UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Soliciting Material under § 240.14a-12

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Wintrust Financial Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)​

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WINTRUST FINANCIAL CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 2020

To the Shareholders of Wintrust Financial Corporation:

You are cordially invited to attend the 2020 Annual Meeting of Shareholders (the “Annual Meeting”) of Wintrust Financial Corporation (the “Company”) to be held via live audio webcast on Thursday, May 28, 2020, at 9:00 a.m. Central Time, at https://web.lumiagm.com/212949112 (Password: win2020) for the following purposes:

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To elect the 13 nominees for director named in this Proxy Statement to hold office until the 2021 Annual Meeting of Shareholders or until a successor has been elected and qualified;

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To approve, on an advisory (non-binding) basis, the Company’s executive compensation as described in this Proxy Statement;

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To ratify the appointment of Ernst & Young LLP to serve as the independent registered public accounting firm for fiscal year 2020; and

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To transact such other business as may properly come before the meeting and any adjournment thereof.

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The record date for determining shareholders entitled to notice of, and to vote at, the Annual Meeting was the close of business on April 3, 2020.

IMPORTANT NOTE:   We are sensitive to the public health and travel concerns our shareholders may have regarding the coronavirus (COVID-19) pandemic and the protocols that federal, state, and local governments may impose. In light of the unique circumstances associated with COVID-19, the Board of Directors has determined that it is prudent to conduct this year’s Annual Meeting virtually. The attached Proxy Statement includes important information regarding the virtual Annual Meeting, including what you need to do in order to participate.

By order of the Board of Directors,

Kathleen M. Boege
Corporate Secretary

April 9, 2020

WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING, IT IS IMPORTANT THAT YOU VOTE BY ONE OF THE METHODS NOTED IN THE ATTACHED PROXY STATEMENT.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 28, 2020: This Notice of the Annual Meeting, Proxy Statement and the 2019 Annual Report on Form 10-K are Available at: https://materials.proxyvote.com/97650W

 

 

TABLE OF CONTENTS

 

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WINTRUST FINANCIAL CORPORATION

9700 West Higgins Road, Suite 800
Rosemont, Illinois 60018

PROXY STATEMENT

FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD THURSDAY, MAY 28, 2020

These proxy materials are furnished in connection with the solicitation by the Board of Directors (the “Board” with individual members of the Board each being referred to herein as a “Director”) of Wintrust Financial Corporation, an Illinois corporation (“Wintrust” or the “Company”), of proxies to be used at the 2020 Annual Meeting of Shareholders (the “Annual Meeting”) and at any adjournment of such meeting. In accordance with rules and regulations of the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each shareholder of record, we furnish proxy materials, which include this Proxy Statement (this “Proxy Statement”) and the accompanying proxy card, Notice of Annual Meeting, and Annual Report on Form 10-K for fiscal year ended December 31, 2019, to our shareholders by making such materials available on the Internet unless otherwise instructed by the shareholder. If you received a Notice of Internet Availability of Proxy Materials (the “Notice”) by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice, which is first being mailed to shareholders on or about April 17, 2020.

ABOUT THE MEETING

When and where is the Annual Meeting?

The Annual Meeting will be held via live audio webcast on Thursday, May 28, 2020 at 9:00 a.m. Central Time at https://web.lumiagm.com/212949112 (Password: win2020). This year’s Annual Meeting will be conducted virtually, for the health and safety of our shareholders, management and Board, in light of public health concerns regarding the coronavirus (COVID-19) pandemic. Please do NOT travel to the Company’s corporate headquarters for the Annual Meeting. You may attend the Annual Meeting, ask questions, and vote your shares during the Annual Meeting at https://web.lumiagm.com/212949112 (Password: win2020). As always, you are encouraged to vote your shares prior to the Annual Meeting. To participate in the Annual Meeting, shareholders will need the 11-digit control number that appears on your Notice or proxy card. In the event that you do not have a control number, please contact your broker, bank or other nominee as soon as possible so that you can be provided with a control number to gain access to the meeting. Please see below for additional instructions if you hold your shares through a broker, bank or other nominee.

Online check-in will begin at 8:45 a.m. Central Time. We encourage you to access the Annual Meeting prior to the start time, leaving ample time for the check-in process. If you encounter any technical difficulties accessing the virtual Annual Meeting or during the Annual Meeting, please call the technical support number that will be posted on the virtual Annual Meeting login page at https://web.lumiagm.com/​212949112 (Password: win2020).

A replay of the entire meeting will be available on the Company’s website at www.wintrust.com under “Investor Relations.” We intend to hold an in-person annual meeting of shareholders in subsequent years once public health concerns regarding the COVID-19 pandemic have subsided.

What is the purpose of the Annual Meeting?

At the Annual Meeting, shareholders will act upon the matters described in the Notice of Annual Meeting that accompanies this Proxy Statement, including the election of the 13 nominees for Director named in this Proxy Statement, a proposal approving (on an advisory basis) the Company’s executive compensation as described in this Proxy Statement, and the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020.

 

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Who may vote at the Annual Meeting?

Only record holders of our Common Stock, no par value per share (“Common Stock”), as of the close of business on April 3, 2020 (the “Record Date”), will be entitled to vote at the meeting. On the Record Date, the Company had outstanding approximately 57,545,352 shares of Common Stock. Each outstanding share of the Common Stock entitles the holder to one vote.

May shareholders ask questions at the virtual Annual Meeting?

Yes. Shareholders will have the ability to submit written questions during the virtual Annual Meeting. Such questions must be confined to matters properly before the Annual Meeting and of general Company relevance.

What constitutes a quorum?

The Annual Meeting will be held only if a quorum is present. A quorum will be present if a majority of the shares of the Common Stock issued and outstanding on the Record Date are represented, online or by proxy, at the Annual Meeting. Shares represented by properly completed proxy cards marked “abstain” or returned without voting instructions are counted as present for the purpose of determining whether a quorum is present at the Annual Meeting. Also, if shares are held by brokers who submit a proxy but are prohibited from exercising discretionary authority for beneficial owners who have not given voting instructions on certain matters (“broker non-votes”), those shares will be counted as present for the purpose of determining whether a quorum is present at the Annual Meeting.

How do I submit my vote?

If you are a shareholder of record, you can vote by:

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attending the Annual Meeting virtually and voting electronically during the Annual Meeting, using the 11-digit control number that appears on your Notice or proxy card;

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using your telephone, according to the instructions on the Notice or proxy card;

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visiting www.voteproxy.com and then following the instructions on the screen; or

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signing, dating and mailing in your proxy card which may be obtained by calling 888-proxyna (888-776-9962) or by emailing info@astfinancial.com.

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The deadline for voting by telephone or on the Internet is 11:59 p.m. Eastern Time on May 27, 2020. Proxy cards submitted by mail must be received by the close of business on May 27, 2020.

How do I vote if I hold my shares through a broker, bank or other nominee?

If you hold your shares through a broker, bank or other nominee, that institution will instruct you as to how your shares may be voted by proxy, including whether telephone or Internet voting options are available. If you hold your shares through a broker, bank or other nominee and would like to vote online during the virtual Annual Meeting, you must first obtain a valid legal proxy issued in your name from the institution that holds your shares and then register in advance to attend the virtual Annual Meeting.

Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form. After obtaining a valid legal proxy from your broker, bank or other nominee, you must then register to attend the virtual Annual Meeting, by submitting proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests can be mailed to:

American Stock Transfer & Trust Company LLC
Attn: Proxy Tabulation Department
6201 15th Avenue
Brooklyn, NY 11219

 

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Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 13, 2020. You will receive a confirmation of your registration by email after we receive your registration materials.

Can I change or revoke my vote after I return my proxy card?

Yes. If you are a shareholder of record, you may change your vote by:

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returning a later-dated proxy card;

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entering a new vote by telephone or on the Internet (prior to 11:59 p.m. Eastern Time on May 27, 2020);

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voting electronically during the virtual Annual Meeting; or

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delivering written notice of revocation to the Company’s Corporate Secretary by mail at 9700 West Higgins Road, Suite 800, Rosemont, Illinois 60018.

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If you vote by phone or Internet, you may change your vote if you do so prior to 11:59 p.m. Eastern Time on May 27, 2020. Any later-dated proxy card or revocation sent by mail must be received by the close of business on May 27, 2020. If you hold your shares through an institution, that institution will instruct you as to how your vote may be changed.

Who will count the votes?

The Company’s Inspector of Election, American Stock Transfer & Trust Company, LLC, will count the votes.

Will my vote be kept confidential?

Yes. As a matter of policy, shareholder proxies, ballots and tabulations that identify individual shareholders are kept secret and are available only to the Company, its tabulator and inspectors of election, who are required to acknowledge their obligation to keep your votes confidential.

Who pays to prepare, mail and solicit the proxies?

The Company pays all of the costs of preparing, mailing and soliciting proxies. The Company asks brokers, banks, voting trustees and other nominees and fiduciaries to forward proxy materials to the beneficial owners and to obtain authority to execute proxies. The Company will reimburse the brokers, banks, voting trustees and other nominees and fiduciaries upon request. In addition to solicitation by mail, telephone, facsimile, Internet or personal contact by its officers and employees, the Company has retained the services of Morrow Sodali LLC, 470 West Avenue, Third Floor, Stamford, Connecticut 06902, to solicit proxies for a fee of  $7,000 plus expenses.

What are the Board’s recommendations as to how I should vote on each proposal?

The Board recommends a vote:

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FOR the election of each of the 13 Director nominees named in this Proxy Statement;

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FOR the approval, on an advisory (non-binding) basis, of the Company’s executive compensation as described in this Proxy Statement; and

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FOR the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020.

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How will my shares be voted if I sign, date and return my proxy card?

If you sign, date and return your proxy card and indicate how you would like your shares voted, your shares will be voted as you have instructed. If you sign, date and return your proxy card but do not indicate how you would like your shares voted, your proxy will be voted:

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FOR the election of each of the 13 Director nominees named in this Proxy Statement;

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FOR the approval, on an advisory (non-binding) basis, of the Company’s executive compensation as described in this Proxy Statement; and

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FOR the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020.

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With respect to any other business that may properly come before the meeting, or any adjournment of the meeting, that is submitted to a vote of the shareholders, including whether or not to adjourn the meeting, your shares will be voted in accordance with the best judgment of the persons voting the proxies.

How will broker non-votes be treated?

A broker non-vote occurs when a broker who holds its customer’s shares in street name submits proxies for such shares, but indicates that it does not have authority to vote on a particular matter. Generally, this occurs when brokers have not received any instructions from their customers. In these cases, the brokers, as the holders of record, are permitted to vote on “routine” matters only, but not on other matters. In this Proxy Statement, brokers who have not received instructions from their customers would only be permitted to vote on:

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the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020.

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Brokers who have not received instructions from their customers would not be permitted to vote on the remaining proposals to be presented at the Annual Meeting, which are considered “non-routine” matters.

We will treat broker non-votes as present to determine whether or not we have a quorum at the Annual Meeting, but they will not be treated as entitled to vote on the “non-routine” matters described above, for which the broker indicates it does not have discretionary authority.

How will abstentions be treated?

For purposes of determining whether or not we have a quorum at the Annual Meeting, if you vote to abstain, your shares will be counted as present at the Annual Meeting.

If you abstain from voting for one or more of the nominees for Director, this will have the same effect as a vote against such nominee. If you abstain from voting on the advisory (non-binding) proposal approving the Company’s executive compensation as described in this Proxy Statement, or on the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020, your abstention will have the same effect as a vote against the proposal or proposals on which you abstain from voting.

What if other matters come up during the Annual Meeting?

If any matters other than those referred to in the Notice of Annual Meeting properly come before the Annual Meeting, the individuals named in the proxy card will vote the proxies held by them in accordance with their best judgment. The Company is not aware of any business other than the items referred to in the Notice of Annual Meeting that may be considered at the Annual Meeting.

Your vote is important.   Whether or not you plan to attend the Annual Meeting by virtual means, prompt voting will be appreciated. Registered shareholders can vote their shares via the Internet or by using a toll-free telephone number. Instructions for using these convenient services are provided on the proxy card. Of course, you may still vote your shares by submitting the proxy card. A proxy card may be obtained as instructed above under “How do I submit by vote?” If you chose to vote by mail, we ask that you complete, sign, date and return the proxy card promptly in the postage-paid envelope.

 

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BOARD OF DIRECTORS, COMMITTEES AND GOVERNANCE

Board of Directors

Overview

The Board provides oversight with respect to our overall performance, strategic direction and key corporate policies. It approves major initiatives, advises on key financial and business objectives, and monitors progress with respect to these matters. Members of the Board are kept informed of our business by various reports and documents provided to them on a regular basis, including operating and financial reports made at Board and committee meetings by the Chief Executive Officer (“CEO”) and other officers. The Board has seven standing committees. The principal responsibilities of the standing committees are described under the applicable committee headings below. Additionally, the independent Directors meet in regularly scheduled executive sessions, with and without management present, at each meeting of the Board and its committees.

Corporate Governance Practices

We believe that a culture of strong corporate governance is a critical component of our success. Our Board continually evaluates corporate governance developments and strives to adopt “best practices” including:

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Annual election of Directors.

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Independent Chairman of the Board.

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Independent Board.   Our Board is comprised of all independent Directors, except our CEO.

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Majority vote standard for election of our Directors.

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Independent Board committees.   Each of our committees (other than the Executive Committee) is made up entirely of independent Directors. Each standing committee operates under a written charter that has been approved by the respective committee, the Nominating and Corporate Governance Committee (the “Nominating Committee”) and the Board.

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Regular executive sessions of independent Directors.   At each meeting of the Board and each of its Committees, the Directors meet without management present in regularly scheduled executive sessions of independent Directors.

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Regular Board self-evaluation process.   The Board and each committee evaluate its performance on an annual basis.

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Service by the majority of our Directors on the boards of our subsidiary banks or other operating subsidiaries.   We believe this dual service gives our Directors a robust view into our operations and performance.

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Limitation on other outside board service.   We limit our Directors to serve on no more than four other public company boards.

