STT State Street Corporation

☐

☒

☐

☐

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

Amount Previously Paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

Ronald P. O’Hanley

Date

Time

Location

Purpose

Record Date

Meeting Admission

Voting by Proxy

Election of Directors (see “Item 1—Election of Directors”)

Advisory Proposal on 2019 Executive Compensation

(see “Item 2—Approval of Advisory Proposal on Executive Compensation”)

State Street Corporation

strengthening our value proposition to clients, including the ongoing build-out of our front-to-back State Street Alpha^SM platform

successfully executing a firm-wide expense savings program that exceeded initial targets and resulted in approximately $415 million in gross expense savings during 2019

reorganized the leadership of our multi-regional international business under a single executive to further our growth objectives

($ In millions, except per share data)

2019

2018

Change

Total fee revenue

$9,147

$9,462

(3.3

)% 

Total revenue

11,712

12,139

(3.5

)% 

Expenses

8,675

8,625

0.6

% 

Pre-tax margin

25.8%

28.8%

(300

) bps 

EPS

6.17

7.21

(14.4

)% 

ROE

10.8%

13.7%

(290

) bps 

State Street Corporation

Total fee revenue

Total revenue

Expenses

Pre-tax margin

EPS

ROE

Financial results are presented on a non-GAAP basis. Non-GAAP financial results adjust selected GAAP-basis financial results to exclude the impact of notable items outside of State Street’s normal course of business. For a reconciliation of non-GAAP measures presented in this proxy statement, see Appendix C.

State Street Corporation

Marie A. Chandoha*^D

Director Since 2019

•  Examining and Audit Committee

•  Technology and Operations Committee

Patrick de Saint-Aignan*

Director Since 2009

Retired Managing Director and Advisory Director,

Morgan Stanley

•  Examining and Audit Committee

•  Executive Committee

•  Risk Committee (Chair)

Lynn A. Dugle*

Director Since 2015

•  Examining and Audit Committee

•  Executive Committee

•  Technology and Operations Committee (Chair)

Amelia C. Fawcett*

Director Since 2006

•  Lead Director

•  Executive Committee

•  Human Resources Committee

William C. Freda*

Director Since 2014

•  Examining and Audit Committee (Chair)

•  Executive Committee

•  Risk Committee

Sara Mathew*

Director Since 2018

•  Nominating and Corporate Governance Committee

•  Risk Committee

William L. Meaney*

Director Since 2018

•  Human Resources Committee

•  Technology and Operations Committee

Ronald P. O’Hanley

Director Since 2019

•  Chairman

•  Executive Committee (Chair)

•  Risk Committee

•  Technology and Operations Committee

Sean O’Sullivan*

Director Since 2017

•  Risk Committee

•  Technology and Operations Committee

Richard P. Sergel*

Director Since 1999

•  Examining and Audit Committee

•  Executive Committee

•  Human Resources Committee (Chair)

•  Nominating and Corporate Governance Committee

Gregory L. Summe*

Director Since 2001

•  Executive Committee

•  Human Resources Committee

•  Nominating and Corporate Governance Committee (Chair)

State Street Corporation

•   10 of 11 director nominees are independent

•   Annual director elections

•   Annual assessment of effectiveness and qualifications of each director nominee

•   36% of director nominees are women

•   Active independent Lead Director elected annually by all independent directors

•   Board and committees meet regularly in executive session without management present

•   At least 75% attendance by each director at Board and committee meetings

•   Directors are elected by a majority of votes cast in uncontested election and by plurality vote in contested elections

•   Active shareholder engagement program

•   No poison pill

•   Proxy access by-law allows shareholders to include director nominees in State Street’s proxy materials

•   No supermajority vote requirements relating to common stock

•   Board and Committee oversight of:

–   strategy, financial performance, ethics and risk management

–   CEO and management succession planning

–   alignment of culture and human capital management with strategy and long-term objectives

•   Directors and executive officers are subject to stock ownership guidelines and are prohibited from short selling, options trading, hedging or speculative transactions in State Street securities

•   Incentive compensation subject to clawback, forfeiture and ex ante mechanisms

•   Monitor material activities and practices on ESG matters

State Street Corporation

State Street Corporation

attract, retain and motivate superior executives and drive strong leadership behaviors

reward those executives for meeting or exceeding individual and company financial and business objectives

drive long-term shareholder value and financial stability

align incentive compensation with the performance results experienced by our shareholders through the use of significant levels of deferred equity-based compensation

provide equal pay for work of equal value

achieve the preceding goals in a manner aligned with sound risk management and our corporate values

What We Do

•   Long-term performance-based equity awards in the form of performance-based RSUs

•   Significant deferred equity- and cash-based incentive compensation

•   Active engagement with shareholders on compensation and governance issues

•   Close interaction between the Human Resources Committee and our Risk Committee and Examining and Audit Committee

•   Independent compensation consultant

•   Clawback and forfeiture provisions to permit recoupment of incentive compensation

•   “Double-trigger” change-of-control required for deferred incentive compensation acceleration and cash payments

•   Stock ownership policy, including holding requirements for NEOs who are below full ownership guidelines

•   Non-compete and other restrictive covenants

•   Annual review of incentive compensation design for alignment with risk management principles

What We Do Not Do

•   No change-of-control excise tax gross-up

•   No “single-trigger” change-of-control vesting or cash payments

•   No option repricing

•   No short-selling, options trading, hedging or speculative transactions in State Street securities

•   No tax gross-ups on perquisites⁽¹⁾

•   No multi-year guaranteed incentive awards

Excluding certain international assignment and relocation benefits.

