<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
SEI Investments Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
S E I
I n v e s t m e n t s N o t i c e o f A n n u a l M e e t i n g
o f S h a r e h o l d e r s t o b e h e l d M a y 1 8 , 1 9 9 9
<PAGE>
SEI Investments Company
Oaks, PA 19456-1100
Notice of Annual Meeting of Shareholders
To be Held May 18, 1999
The Annual Meeting of Shareholders of SEI Investments
Company (the "Company"), a Pennsylvania business
corporation, will be held at 10:00 a.m., local time,
Tuesday, May 18, 1999, at One Freedom Valley Drive,
Oaks, PA 19456-1100 for the following purposes:
1.To elect two directors for a term expiring at the
2002 Annual Meeting;
2.To ratify the selection of Arthur Andersen LLP as
the Company's auditors for 1999; and
3.To transact such other business as may properly come
before the Annual Meeting or any adjournments
thereof.
Only shareholders of record at the close of business
on April 7, 1999 will be entitled to notice of, and
to vote at, the Annual Meeting and at any
adjournments thereof.
By order of the Board of Directors,
William M. Doran
Secretary
April 28, 1999
Your vote is important. Accordingly, you are asked to
complete, sign, and return the accompanying proxy
card in the envelope provided, which requires no
postage if mailed in the United States.
<PAGE>
SEI Investments Company
Oaks, PA 19456-1100
Proxy Statement
1999 Annual Meeting of Shareholders
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of SEI
Investments Company (the "Company") of proxies for
use at the 1999 Annual Meeting of Shareholders of the
Company to be held on May 18, 1999 (the "1999 Annual
Meeting") and at any adjournments thereof. Action
will be taken at the meeting upon the election of two
directors, ratification of the selection of Arthur
Andersen LLP as the Company's auditors for 1999, and
such other business as may properly come before the
meeting and any adjournments thereof. This Proxy
Statement, the accompanying proxy card, and the
Company's Annual Report for 1998 will first be sent
to the Company's shareholders on or about April 28,
1999.
Voting at the Meeting
Only the holders of the Company's Common Stock, par
value $.01 per share ("Shares"), of record at the
close of business on April 7, 1999 are entitled to
vote at the 1999 Annual Meeting. On that date there
were 17,771,246 Shares outstanding and entitled to be
voted at the meeting. Each holder of Shares entitled
to vote will have the right to one vote for each
Share outstanding in his or her name on the books of
the Company. See "Ownership of Shares" for
information regarding the ownership of Shares by
directors, nominees, officers, and certain
shareholders of the Company.
The Shares represented by each properly executed
proxy card will be voted in the manner specified by
the shareholder. If instructions to the contrary are
not given, such Shares will be voted FOR the election
to the Board of Directors of the nominees listed
herein, and FOR ratification of the selection of
Arthur Andersen LLP as the Company's auditors for
1999. If any other matters are properly presented to
the meeting for action, the
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proxy holders will vote the proxies (which confer
discretionary authority to vote on such matters) in
accordance with their best judgment.
Execution of the accompanying proxy card will not
affect a shareholder's right to attend the 1999
Annual Meeting and vote in person. Any shareholder
giving a proxy has the right to revoke it by giving
written notice of revocation to the Secretary of the
Company at any time before the proxy is voted. Under
the Pennsylvania Business Corporation Law, if a
shareholder (including a nominee, broker, or other
record owner) records the fact of abstention or fails
to vote (including broker non-votes) either in person
or by proxy, such action is not considered a vote
cast and will have no effect on the election of
directors or the ratification of the selection of
Arthur Andersen LLP, but will be considered present
for purposes of determining a quorum.
(Proposal No. 1) Election of Directors
The Board of Directors of the Company currently
consists of seven members and is divided into three
classes, one class comprising three directors, and
two classes comprising two directors. One class is
elected each year to hold office for a three-year
term and until successors of such class are duly
elected and qualified, except in the event of death,
resignation, or removal. Subject to shareholder
approval at this meeting, two directors will be
elected for the current class. This class will be
elected at the 1999 Annual Meeting by a plurality of
votes cast at the meeting.
Mr. Porter and Ms. McCarthy, both of whom are
current members of the Board of Directors, have been
nominated by the Board of Directors for election as
directors at the 1999 Annual Meeting. Shares
represented by properly executed proxy cards in the
accompanying form will be voted for such nominees in
the absence of instructions to the contrary. The
nominees have consented to be named and to serve if
elected. The Company does not know of anything that
would preclude the nominees from serving if elected.