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Retirement Age.   We have a policy that we will not nominate a candidate for Director if he or she has attained the age of 76 before the election.

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Robust code of ethics.   Our corporate code of ethics applies to all of our employees, including our Directors and executive officers. We also have an additional code of ethics applicable to our senior financial officers.

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Robust role for the Board in risk oversight.   Our Board and its committees play an active and ongoing role in the management of the risks of our business.

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Stock ownership guidelines for Directors and named executive officers.   Our Directors and named executive officers each must maintain a significant ownership of our Common Stock in order to increase alignment of their interests with those of our shareholders.

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Prohibition on hedging, short selling and pledging.   Our Directors and executive officers are prohibited from engaging in selling short our Common Stock, engaging in hedging or offsetting transactions regarding our Common Stock, including the use of puts, calls, swaps, collars or other derivative securities designed to or that may reasonably be expected to have the effect of hedging or offsetting a decrease in the market value of any securities of the Company, or pledging our Common Stock.

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No shareholder rights plan (poison pill).

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Meetings

The Board met six times in 2019. Each member of the Board attended more than 87% of the total number of meetings of the Board and the committees on which he or she served. We encourage, but do not require, our Board members to attend annual meetings of shareholders. All of our Board members currently in office attended our 2019 Annual Meeting of Shareholders.

Board Leadership Structure

The Board has a non-executive Chairman. This position is independent from management. The Chairman leads the Board meetings as well as meetings of the independent Directors. The CEO is a member of the Board and participates in its meetings. The Board believes that this leadership structure is appropriate for the Company at this time because it allows for independent oversight of management, increases management accountability and encourages an objective evaluation of management’s performance relative to compensation. In addition, the Board recognizes that acting as Chairman of the Board is a particularly time-intensive responsibility. Separating these roles allows the CEO to focus solely on his duties, which the Board believes better serves the Company. Separation of the roles of Chairman and CEO also promotes risk management, enhances the independence of the Board from management, and mitigates potential conflicts of interest between the Board and management. In order to ensure continuity of leadership, the Company has a policy set forth in its Corporate Governance Guidelines providing that each non-executive Chairman may serve for a term of not more than nine (9) consecutive years, subject to the requirement that he or she be re-elected as Chairman annually by the Board. The Nominating Committee has proposed, and the Board has agreed, that pending his re-election, H. Patrick Hackett, Jr. will continue to serve as non-executive Chairman of the Board following the Annual Meeting.

The Board’s Role in Risk Oversight

Our Board has an active and ongoing role in the management of the risks of our business. This role has two fundamental elements: (1) ensuring that management of the Company has implemented an appropriate system to manage risks by identifying, assessing, mitigating, monitoring and communicating about risks; and (2) providing effective risk oversight through the Board and its committees.

The Board believes the first element of its risk oversight role is fulfilled through the Company’s extensive risk assessment and management program designed to identify, monitor, report and control the Company’s risks, which are broken down into various categories deemed relevant to the Company and its business operations. The Enterprise Risk Management Program is administered by the Company’s Senior Vice President — Chief Risk Officer, who provides reports to the Board, the Audit Committee and the Risk Management Committee on a regular basis and other committees of the Board as needed.

The second element of the Board’s oversight role is fulfilled primarily by the full Board regularly receiving written and oral reports from management on the status of various categories of Company risk, including cybersecurity risks, and on the Company’s overall risks as well as any material changes or developments in risk profiles or experiences. In connection with the onset of the COVID-19 pandemic, the Board has been convening regularly to consider and discuss updates on the Company’s management of the COVID-19 crisis, including with regard to the Company’s operations, financial position and liquidity, communications strategy and employee matters, among other items. The Board also periodically receives reports regarding regulatory priorities and reviews regulatory examination reports of the Company to remain informed on issues and observations raised by regulatory authorities regarding the risk categories of the Company.

 

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In addition to the full Board’s direct oversight, the Board’s committees provide oversight of various risks created by the Company’s operations. The Audit Committee provides oversight of the monitoring of risk, generally, and oversight of financial, regulatory, operational and legal risks, in particular. The Risk Management Committee monitors, among other things, overall enterprise risk management, credit, interest rate, liquidity and market risks. The Finance Committee provides oversight of risks related to strategic transactions and reviews risks associated with the Company’s capital planning strategy and liquidity. The Information Technology & Information Security Committee (“IT/IS Committee”) provides oversight of risks related to the Company’s information technology and information security strategy, infrastructure, systems, business continuity planning and disaster recovery plans and testing. The IT/IS Committee and the Audit Committee coordinate regarding oversight of the Company’s information security programs. The Nominating Committee provides risk oversight relating to the Company’s board and governance. The Compensation Committee provides oversight of risks related to the Company’s compensation of its employees. In addition, the Audit Committee, Finance Committee and Risk Management Committee have each undertaken to monitor relevant portions of the risks relating to the capital stress testing process.

Codes of Ethics

The Board has adopted our Corporate Code of Ethics applicable to all Directors, officers and employees, and our Senior Financial Officer Code of Ethics (together with the Corporate Code of Ethics, the “Codes”) each of which is available on the Company’s website at www.wintrust.com by choosing “Investor Relations” and then choosing “Corporate Governance.” To assist in enforcement of the Codes, we maintain Wintrust’s Ethicspoint, a toll-free hotline and Internet-based service through which confidential complaints may be made by employees regarding actual or alleged illegal or fraudulent activity; questionable accounting, internal controls or auditing matters; conflicts of interest, dishonest or unethical conduct; disclosures in the Company’s reports filed with the SEC, bank regulatory filings and other public disclosures that are not full, fair, accurate, timely or understandable; violations of our Codes; and/or any other violations of laws, rules or regulations. Any complaints submitted through this process are presented to the Audit Committee on a regular, periodic basis or more frequently as needed. The Company will post on its website any amendments to, or waivers from, the Codes as they apply to its Directors and executive officers to the extent required by the rules of the SEC or the Nasdaq stock market (“NASDAQ”).

Shareholder Communications

Any shareholder or other interested parties who desires to contact the non-employee Directors or the other members of our Board may do so by writing to: Wintrust Financial Corporation, Board of Directors, c/o the Corporate Secretary, Wintrust Financial Corporation, 9700 West Higgins Road, Suite 800, Rosemont, Illinois 60018. Copies of written communications received at this address will be provided to the Board, the applicable committee chair or the non-employee Directors as a group unless such communications are considered, in consultation with the non-employee Directors, to be improper for submission to the intended recipient(s). All communications will be forwarded to the Chair of the Nominating Committee unless the communication is specifically addressed to another member of the Board, in which case, the communication will be forwarded to that Director. Shareholders also may obtain a copy of any of the documents posted to the website free of charge by calling (847) 939-9000 and requesting a copy. Information contained on Wintrust’s website is not deemed to be a part of this Proxy Statement.

 

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Committee Membership

The following table summarizes the current membership of the Board and each of its committees as of the date of this Proxy Statement:

The Nominating Committee has proposed, and the Board has agreed, that the membership of the Board and each of its committees following the Annual Meeting, assuming each Director nominee is elected, shall be as follows:

* Mr. Washington is a nominee for election to the Board at the Annual Meeting.

The Board adopted the charter of each of the Nominating Committee, the Audit Committee, the Compensation Committee, the Risk Management Committee, the Finance Committee, the IT/IS Committee

 

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and the Executive Committee, copies of which are available at www.wintrust.com by choosing “Investor Relations” and then choosing “Corporate Governance.” Our Corporate Governance Guidelines are also available on the Company’s website under the same heading.

Nominating and Corporate Governance Committee

The Board has established the Nominating Committee which is responsible for the following, among other responsibilities:

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determining criteria for the selection and qualification of the members of the Board and reviewing with the Board the appropriate skills and characteristics required of the Board members;

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identifying, evaluating and recommending candidates to fill positions on the Board;

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seeking out possible candidates and otherwise aid in attracting highly qualified candidates to serve on the Board and coordinating with the CEO to the extent the Nominating Committee deems appropriate;

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evaluating the independence of each member of the Board and establishing procedures for the regular ongoing reporting by Directors of any developments that may be deemed to affect their independence status or qualification to serve as a Director;

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considering any resignation submitted by a Director who has experienced a significant change to his or her personal circumstances;

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reviewing the corporate governance guidelines and code of ethics and recommending modifications thereto to the Board;

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advising the Board with respect to the size, composition and individual members of the various committees of the Board and the functions of the Board and its committees;

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establishing and implementing self-evaluation procedures for the Board and its committees;

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assessing and reviewing with management the overall effectiveness of the organization of the Board and the conduct of its business and making appropriate recommendations to the Board with regard thereto;

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reviewing shareholder proposals submitted for business to be conducted at an annual meeting;

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in consultation with the Audit Committee, reviewing related-party transactions;

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reviewing annually Director compensation and recommending modifications thereto to the Board;

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reviewing insurance policies and indemnification arrangements applicable to the Directors and executive officers and recommending modifications thereto to the Board;

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considering from time to time the overall relationship of the Board and management;

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reviewing and assessing annually the adequacy of the Executive Committee Charter and, if appropriate, recommending changes to the Board for approval; and

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reviewing and assessing annually the adequacy of the Nominating Committee Charter and, if appropriate, recommending changes to the Board for approval.

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The Nominating Committee consists of five Directors, and the Board has determined that each of these Directors (and Director nominee Mr. Washington) has no material relationship with the Company and is otherwise independent under the applicable NASDAQ listing standards. During 2019, the Nominating Committee met four times.

Nomination of Directors

The Nominating Committee seeks nominees from diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. In doing so, the Nominating Committee considers a wide range of factors in evaluating the suitability of director candidates, including a general understanding of finance and other disciplines relevant to the success of a publicly-traded company

 

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in today’s business environment, understanding of our business, education and professional background. The following personal characteristics are considered minimum qualifications for Board membership under the Corporate Governance Guidelines approved by the Board: integrity and accountability, the ability to provide informed judgments on a wide range of issues, financial literacy, a good reputation in the business community, a talent for networking and referring business to the Company, a history of achievements that reflects high standards for themselves and others, and willingness to raise tough questions in a manner that encourages open discussion. Under the Corporate Governance Guidelines adopted by the Board, Directors are expected to own Common Stock having a value of at least four times the annual retainer fee, which is $115,000 for fiscal year 2020, within four years of becoming a Director, and to limit board service at other companies to no more than four other public company boards.

The Nominating Committee believes in an expansive definition of diversity that includes differences of experience, education and talents, among other things. While the Nominating Committee does not have a formal policy in this regard, the diversity of the Board is a consideration in evaluating candidates for the Board, among others, as set forth in our Corporate Governance Guidelines.

The Nominating Committee also evaluates the performance of Directors and assesses the effectiveness of committees and the Board as a whole. The effectiveness of the nomination process is evaluated by the Board each year as part of its self-evaluation process and by the Nominating Committee as it evaluates and identifies director candidates.

The Nominating Committee does not have any single method for identifying director candidates but will consider candidates suggested by a wide range of sources. Mr. Alex E. Washington III, who is standing for election to the Board for the first time at the Annual Meeting, was originally recommended as a candidate for Director by several non-management Directors of the Company. The Nominating Committee, in accordance with its customary process, duly considered the qualifications of Mr. Washington and recommended the nomination of Mr. Washington for election to the Board at the Annual Meeting.

The Nominating Committee will consider director candidates recommended by our shareholders and will apply the same standards in considering director candidates recommended by shareholders as it applies to other candidates. Once the Nominating Committee receives a recommendation from a shareholder, it may request additional information from the candidate about the candidate’s independence, qualifications and other information that would assist the Nominating Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in the Company’s proxy statement, if nominated.

Shareholders may also directly nominate a candidate for Director pursuant to the advance notice provisions of the Company’s By-laws. Nominations must be received in writing at the principal executive offices of the Company and addressed to Wintrust Financial Corporation, Nominating and Corporate Governance Committee, c/o Corporate Secretary, 9700 West Higgins Road, Suite 800, Rosemont, Illinois 60018 and otherwise satisfy the requirements set forth in the Company’s By-laws.

Audit Committee

The Board has established an Audit Committee for the purpose of overseeing our accounting and financial reporting processes and the audits of our financial statements and evaluating and monitoring the risk profile of the Company. In addition, the Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to the following, in addition to other responsibilities:

•

being directly responsible for the appointment, termination, compensation and oversight of the work of the independent auditors, including an assessment of the qualifications and independence of the independent auditors;

​

•

reviewing the adequacy and effectiveness of the Company’s disclosure controls and procedures and management reports thereon;

​

•

discussing with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC;

​

•

overseeing the Company’s internal audit function;

​

 

10

 

•

reviewing with management and the independent auditors, the financial statements, footnotes and related disclosures to be included in the Company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q;

​

•

reviewing results of quarterly interim financial statements and the financial disclosure in the Company’s earnings press releases, registration statements, or current reports;

​

•

in consultation with the Nominating Committee, reviewing related-party transactions;

​

•

reviewing the status of the Company’s Information Security Program, including updates to risk assessments, results of audit testing and details of any security breaches or violations, as well as any changes to the program;

​

•

monitoring and discussing with management and the internal auditors, as it deems appropriate, the Company’s risk assessment and risk management policies;

​

•

reviewing the status and results of regulatory examinations;

​

•

reviewing compliance with the Codes and insider trading policy; and

​

•

reviewing and assessing annually the adequacy of the Audit Committee Charter and, if appropriate, recommending changes to the Board for approval.

​

The Audit Committee has established a policy to pre-approve all audit and non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year. Once
pre-approved, the services and pre-approved amounts are monitored against actual charges incurred and modified if appropriate.

To serve on the Audit Committee, Directors must meet financial competency standards and heightened independence standards set forth by the SEC and NASDAQ. In particular, each Audit Committee member:

•

must be financially literate;

​

•

must not have received any consulting, advisory, or other compensatory fees from the Company (other than in his or her capacity as a Director);

​

•

must not be the Company’s affiliate or the affiliate of any of the Company’s subsidiaries; and

​

•

must not serve on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such Director to effectively serve on the Audit Committee.