State Street Corporation

SUMMARY INFORMATION

LETTER FROM OUR LEAD DIRECTOR

CORPORATE GOVERNANCE AT STATE STREET

Governance Guidelines and Independence

Standards of Conduct

Board Composition

Board Leadership Structure

Meetings of the Board of Directors and Annual Meeting of Shareholders

Committees of the Board of Directors

Non-Employee Director Compensation

Related Person Transactions

ITEM 1 – ELECTION OF DIRECTORS

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Human Resources Committee Report

CEO Pay Ratio Disclosure

Alignment of Incentive Compensation and Risk

Summary Compensation Table

2019 Grants of Plan-Based Awards

Outstanding Equity Awards at Fiscal Year-End, December 31, 2019

2019 Stock Vested

2019 Pension Benefits

2019 Nonqualified Deferred Compensation

Potential Payments upon Termination or Change of Control as of December 31, 2019

ITEM  2 – APPROVAL OF ADVISORY PROPOSAL ON EXECUTIVE COMPENSATION

EXAMINING AND AUDIT COMMITTEE MATTERS

Examining and Audit Committee Pre-Approval Policies and Procedures

Audit and Non-Audit Fees

Report of the Examining and Audit Committee

ITEM  3 – RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

Questions and Answers About Voting

Other Matters

Proposals and Nominations by Shareholders

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Owners

Management

Delinquent Section 16(a) Reports

NOTICE OF AMENDMENT OF BY-LAWS

APPENDIX A: EXCERPT FROM STATE STREET’S CORPORATE GOVERNANCE GUIDELINES

APPENDIX B: STATE STREET’S GOVERNANCE STANDARDS RELATIVE TO THE INVESTOR STEWARDSHIP GROUP’S CORPORATE GOVERNANCE FRAMEWORK

APPENDIX C: RECONCILIATION OF NON-GAAP MEASURES

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

commercial or charitable relationships with an entity for which the State Street director or family member serves as a non-employee director, and with respect to which the director was uninvolved in negotiating such relationship (Ms. Mathew and Messrs. Burnes and Freda)

commercial relationships with an entity for which the State Street director or family member serves as an employee, consultant or executive officer where the director does not receive any special benefits from the transaction and the annual payments to or from the entity are equal to or less than the greater of $1 million or 2% of the consolidated gross annual revenues of the other entity during the most recent completed fiscal year (Messrs. Freda and Meaney)

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

as our Chief Executive Officer, and with his experience in various leadership roles at State Street, Mr. O’Hanley has extensive knowledge of our business and strategy and is well positioned to work with the independent Lead Director to focus our Board’s agenda on the key issues facing State Street

oversight of State Street is the responsibility of our Board as a whole, which maintains a majority of independent directors (10 out of 11 director nominees), and this responsibility can be properly discharged with a strong, active and engaged independent Lead Director

the Chairman and independent Lead Director work together to play a strong and active role in the oversight of State Street’s business strategy and operational management

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Current Members:

•   William C. Freda, Chair

•   Marie A. Chandoha

•   Patrick de Saint-Aignan

•   Lynn A. Dugle

•   Richard P. Sergel

11 Meetings in 2019

Primary Responsibilities:

•   Responsible for the appointment (including qualifications, performance, independence and periodic consideration of retaining a different firm), compensation, retention, evaluation and oversight of the work of State Street’s independent registered public accounting firm, including sole authority for the establishment of pre-approval policies and procedures for all audit engagements and any non-audit engagements

•   Discusses with the independent auditor critical accounting policies and practices, alternative treatments of financial information, the effect of regulatory and accounting initiatives and other relevant matters

•   Oversees the operation of our system of internal control covering the integrity of our consolidated financial statements and reports; compliance with laws, regulations and corporate policies; and the performance of corporate audit

•   Reviews the effectiveness of State Street’s compliance program and conducts an annual performance evaluation of the General Auditor, the Chief Compliance Officer and other senior members of management as appropriate

•   Oversees the Company’s efforts to promote and advance a culture of compliance and ethical business practices

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Current Members:

•   Ronald P. O’Hanley, Chair

•   Patrick de Saint-Aignan

•   Lynn A. Dugle

•   Amelia C. Fawcett

•   William C. Freda

•   Richard P. Sergel

•   Gregory L. Summe

0 Meetings in 2019

Primary Responsibilities:

•   Committee members are the Chairs of each Committee, the independent Lead Director and Chairman of the Board and are authorized to exercise all the powers of the Board, except as otherwise limited by the laws of the Commonwealth of Massachusetts or the Committee’s charter

•   Reviews, approves and acts on matters on behalf of the Board at times when it is not practical to convene a meeting of the Board to address such matters

•   Depending on meeting activities, if any, periodically reports to the Board

Current Members:

•   Richard P. Sergel, Chair*

•   Kennett F. Burnes

•   Amelia C. Fawcett

•   William L. Meaney

•   Gregory L. Summe

8 Meetings in 2019

*Sara Mathew, Chair-elect

(effective May 2020)

Primary Responsibilities:

•   Oversees human capital management strategies, the operation of all compensation plans, policies and programs in which executive officers participate and certain other incentive, retirement, health and welfare and equity plans in which other employees participate

•   Oversees the alignment of our incentive compensation arrangements with the safety and soundness of State Street, including the integration of risk management objectives and related policies, arrangements and control processes, consistent with applicable regulatory rules and guidance

•   Acting together with the other independent directors, annually reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation; evaluates the Chief Executive Officer’s performance; and reviews, determines and approves, in consultation with the other independent directors, the Chief Executive Officer’s compensation

•   Reviews, evaluates and approves the total compensation of all executive officers

•   Approves the terms and conditions of employment and any changes thereto, including any restrictive provisions, severance arrangements and special arrangements or benefits, of any executive officer

•   Adopts equity grant guidelines in connection with its overall responsibility for all equity plans and monitors stock ownership of executive officers

•   Appoints and oversees compensation consultants and other advisors retained by the Committee

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Current Members:

•   Gregory L. Summe, Chair

•   Kennett F. Burnes

•   Sara Mathew

•   Richard P. Sergel

5 Meetings in 2019

Primary Responsibilities:

•   Assists the Board with respect to issues and policies affecting our governance practices, including management succession planning, identifying and recommending director nominees and shareholder matters

•   Recommends each committee’s composition and leads the Board in its annual review of the Board’s and each committee’s performance

•   Reviews and approves State Street’s related person transactions, reviews the amount and form of director compensation and reviews reports on regulatory, political and lobbying activities of State Street

Current Members:

•   Patrick de Saint-Aignan, Chair

•   William C. Freda

•   Ronald P. O’Hanley

•   Sara Mathew

•   Sean O’Sullivan

9 Meetings in 2019

Primary Responsibilities:

•   Oversees the operation of our global risk management framework, including the risk management policies for our operations

•   Reviews the management of all risk applicable to our operations, including credit, market, interest rate, liquidity, operational, technology, business, compliance and reputation risks

•   Oversees our strategic capital governance principles and controls, monitors capital adequacy in relation to risk and discharges the duties and obligations of the Board under applicable Basel, Comprehensive Capital Analysis and Review, Comprehensive Liquidity Assessment and Review and resolution and recovery planning requirements

•   Conducts an annual performance evaluation of the Chief Risk Officer

Current Members:

•   Lynn A. Dugle, Chair

•   Kennett F. Burnes

•   Marie A. Chandoha

•   William L. Meaney

•   Ronald P. O’Hanley

•   Sean O’Sullivan

8 Meetings in 2019

Primary Responsibilities:

•   Oversees technology and operational risk management and the role of these risks in executing the Company’s strategy in support of the Company’s global business requirements

•   Reviews material strategic initiatives from a technology and operational risk perspective

•   Reviews technology related risks, including corporate information security, cybersecurity and data management

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Annual Retainer

Annual Equity Award

Additional Independent Lead Director Retainer

Examining and Audit Committee and Risk Committee Chair Retainers

Human Resources Committee Chair Retainer

Examining and Audit Committee and Risk Committee Member Retainers⁽⁴⁾

A Board meeting fee of $1,500 applies after the 10th Board meeting attended during the Board year. Non-employee directors also receive reimbursement of expenses incurred as a result of Board service.

