coverage can be converted and maintained by the individual participant after employment ends. The benefit may be reduced by income from other sources, and a partial benefit is paid if a disabled participant is able to work on a part-time basis. In 2019, the Company paid an aggregate of $5,100 for supplemental disability insurance for the named executive officers.

 

The retirement and employee welfare benefits paid by the Company for the named executive officers that are required to be disclosed in this proxy statement are included in the “Summary Compensation Table,” the “Components of All Other Compensation,” and the “Nonqualified Deferred Compensation Table,” and are described in the footnotes thereto.

 

Executive Perquisites

 

We do not consider perquisites to be a significant element of our compensation program. However, we believe they are important and effective for attracting and retaining certain executive talent. We do not provide tax reimbursements, or “gross-ups,” on perquisites. For additional details regarding the executive perquisites, see the “Summary Compensation Table” and the “Components of All Other Compensation.”

 

Risk Analysis of Incentive Compensation Plans

 

The CGC reviews the sensitivity of our performance and incentives to risk considerations for our executives throughout the year. It also periodically reviews our cash and equity incentive strategies for other key contributors. In 2019, the CGC with the assistance of our Chief Human Resources Officer completed a review of our incentive strategies for our incentive eligible non-executive employees. The CGC concluded that our incentive compensation programs are designed with the appropriate balance of risk and reward in relation to our overall business strategy will not motivate people to take excessive or imprudent risks, and do not create risks that are reasonably likely to have a material adverse effect on the registrant.

 

Clawback Policy

 

We have adopted a Compensation Recoupment Policy to recover, to the extent practicable and appropriate, incentive compensation from any executive officer when:

 

the incentive compensation payment or award (or the vesting of such award) was based upon the achievement of financial results that were subsequently the subject of an accounting restatement, regardless of whether the executive engaged in misconduct or otherwise contributed to the requirement for the restatement; and

a lower payment or award would have been made to the executive officer based upon the restated financial results.

 

The policy is available on our website at www.SeacoastBanking.com. The policy anticipates the final rules implementing the clawback provision of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, but will be amended, if necessary, when final regulations are issued by the SEC.

 

 29

 

 

 
 

 

Hedging and Pledging Policy

 

The Company has adopted a hedging and pledging policy. The policy prohibits our employees, including our executive officers and directors, from purchasing any financial instrument or entering into any transaction that is designed to hedge or offset any decrease in the market value of our stock, including, without limitation, exchange funds, prepaid variable forward contracts, equity swaps, puts, calls, collars, forwards or short sales.

 

In addition, directors and executive officers are required to obtain advance approval of any pledging of Company shares as collateral for loans, including holding Company shares in margin accounts. The policy also limits pledging to reasonable purposes (as defined in the policy) and limits the value of the securities pledged in connection with a loan or other indebtedness to $250,000.

 

Stock Ownership Guidelines

 

The Board has established stock ownership guidelines for its officers and directors, as described below:

       

Individual/Group 

Stock Ownership Target 

Holding Requirement 

    Before Ownership
Target Met
After Ownership
Target Met

Chief Executive Officer

5 times annual base salary

75% of net shares until target number of shares is met

 

50% of net shares held for one year after vesting / exercise

 

Other Senior Executive Officers

3 times annual base salary

Non-Employee Directors

3 times annual retainer

 

Our executive compensation program is designed to allow a participant to earn targeted ownership over a reasonable period, usually within five years, provided individual and Company targets are achieved and provided the participant fully participates in the program. “Net Shares” means shares of stock in excess of those sold or withheld to satisfy the minimum tax liability upon vesting or conversion. All of our named executive officers and non-employee directors have met or are on track to meet their stock ownership target.

 

Impact of Deduction Limit

 

Code Section 162(m) generally establishes, with certain exceptions, a $1 million deduction limit for all publicly held companies on compensation paid to an executive officer in any year. Prior to enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), this limitation did not generally apply to compensation paid to the Chief Financial Officer or to compensation paid based on achievement of pre-established performance goals if certain requirements were met. The exemption from Section 162(m)’s deduction limit for CFO pay and performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to all of our NEOs in excess of $1 million in 2018 and future years will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. The CGC reserves the right to pay executives’ compensation that is not deductible under Section 162(m).

  

 30

 

 

 
 

 

Strategies to ensure that Incentive Compensation is Sensitive to Risk Considerations

 

Seacoast implemented a number of changes to our incentive strategies, starting with the 2016 equity award cycle. These strategies have been updated in response to shareholder feedback and governance considerations. The CGC and our Chief Risk Officer share the view that our incentive strategies strike the right balance between risk and reward, motivating and retaining our executives in ways that align with shareholder interests but do not motivate inappropriate or excessive risk taking. The evolution of our incentive strategies reflect our commitment to listen to our shareholders and continuously refine our programs to align with our governance and risk management efforts given the growth of Seacoast and changes within the industry and what is deemed as best practice.

 

Strategy

Compensation Design

Compensation is tied to equity and Company performance

 

•    Time-based RSAs vesting period is three years

•    Performance period for PSU awards is three years (2019-2021)

Seacoast performance at levels that equal or exceed the industry

•    PSU metrics based on three-year compound annualized growth in EPS and average return on tangible common equity, which our shareholders views as key indicators of our performance

Governance Considerations

 

•    PSU performance period allows for direct and relevant pay and performance comparisons with industry competitors and alternative investments that share our risk profile

•    PSU program include two types of performance goals; PSU will be earned for average annual growth in EPS, and PSU will be earned for average annual ROATE

•    PSU payouts are capped in the event that certain absolute Company performance in EPS and ROATE are not met

Risk Considerations

 

•    PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service. In addition, we implemented a mandatory deferral feature on new PSU awards so that settlement of 50% of any shares earned will be delayed for an additional 12 months

•    Maintained the 12-month stock holding requirement on 50% of the net shares received upon the exercise of options

•    Maintained service and risk-based vesting requirements on all new performance-contingent and performance-based equity awards

•    Maintained “clawback” provisions for certain incentive-based compensation to ensure accountability

 

COMPENSATION AND GOVERNANCE COMMITTEE REPORT

 

The Compensation and Governance Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation and Governance Committee recommended to the board of directors, and the board of directors approved, that the Compensation Discussion and Analysis be included in this proxy statement.

 

This report shall not be deemed to be “soliciting material” or to be “filed” with the Securities Exchange Commission, nor shall this report be incorporated by reference by any general statement incorporating by reference this 2019 Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such Acts.

  

  Compensation and Governance Committee:
   
  H. Gilbert Culbreth, Jr.
  Julie H. Daum
  Maryann Goebel, Chair
  Alvaro J. Monserrat

 

 31

 

 

 

 

EXECUTIVE COMPENSATION TABLES

 

2019 Summary Compensation Table

 

The table below sets forth the elements that comprise total compensation for the named executive officers of the Company for the periods indicated.

