Imagine -...

Imaginethe Possibilities

2016 Annual Report

1. A Message From Steve Booth and Paul Purcell 6. Our Business at a Glance 8. Private Wealth Management

10. Equity Capital Markets 12. Baird Capital 14. Fixed Income Capital Markets 16. Asset Management

18. Community 19. Executive Committee 20. Financial Information

A single idea can be the catalyst for an extraordinary outcome. Baird provides clients with the deep expertise, thoughtful advice and dynamic service they need to imagine and achieve their financial goals.

Paul Purcell Chairman

Steve Booth President & Chief Executive Officer

To imagine is to embrace possibility – to see beyond barriers; to be inspired by the inherent potential of the future; to begin to pursue a personal dream or objective. At Baird, we partner with our clients to imagine, define and achieve their financial goals. Our mission is very succinct: “To provide the best financial advice and service to our clients and be the best place to work for our associates.” While this is a very straightforward statement, it alludes to an ambitious goal. In order to be the best possible partner to our clients, we must continue to embrace innovation, creativity and the evolution of our industry – that is, we must continue to imagine and pursue possibilities.

2016 was a year of slow economic growth, market volatility and geopolitical tumult, and in many ways, uncertainty reigned. We know these changing times have a heavy bearing on our clients’ goals and aspirations. That’s why we remain wholly focused

on providing strong partnerships, objective advice and exemplary service they can count on in changing times. We take our clients’ trust very seriously, and we believe we need to earn it every day. It is reflected in the assets entrusted to us. At the end of 2016, client assets at Baird totaled $171 billion – a record for Baird, and a 96% increase over the past five years.

We were also humbled to be honored as one of the FORTUNE 100 Best Companies to Work For®

in early 2017. The firm ranked No. 4 in 2017, our 14th consecutive year on the list and fourth straight year among the top 10 companies. This recognition speaks to the quality, dedication and skill of our global team of more than 3,400 associates.

A Strong YearOur steady clients-first focus led to another year of strong financial results for the firm. Baird’s 2016 revenues totaled $1.4 billion – an 8% increase over

A Message From Steve Booth and Paul Purcell

Imagine the Possibilities. Imagine Baird.

1. A Message From Steve Booth and Paul Purcell 6. Our Business at a Glance 8. Private Wealth Management

10. Equity Capital Markets 12. Baird Capital 14. Fixed Income Capital Markets 16. Asset Management

18. Community 19. Executive Committee 20. Financial Information

12 016 B A I R D A N N U A L R E P O R T

As an independent firm, Baird is able to grow our businesses for the benefit of our clients – not outside shareholders.

2 2 016 B A I R D A N N U A L R E P O R T

1 Financial results do not reflect the consolidation of certain private equity partnerships.

our 2015 results and our seventh consecutive year of record revenues.1 Operating income increased to $155 million, a new record for the firm.

Baird’s most distinct advantage comes from being privately held and employee-owned. This not only enables us to be strategic and nimble in how we invest in our business – it means we have a vested interest in our clients’ success. And despite a marked decline in stock value across our industry over the past ten years, Baird’s stock value has increased 168% over the same period. We believe this is a strong validation of our business model and steadfast client focus.

Baird’s return on book value, including a cash dividend paid to shareholders in December, was 12.5%. This strong result again surpassed many of our competitors, and we believe it is among the highest in our industry. The firm achieved these results without the leverage used by many financial firms to drive returns.

Our platform of five complementary businesses provides a strong foundation and driver for these results. This model diversifies and balances our revenues across all types of market conditions. Each of our businesses performed well in 2016, and we continue to gain market share in a competitive environment. We’re pleased to report that three of our businesses – Private Wealth Management,

Equity Capital Markets and Asset Management – posted record revenues in 2016. There were many other notable highlights across the firm:

• Private Wealth Management posted strong results. Its assets under management grew to $117 billion, a record for the business.

• Asset Management continued to grow its businesses. Total assets under management rose to $51 billion, a 29% increase over 2015.

