RAYMOND
JAMES FINANCIAL, INC.
880
Carillon Parkway
St.
Petersburg, Florida 33716
(727)
567-1000
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
February
16, 2006
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 16, 2006 at 4:30 p.m. for the following
purposes:
1.
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To
elect ten nominees to the Board of Directors of the
Company.
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2.
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To
ratify the appointment by the Audit Committee of the Board of
Directors of
KPMG LLP as the Company's independent registered public accounting
firm.
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Shareholders
of record as of the close of business on December 20, 2005 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.
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By
order of the Board of Directors,
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/s/
BARRY AUGENBRAUN
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Barry
Augenbraun, Secretary
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January
13, 2006
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YOUR
VOTE IS IMPORTANT TO THE COMPANY. 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, or by telephone
or
internet vote.
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TABLE
OF CONTENTS
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Page
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Proxy
Statement
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1
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Shareholders
Sharing the Same Last Name and Address
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1
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Electronic
Access to Corporate Governance Documents
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2
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Electronic
Access to Proxy Materials and Annual Report; Internet
Voting
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2
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Shareholders
Entitled to Vote and Principal Shareholders
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2
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Proposal
1: Election of Directors
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4
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Information
Regarding Board and Committee Structure
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6
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Outside
Director Stock Options
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7
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Section
16(a) Beneficial Ownership Reporting Compliance
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7
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Report
of the Audit Committee of the Board of Directors
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7
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Corporate
Governance, Nominating and Compensation Committee Report on
Executive
Compensation
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9
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Summary
Compensation Table
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12
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Stock
Options
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13
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Comparative
Stock Performance
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14
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Transactions
with Management and Directors
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15
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Equity
Compensation Plan Information
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16
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Proposal
2: To Ratify the Appointment by the Audit Committee of the Board
of
Directors of
KPMG
LLP as the Company’s Independent Registered Public Accounting Firm
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17
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Fees
Paid to Independent Registered Public Accounting Firm
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17
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Other
Matters
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18
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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
16,
2006 at 4:30 p.m., or any adjournment thereof. These proxy materials were
mailed
out on or about January 17, 2006, to all shareholders entitled to vote
at the
meeting.
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 your right to attend the meeting. However, if your shares are held
in the
name of a bank, broker or other holder of record, you must obtain a proxy
from
the holder of record, executed in your favor, to be able to vote at the
meeting.
Otherwise, your shares will be voted in the manner in which you instructed
the
record holder of your shares.
If
you are a shareholder of record, you may revoke your proxy at any time
prior to
the close of the polls at the Annual Meeting by submitting a later dated
proxy
to the Secretary of the Company, or delivering a written notice of revocation
to
the Secretary, at Raymond James Financial, Inc. 880 Carillon Parkway, St.
Petersburg, Florida, 33716. If you hold shares through a bank, broker or
other
holder of record, you must contact that entity to revoke any prior voting
instructions.
Each
share of the Company's common stock outstanding on the record date will
be
entitled to one vote on each matter.
The ten
nominees for election as directors who receive the most votes “for” election
will be elected. Ratification of the appointment of the Company's independent
registered public accounting firm and approval of any proposal or other
business
that may properly come before the meeting will each require that the votes
cast
favoring the action exceed the votes cast opposing the action.
For
election of directors, withheld votes, abstentions and broker non-votes
do not
affect whether a nominee has received sufficient votes to be elected. For
the
purpose of determining whether the shareholders have approved matters other
than
the election of directors, withheld votes, abstentions and broker non-votes
do
not have the same effect as a negative vote. Shares represented at the
Annual
Meeting in person or by proxy are counted for quorum purposes, even if
they are
not voted on any matter. Please note that banks and brokers that have not
received voting instructions from their customers may vote their customers’
shares on the election of directors and the ratification of KPMG LLP as
the
Company's independent registered public accounting firm.
A
copy of the Company's Annual Report is being furnished to each shareholder
together with this proxy statement. The cost of all proxy solicitation
will be
paid by the Company.
SHAREHOLDERS
SHARING THE SAME LAST NAME AND ADDRESS
In
accordance with notices that certain banks and brokerage firms sent to
certain
shareholders, shareholders who share the same last name and address are
receiving only one copy of the Company’s annual report and proxy statement,
unless they have notified the Company that they want to continue receiving
multiple copies. This practice, known as “householding,” is designed to reduce
duplicate mailings and save significant printing and postage costs as well
as
natural resources.
If
you received a household mailing this year and you would like to have additional
copies of the Company’s annual report and/or proxy statement mailed to you, or
you would like to opt out of this practice for future mailings, please
contact
the Corporate Secretary at (727) 567-1000 or write to him care of Raymond
James
Financial, Inc., 880 Carillon Parkway, St. Petersburg, FL 33716. We will
promptly send additional copies of the annual report and/or proxy statement
upon
receipt of such request.
Householding
for bank and brokerage accounts is limited to accounts within the same
bank or
brokerage firm. For example, if you and your spouse share the same last
name and
address, and you and your spouse each have accounts containing Raymond
James
Financial stock at two different brokerage firms, your household will receive
two copies of the Company’s annual meeting materials—one from each brokerage
firm. To reduce the number of duplicate sets of annual meeting materials
your
household receives, you may want to take advantage of the Company’s electronic
access program. See “Electronic Access to Proxy Materials and Annual Report;
Internet Voting.”