 

Name and Principal
Position
Year Salary
($)(1)
Bonus
($)
Stock
Awards
($)(2)
Option
Awards
($)(2)
Non-Equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)
(3)
Total
($)
                 
Dennis S. Hudson, III 2019 600,000 -- 699,962 -- -- 33,370 1,333,332
Chairman & CEO 2018 600,000 -- 568,732 306,246 -- 33,910 1,508,888
of Seacoast and Bank 2017 587,500 -- 532,954 359,677 -- 32,685 1,512,816
                 
                 
Charles M. Shaffer 2019 421,667 -- 399,977 -- -- 23,085 844,729
EVP, COO & CFO 2018 331,250 -- 474,938 104,994 -- 22,675 933,857
of Seacoast and Bank 2017 315,000 -- 453,955 131,588 -- 20,107 920,650
                 
                 
Juliette P. Kleffel 2019 316,667 -- 274,946 -- -- 19,708 611,321
EVP, Community Banking 2018 285,000 -- 325,954 69,998 -- 19,075 700,027
& Central Florida Market 2017 259,250 -- 255,335 83,340 -- 16,195 614,120
President of Bank                
                 
                 
David D. Houdeshell 2019 300,000 -- 174,983 -- -- 11,866 486,849
EVP & Chief Credit Officer 2018 285,000 -- 297,943 69,998 -- 11,760 664,701
of Seacoast and Bank 2017 276,250 -- 253,709 76,757 -- 11,070 617,786
                 
                 
Charles K. Cross, Jr. 2019 330,000 -- 249,971 -- -- 23,307 603,278
EVP, South Florida 2018 307,500 -- 378,990 90,995 -- 20,960 798,445
Market President of Bank 2017 300,000 -- 378,974 114,042 -- 22,064 815,080

 

(1)Amount of salary actually received in any year may differ from the annual base salary amount due to the timing of changes in base salary, which typically occur in April or following a mid-year promotion. A portion of executive’s base salary included in this number may have been deferred into the Company’s Executive Deferred Compensation Plan (“EDCP”), the amounts of which are disclosed in the Nonqualified Deferred Compensation Table for the applicable year. Executive officers who are also directors do not receive any additional compensation for services provided as a director.

(2)Represents the aggregate grant date fair value as of the respective grant date for each award calculated in accordance with FASB ASC Topic 718. The assumptions made in valuing stock awards reported in this column are discussed in Note J to the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019. Generally, the aggregate grant date fair value is the amount that the company expects to expense for accounting purposes and does not correspond to the actual value that the named executives will realize from the award. For additional information regarding such grants, see “Compensation Discussion and Analysis –Elements of the 2019 Compensation Program for Executive Officers – Equity Awards.” See also “2019 Grants of Plan-Based Awards”.

 

Each of our executive officers received PSUs. They also each received RSAs. With respect to the PSU awards, the grant date fair value included in the table assumes that target performance is achieved. The maximum value for each executive as of the grant date, assuming the highest level of performance will be achieved, is:

 

Name Grant Date Value
Assuming Target
Performance
Grant Date Value
Assuming Maximum
Performance
Dennis S. Hudson, III $ 524,979 $ 1,181,203
Charles M. Shaffer 299,983 674,962
Juliette P. Kleffel 206,225 464,006
David D. Houdeshell 131,237 295,283
Charles K. Cross, Jr. 187,486 421,844

 

(3) Additional information regarding other compensation is provided in “2019 Components of All Other Compensation”.

 32

 

 

 

 

2019 Components Of All Other Compensation

 

Name Company Paid
Contributions
to Retirement
Savings Plan
Company Paid
Contributions
to EDCP
Company Paid
Contributions
to Supplemental
LTD Insurance
Car Allowance Other
Perquisites
Total
Dennis S. Hudson, III $10,950 $12,800 $1,020 $9,000 -- $33,770
Charles M. Shaffer $9,665 $3,400 $1,020 $9,000 -- $23,085
Juliette P. Kleffel $9,688 -- $1,020 $9,000 -- $19,708
David D. Houdeshell $10,846 -- $1,020 -- -- $11,866
Charles K. Cross, Jr. $11,121 -- $1,020 $9,000 $2,166 (1) $23,307

 

(1) Includes $2,166 for personal use of club membership.

 

2019 Grants Of Plan-Based Awards

 

The following table sets forth certain information concerning plan-based awards granted during 2019 to the named executive officers.

 

Name Grant
Date

 

 

 Estimated Future Payouts Under
Equity Incentive Plan Awards

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
($/Sh)
Grant Date Fair
Value of Stock
and Option
Awards (1)
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Dennis S.
Hudson, III
12/30/2019 4,293 17,173 38,649 17,173     524,979
  12/30/2019       5,724     174,983
Charles M.
Shaffer
12/30/2019 2,453 9,813 22,080 9,813     299,983
  12/30/2019       3,271     99,994
Juliette P.
Kleffel
12/30/2019 1,687 6,746 15,178 6,746     206,225
  12/30/2019       2,248     68,721
David D.
Houdeshell
12/30/2019 1,073 4,293 9,660 4,293     131,237
  12/30/2019       1,431     43,746
Charles K.
Cross, Jr.
12/30/2019 1,533 6,133 13,800 6,133     187,486
  12/30/2019       2,044     62,485

 

(1)Represents the aggregate grant date fair value as of the respective grant date for each award, calculated in accordance with FASB ASC Topic 718. The assumptions made in valuing stock awards reported in this column are discussed in Note J to the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019.

 

 33

 

 

 

 

Employment and Change in Control Agreements

 

The Company and the Bank currently maintain employment and change in control agreements with certain of the Company’s executive officers, the terms of which are described in more detail below.

 

Employment Agreement with CEO Hudson

 

On June 27, 2017, the Company and the Bank entered into an amendment to an employment agreement between Dennis S. Hudson, III and Seacoast and the Bank dated December 18, 2014. The employment agreement dated December 18, 2014 replaced the previous employment agreement between Mr. Hudson and Seacoast and the Bank dated January 18, 1994, as amended December 31, 2008, and the change of control agreement between these parties dated December 24, 2003.

 

The amended agreement extended Mr. Hudson’s employment under the agreement terms for a term of three years. Under the agreement, Mr. Hudson receives a base salary, medical, long-term disability and life insurance in accordance with the Bank’s insurance plans for senior management, as well as a car allowance and any other perquisites that are approved by the Board. Mr. Hudson may also receive other compensation including bonuses, and he will be entitled to participate in all current and future employee benefit plans and arrangements in which senior management of the Bank may participate. In addition, the agreement contains certain non-competition, non-disclosure and non-solicitation covenants.

 

Under the agreement, if Mr. Hudson is terminated for “cause”, or resigns without “good reason,” as defined in the agreement, he will receive payment of his base salary and unused vacation through the date of termination, and any unreimbursed expenses (collectively, the “Accumulated Obligations”). The employment agreement also contains provisions for termination upon Mr. Hudson’s death or permanent disability.