• Equity Capital Markets’ revenues exceeded $400 million for the first time, largely driven by record M&A activity in our Global Investment Banking business.

• Baird Capital invested $72 million in six new and 20 follow-on investments. In addition, the business successfully exited 10 investments and realized approximately $256 million.

• For the eighth consecutive year, our Fixed Income Capital Markets team ranked as the No. 1 municipal underwriter in the United States, based on number of issues, according to Ipreo MuniAnalytics. The business’ revenue also grew by 16%.

Baird stock performance is based on the change in book value per share for Baird Financial Group common stock and includes cumulative cash dividends per share of $7.50, $1.60, $1.65, $1.85, $2.00 and $7.50 paid in December of 2011, 2012, 2013, 2014, 2015 and 2016, respectively. Baird is privately held and no public market exists for its shares. Baird can repurchase shares of Baird stock at book value when associates leave the firm. Past performance does not guarantee future results.

The Standard & Poor's 500 Stock Index and Standard & Poor's 500 Financials Sector Index are unmanaged common stock indices used to measure and report value changes in the stocks comprising these indices. Indices performance information is obtained from Capital IQ and excludes dividends paid during the periods shown. Baird stock is not included in these indices.


Our business is our clients’ success. We manage our firm prudently in order to grow consistently.

BAIRD’S STOCK VALUE HAS GROWN 168% DURING THE PAST DECADE.

Baird stock performance / 168%

S&P 500 / 58%

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S&P 500 Financials Sector Index / -22%

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$170.7 billion Dec. 31, 2016

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BAIRD’S CLIENT ASSETS TOTAL $171 BILLION, A 140%

INCREASE OVER THE PAST 10 YEARS.

$71.1 billion Dec. 31, 2006

2015

For 14 consecutive years, Baird has been honored as one of the FORTUNE 100 Best Companies to Work For®.


OUR EMPLOYMENT HAS GROWN MORE THAN 23% OVER THE PAST FIVE YEARS.

Source: SIFMA Securities Industry Employment Report

U.S. securities industry / 8.3%

Baird employment growth / 23.9%

With an Eye to the FutureAs employee-owners, we are incredibly focused on how we manage our business and how well we perform for our clients. Our independence also affords us the flexibility to continuously build our capabilities for our clients. We have made a number of strategic investments over the past few years and continued to build on that momentum in 2016:

• Private Wealth Management acquired Seattle-based McAdams Wright Ragen in 2014, welcoming 75 talented professionals to Baird. Since then, the business has recruited and trained 196 additional industry veterans and driven individuals.

• Fixed Income Capital Markets has significantly broadened its platform by adding seasoned teams specializing in investment-grade corporate debt, public finance advisory and securitized products. In total, the business has added 78 professionals since 2014.

• Institutional Equities & Research continues to enhance its suite of trading capabilities, including the addition of options and event trading teams in 2016. Global Investment Banking’s recruitment of bankers of all levels, across its sectors, products and geographies of focus, has driven four consecutive years of record revenues.

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Baird ranked No. 4 in 2017 – our fourth straight year among the top 10 companies.

FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 15, 2017 ©2017 Time Inc. Used under license.

Steven G. Booth President & Chief Executive Officer

Paul E. Purcell Chairman

• Baird Equity Asset Management broadened its global and international equity offerings with the addition of Chautauqua Capital Management in early 2016.

• Baird Advisors, our fixed income asset management business, welcomed a nationally recognized municipal bond team in 2015. The team has proven to be a powerful addition to the business’ municipal offering.

• Baird Capital completed the alignment of its U.S., Europe and Asia private equity teams into a single global platform that collaborates to support portfolio companies and drive investment results. It also added a partner to help lead the business’s investment efforts in Asia.

Our global team plays a major role in our success. Our associates’ deep expertise, passion for what they do and genuine commitment make it possible for Baird to pursue new opportunities and serve our clients in new ways. More than 2,200 talented professionals have joined the firm since the end of 2007 – a 55% increase in our employment.

