2018 Northwest Executive Compensation Survey

of Privately Held Companies and Publicly Traded Companies

PAY, BENEFITS, AND TRENDS 33rd Edition

Eff ective date of data: August 2018 www.salarysurveys.milliman.com Publication date: November 2018 www.surveyresults.milliman.com TABLE OF CONTENTS

PDF Page About Milliman ...... 4 Introduction / Methodology ...... 5

Participant Directory ...... 6 Demographics ...... 8

Job Descriptions ...... 9

Summary Data ...... 12 General 1.01 Chief Executive Offi cer (CEO) ...... 12 1.02a President / Chief Executive Offi cer – Group of Subsidiaries / Divisions ...... 14 1.02b President / Chief Executive Offi cer – Singular Subsidiary / Division ...... 16 1.03 Chief Financial Offi cer (CFO) ...... 18 1.04 Chief Operating Offi cer (COO) ...... 20 1.06 Chief Administrative Offi cer (CAO) ...... 22 1.07 Top Strategic Planning Executive ...... 23 1.08 Chief Information Offi cer (CIO) ...... 24 1.09 Chief Technology Offi cer (CTO) ...... 26 1.10 Top Marketing and Sales Executive ...... 28 1.11 Top Marketing Executive ...... 30 1.12 Top Sales Executive ...... 32 1.13 Top Human Resources Executive ...... 34 1.14 Top Legal Executive / General Counsel ...... 36 1.15 Top Manufacturing Executive ...... 38 Banking / Finance 2.01 Chief Credit Administration Offi cer ...... 40 2.02 Chief Lending Offi cer ...... 42 2.03 Chief Retail Banking Offi cer ...... 44 Biotech / Biopharmaceutical / Healthcare 3.01 Chief Medical Offi cer ...... 46

Summary Data - By Industry ...... 48

Salary Adjustment Trends ...... 72 Perquisites ...... 74 Performance Measures - Incentive Plans ...... 82 Long-Term Incentive Plans ...... 86 Nonqualifi ed Deferred Compensation Plans ...... 87

2018 Northwest Executive Compensation Survey Page 4 of 88 ABOUT Milliman

This annual survey is confi dentially conducted Milliman’s compensation consulting staff Spokane / Inland Northwest Compensation and published by Milliman, Inc. provides assistance to clients in the review, Survey (published annually in August) — Reports development, and implementation of salary data on primarily nonexempt level positions within Milliman, whose corporate offi ces are in , administration, incentive compensation, and Spokane, Kootenai and other Inland Northwest is among the world's largest independent executive compensation programs. Utilizing the counties. actuarial and consulting fi rms. With more than fi rm’s proprietary salary survey software, Milliman 3,500 employees and revenue of US$1 billion Compensation Survey conducts numerous custom and regional surveys in 2017, the fi rm serves the full spectrum (published annually in August) — Reports data on each year. of business, fi nancial, government, union, nonexempt through management & professional education, and nonprofi t organizations. Milliman positions within Anchorage, Fairbanks, Southeast, & was founded in 1947 and today has offi ces in Northern / Western Alaska areas. Other surveys available. . . principal cities worldwide. Northwest Financial Industry Compensation Northwest Engineering / Scientifi c / Project Survey (published annually in August) — Reports Management Salary Survey (published annually data on industry-specific positions within Northwest The fi rm has consulting practices in the following in August) — Reports data on engineering, financial institutions. areas: scientifi c, and project management positions. Northwest Utilities Salary & Wage Survey • Employee benefi ts, communications, and Northwest Management & Professional (published in September) — Reports data on compensation consulting Salary Survey (published annually in August) — industry-specifi c positions. • Healthcare consulting Reports data on management, supervisory, and • Life and fi nancial consulting professional positions. • Property and casualty consulting Northwest Healthcare Compensation Survey (published annually in April) — Reports data on For further information, visit milliman.com. If you have any questions about using or hospital, clinic, home care and long-term care interpreting this survey report, please contact positions within the Northwest. Lauren Busey at: Northwest Technology Survey

(published in September) — Reports data on key Milliman technology positions within the Northwest. 1301 Fifth Avenue, Suite 3800 Northwest Benefi ts Survey Seattle, 98101 (published annually in May) — Provides Northwest 206-504-5543 employers with comprehensive benefi ts data. Puget Sound Area Compensation Survey email: [email protected] (published annually in June) — Reports data on primarily nonexempt and selected exempt positions. For more information, visit: www.salarysurveys.milliman.com Portland Area Compensation Survey (published annually in April) — Reports data on primarily nonexempt level positions within the Portland Metropolitan area.

