UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Check the appropriate box:

☐  Preliminary Proxy Statement

☐  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒  Definitive Proxy Statement

☐  Definitive Additional Materials

☐  Soliciting Material Pursuant to §240.14a-12

Financial Engines, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

1050 Enterprise Way, 3rd Floor

Sunnyvale, California 94089

(408) 498-6000

April 6, 2018

Dear Stockholder:

You are cordially invited to attend our 2018 Annual Meeting of Stockholders (the Annual Meeting). The Annual Meeting will be held at 10:00 a.m. Pacific Time, on Tuesday, May 22, 2018, at our offices located at 1050 Enterprise Way, 3^rd Floor, Sunnyvale, CA 94089.

The formal notice of the Annual Meeting and the Proxy Statement has been made a part of this invitation.

Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. After reading this Proxy Statement, please promptly vote and submit your proxy by dating, signing and returning the enclosed proxy card in the enclosed postage-prepaid envelope, or by voting by telephone or via the Internet. Your shares cannot be voted unless you submit your proxy or attend the Annual Meeting in person.

The Board of Directors and management look forward to seeing you at the Annual Meeting.

Sincerely,

Lewis E. Antone, Jr.

General Counsel and Secretary

LETTER FROM THE BOARD CHAIR

To my fellow stockholders,

I am pleased to invite you to attend the Financial Engines 2018 Annual Meeting of Stockholders to be held at 10:00 a.m. on May 22, 2018, at the Financial Engines headquarters, 1050 Enterprise way, 3^rd Floor, Sunnyvale, CA, 94089.

While Financial Engines has historically been known for retirement advice in the workplace, our goal is to be the financial advisor of choice for mainstream Americans by providing holistic, independent financial planning and investment advice. To this end, our company has been focused on executing on our growth strategy and our progress is well demonstrated in the solid 2017 performance in both our financial and operating metrics. Our view is that Financial Engines will do great by doing good, and can have a positive societal impact by bringing comprehensive financial help to the typical American who has all too often been underserved by the conventional financial services industry. We believe that the successful execution on this strategy will drive our future growth and unlock value for our stockholders over the long term.

The Financial Engines management team and the Board of Directors are squarely focused on the interests of our clients and our stockholders. As directors, we strive to provide transparency and strong oversight of the company’s strategy, performance, and operations to achieve value for our stockholders. Accountability to our stockholders is an important element of a robust corporate governance program and we view continuous stockholder outreach as critical to creating an open dialogue to share priorities, insights, and views. In the last year, we have directly engaged with institutional investors that represent the majority of our outstanding shares.

Our Board is a diverse group of active directors with a variety of perspectives and deep knowledge of the financial services industry, business strategy, retiree benefits, and regulatory matters. Eight of the nine directors are independent, including the Chairman of the Board. We believe the tenure of our Board helps bring continuity and focus to oversee the execution of our long-term strategy.

Whether or not you plan to attend the meeting in person, please read this proxy and vote your shares.

Your vote matters to us and to Financial Engines’ business, and we thank you for your continued support.

Sincerely,

Blake Grossman

Blake Grossman

Chairman of the Board

FINANCIAL ENGINES, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 22, 2018

To Our Stockholders:

Financial Engines, Inc. will hold its Annual Meeting at 10:00 a.m., Pacific Time, on Tuesday, May 22, 2018, at our offices located at 1050 Enterprise Way, 3^rd Floor, Sunnyvale, CA 94089. We are holding this Annual Meeting:

Only stockholders of record at the close of business on March 26, 2018 are entitled to notice of, and to vote at this Annual Meeting and any adjournments or postponements of the Annual Meeting. For ten days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be available at the Secretary’s office at 1050 Enterprise Way, 3rd Floor, Sunnyvale, California 94089.

It is important that your shares are represented at this Annual Meeting. Even if you plan to attend the Annual Meeting, we hope that you will promptly vote and submit your proxy by dating, signing and returning the enclosed proxy card, or vote by telephone or via the Internet. This will not limit your rights to attend or vote at the Annual Meeting.

By Order of the Board of Directors,

Lewis E. Antone, Jr.

General Counsel and Secretary

Sunnyvale, California

April 6, 2018

Important Notice Regarding the Availability of Proxy Materials

for the Stockholder Meeting to Be Held on May 22, 2018.

Our Proxy Statement for our 2018 Annual Meeting, along with the proxy card, our Annual Report to Stockholders for the fiscal year ended December 31, 2017 and our Annual Report on Form 10-K are available on our website at www.financialengines.com.

TABLE OF CONTENTS

FINANCIAL ENGINES, INC.

1050 Enterprise Way, 3rd Floor

Sunnyvale, California 94089

(408) 498-6000

PROXY STATEMENT

INFORMATION CONCERNING VOTING AND SOLICITATION

This Proxy Statement is being furnished to you in connection with the solicitation by the Board of Directors of Financial Engines, Inc., a Delaware corporation, of proxies to be used at our 2018 Annual Meeting, referred to as the Annual Meeting, and any adjournments or postponements thereof. Our Annual Meeting will be held at our office located at 1050 Enterprise Way, 3^rd Floor, Sunnyvale, CA 94089. This Proxy Statement and the accompanying form of proxy card are being mailed to stockholders on or about April 6, 2018.

Appointment of Proxy Holders

Our Board asks you to appoint Lawrence M. Raffone, Craig L. Foster and Lewis E. Antone, Jr. as your proxy holders to vote your shares at the Annual Meeting. You may make this appointment by voting the enclosed proxy card using one of the voting methods described below.

If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this Proxy Statement. In the absence of your direction, they will vote your shares as recommended by our Board.

Unless you otherwise indicate on the proxy card, you also authorize your proxy holders to vote your shares on any matters not known by our Board at the time this Proxy Statement was printed and which, under our Bylaws, may be properly presented for action at the Annual Meeting.

Who Can Vote

Only stockholders who owned shares of our common stock at the close of business on March 26, 2018, the record date for the Annual Meeting, can vote at the Annual Meeting. As of the close of business on March 26, 2018, we had 63,451,962 shares of common stock outstanding and entitled to vote. Each holder of common stock is entitled to one vote for each share held as of March 26, 2018. There is no cumulative voting in the election of directors.

How You Can Vote

You may vote your shares at the Annual Meeting either by telephone, via the Internet, by mail or in person as described below. Our Board recommends that you vote by telephone, via the Internet or by mail as it is not practical for most stockholders to attend the Annual Meeting. Giving a proxy will not affect your right to vote your shares if you attend the Annual Meeting and want to vote in person. Stockholders holding shares through a bank or broker should follow the voting instructions on the voting instruction card received.

Voting by Telephone or via the Internet. You can vote by proxy over the telephone or via the Internet. Please follow the instructions provided on the proxy card or voting instruction card you received.

Voting by Mail. You may vote by proxy by dating, signing and returning your proxy card in the enclosed postage-prepaid return envelope.

Voting at the Annual Meeting. You may vote in person at the Annual Meeting. If you hold shares through a bank or broker, you must obtain a proxy, executed in your favor, from the bank or broker to be able to vote at the Annual Meeting. Voting by telephone, via the Internet or by mail will not limit your right to vote at the Annual Meeting, if you decide to attend in person.

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If you submit your proxy, but do not mark your voting preference, the proxy holders will vote your shares FOR the election of the nominees for director, FOR the ratification of the appointment of independent registered public accountants, FOR the advisory vote on our executive compensation and FOR the 2018 Employee Stock Purchase Plan.

Revocation of Proxies

Stockholders can revoke their proxies at any time before they are exercised in any of three ways:

Required Vote

Directors are elected by a plurality vote, which means that the three nominees for Class II directors receiving the most affirmative votes will be elected. However, if the majority of the votes cast for a director are withheld, then notwithstanding the valid election of the director, our Bylaws provide that such director will voluntarily tender his or her resignation for consideration by the nominating and corporate governance committee. Our Board will determine whether to accept the resignation of such director, taking into account the recommendation of the nominating and corporate governance committee. All other matters submitted for stockholder approval require the affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote.

A quorum, which is a majority of the outstanding shares as of March 26, 2018, must be present to hold the Annual Meeting. A quorum is calculated based on the number of shares represented by the stockholders attending in person and by their proxy holders. If you indicate an abstention as your voting preference, your shares will be counted toward a quorum but they will not be voted on the matter.

Abstentions on any matters are treated as shares present or represented and entitled to vote on that matter and have the same effect as a vote against such matter.

If your shares are held in street name and you do not instruct your broker on how to vote your shares, your broker, in its discretion, may either leave your shares unvoted or vote your shares on routine matters. Only Proposal 2 (ratification of the appointment of independent registered public accountants) is considered a routine matter. Proposal 1 (election of directors), Proposal 3 (advisory vote on executive compensation) and Proposal 4 (approval of the 2018 Employee Stock Purchase Plan) are not considered routine matters, and without your instruction, your broker cannot vote your shares. If your broker returns a proxy card but does not vote your shares, this results in a “broker non-vote.” Broker non-votes will be counted as present for the purpose of determining a quorum. However, as brokers do not have discretionary authority to vote on Proposals 1, 3 or 4, broker non-votes will not be counted for the purpose of determining the number of votes cast on Proposals 1, 3 or 4.

Solicitation of Proxies

We will pay the cost of printing and mailing proxy materials. In addition to the solicitation of proxies by mail, solicitation may be made by our directors, officers and other employees by personal interview, telephone or facsimile. No additional compensation will be paid to these persons for solicitation. At this time, we have not engaged a proxy solicitor. If we do engage a proxy solicitor we will pay the customary costs associated with such engagement. We will reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to beneficial owners of our common stock.

Important

Please promptly vote and submit your proxy by signing, dating and returning the enclosed proxy card in the postage-prepaid return envelope, or vote by telephone or via the Internet so that your shares can be voted. This will not limit your rights to attend or vote at the Annual Meeting.