If, for any reason, a nominee should become unable or
unwilling to stand for election as a director, either
the Shares represented by all proxies authorizing
votes for such nominee will be
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<PAGE>
voted for the election of such other person as the
Board of Directors may recommend or the number of
directors to be elected at the 1999 Annual Meeting
will be reduced accordingly.
The Board of Directors unanimously recommends that
the shareholders vote FOR the election of Mr. Porter
and Ms. McCarthy as directors at the 1999 Annual
Meeting.
Set forth below is certain information concerning
Mr. Porter and Ms. McCarthy and each of the five
other current directors whose terms continue after
the 1999 Annual Meeting.
Nominees for election at the 1999 Annual Meeting:
Henry H. Porter, Jr., 64, has been a director since
September 1981 and is a member of the Audit,
Compensation and Stock Option Committees of the Board
of Directors. Since June 1980, Mr. Porter has been a
private investor and financial consultant. Mr. Porter
is a member of the board of directors of Caldwell &
Orkin Funds, Inc., which is an investment company.
Kathryn M. McCarthy, 50, was appointed by the Board
of Directors to be a director in October 1998,
thereby filling the vacancy created by the death of
Donald C. Carroll in February 1998. Since October
1998 Ms. McCarthy has been a member of the Audit
Committee of the Board of Directors. Since November
1996, Ms. McCarthy has been President of MARUJUPU,
LLC, an investment management and estate planning
company. Ms. McCarthy is a director of Clifford Asset
Management ("CAM"), a registered investment adviser
that utilizes investment products and services of the
Company for the benefit of its clients. In 1998, CAM
received marketing support therefore of approximately
$600,000 as well as certain ancillary support
services of the type provided to other investment
adviser clients of the Company. Together with her
husband, who is the president of CAM, Ms. McCarthy
beneficially owns a majority equity interest in CAM.
From June 1992 until October 1996, Ms. McCarthy was a
senior financial counselor/portfolio manager with
Rockefeller & Company.
3
<PAGE>
Directors continuing in office with terms expiring in
2000:
Henry H. Greer, 61, has been a director since
November 1979 and is a member of the Audit Committee
of the Board of Directors. Mr. Greer served as the
Company's President and Chief Operating Officer from
August 1990 until March 1999, and as the Company's
Chief Financial Officer from September 1996 until
March 1999. From May 1989 until August 1990, Mr.
Greer served as President of the Company's Benefit
Services Division under a consulting arrangement. For
the eleven-year period prior to August 1990, Mr.
Greer was President of the Trident Capital Group, a
venture capital firm.
Richard B. Lieb, 51, has been an Executive Vice
President of the Company since October 1990 and a
director since 1994. Mr. Lieb has been President of
the Company's Investment Systems and Services Unit
since 1995. Mr. Lieb was President and Chief
Executive Officer of the Company's Insurance Asset
Services Division from March 1989 until October 1990.
From 1986 to 1989, Mr. Lieb served in various
executive positions with the Company.
Carmen V. Romeo, 55, has been an Executive Vice
President of the Company since December 1985 and a
director since June 1979. Mr. Romeo is President of
the Company's Investment Advisory Group. Mr. Romeo
was Treasurer and Chief Financial Officer of the
Company from June 1979 until September 1996.
Directors continuing in office with terms expiring in
2001:
Alfred P. West, Jr., 56, has been the Chairman of the
Board of Directors and Chief Executive Officer of the
Company since its inception in 1968. From June 1979
until August 1990, Mr. West also served as the
Company's President. He is a member of the
Compensation Committee of the Board of Directors.
William M. Doran, 58, has been a director since March
1985 and is a member of the Compensation Committee of
the Board of Directors. Mr. Doran is Secretary of the
Company and since October 1976 has been a
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<PAGE>
partner in the law firm of Morgan, Lewis & Bockius
LLP, Philadelphia, Pennsylvania. Mr. Doran is a
trustee of SEI Liquid Asset Trust, SEI Tax Exempt
Trust, SEI Daily Income Trust, SEI Institutional
Managed Trust, SEI Index Funds, SEI Institutional
International Trust, SEI Asset Allocation Trust, SEI
Institutional Investments Trust, SEI Insurance
Products Trusts, The Arbor Fund, The Advisors' Inner
Circle Fund, Oak Associates Fund and Expedition
Funds, each of which is an investment company for
which the Company's subsidiaries act as advisor,
administrator and/or distributor.
