SVB Financial (SIVBQ) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant    ☒

Filed by a Party other than the Registrant    ☐

Check the appropriate box:

SVB FINANCIAL GROUP

(Name of Registrant as Specified In Its Charter)

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

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		NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

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		PROXY STATEMENT—TABLE OF CONTENTS

• Indicates matters to be voted on at the Annual Meeting

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		2020 PERFORMANCE AND PROXY STATEMENT SUMMARY

This summary highlights our 2020 performance, as well as information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review this entire Proxy Statement, as well as our Annual Report on Form 10-K for the year ended December 31, 2020.

2020 FINANCIAL PERFORMANCE AND BUSINESS HIGHLIGHTS

In 2020, we navigated the unprecedented challenges presented by the global COVID-19 pandemic crisis to deliver another year of strong financial performance and robust business activities. Selected 2020 financial performance and business highlights include:

 

		• We delivered strong diluted earnings per share (“EPS”) and total net income performance, consistent with 2019. • We attained peer-leading annual return on average equity (“ROE”)1 while continuing to invest in our people, technology and products to drive scalable, long-term growth. • We experienced strong total asset growth, resulting in a year-over-year period-end increase of 63%. • We had healthy loan growth, averaging $37.3 billion in 2020. • Our total client funds growth increased by 51%, fueled by strong client fundraising and exit activity.

 

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We added over 5,600 new clients, which contributed to net client growth of approximately 9.5%.

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We acquired the debt investment business of WestRiver Group to expand SVB Capital’s credit fund platform.

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We announced in early January 2021 our agreement to acquire Boston Private Financial Holdings, a leading provider of integrated wealth management, trust and banking services, to accelerate the growth of our private bank and wealth management platform.2

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We advanced our internal and external diversity, equity and inclusion initiatives, including our response to calls for racial and social justice reform. (See “Environmental, Social and Governance” section of this Proxy Statement.)

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Awards and recognition of the Company included:

○   Forbes’ list of America’s Best Banks - #9 (2021) ○   Bloomberg ’s Gender Equality Index (2021)		○   Newsweek’s list of America’s Most Responsible Companies (2021) ○   Fortune’s 100 Fastest Growing Companies (2020)

Navigating the COVID-19 Pandemic

The global health crisis created by the COVID-19 pandemic presented unprecedented challenges and volatility in the economic and business environment during the majority of 2020, carrying into 2021. Since the declaration of the global pandemic, we have been stridently focused on our business and human response to the crisis --- managing and operating our business as seamlessly as possible, and supporting our employees, clients and communities as we weathered the crisis together:

 

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We focused on providing work, life and health-related support for our employees, especially in a remote work-from-home environment, including expanded medical and other support to those directly impacted by COVID-19, mental health support, and general work-from-home support such as technology, equipment and utility stipends. We maintained our workforce without the need for any furloughs or layoffs. As further discussed in the CD&A section, in light of the economic and environmental uncertainties and instability created by the pandemic, our Compensation Committee approved a funding minimum at target for our 2020 Incentive Compensation Plan applicable to all employees, excluding executives. The special minimum was ultimately not applied, as the Company’s performance exceeded our 2020 ICP target performance goals and the plan was funded accordingly.

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To support our clients, we implemented our own loan payment deferral programs, as well as facilitated loans through government relief programs in the US and the UK, including the Paycheck Protection Program.

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We helped our communities by donating $5.5 million to local, regional and global COVID-19 relief efforts and $20 million of fees (net of costs incurred) received from the Paycheck Protection Program to diversity and community causes.

 

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Measured against the Company’s 2020 Peer Group. (See “Compensation Discussion and Analysis” (“CD&A”) section of this Proxy Statement.)

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Closing is expected to be in mid-2021, subject to regulatory approvals and customary closing conditions.

 

 

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ANNUAL MEETING AND PROXY STATEMENT INFORMATION

Annual Meeting

 

Time and Date:		4:30 p.m. (Pacific Time), April 22, 2021		Voting and Record Date:		Stockholders as of the record date of February 22, 2021 are entitled to vote
Location:		www.virtualshareholdermeeting.com/SIVB2021

Proposals and Voting Recommendations

 

		Election of Twelve (12) Directors   Board recommends voting for all nominees				Advisory (Non- Binding) Vote on Executive Compensation   Board recommends voting for proposal				Ratification of KPMG LLP as Auditors for 2021   Board recommends voting for proposal

Director Nominees and Committees

 

Name		Age		Year Elected By      Stockholders		Other Public    Boards		Committee Membership*
Greg Becker, CEO & President		53		2011		—
Eric Benhamou		65		2005		1								X		C		X
John Clendening		58		2018		—				X		X
Richard Daniels		66		---		—		X
Alison Davis		59		---		2		X
Roger Dunbar, Board Chair^		75		2005		—								X		X		C
Joel Friedman		73		2005		—								C		X		X
Jeffrey Maggioncalda		52		2012		—				X		X
Beverly Kay Matthews		62		2020		2		X		X
Mary Miller		65		2016		—		C						X				X
Kate Mitchell		62		2010		1						C				X		X
Garen Staglin		76		2012		1				C						X		X

 

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

^ Mr. Dunbar stepped off the Audit Committee in January 2021.

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		Board of Directors Highlights
		Composition and Independence   •   Separate Board Chairperson and CEO roles   •   All independent directors, except for CEO director   •   Independent Board Chairperson   •   Independent chairpersons and members of all Board committees   •   No director “overboarding” concerns   •   Board and committee ability to hire outside advisors, independent of management   •   Representation of diverse mix of skills, experience and backgrounds				Accountability   •   Annual election of directors   •   Majority voting standard with director resignation policy   •   Annual Board and committee evaluations   •   Regular executive sessions of non-management directors   •   Robust executive and director equity ownership guidelines   •   Independent Board evaluation of CEO performance   •   Independent Board approval of CEO compensation   •   Ongoing director nominee identification and selection process   •   Limit on director compensation under equity plan
		Board Diversity Profile   Our current directors (as of the date of this Proxy Statement) reflect an effective and diverse mix of skills, experience and backgrounds:

		Diverse Representation*		Skills/Qualifications		We added 2   new directors in   2020, bringing   strong   technology,   financial   services and   other expertise

		Gender		Age		Tenure		Race/Ethnicity/Veteran

		Corporate Governance Highlights
		Stockholder Interests   •   Active stockholder engagement practices   •   One single voting class   •   Proxy access under Bylaws   •   Stockholders may act by written consent   •   No cumulative voting   •   No supermajority voting requirements   •   No poison pill				Risk Management   •   Board and individual committee oversight of risk   •   Separate Board Risk Committee focused on enterprise- wide risk management   •   Risk Committee membership includes the chairpersons of the Board and all Board committees   •   Risk management guided by Risk Appetite Statement (reviewed on an annual basis by the full Board)
		* Diverse Representation is a combined metric that reflects gender, race/ethnicity and veteran status diversity. Race/ethnicity diversity reflects the following: Hispanic/Latino, Black or African American, Asian, American Indian or Native Alaskan, Native Hawaiian or Other Pacific Islander, or Two or More Races/Other.