​

Furthermore, at least one member of the Audit Committee must be an “audit committee financial expert” as defined by SEC rules.

The Audit Committee consists of five Directors, and the Board has determined that each of these Directors has no material relationship with the Company and each is otherwise independent under the applicable NASDAQ listing standards and meets the financial competency and heightened independence standards set forth above. The Board has determined that each of Mses. Glabe, Stafford and Teglia and Messrs. Heitmann and Sweeney qualify as audit committee financial experts. During 2019, the Audit Committee met six times.

Compensation Committee

The Board has established a Compensation Committee which is responsible for the following, among other responsibilities:

•

establishing, in consultation with senior management, the Company’s overall compensation philosophy and overseeing the development and implementation of compensation programs and policies;

​

•

reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other senior management, evaluating the performance of the CEO and other senior management

​

 

11

 

in light of those goals and objectives, and, either as a committee or together with the other independent members of the Board, setting the CEO’s and other senior management’s compensation levels based on this evaluation;

•

reviewing and approving in advance employment agreements, salary levels, salary increases and bonuses for executive and senior officers of the Company and, if appropriate, senior officers of its subsidiaries, including salaries and awards to newly hired executives and senior officers of the Company;

​

•

reviewing the Company’s compensation programs to assess the extent to which such practices encourage risk-taking (including compliance with the Company’s Volcker Rule Compliance Policy) or earnings manipulation, and taking any appropriate remedial actions;

​

•

administering the Company’s stock option and employee stock purchase programs;

​

•

reviewing and recommending for Board approval additional executive compensation and employee benefit programs;

​

•

reviewing with the CEO senior management promotions and employment of senior management candidates;

​

•

conferring with the CEO and other senior management regarding succession planning for senior executive officers and making any such recommendations to the Board;

​

•

reviewing and approving changes to be made to severance programs and forms of employment agreements and change-in-control agreements;

​

•

pre-approving all services provided by any independent compensation consultant retained to participate in the evaluation of executive compensation, other than services performed in connection with non-employee Director compensation;

​

•

reviewing the results of any advisory shareholder votes on executive compensation (say-on-pay votes), and considering whether to recommend adjustments to the Company’s executive compensation policies and practices as a result of such votes;

​

•

recommending for approval by the Board how frequently the Company should conduct advisory shareholder votes on executive compensation, taking into account the results of any prior shareholder votes regarding the frequency of such votes;

​

•

developing and implementing policies with respect to the recovery or “clawback” of any excess compensation, including stock options, paid to any of the Company’s executive officers based on erroneous data; and

​

•

reviewing and assessing annually the adequacy of the Compensation Committee Charter and, if appropriate, recommending changes to the Board for approval.

​

The Compensation Committee consists of four Directors, and the Board has determined that each of these Directors has no material relationship with the Company and each is otherwise independent under the applicable NASDAQ listing standards. During 2019, the Compensation Committee met six times. The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2019, there were no compensation committee interlocks or insider participation.

Risk Management Committee

The Board has established a Risk Management Committee which is responsible for the following, among other responsibilities:

•

reviewing and approving the Enterprise Risk Management Policy;

​

 

12

 

•

reviewing and approving the Risk Appetite Statement;

​

•

reviewing summary reports regarding the Company’s risk profile relative to the Risk Appetite Statement and associated metrics and risk tolerances;

​

•

reviewing the Company’s independent loan review plan and loan review results;

​

•

reviewing measures taken by the Company to identify, measure, monitor, manage and report its risks in the areas of credit, liquidity, interest rates and other market risks, operational risk, vendors, and financial models;

​

•

reviewing measures taken by the Company to identify, measure, monitor, manage and report its risks in the areas of information technology & information security, in cooperation with the IT/IS Committee;

​

•

reviewing measures taken by the Company to identify, measure, monitor, manage and report its risks in the areas of legal & regulatory compliance, in cooperation with the Audit Committee of the Board;

​

•

reviewing the Company’s capital position including the Company’s annual capital planning and stress testing processes and results, in cooperation with the Finance Committee of the Board;

​

•

reviewing and approving additional policies as may be assigned to the Committee pursuant to the Company’s Enterprise Risk Management Policy, subject to the Board’s reservation of its authority to review and approve any such policies;

​

•

meeting periodically with the Chief Risk Officer in separate executive sessions and discussing, among other items, the corporate risk management function’s independent responsibilities, budget and staffing;

​

•

coordinating with other committees of the Board and management committees as appropriate concerning risk management issues within the other committees’ respective areas of responsibility;

​

•

reviewing reports on special or emerging risk topics as deemed appropriate; and

​

•

reviewing and assessing annually the adequacy of the Risk Management Committee Charter and, if appropriate, recommending changes to the Risk Management Committee Charter to the Board for approval.

​

The Risk Management Committee consists of five Directors, and the Board has determined that each of these Directors has no material relationship with the Company and each is otherwise independent under the applicable NASDAQ listing standards. During 2019, the Risk Management Committee met four times.

Finance Committee

The Board has established a Finance Committee to provide guidance to management regarding strategic opportunities and related financing transactions. In addition, the Finance Committee assists the Board in fulfilling its responsibilities with respect to the following, among other responsibilities:

•

reviewing the capital plan and cash position of the Company, and providing advice and guidance on the sources and uses of capital and expected returns on capital deployed;

​

•

reviewing and approving key strategic initiatives to determine if they are aligned with the Risk Appetite Statement;

​

•

reviewing and approving capital policies including the Capital Plan, the Capital Adequacy and Planning Policy and the Capital Contingency Plan;

​

•

reviewing and approving results of capital and earnings business plan, annual budget and forecasts;

​

•

reviewing and approving components of the capital stress testing process including stress test results;

​

•

reviewing holding company/intercompany capital actions, linking to current and forecasted capital levels;

​

 

13

 

•

reviewing and approving action plans to remediate gaps identified in the capital management process;

​

•

reviewing the Company’s financial policies, capital structure, strategy for obtaining financial resources, tax-planning strategies and use of cash flow;

​

•

reviewing and making recommendations with respect to any share repurchase programs and dividend policy;

​

•

reviewing proposed mergers, acquisitions, joint ventures and divestitures involving the Company and its subsidiaries;

​

•

reviewing and making recommendations with respect to private equity and other strategic investments;

​

•

reviewing and making recommendations with respect to issuing equity and debt securities;

​

•

providing advice to management with respect to the financial aspects of transactions by subsidiaries of the Company that require a vote by the Company, as a shareholder of such subsidiaries; and

​

•

reviewing and assessing annually the adequacy of the Finance Committee Charter and, if appropriate, recommending changes to the Board for approval.

​

The Finance Committee consists of five Directors, and the Board has determined that each of these Directors (and Director nominee Mr. Washington) has no material relationship with the Company and each is otherwise independent under the applicable NASDAQ listing standards. During 2019, the Finance Committee met five times.

Information Technology/Information Security Committee

The Board has established an IT/IS Committee to provide guidance to management regarding information technology and information security. In addition, the IT/IS Committee assists the Board in fulfilling its responsibilities with respect to the following, among other responsibilities:

•

reviewing and approving the Company’s information technology strategic plan and planning process;

​

•

assessing the likelihood, frequency and severity of cyber attacks and data breaches;

​

•

reviewing and approving the development and implementation of the Company’s information technology and information security programs and policies in context of the Company’s risk profile;

​

•

reviewing the scope and effectiveness of the Company’s material information technology and information security infrastructure, including strategies for the design, development, implementation and maintenance of new technologies and systems;

​

•

reviewing the strategies and measures taken by the Company to identify, assess, monitor, control and mitigate its risks in the areas of information technology and information security;

​

•

reviewing and approving the data management strategy for the Company;

​

•

overseeing any independent third-party assessments of the Company’s information technology and information security programs and policies and data management strategy;

​

•

reviewing the effectiveness of business continuity/disaster recovery following cyber attacks, including adequate insurance coverage and incident response plans and testing; and

​

•

reviewing annually the adequacy of the IT/IS Committee Charter and, if appropriate, recommending changes to the charter to the Board for approval.

​

The IT/IS Committee consists of five Directors, and the Board has determined that each of these Directors (and Director nominee Mr. Washington) has no material relationship with the Company and each is otherwise independent under the applicable NASDAQ listing standards. During 2019, the IT/IS Committee met four times.

 

14

 

Executive Committee

The Board has established an Executive Committee to provide guidance and counsel to the Company’s management team on significant matters and to take action on behalf of the Board between meetings of the Board or when it is not feasible to convene a meeting of the full Board for timely consideration of the actions proposed to be taken. The Executive Committee may exercise all authority of the Board including, without limitation, the approval of acquisition, financing and other business transactions not involving the issuance of Company stock or approval by shareholders, except as otherwise prohibited by law.

The Executive Committee currently consists of eight Directors, and the Board has determined that each of these Directors, except for Mr. Wehmer, has no material relationship with the Company and is otherwise independent under the NASDAQ listing standards. During 2019, the Executive Committee did not meet.

 

15

 

DIRECTOR COMPENSATION

The Company seeks to compensate its non-employee Directors in a manner that attracts and retains qualified candidates to serve on the Board and to compensate such Directors for their service on the Board in an amount that is commensurate with their role and involvement. In setting non-employee Director compensation, the Nominating Committee and the Board consider the significant amount of time the Directors expend in fulfilling their duties as well as the skill level required. During its most recent review of Director compensation, the Nominating Committee reviewed compensation data for non-employee directors from the Company’s then-current peer group. Based on the 2018 review of compensation data, the Nominating Committee recommended, and the Board determined, to increase the annual retainer fee of our non-employee Directors from $75,000 to $115,000, effective January 1, 2019. None of the other elements of compensation for the non-employee Directors, as described below, changed as compared to 2018.

To strengthen the alignment of interests between Directors and shareholders, the Board maintains a minimum stock ownership guideline for Directors, which requires Directors to own Common Stock (or Common Stock equivalents) having a value of at least four times the then-current annual retainer fee paid to non-employee Directors. For 2019, this resulted in an ownership requirement of  $460,000. This minimum stock ownership is required to be met within four years of joining the Board. In the event the annual retainer fee is increased, Directors will have four years to meet the new ownership guideline.

As of April 1, 2020, all of the Company’s non-employee Directors either own sufficient shares to meet the stock ownership guideline or are on target to meet the minimum stock ownership guideline within the prescribed time frame.

Compensation for Non-employee Directors

For their service to the Company, non-employee Directors are entitled to an annual retainer fee (the “Annual Retainer”), attendance fees for committee meetings and certain Board meetings, and a payment for service as a chairman of the Board or of certain committees (other than the Annual Retainer, “Other Director Fees”). Additionally, non-employee Directors who serve as a director of any of the Company’s subsidiaries are entitled to compensation for such service. Directors who are employees of the Company receive no additional compensation for their service on the Board.

Annual Retainer.   In 2019, the Company paid an Annual Retainer to non-employee Directors of $115,000. As explained further below, this amount may be paid in cash or in shares of the Company’s Common Stock.

Board Meeting Attendance Fees.   The Company does not pay an attendance fee for meetings of the Board; however, in the event the Company holds more than six Board meetings in one year, non-employee Directors will receive per meeting fees of  $2,000 for in-person attendance, or $1,500 for telephonic attendance, for each such additional Board meeting the Director attends.

Committee Meeting Attendance Fees.   In order to properly reward non-employee Directors who sit on committees for their efforts and contributions, non-employee Directors receive an attendance fee for service on a committee of the Board. Non-employee Directors receive $1,700 per committee meeting attended, except for Audit Committee members, who receive a $2,000 per meeting attendance fee.

Chairmanships.   In 2019, each of the Chair of the Audit Committee, the Chair of the Compensation Committee, the Chair of the Finance Committee, the Chair of the IT/IS Committee, the Chair of the Nominating Committee, and the Chair of the Risk Management Committee were entitled to an additional annual fee of  $25,000. In 2019, the Company paid the Chairman of the Board an additional annual fee of $60,000.

Subsidiary Directorships.   Non-employee Directors who serve on the boards of directors of our subsidiaries are entitled to compensation for such service. No independent member of the Company’s Board serves on more than one subsidiary board other than Mses. Glabe and Teglia and Mr. Heitmann.

 

16

 

Directors Deferred Fee and Stock Plan

The 2005 Directors Deferred Fee and Stock Plan (“Director Plan”) is a program that allows non-employee Directors to receive their Director fees in either cash or Common Stock. Under the Director Plan, Directors may also choose to defer the receipt of the Annual Retainer delivered in the form of Common Stock or defer the receipt of Other Director Fees in the form of cash or Common Stock.

A Director will receive all fees in cash unless he or she elects to receive such fees in shares of the Company’s Common Stock. The number of shares of Common Stock to be issued will be determined by dividing the fees earned during a calendar quarter by the fair market value (as defined in the Director Plan) of the Common Stock on the last trading day of the preceding quarter.

Under the Director Plan, a Director may elect to defer receipt of shares of Common Stock received as an Annual Retainer or as Other Director Fees. If a Director elects to defer his or her receipt of fees paid in Common Stock, the Company will maintain on its books deferred stock units (“Units”) representing an obligation to issue shares of Common Stock to the Director. The number of Units credited will be equal to the number of shares that would have been issued but for the deferral election. Additional Units will be credited at the time dividends are paid on the Common Stock. The number of additional Units to be credited each quarter will be computed by dividing the amount of the dividends that would have been received if the Units were outstanding shares by the fair market value of the Common Stock on the last trading day of the preceding quarter. Because Units represent a right to receive Common Stock in the future, and not actual shares, there are no voting rights associated with them. In the event of an adjustment in the Company’s capitalization or a merger or other transaction that results in a conversion of the Common Stock, corresponding adjustments will be made to the Units. The Director will be a general unsecured creditor of the Company for purposes of the Common Stock to be paid in the future. The shares of Common Stock represented by the Units will be issued to the Director in accordance with the deferral election of the Director.