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PROPOSAL 1

ELECTION OF DIRECTORS

Directors and Nominees

Our Bylaws provide for a Board of Directors consisting of not fewer than seven (7) nor more than eleven (11) members with the authorized number of directors set from time to time by resolution of our Board. The authorized number of directors is currently set at nine (9) members.

Our Board is divided into three classes: Class I, Class II and Class III. The members of each class of directors serve staggered three-year terms:

Our Board, upon the recommendation of the nominating and corporate governance committee, selected E. Olena Berg-Lacy, John B. Shoven and David B. Yoffie as nominees for election as Class II directors at the Annual Meeting. The proxies given to the proxy holders will be voted or not voted as directed and, if no direction is given, will be voted FOR the three nominees. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, an event not now anticipated, proxies will be voted for any nominee designated by our Board to fill the vacancy.

In accordance with Securities and Exchange Commission, or SEC, regulations, the names of the nominees and certain biographical information about the nominees, including the director’s business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the nominating and corporate governance committee to recommend that the nominee should serve on our Board, are set forth below.

E. Olena Berg-Lacy has served as a director since July 1998 and as a consultant from July 1998 until December 2007 and from October 2009 until December 2011. She has served as a director of Bentall Kennedy, a private real estate investment advisor company, from September 2012 to October 2015. Ms. Berg-Lacy was a partner with Fiduciary Benchmarks, Inc. from September 2007 to March 2008. Ms. Berg-Lacy was a member of the Board of Trustees for the GM/UAW Trust for Retiree HealthCare from March 2006 to January 2009 and the UAW Trust for Retiree Health Benefits from January 2009 to January 2012. She has been a director, chair of the finance committee, and a consultant to the non-profit Pension Rights Center since 2000. She has served on the National Governing Board of Common Cause since 2013. Prior to this, she served as Assistant Secretary of the United States Department of Labor, a position she held from June 1993 to June 1998. Ms. Berg-Lacy has served as a director of New Tower Trust since 2016. She received an MBA with honors from the Harvard Business School and a bachelor’s degree in English Literature from California State University at Chico.

Ms. Berg-Lacy was asked to join our Board due her extensive experience in retiree benefits and with the U.S. Department of Labor. Her viewpoint enables her to advise our Board and Company from the perspective of retirees as well as the regulatory bodies which govern the highly technical area of retirement benefits. Ms. Berg-Lacy is very familiar with our strategies, business and culture due to her years of service on our Board and has a long-established history of providing valuable counsel in her role as director.

John B. Shoven, Ph.D., has served as a director since January 2010 and currently serves as the Charles R. Schwab Professor of Economics at Stanford University, where he has taught since 1973. Dr. Shoven served as the

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Trione Director of the Stanford Institute for Economic Policy Research from 1999 to 2015, a position he previously held from 1989 to 1993. He served as Chairman of the Economics Department at Stanford University from 1986 to 1989, and as Dean of the School of Humanities and Sciences from 1993 to 1998. Dr. Shoven currently serves as a director on the board of directors of Exponent, Inc. (NASDAQ: EXPO), an engineering and scientific consulting firm, as well as chairman of the nominating and governance committee and a member of the audit committee and compensation committee. He also serves as chairman of the board of directors of Cadence Design Systems, Inc. (NASDAQ: CDNS), a developer of electronic design automation hardware and software, where he chairs the compensation committee and is a member of the nominating and governance committee as well as the audit and finance committee. Dr. Shoven also serves as a director on the board of directors of American Century Funds, Mountain View Board, where he is chairman of the client experience oversight committee and a member of the governance committee. He is a Fellow of the American Academy of Arts and Sciences, a recipient of the Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security, an award-winning teacher at Stanford, and has published more than 100 professional articles and 20 books. Dr. Shoven received a Ph.D. in Economics from Yale University and a bachelor’s degree in Physics from University of California, San Diego.

As a professor of economics and former director of the Stanford Institute for Economic Policy Research, Dr. Shoven has strong financial and corporate governance expertise, as well as strong expertise on Social Security claiming strategies and investment theory. Dr. Shoven’s service on a number of public company boards of directors, including their various committees, also provides cross-board experience and insight into practices at other organizations.

David B. Yoffie, Ph.D., has served as a director since June 2011 and is the Max and Doris Starr Professor of International Business Administration at the Harvard Business School, where he has taught since 1981. Dr. Yoffie served as Chairman of Harvard Business School’s Strategy department from 1997 to 2002, Chairman of the Advanced Management Program from 1999 to 2002, Senior Associate Dean and Chair of Executive Education from 2006 to 2012, and he currently chairs Harvard’s World Presidents’ Organization program. He has also lectured and consulted in more than 30 countries. Dr. Yoffie is a co-chair of the nominating and governance committee of Intel Corporation (NASDAQ: INTC) and served as a member of the board of directors of Charles Schwab Corporation (NYS: SCHW) from 2003 until 2007 and TiVO Inc. (NASDAQ: TIVO) from 2011 until 2016 as chair of the nominating and governance committee. He is also on the board of the National Bureau of Economic Research, a nonprofit research organization since 1995. Dr. Yoffie received a master’s degree and Ph.D. in Political Science from Stanford University, where he has been a Visiting Scholar, and a bachelor’s degree in Politics from Brandeis University.

Dr. Yoffie provides a depth of knowledge regarding the development and operation of successful business enterprises. His service on other boards of directors provides our Board with cross-board experience. Dr. Yoffie also brings experience in strategy and management to his role as a director.

Required Vote

The three nominees for director receiving the highest number of affirmative votes will be elected as directors. However, if the majority of the votes cast for a director are withheld, then notwithstanding the valid election of such director, our Bylaws provide that such director will voluntarily tender his or her resignation for consideration by the nominating and corporate governance committee. Our Board will determine whether to accept the resignation of such director, taking into account the recommendation of the nominating and corporate governance committee. Broker non-votes will have no effect on the election of the nominees. Unless marked to the contrary, proxies received from stockholders of record will be voted FOR the nominees.

Our Board recommends a vote FOR the election of

E. Olena Berg-Lacy, John B. Shoven and David B. Yoffie as

Class II directors of Financial Engines.

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Executive Officers and Directors

The following table shows information about our executive officers and directors as of March 1, 2018. Mr. Sims is not included in the table below as he was not an executive officer on March 1, 2018.

The following presents biographical information for each of our current executive officers, including our named executive officers, or NEOs, and directors listed above in the table, other than the director nominees whose information is on pages 3 and 4 of this Proxy Statement. In accordance with SEC regulations, the biographical information includes information regarding: the individual’s business experience and involvement in certain legal or administrative proceedings, if applicable, and, with respect to our directors, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the nominating and corporate governance committee to recommend that the director should serve on our Board.

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Lawrence M. Raffone has served as our President and Chief Executive Officer and as a director since January 2015, and previously served as our President from November 2012 through December 2014. Prior to November 2012, Mr. Raffone held the position of Executive Vice President, Distribution and Institutional Services from January 2001. Prior to joining us, Mr. Raffone served as the executive vice president of Fidelity Investments Institutional Brokerage Group, a division of Fidelity Investments. Mr. Raffone received an MBA from Babson College and a bachelor’s degree in Marketing from Bryant University.

Mr. Raffone’s tenure at Financial Engines in our sales, distribution and institutional services organization, as President leading our services and marketing organizations, and now as our President and Chief Executive Officer brings to our Board a unique and extensive understanding of the clients we serve, our Company, the strategic choices we have made and our long-term strategy.

Mr. Raffone possesses an in-depth knowledge of our industry as well as leadership, corporate development and operational experience. We also believe it is important that our Chief Executive Officer serve on our Board and that his membership helps to achieve our objective of a Board composed of experienced and dedicated individuals with a diversity of backgrounds, skills and perspectives.

Craig L. Foster has served as our Executive Vice President and Chief Financial Officer since September 2017, and as Chief Accounting Officer since January 2018. Before joining us, Mr. Foster served as the Chief Financial Officer and Chief Accounting Officer of Amobee, Inc., a private company and digital advertising platform, from April 2015 until May 2017. From February 2013 until April 2015, Mr. Foster served as Chief Financial Officer and Chief Accounting Officer of Ubiquiti Networks, Inc., a publicly-traded networking and communications company. From June 2012 to February 2013, Mr. Foster served as director in the technology infrastructure and software group of Credit Suisse Securities (USA) LLC, an investment bank. From August 2007 to June 2012, Mr. Foster served as an Executive Director and co-head of the software group of UBS Securities LLC, an investment bank. Mr. Foster has also held various management positions at RBC Capital Markets, an investment bank, LoudCloud, a software and services platform, as well as Deloitte Consulting and PricewaterhouseCoopers, both public accounting firms. Mr. Foster serves on the board of LiveXLive Media, Inc. (NASDAQ: LIVX), a publicly-traded company. Mr. Foster holds an MBA in Finance from the Wharton School of Business and a bachelor’s degree in Economics from the University of California, San Diego.

John B. Bunch has served as our Executive Vice President and Chief Operating Officer and President, Financial Engines Advisors L.L.C. since February 2017, as our Executive Vice President, Financial Engines and as the President of our investment advisory subsidiaries, Financial Engines Advisors L.L.C. and The Mutual Fund Store, LLC, from February 2016 to February 2017. Prior to joining us, Mr. Bunch held the position of Chief Executive Officer at The Mutual Fund Store from February 2012 to January 2016. He also served as President, Retail Distribution at TD Ameritrade from June 2007 to February 2012 and as Head of Branches at TD Ameritrade from January 2006 to June 2007. From 2004 to January 2006, he served as the Executive Vice President of Branch Distribution for TD Waterhouse. Prior to this, he served as Divisional Senior Vice President at Charles Schwab & Co. from 2002 to 2004 and held other leadership roles at Charles Schwab & Co. from 1993 to 2002. Mr. Bunch attended the University of Iowa and the University of Michigan’s Ross School of Business.