ELECTRONIC
ACCESS TO CORPORATE GOVERNANCE DOCUMENTS
The
Company also makes available on its internet site at http://www.raymondjames.com
under “About Our Company - Inside Raymond James - Corporate
Governance” a number of the Company’s corporate governance documents. These
include: the Corporate Governance Principles, the charters of the Audit
Committee and the Corporate Governance, Nominating and Compensation Committee
of
the Board of Directors, the Senior Financial Officers’ Code of Ethics and the
Codes of Ethics for Employees and the Board of Directors. Printed copies
of
these documents will be furnished to any shareholder who requests them.
The
information on the Company’s website is not incorporated by reference into this
proxy statement.
ELECTRONIC
ACCESS TO PROXY MATERIALS AND ANNUAL REPORT; INTERNET
VOTING
This
notice of Annual Meeting and Proxy Statement and the 2005 Annual Report
are
available on the Company’s internet site. If you are a shareholder of record and
would like to view future proxy statements and annual reports over the
Internet
instead of receiving copies in the mail, follow the instructions provided
when
you vote over the Internet. If you hold your shares through a bank, broker,
or
other holder, check the information provided by that entity for instructions
on
how to elect to view future proxy statements and annual reports electronically
in lieu of receiving copies and how to vote your shares over the Internet.
Opting to access your proxy materials online saves the Company the cost
of
producing and mailing these materials to your home or office and gives
you an
automatic link to the proxy voting site.
Most
shareholders of record have a choice of voting over the internet, by telephone,
or by using a traditional proxy card. Please check your proxy card or the
information forwarded by your bank, broker or other holder of record to
see
which options are available to you.
SHAREHOLDERS
ENTITLED TO VOTE
AND
PRINCIPAL
SHAREHOLDERS
Shareholders
of record at the close of business on December 20, 2005 will be entitled
to
notice of, and to vote at, the Annual Meeting. As of December 20, 2005,
there
were 76,542,681 shares of common stock outstanding and entitled to vote.
Shareholders are entitled to one vote per share on all matters.
The
following table sets forth, as of December 20, 2005 information regarding
the
beneficial ownership of the Company's common shares by each person known
by the
Company to own beneficially more than 5% of the shares of the Company's
common
stock, each Director, the Company's Chief Executive Officer and the four
other
highest paid executive officers (the "Named Executive Officers"), and all
Directors and executive officers as a group.
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Beneficially
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Percent
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Name
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Owned
Shares
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of
Class
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Private
Capital Management, L.P.
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7,213,283
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(1)
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9.4%
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Earnest
Partners LLC
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6,436,001
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(2)
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8.4%
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Robert
A. James Trust
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5,044,020
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6.6%
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Thomas
A. James, Chairman, CEO, Director
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9,963,731
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(3)
(4)
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13.0%
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Angela
M. Biever, Director
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7,893
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*
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Jonathan
A. Bulkley, Director
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21,977
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(3)
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*
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Francis
S. Godbold, Vice Chairman, Director
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447,856
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(3)
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*
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H.
William Habermeyer, Jr., Director
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1,700
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*
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Chet
Helck, President, COO, Director
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117,056
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(3)
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*
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Dr.
Paul W. Marshall, Director
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14,063
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(3)
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*
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Paul
C. Reilly, Director
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275
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*
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Kenneth
A. Shields, Chairman RJ Ltd., Director
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152,976
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(3)(5)
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*
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Hardwick
Simmons, Director
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15,000
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*
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Adelaide
Sink, Director
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7,000
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*
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Richard
K. Riess, Executive Vice President
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61,582
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(3)
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*
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Jeffrey
E. Trocin, Executive Vice President
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97,827
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(3)
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*
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All
Executive Officers
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|
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and
Directors as a Group
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11,519,404
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(3)
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15.1%
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(23
Persons)
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|
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*
Less
than one percent.
(1) Based
on information contained in Form 13F-HR filed with the SEC on November
14, 2005.
Private Capital Management, L.P. is the beneficial owner of these shares
of
common stock held in accounts managed for clients.
(2) Based
on information contained in Form 13F-HR/A filed with the SEC on November
14,
2005. Earnest Partners LLC is the beneficial owner of these shares of common
stock held in accounts managed for clients.
(3) Includes
shares credited to Employee Stock Ownership Plan accounts and shares which
can
be acquired within sixty days of record date through the exercise of stock
options.
(4) Includes
277,262 shares owned by the Robert A. and Helen James' Annuity Trust, of
which
Thomas A. James is a remainder beneficiary and for which Raymond James
Trust
Company West, a wholly owned subsidiary of the Company, serves as trustee.
Excludes shares held by two trusts, of which he is not a beneficiary: 5,044,020
shares owned by the Robert A. James Trust and 138,959 shares owned by the
James'
Grandchildren's Trust, for both of which Raymond James Trust Company West
serves
as trustee, and both of which have as beneficiaries other James family
members.
Thomas A. James disclaims any beneficial interest in these two
trusts.
(5) Includes
84,994 Exchangeable shares that were issued January 2, 2001 in connection
with
the acquisition of Goepel McDermid, Inc. They are exchangeable into shares
of
the Company's common stock on a one-for-one basis.
PROPOSAL
1: ELECTION
OF DIRECTORS
The
Company's Board of Directors presently consists of seven independent directors
and four management directors. All of the present members of the Board
of
Directors have been proposed for re-election by the Corporate Governance,
Nominating and Compensation Committee of the Board of Directors except
for
Jonathan Bulkley, who is retiring from the Board of Directors in accordance
with
the term and age limitations in the Company's Corporate Governance
Principles.
The
ten directors to be elected are to hold office until the Annual Meeting
of
Shareholders in 2007 and until their respective successors shall have been
elected.
All of
the nominees, with the exception of Mr. Paul C. Reilly, were elected by
the
shareholders on February 16, 2005, to serve as Directors of the Company
until
the Annual Meeting of Shareholders in 2006; Mr. Reilly was elected as a
Director
effective January 2, 2006 by the Board of Directors on December 1, 2005.