We value our associates’ spirit of innovation, collaboration and passion for what they do. Our team’s talent makes our firm’s growth possible, which is why we firmly believe in extending the opportunity of employee ownership to our associates. Today, more than 63% of Baird associates are shareholders in the firm, with broadly distributed ownership across the business, and we are very proud to be one of the largest employee-owned financial services firms in the United States.

Pursuing PossibilitiesWe’re very optimistic about the possibilities ahead for the firm and for our clients. While our industry is rapidly changing, we welcome changes and challenges because we know that – thanks to our incredibly talented team, our distinct culture and our strong client partnerships – Baird is positioned to imagine and achieve for many years to come.

PRIVATE WEALTH MANAGEMENTProvides advice, strategies and solutions to high-net-worth individuals and families across the United States.

EQUITY CAPITAL MARKETS INSTITUTIONAL EQUITIES & RESEARCH GLOBAL INVESTMENT BANKING

Delivers a full platform of equity research, sales and trading, equity underwriting, and M&A and debt advisory services.

Invests in smaller, high-potential companies in the U.S., Europe and Asia across the Industrial Products, Technology & Services, and Healthcare sectors.

BAIRD CAPITAL U.S. PRIVATE EQUITY VENTURE CAPITAL

U.K. PRIVATE EQUITY CHINA GROWTH EQUITY

FIXED INCOME CAPITAL MARKETS Provides investment ideas and trading execution to institutional clients as well as leading debt underwriting and advisory services to public, private and nonprofit clients.

FIXED INCOME SALES & TRADING PUBLIC FINANCE

ASSET MANAGEMENTOffers disciplined investing and exceptional service to individual and institutional investors through customized portfolios and mutual funds.

BAIRD ADVISORS BAIRD EQUITY ASSET MANAGEMENT

Baird is a privately held, employee-owned financial services firm. Over the past 97-plus years, we’ve built a strong platform of five complementary businesses that diversify and balance our revenues across all types of market conditions.

1 Financial results do not reflect the consolidation of certain private equity partnerships.

2 Greenwich Associates U.S. Equity Investors–Small-/Mid-Cap Funds, April 2016. Survey conducted with 96 small-cap and mid-cap fund managers. Rankings for qualitative metrics based on leading research firms in survey.

3 Based on number of issues, according to Ipreo MuniAnalytics.

1615141312

$1,390$1,286$1,202$1,069$961

Baird net revenues1 (millions)

BAIRD

The majority of Baird associates are shareholders in the firm, and ownership is broadly distributed across the business.

More than 63%


1615141312

1615141312

1615141312

1615141312


Asset Management revenues

(millions)

$122 $96$65$47$39

$51 billion in assets under management

Baird Capital revenues

(millions)$28 $37$34$35$32

$3.3 billion raised and managed since inception

Equity Capital Markets revenues

(millions)$402 $364$360$322$289

No. 1 “Overall important small-/mid-cap research advisory firm”2

Fixed Income Capital Markets revenues

(millions)$171 $148$141$148$149

No. 1 municipal bond underwriter nationwide for eight consecutive years3

Private Wealth Management revenues

(millions)1615141312

$652$627 $578$501$436

$117 billion in client assets

Completed Alignment of Global Team and Positioned for Future Success


Private Wealth Management

True wealth management goes beyond managing investments. At Baird, we understand it begins with careful listening and learning all we can about what our clients want for themselves and their families. We work closely with them to prioritize their goals, drawing on Baird’s resources and expertise to create a tailored plan to pursue and achieve success as they’ve defined it.

STRENGTHENING OUR CAPABILITIES

Our team of nearly 900 Financial Advisors serves affluent individuals and families across the United States. Our team is both seasoned and stable. Baird’s Financial Advisors possess an average 20 years of industry experience and many have been with the firm for more than a decade. Approximately half of our Advisors hold professional designations that underscore their commitment to specialties like financial planning, asset management and retirement planning. Their commitment to continuous development enhances our ability to build deep client relationships and provide impactful financial advice. In addition, two-thirds of our Advisors work on formal teams to

We are proud to serve clients from 88 locations in 29 states.

