DEF 14A of Sei Investments Co
Filed Apr 15, 2024 · FY20230000350894-24-000066
Investing in our talent for the future
Investing in our talent for the future Our people differentiate our company in the market and community. They are a driving force behind our success, and as one of our greatest assets, we remain committed to investing in their development and aligning our talent to the areas of our business where we believe some of greatest growth potential lies. Enterprise Sales Team. In 2023, we brought together sales expertise from across our business segments to harness the power of our growth engines and take a more holistic approach to our markets. The Enterprise Sales Team’s collaborative approach positions us well to educate our markets on SEI’s differentiation and best meet our clients’ needs. AI Center of Excellence. As we explore emerging technologies like artificial intelligence (AI), we’ve made investments in upskilling our workforce to capitalize on opportunities for enhancing our capabilities and solutions. Our strategic investment in and partnership with TIFIN, a leading innovation platform accelerating the adoption of AI in wealth management, furthers exploration and solution delivery, as well as creates opportunities for our employees to participate in externships. SEI Sales University. In 2024, we launched a fast-track professional development program for current employees—of all professional backgrounds—who have an interest in moving into a sales role. Through this program, they learn fundamentals, expand their business acumen, grow their networks, and increase their sales proficiency. Leadership development. As part of our commitment to fostering an inclusive culture, we partnered with McKinsey’s Connected Leaders Academy to offer accelerated development opportunities to diverse talent with a goal of enhancing leaders’ progression in our organization. In 2023, we held an immersive, offsite leadership development experience facilitated by faculty at St. Joseph’s University. Program participants explored topics such as leading through change, conflict management, and inclusive leadership.
Employee Demographics
Employee Demographics
Employee Demographics
| | | | | | | | Non-Hispanic or Latino | | | | | | | | | | Job categories | Hispanic or Latino | | Male | | | | | | Female | | | | | | Overall totals | | | | | White | Black or African American | Native Hawaiian or Pacific islander | Asian | American Indian or Alaskan Native | Two or more races | White | Black or African American | Native Hawaiian or Pacific islander | Asian | American Indian or Alaskan Native | Two or more races | | | | Male | Female | | | | | | | | | | | | | | | Exec/Sr. Officials & Mgrs | 0 | 0 | 20 | 0 | 0 | 2 | 0 | 1 | 2 | 0 | 0 | 1 | 0 | 0 | 26 | | First/Mid Officials & Mgrs | 9 | 5 | 398 | 10 | 0 | 40 | 1 | 2 | 218 | 13 | 0 | 17 | 0 | 3 | 716 | | Professionals | 74 | 35 | 1674 | 104 | 2 | 289 | 2 | 38 | 727 | 60 | 0 | 191 | 1 | 11 | 3208 | | Technicians | 0 | 0 | 7 | 0 | 0 | 2 | 0 | 1 | 2 | 0 | 0 | 0 | 0 | 0 | 12 | | Sales Workers | 2 | 0 | 131 | 2 | 0 | 3 | 0 | 2 | 30 | 2 | 0 | 4 | 0 | 0 | 176 | | Administrative Support | 1 | 1 | 3 | 0 | 0 | 2 | 0 | 0 | 5 | 0 | 0 | 0 | 0 | 0 | 12 | | Craft Workers | 0 | 0 | 5 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 6 | | Operatives | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Laborers & Helpers | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Service Workers | 1 | 0 | 16 | 0 | 0 | 0 | 0 | 2 | 0 | 0 | 0 | 0 | 0 | 1 | 20 | | Total | 87 | 41 | 2254 | 116 | 2 | 338 | 3 | 46 | 985 | 75 | 0 | 213 | 1 | 15 | 4176 | | Previous Report Total | 77 | 36 | 2150 | 111 | 2 | 293 | 2 | 35 | 984 | 68 | 0 | 193 | 1 | 11 | 3521 |
Employee Demographics
*This table provides demographic data for SEI’s U.S. employees as of the payroll period from October 9-20, 2023. This data was generated in connection with the preparation of SEI’s EEO-1 Report for 2023, which will be submitted to the U.S. Equal Employment Opportunity Commission.
Employee Demographics
| Proxy summary. Annual Meeting of Shareholders DATE AND TIME Wednesday, May 29, 2024 at 9 a.m. ET LOCATION www.virtualshareholdermeeting.com/SEIC2024 RECORD DATE March 22, 2024 |
Employee Demographics
| Voting matters Shareholders will be asked to vote on the following matters at the Annual Meeting. We encourage you to read the entire Proxy Statement before voting. | | | | | | PROPOSAL | | BOARD RECOMMENDATION | | PAGE | | 1 | To elect three directors for a term expiring at our 2027 Annual Meeting of Shareholders Our Board unanimously recommends that Shareholders vote FOR the election of Mr. Carl A. Guarino, Ms. Stephanie D. Miller and Mr. Carmen V. Romeo to the class of directors whose term will expire at our 2027 Annual Meeting of Shareholders. | | Vote FOR each director nominee | 12 | | 2 | To approve on an advisory basis the compensation of our named executive officers Our Board seeks a non-binding advisory vote from our Shareholders to approve the compensation of the named executive officers as disclosed in this Proxy Statement. Our Board and our Compensation Committee value the opinions of our Shareholders. To the extent that there is any significant vote against the compensation of our named executive officers, we will consider our Shareholders’ concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns. | | Vote FOR | 50 | | 3 | To approve the adoption of the 2024 Omnibus Equity Compensation Plan Our Board unanimously recommends a vote for approval of our 2024 Omnibus Equity Compensation Plan. | | Vote FOR | 52 | | 4 | To ratify the appointment of KPMG LLP as independent registered public accountants to examine our consolidated financial statements for 2024 The Audit Committee of our Board has selected KPMG LLP (“KPMG”) as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2024. The Audit Committee and the Board seek to have the Shareholders ratify the appointment of KPMG by the Audit Committee. | | Vote FOR | 66 |
Employee Demographics
Proposal 1 Election of Directors.
Employee Demographics
| Required vote and Board recommendation | Our Board unanimously recommends that Shareholders vote FOR the election of Mr. Carl A. Guarino, Ms. Stephanie D. Miller, and Mr. Carmen V. Romeo to the class of directors whose term will expire at our 2027 Annual Meeting of Shareholders. | | | | Our Board currently consists of eight members and is divided into three classes comprised of three directors in two of the classes and two directors in the other class. One class is elected each year to hold office for a three-year term and until successors of such class are duly elected and qualified, except in the event of death, resignation, or removal of a director. At our 2024 Annual Meeting, Shareholders will be asked to vote upon the election of three nominees to the class of directors whose term will expire at our 2027 Annual Meeting of Shareholders. Shares represented by properly executed proxy cards in the accompanying form will be voted for such nominees in the absence of instructions to the contrary. Under our Bylaws, directors must be elected by a majority of votes cast in uncontested elections. This means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” the nominee. In contested elections, the vote standard would be a plurality of votes cast. Our Bylaws provide that, in an uncontested election, each director nominee who is an incumbent director must submit to the Board before the annual meeting a letter of resignation that is conditioned on not receiving a majority of the votes cast at the annual meeting. Should a candidate not receive a majority of the votes cast at the meeting, his or her resignation is tendered to the independent directors of the Board for a determination of whether or not to accept the resignation. The Board’s decision and the basis for the decision would be disclosed within 90 days following the certification of the final vote results. | The Board, following the recommendation of the Board’s Nominating and Governance Committee and following the nominating process described under the caption “Corporate Governance-Nominating Process” elsewhere in this Proxy Statement, has nominated Carl A. Guarino, Stephanie D. Miller and Carmen V. Romeo for election at our 2024 Annual Meeting. Each of the nominees are incumbent directors, have consented to be named and to serve if elected, and have provided the Board the conditional letter of resignation that is required under our Bylaws. We do not know of anything that would preclude these nominees from serving if elected. If, for any reason, a nominee should become unable or unwilling to stand for election as a director, either the Shares represented by all proxies authorizing votes for such nominee will be voted for the election of such other person as our Board may recommend, or the number of directors to be elected at our 2024 Annual Meeting will be reduced accordingly. Set forth below is certain information concerning Mr. Guarino, Ms. Miller, Mr. Romeo and each of the five other current directors whose terms continue after our 2024 Annual Meeting. In determining to nominate the nominees for election to the Board, as well in considering the continued service of the other members of our Board, our Board has considered the specific experiences and attributes of each director listed below, and based on their direct personal experience, the insight and collegiality that each of the nominees and continuing directors brings to board deliberations. |
Employee Demographics
Nominees for election at our 2024 Annual Meeting of Shareholders with terms expiring in 2027:
