1
RAYMOND JAMES FINANCIAL, INC.
880 Carillon Parkway
St. Petersburg, Florida 33716
(813) 573-3800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 15, 1996
To the Shareholders of Raymond James Financial, Inc.:
The Annual Meeting of Shareholders of Raymond James Financial, Inc.
will be held at the Raymond James Financial Center, 880 Carillon Parkway,
St. Petersburg, Florida, on Thursday, February 15, 1996 at 5:00 p.m. for
the following purposes:
1. To elect eleven nominees to the Board of Directors of the Company;
2. To ratify Incentive Compensation Criteria for certain of the Company's
executive officers;
3. To ratify the selection of Price Waterhouse as independent accountants
of the Company for the fiscal year ending September 27, 1996;
4. To transact any other business as may properly come before the
meeting.
Shareholders of record as of the close of business on December 11,
1995 will be entitled to vote at this meeting or any adjournment thereof.
Information relating to the matters to be considered and voted on at the
Annual Meeting is set forth in the Proxy Statement accompanying this
Notice.
By order of the Board of Directors,
Lynn Pippenger, Secretary
December 29, 1995
If you do not expect
to attend the meeting in person,
please vote on the matters to be
considered at the meeting by
completing the enclosed Proxy and
mailing it promptly in the enclosed
envelope.
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Raymond James Financial, Inc.
(the "Company") for the Annual Meeting of Shareholders to be held on
February 15, 1996 at 5:00 p.m., or any adjournment thereof.
If the accompanying proxy form is completed, signed and returned, the shares
represented thereby will be voted at the meeting. Delivery of the proxy
does not affect the right to vote in person should the shareholder be able
to attend the meeting. The shareholder may revoke the proxy at any time
prior to the voting thereof.
The affirmative vote of a majority of the common shares represented at the
meeting, either in person or by proxy, will be required for the election of
any nominee, or the ratification of any proposal or other business that may
properly come before the meeting.
The annual report of the Company for the year ended September 29, 1995 is
being mailed with this proxy statement to shareholders entitled to vote at
the meeting. The cost of all proxy solicitation will be paid by the
Company.
SHAREHOLDERS ENTITLED TO VOTE
AND
PRINCIPAL SHAREHOLDERS
Shareholders of record at the close of business on December 11, 1995 will be
entitled to notice of, and to vote at, the Annual Meeting. At that date,
there were 20,668,798 common shares outstanding and entitled to vote.
Shareholders are entitled to one vote per share on all matters.
The following table sets forth, as of December 11, 1995, information with
respect to the common stock ownership of each person known by the Company to
own beneficially more than 5% of the shares of the Company's common stock,
and of all Officers and Directors as a group:
Shares Percent
Name Address Beneficially Owned of Class
Thomas A. James (1) 880 Carillon Parkway 5,152,194 (2)(3) 25%
St. Petersburg, (4)(5)
Florida 33716
Christopher W.James(1)P.O. Box 1190 1,957,336(3)(5) 9%
Challis, Idaho 83226
All Officers and 6,793,387 33%
Directors as a Group
(14 Persons)
(1) Messrs. Thomas A. James and Christopher W. James are brothers.
(2) Includes shares credited to his Employee Stock Ownership Plan account.
(3) Includes 1,698,525 shares owned by the Robert A. James Trust, established
for the benefit of members of the James family for which Sound Trust
Company, a wholly-owned subsidiary of the Company, serves as trustee.
(4) Includes 267,115 shares owned by the James' Children Annuity Trust, for
which Sound Trust Company, a wholly-owned subsidiary of the Company,
serves as trustee.
(5) Includes 75,511 shares owned by the James' Grandchildren's Trust, for
which Raymond James Trust Company, a wholly-owned subsidiary of the
Company, serves as trustee.