Board and Committee The Board of Directors of the Company held four
Meetings meetings in 1998. During the year, all directors
attended all meetings of the Board of Directors and
of the committees on which they served. Standing
committees of the Board of Directors of the Company
are the Audit Committee, Compensation Committee and
Stock Option Committee. The Audit Committee has three
members, Messrs. Greer and Porter and Ms. McCarthy.
Members of the Compensation Committee are Messrs.
West, Doran and Porter. Currently, the sole member of
the Stock Option Committee is Mr. Porter.
During 1998, the Audit Committee met two times.
The principal functions of the Audit Committee are to
review with management and the Company's independent
public accountants the scope and results of the
various audits conducted during the year; to discuss
with management and the Company's independent public
accountants the Company's annual financial
statements; and to review fees paid to, and the scope
of services provided by, the Company's independent
public accountants.
During 1998, the Compensation Committee met three
times. The principal function of the Compensation
Committee is to administer the Company's compensation
programs, including certain stock plans and bonus and
incentive plans. The Compensation Committee also
reviews with management and approves the salaries of
senior corporate officers
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<PAGE>
and employment agreements between the Company and
senior corporate officers.
During 1998, the Stock Option Committee met one
time. The principal function of the Stock Option
Committee is to administer certain benefit plans.
The Board of Directors does not have a Nominating
Committee. The Board will consider nominees for
election to the Board of Directors recommended by the
Company's shareholders. All such recommendations
should be submitted in writing to the Board of
Directors at the Company's principal office.
Ownership of Shares
The following table contains information as of
February 26, 1999 relating to the beneficial
ownership of Shares by each of the members of the
Board of Directors, the Chief Executive Officer and
each of the four other most highly compensated
executive officers of the Company, by members of the
Board of Directors and the Company's officers as a
group, and by the holders of 5% or more of the total
Shares outstanding. As of February 26, 1999, there
were 17,874,121 Shares outstanding. Information as to
the number of Shares owned and the nature of
ownership has been provided by these persons and is
not within the direct knowledge of the Company.
Unless otherwise indicated, the named persons possess
sole voting and investment power with respect to the
Shares listed.
6
<PAGE>
<TABLE>
<CAPTION>
Percent
Name of Individual Number of of
or Identity of Group Shares Owned Class (1)
---------------------------------------------------------------
<S> <C> <C>
Alfred P. West, Jr.(/2/)................ 5,076,537 28.4%
William M. Doran(/3/) (/4/)............. 799,718 4.5%
Carmen V. Romeo(/3/) (/5/).............. 422,216 2.4%
Richard B. Lieb(/3/).................... 228,700 1.3%
Henry H. Greer(/3/)..................... 197,873 1.1%
Edward D. Loughlin(/3/)................. 170,236 *
Henry H. Porter, Jr.(/3/)............... 61,000 *
Kathryn M. McCarthy..................... 0 *
All executive officers and directors as
a group (11 persons)(/6/).............. 7,243,035 39.0%
Thomas W. Smith(/7/).................... 1,812,300 10.1%
Thomas N. Tryforos(/7/)................. 1,444,802 8.1%
---------------------------------------------------------------
</TABLE>
* Less than one percent.
(1) Applicable percentage of ownership is based on
17,874,121 shares of Common Stock outstanding on
February 26, 1999. Beneficial ownership is
determined in accordance with the rules of the
Securities and Exchange Commission and means voting
or investment power with respect to securities.
Shares of Common Stock issuable upon the exercise of
stock options exercisable currently or within 60
days of February 26, 1999 are deemed outstanding and
to be beneficially owned by the person holding such
option for purposes of computing such person's
percentage ownership, but are not deemed outstanding
for the purpose of computing the percentage
ownership of any other person. Except for shares
held jointly with a person's spouse or subject to
applicable community property laws, or as indicated
in the footnotes to this table, each stockholder
identified in the table possesses sole voting and
investment power with respect to all shares of
Common Stock shown as beneficially owned by such
stockholder.
(2) Includes an aggregate of 4,000 Shares held by Mr.
West's wife and 816,734 Shares held in trusts for
the benefit of Mr. West's children, of which Mr.