Employee Demographics
| | Carl A. Guarino | | | Chief Executive Officer of WizeHive, Inc / Age: 66 / Director since: September 2014 Mr. Guarino is currently CEO of WizeHive, Inc., a SaaS company that provides a platform for managing grants, scholarships, fellowships and other application-based processes. Mr. Guarino was Chief Executive Officer of Procurian Inc. (a provider of procurement outsourcing services to Fortune 1000 firms) from August 2006 until January 2014, shortly after the acquisition of Procurian by a subsidiary of Accenture PLC. Prior to March 2006, Mr. Guarino was Executive Vice President, Investment Advisors, of the Company. Qualifications Mr. Guarino has great familiarity with the Company and its market units, particularly the investment advisor segment, and his experience and knowledge of the information technology industry provide the Board with a valuable perspective on the Company’s business activities. |
Employee Demographics
| | Stephanie D. Miller | | | Chief Executive Officer of Hazeltree / Age: 55 / Director since: October 2023 Ms. Miller is Chief Executive Officer at Hazeltree, a leading provider of treasury and liquidity management solutions for the asset management industry. She previously served as Chief Administrative Officer at Gilded, a Miami-based gold trading fintech. Prior to Gilded, she was CEO at Intertrust Group, a public Dutch Euronext company, where she led the digital transformation of the client experience and development of a robust organic and inorganic growth strategy. Miller also held executive roles at SS&C Technologies, JP Morgan, and Citco Fund Services. Qualifications With more than 25 years’ experience across financial services, she has a combination of experience in traditional financial markets, digital assets, and emerging markets. |
Employee Demographics
| | Carmen V. Romeo | | | Private Investor / Age: 80 / Director since: June 1979 From December 1985 to December 2004, Mr. Romeo served as an Executive Vice President of the Company. Mr. Romeo was our Treasurer and Chief Financial Officer from June 1979 until September 1996. Mr. Romeo officially retired from the Company effective December 31, 2004. Mr. Romeo was a certified public accountant with Arthur Andersen & Co. prior to 1979. Qualifications In addition to his familiarity with public company accounting and financial management issues, Mr. Romeo has great familiarity with the Company, and particular knowledge of the Company’s business and related technology and asset management solutions, from his previous role with the Company as the person having managerial responsibility for the Company’s Investment Advisors business. |
Employee Demographics
Directors continuing in office with terms expiring in 2025:
Employee Demographics
| | Jonathan A. Brassington | | | Executive Vice President & DCX Business Line Leader, Capgemini, Inc. / Age: 49 Director since: April 2022 Mr. Brassington leads Capgemini’s Digital Customer Experience (DCX) business in North America, focusing on DCX transformation for Global 1000 clients. From March 2018 until December 2019, he led Capgemini Invent in North America, the management consulting division of Capgemini, Inc. Prior to Capgemini, Mr. Brassington was the CEO, Partner, and Co-founder of LiquidHub, a digital transformation company focused on re-imagining customer engagement. Mr. Brassington is a member of the Board of Overseers at the University of Pennsylvania’s School of Engineering and Applied Science. He also serves on the Board and Executive Committee of Philadelphia Alliance for Capital and Technology and on the Board of Trustees at Misericordia University. Qualifications Mr. Brassington has deep expertise in the use of digital technologies to transform the wealth management sector gained from his experience providing strategic advisory and technology transformation services to many asset and wealth management firms, including five of the seven largest global asset managers. He has also advised venture and private equity firms on new and existing fintech investments, giving him insight into the opportunities and challenges faced by SEI’s investment and wealth management business, as well as the Company’s clients. |
Employee Demographics
| | William M. Doran | | | Consultant; Retired Partner Morgan Lewis & Bockius LLP (Law Firm) / Age: 83 Director since: March 1985 From October 1976 to October 2003, Mr. Doran was a partner in the law firm of Morgan, Lewis & Bockius LLP, Philadelphia, PA, a firm that provides significant legal services to SEI, our subsidiaries and our mutual funds. Mr. Doran is a trustee of SEI Tax Exempt Trust, SEI Daily Income Trust, SEI Institutional Managed Trust, SEI Institutional International Trust, SEI Asset Allocation Trust, SEI Institutional Investments Trust, SEI Catholic Values Trust, New Covenant Funds, Adviser Managed Trust, The Advisors’ Inner Circle Fund III, Gallery Trust, Schroder Series Trust and Schroder Global Series Trust, each of which is an investment company for which our subsidiaries act as advisor, administrator and/or distributor. Mr. Doran is also a director of SEI Investments Distribution Co., SEI Investments (Asia) Limited, SEI Investments (Europe) Ltd., SEI Global Nominee Ltd., SEI Investments Global Fund Services Limited, SEI Investments Global, Limited, and SEI Alpha Strategy Portfolios, L.P. Qualifications Mr. Doran’s legal training and experience, his relationship with the Company as outside legal counsel for many years, and his long-standing involvement with our Company and many of its regulated subsidiaries are valuable to his service on the Board and as Chair of the Legal and Regulatory Oversight Committee. |
Employee Demographics
| | Alfred P. West, Jr. | | | Executive Chairman, SEI / Age: 81 / Director since: 1968 Qualifications Mr. West has been the Executive Chairman of our Board since June 2022. Prior to June 2022, Mr. West served as our Chief Executive Officer since our inception in 1968. Mr. West is our founder. He has provided the strategic vision in the development of our business and solutions since our inception and his familiarity with our customers and employees gives Mr. West insights and experience valuable to his service on the Board. |
Employee Demographics
Directors continuing in office with terms expiring in 2026:
Employee Demographics
| | Ryan P. Hicke | | | Chief Executive Officer, SEI / Age: 46 / Director since: June 2022 Mr. Hicke is our Chief Executive Officer, responsible for the global business strategy and execution for the Company across our three pillars of expertise: investments, operations, and technology. Mr. Hicke’s 24-year career at SEI includes 11 years in asset management and 13 years in technology across various parts of our business, with his tenure evenly split between U.S. and global experience. Prior to being named CEO, he was our Chief Information Officer overseeing the information technology strategy and investment operations for the Company. Mr. Hicke also previously served as head of our Technology Unit, as well as a Managing Director in our U.K. wealth management business. Mr. Hicke holds a degree in Finance from Saint Joseph’s University. He also serves on the board of directors for the Philadelphia Alliance for Capital and Technologies. Qualifications Mr. Hicke’s history and experience across the Company expose him to the needs and challenges of our clients on a daily basis, while sitting on our Executive team for many years has given him insight into strategically managing and running the Company. |
Employee Demographics
| | Kathryn M. McCarthy | | | Independent Consultant and Financial Advisor / Age: 75 Director since: October 1998 Ms. McCarthy is an independent consultant and financial advisor to global families and family offices. She is a director and a member of the Audit Committee of the Rockefeller Trust Company, NA. She serves on several family office boards as well as investment committees and private trust company boards. From February 2000 to May 2003, Ms. McCarthy was a Managing Director at Rockefeller & Co., Inc. Ms. McCarthy was the President of Marujupu, LLC (a New York-based family office) from November 1996 to June 1999 and subsequently an advisor to Marujupu, LLC on investment and wealth transfer matters. From June 1992 to October 1996, Ms. McCarthy was a Senior Financial Counselor and portfolio manager with Rockefeller & Co., Inc., a family office and investment manager. Qualifications Ms. McCarthy’s experience as a consultant and financial advisor to investors, family offices and her wealth management experience has given her insight into the various issues faced by the investment and wealth management business of SEI and its clients. Ms. McCarthy serves as Lead Independent Director of the Board. |
Employee Demographics
| Committee memberships | | | | | | | Name | Term | Audit | Compensation | Nominating and Governance | Legal and Regulatory | | Carl A. Guarino (1) | Nominee, expiring 2027 | Member | Chair | Chair | | | Stephanie D. Miller (1) | Nominee, expiring 2027 | Member | | | Member | | Carmen V. Romeo (1) | Nominee, expiring 2027 | Chair | | Member | Member | | Jonathan A. Brassington (1) | Expiring 2025 | Member | Member | Member | | | William M. Doran | Expiring 2025 | | | | Chair | | Alfred P. West, Jr. | Expiring 2025 | | | | | | Ryan P. Hicke | Expiring 2026 | | | | | | Kathryn M. McCarthy (1) (2) | Expiring 2026 | Member | Member | Member | | | (1) Independent Director (2) Lead Independent Director | | | | | |
Employee Demographics
Corporate governance.