The annual retainer and annual equity award are pro-rated for any non-employee director joining the Board after the annual meeting. Committee retainers are pro-rated for any non-employee director joining a committee during the Board year.

For non-employee directors elected at the annual meeting, all awards made in shares of State Street common stock are granted based on the closing price of our common stock on the NYSE on the date of the annual meeting that begins the period, rounded up to the nearest whole share, unless otherwise noted. Under the 2017 Stock Incentive Plan, with limited exceptions, the total value of all compensation components to a non-employee director cannot exceed $1.5 million in a calendar year.

The Examining and Audit Committee and Risk Committee member retainer is payable to each member other than the Lead Director and each committee’s chair.

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Kennett F. Burnes

Marie A. Chandoha⁽³⁾

Patrick de Saint-Aignan

Lynn A. Dugle

Amelia C. Fawcett

William C. Freda

Joseph L. Hooley⁽⁴⁾

Sara Mathew

William L. Meaney

Sean P. O’Sullivan

Richard P. Sergel

Gregory L. Summe

On May 15, 2019, each non-employee director, except Mr. Hooley and Ms. Chandoha, received 3,155 shares of State Street common stock valued at $195,011 based on the closing price of our common stock on the NYSE of $61.81. Stock awards to non-employee directors vest immediately, and there were no unvested non-employee director stock awards as of December 31, 2019.

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Perquisites received in 2019 include director life insurance coverage and business travel accident insurance paid for by State Street ($752 for Messrs. Burnes, de Saint-Aignan, Freda and Sergel; $486 for Messrs. Hooley and Summe; and $345 for Ms. Dugle and Mr. Meaney). Charitable contributions by non-employee directors are eligible for a Company matching contribution of up to $40,000 per calendar year under the State Street matching gift program. Matching charitable contributions made on behalf of the non-employee directors during 2019 were $40,000 for Messrs. Burnes, de Saint-Aignan, Freda, Hooley and Summe; $35,000 for Mr. Meaney; $32,000 for Ms. Dugle; and $29,247 for Mr. Sergel. Mr. Hooley’s perquisites also include company car and driver ($14,225) and personal and home security ($25,389). The total amount of perquisites and other personal benefits for Dame Amelia, Mses. Chandoha and Mathew and Mr. O’Sullivan have not been reported because the total did not exceed $10,000.

Ms. Chandoha joined the Board in September 2019. For her service through the 2020 annual meeting of shareholders, she received a pro-rated annual retainer of $60,000 in cash and a pro-rated annual equity award of 2,128 shares of State Street common stock with a total value of $130,021 based on the closing price of our common stock on the NYSE on September 19, 2019 of $61.10. Ms. Chandoha was appointed to the Examining and Audit Committee in October 2019 and for her service through the 2020 annual meeting, she received a pro-rated member retainer of $11,667 in cash.

For his service as Non-Executive Chairman during 2019, Mr. Hooley, our former CEO, received a $250,000 cash retainer in January 2019 and 4,045 shares of State Street common stock valued at $250,021 based on the May 15, 2019 closing price of our common stock on the NYSE of $61.81. The table does not include compensation awarded to Mr. Hooley in 2019 related to his service as State Street’s Chief Executive Officer during 2018: 40,261 deferred stock awards valued at approximately $2,720,000; 61,344 performance-based restricted stock units valued at approximately $4,080,000; and previously disclosed deferred value awards and immediate cash awarded to Mr. Hooley on March 1, 2019. These awards remain subject to the vesting schedules, recourse mechanisms, restrictive covenants and other terms and conditions described in the proxy statement for State Street’s 2019 annual meeting of shareholders. The table also excludes dividend credits of $61,497 Mr. Hooley earned in 2019 on his outstanding deferred value awards granted for his service as State Street’s Chief Executive Officer. Mr. Hooley retired as Non-Executive Chairman of the Board on December 31, 2019.

State Street Corporation

  Corporate Governance (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

interests arising solely from the related person’s position as an executive officer, employee or consultant of another entity (whether or not the person is also a director of such entity) that is a party to the transaction, where (1) the related person and his or her immediate family members do not receive any special benefits as a result of the transaction and (2) the annual amount involved in the transaction equals less than the greater of $1 million or 2% of the consolidated gross revenues of the other entity that is a party to the transaction during that entity’s last completed fiscal year; or

a transaction that involves discretionary charitable contributions from State Street to a tax-exempt organization where a related person is a director, trustee, employee or executive officer, provided the related person and his or her immediate family members do not receive any special benefits as a result of the transaction, and further provided that, where a related person is an executive officer of the tax-exempt organization, the amount of the discretionary charitable contributions in any completed year in the last 3 fiscal years is not more than the greater of $1 million, or 2% of that organization’s consolidated gross revenues in the last completed fiscal year of that organization (in applying this test, State Street’s automatic matching of director or employee charitable contributions to a charitable organization will not be included in the amount of State Street’s discretionary contributions)

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

The Board of Directors unanimously recommends that you vote

FOR

each of the nominees for director (Item 1 on your proxy card)

age and period of service as a director of State Street

business experience during at least the past five years (including directorships at other public companies)

community activities

other experience, qualifications, attributes or skills that led the Board to conclude the director should serve or continue to serve as a director of State Street

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

MARIE A. CHANDOHA

Age 58, Director since 2019

Board Roles and Committees

•   Examining and Audit Committee

•   Technology and Operations Committee

Career Highlights

•   Retired President and Chief Executive Officer, Charles Schwab Investment Management, Inc., the investment management subsidiary of Charles Schwab Corporation, an NYSE-listed brokerage and wealth management firm (2010 to 2019); Chief Investment Officer (2010)

•   Former Managing Director, Head, ETF, Index and Model-Based Fixed Income Portfolio Management, BlackRock, Inc., an investment management company (2009 to 2010); Global Head, Fixed Income Business, Barclays Global Investors (2007 to 2009) prior to acquisition by BlackRock, Inc.