The Director Plan also permits deferral of Other Director Fees in cash. If a Director elects to defer receipt of Other Director Fees in cash, the Company will maintain on its books a deferred compensation account representing an obligation to pay the Director cash in the future. The amount of the Director’s fees will be credited to a Director’s deferred compensation account as of the date such fees otherwise would be payable to the Director. All amounts in such account will accrue interest based on the 91-day Treasury Bill discount rate, adjusted quarterly, until paid. Accrued interest will be credited at the end of the quarter. No funds will actually be set aside for payment to the Director and the Director will be a general unsecured creditor of the Company for the purposes of the amount in his or her deferred compensation account. The amount in the deferred compensation account will be paid to the Director in accordance with the deferral election of the Director.

All deferrals under the Director Plan will be deferred until the 15th of January following the retirement of such Director from the Board and each of its subsidiaries, or, at the election of the Director at the time of deferral, until the first, second, third, fourth or fifth anniversary of such retirement.

 

17

 

2019 Director Compensation Table

The table below summarizes the compensation paid by the Company to non-employee Directors for the fiscal year ended December 31, 2019.

(1)

Represents fees for services as non-employee Directors of the Company. During 2019, certain Directors elected to receive fees in Common Stock, in lieu of cash payments, as follows:

​

As of December 31, 2019, Directors held Units in our deferred stock program as follows: Mr. Crist: 51,671 Units; Mr. Crowther: 34,532 Units; Mr. Doyle: 4,573 Units; Mr. Hackett: 2,819 Units; Mr. Heitmann: 10,000 Units; Ms. Lefevre: 1,245 Units; Mr. Perry: 24,367 Units; Ms. Stafford: 11,550 Units; Ms. Talton: 1,384 Units; and Ms. Teglia: 982 Units.

(2)

Includes fees paid in cash and stock, both currently paid and deferred, for services as directors of the Company’s subsidiaries. Also includes dividends earned on fees deferred as described above. Directors with $10,000 or more in “All Other Compensation” for the fiscal year ended December 31, 2019 were: Mr. Crist ($49,602 in dividends earned and $8,150 in fees for service as a director of one of the Company’s subsidiaries); Mr. Crowther ($32,932 in dividends earned and $5,650 in fees for service as a

​

 

18

 

director of one of the Company’s subsidiaries); Mr. Francis ($616 in dividends earned and $10,200 in fees for service as a director of one of the Company’s subsidiaries); Ms. Glabe ($869 in dividends earned and $15,800 in fees for service as a director or member of the executive advisory committee of five of the Company’s subsidiaries or divisions); Mr. Heitmann ($9,396 in dividends earned and $25,900 in fees for service as a director of four of the Company’s subsidiaries); Mr. Perry ($22,724 in dividends earned); Ms. Stafford ($11,832 in dividends earned and $17,400 in fees for service as a director of one of the Company’s subsidiaries); Mr. Sweeney ($12,300 in fees for service as a director of one of the Company’s subsidiaries); and Ms. Teglia ($256 in dividends earned and $12,925 in fees for service as a director of two of the Company’s subsidiaries).

(3)

Mr. Francis and Ms. Talton retired from the Board on May 23, 2019. Mr. Francis remains a member of the Board of Directors of Hinsdale Bank & Trust Company, N.A.

​

 

19

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT

The following table sets forth the beneficial ownership of the Common Stock as of the Record Date (except as otherwise indicated), with respect to (i) each Director, nominee for Director and each NEO (as defined herein) of the Company; (ii) all Directors and executive officers of the Company as a group and (iii) significant shareholders known to the Company to beneficially own in excess of 5% of the Common Stock. Unless otherwise indicated, the listed person has sole voting and dispositive power.

*

Less than 1%.

​

**

Mr. Wehmer is also a named executive officer.

​

(1)

Beneficial ownership and percentages are calculated in accordance with SEC Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”).

​

(2)

Based solely on information obtained from a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 4, 2020 reporting beneficial ownership as of December 31, 2019. According

​

 

20

 

to this report, BlackRock’s business address is 55 East 52nd Street, New York, New York 10055. BlackRock has indicated that it holds shares of our Common Stock together with certain of its subsidiaries. BlackRock has sole voting power with respect to 5,383,747 of these shares and sole dispositive power with respect to 5,718,128 of these shares.

(3)

Based solely on information obtained from a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 12, 2020 reporting beneficial ownership as of December 31, 2019. According to this report, Vanguard’s business address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Vanguard has indicated that it holds shares of our Common Stock together with certain of its subsidiaries. Vanguard has sole voting power with respect to 28,703 of these shares, shared voting power with respect to 8,639 of these shares, sole dispositive power with respect to 5,230,876 shares and shared dispositive power with respect to 30,152 of these shares.

​

(4)

Based solely on information obtained from a Schedule 13G filed by FMR LLC (“FMR”) and Abigail P. Johnson with the SEC on February 7, 2020 reporting beneficial ownership as of December 31, 2019. Ms. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. According to this report, FMR’s business address is 245 Summer Street, Boston, Massachusetts 02210. FMR has indicated that it holds shares of our Common Stock together with certain of its subsidiaries. FMR has sole voting power with respect to 449,875 of these shares and sole dispositive power with respect to 4,246,801 of these shares. Ms. Johnson has indicated that she also has sole dispositive power with respect to these 4,246,801 shares.

​

 

21

 

RELATED PARTY TRANSACTIONS

Director Independence

A Director is independent if the Board affirmatively determines that he or she has no material relationship with the Company other than serving as a Director of the Company and he or she otherwise satisfies the independence requirements of the NASDAQ listing standards. A Director is “independent” under the NASDAQ listing standards if the Board affirmatively determines that the Director has no material relationship with us directly or as a partner, shareholder or officer of an organization that has a relationship with us. Direct or indirect ownership of even a significant amount of our stock by a Director who is otherwise independent will not, by itself, bar an independence finding as to such Director.

The Board has reviewed the independence of our current Directors and nominees and found that each of them are independent under the applicable NASDAQ listing standards, except Edward J. Wehmer, who serves as our Founder and CEO. Accordingly, more than 91% of the members of the Board are independent, including the Chairman of the Board.

Related Party Transactions

We or one of our subsidiaries may occasionally enter into transactions with certain “related persons.” Related persons include our executive officers, directors, 5% or more beneficial owners of our Common Stock, immediate family members of these persons and entities in which one of these persons has a direct or indirect material interest. We refer to transactions with these related persons as “related party transactions.” The Audit Committee and the Nominating Committee are jointly responsible for the review and approval of each related party transaction exceeding $120,000. Such committees consider all relevant factors when determining whether to approve a related party transaction including, without limitation, whether the terms of the proposed transaction are at least as favorable to us as those that might be achieved with an unaffiliated third party. Among other relevant factors, the Audit Committee and the Nominating Committee consider the following:

•

the size of the transaction and the amount of consideration payable to a related person;

​

•

the nature of the interest of the applicable executive officer, Director or 5% shareholder in the transaction;

​

•

whether the transaction may involve a conflict of interest;

​

•

whether the transaction involves the provision of goods or services to us that are available from unaffiliated third parties; and

​

•

whether the proposed transaction is on terms and made under circumstances that are at least as favorable to us as would be available in comparable transactions with or involving unaffiliated third parties.

​

Some of the executive officers and Directors of the Company are, and have been during the preceding year, customers of the Company’s banking subsidiaries (the “Banks”), and some of the officers and Directors of the Company are direct or indirect owners of 10% or more of the stock of corporations which are, or have been in the past, customers of the Banks. Extensions of credit by the Company and its banking subsidiaries to “insiders” of the Company and its subsidiaries are also regulated by Regulation O adopted under the Federal Reserve Act and the Federal Deposit Insurance Corporation Improvement Act. It is the Company’s policy that any transactions with persons whom Regulation O defines as “insiders” (i.e., executive officers, Directors, principal shareholders and their related interests) be engaged in the same manner as transactions conducted with all members of the public. As such customers, they have had transactions in the ordinary course of business of the Banks, including borrowings, all of which transactions are or were on substantially the same terms (including interest rates and collateral on loans) as those prevailing at the time for comparable transactions with nonaffiliated persons. In the opinion of management of the Company, none of the transactions involved more than the normal risk of collectability or presented any other unfavorable features. Additionally, in certain cases, a family member of an executive officer or Director of the Company serves as a director of a Bank or is employed in a non-executive role by the Company or an affiliate of the Company on terms that are consistent with their peers and at market

 

22

 

compensation levels that are commensurate with their roles. In no case does an immediate family member directly report to a related executive officer or Director. Other than as described above, since January 1, 2019, no transaction was identified as a related party transaction.

CORPORATE SOCIAL RESPONSIBILITY

We know that many of our shareholders expect that we conduct our business in a socially responsible manner through our actions and interactions with our clients, colleagues and within the communities that we serve. Since the Company was founded, we have worked to integrate corporate social responsibility into all of the Company’s activities, and the Board carefully considers corporate social responsibility when it works with management to determine the Company’s strategic priorities and plans to achieve such priorities. We strive to be a good corporate citizen by conducting our business in an environmentally responsible manner, by operating as an employer that is committed to our vibrant and diverse workforce and, through our fifteen chartered community banks, by maintaining strong ties to the communities in which our clients live, work and do business. Although not an exhaustive list, examples of the Company’s activities that reflect our strong commitment to corporate social responsibility include:

Community Service and Partnership

•

We collaborate with a wide range of nonprofits and community organizations to strengthen low-to-moderate income neighborhoods through our community outreach programs.

​

•

We provided financial support of approximately $15 million to approximately 2,400 nonprofit organizations in 2019, as well as significant in-kind marketing and event space contributions of approximately $2 million in value.

​

•

We provide financial literacy training throughout the communities that are served by Wintrust community banks. Our 2019 financial literacy training involved approximately 1,260 workshops, 14,684 workshop attendees, 2,700 teaching hours and 344 participant organizations.

​

•

We currently maintain an “Outstanding’ rating under the Community Reinvestment Act at fourteen of fifteen of our community bank charters.

​

Environmental Sustainability

At Wintrust we strive to minimize our environmental impact. Although as a financial services company our energy and water use is comparatively small, we nevertheless take pride in trying to promote natural resource conservation through recycling and water conservation and water use reduction. In our efforts to promote greater environmental responsibility and operate at an increased level of resource efficiency we:

•

Endeavor to reduce water consumption at our local bank branches and corporate headquarters, in most cases using low-volume flush valves and motion-activated faucets that help us reduce our water use.

​

•

Seek opportunities to expand recycling programs throughout our locations, in addition to existing paper recycling and shred services in all of our locations.

​

•

Encourage conservation and recycling in the communities we serve via paperless statements and other electronic deliveries to our customers, as well as document imaging of records in lieu of paper storage.

​

•

Aim to reduce energy conservation wherever reasonably possible.

​

•

Construct and remodel our buildings utilizing environmental best practices wherever possible. All new construction of our buildings have LED lighting and high efficiency HVAC systems. Our strategy is to meet and in many cases exceed the guidelines for LEED (Leadership in Energy and Environmental Design) and ENERGY STAR certification, and several of our locations are LEED or ENERGY STAR certified, although we generally forego the expense of formal certification.

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•

Our corporate headquarters received ENERGY STAR certification when it opened in 2013, receiving a score of 75 out of 100, making our headquarters building a top performer in terms of energy performance standards and greenhouse gas emissions and thus helpful in the fight against climate change. Additional environmental sustainability initiatives on our headquarters campus include geothermal energy systems, high efficiency HVAC systems, LED lighting and modernized elevators for maximum energy efficiency.

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Employee Engagement and Welfare

We believe that Wintrust has been recognized as a top workplace because of the commitment we have made to our employees and their families, as further described below:

•

Our best-in-class health care plans reflect a sincere investment in our colleague’s physical, emotional and financial well-being. Offering premium coverage through our health insurance provider, our employees are afforded a large network of doctors and on average, Wintrust pays over 75% of monthly medical premiums for employees enrolled.

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•

Our other benefits include a wide range of employer-sponsored and voluntary offerings such as short and long-term disability insurance, our WTFC Employee Stock Purchase Plan, retirement benefits, life insurance, accident, critical illness, and other benefits, many of which are offered in response to employee survey feedback and dialogue.

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•

We adhere to a compensation philosophy designed to meet market rates derived from competitive data and internal metrics to reward employees with fair and competitive salaries.

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We conduct periodic company-wide employee engagement surveys to assess employee satisfaction and engagement. Our employees’ satisfaction is demonstrated by Wintrust being consistently recognized in the Chicago Tribune Top Places to Work annual survey report for the last five consecutive years.

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Diversity and Inclusion

Wintrust has an unwavering commitment to creating a diverse and inclusive culture where every colleague can be successful. Our expressed vision is: To reinforce the Wintrust Financial Corp. brand as an employer of choice and responsible corporate citizen that is reflective of the diverse markets in which we operate. We will integrate inclusive practices into key strategic objectives and business operations across the entire enterprise, and make evident our commitment by leveraging diverse internal and external assets to drive continued success. This vision, anchored by the One Wintrust Diversity & Inclusion Roadmap, is manifested throughout the organization in numerous ways, including:

•

We have a formal equal employment policy which requires that persons are recruited, hired, assigned, promoted and subject to personnel action without regard to race, national origin, religion, age, color, sex, sexual orientation, gender identity, disability, or protected veteran status, or any other characteristic protected by local, state, or federal laws, rules or regulations. We also have a formal policy prohibiting sexual harassment in the workplace.

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We continue investing in partnerships and initiatives aimed at the growth and readiness of our workforce, such as inclusive leadership training, the Wintrust Women’s Executive Leadership Council, and our efforts to identify more women and professionals of color for leadership development, sponsorship and mentorship opportunities.

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We reach diverse talent pools by establishing a number of strategic partnerships to attract the best talent from the widest sources, doing our part to reshape the banking and financial services industry to meet an increasingly diverse marketplace.

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We drive employee engagement and further foster organizational inclusiveness through business resource groups, which are grassroots networks of employees who provide unique perspective to real business challenges such as the human capital matters of talent attraction, hiring and development, as well as market awareness in order to drive continued success for Wintrust.