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 due to events which are not presently anticipated,
discretionary authority may be exercised by the holder of the proxies to
vote
for a substitute nominee.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING
NOMINEES:
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Principal
Occupation (1) and
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Director
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Nominee
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Age
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Directorships
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Since
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Angela
M. Biever*
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52
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General
Manager, Intel New Business Initiatives since 2000; Director,
Intel
Capital from 1999 to 2000; Independent Consultant, working with
a leading
Internet Services Provider from 1997 to 1998; Various senior
management
positions with First Data Corporation, an information and transaction
processor from 1991 to 1997, beginning as Senior Vice President,
Finance
and Planning and culminating as Executive Vice President, Integrated
Services Division; Vice President, American Express Company from
1987 to
1991. Chairperson of the Audit Committee.
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1997
|
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Francis
S. Godbold
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62
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Vice
Chairman of Raymond James Financial, Inc. ("RJF"); Director and
Officer of
various affiliated entities. Executive Vice President of Raymond
James
& Associates, Inc. ("RJA"), a wholly owned subsidiary of the Company.
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1977
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H.
William Habermeyer, Jr.*
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63
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President
and CEO, Progress Energy Florida since 2000; Vice President,
Carolina
Power & Light from 1993 to 2000; U.S. Navy from 1964 to 1992 - retired
a Rear Admiral. Member of the Audit Committee.
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2003
|
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Principal
Occupation (1) and
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Director
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Nominee
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Age
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Directorships
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Since
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Chet
Helck
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53
|
|
President
and Chief Operating Officer of RJF since 2002; Executive Vice
President of
Raymond James Financial Services, Inc. ("RJFS"), a wholly owned
subsidiary
of the Company from 1999 to 2002; Senior Vice President, RJFS
from 1997 to
1999. Director of RJFS and RJA.
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2003
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Thomas
A. James
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63
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Chairman
of the Board and Chief Executive Officer of RJF. Director and
Officer of
various affiliated entities. Past Chairman of the Securities
Industry
Association. Director of Outback Steakhouse, Inc. and Chairman
of its
Audit Committee.
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1965
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Dr.
Paul W. Marshall*
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63
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The
MBA Class of 1960 Professor of Management Practice at Harvard
Graduate
School of Business Administration since 1996; Chairman and CEO
of
Rochester Shoe Tree Co., Inc. from 1992 to 1997; Chairman of
Corporate
Governance, Nominating and Compensation Committee.
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1993
|
|
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Paul
C. Reilly*
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51
|
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Chairman
and CEO, Korn Ferry International since 2001. CEO, KPMG International
1998
to 2001. Prior to being named to that position, Past Vice Chairman
Financial Services of KPMG L.L.P., the United States member firm
of KPMG
International.
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2006
|
|
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Kenneth
A. Shields
|
|
57
|
|
Chairman
and Chief Executive Officer of Raymond James Ltd. ("RJ Ltd."),
a wholly
owned subsidiary of the Company (formerly Goepel McDermid Inc.,
a Canadian
brokerage firm) and predecessor Company from 1996 to January
31, 2006.
Effective February 1, 2006, will continue as Chairman of RJ Ltd.
Past
Chairman of the Investment Dealers Association of Canada; Director
of
TimberWest Forest Corp.; Trustee, Mercer International Inc.;
Director of
the Council for Business and the Arts in Canada.
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2001
|
|
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Principal
Occupation (1) and
|
|
|
Director
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Nominee
|
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Age
|
|
Directorships
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Since
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|
|
|
|
|
|
|
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Hardwick
Simmons*
|
|
65
|
|
Director,
The National Research Exchange since 2005; Director,
Lions Gate Entertainment Corp. since 2005; Chairman and CEO of
the NASDAQ
Stock Market from 2001 to 2003; President and CEO of Prudential
Securities
from 1990 to 2001; President, Shearson Lehman Brothers - Private
Client
Group, from 1983 to 1990, Past Chairman of the Securities Industry
Association; Past Director of the NASD. Member of Corporate Governance,
Nominating and Compensation Committee.
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2003
|
|
|
|
|
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Adelaide
Sink*
|
|
57
|
|
President,
Bank of America, Florida Banking Division from 1993 to 1997 and
1998 to
2000; Director, Republic Bankshares from 2002 to 2004; Director,
Raymond
James Bank, FSB since 2004; Director, First Advantage Corp. since
2003;
Member of the Corporate Governance, Nominating and Compensation
Committee.
|
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|
2004
|
*
|
Determined
to be independent directors under New York Stock Exchange standards;
see
"Information Regarding Board and Committee Structure"
below.
|
(1)
|
Unless
otherwise noted, the nominee has had the same principal occupation
and
employment during the last five
years.
|
Information
Regarding Board and
Committee Structure
The
Board of Directors held four regular meetings and one telephone meeting
during
fiscal 2005. All directors attended at least 75% of the meetings held during
the
year.
The
current standing Committees of the Board of Directors are the Audit Committee,
and the Corporate Governance, Nominating and Compensation Committee. The
Corporate Governance, Nominating and Compensation Committee met four times
and
held one telephone meeting during the fiscal year. Each member of this
Committee
participated in all of the meetings held during the fiscal year. The Audit
Committee met four times and held seven telephone meetings during the fiscal
year. All Committee members attended at least 75% of the meetings held
during
the year. The activities of the Committees are set out in their reports
below.