•   Former Co-Head and Senior Portfolio Manager of the Montgomery Fixed Income Division, Wells Capital Management, an investment management company (1999 to 2007)

Qualifications and Attributes

In her prior role as President and Chief Executive Officer of Charles Schwab Investment Management, Inc., Ms. Chandoha implemented a new vision of the business by reorganizing the leadership team, adding strong governance and risk management and delivering transparent, low-cost and straightforward investment products and solutions. In addition, Ms. Chandoha transformed the technology and operational platform to efficiently scale and grow the company and increased third-party distribution capabilities. Before joining Charles Schwab Investment Management, Inc., Ms. Chandoha was the Global Head of the Fixed Income Division of BlackRock, Inc. where she focused on commercialization, innovation and new product development. Ms. Chandoha’s more than 35 years of experience as a leader in the financial services industry and her record transforming businesses provides the Board with valuable expertise as State Street continues its technological innovation to continue meeting industry and client expectations. Ms. Chandoha is a trustee of the California chapter of the Nature Conservancy and previously served as member of the Board of Governors and Executive Committee of the Investment Company Institute. She received a B.A. degree in economics from Harvard University.

PATRICK DE SAINT-AIGNAN

Age 71, Director Since 2009

Board Roles and Committees

•   Examining and Audit Committee

•   Executive Committee

•   Risk Committee (Chair)

Career Highlights

•   Retired Managing Director and Advisory Director, Morgan Stanley, an NYSE-listed global financial services company (1974 to 2007); firm-wide head of the company’s risk management function (1995 to 2002)

•   Director, Edaris Health, Inc., a private healthcare information technology company (2007 to present) (2007 to 2016 as Forerun, prior to name change to Edaris Health, Inc. in 2016); member of the Compensation Committee

•   Member of Supervisory Board, BH PHARMA, a private generic drug development company (2015 to present)

•   Former Director, Allied World Assurance Company Holdings AG, a former NYSE-listed specialty insurance and reinsurance company acquired by Fairfax Financial Holdings in 2017 (2008 to 2017); member of the Enterprise Risk Committee (Chairman), Compensation Committee, Audit Committee and Investment Committee

•   Former Director, Bank of China Limited (2006 to 2008); member of the Audit Committee (Chairman), the Risk Policy Committee and the Personnel and Remuneration Committee

Qualifications and Attributes

Mr. de Saint-Aignan’s extensive experience in risk management, corporate finance, capital markets and firm management brings to the Board a sophisticated understanding of risk, particularly with respect to the implementation of risk and monitoring programs within a global financial services organization. Mr. de Saint-Aignan’s service on the board of directors and committees of several other companies gives him additional perspective on global management and governance. A dual citizen of the United States and France, he was honored with Risk Magazine’s Lifetime Achievement Award in 2004. Mr. de Saint-Aignan holds his B.B.A. degree from the Ecole des Hautes Etudes Commerciales and an M.B.A. from Harvard University.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

LYNN A. DUGLE

Age 60, Director Since 2015

Board Roles and Committees

•   Examining and Audit Committee

•   Executive Committee

•   Technology and Operations Committee (Chair)

Career Highlights

•   Retired Chief Executive Officer and Chairman, Engility Holdings, Inc., an NYSE-listed engineering and technology consulting company (2018 to 2019); Chief Executive Officer and Director (2016 to 2018); Director (2014 to 2018) (2014 to 2015 as TASC, prior to acquisition by Engility Holdings, Inc.; 2015 to 2018 as Engility Holdings, Inc., prior to acquisition by Science Applications International Corp. in 2019)

•   Director KBR, Inc., an NYSE-listed engineering, procurement, and construction company (February 2020 to present); member of Audit Committee

•   Director TE Connectivity Ltd., an NYSE-listed and Swiss-domiciled technology company (March 2020 to present); member of Audit Committee

•   Former Corporate Vice President and President, Intelligence, Information and Services, Raytheon Company, an NYSE-listed defense contractor and electronics manufacturer (2004 to 2015); Vice President, Engineering, Technology and Quality, Network Centric Systems (2004 to 2009); Vice President, Support Engineering and Six Sigma (1997 to 1999)

•   Former Vice President, Product, Systems Software Division, ADC Telecommunications, Inc., a former Nasdaq-listed communications company acquired in 2010 by Tyco Electronics (2002 to 2004); General Manager, Cable Systems Division (1999 to 2002)

•   Former Vice President, Quality & Support Engineering, Texas Instruments, Inc., a Nasdaq-listed electronics manufacturer (1982 to 1997)

Qualifications and Attributes

As the former Chief Executive Officer and Chairman of Engility Holdings, a leading provider of integrated solutions and services for the U.S. government, Department of Defense, federal civilian agencies and international customers, Ms. Dugle brings to the Board valuable experience in leading the development of large businesses with a focus on information, technology and security matters. Her understanding of information and technology matters provides the Board with perspective as State Street continues to transform and digitize products and services. Prior to her role at Engility, Ms. Dugle was the president of Intelligence, Information and Services at Raytheon where she was responsible for the company’s advanced cyber solutions, cyber security services and information-based solutions. She also served as vice president of engineering, technology and quality for the former Network Centric Systems business at Raytheon and was responsible for the strategic direction, leadership and operations of the engineering, technology and quality functions. Prior to Raytheon, Ms. Dugle held executive positions at ADC Telecommunications with responsibility for leading teams across Europe, Middle East and Africa and the Asia-Pacific region. She holds B.S. and B.B.A. degrees from Purdue University and an M.B.A. with a concentration in international business from the University of Texas at Dallas.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

AMELIA C. FAWCETT

Age 63, Director Since 2006

Board Roles and Committees

Lead Director

•   Executive Committee

•   Human Resources Committee

Career Highlights

•   Chairman, Kinnevik AB, a Nasdaq Stockholm-listed long-term oriented investment company (2018 to present); Deputy Chairman (2013 to 2018); Non-Executive Director (2011 to present); member of Remuneration Committee (Chair) and Governance, Risk and Compliance Committee (Chair)