88 LOCATIONS

Imagine a partner who’s committed to earning your trust every day.


provide clients with multigenerational perspectives and service. We believe in the power of this model, and we continue to invest resources in this approach to serving our clients.

Every Baird Financial Advisor is supported by our experienced Client Specialists, the vast majority of whom hold securities licenses that equip them to provide enhanced service and expertise. Our Advisors also have access to our team of 85 in-house specialists in disciplines including financial and estate planning and tax-efficient strategies. These experts work alongside our Advisors to craft sophisticated, tailored solutions that help clients achieve their unique goals.

Our steady focus on helping our clients achieve their goals encouraged them to entrust us with $117 billion in assets at the end of 2016.

We also expanded our geographic presence by opening new offices in Florida and New Jersey.

INVESTING IN THE TALENT OF TOMORROW

Experienced Financial Advisors and their clients continued to join Baird in 2016. We also advanced our efforts to recruit strong talent to Baird by inviting exemplary candidates to join our Financial Advisor Training Program, which provides wealth management training to experienced professionals. We are also training future Financial Advisors through our Foundations Program, which provides a two-year rotation opportunity for recent graduates. Additionally, Baird is the founding partner of the Wealth Management and Financial Planning Program at the University of Wisconsin School of Business.

Our 877 Financial Advisors collaborate closely with in-house specialists, teams and product specialists.

877FINANCIAL ADVISORS

Welcoming Top Talent

We have recruited and trained 407 talented professionals over the past five years, including experienced Financial Advisors, Branch Office Managers and graduates of our Financial Advisor Training Program.

INSTITUTIONAL EQUITIES & RESEARCH

Despite choppy markets in 2016, Baird continued to focus on delivering exceptional research, objective advice and crisp trading execution. Our Equity Research team covered more than 700 stocks at the end of 2016, and we also deepened our capabilities in program, events, options and international trading. Today, Baird makes a market in more than 3,700 stocks.

Baird was also recognized as the No. 1 overall “important small-/mid-cap research advisory firm” in Greenwich Associates’ annual survey of fund managers.1 The firm earned six additional No. 1 rankings for the quality of our research, sales and corporate access services. Our series of institutional investor conferences also logged strong attendance and hosted more than 530 presenting companies.

Equity Capital Markets

174TRANSACTIONS

1Greenwich Associates U.S. Equity Investors – Small-/Mid-Cap Funds, April 2016. Survey conducted with 96 small-cap and mid-cap fund managers. Rankings for qualitative metrics are based on leading research firms in survey.


Baird completed 174 M&A, equity and debt transactions in 2016 with a total value of more than $40 billion.

GLOBAL INVESTMENT BANKING

Baird provides M&A, equity and debt financing, and debt advisory services to middle-market companies. Our group of approximately 270 bankers works as one global team across the U.S., Europe and Asia to provide clients with deep sector expertise, transaction experience and innovative solutions. This alignment contributed to our fourth straight year of record revenues in 2016, and we completed 174 transactions with a total value of $40 billion.

Despite challenging market conditions, we continued to grow our business throughout the year. Baird advised on a record $23 billion in M&A advisory transactions, one-third of which involved an international party. Clients recognized the power of our global platform, access to investors and transaction track record and continued to hire us to lead high-profile, international transactions.

We also continued to invest in our team, adding talent across key subsectors within our Technology & Services, Consumer and Healthcare practices, as well as our Europe and Asia teams. Additionally, we continued to strengthen our Equity Capital Markets team to further deepen the sector expertise and execution capabilities we offer to new issuers. These developments underscore our emphasis on collaboration and partnership with clients – two traits that have created a very unique culture at Baird and helped us attract and retain top talent. We are committed to being the employer of choice in our industry. This combination of culture, expertise and client focus positions Baird for long-term success and to achieve our long-term goal: to be the best middle-market investment bank in the world.

Imagine exploring new frontiers with a partner you can trust.

Baird arranged more than 21,000 company–investor connections through company visits, management trips to institutional clients and one-on-one meetings at Baird conferences.