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		COMPANY AND PROXY STATEMENT INFORMATION

About SVB Financial Group

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

Proxy Statement

General Information

This Proxy Statement is furnished in connection with the solicitation of proxies by, and on behalf of, the Board of Directors (the “Board”) of SVB Financial Group (the “Company”) to be voted at our 2021 Annual Meeting of Stockholders and any adjournments or postponements of that meeting (the “Annual Meeting”). Due to health concerns surrounding the COVID-19 pandemic and related federal, state and local orders and guidance, the Annual Meeting will be held solely by means of remote communications on Thursday, April 22, 2021 at 4:30 p.m., Pacific Time at www.virtualshareholdermeeting.com/SIVB2021. All stockholders will need their control number to participate, vote or ask questions during the virtual meeting. The control number can be found on proxy cards, voting instruction forms or other notices sent to stockholders. Instructions for participation, voting and asking questions will be available on the meeting website on the meeting date. Those without a control number may attend as guests of the meeting, but they will not have the option to vote their shares or ask questions during the meeting. Following the meeting, we may post appropriate questions received during the meeting and the Company’s answers on our website.

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

We are first furnishing the proxy materials to stockholders on or about March 4, 2021.

Principal Executive Offices

The Company is a Delaware corporation and financial holding company for Silicon Valley Bank (the “Bank”) and its affiliates. Our principal executive offices are located at 3003 Tasman Drive, Santa Clara, California 95054, and our telephone number at that location is (408) 654-7400.

Record Date

Only stockholders of record as of the close of business on February 22, 2021 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements of the meeting. At the close of business on the Record Date, there were 51,976,551 shares of our common stock, $0.001 par value (“Common Stock”), outstanding.

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

This Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2020 are available electronically at www.svb.com/proxy. The contents of our website are not incorporated herein by reference and any reference to our website address provided throughout this Proxy Statement is intended to be an inactive textual reference only. See also “Information about Voting and Proxy Solicitation—Delivery of Proxy Materials” below.

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		BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
		PROPOSAL NO. 1: ELECTION OF DIRECTORS
		The Board of Directors Recommends a Vote “FOR” All Nominees

Director Nominees, Selection, Diversity and Other Information

Our Directors

Based on the recommendation of the Governance Committee, we are pleased to propose twelve (12) director nominees for election this year. We believe that our director nominees, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to maintain an effective Board to serve the best interests of the Company and its stockholders. All nominees are incumbent directors and are deemed independent, except for our CEO.

During 2020, we added two new Board members — Ms. Alison Davis and Mr. Richard Daniels. At the end of the current term, Mr. John Robinson will retire from the Board. We are grateful for Mr. Robinson’s service to the Company and Board over the past decade.

Selection and Nomination of Director Candidates

The Governance Committee is responsible for the selection and nomination of director candidates and for carrying out the Board’s commitment to maintaining a balanced and diverse composition of members. The Governance Committee therefore identifies candidates for membership on the Board and recommends such candidates’ nomination to the Board based on their ability to diversify and complement the Board’s existing strengths. Additionally, while the Board does not have a formal policy governing diversity among directors, Board diversity is a key priority under the Governance Committee’s primary responsibility for selecting and nominating director candidates and overall Board refreshment.

Board Diversity

One of our Company values is that we embrace diverse perspectives. We believe different points of view brought through diverse representation lead to better business performance, decision making, and understanding of the needs of our diverse clients, employees, stockholders, business partners and other stakeholders. This applies equally to our Board.

The Board values a well-rounded board that taken together, reflects a balanced mix of skills, experience, backgrounds and attributes applicable to the Company’s business, strategy and stakeholder interests. The Board takes a multi-dimensional approach to diversity and considers a variety of skills and attributes such as:

For further information see our Board Diversity Profile under the “2020 Performance and Proxy Statement Summary” section.

Enhanced Focus on Board Diversity in 2020

During 2020, the Governance Committee continued its focus on Board diversity. In particular, it emphasized its commitment to expand the Board’s racial and ethnic representation, and directed its outside director search firm to include racially or ethnically diverse candidates for consideration. As a result of those efforts, the Board added Mr. Richard Daniels in late 2020, who brings strong information technology experience to the Board. Additionally, the Governance Committee continued its focus on gender diversity, and the Board welcomed Ms. Alison Davis to the Board earlier in 2020. Ms. Davis brings strong financial services and client industry experience to the Board.

The Governance Committee’s focus on overall diversity continues in 2021, including on race/ethnicity and other underrepresented categories. Specifically, the Governance Committee will have a standing commitment to being more intentional about seeking and including diverse candidates in its director recruitment efforts to achieve the optimal balance for the Board.    

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Director Qualifications

The Governance Committee has not formally established any minimum qualifications for director candidates. However, in light of our business, the primary areas of experience, qualifications and attributes typically sought by the Governance Committee in director candidates include, but are not limited to, the following primary areas:

Additionally, the Governance Committee may consider other areas relevant to the Company’s strategic growth and business needs, as it determines necessary, including the important attributes, such as: strong strategic, critical and innovative thinking; sound business judgment; high ethical standards; collegial spirit; ability to debate and challenge constructively; and availability and commitment to serve.

Voting for Director Nominees

Majority Vote Standard

Our Bylaws provide for a majority voting standard for director elections. Under this standard, our directors will be elected by the vote of the majority of the votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares “against” such nominee) in uncontested director elections. In contested elections (where the number of nominees to serve as directors exceeds the number of directors to be elected), directors will be elected by a plurality of the votes cast (meaning the nominees with the greatest number of shares voted “for” will be elected). Under our director resignation policy, if a director does not receive a majority vote in an uncontested election (or a plurality of the votes cast in a contested election), he or she shall promptly offer his or her resignation to the Board for consideration. The Governance Committee will act within ninety (90) days after certification of the stockholder vote to determine whether to accept the director’s resignation, and thereafter submit its recommendation to the Board for consideration at the Board’s next scheduled meeting, unless failure to act sooner would cause the Company to not comply with any applicable NASDAQ or SEC requirement, in which case the Governance Committee shall take action as promptly as practicable. Any director whose resignation is under consideration will abstain from participating in any decision or deliberation regarding that resignation. We will disclose any decision made by the Board with respect to any tendered resignation.    

Voting of Proxies

All proxies will be voted “for” the election of the following twelve (12) nominees, as recommended by the Governance Committee and approved for nomination for election by the Board, unless authority to vote for the election of directors (or for any particular nominee) is withheld. If any of the nominees unexpectedly declines or becomes unable to act as a director, the proxies may be voted for a substitute nominee designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to, or in lieu of, those listed below. Our directors serve until the next annual meeting of stockholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal. As described above, election of directors at the Annual Meeting is subject to a majority vote standard. This means that the twelve (12) nominees who receive a majority of the votes cast will be elected.

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

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Biographies of Director Nominees

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

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CORPORATE GOVERNANCE AND BOARD MATTERS

Corporate Governance

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

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

Board Independence and Leadership

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

Separate Chairperson and CEO Roles

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

The Board has determined that Mr. Dunbar, our current Chair of the Board, is independent within the meaning of the director independence standards described above. Subject to his election, Mr. Dunbar is expected to serve as the Board’s Chair for the 2021-2022 director term.

Executive Sessions

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

Board Oversight of Strategy

The Board is actively engaged in overseeing the Company’s strategy. Each year, the Board conducts an annual in-depth, multi-day session to discuss our strategic and growth plans and review our overall business. Discussion topics may include the Company’s vision mission, and values; new or expanded lines of business; clients and market share; global expansion; financial outlook; competition; industry trends; market share; new products and services; human capital management; and regulatory environment. Discussions about the Company’s strategy and execution are also held during the Board’s regular meetings. Additionally, the Board reviews the Company’s annual corporate strategic priorities and goals.

Board Risk Oversight and Risk Committee

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

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

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

Risk Appetite Statement

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

Risk & Controls

Under the Board and committee oversight outlined above, we are focused on, and continually invest in, our risk management and control environment. Our business teams, supported by our risk, compliance, legal, finance and internal audit functions, work together to identify and manage risks applicable to our business, as well as to enhance our control environment. Particular areas of focus include, among other areas, financial reporting, data management, privacy, bank regulatory requirements, and as further discussed below, cybersecurity.