•   Chairman, Standards Board for Alternative Investments (2011 to present) (2011 to 2017 as Hedge Fund Standards Board; 2017 to present as Standards Board for Alternative Investments) (U.K.), a global standard-setting body for the alternative investment industry

•   Former Non-Executive Director, HM Treasury, the British Government’s Economic & Finance Ministry (2012 to 2018)

•   Former Non-Executive Director, Millicom International Cellular S.A., an international telecommunications and media company (2014 to 2016); member of the Remuneration Committee (Chair) and Compliance and Business Practices Committee

•   Former Non-Executive Chairman, Guardian Media Group plc, a privately held diversified multimedia business in London (2009 to 2013); Non-Executive Director (2007 to 2013)

•   Former Vice Chairman and Chief Operating Officer of European Operations, Morgan Stanley, an NYSE-listed global financial services company (2002 to 2006) and Morgan Stanley International Limited, London (2006 to 2007); Senior Adviser (2006 to 2007); Managing Director and Chief Administrative Officer for European Operations (1996 to 2002); Executive Director (1992 to 1996); Vice President (1990 to 1992)

Qualifications and Attributes

Dame Amelia Fawcett, a dual American and British citizen, has many years of extensive and diverse financial services experience. At Morgan Stanley, she served in many roles including Vice Chairman and Chief Operating Officer of Morgan Stanley International and had responsibility for development and implementation of the company’s business strategy (including business integration), as well as oversight of the company’s operational risk functions, infrastructure support and corporate affairs. Prior to joining Morgan Stanley, she was an attorney at the New York-based law firm of Sullivan & Cromwell, practicing primarily in the areas of corporate and banking law in both New York and Paris. Her service on both the Court of Directors of the Bank of England (the Board of the British Central Bank) and the British Treasury provided her with valuable experience with the complex regulatory and compliance frameworks of the financial industry, both in the U.K. and internationally. Dame Amelia was awarded a CBE (Commander of the Order of the British Empire) and a DBE (Dame Commander of the Order of the British Empire) by the Queen, in both instances for services to the finance industry and in 2018 the Queen made her a Commander of the Royal Victorian Order for services as Chairman of The Prince of Wales’s Charitable Foundation. In addition, in 2004, she received His Royal Highness The Prince of Wales’s Ambassador Award recognizing responsible business activities that have a positive impact on society and the environment. Dame Amelia’s public policy experience and experience in the European banking markets provide a valuable international financial markets perspective to State Street. She formerly has served, or currently serves, in the capacity as governor of the Wellcome Trust, chairman of the Royal Botanic Gardens (Kew) (current), chairman of The Prince of Wales’s Charitable Foundation, deputy chairman and governor of the London Business School, a commissioner of the U.S.-U.K. Fulbright Commission, deputy chairman of the National Portrait Gallery, chairman of the American Friends of the National Portrait Gallery and a trustee of Project Hope (current). Dame Amelia received a B.A. degree from Wellesley College and a J.D. degree from the University of Virginia.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

WILLIAM C. FREDA

Age 67, Director Since 2014

Board Roles and Committees

•   Examining and Audit Committee (Chair)

•   Executive Committee

•   Risk Committee

Career Highlights

•   Retired Senior Partner and Vice Chairman, Deloitte, LLP, a global professional services firm (2011 to 2014); Managing Partner of Client Initiatives (2007 to 2011); member of U.S. Executive Committee

•   Chairman, Hamilton Insurance Group, a global insurance and reinsurance company (2014 to present); Director (2014 to 2017); Chairman (2017 to present)

•   Director, Guardian Life Insurance Company, a mutual life insurance company (2014 to present)

•   Former Director, Deloitte Touche Tohmatsu Limited (2007 to 2013); member of Risk Committee (Chairman) (2011 to 2013) and Audit Committee (Chairman) (2008 to 2011)

Qualifications and Attributes

As senior partner and vice chairman of Deloitte, LLP, Mr. Freda served Deloitte’s most significant clients and maintained key relationships, acting as a strategic liaison to the marketplace as well as to professional and community organizations. Mr. Freda joined Deloitte in 1974 and built a distinguished record of service during his 40-year career, having served on a wide range of multinational engagements for many of Deloitte’s largest and most strategic clients. Mr. Freda brings to the Board key insight and perspective on risk management, international expansion and client relationships gained through his extensive experience interacting with audit committees, boards of directors and senior management. He serves as a trustee of Bentley University. Previously, Mr. Freda has served as the chairman of Catholic Community Services, the United Way of Essex and West Hudson and the AICPA Insurance Companies Committee and was a U.S. Representative to the International Accounting Standards Committee’s Insurance Steering Committee. Mr. Freda received a B.S. in accounting from Bentley University.

SARA MATHEW

Age 64, Director Since 2018

Board Roles and Committees

•   Nominating and Corporate Governance Committee

•   Risk Committee

Career Highlights

•   Retired Chairman and Chief Executive Officer, Dun & Bradstreet Corporation, an NYSE-listed international commercial data and analytics provider (2010 to 2013); President and Chief Operating Officer (2007 to 2009); Chief Financial Officer (2001 to 2007)

•   Non-Executive Chairman, Federal Home Loan Mortgage Company, a government-sponsored firm operating in the secondary residential mortgage market (2019 to present); Director (2013 to present); member of Audit Committee (Chair), Executive Committee and Nominating and Governance Committee

•   Director, Reckitt Benckiser Group plc, an FTSE-listed Health and hygiene company (2019 to present); member of Audit Committee

•   Former Director, Campbell Soup Company, an NYSE-listed consumer food producer (2005 to 2019); member of Audit Committee (Chair) and Finance and Corporate Development Committee

•   Former Director, Shire Plc, a Nasdaq-listed FTSE 25 biopharmaceutical company (2015 to 2019; prior to acquisition by Takeda Pharmaceutical Company Limited in 2019); Chair of Audit and Risk Committee and member of Compliance and Nomination and Governance Committee

•   Former Director, Avon Products, Inc., an NYSE-listed beauty, household and personal care products manufacturer (2014 to 2016)

•   Former Vice President of Finance, ASEAN, Australasia and India, Procter and Gamble Company, an NYSE-listed international manufacturer of consumer goods (2000 to 2001); Controller and Chief Financial Officer, Baby-Care and Paper Products (1998 to 2000); other various positions through her 18-year tenure

