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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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March 3, 20176, 2020

To the Stockholders of
Waddell & Reed Financial, Inc.:

        Waddell & Reed Financial, Inc.'s 20172020 Annual Meeting of Stockholders will be held in the William T. Morgan Auditorium at the principal executive offices of the Company, 6300 Lamar Avenue, Overland Park, Kansas 66202 at 10:00 a.m., local time, on Thursday,Wednesday, April 27, 2017.29, 2020.

        At the annual meeting, we will ask you to (1) elect Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton, who have been nominated by the Board, as Class I directors, (2) conduct an advisory vote to approve named executive officer compensation, (3) conduct an advisory vote onapprove the frequency of future advisory votes on named executive officer compensation,Waddell & Reed Financial, Inc. Stock Incentive Plan, as amended and restated, (4) ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 20172020 fiscal year, and (5) transact such other business as may properly come before the annual meeting or any adjournments or postponements thereof. The accompanying formal notice and Proxy Statement further discuss the matters that will be presented for a stockholder vote.

        We have also enclosed our 20162019 Annual Report, which is not a part of the proxy soliciting materials. If you have any questions or comments about the matters discussed in the Proxy Statement or about our operations, we will be pleased to hear from you. It is important that your shares be voted at the annual meeting. If you are unable to attend the annual meeting in person and wish to have your shares voted, you may vote by telephone, Internet or by filling in, signing and dating the enclosed proxy card or voting instruction form and returning it in the accompanying envelope as promptly as possible.

        We hope that you will take this opportunity to meet with us to discuss our results and operations for the 20162019 fiscal year.

		Sincerely,
		Henry J. HerrmannThomas C. Godlasky Chairman of the Board

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WADDELL AND REED FINANCIAL, INC.
6300 Lamar Avenue
Overland Park, Kansas 66202
(913) 236-2000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 27, 201729, 2020

To the Stockholders of
Waddell & Reed Financial, Inc.:

        I am pleased to give you notice that the 20172020 Annual Meeting of Stockholders of Waddell & Reed Financial, Inc. (the "Company") will be held in the William T. Morgan Auditorium at the principal executive offices of the Company, 6300 Lamar Avenue, Overland Park, Kansas 66202 on Thursday,Wednesday, April 27, 2017,29, 2020, at 10:00 a.m., local time.

        At the annual meeting, you will be asked to:

1.

Elect Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton, who have been nominated by the Board, as Class I directors to hold office until the 20202023 Annual Meeting of Stockholders.

2.

Conduct an advisory vote to approve named executive officer compensation.

3.

Conduct an advisory vote onApprove the frequency of future advisory votes on named executive officer compensation.Waddell & Reed Financial, Inc. Stock Incentive Plan, as amended and restated.

4.

Ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the 20172020 fiscal year.

5.

Transact such other business as may properly come before the annual meeting or any adjournments or postponements thereof.

        These matters are more fully discussed in the accompanying Proxy Statement.

        The Board of Directors has fixed Monday, February 27, 2017,March 2, 2020, at the close of business, as the record date for the determination of stockholders entitled to notice of, and to vote at, the annual meeting.

        All stockholders are cordially invited to attend the annual meeting in person. However, if you are unable to attend in person and wish to have your shares voted,YOU MAY VOTE BY TELEPHONE, INTERNET OR BY FILLING IN, SIGNING AND DATING THE ENCLOSED PROXY CARD OR VOTING INSTRUCTION FORM AND RETURNING IT IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Regardless of how you deliver your proxy, you may revoke your proxy before it is voted by timely submitting to the Secretary of the Company a written revocation or a proxy bearing a later date, or by attending the annual meeting and giving verbal notice of your intention to vote in person.

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        The annual meeting for which this notice is given may be adjourned or postponed from time to time without further notice other than announcement at the annual meeting or any adjournments or postponements thereof.

		BY ORDER OF THE BOARD OF DIRECTORS
		Wendy J. HillsMark P. Buyle Senior Vice President, General Counsel, Chief Legal Officer, General Counsel & Secretary

        The accompanying Proxy Statement is dated March 3, 20176, 2020 and is first being mailed to stockholders on or about March 10, 2017.13, 2020.

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WADDELL & REED FINANCIAL, INC.

PROXY STATEMENT

        This Proxy Statement is furnished in connection with the solicitation of proxies by Waddell & Reed Financial, Inc. (the "Company"), on behalf of its Board of Directors (the "Board"), for the 20172020 Annual Meeting of Stockholders (the "Annual Meeting"). This Proxy Statement is dated March 3, 20176, 2020 and, together with the related proxy card, is being mailed to stockholders on or about March 10, 2017.13, 2020.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING

When and where is the Annual Meeting?

        The Annual Meeting will be held in the William T. Morgan Auditorium at the Company's principal executive offices located at 6300 Lamar Avenue, Overland Park, Kansas 66202 at 10:00 a.m., local time, on Thursday,Wednesday, April 27, 2017.29, 2020.

What matters will be voted upon at the Annual Meeting?

        At the Annual Meeting you will be asked to:

•

Elect Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton, who have been nominated by the Board, as Class I directors to hold office until the 20202023 Annual Meeting of Stockholders.



•

Conduct an advisory vote to approve named executive officer compensation.



•

Conduct an advisory vote onApprove the frequency of advisory votes on named executive officer compensation.Company's Stock Incentive Plan, as amended and restated (the "Amended and Restated Stock Incentive Plan").



•

Ratify the appointment of KPMG LLP ("KPMG") as the Company's independent registered public accounting firm for the 20172020 fiscal year.



•

Transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

What constitutes a quorum?

        The presence, either in person or by proxy, of the holders of at least a majority of the voting power of our issued and outstanding shares of Class A common stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes, which are described in more detail below, are counted as shares present at the Annual Meeting for purposes of determining whether a quorum exists.

Who is entitled to vote?

        Only stockholders of record of the Company's Class A common stock at the close of business on February 27, 2017,March 2, 2020, which is the "record date," are entitled to notice of, and to vote at, the Annual Meeting. Shares that may be voted include shares that are held (1) directly by the stockholder of record and (2) beneficially through a broker, bank or other nominee. Each share of our Class A common stock is entitled to one vote on each matter submitted for a vote at the Annual Meeting.

        As of the record date, there were approximately 84,273,65767,151,154 shares of our Class A common stock issued and outstanding and entitled to be voted at the Annual Meeting. Any shares held in treasury on the record date are not considered outstanding and will not be voted.

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What is the difference between holding shares as a "registered owner" and as a "beneficial owner"?

        Most of the Company's stockholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between registered shares and those owned beneficially:beneficially.

•

Registered Owners – If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. ("Computershare"), you are the stockholder of record. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the Annual Meeting.



•

Beneficial Owners – If your shares are held in a brokerage account, bank or by another nominee, you are the "beneficial owner" of shares held in street name. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote or to vote in person at the Annual Meeting. However, since you are not a stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a "legal proxy" from your broker, bank or other nominee (who is the stockholder of record), giving you the right to vote the shares.

What stockholder approval is necessary for approval of the proposals?

•

Election of Directors

        The election of directors requires the affirmative vote of a plurality of the shares of our Class A common stock cast at the Annual Meeting. This means that the three Class I director nominees receiving the most votes will be elected. For purposes of this vote, neither withholding your vote (or a direction to a broker or nominee to do so) nor a broker non-vote (as described below) will be counted as votes cast, and therefore, will have no effect on the outcome of the election of directors.

        Under our Director Resignation Policy, any nominee for director in an uncontested election who receives a greater number of "withheld" votes than "for" votes is required to tender his or her resignation for consideration by the Board. For more detail on this policy, see "Corporate Governance"Governance – Director Resignation Policy" below.

•

Advisory Vote on Named Executive Officer Compensation

        The advisory vote to approve named executive officer compensation requires the affirmative vote of a majority of the shares of our Class A common stock cast at the Annual Meeting. For purposes of this vote, neither a vote to abstain (or a direction to a broker or other nominee to do so) nor a broker non-vote (as described below) will be counted as a vote cast, and therefore, will have no effect on this vote. Although this vote is advisory and non-binding on the Board, the Compensation Committee and the Company, we value the opinion of our stockholders and will take the results of this advisory vote into account when making future decisions regarding our executive compensation program.

•

Advisory Vote onApprove the Frequency of Future Advisory Votes on Named Executive Officer CompensationAmended and Restated Stock Incentive Plan

        The advisory vote to determine our stockholders' preferred frequency for holding an advisory vote on named executive officer compensationapproval of the Amended and Restated Stock Incentive Plan requires the affirmative vote of a pluralitymajority of the shares of our Class A common stock cast at the Annual Meeting. This means that the option for holding an advisory vote every one year, two years, or three years receiving the greatest number of votes will be considered the preferred frequency of the stockholders. For purposes of this vote, neither a vote to abstain (or a direction to a broker or other nominee to do so) nor a broker non-votenon vote (as described below) will be counted as a vote cast, and therefore, will have no effect on this vote. Although this vote is advisory and non-binding on the Board, the Compensation Committee and the Company, we value the opinion of our stockholders and will take the results of this advisory vote into account when making a determination concerning the frequency of future advisory votes on named executive officer compensation.

•

Ratification ofRatify the Appointment of the Company's Independent Registered Public Accounting Firm

        The ratification of the Audit Committee's appointment of KPMG as the Company's independent registered public accounting firm for the 20172020 fiscal year requires the affirmative vote of a majority of the shares of our Class A common stock cast at the Annual Meeting. For purposes of this vote, a vote to abstain (or a direction to a broker or other nominee to do so) is not counted as a vote cast, and therefore, will have no effect on this vote. Stockholder ratification is not required for the appointment of KPMG

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because the Audit Committee has the responsibility of appointing the Company's independent registered public accounting firm. However, we are submitting the proposal to solicit the opinion of our stockholders.

        As of the record date, directors and executive officers of the Company beneficially owned an aggregate of approximately 3,194,4691,839,831 shares of Class A common stock representing approximately 3.8%2.7% of our Class A common stock issued and outstanding, and therefore, 3.8%2.7% of the voting power entitled to vote at the Annual Meeting. The Company believes that its directors and executive officers currently intend to vote their shares (1) FOR the election of Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton as Class I directors, (2) FOR the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, and (3) FOR the approval on an advisory basis, of conducting future advisory votes on named executive officer compensation every year,the Amended and Restated Stock Incentive Plan and (4) FOR the ratification of KPMG as the Company's independent registered public accounting firm for the 20172020 fiscal year.

May I vote my shares in person at the Annual Meeting?

        If you are the registered owner of shares of our Class A common stock, you have the right to vote these shares in person at the Annual Meeting.