2018 Northwest Executive Compensation Survey Page 5 of 88 INTRODUCTION / METHODOLOGY

This 33rd edition of the Northwest Executive Extensive data are included on: Notes on statistical methods: Compensation Survey provides unique reference information regarding executive compensation  Base Salary 1. Both averages (means) and medians are used practices within Northwest companies.  Bonus in this report as measures of central tendency.  Total Cash Compensation Medians can be a more accurate measure Data for 19 top executive positions within both  Equity Compensation when a range of data contains extremes at the privately held companies and publicly traded  Benefi ts and Perquisites low or high end. A median is the point below companies are included in this report. Data which 50% of data observations fall.  Performance Measures for each group are shown separately, by size  Long-Term Incentives categories, to facilitate comparison and analysis. 2. 25th percentile is the point below which 25%  Retirement and Capital Accumulation of data observations fall. 75th percentile is the  Pay Adjustment Trends Data reported in this survey were compiled from point below which 75% of data observations 323 Northwest organizations (106 publicly traded fall. Thus, the range between the 25th and and 217 privately held/other companies). Data for 75th percentile is the middle 50% of the data. As with all Milliman surveys, averages and trends all privately held companies and some publicly are reported, thus maintaining the confi dentiality of traded companies were collected by participant 3. Throughout this report, companies with or individual company practices. input. Data for the remaining publicly traded without bonus plans are included in the companies were gathered from proxy statements calculations for total cash. Therefore, the sum If you have any questions about using or and annual fi nancial reports. of averages/medians for base and bonus may interpreting this survey report, or for further not equal the total cash compensation shown. information or assistance regarding compensation This survey is for the private, confi dential use of matters, please contact Larry Daniels at the recipient; reproducing or distributing this data 4. Nonprofi t organizations have been included in 206-504-5543. without written permission is prohibited. the sample of privately held companies.

Milliman has exercised reasonable care in 5. Subsidiaries of domestic or international compiling data and preparing the results, but does publicly traded organizations have been not warrant that the reports are free from all errors included in the sample of publicly traded and omissions. Milliman disclaims all express and companies. implied warranties, including, without limitation, the implied warranties of merchantability and fi tness 6. Equity amounts refl ect the aggregate for a particular purpose. compensation costs for fi nancial statement reporting purposes under FASB ASC Topic 718 for stock and option awards granted in the current fi scal and prior years. These amounts do not refl ect amounts paid to or realized by Eff ective Date of Data: the executive for the fi scal year. August 2018 (or most recent proxy)

Publication Date: November 2018

2018 Northwest Executive Compensation Survey Page 6 of 88 PARTICIPANT DIRECTORY

Data from a total of 323 Northwest companies are included in this survey. The following list includes 106 publicly traded & 217 privately held/other companies.

