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We generated record adjusted net revenues of $736.3 million, which represents 71% growth since 2011. Importantly, this revenue growth primarily has occurred in our higher margin businesses of mergersadvisory services and acquisitions, public finance, anda key component of our strategy to shift our business mix to these areas. These businesses, together with asset management, increasing our operating discipline, and executing on opportunistic strategic acquisitions and investments. The table below highlights critical aspectscomprised 65% of our 2015 financial performance:

		2015		2014		% Change
Closing Stock Price(1)		$40.40		$58.09		​	(30.5	)%
Net Revenues		$672.9M		$648.1M			3.8	%
Earnings Per Share		$3.34		$3.87		​	(13.7	)%
Net Income		$52.1M		$63.2M			(17.6	)%
Capital Markets Net Revenues		$609.3M		$567.8M		​	7.3	%
Asset Management Net Revenues		$63.6M		$80.3M			(20.9	)%

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(1)

As of last trading day of period.

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Our 2015 net revenues of $672.9 million were a record for our company, and are more than 46% greater than ouradjusted net revenues in 2011, the year before we began our current strategic focus on internal development, selective hiring, cost discipline, and investments in our higher margin businesses.2016.



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AdvisoryWe achieved record adjusted net income of $72.6 million, adjusted earnings per share of $4.69, and adjusted ROE of 9.2%, demonstrating the operating leverage in our business from both the higher absolute revenue level we produced and the shift in the mix of these revenues to our higher-margin businesses of advisory services revenues were $209.2 million in 2015, setting a record for a second consecutive year.and public finance.



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Our advisory services and public finance businesses both had record years and helped to offset challenging markets for our equity financing and asset management businesses. Our advisory services business achieved $305 million in revenues in 2016 due to strong results from our healthcare and consumer franchises and from meaningful contributions from our expansion into the energy sector through our acquisition of Simmons, and the financial institutions sector, primarily through organic hiring efforts. Our public financing group was ranked 2^nd nationally in 2015 for number of municipal negotiated issuances.



•

Our equityfinance business achieved debt financing revenues exceeded $100of $115 million. in 2016, largely as a result of its focused efforts to build a broad and diversified public finance franchise through geographic and sector expansion.

Importantly, we took several steps in 20152016 to drive additionalexecute on our recent organic growth efforts and strategic acquisitions, such as Simmons. Our execution on these initiatives in 2016 drove record adjusted net revenues and adjusted earnings inper share. At the coming years. These steps include the expansionend of 2016, our investment banking and equities sales and trading and research coverage into the energy sector with our acquisition of Simmons & Company International




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("Simmons")one-, three-, and intofive-year total shareholder returns ("TSR") were the financial institutions sector with our acquisition of River Branch Holdings LLC ("River Branch"). Prior to these acquisitions, our investment banking and equity sales and trading and research businesses did not participate in eitherhighest among the energy or the financial institutions sector, which represent a significant portion of the total available mergers and acquisitions and equity financing fee pools. We also added scale and new analytics capabilities in our fixed income business through our acquisition of BMO Capital Markets GKST Inc. ("GKST") during the year.

peer group that we use for compensation purposes. We believe that the declinestrategy that we set in our stock price during the year reflected a decline in our earnings from the record level we achieved in 2014, as well as investor expectations of more challenged market conditions, including a decline in equity financing. We believe that the decline was not commensurate with our performance during the year, and our stock price has improved in the first quarter of this year following the release of our full year 2015 results. We are confident that the strategy upon which we embarked several years ago,2011, which has focused on operating discipline, investment in our higher margin businesses, and execution on opportunistic strategic acquisitions and investments, such as our expansion into the financial institutions and energy sectors, will continue to drive strong returns for our shareholders in the coming years.shareholders.

Named Executive Officers


Throughout this proxy statement, we refer to our chief executive officer ("CEO"), chief financial officer ("CFO"), and each of our three other most highly compensated executive officers for 2015,2016, as the "named executive officers." In addition to our chief executive officerCEO and chief financial officer,CFO, this group includes Chad R. Abraham and R. Scott LaRue, our global co-heads of investment banking and capital markets, and Christopher D. Crawshaw,Frank E. Fairman, our head of asset management.public finance.

Executive Compensation Program


Based on feedback that we received from shareholders during 2016, our Compensation Committee has approved significant changes to our executive compensation program that are described later in this proxy statement. Some of these changes have been implemented with respect to 2016 compensation, and the remaining changes will be implemented with respect to 2017 compensation. These changes are not fully reflected in the compensation paid to our executive officers for 2016 performance and reported in this proxy statement because our 2016 executive compensation program was established prior to the May 2016 annual meeting of shareholders.




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Executive Compensation: Compensation Discussion and Analysis

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In 2016, our executive compensation program consisted primarily of three elements: base salary, annual incentive compensation, and long-term incentive awards in the form of long-term performance share units ("PSUs").

Elements of Our 2016 Executive Compensation Program


Base Salary		+		Annual Incentive Compensation		+		PSUs		=		Annual Compensation
Market-competitive set amount (unchanged since 2010)				Pay for performance based on profitability and individual performance				Vestonly if certain performance metrics achieved
Base Salary		Base salaries have not changed since 2010. Salaries provide a market-competitive set amount of cash compensation for each executive that is not variable.
Annual Incentive Compensation		Our annual incentive program directly aligns our executive officers' annual incentive pay with our pre-tax, pre-profit provision income, a measure of our profitability. Increasing our profitability is a key objective for us as we seek to maximize long-term value for our shareholders. While our pre-tax, pre-profit provision income was up approximately 4.3% in 2016, the total annual incentive compensation paid to our named executive officers was down approximately 10.9% from 2015, reflecting the impact of the discretion exercised by our Compensation Committee based on business line and individual performance. Annual incentive compensation is paid in a mix of cash and restricted compensation.
Long-Term PSU Awards		Our PSU awards are intended to directly align the interests of our named executive officers with those of our shareholders by directly tying the value of the award to certain long-term performance metrics. Beginning with our February 2017 grant, our PSU award program has been revised to include (1) an adjusted ROE, and (2) a relative TSR performance metric. The PSU award will be earned only if over the 36-month performance period we achieve a certain adjusted ROE and relative TSR compared to a broad index of financial services companies. In May 2016, our Compensation Committee made its final grant under our historical PSU award program, which vested based on absolute and relative TSR performance metrics. The amount of each of the May 2016 and February 2017 PSU grant was essentially unchanged from 2015.




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Executive Compensation: Compensation Discussion and Analysis

Overview of Changes to Executive Compensation Program

At the May 2016 annual meeting of shareholders, our say-on-pay proposal received the support of approximately 72% of the votes cast either in favor of, or against, the proposal. From 2013 through 2015, our say-on-pay proposal had received the support of over 97% of the votes cast. In response to the lower level of shareholder support received in 2016, our Compensation Committee (referred to as the "Committee" in this Compensation Discussion and Analysis) sought to engage with our shareholders to determine their concerns with our executive compensation program.

During 2016, we sought out meetings with our 25 largest institutional shareholders representing approximately 50% of our outstanding shares as well as one of the largest proxy advisory firms. Our CFO, Chief Strategy Officer, Chief Human Capital Officer, and General Counsel participated in these meetings. The summary below highlights the key themes that we heard from our shareholders, and the actions that the Committee has taken as a result:

Shareholder Feedback		Compensation Committee Action		Outcome
​	​	​	​	​
Annual Incentives: Overall, the compensation program design places too much emphasis on short-term performance through annual incentives and not enough on long-term performance.		Decreased time-vested restricted compensation andincreased long-term PSU awards.		The Committee revised the executive compensation to reduce the amount of annual incentives paid in time-vested restricted compensation and increase the amount of long-term PSU awards. Beginning with compensation for 2017 performance (which will be granted in February 2018), our named executive officers will receive 50% of their restricted compensation in the form of long-term PSU awards that vest only if certain long-term TSR and adjusted ROE targets are achieved.
​	​	​	​	​
PSU Program Metrics: The long-term PSU awards should use more than TSR as the sole performance metric.		RevisedPSU award performance metrics to include: 1. Adjusted ROE 2. Relative TSR		The Committee revised the February 2017 PSU award to focus on two key metrics: (1) adjusted ROE and (2) relative TSR. Adjusted ROE was selected because increasing profitability and making efficient use of capital are key priorities for our company. Relative TSR was selected because it shows the returns we are providing our shareholders in relation to a broad index of financial services companies.
​	​	​	​	​
Cap on Cash Incentives: There should be a cap on the amount of annual incentives that can be paid to executive officers in cash.		Cappedannual cash incentives for our CEO, CFO, and President.		The Committee implemented a cap on annual incentives that can be paid in cash to our CEO, CFO, and President at three times of their base salaries, beginning with incentives paid in February 2017 for 2016 performance.




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Executive Compensation: Compensation Discussion and Analysis

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The Committee's objective in implementing the changes described above was to respond to the feedback it received during the 2016 shareholder engagement process and further strengthen our pay-for-performance philosophy by designing an executive compensation program that incentivizes strong financial performance, attracts and retains the most talented people who are committed to the long-term success of our company, and is supported by our shareholders. The Committee believes the changes it has made, which are discussed in further detail below, will achieve this objective.

Changes to Annual Incentive Program

Our annual incentive program has historically used a measure of pre-tax operating income as the performance goal in determining our executive officers' annual incentive compensation. Our annual incentive program's emphasis on profitability, which is a similar focus for our financial services industry peers, means that changes in annual incentives are directly related to changes in our profitability. This design incentivizes our executive officers to increase the profitability of their business lines and of the company overall, which the Committee believes will maximize long-term returns for our shareholders.

Of the annual incentives that are awarded to our executive officers for our profitability, a portion is paid in cash and a portion is paid in time-vested restricted compensation. Of this time-vested restricted compensation, 50% is paid in restricted shares of our common stock. This restricted compensation vests ratably over three years. By paying a portion of annual incentives in time-vested restricted stock, our executive officers are incentivized to achieve long-term returns for our shareholders, as the value of the restricted stock that vests is tied to the performance of our stock price.

Shareholder feedback received:

During our 2016 engagement with shareholders, some shareholders expressed the view that the annual incentive program, which is based on profitability, outweighed our long-term PSU program, which since 2012 has been based on (1) absolute TSR and (2) relative TSR. Their concern with the design of our program was that the proportionally greater amount that executive officers can receive through the annual incentive program versus the long-term PSU program might place too much emphasis on short-term profitability and not enough on long-term performance.

Compensation Committee action:

The Committee determined todecrease the amount of compensation paid out in annual incentives in the form of time-vested restricted compensation (including stock), and toincrease the amount of the long-term PSU awards made to our executive officers. Although we view the time-vested restricted compensation to be performancegranted because it is based on annual profitability, the Committee determined to increase the amount of compensation received in the form of long-term PSU awards that will vestonly if certain performance metrics are achieved, which beginning with the February 2017 grant are (1) adjusted ROE and (2) relative TSR.




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Executive Compensation: Compensation Discussion and Analysis

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The effect of this change is illustrated by the graphic below:

2016 Annual Incentive Program (paid in February 2017)



2017 Annual Incentive Program (to be paid in February 2018)



Changes to Annual Cash Incentives

Under our executive compensation program, as our profitability increases, so too does our executive officers' annual incentive compensation. Between 45 and 60% (depending on the executive officer) of each executive officer's annual incentive compensation is paid in restricted compensation, which is made up of time-vested stock and other time-vested compensation that vests ratably over three years. The remaining 40 to 55% of an executive officer's annual incentive compensation is paid in cash.

Shareholder feedback received:

During our 2016 engagement with shareholders, some shareholders expressed the view that the amount of cash that can be paid to executive officers should be capped.

Compensation Committee action:

The Committee has determined to cap the amount of annual cash incentives that can be paid to our CEO, CFO, and President at three times their base salaries. The Committee made this change after reviewing market-competitive practices within the financial services industry, and believes it appropriately caps the amount of annual incentives paid in cash to those executive officers most responsible for our company's overall financial performance. This change was implemented for annual incentives for 2016 performance, which were paid in February 2017.




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Executive Compensation: Compensation Discussion and Analysis

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Changes to Long-Term PSU Program

In 2012, the Committee implemented a long-term performance share unit award, or PSU award, which vestedonly if certain (1) absolute TSR, and (2) relative TSR metrics were achieved during the three-year performance period covered by the award. The Committee implemented the PSU award in order to provide additional long-term incentive compensation to executive officers for achieving certain levels of long-term returns for shareholders. Since 2012, the PSU award program has evolved from its beginning as a means for providing additional long-term incentive compensation for delivering significant returns to shareholders, to become a central component of our executive compensation program and the pay-for-performance philosophy that drives the Committee's determinations of overall executive compensation.

Shareholder feedback received:

During our 2016 engagement with shareholders, some shareholders expressed the view that the absolute TSR metric might not be as relevant to our long-term performance as an operating performance metric aligned with our strategic objectives.