PROPOSAL 1: ELECTION OF DIRECTORS
Eleven directors are to be elected to hold office until the Annual
Meeting of Shareholders in 1997 and until their respective successors shall
have been elected. All of the nominees were elected by the shareholders on
February 16, 1995, to serve as Directors of the Company until the Annual
Meeting of Shareholders in 1996. It is intended that proxies received will
be voted to elect the nominees named below.
Should any nominee decline or be unable to accept such nomination to
serve as a director, events which are not presently anticipated,
discretionary authority may be exercised to vote for a substitute nominee.
Principal Occupation, (1)
Directorships and Director
Nominee Age Security Ownership (2) Since
Jonathan A. Bulkley 61 Managing Director, Barents 1986
Group LLC (emerging markets/capital
markets development consulting);
President and CEO, Charterhouse
Media Group (investment banking) from
July 1988 until July 1992; President
and CEO Jesup & Lamont Securities
Group, Inc. (securities broker-dealer)
from January 1987 until July 1988;
Prior to 1986, President and CEO of
Moseley, Hallgarten, Estabrook &
Weeden Inc. (securities broker-dealer).
Member of Audit Committee
Chairman of Compensation Committee
Common shares owned: 30,487 (.15%)
Herbert E. Ehlers 56 Chairman, CEO, and Chief Investment
Officer of Liberty Investment Management,1986
effective January 1, 1995; President of
Eagle Asset Management through December 31,
1994.
Member of Audit and Compensation Committees.
Common shares owned: 26,010 (.13%)
Thomas S. Franke 54 President and COO of Raymond James & 1991
Associates, Inc. ("RJA")* since
January 1991; President and CEO
of Blunt Ellis & Loewi, Inc. (securities
broker-dealer) from 1986 to 1990.
Common shares owned: 77,200 (.37%)
Francis S. Godbold 52 President of Raymond James Financial, 1977
Inc.("RJF"); Executive Vice President of RJA.
Common shares owned: 481,835 (2.33%)
M. Anthony Greene 57 President of Investment Management 1975
& Research, Inc. ("IM&R")*; Executive
Vice President of RJF
Common shares owned: 268,803 (1.30%)
Harvard H. Hill, Jr. 59 Managing General Partner of Houston 1986
Partners (venture capital) since
July, 1985.
Director of Wonderware Corporation
Chairman of Audit Committee
Member of Compensation Committee
Common shares owned: 11,625 (.06%)
Christopher W.James 50 Manager of Living Waters Ranch 1983
(nondenominational church retreat
center) and Account Executive of IM&R.
Common shares owned: 1,957,336 (9.48%)(3)
Thomas A. James 53 Chairman of the Board and Chief 1970
Executive Officer of RJF; Chairman
of the Board of RJA. Director and
Officer of various affiliated
entities. Past Chairman of the
Securities Industry Association.
Director of Arbor Health Care Corporation
(nursing homes); Sunstyle Homes, Inc.
(inactive); and IMCO Recycling, Inc.
(metal recycling).
Common shares owned: 5,152,194 (24.96%)(3)
Paul W. Marshall 54 Chairman and CEO of Rochester 1993
Shoe Tree Co., Inc. since 1992;
Adjunct Professor at Harvard Graduate
School of Business from 1989 through
1992; Chairman of Industrial Economics,
Inc. from 1989 through 1992. Director of
Applied Extrusion Technologies
(manufacturer); and Foodbrands America, Inc.
(food processing and distribution)
Member of Audit and Compensation
Committees.
Common shares owned: 4,500 (.02%)
J. Stephen Putnam 52 President of Robert Thomas Securi- 1989
ties, Inc. ("RTS")*; Executive Vice
President of RJF. Vice President and
Director of F.L. Putnam Securities.
Treasurer of Meescheart Fund, Inc.
(mutual fund). Director of F.L.
Putnam Investment Management Co.
(investment advisor).
Common shares owned: 82,584 (.40%)
Robert F. Shuck 58 Vice Chairman of RJF; Executive Vice 1970
President of RJA from 1975 through
1991.
Common shares owned: 339,428 (1.64%)
* A wholly-owned subsidiary of Raymond James Financial, Inc.