BANKING / FINANCIAL - PRIVATELY HELD Peninsula Credit Union Islanders Bank ELECTRONICS / TECHNOLOGY Advantis Credit Union Peoples Bank Northrim Bank 3MD Technologies, Inc. / Denali Advanced ALPS Federal Credit Union People's Community Federal Credit Union Pacifi c West Bank Integration Baker Boyer Bank Pioneer Trust Bank, N.A. People's Bank of Commerce BSQUARE Corporation* Bank of Eastern Oregon Providence Federal Credit Union Riverview Community Bank Clearsign Combustion Corp* Bank of Idaho Qualstar Credit Union Sound Community Bank Cray Inc.* bankcda RiverBank Summit Bank - Oregon CUI Global, Inc.* CapEd Credit Union Rogue Credit Union Timberland Bank Data I/O Corporation* Cascade Central Credit Union SaviBank Umpqua Holdings Corporation Digimarc Corporation* Cashmere Valley Bank Security State Bank Washington Federal Electro Scientifi c Industries, Inc.* Central Willamette Community Credit Union Skagit Bank EnergySavvy BIOTECH / PHARMACEUTICAL Coastal Community Bank Solarity Credit Union eventcore Commencement Bank Sound Credit Union Alder BioPharmaceuticals, Inc.* FLIR Systems, Inc.* Community Bank St. Helens Community Credit Union Alpine Immune Sciences, Inc.* Fulcrum Technologies, Inc. Consolidated Community Credit Union State Bank Northwest Atossa Genetics Inc.* Globys, Inc. Craft3 STCU BioLife Solutions, Inc.* Glowforge Credit Union 1 Sunset Science Park Federal Credit Union Cascadian Therapeutics* iovation, Inc. D.L. Evans Bank The Bank of Commerce CTI / Cell Therapeutics, Inc.* Itron, Inc.* Denali Federal Credit Union Tongass Federal Credit Union CytoDyn Inc.* KeyTronicEMS* Fibre Federal Credit Union Unitus Community Credit Union Immune Design Corp.* Lattice Semiconductor Corporation* First Federal - McMinnville Verity Credit Union NanoString Technologies, Inc.* Corporation* Great Northwest Federal Credit Union Washington Trust Bank Omeros Corporation* Microvision, Inc.* HAPO Community Credit Union Wauna Federal Credit Union Quorum Review IRB Milestone Systems Inc Harborstone Credit Union WCLA Credit Union Seattle Genetics, Inc.* Mirador Financial IBEW & United Workers FCU Yakima Federal Savings and Loan Palo Alto Software DISTRIBUTION / WHOLESALE / RETAIL Icon Credit Union Association Pipeworks, Inc. Idaho First Bank .com, Inc.* RadiSys Corporation* BANKING / FINANCIAL - PUBLICLY TRADED Idaho Housing and Finance Association Boise Cascade Company* RealNetworks, Inc.* Kitsap Credit Union Anchor Bank* Wholesale Corporation* REALSELF, INC. Lewis & Clark Bank Bank of the Pacifi c Craft Brew Alliance, Inc.* Skilljar Matanuska Valley Federal Credit Union Banner Corporation Electronic Systems Technology Inc.* Tableau Software, Inc.* Mountain Pacifi c Bank Benefi cial State Bank Gensco Inc. T-Mobile US, Inc.* Mt. McKinley Bank Clatsop Community Bank Co.* Visualant, Inc.* North Coast Credit Union Columbia Bank Lithia Motors, Inc.* Zapproved Northwest Bank Community 1st Bank , Inc.* Zonar Systems Northwest Community Credit Union First Federal - Port Angeles Papa Murphy's Holdings, Inc.* Numerica Credit Union First Financial Northwest Bank Corporation* GOVERNMENT / EDUCATION Olympia Federal Savings First National Bank Alaska URM Stores, Inc. City of Bellevue Oregon Community Credit Union First Sound Bank Willamette Valley Vineyards, Inc.* City of Boise Oregonians Credit Union FS Bancorp, Inc.* Wireless Advocates City of Portland P1FCU Heritage Bank Zumiez, Inc.* City of Spokane Pacifi c Crest Savings Bank HomeStreet, Inc.* City of Tacoma King County

* Data gathered from proxy statements and annual reports. 2018 Northwest Executive Compensation Survey Page 7 of 88 PARTICIPANT DIRECTORY