West's wife is a trustee or co-trustee. Also
includes 21,000 Shares which may be acquired upon
exercise of stock options exercisable within 60 days
of February 26, 1999 held in a trust of which Mr.
West is a trustee. Mr. West disclaims beneficial
ownership of the Shares held in these trusts. Also
includes 756,250 Shares held by APWest Associates,
L.P., a Delaware limited partnership of which Mr.
West is the sole general partner. Also
7
<PAGE>
includes 1,818,400 Shares held in several trusts of
which Mr. West is a trustee. Mr. West's address is
c/o SEI Investments Company, Oaks, PA 19456-1100.
(3) Includes, with respect to Messrs. Doran, Porter,
Greer, Romeo, Lieb, and Loughlin, 8,000, 29,000,
10,000, 92,500, 159,500 and 162,500 Shares,
respectively, which may be acquired upon exercise of
stock options exercisable within 60 days of February
26, 1999.
(4) Includes an aggregate of 699,000 Shares held in
trust for the benefit of Mr. West's children, of
which Mr. Doran is a co-trustee and, accordingly,
shares voting and investment power. Mr. Doran
disclaims beneficial ownership of the Shares held in
trust.
(5) Includes an aggregate of 5,000 Shares held in
custodianship for the benefit of Mr. Romeo's minor
children, of which Mr. Romeo's brother is a
custodian. Mr. Romeo disclaims beneficial ownership
of the Shares held in custodianship.
(6) Includes 718,000 Shares which may be acquired upon
the exercise of stock options exercisable within 60
days of February 26, 1999.
(7) Messrs. Smith and Tryforos share voting and
investment power with respect to 1,437,000 Shares in
their capacities as general partners to private
investment limited partnerships and trustees of a
profit sharing trust. Mr. Smith is the beneficial
owner of an additional 100,300 Shares in his
capacity as investment manager to certain managed
accounts. In addition, Messrs. Smith and Tryforos
own 275,000 and 7,802 Shares, respectively, for
their own accounts. The address of Messrs. Smith and
Tryforos is 323 Railroad Avenue, Greenwich, CT
06830.
Executive Compensation
The Summary Compensation Table set forth below
includes individual compensation information on the
Company's Chief Executive Officer and the Company's
four other most highly paid executive officers for
services rendered in all capacities for the years
ended December 31, 1998, 1997 and 1996.
8
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------- --------------------------
Securities All Other
Fiscal Salary Bonus Underlying Compensation
Name & Principal Position Year ($) (1) ($) (2) Options/SAR's ($) (3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alfred P. West, Jr. ...... 1998 $ 310,000 $ 450,000 --0-- $3,840
Chairman of the Board and 1997 $310,000 $365,000 --0-- $3,840
Chief Executive Officer 1996 $310,000 $190,000 --0-- $3,600
Henry H. Greer............ 1998 $ 285,000 $ 350,000 4,000 $3,840
Director (President, 1997 $ 285,000 $ 290,000 15,000 $3,840
Chief Operating Officer 1996 $ 285,000 $ 165,500 15,000 $3,600
and Chief Financial
Officer through March 31,
1999)
Richard B. Lieb........... 1998 $ 260,000 $ 415,000 8,000 $3,840
Director and Executive 1997 $ 260,000 $ 315,000 20,000 $3,840
Vice President 1996 $ 260,000 $ 190,000 15,000 $3,600
Edward D. Loughlin........ 1998 $ 250,000 $ 275,000 6,000 $3,840
Executive Vice President 1997 $ 250,000 $ 275,000 15,000 $3,840
1996 $ 250,000 $ 175,000 15,000 $3,600
Carmen V. Romeo........... 1998 $ 250,000 $ 400,000 15,500 $3,840
Director and Executive 1997 $ 250,000 $ 275,000 25,000 $3,840
Vice President 1996 $ 250,000 $ 200,000 15,000 $3,600
- --------------------------------------------------------------------------------
</TABLE>
(1) Compensation deferred at the election of the executive, pursuant to the
Company's Capital Accumulation Plan ("CAP"), is included in the year
earned.
(2) Cash bonuses for services rendered during 1998, 1997 and 1996 have been
listed in the year earned, but were actually paid in the following fiscal
year.
(3) The stated amounts are Company matching contributions to the CAP.
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<PAGE>
The Company has an employment agreement with Mr.