Compensation Committee action:

The Committee has determined to eliminate the absolute TSR performance metric, and to have PSU awards, beginning with the February 2017 grant, vest based on the following metrics: (1) adjusted ROE, and (2) relative TSR. 50% of the PSU award will be tied to each metric. The Committee added adjusted ROE to the award because increasing our profitability and making efficient use of capital are key priorities for our company, and management and the Board uses adjusted ROE to inform its strategic decision-making process. Relative TSR was selected because it shows the returns we are providing our shareholders in relation to a broad index of financial services companies. The vesting thresholds of the metrics (which are described later on in this proxy statement) are intended to be challenging, and to incentivize our executive officers to make strategic and business decisions that will increase our long-term adjusted ROE and provide superior returns to our shareholders.




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Executive Compensation: Compensation Discussion and Analysis

Our Compensation Practices Demonstrate Sound Governance


Our compensation practices demonstrate sound corporate governance. We continually review our executive compensation program to ensure it reflects good governance practices and the best interests of shareholders. Our executive compensation program currently includes:

		What we do:				What we do NOT do:
ü		Annual incentivesdirectly tied to our adjusted pre-tax, operating income;pre-profit provision income, a measure of our profitability;		X		Stand-aloneNo stand-alone change-in-control agreements;
ü		Long-term incentives Starting in 2017, long-term PSU awardsdirectly tied to (1) adjusted ROE, a key operating performance metric, and (2) returns generated for our shareholders;shareholders as measured by relative TSR;		X		EmploymentNo employment agreements with our executives;
ü		Meaningfulannual restricted compensation grantedin lieu of—of—not in addition to—annual cash incentives;		X		RepricingNo repricing of underwater stock options;
ü		Stock retention guidelines for executive officers and directors, supplemented with an anti-hedging policy;		X		ExcessiveNo excessive perquisites; and
ü		"Double trigger" change-in controlchange-in-control provision for all equity awards granted on or after May 8, 2013;awards; and		X		TaxNo tax gross-ups, other than in the case of certain tax equalization or relocation expenses, consistent with firm-wide policies.
ü		A clawbackClawback policy to recover incentive compensation in certain circumstances.




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Executive Compensation: Compensation Discussion and Analysis

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Our Compensation Philosophy and Objectives


Our executive compensation program is designed to drive and reward corporate performance annually and over the long term, as measured by increasing shareholder value. Compensation also must be internally equitable and externally competitive. We continually review our executive compensation program to ensure it reflects good governance practices and the best interests of shareholders, while meeting the following core objectives:

Core Compensation Principles and Objectives


Principle		Objectives		How We Achieved These Objectives
​	​	​	​	​
		• Drive Profitability		Most of the total compensation paid to our named executive officers is based on our pre-tax, pre-profit provision income. Beginning in 2017, half of the PSU award will be earnedonly if our adjusted pre-tax operating income.ROE meets certain benchmarks.
Pay for Performance		• Drive Shareholder Returns		OurBeginning in February 2017, our executive officers are awardedgranted a long-term incentivePSU award in the form of performance share units ("PSUs"), which are earnedvestsonly if our total shareholder return meets we achieve certain hurdles.levels of (1) adjusted ROE, and (2) relative TSR over a three-year performance period from the date of grant.
		• Demonstrate Leadership		Our named executive officers' performance is also measured against defined objectives in areas such as strategic initiatives, business performance, leadership effectiveness, and internal talent development.
​	​	​	​	​
Sustain and Strengthen the		• Attract Talent		Because our business is highly competitive and relies on the talents and efforts of our employees, our compensation program is designed to be sufficiently competitive to allow us to attract the most talented people who are committed to the long-term success of our company.
the Franchise		• Retain Talent		Our success drives the compensation realized by our executive officers, both in the form of increased incentive compensation paid and in appreciation of the company's stock price.price, which makes up a significant portion of our executive officers' annual incentive compensation in the form of time-vested restricted stock.
​	​	​	​	​
Align Risk and Reward		• Foster Balanced RiskRisk- Taking		We use a mix of compensation components—base salary, annual incentives and long-term incentives—to create an environment that encourages increased profitability for the company without undue risk taking.risk-taking. We also have an incentive compensation recovery policy that allows the Compensation Committee to recover incentive compensation under certain circumstances.
​	​	​	​	​
Align Employees with Shareholders		• Encourage Equity Ownership		We use equity ownership to directly align the interests of our executive officers with those of our shareholders in creating long-term shareholder value. A significant portion of annual incentives are paid in restricted shares of our common stock, and each executive officer is subject to our stock retention guidelines.
		• Drive Shareholder Returns		Our long-term incentive award program grants PSUs whichguidelines that requires them to hold at least 50% of all company stock granted them while they are earnedonly if our total shareholder return, measured on an absolute and relative basis compared to our peer group over a 36-month performance period, meets certain hurdles.executive officer.
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Executive Compensation: Compensation Discussion and Analysis

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How Compensation Decisions are Made


The Compensation Committee (referred to as the "Committee" in this Compensation Discussion and Analysis) is responsible for approving the compensation paid to our executive officers and ensuring it meets our compensation objectives. With respect to our chief executive officer,CEO, the Committee has sole responsibility for evaluating performance and determining his compensation. In doing so, the chairperson of the Committee solicits evaluation input from each member of the Board of Directors, and also leads a discussion of the full Board reporting on the results of the annual evaluation and reviewing the chief executive officer's self-evaluation.

At the beginning of each year, the Committee approves the amount of incentive compensation to be paid to our executive officers in recognition of prior-year performance, approves their base salaries for the current year if there are changes and establishes performance goals under an annual incentive program, which has historically been our adjusted pre-tax, operatingpre-profit provision income. Subject to limits on the compensation that may be paid under the annual incentive program (as described below under "Compensation Program and Payouts—"Executive Compensation Program—2016 Annual Incentive Compensation"), the Committee has full discretion to determine the amount of compensation to be paid to the executive officers.

Involvement of Executive Officers

The work of the Committee is supported by our human capital department, our finance department, and our legal department. The chief human capital officer, chief financial officer,Our Chief Human Capital Officer, CFO, and general counsel,General Counsel, with input from the chief executive officer,CEO, prepare and present information and recommendations for review and consideration by the Committee, including:

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The performance goals to be established under the annual incentive program, which has historically been our adjusteda measure of our pre-tax, operatingpre-profit provision income;



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Financial information for the company and each business unit reviewed in connection with executive compensation decisions;



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The firms to be includedconsidered in the compensation peer group and financial and compensation data for those firms (including total shareholder return for those firms as compared to the company);



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The performance evaluations and compensation recommendations for the executive officers;



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Tally sheets specifying each element of compensation paid to the executive officers for the current and prior year and reflecting total proposed compensation and potential compensation under various scenarios; and



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The evaluation and compensation process to be followed by the Committee.

Compensation Peer Group

The Committee and its independent compensation consultant, with input from management, annually identify a compensation peer group of firms with which we compete for executive talent. As a middle-market,middle-




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Executive Compensation: Compensation Discussion and Analysis

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market, full-service investment bank with material asset management operations, we believe there are few other companies that are directly comparable to Piper Jaffray. Our peer group includes companies primarily consisting of




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investment banks with revenues and market capitalizations similar to ours, while including representation of companies with asset management operations, which are an important portion of our business. Our peer group for 20152016 was unchanged from 2014, other than to eliminate SWS Group,expanded by two companies: Moelis & Co., and Houlihan Lokey, Inc. following its acquisition by a non-peer firm. Our 20152016 peer group consisted of the following companies, each of whom we believe are direct competitors for talent in some aspect of our business:

20152016 Peer Group
Cowen Group, Inc.		JMP Group LLC
Evercore Partners Inc.		Lazard Ltd.
FBR & Co.		Moelis & Co.
Greenhill & Co.		Oppenheimer Holdings Inc.
Greenhill & Co.Houlihan Lokey, Inc.		Stifel Financial Corp.

We also use data from external market surveys reflecting a broad number of firms within our industry (including members of our peer group), and we may review publicly available data for similar companies that are not direct competitors to address issues we may encounter obtaining compensation information for executives holding positions comparable to our executive officers. The external market surveys that we used for 20152016 were prepared by McLagan Partners and generally related to our industry and sub-sectors within our industry. We also used the surveys to gather market data outside of our industry in the corporate support area. This peer group and market data is an important factor considered by the Committee when setting compensation, but it is only one of multiple factors considered by the Committee, and the amount paid to each executive may be more or less than the composite market median based on individual performance, the roles and responsibilities of the executive, experience level of the individual, internal equity and other factors that the Committee deems important. As such, the Committee uses peer group and market survey information to put the total compensation proposed to be paid to each named executive officer in context of pay ranges for like positions at similar companies and to confirm that any variances from market norms are justified in light of the specific circumstances of our named executive officers.

Compensation Consultant

The Committee engaged Frederic W. Cook & Co., Inc. ("FWC") as its independent compensation consultant for 2015.2016. The Committee considers advice and recommendations received from FWC in making executive compensation decisions. FWC does not provide services to us other than the advice it provides to the Committee and FWC has advised the Committee that the fees and direct expenses received from us during 20152016 were less than 1% of FWC's consulting income for the period. FWC also has advised us that neither it nor, to its knowledge, any member of its consulting team serving the Committee owns any shares or other securities of Piper Jaffray. After considering the foregoing, as well as FWC's conflict of interest policies and procedures and the lack of known business and personal relationships between FWC, its team members serving the Committee and the members of the Committee and our executive officers, the Committee concluded that FWC's work for the Committee does not raise any conflict of interest concerns.




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Executive Compensation: Compensation Discussion and Analysis

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Say-on-Pay

At our 20152016 annual meeting of shareholders, our say-on-pay proposal received "for" votes that represented slightly more than 97%approximately 72% of the aggregate number of shares that voted "for" and "against" the proposal. TheBased on this result, the Committee considered the resultssought out engagement with our top 25 shareholders representing approximately 50% of the voteshares that voted on the proposal. Based on the feedback it received from our shareholders during 2016, the Committee approved significant changes to be an endorsement of the Committee's handling of executive compensation matters. In 2015, our executive compensation program retained allprogram. A full description of the core elements of our 2014 program, whichchanges are described belowabove under "—Overview of Changes to Executive Compensation Program and Payouts.Program."




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Clawback Policy


Our Board of Directors has adopted a clawback policy that allows the Committee to recover incentive compensation from any current or former executive officer if that executive officer engages in intentional misconduct that caused or contributed to noncompliance with a financial reporting requirement under the federal securities laws which requires the company to file an accounting restatement with the Securities and Exchange Commission.Commission (the "SEC"). If the Committee seeks to recover incentive compensation following an accounting restatement, the amount of incentive compensation subject to recovery would be the amount in excess of what the executive officer would have earned based on the restated financial results as determined by the Committee. In addition, regardless of whether there is an accounting restatement, the Committee may recover incentive compensation from a current or former executive officer if that executive officer engages in fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of the company's financial results as filed with the Securities and Exchange Commission.SEC. The incentive compensation recoverable in this circumstance will be based on the Committee's determination of the harm caused by the executive officer's conduct and the incentive compensation awarded to the officer with a vesting or performance period during which the conduct took place. Our clawback policy does not apply to equity-based compensation granted on or before May 8, 2013.

Compensation Program and Payouts


In 2015, our executive compensation program retained all of the core elements of our 2014 program, consisting primarily of three elements: base salary, annual incentive compensation, and long-term incentive compensation in the form of performance share units, or PSUs.




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Elements of the Compensation Program


Base Salary		+		Annual IncentiveExecutive Compensation: Compensation		+		PSUs		=		Annual Compensation
Market-competitive set amount				Pay for performance based on profitability				Vestonly if certain TSR metrics achieved
Base Salary		Base salaries were unchanged in 2015. Salaries provide a market-competitive set amount of cash compensation for each executive that is not variable in nature Discussion and that recognizes the importance of key leadership and daily accountabilities of our senior leaders. We have not changed base salaries since 2010.
Annual Incentive Compensation		Our annual incentive program directly aligns our executive officers' annual incentive pay with our financial performance, which is measured in terms of our adjusted pre-tax operating income, a measure of our profitability. Increasing our profitability is a key objective for us as we seek to maximize long-term value for our shareholders. The total annual incentive compensation paid to our named executive officers was down approximately 9.9% in 2015, reflecting a decrease in our adjusted pre-tax operating income. Annual incentive compensation is paid in a mix of cash and restricted compensation.
Long-Term Incentive Compensation (PSUs)		Our PSU awards are intended to directly align the interests of our named executive officers with those of our shareholders by directly tying the value of the award to our long-term stock performance. The grant date fair values of PSU awards made in 2015 was approximately flat as compared to 2014. Analysis

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20152016 Named Executive Officer Compensation Overview

The table below shows the base salary, annual incentive compensation, and fair value of the long-term incentive award PSU grants that were paid or awarded to each named executive officer in connection with the 20152016 executive compensation program.Importantly, this supplemental table differs from the Summary Compensation Table appearing later in the proxy statement because it shows in the "Restricted Compensation"Compensation Incentive" column the restricted shares of our common stock that were earned as part of the annual incentive compensation program for 20152016 performance, but were granted in February 2016.2017. In contrast, the Summary Compensation Table appearing later in the proxy statement (in accordance with SEC rules) shows for 20152016 the restricted shares of our common stock that were granted in February 2015,2016, meaning that they were earned as part of the annual incentive compensation program for 20142015 performance, rather than the shares earned for 20152016 performance and granted in February 2016.2017.