Qualifications and Attributes

In her prior role as chairman and chief executive officer of Dun & Bradstreet Corporation, Ms. Mathew led the company’s transformation from a data collection business into an innovative provider of data analytics and insights. Prior to her role as chairman and chief executive officer, she served as president and chief operating officer, overseeing the company’s consumer segments, and chief financial officer where she initiated and managed the redesign of the company’s accounting processes and controls. Before joining Dun & Bradstreet Corporation, Ms. Mathew held various positions at Procter and Gamble Company within finance, accounting, investor relations and brand management. Her deep background in finance, technology, corporate strategy and operations, combined with her experiences leading and overseeing a diverse assortment of international consumer-focused companies and transformational initiatives, allows Ms. Mathew to provide a unique, innovative and global perspective to State Street. Ms. Mathew received a B.S. degree in physics, mathematics and chemistry from the University of Madras, India and an M.B.A. degree in finance and marketing from Xavier University.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

WILLIAM L. MEANEY

Age 59, Director Since 2018

Board Roles and Committees

•   Human Resources Committee

•   Technology and Operations Committee

Career Highlights

•   President, Chief Executive Officer and Director, Iron Mountain, Inc., an NYSE-listed information management and data backup and recovery company (2013 to present)

•   Former Director, Qantas Airways, an Australian Securities Exchange-listed airline (2012 to 2018); member of the Safety, Health, Environment and Security Committee and the Remuneration Committee

•   Former Chief Executive Officer, Zuellig Group, a privately owned long-term holding company based in Hong Kong (2004 to 2012)

Qualifications and Attributes

Mr. Meaney, a citizen of the United States, Switzerland and Ireland, has extensive domestic and international business experience across both established and emerging markets. As the president and chief executive officer of Iron Mountain, he has continued to lead the company as it evolves and expands its secure storage and digital transformation offerings. Before joining Iron Mountain, Mr. Meaney was the chief executive officer of Zuellig Group, where he was responsible for a diverse portfolio of Asia Pacific businesses that spanned a variety of heavily regulated and consumer-based industries, including health care, agriculture, pharmaceuticals and materials handling. He has held several senior positions throughout the airline industry, including chief commercial officer of Swiss International Airlines and executive vice president of South African Airways, founded and managed his own consulting firm and served as an operations officer with the U.S. Central Intelligence Agency. Mr. Meaney provides State Street’s Board with an acute global viewpoint on corporate strategy and business expansion founded upon his background in leading and developing large U.S. and international companies. Mr. Meaney is a member of both the FM Global advisory board and President’s Council of Massachusetts General Hospital and is a former trustee of Rensselaer Polytechnic Institute and Carnegie Mellon University. He holds a B.S. degree from Rensselaer Polytechnic Institute and an M.B.A. from Carnegie Mellon University.

RONALD P. O’HANLEY

Age 63, Director Since 2019

Board Roles and Committees

Chairman of the Board

•   Executive Committee (Chair)

•   Risk Committee

•   Technology and Operations Committee

Career Highlights

•   State Street Corporation, Chairman (2020 to present); President and Chief Executive Officer (2019 to present); President and Chief Operating Officer (2017 to 2019); Vice Chairman (2017); Chief Executive Officer and President, State Street Global Advisors (2015 to 2017)

•   Director, Unum Group, an NYSE-listed provider of financial protection benefits in the United States and United Kingdom (2015 to present); member of the Human Capital Committee and Governance Committee

•   Former President of Asset Management & Corporate Services, Fidelity Investments, Inc., a multinational financial services corporation (2010 to 2014)

•   Former Chief Executive Officer and President, BNY Mellon Asset Management (2007 to 2010)

Qualifications and Attributes

Mr. O’Hanley joined State Street in 2015 to lead State Street’s investment management business as the Chief Executive Officer and President of State Street Global Advisors. Since that time, he has held several senior leadership positions within the Company, serving as Vice Chairman from January 2017 to November 2017 and President and Chief Operating Officer from November 2017 to February 2019. Effective January 1, 2019, Mr. O’Hanley began his service as Chief Executive Officer and as a member of the Board of Directors and effective January 1, 2020, he was appointed Chairman of the Board. His extensive leadership, executive management and operational experience over the last three decades in asset management and global financial services provides the Board with the experience necessary to help navigate the Company’s strategic priorities on data management, client experience and technology enhancement. Mr. O’Hanley received a B.A. degree from Syracuse University and an M.B.A. from Harvard Business School.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

SEAN O’SULLIVAN

Age 64, Director Since 2017

Board Roles and Committees

•   Risk Committee

•   Technology and Operations Committee

Career Highlights

•   Retired Group Managing Director and Group Chief Operating Officer, HSBC Holdings, plc., an NYSE-listed banking and financial services organization (2011 to 2014); Executive Director and Chief Technology and Services Officer, HSBC Bank plc. (2007 to 2010); other various positions throughout his 34-year tenure

Qualifications and Attributes

As the Group Managing Director and Group Chief Operating Officer of HSBC Holdings, plc., Mr. O’Sullivan led the bank’s global operations and information technology functions, with worldwide responsibilities for business transformation, organizational restructuring and operational effectiveness. Prior to assuming the role of Group Managing Director and Group Chief Operating Officer, Mr. O’Sullivan held various positions throughout HSBC in the U.S., Canada and Europe. His long tenure at HSBC provided him with valuable experience with the operational and technology challenges faced by a large, global financial institution as well as the management of overall company effectiveness and efficiency, including development of a global approach to expense management and operational risk management. Mr. O’Sullivan is a member of the Information Technology Advisory Committee at the University of British Columbia and a former trustee of the York University Foundation. He is a dual citizen of Canada and the U.K. and received a B.A. degree from the Ivey School of Business at Western University.