(1) Unless otherwise noted, the nominee has had the same principal
occupation and employment during the last five years.
(2) Includes shares credited to their Employee Stock Ownership Plan
accounts and shares which can be acquired within sixty days of record
date through the exercise of stock options.
(3) See footnotes under the Principal Shareholders Ownership table.
The Board of Directors held 4 regular meetings during fiscal 1995.
All of the directors attended each of the four meetings held during the
year.
The current standing committees of the Board of Directors are the
Audit Committee and the Compensation Committee. These committees met four
times during the fiscal year ended September 29, 1995. Each member of
these committees attended all of the meetings held during the year. The
function of the Audit Committee is to meet periodically with the Company's
independent accountants to review the scope and results of the audit and to
consider various accounting and auditing matters related to the Company,
including its system of internal controls and the results of regulatory
examinations. The Committee also makes recommendations to the Board of
Directors regarding the independent public accountants to be appointed as
the Company's auditors. The Compensation Committee reviews and approves
the compensation to be paid to executive officers of the Company and its
subsidiaries and performs certain duties prescribed by the Board with
respect to employee benefit plans.
Mssrs. Marshall, Hill, Bulkley, and Ehlers receive a $6,000 annual
retainer, a $1,500 attendance fee for each regular meeting, $250 for each
telephone meeting, and a $250 attendance fee for each Audit and
Compensation Committee meeting.
Outside Director Stock Options
The inside Directors who are also employees of the Company have voted
in favor of stock option issuances under which the Company's outside
Directors have been granted non-qualified options covering 66,560 shares of
the Company's common stock. These options, 34,500 of which were out
standing at September 29, 1995, are exercisable at prices ranging from
$5.00 to $17.33 at various times through September 1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Compensation Committee (the "Committee") reviews all corporate
compensation and benefit plan policies, as well as the structure and amount
of all compensation for executive officers of the Company. The Committee
is composed exclusively of outside directors of the Company and is
currently chaired by Mr. Bulkley.
The Committee's goal is to establish and maintain compensation
policies that will enable the Company to attract, motivate and retain high-
quality executives and to ensure that their individual interests are
aligned with the long-term interests of the Company and its investors.
The Company's objectives are met through a compensation package which
includes four major components - base salary, annual bonus, incentive stock
option awards and retirement plans.
The cash compensation components (base salary and annual bonus) are
heavily weighted towards annual bonus. These bonuses are based on the
attainment of performance goals, specifically the profits of an individual
subsidiary/department or on the profits of the Company as a whole. The
emphasis on profit-based compensation serves two functions; it encourages
executives to be conscious of the "bottom line" and it keeps the Company's
base salary structure at a modest level, which is advantageous to the firm
given the cyclical nature of the securities industry.
The third component of the compensation package, incentive stock
option awards, is designed to provide a direct link between the long-term
interests of executives and shareholders. Historically, options have been
granted every three years to key management employees. From time to time
special awards may have been granted when a unique situation existed, or if
job performance or a change in job duties warranted. Beginning in fiscal
1996, options will be granted every two years to key management employees.
The fourth and final component of the compensation package is Company
contributions to various retirement plans. The Company maintains three
qualified retirement plans; a profit sharing plan, an employee stock
ownership plan and a 401(k) plan. Contributions to the profit sharing and
employee stock ownership plans, if any, are dependent upon the overall
profits of the Company. Since inception of the 401(k) plan in 1987, the
Company has matched a portion of the first $1,000 contributed annually by
employees to their 401(k) accounts. Effective January 1, 1994 the plan
provides for the Company to match 100% of the first $500 and 50% of the
next $500 of compensation deferred by each participant annually. These
three plans are offered to all full-time employees who meet the length of
service requirements (six months for the 401(k) plan and one year for the
other two plans). The Company also maintains a non-qualified deferred
management bonus plan. Eligibility is restricted to those who meet certain
compensation levels set annually by the Board of Directors. The class year
vesting schedule of this plan is designed to encourage long-term employment
with the firm, and the earliest a participant may become fully vested is at
age 55 with 20 years of service. Contributions to this plan are also
dependent upon the Company's earnings.