Accordingly, the year-over-year changes in compensation in the Supplemental Compensation Table below reflect changes in amounts earned between 2015 and 2014 based onfor performance during that year.2016 and 2015. The table below also includes in the "Restricted Compensation"Compensation Incentive" column the annual incentive compensation paid in the form of eitherrestricted investment fund shares, so it includes both restricted shares of our common stock or mutualas well as these restricted investment fund restricted shares. Both the Supplemental Compensation Table below and the Summary Compensation Table appearing later in the proxy statement reflectsreflect the restricted mutualinvestment fund shares that were granted as part of the annual incentive compensation paid infor the year in which the performance givingthat gave rise to that




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the award as well as the grant date fair value of the long-term incentive PSU grants made to our named executive officers in May of each of the years presented; importantly, PSUs only vest three years after the date of grant if certain TSR metrics are met.occurred.This table is not a substitute for the information required by SEC rules, specifically the Summary Compensation Table and the related tables appearing later in this proxy statement.


Supplemental Compensation Table


												Long-Term Incentives
						Annual Incentive Awards
														Long-Term Incentives						Annual and Long-Term Incentives
Name		Year		Base Salary ($)		Cash Incentive(1) ($)		Restricted Compensation(2) ($)		Total Incentive ($)		Total with Base Salary and PSUs ($)						Base Salary		Cash Incentive(1)		Restricted Compensation Incentive(2)		Long-Term PSU Award(3)		Total with Base Salary and PSUs
Andrew S. Duff		2015		650,000		1,614,000		2,421,000		4,035,000						2016		$650,000		td,563,700		td,345,000		$600,054		$5,158,754
Chairman and		2014		650,000		1,944,800		2,917,200		4,862,000		600,020		6,112,020		2015		$650,000		$1,614,000		$2,421,000		$600,013		$5,285,013
Chief Executive Officer		2013		650,000		1,223,200		1,834,800		3,058,000		600,009		4,308,009
CEO																2014		$650,000		$1,944,800		$2,917,200		$600,019		$6,112,019
Debbra L. Schoneman		2015		500,000		685,000		685,000		1,370,000		300,010		2,170,010		2016		$500,000		$664,875		$664,875		$300,069		$2,129,819
Chief Financial Officer		2014		500,000		824,000		824,000		1,648,000		300,011		2,448,011
CFO																2015		$500,000		$685,000		$685,000		$300,006		$2,170,006
		2013		500,000		380,000		380,000		760,000		300,015		1,560,015		2014		$500,000		$824,000		$824,000		$300,010		$2,448,010
Chad R. Abraham		2015		425,000		2,241,250		1,833,750		4,075,000		200,006		4,700,006		2016		$425,000		$1,883,750		$1,541,250		$200,074		$4,050,074
Global Co-Head of		2014		425,000		2,241,250		1,833,750		4,075,000		200,007		4,700,007		2015		$425,000		$2,241,250		$1,833,750		$200,017		$4,700,017
Investment Banking and		2013		425,000		1,306,250		1,068,750		2,375,000		200,003		3,000,003		2014		$425,000		$2,241,250		$1,833,750		$200,006		$4,700,006
Capital Markets
Christopher D. Crawshaw		2015		550,000		753,500		616,500		1,370,000		200,006		2,120,006
Head of Asset Management
Frank E. Fairman(4)																2016		$425,000		$1,142,350		$934,650		$200,074		$2,702,074
Head of Public Finance
R. Scott LaRue		2015		425,000		2,241,250		1,833,750		4,075,000		200,006		4,700,006		2016		$425,000		$1,663,750		$1,361,250		$200,074		$3,650,074
Global Co-Head of		2014		425,000		2,241,250		1,833,750		4,075,000		200,007		4,700,007		2015		$425,000		$2,241,250		$1,833,750		$200,017		$4,700,017
Investment Banking and		2013		425,000		1,306,250		1,068,750		2,375,000		200,003		3,000,003		2014		$425,000		$2,241,250		$1,833,750		$200,006		$4,700,006
Capital Markets

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(1)

Amounts reflect the cash compensation portion of amounts paid under the 20152016 annual incentive compensation program.





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Executive Compensation: Compensation Discussion and Analysis

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(2)

Amounts reflect the grant date fair value of the restricted shares of our common stock and mutualrestricted investment fund restricted shares granted in February 20162017 as the restricted compensation portion of amounts paid under the 20152016 annual incentive compensation program. Of the annual incentive compensation awarded to our named executive officers, between 45 and 60% is paid in restricted compensation. The restricted compensation vests ratably over three years from the date of grant.



(3)

Amounts reflect the grant date fair value of the long-term incentive PSU awards made in May.February 2017, May 2016, and May 2015, respectively. In prior years, the 2016 entry on this table would have shown the May 2016 grant; however, the 2016 entry in this table reflects the February 2017 grant instead. The timing of the inclusion of the PSU awards in this table has been revised as a result of the changes to our executive compensation program approved by the Committee. Beginning with 2017 performance (to be awarded in February 2018), the size of the February PSU award granted to our executive officers is expected to increase meaningfully as annual incentives received in time-vested restricted compensation is reduced, and the amount of the PSU award granted to each executive officer will vary based on their individual and business performance during the prior year. In other words, the amount of the February PSU awards in 2018 will bear a direct relationship with the amount of restricted compensation received for 2017 performance. The timing of the grant and presentation of the PSU awards in the above table was revised in anticipation of these changes. The Summary Compensation Table appearing later in this proxy statement does not show the February 2017 PSU award, and instead shows the May 2016 PSU award for 2016 compensation.



(4)

Mr. Fairman was not designated as one of our named executive officers during 2014 or 2015. Accordingly, the table above includes the compensation of Mr. Fairman only for the year in which he was one of our named executive officers.




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Executive Compensation: Compensation Discussion and Analysis

20152016 Annual Incentive Compensation

Our annual incentive program is intended to directly align annual incentive pay with our financial performance, which is measured in terms of our adjusted pre-tax operating income, a measure of our profitability.profitability calculated for incentive compensation purposes referred to in this proxy statement as "pre-tax, pre-profit provision income." Our pre-tax, pre-profit provision income is our operating income before taxes adjusted to take into account specific, pre-identified items. Due to this design, the annual incentive compensation earned by our executive officers will vary depending on the company's financial performance.performance of the company and of their business line, as applicable. At the outset of each year, the Committee grants performance-based awards that are earned based on our adjusted pre-tax, operatingpre-profit provision income. Consistent with prior years, each award granted to our executive officers for 20152016 was for an amount equal to 10% of our 2015 adjusted2016 pre-tax, operatingpre-profit provision income, subject to an aggregate limitation of 25% for the group as a whole. The Committee retains sole discretion to reduce the aggregate accrual rate as well as the amount allocated to each named executive officer, and historically the Committee has exercised this negative discretion.




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Executive Compensation: Compensation Discussion and Analysis


20152016 Annual Incentive Compensation Overview


•

Annual incentives aredirectly tied to our adjusted pre-tax, operatingpre-profit provision income. Increasing our profitability is a key objective for us as we seek to maximize long-term value for our shareholders.

Adjusted Pre-Tax, Pre-Profit OperatingProvision Income in 2015		Named Executive Officers' Annual Incentives in 2015Incentive Awards

•

OurBecause our pre-tax, pre-profit provision income in 2016 was up slightly as compared with 2015, the changes in our named executive officers' annual incentive compensation either decreased or remained flat in 2015 as compared2016 reflected individual compensation decisions made by our Compensation Committee with respect to 2014, reflecting the decrease in our adjusted pre-tax operating income during the year:business and individual performance and other considerations:



•

Our CEO, Mr. Duff's annual incentive compensation decreased 17%3.1%.

•

Our CFO, Ms. Schoneman's annual incentive compensation decreased 17%2.9%.

•

Our global co-heads of investment banking and capital markets, Messrs. AbrahamAbraham's and LaRue's annual incentive compensation remained flat, reflecting another very strong year in equities investment banking.decreased 16.0% and 25.8%, respectively.

•

Our head of asset management, Mr. Crawshaw'sFairman's annual incentive compensation decreased 28%increased 10.1%.



•

Between 45% and 60% of our named executive officers' annual incentive compensation is paid in the form of restricted compensation:



•

Of this restricted compensation, between 50% and 100% is received in restricted shares of our common stock.

•

Up tostock, and 50% of thisis paid in the form restricted compensation may be received in restricted shares of mutual funds, most of which are managed by our asset management business.investment fund shares.

•

All restricted compensation vests ratably over three years from the date of grant.




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Executive Compensation: Compensation Discussion and Analysis

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The Compensation Committee's Use of Discretion in Setting Annual Incentive Compensation


Although annual incentive compensation is based on company and business line profitability, the Committee exercises discretion that allows it to best align executive officer performance with pay during the year. The Committee believes that its ability to use discretion in setting annual incentive compensation is a critical feature of the company's annual incentive compensation program for the following reasons:

•

A formulaic annual incentive program based on predetermined metrics could fail to appropriately incentivize our executive officers from pursuing the strategic opportunities that unexpectedly arise in a human capital industry such as ours. For example, our executive officers may find opportunities during the year to hire personnel which may decrease short-term profitability but may be in the best long-term interests of their business. The Committee's use of discretion removes disincentives to taking advantage of such opportunities, while allowing it to hold management accountable for realizing specific results from those opportunities in subsequent years. For example, in 2016, the Committee determined to exclude a portion of the additional earnings contributed by Simmons during the year from consideration from the annual incentive compensation for the named executive officers with responsibility for our investment banking and capital markets business to account for the amount of capital that was invested in the business in connection with the acquisition and the returns we expect to receive on that capital investment.



•

Our annual incentive compensation program is designed to align risk and reward, and the Committee's use of discretion helps to achieve that goal. For example, in recent years the Committee has taken into consideration certain legal settlement costs when determining to reduce executive officers' annual incentive compensation.



•

We operate in a cyclical industry. The Committee's use of discretion allows it to take into consideration other, less quantifiable factors that impacted company and business line performance, and provides the flexibility to adjust annual incentive compensation for individual performance versus broader cyclical or market-driven factors that may have impacted results.



•

A significant portion of our executive officers' annual incentive compensation is deferred in time-vested restricted compensation, including Piper Jaffray restricted stock. The Committee believes that this time-vested restricted stock provides significant additional alignment between our executive officer and our company performance, as the ultimate value of the vested shares will be based on our stock price at the time of vesting.




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Executive Compensation: Compensation Discussion and Analysis

Calculation of Adjusted Pre-Tax, OperatingPre-Profit Provision Income

Adjusted pre-tax operatingPre-tax, pre-profit provision income for purposes of our annual incentive plan equals our total revenues less our total expenses before income taxes, adjusted to eliminate certain compensation and benefits expenses and certain other expenses, losses, income, or gains that are unusual in nature or infrequent in occurrence. The adjustments to eliminate certain expenses and losses that are unusual or infrequent in




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natureadjustments are established at the beginning of each year prior to granting the qualified performance-based awards, andawards. We believe that the exclusion of these items from pre-tax, operatingpre-profit provision income more accurately reflects our operating performance for a given year. For 2015,2016, adjustments included the elimination of: (i) losses from the $82.9 goodwill impairment that we recognized in our Asset Management segment during the year; (ii) net income attributable to noncontrolling interests; (iii) amounts expensed during the year under our annual incentive program for participating executive officers; (iv) amortization expense for cash and equity awards granted in connection with acquisitions; (v) amortization expense for acquisition-related intangibles; (vi) restructuring and integration costs; and (vii) amounts expensed during the year in connection with the PSUs granted to participating executive officers.

In applying the formula described above, our adjusted pre-tax, operatingpre-profit provision income for 20152016 was $117.3$122.4 million, which represented an 8.2% decreasea 4.3% increase from the corresponding figure from 2014.2015. The adjusted pre-tax, operatingpre-profit provision income for 2015 of $117.3 million2016 resulted in a maximum amount payable to each award recipient of $11.7$12.2 million, subject to a maximum aggregate payout of $29.3$30.6 million for the group as a whole. Consistent with prior years, the Committee paid less than the maximum amount payable for 2015,2016, paying an aggregate of $20.1$16.9 million, or 17.1%13.8% of our adjusted pre-tax, operatingpre-profit provision income for 2015.2016. The table below sets forth a calculation of our adjusted pre-tax, operatingpre-profit provision income for 20152016 (in thousands):

Operating incomeloss before taxes		$86,423($30,874)
Losses related to the impairment of goodwill and other intangible assets		$82,900
Removal of net income applicable to noncontrolling interests		($6,407)8,206)
Expense under our annual incentive program		$20,03516,851
Amortization expense for cash or equity awards (including in the MFRS plan) granted in connection with acquisitions		$3,28027,636
Amortization expense for cash awards granted in connection with acquisitionsAmounts expensed as a result of amortization of acquisition-related intangibles		$89421,214
Restructuring and integration costs		$10,65210,206
Expense for PSU grants		$2,4512,678
​	​	​
Adjusted pre-tax operatingPre-tax, pre-profit provision income		$117,329122,405
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Executive Compensation: Compensation Discussion and Analysis

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Relationship between Performance and Annual Incentive Pay

The design of our annual incentive program is intended to directly align pay with performance, which we measure in terms of our adjusted pre-tax, operatingpre-profit provision income. Due to this design, the annual incentive compensation earned by our executive officers will vary depending on the company's adjusted pre-tax, operating income.pre-profit provision income and the Committee's evaluations of individual executive officer and business line performance. The total annual incentives received by our named executive officers for our 20152016 performance decreased 9.9%10.9%, while our adjusted pre-tax, operatingpre-profit provision income decreased 8.2%increased 4.3%, each as compared to the corresponding figure from 2014. 2015. The total annual incentives paid to our executive officers decreased in 2016 as a result of the Committee's exercise of discretion to reduce annual incentive compensation based on certain compensation considerations.