21,000+ CONNECTIONS33 COUNTRIES

Over the past 10 years, Baird has done business with companies and institutions in 33 countries.


Baird Capital makes venture capital, growth equity and buyout investments in smaller, high-potential companies. We strategically focus our efforts on three sectors – Industrial Solutions, Technology & Services, and Healthcare – to identify and partner with promising businesses across the U.S., Europe and Asia. We work alongside management teams and entrepreneurs with the shared goal of building businesses into great companies. Today, our 57 portfolio companies have combined revenues of $1.8 billion and more than 11,500 employees.

A COLLABORATIVE PARTNER

Since our inception in 1989, Baird Capital has developed a global platform with investment expertise, deep sector knowledge and extensive operating resources designed to help executives and entrepreneurs achieve their business goals. As a global private equity firm with an on-the-ground presence on three continents, we believe Baird Capital is uniquely positioned to help high-growth companies compete in the international marketplace.

Baird Capital

Since Baird Capital’s inception in 1989, we have raised $3.3 billion and invested in nearly 300 companies.

$3.3BILLION RAISED AND MANAGED


Our global team of 56 investment, operating and support professionals collaborate across their respective areas of expertise to share knowledge and generate investment and operating ideas in an effort to help our portfolio companies grow and thrive. And when appropriate, we leverage the expertise of Baird’s Equity Research and Global Investment Banking professionals to gain additional insight and perspective on potential market opportunities.

We not only invest in companies – we seek businesses where we can provide resources, expertise and relationships that support their growth. In addition to our sector-focused investment teams, our Portfolio Operations group provides additional support to our portfolio companies. These operational experts work closely with company management teams to deliver best practices, find opportunities for efficiencies and develop human capital and international expansion strategies – powerful resources that companies may

not be able to access on their own. Each of our portfolio companies also benefits from our global relationship network and the insight of our operating partners. This combination of sector, investment and operating expertise enables us to serve as a true partner for growth companies.

REALIZING VALUE

We focused on taking advantage of a seller’s market in 2016, while at the same time making prudent, disciplined investment decisions in 2016’s slow-growth, high-valuation environment. In total, we realized approximately $256 million, primarily from the exit of 10 investments, and deployed $50 million in six new investments. Additionally, we made investments to support the growth of many of our portfolio companies by making 20 follow-on investments totaling $22 million.

1-3 visible medium, over the shoulder shot

Imagine a partner who wants to succeed alongside you.

Baird Capital’s global team, based in our offices in the U.S., U.K. and China, includes 56 investment, operating and support professionals.

56 EXPERIENCED PROFESSIONALS

57 ACTIVE PORTFOLIO COMPANIES

7 Industrial Solutions companies

16 Healthcare companies

34 Technology & Services companies


Fixed Income Capital Markets

FIXED INCOME SALES & TRADING

2016 was a year of meaningful growth for Fixed Income Sales & Trading. While many of our competitors continue to downsize their fixed income offerings, Baird continues to invest in talent, capabilities and product specialization. Our 165 sales, trading and analytics professionals serve institutional clients from 26 offices across the United States. They maintain frequent dialogue with clients to deliver the trading support, analytics and consistent portfolio analysis investors need to navigate today’s evolving markets.

We have added seasoned talent to our sales and trading platform in recent years, and their expertise and client focus are a key driver behind our strong results. We welcomed a 19-person investment- grade corporate debt team in 2015 and have continued to make strategic additions to the platform. In 2016, we made significant investments in our securitized products platform to further deepen the specialized sales, trading and analytical expertise we provide to clients.

Baird serves clients from 32 offices across the United States, enabling us to provide both national coverage and regional insight.

32OFFICES


Imagine a partner who shares your vision for the future.

Our 31-person municipal sales, trading and underwriting team priced 939 issues in 2016 totaling $11.3 billion in bonds. This strong activity contributed to Baird’s ranking as the No. 5 competitive underwriter in the United States and No. 1 underwriter by number of issues priced, according to Thomson Reuters.