Kelly S. O’Donnell has served as our Executive Vice President and Chief Administrative Officer and Chief Risk Officer since February 2017, as our Executive Vice President, Business Operations and Corporate Marketing and Chief Risk Officer from May 2016 to February 2017, as Executive Vice President, Business Operations and Corporate Marketing since March 2015, as Executive Vice President, Corporate and Institutional Marketing from September 2014 to March 2015, as our Executive Vice President of Marketing from January 2013 to September 2014 and as our Vice President of Marketing from July 2007 to January 2013. From October 2006 to June 2007, she served as our Senior Director of Channel Marketing and as our Director of Customer Acquisition and Retention from June 2003 to September 2006. Prior to joining us, she was Director of Consulting and an analyst for Cerulli Associates from June 1998 to June 2003. Ms. O’Donnell was also a litigation assistant at A. G. Edwards & Sons from May 1996 to July 1997 and a manager and associate at Coopers & Lybrand from August 1989 to May 1996. Ms. O’Donnell received a bachelor’s degree in Accountancy from the University of Missouri.

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Christopher L. Jones has served as our Executive Vice President, Investment Management and Chief Investment Officer since January 2006, as our Executive Vice President, Investment Management from May 2001 to January 2006, as our Vice President, Financial Research & Strategy, from January 1998 to May 2001, and as our Director of Financial Research from December 1996 to January 1998. Prior to joining us, Mr. Jones served as a consultant at Cornerstone Research, an economic and financial consulting firm. Mr. Jones received a master’s degree in Business Technology and Engineering-Economic Systems and a bachelor’s degree in Economics from Stanford University.

Lewis E. Antone, Jr. has served as our Executive Vice President and General Counsel since May 2016. Mr. Antone previously served as Vice President and Deputy General Counsel from March 2009 to May 2016, and joined Financial Engines in 2004 as Senior Corporate Counsel. He has also previously served as the Company’s Chief Compliance Officer. Prior to joining us, Mr. Antone handled investment company distribution and contractual matters as Senior Counsel with Columbia Management Group, the asset management business of the Bank of America Corporation. Mr. Antone also has experience in the retail broker/dealer and investment advisory business as Associate Counsel with LPL Financial Services, with emerging markets at ING, and has worked as an attorney with both the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) Office of General Counsel. Mr. Antone received his bachelor’s degree in Politics and a J.D. from The Catholic University of America and an L.L.M. from the Georgetown University Law Center.

Gina M. Cruse has served as our Executive Vice President, Human Resources since March 2015. Prior to joining us, Ms. Cruse served as the Vice President of Human Resources at Saba, a cloud-based intelligent talent management solution company, from November 2011 until February 2015, and as the Group Director of Human Resources at Cadence Design Systems, a leader in global electronic design innovation, from December 1999 until October 2011. Ms. Cruse studied business at Mission College, Santa Clara, California.

Blake R. Grossman has served as our Chairman since February 2016 and as a director since May 2011. Mr. Grossman has served as managing partner of the private investing firms ThirdStream Partners LLC since October 2014 and of CHJ Capital Management LLC since May 2011. Previously, Mr. Grossman held executive positions with BlackRock, Inc., an investment management, risk management and advisory services provider, through 2010, including Vice Chairman and Head of Scientific Investments. Previously, Mr. Grossman served as the Global Chief Executive Officer, a director and a member of the Executive Committee of Barclays Global Investors (BGI), until it was acquired by BlackRock in December 2009. From 1985 to 2009, Mr. Grossman held various executive positions with BGI and its predecessor organizations, including Chief Investment Officer from 1992 to 2002. He currently serves as a director of CamberView Partners LLC, Hillcrest Asset Management LLC and Vista Capital Advisors, which are private companies. The Financial Analysts Journal awarded Mr. Grossman a Graham and Dodd Award for his research on the investment implications of divestment decisions, co-authored with William F. Sharpe, in 1986. Mr. Grossman graduated Phi Beta Kappa from Stanford University, where he received a master’s and a bachelor’s degree in Economics.

Mr. Grossman’s extensive experience with financial products and the strategies used to build portfolios and identify investments are skills essential to understanding the fundamentals of our Company and to advising our growth strategy. Our Board also values the perspective gained from his previous work with our co-founder, Mr. Sharpe. Mr. Grossman’s long tenure as an executive in the financial industry demonstrates his leadership skills and judgment.

Joseph A. Grundfest is one of our founders and has served as a director since our inception in June 1996. Mr. Grundfest has not been an employee of our Company and has no operational involvement with our Company. Mr. Grundfest joined the faculty of Stanford Law School in January 1990 where he is the William A. Franke Professor of Law and Business. He is also senior faculty of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University, and co-director of Director’s College, a venue for the continuing professional education of directors of publicly traded corporations. Prior to joining Stanford Law School, Mr. Grundfest was a Commissioner of the U.S. Securities and Exchange Commission from 1985 to 1990. Mr. Grundfest, who serves on the board of KKR, LLC (the managing partner of KKR LP (NYSE: KKR)), where he is also chair of the audit committee, and is also currently the chairman of the board nominating committee of the NASDAQ Stock Market.

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Mr. Grundfest received a J.D. from Stanford Law School and a bachelor’s degree in Economics from Yale University.

As a professor of law and business, as well as holding senior positions at the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University and of Director’s College, Mr. Grundfest brings to our Board significant corporate governance expertise. We also benefit greatly from Mr. Grundfest’s status as a financial expert under SEC guidelines. In addition, as one of our co-founders, he has extensive knowledge of our strategies, business and culture and has a long-established history of providing valuable insight to our Board.

Robert A. Huret has served as a director since January 2011. He is a founding partner emeritus of FTV Capital, a multi-stage private equity firm whose limited partners include many of the world’s foremost financial institutions. Previously, he was a senior consultant to Montgomery Securities. He also served as Senior Vice President Finance and Planning and Trust Executive Officer at the Bank of California and was Vice President of Planning and Mergers and Acquisitions at First Chicago Corporation/The First National Bank of Chicago. Since 1990, his financial and professional emphasis has focused on technology companies that develop products and services for the financial services industry. He has served as Trustee of Cornell University and San Francisco University High School. Concurrently with his investment banking and venture capital career, he serves as the Chairman of Huret, Rothenberg & Co., a private investment firm. Previously, he has been a founder and Vice Chairman of Newell Associates and a founder and director of Third Age Media. He previously served as a director of Cloudmark, Inc. from 2008 to 2017, and currently serves as a director of Bank of Hawaii Corporation (NYSE: BOH). Mr. Huret received his bachelor’s of science degree in Industrial and Labor Relations from Cornell University and his MBA with distinction from the Harvard Business School.

Mr. Huret previously served on our Board from 2002 to 2009. Mr. Huret left our Board in 2009 in accordance with his firm’s policies requiring resignation when a portfolio company files with the SEC for an initial public offering. Our Board determined that it would benefit from Mr. Huret resuming a director position, and as his firm’s policies permitted him to return to our Board, Mr. Huret accepted his appointment to our Board in January 2011. Mr. Huret’s status as a financial expert under SEC guidelines and experience in the private equity arena and financial industry bring to our Board leadership, management and sophisticated financial expertise. His extensive knowledge of technology companies and their applications in the financial services industry provides key insights for our Company.

Heidi Kunz has served as a director since November 2008. She was the Executive Vice President and Chief Financial Officer of Blue Shield of California from September 2003 until her retirement in December 2012. Prior to joining Blue Shield of California, she served as Executive Vice President and Chief Financial Officer of Gap, Inc. from 1999 to January 2003. From 1995 to 1999, Ms. Kunz served as the Chief Financial Officer of ITT Industries, Inc. She has also held senior financial management positions at General Motors Corporation, including Vice President and Treasurer during her 16-year tenure from 1979 to 1995. Ms. Kunz has served as a director of Halyard Health (NYSE: HYH) since 2014 and Agilent Technologies Inc. (NYSE: A) since 2000. Ms. Kunz received an MBA in Finance/Accounting from Columbia Business School and a bachelor’s degree in Russian Language from Georgetown University.

Ms. Kunz’s experience as a chief financial officer and her background of senior financial management positions with several large corporations brings to our Board in-depth knowledge of financial best practices as well as financial reporting requirements. In addition, she provides insight into how large employers view investment management services for their employees. Ms. Kunz’s status as a financial expert under SEC guidelines and her sophistication with corporate finances offer valuable insight to our management and our Board in her position as chair of our audit committee.

Michael E. Martin has served as a director since February 2016. He is a Partner of Warburg Pincus & Co. and a Managing Director of the private equity firm Warburg Pincus LLC, where he is head of its financial services group and a member of its Executive Management Group. Prior to joining Warburg Pincus & Co. and Warburg Pincus LLC in March 2009, Mr. Martin was President of Brooklyn NY Holdings, LLC, a private investment company, from March 2006 to December 2008. Mr. Martin worked at UBS Investment Bank from March 2002 to March

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2006, where he served as a Vice Chairman and Managing Director of UBS Investment Bank and a member of its Board of Directors and Global Executive Committee. He held senior positions at the investment bank Credit Suisse First Boston from August 1987 to March 2002 and from January 1983 to July 1987 he practiced corporate law at the law firm of Wachtell, Lipton, Rosen & Katz. Mr. Martin served on the Board of Directors of Triton Container International (NYSE: TRTN) from February 2012 to July 2016, Aeolus Re Ltd., a private company, from September 2009 to November 2015, National Penn Bancshares, Inc. (NASDAQ: NPBC) from February 2011 to March 2015, Primerica, Inc. (NYSE: PRI) from April 2010 to May 2014, SLM Corporation (NASDAQ: SLM) from May 2008 to May 2012 and BPW Acquisition Corp. from March 2008 to March 2010. He is currently a director of Ascentium Capital, DBRS, Mariner Finance, Foundation Risk Partners, and WP Fund Management Co., Ltd. Mr. Martin received a bachelor’s degree in Economics from Claremont Men’s College and a J.D. from Columbia University School of Law.