The
Nominating Committee, comprised of three independent Directors as determined
under New York Stock Exchange rules, also serves as the Corporate Governance
and
Compensation Committee. This Committee identifies potential nominees to
the
Board of Directors, including candidates recommended by management, and
reviews
their qualifications and experience. Candidates for board membership are
expected to demonstrate high standards of integrity and character and offer
important perspectives on some aspect of the Company's business based on
their
own business experience. The Company has not paid any third party a fee
to
assist in the process of identifying and evaluating candidates.
This
Committee has not adopted any specific process or policy for considering
nominees put forward by shareholders and has never been requested to consider
such a nominee.
The
Nominating Committee has determined that the Directors identified as Independent
Directors have no material relationship with the Company that would impair
their
independence. In that connection, the Committee considered that
the
Company purchases its electric power needs from Progress Energy Florida,
of
which William Habermeyer, Jr. is President and CEO, and determined that
the
nature of this business relationship did not constitute any impairment
of
independence.
The
Committee also considered that it paid Korn Ferry International, of which
Paul
C. Reilly is Chairman and CEO, recruiting fees of $218,000 during fiscal
2005
and determined that these fees did not result in any impairment of his
independence.
Shareholders
may communicate with directors of the Company by writing to them at the
Company's headquarters, or by contact through the Company's website.
Communications addressed to the Board of Directors will be reviewed by
the
Secretary of the Company and directed to them for their consideration if
appropriate.
It
is the Company's policy that directors attend the Annual Meeting of
Shareholders; at the Annual Meeting of Shareholders on February 17, 2005,
all of
the Company's Directors at that date were present.
Independent
Directors receive an $18,000 annual retainer, a $2,500 attendance fee for
each
regular meeting, $250 for each telephone meeting and a $500 attendance
fee for
Committee service. The Lead Director and the Audit Committee Chair each
receive
a $22,000 annual retainer, and the Chairman of the Corporate Governance,
Nominating and Compensation Committee receives a $20,000 annual retainer.
Management Directors do not receive any additional compensation for service
as
Directors.
Jonathan
Bulkley, who is retiring from the Board of Directors in accordance with
the term
and age limitations of the Company's Corporate Governance Principles, has
served
as Lead Director for the Independent Directors. A new Lead Director will
be
selected at the meeting of the Board of Directors following the Annual
Meeting
of Shareholders.
Outside
Director Stock Options
There
is a non-qualified stock option plan for the Company's outside Directors
covering 569,532 shares of the Company's common stock. These options, 28,312
of
which were outstanding at September 30, 2005, are exercisable at prices
ranging
from $16.53 to $30.50 at various times through February 2008. Outside directors
are generally granted 1,500 options each per year.
Section
16(a) Beneficial Ownership Reporting Compliance
Jonathan
H. Bulkley, a Director of the Company, filed a late Form 4 on November
18, 2005
reflecting the sale of 3,000 shares of the Company's common stock on November
14, 2005. Jeffrey E. Trocin, an officer of the Company, filed a late Form
5 on
November 22, 2005, reflecting the purchase of 213 shares and 189 shares
of the
Company's common stock acquired through the Employee Stock Purchase Plan
on June
2, 2005 and September 2, 2005, respectively.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit Committee of the Board of Directors consists of Angela Biever
(Chairperson), Jonathan A. Bulkley and H. William Habermeyer. This Committee
conducts its activities pursuant to a written charter approved by the Board
of
Directors, which is reviewed annually and was last revised by the Board
of
Directors on November 29, 2004. The Committee serves as the principal agent
of
the Board of Directors in fulfilling the Board's oversight responsibilities
with
respect to the Company's financial reporting, the qualifications and
independence of the independent registered public accounting firm, the
Company's
systems of internal controls and the Company's procedures for establishing
compliance with legal and regulatory requirements.
The
Charter of the Audit Committee provides that the Audit Committee is responsible
for the appointment, compensation and oversight of the work of the independent
registered public accounting firm and must approve in advance any work
to be
performed by the independent registered public accounting firm. The Audit
Committee has not established any general pre-approval procedures, but
instead
reviews each proposed engagement to determine whether the provision of
services
is compatible with maintaining the independence of the independent registered
public accounting firm. During fiscal 2005, the Committee approved a total
of
approximately $16,000 for services performed by
the
Company’s independent registered public accounting firm, KPMG LLP, under the “de
minimis” exception to Section 202 of the Sarbanes Oxley Act, representing 1% of
the total fees paid to them.
In
addition to four regularly scheduled meetings during the course of the
year,
members of the Audit Committee held seven telephone meetings, generally
to
review with management and representatives of KPMG LLP the Company's quarterly
financial results prior to release to the public.
Members
of the Committee have reviewed and discussed with management and with
representatives of KPMG LLP the integrated audit of the consolidated financial
statements and internal control over financial reporting for fiscal 2005.
The
consolidated financial statements for fiscal 2005 are contained in the
Company's
Annual Report on Form 10-K. In addition, the Committee reviewed with the
independent registered public accounting firm the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with
Audit
Committees, as amended. The Committee also received the written disclosures
and
the letter from KPMG LLP required by Independence Standards Board Standard
No. 1
and discussed with KPMG LLP their independence from the Company and its
management, and considered their independence in connection with any non-audit
services provided. The Audit Committee also reviewed with KPMG LLP the
critical
accounting policies and practices followed by the Company and certain written
communications between KPMG LLP and the management of the Company.
Based
on the reviews and discussions referred to above, and in reliance on the
representations of management and the independent registered public accounting
firm's report with respect to the financial statements,
the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for
fiscal
2005 for filing with the Securities and Exchange Commission. The Board
of
Directors approved the recommendation.
Management
is responsible for the Company's financial statements and the financial
reporting process, including the Company's system of internal controls.