PUBLIC FINANCE

Baird’s Public Finance business posted strong results in 2016, nearly matching 2015’s record revenues and transaction levels. This activity contributed to Baird’s ranking as the No. 1 municipal underwriter in the United States for issues of $100 million or less, based on number of issues, according to Ipreo MuniAnalytics. Baird has served issuers in all 50 states during the past five years.

Our team of 57 bankers, analysts and professionals serves clients from 10 offices across the United States, delivering localized sector expertise in Education, Economic Development and Healthcare. Our Houston-based team, which joined us in 2015 and specializes in municipal utility districts, special districts and water authorities, posted a successful first full year at Baird. Additionally, we continue to be a leading underwriter of education bonds in the United States, and our Education and School Business Solutions practices continue to grow. This strong momentum encouraged clients to continue to select Baird to serve in integral leadership roles in local and state-level financings. In 2016, we served as lead financial advisor to the Wisconsin Center District on its successful bond issue to finance a new arena for the Milwaukee Bucks.

Our teams have grown 28% over the past five years.

222 PROFESSIONALS

165 Sales, trading and analytics professionals

57 Public Finance bankers, analysts and professionals

No. 1 MUNICIPAL UNDERWRITER

Baird has ranked as the No. 1 municipal underwriter in the U.S. for eight consecutive years.1

1 Based on the number of issues, according to Ipreo MuniAnalytics.


Asset Management

Our Asset Management businesses’ extraordinary growth stems from Baird Advisors’ continued strong investment performance and Baird Equity Asset Management’s disciplined investing. These teams possess seasoned investment talent, offer consistently managed investment strategies and provide exemplary service to individual and institutional investors. Their senior portfolio managers, who average over 22 years of industry experience, have invested together for many years. This deep experience provides a powerful platform for our teams’ collaborative investment approach and long-term client relationships.

During 2016, we continued to invest in our teams and capabilities amid uncertainty in the equity and fixed income markets. This focus contributed to a year of strong results. Across our businesses, total assets under management grew 29% over last year, totaling $51 billion at the end of 2016.


Morningstar Awards 2016 ©. Morningstar, Inc. All Rights Reserved. Mary Ellen Stanek and Team nominated for Baird Core Plus Bond Fixed Income Fund Manager of the Year, U.S.

Imagine a nationally recognized partner with experience and investment consistency you can trust across market cycles.

CONSISTENT FOCUS, NATIONALLY RECOGNIZED RESULTS

Baird Advisors, our fixed income asset management team, adheres to a unique philosophy that combines the science of understanding, measuring and controlling risk with the art of adding incremental value to returns. Its senior portfolio managers have invested together for more than three decades. This time-tested approach contributed to a remarkable year of results. Baird Advisors’ assets under management grew nearly 30% in 2016, totaling $47.5 billion at year end. Additionally, the business ranked fourth out of all actively managed fixed income mutual fund managers in net new cash flows during 2016, according to Morningstar.

Baird Advisors’ municipal bond investment team, which joined Baird in 2015, continues to thrive. This team’s addition enhances our ability to continue to provide a broad product offering across taxable and municipal investment strategies.

DISCIPLINE AND STRATEGIC GROWTH

Baird Equity Asset Management employs a similarly disciplined approach. Its investment teams use fundamental, bottom-up research to identify investment opportunities in the United States and overseas while carefully managing risk.

In early 2016, we deepened our global and international equities offerings through the addition of Chautauqua Capital Management. This veteran investment team has a strong long-term track record, and clients welcomed their partnership with Baird. The team launched two new mutual funds and manages over $400 million. In total, Baird Equity Asset Management’s assets under management totalled $3.5 billion in 2016 – a 22% increase over 2015.

Baird also has minority investments in Greenhouse Funds, an independent asset manager whose products include a hedge fund, and RiverFront Investment Group, an investment advisor offering equity and fixed income strategies.

Proud to Be a Great Place to WorkFor the fifth consecutive year, Baird was recognized among Pensions & Investments’ Best Places to Work in Money Management.

