Exhibit 10.27

 

Summary of Compensation Arrangements With Executive Officers of the Company

 

I.              Named Executive Officer Compensation.  On December 13, 2007, the
Compensation Committee (the “Committee”) of the Board of Directors of Waddell &
Reed Financial, Inc. (the “Company”) approved the annual base salaries
(effective as of January 1, 2008) of the Company’s executive officers.  The
following table sets forth the annual base salaries of the Company’s Chief
Executive Officer, Chief Financial Officer and the next three most highly
compensated officers (collectively, the “Named Executive Officers”) for 2008:

 

Named Executive Officer

 

Salary

 

 

 

Henry J. Herrmann
Chief Executive Officer

 

$1,000,000

Daniel P. Connealy
Senior Vice President andChief Financial Officer

 

$390,000

Michael L. Avery
Senior Vice President and Chief Investment Officer

 

$550,000

Thomas W. Butch
Senior Vice President and Chief Marketing Officer

 

$475,000

Daniel C. Schulte
Senior Vice President and General Counsel

 

$365,000

 

                The Company has adopted a Supplemental Executive Retirement
Plan, as amended and restated (the “SERP”) pursuant to which participants’
accounts are credited with (1) an amount equal to 4% of his or her base salary,
less the amount of the maximum employer matching contribution allowable that can
be made on the participant’s behalf under the Company 401(k) and Thrift Plan,
and (2) a non-formula award, as determined by the Committee in its discretion.  
For 2007, the Committee designated Mr. Herrmann as a participant of the SERP and
did not award him a non-formula award in 2007.  None of the other Named
Executive Officers were eligible to participate in the SERP for 2007.

 

II.            2007 Executive Incentive Awards.    Pursuant to the Company 2003
Executive Incentive Plan, as amended and restated (the “EIP”), eligible
participants may receive (1) an annual incentive award of cash, and (2) an
annual incentive award of restricted stock, both based upon the annual financial
performance of the Company.

 

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A.            Cash Awards.  On December 13, 2007, the Committee authorized the
payment of annual cash incentive (i.e., bonus) awards based on the Company’s
financial performance for the year ended December 31, 2007 to executive officers
participating in the EIP, which included Messrs. Herrmann, Connealy, Avery,
Butch and Schulte.  With respect to Mr. Herrmann, the Committee authorized the
payment of his annual cash incentive award based on the Company’s financial
performance for the year ended December 31, 2007 in the amount of $2,400,000 on
December 13, 2007 and $100,000 on February 20, 2008. These annual incentive
awards were determined based on performance goals established in February 2007. 
As permitted by the EIP, the Committee exercised its discretion to reduce the
amount of the cash awards payable to Messrs. Herrmann, Connealy, Avery, Butch
and Schulte, but in accordance with the EIP, the reductions did not increase the
award amounts for any other participant.   The following table sets forth the
annual cash incentive awards to the Named Executive Officers for 2007:

 

Named Executive Officer

 

Cash Award

 

 

 

Henry J. Herrmann
Chief Executive Officer

 

$2,500,000

Daniel P. Connealy
Senior Vice President andChief Financial Officer

 

$440,000

Michael L. Avery
Senior Vice President and Chief Investment Officer

 

$1,000,000

Thomas W. Butch
Senior Vice President and Chief Marketing Officer

 

$575,000

Daniel C. Schulte
Senior Vice President and General Counsel

 

$440,000

 

Pursuant to the Company 1998 Executive Stock Award Plan, as amended and
restated, eligible executives may annually convert all or a portion of their
annual cash incentive award into restricted stock of the Company.  Additionally,
the Compensation Committee may, in its sole discretion, direct that all or a
portion of the cash incentive award payments payable under the EIP be paid in
restricted stock.  For 2007, none of the Named Executive Officer converted any
portion of their annual cash incentive award into restricted stock of the
Company, nor did the Committee direct that any portion of their cash incentive
award be paid in restricted stock.

 

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B.            Restricted Stock Awards.  On December 13, 2007, the Committee
authorized the payment of the annual incentive awards of restricted stock based
on the Company’s financial performance for the year ended December 31, 2007 to
executive officers participating in the EIP, which included Messrs. Herrmann,
Connealy, Avery, Butch and Schulte.  These annual incentive awards were
determined based on performance goals established in February 2007.  As
permitted by the EIP, the Committee exercised its discretion to reduce the
amount of the restricted stock awards payable to Messrs. Herrmann, Connealy,
Avery, Butch and Schulte, but in accordance with the EIP, the reductions did not
increase the restricted stock award amounts for any other participant.  The
following table sets forth the annual restricted stock awards to the Named
Executive Officers for 2007:

 

Named Executive Officer

 

Restricted Stock Award

 

 

 

Henry J. Herrmann
Chief Executive Officer

 

50,000 shares

Daniel P. Connealy
Senior Vice President andChief Financial Officer

 

30,000 shares

Michael L. Avery
Senior Vice President and Chief Investment Officer

 

60,000 shares

Thomas W. Butch
Senior Vice President and Chief Marketing Officer

 

50,000 shares

Daniel C. Schulte
Senior Vice President and General Counsel

 

25,000 shares

 

These shares were granted on December 31, 2007 pursuant to the Company 1998
Stock Incentive Plan, as amended and restated, in accordance with the form of
restricted stock agreement filed as Exhibit 10.1 to the Company’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2007.

 

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