The
Company's independent registered public accounting firm is responsible
for the
integrated audit of the consolidated financial statements and internal
control
over financial reporting in accordance with the standards of the Public
Company
Accounting Oversight Board and issuing reports on the Company's consolidated
financial statements and the effectiveness of internal control over financial
reporting.
The
Audit Committee members are not professional accountants or auditors, and
their
functions are not intended to duplicate or to certify the activities of
management and the independent registered public accounting firm. The Audit
Committee serves a board-level oversight role, in which it provides advice,
counsel and direction to management and the independent registered public
accounting firm on the basis of the information it receives, discussions
with
management and the independent registered public accounting firm, and the
experience of the Audit Committee's members in business, financial and
accounting matters. In its oversight role, the Committee relies on the
work and
assurances of the Company's management, which has the primary responsibility
for
financial statements and reports, and of the independent registered public
accounting firm, who, in their report, express an opinion on the conformity
of
the Company's annual financial statements with accounting principles generally
accepted in the United States of America.
Jonathan
A. Bulkley, who is retiring from the Board of Directors, has served as
the Audit
Committee Financial Expert. A new Audit Committee Financial Expert will
be
designated at the meeting of the Board of Directors following the Annual
Meeting
of the Shareholders.
Angela
M. Biever, Chairperson
|
Jonathan
A. Bulkley
|
H.
William Habermeyer, Jr.
|
|
December
19, 2005
|
CORPORATE
GOVERNANCE, NOMINATING AND COMPENSATION COMMITTEE
REPORT
ON EXECUTIVE COMPENSATION
Overview
and Philosophy
The
Corporate Governance, Nominating and Compensation Committee reviews corporate
compensation and benefit plan policies, as well as the structure and amount
of
all compensation for executive officers of the Company. This Committee
consists
of Dr. Paul W. Marshall (Chairman), Hardwick Simmons and Adelaide
Sink.
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 shareholders. In doing so, individual
performance, the compensation of executives of similar firms and the Company's
financial results are considered.
The
Company's objectives are met through a compensation package which includes
four
major components - base salary, annual bonus (including restricted stock),
stock
option awards and retirement plan contributions.
For
senior management of the Company, the cash and restricted stock compensation
components (base salary and annual bonus) are heavily weighted toward annual
bonus. 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. In prior years,
these
bonuses were generally based on formulas related solely to the profits
of the
specific subsidiary/department managed by an executive. For fiscal 2006,
the
Committee has determined to give greater emphasis to the Company's overall
performance in determining bonus payments for senior management. Accordingly,
the Committee has reduced by approximately 25% the percentage of bonus
to be
awarded based on specific subsidiary/department performance and has established
a bonus pool equal to .75% of the Company's total pre-tax profit (the “Company
Performance Bonus Pool”). Bonus awards will be allocated from that pool to
members of senior management based on the Committee's assessment of each
person's contribution to overall firm profits. The Committee does not believe
that this change will result in any net increase in the total bonus awards
compared to the awards as computed under the prior formula. A portion of
any
bonus can be withheld based on subjective performance evaluation by the
Committee. The bonus formulas for fiscal 2006 approved by the Compensation
Committee follow this report.
The
Company issues restricted shares of Company stock in lieu of cash for up
to 20%
of bonus amounts in excess of $250,000. The number of restricted shares
issued
for fiscal 2004 bonuses was determined using a 20% discount from market
value at
the date of grant. For fiscal year 2005 bonuses, the number of restricted
shares
issued to members of the Company's Operating Committee was determined based
upon
the market value at the date of grant and the number of restricted shares
issued
to other employees was determined using a 10% discount from the market
value at
the date of grant. The shares are restricted from sale during a three year
vesting period.
The
third component of the compensation package, incentive and non-qualified
stock
option awards, is designed, along with the restricted stock, to provide
a direct
link between the long-term interests of executives and shareholders. Options
are
granted every two years to key management employees. From time to time
special
awards may be granted when a special situation exists, as inducements when
employees are hired, or if job performance or a change in job duties warrants.
It is the Company's policy to maintain the number of outstanding options
at less
than ten percent of the Company's outstanding shares. During the past five
years
the number of outstanding options has represented between 5% and 8% of
the
Company's outstanding shares.
The
fourth component of the compensation package is Company contributions to
various
retirement plans, which are based on compensation levels and years of service.
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.
The
plan currently 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 employees who meet the length of service and
minimum
hours worked requirements specified in the plans. The Company also maintains
a
non-qualified long term incentive plan for executive officers. Eligibility
of
executive officers is restricted to those who meet certain compensation
levels
set annually by the Committee and approved by the Board of Directors. The
vesting schedule of this plan is designed to encourage long-term employment
with
the firm. Contributions to this plan on behalf of executive officers are
also
dependent upon the Company's earnings.
In
addition, the Company has an employee stock purchase plan which allows
employees
to purchase shares of the Company's common stock on four specified dates
throughout the year at a 15% discount from the market value, subject to
certain
limitations, including a one-year holding period.
Compensation
of the Chief Executive Officer
In
keeping with the general compensation philosophy outlined above, Mr. James'
base
salary for calendar 2006 will be $300,000, a 5.3% increase over his 2005
compensation of $285,000. Mr. James' salary is subject to an annual review,
as
is true of all employees. It was last adjusted in November 2004, effective
January 1, 2005.
In
determining the bonus offered to Mr. James for fiscal 2005 the Committee
considered many factors, including the following:
*
|
Given
the business environment:
|
|
-
The Company’s performance relative to its peer group;
|
|
-
The Company’s performance relative to its budget; and
|
|
-
The Company’s performance relative to its long-term
objectives.
|
*
|
The
compensation of the chief executive officers of other similar
firms.
|
Dr.