Board diversity
(1)Includes, with respect to Messrs. West, Doran, Romeo, Hicke, and Guarino, Ms. McCarthy and Messrs. McGonigle, Withrow, and McCabe 170,000, 50,000, 35,000, 166,500, 60,000, 40,000, 154,000, 80,000, and 162,500 Shares, respectively, that may be acquired upon exercise of stock options that are exercisable within 60 days of March 22, 2024. (2)Applicable percentage of ownership is based on Shares outstanding on March 22, 2024. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally means voting or investment power with respect to securities. Shares issuable upon the vesting of restricted stock units or the exercise of stock options that are exercisable currently or within 60 days of March 22, 2024 are deemed outstanding and to be beneficially owned by the person holding such units or options for purposes of computing such person’s percentage ownership, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Except for Shares that are held jointly with a person’s spouse or are subject to applicable community property laws, or as indicated in the footnotes to this table, each Shareholder identified in the table possesses sole voting and investment power with respect to all Shares shown as beneficially owned by such Shareholder. (3)Includes 322,500 Shares held in a trust for the benefit of Mr. Doran’s children, of which trust Mr. West is a trustee. Mr. West disclaims beneficial ownership of the Shares held in this trust. Also includes 323,767 Shares held by the West Family Foundation, of which Mr. West is a director and officer. Mr. West’s address is c/o SEI Investments Company, Oaks, PA 19456-1100. Mr. West has pledged as security to third parties 3,212,822 Shares, subject to adjustment. Excludes 2,634,305 Shares held by Mr. West’s wife and 10,349,314 Shares held in trusts for the benefit of Mr. West’s children (the “Children’s Trusts”), of which trusts Mr. West’s wife is a trustee or co-trustee. Certain of the Children’s Trusts have pledged as security to third parties 1,420,000 Shares, subject to adjustment. (4)Includes an aggregate of 8,408,060 Shares held in trusts for the benefit of Mr. West’s children, of which trusts Mr. Doran is a co-trustee and, accordingly, shares voting and investment power. Mr. Doran disclaims beneficial ownership of the Shares held in each of these trusts. Also includes 53,400 Shares held by Mr. Doran’s wife, 43,768 Shares held in the William M. Doran 2002 Grantor Retained Annuity Trust of which Mrs. Doran is the Trustee, and 64,603 Shares held in the William M. Doran 2004 Grantor Retained Annuity Trust. Also includes 40,430 Shares held by the Doran Family Foundation, of which Mr. Doran is a director and, accordingly, shares voting and investment power. Of these Shares, Mr. Doran has pledged as security to third parties 505,504 Shares, subject to adjustment. (5)Includes 1,065,680, Shares held by the Carmen V. Romeo 2012 Children’s Trust, 243 Shares held by Mr. Romeo’s wife and 1,059,488 Shares held in the Carmen V. Romeo 2019 GST Exempt Children’s Trust. (6)Includes 10,000 restricted stock units convertible to Shares within 60 days of March 22, 2024. (7)Includes 12,106 Shares held by a foundation and a family trust with respect to which Mr. Guarino shares voting or investment power. (8)Includes 173,000 Shares held by a trust with respect to which Mr. McGonigle’s wife has sole voting power. (9)Includes 1,542,000 Shares that may be acquired upon the vesting of restricted stock units or the exercise of stock options exercisable within 60 days of March 22, 2024. When a Share is reportable as beneficially owned by more than one person in the group, the ownership of the Share is only included once in the Number of Shares Owned column. (10)Includes an aggregate of 10,349,314 Shares held in the Children’s Trusts, of which trusts Ms. West is a trustee or co-trustee and, accordingly, shares voting and investment power. Ms. West disclaims beneficial ownership of the Shares held in each of the Children’s Trusts. Certain of the Children’s Trusts have pledged as security to third parties 1,420,000 Shares, subject to adjustment. (11)Based solely on an amendment to Schedule 13G dated February 13, 2024 by The Vanguard Group, which has shared dispositive power over 239,145 of the Shares indicated, shared voting power over 73,472 of the Shares indicated, and sole dispositive power over 11,649,374 of the Shares indicated. The address of the Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. (12)Based solely on an amendment to Schedule 13G dated January 25, 2024 by BlackRock, Inc., which has sole dispositive power over the number of Shares indicated and sole voting power over 10,517,673 of the Shares indicated. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. (13)Based solely on an amendment to Schedule 13G dated February 13, 2024 by Loomis Sayles & Co., L.P., which has sole dispositive power over the number of Shares indicated and sole voting power over 7,679,220 of the Shares indicated. The address of Loomis Sayles & Co., L.P., is One Financial Center, Boston, MA 02111. Compensation discussion and analysis. The following compensation discussion and analysis contains statements regarding future individual and Company performance measures, targets and other goals. These goals are disclosed in the limited context of our executive compensation program and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Overview
Overview Our compensation philosophy (which is intended to apply to all members of management, including our Executive Chairman and our Principal Executive Officer (“PEO”) who is our Chief Executive Officer), as implemented by the Compensation Committee of our Board (the “Committee”), is to provide a compensation program that provides competitive levels of compensation and that emphasizes incentive compensation plans and equity plans that are designed to align management incentives and behavior with attaining our annual goals and longer-term objectives. We believe that this approach enables us to attract, retain and reward highly qualified personnel and helps us achieve our tactical and strategic goals. The Committee seeks to develop a compensation program that, overall, the Committee believes is competitive with compensation paid to employees with comparable qualifications, experience and responsibilities at companies of comparable size engaged in the same or similar businesses as us. The Committee does not explicitly pay any position at a specific level or mix with reference to any particular group. The compensation program for almost all of our non- sales full-time employees (in addition to benefits afforded to all employees, such as health care insurance and stock purchase and defined contribution plans) consists of: •base salary; and •incentive compensation awards pursuant to a corporate incentive compensation plan. Equity compensation for selected, higher-level employees is provided by annual grants of stock options and restricted stock units (“RSUs”). The Committee has sought to keep base salaries at a relatively modest portion of total compensation for higher compensated employees, so that the overall compensation program is more heavily weighted toward incentive compensation in the form of annual cash bonuses and sales commissions, and for selected high-performing employees: •stock option grants that have performance vesting requirements based on attainment of adjusted pre-tax earnings per share (“EPS”) targets as well as minimum time vesting periods; and •RSU grants that “cliff vest” after three years, provided that the grantee is an employee in good standing on the vesting date. The Committee has sought to include a number of features in the compensation program that are designed to align the interests of management with the interests of shareholders. These features include: •a mixture of elements that we believe will enable us to recruit and retain talented employees; •orientating the cash compensation program elements toward incentive compensation for those employees who are in roles that we believe are critical to our long-term growth prospects; •the use of EPS targets as vesting requirements for stock option grants in order to incent a growth mindset in our employees; •time vesting for our RSU grants in order to create a longer-term view of the value of a tenured career; •our Stock Ownership Policy (requiring minimum threshold shareholdings by our senior executive officers); •our Compensation Recoupment Policy (which provides for claw-back of performance-based compensation in certain instances); and •our Insider Trading Policy (which prohibits short sales, transactions in derivatives of our stock, and hedging transactions). Consistent with our pay for performance philosophy, during 2023 approximately 87% of our current PEO’s pay and 45% of the compensation of our other named executive officers was paid in the form of variable performance-based compensation, such as incentive compensation or stock options and RSUs (see “Summary Compensation Table”). Since 2012, the Committee has retained Semler Brossy Consulting Group, LLC (“Semler Brossy” or “Consultant”) as its executive compensation consultant when structuring compensation plans or engaging in comparative compensation analyses. The Committee continued its annual engagement activities with the Consultant during 2023 and retained the Consultant on an advisory capacity with respect to industry trends (See “Compensation Consultant” below.) When evaluating the compensation practices at “peer group” companies for comparative purposes, the Committee used the same cohort of companies as was used as reference points in the Compensation Analysis Project described in the Proxy Statement we filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Shareholders. Due to the recency of this project, the Committee did not believe that it was necessary to re-evaluate the composition of the “peer group.” At our 2023 Annual Shareholders’ Meeting, our shareholders expressed strong support for the compensation of our named executive officers disclosed in our 2023 Proxy Statement, with 74.5% of the votes cast voting in favor of the “Say-on-Pay” proposal. When setting compensation, and in determining our compensation policies and practices, the Committee took into account the results of the 2023 “Say-on-Pay” advisory resolution to approve such executive compensation as demonstrating support of our compensation programs. The Committee has also reviewed our compensation policies as generally applicable to all of our employees and believes that our policies, taking into account the mitigation policies and arrangements in place, do not encourage excessive or unnecessary risk-taking and that any level of risk they do encourage is not reasonably likely to have a material adverse effect on us.