RICHARD P. SERGEL

Age 70, Director Since 1999

Board Roles and Committees

•   Examining and Audit Committee

•   Executive Committee

•   Human Resources Committee (Chair)

•   Nominating and Corporate Governance Committee

Career Highlights

•   Retired President and Chief Executive Officer, North American Electric Reliability Corporation (NERC), a self-regulatory organization for the bulk electricity system in North America (2005 to 2009)

•   Director, Emera, Inc., a Toronto Stock Exchange-listed energy and services company (2010 to present)

•   Former President and Chief Executive Officer, New England Electric System (and its successor company, National Grid USA), an NYSE-listed electric utility (1998 to 2004)

Qualifications and Attributes

Mr. Sergel’s responsibilities as chief executive officer of the North American Electric Reliability Corporation included imposing statutory responsibility and regulating the industry through adoption and enforcement of standards and practices. To do so, he led NERC to establish the first set of legally enforceable standards for the U.S. bulk power system. Prior to joining NERC, he spent 25 years with the New England Electric System, where he oversaw the merger with National Grid in 2000. His extensive practical and technical expertise in navigating the energy market through regulatory change and major transactions offers the Board important perspective on the evolving financial services industry and regulatory environment. Mr. Sergel served in the United States Air Force reserve from 1973 to 1979 and has served as a director of Jobs for Massachusetts and the Greater Boston Chamber of Commerce. He is a former trustee of the Merrimack Valley United Way and the Worcester Art Museum, prior chairman of the Consortium for Energy Efficiency and was a member of the Audit Committee for the Town of Wellesley, Massachusetts. Mr. Sergel received a B.S. degree from Florida State University, an M.S. from North Carolina State University and an M.B.A. from the University of Miami.

State Street Corporation

  Item 1 (cont.)

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

GREGORY L. SUMME

Age 63, Director Since 2001

Board Roles and Committees

•   Executive Committee

•   Human Resources Committee

•   Nominating and Corporate Governance Committee (Chair)

Career Highlights

•   Managing Partner and Founder, Glen Capital Partners, LLC, an alternative asset investment fund (2013 to present)

•   Former Managing Director and Vice Chairman of Global Buyout, Carlyle Group, a Nasdaq-listed global asset manager (2009 to 2014)

•   Former Chairman, Chief Executive Officer and President, PerkinElmer, Inc., an NYSE-listed developer and producer of life science equipment and services (1998-2009)

•   Director, NXP Semiconductors, a Nasdaq-listed semiconductor manufacturer (2010 to present) (Director, 2010 to 2015 and Chairman, 2013 to 2015 as Freescale Semiconductor, Inc., prior to its acquisition by NXP Semiconductors in 2015; 2015 to present as NXP Semiconductors)

•   Former Director, LMI Aerospace, a Nasdaq-listed designer and provider of aerospace structures (2014 to 2017)

Qualifications and Attributes

Mr. Summe has extensive management experience leading large and complex corporate organizations in evolving environments. While vice chairman of Carlyle Group, he was responsible for buyout funds in financial services, infrastructure, Japan, the Middle East and African markets and served on the firm’s operating and investment committees. His experience in private equity has afforded him a deepened exposure to understanding varied business models, practices, strategies and environments and assessing value in varied international regions. During his tenure as chairman and chief executive officer at PerkinElmer, Mr. Summe led the company’s transformation from a diversified defense contractor to a technology leader in health sciences. Prior to joining PerkinElmer, Mr. Summe held leadership positions at AlliedSignal (now Honeywell), General Electric and McKinsey & Co. Mr. Summe holds B.S. and M.S. degrees in electrical engineering from the University of Kentucky and the University of Cincinnati, respectively, and an M.B.A. with distinction from the Wharton School of the University of Pennsylvania. He is also in the Engineering Hall of Distinction at the University of Kentucky.

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Ronald P. O’Hanley — President and Chief Executive Officer

Eric W. Aboaf — Executive Vice President and Chief Financial Officer

Francisco Aristeguieta — Executive Vice President and Chief Executive Officer for International Business

Jeffrey N. Carp — Executive Vice President, Chief Legal Officer and Secretary

Andrew J. Erickson — Executive Vice President and Head of Global Services

Executive Summary

Compensation Philosophy

New Compensation Program Features for the 2019 Compensation Year

Compensation Vehicles and Design

2019 Compensation Decisions

Prior Year Performance-Based RSU Awards

Other Elements of Compensation

Other Elements of Our Process

Human Resources Committee Process Concerning Risk Alignment

Executive Equity Ownership Guidelines, Practices and Policies

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

attract, retain and motivate superior executives and drive strong leadership behaviors

reward those executives for meeting or exceeding individual and company financial and business objectives

drive long-term shareholder value and financial stability

align incentive compensation with the performance results experienced by our shareholders through the use of significant levels of deferred equity-based compensation

provide equal pay for work of equal value

achieve the preceding goals in a manner aligned with sound risk management and our corporate values

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Our 15-company compensation peer group is described below under the heading, “Other Elements of Our Process—Peer Group and Benchmarking.”

In connection with his offer of employment, State Street agreed to provide Mr. Aristeguieta with 2019 incentive compensation via a pay mix consisting of: 40% performance-based RSUs; 25% DSAs; 20% DVAs; and 15% cash.

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Equity-Based Incentive Compensation

(75% of incentive compensation for CEO; 65% for Other NEOs)

Performance-

Based Restricted

Stock Units

(RSUs)

•   Number of performance-based RSUs ultimately earned based on State Street’s average annual ROE and pre-tax margin over the three-year performance period (2020 – 2022)

•   ROE and pre-tax margin weighted equally in determining the performance-based RSU payout, resulting in a total payout range of 0 – 150%, shown in the table below

•   Equity-based compensation directly aligns the rewards and risks shared by our NEOs and our shareholders

•   Performance-based RSUs are aligned with our long-term performance and financial goals

•   Performance-based RSUs granted for 2019 and 2018 performance included pre-tax margin as a second metric in equal weight with ROE, further aligning NEO compensation with our business strategy

50% Weighting 50% Weighting ROE ROE Performance Pre-tax Margin Pre-tax Margin Performance Total Payout Range < 8% No Payout + < 24% No Payout 8.0% Threshold + 24.0% Threshold 13.0% Target + 29.0% Target > 18.0% Maximum + >34.0% Maximum = 0 - 150% Total Payout

•   Performance-based RSUs ultimately earned “cliff” vest in one installment in February 2023

•   Paid in State Street shares upon vesting

Deferred Stock

Awards (DSAs)

•   DSAs vest ratably in four equal annual installments (with the first installment vesting in February 2021)

•   Paid in State Street shares upon vesting

•   Subject to vesting requirements

•   Equity-based compensation directly aligns the rewards and risks shared by our NEOs and our shareholders

Cash-Based Incentive Compensation

(25% of incentive compensation for CEO; 35% for Other NEOs)

Deferred Value

Awards (DVAs)

•   DVAs are notionally invested in a money market fund

•   Vest ratably in 16 quarterly installments (with the first installment vesting in May 2020)

•   Paid in cash upon vesting

•   Subject to vesting requirements

Immediate Cash

(non-deferred)