Paul W. Marshall, Chairman
|
Hardwick
Simmons
|
Adelaide
Sink
|
|
January
6, 2006
|
|
Fiscal
2006 Bonus Formulas for Executive Officers as Approved by the
Compensation
Committee
|
|
|
|
|
Executive Officer
|
|
Basis
|
|
|
|
|
|
Thomas
A. James
|
|
1.1%
of total Company pre-tax profits.
|
|
Chairman
and Chief Executive Officer - RJF
|
|
|
|
Chet
Helck
President
and Chief Operating Officer - RJF
|
|
0.83%
of total PCG pre-tax profits per PCG Contribution Report*;
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Richard
G. Averitt, III
Chairman
and Chief Executive Officer - RJFS
|
|
0.83%
of pre-tax profits of RJFS per PCG Contribution Report *;
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Richard
K. Riess
Executive
Vice President - RJF
|
|
3.2%
of pre-tax profits of Eagle Asset Management, Inc. (“Eagle”),
plus,
|
|
|
|
|
|
|
|
2.25%
of pre-tax profits of Heritage Asset Management, Inc. and RJA's
Asset
Management Services division;
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Van
C. Sayler
Senior
Vice President,
Fixed
Income - RJA
|
|
A
portion of the pre-tax profits of RJA's Fixed Income department
equal
to:
6.0%
on the first $16 million of such profits, plus,
3.75%
on such profits exceeding $16 million;
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
Jeffrey
E. Trocin
Executive
Vice President,
Equity
Capital Markets Group - RJA
|
|
A
portion of the pre-tax profits of RJA's Equity Capital Markets,
including
international institutional equity sales equal to:
6.0%
on the first $16 million of such profits, plus,
3.75% on such profits exceeding $16 million;
plus,
participation in the Company Performance Bonus Pool
|
|
|
|
|
|
Dennis
W. Zank
President
- RJA
|
|
2.1%
of the pre-tax profits of RJA per PCG contribution report*;
Plus
plus,
participation in the Company Performance Bonus Pool.
|
|
|
|
|
|
* The
PCG Contribution Report adjusts the Private Client Group financial statement
pre-tax profits for items related to the private client group sales force,
primarily a credit for interest income on cash balances arising from private
clients, and also includes adjustments to actual clearing costs, mutual
fund
revenues and expenses, credit for correspondent clearing, insurance agency
and
certain asset management profits, accruals for benefit expenses, profits
generated by certain private client support operations and other adjustments.
These adjustments may include or exclude items to measure specific objectives,
such as losses from discontinued operations, extraordinary, unusual or
nonrecurring gains and losses, the cumulative effect of accounting changes,
acquisitions or divestitures, and foreign exchange impacts.
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 Named Executive Officers of the Company.
|
|
|
|
|
|
Long-Term
|
|
|
Annual
Compensation
|
Restricted Stock
(2)
|
Stock
Option
|
All
Other
|
Name
|
Year
|
Salary
|
Cash
Bonus (1)
|
|
Commissions
|
Shares
|
$
|
Awards
|
Compensation
(3)
|
Thomas
A. James
|
2005
|
$285,000
|
$2,100,000
|
|
$
39,506
|
10,663
|
$399,969
|
-
|
$244,174
|
Chairman
and CEO
|
2004
|
271,000
|
1,900,000
|
|
214,063
|
14,400
|
437,472
|
-
|
58,343
|
|
2003
|
263,250
|
1,300,013
|
|
243,886
|
10,040
|
249,984
|
-
|
38,810
|
|
|
|
|
|
|
|
|
|
|
Kenneth
A. Shields
|
2005
|
$224,747
|
$1,484,962
|
|
-
|
-
|
-
|
-
|
$1,634,521
(4)
|
Chairman
and CEO - RJ Ltd.
|
2004
|
217,596
|
837,692
|
|
-
|
-
|
-
|
12,000
|
817,261
(4)
|
|
2003
|
196,143
|
326,904
|
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
E. Trocin
|
2005
|
$240,000
|
$2,644,000
|
|
$37
|
14,289
|
$535,980
|
-
|
$33,840
|
Executive
VP, Equity
|
2004
|
228,750
|
2,580,000
|
|
47
|
21,395
|
649,980
|
12,000
|
58,643
|
Capital
Markets Group - RJA
|
2003
|
214,250
|
531,100
|
|
34
|
1,752
|
43,625
|
-
|
33,720
|
|
|
|
|
|
|
|
|
|
|
Richard
K. Riess
|
2005
|
$240,000
|
$1,128,000
|
|
-
|
4,185
|
$156,979
|
-
|
$114,757
|
President
and CEO of Eagle
|
2004
|
228,750
|
1,110,000
|
|
-
|
6,171
|
187,475
|
12,000
|
58,707
|
Executive
VP of RJF
|
2003
|
216,250
|
691,774
|
|
-
|
3,174
|
79,033
|
-
|
33,763
|
Managing
Director,
|
|
|
|
|
|
|
|
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chet
Helck
|
2005
|
$266,000
|
$1,100,000
|
|
$269
|
3,998
|
$149,965
|
-
|
$46,521
|
President
and COO
|
2004
|
253,750
|
1,180,000
|
|
377
|
6,994
|
212,478
|
12,000
|
58,578
|
|
2003
|
250,000
|
760,613
|
|
330
|
3,785
|
94,234
|
75,000
|
61,712
|
|
|
|
|
|
|
|
|
|
|
(1)
In
accordance with the bonus formulas approved by the Compensation Committee
for
fiscal 2005 in accordance with the Senior Management Compensation Plan
approved
at the Annual Meeting of Shareholders on February 17, 2005 and bonus formulas
approved by the shareholders on February 12, 2004 and February 13,
2003.