        If you are the beneficial owner of shares of our Class A common stock, you may vote these shares in person at the Annual Meeting if you have requested and received a legal proxy from your broker, bank or other nominee (the stockholder of record) giving you the right to vote the shares at the Annual Meeting, complete such legal proxy and present it to the Company at the Annual Meeting.

        Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy card or voting instructions so that your vote will be counted if you later decide not to attend the Annual Meeting.

        If you are a participant in the Waddell & Reed Financial, Inc. 401(k) Plan (the "401(k) Plan") and have a portion of your 401(k) Plan account invested in shares of our Class A common stock through the Waddell & Reed Financial, Inc. Unitized Stock Fund ("401(k) Plan Shares"), you may submit voting instructions to direct the 401(k) Plan trustee to vote your 401(k) Plan Shares, as described below, but you may not vote your 401(k) Plan Shares in person at the Annual Meeting.

How can I vote my shares without attending the Annual Meeting?

        If you are the registered owner of shares of our Class A common stock, you may instruct the named proxy holders on how to vote your shares by completing, signing, dating and timely returning the enclosed proxy card in the postage pre-paid envelope provided with this Proxy Statement, or by using the Internet voting site or the toll-free telephone number listed on the proxy card. Specific instructions for using the Internet and telephone voting systems are on the proxy card. The Internet and telephone voting systems will be available until 11:59 p.m. Central Time, on Wednesday,Tuesday, April 26, 201728, 2020 (the day before the Annual Meeting).

        If you are the beneficial owner of shares of our Class A common stock held in street name, you may instruct your broker, bank or other nominee on how to vote your shares. Your nominee has enclosed with this Proxy Statement a voting instruction cardform for you to use in directing your nominee on how to vote your shares. The instructions from your nominee will indicate if Internet or telephone voting is available and, if so, will provide details regarding how to use those systems.

        If you are a participant in the 401(k) Plan and have a portion of your 401(k) Plan account invested in 401(k) Plan Shares, you may submit voting instructions to direct the 401(k) Plan trustee to vote your 401(k) Plan Shares, as described below.

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How do participants in the 401(k) Plan vote?

        If you participate in the 401(k) Plan and have a portion of your 401(k) Plan account invested in 401(k) Plan Shares, your completed proxy card or proxy vote using the Internet voting site or the toll-free telephone number listed on the proxy card will serve as the voting instructions for the trustee of the 401(k) Plan. Your voting instructions must be received by no later than 11:59 Central Time, on Sunday, April 26, 2020. Computershare will tabulate the voting instructions with respect to all 401(k) Plan Shares and will provide the voting instructions to the 401(k) Plan trustee who will vote the shares. Your voting instructions will be held in strict confidence by Computershare and will not be shared with anyone at the Company. If a 401(k) Plan participant does not submit voting instructions, or submits voting instructions, but does not indicate a choice for one or more proposals, the trustee of the 401(k) Plan will vote the 401(k) Plan Shares allocated to the participant's account in the same proportion as the 401(k) Plan Shares for which directions have been received.

        If you participate in the 401(k) Plan and have a portion of your 401(k) Plan account invested in 401(k) Plan Shares, and are also the registered owner of shares of our Class A common stock, you will receive a single proxy card for all of these shares.

If my shares are held in "Street Name," will my broker, bank or other nominee vote my shares for me?

        Brokers, banks and other nominees who do not have instructions from their "street name" customers may not use their discretion in voting their customers' shares on "non-routine" matters. The proposal to elect Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton as Class I directors, the advisory vote to

approve named executive officer compensation and the advisory vote on the frequency of advisory votesproposal to approve named executive officer compensationthe Amended and Restated Stock Incentive Plan are non-routine matters and, therefore, shares of our Class A common stock held in "street name" will not be voted with respect to these proposals without voting instructions from the beneficial owners. However, the proposal to ratify the appointment of KPMG as the Company's independent registered public accounting firm for the 2020 fiscal year is considered a routine matter and, therefore, if beneficial owners fail to give voting instructions, nominees will have discretionary authority to vote shares of our Class A common stock with respect to this proposal. You should follow the instructions provided by your nominee in directing your nominee on how to vote your shares.

What is a "broker non-vote"?

        Generally, a "broker non-vote" occurs when a broker, bank or other nominee that holds shares in "street name" for customers is precluded from exercising voting discretion on a particular proposal because (1) the beneficial owner has not instructed the nominee how to vote, and (2) the nominee lacks discretionary voting power to vote such shares. Under New York Stock Exchange ("NYSE") rules, a nominee does not have discretionary voting power with respect to the approval of "non-routine" matters absent specific voting instructions from the beneficial owners of such shares.

        The proposal to elect Sharilyn S. Gasaway, Alan W. KosloffKatherine M.A. ("Allie") Kline and Jerry W. Walton as Class I directors, the advisory vote to approve named executive officer compensation and the advisory vote on the frequency of advisory votesproposal to approve named executive officer compensationthe Amended and Restated Stock Incentive Plan are "non-routine" matters. If you are the beneficial owner of shares of the Company's Class A common stock, your nominee will send you directions on how you can instruct them to vote. If you do not provide voting instructions, your nominee will not vote your shares on these proposals.

How will my proxy be voted?

        Shares represented by a properly executed proxy (in paper form, by Internet or by telephone) that is timely received, and not subsequently revoked, will be voted at the Annual Meeting or any adjournments or postponements thereof in the manner directed on the proxy. HenryThomas C. Godlasky and Philip J. Herrmann and Alan W. KosloffSanders are named as proxy holders in the proxy form and have been designated by the Board to represent you and

2004 to 2018 and Co-Head of Global Distribution from 2011 to 2018. Prior to that, he held various positions with MFS from 1987 to 2004. Mr. Jessee also served on the local Kansas City, Missouri officeboard of United Way, a global leadership and support organization for community-based non-profit organizations, since June 2007. He joined the Investment Company in March 1971 and earned the Chartered Financial Analyst designation in 1977.Institute from 2014 to 2018. Mr. Herrmann'sJessee's term on the Board expires in 2019.2022.

        Mr. HerrmannJessee has over 5138 years of experience in the financial services industry, and is widely regardedwhich includes participating as a distinguished leadermember of the Management Committee of MFS Investment Management, one of the oldest mutual fund companies focused on active management. He brings the Board valuable insight regarding mutual fund operations and distribution based on his experience with MFS. He also has substantial knowledge in the areas of marketing, asset management industry. Mr. Herrmann celebrated his 45^th anniversary with the Company in 2016. As Chairmandistribution outside of the Board and trustee of the Company's affiliated mutual fund boards, he brings to the Board an incomparable knowledge of, and experience with, the Company and its business,United States, as well as valuable leadership anda broad wealth management experience. Mr. Herrmann's prior oversight of all Company operations and his experience in investment management, annual and long-term business planning, the negotiation and integration of acquisitions, and risk management is an indispensable contribution to the Board.industry perspective.

        Wendy J. HillsKatherine M.A. ("Allie") Kline has been Senior Vice President, General Counsel and Chief Legal Officera Director of the Company since February 20142020. She has served as a director of Huntington Bancshares Incorporated, a Columbus, Ohio regional bank holding company, since April 2019 and Secretaryof Pier 1 Imports, Inc., a Fort Worth, Texas retailer specializing in home furnishings and décor, since September 2018. She also serves as a director of National Forest Foundation, the non-profit partner of the Company since April 2005. Prior thereto, sheU.S. Forest Service. Ms. Kline served as Vice Presidentchief marketing and Associate General Counselcommunications officer for Oath Inc. (now Verizon Media), the Verizon Communications, Inc. subsidiary consisting of the Company20+ distinctive digital brands, from April 2005its formation in 2017 following Verizon's acquisition of Yahoo to February 2014, as Assistant General CounselJuly 2018. Ms. Kline was chief marketing and communications officer for AOL from April 20022013 to April 2005,2017 prior to and as Assistant Secretary from April 2000 to April 2005. From June 1998 to April 2000, shefollowing Verizon's acquisition of AOL in 2015. She also served as the Compliance OfficerCEO of Waddell & Reed Investment Management Company ("WRIMCO"). MAKERS, Verizon Media's prominent women's media brand from 2016-2018. Earlier in her career she held digital media and marketing leadership positions with data and analytics company 33Across, Unicast (now Amazon), InterVU (now Akamai), and the Washington Wizards.Ms. HillsKline is a nominee for director.

Ms. Kline has valuable experience as a senior executive at a publicly traded company and provides the Board with strategic marketing, communications, M&A and transformation expertise. Her service as a director of other public companies also Vice President, General Counsel and Secretary of the InvestEd Portfolios, Ivy Funds, Ivy High Income Opportunities Fund, Ivy NextShares, Ivy Variable Insurance Portfolios and Waddell & Reed Advisors Group of Mutual Funds, all of which are mutual funds managed by the Company. Prior to joining the Company in June 1998, Ms. Hills was associatedprovides her with the law firm of Klenda, Mitchell, Austerman and Zuercher LLC, in Wichita, Kansas.a different perspective on Board-related matters.

        Alan W. Kosloff has been a Director of the Company since January 2003 and was Lead Independent Director sincefrom January 2010.2010 to April 2018. Prior thereto, he served as Chairman of the Board from May 2005 through December 2009. He has served as Chairman of Kosloff & Partners, LLC, Edwards, Colorado, a consulting and investment firm, since April 1996. Previously, he served as Chairman of Jones & Mitchell, Olathe, Kansas, an imprinted and licensed sportswear company, from October 1997 to March 2005 and as Chairman, Chief Executive Officer and President of American Marketing Industries, Inc., Kansas City, Missouri, an apparel manufacturing, distribution and marketing firm from 1976 to 1995.Mr. Kosloff is a nominee for director.Kosloff's term on the Board expires in 2020.

        Mr. Kosloff has over 4144 years of experience in executive management, investment, sales and marketing roles, including as President and Chief Executive Officer of American Marketing Industries, Inc. and founder of Kosloff & Partners, LLC. Mr. Kosloff provides the Board the benefit of his substantial financial, management and operational expertise, including with respect to marketing and distribution efforts, corporate governance,

strategic planning and corporate strategy. As Lead Independent Director, Mr. Kosloff has offered valuable insights with respect to strategic planning, executive succession planning and executive development, corporate governance and stockholder communications.