The following chart highlights how the annual




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incentive compensation paid to our CEO over the past three years has been aligned with our performance in terms of our adjusted pre-tax, operatingpre-profit provision income:

Adjusted Pre-Tax, Pre-Profit OperatingProvision Income History		CEO Annual Incentive Compensation History(1)
(dollar amounts below are in thousands)

(1)

Amounts shown correspond to the figures provided in the Supplemental Compensation Table above.




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Executive Compensation: Compensation Discussion and Analysis

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2016 Compensation Determinations and Relevant Factors

After the Committee reviewed our adjusted pre-tax, operatingpre-profit provision income and followed the processes and considered the factors described above under "—SettingHow Compensation Decisions are Made," the following were the material factors that influenced 2015the Committee's determination of 2016 annual incentive compensation at an individual level for each of the named executive officers:

•

Andrew S. Duff, chairman and chief executive officer.  Mr. Duff's 2015 annual incentive compensation was down approximately 17% from 2014, reflecting the 8.2% decrease in our adjusted pre-tax operating income and 17% decrease in net income from 2014. Although down year-over-year, Mr. Duff's annual incentive compensation was positively influenced by our strong operating results, including record net revenues of $672.9 million, net income of $52.1 million, record advisory services (i.e., mergers and acquisitions) revenues of $209.2 million, and equity financing revenues exceeding $100 million for the second consecutive year. We view our strong annual operating performance in 2015, and our execution against our strategic growth strategy during the year with the expansion of our investment banking business into the energy and financial institutions sectors to be a result of his leadership and strategic direction. With the acquisitions of Simmons, River Branch, and GKST we have continued our path of investing in higher margin businesses, managing our costs, and improving productivity and performance. As a result of Mr. Duff's leadership, in 2015 we were positioned to take advantage of accommodative market conditions for our advisory services and public finance businesses, and pursue strategic opportunities that we believe will provide a significant foundation for further growth in future years.



•

Debbra L. Schoneman, chief financial officer.  Ms. Schoneman's annual incentive compensation was down approximately 17% from 2014, reflecting the decrease in our adjusted pre-tax operating income in 2015. Although down year-over-year, Ms. Schoneman's annual incentive compensation was positively influenced by her leading role in our strong operating performance in 2015 and execution on our 2015 strategic and financial plan. The Company also benefited from her leadership and her team's

		Andrew S. Duff Chairman and CEO
​	​	​
Andrew S. Duff		2016 Annual Incentive Compensation: Mr. Duff's 2016 annual incentive compensation was down 3.1% from 2015. Although we achieved record adjusted operating results in 2016, Mr. Duff's incentive compensation decreased slightly from 2015 primarily because of the Committee's exercise of its discretion. 2016 Individual Performance Considerations: • Achieved record 2016 adjusted earnings of $72.6 million, 10% higher than 2015. • Achieved record 2016 adjusted net revenues of $736.3 million, 11% higher than 2015. • Led the successful expansion of our investment banking business into the energy and financial institutions sectors through organic hiring efforts and strategic acquisitions, including that of Simmons. The impact of these strategic efforts contributed to our record adjusted 2016 results. • Drove our business strategy of increasing our share of revenues from our higher margin advisory services and public finance businesses, which, combined with our asset management business, increased to 65% of our adjusted net revenues during the year. Mr. Duff's annual incentive compensation was down slightly year-over-year as a result of the Committee's determination to exclude a portion of the additional earnings contributed by Simmons from Mr. Duff's annual incentive compensation to account for the amount of capital that was invested in the business in connection with the acquisition. Mr. Duff's annual incentive compensation was positively influenced by our strong operating results, including record adjusted net revenues and net income, as well as record advisory services (i.e., primarily mergers and acquisitions) revenues of $305 million and debt financing revenues of $115 million, two areas Mr. Duff has prioritized for growth investments. Our 2016 operating results were driven by Mr. Duff's long-term strategic decision to invest in and increase our share of revenues from our higher margin advisory services and public finance businesses, and expand our investment banking business into the energy and financial institutions sectors. In determining Mr. Duff's 2016 annual incentive compensation, the Committee took all of these factors into account.




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performance in the strategic acquisitions of Simmons, River Branch, and GKST that we undertook during the year, her leadership of capital and risk management initiatives, the quality of our financial reporting, and her contributions to our overall financial strength and performance in 2015. These contributions also aided our continued execution on our strategic initiatives of investing in higher margin businesses, managing costs, and optimizing our capital allocation and deployment.

•

Chad R. Abraham and R. Scott LaRue, global co-heads of investment banking and capital markets.​

Executive Compensation: Compensation Discussion and Analysis

  Messrs. Abraham's and LaRue's annual incentive compensation remained flat compared to 2014, which reflects the strong performance of our mergers and acquisitions and capital markets businesses in both 2014 and 2015. For the second consecutive year, we achieved record advisory services revenues, including $209.2 million in 2015, which is a result of their execution on our strategic efforts over the past few years through investments in our advisory services business and their development, retention, and hiring of senior bankers. In addition, our capital markets business achieved equity financing revenues exceeding $100 million for the second consecutive year despite more challenging market conditions in the second half of 2015. The company also benefitted from the leadership of Messrs. Abraham and LaRue with respect to several strategic initiatives during 2015 that we believe will significantly contribute to our future growth. This includes the expansion of our investment banking business into the energy and financial institutions sectors through our acquisitions of Simmons and River Branch.​


		Debbra L. Schoneman CFO
​	​	​
Debbra L. Schoneman • Christopher D. Crawshaw, head of asset management.  Mr. Crawshaw's annual incentive compensation was down approximately 28% from 2014, reflecting the 28% decrease in our asset management segment pre-tax operating income from 2014, exclusive of losses on firm investments in our asset management funds. The decline in our asset management results in 2015 was due to challenging market conditions that resulted in asset depreciation, especially in our products impacted by the downturn that the energy sector experienced during the year. Mr. Crawshaw's annual incentive compensation was significantly influenced by his leadership of our asset management segment through challenging market conditions and strategic steps he implemented to position the business for future growth. Based on the information described above, the Committee evaluated the performance of the chief executive officer and determined his annual incentive compensation. The Committee then assessed relative levels of responsibility and contribution during the year for each of the other named executive officers, and approved 2015 annual incentive compensation. Equity Awards Consistent with our philosophy regarding executive stock ownership, the annual incentive compensation for the named executive officers was paid out in a combination of cash and equity. The equity portion of our annual incentive awards, or "restricted compensation," takes the form of restricted shares of our common stock, subject to the named executive officers' ability to elect to allocate 10 to 50% (or 75% in the case of our head of asset management) of the amount that they would have received in restricted stock in mutual fund restricted shares pursuant to the MFRS Plan. We believe restricted stock awards, as compared to other forms of equity compensation such as stock options, best align the interests of our executive officers with those of shareholders by ensuring that the same fluctuations in our stock that affect our shareholders also directly affect the value of the awards granted to the executive officers.		2016 Annual Incentive Compensation: Ms. Schoneman's 2016 annual incentive compensation was down 2.9% from 2015. Although we achieved record adjusted operating results in 2016, Ms. Schoneman's incentive compensation decreased slightly from 2015 primarily because of the Committee's exercise of its discretion. 2016 Individual Performance Considerations: • Led our strategic and financial plan, including firm-wide expense management. • Managed our capital and risk management, including a firm-wide risk assessment and risk management framework review. • Led her team's successful accounting and control integration of Simmons and other recent acquisitions. • Led capital management initiatives, including with respect to our Board's decision to initiate a quarterly dividend in February 2017. Ms. Schoneman's annual incentive compensation was down slightly year-over-year as a result of the Committee's determination to exclude a portion of the additional earnings contributed by Simmons during the year from Ms. Schoneman's annual incentive compensation to account for the amount of capital that was invested in the business in connection with the acquisition. Ms. Schoneman's annual incentive compensation was positively influenced by her leading role in our strong operating performance in 2016 and execution on our 2016 strategic and financial plan. During the year, she led initiatives aimed at managing and reducing our expenses, and conducting a firm-wide risk assessment and risk management review that improved our view of our company's primary risks. The company also benefited from her leadership and her team's performance in the integration of Simmons. She led our capital management and allocation initiatives during the year, including our Board's decision to initiate a quarterly dividend in February 2017. In determining Ms. Schoneman's 2016 annual incentive compensation, the Committee took all of these factors into account.




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Executive Compensation: Compensation Discussion and Analysis

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		Chad R. Abraham and R. Scott LaRue Global Co-Heads of Investment Banking and Capital Markets
​	​	​
Chad R. Abraham R. Scott LaRue		2016 Annual Incentive Compensation: Mr. Abraham's 2016 annual incentive compensation was down 16.0% from 2015, and Mr. LaRue's 2016 annual incentive compensation was down 25.8% from 2015. Although our investment banking and capital markets business achieved record advisory services results in 2016, Mr. Abraham's and Mr. LaRue's respective annual incentive compensation decreased significantly from 2016 primarily because of the Committee's exercise of its discretion and recognition of the increased capital invested in our investment banking and capital markets business related to the Simmons acquisition. 2016 Individual Performance Considerations: • Achieved record advisory services revenues of $305 million, nearly all of which was attributable to mergers and acquisition and debt capital markets transactions under their management. • Led growth of our advisory services business of over 250% since 2013. • Led our efforts to successfully integrate Simmons and expand our investment banking platform into the energy and financial institutions sectors. Messrs. Abraham's and LaRue's annual incentive compensation was down significantly year-over-year as a result of the Committee's determination to exclude a portion of the additional earnings contributed by Simmons during the year from their annual incentive compensation to account for the amount of capital that was invested in the business in connection with the acquisition. Although down significantly, Messrs. Abraham's and LaRue's respective annual incentive compensation was positively influenced by our achievement of record advisory services revenues of $305 million, nearly all of which was attributable to mergers and acquisition and debt capital markets transactions under their management, and their leadership of our acquisition and integration of Simmons, through which we expanded our investment banking business into the energy sector, and our growth efforts through which we expanded into the financial institutions sector. A significant component of our long-term strategy is the growth of our higher-margin advisory services business. Under Messrs. Abraham's and LaRue's leadership, this business has grown over 250% since 2013 as we have made strategic investments for growth and devoted significant efforts to developing, retaining, and hiring senior bankers. In determining Messrs. Abraham's and LaRue's 2016 annual incentive compensation, the Committee took all of these factors into account. The difference in the annual incentive compensation between Mr. Abraham and Mr. LaRue was due to a different apportionment of management responsibilities undertaken by the two during the year.




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Executive Compensation: Compensation Discussion and Analysis

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		Frank E. Fairman Head of Public Finance
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Frank E. Fairman		2016 Annual Incentive Compensation: Mr. Fairman's 2016 annual incentive compensation was up 10.1% from 2015. 2016 Individual Performance Considerations: • Achieved record 2016 revenues for our public finance business, including record debt financing revenues of $115 million, 26% higher than 2015. • Led growth in public finance business by 110% since 2011. • Achieved a #8 ranking by Thomson Reuters in 2016 as measured by sole or senior negotiated and private placement municipal transaction par value. • Achieved a #5 and #6 ranking by Thomson Reuters in 2016 as measured by the number of issuances and total par value, respectively, in which the company acted as a financial advisor. Mr. Fairman's annual incentive compensation was positively influenced by our achievement of record public finance debt financing of $115 million, nearly all of which was attributable to our public finance investment banking business under his management, as well as strong results by our municipal financial advisory business. A significant component of our long-term strategy is the growth of our higher-margin public finance business. Under Mr. Fairman's leadership, we have grown our public finance business by 110% since 2011 as Mr. Fairman has focused on developing a broad and diversified public finance franchise, hiring senior bankers, and growing our public finance business in the senior living and healthcare sectors. The Committee took all of these considerations into account in determining Mr. Fairman's annual incentive compensation for 2016.

Annual Incentives Paid in Restricted Compensation

Of the annual incentives that are awarded to our executive officers for our profitability, between 40 and 55% is paid in cash and 45 to 60% is paid in time-vested restricted compensation, with our CEO receiving 60% of his annual incentives in time-vested restricted compensation, our CFO receiving 50% of her annual incentives in time-vested restricted compensation, and the rest of our named executive officers receiving 45% of their annual incentives in restricted compensation. Of this time-vested restricted compensation, 50% is received in restricted shares of our common stock, and 50% is received in restricted investment fund shares pursuant to our MFRS Plan. This restricted compensation vests ratably over three years. By paying a portion of annual incentives in time-vested restricted stock, our executive officers are incentivized to achieve long-term returns for our shareholders, as the value of the restricted stock that vests is tied to the performance of our stock price over time. The number of shares of restricted stock granted to each officer was determined by dividing the total dollar value designated to be paid out to the executive officer in restricted stock by the closing price of our common stock on the NYSE on February 16, 2016, adjusted for each named executive officer's election to participate in the MFRS Plan.15, 2017. The restricted stock granted to the named executive officers vests in three equal annual installments.installments from the date of grant.