Cybersecurity

Like other financial institutions, we are susceptible to information security breaches and cybersecurity-related incidents. We are committed to protecting and continually enhancing the security of our systems, networks and general technology environment.    We have established a Security Program, which includes appropriate security risk assessments, security monitoring, incident response, policies, operating standards, global regulatory compliance and employee training. All global employees are required to complete information security and privacy training on an annual basis. We continually invest in enhancing our preventive and defensive capabilities in line with globally recognized information security standards, maintaining appropriate information security risk insurance policies, and implementing other measures to mitigate potential threats and losses, where possible. Additionally, the Audit Committee reviews the Security Program on an annual basis, as well as receives management updates about information security matters on at least a quarterly basis.

Annual Board Evaluations

The Governance Committee of the Board, in coordination with the full Board, conducts an annual evaluation of the Board’s performance and effectiveness, either the Board as a whole and/or on an individual director basis. The Governance Committee develops and implements a process for such evaluation and review, which may involve outside consultants or advisers and may include a review of how certain attributes affect Board effectiveness, such as Board size, meeting frequency, quality and timing of information provided to the Board, director communication, director education, director skills and qualifications, director independence and Board strategy sessions. In recent years, the Board has conducted an annual evaluation process that involves both a one-on-one interview with each director to solicit feedback, as well as written surveys.

Led by the Chairs of the Board and Governance Committee, the results of the evaluation are reviewed and discussed by the Board. The Governance Committee also leads an annual evaluation of the performance and effectiveness of each of the Board’s committees. See “Board Committees—Committee Governance” below.

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Oversight of CEO and Executives

Annual CEO Performance Evaluations

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

CEO and Executive Succession Planning

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

Director Matters

Outside Directorships

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

Director Education and Orientation

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

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

Meeting Attendance

Board and Committee Meetings; Annual Meeting of Stockholders

Each director attended in person or via teleconference 75% or more of the total number of meetings of the Board and the committees on which he or she served during 2020.

It is the Board’s policy that each director employs his or her best efforts to attend our annual stockholder meetings. Nine (9) of our incumbent Board members attended our 2020 Annual Meeting of Stockholders.

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Board Refreshment; Consideration of Director Nominees

Board Refreshment; Selection and Evaluation of Candidates

The Governance Committee, in coordination with the full Board, primarily oversees the refreshment of Board membership and selection and evaluation of potential candidates. Board succession planning takes into account the importance of balancing the appropriate representation of experience and skills on the Board, with the benefits of Board refreshment. Identification of possible director candidates that possess the appropriate skills and qualifications and the desire to serve on a financial services public company board, as well as complement our existing Board, can be a lengthy process. As such and as an ongoing matter, the Governance Committee discusses recruiting strategies and actively considers potential director candidates, whether or not there is an immediate vacancy on the Board to fill. It may from time to time use reputable outside recruiters to assist with identifying and evaluating potential candidates. The Governance Committee also regularly reports to, and discusses its director recruitment efforts and refreshment planning with, the full Board. In 2020, long-term director succession planning continued to be one of the Governance Committee’s top priorities, focusing on assessing the Board’s collective skills and future needs, as well as identifying and evaluating prospective director candidates. Please see “Director Nominees, Selection, Diversity and Other Information” for additional information about the experience, qualifications and attributes that the Governance Committee typically seeks in director candidates.

Stockholder Nominees and Proxy Access

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

In addition, our Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting, provided such stockholders and the nominees satisfy the requirements specified in our Bylaws. Our Bylaws permit eligible stockholders with a significant long-term interest in the Company to include their own director nominees in our annual proxy materials. Under the proxy access bylaw, a stockholder, or a group of up to twenty stockholders, owning three percent or more of the Company’s outstanding stock continuously for at least three years, may nominate and include in our annual proxy director nominees constituting the greater of two nominees and twenty percent of the Board, so long as the stockholder(s) and the nominee(s) satisfy the requirements specified in our Bylaws. For a description of the process for nominating directors in accordance with the Bylaws, including proxy access, please see “Stockholder Proposals and Director Nominations” below.

Communications with the Board

Individuals who wish to communicate with our Board may do so by sending an e-mail to our Board at bod@svb.com. Any communications intended for non-management directors should be sent to the e-mail address above to the attention of the Board Chair. Board-related communications are reviewed by the Chairperson of the Board and shared with the full Board as appropriate.

Code of Conduct

A copy of our Code of Conduct, which applies to all of our directors, executives and U.S. employees, including our senior financial officers, is available on our website at www.svb.com under “About Us—Investor Relations—Governance,” or can be obtained without charge by any person requesting it. To request a copy of our Code of Conduct, please contact: Corporate Secretary, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, or by telephone (408) 654-7400. We intend to disclose any waivers from our Code of Conduct granted to our directors, executive officers or senior financial officers, and any substantive changes to our Code of Conduct by posting such information on our website. No such waivers or substantive changes were made during fiscal year 2020.

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BOARD COMMITTEES

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

Committee Chairpersons/Membership, Responsibilities and Meetings

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

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

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

Audit Committee – Mary Miller, Richard Daniels, Alison Davis, Beverly Kay Matthews and John Robinson

Compensation Committee – Garen Staglin, John Clendening, Jeffrey Maggioncalda and Beverly Kay Matthews

Credit Committee – Kate Mitchell, John Clendening, Jeffrey Maggioncalda and John Robinson

Finance Committee – Joel Friedman, Eric Benhamou, Roger Dunbar and Mary Miller

Governance Committee – Eric Benhamou, Roger Dunbar, Joel Friedman, Kate Mitchell and Garen Staglin

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Risk Committee – Roger Dunbar, Eric Benhamou, Joel Friedman, Kate Mitchell, Mary Miller, John Robinson and Garen Staglin

Committee Independence and Audit Committee Financial Experts

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

In addition, the Board has determined that each of the following current Audit Committee members are “audit committee financial experts,” as defined under SEC rules, and possess “financial sophistication” as defined under the rules of NASDAQ: Ms. Miller, Ms. Davis, Ms. Matthews and Mr. Robinson.    

Committee Governance

Committee Charters

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

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

Annual Committee Evaluations

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

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2020, the Compensation Committee performed all executive compensation-related functions of the Board, except for the approval of CEO compensation, which was approved by the independent members of the Board based on the Compensation Committee’s recommendation. See discussion above under “Board Committees—Committee Chairpersons/Membership, Responsibilities and Meetings” for additional information on the Compensation Committee. Mr. Becker does not participate in any of the Board or Compensation Committee discussions related to the evaluation of his performance or the recommendation or determination of his compensation. See descriptions of related transactions between us and each of the members of the Compensation Committee, if any, under “Certain Relationships and Related Transactions” below.

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

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COMPENSATION FOR DIRECTORS

Overview

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

2020 Director Compensation

No changes to our non-employee director compensation structure were made in 2020. The Director’s Compensation Table below sets forth the current committee membership assignments, as well as the amounts earned or paid to each non-employee member of our Board of Directors during the year ended December 31, 2020. Individual compensation reflects the base cash and equity compensation, as well as incremental committee chairperson and membership fees, as applicable. Each director serves on at least one committee, ranging up to four committees (as in the case of Mr. Dunbar in 2020).