        Dennis E. Logue has been a Director of the Company since January 2002. He has served as Chairman of the Board of Ledyard Financial Group, Inc., a bank holding company located in Hanover, New Hampshire, sincefrom August 2005.2005 to May 2019. Additionally, Mr. Logue has served as an Emeritus Professor of Management at the Amos Tuck School, Dartmouth College since August 2005. He served as Dean of the Michael F. Price College of Business at the University of Oklahoma from July 2001 to September 2005. Prior thereto, Mr. Logue held numerous business-oriented professorships, most recentlyincluding at the Amos Tuck School, Dartmouth College from July 1974 to June 2001. He has also worked as a consultant and expert witness on various financial matters since 1974. Mr. Logue has served as a director of Abraxas Petroleum Corporation, San Antonio, Texas, a natural gas and crude oil exploration, development and production

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company, since April 2003 and of ALCO Stores, Inc., Dallas, Texas, a general merchandise retailer, from May 2005 through September 2014. Mr. Logue's term on the Board expires in 2018.2021.

        Mr. Logue is highly accomplished in the field of business management and financial academia, having taught in the areas of managerial economics and finance, corporate governance, financial markets and international finance for 4447 years and published over 90 books and articles in the areas of economics, pension plans, corporate and international finance and capital markets. His past leadership roles in the academic world allow him to bring a wide range of experience and new insights to his service on the Board. As a founding director of Ledyard National Bank, Mr. Logue also has substantial expertise in the areas of the financial services industry, executive management and operations.

        Michael F. Morrissey.Shawn M. Mihal has been Senior Vice President – Wealth Management of the Company since December 2018 and President, Waddell & Reed, Inc. ("WRI") since November 2017. Prior to that, Mr. Mihal was Chief Operating Officer of WRI from August 2017 to November 2017 and Senior Vice President, Chief Compliance Officer and Chief Regulatory Officer of WRI and Ivy Distributors, Inc. ("IDI") from March 2015 to August 2017. Prior to joining the company, he served as Vice President and Chief Compliance Officer for Transamerica Financial Advisors, Inc., an independent broker-dealer and registered investment advisor in St. Petersburg, Florida, from September 2010 to March 2015 and as Chief Compliance Officer for Great American Advisors, Inc., a registered investment advisor in Cincinnati, Ohio, from October 2004 to August 2010. Mr. Mihal joined the Company in March 2015.

Michael F. Morrissey has been a director of the Company since July 2010. He has been a director of Ferrellgas Partners, L.P., a propane gas marketing and distribution company in Overland Park, KansasLiberty, Missouri since 1999. He was a director of Westar Energy, Inc., an electric service company based in Topeka, Kansas, from 2003 through May 2015. Mr. Morrissey retired in September 1999 after serving 24 years, including 17 years as a partner, with Ernst & Young LLP, an auditing and financial services firm. Prior thereto, Mr. Morrissey worked for five years for another major accounting firm and six years for a motor truck manufacturer. Mr. Morrissey has been a Certified Public Accountant since 1972. Mr. Morrissey has also served as a director of Blue Cross Blue Shield of Kansas City, a Kansas City, Missouri health insurance company, since 2006;from 2006 through April 2017; of J.E. Dunn Construction Group, Inc., a private construction business located in Kansas City, Missouri, from 2000 through January 2017; of Balance Innovations, Inc., an office management technology company located in Lenexa, Kansas, since 2008;from 2008 through May 2019; and a special advisor to the audit committee of the Dairy Farmers of America, a farmer-owned milk marketing cooperative located in Kansas City, Missouri, from 2000 through August 2014. Mr. Morrissey also serves as a director or trustee for numerous non-profit, civic, and charitable organizations. Mr. Morrissey's term on the Board expires in 2018.2021.

        Mr. Morrissey's qualifications to serve as a director include his substantial experience as the Chairman or member of the audit committee of other public companies, his many years of experience as an audit partner of a major accounting firm, and his extensive experience as a director of other large companies, both public and private. Mr. Morrissey brings to the Board significant audit and accounting expertise and a deep understanding of financial statements, corporate finance, risk management and internal audit functions. Mr. Morrissey's knowledge and experience gained as a board member of various public and private companies, as well as not-for profit, civic and charitable organizations provide the Board with a wide range of experience and insights regarding Board actions. Mr. Morrissey is also a Certified Public Accountant (retired).

        James M. RainesChristopher W. Rackers has been a DirectorSenior Vice President and Chief Administrative Officer of the Company since July 1998.June 2019. He has served as Senior Vice President and Chief Human Resources Officer of James M. Rainesthe Company from January 2019 to June 2019 and as Senior Vice President and Chief Human Resources Officer of certain of the Company's subsidiaries from January 2017 to June 2019. Prior to joining the Company, San Antonio,Mr. Rackers was Vice President, Global Human Resources at Payless ShoeSource, a discount footwear retailer in Topeka, Kansas, from January 2016 to January 2017, Vice President, Global Human Resources at WIS International, a retail and inventory services company in Dallas, Texas, an investment banking firm since September 1988 and served as a director of Clear Channel Outdoor Holdings, Inc., a San Antonio, Texas outdoor advertising company from November 2005 to May 2010. Mr. Raines' term on the Board expires in 2019.2015

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to December 2015, Vice President of Human Resources at H&R Block, a tax preparation company in Kansas City, Missouri, from May 2013 to June 2015. Prior thereto, he held several positions with Aramark, a food service, facilities and uniform services provider, including Senior Vice President, Human Resources, from June 2006 to May 2013. Mr. Raines' 30 years of experienceRackers joined the Company in the investment banking business gives him valuable perspectives on financial and strategic matters, as well as expertise in capital markets and securities distribution. He has provided investment banking and financial advisory services, including with respect to merger and acquisition and capital raising functions, for numerous public and private companies covering a diverse range of businesses, which provides him with a broad perspective that is an asset to the Board. Additionally, Mr. Raines' tenure on the Board provides him with an important depth of knowledge regarding the Company's business, strategy and culture. His experience in investment banking has been particularly useful when the Board considers its capital and liquidity needs and potential acquisitions.January 2017.

        Philip J. Sanders has been Chief Executive Officer and a Director of the Company since August 2016 and2016. He served as Chief Investment Officer of the Company sincefrom February 2011. He2011 to June 2019. Mr. Sanders has served as Chief Executive Officer and President of WRIMCO and IICO sinceIvy Investment Management Company ("IICO") from August 2016 and aswas Chief Investment Officer of WRIMCO and IICO sincefrom August 2010.2010 to June 2019. Prior thereto, he served as Senior Vice President of WRIMCOWaddell & Reed Investment Management Company ("WRIMCO") from July 2000 to August 2016, Senior Vice President of IICO from April 2003 to August 2016 and Vice President of WRIMCO from January 1999 to July 2000. He is also President of the InvestEd Portfolios, Ivy Funds, Ivy High Income Opportunities Fund, Ivy NextShares and Ivy Variable Insurance Portfolios, and Waddell & Reed Advisors Group of Mutual Funds, all of which are mutual funds managed by the Company. Mr. Sanders joined the Company as a mutual fund portfolio manager in August 1998. Mr. Sanders' term on the Board expires in 2022.

        Mr. Sanders has over 2831 years of experience in the financial services industry, including 1821 years with the Company. Mr. Sanders' oversight of all Company operations and his experience in investment management is an indispensable contribution to the Board and provides a critical link between management and the Board.

        John E. Sundeen, Jr.Amy J. Scupham has been Senior Vice President – Distribution of the Company since July 1999December 2018 and Chief Administrative Officer – Investments since January 2006. Previously, he served as Chief Financial Officer from July 1999 to June 2004 and as Treasurer of the Company from July 1999 to January 2006. He was appointed Executive Vice President of Waddell & Reed Services Company in August 2016 and has served as Executive Vice President andIDI since April 2018. Prior to that Ms. Scupham was Chief AdministrativeOperating Officer of WRIMCOIDI from February 2018 to April 2018 and of IICO since June 2004. Previously, he served as Senior Vice President of WRIMCO– Institutional Sales from January 1996May 2016 to June 2004February 2018. Prior thereto, she held various positions at the Company in institutional sales and as Head of Fixed Income within the Investment Management Division thereof from January 1994 to June 1999. Mr. Sundeenconsultant relations. Ms. Scupham joined the Company in June 1983.April 2008.

        Jerry W. Walton has been a Director of the Company since April 2000. Mr. Walton served as a business consultant to Hunt Ventures, a group of private companies located in Rogers, Arkansas, from April 2010 to February 2016. He served as Executive Vice President of Finance and Administration and Chief Financial Officer of J.B. Hunt Transport Services, Inc., a transportation provider in Lowell, Arkansas, from October 1991 until September 2009. Prior thereto, Mr. Walton served as a managing partner and a tax partner with KPMG, with whom he had been employed since 1968. Mr. Walton also serves as a director of the Northwest Arkansas National Airport Authority.Mr. Walton is a nominee for director.

        Mr. Walton brings extensive financial, operational and executive management expertise to the Board having served as the Executive Vice President and Chief Financial Officer of J.B. Hunt Transport Services, Inc., one of the largest transportation logistics companies in North America. Mr. Walton also has significant public accounting experience, including in the areas of accounting, finance and tax, and direct experience in the areas of information and technology services, treasury functions, real estate, human resources and risk management. As a long-time director, Mr. Walton offers a breadth of knowledge about issues affecting the Company and its industry, as well as with respect to its financial statements, balance sheet management, budgeting process and executive compensation. Mr. Walton is also a Certified Public Accountant (retired).

        Constance K. Weaver has been a Director of the Company since February 2020. She has served as a director of Citizens Inc., an Austin, Texas insurance holding company, since June 2018. Ms. Weaver has served as Co-founder and Chief Executive Officer of Tracker Group LLC since 2017. Previously, Ms. Weaver served as Senior Executive Vice President, Chief Marketing & Communications Officer at TIAA, a financial services organization in New York, New York, from 2010 to 2017, Senior Vice President, Chief Marketing & Communications Officer at Hartford Financial Services from 2008 to 2010, Executive Vice President, Chief Marketing Officer at BearingPoint, Inc. from 2006 to 2008, and Executive Vice President, Marketing, Public Relations & Brand from 2002 to 2006 and Vice President, Investor Relations and Financial Communications from 1996 to 2002 at AT&T Corporation. Ms. Weaver served as a director of Westchester Group Investment Management Holding Company, a registered investment company, from 2015 to 2017. Ms. Weaver currently serves on the board of Make a Wish, National Council on Aging,

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CT Public Broadcasting and American Red Cross South Florida. Ms. Weaver's term on the Board expires in 2021.

Ms. Weaver provides the Board with an extensive background and track record of pioneering and enacting multi-phase marketing and brand transformations spanning customer insight analyses, digital infrastructure modernization, holistic customer experience optimization, and implementation of a data-optimized digital marketing ecosystem. She also has a strong background building and directing award-winning investor relations and communications programs, managing crisis, including activist investors and proxy situations and overseeing complex transactions. In addition, her experience also includes numerous engagements, memberships and committee chairs on the board of a variety of public and private companies, providing her with substantial experience in both executive and board leadership.