Incentive compensation
Incentive compensation Incentive compensation consists of two components: annual bonuses and sales commissions. Sales commissions are based on sales events and are measured on the basis of asset accumulation, asset retention, or anticipated revenue from contracted sales, generally taking into account related factors, such as expected profit margins. Executive officers participate only in the annual bonus program and do not participate in sales commission plans. Annual bonuses are determined through a process overseen by the Board and the Committee. Each individual who participates in the plan is assigned a target compensation award which may change from year to year, but generally is the same as that individual’s prior year target amount. In the case of executive officers, the target amount is generally between 123% and 233% of the officer’s base salary, reflecting the determination of the Committee to emphasize performance-based incentive compensation over fixed compensation. The Committee’s process for allocating incentive compensation as follows: •determining the aggregate amount of all individual target compensation awards for that year as input into establishing an overall incentive pool that may be paid out if an EPS target is achieved; •early in the year in question, identifying: •key business metrics, the Company’s sales and a range of EPS (the “Quantitative Performance Metrics”); and •indices of success against executing on management-defined strategic and tactical objectives for the Company as a whole and individual market and business units (the “Qualitative Performance Metrics”), in each case, for the year that may be considered in determining what percentage of that overall pool will be paid in the particular year; •near the end of the particular year, based on the Quantitative and Qualitative Performance Metrics (together, the “Performance Metrics”), the Committee establishes the overall maximum incentive compensation pool for that year; •the Committee then apportions the resulting overall actual incentive compensation pool among the market and business units based on the Committee’s subjective assessment of the degree to which each unit contributed to our overall success in each of the Performance Metrics for that year; and •the management teams of each of our market and business units takes the aggregate amount of incentive compensation allocated to the unit by the Committee and awards individual bonuses to employees within those units based upon such management’s assessment of each individual’s contribution to the achievements of those units, as well as each individual’s personal achievements. The Committee’s assessment is performed for two different pools: •each of our executive officers individually; and •all employees other than executive officers, as a group. When the Committee evaluates business units and executive officers for the purpose of making compensation decisions, it meets with our PEO and reviews a number of factors including: •our PEO’s evaluation of the units and each of the individual executive officers; •the Performance Metrics established at the beginning of each year to provide a basis for assessment of performance for these units and those executive officers who are primarily responsible for the performance of such units; •performance against the prior year’s actual Performance Metrics and other annual goals that are considered within the overall business environment of that year; •achievement of strategic and operating results; and •in the case of the individual executive officers: •their success in their management responsibilities generally; •achievement of strategic and tactical goals of the market or business unit for which they are responsible; •achievement of any personal strategic or tactical goals that may have been established for the individual employee; and •the degree to which the individual employee supported or contributed to, our overall corporate success. When the Committee makes decisions regarding equity or non-equity incentive compensation, it exercises independent business judgment. There is no specific formula the Committee applies when considering the factors that the Committee believes are important to the assessment of any of our market or business units’ performance or that of any individual executive officer or our PEO, nor does the Committee attach any specific weighting or priority to the factors it considers. Consequently, there is no direct correlation between any particular performance measure and the resulting equity or non-equity incentive compensation awards. The Committee believes that compensation decisions should not be formulaic, rigid or focused on the short-term.
Equity grants
Equity grants Our annual equity grants consist of stock options and RSUs. The Committee believes these grants are an important means of aligning the interests of management and employees with the interests of our shareholders. All of our outstanding stock options have performance-based vesting provisions: the stock options vest at a rate of 50 percent when a specified pre-tax earnings-per-share target is achieved, and the remaining 50 percent when a second, higher specified pre-tax earnings-per-share target is achieved. Prior to 2017, there was no minimum time-based factor in the vesting of our stock options. Beginning in 2017, the Committee changed the vesting thresholds from an earnings per share target to a pre-tax earnings per share target, and it also implemented minimum time periods for vesting. In 2022, the Committee introduced RSUs as an element of annual equity compensation awards. Our annual RSU awards generally “cliff vest” on the third anniversary of the date of the grant. Other than in the case of executive officers the annual grants of options and RSUs to employees is standardized across the company and based upon a tier system with the mix of the options and RSUs in favor of options in the higher tiers. Annual equity awards are generally determined by the Committee in December of each year. Our PEO reviews with the Committee the grants for each executive officer, other than himself, as well as the grants for the other employees. The Committee then deliberates and establishes the specific option grants and finally submits these option grant amounts to the entire Board for ratification.
Industry benchmarking
Industry benchmarking In its deliberations regarding compensation, the Committee considered the annual analysis of fintech and asset management industry compensation trends undertaken for the Committee by the Consultant.
Award of 2023 incentive compensation
Award of 2023 incentive compensation For 2023, the Board and the Committee chose to fix the maximum aggregate amount for the non-equity incentive compensation award pool (the “Maximum Bonus Pool”) for each of our business units and corporate services functions as a percentage of total target non-equity incentive compensation for those employees in such business units and corporate services functions. The percentages the Committee determined to apply ranged from 100% to 85%. The managers within each of our business units and corporate services functions allocated these pools among the individual employees reporting to them as they believed was appropriate. In total, the aggregate non-equity incentive awards paid to employees other than our executive officers was 91% of the total amount of 2023 target incentive compensation amounts. For all executive officers eligible for incentive compensation as of December 2023, the Committee determined, based on its discussion of the Performance Metrics, our performance and that of our business units, market units and individuals, as well as the revenue and sales results of our business units, that the amount to be awarded should be equal to that of the market or business unit for which they were responsible. In the aggregate, the non-equity incentive compensation awards made to all executive officers by the Committee were approximately 90% of their aggregate target amount and 100% of the Maximum Bonus Pool. The aggregate amount of non-equity incentive compensation awarded to our executive officers was approximately 112% of the aggregate non-equity incentive compensation awards made to our executive officers in 2022. In December 2023, the Committee received our PEO’s views on the 2023 performance of the senior executives (other than himself) and their market or business units, as well as his recommendations for non-equity incentive compensation awards and stock option grants for the senior executives and their units. The Committee considered and discussed, among other things: •the recommendations of the PEO; •the Company’s incentive compensation philosophy as described in the Proxy Statement for the 2023 Annual Meeting of Shareholders; •input from the Consultant on general industry trends in incentive compensation for fintech companies and asset management companies; •the business metrics disclosed in the “Pay Versus Performance” section of this Proxy Statement; •the projected annual gross sales events and revenue of the Company’s business units; •the $3.46 diluted earnings per share of the Company; •the growth initiatives launched during the year; •the degree to which the responsibilities of the particular executive officers had changed, if at all; •our long-term strategic objectives for our executive officers and their respective business units; •the desire of the Committee to align incentive compensation awards to long-term shareholder value creation; •the approximately $425.6 million returned to our shareholders via dividends and stock repurchases; •our progress towards achieving overall long-term strategic goals; •each executive officer’s market or business unit’s: •performance against its sales goals; •contributions to corporate earnings; •revenues and profit margins; and •success in meeting various strategic and tactical goals of the unit; and •the individual performance and achievements of each of the executive officers. The Committee also independently reviewed the performance of the PEO with primary consideration to our overall performance, as well as his individual performance on strategic and non-financial achievements and discussed and approved his annual non-equity incentive compensation award. With respect to our named executive officers in the Summary Compensation Table, the annual non-equity incentive compensation award targets for 2023 were $1,100,000 for Mr. West, $1,750,000 for Mr. Hicke, $1,300,000 for Mr. McGonigle, $1,200,000 for Mr. Withrow and $1,000,000 for Mr. McCabe. The amounts ultimately awarded were $990,000 to Mr. West, $1,750,000 to Mr. Hicke, $1,300,000 for Mr. McGonigle, $1,050,000 for Mr. Withrow and $900,000 for Mr. McCabe. In addition to his non-equity incentive compensation award, in December 2023, Mr. Withrow entered into a previously disclosed Separation and General Release of Claims Agreement. Per the terms of the agreement, Mr. Withrow separated from the Company on February 28, 2024, and is paid $3,800,000 in equal bi-weekly installments over a 24-month period that began in March of 2024. The Company’s payment obligations are conditioned upon Mr. Withrow’s adherence to the restrictive covenants set forth in the agreement over the 24-month payment period. In the case of Mr. West’s incentive compensation awards the Committee noted Mr. West’s work: •mentoring Mr. Hicke as our Chief Executive Officer; •his work with Mr. Hicke on strategic corporate goals and growth plans. In the case of Mr. Hicke’s incentive compensation awards, the Committee considered Mr. Hicke’s: •creation and execution of a 5-7 year strategic growth plan, including the improvement in the performance of our Private Banking unit; •furtherance of our values and culture, with an emphasis on growth, mobility and talent, including his advocacy of SEI Women’s Network and SEI Diversity & Inclusion efforts; and •continued work reorganizing our structure and the roles and responsibilities of our senior executives to better align with our strategic initiatives. In the case of Mr. McGonigle’s incentive compensation awards, the Committee considered Mr. McGonigle’s: •contributions to the realignment and structuring of our technology operations; •his contributions to our culture, and his work overseeing our finances; •the number of critical functions reporting to Mr. McGonigle, including our Finance, Accounting, Enterprise Risk, and Internal Audit functions; and •in light of Mr. McGonigle’s pending retirement in 2024, the career contributions Mr. McGonigle had made to the Company. In determining Mr. Withrow’s 2023 incentive compensation, the Committee considered the degree to which Mr. Withrow furthered the strategic and sales goals for our asset management businesses. In determining Mr. McCabe’s incentive compensation, the Committee considered: •his leadership of our IMS market unit; •the degree to which his conduct has aligned with our values; •his contributions to our strategic planning process; and •his leadership of several enterprise-wide projects.