(2)
Beginning
with fiscal 2000, the Company began granting restricted stock as part of
the
annual bonus to highly compensated employees. Under this Stock Bonus Plan,
617,334 shares have been granted related to fiscal years 2005, 2004 and
2003.
Dividends are paid to the holders of the stock. The shares vest three years
from
the date of grant. Because the shares of restricted stock are valued at
full
market value in this table, rather than the 80% of market value when awarded
during 2003 and 2004, the total of cash bonus and restricted stock may
exceed
the bonus award computed under the formula.
(3)
This
column includes the amount of the Company's contributions to its 401(k)
Plan,
Profit Sharing Plan, Employee Stock Ownership Plan, Long Term Incentive
Plan and
other miscellaneous taxable income as reported on the employees W-2.
(4)
Represents
retention payments related to the acquisition of Goepel McDermid, Inc.
in
January 2001. There are no such additional amounts to be paid in the
future.
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 the executive officers included in the Summary Compensation Table during
the
fiscal year.
Aggregate
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.
30, 2005
|
Sept.
30, 2005
|
|
Acquired
|
Value
|
(Exercisable/
|
(Exercisable/
|
Name
|
on
Exercise
|
Realized
|
Unexercisable)
|
Unexercisable)
|
Kenneth
A. Shields
|
-
|
-
|
93,000/39,000
|
$842,160/$334,030
|
Jeffrey
E. Trocin
|
9,000
|
$137,970
|
9,000/18,000
|
$97,080/$147,760
|
Richard
K. Riess
|
9,750
|
$153,008
|
9,000/18,000
|
$97,080/$147,760
|
Chet
Helck
|
7,500
|
$120,975
|
3,720/92,279
|
$40,127/$971,485
|
Comparative
Stock Performance
The
graph below compares the cumulative total shareholder return for the common
stock of the Company for the last five fiscal years with the cumulative
total
return on the Standard & Poor's 500 Index ("S&P 500") and the Dow Jones
US Investment Services Index over the same period (assuming an investment
of
$100 in each on September 30, 2000 and the reinvestment of all dividends).
Name
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
Raymond
James Financial, Inc.
|
100.00
|
83.45
|
84.14
|
114.28
|
114.98
|
154.74
|
Standard
& Poor's 500
|
100.00
|
73.38
|
58.35
|
72.58
|
82.65
|
92.78
|
Dow
Jones US Investment Services
|
100.00
|
55.29
|
45.68
|
64.45
|
66.79
|
88.02
|
TRANSACTIONS
WITH MANAGEMENT AND DIRECTORS
In
1998, as a retention vehicle, the Company extended non-recourse loan commitments
to approximately 84 employees for investments in the Raymond James Employee
Investment Fund I, L.P., including the following executive officers: Richard
G.
Averitt, Jeffrey P. Julien, Richard K. Riess, Van C. Sayler, Jeffrey E.
Trocin
and Dennis W. Zank. Committed loan amounts to these individuals range from
$40,000 to $160,000 plus interest per person, with outstanding balances
ranging
from $24,976 to $99,905 at September 30, 2005.
Similarly
in 2001, the Company extended non-recourse loan commitments to approximately
75
employees for investments in Raymond James Employee Investment Fund II,
L.P;
including Barry Augenbraun, Richard G. Averitt, Tim Eitel, Chet B. Helck,
Thomas
A. James, Jeffrey P. Julien, Paul L. Matecki, Van C. Sayler, Jeffrey E.
Trocin,
and Dennis W. Zank. Committed loan amounts to these individuals range from
$66,667 to $200,000 plus interest per person, with outstanding balances
of
$26,931 to $80,794 at September 30, 2005.
All
of the foregoing loan commitments were entered into prior to the passage
of the
Sarbanes-Oxley Act (the “Act”) in 2002. Under the Act, the Company is permitted
to complete the funding of those commitments.
The
Company, in the ordinary course of its business, makes bank loans to, and
holds
bank deposits for certain of its officers and directors and also extends
margin
credit in connection with the purchase of securities to certain of its
officers
and directors who are affiliated with one of the Company's broker-dealers,
as
permitted under the Act. These transactions 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.
Thomas
A. James permits the Company to display over 1,500 pieces from his nationally
known art collection throughout the Raymond James home office complex,
without
charge to the Company. The art collection is a marketing attraction for
businesses and other organizations, and the Company provides regular tours
for
clients and local schools, business groups and nonprofit organizations.
In
return, the Company bears the cost of insurance and the salaries of three
staff
persons who serve as curators for the collection and conduct business tours.
The
total cost to the Company for these services during fiscal 2005 was
approximately $190,000.
In
connection with his proposed service as a Director of the Company, Paul
Reilly
has entered into an indemnification agreement with the Company in the form
executed by other Directors in fiscal 2004. In fiscal 2005, the Company
paid
$218,000 in recruiting/placement fees to Korn Ferry International, of which
Paul
C. Reilly is Chairman and CEO.
Courtland
James, a son of Thomas James, is the Company's Director of Human Resources.
Huntington James, a son of Thomas James, is employed in a non-executive
position
by the Company, as is the son-in-law of Francis S. Godbold.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table includes stock options and restricted stock that can be
issued
pursuant to one of the Company's stock-based compensation plans. The table
below
does not include equity compensation plans that meet the qualification
requirements of Section 401(a) of the Internal Revenue Code, namely the
Profit
Sharing Plan and Employee Stock Ownership Plan.