There are no family relationships among any of the Company's executive officers, directors or nominees for director.

Security Ownership of Management

        The following table reflects information regarding beneficial ownership of the Company's Class A common stock by each of its current directors (including all nominees for director), the current and named executive officers set forth in the Summary Compensation Table, andas well as by all such personsdirectors and executive officers as a group, as of February 27, 2017.March 2, 2020. Unless otherwise indicated in the footnotes below, "beneficially owned" means the sole power to vote or direct the voting of a security and the sole power to dispose or direct the disposition of a security.

*

Denotes less than 1%.

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CORPORATE GOVERNANCE

        We believe that good corporate governance helps to ensure that the Company is managed for the long-term benefit of our stockholders,stakeholders, and we continually review and consider our corporate governance policies and practices, the SEC's corporate governance rules and regulations, and the corporate governance listing standards of the NYSE, the stock exchange on which our Class A common stock is traded.

        You can access and print the charters of our Audit Committee, Compensation Committee and Corporate Governance Committee, as well as our Corporate Governance Guidelines, Corporate Code of Business Conduct and Ethics, Whistleblower Policy and other Company policies and procedures required by applicable law, regulation or NYSE corporate governance listing standards on the "Governance Documents" link in the dropdown menu on the "Corporate Governance" tab of the "Investor Relations" section of our website atir.waddell.com.

Director Independence

        The Board is composed of a majority of directors who satisfy the criteria for independence under the NYSE corporate governance listing standards. In determining independence, each year the Board affirmatively determines, among other items, whether the directors have any direct or indirect material relationship with the Company or any of its subsidiaries pursuant to the NYSE corporate governance listing standards. When assessing the "materiality" of a director's relationship with the Company, if any, the Board considers all relevant facts and circumstances, not merely from the director's standpoint, but from that of the persons or organizations with which the director has an affiliation. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. The Board also considers any other relationship that could interfere with the exercise of independence or judgment in carrying out the duties of a director.

        Applying these independence standards, the Board determined that Kathie J. Andrade, Sharilyn S. Gasaway, Thomas C. Godlasky, James A. Jessee, Katherine M.A. ("Allie") Kline, Alan W. Kosloff, Dennis E. Logue, Michael F. Morrissey, James M. Raines and Jerry W. Walton and Constance K. Weaver are all independent directors.

        After due consideration, the Board has determined that none of theseno non-employee directors havedirector has a material relationship with the Company or any of its subsidiaries (either directly or indirectly as a partner, stockholder or officer of an organization that has a relationship with the Company or any of its subsidiaries) and they all meet the criteria for independence under the NYSE corporate governance listing standards.

        Pursuant Director Membership on Other Boards

        Each director is responsible for ensuring that other commitments do not conflict or materially interfere with his or her responsibilities to the independence criteria ofCompany. Under the NYSE corporate governance listing standards,Company's Corporate Governance Guidelines, without approval from the Board, has determined that Henry J. Herrmann,(i) any non-employee director who retiredserves as Chiefa chief executive officer or in an equivalent position of a public company should not serve on more than two boards of public companies in addition to the Board; and (ii) other directors should not serve on more than four boards of public companies in addition to the Board. Executive Officer on August 1, 2016, is not an independent director due to his service as an employeeofficers of the Company withinmay not serve on the last three years.board of other public companies without the approval of the Board. Audit Committee members may not simultaneously serve on the audit committee of more than two other public companies without the approval of the Board.

        Directors are expected to notify the Chairman of the Board and the General Counsel before accepting a seat on the board of another business corporation. The General Counsel will conduct a review of the potential board membership for conflicts and other issues prior to the director agreeing to serve. Further,

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each Audit Committee member is expected to advise the Chairman of the Board and the General Counsel in advance of accepting a position as a member of another public company audit committee. In such event, the Board will assess whether such service would impair the Audit Committee member's service to the Company.

Board Composition and Director Qualifications

        The Corporate Governance Committee periodically assesses the appropriate size and composition of the Board, and whether any vacancies on the Board are expected. In the event that vacancies are anticipated or otherwise arise, the Corporate Governance Committee will review and assess potential director candidates. The Corporate Governance Committee utilizes various methods for identifying and evaluating candidates for director. Candidates may come to the attention of the Corporate Governance Committee through recommendations of Board members, management, stockholders or professional search firms. Generally, director candidates should, at a minimum:

•

Possess relevant business and financial expertise and experience, including an understanding of financial statements;

•

Have the highest character and integrity and a reputation for working constructively with others;



•

Have sufficient time to devote to Board meetings and consultation on Board matters; and



•

Be free of conflicts of interest that violate applicable law or interfere with director performance.

        In addition, the Corporate Governance Committee will consider for recommendation director candidates who possess the following qualities and skills, among others:

•

The capacity and desire to represent the interests of the Company's stockholdersstakeholders as a whole and not primarily a special interest group or constituency;



•

Diverse backgrounds, with respect to business experience, professional expertise,diversity considered in the broadest sense, including factors such as age, gender, race, ethnicity, and geographic location, as well as variety in terms of experiences and backgrounds and individual perspectives gender and ethnicity thatto support Board dynamics and effectiveness;effectiveness



•

High level of leadership experience in business activities and sound business judgment;



•

Highly accomplished in their respective field, with superior credentials and recognition;



•

The ability to contribute to the mix of skills, core competencies, diversity and qualifications of the Board through notable or significant achievements or expertise, including in one or more of the following areas: executive leadership, accounting and finance,finance; mergers and acquisitions,acquisitions; investment management, law, financial academia, strategic planningor wealth management; distribution; marketing; legal, risk and executive leadership development;compliance; and cybersecurity and technology;



•

Service as a senior officer or equivalent position of, or a competent overseer and trusted advisor to senior management of, a publicly-held company; and



•

Knowledge, or willing and able to quickly gain knowledge, of the critical aspects of the Company's business and operations.

        The director qualifications above are general in nature and may be modified by the Board or the Corporate Governance Committee from time to time as the Board or the Corporate Governance Committee deems appropriate.

        In considering candidates for director nominee, the Corporate Governance Committee generally assemblesreviews all information regarding a candidate's background and qualifications, evaluates a candidate's mix of skills and qualifications, and determines the contribution the candidate could be expected to make to the overall functioning of the Board. The Board seeks independent directors who represent a diverse mix

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of perspectives, backgrounds and experiences that will enhance the quality of the Board's deliberations and decisions. The Corporate Governance Committee does not have a separate policy regarding gender, race, ethnicity, age, or other similar diversity criteria in identifying candidates for director nominee, but rather evaluates diversity in the broadest sense a broad sense, recognizing the benefits of gender, race, ethnic, and ethnicage diversity, butwhile also considering the breadth of perspectives, backgrounds and experiences that directors and candidates for director nominee may bring to the Board. In its assessment of the Board's composition as a whole, the Corporate Governance Committee considers whether the Board reflects the appropriate overall balance of independence, sound judgment, business specialization, technical skills, diversity and other desired qualities.

Changes in Board Composition

        Following the retirement of Henry J. Herrmann and Mr. Godlasky's appointment as Chairman of the Board in April 2018, the Board engaged Russell Reynolds Associates to assess the skills, experiences and background of our directors in light of the Company's strategic initiatives and the planned retirement of additional directors over the next couple of years. Based on the results of this assessment, the Corporate Governance Committee engaged Russell Reynolds to assist in the search for director candidates to fill the vacancy on the Board created by Mr. Herrmann's retirement and to identify candidates to fill vacancies created by the future retirement of directors. Through this process, the Corporate Governance Committee identified (i) Ms. Andrade, who was appointed to the Board in March 2019 to replace Mr. Herrmann, (ii) Mr. Jessee, who was appointed to the Board in July 2019 to replace Mr. Raines following his retirement in April 2019, (iii) Ms. Kline, who was appointed to the Board in February 2020 in connection with Mr. Kosloff's retirement in April 2020 and (iv) Ms. Weaver, who was appointed to the Board in February 2020 in connection with the retirement of Messrs. Logue and Morrissey in April 2021. The Corporate Governance Committee plans to conduct a search for an additional director in connection with the retirement of Messrs. Logue and Morrissey in April 2021.

Director Resignation Policy

        Our Corporate Governance Guidelines include a Director Resignation Policy pursuant to which any director nominee in an uncontested election who receives a greater number of "withheld" votes than "for" votes will, within five business days following the certification of the stockholder vote, tender his or her resignation to the Chairman of the Board for consideration by the Board. In addition, if a director's principal occupation or business association changes from the position the director held when originally invited to join the Board, the director is required to promptly notify the Chairman of the Board and the General Counsel and tender his or her written resignation to the Chairman and the General Counsel for consideration by the Board. A director whose resignation is under consideration shallis required to abstain from participating in any recommendation or decision regarding that resignation.resignation, but may otherwise remain active and engaged in all Board activities, deliberations, and decisions during this Board process.

        The Board will promptly make a determination whether to accept, reject or otherwise act with respect to theany tendered resignation. In making this determination, the Board may consider all factors that it deems

relevant, including the underlying reasons why stockholders "withheld" votes for election from such director (if ascertainable), the effect of the change in the director's principal occupation or business association on such director's independence, the length of service and qualifications of the director whose resignation has been tendered, the director's contributions to the Company, whether by accepting such resignation the Company will no longer be in compliance with any applicable law, rule, regulation or governing document, and whether or not accepting the resignation is in the best interests of the Company and its stockholders.stakeholders. The Board may also consider a range of possible alternatives concerning the director's tendered resignation, including acceptance of the resignation, rejection of the resignation, or in the case of a resignation tendered in connection with a stockholder vote, rejection of the resignation

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coupled with a commitment to seek to address and cure the underlying reasons reasonably believed by the Board to have substantially resulted in the "withheld" votes.

        The Board shallwill act on the tendered resignation, and shallif the resignation is tendered in connection with a stockholder vote, publicly disclose its decision regarding the resignation within 120 days after the results of the election are certified. If the Board does not accept the resignation, the director shall continue to serve until the end of his or her term and until the director's successor is elected and qualified, or until his or her earlier resignation or removal.

Director Recommendations by Stockholders

        In addition to recommendations from Board members, management or professional search firms, the Corporate Governance Committee will consider director candidates properly submitted by stockholders who individually or as a group have beneficially owned at least two percent of the outstanding shares of the Company's Class A common stock for at least one year prior to the date the recommendation is submitted. The mannerNominees recommended by stockholders in whichcompliance with the Company's Policy Regarding Director Recommendations by Stockholders and the Company's Bylaws will be evaluated on the same basis as other nominees considered by the Corporate Governance Committee evaluates candidates recommended by stockholders is generally the same as any other candidate, although the Corporate Governance Committee will also seek and consider information concerning any relationship between a stockholder recommending a candidate and the candidate to determine whether the candidate will represent the interests of all stockholders.Committee.