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These and many other efforts are fortified by the unwavering commitment of Founder and CEO Ed Wehmer — a signatory of the national movement CEO in Action for Diversity & Inclusion Pledge — and other senior executives from across the organization to ensure commitment, accountability and progress toward being an organization where everyone can excel.

Details of the One Wintrust Diversity & Inclusion Roadmap and other employee well-being practices can be found on the Company’s website at www.wintrust.com.

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS

The Company’s Board is currently comprised of 12 Directors, each serving a term that will expire at this year’s Annual Meeting or until a successor has been elected and qualified. On April 7, the Board of Directors adopted a resolution amending the Company’s bylaws to increase the size of the Board to thirteen (13) Directors, effective at the Annual Meeting. Accordingly, 13 individuals are standing for election at the Annual Meeting to serve on the Board until the next Annual Meeting or until a successor has been elected and qualified.

The Board, acting pursuant to the recommendation of the Nominating Committee, has nominated each incumbent Director, and one additional nominee, who are standing for election. Each nominee has indicated a willingness to serve, and the Board has no reason to believe that any of the nominees will not be available for election. However, if any of the nominees is not available for election, proxies may be voted for the election of other persons selected by the Board. Proxies cannot, however, be voted for a greater number of persons than the number of nominees named. Shareholders of the Company have no cumulative voting rights with respect to the election of Directors.

It is expected that, pending re-election at the Annual Meeting, H. Patrick Hackett, Jr. will serve as
non- executive Chairman of the Board following the Annual Meeting. Assuming each Director nominee is elected to serve on the Board until the next Annual Meeting, the membership of the Board and each of its committees following the Annual Meeting, is expected to be as follows:

 

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Nominees for Election at the 2020 Annual Meeting of Shareholders

Peter D. Crist (68), Director since 1996.   Mr. Crist served as the Company’s Chairman from 2008 to 2017. He currently is the chair of the Nominating Committee. Mr. Crist founded Crist/Kolder Associates,

 

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an executive recruitment firm which focuses on chief executive officer and director searches, in 2003 and has served since inception as its Chairman and Chief Executive Officer. From December 1999 to January 2003, Mr. Crist served as Vice Chairman of Korn/Ferry International (NYSE), the largest executive search firm in the world. Previously, he was President of Crist Partners, Ltd., an executive search firm he founded in 1995 and sold to Korn/Ferry International in 1999. Immediately prior thereto he was Co-Head of North America and the Managing Director of the Chicago office of Russell Reynolds Associates, Inc., the largest executive search firm in the Midwest, where he was employed for more than 18 years. He currently serves as a director of Northwestern Memorial Hospital, where he chairs the Nominating and Corporate Governance Committee. Mr. Crist is a director of Hinsdale Bank.

Mr. Crist’s experience assisting companies with executive searches provides him with insight into the attraction and retention of Company personnel, an important concern of the Company. In addition, Mr. Crist’s experience as an executive of several large, Chicago-based businesses provides him with insight into the management and operational challenges and opportunities facing the Company in its markets. He also brings experience as the chair of the compensation committee of Northwestern Memorial Hospital. In addition, Mr. Crist’s experience as a director of Hinsdale Bank gives him valuable insight into the Company’s banking operations.

Bruce K. Crowther (68), Director since 1998.   Mr. Crowther served as President and Chief Executive Officer of Northwest Community Healthcare, Northwest Community Hospital and certain of its affiliates (“Northwest Community”) from January 1992 until his retirement in December 2013. Prior to that time he served as Executive Vice President and Chief Operating Officer of Northwest Community from 1989 to 1991. He is a Fellow of the American College of Healthcare Executives. Mr. Crowther is the past Chairman of the board of directors of the Illinois Hospital Association as well as recent former Chairman of the board of directors of the Max McGraw Wildlife Foundation. Additionally, he serves as a director of NeoGenomics, Inc. (NASDAQ), of Methode Electronics, Inc. (NYSE), and of Gray Matter Analytics, a private-equity company. Mr. Crowther resigned as a director of Barrington Bank in January, 2020.

Mr. Crowther’s experience as President and Chief Executive Officer of Northwest Community provides him with insight into the challenges of leading a large and complex organization in the greater Chicago area and an understanding of the operation and management of a large business. In addition, Mr. Crowther’s experience as a former director of Barrington Bank gives him valuable insight into the Company’s banking operations.

William J. Doyle (69), Director since 2017.   Mr. Doyle served as President and Chief Executive Officer of Potash Corporation of Saskatchewan (“PotashCorp”), one of the world’s largest fertilizer suppliers, for 15 years, and retired in July 2015. Mr. Doyle formerly served as President of the International Fertilizer Industry Association, a trade association representing the global fertilizer industry, and was a board member of Canpotex and the International Plant Nutrition Institute.

Mr. Doyle is a graduate of Georgetown University in Washington, D.C., and Chairman of the University’s Board of Directors. He is also on the board of the Big Shoulders Fund, a charity providing support to Catholic schools in the neediest areas of inner-city Chicago.

Mr. Doyle’s experience as President and Chief Executive Officer of PotashCorp provides him with insight into the challenges of leading a large and complex global organization with key operations throughout the world, as well as an understanding of the operation and management of, and governance and regulatory considerations associated with, a large public company.

Marla F. Glabe (66), Director since 2015.   Ms. Glabe has over 40 years of experience in the financial services industry including her service as a senior executive with Allstate Insurance Company (“Allstate”) and as a member of the board of directors of Allstate Life Insurance Company. From 1974 to 2009, she held various executive positions at Allstate and its affiliates. From 2011 until March of 2019, Ms. Glabe served as the Lead Managing Director for MasterMind Advisory Board, a corporation offering advisory services to CEOs and business entrepreneurs. Ms. Glabe is Senior Advisor for Management Control International, Inc., a privately owned family asset management firm, serves on the boards of Royal Neighbors of America, a fraternal life insurance company, and Northwest Community Healthcare, and is a member of the Society

 

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of Actuaries. Ms. Glabe is a director of Great Lakes Advisors, Wintrust Investments, and The Chicago Trust Company and serves on the Executive Advisory Committee for First Insurance Funding and Wintrust Life Finance.

Ms. Glabe’s business experience gives her in-depth knowledge of managing and providing leadership at sophisticated nationwide organizations in highly regulated businesses. Her knowledge of the insurance industry gives her insight into an area which, through the Company’s insurance premium financing business, impacts a substantial portion of the Company’s business. In addition, her experience in leadership provides Ms. Glabe with knowledge of the issues faced by large and complex businesses in the financial services industry. As a result of her financial experience, Ms. Glabe qualifies as a financial expert for purposes of rules governing audit committees. Ms. Glabe’s experience on the Executive Advisory Committee for First Insurance Funding and Wintrust Life Finance and as a current director of the boards associated with Wintrust Wealth Management gives her valuable insight into the Company’s non-banking operations.

H. Patrick Hackett, Jr. (68), Director since 2008.   Mr. Hackett has served as the Company’s Chairman since 2017. Mr. Hackett has been the Managing Member of HHS Partners, LLC, an investment company located in the Chicago area, since 2001. Previously, he served for 12 years as the President and Chief Executive Officer of RREEF Capital, Inc. and as Principal of The RREEF Funds, an international commercial real estate investment management firm. Mr. Hackett taught real estate finance at the Kellogg Graduate School of Management for 15 years when he also served on the real estate advisory boards of Kellogg and of the Massachusetts Institute of Technology. He serves on the boards of First Industrial Realty Trust, Inc. (NYSE) and Northwestern University. Mr. Hackett is an advisory director of Wintrust Bank.

Mr. Hackett’s experience provides him deep familiarity with financial modeling and underwriting approaches toward valuing corporate and bank acquisitions, as well as commercial real estate, which often serves as collateral for the Company’s products. Mr. Hackett’s experience as an advisory director of Wintrust Bank and as a bank auditor, early in his career, give him valuable insight into bank accounting of the Company’s banking operations.

Scott K. Heitmann (71), Director since 2008.   Mr. Heitmann, retired for the past 14 years, has over 30 years of experience in the banking industry, including his service as Vice Chairman of LaSalle Bank Corporation and President, Chairman and Chief Executive Officer of Standard Federal Bank from 1997 to 2005. He served as the President and Chief Executive Officer of LaSalle Community Bank Group and LaSalle Bank FSB from 1988 to 1996. Mr. Heitmann currently serves as an Advisory Director of Boys Hope Girls Hope of Illinois. Mr. Heitmann has previously served as a director of LaSalle Bank Corporation, Standard Federal Bank and the Federal Home Loan Bank of Chicago. Mr. Heitmann is a director of Great Lakes Advisors, Wintrust Investments, The Chicago Trust Company, and Wintrust Bank.

Mr. Heitmann’s experience in the banking industry, including service in executive leadership roles at LaSalle Bank Corporation and Standard Federal Bank, provide him with knowledge of the financial services business, generally, and the business of community banking, in particular. His experience as a former bank lender also provides insight into the Company’s community banking business. In addition, his experience with LaSalle Bank’s various predecessors provides him with insight into the opportunities and challenges posed to a growth-oriented Chicago-based community bank. As a result of his financial experience, Mr. Heitmann qualifies as a financial expert for purposes of rules governing audit committees. Mr. Heitmann’s experience as a director of Wintrust Bank and the boards associated with Wintrust Wealth Management gives him valuable insight into the Company’s banking, brokerage and investment advisory operations.

Deborah L. Hall Lefevre (52), Director since 2019.   Ms. Lefevre currently serves as Executive Vice President, Chief Technology Officer of Couche-Tard/Circle K (“Circle K”), where she is responsible for global technology and digital strategy and execution across a network of approximately 15,500 locations operated by Circle K, a multinational operator of convenience stores. From 2003 until joining Circle K in 2017, Ms. Lefevre served in various management positions within the Information Technology department of McDonald’s Corporation, including Corporate Vice President, Global Enterprise Solutions and Business Transformation (2015-17); Chief Information Officer, U.S. Segment (2013-15); and Vice President, IT Enterprise (2008-13).

Ms. Lefevre’s extensive knowledge of information technology systems and information security issues will provide the Company with sophisticated guidance regarding the Company’s technology and information

 

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security strategy and tactical objectives. In addition, her experience as a senior executive of two large, highly-complex public companies provides her with comprehensive knowledge of the issues faced by complex businesses.

Christopher J. Perry (64), Director since 2009.   Mr. Perry is currently a partner at CIVC Partners LLC (“CIVC Partners”), a private equity investment firm which he joined in 1994 after leading Continental Bank’s (“Continental”) Mezzanine Investments and Structured Finance groups. Prior to joining Continental in 1985, he served as a Vice President in the Corporate Finance Department of the Northern Trust Company. He has been in the financial services industry for the past 36 years. During his time at CIVC Partners, he has served on the boards of over a dozen public and private companies. Mr. Perry previously served as a director of Wintrust from 2001 to 2002.

Mr. Perry’s role as a partner of CIVC Partners gives him insight into a broad range of privately held companies across a number of industries, including financial services. In addition, his experience as a leader at CIVC Partners, Continental’s Mezzanine Investments Group and Structured Finance Group gives him insight into complex capital structures, financial instruments and all aspects of transactions. Mr. Perry’s more than three decades of experience in the financial services industry have given him considerable experience in many aspects of the industry during several credit and economic cycles.

Ingrid S. Stafford (66), Director since 1998.   Ms. Stafford held various positions with Northwestern University from 1977 to 2019, when she retired as Senior Advisor to the Senior Vice President for Business and Finance. Ms. Stafford is a trustee of the Evanston Alternative Opportunities Fund, an SEC registered fund advised by Evanston Capital Management. She is chair of its audit committee and a member of its fund valuation committee. As of April 2019, Ms. Stafford began service as a director of USAT, Inc. (NASDAQ), a financial service technology company based in Malvern, Pennsylvania. Additionally in 2019, Ms. Stafford concluded her service as a director of the national governing council of the Evangelical Lutheran Church in America, where she was chair of its audit committee and member of its executive and finance committees. She also serves on the investment and audit committees of the Evanston Community Foundation. She is an emeritus director of Wittenberg University where she served from 1993 to 2006, including serving as Board Chair from 2001 to 2005. Ms. Stafford is a director of Wintrust Bank.

Ms. Stafford’s experience in financial management at Northwestern University, including prior service as Vice President for Financial Operations and Treasurer, provides experience with the management of the liquidity, financial reporting, risk and audit management of a large organization. She served in a management support role to its Board of Trustees’ Audit, Risk and Compliance Committee, Finance and Investment Committees. In addition, as a member of the investment committee of the Evanston Community Foundation, she has experience with investment strategy and asset allocation. She also has experience as an audit committee member and chair of the Board of Pensions of the Evangelical Lutheran Church in America (now known as Portico Benefit Services) and audit committee member of Wittenberg University. As a result of her financial experience, Ms. Stafford qualifies as a financial expert for purposes of rules governing audit committees. In addition, Ms. Stafford’s experience as a director of Wintrust Bank gives her valuable insight into the Company’s banking operations.

Gary D. “Joe” Sweeney (62), Director since 2015.   Mr. Sweeney serves as strategic advisor to Corporate Financial Advisors, LLC (“CFA”), a middle-market investment banking firm, which specializes in providing merger and acquisition advisory services, capital sourcing, exit planning and general corporate advisory services. From 2000 to April 2015, Mr. Sweeney was a co-owner and a managing director of CFA. Prior to that time, he founded and served as president of Sports Marketing and Management Group, LLC, a sports marketing and management firm that specializes in assisting and representing coaches and professional athletes in securing contracts and marketing opportunities. Mr. Sweeney is a published best-selling author and a frequent public speaker. Mr. Sweeney has served on the boards of directors of numerous private companies over the past 35 years. He currently serves on the Board of Directors of Town Bank, The University of Notre Dame Graduate Alumni Board for the Mendoza College of Business, Integrity Grading and Excavation Corp., and numerous private equity companies.