LEG-TECH Northwest Kidney Centers Algas-SDI Lynden Incorporated Pierce Transit Northwest Permanente, P.C. American Company Marchex, Inc.* Port of Everett Ocean Beach Hospital & Medical Clinics Applied Technical Services Corporation Milliman, Inc. Port of Seattle Olympic Medical Center Bob's Red Mill Natural Foods Moss Adams LLP Portland Community College Oregon Medical Group Buck Knives, Inc. Mutual of Enumclaw Insurance Company Seattle Public Schools Overlake Hospital Medical Center Clearwater Paper Corporation* NANA Regional Corporation, Inc. Seattle University PeaceHealth System Services Center Columbia Sportswear Company* Nuvodia / Inland Imaging Sound Transit Peninsula Community Health Services Daybreak Oil & Gas, Inc.* Oregon Mutual Insurance Company State of Idaho Pioneer Human Services Deschutes Brewery, Inc. Pacifi cSource Health Plans State of Oregon PMH Medical Center Geonerco Management, LLC PAE Engineers University of Oregon Proliance Surgeons, Inc. Greenbrier Companies, Inc.* Perkins Coie LLP University of Puget Sound Providence Portland Medical Center Hecla Mining Company* Pope Resources* University of Washington - UW Technology Providence Regional Medical Center Everett IsoRay, Inc.* Quest Solution, Inc.* WA School Info Processing Coop. (WSIPC) Pullman Regional Hospital Key Technology, Inc.* Radiant Logistics, Inc.* Washington Health Benefi t Exchange Puyallup Tribal Health Authority Nautilus, Inc.* Red Lion Hotels Corporation* Radia Inc., PS Nike, Inc.* SAIF Corporation HEALTHCARE Saint Alphonsus Medical Center - Nampa Northwest Pipe Company* Savers, Inc. Bay Area Hospital Saint Alphonsus Regional Medical Center - Inc* SPIE Bloodworks NW Boise Pacifi c Research Laboratories, Inc. Thomas Management, LLC CellNetix Pathology & Laboratories Salem Health Potlatch Corporation* TriMet Central Oregon Radiology Associates, P.C Samaritan Health Services Preco Electronics, LLC TrueBlue, Inc.* Columbia Basin Health Association Samaritan Healthcare Roseburg Forest Products Co. Trupanion* Community Health Association of Spokane SCCA Proton Therapy Center Schmitt Industries, Inc.* US Ecology, Inc.* (CHAS) Seattle Cancer Care Alliance (Fred Hutch) Schnitzer Steel Industries, Inc.* Washington State Bar Association Community Health Center of Snohomish Seattle Children's UniSea, Inc. World Vision County Skagit Regional Health Company* Zenith American Solutions, Inc. Confl uence Health Spokane Eye Clinic Zillow, Inc.* EvergreenHealth St. Charles Health System SERVICES Fred Hutchinson Cancer Research Center Summit Pacifi c Medical Center Alacrity Services UTILITIES Frontier Behavioral Health The Center (Oregon) Alaska Air Group, Inc.* Alaska Communications Systems* Grays Harbor Community Hospital The Doctors Clinic Barrett Business Services, Inc.* Avista Corporation* HealthPoint The Polyclinic Blue Nile, Inc. Benton Rural Electric Association Heritage Health Tri-Cities Cancer Center Bristol Bay Native Corporation Chugach Electric Association, Inc.* Island Hospital University of Washington - Harborview Calista Corporation Corix Infrastructure Inc. Kittitas Valley Community Hospital Medical Center Children's Cancer Association Eugene Water & Electric Board (EWEB) Klickitat Valley Health University of Washington Medical Center Clark Nuber IDACORP, Inc.* Kootenai Health Virginia Garcia Memorial Health Center Community Health Plan of Washington Island Network, LLC (Orcas Power & Light Lake Chelan Community Hospital & Clinics Virginia Mason Medical Center Doyon, Limited Cooperative) Legacy Health Willapa Harbor Hospital Expedia, Inc.* Northwest Natural Gas Company* Mason General Hospital & Family of Clinics Yakima Neighborhood Health Services of Washington* Pacifi Corp* Mid-Columbia Medical Center Yellowhawk Tribal Health Center F5 Networks, Inc.* Portland General Electric Company* Morton General Hospital Fairbanks Native Association * Moses Lake Community Health Center MANUFACTURING Ferguson Construction, Inc. U.S. Geothermal Inc.* Newport Hospital & Health Services Aleutian Pribilof Island Community First Choice Health Utility Services of Alaska, Inc. Northwest Hospital & Medical Center Development Association (APICDA) Grange Insurance Association West Oregon Electric Cooperative, Inc. Lighthouse * Data gathered from proxy statements and annual reports. 2018 Northwest Executive Compensation Survey Page 9 of 88 JOB DESCRIPTIONS