2023 equity awards
2023 equity awards At its December 2023 meeting, the Committee reviewed the 5-tier equity grant structure that it had deployed in 2022. The rationale behind the allocation of grants between options and RSUs is to tilt the mix of the options and RSUs in favor of options in the higher tiers (i.e., Tiers 1-3) by evaluating our cost of an equity grant for each tier if the grant were 100% options and then, considering our cost of granting an option as compared to an RSU, apportioning the total cost of a 100% option grant among options and RSUs. In 2022, the Committee determined the apportionment on a percentage basis as follows: •Tiers 1-3: 75% options and 25% RSUs; •Tier 4: 50% options and 50% RSUs; and •Tier 5: 25% options and 75% RSUs. Based on management feedback, the Committee determined that in 2023 that there would be four tiers of grants, with individual executive officers and board members being considered on a case by case basis, and the participants in each of the tiers would receive options and RSUs as follows:
2023 equity awards
| Grant Type | Tier 1 | Tier 2 | Tier 3 | Tier 4 | | Options | 11,000 | 6,500 | 3,000 | 0 | | RSUs | 1,100 | 700 | 500 | 500 |
2023 equity awards
The Committee reaffirmed its 2022 decision to re-evaluate in connection with each annual award cycle the composition of each tier with some employees who had previously participated being removed from the program, with a particular focus on those employees in lowest tier. At its December 2023 meeting, the Committee considered the annual grant of equity awards to each of our named executive officers. The Committee reaffirmed its belief that option grants with performance-based vesting targets were a very effective way to align the interests of the executives with the interests of shareholders. Additionally, the Committee concluded that a three-year “cliff vesting” for the RSUs created an incentive for the executives to focus on growth and the long-term value of the Company. In addition to the factors enumerated above in “Award of 2023 Incentive Compensation,” the Committee considered impact that it believed the role the executive holds should have on the growth prospects of the Company. In December 2023, the Committee awarded: •Mr. West an annual grant of 25,000 options and 4,000 RSUs (compared to the 30,000 options and 2,500 RSUs granted to him in December 2022); •Mr. Hicke an annual grant of 100,000 options (as required by the terms of Mr. Hicke’s employment agreement) and 30,000 RSUs (compared to an annual grant to him of 100,000 options in December 2022 and no RSUs); •Mr. McGonigle did not receive an annual grant of options or RSUs (compared to the 75,000 options granted to him in December 2022); •Mr. Withrow did not receive an annual grant of options or RSUs (compared to the 75,000 options granted to him in December 2022); and •Mr. McCabe an annual grant of 25,000 options and 4,000 RSUs (compared to the 30,000 options and 2,500 RSUs granted to him in December 2022). The number of options and RSUs granted at the December 2023 meeting to our named executive officers was approximately 75% and 192%, respectively, of the number granted to such officers in December 2022. In 2023, the total number of options and RSU grants the Committee approved as part of the year-end annual grant process was 1.7 million options to 273 employees and 351 thousand RSUs to 509 employees as compared to 2022 when the Committee approved the annual grant of 2.2 million options to 506 employees and 407 thousand RSUs to 500 employees. During 2023, we repurchased in open market or private transactions 5.2 million Shares under our stock repurchase program at a total cost of approximately $310.8 million, compared to 5.9 million Shares in 2022 at a total cost of approximately $338.4 million. These share repurchase activities substantially offset the dilution which can result from grants and exercises under our equity compensation programs.
Compensation consultant
Compensation consultant The Committee has retained the firm of Semler Brossy as its independent consultant since 2012. During 2023, the Committee re-engaged Semler Brossy to provide advice on general industry trends for executive compensation in the asset management and fintech sectors. Semler Brossy provides no other services to us outside of its role as independent Committee advisor. Because of the policies and procedures Semler Brossy and the Committee have in place, the Committee is confident that the advice it receives from the executive compensation consultant is objective. These policies and procedures include the following provisions: •the Committee has the sole authority to retain and terminate the executive compensation consultant; •the Consultant has direct access to the Committee without management intervention; •the Committee’s evaluation of the quality and objectivity of the services provided by the Consultant each year in connection with retaining the Consultant; and •the protocols for the engagement (described below) limit how the Consultant may interact with management. While it is necessary for the Consultant to interact with management to gather information, the Committee has adopted protocols governing if and when the Consultant’s advice and recommendations can be shared with management. These protocols are included in the Consultant’s engagement letter. The Committee also determines the appropriate forum for receiving Consultant recommendations. Where appropriate, management invitees are present to provide context for the recommendations. This approach protects the Committee’s ability to receive objective advice from the Consultant so that the Committee may make independent decisions about our executive compensation. The Consultant reports directly to the Committee and performs no other work for the Company. The Committee has analyzed whether the work of Semler Brossy as a compensation consultant has raised any conflict of interest, taking into consideration the following factors: •The provision of other services to us by Semler Brossy; •The amount of fees by us to Semler Brossy as a percentage of the firm’s total revenue; •Semler Brossy’s policies and procedures that are designed to prevent conflicts of interest; •Any business or personal relationship of Semler Brossy or the individual compensation advisors employed by the firm with any of our executive officers; •Any business or personal relationship of the individual compensation advisors with any member of the Committee; and •Any of our stock owned by Semler Brossy or the individual compensation advisors employed by the firm. The Committee has determined, based on its analysis of the above factors, that the work of Semler Brossy and the individual compensation advisors employed by Semler Brossy as our compensation consultants has not created any conflict of interest.
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for each person who served as our principal executive officer (“PEO”) and for our Non-PEO named executive officers (“NEOs”) and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
Pay Versus Performance
| | Summary Compensation Table Total | | Compensation Actually Paid | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Year | PEO 1 Ryan P. Hicke ($) (1) | PEO 2 Alfred P. West, Jr. ($) (2) | PEO 1 Ryan P. Hicke ($) (3) | PEO 2 Alfred P. West, Jr. ($) (4) | Average Summary Compensation Table Total for non-PEO NEOs ($) (5) | Average Compensation Actually Paid to non-PEO NEOs ($) (6) | SEI TSR ($) (7) | Industry Index TSR ($) (8) | Net Income ($000s) (9) | Adjusted Pre-Tax Earnings Per Share ($) (10) | | 2023 | 5,934,430 | N/A | 6,142,130 | N/A | 3,050,860 | 3,080,441 | 102.46 | 181.96 | 462,258 | 4.61 | | 2022 | 6,402,465 | 2,469,653 | 6,224,840 | 2,377,978 | 3,494,008 | 3,332,318 | 92.66 | 129.82 | 475,467 | 4.48 | | 2021 | N/A | 2,367,239 | N/A | 2,475,614 | 1,991,178 | 2,162,026 | 95.47 | 180.24 | 546,593 | 5.12 | | 2020 | N/A | 2,933,734 | N/A | 2,552,384 | 2,823,425 | 2,899,647 | 88.89 | 125.65 | 447,286 | 3.99 |
Pay Versus Performance
(1)Reflects compensation amount reported in the Summary Compensation Table (“SCT”) in 2022 for Ryan P. Hicke, who was appointed Chief Executive Officer (and thus became our PEO) effective June 1, 2022. (2)Reflects compensation amounts reported in the SCT in 2022 for Alfred P. West, Jr., who served as our Chief Executive Officer (and thus as our PEO) during 2020, 2021 and for the period January 1, 2022, through May 31, 2022. (3)Compensation Actually Paid (“CAP”) for Mr. Hicke in 2023 and 2022 reflects the respective amount set forth in column (1) of this table, adjusted as set forth in the table below, as determined in accordance with SEC rules. RSUs are paid in Company shares once the underlying award vests, and are incorporated as applicable in the table below. The dollar amount reflected in column (1) of this table does not reflect the actual amount of compensation earned by or paid to Mr. Hicke during the applicable year. (4)CAP for Mr. West in each of 2022, 2021 and 2020 reflects the respective amounts set forth in column (2) of this table, adjusted as set forth in the table below, as determined in accordance with SEC rules. RSUs are paid in Company shares once the underlying award vests, and are incorporated as applicable in the table below. The dollar amounts reflected in column (2) of this table do not reflect the actual amount of compensation earned by or paid to Mr. West during the applicable year.