Over the past five years, assets under management have grown 196% across our businesses.

16 15 14 13 12

$51.0$39.4$31.9$22.7$19.7

$23.7

Baird Funds Total AUM (billions)

$17.0

$9.3

$7.8

$32.6196% INCREASE


Imagine making a difference in communities across the globe. Community

Community involvement is central to Baird’s culture. We are proud to support our associates’ individual and collective efforts to make a difference in their communities, and many serve charities in board and other leadership roles. Our Associate Resource Groups support a variety of deserving causes, while our Baird Cares program provides paid time off for volunteering. One of our broadest community initiatives is Baird Gives Back Week, an annual event that unites Baird associates, family and friends for collaborative service opportunities. In 2016, more than 1,500 Baird volunteers donated 5,300 hours to more than 100 nonprofit organizations globally.

COMING TOGETHER FOR OUR COMMUNITIES

We are committed to supporting our associates’ passion for giving back. Baird’s Milwaukee and Chicago associates contributed a record $2.1 million to United Way in 2016, reflecting our firm and associates’ commitment to supporting those in need. We expanded our campaign on behalf of United Way to 31 Baird locations across the U.S.

Baird Foundation supports organizations devoted to health and human services, education, the arts and diversity. It enhances our associates’ financial generosity through matching and charitable gifts. Over 70% of our associates requested matching gifts in 2016 to further the impact of their personal donations. The Foundation also supports organizations where our associates are actively engaged.


Making an Impact

*Includes ethnic, religious, environmental, professional and youth organizations.

Baird Foundation contributed $3.2 million to qualified nonprofits in 2016.

Arts: 11%

Education: 28%

Health and Human Services: 34%

Other*: 27%

Leadership

With an average of more than 21 years of experience at Baird, the 17 members of our Executive Committee represent an extraordinary continuity of leadership. Each is a passionate advocate for the strategic focus and core values on which Baird has built its success.

MANAGING DIRECTORS A full listing of Baird’s Managing Directors can be found in the online version of this report at bairdannualreport.com.

EXECUTIVE MANAGEMENTPaul E. PurcellChairman

Steven G. BoothPresident & Chief Executive Officer

Glen F. HackmannVice Chairman

C.H. Randolph LyonVice Chairman

Brooks G. RagenVice Chairman

EXECUTIVE COMMITTEE

Steven G. Booth*

President & Chief Executive Officer

Timothy P. ByrneChief Information Officer

Leslie H. DixonChief Human Resources Officer

Brian S. DoyalCo-Head of Global Investment Banking

Jon A. LangenfeldHead of Global Equities and Director of Research

Patrick S. Lawton*

Director of Fixed Income Capital Markets

C.H. Randolph LyonVice Chairman

William W. Mahler*

Chairman of Equity Capital Markets and Chairman of Equity Asset Management

Terrance P. MaxwellChief Financial Officer

Brian P. McDonaghCo-Head of Global Investment Banking

Gordon G. PanPresident of Baird Capital

Paul E. Purcell*

Chairman of the Board and Chairman of Baird Capital

Mark A. RobleDirector of Risk Management

Michael J. Schroeder*

President of Private Wealth Management

Paul L. SchultzGeneral Counsel and Secretary

Russell P. SchweiChief Operations Officer

Mary Ellen Stanek*

Director of Asset Management

*Director of Baird Financial Group


Financial InformationBaird Financial Group is the ultimate parent company of all of Baird’s global operations. Our primary businesses are wealth management, capital markets, asset management and private equity. We are independent and employee-owned.

