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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On February 13, 2020, the Compensation Committee of the Board of Directors (“Compensation Committee”) of Synovus Financial Corp. (“Synovus”) took several actions impacting the compensation arrangements of Synovus’ executive officers, including Synovus’ named executive officers last identified under Item 402(c) of Regulation S-K.
2020 Annual Incentive Plan. The Compensation Committee approved the executive annual incentive plan for 2020. For 2020, the approved formulaic annual performance goals are based 60% on adjusted earnings per share, 20% on adjusted revenue and 20% on adjusted tangible efficiency ratio. In addition, the Compensation Committee approved discretionary adjustment factors it may use in 2020 under the incentive plan to include quality of financial results (including quality of earnings, credit quality, quality and composition of loan growth, including concentration limits and composition, and quality of deposit growth), strategic initiatives (including execution of the transformation initiative, core deposit growth as compared to plan, inclusion and diversity initiatives, brand awareness, account growth and various measures related to customers, team members and technology), external factors (including the impact of Federal Reserve rate increases as compared to budget assumptions), regulatory compliance, risk management, total shareholder return and individual performance. The Compensation Committee also established the following individual award targets as a percentage of base salary for each named executive officer, respectively, for 2020:
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Named Executive Officer
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Title
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2020 Award Target
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Kessel D. Stelling
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Chairman and Chief Executive Officer
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125%
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Kevin S. Blair
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President and Chief Operating Officer
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100%
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J. Barton Singleton
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Executive Vice President and President, Financial Management Services
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70%
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Mark G. Holladay
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Executive Vice President and Chief Risk Officer
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60%
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The actual payout may range from 0% to 150% of the award target based upon Synovus’ performance results for 2020 compared to the performance goals and the Compensation Committee’s evaluation of the discretionary factors.
Long-Term Incentive Awards. The Compensation Committee also granted Synovus’ executive officers, including its named executive officers, long-term incentive awards (comprised of performance stock unit awards and restricted stock unit awards), effective February 13, 2020.
The performance stock unit awards (“PSUs”) granted to Synovus’ executive officers, including its named executive officers, include service and performance vesting components. Under the service-based vesting component, the PSUs vest 100% after three years of service. Under the performance-based vesting component, there are two performance measures (weighted average return on tangible common equity and relative total shareholder return) that are measured over a three-year performance period, with each measure impacting one-half of the PSUs awarded to each executive. The actual payout of the PSUs may range from 0% to 150% of the target amount based upon the results of the two performance measures during the performance period compared to the performance objectives approved by the Compensation Committee.
The restricted stock unit awards (“RSUs”) vest one-third each year over a three-year period.
The PSUs are subject to a Risk-Based Modifier, which may reduce the payouts of outstanding awards if future results suggest that risk was not properly considered in achieving the results on which the number of units awarded were based. The Compensation Committee may consider whether payout reductions are warranted if any of the following occur during the vesting period: (1) Synovus or a line of business experiences a material loss, (2) Synovus or an individual executive fails to comply with risk policies or properly address risk concerns, or (3) regulatory capital falls below regulatory capital requirements.
In addition, the foregoing PSUs and RSUs vest in the event of death, disability or retirement when such retirement occurs after age 65 with 10 or more years of service.
The Compensation Committee granted the following awards to each of the named executive officers last identified under Item 402(c) of Regulation S-K, respectively:
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Named Executive Officer
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Number of PSUs
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Number of RSUs
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Kessel D. Stelling
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40,345
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26,897
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Kevin S. Blair
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24,207
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16,138
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J. Barton Singleton
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8,069
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5,380
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Mark G. Holladay
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8,069
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5,380
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