Mr. Sweeney’s experience provides him with extensive knowledge of mergers and acquisitions, capital raising, and the investment process, each of which are key functions of the Company. His knowledge of underwriting approaches and valuation methodologies are valuable in evaluations of proposed transactions.

 

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Mr. Sweeney’s experience also provides him with familiarity with the management of the liquidity, financial reporting, risk and audit management of a large organization. As a result of his financial experience, Mr. Sweeney qualifies as a financial expert for purposes of rules governing audit committees. In addition, his experience in leadership provides Mr. Sweeney with knowledge of the issues faced by large and complex businesses. Mr. Sweeney’s experience as a current director of Town Bank gives him valuable insight to the Company’s banking operations.

Karin Gustafson Teglia (52), Director since 2019.   Ms. Teglia is President of DEKK Enterprises, LLC, an incubator that develops innovative concepts and go-to-market strategies for consumer products and services and DEKK Investments, LLC. Ms. Teglia also has served since 2009 as an advisor to TRP Investments, LLC, a commercial real estate investor. Prior to this role, Ms. Teglia served in various corporate finance management and international tax roles within McDonald’s Corporation, including Corporate Senior Vice President, Finance (2007-08); Corporate Vice President, Finance (2005-07) and Corporate Vice President of Tax (2001-05). Prior to joining McDonald’s Corporation in 1995, Ms. Teglia began her career as an international tax consultant with Price Waterhouse. Ms. Teglia is a certified public accountant and an attorney licensed to practice in Illinois.

Ms. Teglia currently serves as a director of Tricom as well as a director of Hinsdale Bank, chairing its Audit Committee and also serving on its Risk Committee. She also served on an Advisory Panel of the National Academy of Sciences, focusing on food allergy research, and serves on the Food Allergy Research and Education Board of National Ambassadors.

Ms. Teglia’s management experience at McDonald’s Corporation provides experience with the management of the liquidity, financial reporting, risk and audit management of a large organization. As a result of her financial experience, Ms. Teglia qualifies as a financial expert for purposes of rules governing audit committees. Additionally, Ms. Teglia’s experience as a director of Hinsdale Bank gives her valuable insight into the Company’s banking operations, as well as experience as an audit committee member and chair.

Alex E. Washington, III (46), Director Nominee.   Mr. Washington serves as a Managing Director of Wind Point Partners, a middle market private equity firm based in Chicago, Illinois with approximately $3.0 billion in assets under management. He has held this position since 2009. Mr. Washington currently serves on the boards of several private companies, including A&R Logistics, Ascensus Specialties, ClockspringNRI, and Kleinfelder Group. Past directorships include Argotec, Arr-Maz Custom Chemicals, Dicom Transportation Group, Evans Food Group, Novolex, and Paragon Films. Prior to Wind Point Partners, he held professional roles with J.H. Whitney, Donaldson Lufkin & Jenrette, and McKinsey & Company.

Mr. Washington received a Bachelor of Arts in Finance from Morehouse College and a Master of Business Administration from Harvard Business School. He currently serves as a director of Wintrust Bank, where he chairs its Audit Committee. His civic activities include serving as a board member of the Chicago Council on Global Affairs, board member of the Chicago Urban League, life trustee of the Chicago Foundation for Education, and member of both the Chicago Club and the Economic Club of Chicago.

Mr. Washington’s extensive private equity experience provides him with comprehensive knowledge of mergers and acquisitions, capital raising, and the investment process, each of which are key functions of the Company. The Board believes that his knowledge of underwriting approaches and valuation methodologies will be extremely valuable in evaluation of proposed transactions. Mr. Washington’s significant experience on the board of directors of other companies also provides him with familiarity with the management of the liquidity, financial reporting, risk and audit management of complex organizations.

Edward J. Wehmer (66), Director since 1996.   Mr. Wehmer, a founder of the Company, served as President and Chief Executive Officer of the Company from May 1998 to February 2020, at which point he was named Founder and Chief Executive Officer. Prior to May 1998, he served as President and Chief Operating Officer of the Company since its formation in 1996. He served as the President of Lake Forest Bank from 1991 to 1998. He serves as an Advisory Director of each of the Company’s main operating subsidiaries. Mr. Wehmer is a certified public accountant and earlier in his career spent seven years with the accounting firm of Ernst & Young LLP specializing in the banking field and particularly in the area of bank mergers and acquisitions. Mr. Wehmer serves as Lead Independent Director on the board of directors

 

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of Stepan Company (NYSE), a chemical manufacturing and distribution company. He also serves as a director of the Catholic Extension Society, on the audit committee of Northwestern Memorial Health Care, as a trustee for Ann & Robert H. Lurie Children’s Hospital and Foundation, as chair of Northwestern Memorial Hospital Foundation, and on the Finance Board of the Archdiocese of Chicago.

Mr. Wehmer is the only member of the Board who is also an executive officer of the Company. As such, he provides the views of the management of the Company and substantial insight into the operations of the Company. As an employee of the Company since its inception, he also provides historical context for the Board’s discussions.

Required Vote

Election as a Director of the Company requires that a nominee receive the affirmative vote of a majority of the shares of Common Stock represented at the Annual Meeting, online or by proxy, and entitled to vote thereon. Accordingly, instructions to abstain will have the same effect as a vote against such nominee. Broker non-votes will have no impact on the election of Directors.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR NAMED ABOVE.

 

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EXECUTIVE OFFICERS OF THE COMPANY

Certain information regarding those persons serving as the Company’s executive officers is set forth below.

Edward J. Wehmer (66) — Founder and Chief Executive Officer — Mr. Wehmer serves as the Company’s Founder and Chief Executive Officer. Accordingly, he is responsible for overseeing the execution of the Company’s day-to-day operations and strategic initiatives. See the description above under “Proposal No. 1 —  Election of Directors” for additional biographical information.

David A. Dykstra (59) — Vice Chairman, Chief Operating Officer — Mr. Dykstra joined the Company in 1995 and currently serves as the Company’s Vice Chairman, Chief Operating Officer, a position he has held since February 2020. He previously had held the title of Senior Executive Vice President, Chief Operating Officer since 2002. Prior to 2002, Mr. Dykstra served as the Company’s Chief Financial Officer. Earlier in his career, Mr. Dykstra was employed from 1990 to 1995 by River Forest Bancorp, Inc., Chicago, Illinois, most recently holding the position of Senior Vice President and Chief Financial Officer. Prior to his association with River Forest Bancorp, Mr. Dykstra spent seven years with KPMG LLP, most recently holding the position of Audit Manager in the banking practice. Mr. Dykstra is a Director of Chicago Deferred Exchange Company, LLC, State Bank of the Lakes, and Tricom.

Kathleen M. Boege (53) — Executive Vice President, General Counsel and Corporate Secretary — Ms. Boege joined the Company in September 2015. Ms. Boege manages all legal affairs of the Company, as well as assisting banks and non-bank subsidiaries with legal matters. Prior to joining the Company, Ms. Boege served as General Counsel and Corporate Secretary of FreightCar America, Inc. from January 2013 through August 2015. She joined FreightCar America, Inc. from Bally Total Fitness Corporation (“Bally”) where she served as Chief Administrative Officer, General Counsel and Secretary from August 2011 through December 2012. Prior to this role, she held other leadership roles in legal and human resources at Bally commencing in 2007. Prior to joining Bally, Ms. Boege was Vice President, Associate General Counsel and Assistant Secretary at the Chicago Stock Exchange. Prior to joining the Chicago Stock Exchange, Ms. Boege worked in private practice at two Chicago law firms from 1991 to 1999.

Timothy S. Crane (58) — President — Mr. Crane joined the Company in August 2008. In February, 2020, he was appointed President, after previously holding the title of Executive Vice President, Senior Market Head and Treasurer since February 2017. He oversees Wintrust’s subsidiary banks, banking operations and treasury function. In January 2016, he was appointed to serve as Corporate Treasurer of the Company. Prior to joining the Company, Mr. Crane served as President of Harris Bank in Chicago where he was employed for 24 years. Mr. Crane serves on the boards of the Metropolitan Family Services and the Bank Administration Institute and serves as a trustee of DePaul University. In addition, Mr. Crane is Chairman of the Company’s two largest bank subsidiaries, Lake Forest Bank and Wintrust Bank.

Guy W. Eisenhuth (64) — Executive Vice President and Regional Market Head — Mr. Eisenhuth joined the Company in January 2010 as President and Chief Executive Officer of Village Bank and was promoted in January 2014 to Executive Vice President and Regional Market Head and currently oversees Barrington Bank, Schaumburg Bank, St. Charles Bank and Village Bank. Prior to joining the Company, Mr. Eisenhuth served as Head of Commercial Banking of Fifth Third Bank in Chicago where he was employed for one year and worked for several years at J.P. Morgan Chase, and predecessors, ultimately serving as Senior Vice President-Group Head, Middle Market Banking. Mr. Eisenhuth is a Director of Barrington Bank, Schaumburg Bank, St. Charles Bank and Village Bank.

Leona A. Gleason (70) — Executive Vice President and Chief Administrative Officer — Ms. Gleason joined the Company in January 2010 and oversees certain administrative affairs of the Company including Operations, Compliance, Community Reinvestment Act, Bank Secrecy Act and Anti-Money Laundering. From 1996 to 2009, Ms. Gleason was Executive Vice President at FBOP Corporation, a $19 billion privately-held bank holding company. She had primary responsibility for Human Resources, Training, Compliance, Community Reinvestment Act, Bank Secrecy Act, Risk Management, Retail, Operations and Information Technology. Prior to her association with FBOP, from 1977 to 1996, Ms. Gleason was Senior Vice President at Corus Bankshares, Inc. where she managed Retail Banking, Operations, Information Technology, Compliance and Human Resources and from 1972 to 1977 was Vice President at Boulevard Bank.

 

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David L. Larson (57) — Executive Vice President and Regional Market Head — Mr. Larson joined the Company in April 2010. He oversees the Managed Asset Division of the Company which directs collection efforts for both the Company’s loan portfolios. Mr. Larson was the President and Chief Executive Officer of Wheatland Bank from December 2009 to April 2010, when it was taken into receivership by the FDIC and acquired by the Company. From 1995 until 2009, Mr. Larson served in various executive positions at Chicago subsidiaries of FBOP Corporation, a $19 billion privately-held bank holding company. Prior to his association with FBOP, Mr. Larson served in various commercial banking positions at American National Bank from 1987 to 1995. Mr. Larson is the Chairman of Beverly Bank and a Director of Old Plank Trail Community Bank and Wheaton Bank.

Richard B. Murphy (60) — Vice Chairman, Lending — In February 2020, Mr. Murphy became Vice Chairman, Lending, after previously holding the title of Chief Credit Officer since January 2002. He is responsible for coordinating all the credit functions of the Company as well as its mortgage banking business. Mr. Murphy served as the President of Hinsdale Bank from 1996 until December of 2005. From 1993 until his promotion to President of Hinsdale Bank, Mr. Murphy served as the Executive Vice President and Senior Lender of Hinsdale Bank. Prior to his association with the Company, Mr. Murphy served as President of the First State Bank of Calumet City. Mr. Murphy is on the Board of the Big Shoulders Fund, the Keystone Board of Shirley Ryan Ability Labs, and the Advisory Board of After School Matters. Mr. Murphy is married to the sister of Mr. Wehmer’s wife. Mr. Murphy is a member of the Executive Advisory Committee of First Insurance Funding and Wintrust Life Finance.

David L. Stoehr (60) — Executive Vice President and Chief Financial Officer — Mr. Stoehr joined the Company in January 2002 and manages all financial and accounting affairs of the Company, including internal and external financial reporting. Previously, Mr. Stoehr was Senior Vice President/Reporting & Analysis at Firstar/U.S. Bancorp, Director of Finance/Controller of Associated Banc-Corp with primary responsibility for financial accounting and reporting, business unit financial management and data warehouse design and implementation. Prior to his association with Associated Banc-Corp, Mr. Stoehr was Assistant Vice President/Balance Sheet Management at Huntington Bancshares, Inc., Columbus, Ohio, from 1993 to 1995 and Financial Reporting Officer at Valley Bancorporation, Appleton, Wisconsin, from 1983 to 1993.

Thomas P. Zidar (51) — Executive Vice President and Senior Market Head of Wealth Management Services — Mr. Zidar joined the Company in 2006 and also serves as Chairman and Chief Executive Officer of Wintrust Wealth Management. Prior to joining the Company, Mr. Zidar worked at ABN AMRO/​LaSalle Bank for nine years, most recently as Executive Vice President in the Personal Financial Services group of LaSalle Bank, responsible for five business units. Throughout Mr. Zidar’s tenure with ABN AMRO/​LaSalle Bank, he served as Chairman, President and CEO of ABN AMRO Financial Services; Senior Vice President, Integration Management; Senior Vice President/First Vice President, Acquisitions & Corporate Capital; and Vice President, Profit Enhancement. Previously, Mr. Zidar held positions as an Associate at A.T. Kearney, a management consulting firm, in Chicago, and as a Financial Analyst and Associate at TTG, an investment banking firm, in New York and London. Mr. Zidar serves as a Director of Great Lakes Advisors, Wintrust Investments, The Chicago Trust Company, and Chicago Deferred Exchange Company.

 

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EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION & ANALYSIS

This Compensation Discussion & Analysis section reviews the compensation program for our five named executive officers (“NEOs”), which include our principal executive officer, principal financial officer and our three other most highly-compensated executive officers as of December 31, 2019.

Our 2019 NEOs were:

*

Table reflects titles through 2019. Effective February 2, 2020, Mr. Wehmer was appointed Founder and Chief Executive Officer; Mr. Dykstra was appointed Vice Chairman, Chief Operating Officer; Mr. Murphy was appointed Vice Chairman, Lending; and Mr. Crane was appointed President.