Name		2020 Board Committee Membership												Fees Earned or Paid in Cash				Stock Awards ($) (1)				Total
Roger Dunbar (Board Chair)(2)		X						X		X		C		$	228,000			$	213,699			$	441,699
Eric Benhamou								X		C		X			110,000				133,469				243,469
John Clendening				X		X									90,000				133,469				223,469
Richard Daniels (3)		X													45,781				69,377				115,158
Alison Davis (4)		X													88,329				118,829				207,158
Joel Friedman								C		X		X			113,000				133,469				246,469
Jeffrey Maggioncalda				X		X									90,000				133,469				223,469
Beverly Kay Matthews		X		X											105,455				133,469				238,924
Mary Miller		C						X				X			135,000				133,469				268,469
Kate Mitchell						C				X		X			106,000				133,469				239,469
John Robinson		X				X						X			112,579				133,469				246,048
Garen Staglin				C						X		X			113,000				133,469				246,469

C – denotes Committee Chairperson

Elements of Director Compensation

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Director Equity Compensation

Our annual equity retainer awards are typically granted to directors in the form of restricted stock units. The awards are approved by the Compensation Committee and are granted shortly after the Company’s annual meeting of stockholders. The awards vest in full upon the completion of the annual director term on the date of the next annual meeting.

The determination of the number of shares to be granted to directors is based on the 30-day average stock price from the date of grant, rounded to the nearest dollar. New directors that join the Board during the annual director term receive a pro-rated award. For 2020, the Board Chair and each other director (except Ms. Davis and Mr. Daniels) were each granted 1,156 and 722 shares, respectively, of our Common Stock on May 1, 2020, based on the 30-day average stock price of $173.00. Ms. Davis and Mr. Daniels, who joined the Board in May and October 2020, respectively, were granted a pro-rated award of 663 and 226 shares, based on the 30-day average stock price of $179.00 and $277.00, respectively.

Deferred Equity

Non-employee directors may elect an irrevocable deferral of the settlement of restricted stock unit awards until the earliest of: (i) a specific future settlement date that meets the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (ii) separation from service, (iii) a change in control, (iv) death, or (v) disability. Ms. Mitchell elected to defer the settlement of her 2020 equity grant.

Equity Plan Limits Applicable to Directors

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

Determination of Director Compensation

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

Director Equity Ownership Guidelines

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

As of December 31, 2020, all non-employee directors had attained the applicable ownership requirements or otherwise remained on target to meet such requirements within the established compliance time frame.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions Policy

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

The Audit Committee has primary responsibility for reviewing our related party transactions, as well as certain related party loan transactions as described below, for potential conflicts of interest and approving them (or denying approval, as the case may be). The Audit Committee’s approval may be granted in advance, ratified, or delegated to the committee chairperson or other member. Additionally, the Governance Committee takes into consideration related party transactions involving our directors as part of its annual director independence review.

Insider Loan Policy

We also have in place a policy that permits the Bank to make loans (“Insider Loans”) to directors, executive officers and principal stockholders of the Bank or its affiliates and the related interests of those Insiders (“Insiders”), pursuant to the applicable requirements of Regulation O of the Federal Reserve Act (“Regulation O”). Insider Loans qualify for an exemption from Section 402 of the Sarbanes-Oxley Act of 2002, as they are made by the Bank and subject to Regulation O. The Insider whose credit extension is subject to Board approval may not participate either directly or indirectly in the voting to approve such extension of credit.

Related Party Transactions

Ordinary Course Loan Transactions

Except as described below, during 2020, the Bank made loans to Related Parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of 10% or more of the equity securities of such companies, that were (i) in the ordinary course of business, (ii) on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and (iii) not involving more than the normal risk of collectability or present other unfavorable features.

Employee Matters

SVB maintains a series of employee-funded investment funds known as Qualified Investors Funds (“QIFs”), which invest employees’ own capital in certain funds, including certain SVB Capital funds. We pass on the cost of external expenses to the QIF participants and do not charge a management fee. Participating employees must meet certain eligibility qualifications pursuant to applicable regulatory requirements. Of our executive officers, Messrs. Beck, Becker, Cadieux, China, Cox, Descheneaux, and Zuckert and Ms. Draper have each made commitments to QIFs in aggregate commitment amounts ranging from $50,000 to $1,525,000 depending on the number of QIF funds they participate in.

Vendor Arrangements

Cachematrix, a cash management platform provider for the Bank’s Cash Sweep Program, is controlled by BlackRock, Inc., which, together with its affiliates, is greater than 5% owner of our outstanding voting securities. In 2020, we paid fees totaling approximately $730,000 to Cachematrix. Additionally, we offer certain BlackRock investment funds, among other third-party investment funds, under our Cash Sweep Program. In connection with offering BlackRock funds in our Cash Sweep Program, we earned $37.0 million in fee sharing and related revenue for 2020. Client investments in the Cash Sweep Program are initiated and directed by clients themselves.

In addition, The Vanguard Group, which, together with its affiliates, is a greater than 5% owner of our outstanding securities, is the record-keeper and trustee of our 401(k) and Employee Stock Ownership Plan, as well as the record-keeper of our Deferred Compensation Plan. Fees relating to these services rendered for the fiscal year 2020 totaled approximately $306,000.

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

Overview

We work with small and large businesses across the innovation economy. Our mission is to increase the probability of our clients’ success, and we are dedicated to supporting all our stakeholders in the global communities in which we operate. For more than 35 years, we have helped innovative companies and their investors move bold ideas forward, fast. Now more than ever, we strive to be agents of positive change and take care of our employees, our clients, our shareholders, our communities and our environment. By focusing on the things that matter, we more effectively manage our environmental, social and governance (“ESG”) impacts while continuing to help the innovation economy grow. Our ESG program focuses on creating value through the following areas: governance, sustainable finance, diversity, equity and inclusion (“DEI”), engaging and empowering employees, our hallmark Access to Innovation program for underrepresented individuals, philanthropy, employee giving and volunteerism and investment in affordable housing.

We continue to improve and expand our ESG initiatives by assessing our practices against industry best practices, incorporating stakeholder feedback and actively participating in and advocating for the causes that matter most to our various stakeholders.

Areas of 2020 Focus

The devastating effects of the COVID-19 pandemic and failures to address systemic inequality in our society have highlighted the importance of sharpening our focus on how our business impacts individuals, groups and communities around the world. As further described below, our key ESG accomplishments in 2020 included:

2020 Recognitions

We are proud of the recognition our ESG-related initiatives received in 2020. For the third consecutive year, we were included in Bloomberg’s Gender-Equality Index, which tracks the financial performance of public companies committed to supporting gender equality through policy development, representation, and transparency. We were also included in Newsweek’s list of America’s Most Responsible Companies.

ESG Governance and Reporting

Our ESG program is under the primary oversight of our Governance Committee. We review and discuss our strategy, goals, practices and performance with the committee, which also receives management updates on our progress, ratings, disclosures and stakeholder engagement. At the executive management level, our ESG program is led by our Chief Marketing Officer, supported by a dedicated ESG Program Office established in 2020, with appropriate alignment and involvement from the Chief Executive Officer, other executive leaders and cross-functional management support. We have enhanced transparency around our performance on material ESG issues, with expanded ESG disclosures on our company website. In 2020, in addition to publishing our annual Corporate Social Responsibility report, for the first time, we published a disclosure in accordance with the SASB, a CDP response and a DEI Report. These new disclosures include details on our operational greenhouse gas emissions, sustainable finance activities, workforce diversity and Board diversity.

We will continue to enhance and evolve our disclosures, taking into consideration industry practices and stakeholder expectations.

Environmental

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Social

     Visit www.svb.com/covid-relief for the most up-to-date information on our pandemic response efforts.

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Governance

The above summary reflects selected highlights of our various ESG efforts and is not an exhaustive list. For more information about the above highlights and our ESG efforts (including access to our 2020 Corporate Social Responsibility Report and 2020 Diversity, Equity and Inclusion Report), please see our ESG disclosures on our website under “About Us—Living Our Values,” which we expanded in 2020.