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Executive Compensation: Compensation Discussion and Analysis

As previously discussed in the section "—Overview of Changes to Executive Compensation Program," beginning with 2017 annual incentive compensation, which will be granted in February 2018, our Compensation Committee willreducethe restricted compensation andincreasethe PSU awards received by our executive officers. This change will result in our executive officers receiving an equal amount of restricted compensation and PSU awards, meaning the executive officer will have to earn an increased portion of their total compensation through the PSU awards tied to adjusted ROE and relative TSR performance metrics.

Mutual Fund Restricted Share Plan

The Mutual Fund Restricted Share Plan, or MFRS Plan, allows recipients of restricted stock of the company to instead elect to receiveprovides that a portion of the equity portion of theirrestricted compensation granted for annual incentive compensation is paid in the form of restricted shares of selected investment funds, threetwo of which are mutual funds managed by our asset management business. In 2015,2016, each named executive officer was permitted to receive 10% toreceived 50% of their restricted compensation in investment fund restricted shares, except that our head of asset management was permitted to receive up to 75% of his restricted compensation in investment fund restricted shares. The mutual fund restricted shares have the same restrictions that would apply to restricted shares of our common stock and vest ratably over three years.years from the date of grant. We adopted the MFRS Plan to provide our executives an opportunity to diversify the restricted compensation they receive, and believe the plan will help us attract and retain top talent. Historically,In addition, two of the investment funds offered by the MFRS Plan has included only investment fundsare managed by our asset management business, but the Committee approved the addition of two non-affiliated funds in 2016 in order to increase the ability of participants to diversify the portion of their restricted compensation in the MFRS Plan, while still providingwhich provides our employeesexecutive officers the opportunity to invest alongside the clients of our asset management business.

Long-Term Incentive CompensationPSU Awards

Since 2012, the Committee has awarded our executive officers long-term incentive compensation in the form of a PSU award. In May 2015,2016, the Committee awarded theour named executive officers a long-term incentivePSU award that vests based on the achievement of certain performance-based metrics that our program has used since 2012: (1) absolute TSR; and (2) relative TSR, as measured against a broad index of financial services companies. The grant date fair value of the May 2016 award is reflected in the formSupplemental Compensation Table above for 2015 compensation.

Following our 2016 annual meeting of PSUsshareholders, we sought engagement with our 25 largest institutional shareholders for their perspectives on our executive compensation program. Some shareholders expressed to us that our PSU award should contain an operating performance metric in addition to absolute and relative TSR. Other shareholders expressed the fourth consecutive year.view that our PSU award program was overshadowed by our annual incentive program. In response to this shareholder feedback, the Committee made two changes to our PSU award program beginning in 2017. First, the Committee has determined to increase the size of the PSU award program and reduce the amount of time-vested restricted compensation received by executive officers. Second, the Committee has added adjusted ROE as a performance metric to our PSU awards, and has eliminated absolute TSR. The PSUs grantedCommittee added adjusted ROE to the award because increasing our profitability and making efficient use of capital are key priorities for our company, and management and the Board uses adjusted ROE to inform its strategic decision-making process.

As discussed above in 2015the section titled "—Annual Incentives Paid in Restricted Compensation," beginning with annual incentive compensation awarded in February 2018 for 2017 performance, the amount of each executive officer's PSU award will be earned baseddetermined in relationship with his or her annual incentive compensation. In anticipation of this change, the Committee granted the 2017 PSU award on our total shareholder return measured over a 36-month performance period that began on MayFebruary 15, 2015 and ends on May 14, 2018. Half2017. The grant date fair value of the awards will be earned based on our total shareholder return (or "TSR") compared to our peer group andFebruary 2017 award is reflected in the other halfSupplemental Compensation Table above for 2016 compensation.




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Executive Compensation: Compensation Discussion and Analysis

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2015May 2016 PSU Award Overview


•

PSUs are intended to drive long-term shareholder returns, and vestThe May 2016 PSU award vests only if certain (1) absolute TSR, and (2) relative TSR metrics are met.



•

Of the PSUs granted in 2012, 94.3%2013, 100% of the PSUs vested in 20152016 based on 110.9%34.9% absolute TSR and a 69.3%an 84.5% TSR percentile ranking among our peer group.

Piper Jaffray Relative TSR		Piper Jaffray Absolute TSR


February 2017 PSU Award Overview


•

The February 2017 PSU award vestsonly if certain (1) adjusted ROE, and (2) relative TSR metrics are met.



•

The February 2017 PSU award provides for threshold, target, and maximum vesting that would allow executive officers at vesting to receive up to 150% of the target shares granted.

Piper Relative TSR		Piper Jaffray Adjusted ROE

Note: Each vesting metric provides for interpolation between points in the tables above on a straight-line basis (from threshold to target and from target to maximum).




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Executive Compensation: Compensation Discussion and Analysis

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The outstanding PSUsPSU awards made in May 2013 and May 2014 use substantially the same peer group as described above under "—SettingHow Compensation Decisions are Made—Compensation Peer Group.Group," with the exception of the two companies added to our peer group this year. Beginning with the May 2015 grant, the PSU awards use the companies comprising the KBW Capital Markets Index as of the date of grant as the peer group for the relative TSR performance measure.

TSR forThe 2017 PSU awards are intended to directly align the interests of our named executive officers with those of our shareholders by requiring that the company achieve certain shareholder returns and operating performance in order to vest. The Committee believes that the 2017 PSU award program will incentivize our executive officers to achieve superior financial performance as measured by adjusted ROE and shareholder returns as compared with a broad index of financial services companies.

The 36-month performance period is designed to provide management an incentive to focus on our strategic direction, sustained performance, and long-term value creation. The Committee established the vesting performance metrics with the intent that the executive would only receive significant additional long-term incentive compensation if we significantly outperform the broad index of financial services companies and achieve a superior adjusted ROE over the performance period.

For purposes of the awards, TSR is calculated based on the average closing price during the trailing 60 calendar days as of the beginning and the end of the performance period, and takes into account dividends paid during the performance period. Adjusted ROE under the PSU awards is a non-GAAP measure that is calculated based on our reported net income adjusted to eliminate certain expenses and losses.

The PSUs do not provide the recipient any rights as a shareholder. As a result, the awards do not includeshareholder such as the right to vote or receive dividends on any shares subject to the PSUs.

The Beginning with the February 2017 PSU awards are intended to directly align the interests of our named executive officers with those of our shareholders by directly tying the value of the award to our stock performance. The Committee decided to measure performance both on a relative basis compared to the peer group as well as on an absolute basis to balance the desire to reward relatively superior performance, while recognizing the difficulty of constructing a peer group of comparable middle-market investment banks with material asset management operations and seeking to reward the named executive officers for creating overall shareholder value.

The 36-month performance period is designed to provide management an incentive to focus on our strategic direction and long-term value creation. The Committee established the TSR measurements for earninggrant, the PSUs with the intentwill have dividend equivalent rights, which will result in dividends accruing on earned shares that the PSUs would only reward recipients for strong long-termare paid out when those shares ultimately vest. No dividends are paid on unvested performance with the full numbershares.




Table of PSUs being earned only if we significantly outperform our peer group and satisfy certain thresholds of absolute TSR. In connection with 2015's grant, in light of the change to the KBW Capital Markets Index as the peer group for the relative TSR vesting performance for the awards, the Committee lowered the relative performance threshold at which some portion of the PSU's vest from the 50^th percentile to the 30^th percentile, and lowered the threshold to receive the vesting of the full portion related to relative TSR from the 75^th percentile to the 70^th percentile. The number of PSUs granted to each named executive officer was determined by dividing a dollar value for the executive's award by the fair market value of a PSU, rounded up to the nearest whole PSU. The fair market value of $21.83 for each PSU granted in 2015 was determined using a Monte Carlo simulation, which assumed a risk-free interest rate of 0.90 percent and expected stock price volatility of 29.8 percent. Because a portion of the award vesting depends on our TSR relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between our company and the peer group. The expected stock price volatility assumptions were determined using historical volatility as correlation coefficients can only be developed through historical volatility. The risk-free interest rate was determined based on three-year U.S. Treasury bond yields. The value of the PSUs awarded was $600,019 in the case of Mr. Duff, $300,010 in the case of Ms. Schoneman, and $200,006 for the other named executive officers.Contents

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2016 Pay Mix

As illustrated below, the pay mix for all 20152016 elements of compensation received by our chief executive officerCEO and by our other named executive officers, as disclosed in the Supplemental Compensation Table




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above (including the value of the PSU awards granted during the year)in February 2017) was significantly weighted toward performance-based compensation:

		20152016 OTHER NAMED
		EXECUTIVE
2015                        2016 CEO		OFFICERS
PAY MIX		PAY MIX

We believe the mix of base salary relative to performance-based compensation in the form of annual incentives and PSUsPSU awards illustrated above appropriately balances our goal of aligning pay for performance without encouraging undue risk takingrisk-taking that can arise from compensation excessively weighted toward performance-based elements. We also believe the relative mix of base salary and performance-based compensation is generally in line with the mix paid by our peer group to similarly situated executive officers. The Committee annually reviews our executive compensation process to determine the allocation of our executive compensation between cash and equity.

Each executive officer receives a significant portion of their performance-based compensation in the form of restricted compensation. This restricted compensation includes both restricted shares of our common stock as well as restricted shares of selected investment funds to the extent the executive officer chooses to participate in the MFRS Plan, which in 2016 was capped at a maximum of 50% of restricted compensation forunder our named executive officers, with the exception of our head of asset management who was permitted to elect to receive up to 75% of his restricted compensation in the MFRS Plan. With respect to the 20152016 annual incentive awards, the portion payable to the named executive officers in restricted compensation was 60% for our chief executive officer,CEO, 50% for our chief financial officer,CFO, and 45% for each of our co-heads of investment banking and capital markets and head of asset management.public finance. This mix of forms of annual incentive compensation was consistent with our practice for 2014.2015.

Our chief executive officerCEO receives a relatively greater portion of his performance-based and overall compensation in the form of restricted compensation due to his greater ability to influence our financial performance as well as to most closely align his interests with those of our shareholders through equity ownership. For the other named executive officers, the mix of cash compensation versus restricted compensation, which includes both restricted stock as well as restricted shares of selected investment funds to the extent the executive officer chooses to participate in the MFRS Plan, is designed to provide an appropriate and competitive amount of incentives for positive performance, while leaving a sufficient level of




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long-term value creation. The balance of these interests is determined by the Committee in its discretion, considering factors including reference to pay practices at our peer group.

Other Compensation

Our executives receive only limited perquisites. Executive officers receive limited additional compensation in the form of reimbursement of dues for club memberships used for business purposes and certain insurance premiums. The cost of these perquisites is included in the "All Other Compensation" column of the Summary Compensation Table.Table in this proxy statement.

We also maintain an international assignment policy that provides benefits for employees working on non-permanent assignments outside their home countries. Under the policy, we assume responsibility for any additional U.S. or foreign taxes that employees incur as a direct result of international assignments, and the employees are responsible for the amount of taxes they would have incurred had they continued to live and work exclusively in the United States. We maintain this policy to encourage employees to accept international assignments that our management believes are in the best interests of our company by mitigating potentially adverse tax consequences that otherwise could result from accepting such assignments. All employees are eligible to participate in our international assignment policy. In 2015,2016, we made certain tax equalization payments on behalf of and to Mr. LaRue as a result of a prior assignment in Hong Kong, as well as other payments on behalf of Mr. LaRue for tax consulting and preparation services during the year.

Some of our executive officers also receive payments from time to time related to historical deferred compensation programs, typically structured as investments made by the company on behalf of certain employees. Certain key employees were eligible to participate in these programs, under which participants were granted one or more deferred awards that were deemed invested in certain measuring investments. No new awards have been granted under these programs since 2000, and participation in these programs is frozen. Following a liquidity event for a particular investment, the participant receives a benefit payment based on the deemed return to the participant and payment of the portion of the participant's account that was deemed invested. Participants may continue to receive payments under the plans until a liquidity event has occurred with respect to each measuring investment. Messrs. Abraham and LaRue received the payouts set forth in the Summary Compensation Table in 20152016 in connection with their participation in these programs.

Prior to becoming our head of asset management, Mr. Crawshaw participated in a long-term incentive compensation program established for certain key employees of our asset management business. Mr. Crawshaw is no longer eligible to receive new awards under this program, but he does receive payments relating to awards previously made. In 2015, Mr. Crawshaw received the payout set forth in the Summary Compensation Table in connection with his participation in this program.