Pay Versus Performance
| Year | 2020 | 2021 | 2022 | 2022 | 2023 | | PEO | Alfred P. West, Jr. | Alfred P. West, Jr. | Alfred P. West, Jr. | Ryan P. Hicke | Ryan P. Hicke | | SCT Total Compensation ($) | 2,933,734 | 2,367,239 | 2,469,653 | 6,402,465 | 5,934,430 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | (1,014,000) | (373,625) | (694,825) | (4,106,600) | (3,416,000) | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year ($) | 988,875 | 383,000 | 628,450 | 3,941,000 | 3,544,500 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | (356,225) | 49,500 | 50,075 | 63,350 | 95,800 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | — | 49,500 | (75,375) | (75,375) | (16,600) | | Compensation Actually Paid ($) | 2,552,384 | 2,475,614 | 2,377,978 | 6,224,840 | 6,142,130 |
Pay Versus Performance
Equity Valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of date of grant. Adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. RSU grant date fair values are calculated using the stock price as of date of grant. (5)The following non-PEO named executive officers are included in the average figures shown: 2020: Dennis J. McGonigle, Stephen G. Meyer, Ryan P. Hicke, Michael N. Peterson 2021: Dennis J. McGonigle, Wayne M. Withrow, Ryan P. Hicke, Philip N. McCabe 2022: Dennis J. McGonigle, Wayne M. Withrow, Kevin P. Barr, Philip N. McCabe 2023: Alfred P. West, Jr., Dennis J. McGonigle, Wayne M. Withrow, Philip N. McCabe (6)Average CAP for our non-PEO named executive officers in each of 2023, 2022, 2021 and 2020 reflects the respective amount set forth in column (5) of this table, adjusted as set forth in the table below, as determined in accordance with SEC rules. RSUs are paid in company shares once the underlying award vests, and are incorporated as applicable in the table below. The dollar amounts reflected in column (5) of this table do not reflect the actual amounts of compensation earned by or paid to our non-PEO named executive officers during the applicable years.
Pay Versus Performance
| Year | 2020 Average | 2021 Average | 2022 Average | 2023 Average | | Non-PEO NEOs | See column (5) note | See column (5) note | See column (5) note | See column (5) note | | SCT Total Compensation ($) | 2,823,425 | 1,991,178 | 3,494,008 | 3,050,860 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | (1,280,438) | (429,669) | (1,893,842) | (637,000) | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year ($) | 1,994,694 | 440,450 | 1,754,833 | 663,700 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | (638,034) | 176,488 | 52,694 | (11,369) | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | — | (16,421) | (75,375) | 14,250 | | Compensation Actually Paid ($) | 2,899,647 | 2,162,026 | 3,332,318 | 3,080,441 |
Pay Versus Performance
Equity Valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the date of grant. Adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. RSU grant date fair values are calculated using the stock price as of date of grant. (7)For the relevant fiscal year, represents the cumulative total shareholder return (“TSR”) of the Company for the measurement periods ending on December 31 of each of 2023, 2022, 2021 and 2020, respectively. (8)For the relevant fiscal year, represents the cumulative TSR of an Industry Index, a blend of indices including 79% NASDAQ US Asset Managers and Custodians and 21% NASDAQ US Software for the measurement period ended on December 31, 2023 and 76% NASDAQ US Asset Managers and Custodians and 24% NASDAQ US Software for the measurement periods ended on December 31 of each of 2022, 2021 and 2020, respectively. (9)Reflects net income in the Company’s Consolidated Statements of Operations included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022, 2021, and 2020. (10)The Company’s selected measure is Adjusted Pre-Tax Earnings Per Share, which is a non-GAAP financial measure that consists of the quotient of (A) the Company’s calendar year net income before income taxes adjusted to not include any reduction for stock-option expense under ASC 718 equity compensation and the effect of items or events that the Compensation Committee determines in its discretion should be excluded for compensation purposes, divided by (B) the Company’s diluted shares outstanding. See Annex A of this Proxy Statement for a reconciliation of Diluted Earnings Per Share reported in accordance with generally accepted accounting principles (GAAP) to Adjusted Pre-Tax Earnings Per Share (non-GAAP).
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”)
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company’s cumulative TSR, and the Industry Index cumulative TSR over the four most recently completed fiscal years. TSR values for the Company and Industry Index assume $100 invested on December 31, 2019 through the last business day of the listed year.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the four most recently completed fiscal years.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Adjusted Pre-Tax Earnings Per Share (“EPS”)
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Adjusted Pre-Tax Earnings Per Share (“EPS”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Adjusted Pre-Tax EPS during the four most recently completed fiscal years. When calculating our 2023 Adjusted Pre-Tax Earnings Per Share for purposes of our Pay Versus Performance disclosure, the Committee made the following adjustment to our GAAP earnings per share, which is consistent with the adjustment the Committee makes when determining whether the EPS vesting targets for outstanding stock options have been met: •excluded any reduction for stock-based compensation expense associated with stock options in accordance with Accounting Standards Codification 718 equity compensation (Stock-Based Compensation) from any calculation of the achievement of EPS vesting targets. See Annex A of this Proxy Statement for a reconciliation of Diluted Earnings Per Share reported in accordance with generally accepted accounting principles (GAAP) to Adjusted Pre-Tax Earnings Per Share (non-GAAP) during the four most recently completed fiscal years.
Pay ratio
Pay ratio Consistent with Instruction 2 to Item 402(u) of Regulation S-K, the applicable SEC rule, we may identify our median employee for purposes of providing pay ratio disclosure once every three years and calculate and disclose total compensation for that employee each year; provided that, during the last completed fiscal year, there has been no change in the employee population or employee compensation arrangements that we reasonably believe would result in a significant change to the previous year’s pay ratio disclosure. We reviewed the changes in our employee population and employee compensatory arrangements and determined there has been no change in our employee population or employee compensatory arrangements that would significantly impact the 2023 pay ratio disclosure. The median employee identified in 2022 remains employed in substantially the same role and at the same location. We chose December 31, 2022 as the date for establishing the employee population used in identifying the median employee and used fiscal 2022 as the measurement period. We identified the median employee using a consistently applied compensation measure which includes annual base salary or wages, target annual performance-based cash bonuses, target commissions, and long-term equity awards based on their grant date fair values. Permanent employees who joined in 2022 and permanent employees who were on leave during 2022 were assumed to have worked for the entire year. All U.S. and non-U.S. employees employed as of December 31, 2022 were captured with the exception of employees accepted into our voluntary separation program, who represent less than 1% of our global workforce. No cost-of-living adjustments were made. With respect to the annual total compensation of our Chief Executive Officer, we included the amount reported for Mr. Hicke in the “Total” column for 2023 in the Summary Compensation Table included in this Proxy Statement. The annual total compensation of the median employee and the annual total compensation of the Chief Executive Officer were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
Pay ratio
| Pay ratio | | | Annual total compensation of the median employee for 2023 | $115,346 | | Annual total compensation of the CEO for 2023 | $5,934,430 | | Ratio of annual total compensation of the median employee to the annual total compensation of CEO for 2023 | 51.4 |
Summary compensation table
Summary compensation table
Summary compensation table
| Name and Principal Position | Year | Salary ($)(1) | Option Awards ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Ryan P. Hicke | 2023 | 750,000 | 1,556,000 | 1,860,000 | 1,750,000 | 18,430 | 5,934,430 | | Chief Executive Officer | 2022 | 688,269 | 1,801,000 | 2,305,600 | 1,575,000 | 32,596 | 6,402,465 | | | 2021 | 600,000 | 373,625 | — | 880,000 | 73,586 | 1,927,211 | | Alfred P. West, Jr. | 2023 | 750,000 | 389,000 | 248,000 | 990,000 | 23,599 | 2,400,599 | | Executive Chairman | 2022 | 750,000 | 540,300 | 154,525 | 990,000 | 34,828 | 2,469,653 | | | 2021 | 750,000 | 373,625 | — | 1,210,000 | 33,614 | 2,367,239 | | Dennis J. McGonigle | 2023 | 700,000 | — | — | 1,300,000 | 22,310 | 2,022,310 | | Executive Vice President | 2022 | 642,692 | 1,350,750 | 1,049,000 | 1,170,000 | 31,347 | 4,243,789 | | and Chief Financial Officer | 2021 | 600,000 | 373,625 | — | 880,000 | 30,133 | 1,883,758 | | Wayne M. Withrow | 2023 | 700,000 | — | — | 1,050,000 | 3,823,412 | 5,573,412 | | Executive Vice President > | 2022 | 618,846 | 1,350,750 | 1,236,200 | 1,080,000 | 34,641 | 4,320,437 | | Head of Global Asset Management | 2021 | 600,000 | 597,800 | — | 960,000 | 33,427 | 2,191,227 | | Philip N. McCabe | 2023 | 650,000 | 389,000 | 248,000 | 900,000 | 20,118 | 2,207,118 | | Executive Vice President > | 2022 | 609,423 | 540,300 | 154,525 | 1,050,000 | 31,347 | 2,385,595 | | Investment Managers | 2021 | 600,000 | 373,625 | — | 960,000 | 28,891 | 1,962,516 |
Summary compensation table
(1)Compensation deferred at the election of the executive, pursuant to our Capital Accumulation Plan (“CAP”), is included in the year in which such compensation is earned. (2)Reflects the aggregate grant date fair value of options based upon the Black-Scholes option pricing model. The assumptions used in determining the amounts in this column are set forth in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (3)Reflects the aggregate grant date fair value of RSUs calculated in accordance with Accounting Standards Codification 718 (ASC 718). See Notes 1 and 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (4)Non-equity incentive compensation awards for services rendered during a year have been listed in the year earned, but were actually paid in the following fiscal year. (5)Includes matching contributions to the CAP for the named individuals as well as supplemental life insurance premiums with respect to life insurance on the named individual and group insurance medical premiums. Also, for Mr. Withrow, includes severance of $3.8 million upon his separation from the Company in 2024 which amount is to be paid in equal bi-weekly installments over a 24-month period commencing in March of 2024. Mr. Withrow’s last day of employment with the Company was February 28, 2024.