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		EXECUTIVE OFFICERS AND COMPENSATION

INFORMATION ON EXECUTIVE OFFICERS

Our executive officers perform policy-making functions for us within the meaning of applicable SEC rules. They may also serve as officers of the Bank and/or our other subsidiaries. There are no family relationships among our directors or executive officers.

The following information outlines the name and age of each of our executive officers, as of the date of this Proxy Statement, and his or her principal occupation with the Company, followed by his or her biography below:

Executive Biographies

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

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

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

John China, President of SVB Capital, oversees the growth of our funds management business as well as our Early Stage and Family Office practices. Mr. China joined us in 1996 as Senior Relationship Manager and has since held a variety of positions with the Company, including Head of Venture Capital Management and Head of Venture Capital and Private Equity division. Mr. China was appointed as the Head of Relationship Management in 2010, Head of Relationship Banking in 2014, and Head of Technology Banking in 2017, prior to his appointment to his current role in 2019. Mr. China is a member of the boards of DEMO; H2 Global, a digital industry leadership network; BUILD, a nonprofit organization dedicated to educating under-resourced youth through entrepreneurship, and Meals on Wheels San Francisco; and the advisory boards of Alpha Club, a networking community of founders, CEOs and technology influencers, and York Butter Factory, an Australian coworking and startup incubator space. Mr. China holds a Bachelor’s degree in Industrial Engineering from Stanford University.

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Philip Cox, Chief Operations Officer, is responsible for our core operations, enterprise project management, client service and information technology teams. Mr. Cox joined us in 2009 as Head of UK, Europe & Israel, and was appointed Head of Europe, Middle East and Africa and President of the UK Branch in 2012, where he was focused on the international development of our business and was responsible for our UK Branch, prior to his appointment to his current role in 2019. Prior to joining the Company, Mr. Cox was Head of Commercial Banking at the Bank of Scotland in London, a division of Lloyds Banking Group (2008-2009) and the Chief Executive Officer of Torex Retail PLC (2005-2008). Prior to his tenure at Torex Retail PLC, Mr. Cox spent approximately 23 years with NatWest/RBS Group in a variety of positions, including Managing Director of Transport and Infrastructure Finance, Regional Managing Director of the North of England Region and the same position for the South West and Wales business. Mr. Cox is a member of the Chartered Institute of Bankers (UK) and the Association of Corporate Treasurers (UK).

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

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

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

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

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

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PROPOSAL NO. 2: ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

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

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

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

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

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

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

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

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

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) discusses our 2020 executive compensation program, primarily as it relates to our “named executive officers” (“NEOs”) listed below.

Overview of 2020 Executive Compensation

 

From the Compensation Committee...   We, the Compensation Committee of the Board of Directors (“Compensation Committee”), have the delegated responsibility of primary oversight over the design and execution of the Company’s executive compensation program.   Despite the unprecedented challenges presented in 2020 from the global COVID-19 pandemic crisis and other extraordinary events such as unrest related to calls for racial and social justice reform, the Company delivered a year of exceptional performance and growth, all while navigating difficult business and operating conditions. We shifted our attention to prioritizing and supporting our business and people through these challenges, but still maintained our core compensation strategy and objectives, including pay for performance, appropriate risk management and talent retention. As further explained in this CD&A, our key areas of focus in 2020 were:   •   Broadly supporting our employees with physical and mental health, financial, and practical work-from-home support during the pandemic crisis — in particular: ○  Providing a 100% minimum ICP target funding for all employees except executive officers, in anticipation of the impact from COVID-19, which ultimately was not applied since the Company outperformed its annual target goals; •   Maintaining our core executive compensation program which emphasizes pay for performance, particularly long-term performance, consistent with prior years. •   Continuing focus on risk management, including the expansion of our Recoupment Policy. •   Expanding our focus on the Company’s human capital, specifically diversity, equity and inclusion initiatives and the evolution of our workplace in an increasing virtual environment.   As we continue navigating the challenges that have carried into 2021, we will seek to define our “new normal” and adjust, as needed, our executive compensation strategy and approach to continue to effectively drive the Company’s sustainable, long-term global growth and strategy.				Compensation Committee Members   Garen Staglin, Chair John Clendening Jeffrey Maggioncalda Beverly Kay Matthews
				2020 NEOs   Greg Becker President & Chief Executive Officer   Dan Beck Chief Financial Officer   Michael Descheneaux President of Silicon Valley Bank   Philip Cox Chief Operations Officer   John China President of SVB Capital

2020 Executive Compensation Elements At-A-Glance

 

Salary

ICP

PRSUs

Stock Options

RSUs

Ongoing

1-Year Performance Period

3-Year Performance Period

4-Year Vesting Period

Fixed

Performance-Based^

Fixed^

Performance Metrics:

ROE*

TSR*   ROE*

Stock Price Appreciation^

 

*

Includes measurement of performance relative to peers

^

ICP and earned PRSU awards are determined after the performance period; RSU and stock option awards are based on a fixed number of shares at the time of grant; any incremental value realized above the grant value of RSUs and stock options, as well as earned PRSUs, is based on stock price appreciation.

 

Glossary of CD&A Terms
DCP  –  Deferred Compensation Plan EPS   –  Earnings Per Share ERM  –  Enterprise-wide Risk Management		ICP    –  Incentive Compensation Plan (annual cash     incentive plan) NEO   –  Named Executive Officer PRSU   –  Performance-Based Restricted Stock Unit		ROE   –  Return on Average Equity RSU   –  Restricted Stock Unit TSR  –  Total Stockholder Return

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		2020 Executive Compensation Highlights   Navigating the COVID-19 Pandemic   Among our highest priorities in 2020 was, and still is in 2021, the safety, well-being and stability of our people. We maintained our workforce without the need for any furloughs or layoffs. We focused on providing work, life and health-related support for our employees, especially in a remote work-from-home environment, including expanded medical and other support to those directly impacted by COVID-19, mental health support, and general work-from-home support such as technology, equipment and utility stipends. All COVID-19-related support was broadly available to all employees (though not all executives participated). There was no support exclusive to executives.   The Compensation Committee focused on enhancing compensation and benefits, where appropriate, given the extraordinary circumstances of 2020. More specifically, in March 2020, in light of the economic and environmental uncertainties and instability created by the pandemic, the Compensation Committee took the exceptional step of approving a funding minimum at target for our 2020 ICP, applicable to all employee participants except for executive officers. Individual awards were still subject to individual performance. The special minimum was ultimately not applied, as the Company’s performance exceeded our 2020 ICP target performance goals and the plan was funded accordingly as further discussed in this CD&A.   Additionally, performance goals for executive awards were determined in normal course primarily during the first quarter of 2020, without special consideration or adjustment for any impact from COVID-19. Our 2020 performance-based awards for our executives (including NEOs) were determined based on performance against those goals.

		Pay for Performance		Ranked #1 among our peer group for our ROE and our 1-, 2- and 3- year TSR performance.*
		In a year unlike any other where we faced an extraordinary macroeconomic environment, we performed exceptionally and delivered another year of strong strategic execution, business growth and financial performance, resulting in total net income, EPS, ROE and TSR performance for the year 2020 as highlighted on the right. We ranked first relative to our peer group for our 2020 ROE performance, as well as our 1-year, 2-year and 3-year TSR performance, based on our established TSR measurement methodology. Other notable accomplishments also included: facilitation of loans under the Paycheck Participation Program, seamless shift to work from home environment, advancement of our diversity, equity and inclusion initiatives, and efforts to consummate the signing of our merger with Boston Private Financial Holdings in early January 2021. The Compensation Committee’s compensation decisions for 2020 reflected our strong performance throughout the year. (For further details about our 2020 business and financial performance, see “2020 Performance and Proxy Statement Summary” in this Proxy Statement.)