Termination and Change-in-Control Arrangements

We do not have any separate change-in-control agreements (often referred to as "golden parachute" arrangements) that would pay a certain multiple of an executive's compensation (e.g., base salary) upon a change-in-control of the company. In certain instances, award agreements and plans may include provisions regarding the payment of compensation in the event of a termination of employment or a change-in-control of our company, as follows:

•

Following a change-in-control, all outstanding restricted stock and mutual fund restricted shares that were granted before May 8, 2013 will vest and all restrictions on the restricted




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stock and mutual fund restricted shares will lapse.

•

All awards granted under the Incentive Plan on or after May 8, 2013, contain a "double trigger" provision that provides that awards that are continued, assumed or replaced in connection with a change-in-control will vest, be deemed earned or have restrictions lapse only if the award recipient's employment is terminated involuntarily (other than for "cause") within 24 months of the change-in-control.





•

If a change-in-control occurs during the performance period for the PSUs, then each PSU will be converted into a share of restricted stock with time-based vesting, and, if the executive's employment with us or one of our affiliates is terminated after the change-in-control and prior to the end of the performance period by us or one of our affiliates without cause, by the executive for good reason, or in connection with the executive's death, disability or retirement, then all restrictions on such shares of restricted stock will lapse upon such termination.



•

Under the Incentive Plan, following a termination of employment (other than as a result of a change-in-control), our restricted stock awards granted as part of our annual incentive program will continue to vest so long as the termination was not for cause and the employee does not violate certain post-termination restrictions for the remaining vesting term of their awards.



•

Executive officers who are terminated during the year (other than as a result of a change-in-control) will receive cash and equity compensation for that year under our annual incentive program in the discretion of the Committee.



•

Our annual performance awards, including the annual qualified performance-based awards under the annual incentive program, will be considered to be earned and payable in full upon a change-in-control, and the awards will be settled in cash or shares, as determined by the Committee, as promptly as practicable. Because annual incentive award payouts are based on adjusted pre-tax, operatingpre-profit provision income, which varies from year to year, and because the Committee historically has needed to reduce the size of some awards to comply with the limits on the aggregate amount of incentive compensation that may be paid under the annual incentive program, the specific amounts that would be payable in the event of a change-in-control are indeterminable.

Compensation Policies


Executive Stock Ownership and Prohibition on Hedging

We have adopted stock retention guidelines to ensure that our executives maintain a meaningful equity stake in the company, which aligns management's interests with those of our shareholders. The guidelines also help to drive long-term performance and strengthen retention. Our stock retention guidelines provide that our executives should retain at least 50% of the equity awarded to them as executive officers through our Incentive Plan, or acquired upon exercise of stock options, net of taxes and exercise costs. The guidelines apply upon becoming an executive officer and remain in effect while the individual serves as an executive officer. Furthermore, all of our executive officers, including our named executive officers, are prohibited from hedging any shares of Piper Jaffray Companies common stock, even shares they can freely sell.




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Equity Grant Timing Policy

In 2006, we established a policy pursuant to which equity grants to employees will be made only once each quarter, on the 15^th calendar day of the month following the public release of earnings for the preceding quarter (or, if the 15^th calendar day falls on a weekend or holiday, on the first business day thereafter). This policy covers grants made by the Committee as well as grants made by our chief executive officerCEO to employees other than executive officers pursuant to authority delegated to him by the Committee. We established this policy to provide a regular, fixed schedule for equity grants that eliminates the exercise of discretion with respect to the grant date of employee equity awards.

Policy on Qualifying Compensation for Deductibility

Section 162(m) of the Internal Revenue Code limits deductions for non-performance-based annual compensation in excess of $1 million paid to our named executive officers who served as executive officers at the end of the preceding fiscal year. Our policy is to maximize the tax deductibility of compensation paid to these officers when it is consistent with our compensation philosophy. The Incentive Plan and the awards we grant thereunder, including our annual incentive awards, are generally designed and administered to qualify compensation as "performance-based" to ensure that the tax deduction is available to the company. From time to time the Committee may authorize payments to the named executive officers that may not be deductible, if they believe such payments are in the interests of shareholders to satisfy our primary objective of attracting and retaining top talent.




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Compensation Committee Report


The Committee has reviewed and discussed the Compensation Discussion and Analysis with management and has recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in the company's 20152016 year-end disclosure documents.

Compensation Committee of the Board of Directors of Piper Jaffray Companies
Michele Volpi,Chairperson
William R. Fitzgerald
Sherry M. Smith
Scott C. Taylor




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Summary Compensation Table


The following table contains compensation information for our chief executive officer,CEO, our chief financial officer,CFO, and our three other most highly compensated executive officers.officers (each, a named executive officer).

Name & Principal Position		Year			Salary ($)			Stock Awards(1) ($)			Non-Equity Incentive Plan Compensation(2) ($)			All Other Compensation(3) ($)			Total ($)
Name and Principal Position																					Year			Salary ($)			Stock Awards(1) ($)			Non-Equity Incentive Plan Compensation(2) ($)			All Other Compensation(3) ($)			Total ($)
Andrew S. Duff		​	2015		​	650,000		​	2,058,662		​	2,098,200		​	194,599		​	5,001,461			​	2016		​	650,000		​	2,536,851		​	2,736,475		​	66,783		​	5,990,109
Chairman and		​	2014		​	650,000		​	1,700,913		​	3,403,400		​	312,136		​	6,066,449			​	2015		​	650,000		​	2,058,662		​	2,098,200		​	194,599		​	5,001,461
CEO		​	2013		​	650,000		​	1,444,528		​	1,957,120		​	99,858		​	4,151,506			​	2014		​	650,000		​	1,700,913		​	3,403,400		​	312,136		​	6,066,449
Debbra L. Schoneman			2015			500,000			712,029			1,027,500			59,724			2,299,253				2016			500,000			642,543			997,313			22,896			2,162,752
Chief Financial Officer			2014			500,000			490,020			1,236,000			34,028			2,260,048
CFO																						2015			500,000			712,029			1,027,500			59,724			2,299,253
			2013			500,000			498,052			570,000			17,381			1,585,433				2014			500,000			490,020			1,236,000			34,028			2,260,048
Chad R. Abraham		​	2015		​	425,000		​	1,116,936		​	3,158,125		​	192,473		​	4,892,534			​	2016		​	425,000		​	1,116,898		​	2,654,375		​	53,635		​	4,249,908
Global Co-Head of		​	2014		​	425,000		​	948,165		​	3,158,125		​	340,003		​	4,871,293			​	2015		​	425,000		​	1,116,936		​	3,158,125		​	192,473		​	4,892,534
Investment Banking		​	2013		​	425,000		​	520,660		​	1,626,875		​	131,182		​	2,703,717			​	2014		​	425,000		​	948,165		​	3,158,125		​	340,003		​	4,871,293
and Capital Markets		​			​			​			​			​			​				​			​			​			​			​			​
Christopher D. Crawshaw			2015			550,000			630,481			1,061,750			280,997			2,523,228
Head of Asset Management(4)
Frank E. Fairman																						2016			425,000			624,632			1,609,675			17,580			2,676,887
Head of Public Finance(4)
R. Scott LaRue		​	2015		​	425,000		​	1,116,936		​	3,158,125		​	270,341		​	4,970,402			​	2016		​	425,000		​	1,118,898		​	2,334,375		​	409,805		​	4,288,078
Global Co-Head of Investment		​	2014		​	425,000		​	734,406		​	3,158,125		​	238,942		​	4,556,473			​	2015		​	425,000		​	1,116,936		​	3,158,125		​	270,341		​	4,970,402
Banking and Capital Markets		​	2013		​	425,000		​	531,897		​	1,840,625		​	343,787		​	3,141,309			​	2014		​	425,000		​	734,406		​	3,158,125		​	238,942		​	4,556,473

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(1)

The entries in the "Stock Awards" column reflect the aggregate grant date value of the restricted stock awards and PSUs granted during the year2016 computed in accordance with FASB ASC Topic 718. SEC rules do not permit inclusion in a given year of stock awards attributable to a particular year's performance, as is the case for salary and non-equity incentive plan amounts. See Note 2221 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 20152016 for the assumptions used in the valuation of the awards granted during 20152016 in accordance with FASB ASC Topic 718.



(2)

The amounts in this column include for the applicable year (1) the cash compensation earned under our annual incentive program and (2) the portion of the annual incentive plancompensation earned during the year and paid in restricted compensation in the form of restricted investment fund restricted shares under our MFRS plan rather than(which was 50% of the restricted sharescompensation for 2016 annual incentive




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compensation). The named executive officers elected to have the following amounts earned in 20152016 were paid to themthe named executive officers in the form mutualof restricted investment fund restricted shares: Mr. Duff: $484,200;$1,172,775; Ms. Schoneman: $342,500;$332,438; Mr. Abraham: $916,875;$770,625; Mr. Crawshaw: $308,250;Fairman: $467,325; and Mr. LaRue: $916,875.$680,625. The mutual fund restricted shares vest in three equal annual installments.

installments from the date of grant.

(3)

All other compensation for 20152016 consists of the following:

Form of All Other Compensation ($)		Andrew S. Duff			Debbra L. Schoneman			Chad R. Abraham			Christopher D. Crawshaw			R. Scott LaRue
Club membership dues		​	4,494		​	—		​	—		​	5,343		​	—
401(k) matching contributions			7,110			7,110			7,110			7,110			7,110
Life and long-term disability insurance premiums		​	1,212		​	708		​	708		​	708		​	1,212
Dividends from Mutual Fund Restricted Share Program			181,083			50,164			122,655			48,777			149,367
Employer Health Savings Account Contribution		​	700		​	950		​	950		​	950		​	950
Other			—			792			61,050			217,149			111,701

Form of All Other Compensation ($)		Andrew S. Duff			Debbra L. Schoneman			Chad R. Abraham			Frank E. Fairman			R. Scott LaRue
Club membership dues		​	4,494		​	—		​	—		​	2,400		​	—
401(k) matching contributions			7,110			7,110			7,110			7,110			7,110
Life and long-term disability insurance premiums		​	1,212		​	708		​	708		​	1,212		​	1,212
Dividends from Mutual Fund Restricted Share Program			53,717			14,628			15,580			6,558			39,103
Employer Health Savings Account Contribution		​	250		​	450		​	450		​	300		​	950
Other			—			—			29,787			—			361,430




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The "Other" amounts identified in the table above reflect (i) the cost of airfare for Ms. Schoneman's spouse to attend a company retreat held during 2015; (ii) a payment of $51,515$29,787 to Mr. Abraham from his proportionate share of a venture capital fund carried interest held by the company as part of a compensation program implemented prior to our spin-off from U.S. Bancorp on December 31, 2003; (iii)(ii) a payment of $9,535 to Mr. Abraham and $2,711$1,568 to Mr. LaRue related to a legacy deferred compensation program adopted prior to our spin-off from U.S. Bancorp, and described above in "Compensation Discussion and Analysis—Executive Compensation Program and Payouts—Other Compensation"; (iv) a payment of $217,149 to Mr. Crawshaw from his participation in an incentive plan for our asset management employees prior to the time he became an executive officer, and described above in "Compensation Discussion and Analysis—Compensation Program and Payouts—Program—Other Compensation"; and (v)(iii) a $108,990$359,862 benefit to Mr. LaRue, of which $31,040$304,905 was related to tax equalization payments made by us related to his international assignment to Hong Kong in prior years for work on our behalf, and $77,950$54,957 was related to additional tax consulting and preparation services we provided on Mr. LaRue's behalf during the year.

(4)

Mr. CrawshawFairman was not a named executive officer for 20132014 or 2014.2015. Accordingly, the table above includes the compensation of Mr. CrawshawFairman only for the year in which he was one of our named executive officers.




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Grants of Plan-Based Awards

The following table provides information regarding the grants of plan-based awards made to the named executive officers during the year ended December 31, 2015.2016.