Compensation of the Chief Executive Officer
In keeping with the general compensation philosophy outlined above,
Mr. James' base salary for calendar 1996 will be $216,000, which represents
a 7% increase from the $202,000 received in 1995. Mr. James' salary is
subject to an annual review, as is true of all employees. It was last
adjusted in December 1994, to be effective January 1, 1995.
In determining the subjective portion of the bonus offered to Mr.
James for fiscal 1995 the Committee considered many factors including the
following:
* 1995 was the eleventh consecutive record year for the firm
in terms of revenues;
* Net income increased 10% over the prior year;
* Book value per share increased to $12.91, a 16.4% increase,
during the year;
* Return on average equity for the year was 18.2%;
* The compensation of the chief executive officers of other
similar brokerage firms, as of their most recent proxy statement.
Compensation Committee
November 14, 1995
Jonathan A. Bulkley, Chairman
Harvard H. Hill, Jr.
Paul W. Marshall
Herbert E. Ehlers
PROPOSAL 2: TO RATIFY INCENTIVE COMPENSATION CRITERIA
FOR CERTAIN OF THE COMPANY'S EXECUTIVE OFFICERS
In last year's proxy statement, dated December 28, 1994, executive
officers' incentive compensation calculations were formalized. This was
done in consideration of the limitations on tax deductibility imposed under
Section 162(m) of the Internal Revenue Code of 1986, as amended. Section
162(m) limits deductions for compensation in excess of $1 million a year by
a public corporation to its executive officers unless certain criteria are
met. This rule requires that the incentive compensation be based on
attainment of one or more performance goals and that the Company's
shareholders approve both the performance goals and the formula used to
calculate the payment amount.
The intention of the Committee was, and remains, that the executives
continue to be compensated on a basis consistent with prior years.
However, at the time the proxy statement was written and subsequently
approved by the shareholders, the Committee anticipated that certain
intercompany accounting adjustments would be made so that the RJA retail
division, IM&R and RTS would receive credit in their financial statements
for certain items (primarily interest income on the balances arising from
their customers) attributable to the retail sales forces. The maximum
percentages for the bonus calculations were set in anticipation of this
change, which would have increased pretax fiscal 1995 profits by
$1,609,582, $9,055,182 and $5,798,410 for the RJA retail division, IM&R and
RTS, respectively.
Subsequent to the shareholders annual meeting it was determined that
the costs associated with these changes did not justify modifying the
internal accounting system. As a result, at their November 14, 1995
meeting, the Compensation Committee resolved to pay the RJA retail
division, IM&R, and RTS bonuses based on pretax profits as though they had
received credit for the items as anticipated in the prior year's proxy
statement. This resulted in increased maximum bonuses payable to Mr.
Franke, Mr. Greene and Mr. Putnam of $64,383, $430,121, and $231,936,
respectively (see summary compensation table on page 9). Therefore, as
intended, these bonus amounts were calculated in a manner consistent with
the prior years.
For purposes of determining future incentive compensation for the
officers affected by this change, the Committee has amended the executive
bonus plan description approved in the prior year to the formulas described
below and recommends a vote FOR the approval of these amended formulas by
shareholders.
Recommended Bonus Formulas for Executive Officers
Maximum Percent for
Executive Officer Basis Bonus Calculation
Thomas S. Franke RJA retail division's pretax
profits per Retail Contribution
Report* 4%
RJA institutional equity, syndicate,
and fixed income departmental pretax
profits and Planning Corporation of
America, Inc. pretax profits 2%
M. Anthony Greene IM&R pretax profits per Retail
Contribution Report* 4.75%
J. Stephen Putnam RTS pretax profits per Retail
Contribution Report* 4%
Correspondent clearing department's
pretax profits per Retail Contribution
Report* 4%
*The Retail Contribution Report adjusts financial statement pretax profits
for items related to the retail sales force, primarily a credit for
interest income on balances arising from retail customers and also includes
adjustments to actual clearing costs, a portion of mutual fund reciprocal
commissions, credit for correspondent clearing profits and accruals for
benefit expenses.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
remuneration earned during the last three fiscal years by the Chief
Executive Officer and each of the four other most highly compensated
executive officers of the Company.