Mr. Martin’s experience in the financial services industry as well as his service on private and public boards of directors provide extensive, relevant expertise to our Board.

There are no family relationships among any of our directors or executive officers.

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CORPORATE GOVERNANCE

Organization of our Board of Directors

Our Board oversees, counsels, and directs management in our long-term interests and those of our stockholders. Under our Corporate Governance Guidelines, which can be found on our Company website, our Board’s responsibilities, including those of its committees, include:

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Our Board and its committees met throughout the year at regularly-scheduled meetings, held special meetings, and acted by written consent from time to time as appropriate. Our Board held nine (9) meetings during 2017. Each director attended at least 75% of the total regularly-scheduled and special meetings held by our Board and the committees on which such director served during his or her tenure in 2017. Our non-management directors meet in regularly-scheduled sessions without the presence of management in executive sessions, over which the Chairman of the Board generally presides. We do not have a policy regarding directors’ attendance at our annual meetings of stockholders, however, we encourage our directors to attend. All of our directors attended the 2017 annual meeting of stockholders, including Mr. Raffone.

Board Leadership Structure. Our Board has determined that having an independent director serve as Chairman of the Board is in the best interest of our stockholders at this time. An independent Chairman allows our Board to have an independent perspective, which works in tandem with the viewpoint of our Chief Executive Officer to provide robust review of our Company’s business and strategies.

Risk Oversight. Our Board is actively involved in oversight of risks that could affect our Company. This oversight is also conducted through the committees of our Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees. For example, strategic risks are overseen by the full Board; financial conduct, financial reporting, accounting matters, related person transactions and some enterprise risks are overseen by the audit committee; risks related to our governance structure are overseen by the nominating and corporate governance committee; and compensation risks are overseen by the compensation committee. In addition to the committees’ attention to risk, our Board has retained responsibility for general risk oversight. Our Board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within our Company. This includes reports from the Chief Compliance Officer of our wholly-owned subsidiary, Financial Engines Advisors L.L.C., at least annually, and periodic reports from the Chief Compliance Officer of Financial Engines, Inc. In addition, we have an enterprise risk management program overseen by our Chief Risk Officer under which enterprise risks, including cybersecurity, are identified and prioritized by our management. Our management regularly reports on enterprise risks to the relevant committee or our Board. Additional review or reporting on enterprise risks is conducted as needed or as requested by our Board or a committee. We believe that these processes are consistent with, and provide additional support for, the current Board leadership structure.

Board Independence. Our Corporate Governance Guidelines provide that a majority of our directors will be independent. Based on the review and recommendation by the nominating and corporate governance committee, our Board has determined that each of our directors other than Mr. Raffone, our President and Chief Executive Officer, qualifies as “independent” in accordance with the published listing requirements of The NASDAQ Stock Market. In addition, all compensation committee members are “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (which is referred to in this Proxy Statement as the Code), to allow our Company a tax deduction for certain employee compensation exceeding $1,000,000 for an individual (see “Compensation Discussion and Analysis – Tax and Accounting Treatment of Compensation” regarding tax reform changes to Section 162(m)). All compensation committee members are also “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 (which is referred to in this Proxy Statement as the Exchange Act) to allow our Company to exempt certain option grants and similar transactions from the short-swing profits prohibition of Section 16 of the Exchange Act. To facilitate this determination, each director completes a questionnaire annually that provides information about relationships that might affect the determination of independence. Management provides the nominating and corporate governance committee and our Board with relevant facts and circumstances of any relationship bearing on the independence of a director or nominee.

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Board Committees

Board Committees. Our Board has established three standing committees: the audit committee, the compensation committee and the nominating and corporate governance committee. We believe that the composition of these committees meet the criteria for independence under, and the functioning of these committees complies with, the applicable requirements of, the Sarbanes-Oxley Act of 2002, the current rules of The NASDAQ Stock Market and SEC rules and regulations. We intend to comply with future requirements as they become applicable to us. Our Board has approved a charter for each of these committees, which can be found on our website at www.financialengines.com. Each committee has the composition and responsibilities described below:

Each of our audit committee members has been determined by our Board to be an “audit committee financial expert” as defined by SEC rules.

The audit committee assists our Board in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control and legal compliance functions by approving the services performed by our independent registered public accountants and reviewing their reports regarding our accounting practices and systems of internal accounting controls. The audit committee oversees the audit efforts of our independent registered public accountants and takes actions as it deems necessary to satisfy itself that the accountants are independent of management. The audit committee is also responsible for monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters. In addition, the audit committee is responsible for oversight of our risks relating to financial conduct, financial reporting, accounting matters, related person transactions and some enterprise risks.

To satisfy these oversight responsibilities, the audit committee meets at regularly-scheduled meetings with our Chief Financial Officer, Chief Accounting Officer, Controller, and our Chief Risk Officer, as well as our General Counsel and other members of management, including our internal audit personnel and internal risk committee, and separately in executive sessions with our independent registered public accountants, to discuss and review our financial statements, internal controls, auditing, accounting and financial reporting processes, and the adequacy of the resources devoted to these functions. The audit committee receives regular reports at committee meetings regarding issues such as the status and findings of audits being conducted by the independent registered public accountants, accounting changes that could affect our financial statements and proposed audit adjustments, if any.

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The compensation committee is responsible for meeting the Board’s responsibilities with regard to oversight and determination of executive compensation and assesses whether our compensation structure establishes appropriate incentives for officers and employees. The compensation committee can form and delegate authority to subcommittees consisting of one or more members of the compensation committee and members of management. The compensation committee is responsible for risks relating to employment policies and our compensation and benefit plans. To assist it in satisfying these oversight responsibilities, the compensation committee has retained Semler Brossy Consulting Group, LLC, or Semler Brossy, as its independent compensation consultant and meets regularly with management to understand the financial, human resources and stockholder implications of compensation decisions being made. The compensation committee chairperson also meets as needed with management and the committee’s consultant.

The compensation committee reviews and makes recommendations to our Board with respect to our major compensation plans, policies and programs. In addition, the compensation committee establishes and modifies the terms and conditions of employment of our executive officers, and administers our Amended and Restated 2009 Incentive Stock Plan, our executive cash incentive plans and our employee cash incentive plans. Pursuant to its charter, the compensation committee has sole discretion and authority with respect to any action regarding compensation payable to the Chief Executive Officer or the other executive officers of the Company, including compensation that is intended to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Code or to be exempt from the short-swing profit recovery provisions under Section 16(b) of the Exchange Act (see “Compensation Discussion and Analysis – Tax and Accounting Treatment of Compensation” regarding tax reform changes to Section 162(m)).

The nominating and corporate governance committee is responsible for making recommendations to our Board regarding candidates for directorships, the size and composition of our Board and the compensation for non-employee directors. In addition, the nominating and corporate governance committee oversees our Corporate Governance Guidelines as well as our policies addressing regulatory and legal matters, and reports and makes recommendations to our Board concerning corporate governance matters.

The nominating and corporate governance committee is also responsible for oversight of risks relating to Board succession planning, our ethics policies and corporate governance practices. To satisfy these oversight responsibilities, the nominating and corporate governance committee receives reports from our Company officers responsible for each of these risk areas.

Compensation Committee Interlocks and Insider Participation

None of the current members of the compensation committee is or has in the past served as an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on, or proposed to serve on, our Board or the compensation committee.

Director Nominations

Our Board nominates directors for election at each annual meeting of stockholders and elects new directors to fill vacancies when they arise. The nominating and corporate governance committee has the responsibility to identify, evaluate, recruit and recommend qualified candidates to our Board for nomination or election.

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Director Criteria. The nominating and corporate governance committee has a policy regarding consideration of director candidates recommended by stockholders. The committee reviews suggestions for director candidates recommended by stockholders and considers such candidates based on the same criteria used for other candidates. Our Board has an objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives and skills. We do not have a specific policy regarding diversity of candidates. The nominating and corporate governance committee selects candidates for director based on an appropriate balance of knowledge, experience and capability, and specifically based on their character, judgment, diversity of experience, business acumen, and his or her willingness and ability to devote sufficient time to effectively carry out his or her duties as a director. The nominating and corporate governance committee believes it appropriate for at least one, and, preferably, multiple, members of our Board to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and for a majority of the members of our Board to meet the definition of “independent director” under the rules of The NASDAQ Stock Market. The nominating and corporate governance committee also believes it appropriate for our Chief Executive Officer to participate as a member of our Board.

Prior to each annual meeting of stockholders, the nominating and corporate governance committee identifies nominees first by reviewing the current directors whose terms expire at the annual meeting of stockholders and who are willing to continue in service. These candidates are evaluated based on the criteria described above, including as demonstrated by the candidates’ prior service as directors, and the needs of our Board with respect to the particular talents and experience of its directors. In the event that a director does not wish to continue in service, the nominating and corporate governance committee determines not to nominate the director, or a vacancy is created on our Board as a result of a resignation, an increase in the size of our Board or other event, the nominating and corporate governance committee will consider various candidates for Board membership, including those suggested by members of the nominating and corporate governance committee, by other members of our Board, by any executive search firm engaged by the nominating and corporate governance committee and by stockholders. A stockholder who wishes to suggest a prospective nominee for our Board should notify Financial Engines’ Secretary, any member of the nominating and corporate governance committee, or the persons referenced below in “Communications with our Board of Directors” in writing with any supporting material the stockholder considers appropriate.

