Corporate Governance
Compensation Recoupment Policy
Effective October 1, 2010
The Board of Directors of Raymond James Financial, Inc. (hereinafter the “Company” and such term “Company” shall be read to include in the definition thereof all of the Company’s subsidiaries) believes it is desirable, and in the best interests of the Company and its stockholders, to maintain and enhance a culture that is focused on integrity, accountability and that discourages conduct detrimental to the Company’s sustainable growth. Therefore, it may be appropriate for the Company to recover incentive compensation provided to certain employees in the event that there is a restatement of the Company’s financial results or the incentive compensation was based upon materially inaccurate performance metrics. In light of these concerns, and to set an example for all employees throughout the Company, the Board of Directors has adopted the following Compensation Recoupment Policy (the “Policy”) effective as of October 1, 2010 (the “Effective Date”). The Policy applies to any Company employee who receives a cash or equity incentive award after the Effective Date.
1. Definitions
A. “Executive Officer” shall have the meaning set forth in 17 CFR §240.3b-7.
B. “Incentive Compensation” shall mean any compensation payable in cash, shares of the Company’s common stock, restricted stock units or stock options that is tied to a metric and intended to serve as an incentive for performance over a period of one year or more, including but not limited to, such compensation, or any portion thereof, that is based upon quantitative or qualitative measures and notwithstanding whether determined in whole or in part on an objective, subjective or discretionary basis by the person or committee determining the amount of such compensation.
C. “Measurement Date” shall mean the date on which the Company files restated financial statements with the Securities and Exchange Commission or if the Company does not restate its financial results, but determines any performance metric(s) pursuant to which Incentive Compensation has been awarded was materially inaccurate, the date accurate performance metrics are calculated and made available to the Administrator.
2. Recoupment of Incentive Compensation
A. Executive Officers. If the Company restates its financial statements, then, to the fullest extent permitted by law, the Company shall require each current or former Executive Officer who received Incentive Compensation to reimburse the Company any Incentive Compensation received by such Executive Officer within three years preceding the Measurement Date to the extent that such compensation would have been in excess of that which would have been paid to such Executive Officer if it were based upon the financial statements as so restated.
B. All Employees. If Incentive Compensation is paid to any employee on the basis of materially inaccurate performance metric(s) notwithstanding (i) that the inaccuracy did not result in a restatement of the Company’s financial statements, and (ii) whether or not the employee was responsible for the inaccuracy, then the Company may require such employee to reimburse the Company any Incentive Compensation received by such employee within three years preceding the Measurement Date to the extent that such compensation would have been in excess of that which would have been paid to such employee if were based upon accurate performance metric(s).
3. Recoupment Amount and Procedures
A. The amount required to be reimbursed or returned to the Company shall be determined by the Administrator, and absent unusual circumstances, will generally equal the excess of (i) the gross Incentive Compensation payment(s) made over (ii) the gross Incentive Compensation payment(s) that would have been made if the original payment had been determined based on the restated financial statements or accurate performance metric(s).
B. The Company will determine, in its sole discretion, the method for obtaining reimbursement or return of payments made, which may include, but is not limited to: (i) by offsetting the amount from any compensation owed by the Company to the affected employee (including, without limitation, amounts payable under a deferred compensation plan at such time as is permitted by Section 409A of the Internal Revenue Code of 1986, as amended); (ii) by reducing or eliminating future salary increases, cash incentive awards or equity awards; or (iii) by requiring the individual to pay the amount to the Company upon its written demand for such payment.
4. Administration
The Policy is to be administered by the Corporate Governance, Nominating & Compensation Committee of the Board of Directors (the “Committee”), unless the Board of Directors elects to administer the Policy itself (the Committee or Board of Directors, as applicable, in its role administering the Policy is the “Administrator”). The Administrator may delegate ministerial duties to one or more officers or employees of the Company.
5. Miscellaneous
The Board of Directors intends that this Policy will be applied to the fullest extent permitted by law. In addition, the Administrator may determine that any equity award agreement, employment agreement or similar agreement entered into or amended after the Effective Date shall, as a condition to the grant of any benefit covered by such agreement, require the affected employee to contractually agree to abide by the terms of this Policy. Further, the adoption of this Policy does not mitigate, and is intended to enhance, the effect of any recoupment or similar policies in any equity award agreement, employment agreement or similar agreement in effect prior to the Effective Date.
6. Binding on Successors
The terms of this Policy shall be binding and enforceable against all employees and their heirs, executors, administrators and legal representatives.
If you have any questions concerning this Policy, please call Paul Matecki or Ken Armstrong in the Legal Department, at 727 567 5180 or 727 567 5170, respectively.