Long-Term
Annual Compensation Compensation
Other
Annual Stock All Other
Fiscal Commis-Compen- Option Compen-
Name Year Salary Bonus sions sation(1)Awardssation(2)
Thomas A. James 1995$200,100$ 875,000(3)$144,462 - - $45,795
CEO 1994 194,000 760,000 161,239 - - 41,775
Chairman 1993 192,500 900,000 154,713 - - 58,223
Francis S. Godbold1995171,250 741,000(3) 21,435 $62,772 - 45,708
President of RJF,1994164,0001,058,401 20,148 87,144 - 41,708
Executive VP of RJA1993156,000720,000 21,120 60,902 $7,500 58,099
M. Anthony Greene1995200,100 772,000(4) 13 - - 45,577
President of IM&R1994192,050 678,451 28 - - 41,608
1993 185,000 724,000 134 - 7,500 57,913
Thomas S. Franke1995 182,500 375,000(4) 2,244 - - 45,239
President & COO of1994176,000 420,000 2,173 - - 41,349
RJA 1993 167,500 525,000 1,729 - 7,500 54,930
J. Stephen Putnam1995126,150 293,273(4) 7,910 - - 33,540
President of RTS1994 120,800 257,771 8,517 - - 38,728
1993 114,500 371,000 5,039 - 7,500 50,108
(1) Represents distributions received by Mr. Godbold from investor limited
partnerships which were syndicated by, and have as a General Partner,
a subsidiary of the Company. The distributions were a portion of the
General Partner's incentive profits ownership interest, which Mr.
Godbold had purchased in prior years for a nominal amount.
(2) This column includes the amount of the Company's contributions to its
401(k) Plan, Profit Sharing Plan, Employee Stock Ownership Plan, and
Deferred Management Bonus Plan.
(3) In accordance with the bonus formulas approved at the annual meeting
of the shareholders on February 16, 1995, as set forth below:
Maximum Percentage for
Executive Officer Basis Bonus Calculation
Thomas A. James Total company pretax profits 1.5%
Francis S. Godbold Investment Banking and related sub-
sidiaries' pretax profits. 13.25%
(4) In accordance with the bonus formulas as described in Proposal 2 on
page 7 of this proxy statement.
Incentive Stock Options
The following table contains information concerning options exercised
by the executive officers included in the Summary Compensation Table during
the fiscal year. No options were granted to any of the executive officers
included in the Summary Compensation Table during the fiscal year.
Aggregated Option Exercises during
Last Fiscal Year and Year End Value
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Sept. 29, 1995 Sept. 29, 1995
Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized Unexercisable) Unexercisable)
Francis S. Godbold 10,125 $ 92,492 -/ 7,500 -/$ 51,900
M. Anthony Greene 10,125 $ 92,492 -/ 7,500 -/$ 51,900
Thomas S. Franke 16,875 $147,066 16,875/24,375 $275,781/$327,594
J. Stephen Putnam 10,125 $ 92,492 -/ 7,500 -/$ 51,900
Comparative Stock Performance
The graph below compares the cumulative total shareholder return on
the common shares of the Company for the last five fiscal years with the
cumulative total return on the Standard & Poor's 500 Index and the Value
Line Securities Brokerage Index over the same period (assuming an
investment of $100 in each on October 1, 1990 and the reinvestment of all
dividends).
TRANSACTIONS WITH MANAGEMENT & DIRECTORS
IM&R leases its Atlanta, Georgia headquarters office from Eagle
Management Associates (no relation to Eagle Asset Management, Inc., a
subsidiary of the Company), which is owned by M. Anthony Greene.