Stockholders Agreement. Concurrently with the entry into the Agreement and Plan of Mergers (the Merger Agreement) for the acquisition of The Mutual Fund Store, or TMFS, (the Acquisition), Financial Engines entered into a Stockholders Agreement, dated as of November 5, 2015, with (i) WP X Finance, L.P., a Delaware limited partnership, Warburg Pincus X Partners, L.P., a Delaware limited partnership (collectively, Warburg), and (ii) TMFS Holdings, Inc., a Nevada corporation, and Christopher R. Braudis (the Stockholders Agreement). The Stockholders Agreement sets forth arrangements regarding certain governance matters and contains various provisions described below relating to, among other things, board representation, the acquisition of additional equity interests in Financial Engines, prohibitions on certain actions and undertakings related to Financial Engines, certain transfer restrictions, and registration rights.

Under the terms of the Stockholders Agreement, Warburg was entitled to designate one individual for initial appointment to our Board with subsequent nomination rights. The right of Warburg to designate a director to the Board terminated when Warburg beneficially owned less than the lower of (i) 5% of all of the outstanding shares of our common stock and (ii) 50% of the number of shares of our common stock received by Warburg as consideration in the Acquisition. Pursuant to the Stockholders Agreement, upon the closing of the Acquisition, Mr. Martin was appointed to our Board as the Warburg designee.

Warburg subsequently sold all of the shares of our common stock received by Warburg as consideration in the Acquisition, through two registered underwritten public offerings, which closed on March 10, 2017 and August 22, 2017. In each offering, entities affiliated with Warburg Pincus LLC sold an aggregate of 4,109,128 shares of our common stock. We did not receive any proceeds from the sale of the common stock by the selling stockholders. Pursuant to the terms of the Stockholders Agreement, Warburg is no longer entitled to designate an individual for appointment to our Board. Mr. Martin continued to serve on our Board following the sale of the common stock owned by Warburg. See also “Certain Relationships and Related Person Transactions – Transactions Related to the Acquisition of The Mutual Fund Store.”

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Stockholder Nominees. In addition, our Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to our Board at the annual meeting of stockholders. In order to nominate a candidate for director, a stockholder must give timely notice in writing to Financial Engines’ Secretary and otherwise comply with the provisions of our Bylaws. To be timely, our Bylaws provide that we must have received the stockholder’s notice not more than 120 days nor less than 90 days prior to the anniversary of the date our proxy statement was provided to stockholders in connection with previous year’s annual meeting, which was April 10, 2017. However, if the date of the annual meeting is more than 30 days before or after the anniversary date of the prior year’s annual meeting, we must receive the stockholder’s notice by the close of business on the later of 90 days prior to the annual meeting and the 10th day after the day we provided such public disclosure of the meeting date. Information required by our Bylaws to be in the notice include the name and contact information for the candidate and the person making the nomination and other information about the nominee that must be disclosed in proxy solicitations under Section 14 of the Exchange Act and the related rules and regulations under that section.

Stockholder nominations must be made in accordance with the procedures outlined in, and include the information required by, our Bylaws and must be addressed to: Secretary, Financial Engines, Inc., 1050 Enterprise Way, 3rd Floor, Sunnyvale, California 94089. You can obtain a copy of our Bylaws by writing to the Secretary at this address.

Investor Outreach

Our Investor Relations team follows a program of engagement and responsiveness. We actively meet with investors at conferences and in individual meetings. We regularly engage with our investors to learn about issues of concern to them and we are responsive to investors who contact us. We aim to make sure that our Board and management are aware of the issues that are most important to all of our stockholders and we strive to provide a forum where both parties can effectively address those topics. In 2017, we were able to meet in person with almost all of our largest active institutional investors at their offices. We also do proactive annual outreach to all of our top stockholders to engage with the corporate governance personnel at those stockholders and to maintain open communication channels about policies and topics of interest to them. In 2017, we proactively reached out to our largest stockholders’ corporate governance personnel to offer the opportunity to engage with us on topics of interest to them. Representatives from our executive management and our Board spoke with the investment stewardship teams at stockholders representing in the aggregate over 32% of our shares outstanding.

Communications with our Board of Directors

Our Board recommends that stockholders and other interested persons initiate communications with our Board, the Board Chair, or any committee of our Board, in writing to the attention of our Secretary at 1050 Enterprise Way, 3rd Floor, Sunnyvale, California 94089. This process will assist our Board in reviewing and responding to stockholder communications in an appropriate manner. Our Board has instructed our Secretary to review such correspondence and, at his discretion, not to forward items if he deems them to be of a commercial or frivolous nature or otherwise inappropriate for our Board’s consideration, such as spam, junk mail and mass mailings, product complaints, personal employee complaints, product inquiries, new product suggestions, resumes and other forms of job inquiries, surveys, business solicitations or advertisements.

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Corporate Governance Principles and Practices

We believe our corporate governance initiatives comply with the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC adopted thereunder. In addition, we believe our corporate governance initiatives comply with the rules of The NASDAQ Stock Market.

Our Board has adopted Corporate Governance Guidelines, as discussed above, as well as a Code of Business Conduct and Ethics that apply to our directors, officers and employees. Our Employment Polices Handbook outlines additional expectations and guidelines for our employees. Our codes and policies address various corporate governance topics, including:

Our Company has also adopted a Code of Ethics for Senior Financial Officers applicable to our Chief Executive Officer, President, Chief Financial Officer, Chief Accounting Officer, Controller, and other key management employees, addressing ethical issues. The Corporate Governance Guidelines, Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers are available in the Corporate Governance section of our website. We have also adopted an Insider Trading and Communications Policy which prohibits the following transactions: engaging in any form of hedging transactions in our stock, pledging our stock as collateral for a loan, trading in our securities on a short-term basis, purchases of our securities on margin, short sales of our securities and buying or selling puts or calls, or their equivalent positions, on our securities. The Insider Trading and Communications Policy further provides that we will not arrange for cashless exercises of stock options and sets forth the principle that any of our securities purchased in the open market by an employee should be held for a minimum of six months. We have implemented whistleblower procedures that establish formal protocols for receiving and handling complaints regarding questionable federal securities law matters, accounting and auditing matters from employees. Any concerns regarding accounting or auditing matters reported under these procedures will be communicated promptly to the audit committee.

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COMPENSATION OF DIRECTORS

Our Board and its committees are responsible for reviewing and establishing non-employee director compensation. Our nominating and corporate governance committee charter and Corporate Governance Guidelines state that the committee will review non-employee director compensation annually and make recommendations to the Board regarding fees and other compensation to be paid to non-employee directors. Our compensation committee charter also provides that non-employee director equity shall be considered annually by the entire Board. The nominating and corporate governance committee has the ability to select and retain a consultant or advisor on this matter, and has engaged Semler Brossy in the past.

The nominating and corporate governance committee considers various factors in making non-employee director compensation recommendations, including, but not limited to, the responsibilities of directors and the committee chairs, as well as the form and amount of compensation paid to directors by comparable companies. The nominating and corporate governance committee and the Board believe that the director’s compensation program effectively ties the majority of directors’ compensation to stockholder interests through the grant of nonstatutory stock options and restricted stock units, and the compensation is equitable based on the work required of directors serving an entity of the Company’s size and scope.

Our non-employee directors are entitled to receive an annual retainer of $40,000. The chairperson of the audit committee receives an additional annual retainer of $15,000 and the chairpersons of the compensation committee and nominating and corporate governance committee each receive an additional annual retainer of $10,000. The higher retainer for the audit committee chair reflects the additional meetings and specialized attention to our earnings releases and financials required of this committee chair. Directors who are employees of the Company receive no additional remuneration for serving on the Board.

In addition, non-employee directors receive nondiscretionary, automatic grants of nonstatutory stock options and restricted stock units, or RSUs, under our Amended and Restated 2009 Stock Incentive Plan, or the 2009 Stock Incentive Plan. A non-employee director is automatically granted an initial option to purchase 25,000 shares upon becoming a member of our Board. The initial option vests and becomes exercisable pursuant to the same schedule generally applicable to employees: vesting over four years, with 1/4th of the shares subject to the option vesting on the first anniversary of the date of grant and the remainder vesting in equal monthly installments thereafter over the subsequent three years. The options granted to non-employee directors will have a per-share exercise price equal to 100% of the fair market value of the underlying shares on the date of grant and will become fully vested if a change in control occurs.

On the first business day following each annual meeting of the Company’s stockholders (including this Annual Meeting), each non-employee director is automatically granted an RSU award with a value of $200,000, rounded up to the nearest whole share, provided the director has served on our Board for at least six months. In 2015 and previously, our non-employee director annual RSU grants vested over four years, with one-fourth vesting annually. In January 2016, our Board, at the recommendation of the nominating and corporate governance committee, approved a different vesting schedule for new annual non-employee director RSU grants. The 2016 annual RSU grant vests over three years, with one-third vesting annually. The 2017 annual grant vests over two years, with one-half vesting annually. The 2018 grant, to be made after the Annual Meeting, as well as annual grants thereafter, will fully vest on the one-year anniversary of the vesting commencement date. The Board feels that this vesting schedule better compensates our non-employee directors for their service and aligns our Board’s total compensation with that of our peers. The new vesting has been phased-in over three years in order to reduce the impact on the Company’s financials. The RSUs will also become fully vested if a change in control occurs.

On March 21, 2016, our Board, at the recommendation of the nominating and corporate governance committee, approved an amendment and restatement of our 2009 Stock Incentive Plan, which includes a limit on non-employee director equity awards made thereunder. Under the amended and restated plan, equity awards granted to a non-employee director as compensation for services as an outside director in any 12-month period may not exceed a $500,000 grant date fair value (as determined in accordance with ASC 718), provided that the 25,000 share initial option grant for new non-employee directors is excluded from such limit.

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We also have paid or reimbursed our directors for reasonable out-of-pocket and travel expenses in connection with attendance at our Company events and Board and committee meetings.