West (which renews annually in May) pursuant to which
he is entitled to a certain minimum base salary, a
bonus based on the performance of the Company, and
certain retirement benefits. The Company also has an
employment agreement with Mr. Lieb. Mr. Lieb's
employment agreement is for a one-year term and
renews annually in July of each year unless
terminated prior thereto by either Mr. Lieb or the
Company. In the event that the Company terminates his
employment agreement without cause, Mr. Lieb is
entitled to one year's severance pay. Mr. Lieb's
employment agreement provides for a certain minimum
base salary and participation in management bonus
programs. Mr. Lieb received a base salary of $260,000
in 1998.
The Securities and Exchange Commission's proxy
rules also require disclosure of the range of
potential realizable values from stock options
granted during the fiscal year ended December 31,
1998, at assumed rates of stock price appreciation
through the expiration date of the options, and the
value realized from the exercise of options during
the fiscal year ended December 31, 1998.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------------
Number of
Securities % of Total
Underlying Options/SAR's Exercise or
Options/SAR's Granted to Base Price Grant Date
Granted Employees in per Share Expiration Present
Name (#)(1) Fiscal Year(2) ($/Sh) Date Value ($)(3)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alfred P. West, Jr. .... -0- 0.0% N/A N/A $ 0.00
Henry H. Greer.......... 4,000 0.8% $89.750 12/16/08 $161,040.00
Richard B. Lieb......... 8,000 1.6% $89.750 12/16/08 $322,080.00
Edward D. Loughlin...... 6,000 1.2% $89.750 12/16/08 $241,560.00
Carmen V. Romeo......... 7,500 3.1% $68.750 4/9/08 $241,725.00
8,000 $89.750 12/16/08 $322,080.00
----------------------------------------------------------------------------------------
</TABLE>
(1) All options granted to the named executive
officers were non-qualified options granted on
April 9, 1998 (7,500 to Carmen Romeo only) and
December 16, 1998, at an exercise price equal to
the fair market value on such date. The April 9,
1998 options vest fifty percent upon the
Company's attainment of diluted earnings per
share of $3.25 during a twelve month reporting
period and the
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other fifty percent upon the Company's attainment
of diluted earnings per share of $5.00 during a
twelve month reporting period or fully vest on the
seventh anniversary from the date of grant. The
December 16, 1998 options vest fifty percent upon
the Company's attainment of diluted earnings per
share of $4.50 during a twelve month reporting
period and the other fifty percent upon the
Company's attainment of diluted earnings per share
of $6.75 during a twelve month reporting period or
fully vest on the seventh anniversary from the date
of grant.
(2)Based on total number of shares granted to
employees in 1998 of 508,000.
(3)Based on the Black-Scholes stock option pricing
model price using the following assumptions:
<TABLE>
<CAPTION>
April 9, 1998 December 16, 1998
------------- -----------------
<S> <C> <C>
Price......................... $ 32.23 $ 40.26
Risk free rate................ 5.728% 4.638%
Beta.......................... 40.25% 40.31%
Dividend Yield................ 1.00% 1.00%
Exercise Date................. 7 years 7 years
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised,
Unexercised In-the-Money
Options Held Options at Fiscal
Shares Value at Fiscal Year End (#) Year End ($)(2)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alfred P. West, Jr. .... -0- $ 0 -0- -0- $ 0 $ 0
Henry H. Greer.......... 341,500 $21,382,513 7,500 24,000 $ 595,781 $1,507,563
Richard B. Lieb......... -0- $ 0 157,000 33,000 $13,714,938 $1,832,938
Edward D. Loughlin...... 24,000 $ 1,482,250 160,000 26,000 $13,156,563 $1,526,813
Carmen V. Romeo......... 20,000 $ 1,618,750 90,000 45,500 $ 7,561,563 $2,349,500
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the difference between the closing price of the Company's
Common Stock on the exercise date and the exercise price of the options.
(2) Represents the difference between the closing price of the Company's
Common Stock at December 31, 1998 ($99.375) and the exercise price of the
options.
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Director Compensation Each director who is not an employee of the Company
receives $1,800 per meeting attended and an annual
retainer of $10,800. The chairman of the Audit
Committee receives an additional annual fee of
$2,400.