1. GENERAL INDUSTRY 1.07 Top Strategic Planning Executive 2. BANKING INDUSTRY 1.08 Chief Information Offi cer (CIO) 1.01 Chief Executive Offi cer (CEO) 1.09 Chief Technology Offi cer (CTO) 2.01 Chief Credit Administration Offi cer 1.02a President / Chief Executive Offi cer – 1.10 Top Marketing and Sales Executive 2.02 Chief Lending Offi cer Group of Subsidiaries / Divisions 1.11 Top Marketing Executive 2.03 Chief Retail Banking Offi cers 1.02b President / Chief Executive Offi cer – 1.12 Top Sales Executive Singular Subsidiary / Division 1.13 Top Human Resources Executive 3. BIOTECH / BIOPHARMACEUTICAL / 1.03 Chief Financial Offi cer (CFO) 1.14 Top Legal Executive / General Counsel HEALTHCARE 1.04 Chief Operating Offi cer (COO) 1.15 Top Manufacturing Executive 1.06 Chief Administrative Offi cer (CAO) 3.01 Chief Medical Offi cer

GENERAL INDUSTRY 1.01 Chief Executive Offi cer (CEO) Establishes current and long-range objectives, plans, and policies of the company. Develops organizational structure and allocates responsibility to senior executive staff . Key representative of the company to customers, outside agencies, and the general public. Intended to be the highest level position of the company. May also be the Chairman of the Board or hold title of President.

1.02a President / Chief Executive Offi cer – Group of Subsidiaries / Divisions Top division executive with multiple profi t center responsibilities. Responsible for the activities of multiple subsidiaries or divisions of an organization in accordance with objectives, plans, and policies instituted by parent company. Key representative of the subsidiaries or divisions to customers, outside agencies, and the general public. Intended to be the highest level position of the subsidiaries or divisions.

1.02b President / Chief Executive Offi cer – Singular Subsidiary / Division Top division executive with singular profi t center responsibilities. Responsible for the activities of a singular subsidiary or division of an organization in accordance with objectives, plans, and policies instituted by parent company. Key representative of the subsidiary or division to customers, outside agencies, and the general public. Intended to be the highest level position of a subsidiary or division.

1.03 Chief Financial Offi cer (CFO) Responsible for company’s overall fi nancial plans and policies as well as its accounting practices and conduct of relationship with lending institutions, shareholders, and fi nancial community. Provides direction for fi nancial functions such as accounting, budgeting, credit, insurance, tax and treasury. Typically reports to the Chief Executive Offi cer.

1.04 Chief Operating Offi cer (COO) Establishes and administers all the activities of the company in accordance with policies and objectives established by Chief Executive Offi cer and the Board of Directors. Responsible for the execution of the company’s strategic plans in functional areas such as operations, fi nancial performance, human resources, and company expansion. Typically reports to the Chief Executive Offi cer.

2018 Northwest Executive Compensation Survey Page 10 of 88 JOB DESCRIPTIONS

1.06 Chief Administrative Offi cer (CAO) Plans and directs the majority of the company’s staff and administrative services areas such as accounting, fi nance, facilities management, human resources, management information systems, and strategic planning and development. Typically reports to the Chief Operating Offi cer or Chief Executive Offi cer.

1.07 Top Strategic Planning Executive Establishes company’s long-range objectives and strategic plans. Sets and defi nes goals and programs to align with prospective company growth and profi tability. Ensures the company is using its resources eff ectively and effi ciently. Typically reports to the Chief Executive Offi cer.

1.08 Chief Information Offi cer (CIO) Recommends, implements, and oversees fi rm-wide IT initiatives such as security, disaster recovery, operations, and business continuity planning. Directs IT systems and services. Typically requires a degree, with 12+ years of broad and deep technology consulting and technology operations management experience. Reports to Chief Operating Offi cer or Chief Executive Offi cer.