Grants of plan-based awards
Grants of plan-based awards The following table discloses certain information concerning options and stock awards granted during 2023 to each of our named executive officers who received any such award during 2023.
Grants of plan-based awards
| Name | Type of Award | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Options (#)(2) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3)(4) | | Ryan P. Hicke | RSUs | 12/15/2023 | 30,000 | | | 1,860,000 | | | Options | 12/15/2023 | | 100,000 | 62.00 | 1,556,000 | | Alfred P. West, Jr. | RSUs | 12/15/2023 | 4,000 | | | 248,000 | | | Options | 12/15/2023 | | 25,000 | 62.00 | 389,000 | | Philip N. McCabe | RSUs | 12/15/2023 | 4,000 | | | 248,000 | | | Options | 12/15/2023 | | 25,000 | 62.00 | 389,000 |
Grants of plan-based awards
(1)All stock awards granted to our named executive officers in 2023 were RSUs granted upon the approval of the Committee under our 2014 Omnibus Equity Compensation Plan. RSUs awarded in 2023 vest on the third anniversary of the date of grant and are not based on the achievement of performance targets. (2)All stock options granted to our named executive officers in 2023 were nonqualified options granted upon the approval of the Committee under our 2014 Omnibus Equity Compensation Plan, with an exercise price per Share equal to the fair market value of our Shares on the date of grant. 50% of these options vest on December 31 of the year in which we attain an adjusted pre-tax earnings per share of $5.25 or more, but not earlier than the second anniversary of the date of grant, and the remaining 50% of these options vest on December 31 of the year in which we attain an adjusted pre-tax earnings per share of $7.10 or more, but not earlier than the fourth anniversary of the date of grant, in each case based upon our audited financial statements and subject to certain adjustments relating to non-recurring transactions or the option expense we record under ASC 718. (3)The Grant Date Fair Value of RSUs were calculated in accordance with ASC 718. See Notes 1 and 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (4)The Grant Date Fair Value of the Option Grants made on December 15, 2023 was based upon the Black-Scholes option pricing model. The assumptions used are set forth in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Outstanding equity awards at year-end
Outstanding equity awards at year-end The following table reflects outstanding options and stock awards held by our named executive officers as of December 31, 2023.
Outstanding equity awards at year-end
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | | Ryan P. Hicke | 12/9/2014 | 20,000 | — | 40.64 | 12/9/2024 | | | | | 12/8/2015 | 24,000 | — | 53.34 | 12/8/2025 | | | | | 12/13/2016 | 35,000 | — | 49.63 | 12/13/2026 | | | | | 12/12/2017 | 12,500 | 12,500 | 71.12 | 12/12/2027 | | | | | 12/11/2018 | 17,500 | 17,500 | 48.47 | 12/11/2028 | | | | | 12/9/2019 | 20,000 | 20,000 | 64.43 | 12/9/2029 | | | | | 12/8/2020 | 37,500 | 37,500 | 56.54 | 12/8/2030 | | | | | 12/10/2021 | — | 25,000 | 60.46 | 12/10/2031 | | | | | 6/1/2022 | | | | | 30,000 | 1,906,500 | | | 12/5/2022 | — | 100,000 | 61.81 | 12/5/2032 | | | | | 12/15/2023 | — | 100,000 | 62.00 | 12/15/2033 | 30,000 | 1,906,500 | | Alfred P. West, Jr. | 12/9/2014 | 35,000 | — | 40.64 | 12/9/2024 | | | | | 12/8/2015 | 30,000 | — | 53.34 | 12/8/2025 | | | | | 12/13/2016 | 35,000 | — | 49.63 | 12/13/2026 | | | | | 12/12/2017 | 10,000 | 10,000 | 71.12 | 12/12/2027 | | | | | 12/11/2018 | 12,500 | 12,500 | 48.47 | 12/11/2028 | | | | | 12/9/2019 | 10,000 | 10,000 | 64.43 | 12/9/2029 | | | | | 12/8/2020 | 37,500 | 37,500 | 56.54 | 12/8/2030 | | | | | 12/10/2021 | — | 25,000 | 60.46 | 12/10/2031 | | | | | 12/5/2022 | — | 30,000 | 61.81 | 12/5/2032 | 2,500 | 158,875 | | | 12/15/2023 | — | 25,000 | 62.00 | 12/15/2033 | 4,000 | 254,200 | | Dennis J. McGonigle | 12/9/2014 | 27,500 | — | 40.64 | 12/9/2024 | | | | | 12/8/2015 | 24,000 | — | 53.34 | 12/8/2025 | | | | | 12/13/2016 | 25,000 | — | 49.63 | 12/13/2026 | | | | | 12/12/2017 | 12,500 | 12,500 | 71.12 | 12/12/2027 | | | | | 12/11/2018 | 12,500 | 12,500 | 48.47 | 12/11/2028 | | | | | 12/9/2019 | 15,000 | 15,000 | 64.43 | 12/9/2029 | | | | | 12/8/2020 | 37,500 | 37,500 | 56.54 | 12/8/2030 | | | | | 12/10/2021 | — | 25,000 | 60.46 | 12/10/2031 | | | | | 7/18/2022 | | | | | 15,000 | 953,250 | | | 12/5/2022 | — | 75,000 | 61.81 | 12/5/2032 | | | | Wayne M. Withrow | 12/9/2014 | 27,500 | — | 40.64 | 12/9/2024 | | | | | 12/8/2015 | 30,000 | — | 53.34 | 12/8/2025 | | | | | 12/13/2016 | 25,000 | — | 49.63 | 12/13/2026 | | | | | 12/12/2017 | 10,000 | 10,000 | 71.12 | 12/12/2027 | | | | | 12/11/2018 | 10,000 | 10,000 | 48.47 | 12/11/2028 | | | | | 12/9/2019 | 10,000 | 10,000 | 64.43 | 12/9/2029 | | | | | 12/8/2020 | 37,500 | 37,500 | 56.54 | 12/8/2030 | | | | | 12/10/2021 | — | 40,000 | 60.46 | 12/10/2031 | | | | | 12/5/2022 | — | 75,000 | 61.81 | 12/5/2032 | 15,000 | 953,250 | | Philip N. McCabe | 12/9/2014 | 21,000 | — | 40.64 | 12/9/2024 | | | | | 12/8/2015 | 24,000 | — | 53.34 | 12/8/2025 | | | | | 12/13/2016 | 30,000 | — | 49.63 | 12/13/2026 | | | | | 12/12/2017 | 12,500 | 12,500 | 71.12 | 12/12/2027 | | | | | 12/11/2018 | 17,500 | 17,500 | 48.47 | 12/11/2028 | | | | | 12/9/2019 | 20,000 | 20,000 | 64.43 | 12/9/2029 | | | | | 12/8/2020 | 37,500 | 37,500 | 56.54 | 12/8/2030 | | | | | 12/10/2021 | — | 25,000 | 60.46 | 12/10/2031 | | | | | 12/5/2022 | — | 30,000 | 61.81 | 12/5/2032 | 2,500 | 158,875 | | | 12/15/2023 | — | 25,000 | 62.00 | 12/15/2033 | 4,000 | 254,200 |
Outstanding equity awards at year-end
(1)The following tables set forth opposite the relevant option expiration date, the vesting thresholds for all options which are currently unexercisable:
Outstanding equity awards at year-end
| Option Expiration Date | 50% Exercisable When Our Reported EPS Plus ASC 718 Expense Exceeds | 100% Exercisable When Our Reported EPS Plus ASC 718 Expense Exceeds | | 12/12/2027 | Vested | $5.50 | | 12/11/2028 | Vested | $6.00 | | 12/9/2029 | Vested | $6.00 | | 12/8/2030 | Vested | $5.35 | | 12/10/2031 | $5.75 | $7.00 | | 12/5/2032 | $5.00 | $6.25 | | 12/15/2033 | $5.25 | $7.10 |
Outstanding equity awards at year-end
(2) All RSUs vest in a single tranche on the third anniversary of their date of grant. Market value is calculated based on the closing price of the Company’s common stock on December 29, 2023 (the last trading day of the year) of $63.55 as reported by the NASDAQ Stock Market, LLC.