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans
|
Equity
compensation plans approved by shareholders (1)
|
2,933,470
|
$22.47
|
7,297,664
|
Equity
compensation plans not approved by shareholders (2)
|
1,766,644
|
$22.40
|
2,919,448
|
Total
|
4,700,114
|
$22.45
|
10,217,112
|
(1)
The
Company has four plans that were approved by shareholders: the 1992 and
2002
Incentive Stock Option Plans, the 2003 Employee Stock Purchase Plan and
the 2005
Restricted Stock Plan.
(2)
The
Company has four active plans that were not required to be approved by
shareholders: three non-qualified option plans and one restricted stock
plan.
The
material features of the Company's equity compensation plans which have
not been
approved by shareholders are, as required by the SEC rules, described below.
These descriptions do not purport to be complete and are qualified in their
entirety by reference to the plan documents which are included as exhibits
to
the Company's Annual Report on Form 10-K for the fiscal year ended September
30,
2005.
Under
one
of the Company's non-qualified stock option plans, the Company may grant
options
for up to 3,417,188 shares of common stock to independent contractor Financial
Advisors. Options are exercisable five years after grant date provided
that the
Financial Advisors are still associated with the Company. Under the Company's
second non-qualified stock option plan, the Company may grant options for
up to
569,532 shares of common stock to the Company's outside directors. Options
vest
over a three-year period from grant date provided that the Director is
still
serving on the Board of the Company. Under the Company's third non-qualified
stock option plan, the Company may grant options for up to 1,687,500 shares
of
common stock to key management personnel. Option terms are specified in
individual agreements and expire on a date no later than the tenth anniversary
of the grant date. Under all plans, the exercise price of each option equals
the
market price of the Company's stock on the date of grant and an option's
maximum
term is 10 years.
Two
of
the Company's restricted stock plans were not approved by shareholders.
Under
the 2003 Restricted Stock Plan the Company is authorized to issue up to
1,500,000 restricted shares of common stock to employees and independent
contractors. Awards under this plan may be granted in connection with initial
employment or under various retention plans for individuals who are responsible
for a contribution to the management, growth and/or profitability of the
Company. These shares are forfeitable in the event of voluntary termination.
The
compensation cost is recognized over the vesting period of the shares and
is
calculated as the market value of the shares on the date of grant.
The
Company's 1999 Stock Bonus Plan authorized the Company to issue up to 1,500,000
restricted shares to officers and certain other employees in lieu of cash
for
10% to 20% of annual bonus amounts in excess of $250,000.
The
shares are generally restricted for a three year period, during which time
the
shares are forfeitable in the event of voluntary termination. The compensation
cost is recognized over the three year vesting period based on the market
value
of the shares on the date of grant. This plan has been replaced by the
2005
Stock Bonus Plan which has substantially the same terms and was approved
by
shareholders in February 2005.
PROPOSAL
2:
|
TO
RATIFY THE APPOINTMENT BY THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS OF
KPMG LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
The
Audit
Committee of the Board of Directors has selected KPMG LLP as the Company's
independent registered public accounting firm for the fiscal year ending
September 30, 2006, and the Board of Directors has directed that management
submit the appointment of the independent registered public accounting
firm for
ratification by the shareholders at the Annual Meeting. KPMG LLP has served
as
the Company's independent registered public accounting firm since 2001.
Representatives of KPMG LLP are expected to be present at the Annual Meeting.
They will have an opportunity to make a statement at the Annual Meeting
and will
be available to respond to appropriate questions.
Neither
the Company's By-Laws nor other governing documents or law require shareholder
ratification of appointment of KPMG LLP as the Company's independent registered
public accounting firm. However, the Audit Committee of the Board of Directors
recommended, and the Board of Directors is, submitting the appointment
of KPMG
LLP to the shareholders for ratification as a matter of good corporate
practice.
If the shareholders fail to ratify the appointment, the Audit Committee
will
reconsider whether or not to retain that firm. Even if the appointment
is
ratified, the Audit Committee in its discretion may direct the appointment
of a
different independent registered public accounting firm at any time if
it
determines that such a change would be in the best interests of the Company
and
its shareholders.
Ratification
of the appointment of KPMG LLP will require that the votes cast favoring
the
appointment exceed the votes cast opposing it.
FEES
PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
following table shows information about fees paid by Raymond James Financial,
Inc. to KPMG LLP related to the fiscal years indicated. All fees were approved
by the Audit Committee (see discussion in Report of the Audit
Committee).
|
2005
|
|
2004
|
Audit
fees(a)
|
$1,655,605
|
|
$947,757
|
Audit
- related fees(b)
|
28,140
|
|
87,877
|
Tax
fees(c)
|
141,906
|
|
157,756
|
All
other fees
|
-
|
|
4,663
|
(a) |
The
significant increase in audit fees in 2005 were largely attributable
to
KPMG LLP’s initial report on internal controls related to Section 404
of
the Sarbanes-Oxley Act.
|
(b) |
Audit
related fees in 2004 included services related to the review
of the
Company's documentation of internal controls pursuant to Section
404 of
the Sarbanes-Oxley Act and attest services related to specific
items.
Audit related fees in 2005 included various minor
matters.
|
(c) |
Tax
fees include fees related to the preparation of Canadian tax
returns,
consultation on various tax matters and support during income
tax audit or
inquiries.
|
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
OTHER
MATTERS
Proposals
which shareholders intend to present at the 2007 Annual Meeting of Shareholders
must be received by the Company’s Secretary no later than September 15, 2006 to
be eligible for inclusion in the proxy material for that meeting or otherwise
submitted at the 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,
/s/
Barry
Augenbraun, Secretary
January
13, 2006