Director Stock Ownership and Holding Guideline

Our Board established a guideline, at the recommendation of the nominating and corporate governance committee, which became effective immediately following the 2014 annual meeting of stockholders, to better ensure that our non-employee directors each maintain an appropriate equity stake in our Company. Our guideline requires that each non-employee director own an equity stake in our Company equal in value to not less than five times the annual retainer, or $200,000, and that each director hold 50% of the shares obtained from each annual RSU vesting event until the director meets the guideline. The guideline is similar to our guideline for executives, described below under “Executive Stock Ownership and Holding Guideline.”

2017 Director Compensation

The following table sets forth the compensation paid or accrued by us to our non-employee directors in 2017. The table excludes Mr. Raffone, who did not receive any additional compensation from us in 2017 for his role as a director because he was our Chief Executive Officer.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT   

The following table sets forth certain information as of March 1, 2018, as to shares of our common stock beneficially owned by: (i) each person who is known by us to own beneficially more than 5% of our common stock, (ii) each of our named executive officers listed in the 2017 Summary Compensation Table on page 38, (iii) each of our directors and our nominees for director and (iv) all of our current directors and executive officers as a group. Unless otherwise stated below, the address of each beneficial owner listed on the table is c/o Financial Engines, Inc., 1050 Enterprise Way, 3rd Floor, Sunnyvale, California 94089. The percentage of common stock beneficially owned is based on 63,348,560 shares outstanding as of March 1, 2018.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

In addition to the compensation arrangements with directors and executive officers, including those arrangements described elsewhere in this Proxy Statement, the following is a description of each transaction since January 1, 2017 and each currently proposed transaction in which:

We have entered into indemnification agreements with each of our current directors and executive officers. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We also intend to enter into indemnification agreements with our future directors and executive officers.

Transactions Related to the Acquisition of The Mutual Fund Store.

In connection with the Acquisition we issued approximately 9.9 million shares of our common stock and paid approximately $250 million in cash, subject to certain closing and post-closing adjustments. Immediately following the closing of the Acquisition, entities affiliated with Warburg Pincus LLC together beneficially owned approximately 13% of our common stock.

Concurrently with entry into the Merger Agreement, we entered into the Stockholders Agreement with Warburg, TMFS Holdings, Inc., a Nevada corporation, and Christopher R. Braudis. The Stockholders Agreement set forth arrangements regarding certain governance matters and contained various provisions relating to, among other things, board representation, the acquisition of additional equity interests in Financial Engines, prohibitions on certain actions and undertakings related to Financial Engines, certain transfer restrictions, and registration rights.

Under the terms of the Stockholders Agreement, Warburg was entitled to designate one individual for initial appointment to our Board with subsequent nomination rights. The right of Warburg to designate a director to the Board terminated when Warburg beneficially owned less than the lower of (i) 5% of all of the outstanding shares of our common stock and (ii) 50% of the number of shares of our common stock received by Warburg as consideration in the Acquisition. Pursuant to the Stockholders Agreement, upon the closing of the Acquisition, Mr. Michael Martin was appointed to our Board as the Warburg designee.

Warburg subsequently sold all of the shares of our common stock received by Warburg as consideration in the Acquisition, through two registered underwritten public offerings, which closed on March 10, 2017 and August 22, 2017. In each offering, entities affiliated with Warburg Pincus LLC sold an aggregate of 4,109,128 shares of our common stock. We did not receive any proceeds from the sale of the common stock by the selling stockholders. Pursuant to the terms of the Stockholders Agreement, Warburg is no longer entitled to designate an individual for appointment to our Board. Mr. Martin continued to serve on our Board following the sale of the common stock owned by Warburg. See also “Corporate Governance — Director Nominations — Stockholders Agreement.”

Also in conjunction with the Acquisition, Mr. Bunch, formerly an officer of The Mutual Fund Store, became an executive officer of Financial Engines. Under the terms of incentive units issued by The Mutual Fund Store, Mr. Bunch received approximately $6 million in cash from the merger consideration paid by Financial Engines. In addition, as a result of the Acquisition, Mr. Bunch was entitled to receive approximately $2 million in long term incentive payments from The Mutual Fund Store, of which approximately $1 million was paid in connection with the closing of the Acquisition and the remainder of which is contingent on Mr. Bunch’s continued employment with Financial Engines, with 50% payable by Financial Engines on each of the first two anniversaries of the closing, in February 2017 and February 2018. The amount of these incentive payments was deducted from the purchase price of the Acquisition.

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Procedures for Approval of Related Person Transactions

We have a Related Person Transactions Policy which provides that the audit committee of our Board will review and, when appropriate, approve or ratify transactions with our Company valued at or more than $120,000 in which any director, officer, 5% or greater stockholder or certain related persons or entities has a direct or indirect material interest, subject to such exceptions consistent with applicable SEC rules and regulations. Each of our directors and executive officers has primary responsibility for the administration of, and compliance with, this policy as it relates to them. Our audit committee reviews and considers any proposed related person transactions at its regularly-scheduled meetings (or sooner, as determined by the audit committee chairperson), and its review is based on all relevant facts and circumstances reasonably available to it.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

The following discussion provides information regarding our 2017 compensation program for our named executive officers, or our NEOs, who held the following titles in 2017:

2017 Company Performance and Strategic Context.

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We experienced solid growth in other key operational and financial measures, as demonstrated below.

Compensation Highlights.

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Pay mix and focus on performance-based compensation. Our compensation philosophy and programs are designed to incentivize our executives to focus on achievement of short- and long-term company performance. A significant portion of executive pay is at-risk, with value derived from business performance and stock price performance over the long term. For 2017, the weighting of performance-based pay for our NEOs as a group was approximately 87%. The Other NEO graphic below excludes our former and new CFO, as the former CFO’s transition-period compensation and the new CFO’s new-hire compensation are not reflective of typical or ongoing compensation levels or mix.

Realizable Compensation. In the graphics below, we show the average annual total target compensation for our CEO over the past three years, as well as his average annual realizable compensation during the same time period. Approximately 75% of our CEO’s total target compensation was delivered in the form of equity awards during this time period, which ties the realizable pay of our CEO directly to stock price performance. Although the Company has experienced solid financial performance in the past three fiscal years, as demonstrated by our compound annual growth rates of 19.5% for revenue and 17.7% for Adjusted EBITDA from the beginning of 2015 through the end of 2017, annualized total stockholder return was down by 5% during this same period. Revenue and Adjusted EBITDA compound annual growth rates are inclusive of merger and acquisition activity during the period. The annual average realizable pay of our CEO during this time period was 42% lower than his annual average total target compensation over the past three fiscal years, which we believe demonstrates a strong performance orientation and alignment with stockholders.

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Amounts shown in the Target column reflect the CEO’s average annual compensation for 2015, 2016, and 2017. This includes: (1) base salary paid during the year, (2) Executive CIP target for the year, and (3) grant date fair value of equity awards intended to compensate for each year. Note that the equity granted to our CEO on November 11, 2014 is included, as it was intended to compensate for 2015.

Amounts shown in the Realizable column reflect the average annual realizable compensation for 2015, 2016, and 2017. This includes: (1) base salary paid during the year, (2) Executive CIP earned for the year, and (3) the value of equity awarded intended to compensate for each year, valued as of December 31, 2017. Options are valued at their intrinsic value (the number of options multiplied by the market value as of December 29, 2017, the last trading day of our fiscal year, minus the exercise price of the option).

Strong governance and compensation policies. We continued to maintain strong compensation- and governance- related policies and practices, including the factors listed below.

Stockholder Advisory Vote (Say on Pay)

Our stockholders cast an advisory vote on our executive compensation practices in a “Say on Pay” vote at the 2017 annual meeting of stockholders, with the following results:

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The compensation committee takes into account the results of the Say on Pay vote as it completes its annual review of pay programs. Given the significant level of stockholder support, the committee concluded our executive compensation programs appropriately align executive pay with stockholder interests.

Compensation Philosophy and Objectives

The primary objectives of our compensation and benefits programs for executives are to attract and retain senior, skilled executive management, to motivate their performance toward achieving clearly defined corporate goals, and to align their long-term interests with those of our stockholders.

We have established a set of guiding principles that have provided the foundation for all compensation programs for executives and all employees. These principles include, but are not limited to, taking a total rewards approach (which includes all aspects of our compensation package, including cash compensation, equity, Company-provided benefits and intangibles such as our culture and environment), paying consistently within the markets in which we compete for talent, making compensation decisions based on Company and individual performance, and offering pay programs that allow employees at all levels to share in our success in a form that is simple to explain and administer. We use these principles to guide us in our compensation recommendations and decisions.

Each year our Board approves a set of goals and objectives for our Company. Our executive incentive compensation is tied directly to the achievement of clearly defined financial objectives, and is designed to align executive incentives with our success. We strive to recognize and reward contributions of our executive officers to our performance without encouraging unnecessary risk-taking.

Role of the Compensation Committee and Committee Consultant

The compensation committee determined the 2017 base salary, merit increases, incentive compensation targets and equity award grants of our executive officers, including our NEOs. For our CEO, the compensation committee reviews analysis provided by the compensation consultant in order to establish compensation. For our other executive officers, the compensation committee considers input from our Chief Executive Officer, who provides evaluations of our executives and other relevant information to the compensation committee and makes recommendations regarding appropriate compensation for each executive, including base salary increases, changes to incentive compensation and grants of equity awards. The information and analysis provided by our compensation consultant is utilized by the compensation committee in evaluating appropriate compensation levels and by the CEO to inform his recommendations. Our Human Resources department and our management team, from time to time, provide market data and other information to assist the compensation committee in determining appropriate compensation levels for executives.

Under its charter, the compensation committee has the authority, without seeking the approval of our Board, to select, retain, terminate and approve, at the Company’s expense, outside compensation, legal, accounting or other consultants to advise the compensation committee and to authorize or conduct investigations into any matters within the scope of its responsibilities and to approve related fees and retention terms. The Company pays the fees for the services provided by the consultant to the compensation committee.