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Executive Summary

2019 Business Highlights

In 2019, despite headwinds created by factors including decreased interest rates, the Company achieved favorable business results overall with continued growth and operational efficiency as a focus for both the banks and the non-bank business. Consistent with its founding values, the Company continued to adhere to its core principles of sound and conservative underwriting. The Company drove growth through both new bank branches and multiple acquisitions while also making significant investments in segments of the business as well as continued asset diversification. As a result of these steps and the executive officers’ leadership, the Company generated its highest net income in history. We believe that the exceptional results achieved in 2019 highlighted the benefit of the guidance provided by the executive leadership team who maintained a measured and balanced approach to pursuing a comprehensive growth strategy and increasing net income, while maintaining credit quality and appropriate reserves.

The Compensation Committee of our Board (the “Committee”) recognizes that the Company’s executive officers have a key role in overseeing growth while appropriately managing risk. In that regard, the Committee considered the accomplishments of management in the following context (results are as of December 31, 2019):

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generated highest reported net income in the history of the Company ($355.7 million, up 4% from $343.2 million in 2018);

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increased deposits by 15% to $30.1 billion (a $4 billion increase from $26.1 billion in 2018);

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increased loan portfolio ( excluding loans held for sale) by 13% from year-end 2018 to $26.8 billion, the highest reported level in the history of the Company);

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increased total assets to $36.6 billion;

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reduced total non-performing assets as a percentage of total assets to 0.36%, down from 0.44% at the end of 2018;

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increased number of banking offices to 187, compared to 167 at year-end 2018, and planned for future organic growth;

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increased quarterly Common Stock dividend to $0.25 per share, resulting in total dividends of $56.9 million paid in 2019 to eligible holders of Common Stock;

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increased reported earnings per diluted share of Common Stock to $6.03 per share, up from $5.86 per share in fiscal year 2018;

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2019 was the Company’s twenty-third consecutive year of profitability; and

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our assets have grown 83%, 43% and 17% over the last five, three and one year periods, respectively, and our loans, excluding covered loans and loans held for sale, have grown 86%, 36% and 13% over the same five, three and one year periods, respectively.

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Highlights of our Executive Compensation Philosophy, Program and Practices

Philosophy and Culture of Achievement and Accountability

The Committee has responsibility for developing, implementing and monitoring our executive officer compensation program and policies as well as determination and oversight of the Company’s executive compensation philosophy. The Committee sets the compensation for all of our NEOs and reviews compensation for all executive officers of the Company. In administering the Company’s executive compensation program, the Committee is mindful of our operating structure, culture and history as well as the growth strategy of our Company and its business. As a Company with growth oriented operations, we are cognizant that to attract and retain the managerial talent deemed necessary to operate and grow our businesses, we often have to compensate our executives with a view to the scope and complexity of the business we expect them to manage, rather than the size of the business they currently manage. Our executive compensation philosophy and programs are designed to attract and retain management capable of leading the organization in its efforts to create the infrastructure to meet its growth curve while still managing risk.

The Committee believes executives’ total direct compensation should be heavily weighted toward incentive compensation rather than through fixed components such as base salary and benefits. This philosophy is intended to create and foster a pay-for-performance framework within defined risk parameters that drives shareholder value by aligning shareholder and NEO interests. Our Short-Term Incentive Plan, or STIP, and Long-Term Incentive Program, or LTIP, are designed to provide a significant percentage of our executives’ total compensation which is linked to performance and the interests of our shareholders.

Our Pay-for-Performance Focus

Reinforcing pay for performance is an important underpinning of our executive compensation framework. For 2019, target performance-based compensation for our CEO and the other NEOs was (on average) was approximately 77% and 58% of total compensation, respectively. As seen in the pie charts below, a majority of compensation for the CEO and the other NEOs is performance based.

 

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Our Executive Compensation Practices

Shareholder Support

During its compensation review process, the Committee considers whether the Company’s executive compensation and benefits program are in line with the interests of the Company’s shareholders. In that respect, the Committee considered the approval by approximately 98% of the votes cast for the Company’s “say on pay” proposal at the Company’s prior annual meeting of shareholders and determined that the Company’s executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any changes to the Company’s executive compensation program in response to such vote.

Compensation Philosophy and Objectives

The philosophy underlying our executive compensation program is to promote a pay-for-performance environment and remain competitive with market practices in order to attract and retain key talent, which we believe will support the long-term success of the Company and build value for our shareholders.

The compensation elements included in the pay of our NEOs vary and are reflective of different pay objectives. Base salaries are intended to pay executives competitively relative to market peers and individual

 

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performance. Relevant performance factors that influence base pay include leadership, innovation, strategic contributions, maintaining effective company systems and infrastructure, customer service and talent management. Variable compensation (short-term and long-term incentives) is tied to financial measures (such as pre-tax net income, net interest margin, net overhead ratio, core loan and deposit growth, credit quality, and earnings per share) as well as the achievement of specific business objectives (including satisfactory regulatory exams), employee retention, and increased shareholder value. It is also the Committee’s philosophy to provide retirement and health and welfare benefits to all employees on a non-discriminatory basis. We do not provide supplemental retirement benefits to our executives.

The Committee has set forth the following objectives for its executive compensation program:

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Attract first-rate entrepreneurial talent that reflects our structure.   We believe that our organizational design and structure are a significant part of our value proposition. Consequently, we need to hire leaders who will thrive within our structure, are able to operate well within a matrixed organizational structure which allows the capacity to act in equal measure autonomously at times and in collaboration at times, while driving growth and managing risk.

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Focus on performance-based compensation.   Our compensation program is designed to support performance and achievement at every level of the organization, from the individual to the bank, subsidiary, and Company. It is also designed to drive performance across both short-term and long-term horizons.

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A significant portion of total compensation should be in the form of long-term incentives.   Our compensation program includes incentives designed to align management and shareholder interests over a multi-year performance period. This longer-term horizon also helps promote retention and therefore business continuity.

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Long-term incentive compensation should balance growth and risk.   Our longer-term rewards are structured to help mitigate excessive risk-taking since leaders are rewarded for creating sustained value for the Company and its shareholders.

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Long-term incentive compensation should be highly correlated with returns.   The prescribed performance goals under our long-term incentive compensation program are designed to be challenging and at or above target payouts should be achievable only with above target, superior organizational performance.

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Compensation levels should be competitive to ensure that we attract and retain a highly qualified management team to lead and grow our Company.   The successful operation of our Company requires an experienced and talented management team. We hire for both the current and anticipated future needs of the organization, so executives must be able to effectively lead the organization now, and also meet future needs of a growing organization. To do this, our compensation program must be competitive with those of our peer firms to attract and retain talent that is capable of scaling for the future.

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Compensation opportunities should be commensurate with an executive’s roles and responsibilities.   Our organization values talented executives who perform comprehensively, both within their specific roles as well as taking on more leadership responsibilities. Consequently our compensation program seeks to recognize and reward our executives who are most responsible for the performance of the Company and who engage in broader duties than their job titles may imply.

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Compensation for NEOs should be fair and perceived as such, both internally and externally.   We measure the appropriateness of our compensation offerings by comparing them both internally and externally to peer group benchmarks. Shareholders are best served when we can attract and retain talented executives with compensation packages that are competitive but fair.

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Peer Group Benchmarking

On an annual basis, the Committee’s independent compensation consultant, Meridian Compensation Partners LLC (“Meridian”), provides the Committee with assessments of the competitive market and best

 

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practices relating to executive compensation practices, including peer group benchmarking, pay-for-performance analysis, research on regulatory and industry trends, and program design. The Committee utilizes these assessments when considering compensation program design and other decisions.

Peer Group Analysis.   On an annual basis, the Committee asks Meridian to review the peer group to evaluate whether it reflects the appropriate population of banks both regionally and nationally similar to Wintrust in size, scope and complexity. When identifying and constructing the competitive peer group, the Committee took into consideration which companies compete for customers, executive talent or investors, as well as other factors including the amount of commercial and industrial loans, level of non-interest revenue, and comparability in business models. These factors were considered as the Committee sought to develop a peer group that approximated the size and the structure of the Company. The following peer group, developed in 2018 and used by the Committee to make 2019 compensation decisions, was comprised of 20 banks, including 13 similarly-sized national banks and seven Midwestern banks. This reference group of banks had assets between $14 billion and $44 billion at March 31, 2018, with Wintrust’s assets then positioned at approximately the median.

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The 2019 peer group was updated as compared to 2018 to eliminate East West Bancorp and Trustmark Corporation and to add Pinnacle Financial Partners, Inc. based on the peer group selection criteria described above.

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When making compensation decisions, the Committee reviews the compensation paid to our CEO and other NEOs relative to the compensation paid to similarly-situated executives, to the extent available, at our peer companies based on publicly available information reported in our peers’ proxy statements.

In December 2018, Meridian provided the Committee with background information regarding the Company’s compensation structure as compared to the peer group and market practices. Meridian provided the Committee with an analysis undertaken with respect to each of the NEO’s positions, including a comparison of actual total compensation, total direct compensation, target total direct compensation as well as each component of compensation on a comparative basis with the Company’s peer group and market data where available.

In addition, the Committee reviewed NEO compensation in the aggregate to that of our peer group. The Committee believes that reviewing compensation across both dimensions of their role and in aggregate provides the Committee with the most well-rounded view of the appropriateness of NEO compensation levels relative to peers.

Pay-for-Performance Analysis

In 2019, Meridian conducted a pay-for-performance analysis which compared realized and realizable pay for the CEO as compared to the chief executive officers in our peer group. This analysis provided a retrospective look which evaluated the historical relationship between pay and performance, helped evaluate the effectiveness of the Company’s pay structures and performance goals and helped assess whether pay was aligned with performance. The study found that changes made in 2018 improved the three year alignment between the Company’s historical performance and the CEOs’ actual pay results, noting that the Company

 

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continued to perform on a composite basis in the top quartile of the benchmarked peer group and the CEO’s pay and performance were appropriately aligned when compared with the peer group for the three-year period ending in 2018. The Committee intends to periodically conduct this analysis as it continues to monitor the effectiveness of the Company’s executive pay program.

2019 Compensation Elements and Decisions

This section describes the various elements of our 2019 compensation program for the NEOs and outlines why the Committee chose each element, how it’s determined and its impact on the Committee’s pay decisions.

Base Salary

The Company provides NEOs with base salaries to compensate them for services rendered during the fiscal year and reflect each NEO’s position, specific skills, tenure, experience, responsibility and performance.

 

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Annual base salary adjustments for NEOs for any given year are generally determined by the Committee at its meeting in January. Increases, if any, in base salary on a year-over-year basis are dependent on the Committee’s assessment of the Company’s and individual’s performance and data from Meridian regarding market competitive base salaries. The Committee has full discretion to set NEO salary at any level it deems appropriate. As part of this process, the Committee solicits the recommendations of Mr. Wehmer with respect to the NEOs (other than Mr. Wehmer and Mr. Murphy). The Committee also considers peer data provided by Meridian, internal pay equity and merit history in evaluating recommendations.

In 2019, the Committee made the following determinations relative to base salary.

Annual Short-Term Incentive

The Company’s performance-based annual short-term incentives are based on each NEO’s overall performance and the achievement of performance goals subject to the discretion and adjustment by the Committee. Annual short-term incentives are intended to provide officers with an opportunity to receive cash compensation (may be paid in equity at the discretion of the Committee), based on consideration of the Company, subsidiary and individual performance goals. Performance-based incentives are a key component of our total compensation package because they reward our executives for pursuing objectives that the Committee believes are consistent with the overall goals and strategic direction that the Board has set for the Company.

NEO short-term incentive targets are reviewed by the Committee annually to evaluate appropriateness to the current business cycle and competitiveness relative to the market. In determining the target annual short-term incentives, the Committee considers several factors, including:

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market practices;

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the target annual incentive set and achieved in recent years;

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the desire to provide, as described above, a substantial portion of total compensation as performance-based; and

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the relative importance and degree of difficulty of the short-term and long-term performance goals of the Company.

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Once the annual short-term incentive opportunity is established, the Committee converts the target short-term incentive opportunity to a range of payout levels as a percentage of base salary with a maximum payout opportunity of 150% of target for 2019. Below are the short-term incentive award opportunities (at both target and maximum levels) for our NEOs in 2019, expressed as a percentage of base salary:

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The annual short-term incentive target for Mr. Wehmer was increased from 100% to 125% based upon Meridian’s compensation market research, resulting in a total compensation package commensurate with the Company’s most comparable peers.

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Consistent with 2018, the 2019 target annual short-term incentive opportunity was allocated in the following manner based upon the executive’s role:

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75% based on Company performance, associated with consolidated pre-tax net income; and

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25% based on individual goals and objectives.

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Based upon the weighting outlined above of the 75/25 allocation of the short-term incentive target, the table below reflects each NEO’s 2019 base salary and how their total incentive targets were allocated as a percentage of each NEO’s base salary.

Development of Company Performance Objectives

One of the key Company-level objectives for 2019 was to achieve consolidated pre-tax net income of $524.1 million. The Committee used the following guidelines to set the high, target, low, or threshold portion of the annual short-term incentive award opportunity allocated to the Company-level objective:

Development of Individual Performance Objectives

The performance objectives for the NEOs are developed through an iterative process between the Committee and management. Management develops an initial set of recommended objectives based upon business needs. The Committee reviews the proposed objectives and modifies them at its discretion, after considering whether the objectives are aligned with the Board’s strategic focus. The following objectives, among others including regulatory objectives, were established for the NEOs in 2019:

Edward J. Wehmer

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Improve core performance of the enterprise reflected in various measures such as core loan, asset and deposit growth, net overhead ratio, performance on niche and core loans, earnings per share, stock price, shareholder return, and net income.

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Continue to identify and acquire strategic assets, asset generation platforms and bank acquisitions to complement the Company’s strategy.

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Maintain the appropriate organizational infrastructure to support technology efforts, expansion efforts, streamlining operations and expense management.

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Identify and execute key partnerships to complement the Company’s strategy.

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David A. Dykstra

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Lead all market transactions and strategic acquisition activities. Execute acquisitions and oversee integration.

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Increase core earnings and net income through planned and profitable growth. Improve year-over-year performance in core loan, asset and deposit growth, net overhead ratio, performance on niche loans, earnings per share, stock price, and shareholder return.