Management believes the rental paid to Eagle Management Associates does not
exceed that charged by unaffiliated parties for similar space.
Mr. Francis S. Godbold, President and a Director of the Company,
previously owned 15% of the outstanding shares of common stock of RJ
Properties, Inc. ("RJP"), the balance of which is owned by the Company.
Such shares were acquired by Mr. Godbold for nominal consideration in
connection with the organization of RJP in 1980. Mr. Godbold transferred
50% of his current ownership interest in RJ Properties, Inc. to Mr. J.
Robert Love, its President, in December 1994. Mr. Godbold retains
ownership of 7.5% of RJP.
The Company has committed to invest $1 million in Houston Partners - a
venture capital fund managed by Houston Partners, of which Harvard H. Hill,
Jr. is the Managing General Partner. The commitment is recorded as an
investment and a liability in the Company's financial statements.
As of January 1, 1995, Liberty Investment Management ("Liberty"), was
formed by Herbert E. Ehlers, director and former President and Chief
Investment Officer of Eagle Asset Management, Inc. ("Eagle"). At this
time, the institutional growth equity accounts previously managed by Eagle
were transferred to Liberty. Pursuant to Ehlers' employment contract with
the Company, the Company will receive 50% of the revenues from these
accounts through December 31, 1999 while bearing none of the expenses. At
the end of the 5-year period, the Company has the option to purchase 20% of
Liberty at a predetermined price.
The Company, in the ordinary course of its business, extends credit to
certain margin accounts in which certain of its officers and directors have
an interest, in connection with the purchase of securities. These
extensions of credit have been made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with non-affiliated persons, and do not involve
more than normal risk of collectibility or present other unfavorable
features. The Company also, from time to time and in the ordinary course
of its business, enters into transactions involving the purchase or sale of
securities as principal from or to directors, officers and employees and
accounts in which they have an interest. These purchases and sales of
securities on a principal basis are effected on substantially the same
terms as similar transactions with unaffiliated third parties.
All past transactions with management and affiliates have been, and
all such future transactions will be, on terms no less favorable to the
Company than could be obtained from unaffiliated parties.
PROPOSAL 3: SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Price Waterhouse LLP has served as independent accountants
of the Company since fiscal 1979, and has audited the Company's
broker-dealer subsidiaries since fiscal 1970.
A representative of Price Waterhouse LLP will be present at the Annual
Meeting of Shareholders. Such representative will be available to respond
to appropriate questions and may make a statement if he so desires.
The Board of Directors recommends a vote FOR the appointment of Price
Waterhouse LLP as the Company's auditors for 1996.
OTHER MATTERS
Proposals which shareholders intend to present at the 1997 annual
meeting of shareholders must be received by the Company no later than
October 1, 1996 to be eligible for inclusion in the proxy material for that
meeting.
Management knows of no matter to be brought before the meeting which
is not referred to in the Notice of Meeting. If any other matters properly
come before the meeting, it is intended that the shares represented by
proxy will be voted with respect thereto in accordance with the judgment of
the persons voting them.
By Order of the Board of Directors,
Lynn Pippenger, Secretary
Option Grants in Last Fiscal Year
% of Total Potential Realizable
Options Value at Assumed
Granted to Annual Rates of
Options Employees Exercise Expir- Stock Appreciation
Granted in Fiscal Price ration for Option Term(2)
Name (#) (1) Year ($/share) Date 5% 10%
Thomas A. James - - - - -
- -
Herbert E. Ehlers - - - - - -
Francis S. Godbold - - - - - -
M. Anthony Greene - - - - - -
Thomas S. Franke - - - - - -
(1) All of these options were granted on December , 1993. The options
vest 60% after three years, an additional 20% after four years and the
remaining 20% after five years.
(2) Potential realized values represent the future value, net of exercise
price, of the options granted if the Company's stock price was to
appreciate by 5% and 10% during each year of the awards' five-year
life.