The compensation committee directly retained the services of Semler Brossy as an independent compensation consultant to advise on executive compensation for 2017. In 2017, Semler Brossy supported the committee throughout the year on various topics relating to executive compensation, including selection of our peer group companies and other competitive references, review of our equity compensation program, competitive assessment of pay levels, review and structure of our executive incentive compensation programs, and recommendations on executive pay actions.

The compensation committee conducted an independence review of Semler Brossy pursuant to SEC and The NASDAQ Stock Market requirements. The compensation committee determined that there was no conflict of interest that would prevent Semler Brossy from being objective in its work for the compensation committee. In addition, Semler Brossy shared with the compensation committee the details of its policies and procedures in place to prevent conflicts of interest from arising, that the Semler Brossy advisors serving the compensation committee

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did not own any of our common stock, and that the lead advisor did not have any business or personal relationship with members of the compensation committee or our management.

Competitive Determinations

Consistent with our compensation philosophy and objectives outlined above, the compensation committee reviews each executive officer’s target compensation levels at least annually. The compensation committee does not target executive officer compensation at a specific level or percentage relative to the competitive references. Instead, when determining target compensation for the executive officers, the compensation committee takes into account numerous factors, without prescribing particular weightings, including: Company performance, individual leadership and performance assessments, job scope, individual skills and experience, the relative importance of individual roles, internal pay equity, historical pay levels, and equity holdings.

Because of the unique characteristics of our Company as an investment services provider as well as a technology company, there are limited directly comparable companies of our segment and size. As a result, we use both technology and investment company comparables as sources to assess the competitiveness of compensation.

In selecting the actual companies, the compensation committee considered companies of comparable scale, business model and talent focus. In July 2016, the compensation committee selected the peer group used to establish 2017 compensation. The peer group for 2017 was shifted substantially toward investment comparables to better reflect the size and strategic focus of the combined organization and the expanded market in which we compete for talent. The 2017 peer group includes 6 investment management companies, 3 financial technology companies, 2 workplace benefit companies and 1 brokerage company. The information from the peer group is supplemented with survey information from the Radford Global Technology Survey and custom McLagan Surveys.

In July 2017, the compensation committee determined that this same peer group remains appropriate, and will be used to establish 2018 compensation.

Restructured Executive Team. Following the Acquisition, the Board of Directors and management made several changes to the Company’s executive structure to enhance oversight of the Company’s newly-combined business. This included changes to the titles and areas of responsibility for the NEOs as follows:

Investment Management SEI Investments Artisan Partners Virtus Investment Partners WisdomTree Investments Westwood Holdings Group Silvercrest Asset Management Workplace Benefits WageWorks Benefitfocus Holistic View of the Market Brokerage E*TRADE Other Fintech SS&C Technologies Morningstar Envestnet

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Principal Elements of Executive Compensation

Our executive compensation program consists of three main elements:

Base Salaries. Base salaries are intended to provide our executives with a degree of financial certainty and stability that does not depend on our Company performance. Base salary adjustments are based on market data, individual performance, individual experience, our overall financial results and performance, and our overall budget for base salary increases.

The 2017 base salaries for our four continuing NEOs were established by the compensation committee in February 2017 and the base salary of Mr. Foster, our new CFO, was established in September, 2017. Mr. Raffone received a base salary increase in 2017 after review of competitive market references and to recognize his strong leadership. None of the other continuing NEOs received a base salary increase in 2017.

Executive Cash Incentive Plan. In 2017, all of our senior executive officers, including our NEOs, with the exception of Mr. Sims, were covered by our Executive CIP. The Executive CIP provided our continuing NEOs an annual incentive opportunity for fiscal 2017 performance of the Company with respect to the objective criteria described below.

In February 2017, after discussion and consultation with Company management, the compensation committee determined participation, metrics and weighting for the 2017 Executive CIP. Adjustments were made to reflect a shift in the Company’s pay philosophy for our NEOs to be more reflective of the updated peer group, with a higher

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degree of cash incentive pay and less emphasis on equity awards relative to 2016. Messrs. Foster and Bunch were not participants in the 2016 Executive CIP, and Mr. Sims was not a participant in the 2017 Executive CIP.

The compensation committee designed the 2017 Executive CIP with the following key business metrics weighted evenly:

The 2017 Executive CIP was designed in a way intended to meet the requirements of Section 162(m) of the Code to preserve the deductibility of payments. If the 2017 Adjusted EBITDA threshold performance level was met, then 200% of each NEO’s individual target would be funded and available for award. Thereafter, the compensation committee would use negative discretion to adjust the actual bonus payment based on the results achieved on each of the four 2017 Executive CIP metrics listed above.

Cash incentive payments to our executive officers, including our continuing NEOs, for fiscal 2017 were calculated in 2018 based on the applicable officer’s 2017 eligible earnings and individual incentive target. For 2017, we set aggressive performance targets. We did not meet our NMFRR or Personal Advisor Scorecard targets, but exceeded our Adjusted EBITDA and CMFRR targets. Our goal was to achieve more NMFRR and Adjusted EBITDA, but to minimize CMFRR.

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In February 2018, the compensation committee certified the results shown below and the payouts for each NEO as listed in the 2017 Summary Compensation Table who was a participant in the plan.

Equity Awards. We grant equity awards to our current and newly-hired executive officers, including NEOs, to enable them to share in our success and to reinforce a corporate culture that aligns employee interests with stockholder interests. Equity awards granted under our 2009 Stock Incentive Plan are a key element of our normal, ongoing compensation program.

Current Ongoing Equity Grant Practices. It has been our practice to periodically grant equity awards to employees, including executives, in recognition of performance, as an incentive tool and for retention purposes. Equity awards are determined as part of the total compensation awarded to employees, taking into account base salary and cash incentive plan payout potential.

The compensation committee also takes into consideration the value of equity awards previously granted, existing equity ownership of each executive officer, total unvested value for each executive officer, and the potential dilution and accounting costs of long-term equity awards.

Annual grants consist of a mix of stock options and RSUs to our continuing executive officers, including the NEOs, as a way to balance risk and reward with retention. We believe that offering both stock options and RSUs has greater retentive value than either instrument issued separately and reduces the focus on short-term improvements in share price due to an over emphasis on stock options. We also continue to believe that stock options are an effective means to focus the NEOs on delivering long-term value to stockholders because options only have value to the extent that our stock increases in value from the grant date over time, while RSUs reward and retain the NEOs by offering them the opportunity to receive shares of our stock on the date the restrictions lapse. Our 2009 Stock Incentive Plan does not contain mandated vesting periods or minimum required vesting periods for employee or executive equity awards.

The non-qualified stock options have an exercise price equal to the closing price of the Company’s common stock on the date of grant. The options will vest over four years, with 1/4th of the shares subject to the option vesting on the first anniversary of the vesting commencement date and the remainder vesting in equal monthly installments thereafter over the subsequent three years. The options will have a term of ten years and are subject to other terms set forth in the standard form of Stock Option Agreement. The restricted stock units will vest over four years, with 25% vesting annually on the anniversary of the vesting commencement date, subject to additional vesting and other terms that may apply as set forth in the standard form of RSU Agreement.

Beginning in November 2011, our standard stock option and RSU award agreements provide for accelerated vesting of a portion of the award upon the occurrence of specified events. Beginning with our May 2016 grants, our executive award agreements provide for full acceleration of vesting upon the occurrence of specified events. The circumstances under which our outstanding awards may accelerate vesting are described below under “Potential Payments Upon Termination or Change in Control.”

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2017 Equity Awards. In February 2017, the compensation committee approved equity awards in the ratio of 50% RSUs and 50% options for each of our NEOs, with the exception of Mr. Sims who did not receive an equity award in 2017 and Mr. Foster, who received an equity award in September 2017. The awards, other than the new hire award granted to Mr. Foster, were granted on February 28, 2017 and have a vesting commencement date of February 26, 2017. The actual awards granted to our NEOs are shown in the 2017 Grants of Plan-Based Awards table.

2013-2017 Long-Term Incentive Program. The 2013-2017 LTIP is a one-time program under which PSU grants were made in 2013 and 2014. The 2013-2017 LTIP was designed with aggressive performance metric targets to drive revenue growth and maximize profitability over a long-term period. Grants of 2013-2017 LTIP PSUs were eligible to be earned based on both (i) our Company performance; sixty percent (60%) based on performance during 2013-2015 (the 3-year period) and forty percent (40%) based on performance during 2013-2017 (the 5-year period) and (ii) the executive’s continued service to the Company through the applicable performance period. The percentage of the target PSU award earned for each of the 3-year and 5-year performance periods was based on Company achievement of the metrics below.

If the minimum performance percentages of the internally-established goals are not achieved, no PSUs will vest. In both the 3- and 5-year performance cycles, the minimum achievement for either metric produces a vesting potential of 60%, 100% achievement produces 100% vesting potential, increasing to a maximum of 140% vesting with 120% or more achievement.

On February 14, 2018, the compensation committee certified achievement under the 2013-2017 LTIP performance period. For the full 5-year performance cycle, the minimum achievement percentage that produces a payout for Market Adjusted MFRR is 80%; actual achievement was 75.6%; resulting in no payout for this metric. The minimum achievement percentage that produces a payout for Adjusted EBITDA Margin is 80%; actual achievement was 88%; resulting in a 76.5% payout for this metric. For both metrics, the maximum achievement percentage is 120% for all participants, which produces the maximum of 140% vesting. The PSUs allocated to the 5-year performance cycle vested on January 1, 2018 at 25.2% for plan participants, resulting in a PSU vesting of 10,764 shares for Mr. Raffone, 5,534 shares for Mr. Jones, and 2,464 shares for Ms. O’Donnell. Mr. Sims left the Company prior to the 2013-2017 LTIP vesting date. The other NEOs are not 2013-2017 LTIP participants.