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Maintain cost effective, scalable and efficient internal operations.

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Richard B. Murphy

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Maintain core portfolio and non-performing assets at acceptable levels.

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Work with operations to assist in credit related systems implementations to enhance the efficiency of the credit function.

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Preserve exemplary credit quality through effective underwriting and disciplined loan management.

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Provide leadership to mortgage business to optimize business outcomes.

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Improve asset quality and improve management reporting on all loans.

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David L. Stoehr

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Proactively develop strategies to manage interest rate risk and improve earnings.

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Provide effective analytics, metrics and reporting to measure strategic initiatives.

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Maintain capital above policy thresholds and advise and present completion of capital stress testing.

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Timothy S. Crane

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Manage all banks to meet/exceed financial targets.

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Achieve loan growth without credit loss outside acceptable ranges.

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Focus on expansion and new branch openings.

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Maintain an appropriate focus on enhancing customer relationships.

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Performance Results and Payouts

As noted above under “2019 Business Highlights,” the Company achieved exceptional results in 2019, which we believe highlights the benefit of the guidance provided by the Company’s executive leadership team.

Consolidated Pre-Tax Net Income:   The Company’s consolidated pre-tax net income for the year ended December 31, 2019 was $480.1 million. In determining the actual annual short-term incentive for each NEO associated with the achievement of Company-level objectives, the Committee considered a number of factors, including the following achievements:

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company’s achievement of 91.6% of the consolidated pre-tax net income objective;

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solid key performance indicators, including net interest margin, net overhead ratio, loan, asset and deposit growth and credit quality;

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continued progress on diversification strategy via expanded lines of business; and

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continued build out of enterprise infrastructure to support future success of organization.

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The Committee, taking into account that the Company achieved 91.6% of the targeted consolidated pre-tax net income performance goal along with all of the other above-referenced positive key performance indicators, determined to pay out the portion of annual short-term incentives associated with the Company-level results at 95% of target.

Individual Performance Objectives:   The Committee reviewed each executive’s performance relative to individual goals and determined that each of the NEOs achieved or exceeded their individual performance objectives.

 

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Total Annual Short-Term Incentive Payout:   The final determination of an NEO’s actual short-term incentive payment is based on the Committee’s holistic evaluation of Company and individual performance metrics including consolidated pre-tax net income, individual performance objectives, and discretionary factors. The Committee retains the discretion to determine the amount of any annual short-term incentive awarded to an NEO. The final determination of the Committee could result in no short-term incentive being paid or a short-term incentive amount above or below a strictly formulaic view of performance. Based on their analysis, the Committee exercised its discretion, and approved the annual short-term incentive award for each NEO. The extent of achievement by Mr. Wehmer and the other NEO’s relative to the accomplishment of the Company’s financial objectives was taken into account. Additionally, short-term incentives were informed by the Committee’s intention to ensure that total cash compensation was at an appropriate competitive position relative to the Company’s performance. The following table sets forth the total eligible annual short-term incentive amounts at target and annual short-term incentives actually paid to each of our NEOs under the 2019 NEO short-term incentive program.

Our annual short-term incentive may be paid in cash and/or equity at the discretion of the Committee. With regard to 2019 performance, annual short-term incentives awarded by the Committee to the NEOs were paid in cash and are reported in the “Bonus” column in the 2019 Summary Compensation Table.

Long-Term Incentive Plan (LTIP)

The Committee believes that a substantial portion of each NEO’s compensation should be in the form of long-term incentive compensation in order to further align the interests of our NEOs and shareholders. The framework is also designed to:

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provide a competitive compensation opportunity;

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foster retention;

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allow the Company to compete effectively for talent;

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incorporate leading practices;

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provide transparency;

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support the Company’s long-term strategy and growth objectives;

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align management’s long-term compensation with shareholder returns;

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link pay and performance;

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create a long-term focus based on sustainable results; and

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create stock ownership.

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Award Mix

The Committee administers the LTIP and can determine on an annual basis the mix of awards included in the annual grant. Consistent with the 2018 design, the Committee determined that the 2019 award vehicle mix should be comprised of the following:

 

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Performance-based cash and performance-based restricted stock units are designed to promote pay for performance since the awards vest only upon the achievement of certain performance conditions. Performance-based awards under the LTIP are contingent upon the achievement of pre-established long-term goals set in advance by the Committee over a multi-year performance period (i.e., three years), with overlapping performance cycles. Performance-based cash and equity awards are earned only at the end of the performance cycle based on the Company’s performance against pre-established goals certified by the Committee, subject to negative discretionary adjustments.

In 2019, the Committee selected three-year cumulative earnings per share (as adjusted to exclude acquisition-related charges, the effect of certain changes in the effective tax rate and any excess tax benefits or tax deficiencies related to stock-based compensation awards as determined by the Committee, “Cumulative Adjusted EPS”) as the measure for the 2019-2021 LTIP cycle. The Company believes that targets established by the Committee for this performance metric are reasonably achievable with strong executive management performance.

2019 LTIP Target and Grants:   The Committee provided a 2019 LTIP grant for the performance period from January 1, 2019 through December 31, 2021, with the performance-based restricted stock units and cash awards that are scheduled to vest based on our Cumulative Adjusted EPS performance during the performance period. The ultimate value of the awards will depend on the Company’s performance relative to three-year goals and in the case of the performance-based restricted stock units, the Company’s stock price at vesting. Each NEO’s long-term incentive target percentage, as a percentage of base salary, which remained consistent with each of their 2018 grants, is outlined below:

Performance-Based Restricted Stock Unit Awards and Performance-Based Cash Awards:   The performance-based restricted stock unit awards (50% of incentive target opportunity) and performance-based cash awards (50% of target incentive opportunity) will each be measured following the end of the performance period ending December 31, 2021. The threshold, target and maximum award opportunities for each NEO for the performance-based restricted stock unit and cash awards is set forth in the following two tables:

Performance-Based Restricted Stock Unit Awards

 

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Performance-Based Cash Awards

2017-2019 LTIP Results and Payment:   The 2017-2019 LTIP used a mix of awards comprised of 50% performance-based cash awards, and 50% performance-based restricted stock unit awards. The Committee determined for this performance cycle to use cumulative earnings per share as the performance measure, adjusted for acquisition related costs, tax benefits associated with stock-based compensation and the change in the corporate tax rate. The following chart outlines the performance award matrix adopted in conjunction with the 2017-2019 LTIP cycle for the performance-based cash and performance-based restricted stock unit awards:

The Company’s cumulative adjusted EPS over this 3-year period was $15.17. Based on this level of achievement, the Committee certified a payout equal to 137% of target which was paid on February 28, 2020, as set forth in the following table:

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The NEOs received shares as follows: Mr. Wehmer 17,377; Mr. Dykstra 5,453; Mr. Murphy 3,752; Mr. Stoehr 3,133; and Mr. Crane 2,974. The value ascribed in the table above was derived based on the $53.725 fair market value of a share of Common Stock on February 28, 2020, the date these awards were settled.

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Perquisites and Other Benefits

Our NEOs receive modest perquisites provided by or paid for by the Company that the Committee believes are reasonable, competitive and consistent with the Company’s overall compensation philosophy. In 2019, these perquisites included: car allowances or Company-owned automobiles; club dues; life insurance; and supplemental long-term disability. Our NEOs were also eligible for a 401(k) employer matching contribution on the same terms as all other employees of the Company.

 

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The Committee reviews the perquisites provided to its NEOs on a regular basis to evaluate whether they continue to be appropriate in light of the Committee’s overall goal of designing a competitive compensation program for NEOs that is aligned with the interests of our shareholders. Attributed costs of the personal benefits described above for the NEOs for the fiscal year ended December 31, 2019 are included in column (i) of the “2019 Summary Compensation Table.”

Post-Termination Compensation

We have entered into employment agreements with each of our NEOs that provide for post-termination compensation. These agreements provide for payments and other benefits if the NEO’s employment terminates for a qualifying event or circumstance, such as being terminated without “Cause” or leaving employment for “Constructive Termination,” as these terms are defined in the employment agreements. Additionally, the employment agreements provide for the payment of enhanced severance benefits if the NEO’s employment is terminated within eighteen months of a “Change-in-Control” (as defined in the agreements). Additional information regarding the employment agreements, including a definition of key terms and a quantification of benefits that would have been received by our NEOs had termination occurred on December 31, 2019, is found under the heading “Potential Payments upon Termination or Change in Control” on page 53 of this Proxy Statement.

The Committee believes that these employment arrangements are an important part of overall compensation for our NEOs and will help to secure the continued employment and dedication of our NEOs, prior to or following a change in control, notwithstanding any concern that they might have at such time regarding their own continued employment. These agreements also contain restrictive covenants, including non-compete and non-solicitation provisions, which protect the Company’s interests in its client and employee relationships. The Committee also believes that these agreements are important as a recruitment and retention device, as nearly all of the companies with which we compete for executive talent have similar agreements in place for their senior employees.

Additional Information Regarding Compensation Policies

We have additional compensation policies that support our practices. These policies serve to further illustrate and provide context around our approaches to compensation.

Clawback Policy.   Our clawback policy provides that the Company may recover any payment or equity awards made to a current or former executive officer, if the payment was predicated upon achieving certain financial results that were subsequently the subject of a material negative restatement caused by the intentional misconduct of the executive officer. In such event, the Company may recover the amount by which any annual or long-term payments or awards made or granted exceeded what would have been awarded or granted based on restated financials. In addition, the Company may recover any profits realized on the sales of securities received by such executive officer pursuant to such awards.

In addition, the clawback provision of the Sarbanes-Oxley Act of 2002 also applies to Messrs. Wehmer and Stoehr. This provision provides that if the Company is required to restate its financial statements as a result of misconduct, Mr. Wehmer and Mr. Stoehr are required to reimburse the Company for short-term incentives or other incentive-based or equity-based compensation and profits realized in the 12 months after the financial information was first publicly issued or filed with the SEC.

Policy Regarding Excessive or Luxury Expenditures.   Our Board adopted a policy designed to eliminate or prevent any excessive or luxury expenditures, including excessive expenditures on entertainment or events, office and facility renovations, aviation or other transportation services. A copy of this policy is available on our website, www.wintrust.com.

Tax Gross-Up Provisions.   Effective May 20, 2009, the Company adopted a policy that it will not enter into any new or materially amended agreements with NEOs that include any excise tax gross-up provisions with respect to payments contingent upon a change in control.

Prohibition on Hedging and Short Selling.   The Company’s executive officers and Directors are prohibited from engaging in short selling of the Common Stock or engaging in hedging or offsetting transactions regarding the Common Stock.

 

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Prohibition on Pledging Stock.   In April 2013, the Company adopted a policy prohibiting executive officers and Directors from pledging any of the Company’s securities.

Stock Ownership Guidelines.   In January 2011, the Company adopted stock ownership guidelines for our executive officers as part of our commitment to corporate governance and to strengthen the alignment of interests between our executive officers and shareholders. Under the guidelines, our Chief Executive Officer and other NEOs are expected to accumulate shares of Common Stock to meet the applicable ownership level within five years of their election or appointment.

For purposes of the guidelines, “shares” include shares owned by the executive or the executive’s immediate family members residing in the same household, including shares held in the Company’s 401(k) plan or employee stock purchase plan, shares held in trust for the benefit of the executive or the executive’s family, shares obtained through stock option exercises, deferred shares, shares of restricted stock and restricted stock units granted under the Company’s equity plans.

The Committee reviews an executive’s progress toward achieving the applicable guideline. An executive’s progress toward the applicable ownership guideline is expected to be approximately 20% per year. If the Committee determines that an executive has not demonstrated sufficient progress toward compliance with the applicable guideline, it may take appropriate action. The Committee determined that each of these executives met this requirement as of December 31, 2019.

Compensation Process and Roles

Role of Management.   The Committee made all 2019 compensation decisions for our NEOs. Mr. Wehmer annually reviews the performance of each of the Company’s and its subsidiaries’ officers (other than Mr. Wehmer whose performance is reviewed by the Committee and Mr. Murphy whose performance is reviewed by the Committee due to the fact that he is married to the sister of Mr. Wehmer’s wife). The conclusions reached and the compensation recommendations based on these reviews, including with respect to salary adjustments and incentive award amounts, were presented to the Committee. The Committee exercised its discretion in modifying any recommended adjustment or award.

Committee Process.   During 2019, the Committee reviewed both the Company’s compensation philosophy and the actual compensation being paid by the Company. The Committee met, including in executive sessions without any members of management present, to discuss, evaluate and set executive officer compensation. In setting compensation for each of the NEOs, the Committee focused on the total compensation received by each NEO, as well as the allocation of each element of compensation in relation to those provided by the peer companies identified above. The Committee acted pursuant to a written charter that had been approved by our Board.

Compensation Consultant.   The Committee has the sole authority to retain and dismiss its own outside compensation consultants and any other advisors it deems necessary. The role of a compensation consultant is to assist the Committee in analyzing executive compensation packages and to provide the Committee with information regarding market compensation levels, general compensation trends and best practices. The consultant also provides advice regarding the competitiveness of specific pay decisions and actions for the NEOs, as well as the appropriateness of the design of the Company’s executive compensation program. In 2019, the Committee engaged Meridian to advise it on executive compensation-related issues, conduct benchmarking and pay-for-performance analyses and to provide advice relating to establishing bonus opportunities and target incentives for 2019. In addition, Meridian provided guidance on leading practices on compensation. Meridian attended meetings of the Committee, including executive sessions, upon invitation. Meridian did not provide any other services to the Company. The Committee has assessed the independence of Meridian pursuant to the rules of the SEC and concluded that Meridian’s work for the Committee does not raise any conflicts of interest.

 

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2019 Summary Compensation Table

The following table summarizes compensation awarded to, earned by or paid to our NEOs for 2019, 2018, and 2017. The section of this Proxy Statement entitled “Compensation Discussion & Analysis” describes in greater detail the information reported in this table and the objectives and factors considered in setting NEO compensation.