In 1998, Messrs. Doran, Porter and Ms. McCarthy,
the Company's non-employee directors, each received
options to purchase 4,000 Shares at an exercise price
of $89.75 per share under the SEI Investments Company
1998 Equity Compensation Plan. These options have an
exercise price equal to the fair market value of the
Shares as of the date of grant and a ten-year term.
The options become exercisable in two equal
installments upon achievement by the Company of
certain diluted earnings per share goals; provided
that all options fully vest upon the seventh
anniversary of the date of the option grant. Upon her
election to the Board of Directors, Ms. McCarthy also
received options to purchase 8,000 Shares at an
exercise price of $57.00 per share under the SEI
Investments Company 1998 Equity Compensation Plan.
Notwithstanding anything to the contrary, the following Report of the
Compensation Committee and the Performance Graph on page 17 shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of
1933, as amended, or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
Compensation The Compensation Committee, consisting of two non-
Committee Report on employee directors and Mr. West, the Chairman and
Executive Chief Executive Officer and largest shareholder of
Compensation the Company, approves all policies and plans under
which compensation is paid or awarded to management
employees. Included in this group are management
level employees of all of its business units other
than sales employees who are under sales commission
compensation plans.
The Company's compensation philosophy (which is
intended to apply to all members of management,
including the Chief Executive Officer and the
President and Chief Operating Officer), as
implemented by the Compensation Committee, is to
provide a compensation program for management which
results in competitive levels of compensation and
which emphasizes incentive plans aligned with
attaining the Company's
12
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annual goals and longer term objectives. The Company
believes that this approach enables it to attract,
retain and reward highly qualified personnel.
The compensation program consists of base salary;
bonuses pursuant to incentive plans; and grants of
stock options (in addition to benefits afforded all
employees such as healthcare insurance and stock
purchase and defined contribution plans).
In 1997, the Compensation Committee retained an
independent compensation consulting firm to review
compensation levels for senior management and its
overall compensation program. Its review included a
comparison of compensation of senior management
(approximately 20 senior executives) to the
compensation for senior management of comparable
companies and interviews with individual members of
senior management. As a result of this review the
Compensation Committee implemented certain changes in
the compensation program to (1) align compensation
more closely to long and short term profitability of
the Company and other Company financial goals and (2)
encourage long term stock ownership by senior
management. In addition to the changes with respect
to stock options described hereinafter, the Company
modified its 401(k) plan to permit investment in
Company stock and removed the limit on annual
compensation which can be invested in Company stock
through the Company Employee Stock Purchase Plan. The
Compensation Committee believes that these changes
will enhance shareholder value.
The discussion below describes the Compensation
Committee's compensation process for 1998 and its
1999 strategies for compensation.
Base Salaries
The Compensation Committee seeks to set base salaries
for management employees at levels that are
competitive with salaries paid to management with
comparable qualifications, experience, and
responsibilities at companies of comparable size
engaged in the same or similar businesses as the
Company. Since 1992, the Committee has minimized base
salary increases. The Committee expects to continue
to minimize base salary increases with incentive
compensation tied to performance objectives becoming
a larger portion of overall compensation. Base
salaries, however,
13
<PAGE>
may be adjusted if a manager is promoted to a higher
level management position or is given increased
responsibilities.
Incentive Bonuses
During the first quarter of each year, the
Compensation Committee reviews target performance
goals which are developed by the Chief Executive
Officer, the President and Chief Operating Officer,
and senior management of each business unit of the
Company. The Compensation Committee uses these to set
threshold and target performance goals for purposes
of the incentive compensation plan for the year.
Goals are established at the corporate level and also
at business unit levels. Bonus pools for achieving
targets are established for business units and for
senior management (including the Chief Executive
Officer and the President and Chief Operating
Officer). These target bonus pools are prorated if
the target goals are exceeded or if they are not met,
provided that the threshold goals are met. Each
individual is then assigned a target compensation
award. This award is based on three indices, a
corporate goal index, a unit goal index and a
personal goal index. Although sales compensation
continues to be based in part on a standard revenue
payout, there also is incorporated a corporate goal
index, unit goal index and a personal index in the
computation of actual incentive compensation.