•   Immediate cash award

•   Provides a limited immediate incentive

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Base

Salary Rate

Ronald P. O’Hanley

Eric W. Aboaf

Francisco Aristeguieta⁽¹⁾

Jeffrey N. Carp

Andrew J. Erickson

In connection with his offer of employment, State Street agreed to provide Mr. Aristeguieta with compensation designed to maintain his 2019 compensation near his expected level of compensation at his prior employer.

financial performance

business performance

risk management performance

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Performance Scorecard

2019 Performance Highlights

2019 Committee Evaluation

Key Areas Reviewed:

Consolidated Financial Performance (excluding notable items,
non-GAAP⁽¹⁾)

Full Year Evaluation:

Below Expectations

• Revenue

($ in millions, except per share data)

• Expenses

Total fee revenue

Second Half Trend:

• Pre-tax Margin

Total revenue

• EPS

Expenses

• ROE

Pre-tax margin

• Structural Expense Savings

EPS

ROE

($ in millions, except per share data)

Total fee revenue

Total revenue

Expenses

Pre-tax margin

EPS

ROE

Total Shareholder Return (TSR):

Financial

Index

1-Year TSR

3-Year TSR

Financial results are presented on a non-GAAP basis in this section, unless otherwise noted. Non-GAAP financial results adjust selected GAAP-basis financial results to exclude the impact of notable items outside of State Street’s normal course of business. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in conformity with GAAP. For a reconciliation of non-GAAP measures presented in this CD&A, see Appendix C.

Our 15-company compensation peer group is described below under the heading, “Other Elements of Our Process—Peer Group and Benchmarking.”

State Street Corporation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Key Goals:

•   Be an essential partner—trusted, strategic and proactive

•   Develop a scalable, configurable end-to-end operating model that sets the industry standard

•   Establish initial version of our front-to-back platform

•   Establish leadership in our key products

•   Be a global destination for talent and become a high performing organization

•   Took key actions to drive our strategic and operational objectives, including:

–   rolling out State Street Alpha, the industry’s first front-to-back platform from a single provider;

–   re-engineering asset servicing design in support of our planned end-to-end operating model;

–   completing our senior executive client coverage model for our largest clients; and

–   implementing a new pricing committee that has brought a firm-wide view to client relationships, profitability and new revenue opportunities

•   Aligned our operating model by combining Operations, Technology and Delivery teams to strengthen business and operational connectivity

•   Initiated a systematic transformation of State Street with a goal of improving client, employee and shareholder experience

•   Broadened the composition of the company’s Management Committee, our most senior strategy and policy-making team, resulting in a more globally-focused and diverse body

•   Reorganized the leadership of our multi-regional international business under a single executive to further our growth objectives

Full Year Evaluation:

At Expectations

Second Half Trend:

Consistent with Full Year Evaluation

Key Areas Reviewed:

•   Financial and non-financial risks

•   Progress against risk and compliance commitments and risk mitigation programs

•   Process improvements in higher risk areas or activities

•   Did not achieve desired non-financial risk improvement

•   Demonstrated positive trends in financial risk performance, including across measures of the Company’s credit, asset liability management, liquidity and capital adequacy activities

•   Experienced higher operational loss rates relative to the last two years due to increased re-investment in enterprise change programs

•   Completed the Federal Reserve’s 2019 CCAR process, without the Federal Reserve objecting to our 2019 capital plan

Full Year Evaluation:

Below Expectations

Second Half Trend:

Consistent with Full Year Evaluation

State Street Corporation

  Executive Compensation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Ronald P. O’Hanley, President and Chief Executive Officer

2019 Performance Highlights

•   Took swift actions to address financial headwinds

–   Stabilized servicing fee revenues

–   Announced approximately $1.8 trillion in new servicing business wins

–   Announced a State Street record level of assets under management reflecting higher market levels and net inflows of approximately $100 billion

•   Revenue declined from 2018, reflecting the elevated level of industry servicing fee pricing pressure; pre-tax margin, EPS and ROE each declined from 2018

•   Actively managed expenses, driven by new resource discipline, process reengineering and automation efforts. Exceeded initial target of $350 million in gross expense savings, finishing the year at approximately $415 million

•   Executed against our strategic and operational objectives

–   Launched State Street Alpha, the industry’s first front-to-back platform from a single provider; signed first four Alpha clients

–   Re-engineered asset servicing design to support our planned end-to-end operating model

–   Completed our senior executive client coverage model for our largest clients

•   Combined Operations, Technology and Delivery teams to strengthen business and operational connectivity

•   Initiated a systematic transformation of State Street with a goal of improving client, employee and shareholder experience

•   Improved transparency and accountability across senior leadership team to strengthen risk excellence in key focus areas

•   Completed CCAR 2019, allowing for a capital return of approximately 116% of earnings⁽¹⁾, and executed an additional capital action, in addition to our original CCAR plan, with a redemption of $750M of preferred equity

•   Enhanced Anti-Money Laundering program, Liquidity Risk, Model Risk Management and Recovery and Resolution Planning

•   Demonstrated positive trends in financial risk performance

•   Did not achieve desired non-financial risk improvement

•   Experienced higher operational loss rates relative to the last two years as re-investment through enterprise change programs has increased

•   Completed transition into Chief Executive Officer position

•   Reorganized the leadership of our multi-regional international business under a single executive to further our growth objectives

•   Broadened Management Committee to drive global strategies and improve diversity

•   Improved company-wide performance management processes with a focus on improving employee engagement and recognition

•   Identified and articulated cultural traits and behaviors required to achieve strategic objectives

Compensation for 2019

Mr. O’Hanley received total compensation of $11,800,000 for 2019. This compensation is an increase from his total compensation for 2018, which reflected his prior role of President and Chief Operating Officer. The individual component of his incentive was 97% of target reflecting both overall corporate results as well as his leadership on actions taken in light of the significant challenges described earlier. State Street’s corporate component was 62.5% of target for all executive officers. These components resulted in Mr. O’Hanley receiving total incentive compensation of $11,000,000 for 2019, representing 83% of target.

Capital return represents total common stock dividends and common stock purchases of $2,331 million during 2019 as a percentage of net income available to common shareholders for the year ended December 31, 2019 of $2,009 million.

State Street Corporation

  Executive Compensation

    2020 NOTICE OF MEETING AND PROXY STATEMENT  

Eric W. Aboaf, Chief Financial Officer

2019 Performance Highlights