Name		Grant Date			Compensation Committee Approval Date			Estimated Possible Payouts Under Incentive Plan Awards Maximum ($)(1)			Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2)			All Other Stock Awards: Number of Shares of Stock or Units (#)(3)			Grant Date Fair Value of Stock Awards ($)(4)				Grant Date			Compensation Committee Approval Date			Estimated Possible Payouts Under Incentive Plan Awards Maximum ($)(1)			Estimated Future Payouts Under Equity Incentive Plan Awards Maximum (#)(2)			All Other Stock Awards: Number of Shares of Stock or Units (#)(3)			Grant Date Fair Value of Stock Awards ($)(4)
Andrew S. Duff		​	5/15/2015		​	5/13/2015		​	—		​	27,486		​	—		​	600,019			​	5/15/2016		​	5/4/2016		​	—		​	30,106		​	—		​	600,013
​		​	2/17/2015		​	2/3/2015		​	11,732,924		​	—		​	26,396		​	1,458,643			​	2/23/2016		​	2/23/2016		​	12,240,600		​	—		​	—		​	—
​																					​	2/16/2016		​	1/28/2016		​	—		​	—		​	46,581		​	1,936,838
Debbra L. Schoneman			5/15/2015			5/13/2015			—			13,743			—			300,010				5/15/2016			5/4/2016			—			15,053			—			300,006
																						2/23/2016			2/23/2016			12,240,600			—			—			—
			2/17/2015			2/3/2015			11,732,924			—			7,456			412,019				2/16/2016			1/28/2016			—			—			8,238			342,537
Chad R. Abraham		​	5/15/2015		​	5/13/2015		​	—		​	9,162		​	—		​	200,006			​	5/15/2016		​	5/4/2016		​	—		​	10,036		​	—		​	200,017
​		​	2/17/2015		​	2/3/2015		​	11,732,924		​	—		​	16,593		​	916,930			​	2/23/2016		​	2/23/2016		​	12,240,600		​	—		​	—		​	—
Christopher D. Crawshaw			5/15/2015			5/13/2015			—			9,162			—			200,006
​																					​	2/16/2016		​	1/28/2016		​	​		​	—		​	22,051		​	916,881
Frank E. Fairman																						5/15/2016			5/4/2016			—			10,036			—			200,017
																						2/23/2016			2/23/2016			12,240,600			—			—			—
			2/17/2015			2/3/2015			11,732,924			—			7,790			430,476				2/16/2016			1/28/2016						—			10,212			424,615
R. Scott LaRue		​	5/15/2015		​	5/13/2015		​	—		​	9,162		​	—		​	200,006			​	5/15/2016		​	5/4/2016		​	—		​	10,036		​	—		​	200,017
​		​	2/17/2015		​	2/3/2015		​	11,732,924		​	—		​	16,593		​	916,930			​	2/23/2016		​	2/23/2016		​	12,240,600		​	—		​	—		​	—
​																					​	2/16/2016		​	1/28/2016		​	​		​	—		​	22,051		​	916,881

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(1)

The amounts in this column reflect an estimate of the maximum combined value of the cash and restricted compensation that would have been payable to the named executive officers under qualified performance-based awards granted to the named executive officers for 20152016 performance under the annual incentive program, calculated using our actual 20152016 performance. Because the potential amounts payable under the qualified performance-based awards are stated in the annual incentive program as a percentage of adjusted pre-tax, operatingpre-profit provision income that can only be decreased, and not increased, from that maximum level, and because actual amounts paid below this maximum level are within the full discretion of the Committee, there are no identifiable threshold or target amounts under the awards, and the maximum amounts actually payable to the named




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executive officers pursuant to the awards for 20152016 performance were indeterminable at the time the awards were granted.





(2)

The amounts in this column reflect the number of PSUs granted to the named executive officers in May 2015,2016, which will be earned and vest based on our total shareholder return measured on an absolute and relative basis compared to our peer groupa broad index of financial services companies over a 36-month performance period. The number of PSUs granted to each named executive officer was determined by dividing a dollar value for the executive's award by the fair market value of a PSU, rounded up to the nearest whole PSU. The fair market value of $21.83$19.93 for each PSU granted in 20152016 was determined using a Monte Carlo simulation, which assumed a risk-free interest rate of 0.900.98 percent and expected stock price volatility of 29.834.9 percent. The number of PSUs reflected in the




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table above represents the maximum number of shares that may be issued pursuant to the PSU awards. The May 2016 PSUs do not provide any voting rights or rights to receive dividends until the PSUs are earned and vested. For a more complete description of the PSUs, see "Compensation Discussion and Analysis—Long-Term Incentive Compensation.PSU Awards."



(3)

The amounts in this column reflect equity compensation paid to the named executive officers in 20152016 pursuant to annual qualified performance-based awards granted to these officers in 20142015 under our annual incentive program. The shares of restricted stock were granted to these officers on February 17, 201516, 2016 following the Compensation Committee's certification of the attainment of 20142015 annual financial performance goals established by the Committee under the annual incentive program. All of the restricted stock was granted under the Incentive Plan and will vest in three equal installments on February 1716 of each of 2016, 2017, 2018 and 2018,2019, assuming the award recipient complies with the terms and conditions of the applicable award agreement. The restricted stock awards are subject to forfeiture prior to vesting following certain terminations of employment or in the event the award recipient is terminated for cause, misappropriates confidential company information, participates in or is employed by a talent competitor of Piper Jaffray, or solicits employees, customers or clients of Piper Jaffray, all as set forth in more detail in the applicable award agreement. Recipients have the right to vote all shares of Piper Jaffray restricted stock they hold and to receive dividends (if any) on the restricted stock at the same rate paid to our other shareholders. The number of shares of restricted stock awarded to each named executive officer for the 20142015 qualified performance-based awards was determined by dividing specified dollar amounts representing a percentage of the individual's total annual incentive compensation for 20142015 by $55.26,$41.58, the closing price of our common stock on the New York Stock Exchange on the February 17, 201516, 2016 grant date.



(4)

The grant date fair value is generally the amount the company would expense in its financial statements over the award's service period under FASB ASC Topic 718.




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Executive Compensation

Outstanding Equity Awards at Fiscal Year EndYear-End

The following table sets forth certain information concerning equity awards held by the named executive officers that were outstanding as of December 31, 2015.2016.

		Option Awards												Stock Awards													Option Awards												Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)			Option Expiration Date			Number of Shares of Stock That Have Not Vested(1) (#)			Market Value of Shares of Stock That Have Not Vested(2) ($)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)				Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)			Option Expiration Date			Number of Shares of Stock That Have Not Vested(1) (#)			Market Value of Shares of Stock That Have Not Vested(2) ($)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)
Andrew S. Duff		​	6,098		​	—		​	47.85		​	2/21/2016		​	51,555		​	2,082,822		​	81,249		​	3,282,460			​	9,641		​	—		​	70.13		​	2/15/2017		​	73,327		​	5,316,208		​	83,212		​	6,032,870
​		​	9,641		​	—		​	70.13		​	2/15/2017		​	—		​	—		​	​		​	​
​		​	32,149		​	—		​	41.09		​	2/15/2018		​	—		​	—		​	​		​	​
Debbra L. Schoneman			—			—			—			—			12,225			493,890			40,625			1,641,250				—			—			—			—			14,789			1,072,203			41,606			3,016,435
Chad R. Abraham		​	—		​	—		​	—		​	—		​	31,632		​	1,277,933		​	27,083		​	1,094,154			​	—		​	—		​	—		​	—		​	39,329		​	2,851,353		​	27,738		​	2,011,005
Christopher D. Crawshaw			—			—			—			—			7,790			314,716			17,702			715,161
Frank E. Fairman																												—			—			—			—			13,350			967,875			27,738			2,011,005
R. Scott LaRue		​	—		​	—		​	—		​	—		​	28,172		​	1,138,149		​	27,083		​	1,094,154			​	—		​	—		​	—		​	—		​	37,553		​	2,722,593		​	27,738		​	2,011,005

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(1)

The shares of restricted stock vest on the dates and in the amounts set forth in the table below, so long as the award recipient complies with the terms and conditions of the applicable award agreement.

Vesting Date		Andrew S. Duff		Debbra L. Schoneman		Chad R. Abraham		Christopher D. Crawshaw		R. Scott LaRue
February 15, 2016		6,865		1,611		2,607		—		2,699
February 17, 2016		8,798		2,485		5,531		2,596		5,531
February 18, 2016		9,147		1,579		6,216		—		4,440
February 17, 2017		8,799		2,485		5,531		2,597		5,531
February 18, 2017		9,147		1,579		6,216		—		4,440
February 17, 2018		8,799		2,486		5,531		2,597		5,531

Vesting Date		Andrew S. Duff		Debbra L. Schoneman		Chad R. Abraham		Frank E. Fairman		R. Scott LaRue
February 16, 2017		15,527		2,746		7,350		3,404		7,350
February 17, 2017		8,799		2,485		5,531		984		5,531
February 18, 2017		9,148		1,580		6,216		1,170		4,440
February 16, 2018		15,527		2,746		7,350		3,404		7,350
February 17, 2018		8,799		2,486		5,531		984		5,531
February 16, 2019		15,527		2,746		7,351		3,404		7,351

(2)

The values in this column are based on the $40.40$72.50 closing sale price of our common stock on the New York Stock Exchange on December 31, 2015.2016.



(3)

The numbers in this column reflect the number of PSUs awarded in May of 2013, 2014, 2015, and 20152016 that will vest on May 14 of 2016, 2017, 2018, and 2018,2019, respectively, to the extent earned in accordance with the total shareholder return requirements established for the three-year performance period.




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Executive Compensation

Option Exercises and Stock Vested

The following table sets forth certain information concerning stock options exercised and restricted stock and PSU awards vested during the year ended December 31, 2015.2016.

		Option Exercises				Stock Awards					Option Exercises				Stock Awards
Name		Number of Shares Acquired on Exercise (#)		Value Realized on Exercise(1) ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting(2) ($)			Number of Shares Acquired on Exercise (#)		Value Realized on Exercise(1) ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting(2) ($)
Andrew S. Duff		—		—		52,203		2,632,069			32,149		782,906		52,952		1,845,816
Debbra L. Schoneman		—		—		19,183		924,956			—		—		19,746		832,970
Chad R. Abraham		—		—		24,384		1,223,529			—		—		23,735		997,787
Christopher D. Crawshaw		—		—		—		—
Frank E. Fairman											—		—		14,277		601,377
R. Scott LaRue		—		—		24,758		1,242,635			—		—		22,051		1,039,475

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(1)

The value realized upon exercise of the stock options reflects the difference between the market price of Piper Jaffray Companies common stock at the time of exercise on the exercise date and the exercise price of the option.



(2)

The value realized upon vesting of the stock awards is based on the $54.56$41.58, $41.95, and $55.26$41.87 closing sale price of our common stock on the New York Stock Exchange on February 16, 17, and 18, 2015,2016, the twothree dates on which restricted stock awards granted in previous years vested. In addition, 94.3%100% of the PSUs that were granted to our executive officers in May 20122013 vested following the certification by our Compensation Committee that certain total shareholder return metrics were met, and each PSU that vested was settled in a share of our common stock. The value realized upon settlement of the PSUs is based on the $47.41$42.33 closing sale price of our common stock on the New York Stock Exchange on June 1, 2015.2016.

Non-Qualified Deferred Compensation Plans

In June 2013, we adopted the Piper Jaffray Companies Deferred Compensation Plan (the "Deferred Compensation Plan"). The Deferred Compensation Plan is intended to be an "unfunded" plan, and, subject to the terms and conditions set forth in the Deferred Compensation Plan, each eligible participant may elect to defer a maximum of 50% of their salary or 90% of the cash award they receive under the annual incentive program. Deferrals under the Deferred Compensation Plan are fully vested at all times, and are credited to a deferral account maintained for each participant. Each participant has the opportunity to select from notional investment options determined by the plan administrator, and the amounts credited to their deferral accounts are adjusted periodically to reflect earnings and losses calculated based on the market return of the notional investment options selected by the participant. The notional investment options available under the Deferred Compensation Plan are similar to those offered under the company's 401(k) plan, except that the the self-directed brokerage feature is not available. Participants may make investment changes at any time. With certain exceptions, deferral accounts are paid or commence payment upon a fixed payment date, as elected by the participant, or upon the participant's retirement. Participants generally may elect that payments be made in a single lump sum or in annual installments over a period of between two and ten years, however, payment will be made in a lump sum upon the termination of a participant's employment for any reason other than retirement.




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Executive Compensation

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The following table summarizes information with respect to the participation of the named executive officers in the Piper Jaffray Companies Deferred Compensation Plan for the year ended December 31, 2015.2016.

Name		Executive Contributions in Last Fiscal Year ($)(1)		Aggregate Earnings in Last Fiscal Year ($)(2)		Aggregate Balance at Last Fiscal Year End ($)(3)		Executive Contributions in Last Fiscal Year ($)(1)		Aggregate Earnings in Last Fiscal Year ($)(2)		Aggregate Balance at Last Fiscal Year End ($)(3)
Andrew S. Duff		—		—		—		—		—		—
Debbra L. Schoneman		$468,000		($60,937)		$575,606		242,500		116,729		934,835
Chad R. Abraham		$745,625		($26,836)		$1,289,192		448,250		236,501		1,973,942
Christopher D. Crawshaw		—		—		—
Frank E. Fairman								—		—		—
R. Scott LaRue		$1,793,000		($228,643)		$2,673,878		1,793,000		574,945		5,041,822

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(1)

The amounts reported in this column are reported as "Non-Equity Incentive Compensation" for 20142015 in the Summary Compensation Table above to the extent that the named executive officer's 20142015 compensation was required to be disclosed.



(2)

The amounts reported in this column were not reported in the Summary Compensation Table as part of each named executive officer's compensation for year the ended December 31, 20152016 because the company does not pay guaranteed, above-market or preferential earnings on deferred compensation.



(3)

The amounts reported in this column for each named executive officer include total amounts deferred from non-equity annual incentive compensation earned in February 2015 for 2014 performance, and reflect the returns of each named executive officer on those amounts deferred based on the performance of their notional investment selections.




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Potential Payments Upon Termination or Change-in-Control

The following table sets forth quantitative information with respect to potential payments to be made to each of the named executive officers or their beneficiaries upon termination in various circumstances, assuming termination on December 31, 2015.2016. In the following table, unless indicated otherwise, all equity is listed at its dollar value as of December 31, 2015.2016.