1.09 Chief Technology Offi cer (CTO) Provides and directs fi rm-wide current and long-range technology planning. Oversees analysis of purchased systems, hardware and software, or the internal design and development of hardware and software systems. Dispenses technical advice, guidance, and direction to carry out major plans and procedures. Coordinates the design, development, marketing, and maintenance of technology projects or product lines. Analyzes new technologies and runs competitive analyses. Typically requires 12 or more years of experience and a degree. Typically reports to Chief Information Offi cer, Chief Operating Offi cer, or Chief Executive Offi cer.

1.10 Top Marketing and Sales Executive Establishes objectives, policies, and program goals for the marketing and sales of the company’s product(s) and/or service(s). Directs and manages the eff orts of marketing and sales personnel. Typically reports to the Chief Operating Offi cer or Chief Executive Offi cer. Intended to be the most senior position in marketing and sales. Note: If executive is only responsible for marketing or sales, see either Top Marketing Executive or Top Sales Executive.

1.11 Top Marketing Executive Plans and implements marketing policies and programs for the company’s product(s) and/or service(s). Develops and evaluates the marketing strategy to ensure it strategically aligns with the company’s current objectives and long-term goals. Directs and manages the eff orts of marketing personnel. Typically reports to the Chief Operating Offi cer or Chief Executive Offi cer. Intended to be the most senior position in marketing.

1.12 Top Sales Executive Plans and implements sales objectives, policies, and procedures for the company’s product(s) and/or service(s). Directs and manages the eff orts of the sales force. May also oversee customer service functions and be the company’s key representative to distributors and/or manufacturers. Typically reports to the Chief Operating Offi cer or Chief Executive Offi cer. Intended to be the most senior position in sales.

1.13 Top Human Resources Executive Plans and implements organizational-wide policies, procedures, and programs for all areas of human resource management, such as employment, employee relations, benefi ts, compensation, training, ADA and EEO compliance, labor relations, organizational development, safety, and security. Typically reports to the Top Administrative Offi cer, Chief Operating Offi cer, or Chief Executive Offi cer.

2018 Northwest Executive Compensation Survey Page 11 of 88 JOB DESCRIPTIONS

1.14 Top Legal Executive / General Counsel Plans and directs the legal events, obligations, and interests of the company. Evaluates company’s practices, policies, and activities to ensure they meet regulatory requirements. Provides guidance and legal counsel, interprets and prepares legal documents, and manages company’s legal defense. Oversees the Corporate Legal Secretary and supervises the legal staff . Typically reports to the Top Administrative Offi cer or Chief Executive Offi cer.

1.15 Top Manufacturing Executive Plans and directs manufacturing policies and procedures to strategically align the manufacturing process with company current objectives and long-term goals. Ensures all program goals and production activities maintain and/or improve the manufacturing schedule, quality standards and cost objectives of the product. Typically reports to the Chief Operating Offi cer or Chief Executive Offi cer.

BANKING INDUSTRY

2.01 Chief Credit Administration Offi cer Responsible for administering and overseeing the company’s entire loan portfolio. Develops and recommends loan portfolio objectives, loan policies and procedures. Serves as chair of the loan committee. Calls meetings of the committee, prepares agenda, and prescreens loan recommendation. Provides guidance to offi cers engaged in lending activities.

2.02 Chief Lending Offi cer Accountable for all lending activities, including installment/consumer, commercial, and real estate loans made by the bank.

2.03 Chief Retail Banking Offi cer Responsible for profi tably directing all operations of retail banking, including general administration, budgeting and control, as well as evaluation of eff orts. Develops policies and procedures. May also be responsible for branch administration. This position typically reports to the CEO.

BIOTECH / BIOPHARMACEUTICAL / HEALTHCARE

3.01 Chief Medical Offi cer Plans, directs, and coordinates all medical and related activities, with the exception of nursing services. Participates in establishing and implementing standards of medical service, and advises on medical and administrative questions and policies. Investigates and implements new medical practices and techniques. Requires an MD.

2018 Northwest Executive Compensation Survey