During December of each year, the Compensation
Committee reviews the Company's actual performance as
compared to the threshold and target goals and
determines the total amount of bonuses for the year
and the specific bonuses to be paid to the Chief
Executive Officer, the President and Chief Operating
Officer and senior management. In addition, the size
of the final bonus pools may be adjusted for non-
financial achievements, changes in the business units
or other organizational changes during the year. The
amount of the bonus paid to each member of senior
management (other than the Chief Executive Officer
and the President and Chief Operating Officer) is
based upon recommendations from the Chief Executive
Officer and the President and Chief Operating Officer
and reflects, in addition to overall Company
14
<PAGE>
performance, the performance of his or her business
unit, and any individual achievements during the year
as well as internal and client evaluations. The
amounts of the bonuses paid to the Chief Executive
Officer and the President and Chief Operating Officer
of the Company are determined by the non-employee
members of the Compensation Committee based upon the
Company's achievement of profitability and revenue
growth goals and the achievement of strategic
organizational goals.
In December 1998, the Compensation Committee
reviewed the performance of the Company for 1998
against the incentive compensation plan targets. The
corporate goals were achieved and each of the
business units achieved its targeted goals except for
two of the units which fell below the target goals.
Based on its review of this performance against the
plan, the Committee approved payment of incentive
compensation for the year in a total amount which was
approximately $800,000 less than the 1998 plan would
have called for had all of the units met their
targets.
For 1999, the Compensation Committee again adopted
a corporate compensation plan that is based on
assigning each employee an individual target
compensation award. The actual award is then based on
the achievement of (1) corporate goals, (2) the
employee's business unit goals and (3) the employee's
own goals. The Compensation Committee believes that
the establishment of individual target awards and
objective measurement standards gives employees more
predictability as to the incentive compensation to be
achieved.
Stock Options
Prior to 1992, the philosophy of the Company was to
grant stock options to senior management as an
additional form of compensation for services
rendered. In accordance with this philosophy, senior
management normally would receive option grants each
year except that Mr. West, the Chairman, Chief
Executive Officer and largest shareholder of the
Company, has never received stock option grants from
the Company.
15
<PAGE>
Stock option grants are viewed by the Committee as
an important
means of aligning the interest of management and
employees with shareholders. The Company implemented
changes in its stock option plans and related plans
at the end of 1997 which are intended to encourage
long term stock ownership by employees and which tie
vesting of stock options to financial performance by
the Company. Beginning with stock options granted at
the end of 1997, the stock options will vest at a
rate of 50% when a specified earnings per share
target is achieved and the remaining 50% when a
second, higher specified earnings per share target is
achieved. In any event, the options will fully vest
after seven years. The Company also adopted a stock
ownership program which will make loan guarantees
available for employees who exercise stock options
and also permits a deferral plan for stock options.
Application of Section 162(m)
Payments during 1998 to the Company's management
employees as discussed above were made with regard to
the provisions of section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code").
Section 162(m) limits the deduction that may be
claimed by a "public company" for compensation paid
to certain individuals to $1 million except to the
extent that any excess compensation is "performance-
based compensation." It is the Compensation
Committee's intention to consider the deductibility
of compensation under Section 162(m).
Compensation Committee
Alfred P. West, Jr.
William M. Doran
Henry H. Porter, Jr.
Compensation Members of the Company's Compensation Committee are
Committee Interlocks Messrs. West, Doran and Porter. Mr. West is the Chief
and Insider Executive Officer of the Company. Mr. Doran is a
Participation partner in the law firm of Morgan, Lewis & Bockius
LLP, which performed services for the Company during
the year ended December 31, 1998. The Company
proposes to retain the services of such firm in 1999.
16
<PAGE>
Stock Price Performance Graph
The Stock Price Performance Graph below compares the
yearly percentage change in the cumulative total
return (based upon changes in share prices) of the
Company's Common Stock against the NASDAQ National
Market System ("NASDAQ Market Index") and a peer
industry group that consists of software, data
processing companies (40%) and financial, fund
management companies (60%). The percentage allocation
for each industry group is based on the approximate
percentage of the Company's revenue attributable to
each line of business during the fiscal year ended
December 31, 1998. The graph assumes a $100
investment on January 1, 1994 and the reinvestment of
all dividends.
[Graph appears here]
Comparison of Cumulative Total Return of SEI Investments,
Industry Index, and NASDAQ Market Index
SEI Investments Combined Group NASDAQ Market Index
1993 100 100 100
1994 66.31 102.91 104.99
1995 84.4 144.63 136.18
1996 87.31 199.85 169.23
1997 166.4 287.95 207
1998 395.37 394.52 291.96
17
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(Proposal No. 2) Ratification of Selection of Auditors
The Board of Directors has appointed Arthur Andersen
LLP, independent public accountants, to be the
Company's auditors for 1999. Although not required to
do so, the Board of Directors has determined that it
would be desirable to request ratification of this
appointment by the holders of Shares of the Company.