        Stockholders must submit director candidate recommendations in writing by certified mail to the Company's Secretary not less than 120 days prior to the first anniversary of the date of the proxy statement relating to the Company's previous annual meeting. Accordingly, for the 20182021 Annual Meeting of Stockholders, director candidates must be submitted to the Company's Secretary by November 3, 2017.6, 2020. Director candidates submitted by stockholders must contain at least the following information:

•

The name and address of the recommending stockholder;



•

The number of shares of the Company's Class A common stock beneficially owned by the recommending stockholder and the dates such shares were acquired;



•

The name, age, business address and residence of the candidate;



•

The principal occupation or employment of the candidate for the past five years;



•

A description of the candidate's qualifications to serve as a director, including financial expertise, and why the candidate does or does not qualify as "independent" under the NYSE corporate governance listing standards;



•

The number of shares of the Company's Class A common stock beneficially owned by the candidate, if any; and



•

A description of the arrangements or understandings between the recommending stockholder and the candidate, if any, or any other person pursuant to which the recommending stockholder is making the recommendation.

        In addition, the recommending stockholder and the candidate must submit, with the recommendation, a signed statement agreeing and acknowledging that:

•

The candidate consents to being a director candidate and, if nominated and elected, he/she will serve as a director representing all of the Company's stockholders in accordance with applicable laws and the Company's Certificate of Incorporation and Bylaws;



•

The candidate, if elected, will comply with the Company's Corporate Governance Guidelines and any other applicable rule, regulation, policy or standard of conduct applicable to the Board and its individual members;



•

The recommending stockholder will maintain beneficial ownership of at least two percent of the Company's issued and outstanding Class A common stock through the date of the annual meeting

for which the candidate is being recommended for nomination and that, upon such candidate's nomination and election to the Board, the recommending stockholder intends to maintain such ownership throughout the candidate's term as director; and



•

The recommending stockholder and the candidate will promptly provide any additional information requested by the Corporate Governance Committee and/or the Board to assist in the consideration of the candidate, including a completed and signed Questionnaire for Directors and Officers on the Company's standard form and an interview with the Corporate Governance Committee or its representative.

        For a complete list of the information that must be included in director recommendations submitted by stockholders, please see the "Policy Regarding Director Recommendations By Stockholders" by clicking on the "Governance Documents" link in the dropdown menu on the "Corporate Governance" tab of the "Investor Relations" section of our website atir.waddell.com. The Corporate Governance Committee will consider all director candidates submitted through its established processes, and will evaluate each of them, including incumbents, based on the same criteria. However, the Corporate Governance Committee may prefer incumbent directors and director candidates who they know personally or that have relevant industry experience and in-depth knowledge of the Company's business and operations.

        The policies and procedures above are intended to provide flexible guidelines for the effective functioning of the Company's director nomination process. The Board intends to review these policies and procedures periodically and anticipates that modifications may be necessary from time to time as the Company's needs and circumstances change.

Communications with the Board

        Stockholders and all other interested parties may communicate with the Board, Board committees, the independent or non-employee directors, each as a group, and individual directors by submitting their communications in writing to the attention of the Company's Secretary. All communications must identify the recipient, the author, state whether the author is a stockholder of the Company, and be forwarded to the following address:

Waddell & Reed Financial, Inc.
6300 Lamar Avenue
Overland Park, KS 66202
Attn: Secretary

        The directors of the Company, including the non-employee directors, have directed the Secretary not to forward to the intended recipient any communications that are reasonably determined in good faith by the Secretary to relate to improper or irrelevant topics or are substantially incomplete.

Board Meetings

        The Board held tensix meetings during the 20162019 fiscal year.year and the non-employee/independent directors held executive sessions at each of the quarterly Board meetings with Mr. Godlasky serving as chairman of the executive sessions. Each director attended at least 75% of the aggregate of the meetings of the Board and committees of the Board on which the director served. The Company has adopted a Director Attendance Policy to stress the importance of attendance, director preparedness, and active and effective participation at Board, Board committee and stockholder meetings. All of the directors attendedserving on the 2016Board at the time of the 2019 Annual Meeting of Stockholders.

        Additionally,Stockholders attended the non-employee/independent directors held five executive sessions with Mr. Alan W. Kosloff serving as chairman of each of these executive sessions.meeting.

Board Leadership Structure and Role in Risk Oversight

        The Board believes that it should have the flexibility to make determinations as to whether the same individual should serve as both the Chief Executive Officer and the Chairman of the Board, taking into account changing needs and circumstances of both the Company and the Board over time. In determining the appropriate leadership structure, the Board considers, among other things, the current composition of the Board the role of the Lead Independent Director, and challenges and opportunities specific to the Company. In prior years, the Company has had the same and different individuals serving as its Chief Executive Officer and Chairman of the Board at different points in time.

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        Currently, Mr. Sanders serves as Chief Executive Officer of the Company and Mr. HerrmannGodlasky serves as non-executive Chairman of the Board, while Mr. Kosloff, an independent director, serves as our Lead Independent Director.Board. The Board believes that its current leadership structure is appropriate given the transition of duties as Chief Executive Officer from Mr. Herrmann to Mr. Sanders during 2016, the need forand allows Mr. Sanders to focus on the operations of the Company Mr. Herrmann's extensive experience as a leader inand consult with the asset management industry and intimate knowledge of the Company's strategy and daily operations and the fact that Mr. Herrmann does not qualify as an independent director due to his recent retirement as Chief Executive Officer. Mr. Sanders consults with Mr. HerrmannChairman on Board matters and issues facing the Company andCompany. As Chairman, Mr. Herrmann, in turn, consults with Mr. Kosloff, as Lead Independent Director. Mr. KosloffGodlasky serves as the principal liaison between the non-executive Chairman of the Boardmanagement and the independent directors, advises the Chairman of the Boardmanagement with respect to agenda items and presides over executive sessions of the non-employee/independent directors at regularly scheduled Board meetings, as well as presides over Board meetings indirectors.

        Management is responsible for the event the ChairmanCompany's day-to-day risk management. The Board's role is to provide oversight of the Board is unableprocesses designed to attend.

identify, assess and monitor key risks and risk mitigation activities. The Board's oversight responsibility with respect to risk management is primarily discharged through the Audit Committee. Pursuant to applicable NYSE rules, the Audit Committee's charter addresses the duties and responsibilities of the Audit Committee, to reviewwhich reviews with management the Company's risk assessment and risk management policies, including steps taken to mitigate such risks. The Audit Committee's risk oversight responsibilities are principally addressed through a comprehensive enterprise risk assessment conducted and prepared by the head of our Internal Audit Department, who, along with input from members of executive and senior management,management. Management is ultimately responsible for the identification and assessment of internal and external risks that could materially impact the Company's operations, monitoring identified risks and taking appropriate steps to mitigate such risks. Specifically, the head of ourAnnually, Internal Audit Department leads an annualconducts a comprehensive enterprise risk assessment which is based on input from the Company's Risk Assessment Committee, comprised of division heads and members of senior management, and uses an established risk management framework to identify and characterize various risks based on the significance of their potential impact on the Company's operations, reputation and reputationstrategy, and the likelihood of occurrence. Such risks include internal and external financial, operational, strategic, technological, technology/cybersecurity, industry/market, legalreputation, people/culture, and legal/regulatory risks. TheIn addition, the Chief Audit Committee reviews and discusses the Company's risk assessment and risk management policies annually. The head of Internal AuditExecutive and the Company's independent registered public accounting firm provide regular reports to the Audit Committee regarding the internal and external audit plans and the results of on-going audits, as well as a report on Sarbanes-Oxley compliance. To ensure candid and complete reporting, the Audit Committee meets regularly in separate executive sessions with management, the head

of our InternalChief Audit DepartmentExecutive and the Company's independent registered public accounting firm at least twice annually.firm.

        In addition to the Audit Committee's oversight of cybersecurity risks through the enterprise risk assessment described above, senior management, including the Company's Chief Technology Officer, provide the Board with a comprehensive review of the Company's cybersecurity program, including the framework, policies and procedures, employee training, vendor information security management, security tools and protections, and incident response plan.

        Each standing committee including the Audit Committee, regularly reports its actions to the full Board and the Board receives regular financial and operational reports from senior management, including updates regarding legal, regulatory and compliance matters from the General Counsel, at each meeting, which enables coordination of the risk oversight function. The risk oversight function is also supported by our non-executive Chairman of the Board, whose industry leadership, tenure and experience provide a deep understanding of the risks that the Company faces. Collectively, these processes are intended to provide the Board as a whole with an in-depth understanding of risks faced by the Company and enables the Board to provide direction to the Audit Committee and senior management with respect to its approach to identifying, assessing, monitoring and mitigating material risks. The Board believes that the combination of a non-executive Chairman of the Board, who has prior experence in our day-to-day risk management processes, a Lead Independent Director, the Audit Committee, and an experienced senior management team provide the appropriate leadership to assist in effective risk oversight by the Board.

Risk Analysis of Compensation Policies and Practices

        The Compensation Committee assessed, with the assistance of management, the Company's compensation policies and practices to determine whether these policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.

        This assessment included a review of the Company's executive and broad-based employee compensation programs, the identification of potential risks that could result from such policies and practices, the identification of factors and controls that mitigate those risks, and an analysis of the potential risks against mitigating factors and controls and the Company's business strategies and objectives. Based on this assessment, the Compensation Committee concluded that our compensation policies and practices

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do not create risks that are reasonably likely to have a material adverse effect on the Company. In its assessment and conclusion, the Compensation Committee considered the following design features, among others:

•

Overall compensation levels are competitive with the market.



•

The use of multiple financial performance measures that are quantifiable and measurable.



•

The use of performance goals that are reasonableappropriate in light of past performance and market conditions.



•

Oversight by a Compensation Committee comprised of independent, non-employee directors with the ability to use negative discretion in determining compensation levels.



•

The use of long-term equity incentive awards, which comprise a significant portion of total annual incentive compensation and are paid in the form of restricted stock that typically vestsvest over a four-year period, and our stock ownership requirements that align the long-term interests of our executive officers with those of our stockholders.



•

The ability of management to exercise discretion to reduce payouts, including in connection with extraordinary or unanticipated events.



•

Multiple internal controls and approval processes intended to prevent manipulation of performance.