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2018 NEO Compensation

In February 2018, the compensation committee reviewed pay levels and the three main elements of compensation, taking into consideration 2017 executive and business performance. The committee established base salaries, the 2018 Executive CIP design and bonus potential thereunder, as well as equity. The 2018 Executive CIP incentive targets became effective on January 1, 2018 and equity awards were made on February 27, 2018.

2018 Cash Compensation. 2018 NEO cash compensation, including base salary and target 2018 Executive CIP levels, reflects no change from 2017 levels. The Committee considered a variety of factors, including competitive market reference and alignment with the stockholder experience.

2018 Application of the Executive CIP. Each year, the compensation committee evaluates the design of the Executive CIP and determines appropriate incentive compensation levels. In February 2018, the compensation committee set the 2018 Executive CIP design with the metrics and weightings shown below, which align with our 2018 strategic priorities and emphasis on driving growth. Net Revenue includes revenue net of direct connectivity fees. Adjusted EBITDA is defined as it was in 2017. A Consolidated Inflows (New AUM) metric replaces the NMFRR and CMFRR metrics from 2017, and a Growth Scorecard metric replaces the Personal Advisor Scorecard metric from 2017. The Adjusted EBITDA funding threshold was eliminated for 2018.

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2018 Equity Awards. In February 2018, the compensation committee approved equity awards granted in the ratio of 50% options and 50% RSUs to our NEOs. These awards were granted under the 2009 Stock Incentive Plan and vest over four years in accordance with our standard terms and conditions. In addition to the factors described above for annual equity grants, the compensation committee sized the 2018 equity awards with consideration to recent share price performance and alignment with the stockholder experience. Mr. Foster’s award reflects his sign-on equity grant. As Mr. Sims was not employed by the Company in 2018, he did not receive an equity award in February 2018.

Assessment of Risk

The compensation committee annually reviews the elements of NEO compensation to determine whether any portion of the overall program encourages excessive risk taking. In 2017, the compensation committee engaged in a thorough risk analysis of compensation plans, policies and practices, including review of a detailed report prepared by a cross-functional management compensation risk review team. The compensation committee believes that the design, governance and risk oversight process of the Company’s incentive programs guard against imprudent risk taking that could have a material adverse effect on the Company. The compensation committee believes that the design of our compensation programs encourages our NEOs to remain focused on both short-term and long-term strategic goals. Safeguards integrated into the Company’s compensation practices include: (1) the balance of short-term and long-term incentive compensation; (2) the use of time-based vesting criteria in long-term incentive awards to align holders’ interests with the Company’s prospects; (3) the use of multiple performance metrics in the annual cash incentive plan, each linked to overall Company progress as opposed to narrow targets; (4) the limitation of maximum payouts under both our short-term and our long-term performance-based awards programs; (5) the limitation on annual awards under the Company’s equity incentive plan; and (6) the reservation of compensation committee negative discretion to reduce amounts payable under the short-term and long-term performance-based awards programs. Additionally, in 2016 the compensation committee recommended, and the Board adopted, a clawback policy to further reinforce appropriate incentives for avoiding risk. This policy is further described under “Policy Regarding Clawbacks and Restatement.”

Benefits

We provide the following benefits to our executives on the same basis as provided to all of our employees:

Executive Stock Ownership and Holding Guideline

Effective April 1, 2017, the compensation committee adopted a stock ownership and holding guideline covering our CEO and Executive Vice Presidents, including the NEOs. The guideline is similar to our guideline for non-employee directors, described above under “Director Stock Ownership and Holding Guideline.” It encourages

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executives to maintain a meaningful stake in the Company and aligns their long-term interests with stockholders. Our guideline provides that the CEO and each Executive Vice President should own an equity stake in our Company equal in value to a multiple of base salary, depending upon position. With the exception of our CEO, whose ownership guideline is applicable immediately, each executive will have five years to meet the guideline from the time that it first becomes applicable to the individual. Four years after the guideline first becomes applicable to an executive, a holding requirement is imposed such that he or she will be required to hold 50% of the shares acquired through vesting or exercises of equity compensation awards, net of amounts required to pay taxes or exercise prices, until the equity stake guideline is met. As of the date that the compensation committee adopted the guideline, our executive officers listed below were in compliance with the guideline.

Policy Against Hedging and Pledging

Our Insider Trading and Communications Policy prohibits employees (including NEOs) from engaging in any form of hedging transactions in our stock, pledging our stock as collateral for a loan, trading in our securities on a short-term basis, purchases of our securities on margin, short sales of our securities and buying or selling puts or calls, or their equivalent positions, on our securities. The Insider Trading and Communications Policy further provides that we will not arrange for cashless exercises of stock options and sets forth the principle that any of our securities purchased in the open market by an employee should be held for a minimum of six months.

Policy Regarding the Timing of Equity Awards

The compensation committee and senior management manage our stock option grant policies to align with governing regulations and good corporate practice. Subsequent to our initial public offering, we have considered the timing of stock option grants to executive officers in relation to the release of material non-public information. We also consider the timing of stock option grants or other equity awards in relation to our compensation packages as a whole. Beginning in 2013, we have made and intend to make executive equity awards in the first quarter of the year, following the release of our previous year-end earnings, to better align the level of equity grants with full fiscal-year performance of our Company and the executive officers.

Absent any major corporate events, the annual equity grants for both non-executives and executives will occur during an open trading window for our Company stock under our Insider Trading and Communications Policy, although the compensation committee, in its sole discretion, may determine to make the grants at a different time. Stock option grants or other equity awards to executives and other employees may also be made at other times of the year as the compensation committee feels is necessary for competitive or retention purposes, or for newly-hired executives or employees.

Policy Regarding Clawbacks and Restatements

In November 2016, at the recommendation of the compensation committee, our Board of Directors adopted a policy regarding compensation adjustments, or “clawbacks”, in the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirements under applicable securities laws. The policy covers incentive compensation awarded, earned, vested or paid on or after January 1, 2017, as well as the 2013-2017 LTIP, and looks back to the three completed fiscal years preceding a restatement event. The policy applies to all current and former officers of the Company, as determined pursuant to Rule 16a-1(f) of the Securities Exchange Act of 1934. Our Board would have discretion on whether to pursue recoupment, from whom to pursue recoupment, the appropriate amount to recoup, and methods of recoupment taking into account the requirements of the Sarbanes-Oxley Act of 2002 and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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Tax and Accounting Treatment of Compensation

Section 162(m) of the Code limits deductions for certain executive compensation in excess of $1,000,000 in any fiscal year. There is an exception to the $1 million limitation for performance-based compensation meeting certain requirements, although this exception is severely limited beginning in 2018, as described below. The material terms of the 2009 Stock Incentive Plan were previously approved by stockholders in 2016 for purposes of Section 162(m), which allowed us to grant certain incentive awards that are designed to meet the definition of performance-based compensation under Section 162(m) in order to qualify for the performance-based exception to the $1 million deduction limit. However, to maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals in the best interest of the Company, the compensation committee did not previously limit executive compensation to amounts deductible under Section 162(m) if the compensation committee determined that doing so is in the best interests of the Company.

The Tax Cuts and Jobs Act, enacted on December 22, 2017, substantially modifies Section 162(m) and, among other things, eliminates the performance-based exception to the $1 million deduction limit effective as of January 1, 2018. As a result, beginning in 2018, compensation paid to certain executive officers in excess of $1 million will generally be non-deductible, whether or not it is performance-based. In addition, beginning in 2018, the executive officers subject to Section 162(m) (the Covered Employees) will include any individual who served as the chief executive officer (CEO) or chief financial officer (CFO) at any time during the taxable year and the three other most highly compensated officers (other than the CEO and CFO) for the taxable year, and once an individual becomes a Covered Employee for any taxable year beginning after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination of employment.

The Tax Cuts and Jobs Act includes a transition rule under which the changes to Section 162(m) described above will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not materially modified after that date. To the extent applicable to our existing contracts and awards, the compensation committee may avail itself of this transition rule. However, because of uncertainties as to the application and interpretation of the transition rule, no assurances can be given at this time that our existing contracts and awards, even if in place on November 2, 2017, will meet the requirements of the transition rule. Moreover, to maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals in the best interest of the company, the compensation committee does not limit its actions with respect to executive compensation to preserve deductibility under Section 162(m) if the compensation committee determines that doing so is in the best interests of the Company.

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COMPENSATION COMMITTEE REPORT

The following report of the compensation committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by Financial Engines under the Securities Act of 1933 or the Securities Exchange Act of 1934.

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with Financial Engines’ management. Based on this review and these discussions, the compensation committee recommended to the Board of Directors of Financial Engines that the Compensation Discussion and Analysis be included in Financial Engines’ proxy statement on Schedule 14A and incorporated by reference into its Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Respectfully submitted on March 12, 2018, by the members of the compensation committee of the Board of Directors:

Mr. Michael E. Martin, Chairperson

Mr. Blake R. Grossman

Mr. Robert A. Huret

Dr. John B. Shoven

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EXECUTIVE COMPENSATION

2017 Summary Compensation Table

The following table sets forth compensation earned for services rendered in all capacities to us for the years ended December 31, 2017, 2016 and 2015 for our Chief Executive Officer, our former and current Chief Financial Officer, and our three other most highly compensated executive officers as of December 31, 2017, whom we refer to in this Proxy Statement as the NEOs.

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2017 Grants of Plan-Based Awards

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Narrative to 2017 Summary Compensation Table and Grants of Plan-Based Awards

Please see “Compensation Discussion and Analysis” above for a complete description of compensation plans pursuant to which the amounts listed under the 2017 Summary Compensation Table and the 2017 Grants of Plan-Based Awards table were paid or awarded and the criteria for such payment, including targets for payment of annual incentives, as well as performance criteria on which such payments were based. The Compensation Discussion and Analysis section also describes the equity awards.

2017 Outstanding Equity Awards at Fiscal Year End

The following table lists all outstanding equity awards held by our NEOs as of December 31, 2017.