If such ratification is not received, the Board of
Directors will reconsider the appointment.
Representatives of Arthur Andersen LLP are expected
to be available at the 1999 Annual Meeting to respond
to appropriate questions and to make a statement if
they so desire.
The affirmative vote of a majority of the votes
cast at the 1999 Annual Meeting by the holders of the
outstanding Shares is required for the ratification
of this selection. The Board of Directors unanimously
recommends that the shareholders vote FOR approval of
this proposal.
Other Matters
As of the date of this Proxy Statement, management
knows of no other matters to be presented for action
at the 1999 Annual Meeting. However, if any further
business should properly come before the 1999 Annual
Meeting, the persons named as proxies in the
accompanying proxy card will vote on such business in
accordance with their best judgment.
Section 16(a) Beneficial Ownership Reporting
Compliance
Donald C. Carroll, a director of the Company who died
in February of 1998, failed to file a Statement of
Changes in Beneficial Ownership of Securities on Form
4 in January 1998 with respect to the exercise in
December 1997 of 8,000 options. Such transaction was
reported in February 1998 on an Annual Statement of
Changes in Beneficial Ownership of Securities on Form
5. Also, Kathryn M. McCarthy failed to file an
Initial Statement of Beneficial Ownership of
Securities on Form 3 within ten days of becoming a
director of the Company on October 8, 1998. This Form
was filed on December 10, 1998.
18
<PAGE>
Solicitation of Proxies
The accompanying proxy card is solicited on behalf of
the Board of Directors of the Company. Following the
original mailing of the proxy materials, proxies may
be solicited personally by officers and employees of
the Company, who will not receive additional
compensation for these services. The Company will
reimburse banks, brokerage firms, and other
custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy material
to beneficial owners of Shares.
Proposals of Shareholders
Proposals which shareholders intend to present at the
next annual meeting of Shareholders of the Company
must be received by the Secretary of the Company at
its principal offices (Oaks, PA 19456-1100) no later
than December 29, 1999.
Additional Information
The Company will provide without charge to any person
from whom a proxy is solicited by the Board of
Directors, upon the written request of such person, a
copy of the Company's 1998 Annual Report on Form
10-K, including the financial statements and
schedules thereto, required to be filed with the
Securities and Exchange Commission pursuant to Rule
13a-1 under the Securities Exchange Act of 1934, as
amended. Such written requests should be directed to
Murray A. Louis, Vice President, at the Company's
principal offices.
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S E I
I n v e s t m e n t s O a k s , P A 1 9 4 5 6
<PAGE>
PROXY SEI INVESTMENTS COMPANY PROXY
This proxy is solicited on behalf of the Board of Directors
The undersigned shareholder of SEI Investments Company (the "Company")
hereby appoints Kevin P. Robins and Lydia A. Gavalis, or either of them (with
full power to act alone in the absence of the other and with full power of
substitution in each), the proxy or proxies of the undersigned, and hereby
authorizes either of them to represent and to vote as designated on the reverse,
all Shares of Common Stock of the Company held of record by the undersigned at
the close of business on April 7, 1999, at the Annual Meeting of Shareholders to
be held on May 18, 1999, and at any adjournments thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
SEI INVESTMENTS COMPANY
May 18, 1999
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
FOR ALL WITHHOLD ALL
1. Election of [_] [_] Nominees: Henry H. Porter, Jr.
Directors Kathryn M. McCarthy
(Instructions: To withhold authority to vote for any
individual nominee, strike such nominee's name from
the list of nominees.)
FOR AGAINST ABSTAIN
2. Ratification of the selection of Arthur Andersen [_] [_] [_]
LLP as the Company's auditors for 1999.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
This proxy, when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
CHECK HERE FOR ADDRESS CHANGE [_]
CHECK HERE IF YOU PLAN TO ATTEND [_]
THE MEETING
SIGNATURE(S)__________________________________________DATE______________________
Note: Please sign exactly as name appears hereon. When Shares are held by joint
tenants, all joint tenants should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give the full title as such. If a
corporation, please sign in the full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