2016 Audit, Compensation and Corporate Governance Committees

        The Board has an Audit Committee, a Compensation Committee and a Corporate Governance Committee. Committee members are elected annually by the Board and serve until their successors are elected and qualified or until their earlier death, retirement, resignation or removal. The functions of each committee are described in detail in its respective charter, which is available on the "Governance Documents" link in the dropdown menu of the "Corporate Governance" tab on the "Investor Relations" section of the Company's website atir.waddell.com.

        For 2016, uponUpon the recommendation of the Corporate Governance Committee, the Board appointed the following members to serve on these committees:

•

Audit Committee comprised of



•

Sharilyn S. Gasaway Dennis E. Logue, Michael F. Morrissey and Jerry W. Walton. Mr. Morrissey served as Chairman of the Audit Committee in 2016.



•

Compensation Committee, comprised of Alan W. Kosloff, Michael F. Morrissey, James M. Raines and Jerry W. Walton. Mr. Walton served as Chairman of the Compensation Committee in 2016.Dennis E. Logue



•

Michael F. Morrissey (Chair)



•

Jerry W. Walton



•

Compensation Committee



•

Kathie J. Andrade (from October 2019)



•

James A. Jessee (from October 2019)



•

Alan W. Kosloff



•

Michael F. Morrissey



•

James M. Raines (until his retirement in April 2019)



•

Jerry W. Walton (Chair)

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•

Corporate Governance Committee comprised of



•

Kathie J. Andrade (from March 2019)



•

Sharilyn S. Gasaway



•

Thomas C. Godlasky (Chair)



•

James A. Jessee (from July 2019)



•

Katherine M.A. ("Allie") Kline (from February 2020)



•

Alan W. Kosloff



•

Dennis E. Logue



•

Michael F. Morrissey



•

James M. Raines and (until his retirement in April 2019)



•

Jerry W. Walton. Mr. Kosloff served as Chairman of the Corporate Governance Committee in 2016.Walton



•

Constance K. Weaver (from February 2020)

        Additionally, as Lead Independent Director, Mr. Kosloff served as an advisory member of the Audit Committee through October 2016.Descriptions

        Audit Committee.    The Audit Committee (1) appoints, terminates, retains, compensates and oversees the work of the independent registered public accounting firm, (2) pre-approves all audit review and attest services and permitted non-audit services provided by the independent registered public accounting firm, (3) oversees the performance of the Company's internal audit function, (4) evaluates the qualifications, performance and independence of the independent registered public accounting firm, (5) reviews external and internal audit reports and management's responses thereto, (6) oversees the integrity of the financial reporting process, system of internal accounting controls, and financial statements and reports of the Company, (7) oversees the Company's compliance with legal and regulatory requirements, (8) reviews and discusses with management and the independent registered public accounting firm the Company's annual and quarterly financial statements, including disclosures made in "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in periodic reports filed with the SEC, (9) discusses with management earnings press releases, (10) meets with management, the internal auditors, the independent registered public accounting firm and the Board, (11) discusses with the independent registered public accounting firm the matters required to be discussed by standards adopted by the Public Company Accounting Oversight Board (the "PCAOB") or other applicable accounting standards or regulations, including the independent registered public accounting firm's responsibility under the auditing and related professional practice standards established by the PCAOB, critical audit matters addressed during the audit, and disagreements with management encountered in the course of the audit, (12) provides the Board with information and materials as it deems necessary to make the Board aware of significant financial, accounting and internal control matters of the Company, (12)(13) periodically reviews the Company's Whistleblower Policy and Code of Business Conduct and Ethics and oversees the receipt, investigation, resolution and retention of all complaints submitted under these policies, (14) reviews and pre-approves all "related-person transactions" (as defined the Company's Whistleblower Policy, (13)Securities and Exchange Commission regulations), (15) produces an annuala report for inclusion in the Company's proxy statement, and (14)(16) otherwise complies with its responsibilities and duties as stated in the Company's Audit Committee Charter.

        The Board has determined that all four members of the Audit Committee satisfy the independence and other requirements for audit committee membership of the NYSE corporate governance listing standards and SEC requirements. The Board has also determined that Ms. Gasaway and Messrs. Logue, Morrissey and Walton are audit committee financial experts as defined by the SEC. The Board determined that these members acquired the attributes of an audit committee financial expert through their experience

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in preparing, auditing, analyzing or evaluating financial statements containing accounting issues as generally complex as the Company's financial statements; actively supervising one or more persons engaged in such activities; and their experience of overseeing or assessing the performance of companies and public accountants with respect to the preparation, auditing or evaluation of financial statements. In 2016,2019, the Audit Committee met sevensix times. For additional information concerning the Audit Committee, see "Audit Committee Report" below.

        Compensation Committee.    The Compensation Committee (1) determinesapproves and oversees the Company's executive and non-employee director compensation policies, objectives and programs, (2) reviews and approves the compensation ofdecisions with respect to the Company's executive officers includingto help ensure that such persons are fairly compensated based upon their performance and contribution to the Chief Executive Officer, (2) reviewsCompany's growth and approvesprofitability, and that such compensation decisions support the annual performance goals andCompany's objectives and rewards outstanding performance of the Company's executive officers, including the Chief Executive Officer,its stakeholders' interests, (3) establishesacts and certifies the achievement of performance goals, (4) overseesprovides oversight with respect to, the Company's incentive compensation and other equity-based compensation plans, (5)(4) reviews and approves compensation recommendations for the Company's non-employee directors, (6)(5) assesses the adequacy and competitiveness of the Company's executive and non-employee director compensation programs, (7)(6) reviews and discusses with management the "Compensation Discussion & Analysis" and recommends whether such analysis should be included in the Company's proxy statement filed with the SEC, (7) in consultation with management, reviews the Company's compensation policies and practices to determine if they create risks that are reasonably likely to have a material adverse effective on the Company and risk management policies and practices to mitigate any risks, (8) produces an annuala report on executive compensation for inclusion in the Company's proxy statement, (9) reviews and (9)discusses items with respect to the Company's strategies related to people, culture and leadership, and (10) otherwise complies with its responsibilities and duties as stated in the Company's Compensation Committee Charter.

        The agenda for meetings of the Compensation Committee is determined by its Chairman with the assistance of the Chairman of the Board and the Company's Secretary. Compensation Committee meetings are regularly attended by several of the Company's officers, including the Chief Executive Officer. Independent advisors and the Company's legal, accounting and human resources departments support the Compensation Committee in fulfilling its responsibilities. The Compensation Committee has sole authority under its charter to retain, compensate and terminate independent advisors as it deems necessary to assist in the fulfillment of its responsibilities. The Compensation Committee met six times in 2016. For more detail on the Compensation Committee, including its role, see "Compensation Discussion & Analysis" and "Compensation Committee Report" below.

        None of the individuals serving on the Compensation Committee has ever been an officer or employee of the Company. The Board has determined that all of the members of the Compensation Committee satisfy the independence requirements of the NYSE corporate governance listing standards and SEC requirements. Additionally, all of the members of the Compensation Committee qualify as "non-employee directors" for purposes of SEC requirements, and as "outside directors" for purposes of Section 162(m)requirements. The Compensation Committee met three times in 2019. Compensation Committee meetings are regularly attended by several of the Internal Revenue Code ("IRC Section 162(m)").Company's officers, including the Chief Executive Officer. For more detail on the Compensation Committee, including its role, see "Compensation Discussion & Analysis" and "Compensation Committee Report" below.

        Corporate Governance Committee.    The Corporate Governance Committee (1) annually reviews the Company's Corporate Governance Guidelines, (2) assists the Board in identifying, screening and recruiting qualified individuals to become Board members, (3) proposes nominations for Board membership and committee membership, (4) oversees the orientation program for new directors and the continuing education program/policy for all directors, (5) assesses the composition of the Board and its committees, (5)(6) oversees the performanceevaluations of the Board, management and the Board committees, thereof, and (6)(7) otherwise complies with its responsibilities and duties as stated in the Company's Corporate Governance Committee Charter.

        The Board has determined that all of the members of the Corporate Governance Committee satisfy the independence requirements of the NYSE corporate governance listing standards. The Corporate Governance Committee met two times in 2016.2019.

Committee Meetings and Process

        The agenda for meetings of each committee is determined by its Chairman with the assistance of the Chairman of the Board and the Company's Secretary. Pursuant to theits respective charter, of the Audit, Compensation and Corporate Governance Committee, each committee may appoint subcommittees for any purpose that the committee deems appropriate and delegate to such

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subcommittees such power and authority as the committee deems appropriate; however, (1) no subcommittee shall consist of fewer than two members, and (2) the committee may not delegate to a subcommittee any power or authority required by any law, regulation or corporate governance listing standard to be exercised by the committee as a whole.

        Each of the committees has sole authority under its respective charter to retain, compensate and terminate independent advisors and to utilize the Company's employees, as it deems necessary to assist in the fulfillment of its responsibilities

        In connection with the engagement of Russell Reynolds Associates to identify director candidates to fill vacancies on the Board created by director retirements, the Corporate Governance Committee formed a subcommittee in the fourth quarter of 2018 comprised of Messrs. Godlasky, Kosloff and Walton and Ms. Gasaway. Mr. Godlasky served as Chairman of the subcommittee. The subcommittee's role was to work with Russell Reynolds Associates to identify and screen individuals to serve on the Board. Mr. Sanders assisted the subcommittee with its director search process. Through this process, the subcommittee identified Ms. Andrade and Mr. Jessee, who were appointed to the Board in March 2019 and July 2019, respectively, to fill the vacancies created by the retirement of Mr. Herrmann in April 2018 and Mr. Raines in April 2019.

        In the fourth quarter of 2019, the Corporate Governance Committee formed another subcommittee comprised of Messrs. Godlasky and Jessee and Mss. Andrade and Gasaway. Mr. Godlasky served as Chairman of the subcommittee. Mr. Sanders assisted the subcommittee with its director search process. Through this process, the subcommittee identified Mss. Kline and Weaver, who were appointed to the Board in February 2020, to fill the vacancies created by the retirement of Mr. Kosloff in April 2020 and the retirement of Messrs. Logue and Morrissey scheduled for April 2021.

Compensation of Directors

        The Compensation Committee reviews annual compensation for directors who are not officers or employees of the Company or its subsidiaries (the "Outside Directors"). The Company uses a combination of cash and equity compensation to attract and retain qualified candidates to serve on the Board. All amounts are pro-rated if a director joins the Board after the commencement of the Company's fiscal year. Outside Directors are not compensated for the execution of written consents in lieu of Board and committee meetings.

        In setting Outside Director compensation, the Compensation Committee considers the significant amount of time that directors spend in fulfilling their duties to the Company, as well as the skill level required of Board members. The Compensation Committee also reviews competitive compensation data and analysis provided by Frederic W. Cook and Co., Inc. ("FWC"FW Cook"), the Compensation Committee's independent compensation consultant.

        In determining Outside Director compensation for 2016,December 2018, FW Cook provided the Compensation Committee retained FWC to providewith competitive compensation data and analysis of our Outside Director compensation, including retainers meeting fees and equity compensation awards, as compared to that paid to the non-employee directors of the Company's peer group. The companies included in this peer group are listed in "Peer Group Analysis" in the "Compensation Discussion & Analysis" below. In determining Outside Director compensation for 2016, the Compensation Committee considered the current compensation structure for Outside Directors, market trends with respect to director compensation including committee retainers vs. individual meeting fees, and Company stock performance. In December 2015,peer data. The companies included in the peer group are listed in "How We Determine Compensation – Peer Group Analysis" in the "Compensation Discussion & Analysis" below.

        Based on peer data and the time commitment of Mr. Godlasky, as Chairman of the Board, the Compensation Committee determined that 2016 cash and equityapproved changes to 2019 compensation for the Chairman of the Board, and the Board ratified the changes. For 2019, the cash retainer for the Chairman of the Board was increased to $225,000; however, the Chairman was not eligible to receive any additional cash compensation through committee retainers or meeting fees. Compensation for other Outside Directors would remainin 2019 was unchanged from 2015 levels. The Board, upon2018. Cash retainers and restricted stock awards payable to Outside Directors are pro-rated based on the recommendationnumber of the Compensation Committee, approves changes to the annual compensation for Outside Directors.whole or partial months served during a calendar year.

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Cash Compensation

        For 2016,2019, Outside Directors (other than the Chairman of the Board) received the following cash compensation:

Cash Retainers – Board

•

An annual retainer of $70,000, other$80,000 for each Board member (other than the Lead Independent Director, who received an annual retainer of $110,000;Chairman)



•

$225,000 for the Chairman

Cash Retainers – Committees

•

$20,000 for Audit Committee Chair



•

Meeting fees of $2,000$10,000 for each Board meeting attended; andAudit Committee Member



•

Meeting fees of $1,500$15,000 for eachCompensation Committee Chair



•

$7,500 for Compensation Committee Member



•

$12,000 for Corporate Governance Committee Chair



•

$6,000 for Corporate Governance Committee Member

        Although, Outside Directors generally are not paid for attending Board or committee meeting attended, other thanmeetings, the Chairman of each committee, who received fees of $3,000 per committee meeting.

        On August 1, 2016, Mr. Herrmann retired as Chief Executive Officer of the Company, but remained non-executiveBoard and the Chairman of the Board. In connection with Mr. Herrmann's retirement, the Compensation Committee retained FWC to provide market compensation information, including for the Company's peer group, for non-employee directors serving as chairman of the board. The Board, upon recommendation of the Compensation Committee determined that Mr. Herrmann would receive an annual retainer of $325,000, but would not receivemay determine to pay meeting fees for one or equity compensation duemore meetings to his significant beneficial ownershipthe extent the number of Board or committee meetings exceeds the Company's Class A common stock, including unvested restricted stock that would continue to vesttypical number of meetings during his service on the Board.

year. The Company also reimburses Outside Directors for travel and lodging expenses, if any, incurred to attend Board and committee meetings, and subject to approval by the Chairman of the Board, expenses incurred by a director in attending meetings.continuing education programs relevant to his or her duties as a director of the Company.

Equity Compensation

        For 2019, Outside Directors received the following equity compensation:

Restricted Stock Awards

•

$125,000 for each Board member (other than the Chairman)



•

$165,000 for the Chairman

        Equity awards for Outside Directors are intended to increase their beneficial ownership in the Company to more closely align their interests with those of our stockholders. Pursuant to the Stock Incentive Plan, Outside Directors are granted 5,000 restricted shares of the Company's Class A common stock upon their initial election to the Board. Following the first year of service, Outside Directors (other than the Chairman of the Board) are granted $125,000 in restricted stock ($207,500 in restricted stock for the Lead Independent Director) based on the closing market price on the grant date, which is the first business day ofOn January unless otherwise determined by the Board. Accordingly,2, 2019, Ms. Gasaway and Messrs. Godlasky, Logue, Morrissey, RainesKosloff and Walton were each granted 4,4216,922 shares of restricted stock, Mr. Godlasky was granted 9,137 shares of restricted stock and Mr. KosloffRaines was granted 7,3382,308 shares of restricted stock. Upon their appointment to the Board on March 3, 2019 and July 3, 2019, respectively, Ms. Andrade was granted 5,646 shares of restricted stock on January 4, 2016.and Mr. Jessee was granted 3,725 shares of restricted stock. Restricted shares granted to Outside Directors do not have a purchase price vest in 33¹/3% increments annually beginning on the second anniversary of the grant date, and are subject to accelerated vesting upon a change of control, death, disability or mandatory retirement. Beginning in 2017, grants of restrictedRestricted stock awards granted to Outside Directors and employees will vest in 25% increments annually beginning2019 vested 100% on the first anniversary of the grant date in order to be more consistent with the vesting practices of our peers.date. Dividends are paid on awards of restricted stock at the same rate that is paid to all stockholders generally.

Other Personal Benefits

        In addition to the compensation outlined above, Outside Directors also receive the following benefits:

•

At their election, Outside Directors and their spouses are eligible to participate in the Company's group health insurance plan, which is generally available to all Company employees; a portion of the Outside Directors' premiums are paid for by the Company. Ms. Gasaway and Messrs. Godlasky, Herrmann (beginning August 1, 2016), Kosloff, Raines and Walton made this election for 2016.



•

On certain occasions, an Outside Director's spouse may accompany the Outside Director on Company aircraft when the director is attending Board or committee meetings; no incremental cost is incurred by the Company in these instances. The value of these benefits (calculated pursuant to Internal Revenue Service guidelines) is imputed as income to the Outside Director and included as taxable income on their Form 1099-MISC. See footnote 4(a) to the Summary Compensation Table for additional information regarding the value of personal aircraft useage.



•

The Company maintains director and officer insurance coverage and provides Outside Directors with special indemnification rights in the form of an indemnification agreement that exceeds the general rights provided under our Certificate of Incorporation and Bylaws.




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2020 Compensation

•

        In December 2019, FW Cook provided the Compensation Committee with competitive compensation data and analysis of our Outside Director compensation, including retainers and equity compensation awards, as compared to that paid to the non-employee directors of the Company's peer group. The Company also provides individual or family travel insurance policiesCompensation Committee considered the current compensation structure for Outside Directors, market trends with respect to director compensation and peer data. Based on the peer data and the time commitment of Mr. Morrissey, as well asChairman of the executive officers, at a nominal cost.



•

Audit Committee, the Compensation Committee (with Mr. Morrissey abstaining) approved an increase to the cash retainer for the Chairman of the Audit Committee in 2020 to $25,000, and the Board ratified the change. Compensation for other Outside Directors may receive occasional perquisites or personal benefits of reasonable value, such as commemorative items in connection with their Board service, holiday gifts and recreational benefits or other services and amenities when attending off-site Board meetings.

        The Committee used this market data, Mr. Sanders' prior compensation as Chief Investment Officer and Portfolio Manager, and the compensation of the other current named executive officers to determine Mr. Sander's base salary as Chief Executive Officer. The Committee also considered the Company's historical pay practices for its Chief Executive Officer, as well as feedback from the Company's stockholder outreach in connection with the 2016 annual meeting of stockholders, and made the following changes to Chief Executive Officer compensation:

•

Reduced Chief Executive Officer annual base salary from $1,000,000 to $725,000; and



•

Eliminated several benefits historically provided to our Chief Executive Officer, including:



•

The change in control agreement, which provided greater severance benefits than the Company's Severance Pay Plan described under "Potential Payments Upon Termination or Change in Control" and included a tax gross up payment for any applicable excise taxes on excess parachute payments;



•

Split-dollar life insurance policy; and



•

Supplemental executive retirement plan benefits.

        In addition, the Committee made the following additional changes in 2016 to the Company's executive compensation program:

•

Eliminated tax gross-ups for spousal travel on a Company aircraft when the spouse of a director or officer accompanies the director or officer on Company business; and



•

Adopted a clawback policy that allows the Board to recoup incentive compensation from executive officers in the event of a material restatement of the Company's financial results within three years of the original reporting.

        Due to the Company's financial performance in 2016, incentive compensation declined approximately 28%, in the aggregate, for the six named executive officers that participated in the Company's Executive Incentive Plan, including a 55% reduction, in the aggregate, in cash incentive compensation and a 15% reduction, in the aggregate, in equity incentive compensation. The increase or decrease in the components of total direct compensation for each named executive officer varied based on factors affecting each respective officer, as well as the need to provide total direct compensation that remains competitive in the marketplace. The table below sets forth the components of total direct compensation for each named executive officer attributable to 2019, as well as total direct compensation attributable to 2018, in each case regardless of the timing of incentive compensation payments or grants. Total direct compensation for 2019 set forth below is different than total direct compensation set forth in the Summary Compensation Table because equity incentive awards based on 2019 performance will not be granted until March 2020 and, therefore, are not reflected in the Summary Compensation Table or the Grants of Plan-Based Award Table.

2016 2019 Stockholder Vote on Named Executive Officer Compensation

        In April 2016,2019, the compensation paid to our named executive officers in 20152018 was approved by over 78%88% of the votes cast on the proposal. Prior to the 2016 annual meeting of stockholders, we contacted our largest stockholders to discuss our executive compensation program. The Committee considered the results of the advisory vote and our shareholder outreach in reviewing our executive compensation program, andnoting the high level of stockholder support. Except for the changes implemented during 2019 to institute a more structured discretionary approach to determine incentive compensation for all eligible employees, including our executive officers, described under "How We Determine Compensation", the Committee elected to makecontinue the changes described abovesame principles in determining the "Executive Summary."types and amounts of compensation to be paid to our executive officers in 2019. The Committee will continue to focus on responsible executive compensation practices that attract, motivate and retain high performanceperforming executives, reward those executives for the achievement of short-term and long-term performance, as well as progress on our strategic initiatives, and support our other executive compensation objectives, including long-term career development and retention goals.

Compensation Program Objectives

        The Company's executive compensation program is intended to attract and retain highly qualified executive talent, provide rewards for the pastprior year's performance, and provide incentives for future performance to drive the creation of stockholder value. More specifically, our executive compensation program objectives are to:

•

Attract, motivate and retain a high-performancehigh-performing executive team with the appropriate expertise and leadership to build and sustain long-term stockholder value;



•

Incentivize and reward short-term and long-term financial, operational, strategic and individual performance that results in increased value for our stockholders; and



•

Align our executives' long-term interests with those of our stockholders.

        The investmentasset management and financial serviceswealth management industries are extremely competitive, and experienced professionals have significant career mobility. Our intellectual capital is our greatest asset. Our success, and that of our stockholders,stakeholders, depends on our ability to successfully engage a highly skilled and experienced executive team through a combination of career opportunities, a challenging work environment, and competitive compensation, particularly during the difficult financialchallenging operating environment for active asset managers and economic conditions experiencedthe dynamic operating environment for wealth managers during recent years.

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Our executive officers have developed over a number of years as a cohesive and complementary executive team and are considered an invaluable resource. Historically, we have sought to groom internal personnel for executive positions or recruited external candidates with a high degree of experience and knowledge of our industry, believing that executives with industry knowledge are more likely to excel. However, this limits the recruiting pool and makes retention a key focus of our compensation program.

        Considering these objectives and factors, the Committee has developed an executive compensation program that continues to be based on the following principles:

•

Compensation levels should be sufficiently competitive to attract, motivate and retain high caliber executives.



•

Appropriate levels of reward for performance should be tied to and vary with the Company's financial and operational performance, as well as progress on strategic objectives and individual performance.



•

A majority of total compensation should be "at risk" in the form of short-term and long-term incentive awards.



•

Long-term awards should constitute a significant portion of incentive awards to encourage executives to focus on the Company's long-term growth and prospects.



•

Retirement benefits shouldno longer comprise ana significant element of executive compensation, whichcompensation. Effective September 30, 2017, the Committee believes providesfroze future benefit accruals under Company's Retirement Income Plan (the "Pension Plan"). Although each named executive officer except Mr. Hanson has accrued a competitive advantage.vested pension benefit, they stopped earning additional benefits based on service or compensation after September 30, 2017. The Committee approved the termination of the Pension Plan, effective June 1, 2019. The Company is currently performing the administrative actions required to carry out the termination with an expected completion date in 2020. The Company maintains a 401(k) Plan and matches employee contributions up to 4% of eligible compensation and has the discretion to make additional contributions to eligible participants, subject to applicable non-discrimination requirements. For the 2019 plan year, the Company made a discretionary contribution to the 401(k) account of eligible participants in an amount equal to 2% of eligible 2019 compensation.

Elements of Our Compensation Program

        Each element of compensation paid to the Company's executive officers is designed to support one or more of the objectives described above. Total compensation for the executive officers consists of one or more of the following components:

•

Base salary;



•

Annual performance-based incentive awards, including a short-term cash award and long-term equity compensation award;



•

Retirement benefits; and



•

Personal benefits and other perquisites.

How We Determine Compensation

        Each year, theThe Committee makes compensation decisions using an approach that considers total direct compensation (i.e., base salary, annual cash incentive awards and annual equity incentive awards). Base salary is generally the smallest component of total direct compensation, which results in a significant portion of our executive officers' compensation being paid in "at risk" incentive compensation. At the beginning of each year, the Committee designates certain of ourthe executive officers tothat will participate in our Executive Incentive Plan. For 2016, the named2019, all executive officers that participated in the Executive Incentive Plan were Messrs. Herrmann, Sanders, Bloss, Butch and Sundeen and Ms. Hills. Mr. Avery did not participate inPlan.

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        For 2019, the Committee continued to utilize one incentive pool under the Executive Incentive Plan, in 2016. Incentive compensation awarded pursuant to our Executive Incentive Plan utilized a cash incentive pool and a restricted stock incentive pool. For 2016, the aggregate cash incentive pool was set at 6%funded with 10% of adjusted operating income and the aggregate restricted stock incentive pool was set at 600,000 shares of restricted stock, the maximum amounts offor cash and restricted stock that couldawards to be awarded to all individuals participating indetermined at the Executive Incentive Plan. The maximumdiscretion of the Committee. Utilizing one pool for cash and equity incentive compensation is consistent with the approach used by several companies in the Company's peer group and provides the Committee the flexibility to award cash and equity incentive compensation in the proportions that it determines are most appropriate for each executive officer. The aggregate of all executive officer who participates inincentive awards under the Executive Incentive Plan is limited to the funding pool described above.

        In 2018, senior management engaged a compensation consultant (the "Non-executive Compensation Consultant") to review 2019 incentive plan design for eligible non-executive officers and employees that do not participate in a business unit specific incentive plan to receiveensure the Company is calculated asproviding market competitive incentive opportunities. Although executive officer positions were not the individual percentagefocus of its engagement, the cashNon-executive Compensation Consultant included, for informational purposes, executive officer compensation data consistent with the proposed incentive pool and restricted stock incentive pool allocatedcompensation structure for non-executive officer positions. The Committee asked FW Cook to review the executive officer compensation information included in the Non-executive Compensation Consultant's recommendations to determine if any changes should be made to the plan design for 2019 executive officer incentive compensation in order to align incentive plan design throughout the Company. See "Compensation Consultant" below regarding FW Cook's review and assessment of the design of 2019 incentive compensation for executive officers.

        The Non-executive Compensation Consultant gathered compensation data from 10 publicly traded asset management companies, which comprise the peer group used by the Committee. Upon calculatingCommittee for 2019 executive compensation decisions. The selection of these companies was based upon market capitalization (ranging from approximately $700 million to $3 billion in late 2018). The Non-executive Compensation Consultant also used McLagan and other compensation survey information, as appropriate, for the maximumproject.

        The Non-executive Compensation Consultant's incentive plan design recommendations, as described below, were implemented for executive officers in 2019.

•

Instituted a more structured discretionary approach to better align incentive awards with performance. Under this approach, the Committee, with the input of the executive officers, established certain financial and operating goals, as well strategic objectives at the beginning of the year.



•

Implemented target long-term and short-term incentive opportunities as a percentage of base salary.



•

Shifted a portion of equity incentive compensation to cash incentive compensation to better align the Company's pay mix with the industry and the Company's peer group.

        Although the Committee utilizes financial and operating metrics to monitor the Company's performance in light of the goals established at the beginning of the year, it does not utilize any weightings or formulas to determine incentive compensation based on achievement of those goals. Rather, the financial and operating metrics are one component of the framework the Committee uses to evaluate the performance of each executive. The Committee implemented cash and equity incentive awards eachtargets for executive officer is eligibleofficers during 2019; however, such targets are meant to receive pursuant tobe a guide for the Executive Incentive Plan, theCommittee in determining incentive compensation. The Committee may exercise its negative discretion, as it did in 2016,consistent with industry practice, to paydetermine actual incentive amounts that are less than those maximum amounts.compensation awards. In determining total direct compensation, the Committee reviews and considers one or more of the following:

•

The Company's financial and operational performance, for the year;as well as progress on strategic initiatives;



•

Market survey information for comparable public and private asset managers;

        In February 2019, the equity incentive pool when it sets the performance goals, which it did in March 2016 for the 2016 performance period.

        For 2016,Committee determined that the size of the incentive pool available for cash and restricted stock incentive awards waswould be based upon 6%10% of the Company's 20162019 "adjusted operating income," defined as net income (i)(1) increased by interest expense; federal, state and local income taxes; executive cash incentive awards; extraordinary or non-recurring losses ($47.46.8 million comprisedrelated to an asset impairment charge, $11.2 million related to the revaluation of pension settlement,the Pension Plan liability and $6.9 million related to severance and intangible impairment charges); and losses from publicly-disclosed acquisitions in 20162019 (of which there were none) and (ii)(2) decreased by extraordinary or non-recurring gains ($8.5 million curtailment gain related to an amendment to our postretirement medical plan)(of which there were none) and gains from publicly-disclosed acquisitions (of which there were none), for a total of $16,510,544.$19,202,000.

        Operating income is used by the Company and investorsstockholders as a measure of the Company's underlying profitability and fluctuates with the Company's performance, which in turn creates an incentive pool that moves with the Company's performance. It is adjusted in order to provide a measure of performance that reflects the influence and contributions of each participating executive on a relatively equal basis and excludes items that, for example, may be disproportionately influenced by the business decisions of one executive more than others, or that are not indicative of our business and economic trends. This results in a measure of our executive officers' management of the Company's operating business as a whole. In setting the discretionary 6%10% threshold, the Committee considered industry practice, recommendations of FWCFW Cook regarding the performance measure, the number of executive

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officers participating in the Executive Incentive Plan, historicalprojected operating results, the need to have the ability to reward extraordinary performance, when and if achieved, and cash incentive awards granted in prior years.

        Equity incentive awards were based upon the attainmentUse of a 20% "adjusted return on equity" or "adjusted ROE" defined as adjusted operating income divided by average stockholders' equity for the year, with ending stockholders' equity (i) increased by executive cash incentive awards, extraordinary or non-recurring losses ($47.4 million comprised of pension settlement, severance and intangible impairment charges), and losses from publicly-disclosed acquisitions in 2016 (of which there were none), and (ii) decreased by extraordinary or non-recurring gains ($8.5 million curtailment gain relatedDiscretion.    Pursuant to an amendment to our postretirement medical plan) and gains from publicly-disclosed acquisitions in 2016 (of which there were none). Return on equity is a measure of how well the Company uses stockholders' equity to generate net income. Upon the attainment of a 20% adjusted ROE, 600,000 shares of the Company's Class A common stock were eligible for issuance from the restricted stock incentive pool. In 2015, the adjusted ROE threshold was 40%. However, based on the level of stockholders' equity, which had increased significantly over the past few years, and declining revenues based on assets under management, the Committee reduced the threshold to 20% based upon the 2016 forecast. In setting the discretionary 20% threshold and the maximum 600,000 share level, the Committee considered adjusted return on equity for the industry, the number of executive officers participating in the Executive Incentive Plan, historical equity incentive awards, the need to have the ability to reward extraordinary performance, when and if achieved, and the expected difficulty of achieving the desired results. The Company's adjusted ROE in 2016 was 32%.

Percentage Allocations.    The maximum percentage of the incentive pools that each participating executive is eligible to receive is based on the Committee's subjective judgment and primarily determined relative to each individual's scope of authority and complexity of responsibilities. The Committee also takes into consideration internal equity within the incentive compensation structures and the overall compensation structure of individual positions.

        The Company's Chief Executive Officer has comprehensive oversight and management responsibilities across the entire organization and is held primarily responsible for the Company's financial results. In addition, Mr. Sanders continues to oversee the investment management division, as Chief Investment Officer. The investment management division and our distribution organization, which Mr. Butch oversees, represent the two business units with the most influence on our success and the creation of stockholder value. Therefore, the incentive compensation of Messrs. Sanders and Butch is more variable from year to year compared to the incentive compensation of the other current named