 

If Mr. Hudson resigns for “good reason” or is terminated “without cause” prior to a change in control, he will receive: 1) the Accumulated Obligations; and 2) upon execution of a release of all claims against the Company, severance of: a) two times the sum of his base salary in effect on the date of separation, and the highest bonus earned by Mr. Hudson for the previous three full fiscal years (“Cash Bonus”) payable over 24 months, and b) continuing group medical, dental, vision and prescription drug plan benefits (“Continuing Benefits”) for two years. If Mr. Hudson resigns for “good reason” or is terminated “without cause”, within twelve months following a change in control (as defined in the agreement), he will receive: 1) the Accumulated Obligations; and 2) upon execution of a release of all claims against the Company, severance of: a) three times the sum of his base salary in effect on the date of separation, and the Cash Bonus payable in a lump sum, and b) Continuing Benefits for 36 months. In response to the unintended negative consequence created by granting equity awards in lieu of cash bonuses for 2017 and 2018 performance, the CGC determined that the Cash Bonus portion of Mr. Hudson’s severance for such years would be calculated using the same bonus cash equivalent value that is relied on in determining the value of such equity awards.

 

In addition, under the agreement, Mr. Hudson is subject to the Company’s policies applicable to executives generally, including its policies relating to claw-back of compensation. For a further discussion of the payments and benefits to which Mr. Hudson would be entitled upon termination of his employment see “2019 Other Potential Post-Employment Payments.”

 

Change in Control Agreements with Other Named Executive Officers

 

The Company entered into change in control employment agreements with Messrs. Cross, Houdeshell and Shaffer (each referred to here as the “Executive” or by name) on September 21, 2016. The Company also entered into a change in control employment agreement with Ms. Kleffel on April 6, 2017.

 

Each agreement has an initial term of one year and provides for automatic one-year extensions unless expressly not renewed. A change in control, as defined in the agreement, must occur during the term in order to trigger the agreement. The agreement provides that, once a change in control has occurred, the Company agrees to continue the employment of the Executive subject to the contract for a one-year period, in a comparable position as the Executive held in the 120-day period prior to the change in control, and with the same annual base pay and target bonus opportunity. If the Executive is terminated “without cause” or resigns for “good reason,” as defined in the agreement, during the one-year period following a change in control, the Executive will receive:

 

cash severance equal to a multiple (two times, for Messrs. Cross and Shaffer, and one times for Mr. Houdeshell and Ms. Kleffel) of the sum of (i) Executive’s Annual Base Salary at the rate in effect on the date of termination, and (ii) the Executive’s average annual performance bonus for the last three full fiscal years prior to the date of termination (“Executive’s Average Annual Performance Bonus”);
a prorated final year bonus, based on the Executive’s Average Annual Performance Bonus; and
health and other welfare benefits, as defined in the agreement, for a period of time following termination (18 months for Messrs. Cross and Shaffer, and 12 months for Mr. Houdeshell and Ms. Kleffel).

 

In response to the unintended negative consequence created by granting equity awards in lieu of cash bonuses for 2017 and 2018 performance, the CGC determined that the Cash Bonus portion of each Named Executive Officer’s severance for such years would be calculated using the same bonus cash equivalent values that is relied on in determining the value of such equity awards. The Executive is required to execute a release of claims as a condition to receipt of severance under the Change in Control Agreement and is subject to protective covenants prohibiting the disclosure and use of the Company’s confidential information and, during the one-year period following a termination by the company any reason other than for death or disability, or by the Executive for Good Reason, protective covenants regarding non-competition, non-solicitation of protected customers; non-solicitation of employees, and non-disparagement of the Company or its directors, officers, employees or affiliates.

 

 34

 

 

 

 

Outstanding Equity Awards at Fiscal Year End 2019

 

The following table sets forth certain information concerning outstanding equity awards as of December 31, 2019 granted to the named executive officers. 

 

  Option Awards Stock Awards
Name Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
Number of
Securities
Underlying
Unexercised
Options
(#) Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of Stock
That Have Not
Vested (1)
(#)
Market Value of
Shares or Units of
Stock That Have
Not Vested (2)
($)
Equity incentive plan
awards: number of
unearned shares,
units or other rights
that have not vested
(#)
Equity incentive plan awards:
market or payout value of
unearned shares, units or
other rights that have not
vested (2)
($)
  19,400(3) -- 11.00 06/28/2023        
  50,000(3) -- 10.54 04/29/2024        
  17,975(4) -- 12.63 01/29/2023        
  40,054 11,902(4) 14.82 02/28/2024        
  52,014 26,007(5) 28.69 04/01/2027        
  18,427 36,852(6) 31.15 04/01/2028        
D. Hudson, III                
              24,122(11) 737,410
              11,145(14) 340,703
              11,145(14) 340,703
              10,954(15) 334,864
              10,954(15) 334,864
          5,724(10) 174,983 17,173(16) 524,979
  2,400(3) -- 11.00 06/28/2023        
  25,000(3) -- 10.54 04/29/2024        
  8,100(3) -- 12.63 01/29/2023        
  16,393 4,862(4) 14.82 02/28/2024        
  19,030 9,514(5) 28.69 04/01/2027        
  6,318 12,634(6) 31.15 04/01/2028        
C. Shaffer                
              9,868(11) 301,665
          3,610(8) 110,358 4,077(14) 124,634
              4,077(14) 124,634
          7,226(9) 220,899 3,755(15) 114,790
              3,755(15) 114,790
          3,271(10) 99,994 9,813(16) 299,983
  4,054 1,199(4) 15.99 03/31/2024        
  12,052 6,026(5) 28.69 04/01/2027        
  4,213 8,422(6) 31.15 04/01/2028        
              2,439(12) 74,560
          339(7) 10,363 2,038(13) 62,302
J. Kleffel         827(8) 25,281 2,582(14) 78,932
              2,582(14) 78,932
          5,059(9) 154,654 2,503(15) 76,517
              2,503(15) 76,517
          2,248(10) 68,721 6,746(16) 206,225
  4,200(3) -- 11.00 06/28/2023        
  25,000(3) -- 10.54 04/29/2024        
  6,475(3) -- 12.63 01/29/2023        
  10,200 3,025(4) 14.82 02/28/2024        
  11,100 5,550(5) 28.69 04/01/2027        
  4,213 8,422(6) 31.15 04/01/2028        
D. Houdeshell                
              6,140(11) 187,700
          1,951(8) 59,642 2,378(14) 72,695
              2,378(14) 72,695
          4,336(9) 132,552 2,503(15) 76,517
              2,503(15) 76,517
          1,431(10) 43,746 4,293(16) 131,237
  2,400(3) -- 11.00 06/28/2023        
  25,000(3) -- 10.54 04/29/2024        
  9,875(3) -- 12.63 01/29/2023        
  18,940 5,621(4) 14.82 02/28/2024        
  16,492 8,246(5) 28.69 04/01/2027        
  5,475 10,950(6) 31.15 04/01/2028        
C. Cross, Jr.                
              11,403(11) 348,590
          2,927(8) 89,478 3,534(14) 108,034
              3,534(14) 108,034
          5,420(9) 165,689 3,255(15) 99,505
              3,255(15) 99,505
          2,044(10) 62,485 6,133(16) 187,486

 

 35

 

 

 

 

(1)During the vesting period, the named executive officer has full voting and dividend rights with respect to the restricted stock, but does not have dividend rights with respect to the units until the performance criteria has been met.

(2)For the purposes of this table, the market value is determined using the closing price of the Company’s common stock on December 31, 2019 ($30.57).
(3)Represents option to purchase fully vested common stock, as long as named executive officer remains employed by the Company.

(4)Represents option to purchase common stock; the shares covered by this award began vesting in 1/48th share increments on December 1, 2016, and the remaining shares will, as long as named executive officer remains employed by the Company, vest in 1/48th increments each month thereafter.

(5)Represents option to purchase common stock, of which the remaining unexercisable shares will vest on April 3, 2020.

(6)Represents option to purchase common stock, of which one-third of the unexercisable shares covered by this award vested on April 2, 2019, one-third will vest on April 2, 2020 and the remaining unexercisable shares will, as long as named executive officer remains employed by the Company, vest one-third on April 2, 2021.

(7)Represents time-vested restricted stock units granted on April 1, 2017, of which the remaining shares will vest on April 1, 2020.
(8)Represents time-vested restricted stock units granted on April 3, 2017, of which the remaining shares will vest on April 3, 2020.

(9)Represents time-vested restricted stock units granted on April 2, 2018, of which one-third of the shares vested on April 2, 2019, one-third of the shares will vest on April 2, 2020 and the remaining shares will, as long as names executive officer remains employed by the Company, vest one-third on April 2, 2021.

(10)Represents time-vested restricted stock units granted on December 30, 2019, of which one-third of the shares will vest, as long as names executive officer remains employed by the Company, each one-third on December 30, 2020, December 30, 2021 and December 30, 2022.

(11)Represents performance-vesting restricted stock units granted on February 29, 2016, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2019. These units vested on February 27, 2020.

(12)Represents performance-vesting restricted stock units granted on April 1, 2016, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2019. These units vested on February 27, 2020.

(13)Represents performance-vesting restricted stock units granted on April 1, 2017, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2019. These units vested on February 27, 2020.

(14)Represents performance-vesting restricted stock units granted on April 3, 2017, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2019. These units vested on one-half on February 27, 2020 and will vest one-half on December 31, 2020.

(15)Represents performance-vesting restricted stock units granted on April 2, 2018, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2020.
(16)Represents performance-vesting restricted stock units granted on December 30, 2019, representing the named executive officer’s right to earn, on a one-for-one basis, shares of common stock, subject to performance requirements over a period ending December 31, 2021 and additional service through December 21, 2022. The awards are more fully described under “Equity Awards–2019 Performance Share Unit (“PSU”) Awards”.

 

2019 Option Exercises and Stock Vested

 

The following table reports the exercise of stock options, and the vesting of stock awards or similar instruments during 2019, for the named executive officers and the value of the gains realized on vesting. No stock options were exercised in 2019.

 

Name Number of Shares
Acquired on Vesting
Value Realized on
Vesting
Dennis S. Hudson, III 45,958 $1,353,004
Charles M. Shaffer 27,879 $802,906
Juliette P. Kleffel 4,281 $114,009
David D. Houdeshell 20,641 $597,501
Charles K. Cross, Jr. 30,844 $894,108

 

 36

 

 

 

 

Executive Deferred Compensation Plan

 

The Bank’s Executive Deferred Compensation Plan is designed to permit a select group of management and highly compensated employees, including two of the current named executive officers (Messrs. Hudson and Shaffer), to elect to defer a portion of their compensation until their separation from service with the Company, and to receive matching and other Company contributions that are precluded under the Company’s Retirement Savings Plan as a result of limitations imposed under ERISA.

 

The Executive Deferred Compensation Plan was amended and restated in 2007 to reflect changes arising from requirements under Code Section 409A and the underlying final regulations. As a result, each participant account is separated into sub-accounts to reflect:

 

contributions and investment gains or losses that were earned and vested on or before December 31, 2004, and any subsequent investment gains or losses thereon (the “Grandfathered Benefits”); and
contributions and earnings that were earned and vested after December 31, 2004 (the “Non-Grandfathered Benefits”).

 

A participant’s elective deferrals to the Executive Deferred Compensation Plan are immediately vested. The Company contributions to the Executive Deferred Compensation Plan vest at the rate of 25 percent for each year of service the participant has accrued under the Retirement Savings Plan, with full vesting after four years of service. If a participant would become immediately vested in his Company contributions under the Retirement Savings Plan for any reason (such as death, disability, or retirement on or after age 55), then he would also become immediately vested in his account balance held in the Executive Deferred Compensation Plan.

 

Each participant directs how his account in the Executive Deferred Compensation Plan is invested among the available investment vehicle options. The plan’s investment options are reviewed and selected annually by a committee appointed by the Board of Directors of the Company to administer the plan. The plan committee may appoint other persons or entities to assist it in its functions. No earnings or dividends paid under the Executive Deferred Compensation Plan are above-market or preferential.

 

All amounts paid under the plan are paid in cash from the general assets of the Company, either directly by the Company or via a “rabbi trust” the Company has established in connection with the plan. Nothing contained in the plan creates a trust or fiduciary relationship of any kind between the Company and a participant, beneficiary or other person having a claim to payments under the plan. A participant or beneficiary does not have an interest in his plan account that is greater than that of an unsecured creditor.

 

Upon a participant’s separation from service with the Company, he will receive the balance of his account in cash in one of the following three forms specified by the participant at the time of initial deferral election, or a subsequent permitted amendment:

 

a lump sum;
monthly installments over a period not to exceed five years; or
a combination of an initial lump sum of a specified dollar amount and the remainder in monthly installments over a period not to exceed five (5) years.

 

A participant may change his existing distribution election relating to Non-Grandfathered Benefits only in very limited circumstances. Upon death of the participant, any balance in his account will be paid in a lump sum to his designated beneficiary or to his estate.

 

2019 Nonqualified Deferred Compensation

 

The following table discloses, for each of the named executive officers, contributions, earnings and balances during 2019 under the Executive Deferred Compensation Plan, described above.

 

Name Executive
Contributions in
Last Fiscal Year
($)
Registrant
Contributions in
Last Fiscal Year
($)(1)
Aggregate Earnings
/ Losses in Last
fiscal Year
($)(2)
Aggregate
Withdrawals/
Distributions
($)
Aggregate Balance
at Last Fiscal
Year End
($)
Dennis S. Hudson, III 16,443 12,800 298,999 -- 1,305,759(3)
Charles M. Shaffer 30,147 3,400 15,332 -- 84,832(4)
Juliette P. Kleffel -- -- -- -- --
David D. Houdeshell -- -- -- -- --
Charles K. Cross, Jr. -- -- -- -- --

 

(1)Total amount included in the All Other Compensation column of the Summary Compensation Table.
(2)None of the earnings or dividends paid under the Executive Deferred Compensation Plan are above-market or preferential.
(3)Includes $290,981 contributed by the Company, as well as executive contributions, which were included in the Summary Compensation Table for previous years.

(4)Includes $10,750 contributed by the Company, as well as executive contributions, which were included in the Summary Compensation Table for previous years.

 

 

 37

 

 

 

2019 Other Potential Post-Employment Payments

 

The following table quantifies, for each of the named executive officers, the potential post-employment payments under the provisions and agreements described above under “Employment and Change in Control Agreements,” assuming that the triggering event occurred on December 31, 2019. The closing market price of the Company’s common stock on that date was $30.57 per share. None of the named executive officers would be eligible for any of these payments if they were terminated for cause.

 

Name Term (in years) (#) Cash Severance ($) Value of Other Annual Benefits ($)

Total Value of Outstanding Stock Awards that Immediately Vest

($)

In-the-Money Value of Outstanding Stock Option Awards that Immediately Vest

($)

Total Value of

Benefit ($)

Dennis S. Hudson, III            
Upon Termination without Cause or with Resignation for Good Reason(1) 2(2) 1,403,333 3,840 -- -- 1,407,173
Upon Death or Disability (1) 2(2) 1,200,000 3,840 2,788,504(3) 236,350(3) 4,228,694
Upon Termination Following a Change-in-Control (1) 3 2,105,000 5,760 2,788,504(3) 236,350(3) 5,135,614
Upon Change-in-Control where Award is not assumed by surviving entity -- -- -- 2,788,504(3) 236,350(3) 3,024,854
Upon Change-in-Control where Award assumed by surviving entity -- -- -- --(3) --(3) --
Charles M. Shaffer            
Upon Death or Disability -- -- -- 1,511,748(3) 94,463(3) 1,606,211
Upon Termination Following a Change-in-Control (4) 2 1,285,000 3,180 1,511,748     94,463     2,894,391
Upon Change-in-Control where Award is not assumed by surviving entity -- -- -- 1,511,748(3) 94,463(3) 1,606,211
Upon Change-in-Control where Award assumed by surviving entity -- -- -- --(3) --(3) --
Juliette P. Kleffel            
Upon Death or Disability -- -- -- 706,778(3) 28,810(3) 735,588
Upon Termination Following a Change-in-Control (4) 1 475,000 2,120 706,778     28,810     1,212,708
Upon Change-in-Control where Award is not assumed by surviving entity -- -- -- 706,778(3) 28,810(3) 735,588
Upon Change-in-Control where Award assumed by surviving entity -- -- -- --(3) --(3) --
David D. Houdeshell            
Upon Death or Disability -- -- -- 722,981(3) 58,078(3) 781,059
Upon Termination Following a Change-in-Control(4) 1 446,667 2,120 722,981     58,078     1,229,846
Upon Change-in-Control where Award is not assumed by surviving entity -- -- -- 722,981(3) 58,078(3) 781,059
Upon Change-in-Control where Award assumed by surviving entity -- -- -- --(3) --(3) --
Charles K. Cross, Jr.            
Upon Death or Disability -- -- -- 1,081,322(3) 104,033(3) 1,185,355
Upon Termination Following a Change-in-Control(4) 2 960,000 3,180 1,081,322     104,033     2,148,535
Upon Change-in-Control where Award is not assumed by surviving entity -- -- -- 1,081,322(3) 104,033(3) 1,185,355
Upon Change-in-Control where Award assumed by surviving entity -- -- -- --(3) --(3) --

 

 38

 

 

 

(1)As provided for in Mr. Hudson’s employment agreement, the Bank would continue to pay to Mr. Hudson or his estate or beneficiaries his annual base salary, including any other cash compensation to which he would be entitled at termination date, for the period indicated under Term. In addition, the Bank would continue to pay the insurance premium for Mr. Hudson, his spouse and eligible dependents for continued participation in any group medical, dental, vision and/or prescription drug plan benefits (including any excess COBRA cost of coverage) for the term indicated or until his earlier death. In the case of termination without cause or resignation for good reason, Mr. Hudson’s severance for the Term also would include an amount equal to his highest annual bonus for the previous three full fiscal years. In the case of termination without cause or resignation for good reason within twelve months following a change in control, severance payments would be made in a lump sum.

(2)The initial term of agreement is three years, but benefits under the agreement are paid for the Term as indicated in the table.

(3)As provided for in the award document. Starting with awards granted in January 2015, there is no vesting of equity in a change in control if the award is assumed by the surviving entity or otherwise equitably converted or substituted.

(4)As provided for change in control agreement, the Company shall pay the executive officer in a lump sum in cash within thirty (30) days after the date of termination the aggregate of the: (i) base salary through the termination date to the extent not paid (assumed already paid in table above), (ii) annual bonus (prorated in the event that the executive was not employed by the Company for the whole of such fiscal year), and (iii) annual base salary and annual bonus, multiplied by the Term as indicated in the table. Annual base salary is equal to 12 times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the executive officer by the Company in the 12-month period immediately preceding the month in which the triggering event occurs. Annual bonus is equal to the executive officer’s average annual bonus for the last three full fiscal years prior to the triggering event. All unvested stock options and restricted stock of the Company held by the executive officer shall immediately and fully vest on termination. In addition, the Company will pay or provide to the executive officer or eligible dependents “Welfare Benefits”, for a period of 18 months for Messrs. Cross and Shaffer and 12 months for Mr. Houdeshell and Ms. Kleffel. “Welfare Benefits” include similar medical, prescription, dental, and vision insurance plans benefits paid by the Company prior to the change in control. If the executive officer’s employment is terminated by reason of death, disability, retirement or for cause within the term indicated following a change in control, no further payment is owed to the executive except for accrued obligations, such as earned but unpaid salary and bonus.

 

CEO Pay Ratio

 

We are providing the following information to comply with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K. For 2019, our last completed fiscal quarter, the median annual total compensation of our employees (other than Mr. Hudson, our CEO) was $69,884 and the annual total compensation for Mr. Hudson, as reported in the Summary Compensation Table was $1,333,332. Based on this information, for 2019, the ratio of compensation for our Chief Executive Office to the median employee was 19:1. This ratio is specific to our Company and may not be comparable to any ratio disclosed by another company.

 

Seacoast identified the median associate in 2017; however, due to the termination of the former median associate, an alternate associate was identified as the median employee in 2019, as allowed by the SEC. Using our HRIS we were able to determine any compensation earned by associates including regular pay, incentive, bonus, business continuity, and any other prerequisites. No assumptions, adjustments, or estimates, including any cost of living adjustments were made in identifying the median employee. Next we calculated the median employee’s annual total compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K for the Summary Compensation Table, consistent with the calculations we provide for all of our Named Executive Officers.

 

 39

 

 

 

PROPOSAL 1
ELECTION OF DIRECTORS

 

 

 

General

 

Our non-employee directors are appointed to act on behalf of shareholders by overseeing critical aspects of our business strategy, operations, risk management and governance efforts. Our belief is that superior talent in the board room should generate exceptional levels of customer service, financial performance and, ultimately, superior shareholder returns compared to alternative investments. To this end, the Board is committed to identifying the best available talent to make meaningful contributions to our business and fully execute its duties and responsibilities on behalf of shareholders. The profile of our Board continues to evolve in response to the needs of a dynamic and growing organization. Our Board of Directors plays a meaningful role in helping Seacoast develop, test and implement our business, risk management, talent and reward strategies. The Board’s activities are focused on representing our shareholders in ways that position Seacoast to create significant value for customers, employees and our shareholders within a risk appropriate framework.