 

		2020 CEO Pay   In designing Mr. Becker’s 2020 compensation structure, we continued to emphasize long-term, performance-based pay, placing greater emphasis relative to our applicable Peer Group. 86% of his total target pay is at risk and subject to Company/individual performance.    With respect to his actual total compensation, Mr. Becker received for 2020 a total package commensurate with our 2020 performance.

Peer Comparison of Target CEO Pay Mix^ (Average Peer Group pay mix)   Performance-Based: 64% Fixed: 36% Long-Term: 54% Short-Term: 46%   Relative to our Peer Group, we place a greater emphasis on performance- based and long term pay.

* Based on the TSR calculation methodology discussed under “Long Term Equity Incentives”; our 56.0% represents our 3-year TSR performance (2018-2020). ** Special one-time equity award (subject to three-year cliff vesting) granted to Mr. Becker in 2019. ^ Based on our 2020 Peer Group and peer compensation data available at the time of determination of Mr. Becker’s 2020 compensation.

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Compensation Governance and Risk Management

Role of Compensation Committee and the Independent Board Members

All members of the Compensation Committee are “independent” under applicable NASDAQ rules. The Compensation Committee has primary oversight of our executive compensation program as provided in its charter, including the design and administration of executive compensation plans in a manner consistent with the executive compensation program objectives described above. More specifically, the committee determines compensation strategy, establishes applicable performance goals and metrics, selects forms of compensation, determines the overall pay mix, sets target pay levels, and approves final executive compensation awards.

In the case of the CEO, the Compensation Committee makes recommendations about CEO pay decisions for approval by the independent members of the full Board (all Board members except the CEO, acting as a committee). Subject to the recommendation of the Compensation Committee, all of the independent directors of the Board review and approve the compensation for the CEO. Such review and approval are conducted during executive sessions, where neither the CEO nor any other member of management is present. In the case of all other non-CEO executive and Section 16 officers, as well as other key positions, the Compensation Committee reviews and approves the compensation of such individuals. The determination of compensation awards for all non-CEO positions is conducted during executive sessions, where the CEO may participate at the Compensation Committee’s invitation.

The Compensation Committee regularly monitors performance against established goals and approves funding accruals, as well as focus on other aspects of the compensation program, including, among other things, peer group review and determination, compensation risk review, and monitoring of market and governance trends impacting compensation.

In carrying out its oversight responsibilities, the Compensation Committee regularly reports to the Board on the actions it has taken, as well as confers with the Board on compensation matters, as necessary. The Compensation Committee also makes recommendations for all other compensation-related matters that require full Board approval.

The Compensation Committee meets on a regular basis, and routinely meets in executive session without management present. During 2020, the committee held 9 meetings, including a separate session dedicated to enhancing compensation strategy based on the direction of the business.

Role of Chief Executive Officer

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

Role of Compensation Committee Consultant

Consistent with prior years, the Compensation Committee retained Pay Governance LLC, an independent executive compensation consultant, to provide advice and recommendations on all compensation matters under its oversight responsibilities as defined in the committee’s charter. The Compensation Committee in its sole discretion selects the consultant and determines its compensation and the scope of its responsibilities.

In 2020, Pay Governance assisted the Compensation Committee with: advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on director and executive compensation levels and practices, including review and recommendations on director, CEO and other executive compensation and evaluation of CEO pay and Company performance; assessment of realizable pay and performance; advice on the Company’s peer group; guidance on the design of our compensation plans and policies, including recoupment policy and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Compensation Committee’s annual compensation risk review; and periodic reports to the Compensation Committee on market and industry compensation trends and regulatory developments.

Pay Governance provides services only to the Compensation Committee, and not to the Company, and did not provide any additional services to the committee outside of executive and director compensation consulting during 2020. The Compensation Committee does not believe there were any potential conflicts of interest that arose from any work performed by Pay Governance during 2020.

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Compensation Committee – Key Areas of Focus

Compensation Risk Management

Compensation risk management is a primary area of oversight of the Compensation Committee. At the direction of the committee, its compensation consultant conducts an annual review of the Company’s incentive programs, including design and risk assessment. Additionally, management performs an annual risk assessment of certain compensation plans, which includes back-testing of awards to evaluate against plan design, governance and risk mitigation. Our Chief Risk Officer reviews and shares her input on those risk assessments, and reports and discusses with the committee her risk assessment of our compensation programs (including plan design and execution), and any recommendations. Based on these assessments and discussions, we do not believe that our compensation program promotes excessive risk taking or creates risks that are reasonably likely to have a material adverse effect on the Company.

Moreover, from time to time, the Compensation Committee may implement policies or other tools to strengthen compensation risk management, such as the Company’s Recoupment Policy. The committee amended the policy in late 2020 by adding an additional trigger event and expanding its applicability to certain senior level employees. See “Executive Benefits and Other Executive Compensation-Related Matters – Compensation Recovery Policy.”

Our compensation programs and risks are routinely discussed at the Board level, both with and without the CEO present. In particular, the chairperson of our Compensation Committee reports to and discusses significant compensation risk issues with the full Board and the Risk Committee. The chairperson of the Compensation Committee (Mr. Staglin) is a member of the Risk Committee of the Board of Directors. Additionally, certain compensation matters are also reviewed by the Audit Committee, specifically those related to exclusions under our performance-based funding arrangements, where applicable.

The Compensation Committee does not solely rely on comparative data from the 2020 Peer Group. Such comparative data provides helpful market information about our peer companies as a reference, but the Compensation Committee does not target any specific positioning or percentile, nor does it use a formulaic approach, in determining executive pay levels. The Compensation Committee may refer to other banks or financial companies outside of the peer group for additional benchmarking information. It also utilizes other resources, including published compensation surveys (from Willis Towers Watson and McLagan) and other available proxy and compensation data. All such comparative peer data and supplemental resources are considered, along with the Company’s pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and the Compensation Committee does not place any particular weighting on any one factor.

Performance-Based Compensation – Design and Assessment

Another primary area of focus of the Compensation Committee is the design of performance-based compensation, including selecting and setting appropriate performance metrics and measuring actual performance against those metrics. The committee monitors performance of current year performance-based awards, as well as designs and plans performance metrics for future years. In designing performance metrics, the committee reviews market and peer practices, as well as seeks the input of the full Board and CEO to take into account key areas of strategic and business focus. As further discussed in this CD&A section, specific performance metrics

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for annual and long-term incentive awards include ROE and TSR, and for long-term performance-based equity awards granted in 2018 and 2019, strategic business objectives and EPS growth. In certain cases, such as ROE and TSR, our performance is measured relative to peer performance.    

Determination of Compensation for Individual Executives

In making compensation decisions or recommendations for individual executives, the Compensation Committee takes into consideration the performance reviews conducted for each executive officer. The committee meets and discusses with the CEO his assessment of the performance of the other executive officers, based on their self-reviews and the CEO’s own evaluation of their performance. The independent members of the Board meet and discuss, without the CEO present, their collective performance assessment of the CEO, taking into consideration his self-review and the individual evaluation provided by each Board member. (See “Oversight of CEO and Executives – Annual CEO Performance Evaluations” under the “Corporate Governance and Board Matters” section.)