Operating Results

Per-Share Data

Financial Position

Other Data

Net Revenues (millions)

Operating Income

(millions)Book Value

(fully diluted)Cash

DividendTotal Assets

(millions) AssociatesFinancial Advisors

2016 $ 1,390 $ 155 $ 34.67 $ 7.50 $ 2,613 3,410 877

2015 $ 1,286 $ 154 $ 37.48 $ 2.00 $ 2,793 3,312 872

2014 $ 1,202 $ 136 $ 34.87 $ 1.85 $ 2,635 3,172 816

2013 $ 1,069 $ 117 $ 31.78 $ 1.65 $ 2,259 2,935 727

2012 $ 961 $ 100 $ 28.98 $ 1.60 $ 2,340 2,787 698

2011 $ 925 $ 86 $ 27.19 $ 7.50 $ 2,264 2,752 694

2010 $ 847 $ 84 $ 31.51 — $ 2,414 2,629 680

2009 $ 718 $ 62 $ 28.60 — $ 2,159 2,458 650

2008 $ 680 $ 71 $ 26.89 — $ 1,140 2,407 592

2007 $ 729 $ 105 $ 24.84 — $ 1,752 2,282 586

Baird Financial Group: Financial Highlights

Financial information does not reflect the consolidation of certain private equity partnerships.

BOOK VALUE: Baird paid cash dividends per share of $7.50, $2.00, $1.85, $1.65, $1.60 and $7.50 in December of 2016, 2015, 2014, 2013, 2012 and 2011, respectively, which resulted in corresponding decreases in book value. In addition, per- share amounts have been restated to give effect for a three- for-one stock split, effective November 30, 1999, and a two-for-one stock split, effective February 19, 2008.

2 0 2 016 B A I R D A N N U A L R E P O R T

NET REVENUES

(millions)

OPERATING INCOME

(millions)

To learn more about Baird, visit rwbaird.com.

©2017 Robert W. Baird & Co. Incorporated

Member SIPC. MC-48278.

“Baird” is the marketing name for Robert W. Baird & Co. Incorporated and its subsidiaries and affiliates worldwide.

Robert W. Baird Limited and Baird Capital Partners Europe Limited are authorized and regulated in the United Kingdom by the Financial Conduct Authority.

Services or products may not be available in all jurisdictions or to all persons/entities.

For additional information, please visit Important Disclosures at rwbaird.com.

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$1,390$1,286$1,202$1,069$961

$155$154 $135$117$100

RETURN ON BOOK VALUE*

(per share)

12.5%13.2%15.5%15.4%12.5%

ASSOCIATES

3,4103,3123,1722,9352,787

BOOK VALUE

(per share / including cumulative dividends)

*Represents the book value per share of Baird stock at December 31, 2016, of $34.67 plus cumulative cash dividends per share from 2011 through 2016 of $22.10 per share, representing annual dividends of $7.50, $2.00, $1.85, $1.65, $1.60 and $7.50 per share in 2016, 2015, 2014, 2013, 2012 and 2011, respectively.

$56.77*

$52.08 $47.47$42.53$38.08

$22.10$34.67

STOCKHOLDER’S EQUITY

(millions / including cumulative dividends)

*For comparative purposes, book value appreciation includes an adjustment for the value of the dividends paid in December of each year. The compound annual return for 2012–2016 is 13.8%.


1615141312

1615141312

1615141312

1615141312

$1,007*

$909 $808$695$596

$375$6321615141312

*Represents Stockholders’ Equity at December 31, 2016, of $632 million plus cumulative cash dividends from 2011 through 2016 of $375 million, representing annual dividends of $136 million, $35 million, $32 million, $27 million, $25 million and $120 million in 2016, 2015, 2014, 2013, 2012 and 2011, respectively.

#7033.16

This report is printed on FSC certified paper. The fiber used in the manufacture of the stock comes from well-managed forests, controlled sources and recycled wood or fiber.

UNITED STATES

777 East Wisconsin AvenueMilwaukee, Wisconsin 53202800-79-BAIRDrwbaird.com

bairdannualreport.com

EUROPE

Finsbury Circus House15 Finsbury CircusLondon EC2M 7EB +44-207-488-1212bairdeurope.com

ASIA

Rm 1201D, Building 2Century Metropolis,No.1239 Century Avenue, Pudong, Shanghai 200122, China+86-21-6182-0980bairdasia.com

updated: 4/29/2016

cmyk of pms 425 grayupdated: 4/29/2016

cmyk of pms 425 gray

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