		Type of Termination														Type of Termination
Name		Change-in-Control Not Followed by Employment Termination		Involuntary Termination Within 24 Months Following a Change-in-Control		Voluntary Termination		Involuntary Termination Under Severance Plan		Other Involuntary Termination Not for Cause		Death or Disability		Involuntary Termination for Cause		Change-in-Control Not Followed by Employment Termination		Involuntary Termination Within 24 Months Following a Change-in-Control		Voluntary Termination		Involuntary Termination Under Severance Plan		Other Involuntary Termination Not for Cause		Death or Disability		Involuntary Termination for Cause
Andrew S. Duff
Severance(1)		—		—		—		$325,000		—		—		—		—		—		—		$325,000		—		—		—
Restricted Compensation(2)(3)		$277,346		$2,082,822		$2,082,822		$2,082,822		$2,082,822		$2,082,822		—		—		$5,316,208		$5,316,208		$5,316,208		$5,316,208		$5,316,208		—
PSUs(4)		$3,282,460		$3,282,460		—		Indeterminable		—		Indeterminable		—		$6,032,870		$6,032,870		—		Indeterminable		—		Indeterminable		—
Annual Incentive Award(5)		Indeterminable		—		—		—		—		—		—		Indeterminable		—		—		—		—		—		—
Debbra L. Schoneman
Severance(1)		—		—		—		$250,000		—		—		—		—		—		—		$250,000		—		—		—
Restricted Compensation(2)(3)		$65,085		$493,890		$493,890		$493,890		$493,890		$493,890		—		—		$1,072,203		$1,072,203		$1,072,203		$1,072,203		$1,072,203		—
PSUs(4)		$1,641,250		$1,641,250		—		Indeterminable		—		Indeterminable		—		$3,016,435		$3,016,435		—		Indeterminable		—		Indeterminable		—
Annual Incentive Award(5)		Indeterminable		—		—		—		—		—		—		Indeterminable		—		—		—		—		—		—
Chad R. Abraham
Severance(1)		—		—		—		$212,500		—		—		—		—		—		—		$212,500		—		—		—
Restricted Compensation(2)(3)		$105,323		$1,277,933		$1,277,933		$1,277,933		$1,277,933		$1,277,933		—		—		$2,851,353		$2,851,353		$2,851,353		$2,851,353		$2,851,353		—
PSUs(4)		$1,094,154		$1,094,154		—		Indeterminable		—		Indeterminable		—		$2,011,005		$2,011,005		—		Indeterminable		—		Indeterminable		—
Annual Incentive Award(5)		Indeterminable		—		—		—		—		—		—		Indeterminable		—		—		—		—		—		—
Christopher D. Crawshaw
Frank E. Fairman
Severance(1)		—		—		—		$275,000		—		—		—		—		—		—		$275,000		—		—		—
Restricted Compensation(2)(3)		—		$314,716		$314,716		$314,716		$314,716		$314,716		—		—		$967,875		$967,875		$967,875		$967,875		967,875		—
PSUs(4)		$715,161		$715,161		—		Indeterminable		—		Indeterminable		—		$2,011,005		$2,011,005		—		Indeterminable		—		Indeterminable		—
Annual Incentive Award(5)		Indeterminable		—		—		—		—		—		—		Indeterminable		—		—		—		—		—		—
R. Scott LaRue
Severance(1)		—		—		—		$196,154		—		—		—		—		—		—		$196,154		—		—		—
Restricted Compensation(2)(3)		$109,040		$1,138,149		$1,138,149		$1,138,149		$1,138,149		$1,138,149		—		—		$2,722,593		$2,722,593		$2,722,593		$2,722,593		$2,722,593		—
PSUs(4)		$1,094,154		$1,094,154		—		Indeterminable		—		Indeterminable		—		$2,011,005		$2,011,005		—		Indeterminable		—		Indeterminable		—
Annual Incentive Award(5)		Indeterminable		—		—		—		—		—		—		Indeterminable		—		—		—		—		—		—

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(1)

Under our Severance Plan, employees may be eligible for severance payments in the event of employment termination by us due to a facility closure, permanent work-force reduction, organizational change that eliminates the employee's position, or similar event as determined by the company. The named executive officers participate in the Severance Plan on the same basis as all other employees. The amount in the table reflects salary continuation payments calculated in accordance with the provisions of the plan. Also under this plan, the named executive officers would be entitled to continue to participate in our health and welfare benefits programs at employee rates during the severance period.



(2)

Under the Incentive Plan, in the event of a change-in-control of Piper Jaffray, regardless of whether an employee's employment is terminated, all outstanding restricted stock and mutual fund restricted shares that were granted prior to May 8, 2013 will vest and all restrictions on the restricted stock and mutual fund restricted shares will lapse. All awards granted under the Incentive Plan on or after May 8, 2013 that are continued, assumed or replaced in connection with a change-in-control will vest, be deemed earned or have restrictions lapse only if the recipient's employment is terminated involuntarily (other than for cause) within 24 months of the change-in-control.



(3)

Under the applicable award agreements, all of the restricted stock awards and mutual fund restricted shares will continue to vest following a termination of employment so long as the termination was not for cause and the employee does not violate certain post-termination




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restrictions. Also, vesting is accelerated upon a company-determined severance event. The amounts in the table reflect these terms and conditions and assume compliance with any post-termination vesting requirements that are within the named executive officers' control.

(4)

Under the applicable award agreements, each PSU automatically will become one share of restricted stock on the closing date of a change-in-control, and each resulting share of restricted stock will remain restricted until the end of the applicable 36-month performance period. If the named executive officer remains continuously employed by us after the closing of the change-in-control through the end of the 36-month performance period, all shares of restricted stock arising from the PSUs will vest on the last day of the performance period. The amounts in the table reflect these terms and conditions and assume the named executive officer remains continuously employed by us throughout the 36-month performance period. If the named executive officer's employment is terminated after the closing of the change-in-control and prior to the end of the performance period (i) by us without cause, (ii) by the named executive officer for good reason, (iii) in connection with the named executive officer's death or disability or (iv) under such circumstances determined to constitute retirement by the Compensation Committee in its sole discretion, all unvested shares of restricted stock arising from the PSUs will vest on the date of termination of the named executive officer's employment with us. If the named executive officer's employment with us terminates because of a company-determined severance event or the named executive officer's, retirement (as determined by the Compensation Committee), death, or disability prior to a change-in-control, then the named executive officer will earn a number of PSUs equal to (i) the number of PSUs that would otherwise be earned pursuant to the award agreement but for the named executive officer's termination multiplied by (ii) a fraction, (1) the numerator of which is the number of days during the performance period up to and including the date of termination of the named executive officer's employment with us and (2) the denominator of which is the total number of days in the performance period. Certain of our outstanding PSU awards provide for full vesting based on the amount of the PSU award that is ultimately earned if the executive officer is deemed to "retire" by the Compensation Committee. The 36-month performance period for the PSUs awarded in 2013, 2014, 2015, and 20152016 ends on May 14 of 2016, 2017, 2018, and 2018,2019, respectively, and therefore any PSUs that might vest in connection with a named executive officer's termination as a result of a company-determined severance event, or his or her retirement, death or disability is not determinable at this time.



(5)

Qualified performance-based awards granted under the annual incentive program are payable in the discretion of the Compensation Committee, and are therefore indeterminable.

Risk Assessment of Compensation Policies and Practices

In early 2016,2017, our management prepared a company-wide inventory and review of our compensation policies and practices for both executive officers and for employees generally, which management discussed with the Compensation Committee. In connection with this review and discussion, we determined that our compensation policies and practices are not reasonably likely to have a material adverse effect on our company.




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Outstanding Equity Awards

The following table summarizes, as of December 31, 2015,2016, the number of shares of our common stock to be issued upon exercise of outstanding options granted under our equity plans as of December 31, 2015.2016. The table also includes the weighted-average exercise price of options and the number of shares remaining available for future issuance under the plans for all awards.

Plan Category		Number of shares to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of shares remaining available for future issuance under equity compensation plans (excluding shares in first column)			Number of shares to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of shares remaining available for future issuance under equity compensation plans (excluding shares in first column)
Equity compensation plans approved by shareholders		157,201		$50.35		1,629,229	(1)		30,613		$65.86		881,877	(1)
Equity compensation plans not approved by shareholders(2)		—		n/a		400,000			—		n/a		—
Total		157,201		$50.35		2,029,229

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(1)

Based on the 8,200,000 shares currently authorized for issuance under the plan. In addition to the 157,20130,613 shares to be issued upon the exercise of outstanding options to purchase our common stock, 1,287,9151,590,385 shares of restricted stock and 356,242374,460 performance-based restricted share units were issued and outstanding as of December 31, 2015.2016. All of the shares available for future issuance under the plan as of December 31, 20152016 may be granted in the form of restricted stock, restricted stock units, options or another equity-based award authorized under the plan.



(2)

In 2015, we established the Piper Jaffray Companies 2016 Employment Inducement Award Plan ("Inducement Plan") in anticipation of the acquisition of Simmons & Company International ("Simmons").Simmons. The New York Stock Exchange permits the adoption of an equity compensation plan without shareholder approval if awards under the plan are to be a material inducement to prospective employees to accept employment. Accordingly, we adopted the Inducement Plan to induce employees of Simmons to accept employment with the company in connection with the acquisition. The aggregate number of shares that may be issued under the Inducement Plan is 400,000. On May 15, 2016, approximately $11.6 millionwe issued 286,776 shares of restricted shares will be issuedstock to 24 employees who had been associated with Simmons, with the number of shares determined based upon the closing price of our common stock on that date.Simmons. These shares vest three years from the date of grant. The Inducement Plan is administered by the Compensation Committee, which has the authority to designate participants, determine whetherAs of December 31, 2016, 269,491 of these shares of restricted stock were issued and to what extent any type of award is to be granted, determine the number of shares to be covered by each award, determine the terms of any award, amend the terms of any award, accelerate the vesting and/or exercisability of any award and interpret and administeroutstanding. On August 5, 2016, we terminated the Inducement Plan and any related instruments or agreements. The types of awards that mayas to future grants. No additional shares will be granted under the Inducement Plan are stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, other stock grants and other stock-based awards. Awards under the Inducement Plan generally are not transferable. In the event of a change-in-control, awards that are continued, assumed or replaced in connection with a change-in-control will vest, be deemed earned or have restrictions lapse only if the award recipient's employment is terminated involuntarily (other than for "cause") within 24 months of the change-in-control. The Board may amend, alter, suspend, discontinue or terminate the Inducement Plan at any time, but the Inducement Plan will terminate no later than November 15, 2025. The foregoing is only a summary of the material terms of the Inducement Plan and is qualified in its entirety by reference to the Inducement Plan, a copy of which has been filed with the SEC.Plan.




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Security Ownership

SECURITY OWNERSHIP


SECURITY OWNERSHIP

Stock Ownership Guidelines

We believe it is important for our directors and executive officers to maintain a meaningful equity interest in our company, to ensure that their interests are aligned with the interests of our shareholders. Our Compensation Committee has adopted stock retention guidelines to establish expectations for our executive officers and non-employee directors with respect to their equity stake in the company. Non-employee directors are expected to retain 50% of the shares awarded to them through our incentive plan, or acquired upon exercise of stock options. The guideline for non-employee directors applies irrespective of taxes paid for shares awarded, but is net of exercise costs for stock options. The stock retention guidelines applicable to our executive officers are described above in "Compensation Discussion and Analysis—Compensation Policies—Executive Stock Ownership and Prohibition on Hedging."

Beneficial Ownership of Directors, Nominees and Executive Officers

The following table shows how many shares of our common stock were beneficially owned as of March 9, 201615, 2017 by each of our directors and executive officers named in the Summary Compensation Table contained in this proxy statement, and by all of our directors and executive officers as a group. The table also includes the number of shares of phantom stock that were deemed owned as of this date by each of our non-employee directors. Unless otherwise noted, the shareholders listed in the table have sole voting and investment power with respect to the shares owned by them.

Name of Beneficial Owner		Shares of Piper Jaffray Common Stock*		Phantom Shares**
Chad R. Abraham		79,70155,672(1)		—
Christopher D. CrawshawAndrew S. Duff		78,388243,844(2)		—
Andrew S. DuffFrank E. Fairman		276,01756,046(3)		—
William R. Fitzgerald		—		7,17610,521
Michael E. Frazier		160,481(4)		—
B. Kristine Johnson		18,07715,393(5)		1,7431,752
R. Scott LaRue		99,65354,626(6)		—
Addison L. Piper		21,68023,483(7)		3,4953,512
Lisa K. Polsky		1,925(8)		25,723
Debbra L. Schoneman		38,58628,544(9)(8)		—
Philip E. Soran		2,8344,637(10)(9)		3,2323,247
Sherry M. Smith		—		1,7803,600
Scott C. Taylor		4,4136,216(10)		—
Michele Volpi		10,807(11)		—
Michele Volpi		9,546(12)		—
All directors and executive officers as a group (20(19 persons)		995,804814,206(13)(12)		43,14922,632

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*

None of the individuals identified in this table owns more than 1% of Piper Jaffray common stock outstanding with the exception of Mr. Duff with 1.71%1.6%. As a group, our directors and executive officers hold 6.17%5.4% of Piper Jaffray common stock. (These percentages are calculated using our outstanding




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Security Ownership

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shares as of March 9, 2016 plus 46,248 shares of common stock covered by options that are currently exercisable for the group.15, 2017.) The holders of restricted stock identified in the footnotes below have no investment power with respect to the restricted stock.




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