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

Committee Decisions

The performance metrics utilized for executive compensation, where applicable, are largely used for target funding determination purposes. Funding determinations guide decisions for actual awards to executive officers by the Compensation Committee (or in the case of the CEO, the Board) at its discretion. We believe that discretion, when judiciously applied, is an important part of our compensation decision processes, as it allows the Compensation Committee (or in the case of the CEO, the Board) to better link executive pay to actual performance, or take into account extraordinary considerations. Discretion, both positive and negative, allows directors to make appropriate pay decisions based on their informed business judgment, particularly in circumstances where there may be other relevant performance factors or unforeseen circumstances that should be considered beyond the actual performance metrics. The Compensation Committee believes that a balanced utilization of performance metrics and committee discretion leads to appropriately calibrated compensation for executives or the broader employee base.

For 2020, in light of the economic and environmental uncertainties and instability created by the pandemic, the Compensation Committee utilized its discretion and took the exceptional step of approving a funding minimum at target for our ICP, applicable to all employee participants, but excluding executives. The Company’s performance exceeded the target ICP goals and therefore, the minimum was ultimately not applied or needed.

Enhanced Focus on Human Capital

In 2020, the Compensation Committee, along with the full Board, increased its engagement in various human capital-related matters. In particular, the Committee focused on the Company’s diversity, equity and inclusion initiatives, such as increasing diverse representation among the Company’s leadership, fair pay analyses, training and educational opportunities, employment awareness programs and resource groups, and promotion of an inclusive culture. The Committee also focused on the planning of the future of work in an increasingly virtual environment, balancing the need for employee flexibility, internal collaboration and business needs.

Annual Say on Pay

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

In 2020, 91% of the votes cast approved, on an advisory basis, our 2019 executive compensation program (as described in our 2020 proxy statement). In light of the strong voting support and the extent of other feedback we have solicited from our stockholders, the Compensation Committee remained consistent with our executive compensation philosophy, policies or overall program, and did not make any material changes. We continue to carry out our executive compensation program based on our key philosophy and objectives as described above. The Compensation Committee will continue to consider changes to the program on an ongoing basis, as appropriate, in light of evolving factors such as our corporate strategy, the business environment and competition for talent, as well as stockholder feedback.

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Stockholder Alignment and Engagement

Our stockholders matter and aligning with their interests is important. We use performance metrics tied to stockholder return for our performance-based incentive awards ---- total stockholder return, return on equity and for long-term equity awards granted in 2019, earnings per share. We measure performance against our own goals and/or relative to our peer performance.

In addition to our active stockholder engagement activities throughout the year (over 200 (primarily virtual) stockholder meetings conducted in 2020), particularly as part of our annual proxy statement preparation process, we reach out to our larger stockholders to invite their feedback, including their views about our executive compensation program. Feedback from stockholders is important to consider, and we value opportunities to seek their input.

Elements of Executive Compensation

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

Cash Compensation

Base Salary

In 2020, no base salary changes were made for any NEO, except for Mr. China. Mr. China received a merit-based adjustment to his base salary primarily due to his individual performance, strong strategic leadership to expanding the SVB Capital platform, and salary market positioning relative to peers.

Annual Cash Incentives (ICP)

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

In 2020, the Compensation Committee adjusted each of the NEOs’ incentive target based on merit due to strong performance and execution, as well as market compensation data. More specifically, reasons for ICP target changes in 2020 reflected: (i) for Mr. Becker, continued outstanding leadership of the Company; (ii) for Mr. Beck, continuing excellence in strong financial management; (iii) for Mr. Descheneaux, continued strong leadership of the core banking business, including product development initiatives; (iv) for Mr. Cox, excellent leadership in strengthening our operational and technological infrastructure; and (v) for Mr. China, strong strategic leadership to expanding the SVB Capital platform.

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ICP - Funding

Each year, the Compensation Committee establishes metric(s) used to measure Company performance for ICP funding purposes, on an absolute basis, as well as relative to peers. For 2020, the Compensation Committee stayed consistent with its prior methodology for funding the ICP by utilizing ROE as the primary performance metric on an absolute and relative basis. The Compensation Committee believes that it continues to be an appropriate indicator of financial performance that drives stockholder value. The funding methodology for 2020 was as follows:

The Compensation Committee determines the final ICP funding and adheres to the formulaic funding described above, unless it determines in its discretion an adjustment is necessary. Such adjustments are made infrequently. Due to the extraordinary COVID-19-related circumstances in 2020, the Compensation Committee exercised its discretion and made the decision in March 2020 to approve minimum ICP funding at 100% target for all employees except executive officers, notwithstanding actual performance. (Individual awards would still be subject to performance.) The Committee felt that this was important to provide a level of stability and support for employees amidst the uncertainties presented by the pandemic.

Notwithstanding the minimum funding approved, the Company’s 2020 performance exceeded target, and the Compensation Committee approved the funding of the total ICP pool at 130% of total target, based on: (i) 95% funding for performance against our annual budget (2/3 of pool), and (ii) 200% funding for performance against 2020 Peer Group (1/3 of pool).

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ICP - 2020 NEO Awards

Specifically for Mr. Becker, key factors considered included:

Key factors considered by the Compensation Committee for the other NEOs, included: (i) for Mr. Beck, excellent execution of overall financial management (including strong balance sheet and capital management) and key business initiatives; (ii) for Mr. Descheneaux, outstanding leadership of our core banking business, including global business growth, client focus, and product development; (iii) for Mr. China, strong leadership expanding the SVB Capital platform, including the successful acquisition of the credit fund business of the West River Group; and (iv) for Mr. Cox, excellent leadership in the Company’s response to the operational challenges from the pandemic, as well as the continued strengthening of our operational and technological foundation.

Long-Term Equity Incentives

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Stock Options and Restricted Stock Units (RSUs)

Stock options and RSUs are subject to annual vesting over a 4-year period. The stock options have a maximum term of 7 years from the date of grant. No performance-based criteria are associated with stock options and RSUs, as the increase in the value of these stock options, and the value of the RSUs, are inherently tied to the future performance of our Common Stock.

Performance-based Restricted Stock Units (PRSUs)

PRSUs are earned based on the achievement of certain performance metrics, as determined by the Compensation Committee. After the end of the specified performance period, the Compensation Committee will determine the extent the NEOs earned the PRSUs, subject to a maximum total payout of 150% of target award.

For 2020, the Compensation Committee granted PRSUs subject to vesting over a three-year period (from 2020-2022) based on two performance metrics for the PRSUs, as further described below: (i) TSR relative to peers, and (ii) ROE relative to peers. To the extent earned, these awards are subject to additional time-based vesting through January 31, 2023.

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PRSU Awards for Performance Period Ended in 2020

In 2018, each of the NEOs were granted PRSU awards subject to performance over a 3-year performance period (2018-2020). The 2018 PRSUs were subject to the following performance metrics: (i) 50% of the award was subject to the Company��s TSR performance relative to peers (similar to the 2020 PRSU awards), and (ii) 50% of the award was subject to certain strategic business objectives. The strategic business objectives were focused on improving the Company’s operating leverage through the transformation of key business processes and the implementation of scalable solutions, primarily in three key areas: (i) scalable growth — evaluating our underlying financial fundamentals relative to operating expense growth, which was weighted 50%; (ii) client experience — evaluating continual improvement in overall client satisfaction around our products and services (including net promoter scores), which was weighted 25%; and (iii) employee enablement — evaluating our efforts to enhance processes and tools to make it easier for employees to perform their job responsibilities, which was weighted 25%.