Option exercises and stock awards vested table
Option exercises and stock awards vested table The following table presents information regarding stock options exercised and stock awards vested for our named executive officers during 2023.
Option exercises and stock awards vested table
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of shares acquired on vesting (#)(1) | Value realized on vesting ($) | | Ryan P. Hicke | 25,000 | 606,350 | 10,000 | 566,400 | | Alfred P. West, Jr. | 45,000 | 1,172,118 | — | — | | Dennis J. McGonigle | 30,000 | 853,935 | 5,000 | 310,900 | | Wayne M. Withrow | 30,000 | 819,028 | 5,000 | 300,600 | | Philip N. McCabe | 25,000 | 515,125 | — | — |
Option exercises and stock awards vested table
(1) See caption “2023 equity awards” in the Compensation discussion and analysis for details regarding vesting of stock awards.
Potential payments on termination
Potential payments on termination Mr. Hicke, our Chief Executive Officer, has an employment agreement. Mr. Hicke’s employment agreement, among other things, provides for certain compensation and benefits that are in addition to those provided by us pursuant to those plans and arrangements available to our employees generally, and those that are customarily (but not required to be) extended to those executive officers terminated without cause or in the event of their death or disability. Mr. Hicke’s employment agreement provides that if he is terminated without cause prior to June 1, 2026, and he executes and does not revoke a general release of claims, then in addition to those benefits generally provided by us to our employees pursuant to those plans and arrangements available to our executive officers generally and those that are customarily (but not required to be) extended to departing executive officers, Mr. Hicke will receive: •an amount equal to any accrued obligations he is owed under the terms of his employment agreement; and •an amount (the “Severance Amount”) equal to the sum of (x) one and one-half times his base salary as of the termination date, plus (y) one and one half times his annual bonus for the year of termination, which Severance Amount would be payable in equal payroll installments during the 18-month period following the year of termination. Mr. Hicke’s employment agreement also provides that in addition to the benefits customarily (but not required to be) extended to departing executive officers if he is terminated without cause or his employment ceases for death or disability, any portion of the 40,000 RSU Staking Grant that has not vested at the time of such departure will accelerate and the Shares issuable thereunder will be issued to Mr. Hicke and such shares will be tradeable without restriction. Any options to purchase Shares that have been or may be granted to Mr. Hicke are not subject to the accelerated vesting or extended exercise period provisions of his employment agreement and would be treated in the same manner as have those options held by other departing executive officers. Pursuant to the terms of his employment agreement, Mr. Hicke will be subject to covenants not to compete with the Company or solicit its employees or customers during his employment and for a period of 18 months following termination of employment for any reason, as well as confidentiality covenants. The following table illustrates our estimates of the potential value of the payments and benefits to which Mr. Hicke would be entitled to receive upon a termination of his employment without cause or upon his death or disability pursuant to his employment agreement that are in addition to those benefits customarily extended to departing executive officers, in either case as of December 31, 2023. The amounts that Mr. Hicke would receive in an actual termination can only be determined at the time the event occurs.
Potential payments on termination
| Benefits and Payments Upon Termination | Termination Without Cause ($) | Death or Disability ($) | | Cash Severance-Salary (1) | 1,125,000 | — | | Cash Severance-Bonus (2) | 2,625,000 | — | | RSUs-Accelerated (3) | 1,906,500 | 1,906,500 |
Potential payments on termination
(1)The calculation is 1.5 times Mr. Hicke’s base salary for 2023 per the terms of his employment agreement and does not include the amount of any accrued but unpaid base salary or vacation through the date of termination that may be payable to Mr. Hicke at the time of termination. (2)The calculation is 1.5 times Mr. Hicke’s incentive compensation target for 2023, per the terms of his employment agreement. (3)The aggregate value is based on the closing market price of the Shares on December 31, 2023 ($63.55). As of December 31, 2023, 30,000 Shares underlying Mr. Hicke’s 40,000 RSU Staking Grant had not yet vested. As disclosed in the Summary Compensation Table, Mr. Withrow will receive a payment of $3.8 million payable in equal installments for a period of 24 months after the end of the statutory revocation periods described in the agreement in connection with his separation from the Company.
Director compensation
Director compensation During 2023, each director who was not an employee received an annual retainer of $70,000. The annual chair fee for the Audit, Compensation, Legal and Regulatory Oversight and Nominating and Governance Committees was $20,000, $15,000, $15,000 and $5,000, respectively, and the annual retainer fee for the Audit Committee was $10,000, for each of the Compensation and Legal Regulatory and Oversight Committees was $7,500, and for the Nominating and Governance Committee was $5,000. The annual retainer for the Lead Independent Director was $15,000. Each non-employee director also received an annual grant of 8,000 options to purchase Shares and 1,000 RSUs. Thus, on December 15, 2023, each of our non-employee directors, Messrs. Brassington, Doran, Guarino, Romeo and Mss. McCarthy and Miller, was granted options under our 2014 Omnibus Equity Compensation Plan to purchase 8,000 Shares at an exercise price of $62.00, all of which options remained outstanding at December 15, 2023. These options have a ten-year term, with 50 percent of these options to vest on December 31 of the year in which we attain adjusted pre-tax earnings per share of $5.25 or more, but not earlier than the second anniversary of the date of grant, and the remaining 50 percent of these options to vest on December 31 of the year in which we attain adjusted pre-tax earnings per share of $7.10 or more, but not earlier than the fourth anniversary of the date of grant (in each case based upon our audited financial statements and subject to certain adjustments relating to the option expense we recorded under ASC 718 and to adjustment for certain extraordinary events). RSUs granted in 2023 were time-based and not based on the achievement of performance targets. The following table summarizes the compensation paid to our directors for 2023:
Director compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | Total ($) | | Jonathan A. Brassington | 95,000 | 62,000 | 124,480 | — | 281,480 | | William M. Doran | 92,500 | 62,000 | 124,480 | 348,004(3) | 626,984 | | Carl A. Guarino | 112,500 | 62,000 | 124,480 | — | 298,980 | | Kathryn M. McCarthy | 107,500 | 62,000 | 124,480 | — | 293,980 | | Stephanie D. Miller | 21,875 | 103,755(4) | 245,905(5) | — | 371,535 | | Carmen V. Romeo | 112,500 | 62,000 | 124,480 | — | 298,980 |
Director compensation
(1)Reflects the aggregate grant date fair value of RSUs as calculated in accordance with ASC 718. See Notes 1 and 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. As of December 31, 2023, our directors owned the following aggregate numbers of RSUs: Mr. Brassington, 1,766; Mr. Doran, 1,766; Mr. Guarino, 1,766; Ms. McCarthy, 1,766; Ms. Miller, 1,766 and Mr. Romeo, 1,766. (2)Reflects the aggregate grant date fair value of options based upon the Black-Scholes option pricing model. The assumptions used in determining the amounts in this column are set forth in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. As of December 31, 2023, our directors owned options to purchase the following aggregate numbers of Shares: Mr. Brassington, 25,500; Mr. Doran, 95,500; Mr. Guarino, 105,500; Ms. McCarthy, 85,500; Ms. Miller, 15,500; and Mr. Romeo, 80,500. (3)During 2023, Mr. Doran received trustee fees of $178,000 for serving as a trustee of approximately 13 mutual funds or trusts, each of which we either administered or sponsored. During 2023, Mr. Doran served as a director of SEI Investments Distribution Co., SEI Investments (Asia) Limited, SEI Investments (Europe) Ltd., SEI Global Nominee Ltd., SEI Investments Global Fund Services Limited, SEI Investments Global, Limited and SEI Alpha Strategy Portfolios, L.P. and received $14,166 per month pursuant to a consulting agreement with us. (4)In connection with her appointment as a director on October 24, 2023, Ms. Miller was awarded a one-time on-boarding grant of 766 RSUs under our 2014 Omnibus Equity Compensation Plan. Ms. Miller also received a year-end annual RSU grant consistent with that awarded to our other directors. (5)In connection with her appointment as a director on October 24, 2023, Ms. Miller was awarded a one-time on-boarding grant of options under our 2014 Omnibus Equity Compensation Plan to purchase 7,500 Shares at an exercise price of $54.51, all of which options remained outstanding at December 31, 2023. These options have a ten-year term, with 50 percent of these options to vest on December 31 of the year in which we attain adjusted pre-tax earnings per share of $5.00 or more, but not earlier than the second anniversary of the date of grant, and the remaining 50 percent of these options to vest on December 31 of the year in which we attain adjusted pre-tax earnings per share of $6.25 or more, but not earlier than the fourth anniversary of the date of grant (in each case based upon our audited financial statements and subject to certain adjustments relating to the option expense we recorded under ASC 718 and to adjustment for certain extraordinary events). Ms. Miller also received a year-end annual option grant consistent with that awarded to our other directors.