 

As of the date of this proxy statement, Seacoast’s Board of Directors consists of eleven members divided into three classes, serving staggered three year terms as provided in our Articles of Incorporation. At this time, Seacoast’s Compensation and Governance Committee and Board of Directors believe that eleven directors is adequate to provide a diversity of background, experience and expertise, and that there are sufficient independent directors to staff the independent committees of the Board and provide independent oversight.

 

The Annual Meeting is being held to, among other things, elect three Class III directors of Seacoast, each of whom has been nominated by the CGC of the Board of Directors. Each of the nominees is presently a director of Seacoast. All of the nominees will also serve as members of the Board of Directors of Seacoast National Bank (the “Bank”). The members of the Boards of Directors of the Bank and the Company are the same except for Dale M. Hudson and T. Michael Crook, who are currently directors of the Bank only. If elected, each Class III director nominee will serve a three year term expiring at the 2023 Annual Meeting and until their successors have been elected and qualified.

 

Currently, the Board of Directors is classified as follows:

 

Class Term Names of Directors
Class I Term Expires at the 2021
Annual Meeting

Jacqueline L. Bradley 

H. Gilbert Culbreth, Jr.
Christopher E. Fogal 

Herbert A. Lurie

Class II Term Expires at the 2022
Annual Meeting
Dennis J. Arczynski
Maryann Goebel
Robert J. Lipstein
Thomas E. Rossin
Class III Term Expires at the 2020
Annual Meeting
Julie H. Daum
Dennis S. Hudson, III
Alvaro J. Monserrat

 

Manner for Voting Proxies

 

All shares represented by valid proxies, and not revoked before they are exercised, will be voted in the manner specified therein. If a valid proxy is submitted but no vote is specified, the proxy will be voted FOR the election of each of the three nominees for election as directors. Please note that banks and brokers that do not receive voting instructions from their clients are not able to vote their client’s shares in the election of directors. Although all nominees are expected to serve if elected, if any nominee is unable to serve, then the persons designated as proxies will vote for the remaining nominees and for such replacements, if any, as may be nominated by the CGC. Proxies cannot be voted for a greater number of persons than the number of nominees specified herein (three persons). Cumulative voting is not permitted.

 

The affirmative vote of the holders of shares of common stock representing a plurality of the votes cast at the Annual Meeting at which a quorum is present is required for the election of the directors listed below, which means that the director nominees who receive the highest votes “for” their election are elected. However, to provide shareholders with a meaningful role in uncontested director elections, which is the case for the election of the director nominees listed below, our Corporate Governance Guidelines provide that if any director nominee receives a greater number of votes “withheld” for his or her election than votes “for” such election, then the director will promptly tender his or her resignation to the Board following certification of the shareholder vote, with such resignation to be effective upon acceptance by the Board of Directors. The CGC would then review and make a recommendation to the Board of Directors as to whether the Board should accept the resignation, and the Board would ultimately decide whether to accept or reject the resignation. The Company will disclose its decision-making process regarding any resignation in a Form 8-K filed with the SEC. In contested elections, the required vote would be a plurality of votes cast and the resignation policy would not apply.

 

Further details of this policy and the corresponding procedures are set forth in our Corporate Governance Guidelines, available on our website at www.SeacoastBanking.com.

 

The three nominees have been nominated by Seacoast’s Compensation and Governance Committee, and the Board of Directors unanimously recommends a vote “FOR” the election of all three nominees listed below.

 

 40

 

 

 

Nominees for Re-election at the Annual Meeting

 

       
  Julie H. Daum Age: 65  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2013

•   Bank since 2013

•   Bank Credit Risk

•   Compensation & Governance

 

 

Ms. Daum has been a senior director of Spencer Stuart, a privately-held global executive search firm since 1993. As head of the North American Board Practice at Spencer Stuart, she has helped place over 1,000 directors on corporate boards working with companies from the Fortune 10 to pre-IPO. Prior to her work at Spencer Stuart, Ms. Daum was the executive director of the corporate board resource at Catalyst, where she managed all board of directors’ activities and worked with companies to identify qualified women for their boards. A widely renowned expert on corporate governance topics, Ms. Daum was recognized by the National Association of Corporate Directors (“NACD”) as one of the top 100 most influential leaders in corporate governance in 2013. Ms. Daum also advises corporate boards on governance issues, board refreshment, and succession planning. Each year, Ms. Daum develops the Spencer Stuart Board Index, a publication detailing trends at national boardrooms. She is a graduate of the Wharton Business School.

 

       
  Dennis S. Hudson, III Age: 64  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 1984

•   Bank since 1984

•   Bank Credit Risk

•   Strategy & Innovation

 

 

Mr. Hudson was named Chairman of Seacoast in July 2005, and has served as Chief Executive Officer of the Company since June 1998. Mr. Hudson has also served as Chairman and Chief Executive Officer of the Bank since 1992. He was President of Seacoast from June 1998 to July 2005, after serving in various positions with the Company and the Bank since 1978.

 

Mr. Hudson also serves on the board of directors, the audit committee and the compensation committee of Chesapeake Utilities Corporation (ticker: CPK), a public gas and electric utilities company headquartered in Dover, Delaware. In November 2015, Mr. Hudson was appointed as an independent director to PENN Capital Funds, a mutual fund group managed by PENN Capital Management. Mr. Hudson also serves on the Board of the Community Foundation for Palm Beach and Martin counties. From 2005 through 2010, he also served as a member of the board of directors of the Miami Branch of the Federal Reserve Bank of Atlanta.

 

Mr. Hudson is actively involved in the community, having served on the boards of the Martin County YMCA Foundation, Council on Aging, The Pine School, the Job Training Center, American Heart Association, Martin County United Way, the Historical Society of Martin County, and Martin Health System, as well as Chairman of the Board of the Economic Council of Martin County. Mr. Hudson is a graduate of Florida State University with a Bachelor’s degree in Finance, and a Master’s degree in Business Administration.

 

       
  Alvaro J. Monserrat Age: 51  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2017

•   Bank since 2017 

•   Audit

•   Compensation & Governance

•   Strategy & Innovation

 

 

Mr. Monserrat is an independent advisor on business strategy and execution for CEOs of technology start-up companies. From January 2018 to February 2019, Mr. Monserrat was the Executive Vice President and General Manager at Nuance Imaging, a subsidiary of Nuance Communications, Inc. (ticker: NUAN), a multinational computer software technology corporation. Prior to Nuance, he was the former CEO of RES Software (acquired by Invanti in 2017), a leading digital workspace technology company from 2015 to 2017, and also served as Citrix Systems’ Senior Vice President of worldwide sales & service from 2008 to 2015. Mr. Monserrat’s career spans more than 25 years in large companies and entrepreneurial ventures within enterprise software, mobility, cloud, networking and business strategy. At Citrix, Monserrat was part of the executive leadership team that grew the company from hundreds of millions to more than $3 billion in revenue by 2014, and was instrumental in crafting the strategy that helped Citrix grow from a single-product company to a multi-product industry leader. Prior to joining Citrix, Mr. Monserrat was a principal in Innovex Group (acquired by Citrix) and received numerous awards including Microsoft’s Best E-Commerce Solution and Best Small Business Solution Awards. In addition, Mr. Monserrat has served on the board of advisors for Virsto and Whiptail, the national partner board of the Leukemia and Lymphoma Society and the board of the Children’s Harbor Society. Mr. Monserrat holds a Masters of Business Administration degree from the University of Texas at Austin and a Bachelor of Science degree in Computer Science from the University of Miami.

 

 

 

 41

 

 

 

Director Terms Extended Beyond the Annual Meeting 

 

       
  Dennis J. Arczynski Age: 68  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2013

•   Bank since 2007

•   Audit

•   Risk Management (Chair)

•   Strategy & Innovation

•   Bank Credit Risk (Chair)

 

 

Mr. Arczynski has been a risk management, corporate governance, regulatory affairs and banking consultant since 2007. He previously served for 33 years in various managerial and examiner positions in the U.S. Office of the Comptroller of the Currency’s (the “OCC”) headquarters in Washington, D.C. and in several other OCC districts until 2007. As a National Bank Examiner with the OCC, Mr. Arczynski was responsible for the supervision and examination of the largest and most complex mid-size banks, community banks and trust companies; provided guidance to banks in all facets of commercial banking and fiduciary operations including international activities; performed risk assessment and conducted BSA/AML reviews and examinations of internationally active banks; and developed formal enforcement actions and corrective action plans for struggling and deficient institutions. Mr. Arczynski’s other positions of responsibility with the OCC were Assistant Director for Trust Operations, Special Assistant to the Senior Deputy Comptroller (FFIEC Liaison), Associate Director for Financial Management (Financial Systems and Review) and Field Office Manager (Miami Field Office). His duties included the formation of national policies and programs, development of OCC supervisory initiatives, establishment of interagency relations, drafting regulations and writing OCC examiner handbooks. Mr. Arczynski received his Bachelor’s degree from the University of Maryland in Finance and his Master’s degree from the Johns Hopkins University.

 

       
  Jacqueline L. Bradley Age: 62  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2015

•   Bank since 2014

•   Bank Trust (Chair)

•   Strategy & Innovation

 

 

Ms. Bradley served as a director of BankFIRST from 2005 until BANKshares was acquired by Seacoast in 2014. During her tenure at BankFIRST, she served on BankFIRST’s Special Assets Committee and Audit Committee. Ms. Bradley currently chairs Seacoast Bank’s Trust and Wealth Management Committee. Ms. Bradley serves on the board of directors of the Boys & Girls Club of Central Florida, serving as chairperson in 2002 and 2003. Additionally, Ms. Bradley is a board member of The Studio Museum in Harlem. She also served on the finance committee for the Central Florida Expressway Authority and Orange County Tourist Development Council, and the board of directors of the Greater Orlando Aviation Authority, Florida Arts Council, and Cornell Museum of Fine Arts.

 

Ms. Bradley has had a 20 year career in financial services, including seven years with SunTrust Bank in Central Florida, culminating in her last position as senior vice president leading its Private Client Group (1999-2002). Her previous experience also includes 8 years as vice president with Moody’s Investors Services and 3 years providing consulting services for McKinsey Management Consultants and Touché Ross. Ms. Bradley received her Bachelor of Arts degree in Economics and Political Science from Yale College, and her Master’s degree in Business Administration from Columbia University Graduate School of Business with a concentration in Finance and Marketing.

 

       
  H. Gilbert Culbreth, Jr. Age: 74  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2008

•   Bank since 2006

•   Bank Credit Risk

•   Compensation & Governance

 

 

Mr. Culbreth has been chief executive officer and owner of Gilbert Chevrolet Company, Inc., a car dealership located in Okeechobee, Florida, for over 40 years. He also owns and manages Gilbert Ford car dealership in Okeechobee, Florida. Mr. Culbreth was previously a member of Big Lake Financial Corporation’s (“Big Lake”) board of directors for 10 years prior to the acquisition of Big Lake by Seacoast in 2006, and has served on the Bank’s board of directors since the acquisition. In addition, Mr. Culbreth is president of several other family businesses, including: Culbreth Realty, Inc. (a real estate brokerage company), Parrott Investments, Inc. (a holding company for two other businesses), Gilbert Cattle Co., LLC (a cattle operation), Grace Marine (a watercraft sales company), Gilbert Aviation Inc. (an aircraft sales and service company), Gilbert Oil Company, LLC and Gilbert Trucking, Inc. Mr. Culbreth is a former director of the Florida Council on Economic Education, the Okeechobee County Board of Realtors, the Okeechobee Economic Council, and the United Way of Okeechobee and is a member of the Masonic Lodge.

 

 

 

 42

 

 

 

       
  Christopher E. Fogal Age: 68  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 1997

•   Bank since 1997

•   Bank Trust

•   Audit

 

 

Mr. Fogal is a certified public accountant and a partner with the public accounting firm of Carr, Riggs & Ingram, LLC (“Carr Riggs”), a top 25 firm that is the second largest super-regional in the southeastern U.S. He was previously a principal with the public accounting firm of Proctor, Crook, Crowder & Fogal, P.A. (“Proctor Crook”), a BDO affiliate firm, located in Stuart, Florida, from 2009 to January 31, 2017 when the firm merged with Carr Riggs. Mr. Fogal was the managing partner of Fogal & Associates from 1979 until the firm merged with Proctor Crook in 2009. He also served on the board of directors of Port St. Lucie National Bank until it was acquired by Seacoast in 1996. Currently, Mr. Fogal is treasurer of the St. Lucie County Economic Development Council. He has also served as past chairman of the Treasure Coast Private Industry Council and past president of the St. Lucie County Chamber of Commerce, and is active in a number of professional organizations including the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants.

 

       
  Maryann Goebel Age: 69  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2014

•   Bank since 2014

•   Audit

•   Compensation & Governance (Chair)

•   Risk Management

 

 

Ms. Goebel has been an independent IT management consultant since 2012. She was executive vice president and chief information officer of Fiserv, Inc. (NASDAQ: FISV) from 2009 to 2012. In this role, she was responsible for all internal Fiserv IT systems (infrastructure and applications), as well as IT infrastructure, operations, engineering and middleware services. In her 40+ year career, Ms. Goebel has shaped the strategic direction of information technology for major corporations around the world, serving in the critical role of chief information officer for: DHL Express from 2006 to 2009; General Motors North America from 2003 to 2006; Frito-Lay from 2001 to 2002; General Motors Europe from 1999 to 2001; General Motors Truck Group from 1997 to 1999; and Bell Atlantic NYNEX Mobile (now Verizon Mobile) from 1995 to 1997. She has also held senior IT leadership positions at Texas Instruments, Inc., Aérospatiale Helicopter Corporation, and the Southland Corporation, among others.

 

In 2019, Ms. Goebel was elected to serve as an Independent Director of Repay Holdings Corporation (ticker: RPAY), a leading provider of vertically-integrated payment solutions headquartered in Atlanta, Georgia (formerly Repay Holdings, LLC, a subsidiary of Hawk Parent Holdings, LLC, and acquired by Thunder Bridge, together forming the combined public company Repay Holdings Corporation in July 2019), where she serves as the Chair of the Technology Committee and member of the Audit Committee.

 

Ms. Goebel received the “100 Leading Women in the North American Auto Industry” award in 2005. She also received an award for outstanding professional achievement from her alma mater, Worcester Polytechnic Institute, where she earned a Bachelor of Science degree in mathematics and currently serves on their Arts and Sciences Advisory Board. In 2017, Ms. Goebel was awarded the CERT Certificate in Cybersecurity Oversight by the NACD.

 

       
  Robert J. Lipstein Age: 64  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2019

•   Bank since 2019

•   Audit (Chair)

•   Risk Management

 

 

Mr. Lipstein is a certified public accountant and has over 40 years of diversified experience in various business roles, including leadership in audit, corporate governance, information technology, and enterprise risk management. Mr. Lipstein is an Independent Director of Ocwen Financial Corporation (ticker: OCN), a provider of residential and commercial mortgage loan servicing headquartered in Mount Laurel, New Jersey, where he has served as a member of the Audit Committee since March 2017, and previously served as a member of the Compensation Committee. In 2020, Mr. Lipstein was appointed to the Board of Advisors of Cloud Pricing Services, a company which offers visibility into IT infrastructure costs and utilization to enable optimization of bare metal costs. In 2019, Mr. Lipstein was elected to the Board of Trustees of Einstein Healthcare Network and serves as the chair of the Audit Committee and is a member of the Finance and IT Committees. In January 2017, he became a Director at CrossCountry Consulting, a privately-held consulting firm that focuses on corporate advisory services. Mr. Lipstein is a former senior partner and national SOX leader of KPMG LLP and served as the Global IT Partner in Charge of Business Services and as an Advisory Business Unit Partner in Charge for its Mid-Atlantic Region.

 

 

 

 43

 

 

 

       
  Herbert A. Lurie Age: 59  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2016

•   Bank since 2016

•   Bank Credit Risk

•   Strategy & Innovation

 

 

Mr. Lurie was Senior Managing Director and Chairman of the Financial Institutions Group of Guggenheim Securities from 2011 to 2016, and is now a Senior Advisor at the firm. Previously, he led the Global Financial Institutions Group at Merrill Lynch, which he helped found, and was a member of Merrill Lynch’s Global Investment Banking Management Committee. Mr. Lurie has advised on numerous financial institution transactions world-wide, including Bank One Corp.’s merger with First Chicago Corp., and NationsBank Corp.’s merger with BankAmerica Corp. to form Bank of America. He began his Wall Street career as an M&A and securities attorney at Simpson Thacher & Bartlett LLP. Mr. Lurie has also served on a number of philanthropic and corporate boards, including as Vice Chairman of the Board of the United States Equestrian Team, a Trustee of Princeton’s Eden Autism Institute, and The Seeing Eye. Mr. Lurie holds a JD from the University of California at Berkeley, an MA in Clinical Psychology from Columbia University, and a dual BS/BA in Finance and Economics from the University at Albany.

 

       
  Thomas E. Rossin Age: 86  
     
TENURE: BOARD COMMITTEES: QUALIFICATIONS & EXPERIENCE:

•   Company since 2003

•   Bank since 2003

•   Risk Management

•   Strategy & Innovation (Chair)

 

 

Mr. Rossin is a retired attorney in West Palm Beach, Florida, previously serving as management chairman with the firm of St. John, Rossin & Burr, PLLC from 1993 to 2016. He served as a Florida State Senator from 1994 to 2002, the last two years as minority leader, and was a candidate for Florida Lt. Governor in 2002. Mr. Rossin founded Flagler National Bank in 1974, serving as president, chief executive officer and director and growing it to the largest independent bank in Palm Beach County with over $1 billion in assets. Forming The Flagler Bank Corporation, the holding company for Flagler National Bank, in 1983 and serving as president, chief executive officer and director, he took it public in 1984 and facilitated the acquisition of three financial institutions, until both Flagler National Bank and the holding company were sold in 1993 to SunTrust Bank. Prior thereto, Mr. Rossin was vice chairman and director of First Bancshares of Florida, Inc. after consolidating four banks under one charter, including First National Bank in Riviera Beach at which he served as president and chief executive officer. He has served as past president of the Community Bankers Association of Florida and Palm Beach County Bankers Association, and is currently a member of the Florida Bar Association. In March 2014, Mr. Rossin received the Exemplary Elected Official Award from the Forum Club of the Palm Beaches.

 

 

 

 44

 

 

 

  

Director Compensation

 

Decisions regarding our non-employee director compensation program are approved by our full board of directors based on recommendations from the CGC. In making its recommendations, the CGC considers the director compensation practices of peer companies and whether such recommendations align with the interests of our shareholders with respect to total compensation and each element thereof. Our compensation program for non-employee directors is designed to:

 

appropriately compensate directors for the work required at a company of Seacoast’s size, growth, and dynamic and evolving business model;

align directors’ interests with the long-term interests of Seacoast’s shareholders; and

make meaningful adjustments every few years, rather than small annual adjustments.

 

Non-Employee Director Compensation Structure

 

Annual Retainer paid to all Non-employee Directors of the Company:
Cash (1) $37,500
Stock Award (2) $62,500
Annual Committee Chair Retainer for all Committees $25,000

 

(1) A number of directors have elected to receive all or a portion of their cash retainer in stock or stock options as described below. 

(2) Granted under the 2013 Incentive Plan following election or re-election at each annual meeting of shareholders.

 

All cash retainers are paid in quarterly installments. To further align directors’ interests with long-term shareholder interests, directors may elect to receive: 1) all or a portion of their annual cash retainer in Company common stock, and 2) up to a maximum of 30% of their annual cash retainer in the form of non-qualified options to purchase shares of Company common stock. Retainers are pro-rated for directors who join or leave the Board or have a change in Board role during a quarterly period.

 

Non-employee directors are also reimbursed for their travel, lodging and related expenses incurred in connection with attending Board, committee and shareholders meetings and other designated Company events. Executive officers who are also directors do not receive any compensation for services provided as a director.

 

Lead Independent Director Compensation

 

The Board appointed Christopher E. Fogal as Lead Independent Director in December 2018. Mr. Fogal receives an additional annual cash retainer of $25,000 for his service as Lead Independent Director.

 

Director Stock Ownership Policy

 

To align the interests of our directors and shareholders, our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently, our Corporate Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their base annual retainer within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum share ownership requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of our directors own more than the minimum stock requirement, except for two of our newest directors who have been on the Board for three years or less, and are on track to be compliant with our policy within the prescribed time frame.