Upon completion of the 3-year performance period, the Compensation Committee (and in the case of the CEO, the Board) determined that 95% (in the case of Mr. Beck) and 115% (in the case of Messrs. Becker, Descheneaux, China and Cox) of the target PRSU awards were earned, based on: (i) the Company’s TSR outperformance relative to peers; and (ii) solid performance towards improving scalability, client satisfaction and employee enablement. The awards were also subject to a time-based vesting requirement and were fully vested as of January 29, 2021. Messrs. Becker, Beck, Descheneaux, China and Cox each earned 9,065, 3,271, 3,960, 2,263 and 1,641 shares, respectively, of our Common Stock upon vesting. (The shares earned by Mr. Beck also includes the additional PRSU award he received in 2018 which was subject to the same three-year vesting terms, but subject solely to performance against the strategic business objectives.)

Executive Benefits and Other Executive Compensation-Related Matters

Executive Benefits

Employee Retirement Benefits

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

Under our 401(k) Plan, our U.S. employees, including our NEOs, may make voluntary pre-tax and/or traditional/Roth post-tax deferrals up to the maximum provided for by IRS regulations and our Plan. The Company provides dollar-for-dollar matching contributions up to a maximum of 5% of eligible compensation or the Internal Revenue Section 401(a) compensation limit, whichever is less. Company 401(k) matching contributions vest immediately upon deposit into the individual’s 401(k) account.

The plan also includes a profit-sharing component. Under the ESOP, we may make discretionary annual contributions for U.S. employees, as determined by the Compensation Committee. ESOP contributions may be in the form of cash, Common Stock or a combination of both, and are subject to certain vesting conditions. Contributions are determined based on the Company’s performance and are not adjusted to reflect individual performance.

Similar to prior years, for 2020, the Compensation Committee established performance criteria based on the Company’s adjusted ROE against budget (same as the calculation of 2/3 of the total ICP pool) to fund the ESOP contribution, and set the funding level to 1.25% of eligible compensation based on target ROE performance. Despite a higher allowable maximum under the ESOP, the Compensation Committee has committed to a funding maximum of 5%. Based on the Company’s 2020 ROE performance, the Compensation Committee approved a contribution of 1.19% of eligible compensation in cash (50%) and Common Stock (50%) for all eligible participants.

Prior to his relocation to the U.S. in 2019, Mr. Cox was eligible to participate in our U.K. Group Personal Pension Scheme (“Pension Scheme”) that is generally available to all of the Company’s U.K. employees. Under our Pension Scheme, because Mr. Cox was enrolled in U.K. statutory pension protection, the Company provided him with cash payments in lieu of employer matching contributions in 2019. No such amounts were paid in 2020.

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Deferred Compensation

We do not provide NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity to defer a portion of their income, beyond what is allowed to be deferred in the Company’s qualified retirement plan. Specifically, under our DCP, each individual may defer 5% to 50% of their base pay and 5% to 100% of eligible incentive payments during each plan year. The DCP is an unfunded plan, and participating executives bear the risk of forfeiture in the event that we cannot fund DCP liabilities. We do not match executive deferrals to the DCP. See “Compensation for Named Executive Officers—Non-Qualified Deferred Compensation” below.

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

Health and Welfare Benefits/Time Away From Work

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

During 2020, executives were eligible to participate in the same COVID-19-related benefits and support that were broadly available to other employees, except that executives received a $500 stipend for utilities on a one-time basis while the broader employee based received the stipend on a quarterly basis. Mr. Becker did not receive any stipend.

Executive Termination Benefits

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

Perquisites

We do not have any executive perquisite programs. Other than our executive Change in Control Plan, we do not have any special executive programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are generally available to our employees. Executives may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan. From time to time and on a limited basis, we may provide individual benefits deemed to be perquisites, which we generally believe serve, or are related to, a reasonable business-related or employment purpose. Additionally, we provided certain benefits to Mr. Cox that are deemed to be perquisites, such as car allowance benefits (in 2019) and imputed income for spousal attendance at business events. See “Compensation for Named Executive Officers - Summary Compensation Table.”

Executive Relocation

In connection with his promotion to Chief Operations Officer and the relocation of him and his family from London, England to California in 2019 and then to Arizona in 2020, Philip Cox (our former Head of EMEA and President of the UK Branch) received certain benefits, including temporary housing and relocation benefits (such as immigration fees, travel costs for him and his family, car rental, shipment of goods, etc.), reimbursement for loss on sale of vehicle upon relocation, and tax preparation services costs. Many of these benefits were similar to the relocation benefits the Company typically provides to other similarly-situated employees relocating internationally or are customary based on U.K. practices. Moreover, Mr. Cox’s relocation benefits are subject to repayment under certain employment termination events.

Employment Agreements

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

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Compensation Recovery Policy

Our executive officers are subject to our Recoupment Policy (or clawback policy). Under the policy, subject to the determination of the Board or (in the case of any non-CEO executive officer) the Compensation Committee, the Company may recover or adjust any cash or equity-based compensation paid or payable to any such officer, including our NEOs, in the event of a material financial restatement or a material miscalculation of a financial metric used to determine the payment of a bonus or incentive award to such officer, to the extent permitted by applicable law. In October 2020, the Compensation Committee amended the policy by including, as an additional recoupment trigger, certain misconduct events and expanding the applicability of the policy to certain senior level employees (in addition to the Company’s executive officers). The amended policy became effective in January 2021.

Tax Considerations

Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), compensation paid to our covered executive officers (including our CEO) will not be deductible to the extent it exceeds $1,000,000. In 2020, the Compensation Committee considered the potential future effects of Section 162(m) when determining NEO compensation and the Compensation Committee is expected to consider the potential future effects of Section 162(m) when determining future NEO compensation.

Stock Option and Other Equity Practices

Grant Practices for Executive Officers

The Compensation Committee approved all equity grants in 2020 made to executive officers of the Company, except that the independent members of the Board approved equity grants made to the Chief Executive Officer based on the Compensation Committee’s recommendation. Similar to prior years, 2020 annual equity compensation grants to executives were made effective during the second quarter of the year. Actual equity grants are determined based on the equity compensation dollar value awarded to executives, divided by either (i) the 30-day average (from date of grant) stock price (in the case of PRSUs and RSUs); or (ii) the 30-day average (from date of grant) stock price, multiplied by the ratio of the weighted average grant date fair value of stock options to the weighted average grant date fair value of RSUs, as reported in our most recent Annual Report on Form 10-K (in the case of stock options). The exercise price for stock option grants is equal to the closing market price on the grant’s effective date and time-based grants typically have an annual vesting period of 4 years, subject to continued employment or service. All 2020 annual grants to our NEOs were made in accordance with this practice.

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

Grant Practices for Other Employees

The Board has delegated authority to the Equity Awards Committee to make equity grants to non-executive employees under our 2006 Equity Incentive Plan. The Equity Awards Committee is a committee of two, comprised of our Chief Executive Officer and the Chair of our Board, and may not make equity grants to executives or certain other designated positions. The Equity Awards Committee may make grants only within established individual employee and aggregate share limits as determined by the Board. Any grant that does not meet the requirements established for the Equity Awards Committee must be made by the Board, the Compensation Committee or other authorized committee.

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

Policy Prohibitions Against Hedging and Pledging

Under our Insider Trading Policy, our directors, executive officers (including our NEOs) and employees are not permitted to hedge, sell puts or short, or otherwise engage in any transaction designed to establish downside price protection in any of the Company’s publicly-traded securities at any time. Additionally, our policy restricts directors and executive and Section 16 officers from holding in a margin account, or pledging or using as collateral to secure personal loans or other obligations, the Company’s publicly-traded securities at any time.

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Equity Ownership Guidelines for Executive Officers

Neither vested nor unvested stock options count towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.

As of December 31, 2020, all of our NEOs were in compliance with the applicable ownership guidelines or otherwise expected to achieve the requisite ownership levels within the designated 5-year time-frame.

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COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2020, 2019 and 2018, respectively: