SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
☒
Filed by a Party other than the Registrant
☐
Check the appropriate box:
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☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material Pursuant to § 240.14a-12
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CITIZENS FINANCIAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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☒
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No fee required.
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☐
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$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
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☐
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Notice
of 2018
Annual
Meeting
of
Stockholders
and
Proxy
Statement
LETTER
FROM THE
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
March 9, 2018
Dear Stockholder,
We
recently completed
our
third
year as
a
n
independent,
publicly
traded
company
and
I am pleased
to
invite
you
to
attend
our
annual
meeting
of
stockholders
to
be
held
on
Thursday,
April 26, 2018, at
9:00 a.m.
Eastern
Time,
at
our
headquarters
located
at
One
Citizens
Plaza,
Providence, Rhode
Island
02903. You’ll
find
the
matters
scheduled
for
consideration
at
the
meeting
described
in detail
in
the
following
2018 Notice
of
Annual
Meeting
of
Stockholders
and
Proxy Statement.
If you owned
shares
of
our
stock
as
of
March 2, 2018, we encourage
you
to
vote
on
these
matters.
In order
to
accommodate
those
attending,
we ask that
you
please
mark your
enclosed
proxy
card
to let
us
know
of
your
plans
to
attend.
Registration
and
seating
will begin
at
8:00 a.m.
Eastern
Time and
we will ask you
to
sign
an
admittance
card
and
present
valid
photo identification.
If you
held your
shares
in
a
brokerage
account
please
be
sure
to
bring
a
copy
of
a
brokerage
statement
that shows
you
held
shares
as
of
March 2, 2018. If you are the legal representative of a stockholder, please also bring proof thereof. Cameras and
recording
devices
will not
be
permitted
at the
meeting.
We
furnish
our
proxy
materials
to
stockholders
on
the
internet
at
www.edocumentview.com/CFG
in order
to
provide
you
with
the
information
you
need
in
an
expedited
manner
while
significantly lowering
the
costs
of
delivery and
reducing
the
environmental
impact
of
our
annual
meeting.
You will receive a
notice
with
instructions
for
accessing
the
proxy
materials
and
voting
via
the
Internet
in addition
to
information
about
how
to
obtain
paper
copies
of
our
proxy
materials
if
you
would
prefer.
Your
vote
is
important
and
whether
or
not
you
plan
to
attend
the
meeting,
we encourage
you
to access
electronic
voting
via
the
Internet
or
utilize
the
automated
telephone
voting
feature
as described
on
your
enclosed
proxy
card,
or
you
may sign,
date
and
return
the
proxy
card
in
the envelope
provided.
You
may also
vote
in
person
if
you
plan
to
attend
the
annual
meeting.
On
behalf
of
our
board
of
directors,
we thank
you
for
your
support
of
Citizens
Financial
Group,
Inc.
Sincerely,
|
|
|
|
Bruce
Van
Saun
|
Chairman of the Board and
Chief
|
Executive
Officer
|
NOTICE
OF ANNUAL
MEETING OF STOCKHOLDERS
TO BE
HELD
ON APRIL 26, 2018
To
the
Stockholders
of
Citizens
Financial
Group,
Inc.:
NOTICE
IS HEREBY GIVEN
that
the
annual
meeting
of
stockholders
(the
“Annual
Meeting”)
of Citizens
Financial
Group
Inc.,
a
Delaware corporation
(the
“Company”),
will be
held
on
April 26, 2018, at
9:00 a.m.
Eastern
Time,
at
the
Company’s
headquarters
located
at
One
Citizens
Plaza, Providence,
Rhode
Island
02903 for
the
following
purposes:
1.
|
The
election
of
the
twelve
directors
named
in
the
accompanying
proxy
statement
to
serve until
the
2019 annual
meeting
or
until
their
successors
are duly
elected
and
qualified;
|
2.
|
Advisory
vote
to
approve
the
Company’s
executive
compensation,
commonly
referred to
as a
“say- on-pay” vote;
|
3.
|
Ratification
of
the
appointment
of
Deloitte
&
Touche
LLP
as
the
Company’s
independent registered
public
accounting
firm for
fiscal
year 2018; and
|
4.
|
The
transaction
of
such
other
business
as
may properly
come
before
the
Annual
Meeting
or any reconvened
meeting
following
any adjournment
or
postponement
thereof.
|
Stockholders
of
record
at
the
close
of
business
on
March 2, 2018 are entitled
to
notice
of,
and
to vote
at,
the
Annual
Meeting.
We
are first
sending
this
proxy
statement
and
the
enclosed
proxy
form to
stockholders
on
or
about
March 16,
2018.
Our board
of
directors
recommends
that
you
vote
FOR
the
election
of
each
of
the
director
nominees named
in
Proposal
No.
1 of
the
proxy
statement,
FOR,
on
an
advisory
basis,
the
Company’s
executive compensation
as
described
in
Proposal
No.
2 of
the
proxy
statement
,
and
FOR
the
ratification
of
the appointment
of
Deloitte
&
Touche
LLP
as
our
independent
registered
public
accounting
firm as described
in
Proposal
No.
3 of
the
proxy
statement.
For
our
Annual
Meeting,
we have
elected
to
use
the
Internet
as
the
primary means
of
providing
our proxy
materials
to
stockholders.
We
will send
to
stockholders
of
record
a
Notice
of
Internet Availability
of
Proxy Materials (the
“Notice”)
with
instructions
for
accessing
the
proxy
materials, including
our
proxy
statement
and
annual
report,
and
for
voting
via
the
Internet.
The
Notice provides
the
information
above
and
also
provides
information
on
how
stockholders
may obtain
paper copies
of
our
proxy
materials
free of
charge.
Electronic
delivery of
our
proxy
materials
significantly reduces
our
printing
and
mailing
costs
and
the
environmental
impact
of
circulating
our
proxy materials.
The
Notice
also
provides
information
on
how
to
vote,
including
how
to
attend
the
meeting and
vote
in
person.
i
You
are cordially
invited
to
attend
the
Annual
Meeting,
but
whether
or
not
you
expect
to
attend
in person,
you
are urged
to
mark,
date
and
sign
your
proxy
card
and
return
it
by
mail
or
follow
the alternative
voting
procedures
described
in
the
Notice
or
the
proxy
card.
|
BY
ORDER
OF THE
BOARD
OF DIRECTORS
|
|
|
Robin
S.
Elkowitz
|
Executive
Vice
President,
Deputy
|
General
Counsel
and
Secretary
|
Stamford,
Connecticut
March 9, 2018
Important notice
regarding
the availability
of
proxy
materials for
the Annual Meeting
of Stockholders
to
be
held on
April 26, 2018:
This notice
of
the Annual Meeting
of
Stockholders,
the accompanying proxy
statement
and our 2017
annual report
to
stockholders
will be
available at www.edocumentview.com/CFG commencing
on
or
about
March
16, 2018.
ii
TABLE OF CONTENTS
TO
PROXY
STATEMENT
PROXY STATEM
ENT
SUMMARY
This
summary
highlights
information
contained
elsewhere
in
this
proxy
statement.
This
summary does
not
contain
all
of
the
information
that
you
should
consider,
and
you
should
read
the
entire proxy
statement
carefully
before
voting.
2018
ANNUAL MEETING
INFORMATION
Date and Time:
|
April 26, 2018, at
9:00 a.m.
Eastern
Time.
|
Place:
|
One
Citizens
Plaza,
Providence,
Rhode
Island
02903.
|
Record
Date:
|
March 2, 2018.
|
Voting:
|
Holders
of
common
stock
are entitled
to
one
vote
per
share.
|
Admission:
|
To
attend
the
meeting
in
person
you
will need
proof
of
your
stock
ownership as
of
the
record
date
and
a
form
of
government-issued
photo
identification. If you are the legal representative of a stockholder, you must also bring a letter from the stockholder certifying (a) the beneficial ownership you represent and (b) your status as a legal representative. We will determine in our sole discretion whether the letter presented for admission meets the above requirements.
|
Date of
Mailing:
|
A
Notice
of
Internet
Availability
of
Proxy Materials (the
“Notice”)
or
this proxy
statement
is
first
being
mailed
to
stockholders
on
or
about
March 16, 2018.
|
MATTERS
TO
BE VOTED ON
AT
THE
2018
ANNUAL MEETING
|
|
|
|
|
PROPOSAL
|
BOARD VOTE
RECOMMENDATION
|
REASON FOR VOTE
RECOMMENDATION
|
PAGE
|
1.
|
Elect
the
following nominees as
directors:
Bruce
Van
Saun,
Mark Casady,
Christine M. Cumming,
Anthony
Di lorio,
William
P.
Hankowsky, Howard
W.
Hanna
III, Leo
I.
(“Lee”)
Higdon, Charles J.
(“Bud”)
Koch,
Arthur
F.
Ryan,
Shivan
S.
Subramaniam,
Wendy
A.
Watson
and
Marita Zuraitis.
|
FOR ALL
|
Our Board believes that its directors represent an appropriate mix of experience and skills relevant to the size and nature of our business.
|
8
|
2.
|
Approve,
on
a
non
-
binding,
advisory
basis,
the
compensation
of
the Company’s
executive
officers
named
in
the
2017 Summary
Compensation
Tabl
e
,
as
disclosed
in
the Compensation
Discussion
and
Analysis,
the
c
ompensation
tables
and
accompanying
narrative.
|
FOR
|
Our Board believes the executive compensation closely aligns the interests of our named executive officers and the interests of our stockholders.
|
29
|
3.
|
Ratify the
selection
of
Deloitte
&
Touche
LLP
as
our
independent registered
public
accounting
firm for
the
2018 fiscal
year.
|
FOR
|
Based on its most recent evaluation, the Audit Committee believes it is in the best interests of the Company and its stockholders to retain Deloitte & Touche LLP.
|
62
|
1
HOW TO
VOTE
Stockholders
of
record
may vote
by
using
the
Internet
or
(if
you
received
a
proxy
card
by
mail)
by mail
as
described
below.
|
|
|
Using
the
Interne
t
.
The
address
of
the
website
for
Internet
voting
can
be found
on
your
proxy
card
or
Notice.
Internet
voting
is
available
24 hours
a
day
and
will be accessible
until
11:59 p.m.
Eastern
Time
on
April
25,
2018. Easy-to-follow
instructions allow
you
to
vote
your
shares
and
confirm
that
your
instructions
have
been
properly recorded.
|
|
By
telephon
e
.
Dial the
number
listed
on
your
proxy
card
or
your
voting instruction
form.
You
will need
the
control
number
included
on
your
proxy
card
or
voting instruction
form.
|
|
By mai
l
.
If you
received
a
proxy
card
by
mail
and
choose
to
vote
by
mail, simply
mark your
proxy
card,
date
and
sign
it,
and
return
it
in
the
postage-paid
envelope
.
|
|
In person
. Stockholders
also
may attend
the
meeting
and
vote
in
person.
|
If you
hold shares
through
a
bank
or
broker,
please
refer to
your
proxy
card,
Notice
or
other
information forwarded
by
your
bank
or
broker
to
see
which
voting
options
are available
to
you.
The
method
you
use
to
vote
will not
limit
your
right
to
vote
at
the
Annual
Meeting
if
you
decide
to attend
in
person.
Written
ballots
will be
passed
out
to
anyone
who
wants
to
vote
at
the
Annual Meeting.
If you
hold
your
shares
in
“street
name”
you
must
obtain
a
proxy,
executed
in
your
favor, from
the
holder
of
record
to
be
able
to
vote
in
person
at
the
Annual
Meeting.
BOARD AND GOVERNANCE HIGHLIGHTS
Our board
of
directors
(the
“Board”)
will consist
of
not
less
than
5 nor
more
than
25 directors, excluding
any directors
elected
by
holders
of
preferred
stock
pursuant
to
provisions
applicable
only
in
the case
of
defaults under the terms of our preferred stock.
The
exact
number
of
directors
will be
fixed
from
time
to
time
by
resolution
of
our Board.
Citizens
Financial
Group,
Inc.
(the
“Company” or
“we” or
“us” or
“our”)
currently has twelve
directors.
The
terms
of
office
of
all
directors
expire
at
the
Annual
Meeting.
2
The
nominees
for
director
all currently serve on our Board and
are as
follows:
|
|
|
|
|
|
Name
|
Age
|
Director Since
|
Occupation
|
Board Committees
|
Independen
t
1
|
Bruce
Van
Saun
|
60
|
2013
|
Chairman and
CEO,
Citizens Financial
|
Executive
(Chair)
Equity
|
No
|
|
|
|
Group,
Inc.
|
|
|
Mark Casady
|
57
|
2014
|
Retired Chairman and
CEO, LPL
Financial
|
Risk
|
Yes
|
|
|
|
Holdings,
Inc.
|
|
|
Christine
M.
Cumming
|
65
|
2015
|
Retired
First
Vice
|
Risk
|
Yes
|
|
|
|
President
and
COO, Federal Reserve
|
|
|
|
|
|
Bank
of
New York
|
|
|
Anthony
Di Iorio
|
74
|
2014
|
Retired
CFO,
|
Audit
|
Yes
|
|
|
|
Deutsche
Bank
AG
|
Governance
|
|
William
P.
Hankowsky
|
66
|
2006
|
Chairman,
President
and
|
Audit
|
Yes
|
|
|
|
CEO,
Liberty
Property Trust
|
Compensation
|
|
Howard
W.
Hanna
III
|
70
|
2009
|
Chairman and
CEO,
|
Audit
|
Yes
|
|
|
|
Hanna
Holdings,
Inc.
|
Governance
|
|
Leo
I.
(“Lee”)
Higdon
|
71
|
2014
|
Past President,
|
Audit
|
Yes
|
|
|
|
Connecticut
College
|
Compensation
|
|
Charles J.
(“Bud”)
Koch
|
71
|
2004
|
Retired
Chairman,
President
and
CEO,
|
Risk
(Chair)
Audit
|
Yes
|
|
|
|
Charter One
Bank
|
|
|
Arthur
F.
Ryan
|
75
|
2009
|
Retired
Chairman,
CEO and President,
Prudential
Financial,
Inc.
|
Compensation
(Chair)
Governance
Executive
|
Yes
|
Sh
iva
n
S.
Sub
rama
n
iam
|
69
|
2005
|
Retired Chairman,
FM Global
|
Governance
(Chair)
Risk
Executive
|
Yes
|
Wendy
A.
Watson
|
69
|
2010
|
Former
Executive
Vice
|
Audit
(Chair)
|
Yes
|
|
|
|
President,
Global
Services, State
Street
|
Compensation
Risk
|
|
|
|
|
Bank
&
Trust Company
|
|
|
Marita Zuraitis
|
57
|
2011
|
Director,
President
and
CEO, The
Horace
|
Risk
|
Yes
|
|
|
|
Mann
Companies
|
|
|
Additional
information
about
the
director
nominees
can
be
found
beginning
on
page
9.
|
1
|
Under
NYSE
and
SEC
independence
standards.
|
3
We
believe
that
our
directors
represent an
appropriate
and diverse
mix
of
experience and
skills relevant
to
the
size
and
nature
of
our
business.
|
|
Board Skills and Expertise
|
✓
CEO experience
✓
CFO experience
✓
Retail Banking
✓
Financial Services Industry
✓
Finance/Capital Management
✓
Risk Management
|
✓
Compliance/Regulatory
✓
Technology
✓
Data Analytics
✓
Insurance
✓
Real Estate
✓
Academia
|
|
|
|
|
Board and Governance Key Facts
|
Size of Board
|
12
|
Classified Board
|
No
|
Number of Independent Directors
|
11
|
Lead Independent Director
|
Yes
|
Board meetings held in 2017
|
10
|
Majority Voting for Directors
|
Yes
|
Director Election Term (years)
|
1
|
Tenure Limits
|
No
|
Average Director Age
|
67
|
Mandatory Retirement Age Policy
|
Yes
|
Annual Board & Committee Evaluation
|
Yes
|
Executive Sessions of Independent Directors
|
Yes
|
Board Orientation & Continuing Education Program
|
Yes
|
Limit service on other public company boards
|
Yes
|
Stock Ownership Guidelines
|
Yes
|
Succession Planning Process
|
Yes
|
Stockholder Outreach
|
Yes
|
Diversity & Inclusion Program
|
Yes
|
Political Contributions Policy
|
Yes
|
|
|
4
PERFORMANCE HIGHLIGHTS
– OUR JOURNEY TO SUSTAINABLE GROWTH
Prior to our initial public offering in September 2014 and subsequent separation from The Royal Bank of Scotland Group plc, our performance was well-behind peers and there had been underinvestment in strategic initiatives, technology and talent over a number of years. With the onboarding of Bruce Van Saun as our chief executive officer in October 2013, we outlined an aggressive turnaround plan focused on investing in infrastructure, products and talent, growing revenue and managing expenses in preparation for and following our initial public offering.
Over the past three years, we have executed well on our turnaround plan and
have met or exceeded analyst expectations
for 14 consecutive quarters.
In addition, we have built a solid foundation with additional levers available to us for continued performance improvement.
2017 Year-end Strategic Achievements
|
IPO-based medium-term targets
|
|
|
2017 GAAP results
|
|
|
2017 Underlying results*
|
|
|
|
4Q17 GAAP results
|
|
|
4Q17 Underlying results*
|
|
|
GAAP improvement since 3Q13
|
|
|
Underlying improvement since 3Q13
*
|
|
ROTCE*
|
|
10.0%
|
|
|
|
12.3%
|
|
|
|
9.8%
|
|
|
|
19.9
|
%
|
|
|
10.4%
|
|
|
|
15.6%
|
|
|
|
6.1%
|
|
ROTA*
|
1.0%+
|
|
|
|
1.2%
|
|
|
|
0.9%
|
|
|
|
1.8
|
%
|
|
|
1.0%
|
|
|
|
1.3%
|
|
|
|
0.4%
|
|
Efficiency ratio*
|
~60.0%
|
|
|
|
60.9%
|
|
|
|
60.0%
|
|
|
|
60.5
|
%
|
|
|
58.5%
|
|
|
|
8.0%
|
|
|
|
10.0%
|
|
•
|
Generated net income available to common stockholders of $1.6 billion, up 59% from 2016 and Adjusted/Underlying basis* net income available to common stockholders of $1.3 billion, up 28%
|
|
•
|
Improved ROTCE by 461 basis points from prior year and 219 basis points on an Adjusted/Underlying basis*
|
|
|
|
|
|
•
|
Grew diluted earnings per common share of $3.25 by 65% from 2016 and Adjusted/Underlying basis* diluted earnings per common share of $2.58 by 34%
|
|
•
|
We returned $1.1 billion to common stockholders in 2017, including dividends and share repurchases, up 70% from 2016
|
|
|
|
|
|
•
|
Revenue growth of 9% versus prior year, or 10% on an Adjusted/Underlying basis* with expense growth of just 4%, or 3% on an Adjusted/Underlying basis*
|
|
•
|
Strong CET1 ratio of 11.2% allows for attractive loan growth and continued capital returns to stockholders
|
|
|
|
|
|
•
|
Positive operating leverage helped drive improvement in the efficiency ratio of 293 basis points from prior year and 396 basis points on an Adjusted/Underlying basis*
|
|
•
|
Continued focus on delivering enhanced returns to stockholders through commitment to continuous improvement and positive operating leverage
|
|
|
|
|
|
*
Key Performance Metrics (KPMs) are used by management to gauge our performance and progress over time in achieving our
|
|
strategic and operational goals and also in comparing our performance against our peers. Underlyin
g results, Adjusted results
|
|
and Adjusted
/Underlying
results are considered non-GAAP financial measures and exclude certain notable items, where
|
|
applicable. Adjusted
, Underlying and Adjusted/Underlying
KPMs are considered non-GAAP financial measures. For
additional
|
|
information on
our use of
KPMs and non-GAAP financial measures
,
see
pages
41-42
of
our 2017 Annual Report on Form 10-K, in
|
|
the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Introduction
—
K
ey
|
|
Performance Metrics Used by Management and Non-GAAP Financial Measures” and pages 45-50 of our 2017 Annual Report on
|
|
Form 10-K, in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations
—
Key
|
|
Performance Metrics, Non-GAAP Financial Measures and Reconciliations”
of Part II, Item 7.
See Appendix A to this Proxy
|
|
Statement for calculations of KPMs and reconciliations of non-GAAP financial measures used herein
.
|
|
5
Beyond Our Financial Performance
Since our initial public offering, we have also made significant progress in how we run the Company:
|
•
|
Exercised strong financial discipline, with a mindset of continuous improvement that has delivered efficiencies to self-fund investments and strategic initiatives to better serve customers and grow revenues. We have utilized new technologies to deliver more effective service delivery at lower costs.
|
|
•
|
Disciplined execution
against
major
growth
initiatives with expanded capabilities
in
key fee
income
businesses,
including
Capital
& Global
Markets, Mortgage,
Wealth and
Treasury Solutions.
|
|
•
|
Strong
progress
on
advancing
strategic
capabilities
using
digital
technologies
and Fintech partnerships
to
create
better
experiences
for
our
customers.
|
|
•
|
Attracting high caliber talent in order to further strengthen the senior leadership team while developing existing leaders and talent.
|
|
•
|
Continued
momentum
in
creating a value-driven, customer centric culture. Our goal is to achieve a peer leading employee, customer and community experience.
|
|
•
|
Further progress in building a strong risk management culture, which has resulted in an improved control environment, as well as significant advancements in our regulatory agenda, including effectively remediating and terminating regulatory actions and receipt
of
a
non-objection
to
our
Comprehensive Capital Analysis and Review (
CCAR) submission
for
the
third
year in
a
row.
|
While we recognize there is much remaining to achieve, these milestones signify meaningful progress toward becoming a top-performing bank. We believe we have the strategy, vision, capabilities and talent to continue to deliver strong performance that meets rising stockholder expectations.
6
COMPENSATION
HIGHLIGHTS
|
|
Completion of Evolution from UK-Influenced Compensation Program
|
We have completed our evolution from a UK-influenced compensation program under our previous ownership by RBS, to a compensation program designed to be consistent with US market and regulatory standards. This evolution has included the elimination of role-based allowances which rebalanced variable compensation and fixed pay (starting with compensation for the 2016 performance year), the negotiation of a new employment agreement with Mr. Van Saun in May 2016 more closely aligned to US practice, and the vesting of the final installment of converted RBS-granted equity in March 2017.
|
|
|
Executive Pay Mix Aligned with Stockholder Interests
|
Our executive pay mix is aligned with stockholder interests by delivering 60%-70% of variable compensation in the form of long-term awards. Of our long-term awards, 50%-70% are delivered in the form of performance stock units with a three-year performance period (with our CEO and most of our named executive officers receiving 70% of long-term awards in the form of performance stock units).
|
|
|
|
|
Bonus Funding Determined Based on Balanced Review of Company Performance
|
The Compensation and Human Resources Committee (the “Compensation Committee”) determines overall bonus funding based on a number of performance factors, including the Company’s financial performance, risk performance, progress against strategic priorities, delivery to stakeholders, performance relative to peers, and funding as a percentage of
pre-tax, pre-incentive operating profit.
|
|
|
Executive Compensation Decisions Consider Various Performance Dimensions, Including the Consideration of Risk Performance at Various Levels
|
The Compensation Committee determines executive compensation based on an evaluation of Company, business/function and individual performance, through the use of a scorecard reflecting the following dimensions: financial
and
overall business performance; risk and
control;
customer outcomes; strategic
initiatives;
and
development/leadership of employees.
Our executives,
including
our named executive officers,
are also
subject
to
an annual
risk assessment
by
our
Chief Risk
Officer,
the
results
of
which
are considered
by
the Compensation
Committee when making compensation decisions.
|
|
|
Pay Practices Demonstrate Good Governance
|
We believe our pay practices demonstrate our commitment to good governance, including but not limited to:
•
Clawback Process:
We have a process whereby events having a material adverse impact on the Company are reviewed for potential impact on compensation.
•
Incentive Plan Review Process:
Our compensation plans are subject to a robust governance process requiring approval for changes by all control partners (including risk, legal, human resources, and finance). The plans are subject to a risk review by the Compensation Committee on an annual basis, and a risk review by an independent third party every three years.
•
No Single Trigger Payments:
We do not provide for any single trigger severance payments upon a change of control, and do not offer tax gross-ups on executive benefits.
|
7
CORPORATE
GOVERNANCE
PROPOSAL 1
-
ELECTION OF DIRECTORS
Our Charter and
Bylaws provide
that
the
Board
shall
consist
of
not
less
than
5 nor
more
than 25 directors,
excluding
any directors
elected
by
holders
of
preferred
stock
pursuant
to
provisions applicable
only
in
the
case
of
defaults
under
the
terms
of
our
preferred
stock.
The
Board will fix the
exact
number
of directors
from
time
to
time and has currently fixed
the
current number
of
directors
at
twelve.
At
each
annual
meeting,
directors
are elected
to
hold
office
for
a
term
expiring at
the
next
annual
meeting.
The Board
has
nominated
the
twelve
directors currently serving on the Board
for
election
at
the
Annual Meeting
to
serve until
the
2019 annual
meeting
or
until
their
respective
successors
are duly
elected and
qualified.
If any nominee
is unable
to
serve as
a
director,
the
Board
by
resolution
may reduce
the number
of
directors
or
choose
a
substitute
nominee.
We
are not
aware of
any nominee
who
will be
unable
to
or
will not
serve as
a
director.
Our Bylaws provide
for
the
election
of
directors
by
a
majority of
the
votes
cast
in
an
uncontested
election.
This
means
that
the
twelve
individuals
nominated
for election
to
the
Board
must
receive more
“FOR” than
“AGAINST” votes
(among
votes
properly
cast
in person,
electronically
or
by
proxy)
to
be
elected.
Abstentions
and
broker
non-votes
are not considered
votes
cast
for
the
foregoing
purpose,
and
will have
no
effect
on
the
election
of
nominees. Proxies
cannot
be
voted
for
a
greater
number
of
persons
than
the
number
of
nominees
named.
There is
no
cumulative
voting.
If you
sign
and
return
the
accompanying
proxy
card,
your
shares
will be voted
for
the
election
of
the
twelve
nominees
recommended
by
the
Board
unless
you
choose
to
vote against
any of
the
nominees
or
abstain
from
voting.
If any nominee
for
any reason
is
unable
to
serve or
will not
serve,
proxies
may be
voted
for
such
substitute
nominee
as
the
proxy
holder
may determine.
If the
election
of
directors
is
not
an
uncontested
election,
directors
are elected
by
a
plurality
of
the votes
cast.
Our Bylaws also
provide
that
directors
may be
removed,
with
or
without
cause,
by
an
affirmative vote
of
shares
representing
a
majority
of
the
outstanding
shares
then
entitled
to
vote
at
an
election of
directors.
Any vacancy occurring
on
our
Board
and
any newly created
directorship
may be
filled only
by
a
vote
of
a
majority
of
the
remaining
directors
in
office.
Biographical
information
about
the
nominees
for
director,
including
information
about
their qualifications
to
serve as
a
director, is
set
forth
below.
8
Nomi
nees
Bruce Van Saun
|
|
Mark Casady
|
|
Chairman and Chief Executive Officer, Citizens Financial Group, Inc.
Age: 60
Director Since: 2013
Committees: Executive (Chair); Equity
|
|
|
Retired Chairman and Chief Executive Officer, LPL Financial Holdings, Inc.
Age: 57
Director Since: 2014
Committees: Risk
|
Experience, Skills and Qualifications
• Experienced executive in the financial services industry, extensive financial background and service on the boards of other public companies
• Additional role as our Chief Executive Officer brings management’s perspective to Board deliberations and provides valuable information about the status of day-to-day operations
|
|
Experience, Skills and Qualifications
• Compliance and risk experience as an executive in the financial services industry and service on the board of governors of Financial Industry Regulatory Authority (FINRA)
• Expertise in the area of wealth management and brokerage including experience as retired Chairman and Chief Executive Officer of LPL Financial Holdings, Inc.
• Knowledge of technology and innovation through his service on the board of Eze Software Group and data management and analysis through his role at Vestigo Ventures
|
Background
Before joining the Company as Chairman and CEO, Mr. Van Saun served as The Royal Bank of Scotland Group plc Finance Director and was a member of its board of directors from October 2009 to October 2013. From 1997 to 2008, Mr. Van Saun held a number of senior positions with The Bank of New York and later The Bank of New York Mellon, including Vice Chairman and Chief Financial Officer. Earlier in his career, he held senior positions with Deutsche Bank, Wasserstein Perella Group and Kidder Peabody & Co. In all, Mr. Van Saun has more than 30 years of financial services experience. Mr. Van Saun has also served on the boards of directors of our subsidiaries Citizens Bank, N.A. (“CBNA”) and Citizens Bank of Pennsylvania (“CBPA”) since October 2013. Mr. Van Saun joined the board of directors of Moody’s Corporation on March 1, 2016 and serves on the Audit and Governance and Compensation Committees. He also sits on the Federal Advisory Council and is a member of The Clearing House supervisory board, and serves on the boards of Jobs for Massachusetts, the Partnership for Rhode Island, and the National Constitution Center. Previous directorships held by Mr. Van Saun in both the United Kingdom and United States include Lloyds of London (from September 2012 to May 2016), Direct Line Insurance Group plc (from April 2012 to October 2013), WorldPay (Ship Midco Limited) (from July 2011 to September 2013) and ConvergEx Inc. (from May 2007 to October 2013). Mr. Van Saun received a B.S. in Business Administration from Bucknell University in 1979 and an M.B.A. in Finance and General Management from the
University of North Carolina in 1983.
|
Background
Mr. Casady is the retired Chairman and Chief Executive Officer of LPL Financial Holdings Inc (“LPL Financial”). Mr. Casady retired as LPL Financial CEO in early January 2017 and as non-executive chairman of the board in early March 2017. He joined LPL Financial in May 2002 as Chief Operating Officer, became President in April 2003 and Chairman and Chief Executive Officer in December 2005. During his time there, he guided LPL to become a leading financial services organization that serves independent financial advisors, banks, and credit unions, and provides clearing services to broker/dealers at financial services companies. Before joining LPL Financial in 2002, Mr. Casady was managing director of the mutual fund group for Deutsche Asset Management, Americas - formerly Scudder Investments which he joined in 1994. Prior to Scudder, he held roles at Concord Financial Group, a start-up funded by Hambrecht & Quist that went public, and started his career at Northern Trust. Mr. Casady co-founded Vestigo Ventures in 2016 with a focus on financing start -ups in FinTech. He is general partner and chairman of the advisory board. He is also a member of the board of the EZE Software Group and serves as an advisor to Jobcase, Inc. He is a former member of the Financial Industry Regulatory Authority (FINRA) Board of Governors and former Chairman of the Insured Retirement Institute. Mr. Casady has also served on the boards of our subsidiaries CBNA and CBPA since June 2014. Mr. Casady received a B.S. from Indiana University and his M.B.A. from DePaul University.
|
9
Christine M. Cumming
|
|
Anthony Di Iorio
|
|
Retired First Vice President and Chief Operating Officer, Federal Reserve Bank of New York
Age:
65
Director Since:
2015
Committees:
Risk
|
|
|
Retired
Chief Financial
Officer,
Deutsche
Bank
AG
Age:
74
Director Since:
2014
Committees:
Audit;
Nominating
&
Corporate
Governance
|
Experience, Skills
and Qualifications
• Seasoned
bank
regulatory
executive,
including
as
First
Vice
President
and
Chief Operating
Officer with
the
Federal
Reserve
Bank
of
New York
• Extensive
background
in
risk management,
technology,
monetary
policy
and
bank
supervision
• Experience
in
crisis management
as
chair
of
the
Cross-Border
Crisis Management
Group
for
the Resolution
Steering
Group
of
the
G-20’s
Financial
Stability
Board
|
|
Experience, Skills
and Qualifications
• Experienced
executive
in
the
financial
services industry,
including
serving
as
Chief Financial Officer and
board
member
of
Deutsche
Bank
• Extensive
financial
and
accounting
background
and
service on
the
boards
of
other
public companies
|
Background
Until
her
retirement
in
June
2015, Ms.
Cumming
was First
Vice
President
of
the
Federal
Reserve
Bank of
New York
(“FRBNY”),
the
second
ranking
officer
in
the
FRBNY,
and
served
as
its
Chief Operating Officer,
as
well as
an
alternate
voting
member
of
the
Federal
Open
Market Committee.
Prior to holding
that
position,
Ms.
Cumming
was executive
vice
president
and
director
of
research with responsibility
for
the
Research
and
Market Analysis Group.
Previously,
she
served
as
senior
vice president
responsible
for
the
Bank
Analysis and
Advisory
and
Technical
Services
Functions
in
the Bank
Supervision
Group.
In 1992, she
was appointed
vice
president
and
assigned
to
Domestic
Bank Examinations
in
Bank
Supervision.
She
also
was active
in
the
work of
the
Basel
Committee,
including as
co-chair
of
the
Risk
Management
Group
and
chair
of
the
task
forces
on
supervisory
matters
for
the Joint
Forum,
made
up
of
banking,
securities
and
insurance
regulators.
From
2011 to
April
2015, Ms.
Cumming
chaired
the
Cross-Border
Crisis Management
Group,
which
coordinated
recovery and resolution
planning
for
large,
global
financial
institutions
for
the
Resolution
Steering
Group
of
the G-20’s
Financial
Stability
Board.
Ms.
Cumming
joined
the
FRBNY’s
staff
in
September
1979 as
an economist
in
the
International
Research
D
epartment,
and
later
in
the
FRBNY’s
International
Capital Markets staff.
Ms.
Cumming
also
serves
on
the
board
of
American
Family Insurance
Mutual Holding Company
which
she
joined in
February 2016 and
teaches
part
time
at
Colombia
University’s SIPA and
Rutgers
University. She
has also
served
on
the
boards
of
our
subsidiaries
CBNA and
CBPA since
October
2015. Ms.
Cumming
holds both
a
B.S.
and
Ph.D in
economics
from
the
University of
Minnesota.
|
Background
Mr.
Di lorio
began
his
career at
Peat Marwick (KPMG)
where he
worked
in
the
firm’s
Financial Institutions
Practice in
New York
and
Chicago.
After
leaving
Peat Marwick, he
worked
for
several leading
financial
institutions,
including
as
Co-controller
of
Goldman
Sachs,
Chief Financial
Officer of the
Capital
Markets business
of
NationsBank
(Bank
of
America),
Executive
Vice
President
of
Paine Webber
and
Chief Executive
Officer of
Paine Webber
International.
He joined
Deutsche
Bank
in Frankfurt
in
2001 and
later
became
Chief Financial
Officer and
a
member
of
its
board
of
directors and
group
executive
committee.
After
retiring
from
Deutsche
Bank
in
2008, he
served
as
senior adviser
to
Ernst
&
Young
working
with
the
firm’s
financial
services partners
in
the
United
Kingdom, Europe,
the
Middle
East
and
Africa.
Mr.
Di lorio
has
also
served
on
the
boards
of
directors
of
our subsidiaries
CBNA and
CBPA since
January
2014 and
served
as
a
director
on
the
board
of
our
former affiliate,
The
Royal
Bank
of
Scotland
Group
plc
from
September
2011 to
March 2014. Mr.
Di Iorio received
a
Bachelor
of
Business
Administration
from
lona
College
and
an
M.B.A.
from
Columbia University.
|
10
William P. Hankowsky
|
|
Howard H. Hanna III
|
|
Chairman,
President
and
Chief Executive
Officer,
Liberty
Property Trust
Age:
66
Director Since:
2006
Committees:
Audit;
Compensation
|
|
|
Chairman and
Chief Executive
Officer,
Hanna
Holdings,
Inc.
Age:
70
Director Since:
2009
Committees:
Audit;
Nominating
&
Corporate
Governance
|
Experience, Skills
and Qualifications
• Extensive
business
and
management
expertise,
particularly
in
the
real estate
sector
as
Chief Executive
Officer of
Liberty
Property Trust
and
as
President
of
the
Philadelphia
Industrial Development
Corporation
• Service
on
the
boards
of
other
public
companies
and
numerous
non-profit
entities
|
|
Experience, Skills
and Qualifications
• Extensive
business
and
management
expertise,
particularly
in
the
real estate
and
mortgage origination
sectors
• Compliance
and
regulatory
experience
serving
on
the
board
of
directors
of
the
Federal
Reserve Bank
of
Cleveland’s
Pittsburgh
office
• Service
on
the
boards
of
numerous
non-profit
entities
and
academic
institutions
|
Background
Mr.
Hankowsky is
the
Chairman,
President
&
CEO of
Liberty
Property Trust.
He joined
Liberty
in January
2001 as
Chief Investment
Officer and
was responsible
for
refining
the
company’s
corporate strategy
and
investment
process.
In 2002, he
was named
President,
and
in
2003, was appointed
Chief Executive
Officer and
elected
Chairman of
Liberty’s
board
of
trustees.
Prior to
joining
Liberty, Mr.
Hankowsky served
for
11 years as
President
of
the
Philadelphia
Industrial
Development Mr.
Hankowsky currently serves on
the
boards
of
Aqua
America Inc.
(since
2004),
Delaware River Waterfront
Corporation,
Greater
Philadelphia
Chamber
of
Commerce,
Philadelphia
Convention
and
Visitors
Bureau,
Pennsylvania Academy
of
the
Fine Arts,
Philadelphia
Shipyard
Development
Corporation
and
United
Way
of
Greater
Philadelphia
and Southern
New Jersey.
He has
also
served
on
the
boards
of
directors
of
our
subsidiaries
CBNA and CBPA since
November
2006. Mr.
Hankowsky received
a
B.A.
in
economics
from
Brown
University.
|
Background
Mr.
Hanna
is
the
Chairman and
Chief Executive
Officer of
Hanna
Holdings,
Inc.
He became
a
sales associate
in
1970 and
the
General
Manager
of
Howard
Hanna
Real
Estate
Services
in
1974. Mr.
Hanna became
Chief Operating
Officer of
Howard
Hanna
Real
Estate
Services
and
its
parent
company, Hanna
Holdings,
Inc.
when
the
company
incorporated
in
1979 and
then
became
President
in
1983 and Chief Executive
Officer in
1990. Howard
Hanna
Real
Estate
Services,
Inc.
offers
mortgage
origination products
and
services in
certain
geographies
and,
in
this
capacity,
competes
with
us
in
Pennsylvania, Ohio,
Michigan,
Virginia,
West
Virginia,
North
Carolina,
New York
and
Maryland.
Mr.
Hanna
currently serves as
the
Chair of
the
Children’s
Hospital
of
Pittsburgh
Board
of
Trustees
and
is
a
member
of
the hospital’s
Foundation
Board
and
Finance
and
Investment
Committee.
Mr.
Hanna
also
serves on
the boards
of
LaRoche
College,
the
Katz
Graduate
School
of
Business
Board
of
Visitors,
the
University of Pittsburgh,
the
University of
Pittsburgh
Medical
Center Health
System,
the
Diocese
of
Pittsburgh Finance
Council
and
the
YMCA of
Greater
Pittsburgh.
From
2007 to
2012, he
served
on
the
board
of directors
of
the
Federal
Reserve
Bank
of
Cleveland’s
Pittsburgh
office.
Mr.
Hanna
has
also
served
on the
boards
of
directors
of
our
subsidiaries
CBNA and
CBPA since
June
2009. Mr.
Hanna
received
a B.S.
from
John
Carroll University in
1969.
|
11
Leo I. (“Lee”) Higdon
|
|
Charles J. (“Bud”) Koch
|
|
Past President,
Connecticut
College
Age:
71
Director Since:
2014
Committees:
Audit;
Compensation
|
|
|
Retired Chairman President
and
Chief Executive
Officer,
Charter One
Bank
Age:
71
Director Since:
2004
Committees:
Risk (Chair);
Audit
|
Experience, Skills
and Qualifications
• Experienced
executive
in
the
financial
services industry,
including
serving
as
Managing
Director and
Vice
Chairman of
Salomon
Brothers
Inc.
• Service
on
the
boards
of
other
public
companies,
including
as
non-executive
Chairman of Encompass Health
Corporation
and
as
lead
director
of
Eaton
Vance
Corporation
• Experience
in
academic
institutions,
including
as
Past President
of
Connecticut
College,
Dean of the
Darden
Graduate
School
of
Business
Administration
at
the
University of
Virginia
|
|
Experience, Skills
and Qualifications
• Veteran
executive
in
the
financial
services industry,
particularly
in
the
retail
banking
sector, including
position
as
Chief Executive
Officer of
Charter One
Financial
• Regulatory
experience
from
service on
the
board
of
the
FHLB
of
Cincinnati
• Service
on
the
boards
of
other
public
companies
and
academic
institutions
|
Background
From
2006 to
2013, Mr.
Higdon
was the
President
of
Connecticut
College.
He serves on
the
board
of directors
of
Eaton
Vance
Corporation
(since
2000) where he
is
currently lead
director,
and Encompass Health
Corporation
(since
2004) where he
is
currently the
non-executive
Chairman.
From
2001 to
2006, he
was the
President
of
the
College
of
Charleston.
Prior to
becoming
President
of
the College
of
Charleston,
Mr.
Higdon
was the
President
of
Babson
College
and
the
Dean of
the
Darden Graduate
School
of
Business
Administration
at
the
University of
Virginia.
Mr.
Higdon
spent
over
20 years at
Salomon
Brothers
Inc,
holding
various
positions,
including
Managing
Director and
Vice Chairman.
In addition,
Mr.
Higdon
previously
served
on
the
boards
of
directors
of
Bestfoods,
Inc., Chemtura
Corporation
and
Newmont
Mining
Corporation.
Mr.
Higdon
currently serves on
the
board
of Charleston
Symphony
Orchestra which
he
joined
in
August
2016. He has
also
served
on
the
boards
of our
subsidiaries
CBNA and
CBPA since
August
2014. Mr.
Higdon
received
a
B.A.
in
history
from Georgetown
University and
a
M.B.A.
in
Finance
from
the
University of
Chicago.
|
Background
Mr.
Koch
is
the
retired
Chairman and
Chief Executive
Officer of
Charter One
Financial
and
its subsidiary
Charter One
Bank
(“Charter One”).
He served
as
Charter One’s
Chief Executive
Officer from
1987 to
2004 and
as
its
Chairman from
1995 to
2004, when
the
bank
was acquired
by
The
Royal Bank
of
Scotland
Group
plc.
Mr.
Koch
has
served
on
the
boards
of
directors
of
our
subsidiaries
CBNA and
CBPA since
September
2004. He also
served
on
the
board
of
directors
of
our
former
affiliate,
The Royal
Bank
of
Scotland
Group
plc
from
2004 until
February 2009. Mr.
Koch
has
been
a
director
of Assurant
Inc.
(AIZ)
since
August
2005, and
is
currently a
member
of
the
Assurant
Finance
and
Risk Committee
which
he
chaired
from
2005 to
2014, as
well as
a
member
of
its
Compensation Committee.
He has
been
a
director
of
the
Federal
Home
Loan
Bank
(“FHLB”)
of
Cincinnati
since 1990. He was Chairman of
the
Board
of
the
FHLB
of
Cincinnati
from
2005 to
2006, and
currently serves on
its
Risk,
Compensation,
and
Nomination
and
Governance
Committees.
His long
tenure
on the
FHLB
of
Cincinnati
Board
has
been
interrupted
twice,
for
a
total
of
three
years, due
to
term limitations.
Mr.
Koch
serves as
a
trustee
of
Case Western
Reserve
University, and
he
served
as
its Chairman of
the
Board
from
2008 to
2012. He is
also
a
past
Chairman of
the
Board
of
John
Carroll University. Mr.
Koch
is
a
Graduate
of
Lehigh
University with
a
B.S.
in
Industrial
Engineering
and earned
a
M.B.A.
from
Loyola
College
in
Baltimore,
Maryland.
|
12
Arthur F. Ryan
|
|
Shivan Subramaniam
|
|
Retired
Chairman,
Chief Executive
Officer and
President,
Prudential
Financial,
Inc.
Age:
75
Director Since:
2009
Lead Director
Committees:
Compensation
(Chair);
Nominating
&
Corporate
Governance; Executive
|
|
|
Retired Chairman,
FM Global
Age:
69
Director Since:
2005
Committees:
Nominating
&
Corporate
Governance
(Chair);
Risk;
Executive
|
Experience, Skills
and Qualifications
• Veteran
executive
in
the
financial
services industry,
including
position
as
Chief Executive
Officer of
Prudential
Financial,
Inc.
• Extensive
experience
in
the
retail
banking
sector
as
President
and
Chief Operating
Officer of
Chase Manhattan
Bank
• Service
on
the
boards
of
other
public
companies
|
|
Experience, Skills
and Qualifications
• Extensive
business
and
management
expertise,
including
serving
as
Chairman and
Chief Executive Officer of
FM Global
• Particularly expertise
in
the
Insurance
sector
with
over
40 years industry
experience
• Service
on
the
boards
of
directors
of
FM Global,
Lifespan
Corporation
and
LSC
Communications
|
Background
Mr.
Ryan
is
the
retired Chairman,
Chief
Executive
Officer and
President
of
Prudential
Financial,
Inc. (“Prudential”)
After
13 years at
Prudential,
he
retired
as
Chief Executive
Officer and
President
in 2007 and
he
retired
as
Chairman in
May 2008. Prior to
joining
Prudential
in
1994, Mr.
Ryan
worked
at Chase Manhattan
Bank
(“Chase
Manhattan”)
for
22 years. He ran
Chase Manhattan’s
worldwide
retail bank
between
1984 and
1990 and
became
President
and
Chief Operating
Officer in
1990. Mr.
Ryan has
served
on
the
boards
of
directors
of
our
subsidiaries
CBNA and
CBPA since
April
2009 and
also served
(from
October
2008 to
September
2013) as
a
director
on
the
board
of
our
former
affiliate, The
Royal
Bank
of
Scotland
Group
plc.
He also
has
served
as
a
non-executive
director
of
Regeneron Pharmaceuticals,
Inc.
since
January
2003.
|
Background
Mr.
Subramaniam
was
Chairman of
Factory
Mutual
Insurance
Company,
a
commercial
and industrial
property
insurer
from
2002 until December 2017 and
also
served
as
President
and
Chief Executive
Officer from 1999 until
his
retirement
at
the
end
of
2014. Previously,
Mr.
Subramaniam
served
as
Chairman and Chief Executive
Officer at
Allendale
Insurance,
a
predecessor
company
of
FM Global.
Elected president
of
Allendale
in
1992, he
held
a
number
of
senior-level
positions
in
finance
and management
after
joining
the
company
in
1974. Mr.
Subramaniam’s
career spans
nearly 40 years in the
insurance
industry.
He has
served
on
the
board
of
directors
of
FM Global since 1999,
LSC
Communications
since
October 2016 and
Lifespan
Corporation
since
December 2006. He is
also
a
director
of
the
Rhode
Island
Public
Expenditure
Council.
Mr.
Subramaniam
has
also
served
on
the boards
of
directors
of
our
subsidiaries
CBNA and
CBPA since
January
2005. Mr.
Subramaniam
received a
bachelor’s
degree
in
mechanical
engineering
from
the
Birla
Institute
of
Technology,
Pilani,
India, and
two
master’s
degrees—one
in
operations
research from
the
Polytechnic
at
New York
University, and
another
in
management
from
the
Sloan
School
of
Management
at
the
Massachusetts
Institute
of Technology.
|
13
Wendy A. Watson
|
|
Marita Zuraitis
|
|
Retired
Executive
Vice
President,
Global
Services,
State
Street
Bank
&
Trust Company
Age:
69
Director Since:
2010
Committees:
Audit
(Chair);
Compensation;
Risk
|
|
|
Director,
President
and
Chief Executive
Officer,
The
Horace
Mann
Companies
Age:
57
Director Since:
2011
Committees:
Risk
|
Experience, Skills and Qualifications
• Experienced executive in the financial services industry and extensive financial background, including serving as Executive Vice President, Global Services for State Street Bank & Trust Company
• Fellowship with the National Association of Corporate Directors and credentials as a CPA and Certified Fraud Examiner
• Advanced Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization
|
|
Experience, Skills and Qualifications
• Seasoned executive in the financial services industry, particularly in the insurance sector as Chief Executive Officer of The Horace Mann Educators Corporation
• Over 30 years of insurance industry experience
• Service on the boards of other companies and academic institutions
|
Background
Until her retirement in 2009, Ms. Watson was the Executive Vice President, Global Services for State Street Bank & Trust Company which she joined in 2000. Previously, Ms. Watson was with the Canadian Imperial Bank of Commerce where she served as Head of the Global Private Banking and Trust business and President & Chief Executive Officer CIBC Finance. She has also served as Chief Information Officer and as Head of Internal Audit for Confederation Life Insurance Company in Toronto. Ms. Watson began her career in the audit department of Sun Life Assurance Company in Canada. She has served as a director of MD Financial Holdings (CMA Holdings) Canada since 2010, DAS Canada Insurance Company (a subsidiary of Munich Re) since 2010, the Independent Order of the Foresters Life Insurance Company since 2013 and MD Private Trust (a subsidiary of MD Financial Holdings) since 2015. Ms. Watson’s years of board service also include Chair of the board of two of State Street Bank’s multi-national entities—State Street Syntel Private Ltd (India) and State Street Syntel Services Ltd (Mauritius). She currently serves on the Community Service Committee of Boston Children’s Hospital and the Advisory Board of Empathways. Ms. Watson has also served on the boards of directors of our subsidiaries CBNA and CBPA since October 2010. In addition to her corporate directorship roles, Ms. Watson is also currently a member of the Editorial Board of the “Intelligent Outsourcer” Journal and has served as a member of the board of directors of the Women’s College Hospital and the Women’s College Hospital Foundation in Toronto. Ms. Watson is a magna cum laude graduate of McGill University in Montreal with a Bachelor of Commerce degree with majors in Accounting and Law.
|
Background
Ms. Zuraitis is Director, President and Chief Executive Officer of The Horace Mann Educators Corporation. Prior to joining Horace Mann in May 2013, Ms. Zuraitis served as Executive Vice President and a member of the Executive Leadership Team for The Hanover Insurance Group, Inc. While at The Hanover Insurance Group, Ms. Zuraitis served as President, Property and Casualty Companies, responsible for the personal and commercial lines of operation at Citizens Insurance Company of America, The Hanover Insurance Company and their affiliates, a position she held since 2004. Prior to 2004, she was President and Chief Executive Officer, Commercial Lines for The St. Paul Travelers Companies. Previously, she held underwriting and field management positions with United States Fidelity and Guaranty Company and Aetna Life and Casualty. Ms. Zuraitis has over 30 years of experience in the insurance industry. She has served as a member of the board of trustees for the American Institute for Chartered Property and Casualty Underwriters, and has been a member of the executive and the compensation committees since June 2009. Ms. Zuraitis has also served on the boards of directors of our subsidiaries CBNA and CBPA since May 2011. She is a past Chairperson of the board of trustees for NCCI Holdings, Inc., a provider of workers’ compensation data analytics based in Boca Raton, Florida and a past member of the board of Worcester Academy in Worcester, Massachusetts. Ms. Zuraitis is a graduate of Fairfield University and completed Advanced Executive Education Program at the Wharton School of Business and the Program on Negotiations at Harvard University.
|
14
BOARD GOVERNANCE
AND OVERSIGHT
The
following
sections
provide
an
overview
of
our
board
governance
structure
and
processes.
Among other
topics,
we describe
how
we select
directors,
how
we consider
the
independence
of
our directors
and
key aspects
of
our
Board
operations.
Corporate
Governance
Guidelines,
Committee
Charters
and Code
of
Business
Conduct
and Ethics
Our Board
has
adopted
Corporate
Governance
Guidelines,
which
set
forth
a
flexible
framework within
which
our
Board,
assisted
by
Board
committees,
directs
our
affairs.
The
Corporate Governance
Guidelines
address,
among
other
things,
the
composition
and
functions
of
the
Board, director
independence,
Board
and
Board
committee
evaluations,
compensation
of
directors, management
succession
and
review,
Board
committees
and
selection
of
new
directors.
Our Corporate
Governance
Guidelines
are available
on
the
corporate
governance
section
of
our
investor relations
website
at
www.citizensbank.com/investor-relations.
The
charters
for
each
of
the
Audit, Compensation,
Nominating
and
Corporate
Governance,
Risk
and
Executive
Committees
are also available
on
the
corporate
governance
section
of
our
investor
relations
website
at www.citizensbank.com/investor-relations.
Our Board
has
also
adopted
a
Code
of
Business
Conduct
and
Ethics
(the
“Code”),
which
sets
forth
key guiding
principles
concerning
ethical
conduct
and
is
applicable
to
all
of
our
directors,
officers
and employees.
The
Code
addresses,
among
other
things,
conflicts
of
interest,
protection
of
confidential information
and
compliance
with
laws,
rules
and
regulations,
and
describes
the
process
by
which
any concerns
about
violations
should
be
reported.
The
Code
is
available
on
the
corporate
governance section
of
our
investor
relations
website
at
www.citizensbank.com/investor-relations.
You
may also obtain
a
copy,
free of
charge,
by
writing
to
our
Corporate
Secretary at
600 Washington
Boulevard, Stamford,
Connecticut
06901. Any amendments
to
the
Code,
or
any waivers of
its
requirements,
will be
disclosed
on
our
website.
Board Composition
When
considering
whether
directors
and
director
nominees
have
the
experience,
qualifications, attributes
or
skills,
taken
as
a
whole,
to
enable
our
Board
to
satisfy its
oversight
responsibilities effectively in
light
of
our
business
and
structure, our
Board
focuses
primarily on
each
person’s background
and
experience. This includes leadership, character, financial literacy, judgment, independence, age, diversity and key skills.
We
believe
that
our
directors
represent
an
appropriate
and diverse
mix
of
experience and
skills relevant
to
the
size
and
nature
of
our
business.
15
|
|
|
|
Board Skills and Expertise
|
✓
CEO experience
✓
CFO experience
✓
Retail Banking
✓
Financial Services Industry
✓
Finance/Capital Management
✓
Risk Management
|
✓
Compliance/Regulatory
✓
Technology
✓
Data Analytics
✓
Insurance
✓
Real Estate
✓
Academia
|
Board Selection and Refreshment
Our Board
has
delegated
to
the
Nominating
and
Corporate
Governance
Committee
the
responsibility of
reviewing
and
recommending
to
the
Board
nominees
for
director.
Process
|
|
The
Nominating
and
Corporate
Governance
Committee
evaluates and
recommends
candidates
for
Board
membership
to
the
Board
annually
and
as
vacancies
or
newly created
positions
occur.
Upon
the
recommendation
of
the
Nominating
and
Corporate
Governance Committee,
a
slate
of
directors
is
nominated
by
the
Board
and
submitted
to
a
stockholder
vote annually.
The Nominating and Corporate Governance Committee also recommends individuals for membership on the committees of the Board annually and as vacancies or newly created positions occur.
|
|
|
|
Considerations
|
|
The
Nominating
and
Corporate
Governance
Committee
will consider
for
nomination
persons
who have
demonstrated
leadership,
have
experience
or
relevant
knowledge,
time
availability
and commitment,
the
highest
character,
reputation
and
integrity,
the
analytical
and
critical
thinking skills,
the
financial
literacy,
risk management
and
other
business
experience
and
acumen,
the
ability to
work as
a
team
constructively
in
a
collegial
environment
and
who
exhibit
independent
thought and
judgment.
|
|
|
|
Recommendations
|
|
In making
its
recommendations
for
Board
and
committee
membership,
the
Nominating
and
Corporate Governance
Committee
reviews candidates’
qualifications
for
membership
on
the
Board
or committee
(including
making
a
specific
determination
as
to
the
independence
of
the
candidate) based
on
the
criteria described
above
and
taking
into
account
the
enhanced
independence,
financial literacy and
financial
and
risk management
expertise
standards
that
may be
required
under
law, regulation
or
New York
Stock
Exchange
rules
for
committee
membership
purposes.
In recommending the re-nomination of directors
to the
Board
or
committee, the Nominating
and
Corporate
Governance
Committee
evaluates
current
directors
including
assessing
such
directors’
performance
and
reassessing
their independence.
|
|
|
|
Review
|
|
The
Nominating
and
Corporate
Governance
Committee
also
periodically
reviews the
composition
of the
Board
and
its
committees
in
light
of
the
current
challenges
and
needs
of
the
Board
and
the Company,
and
determines
whether
it
may be
appropriate
to
add
or
remove
individuals
after considering
issues
of
judgment,
diversity,
age,
skills,
background
and
experience.
|
New candidates
may be
identified
through
recommendations
from
independent
directors
or
members of
management,
search
firms or other sources to
serve on
the
board
of
directors,
and
stockholder
16
recommendations.
Evaluations
of
prospective candidates
typically include
a
review of
the
candidate’s
background
and
qualifications
by
the Nominating
and
Corporate
Governance
Committee,
interviews
with
the
committee
as
a
whole,
on
e or
more
members
of
the
committee,
or
one
or
more
other
board
members,
and
discussions
within the
committee
and
the
full
board
of
directors.
Any stockholder
who
wishes
to recommend
a
prospective
candidate
for
the
board
of
directors
for
consideration
by
the
Nominating and
Corporate
Governance
Committee
may do
so
by
submitting
the
name
and
qualifications
of
the prospective
candidate
in
writing
to
the
following
address:
Corporate
Secretary,
600 Washington Boulevard,
Stamford,
Connecticut
06901. Stockholders
must
propose
nominees
for
consideration
by the
Nominating
and
Corporate
Governance
Committee
in
accordance
with
the
procedures
and
other requirements
set
forth
in
our
Bylaws.
See
“
Information
for
Stockholders—2019
Annual
Meeting
and Stockholder
Proposals.
”
Director
Independence
As
a
part
of
its
listing
standards,
the
New York
Stock
Exchange
(“NYSE”)
has
adopted
certain
criteria that
our
Board
considers
when
determining
director
independence.
Under
the
NYSE
rules,
the
Board also
broadly
considers
all
other
relevant
facts
and
circumstances
that
bear
on
the
materiality of each
director’s
relationship
with
the
Company,
including
the
potential
for
conflicts
of
interest,
when determining
director
independence.
In addition,
the
Board
considers
whether
the
Company
or
one
of its
subsidiaries
has
a
lending
relationship,
deposit
relationship,
or
other
banking
or
commercial relationship
with
a
director,
an
immediate
family member,
or
an
entity
with
which
the
director
or
a family member
is
affiliated
by
reason
of
being
a
director,
an
officer
or
a
significant
stockholder thereof.
Any such
relationship
must
meet
the
following
criteria:
(i)
it
must
be
in
the
ordinary
course of
business
and
on
substantially
the
same
terms
as
those
prevailing
at
the
time
for
comparable transactions
with
non-affiliated
persons;
and
(ii)
with
respect
to
extensions
of
credit
by
the
Company or
its
subsidiaries
to
such
entity:
(a)
such
extensions
of
credit
have
been
made
in
compliance
with applicable
law,
including
Federal
Reserve
Regulation
O and
Section
13(k)
of
the
Securities
Exchange Act
of
1934, as
amended
(the
“Exchange
Act”)
and
(b)
no
event
of
default
has
occurred
and
is continuing
beyond
any period
of
cure.
To
assist
the
Board
in
its
determination
of
director
independence,
the
Nominating
and
Corporate Governance
Committee
annually
evaluates
each
prospective
and
incumbent
director
using
the foregoing
standards
and
such
other
factors
as
the
Nominating
and
Corporate
Governance
Committee deems
appropriate,
and
makes a
recommendation
to
the
Board
regarding
the
independence
or
non- independence
of
each
such
person.
As
a
part
of
this
evaluation
process,
the
Nominating
and Corporate
Governance
Committee
considers
all
relevant
facts
and
circumstances
and,
in
particular, the
independence
requirements
of
the
Securities
Exchange
Commission
(“SEC”)
and
the
NYSE. Banking
relationships
with
the
Company
or
any of
its
subsidiaries
(including
deposit,
investment, lending,
fiduciary)
that
are conducted
in
the
ordinary
course
of
business
on
substantially
the
same terms
and
conditions
as
are otherwise
available
to
nonaffiliated
customers
for
comparable transactions
are not
considered
material
in
determining
independence.
We
have
determined
that
each
of
Mr.
Casady,
Ms.
Cumming,
Mr.
Di lorio,
Mr.
Hankowsky, Mr.
Hanna, Mr.
Higdon,
Mr.
Koch,
Mr.
Ryan,
Mr.
Subramaniam,
Ms.
Watson
and
Ms.
Zuraitis
is
an
independent director
within
the
meaning
of
the
applicable
rules
of
the
SEC
and
NYSE.
In addition,
we have determined
each
Committee member meets the independence and expertise requirements
within
the
meaning
of
the
applicable
rules
of
the
SEC
and
NYSE
for the Committees on which they serve
. For further information see “
Corporate Governance – Board Governance and Oversight – Committees of the Board.
”
Board
Leadership
The
Company’s
Corporate
Governance
Guidelines
provide
that
our
Chief Executive
Officer shall
serve as
Chairman of
the
Board,
while
an
independent
director
shall
serve as
Lead
Director.
Given
the significant
duties
designated
to
our
independent
Lead
Director,
the
Board’s
view is
that
having
a combined
Chairman and
Chief Executive
Officer enables
it
to
(i)
provide
efficient
and
effective
17
governance
and
leadership
to
the
Company,
(ii)
be
apprised
of
current
risks and
issues
that
may impact
the
Company
in
a
timely manner,
and
(iii)
present
a
single
point
of
leadership
to
all
Company stakeholders.
Accordingly,
the
Board
has
determined
that
a
combined
Chairman and
Chief Executive Officer position,
with
an
indepe
ndent
Lead
Director,
is
the
most
appropriate
Board
leadership structure
for
the
Company.
The
Board
reviews its
leadership
structure
periodically
in
light
of
the
composition
of
the
Board,
the needs
of
the
Company
and
its
stockholders,
the
practices
of
the
Company’s
peers,
and
other
factors, and
retains
its
flexibility
to
allocate
the
responsibilities
of
the
offices
of
the
Chairman and
Chief Executive
Officer in
any way that
is
in
the
best
interests
of
the
Company
at
a
given
point
in
time.
The
Lead
Director is
an
independent
director
designated
by
the
Board,
based
on
the recommendation
of
the
Nominating
and
Corporate
Governance
Committee.
Lead Director Responsibilities
|
In addition
to
other duties
and
responsibilities
of
the
Lead
Director set
forth
in
the
Corporate
Governance
Guidelines
or our
Bylaws,
the
Lead
Director shall:
• preside
at
Board
and
stockholder
meetings
at
which
the
Chairman is
not
present,
including executive
sessions
of
the
independent
directors;
• serve as
a
liaison
between
the
independent
directors
and
the
Chairman and
Chief Executive
Officer;
• review and
approve,
in
coordination
with
the
Chairman and
Chief Executive
Officer, agendas/agenda
planners
for
Board
meetings,
materials,
information
and
meeting schedules,
and
have
the
authority
to
add
items
to
the
agenda
for
any Board
meeting;
• have
the
authority
to
call
meetings
of
the
independent
directors;
• be
available
for
consultation
and
direct
communication
with
major
stockholders
and regulators
upon
request;
• discuss
with
the
Chief Executive
Officer,
together
with
the
Chair of
the
Compensation Committee,
the
results
of
the
Board’s
annual
evaluation
of
the
Chief Executive
Officer’s performance;
and
• perform such other functions as the Board shall direct or request from time to time.
|
Currently, Mr.
Van
Saun
serves as
our
Chairman of
the
Board
and
Chief Executive
Officer and Mr.
Ryan
serves as
our
Lead
Director.
Our Corporate Governance Guidelines provide that directors may not be nominated to a new term if they will be age 75 or over at the expiration of his or her current term, unless the Board waives the mandatory retirement age for a specific director.
Mr. Ryan is being nominated for election to the Board at the 2018 Annual Meeting, although he is age 75. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board has waived the mandatory retirement requirement for Mr. Ryan for this year as he is a key Board member, serving as both our independent Lead Director and Chair of the Compensation Committee. The Board decided to nominate Mr. Ryan for an additional term as director as he is a seasoned financial services executive with over 40 years of management and industry experience. The Board also believes that, given our relatively short duration as a public company, maintaining the continuity of Mr. Ryan as our Lead Director at this time is in the best interests of the Company. Should Mr. Ryan be reelected by our stockholders to serve on our Board for an additional term beginning April 26, 2018, we expect that he will not stand for reelection at the April 2019 annual meeting.
18
Meetings
of
the Board
of
Directors
a
nd Attendance
at the Annual Meeting
Our board
of
directors
held
ten
meetings
during
fiscal
2017. No
member
attended
fewer than
75% of
the
Board
and
committee
meetings
on
which
the
member
sits.
In accordance
with
our
Corporate Governance
Guidelines,
all
directors
are expected
to
attend
our
annual
meetings.
Ten of
our
twelve
directors attended
the
annual
meeting
held
April
27,
2017. The
2018 Annual
Meeting
is
the
Company’s
fourth annual
meeting
since
becoming
a
public
company
during
fiscal
2014.
Executive
Sessions
of
Our
Non-Management
Directors
The
Company’s
non-employee
directors, who are all independent, participate
in
regularly scheduled
executive
sessions
in which
management
does
not
participate.
Our
Lead
Director, Mr.
Ryan, presides
at
each executive
session.
I
nterested
persons
may make their concerns
known
directly
to
Mr. Ryan or
the
non-employee
directors
as
a
group
by submitting
their
written
correspondence
to
the
Company’s
Corporate
Secretary located
at
600 Washington
Boulevard,
Stamford,
Connecticut
06901. The
Corporate
Secretary may facilitate
such direct
communication
to
the
Lead
Director or
the
non-management
directors
as
a
group
by reviewing,
sorting
and
summarizing
such
communications.
Board, Committee and Director Evaluations
The Board, led by the Nominating and Corporate Governance Committee, conducts an annual self-evaluation to determine whether it and its Committees are functioning effectively. Under each Committee’s charter, the Committee evaluates and assesses its performance, skills and resources required to meet its obligations under its charter at least annually. In addition, directors complete a self-evaluation. At least every three years, an independent party is used to conduct the Board and Committee evaluations.
1.
|
|
Nominating and Corporate Governance Committee initiates process
|
|
Topics
|
|
|
|
|
Subjects considered as part of the evaluation process include:
▪
Board and Committee Meetings
▪
Board and Committee Composition and Structure
▪
Board and Committee Relationship with Management
▪
Board Oversight Role
▪
Suggestions for Improvement
|
2.
|
|
Evaluations completed and results shared with the Chairman, Lead Director and Nominating and Corporate Governance
Committee
|
|
|
|
|
|
3.
|
|
Actions plans established to address feedback as appropriate
|
|
|
|
|
|
4.
|
|
Board and each Committee review their respective results taking any additional actions as warranted
|
|
Board Education
To assist the Board in discharging its responsibilities, members
participate in an annual training and continuing education program which
includes both full board training and board committee training. An annual schedule is developed, with input from the directors, which covers a broad range of topics to enhance and strengthen the skills, knowledge, and competencies of directors, individually and collectively. The program includes internal and external speakers as well as onsite visits and regular meetings with management. In addition, directors are encouraged to avail themselves of educational programs offered through recognized independent providers.
19
Board’s
Role
in
Risk Oversight
The
Board
is
responsible
for
oversight
of
the
Company’s
internal
controls
and
risk management framework.
This
oversight
generally
requires
evaluation
of
management’s
systems of
internal control,
financial
reporting
and
public
disclosure,
ensuring
the
accuracy and
completeness
of financial
results,
review and
approval
of
the
Company’s
enterprise-wide
risk management
governance
framework and
ensuring
that
risks to
the
Company
are properly
managed.
The
Board
has
delegated
certain
risk oversight
duties
to
the
Risk
Committee and, with respect to financial controls, the Audit Committee.
The
Board
receives independent
reports
from
each
of
the Audit
Committee
and
the
Risk
Committee
at
each
of
its
meetings.
Under
its
charter,
the
Risk
Committee
is
responsible
for
overseeing
the
design,
implementation
and operation
of
the
Company’s
enterprise-wide
risk management
governance
framework
with
respect
to
funding
and liquidity
risk,
credit
risk,
market risk,
strategic
risk,
business
risk,
reputation
risk,
operational
risk, model
risk and
pension
risk.
The
Risk
Committee
reviews and,
as
it
deems
appropriate,
recommends to
the
Board
the
design
and
implementation
of
the
Company’s
risk strategy
and
policy,
risk appetite framework and
specific
risk appetites
and
limits.
While each committee plays a role in the oversight of risk, it is the
Risk
Committee
which
serves as
the
primary point
of
contact
between
the
Board
and
the
management-level
committees
that
have responsibility for
risk management.
See “Corporate
Governanc
e
—Board
Governance
and
Oversight—Committees
of
the
Board—Risk Committe
e.
”
Under the oversight of the Risk Committee, the
Company operates an enterprise-wide
risk management f
ramework which sets standards and provides guidance for the identification, assessment, monitoring, and control of material risks that affect or have the potential to affect the value for our stockholders, customers, and colleagues and the safety and soundness of the Company. The framework sets forth the risk governance model that operates within the Company and outlines the responsibilities of the Board and its committees, executive officers, colleagues and oversight committees with respect to risk governance, supervision and internal control systems.
We are committed to building and maintaining a strong risk management culture. We
believe having an ethical culture that extends through every layer of the company is foundational to delivering the best possible banking experience for our customers and a great workplace for our colleagues. To that end, in 2017 we established a Conduct Office, overseen by the Audit Committee, which has oversight responsibility for monitoring the behavior of our colleagues in relation to our Code of Business Conduct and Ethics, Sales Practices, and other key policy considerations on a Company-wide basis.
Committees
of
the Board
Our Board
has
six
standing
committees.
Four
of
these
committees
(Audit,
Compensation,
Nominating and
Corporate
Governance
and
Risk)
meet
on
a
regular
basis.
The
Executive
Committee
meets
as needed
and
is
composed
of
our
Chairman and
Chief Executive
Officer,
our
Lead
Director and
the Chair of
our
Nominating
and
Corporate
Governance
Committee.
The
Executive
Committee
may act on
behalf
of
the
Board
and
reports
its
actions
to
the
full
Board.
The
Equity
Committee
is
composed
of
our
Chairman and
Chief Executive
Officer and acts as needed to make equity
grants
(subject
to
certain
limitations
determined
by
the
Compensation
Committee)
between annual
grant
cycles,
and
reports
its
actions
to
the
Compensation
Committee.
See
“
Compensation Matters—Compensation
Discussion
and
Analysis—Process
for
Approval
of
Equity
Grants
.
” The following
table
shows
the
current
members
of
each
of
the
four
primary standing
committees
and
the number
of
meetings
held
during
fiscal
2017.
20
Director Audit C&HR N&CG Risk Mark Casady Christine M. Cumming Anthony Di lorio William P. Hankowsky Howard W. Hanna III Leo I. Higdon Charles J. Koch Arthur F. Ryan Shivan S. Subramaniam Wendy A. Watson Marita Zuraitis Current committee member Chair Number of Risk Committee meetings does not reflect 4 meetings held by the Compliance Sub-Committee of the Risk Committee which was established by, and operates, under delegated authority from the Risk Committee
Audit Committee
|
|
Members:
Wendy
A.
Watson (Chair)
Anthony
Di lorio
William
P.
Hankowsky
Howard
W.
Hanna
III
Leo
I.
Higdon
Charles J.
Koch
Meetings held in 2017
:
15
|
The
Audit
Committee
reviews and,
as
it
deems
appropriate,
recommends
to
our Board
our
internal
accounting
and
financial
controls
and
the
accounting
principles
and
auditing practices
and
procedures
to
be
employed
in
preparation
and
review of
our
financial
statements.
The Audit
Committee
is
also
directly
responsible
for
the
appointment, compensation, qualifications, independence, performance and retention
of
our
independent public
auditors.
Each
member
of
the
Audit Committee
meets
the
independence
requirements
of
the
NYSE
and
is
financially
literate,
and
each member
of
the
Audit
Committee
is
an
independent
director
under
Rule
10A-3 under
the
Exchange Act.
In addition,
each
member
of
the
Audit
Committee
is
an
audit
committee
financial
expert.
The
Audit Committee
charter
is available
on
the
corporate
governance
section
of
our
investor
relations
website
at www.citizensbank.com/investor-relations.
|
21
Compensation
Committee
|
|
Members:
Arthur F. Ryan (Chair)
William
P.
Hankowsky
Leo
I.
Higdon
Wendy
A.
Watson
Meetings held in 2017
:
7
|
The
Compensation
Committee
is
responsible
for, among
other
things,
reviewing
and
approving
our
overall
compensation
philosophy, determining the compensation
of
our
executive
officers
and
directors,
administering
our
incentive
and
equity-based compensation
plans,
and
talent and
succession
plannin
g
,
as
described
in
further
detail
in
the
Compensation Discussion
and
Analysis.
Each
member
of
our Compensation
Committee
meets
the
independence
requirements
of
the
NYSE
and
Rule
10C-1 of
the Exchange
Act,
is
a
“non-employee
director”
under
Exchange
Act
Rule
16b-3,
and
is
an
“outside director”
under
Section
162(m)
of
the
Internal
Revenue
Code.
If,
at
any time,
all
directors
serving
on the
Compensation
Committee
do
not
meet
the
“non-employee
director”
requirements
of
Exchange Act
Rule
16b-3
and
“outside
director”
requirements
of
Section
162(m)
of
the
Internal
Revenue
Code, the
Compensation
Committee
will delegate
to
a
special
Section
16b-3
and
Section
162(m) subcommittee
consisting
of
those
Compensation
Committee
members
who
meet
such
requirements the
authority
to
approve
grants
of
equity-based
compensation
subject
to
Section
16(b)
of
the Exchange
Act
and
Section
162(m)
of
the
Internal
Revenue
Code.
Compensation
Advisory
Partners, LLC
provides
guidance
and
advice
to
the
Compensation
Committee
on
compensation-related
matters. See
“
Compensation
Matters—Compensation
Discussion
and
Analysis—Executive
Compensation Governance—Role
of
Compensation
Consultants
.
”
The
Compensation Committee
charter
is available
on
the
corporate
governance
section
of
our
investor
relations
website
at www.citizensbank.com/investor-relations.
|
Nominating and Corporate Governance Committee
|
Members:
Shivan Subramaniam (Chair)
Anthony
Di lorio
Howard
W.
Hanna
III
Arthur F. Ryan
Meetings held in 2017
:
3
|
The
Nominating
and
Corporate
Governance Committee
reviews and,
as
it
deems
appropriate,
recommends
to
the
Board
policies
and
procedures relating
to
director
and
board
committee
nominations
and
corporate
governance
policies.
It also oversees the development and implementation of the Board annual training and continuing education program and annual Board self-evaluation process.
Each
member of
the
Nominating
and
Corporate
Governance
Committee
meets
the
independence
requirements
of the
NYSE.
The
Nominating and Corporate Governance Committee
charter
is available
on
the
corporate
governance
section
of
our
investor
relations
website
at www.citizensbank.com/investor-relations.
|
22
Risk Committee
|
|
Members:
Charles J.
Koch (Chair)
Mark Casady
Christine M. Cumming
Shivan Subramaniam
Wendy
A.
Watson
Marita Zuriatis
Meetings held in 2017
:
8*
*
Number
of
Risk
Committee
meetings
does
not
reflect
4
meetings
held
by
the
Compliance Sub-Committee
of
the
Risk
Committee
which
was established
by
and
operates
under
delegated authority
from
the
Risk
Committee
|
The
Risk
Committee
reviews and,
as
it
deems
appropriate,
recommends
to
the Board
the
design
and
implementation
of
our
risk strategy
and
policy,
risk appetite
framework and specific
risk appetites
and
limits.
The
Risk
Committee
also
oversees
our
risk management
function, our enterprise risk management governance framework and
reviews the
due
diligence
of
any proposed
strategic
transaction.
In addition,
the
Risk
Committee oversees
the
Chief Risk
Officer and
the
internal
risk management
function
of
the
Company.
In carrying out
its
duties,
the
Risk
Committee
is
authorized
to
select,
retain,
terminate
and
approve fees
and
other
retention
terms
of
independent
legal
or
other
advisors
as
it
deems
appropriate, without
seeking
approval
of
management
or
the
Board.
Each
member
of
the
Risk
Committee meets
the
independence
requirements
of
the
NYSE.
Mr.
Koch
qualifies
as
an
expert,
as
required
by federal
banking
regulations,
having
the
experience
in
identifying,
assessing
and
managing
large, complex
financial
firms’
risk exposures
relevant
to
the
Company’s
particular
risks and
commensurate with
the
Company’s
structure,
risk profile,
complexity,
activities
and
size.
As
required
by
the
Risk Committee
charter,
the
chair
of
the
committee,
Mr.
Koch,
is
also
a
non-executive
director
who meets
the
criteria for
independence
specified
by
the
Federal
Reserve
Board’s
Enhanced
Prudential Standards
(12
CFR
252.33(a)(4)(ii)).
The
Risk Committee
charter
is available
on
the
corporate
governance
section
of
our
investor
relations
website
at www.citizensbank.com/investor-relations.
|
Compensation Committee
Interlocks
and Insider
Participation
None
of
the
members
of
the
Compensation
Committee
who
served
during
2017 are current
or
former officers
or
employees
of
the
Company
or
any of
our
subsidiaries.
No
Company
executive
officer served
on
the
compensation
committee
of
another
entity
that
employed
an
executive
officer
who also
served
on
our
Board.
No
Company
executive
officer
served
as
a
director
of
an
entity
that employed
an
executive
officer
who
also
served
on
our
Compensation
Committee.
Talent Management and Succession
Planning
The
Compensation
Committee
reviews at
least
annually,
in
consultation
with
the
Chief Executive Officer,
the
Company’s
talent
management
and
succession
plan,
including
with respect
to
Chief Executive
Officer selection
and
succession
in
the
event
of
the
incapacitation, retirement
or
removal
of
the
Chief Executive
Officer,
and
reviews evaluations
of,
and
development plans
for,
any potential
successors
to
the
Chief Executive
Officer and
other
key positions.
Executive
Officers
Our executive
officers
are designated
by,
and
serve at
the
discretion
of,
our
board
of
directors. There
are no
family relationships
among
any of
our
directors
or
executive
officers.
Our executive officers
are as
follows:
23
Exe
cutive
Officer
|
Age
|
Position
|
Bruce
Van
Saun
|
60
|
Chairman and
Chief Executive
Officer
|
Mary Ellen
Baker
|
59
|
Executive
Vice
President
and
Head
of
Business
Services
|
Randall
J.
Black
|
61
|
Executive
Vice
President
and
Controller
|
Brad
L.
Conner
|
56
|
Vice
Chairman,
Consumer
Banking
|
Stephen
T.
Gannon
|
65
|
Executive
Vice
President,
General
Counsel
and
Chief Legal Officer
|
Malcolm
Griggs
|
57
|
Executive
Vice
President
and
Chief Risk
Officer
|
Donald
H.
McCree III
|
56
|
Vice
Chairman,
Commercial Banking
|
John
F.
Woods
|
53
|
Executive
Vice
President
and
Chief Financial
Officer
|
|
Bruce Van Saun
|
Mr.
Van
Saun’s
biography
and
related
information
may be
found
above
under
“
Corporate Governance—Election
of
Directors—Nominee
s
.”
|
|
Mary Ellen Baker
|
Mary
Ellen
Baker
is
Executive
Vice
President
and
Head
of
Business
Services
with
responsibility
for Technology,
Information
and
Corporate
Security,
Property Services,
Vendor
Management, Enterprise Information and
Change
Management.
Ms.
Baker joined
the
Company
in
August
2016 from
PNC
Financial
Services Group,
Inc.
where she
most
recently held
the
title
of
Executive
Vice
President
of
Enterprise
Services. She
previously
worked
for
Bank
of
America Corporation
as
Head
of
Enterprise
Resiliency
and Corporate
Services
and
Head
of
Technology
and
Operations
for
the
Consumer
and
Small
Business Bank.
Throughout
her
career,
Ms.
Baker has
led
numerous
strategic
projects
in
the
areas of technology
and
operations,
including
supply
chain,
risk management,
new
technology implementation,
and
crisis response
initiatives.
|
|
Randall J. Black
|
Randall
J.
Black
became
our
Executive
Vice
President
and
Controller
in
April
2016. He is also the controller of our two subsidiary banks. Prior to
joining us,
Mr.
Black
most
recently was the
Chief Executive
Officer reporting
to
the
Claims Administrator
for the
Deepwater Horizon
Economic
and
Property Damages
Settlement,
a
role
he
held
since
2014. From 2011 through
2013, he
served
as
Managing
Director for
Citigroup’s
Mortgage
Division.
From
2009 through
2011, he
was the
Deputy
Chief Accountant
of
the
Office of
the
Comptroller
of
the
Currency. Previously,
Mr.
Black
held
senior
management
positions
at
several banking
institutions,
including MBNA America where he
served
as
Chief Accounting
Officer and
Controller
from
1991 through
2005.
|
24
|
|
Brad L. Conner
|
Brad
L.
Conner
is
Vice
Chairman of
our
Consumer
Banking
Division.
He is
responsible
for
Retail Banking,
Business
Banking,
Wealth
Management,
Home
Lending
Solutions,
Auto
Finance
and Education
Finance,
a
s
well as
the
Consumer
Phone
Bank
and
online
channels.
Before
joining
the Company
in
2008, Mr.
Conner
was President
of
JP
Morgan
Chase &
Co.’s
Home
Equity
and
Mortgage Home
Loan
Direct business.
He previously
oversaw
the
combined
home
equity
business
of
Chase and Bank
One
after
the
companies
merged
in
2004, and
served
as
Chief Executive
Officer of
Chase’s Education
Finance
businesses.
Mr.
Conner
served
as
a
director
for
the
Rhode
Island
Public Expenditure
Council
from
2010 through
2012. Since
2009, he
has
served
on
the
board
of
trustees
of the
Dave Thomas
Foundation
for
Adoption,
where he
has
served
as
treasurer since
2011, and currently serves on
its
audit
committee
and
committee
for
institutional
advancement.
Mr. Conner currently serves on the board of directors of Amgine Technologies (US), Inc. and is Chairman
of
the
Consumer
Bankers
Association
board
of
directors, where he has served as a board member
since
2011. Mr.
Conner
has
a B.A.
and
M.B.A.
from
the
University of
Arkansas.
|
|
Stephen T. Gannon
|
Stephen
T.
Gannon
is
our
Executive
Vice
President,
General
Counsel
and
Chief Legal
Officer.
Mr.
Gannon
is
responsible
for
overseeing
our
legal
department,
providing
strategic
leadership
to
the management
of
legal
risk and
overseeing
an
integrated
legal
function which includes regulatory relations and government relations.
Prior to
joining
the
Company in
August
2014, Mr.
Gannon
was the
Executive
Vice
President
and
Deputy
General
Counsel
of
Capital One
Financial
Corporation.
In his
seven
years at
Capital
One
Financial
Corporation,
Mr.
Gannon
was responsible
for
advising
on
litigation
and
regulatory
matters,
transactional
and
product
line
matters as
well as
policy
affairs and
governance
and,
in
January
2014, was appointed
to
serve as
Market President
for
Central Virginia.
Mr.
Gannon
was previously
the
General
Counsel—Retail
Brokerage Group
at
Wachovia
Securities
LLC,
a
partner
and
head
of
the
securities
litigation
practice
at
LeClair Ryan,
P.C.,
as
well as
a
Staff
Attorney
and
Branch
Chief at
the
Securities
and
Exchange
Commission. Mr.
Gannon
earned
an
A.B.
in
History and
a
J.D.
from
Georgetown
University.
|
|
Malcolm Griggs
|
Malcolm
Griggs
has been
our
Executive
Vice
President
and
Chief Risk
Officer since
April
2016. Mr.
Griggs joined
the
Company
in
December 2014 as
Executive
Vice
President
and
Chief Credit
Officer.
He is responsible
for
all
credit,
market,
regulatory,
compliance
and
operational
risk management
for
the Company.
Prior to
joining
Citizens,
Mr.
Griggs
was head
of
business
risk and
controls
for
the
U.S. Consumer
and
Commercial Banking
business
at
Citigroup.
Mr.
Griggs
has
had
a
wide
range
of
risk management
responsibility
over
his
banking
career,
including
senior
risk positions
at
Morgan
Stanley Private Bank,
Bank
of
America,
Wachovia,
and
as
the
first
Chief Risk
Officer at
Fifth
Third
Bank.
He also
served
on
the
national
Board
of
Directors of
the
Risk
Management
Association,
including
serving as
Chairman.
He currently serves on
the
Rhode
Island
Public
Expenditure
Council,
Rhode
Island Philharmonic
Orchestra and
RMA
Foundation
Boards.
Mr.
Griggs
received
his
undergraduate
and
law degrees
from
the
University of
North
Carolina
at
Chapel
Hill.
|
|
25
|
Donald H. McCree III
|
Donald
H.
McCree
III
is
Vice
Chairman of
our
Commercial Banking
Division.
Prior to
joining
the Company
in
August
2015,
Mr.
McCree served
in
a
number
of
senior
leadership
positions
over
the course
of
31 years at
JPMorgan
Chase &
Co.
and
its
predecessor
companies.
Most
recently, Mr.
McCree was Head
of
Corporate
Banking
and
Chief Executive
Officer of
Global
Treasury Services at
JPMorgan,
where he
was responsible
for
providing
relationship
banking
services to
commercial clients
as
well as
treasury and
trade
finance
solutions
to
small
businesses,
multinational corporations,
financial
services firms and
government
entities
worldwide.
Prior to
becoming
Head
of Corporate
Banking,
Mr.
McCree’s roles
at
JPMorgan
included
Head
of
Global
Credit
Markets,
North American
Co-Head
of
Fixed
Income
and
Head
of
Wholesale
Risk
Management.
He also
served
as
Head of
Treasury and
Corporate
Development
and
was based
in
London
for
several years, where he
served as
European
Co-Head
of
Investment
Banking
and
Head
of
European
and
Asian
Syndicated
Finance. Mr.
McCree received
his
B.A.
from
the
University of
Vermont.
|
|
John F. Woods
|
John
F.
Woods
joined
the
Company
in
February 2017 and
assumed
the
position
of
Executive
Vice President
and
Chief Financial
Officer in
March 2017. As
Chief Financial
Officer,
Mr.
Woods
has responsibility
for
our
Financial
Planning
and
Analysis,
Controller,
Investor
Relations,
Strategy and Corporate Development, Treasury and
Tax
functions
as
well as
for
the
business
line
finance
groups. Mr.
Woods
joined
the
Company
from
Mitsubishi
UFJ
Financial
Group,
Inc.
(MUFG),
where he
served
as Chief Financial
Officer of
the
MUFG Americas Holdings
Corporation,
which
operates
MUFG Union Bank,
since
2013. He previously
served
as
Vice
Chairman and
Chief Financial
Officer for
the predecessor
company
of
MUFG Union
Bank
since
December 2009. Prior to
that,
Mr.
Woods
was Chief Financial
Officer of
the
Home
Lending
business
at
JPMorgan
Chase and
at
Washington
Mutual,
a predecessor
entity.
Before
that
he
held
senior
financial
positions
at
the
Federal
Home
Loan
Mortgage Corporation
(Freddie
Mac),
including
Chief Financial
Officer of
the
Funding
&
Investment
Division and
Corporate
Controller.
Mr.
Woods
began
his
financial
career in
1986 with
Arthur
Andersen
in Washington,
D.C.,
where he
rose
to
partner
in
the
financial
and
risk consulting
group
during
his 16 years with
the
firm.
Mr.
Woods
holds
a
Bachelor
of
Science
degree
in
Commerce from
the University of
Virginia
at
Charlottesville.
|
STOCKHOLDER OUTREACH AND ENGAGEMENT
Stockholder
Outreach
Throughout the year we interact and communicate with our stockholders in a number of forums, including quarterly earnings presentations, investor conferences, press releases and SEC filings, the annual report, proxy statement and the annual meeting.
On an annual basis, we proactively reach out
to
our
stockholders
to
solicit
feedback
on
corporate governance and executive compensation.
During 2017, w
e
met
with
seven
of
our
largest
stockholders,
representing
holders of
over
a
quarter
of
our outstanding
common
stock.
We reviewed with our stockholders the strides we have made toward our goal of becoming a top performing regional bank,
executive compensation
and
corporate
governance practices and
sought feedback on each of these topics.
Obtaining
investor
feedback
is
important
to
us
and feedback
received
was shared
with
the
Board.
Communications
with the Board
Stockholders
who
wish
to
contact
our
Board
may send
written
correspondence,
in
care of
the Corporate
Secretary,
to
Citizens
Financial
Group,
Inc.,
600 Washington
Boulevard,
Stamford, Connecticut
06901. Communications
may be
addressed
to
the
Lead
Director or
any alternate director,
marked
as
confidential
or
otherwise.
Communications
which are addressed
to
the Board, an individual
director or group of directors
will be processed
by
the
Office of
the
Corporate
Secretary. Communications received that
discuss
business
or
other
matters
relevant
to
the
activities
of
our Board, as determined by the Corporate Secretary,
will be
distributed to the addressees either
in
summary form
or
by
delivering
a
copy
of
the
communication.
With
respect
to
other
correspondence received
by
the
26
Company
on behalf of
one
or
more
directors,
the
Board
has
requested
that certain items, including the following, not
be
distributed
to
directors,
because
they
generally
fall
into
the
purvi
ew
of management,
rather
than
the
Board:
junk
mail
and
mass
mailings,
product
and
services complaints, product
and
services inquiries,
resumes
and
other
forms
of
job
inquiries,
solicitations
for
charitable donations,
surveys,
business
solicitations
and
advertisements.
CORPORATE SOCIAL RESPONSIBILITY
We know that a strong bank sits at the heart of a healthy community. It gives loans to neighbors, invests in local businesses, supports local community initiatives, is responsible toward the environment and generally contributes to the health of the community. These values drive our performance and support our vision of being a top-performing bank.
Community Investment
Community investment is one of our principal values. We strive to contribute to a better quality of life by serving communities across our footprint through employee volunteer efforts, a foundation that funds a range of nonprofit organizations, and through executives who provide board leadership to community organizations. We have a number of programs to assist those in need so they may receive food and clothing, find affordable housing, develop their skills for better jobs, and expand their financial literacy.
Diversity
We are committed to building a diverse and inclusive organization positioned to support the growth of our colleagues and our communities. Our Diversity and Inclusion Business Resource Groups have over 1,000 members. In 2017, 200 business leaders and employees from all levels of the organization attended our first Diversity & Inclusion Conference which focused on how diversity and inclusion drive growth and innovation, helping our customers and colleagues reach their potential. In 2017, we received recognition for having 25% women on our Board from the organization 20/20 Women on Boards, which has a mission of having 20% women on corporate boards in the U.S. by the year 2020.
Environmental Sustainability
Our Environmental Sustainability program governs how we mitigate our impact on the environment. We work in partnership with expert vendors to consider industry best practices around energy and environmental sustainability management. By better managing our energy and other environmental impacts, we are able to translate these financial and operational efficiencies into a more competitive service for our customers. Additionally, by focusing on the reduction of our operational footprint through smaller redesigned branch concepts, our business operations will continue to align with customer trends such as increased mobile banking and a desire for companies to have a smaller physical environmental footprint.
RELATED PERSON
TRANSACTIONS
Policies
and Procedures
for
Related
Person
Transactions
We
have
adopted
a
written
related
person
transactions
policy
pursuant
to
which
our
executive officers,
directors
and
significant
stockholders,
including
their
immediate
family members,
are not permitted
to
enter
into
a
related
person
transaction
with
us
without
the
consent
of
our
Nominating and
Corporate
Governance
Committee.
Subject
to
certain
transactions
excluded
from
the
policy,
any request
for
us
to
enter
into
a
transaction
with
an
executive
officer,
director,
significant
stockholder or
any of
such
persons’
immediate
family members,
in
which
the
amount
involved
exceeds
$120,000, is
required
to
be
presented
to
our
Nominating
and
Corporate
Governance
Committee
for
review, consideration
and
approval.
All
of
our
directors,
director
nominees,
executive
officers
and significant
stockholders
are required
to
report
to
our
Nominating
and
Corporate
Governance Committee
any such
related
person
transaction.
In approving
or
rejecting
the
proposed
transaction, our
Nominating
and
Corporate
27
Governance
Committee
will take
into
a
ccount,
among
other
factors
it deems
appropriate,
the
commercial
reasonableness
of
the
terms,
the
benefit
or
perceived
benefit, or
lack thereof,
to
the
Company,
opportunity
costs
of
alternate
transactions,
the
materiality and character
of
the
related
person’s
direct
or
indirect
interest
and
the
actual
or
perceived
conflict
of interest
of
the
related
person.
Transactions
with Executive
Officers
and Directors
We
provide
credit
facilities
from
time
to
time
to
certain
directors
and
executive
officers
and
their immediate
families,
as
well as
their
affiliated
companies.
These
credit
facilities
(i)
complied
with our
Regulation
O policies
and
procedures,
(ii)
were made
in
the
ordinary
course
of
business, (iii) were made
on
substantially
the
same
terms,
including
interest
rates
and
collateral,
as
those prevailing
at
the
time
for
comparable
loans
with
persons
not
related
to
the
lender,
and
(iv)
did
not involve
more
than
a
normal
risk of
collectability
or
did
not
present
other
features
unfavorable
to
the Company.
Under
supplemental
retirement
arrangements
relating
to
their
prior
service to
Charter One,
which we acquired
in
2004, Mr.
Charles Koch,
a
director,
as
well as
his
brother,
Mr.
John
Koch,
are entitled
to
receive monthly
payments.
Mr.
Charles Koch
and
Mr.
John
Koch
received
approximately $877,500 and
$744,900, respectively,
under
this
arrangement
during
2017.
Other
Based
solely
on
Schedule
13G filings
made
with
the
SEC,
BlackRock,
Inc.
(“BlackRock”),
The Vanguard
Group,
State
Street
Corporation
and
their
affiliates
are each
considered
a
“Related Person” under
our
related
person
transaction
policy
because
they
each
beneficially
owned
more
than 5% of
our
outstanding
common
stock
as
of
December 31,
2017. See
“
Security Ownership of Certain Beneficial Owners and Management.
”
Certain of
our
retirement
plans
use
BlackRock
and
its
affiliates
to
provide
investment
management services.
In connection
with
these
services,
we paid
BlackRock
approximately
$346,950 in
fees
during 2017. The
Nominating
and
Corporate
Governance
Committee
ratified
and
approved
the
relationship with
BlackRock
in
accordance
with
our
policy.
Indemnification
Agreements
We
entered
into
indemnification
agreements
with
our
directors
and
executive
officers.
These agreements
require
us
to
indemnify
these
individuals
to
the
fullest
extent
permitted
by
Delaware law against
liabilities
that
may arise by
reason
of
their
service to
us,
and
to
advance
expenses incurred
as
a
result
of
any proceeding
against
them
as
to
which
they
could
be
indemnified.
Insofar
as indemnification
for
liabilities
arising
under
the
Securities
Act
of
1933, as
amended,
may be permitted
to
directors
or
executive
officers,
we have
been
informed
that
in
the
opinion
of
the
SEC such
indemnification
is
against
public
policy
and
is
therefore
unenforceable.
There
is
currently no
pending
material
litigation
or
proceeding
involving
any of
our
directors
and executive
officers
for
which
indemnification
is
sought
or
which
is
adverse
to
the
Company.
28
COMPENSATI
ON
MATTERS
PROPOSAL 2
-
ADVISORY
VOTE
ON
EXECUTIVE
COMPENSATION
We provide this vote under the federal securities laws (Section 14A of the Securities Exchange Act of 1934) and in recognition of our stockholders’ vote in 2015 recommending that we hold a non-binding, advisory vote on executive compensation each year. Following that vote, the Board affirmed that recommendation and elected to hold future “say-on-pay” advisory votes on an annual basis, until the next stockholder vote on say-on-pay frequency.
With this item, stockholders may submit an advisory vote on the compensation of our CEO and other named executive officers listed in the Summary Compensation Table. We encourage stockholders to
review the
complete
description
of
our
executive
compensation
programs provided
in
this
proxy
statement,
including
the
Compensation
Discussion
and
Analysis and
the compensation
tables
and
accompanying
narrative, which describe the ways in which we seek to align the interests of our executives with those of our stockholders.
We ask our
stockholders
to
vote
on
the
following
resolution
at
the
Annual
Meeting.
RESOLVED, that the Company’s
stockholders
approve,
on
a non-binding,
advisory
basis,
the compensation of
the Company’s
executive
officers
named in the
2017
Summary
Compensation Table
,
as disclosed
pursuant
to
Item 402
of
Regulation
S-K
(which disclosure
includes
the Compensation Discussion
and Analysis, the compensation tables
and accompanying narrative).
Although
the
vote
on
this
proposal
is
advisory
and,
therefore,
is
non-binding,
the
Compensation Committee
will carefully consider
the results of this vote when making future compensation decisions.
THE
BOARD OF DIRECTORS
RECOMMENDS
A VOTE
FOR APPROVAL OF THE
COMPANY’S
EXECUTIVE
COMPENSATION.
29
COMPENSATION
DISCUS
SION
AND ANALYSIS
Introduction
This
Compensation
Discussion
and
Analysis (“CD&A”) describes
our
executive
compensation philosophy
and
program.
In particular,
the
CD&A and
the
compensation
tables
that
follow
focus
on the
compensation
paid
to
our
named
executive
officers
(“NEOs”)
with
respect
to
fiscal
year 2017. Our NEOs for
2017 are named
below:
Name of Executive
|
|
Position
|
Bruce
Van
Saun
|
|
Chairman and
Chief Executive
Officer
|
John
Woods
|
|
Chief Financial
Officer
|
Donald
H.
McCree III
|
|
Vice
Chairman,
Commercial Banking
|
Brad
L.
Conner
|
|
Vice
Chairman,
Consumer
Banking
|
Stephen T. Gannon
|
|
General Counsel and Chief Legal Officer
|
|
|
|
Name of
Former
Executive
|
|
Position
|
John J. Fawcett
|
|
Interim Chief Financial Officer
|
Alignment of Pay and Performance
As described in this proxy statement in the section titled “
Performance Highlights – Our Journey to Sustainable Growth”
, the Company has executed well on its turnaround plan since the initial public offering in September 2014. In order to realize these results, it has been essential for us to effectively retain and motivate highly capable and experienced executive management, and we feel our compensation program has been integral in achieving this goal.
While much remains to be achieved as we continue our journey to becoming a top performing regional bank, we remain diligent in the execution of our strategic plan and our executives continue to lead their teams in maintaining focus on growing and diversifying revenue and practicing disciplined expense management.
Executive
Compensation Philosophy &
Principles
The
fundamental
principles
that
guide
the
design
and
implementation
of
compensation
programs
for our
NEOs include:
|
•
|
Attract,
retain,
motivate
and
reward high-caliber
executives
to
deliver
long-term
business performance
within
acceptable
risk parameters;
|
|
|
•
|
Provide
clear alignment
between
annual
and
long-term
compensation
for
executives
and
the Company’s
strategic
plans;
|
|
|
•
|
Support
a
culture
where employees
recognize
the
importance
of
serving
customers
well and are rewarded
for
superior
performance;
and
|
|
|
•
|
Encourage
the
creation
of
value
over
the
long-term
and
align
the
rewards of
executives
with returns
to
stockholders.
|
|
Significant 2017 Compensation Decisions
Over 96% of the votes cast on the advisory say-on-pay vote conducted at our 2017 annual meeting approved the compensation of our NEOs. No significant changes were recommended to our executive compensation program as a result of this vote.
Notwithstanding our say-on-pay results in any given year, throughout the year the Compensation Committee’s consultant provides updates regarding executive compensation trends, best practices, and regulatory developments in order to assist the Compensation Committee in determining whether any changes to our executive compensation program should be considered. Based on this review and
30
in response to
our
businesses needs and market practice,
we made the following change
to our executive compensation program in 2017:
|
|
|
Change During 2017
|
|
Rationale
|
Amended our executive employment agreements to provide severance in the event of an involuntary termination after a change of control
|
|
•
Aligns with market practice
•
Puts the Company in a more favorable position to attract senior talent
•
Achieves parity among the executive team
•
Enhances alignment of management’s interests with those of our stockholders in the event of a potential change of control transaction
|
Highlights of our Pay Practices
We believe our pay practices demonstrate our commitment to alignment with stockholders’ interests and our dedication to maintaining a compensation program supported by strong corporate governance, as exemplified by the following practices:
|
|
|
|
What We Do
|
What We Don’t Do
|
✓
|
Pay for performance.
A significant portion of our executives’ compensation is awarded in the form of awards that are earned based on Company performance.
|
✘
|
No single trigger vesting of equity awards or cash payments.
We do not provide for any single trigger vesting of equity awards or severance payments upon a change of control.
|
✓
|
Bonus funding dependent on our risk performance.
Our bonus funding is determined based on a number of factors, including but not limited to, the Company’s risk performance.
|
✘
|
Prohibition against hedging and pledging.
We prohibit employees and directors from hedging or pledging Company securities.
|
✓
|
Pay is subject to clawback.
We have a broad-based process through which events having a material adverse impact on the Company are reviewed for potential impact on compensation.
|
✘
|
No tax gross-ups.
We do not offer tax gross-ups on executive benefits other than in connection with our relocation program, which provides a gross-up to all employees receiving relocation assistance. In addition, we do not provide for excise tax gross-ups upon a change of control.
|
✓
|
Robust compensation plan governance.
Our compensation plans are subject to a robust governance process that involves review by control partners (including risk, legal, human resources and finance). The plans are subject to a risk review by the Compensation Committee on an annual basis, and a risk review by an independent third party every three years.
|
✘
|
Dividend equivalents are not paid on unvested units.
Dividend equivalents are accrued but not paid until restricted stock units and performance stock units become vested.
|
31
|
|
|
|
|
|
|
|
✓
|
Stock ownership and retention guidelines.
Our executives and directors are subject to stock ownership and retention guidelines (CEO - 5x base salary; other executives - 3x base salary; directors - 4x annual cash retainer).
|
|
|
✓
|
Annual say-on-pay vote.
We submit our executive compensation to an annual say-on-pay vote in order to elicit regular feedback from stockholders.
|
|
|
✓
|
Stockholder engagement.
We proactively engage with key stockholders in order to elicit their feedback on our corporate governance and compensation practices.
|
|
|
✓
|
Independent compensation consultant.
The Compensation Committee engages an independent compensation consultant, who performs work solely for the committee.
|
|
|
Executive
Compensation Program
Components
The
following
table
summarizes
the
principal
elements
of
the
compensation
program
that
applied
to our
NEOs for
2017. Each
element
is
described
more
fully in
subsequent
sections
of
the
CD&A. Mr.
Fawcett,
our
Interim
Chief Financial
Officer until March 2017,
was eligible
for
base
salary only.
|
|
|
Element of Pay
|
Objective
|
Key Characteristics
|
Base Salary
|
To attract and retain talented executives who can effectively lead the organization to achieve our strategic objectives.
|
Base
salaries
are reviewed
annually
and
are intended
to fairly compensate executives
for
the position
held.
|
Variable Compensation
|
To support a culture where
employees recognize
the importance of serving customers
well
and
are rewarded
for
their individual
contributions and
our collective success, and
to align compensation
with stockholders’
interests.
|
Variable compensation is designed to reward achievement of long-term objectives and annual progress toward those objectives, in a manner that aligns pay with the interests of stockholders and is market competitive. Variable compensation awards for NEOs are determined based on Company, divisional/functional and individual performance, as discussed below
in
“
—
Executive Compensation Decisions.”
Our variable compensation program is designed to discourage
inappropriate
risk taking
by delivering
a balanced
portfolio of short-term and long-term awards:
|
32
|
|
|
|
Long-Term Awards
|
Generally granted in the form of restricted stock units and performance stock units, long-term awards are intended to tie executive
pay to the interests of stockholders
and
to provide
a
retention incentive
for executives. The
value
actually
realized
by the executive varies based
on stock price movement and other financial performance factors in the case of performance stock units. For the 2017
performance year, 60%-70% of variable
compensation
was
delivered
to the NEOs in
the form
of long-term awards, of which
between 50%-70% was in
the form
of performance stock units.
|
|
Short-Term Awards
|
The remaining portion of variable pay for the 2017 performance year was delivered in cash.
|
Other
Benefits
|
To give
executives
an opportunity to provide for
their retirement
and address other specific
needs.
|
Our
NEOs are
eligible
to participate
in
our Company-sponsored
benefit programs,
including
our broad-based
401(k) plan
and
employee
stock purchase plan,
on the same terms
and
conditions
that apply to all
of our employees.
In addition,
we
provide
certain limited perquisites to our NEOs, which are described in footnote 8 to the
2017 Summary Compensation Table
.
|
Executive
Compensation Governance
Role
of
Compensation
Committee
The
Compensation
Committee
is
composed solely
of
independent
directors
and
is
responsible
for establishing,
implementing
and
monitoring
the
administration
of
our
executive
compensation
plans and
programs,
and
approving
our
executives’
compensation.
Among
its
duties,
the
Compensation Committee
is
responsible
for
determining
the
compensation
of
our
CEO
and, based
upon recommendations
from
the
CEO (together
with
our
Chief Human
Resources
Officer),
approving compensation
for
our
other
executives.
In addition,
the
Compensation
Committee
is
generally responsible
for
overseeing
our
material
compensation
and
benefit
plans,
recommending
to
the
Board non-employee
director
compensation,
evaluating
executive
performance,
and
reviewing talent
management
and
succession
plans.
Role
of
Compensation
Consultants
Compensation
Advisory
Partners,
LLC
The
Compensation
Committee
retained
Compensation
Advisory
Partners,
LLC
(“CAP”) to
provide guidance
and
advice
on
compensation-related
matters
during
2017. CAP was directly
selected
and retained
by
the
Compensation
Committee
to
provide
a
broad
set
of
services pertaining
to
the compensation
of
our
executives
and
our
directors.
The
Compensation
Committee
does
not
engage CAP for
any additional
services outside
of
executive
and
director
compensation
consulting.
In connection
with
CAP’s retention
and
on
an
annual
basis,
the
Compensation
Committee
conducts
an assessment
of
potential
conflicts
of
interest, considering
various
factors
including
but
not limited
to
the
six
factors
mandated
by
the
New York
Stock
Exchange
rules,
and
no
conflicts
of interest
relating
to
its
services have
been
identified.
33
McLagan,
AON Hewitt
(“M
c
Lagan”)
Our management
retains
McLagan
to
provide
market compensation
data,
which
is
referenced
by
the Compensation
Committee
when
making
executive
compensation
decisions.
In addition
to
our
internal review of
incentive
plans,
management
engaged
McLagan
to
conduct
an
independent risk review of our incentive compensation plans in 2015.
The Company plans to engage McLagan to do this analysis again
in 2018 and to
continue
to
engage
an
external
consultant
to
conduct
this
type
of analysis at
least
once
every three
years.
Role
of
Management
Our CEO reviews the
performance
of
each
of
the
other
executives, including the
NEOs, annually.
Following
this
review,
the
CEO (together
with
our
Chief Human
Resources
Officer)
makes salary and
variable
compensation recommendations
for
executives (other
than
himself)
to
the
Compensation
Committee
for
review, feedback,
and
approval.
Our CEO does
not
have
any role
in
determining
his
own
compensation.
Compensation
Peer
Group
As
part
of
its
decision-making
process,
the
Compensation
Committee
refers to
a
peer
group
of
companies for
comparisons
of
compensation
and
performance.
Although
the
Compensation
Committee
refers to peer group data in
making
compensation
decisions,
it
does
not
target
a
specific
percentile for executive compensation. In determining how to position our compensation relative to peers, the Compensation Committee focuses on how well the Company has performed relative to internal targets and performance improvement relative to peers.
The Compensation Committee’s compensation consultant leads a review of the Company’s peer
group on
an
annual
basis,
with the Compensation Committee making
any adjustments based
on
the advice
of
management and
its
compensation
consultant. During
its
annual
review of
the
peer
group, the
Compensation Committee
considers
the
size,
complexity, and
business
mix
of
potential peers, and also considers the banks with which the Company competes for talent.
The median annual assets of these companies at the time of our 2017 review was $141.1 billion, which was comparable to our asset size of $151.4 billion as of the second quarter of 2017.
The
Compensation
Committee
determined
in
2017 that
continued
use
of
the
following
peer
group, which is also consistent
with
our
financial
peer
group,
remained
appropriate
for
its
reference in
making 2017 performance
year compensation decisions:
|
|
|
BB&T
Corporation
|
KeyCorp
|
SunTrust
Banks,
Inc.
|
Comerica Corporation
|
M&T
Bank
Corporation
|
Regions
Financial Corporation
|
Fifth
Third
Bancorp
|
PNC
Financial Services
Group
|
U.S.
Bancorp
|
Executive
Compensation Decisions
Base Salary
The base salaries of our executives, including those of our NEOs, are reviewed
by
the
Compensation
Committee
annually.
Executives’
salaries are subject
to
change
at
the
Compensation
Committee’s
discretion
if,
among
other
reasons,
the executives’
responsibilities
change
materially or
there
are significant
changes
in
the
competitive market environment.
No modifications have been made to our NEOs’ salaries for 2018, as the Compensation Committee determined each of their salaries is at a level appropriate to their role.
For
the
amounts
of
our
NEOs’
base
salaries earned
during
2017, see
the
“Salary” column
of
the
2017 Summary
Compensation
Table
below,
along
with
accompanying
footnotes.
34
Variable Compensation
Process for Determining Overall Funding
The determination of our variable compensation pool is discretionary and is informed by a robust process that includes a comprehensive review of Company performance through multiple dimensions. These dimensions include key financial performance measures, risk performance, delivery to stakeholders (customers, employees, stockholders, regulators and community), progress on strategic initiatives, compensation position relative to peer companies, performance relative to peer companies (including relative performance improvement), and the amount of the pool as a percentage of our pre-tax, pre-incentive operating profit.
At the end of 2017, performance against each of these dimensions was reviewed by the Compensation Committee, as well as the potential impact of various pool allocation scenarios on the employee population. In addition, the Chief Financial Officer and Chief Risk Officer provided the Compensation Committee with input regarding the quality of results and risk performance for the year, respectively. Following the consideration of all of these factors, the Compensation Committee determined the overall variable compensation pool.
Determining NEO
Variable
Compensation Awards
After the overall variable compensation pool was established, the
Compensation
Committee
determined
the
variable
compensation
amounts
for
each of
our
NEOs
using structured discretion as described below,
with compensation amounts
based
on
an
evaluation
of
Company
and
individual
performance
and subject to
the
parameters
of
our Section 162(m)
annual
incentive
plan.
The
factors
considered
by the
Compensation
Committee
represent
both
objective
and
subjective
considerations.
The Compensation
Committee
does
not
favor
one
measure
over
another
or
apply
a
particular formula
or
weighting,
but
instead
uses
a
balanced
view of
performance
to
gain
a
comprehensive understanding
of
the
Company’s
overall
results
and
the
individual
executive’s
contributions to those
results.
In making
these
determinations,
the
Compensation
Committee
evaluated executive performance through
the
use
of
a
scorecard
reflecting
the
following
dimensions: (i) financial
and
overall
business performance; (ii) risk and
control; (iii) customer outcomes; (iv) strategic
initiatives; and (v) human capital. These dimensions reflect
a
balanced
review of
performance,
providing
a
means
for
applying
structured
discretion
in assessing
results
and
determining
pay.
Our executives,
including
our
NEOs,
are also
subject
to
an annual
risk assessment
by
our
Chief Risk
Officer,
the
results
of
which
are considered
by
the Compensation
Committee
when
evaluating executive performance and
making
compensation
decisions. Key achievements for each of the NEOs during 2017 are described below.
Executive
compensation levels
at
our
peer
companies were also considered
by
the
Compensation
Committee
based
on
most
recently available
data
(McLagan 2016 survey data).
Our peer
firms for
this
purpose
are identified
above
in
“
—Executive Compensation
Governance—Compensation
Peer
Grou
p.
”
Consideration was also given to the target compensation amounts for Messrs. Van Saun and Woods in determining their variable compensation amounts, although these targets are intended to serve only as reference points. Mr. Van Saun has target
total compensation
o
f
$8.1 million (which was increased from $7.5 million in August 2017 in light of the increase to median CEO compensation in our peer group) and Mr. Woods has target variable compensation of $2.7 million.
The
Compensation
Committee
determined
that
the
2017 variable
compensation
amounts
reflected below
in
the
2017 Performance
Year
Compensation
Supplemental
Table
for
our
NEOs were appropriate,
in
large
part,
due
to
2017 Company
performance
described
earlier in
“
Performance Highlights – Our Journey to Sustainable Growth”
and
the
following
key individual
achievements
during
2017:
35
|
•
|
Bruce
Van
Saun,
Chairman
and
Chief
Executive
Officer:
|
|
•
|
Continued to achieve strong
financial
performance,
substantially
exceeding annual guidance and budget,
hitting our medium-term IPO targets of greater than 10% ROTCE
(as defined below) and an effi
ciency ratio in the 60% range, and continuing to
close
the gap
in
our
performance
relative
to
peers.
|
|
|
•
|
Strong balance sheet management, with higher Net Interest Margin (net interest income divided by average total interest-earning assets (“NIM”)),
good loan and deposit growth, and above-target capital, liquidity, and funding ratios.
|
|
|
•
|
Progress
on
advancing
strategic
capabilities
using
digital
technologies
and partnerships
to
create
better
experiences
for
our
customers.
|
|
|
•
|
Further advancement in building
a
strong
risk
culture
focused
on meeting heightened regulatory expectations for risk management and compliance,
including the establishment of a Conduct Office,
effectively remediating and terminating regulatory actions, and further gaining the confidence of the Company’s regulators.
|
|
|
•
|
Successful recruitment of talent for several key positions and talent build-outs across digital, data analytics, customer experience, and cyber security.
|
|
|
•
|
Continued focus on our mission to help our customers, employees and communities reach their potential, including advancement of our people and culture agenda, with an emphasis on leadership development, career planning and recognition, diversity and inclusion, ongoing commitment to community service, and expected completion of the Johnston, Rhode Island campus during 2018.
|
|
|
•
|
John Woods, Chief Financial Officer:
|
|
•
|
Supported strong financial performance year-over-year in 2017, including ROTCE exceeding 10%, improving NIM and efficiency ratios, and delivery of strong balance sheet metrics for capital and liquidity.
|
|
•
|
Formalized a balance sheet optimization program designed to continue to deliver improved risk-adjusted returns and narrow the NIM gap to peers.
|
|
•
|
Successful execution of the Top 3 efficiency initiatives and development of Top 4.
|
|
•
|
Significant contributions to the refinement of strategies and processes across the bank, including mortgage strategy, merger and acquisition strategy, and the strategic planning process.
|
|
•
|
Strengthened management reporting capabilities in order to provide challenge and additional transparency.
|
|
•
|
Contributed to our r
eceipt
of
a
non-objection
to
our
Comprehensive Capital Analysis and Review (“
CCAR”) submission
for
the
third
year in
a
row.
|
|
•
|
Donald
H.
McCree
III, Vice
Chairman,
Commercial
Banking:
|
|
•
|
Delivered financial performance in excess of budget, due in part to continued momentum in capital markets.
|
|
|
•
|
Reorganized across five geographic regions to strengthen our coverage model around clients, including expansion into the Southeast region of the U.S. and expanding our focus on industry-specific areas.
|
|
|
•
|
Successfully completed the acquisition of Western Reserve Partners, which has increased our merger and acquisition advisory capabilities.
|
|
|
•
|
Delivered product enhancements including foreign exchange options, escrow, and permanent real estate financing, and began re-platforming our cash
|
|
36
|
|
management product and upgrading several other key customer-facing applications, which
are expected to help drive improvement in
client satisfaction, colleague effectiveness, and problem resolution capabilities.
|
|
|
•
|
Brad
L.
Conner,
Vice
Chairman,
Consumer
Banking:
|
|
•
|
Completed targeted goals for 2017 physical network transformation, which coupled with enhancements in digital, position us to better meet changing consumer preferences and create a more integrated multi-channel experience.
|
|
•
|
Continued focus on improving customer experience throughout the organization by driving better consistency and efficiency, with early success evidenced by further improvement against key metrics.
|
|
•
|
Materially advanced the digital agenda, including the introduction of the SpeciFi digital investing platform, small business digital lending capability in partnership with Fundation, and the launch of Zelle person-to-person payments.
|
|
•
|
Solidified status as industry leader in specialty student lending and continued to grow product offerings within the unsecured lending business.
|
|
•
|
Stephen
T.
Gannon,
General
Counsel
and
Chief
Legal
Officer:
|
|
•
|
Continued stewardship of regulatory relationships, resulting in improved regulatory feedback.
|
|
|
•
|
Provided
strategic
input
and
oversight
on corporate
initiatives and transactions, including the Western Reserve acquisition and the CCAR process.
|
|
|
•
|
Enhanced processes with an eye toward continuous improvement, savings initiatives and reporting capabilities.
|
|
|
•
|
Continued to strengthen partnerships between the legal department and the other businesses and functions in order to ensure effective litigation management and drive Board effectiveness and challenge.
|
|
Mr.
Fawcett,
our
Interim
Chief Financial
Officer,
was not eligible
for
variable
compensation
in
respect
of
the
2017 performance
year.
Variable
compensation
payable
to
our
executive
officers for performance year 2017 was
generally
subject
to
the
maximums
set forth
in
the
Citizens
Financial
Group,
Inc.
Performance Formula
and
Incentive
Plan (the
“Section 162(m)
Plan”)
(also
see
“—
Tax
Deductibility
of
Compensati
o
n
” below),
which
limits
the
amount
of annual
variable
compensation
that
can
be
granted
to
2% of
adjusted
pre-tax
operating
income
for our
CEO and
0.7%
of
adjusted
pre-tax
operating
income
for
other
executive
officers.
For
more information
about
awards
granted
under
the
Section
162(m)
Plan in
respect
of
2017, including
the definition
of
pre-tax
operating
income,
please
see
footnote
2
to
the
2017 Grants
of
Plan-Based
Award
s
Table
.
37
Variable
Compensation
Mix
Each
year, the
Compensation
Committee
determines
the
appropriate
mix
of
variable
compensation. For performance
years 2015-2017, the
following
variable
compensation
mixes
were approved for
our
NEOs:
Under
the
SEC
reporting
rules,
the
cash
portion
of
our
NEOs’
variable
compensation
for
the 2017 performance
year is
reflected
in
the
“Non-Equity
Incentive
Compensation”
column
of
our
2017 Summary
Compensation
Tabl
e
.
In addition, the performance stock units and restricted stock units granted in 2017 relating to performance year 2016
are reflected
in
the
“Stock
Awards” column
of
our
2017 Summary
Compensation
Tabl
e
. However, the
performance
stock
units
and
restricted stock units
granted in 2018 for performance year 2017
will be reflected
in
the
“Stock
Awards” column
of
our
2018 Summary
Compensation
Tabl
e
.
Restricted
stock
units
granted
in
2017 for
performance
year 2016 are scheduled
to
become
vested
in equal
installments
on
the
first,
second
and
third
anniversaries
of
the
grant
date.
Performance stock units granted in 2017 for performance year 2016 (“2017 PSU Awards”) have a three-year performance period of January 1, 2017 through December 31, 2019, and are scheduled to become vested on the third anniversary of the grant date. Half of each 2017 PSU Award will be earned based on achievement of targeted cumulative diluted earnings per share (“Diluted EPS”) and half will be earned based on achievement of targeted average return on average tangible common equity (“ROTCE”), with a maximum payout of 150% of target. The Compensation Committee selected Diluted EPS and ROTCE as appropriate measures for the 2017 PSU Awards because improvement in these metrics has been an integral element of the Company’s strategic plan, with growth in Diluted EPS and in ROTCE being essential for us to become a top performing regional bank. Targets set for Diluted EPS and ROTCE for the 2017 PSU Awards have been determined based on a review of the Company’s historical performance and strategic plan, and an assessment of peer performance and analyst and investor growth expectations.
We define “ROTCE” as net income available to common stockholders divided by average common equity excluding average goodwill (net of related deferred tax liabilities) and average other intangible assets, as reported on an underlying or adjusted basis consistent with our external earnings reporting. We define “Diluted EPS” as net income divided by weighted average diluted common shares outstanding, also as reported on an underlying or adjusted basis consistent with our external earnings reporting.
“Underlying” or “adjusted” results exclude certain items, as applicable, that may occur in a reporting period which management does not consider indicative of on-going financial performance.
38
2015 PSU Award
Performance
Risk
Assessment
As described in our proxy statement filed in March 2017,
in February 2017 the
Compensation
Committee
assessed the
performance
level
for
performance
stock
units
granted
in 2015 (relating
to
the
2014 performance
year)
at 74% of target. While execution of the turnaround plan was excellent, certain assumptions around interest rates did not materialize, resulting in a below target payout. Following that performance assessment, awards remained subject to a
risk sensitivity assessment
to
be
performed
by
the
Compensation
Committee in early 2018. This risk assessment occurred on February 15, 2018, during which the
Compensation
Committee
concluded that
the performance results were achieved with adequate
sensitivity
to
risk. As a result, the
Compensation
Committee
has elected not to reduce the amount of awards scheduled to become vested in March 2018.
2017
Performance
Year
Compensation
Supplemental
Table
The
following
table
reflects
the
direct
compensation
earned
by
each of our
active
NEOs for
the
2017 performance year.
|
|
|
|
|
Variable Compensation
|
|
Total 2017
|
|
Name
|
Base
Salary
|
|
|
Cash
(2)
|
|
Restricted
Stock Units
(3)
|
|
Performance
Stock Units
(3)
|
|
Direct
Compensation
|
|
Bruce Van Saun
|
$
|
1,487,000
|
|
|
$
|
2,253,900
|
|
$
|
1,502,600
|
|
$
|
3,756,500
|
|
$
|
9,000,000
|
|
John Woods
|
$
|
619,231
|
|
(1)
|
$
|
810,000
|
|
$
|
540,000
|
|
$
|
1,350,000
|
|
$
|
3,319,231
|
|
Donald H. McCree III
|
$
|
700,000
|
|
|
$
|
952,500
|
|
$
|
635,000
|
|
$
|
1,587,500
|
|
$
|
3,875,000
|
|
Brad L. Conner
|
$
|
700,000
|
|
|
$
|
697,500
|
|
$
|
465,000
|
|
$
|
1,162,500
|
|
$
|
3,025,000
|
|
Stephen T. Gannon
|
$
|
600,000
|
|
|
$
|
564,000
|
|
$
|
423,000
|
|
$
|
423,000
|
|
$
|
2,010,000
|
|
|
(1)
|
Reflects
the
amount
of salary
earned
by
Mr. Woods f
or his
service
as Chief Financial
Officer
from February 13, 2017
through
December 31
, 2017.
Mr. Woods’ annualized salary is $700,000.
|
|
|
(2)
|
The
cash portion
of 2017
variable
compensation
awards is
reflected
in
the
“Non-Equity
Incentive
Plan” column
of the
2017
Summary
Compensation Table
below
for all NEOs
above, each
of whom
was a participant
in
the
Section
162(m)
Plan
during
2017. This table does not include the portion of Mr. Woods’ buy-out award that was paid in cash, which is reflected in the “Bonus” column of the
2017 Summary Compensation Table
below and is described in more detail below in
“—Other Benefits—Employment Agreements.”
|
|
|
(3)
|
The
number
of Company shares subject
to
these
awards was determined
based
on
the
Company’s closing
share price
on
the
grant
date.
Under
SEC reporting
rules,
these
equity
awards relating
to
performance year 2017
are not
reflected
in
the
2017
Summary
Compensation Table
because
they
were
granted
in March 2018,
and
will
instead
be
disclosed
in
our
proxy
statement
filed
next
year. This table does not include the portion of Mr. Woods’ buy-out award that was granted in restricted stock units, which is reflected in the “Stock Awards” column of the
2017 Summary Compensation Table
and is described in more detail below in
“—Other Benefits—Employment Agreements
.”
|
|
Other Benefits
Employment Agreements
Each
of
our
active
NEOs is
party
to
an
employment
agreement
that sets forth their compensation
and
benefits,
including
severance
benefits
available
in
certain circumstances.
For
details,
see
“
Termination
of
Employment
and
Change
of
Control—Employment Agreements
with
our
NEOs
” below
and
“
Termination
of
Employment
and
Change
of
Control—Severanc
e
” below.
On
December 13,
2016, we entered
into
an
employment
agreement
with
our
Chief Financial Officer,
John Woods, to commence employment on February 13, 2017. The
agreement provides
for
an annual salary of $700,000 and a target bonus opportunity of $2.7 million.
In addition, the employment agreement provided Mr. Woods with
a $7 million buy-out award in order to compensate him for the bonus which would have otherwise been paid to him by his former employer for the 2016 year and
39
the value of awards he forfeited in connection with his resignation
. Of this amount, $3 million
was paid in ca
sh on March 31, 2017 and $4
.66 million
was granted in the form of restricted stock units that will become vested in installments on March 1, 2018, 2019 and 2020
(with the increase in award value from $4 million to $4.66 million due to the difference betwee
n the initial valuation and grant date values)
.
Mr. Woods is also entitled to
a
minimum
payment
of
26 weeks of
base
salary in
the
event
he is terminated
by
the Company
without
“c
ause” (as defined in the agreement),
subject
to
the execution
and
non-revocation
of
a
release in
favor
of
the
Company, consistent
with
severance
available
to
all
executives. Mr. Woods’ original agreement also included increased severance upon a qualifying termination within 18 months following a change of control equal to his base salary and target bonus opportunity which, as described below, was superseded by a subsequent amendment to his agreement in August 2017.
The agreement also provides that,
for
purposes
of
calculating retirement
eligibility
under
the
Company’s
various
plans,
Mr. Woods
will be
credited
with
an
additional
five years of
service.
In August 2017, the Compensation Committee approved amendments to the agreements in place for the executive team, including Messrs. Woods, McCree, Conner and Gannon to provide for double trigger severance in the event of a qualifying termination following a change of control. This decision was made following a review of peer practice and to achieve parity among members of senior management. The amendments provide that in the event of a termination by the Company without “cause” (as defined in the agreement) or resignation by the executive with “good reason” (as defined in the agreement) within 24 months following a change of control, the executives will receive severance consisting of: (i) two times the sum of current base salary and average cash bonus received during the prior three years, plus (ii) a pro-rata cash bonus for the year in which termination occurs, also based on the average cash bonus during the prior three years. The amendment to Mr. Woods’ agreement superseded the change of control severance set forth in his original employment agreement.
The terms
of
Mr.
Woods’ employment
agreement and the amendments to his and the other NEOs’ agreements
are described
in
greater
detail
below
under
the heading
“
Termination
of
Employment
and
Change
of
Control—Employment
Agreements
with
our NEOs—Employment
Agreements
with
Other
Active
NEOs.
”
Nonqualified
Deferred
Compensation
Plan
The
CFG Voluntary
Executive Deferred Compensation
Plan was adopted,
effective
as
of
January
1,
2009, and does not offer any matching contributions or provide for above-market earnings. During
2017, Mr.
Van
Saun was the only NEO who participated
in
the
CFG Voluntary
Executive
Deferred Compensation
Plan.
For
a
description
of
the
material
terms
of
this
deferred
compensation
plan,
see the
narrative
following
the
2017 Nonqualified
Deferred
Compensation
Table
below.
Pension
Plan
The
CFG Pension
Plan,
a
tax-qualified,
non-contributory
defined
benefit
pension
plan was closed
to
new
participants
effective
January
1,
2009 and
frozen
to
all
participants
and benefit
accruals
effective
December 31,
2012. Mr.
Conner
had
a
benefit
under
this
plan
as
of December 31,
2017 because
he
was hired
prior
to
2009. For
a
description
of
the
material
terms
of the
CFG Pension
Plan,
see
the
narrative
following
the
2017 Pension
Benefits
Tabl
e
.
401(k)
Plan
We
maintain
a
qualified
defined
contribution
401(k)
plan
for
all
of
our
employees.
Employees
may defer
up
to
50% of
their
eligible
pay
to
the
plan
up
to
Internal
Revenue
Code
limits.
After
employees have
completed
one
full
year of
service,
employee
contributions
are matched
at
100% up
to
an overall
limit
of
4% and
employees
receive an
additional
Company
contribution
equal
to
2% of earnings,
subject
to
limits
set
by
the
Internal
Revenue
Service.
Our NEOs are entitled
to
participate in
our
401(k)
plan
on
the
same
basis
as
our
employees
generally.
40
Health and Welfare
Benefit
Plans
Our NEOs are eligible
to
participate
in
Company-sponsored
benefit
programs, offered
on
the
same
terms
and
conditions
as
those
made
generally
available
to
our
employees, including
medical,
dental,
vision,
short-term
and
long-term
disability
plans. Mr. Fawcett was not eligible for benefits
during his service as Interim Chief Financial Officer.
Perquisites
and Other
Benefits
We
provide
our
executives, including our NEOs,
with
independent
advisors
to
assist
them
with
financial
planning,
if
desired
by the
executives.
Our executives, including our NEOs, are also
covered
by
a
relocation
policy
and
a
charitable
contribution
policy that
generally
cover
all
our
employees and our company
car was used
by
certain
of
our
NEOs for
limited personal
use.
Mr.
McCree was
provided
with
a
housing
allowance
through
2017 due
to
travel
obligations associated
with
his
role, which was discontinued effective December 31, 2017.
For
additional
details
on
the
perquisites
provided
to
our
NEOs in
2017, see footnote 8 to
the
2017 Summary
Compensation
Table
below.
Clawback Process
The Company
has
a
firm-
wide
accountability
review process
to
ensure
that
there
is
a
standardized process
to
take
appropriate
action
in
instances
where new
information
would
have
changed
compensation
decisions
made
in
previous
years or
should
be
considered
in
making
compensation decisions
for
the
current
year. As
part
of
that
process,
the
Accountability
Review Panel (“ARP”)
meets
on
a
regular
basis
to
consider
events having a material adverse impact on the Company to
determine
whether
compensation
adjustments
are appropriate for
involved
employees.
Potential
actions
by
the
ARP
include
current-year compensation
adjustment,
forfeiture
of
unvested
awards,
or
clawback.
Our CEO and
CFO are also
subject
to
clawback
as
mandated
by
the
Sarbanes-Oxley
Act.
The Compensation
Committee
monitors
regulatory
developments
relating
to
clawback
and
will continue to
evaluate
our
practices
in
order
to
ensure
they
drive
appropriate
behavior and discourage inappropriate risk taking, as well as comply with law.
Stock
Ownership
and Retention
Guidelines
The
Company
maintains
stock
ownership
and
retention
guidelines
in
order
to
further
align
the long-term
interests
of
our
executives
and
non-employee
directors
with
those
of
our
stockholders.
Our stock
ownership
guidelines
require
that
our
executives
and
non-employee
directors
hold
shares having
an
aggregate
value
equal
to
a
multiple
of
executives’
annual
base
salary or
non-employee directors’
annual
cash
retainer,
as
follows:
Position
|
|
Multiple
|
Chief Executive
Officer
|
|
5x
Annual
Base
Salary
|
Other
Executives
|
|
3x
Annual
Base
Salary
|
Non-Employee
Directors
|
|
4x
Annual
Cash Board
Retainer
|
Shares
that
count
for
purposes
of
ownership
under
the
guidelines
include
(i)
shares
or
units
for
which receipt
has
been
deferred
(including
shares
held
through
our
401(k)
plan,
shares
purchased
under
our tax-qualified
employee
share
purchase
program,
unvested
restricted
stock
units
and
shares
or
units held
through
a
deferred
compensation
plan
maintained
by
the Company)
and
(ii)
restricted
stock
and unvested
restricted
stock
units
(that
may only
be
settled
in
shares)
that
are subject
to
time-based vesting
conditions
only.
Unexercised
options
(whether
vested
or
unvested),
performance
awards (including
performance-based
restricted
stock
and
performance-based
units), and
unvested
restricted stock
units
that
may only
be
settled
in
cash
do
not
count
towards
the
satisfaction
of
these guidelines.
41
Each
executive
or
non-employee
director
has
five
years from
the
date
he
or
she
becomes
subject
to these
guidelines
to
achieve
compliance.
As
a
result
of
modifications
made
to
our
guidelines
effective for
2016, executives
are also
required
to
hold
50% of
the net
shares
acquired
as
a
result
of
settlement
of compensatory
awards
granted
in
2016 and
onward
until
ownership
guidelines
have
been
met. Starting
in
2016, directors’
restricted
stock
unit
awards
are not
settled
until
their
cessation
from service on
the
Board.
Prohibition
on
Hedging
and Pledging
We
prohibit
our
employees,
including
our
NEOs,
from
engaging
in
any hedging
transactions
(including transactions
involving
options,
puts,
calls,
prepaid
variable
forward
contracts,
equity
swaps,
collars and
exchange
funds
or
other
derivatives)
that
are designed
to
hedge
or
speculate
on
any change
in the
market value
of
the
Company’s
equity
securities
or
pledging
their
ownership
in
our
securities (including
equity-based
awards),
which
would
undermine
the
risk alignment
embedded
in
our
equity- based
compensation
arrangements.
Tax
Deductibility of
Compensation
Under
Section
162(m) of the Internal Revenue Code (“Section 162(m)”),
a
public
company
generally
may not
deduct
compensation
in
excess
of $1 million
paid
to
its
CEO
and other covered officers. Recently enacted legislation commonly known as the Tax Cuts and Jobs Act (“TCJA”) makes certain changes to Section 162(m), most notably repealing the exemption for qualified performance-based compensation for taxable years beginning after December 31, 2017 and expanding the scope of persons covered by its limitations on deductibility. Accordingly, compensation paid after 2017 to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. We have historically sought to structure our
variable
equity-based
and
cash-based incentive
awards
to
be
deductible
under
Section
162(m),
to the extent
possible.
However,
to
maintain
flexibility in
compensating
our
executives,
we do
not
have
a
policy
requiring
compensation
to
be
fully deductible
under
Section
162(m).
While the Company plans to rely on the transition relief included in the TCJA to the extent practicable, t
he
Company
believes
that
tax
deductibility
of
compensation
should not be the
sole
or
primary factor
in
setting
executive
compensation
policy
or
in
rewarding executive
performance.
Process
for
Approval of
Equity Grants
We
do
not
grant
equity
awards
in
anticipation
of
the
release of
material,
non-public
information,
nor do
we time
the
release of
material,
non-public
information
based
on
equity
grant
dates.
The Compensation
Committee
has
delegated
the
authority
to
make off-cycle
equity
grants
under
the Citizens
Financial
Group,
Inc.
2014 Omnibus
Plan (“Omnibus
Plan”)
to
participants
other
than
our executives
to
the
Equity
Committee
of
the
Board,
which
is
comprised
of
our
CEO,
subject
to
limits designated
by
the
Compensation
Committee,
as
described
above
in
“
Board
Governance
and
Oversight—Committee
s
o
f
th
e
Board.
”
COMPENSATION
COMMITTEE
REPORT
The
Compensation
Committee
has
reviewed
and
discussed
the
CD&A included
in
this
proxy
statement
with
members
of
management,
and
based
on
such
review and discussions,
the
Compensation
Committee
recommended
to
the
board
that
the
CD&A be
included
in
this
proxy
statement.
The
Compensation
and
Human
Resources
Committee
|
|
Arthur
F.
Ryan
(Chair)
|
William
P.
Hankowsky
|
Leo
I.
Higdon
|
Wendy
A.
Watson
|
42
EXECUTIVE
CO
MPENSATION
2017
Summary Compensation Table
This
2017 Summary
Compensation
Table
reflects
the
compensation
of
our
NEOs in
accordance
with
SEC reporting
rules,
which
require
that
cash
awards
be
disclosed
in
the
year in
which
they
are earned
and
that stock
grants
be
disclosed
in
the
year of
grant
(regardless
of
whether
they
were earned
for
performance
during that
year).
Name and Principal
Position
|
Year
|
Salary
($)
(3)
|
|
Bonus
($)
(4)
|
|
Stock
Awards
($)
(5)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(6)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(7)
|
|
All
Other
Compensation
($)
(8)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce Van Saun,
|
2017
|
|
1,487,000
|
|
|
-
|
|
|
4,699,056
|
|
|
2,253,900
|
|
|
-
|
|
|
110,033
|
|
|
|
8,549,989
|
|
Chairman & Chief
|
2016
|
|
1,487,000
|
|
|
-
|
|
|
5,478,086
|
|
|
2,013,900
|
|
|
-
|
|
|
260,538
|
|
|
|
9,239,524
|
|
Executive Officer
|
2015
|
|
1,487,000
|
|
|
-
|
|
|
4,393,876
|
|
|
1,000,920
|
|
|
-
|
|
|
1,115,166
|
|
|
|
7,996,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Woods,
|
2017
|
|
619,231
|
|
|
3,000,000
|
|
|
4,659,743
|
|
|
810,000
|
|
|
-
|
|
|
12,825
|
|
|
|
9,101,799
|
|
Chief Financial Officer
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald H. McCree III,
|
2017
|
|
700,000
|
|
|
-
|
|
|
1,977,481
|
|
|
952,500
|
|
|
-
|
|
|
119,907
|
|
|
|
3,749,888
|
|
Head of Commercial Banking
|
2016
|
|
700,000
|
|
|
-
|
|
|
641,363
|
|
|
847,500
|
|
|
-
|
|
|
139,200
|
|
|
|
2,328,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad L. Conner,
|
2017
|
|
700,000
|
|
|
-
|
|
|
1,487,475
|
|
|
697,500
|
|
|
13,875
|
|
|
54,983
|
|
|
|
2,953,833
|
|
Head of Consumer
|
2016
|
|
700,000
|
|
|
-
|
|
|
752,605
|
|
|
637,500
|
|
|
10,977
|
|
|
51,456
|
|
|
|
2,152,538
|
|
Banking
|
2015
|
|
700,000
|
|
|
-
|
|
|
979,713
|
|
|
306,000
|
|
|
164
|
|
|
546,499
|
|
|
|
2,532,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen T. Gannon,
|
2017
|
|
600,000
|
|
|
-
|
|
|
839,941
|
|
|
564,000
|
|
|
-
|
|
|
11,624
|
|
|
|
2,015,565
|
|
General Counsel
|
2016
|
|
600,000
|
|
|
-
|
|
|
695,666
|
|
|
560,000
|
|
|
-
|
|
|
7,128
|
|
|
|
1,862,794
|
|
|
2015
|
|
600,000
|
|
|
-
|
|
|
764,498
|
|
|
440,000
|
|
|
-
|
|
|
528,243
|
|
|
|
2,332,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Fawcett,
|
2017
|
|
634,615
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
204,352
|
|
|
|
838,967
|
|
Former Interim Chief
|
2016
|
|
115,385
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,855
|
|
|
|
117,240
|
|
Financial Officer
(2)
|
2015
|
|
243,704
|
|
|
-
|
|
|
574,061
|
|
|
-
|
|
|
131
|
|
|
762,839
|
|
|
|
1,580,735
|
|
|
(1)
|
Mr. Woods served as our Chief Financial Officer from February 13, 2017 through December 31, 2017. The
amount
in
this
table
for 2017
reflects
the compensation earned
by
him during this period.
|
|
|
(2)
|
Mr. Fawcett served as our
I
nterim
Chief
Financial
Officer
from December
17,
2016 through March 17, 2017.
The
salary
amounts in this table for 2016 and 2017 reflect salary earned by him during this period.
|
|
|
(3)
|
Mr. Van Saun elected to defer 10% of his 2017 base salary, or $148,700, pursuant to the CFG Voluntary Executive Deferred Compensation Plan, which is discussed in more detail in the narrative following the
2017 Nonqualified Deferred Compensation Table
.
|
|
|
(4)
|
The amount in this column for 2017 for Mr. Woods reflects the cash portion of the buy-out award provided under his employment agreement described earlier under
“Compensation Discussion and Analysis—Executive Compensation Decisions—Other Benefits—Employment Agreements.”
|
|
|
(5)
|
Amounts in this column for 2017 reflect the aggregate grant date fair value of restricted stock unit and performance stock unit
awards granted
in
March 2017
as part
of 2016
performance
year compensation and, for Mr. Woods, the aggregate grant date fair value of restricted stock units granted to him in respect of the buy-out award provided under his employment agreement, described earlier under
“Compensation Discussion and Analysis—Executive Compensation Decisions—Other Benefits—Employment Agreements.”
The
fair value
of awards has been
calculated
in
accordance with
Financial
Accounting
Standards Board
Accounting
Standards Codification
Topic
718
(“FASB ASC 718”),
using
the
|
|
43
|
|
valuation
methodology
and
assumptions
set forth in
Note 17
to
the
Company’s 2017
Annual
Report
on
Form 10-K
for the
year ended
December
31,
2017, which
are hereby
incorporated
by
reference.
|
|
For the
performance
stock unit
awards, the
amounts
above were
calculated
based
on
the
probable
outcome
of the performance
conditions
as of the
service
inception
date,
and
represent
the
value
of the
target
number
of units granted,
consistent
with
the
estimate
of aggregate
compensation
cost
to
be
recognized
over
the
service
period determined
as of the
service
inception
date
under
FASB ASC Topic
718.
As
of the
service
inception
date, the
values
of the
performance
stock unit
awards granted to
the
NEOs in 2017 assuming
the
highest
level
of performance
(150%
of the
grant
date
value), were
as follows: Mr. Van Saun ($5,034,700); Mr. McCree ($2,118,738);
Mr. Conner
($1,593,695);
and Mr. Gannon ($629,956).
For a breakdown of all awards granted
during
2017,
see
the
2017
Grants of Plan-Based
Awards Table
.
|
(6)
|
2017 amounts in this column reflect the cash portion of annual variable compensation awards for the 2017 performance year. Mr. Van Saun elected to defer 80% of the cash portion of his 2017 variable compensation ($1,803,120 out of $2,253,900) pursuant to the CFG Voluntary Executive Deferred Compensation Plan, which is discussed in more detail in the narrative following the
2017 Nonqualified Deferred Compensation Table.
|
|
|
(7)
|
For Mr. Conner, the only NEO who is eligible to participate in our pension plan, the 2017 amount shown reflects the aggregate change in actuarial present value of his accumulated benefit under our pension plan during 2017. The pension value for Mr. Conner increased by $13,875 during 2017, which includes an increase of $10,127 due to changes in assumptions underlying the present value calculations and an increase of $3,748 due to the effect of Mr. Conner being one year closer to his assumed retirement age. See footnote 3 to the
2017 Pension Benefits Table
for more details on the assumptions used to determine the present value.
|
|
|
(8)
|
The below table reflects 2017 amounts included as “All Other Compensation” for each NEO. Amounts reflected in the “Other” column below include the following: (i) incremental costs relating to personal use of car and driver, calculated based on variable vehicle costs (maintenance, fuel, tolls), variable driver costs (overtime and bonus), and the percentage of miles driven for personal versus business use for Messrs. Van Saun and Fawcett; (ii) cost of financial planning services for Messrs. Van Saun, Woods and Conner; (iii) a housing allowance for Mr. McCree in the amount of $100,000 (which was discontinued as of December 31, 2017); and (iv) a payment to Mr. Fawcett in order to settle a claim regarding previously outstanding compensatory awards in the amount of $200,000, which included attorney’s fees. During
2017,
the
spouses
of Messrs. Van Saun, McCree and Conner
accompanied
them
on certain
business
trips
on
the
C
ompany
plane,
but
there
was no
incremental
cost
associated with
such
use.
|
|
|
401(k)
Company
Contribution
($)
|
|
Charitable
Matching
Contribution
($)
|
|
Dividend Equivalents Paid in Cash
($)
|
|
Other
($)
|
|
Total ($)
|
|
Bruce Van Saun
|
|
16,200
|
|
|
50,000
|
|
|
13,011
|
|
|
30,822
|
|
|
110,033
|
|
John Woods
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,825
|
|
|
12,825
|
|
Donald H. McCree III
|
|
5,400
|
|
|
13,000
|
|
|
1,507
|
|
|
100,000
|
|
|
119,907
|
|
Brad L. Conner
|
|
16,200
|
|
|
20,000
|
|
|
3,333
|
|
|
15,450
|
|
|
54,983
|
|
Stephen T. Gannon
|
|
5,400
|
|
|
1,500
|
|
|
4,724
|
|
|
-
|
|
|
11,624
|
|
John J. Fawcett
|
|
-
|
|
|
-
|
|
|
4,173
|
|
|
200,179
|
|
|
204,352
|
|
44
2017
Grants
of
Plan-Based
Awards
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
|
All Other
Stock Awards:
|
|
|
Grant Date
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
of Stock
|
|
Name
|
Grant
Date
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
Shares of Stock
or Units (#)
|
|
|
Awards
($)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce Van Saun
|
|
|
-
|
|
|
-
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
42,390
|
|
|
84,781
|
|
(3)
|
|
127,171
|
|
|
-
|
|
|
|
3,356,480
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
33,912
|
|
(4)
|
|
1,342,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Woods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
117,700
|
|
(5)
|
|
4,659,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald H. McCree III
|
|
|
-
|
|
|
-
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
17,839
|
|
|
35,678
|
|
(3)
|
|
53,517
|
|
|
-
|
|
|
|
1,412,492
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
14,271
|
|
(4)
|
|
564,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad L. Conner
|
|
|
-
|
|
|
-
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13,418
|
|
|
26,837
|
|
(3)
|
|
40,255
|
|
|
-
|
|
|
|
1,062,477
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
10,735
|
|
(4)
|
|
424,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen T. Gannon
|
|
|
-
|
|
|
-
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,304
|
|
|
10,608
|
|
(3)
|
|
15,912
|
|
|
-
|
|
|
|
419,971
|
|
|
3/1/2017
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
10,608
|
|
(4)
|
|
419,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Fawcett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
(1)
|
Amounts
in
this
column
reflect
the
grant
date
fair value
of awards calculated
in
accordance with
FASB ASC 718,
using
the
valuation
methodology
and
assumptions
set
forth in
Note 17
to
the
Company’s 2017 Annual
Report
on
Form 10-K
for the
year ended
December
31,
2017, which are hereby
incorporated
by
reference.
For the
performance
stock units,
the
amounts
above were calculated
based
on
the
probable
outcome
of the
performance
conditions
as of the
service
inception
date, and
represent
the
target
number
of units,
consistent
with
the
estimate
of aggregate
compensation
cost
to be
recognized
over
the
service
period
determined
as of the
service
inception
date
under
FASB ASC 718.
|
|
|
(2)
|
Represents
awards granted
under
the
Section
162(m)
Plan.
Amounts
to
be
earned
under
this
plan
could
not be
determined
as of the
date
of grant.
As
discussed
above, the
Section
162(m)
Plan
sets
forth the
maximum annual
variable
compensation
that
can
be
granted
at 2%
of adjusted
pre-tax
operating
income
for our
CEO and
0.7%
of pre-tax
operating
income
for other
participants.
For the
2017
performance
period,
the Compensation
Committee
determined
to
pay less
than
the
maximum
amounts
for participants.
The
Section 162(m)
Plan
defines
“pre-tax
operating
income”
as, for the
applicable
fiscal year, our
consolidated
pretax income,
adjusted
to
exclude
the
impact
of any extraordinary
items,
goodwill
impairment,
integration
and restructuring
costs,
discontinued
operations,
acquisition
costs,
gains
or losses on
strategic
disposals, pension
curtailments
or settlements,
cumulative
effect of accounting
changes,
valuation
adjustments related
to
debt
accounted
for at fair value,
and
other
unusual
or non-recurring
items
of loss or expense.
|
|
|
(3)
|
Represents
performance
stock units
granted
under
the
Omnibus
Plan
for performance
year 2016,
which
are scheduled
to
vest
on
March 1,
2020
following
the
end
of the
three-year
performance
period,
based
half on ROTCE and
half on
Diluted
EPS
as described
earlier
in
“
Compensation Discussion
and
Analysis—Executive Compensation Decisions—Variable
Compensation—Variable
Compensation Mix”
above.
|
|
|
(4)
|
R
epresent
s
restricte
d
stoc
k
unit
s
grante
d
under the Omnibu
s
Pla
n
for performanc
e
y
ea
r
2016.
|
|
(5)
|
Represents restricted stock units granted under the Omnibus Plan as a buy-out award to Mr. Woods to compensate him for the bonus that would have otherwise been paid to him by his former employer for the 2016 year and the value of equity-based awards he forfeited in connection with his resignation, as
described earlier under
“Compensation Discussion and Analysis—Executive Compensation Decisions—Other Benefits—Employment Agreements.”
|
45
Outstanding
Equity Awards at 2017
Fiscal Year-End
The
following
table
shows,
for
each
NEO,
the
outstanding
equity
awards
held
as
of
December 31, 2017. These
awards
include
restricted
stock
units
and performance stock units
granted
in
years 2015, 2016 and 2017
.
|
Stock Awards
|
|
Name
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(1)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
|
Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
(1)
|
|
Bruce Van Saun
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 RSUs
(2)
|
|
8,029
|
|
|
337,057
|
|
|
-
|
|
|
-
|
|
2015 PSU
(3)
|
|
35,653
|
|
|
1,496,713
|
|
|
-
|
|
|
-
|
|
2016 RSUs
(4)
|
|
23,132
|
|
|
971,081
|
|
|
-
|
|
|
-
|
|
2016 PSUs
(5)
|
|
-
|
|
|
-
|
|
|
86,749
|
|
|
3,641,723
|
|
2016 Special RSUs
(6)
|
|
68,212
|
|
|
2,863,540
|
|
|
-
|
|
|
-
|
|
2016 Special PSUs
(7)
|
|
-
|
|
|
-
|
|
|
34,106
|
|
|
1,431,770
|
|
2017 RSUs
(8)
|
|
33,912
|
|
|
1,423,626
|
|
|
-
|
|
|
-
|
|
2017 PSUs
(9)
|
|
-
|
|
|
-
|
|
|
84,781
|
|
|
3,559,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Woods
|
|
|
|
|
|
|
|
|
|
|
|
|
RSU Buy-out
(10)
|
|
117,700
|
|
|
4,941,046
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald H. McCree III
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 RSUs
(4)
|
|
6,026
|
|
|
252,971
|
|
|
-
|
|
|
-
|
|
2016 PSUs
(5)
|
|
-
|
|
|
-
|
|
|
22,601
|
|
|
948,790
|
|
2017 RSUs
(8)
|
|
14,271
|
|
|
599,097
|
|
|
-
|
|
|
-
|
|
2017 PSUs
(9)
|
|
-
|
|
|
-
|
|
|
35,678
|
|
|
1,497,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad L. Conner
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 RSUs
(2)
|
|
1,738
|
|
|
72,961
|
|
|
-
|
|
|
-
|
|
2015 PSU
(3)
|
|
10,390
|
|
|
436,172
|
|
|
-
|
|
|
-
|
|
2016 RSUs
(4)
|
|
7,071
|
|
|
296,841
|
|
|
-
|
|
|
-
|
|
2016 PSUs
(5)
|
|
-
|
|
|
-
|
|
|
26,521
|
|
|
1,113,352
|
|
2017 RSUs
(8)
|
|
10,735
|
|
|
450,655
|
|
|
-
|
|
|
-
|
|
2017 PSUs
(9)
|
|
-
|
|
|
-
|
|
|
26,837
|
|
|
1,126,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen T. Gannon
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 RSUs
(2)
|
|
2,069
|
|
|
86,857
|
|
|
-
|
|
|
-
|
|
2015 PSU
(3)
|
|
9,845
|
|
|
413,293
|
|
|
-
|
|
|
-
|
|
2016 RSUs
(4)
|
|
11,439
|
|
|
480,209
|
|
|
-
|
|
|
-
|
|
2016 PSUs
(5)
|
|
-
|
|
|
-
|
|
|
17,160
|
|
|
720,377
|
|
2017 RSUs
(8)
|
|
10,608
|
|
|
445,324
|
|
|
-
|
|
|
-
|
|
2017 PSUs
(9)
|
|
-
|
|
|
-
|
|
|
10,608
|
|
|
445,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Fawcett
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The values in
these
columns
have
been
calculated
by
multiplying
the
number
of shares outstanding
as of December
31,
2017
by
$41.98,
the
closing
price
on
the
NYSE for Company shares as of December
29
,
2017 (the last trading day of the year on the NYSE).
|
|
|
(2)
|
These
amounts
reflect
restricted
stock units
granted
in
March 2015
for the
2014
performance
year under the
Omnibus
Plan.
The
units
that
remained
unvested
at the
end
of the
2017
fiscal
year are scheduled
to vest
on
March 23,
2018.
|
|
46
|
(3)
|
These
amounts
reflect
the
number
of performance
stock units
granted
in
March 2015
for the
2014 performance
year under
the
Omnibus
Plan,
which
were
earned
during
the
performance
period
of January 1, 2016
through
December
31,
2016
based
half on
ROTCE and
half on
Diluted
EPS.
The
Compensation Committee
assessed the
performance
of these
awards at its
February 16,
2017
meeting,
as described in our Proxy State
ment filed on March 7, 2017, in
“
Compensation Discussion
and
Analysis—Executive Compensation Decisions—Variable Compensation—20
15
PSU Award Performance Assessment
.
”
These
units
are scheduled
to
vest
on March 23,
2018, following the recently completed risk assessment by the Compensation Committee.
|
|
|
(4)
|
These
amounts
reflect
restricted
stock units
granted
in
March 2016
for the
2015
performance
year under the
Omnibus
Plan,
which
have two remaining equal i
nstallments scheduled to vest
on
March 1,
2018
and
2019.
|
|
|
(5)
|
These
amounts
reflect
performance
stock units
granted
in
March 2016
for the
2015
performance
year under the
Omnibus
Plan,
which
are scheduled
to
vest
on
March 1,
2019
following
the
end
of the
three-year performance
period,
based
half on
ROTCE and
half on
Diluted
EPS
as described
earlier
in
“
Compensation Discussion
and
Analysis—Executive Compensation Decisions—Variable
Compensation—Variable
Compensatio
n
Mix.
”
Based on performance through December 31, 2017, amounts
in
this
column
reflect
the maximum level
of performance
for ROTCE and the
threshold level of performance
for Diluted
EPS.
|
|
|
(6)
|
This
amount
reflects
restricted
stock units
granted
to
Mr. Van Saun on
May 5,
2016
as part
of his
special award, which
are scheduled
to
become
vested
on
May 5,
2019.
|
|
|
(7)
|
T
hi
s
a
moun
t
reflect
s
performanc
e
stoc
k
unit
s
grante
d
t
o
M
r
.
Va
n
S
au
n
o
n
M
a
y
5
,
201
6
a
s
par
t
o
f
hi
s
s
pecial award
,
whic
h
a
r
e
schedule
d
t
o
becom
e
veste
d
o
n
Ma
y
5
,
2019
,
subjec
t
t
o
performanc
e
condition
s
a
s
described
abov
e
i
n
“
Termination of Employment and Change of Control—Employment Agreements with our NEOs—Employmen
t
Agreement with Bruce Van Saun.
”
Amount
s
i
n
this colum
n
reflec
t
the
threshol
d
performanc
e
leve
l
fo
r
thi
s
a
ward.
|
|
|
(8)
|
These
amounts
reflect
restricted
stock units
granted
in
March 2017
for the
2016
performance
year under the
Omnibus
Plan,
which
are scheduled
to
vest
in
equal
installments
on
March 1,
2018, 2019 and 2020.
|
|
|
(9)
|
These
amounts
reflect
performance
stock units
granted
in
March 2017
for the
2016
performance
year under the
Omnibus
Plan,
which
are scheduled
to
vest
on
March 1,
2020
following
the
end
of the
three-year performance
period. Based on performance through December 31, 2017, amounts
in
this
column
reflect
the
maximum level
of performance
for ROTCE and the
threshold level of performance
for Diluted
EPS.
|
|
|
(10)
|
This amount reflects a buy-out award
provided under Mr. Woods’ employment agreement, described earlier under
“Compensation Discussion and Analysis—Executive Compensation Decisions—Other Benefits—Employment Agreements.”
This award is scheduled to become vested in three installments: March 1, 2018 (44,726 units); March 1, 2019 (40,018 units); and March 1, 2020 (32,956 units).
|
|
Stock
Vested
in 2017
|
Stock Awards
(1)
|
|
Name
|
Number of Shares Acquired on
Vesting(#)
|
|
Value Realized on
Vesting($)
(2)
|
|
Bruce Van Saun
|
|
132,130
|
|
|
5,008,413
|
|
John Woods
|
|
-
|
|
|
-
|
|
Donald H. McCree III
|
|
3,014
|
|
|
119,324
|
|
Brad L. Conner
|
|
34,631
|
|
|
1,314,760
|
|
Stephen T. Gannon
|
|
7,791
|
|
|
298,054
|
|
John J. Fawcett
(3)
|
|
34,277
|
|
|
1,285,732
|
|
|
(1)
|
Amounts
reflect
Company shares issued
under
the
Omnibus
Plan and
the
Citizens Financial Group, Inc. Converted Equity 2010 Long Term Incentive Plan in connection
with
the
vesting
of equity-based
awards in
2017.
|
|
|
(2)
|
The
values
reflected
in
this
column
were
calculated
by
multiplying
the
number
of shares that
vested
in 2017
by
the
closing
price
of a Company share on
the
NYSE on
each
applicable
vesting
date.
|
|
|
(3)
|
The
awards reflected for Mr. Fawcett were
granted
in
connection
with
his
prior
service
as Chief
Financial Officer.
Pursuant
to
Mr. Fawcett’s separation agreement,
his
equity
awards remained
outstanding
following his
separation and
continued
to
vest
on
their
original
vesting
schedules subject to compliance with restrictive covenants.
|
|
47
2017
Pension
Benefits
Name
|
Plan Name
|
Number of Years
Credited Service
(2)
|
|
Present Value of Accumulated
Benefits($)
(3)
|
|
Payments During
Last Fiscal Year($)
|
|
Bruce Van Saun
|
—
|
|
-
|
|
|
-
|
|
|
-
|
|
John Woods
|
—
|
|
-
|
|
|
-
|
|
|
-
|
|
Donald H. McCree III
|
—
|
|
-
|
|
|
-
|
|
|
-
|
|
Brad L. Conner
(1)
|
CFG Pension Plan
|
|
4.5411
|
|
|
114,217
|
|
|
-
|
|
Stephen T. Gannon
|
—
|
|
-
|
|
|
-
|
|
|
-
|
|
John J. Fawcett
|
—
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1)
|
Mr. Conner
is
the only NEO
eligible to
participate in
the CFG Pension Plan.
|
|
(2)
|
After
December
31, 2012,
there were no further benefit accruals under
the CFG Pension Plan. Therefore,
an eligible employee’s
actual years
of
service may be more than such employee’s years
of
credited service under
the CFG Pension Plan.
|
|
(3)
|
For Mr. Conner,
the present
value of
accumulated
benefits at
December
31, 2017
was
calculated using
the same actuarial assumptions used by the Company for
GAAP
financial reporting purposes,
except where different assumptions are required. The following are the key assumptions used: (i) a discount rate of 3.67%; (ii) a retirement age of 65, as required (the earliest unreduced retirement age under the CFG Pension Plan); (iii) the mortality assumption reflects generational mortality improvement using Scale MP-2017 for males; and (iv) no pre-retirement decrements, as required.
|
2017 Pension
Benefits
We
sponsor
the
CFG Pension
Plan (formerly
RBS
Americas Pension
Plan)
(“Pension
Plan”),
which
is
a non-contributory
defined
benefit
pension
plan
that
is
qualified
under
Section
401(a)
of
the
Internal Revenue
Code.
The
Pension
Plan was closed
to
new
hires
and
re-hires
effective
January
1,
2009, and frozen
to
all
participants
and
benefit
accruals
effective
December 31,
2012. Regular
full-time
and part-time
employees
of
the
Company
who
were hired
before
January
1,
2009 and
completed
one year of
service were eligible
for
benefits
under
the
Pension
Plan.
The
benefit
under
the
Pension
Plan for
employees
is
currently calculated
using
a
formula
based
on an
employee’s
“average
gross
compensation”
(defined
under
the
Pension
Plan as
a
participant’s average
eligible
compensation
during
five
years of
employment
(whether
or
not
consecutive)
prior
to December 31,
2012 yielding
the
highest
average),
subject
to
limitations
imposed
by
the
Internal Revenue
Service.
Eligible
compensation
generally
includes
all
taxable
compensation,
other
than certain
equity-based
and
non-recurring
amounts.
The
formula
generally
provides
for
a
benefit
of
1% of
average
gross
compensation
multiplied
by
each
year of
the
participant’s
credited
service,
with such
benefit
percentage
varying
depending
on
the
employee’s
hire
date
and
retirement
date,
as specified
under
the
Pension
Plan.
B
enefits
under
the
Pension
Plan are generally
payable
in the
form
of
a
monthly
annuity,
though
benefits
under
the
Pension
Plan may be
received
as
a
lump sum
payment.
A participant’s pension benefit under the Pension Plan generally vests in full on the “normal retirement date,” when the participant reaches age 65 or the fifth anniversary of the date the participant commenced participation in the Plan, whichever is later. A
participant’s
pension benefit
under
the
Pension
Plan also
vests
in
full
upon
completion
of
five
years of
vesting
service. Participants
may begin
receiving
full
retirement
benefits
on
the
first
day
of
the
month
coincident with
or
immediately
following
the
normal
retirement
date
and
may be
eligible
for
reduced
benefits if
retiring
after
attainment
of
age
55 with
a
minimum
of
five
years of
vesting
servi
ce.
Participants who
retire after
attainment
of
age
62 with
a
minimum
of
twenty
years of
vesting
service are eligible to
receive unreduced
retirement
benefits.
Mr.
Conner
became
a
participant
in
the
Pension
Plan on July
1,
2009. As of December 31, 2017, Mr. Conner is eligible for early retirement under the Pension Plan and, based on his age at date of hire, will never be eligible for unreduced retirement benefits at age 62.
48
2017
Nonqualified Deferred
Compensation
Name
|
Executive Contributions in
Last FY ($)
|
|
Registrant Contributions in
Last FY ($)
|
|
Aggregate Earnings in
Last FY ($)
(2)
|
|
Aggregate Withdrawals in
Last FY ($)
(3)
|
|
Aggregate Balance at
Last FY ($)
|
|
Bruce Van Saun
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary deferred compensation plan
(1)
|
|
1,951,820
|
|
|
-
|
|
|
164,899
|
|
|
-
|
|
|
5,554,131
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
199,150
|
|
|
199,149
|
|
John Woods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Donald H. McCree III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Brad L. Conner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
43,117
|
|
|
43,116
|
|
Stephen T. Gannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
51,333
|
|
|
51,333
|
|
John J. Fawcett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable compensation awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
115,000
|
|
|
-
|
|
|
(1)
|
The
material
terms
of the
CFG
Voluntary Executive
Nonqualified
Deferred
Compensation
Plan
are described in
the
narrative
below.
Executive
contributions
for Mr. Van Saun in
the
last fiscal year include the
deferred portion
of his
2017
base salary
($148,700,
which
is
also reflected
in
the
“Base Salary”
column
of the
2017 Su
mmary
Compensation Tabl
e
)
and t
he
deferred
portion
of his
2017
variable
compensation
paid
in
cash during
2018
($1,803,120,
which
is
also reflected
in
the
“Non-Equity
Incentive
Compensation”
column
of the
2017
Summary
Compensati
on Tabl
e
).
T
he
aggregate
balance at last fiscal year end
also includes the following amounts, plus earnings on all such amounts:
|
|
|
-
|
$297,400 of his deferred 2016 salary (which was reflected in the “Base Salary” column of
the
2016
Summary
Compensation Tabl
e
);
|
|
|
-
|
$1,611,120
of his
2016
cash bonus
(which
was reflected
in
the
“Non-Equity
Incentive
Compensation”
column
of the
2016
Summary
Compensation Tabl
e
);
|
|
|
-
|
$297,400
of his
deferred
2015
salary
(which
was reflected
in
the
“Base Salary”
column
of the
2015
Summary
Compensation Tabl
e
);
|
|
|
-
|
$800,736
of his
2015
cash bonus
(which
was reflected
in
the
“Non-Equity
Incentive
Compensation”
column
of the
2015
Summary
Compensation Tabl
e
)
; and
|
|
|
-
|
$318,640
of his
2014
cash bonus
(which
was reflected
in
the
“Non-Equity
Incentive
Compensation” column
of the
2014
Summary
Compensation Tabl
e
).
|
|
|
(2)
|
For Mr. Van Saun, the
amount
in
this
column
reflects
the
earnings
on
his
deferred
compensation
plan account
during
2017.
|
|
|
(3)
|
Amounts
in
this
column
reflect
the
value
of deferred
cash awards that
were paid
as part of variable compensation fo
r the
2014 performance
year, and which were previously
disclosed
in
the
“Non-Equity
Incentive
Compensation”
column
of the
2014
Summary
Compensation Tabl
e
.
|
|
We
sponsor the
CFG Voluntary
Executive
Deferred Compensation
Plan, which does not offer
any matching
contributions
or
provide
for
above-market
earnings.
During
2017, Mr.
Van
Saun
participated
in
the
CFG Voluntary
Executive
Deferred Compensation
Plan and
elected to
defer 10% of
his
base
salary and 80% of
the
cash
portion
of
his
variable
compensation
award
for the
2017 performance
year.
Under
the
CFG Voluntary
Executive
Deferred Compensation
Plan,
eligibility
is
limited
to
employees who
have
total
compensation
in
the
immediately
preceding
year equal
to
or
exceeding
the
Internal Revenue
Code
Section
401(a)(17)
limit
for
the
relevant
plan
year. Participants
are permitted
to defer
between
1% and
80% of
their
base
salary and
annual
bonus.
Participants
select
the
allocation
49
of
their
accounts
among
investment
indices
available
under
the
plan.
Our Board has
the power
to
amend
the
plan
at
any time,
as
long
as
the
amount
accrued
to
the
da
te
of
amendment
in any account
under
the
plan
is
not
decreased
or
otherwise
restricted.
In addition,
following
a termination
of
employment
participants
in
the
CFG Executive
Voluntary
Deferred Compensation
Plan are entitled
to
receive amounts
that
have
been
deferred
under
that
plan.
TERMINATION
OF EMPLOYMENT AND CHANGE
OF CONTROL
We
have
entered
into
an
employment
agreement
with
each
of
our
NEOs,
the
material
terms
of
which are summarized
below,
including
severance
provisions.
In addition,
the
treatment
of
equity-based and deferred cash awards
held
by
our
NEOs upon
a
termination
of
employment
and
change
of
control
are summarized below.
Please see
the
Potential
Payments Table
below
for
quantification
of
estimated
payments
and benefits
to
which
our
NEOs would
be
entitled
under
various
termination
scenarios
and
upon
a
change of
control,
in
each
case,
assuming
such
event
occurred
on
December 31,
2017.
Equity Awards and Deferred Cash Awards
Equity
awards under
the
Omnibus
Plan and deferred cash awards
granted
to
our
NEOs have
the
following
treatment upon termination of employment.
Provisions relating
to
the
treatment
of
Bruce
Van
Saun’s
equity-based
awards
and deferred cash awards
upon
termination
of
employment (including
following
a
change
of
control
of
the
Company)
are included
below
in
the
description
of
his employment
agreement.
Restricted
Stock
Units & Deferred Cash Awards
-
If a
participant’s
employment
with
the
Company
is
terminated
by
the Company
without
“
cause”
(as
defined
in
the award agreements under the
Omnibus
Plan),
or
by
reason
of
“
disability”
or “retirement”
(as
defined
in
award agreements under
the
Omnibus
Plan),
vesting
and
settlement
of
awards
will continue
as originally
scheduled
subject
to
the
participant
not
engaging
in
“
detrimental
activity”
(as defined in award agreements under the Omnibus Plan),
or competitive
activity
in
the
case
of
disability
or
retirement, during
the
remaining
vesting period.
If a
participant
voluntarily
resigns
or
is
terminated
by
the
Company
for
cause,
unvested awards
will be
forfeited.
All
unvested
awards
will become
vested
on
the
date
of
a
participant’s death.
Performance
Stock
U
nits
-
I
n
th
e
even
t
o
f
a
participant’
s
v
oluntar
y
resignation
,
al
l
unvested award
s
woul
d
b
e
f
orfeited
.
I
n
th
e
even
t
o
f
a
n
i
nvoluntar
y
terminatio
n
b
y
th
e
Compan
y
o
f
the grante
e
w
ithou
t
cause
,
a
wards wil
l
continu
e
t
o
ves
t
i
n
accordanc
e
wit
h
th
e
origina
l
schedul
e
s
ubjec
t
t
o
actua
l
performanc
e
and wil
l
no
t
b
e
pro-rate
d
base
d
o
n
service
,
provide
d
th
e
terminatio
n
doe
s
no
t
occu
r
prio
r
t
o
th
e
first anniversar
y
o
f
th
e
performanc
e
perio
d
star
t
dat
e
a
n
d
th
e
participan
t
doe
s
no
t
engag
e
in “detrimenta
l
activity
”; if
the terminatio
n
occur
s
prio
r
t
o
th
e
firs
t
yea
r
anniversar
y
o
f
th
e
performanc
e
perio
d
star
t
date, award
s
wil
l
b
e
forfeited
.
I
n
th
e
even
t
o
f
a
termination by reason of “disability” or “retirement”
(a
s
eac
h
i
s
define
d
i
n
th
e
Omnibu
s
P
lan
),
a
wards wil
l
continu
e
t
o
ves
t
i
n
accordanc
e
wit
h
th
e
origina
l
schedul
e
s
ubjec
t
t
o
actua
l
performanc
e
and wil
l
no
t
b
e
pro-rate
d
base
d
o
n
service
,
provided th
e
participan
t
doe
s
no
t
engag
e
in “detrimenta
l
activity
” or “competitive activity.”
I
n
th
e
even
t
o
f
a
participant’
s
death
,
award
s
wil
l
becom
e
veste
d
at targe
t
an
d
w
il
l
no
t
b
e
s
ubjec
t
t
o
pro-ratio
n
base
d
o
n
service
.
I
n
th
e
even
t
o
f
a
terminatio
n
f
o
r
cause
,
award
s
wil
l
be forfeited.
50
Omnibus Plan Provisions
In the
event
of
a
“change
of
control”
(as
defined
in
the
Omnibus
Plan and
summarized
below), except
as
otherwise
provided
in
the
applicable
award
agreement,
the
Compensation Committee
may provide
for:
|
•
|
continuation
or
assumption
of
outstanding
awards
under
the
Omnibus
Plan by
the Company (if
we are the
surviving
corporation)
or
by
the
surviving
corporation
or
its
parent;
|
|
|
•
|
substitution
by
the
surviving
corporation
or
its
parent
of
awards
with
substantially
the same
terms
and
value
as
such
outstanding
awards
under
the
Omnibus
Plan;
|
|
|
•
|
acceleration
of
the
vesting
(including
the
lapse
of
any restrictions,
with
any performance criteria or
conditions
deemed
met
at
target)
or
the
right
to
exercise
outstanding
awards immediately
prior
to
the
date
of
the
change
of
control
and
the
expiration
of
awards
not timely exercised
by
the
date
determined
by
the
Compensation
Committee;
or
|
|
|
•
|
in
the
case
of
outstanding
stock
options
and
SARs,
cancelation
in
consideration
of
a payment
in
cash
or
other
consideration
equal
to
the
intrinsic
value
of
the
award.
The Compensation
Committee
may,
in
its
sole
discretion,
terminate
without
the
payment
of any consideration,
any stock
options
or
SARs
for
which
the
exercise
or
hurdle
price
is
equal to
or
exceeds
the
per
share
value
of
the
consideration
to
be
paid
in
the
change
of
control transaction.
|
|
Under
the
Omnibus
Plan,
except
as
otherwise
provided
in
a
participant’s
award
agreement, “change
of
control”
generally
means
the
occurrence
of
one
or
more
of
the
following
events:
|
•
|
the
acquisition
of
more
than
50% of
the
combined
voting
power
of
our
outstanding securities
(other
than
by
an
employee
benefit
plan
or
trust
maintained
by
us);
|
|
|
•
|
the
replacement
of
the
majority
of
our
directors
during
any 12-month
period;
|
|
•
|
the
consummation
of
our
merger
or
consolidation
with
another
entity
(unless
our
voting securities
outstanding
immediately
before
such
transaction
continue
to
represent
at
least 50% of
the
combined
voting
power
and
total
fair market value
of
the
securities
of
the surviving
entity,
or
if
applicable,
the
ultimate
parent
thereof,
outstanding
immediately after
such
transaction);
or
|
|
|
•
|
the
transfer
of
our
assets
having
an
aggregate
fair market value
of
more
than
50% of
the fair market value
of
the
company
and
our
subsidiaries
immediately
before
such
transfer, but
only
to
the
extent
that
in
connection
with
such
transfer
or
within
a
reasonable
period thereafter,
our
stockholders
receive distributions
of
cash
and/or
assets
having
a
fair market value
that
is
greater
than
50% of
the
fair market value
of
us
and
our
subsidiaries immediately
before
such
transfer.
|
|
Restricted
Stock
Unit, Performance
Stock
Unit
and Deferred Cash
Award
Agreements
In the
event
of
a
c
hange
of
c
ontrol,
the
actual
number
of
performance
stock
units
earned
will be
determined
and
will remain
subject
to
time-based
vesting
conditions
until
the
end
of
the original
vesting
period.
If within
12 months
following
a
c
hange
of
c
ontrol,
the
participant’s employment
is
terminated
by
the
Company
without
“
cause”
(as
defined
in
award agreements under
the
Omnibus
Plan)
or the
participant
resigns
for
“
good
reason”
(as
defined
in
the
award agreements under the
Omnibus
Plan),
restricted
stock
units, deferred cash and
performance
stock
units
will fully vest
and
be
settled
immediately
following
the termination, with the level of performance for performance stock units measured as of the change of control.
51
Severance
The
severance
to
which
our
NEOs are entitled
in
various
circumstances
is
governed
by
their employment
agreements,
which
are described
below
in
“—
Employment
Agreements
with
Our
NEOs.
” None
of
our
NEOs’
employment
agreements
provides
for
excise
tax
gross-ups
in
connection
with
a change
of
contro
l
.
In addition
to
severance
pay,
under
our
severance
practice
our
NEOs would
also
be
entitled
to
receive benefits
under
our
then-existing
health
and
welfare plans
for
one
month at active employee rates, prior to the start of the COBRA continuation period.
Outplacement
services would
also
be
offered
for
12 months.
We
may amend
or
terminate
this
practice
at
any time.
Employment Agreements
with Our
NEOs
The
material
terms
of
the
agreements
entered
into
with
our
NEOs are summarized
below.
Employment Agreement
with
Mr.
Van Saun
In light
of
UK and
European
remuneration
regulations
ceasing
to
apply
to
the
Company
in
late
2015, we entered
into
an
amended
employment
agreement
with
Mr.
Van
Saun
on
May 5,
2016. The Compensation
Committee’s
objective
was to
put
into
place
an
arrangement
that
balanced
its
former obligations
under
Mr.
Van
Saun’s
prior
agreement
and
achieved
the
following
positive
results
for
the Company:
(i)
motivates
and
rewards Mr.
Van
Saun
for
the
achievement
of
our
strategic
objectives; (ii) provides
additional
retentive
value;
and
(iii)
aligns
terms
and
conditions
more
closely
with
US market practice.
The agreement has an initial
five-year term
that
will be
extended
automatically
for
a subsequent
two-year
term
unless
either
party
provides
at
least
12 months notice
to terminate. There
is
no
further
opportunity
for
automatic
renewal beyond
the additional
two-year
term.
In the
event
of
Mr.
Van
Saun’s
voluntary
resignation,
he
would
be
required to
provide
the
Company
at
least
six
months
notice
in
order
to
effectuate
an
orderly
handover
of duties.
Pursuant to the agreement, Mr.
Van
Saun
is
entitled
to
receive an
annual
base
salary of
$1,487,000 and
has
a
target
total
compensation
opportunity
of
$8.1 million, which was increased from $7.5 million
in August 2017 in light of the subsequent increases to median CEO compensation in our peer group. The form and
terms
of Mr. Van Saun’s
variable
compensation
are
to
be
determined
annually
by
the
Compensation
Committee.
In addition, Mr.
Van
Saun
is
eligible
to
participate
in
employee
benefits
available
to
the
Company’s
senior executives
generally,
and
is
also
entitled
to
the
business
use
of
a
company
car.
The agreement also provided Mr. Van Saun with a one-time
equity
award
with
a
target value
of
$3 million,
half
of
which
was granted
in
the
form
of restricted
stock
units
and
half
in
performance
stock
units
(in
the
case
of
performance
stock units,
with
vesting
level
depending
on
performance,
as
described
below).
This
award
will become
vested
on
the
three
year anniversary of
the
grant
date,
provided
Mr.
Van
Saun
does not
resign
prior
to
that
date.
The
performance
stock
units
are intended
to
focus
and
reward Mr.
Van
Saun
for
progress toward the
successful
achievement
of
the
Company’s
long-term
strategic
plan.
T
he
Compensation
Committee
will conduct
a qualitative assessment
of
results
across
financial, risk,
customer
and
enterprise
p
erformance
dimensions
following
the
end
of
the three-year
performance
period to determine the extent to which these performance stock units ultimately vest.
52
Under
the
terms
of
his
agreement,
Mr.
Van
Saun
is
also
entitled
to
the
following
payments
and benefits
upon
termination
of
employment
in
various
scenarios,
in
each
case,
subject
to
execution and
non-revocation
of
a
release in
our
favor:
Termination
without
cause or
resignation
for
good reason
absent
a
change
of control
|
|
Mr.
Van
Saun
would
receive a
lump
sum
cash
severance
payment equal
to
two
times
his
base
salary and
would
also
receive a
pro-rata portion
of
his
target
cash
incentive
for
the
year of
termination payable
when cash
incentives
are paid
to
other
executives,
in
each
case, subject
to
an
orderly
handover
of
duties.
In addition,
his outstanding
unvested
equity and deferred cash
awards
would
continue
to
vest
on
their original
schedule,
with
performance
stock
units
subject
to
actual performance
and,
in
each
case,
subject
to
Mr.
Van
Saun
not engaging
in
detrimental
activity
for
12 months post-termination.
It should
be
noted
that
the
Company’s
election not
to
renew the
agreement
for
an
additional
two
year term
would constitute
a
termination
without
cause.
|
|
|
|
Termination
without
cause or
resignation
for
good reason
following
a
change
of control
|
|
In the
event
of
a
qualifying
termination
of
employment
occurring
within 24 months
following
a
change
of
control,
Mr.
Van
Saun
would receive a
lump
sum
cash
severance
payment
equal
to
three
times the
sum
of
his
base
salary and
his
target
cash
incentive
for
the
year of termination,
plus
a
pro-rata
portion
of
his
target
cash
incentive
for the
year of
termination.
Upon
the
change
of
control,
Mr.
Van
Saun’s performance
stock
units
would
be
frozen
at
target
performance level,
but
not
accelerated.
Following
the
subsequent
qualifying termination,
all
of
Mr.
Van
Saun’s
outstanding
equity
and deferred cash awards
would immediately
vest
and
be
paid.
The
agreement
also
provides
that
if any payments
or
benefits
to
Mr.
Van
Saun
(whether
or
not
under
the employment
agreement)
would
be
considered
parachute
payments pursuant
to
Internal
Revenue
Code
Section
280G,
these
payments and
benefits
would
be
reduced
to
the
extent necessary to avoid triggering
the
excise
tax
under
Internal
Revenue
Code
Section
4999 unless
he
would
be
better
off
(on
an
after-tax
basis)
if he
received
all
payments
and
benefits
due
and
paid
all excise
and
income
taxes.
The
employment
agreement
does
not provide
any gross-up
for
excise
taxes.
|
|
|
|
Resignation
without
Good Reason
(Retirement)
|
|
Mr.
Van
Saun
currently meets
the
Company’s
retirement
rule
as
his age
plus
years of
service equals
or
exceeds
65,
with
a
minimum
of at
least
five
years of
service.
In connection
with
Mr.
Van
Saun’s retirement,
he
would
be
required
to
provide
at
least
six
months notice
and
effectuate
an
orderly
handover
of
duties.
At
the
time
of termination,
if
the
Company
requires
Mr.
Van
Saun
to
work during the
notice
period,
the
Company
and
Mr.
Van
Saun
would
mutually agree
on
how
a
pro-rata
portion
of
his
variable
compensation (excluding
performance-based
awards)
for
the
year in
termination would
be
payable.
Outstanding
unvested
equity
and deferred cash awards,
other
than the
one-time
special
award
granted
in
May 2016, would
continue
to vest
on
their
original
schedule,
with
performance
stock
units subject
to
actual
performance
and,
in
each
case,
subject
to
Mr.
Van Saun
not
engaging
in
competitive
activity
during
the
remaining vesting
period
or
specified
detrimental
activity
for
12 months
post- termination.
The
one-time
special
award
would
be
forfeited.
|
|
|
|
53
Death
|
|
Mr.
Van
Saun’s
estate
would
receive his
base
salary through
the
end of
the
month
in
which
his
death
occurs
as
well as
a
pro-rata
portion of
his
target
cash
incentive.
In addition,
his
outstanding
equity and deferred cash awards
would
immediately
vest
and
be
paid,
with
performance stock
units
vesting
at
target
level.
|
|
|
|
Disability
|
|
Mr.
Van
Saun
would
continue
to
receive his
base
salary up
to
the date
he
becomes
eligible
for
long-term
disability
benefits
under
the Company’s
plan
(currently,
six
months from the date of disability)
and,
in
addition,
his outstanding
unvested
equity
and deferred cash awards
would
continue
to
vest
on
their original
schedule,
with
performance
stock
units
subject
to
actual performance
and,
in
each
case,
subject
to
Mr.
Van
Saun
not engaging
in
competitive
activity
during
the
remaining
vesting
period or
specified
detrimental
activity
for
12 months
post-termination.
|
Mr.
Van
Saun
is
subject
to
a
perpetual
confidentiality
covenant.
In addition,
Mr.
Van
Saun
is
subject to
non-competition
and
non-solicitation
covenants.
The
non-competition
covenant
applies
for
six months
post-termination,
concurrent
with
any notice
period,
in
the
event
of
a
termination
without cause
or
resignation
for
good
reason.
For
this
purpose,
competitors
are defined
to
include
the following
companies:
JP
Morgan
Chase,
Bank
of
America,
Citigroup,
Wells
Fargo,
US Bancorp,
Regions Financial
Corp.,
M&T
Bank
Corp.,
PNC, Fifth
Third,
Sun
Trust,
Comerica,
KeyCorp,
BB&T,
Capital
One and
TD Bank.
The
non-solicitation
covenant
prohibits
solicitation
of
employees
as
well as
customers and
prospective
clients
for
twelve
months
post-termination,
concurrent
to
any notice
period,
in
the event
of
a
termination
without
cause
or
resignation
for
good
reason.
The
agreement
includes
the
following
definitions
of
cause
and
good
reason:
“
Caus
e
” includes:
(i)
any indictment
for,
conviction
of,
plea
of
guilty
or
nolo
contendere
to
by Mr.
Van
Saun
for
the
commission
of:
(a)
any felony,
(b)
any criminal
offense
within
the
scope
of Section
19 of
the
Federal
Deposit
Insurance
Act,
12 U.S.
C.
§ 1829; or
(c)
a
misdemeanor
i
nvolving dishonesty;
(ii)
if
Mr.
Van
Saun
willfully commits
a
material
breach
of
his
obligations
under
his employment
agreement
or
repeats
or
continues
after
written
warning
any material
breach
of
his obligations
under
his
employment
agreement,
or
is,
in
the
opinion
of
the
board,
guilty
of
gross misconduct
which
brings
him
or
the
company
or
any of
its
affiliates
into
disrepute;
(iii)
if
Mr.
Van Saun
is
guilty
of
dishonesty
in
the
conduct
of
his
duties
under
his
employment
agreement,
gross incompetence,
willful
neglect
of
duty,
or
of
mismanagement
of
his
financial
affairs through
failure to
observe
the
company’s
rules
and
procedures
for
the
operation
of
bank
accounts
and/or
borrowing; (iv) if
Mr.
Van
Saun
commits
any act
of
bankruptcy
or
takes
advantage
of
any statute
for
the
time being
in
force
offering
relief to
insolvent
debtors;
or
(v)
if,
as
a
result
of
any default
on
the
part
of Mr.
Van
Saun,
he
is
prohibited
by
law from
acting
as
an
officer
of
the
company
or
any of
its affiliates.
“
Good
Reaso
n
” includes
a
material
breach
of
the
employment
agreement
by
the
company,
or
a substantial
diminution
or
other
substantial
adverse
change,
not
consented
to
by
Mr.
Van
Saun,
in
the nature
or
scope
of
his
responsibilities,
authorities,
powers,
functions
or
duties
or
in
his
base
salary, except
that
removal
of
the
role
of
chairman
of
the
company
from
his
duties
shall
not
amount
to
good reason.
54
Employment Agreements
with
Other
Active
NEOs
Each
of
Messrs. Woods,
McCree, Conner
and
Gannon has
entered
into
an
employment
agreement
with
the Company.
These
agreements
generally
provide
for
the
terms
of
each executive’s
compensation
arrangement,
including
salary and
variable
compensation,
vacation
and eligibility
for
other
health
and
welfare benefits.
Under
each
executive’s
agreement,
the
executive
is subject
to
a
notice
period
with
regard
to
his
intent
to
leave
our employ
for
any reason (120 days for Messrs. Woods, McCree and Conner and 90 days for Mr. Gannon).
In addition,
each
of
the
agreements contains
covenants
regarding
the non-solicitation
of
customers
and
employees
that
apply
for
12 months
following
a
termination
of employment
for
any reason.
These
agreements
each
provide
that
the
executive
is
entitled to
a
minimum
payment
of
26 weeks of
base
salary in
the
event
he
is
made
redundant
or
is terminated
by
the Company
without
“
cause”
(as defined in the agreements)
,
subject
to
the execution
and
non-revocation
of
a
release in
favor
of
the
Company.
This
level
of
severance
is consistent
with
severance
available
to
all
executives. Mr. Woods’ agreement also included increased severance upon a qualifying termination within 18 months following a change of control equal to his base salary and target bonus opportunity which, as described below, was superseded by a subsequent amendment to his agreement in August 2017.
In August 2017, the Compensation Committee approved amendment of the agreements in place for Messrs. Woods, McCree, Conner and Gannon to provide for double trigger severance in the event of a qualifying termination following a change of control. This decision was made following a review of peer practice and to achieve parity among members of senior management. The amendment to each agreement provides that in the event of a termination by the Company without “cause” (as defined in the agreement) or resignation by the executive with “good reason” (as defined in the agreement) within 24 months following a change of control, the executive will receive severance consisting of: (i) two times the sum of his current base salary and average cash bonus received during the prior three years, plus (ii) a pro-rata cash bonus for the year in which termination occurs, also based on the average cash bonus during the prior three years. The amendment for Mr. Woods’ agreement superseded the change of control severance set forth in his original employment agreement.
The agreements in place for Messrs. Woods and McCree also
provide
that,
for
purposes
of
calculating retirement
eligibility
under
the
Company’s
various
plans,
each executive
will be
credited
with
an
additional
five years of
service.
Pursuant to Mr. Woods’ agreement, he was granted a $7 million buy-out award in order to compensate him for the bonus which would have otherwise been paid to him by his former employer for the 2016 year and the value of awards he forfeited in connection with his resignation. Of that amount, $3 million was paid in cash on March 31, 2017 and $4.66 million was granted in the form of restricted stock units that will become vested in installments on March 1, 2018, 2019 and 2020
(with the increase in award value from $4 million to $4.66 million due to the difference between the initial valuation and the grant date values)
. Lastly,
Mr.
McCree received an
annual
gross
housing
allowance
of
$100,000, which was discontinued effective December 31,
2017.
The
agreements
include
the
following
definitions
of
cause
and
good
reason:
“
Caus
e
” includes (i) any conviction (including a plea of guilty or of nolo contendere or entry into a pre-trial diversion program) for the commission of a felony or any conviction of any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829; (ii) an act of gross misconduct, fraud, embezzlement, theft or material dishonesty with the executive’s duties or in the course of employment with the Company or an affiliate; (iii) failure on the part of executive to perform his employment duties in any material respect, which is not cured to the reasonably satisfaction of the Company within thirty (30) days after the executive receives written notice of such failure; (iv) the executive’s violation of the provisions of his employment agreement relating to non-solicitation, confidentiality, ownership of materials, duty to return company property or intellectual property rights; and/or (v) the executive makes any material false or disparaging comments about the Company or any Company affiliate, or any Company or Company affiliate employee, officer, or director, or engages in any such activity which in the opinion of the Company is not consistent with providing an orderly handover of the executive’s responsibilities.
55
“
Good Reason
” includes a material diminution
in the executive’s authority, duties, or responsibilities, a material diminution in the executive’s base salary other than a general reduction in base salary that affects all similarly situated employees, or a relocation of the executive’s principal place
of employment by more than fifty (50) miles from his current principal place of employment, unless the new principal place of employment is closer to the executive’s home address.
Employment Agreement with Mr. Fawcett
On
November
3,
2016, Mr.
Fawcett
entered
into
an
employment
agreement
with
the
Company
to serve as
Interim
Chief Financial
Officer following
the
departure
of
our Former Chief Financial Officer,
Mr.
Eric
Aboaf.
Mr.
Fawcett’s agreement
provided
that
he
would have
a
monthly
salary of
$250,000, or
$57,692 per
week, commencing
December 17,
2016. Mr.
Fawcett remained in this role until March 17, 2017, as expected, and was not
eligible
for
any bonus
or
any other
type of
incentive
payment
or
award
or
separation
payment.
Potential
Payments
Table
The
following
table
s
ummarizes
estimated
payments
and
benefits
that
w
ould
be
provided
to
our
N
EOs (other
than
M
r. Fawcett)
pursuant
to
their
employment
a
greements,
our
severance practice
and
the
terms
of
outstanding
a
wards,
in
connection
w
ith
a
termination
of
employment
under various
scenarios
or
a
change
of
control,
assuming
s
uch
event
occurred
on
D
ecember
31,
2017.
F
o
r
th
e
summar
y
o
f
th
e
materia
l
term
s
o
f
th
e
outstandin
g
e
quit
y
a
wards
,
th
e
severanc
e
t
o
whic
h
NEOs
’
w
oul
d
b
e
entitled, an
d
th
e
term
s
a
n
d
condition
s
o
f
ou
r
N
EOs
’
employmen
t
a
greements
,
se
e
“
—Equit
y
Awards”, “—Severance
”
an
d
“—Employmen
t
Agreement
s
wit
h
ou
r
NEO
s
”
a
bove.
56
Name
|
Voluntary
Termination
($)
|
|
|
Voluntary
Termination
with Good
Reason
($)
|
|
|
Not for Cause
Termination
($)
|
|
|
For Cause
Termination
($)
|
|
|
Change in
Control Not
for Cause
Termination
($)
|
|
|
Change in
Control
Good Reason
Resignation
($)
|
|
|
Change in
Control Only
(No Related
Termination)
($)
|
|
|
Death
($)
|
|
|
Disability
($)
|
|
|
Retirement
($)
|
|
|
Bruce Van Saun
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payment
|
|
3,756,500
|
|
(6)
|
|
4,957,900
|
|
(7)
|
|
4,957,900
|
|
(7)
|
|
-
|
|
|
|
12,396,600
|
|
(8)
|
|
12,396,600
|
|
(8)
|
|
-
|
|
|
|
1,983,900
|
|
(9)
|
|
743,500
|
|
(10)
|
|
3,756,500
|
|
(6)
|
Equity Awards
(1)(2)
|
|
11,429,307
|
|
|
|
15,724,617
|
|
|
|
15,724,617
|
|
|
|
-
|
|
|
|
15,724,617
|
|
|
|
15,724,617
|
|
|
|
-
|
|
|
|
15,724,617
|
|
|
|
15,724,617
|
|
|
|
11,429,307
|
|
|
Deferred Cash Awards
(1)(2)
|
|
199,149
|
|
|
|
199,149
|
|
|
|
199,149
|
|
|
|
-
|
|
|
|
199,149
|
|
|
|
199,149
|
|
|
|
-
|
|
|
|
199,149
|
|
|
|
199,149
|
|
|
|
199,149
|
|
|
Health Benefits
(3)
|
|
-
|
|
|
|
1,141
|
|
|
|
1,141
|
|
|
|
-
|
|
|
|
1,141
|
|
|
|
1,141
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outplacement Services
(4)
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
15,384,956
|
|
|
|
20,891,307
|
|
|
|
20,891,307
|
|
|
|
-
|
|
|
|
28,330,007
|
|
|
|
28,330,007
|
|
|
|
-
|
|
|
|
17,907,666
|
|
|
|
16,667,266
|
|
|
|
15,384,956
|
|
|
John Woods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payment
|
|
-
|
|
|
|
-
|
|
|
|
350,000
|
|
(11)
|
|
-
|
|
|
|
3,830,000
|
|
(12)
|
|
3,830,000
|
|
(12)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
4,941,046
|
|
|
|
-
|
|
|
|
4,941,046
|
|
|
|
4,941,046
|
|
|
|
-
|
|
|
|
4,941,046
|
|
|
|
4,941,046
|
|
|
|
4,941,046
|
|
|
Deferred Cash Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Health Benefits
(3)
|
|
-
|
|
|
|
-
|
|
|
|
1,211
|
|
|
|
-
|
|
|
|
1,211
|
|
|
|
1,211
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outplacement Services
(4)
|
|
-
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
-
|
|
|
|
-
|
|
|
|
5,300,757
|
|
|
|
-
|
|
|
|
8,780,757
|
|
|
|
8,780,757
|
|
|
|
-
|
|
|
|
4,941,046
|
|
|
|
4,941,046
|
|
|
|
4,941,046
|
|
|
Donald H. McCree III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payment
|
|
-
|
|
|
|
-
|
|
|
|
350,000
|
|
(11)
|
|
-
|
|
|
|
3,950,000
|
|
(12)
|
|
3,950,000
|
|
(12)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
1,800,858
|
|
|
|
-
|
|
|
|
3,298,620
|
|
|
|
3,298,620
|
|
|
|
-
|
|
|
|
3,298,620
|
|
|
|
3,298,620
|
|
|
|
3,298,620
|
|
|
Deferred Cash Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Health Benefits
(3)
|
|
-
|
|
|
|
-
|
|
|
|
1,096
|
|
|
|
-
|
|
|
|
1,096
|
|
|
|
1,096
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outplacement Services
(4)
|
|
-
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
-
|
|
|
|
-
|
|
|
|
2,160,454
|
|
|
|
-
|
|
|
|
7,258,216
|
|
|
|
7,258,216
|
|
|
|
-
|
|
|
|
3,298,620
|
|
|
|
3,298,620
|
|
|
|
3,298,620
|
|
|
Brad L. Conner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payment
|
|
-
|
|
|
|
-
|
|
|
|
350,000
|
|
(11)
|
|
-
|
|
|
|
3,282,500
|
|
(12)
|
|
3,282,500
|
|
(12)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
2,369,981
|
|
|
|
-
|
|
|
|
3,496,598
|
|
|
|
3,496,598
|
|
|
|
-
|
|
|
|
3,496,598
|
|
|
|
3,496,598
|
|
|
|
3,496,598
|
|
|
Deferred Cash Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
43,116
|
|
|
|
-
|
|
|
|
43,116
|
|
|
|
43,116
|
|
|
|
-
|
|
|
|
43,116
|
|
|
|
43,116
|
|
|
|
43,116
|
|
|
Health Benefits
(3)
|
|
-
|
|
|
|
-
|
|
|
|
1,211
|
|
|
|
-
|
|
|
|
1,211
|
|
|
|
1,211
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outplacement Services
(4)
|
|
-
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
-
|
|
|
|
-
|
|
|
|
2,772,808
|
|
|
|
-
|
|
|
|
6,831,925
|
|
|
|
6,831,925
|
|
|
|
-
|
|
|
|
3,539,714
|
|
|
|
3,539,714
|
|
|
|
3,539,714
|
|
|
Stephen T. Gannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payment
|
|
-
|
|
|
|
-
|
|
|
|
300,000
|
|
(11)
|
|
-
|
|
|
|
2,984,000
|
|
(12)
|
|
2,984,000
|
|
(12)
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
2,146,060
|
|
|
|
-
|
|
|
|
2,591,383
|
|
|
|
2,591,383
|
|
|
|
-
|
|
|
|
2,591,383
|
|
|
|
2,591,383
|
|
|
|
2,591,383
|
|
|
Deferred Cash Awards
(1)(5)
|
|
-
|
|
|
|
-
|
|
|
|
51,333
|
|
|
|
-
|
|
|
|
51,333
|
|
|
|
51,333
|
|
|
|
-
|
|
|
|
51,333
|
|
|
|
51,333
|
|
|
|
51,333
|
|
|
Health Benefits
(3)
|
|
-
|
|
|
|
-
|
|
|
|
720
|
|
|
|
-
|
|
|
|
720
|
|
|
|
720
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outplacement Services
(4)
|
|
-
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
8,500
|
|
|
|
8,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
-
|
|
|
|
-
|
|
|
|
2,506,613
|
|
|
|
-
|
|
|
|
5,635,936
|
|
|
|
5,635,936
|
|
|
|
-
|
|
|
|
2,642,716
|
|
|
|
2,642,716
|
|
|
|
2,642,716
|
|
|
|
(1)
|
These
amounts
reflect
the
value
of deferred
cash and
shares expected
to
vest,
with
equity award values determined by
multiplying
the
number
of shares subject
to
outstanding
awards by
$41.98,
which
is
the
closing
price
of a Company share on
the
NYSE on
December
29,
2017 (the last trading day of the year on the NYSE).
In
circumstances
where
the
performance
stock units granted
in
2015
are expected
to
vest,
that
award is
reflected
based
on
the
actual level
of performance assessed by
the
Compensation
Committee
on
February 16,
2017.
|
|
(2)
|
For a description of the treatment of Mr. Van Saun’s outstanding equity and deferred cash awards, please see
“—
Termination of Employment and Change of Control
—
Employment Agreements with our NEOs
—
Employment Agreement with Mr. Van Saun.”
|
|
(3)
|
These amounts reflect the cost of COBRA benefit continuation coverage for one month under the plan in which the particular executive is enrolled, less the monthly active employee rate for those benefits. This represents the benefit received by the NEOs as a result of receiving coverage at active employee rates for one month, when they would have otherwise been required to elect COBRA continuation coverage.
|
|
(4)
|
These amounts reflect the cost for us to provide outplacement services for executive level employees for 12 months under our outplacement policy.
|
57
|
(5)
|
For a description of the treatment of outstanding equity and deferred cash awards held by NE
Os other than Mr. Van Saun, please
see
“—
Termination of Employment and Change of Control—Equity Awards
and Deferred Cash Awards.”
|
|
(6)
|
This
amount
includes
a pro-rata portion
of Mr. Van Saun’s 2017 variable
compensation,
excluding performance-based
awards. Because the assumed termination date is December 31, 2017, the full award is reflected, based on the amount of his variable compensation and related mix for the 2017 performance year.
|
|
(7)
|
This amount reflects the sum of (i) two times Mr. Van Saun’s base salary, and (ii) a pro-rata portion of his target cash bonus for 2017. Because the assumed termination date is December 31, 2017, the full award is reflected, based on the amount of his variable compensation and related mix for the 2017 performance year.
|
|
(8)
|
This amount reflects (i) three times the sum of Mr. Van Saun’s (a) base salary and (b) 2017 target cash bonus, and (ii) a pro-rata portion of his target cash bonus for 2017. Because the assumed termination date is December 31, 2017, the full award is reflected, based on the amount of his variable compensation and related mix for the 2017 performance year.
|
|
(9)
|
This amount
reflects
a pro-rata portion
of Mr. Va
n Saun’s
target
cash bonus
for 2017. Because
the
assumed
termination
date
is
December
31,
2017,
the
full
target
award is
reflected, based
on
the
amount
of his
variable
compensation
and
related
mix
for the
2017
performance
year. Although
Mr. Van Saun’s estate
would
also receive
continuation
of base salary
for the
month
in which
his
death
occurs,
no
salary
has been
included
in
this
table
because
a termination
date
of December
31,
2017
is
assumed.
|
|
(10)
|
This
amount reflects six months of base salary, which would be paid to Mr. Van Saun prior to his receipt of long-term disability benefits.
|
|
(11)
|
This amount reflects 26 weeks of base salary.
|
|
(12)
|
This amount reflects (i) two times the sum of (a) base salary and (b) the average cash bonus paid for 2017, 2016 and 2015, plus (ii) a pro-rata portion of cash bonus for 2017, based on the average cash bonus paid for 2017, 2016 and 2015. Because the assumed termination date is December 31, 2017, the full award is reflected, based on the amount of each NEO’s variable compensation and related mix for the 2017 performance year.
|
Mr. Fawcett was not eligible to receive any payments or benefits from the Company in connection with a separation from service following his service as Interim Chief Financial Officer.
COMPENSATION RISK
A
SSESSMENT
The
Compensation
Committee
has
performed
a
review of
compensation
policies
and
practices
for
all of
our
employees
and
has
concluded
that
our
compensation
policies
and
practices
are not
reasonably likely to
have
a
material
adverse
impact
on
the
Company.
CEO PAY RATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Bruce Van Saun, our
Chief
Executive Officer:
For 2017, our last completed fiscal year:
|
•
|
the median of the annual total compensation of all employees of our company (other than our CEO) was $55,118; and
|
|
•
|
the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $8,549,989.
|
Based on this information, for 2017 the reasonably estimated ratio of the annual total compensation of Mr. Van Saun, our Chief Executive Officer, to the median of the annual total compensation of all employees, calculated in a manner consistent with Item 402(u) of Regulation S-K, was 155 to 1.
|
58
Consistent with applicable rules, t
o
identify the “median employee”
we reviewed our employee population as of
November 30, 2017
and the amount of their compensation for the period of January through
November 30,
2017 as would be reported to the Internal Revenue Service on Form W-2 in Box 1
,
which we determined reasonably reflects the compensation of our employees
.
More specifically, this calculation included all of our part-time and full time-employees as of such date
.
In addition, because all our employees are located in the United States, as is our CEO, we did not make any cost-of-living adjustments in identif
ying the “median employee.”
Once we identified our median employee, we combined all of the elements of such employee’s compensation for the full 2017 year in accordance with the requirements of Item 402 of Regulation S-K. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table included in this proxy statement.
59
DIRECTOR CO
MPENSATION
The
Citizens
Financial
Group,
Inc.
Non-Employee
Director Compensation
Policy (the “Director Compensation
Policy”) governs the compensation of our non-employee directors. The Director Compensation Policy is reviewed on an annual basis by the Compensation Committee, together with CAP, its independent compensation consultant. Following the annual review during 2017, the following changes were approved in order to further align our director compensation offering with market practice:
|
•
|
Modest increases to annual cash and equity retainers, lead director retainer, and committee chair retainers;
|
|
•
|
Elimination of $1,500 fee for each committee meeting in excess of six, per committee, in any calendar year;
|
|
•
|
Addition of an Audit Committee member retainer of $10,000; and
|
|
•
|
For director restricted stock units, awards will vest immediately (as opposed to one year after the grant date) and will have reinvestment of dividend equivalents into additional restricted stock units until the awards settle when directors cease to serve on the Board.
|
The below chart summarizes the elements of our Director Compensation Policy and the amount of each element prior to, and following, the changes effective as of August 1, 2017.
Element of Compensation
|
1/1/17-
7/31/17
|
Effective
8/1/17
|
Annual
Cash Retainer
|
$75,000
|
$80,000
|
Annual
Restricted
Stock
Unit
Retainer
|
$100,000
|
$120,000
|
Lead
Director Cash Retainer
|
$25,000
|
$30,000
|
Audit Committee Member Retainer
|
$0
|
$10,000
|
Audit
Chair Cash Retainer
|
$30,000
|
$35,000
|
Risk Chair Cash Retainer
|
$15,000
|
$30,000
|
Other Committee Chair Cash Retainers
|
$15,000
|
$20,000
|
Committee Meeting Fees for Meetings >6
|
$1,500
|
$0
|
On
the
date
of
each
annual
meeting
of
our
stockholders,
each
non-employee
director
receives a grant
of
restricted
stock
units
under
the
Citizens
Financial
Group,
Inc.
2014 Non-Employee Directors Compensation
Plan (“Directors
Plan”),
having
a
fair market value
of
$120,000, as compensation for their service until the next annual meeting. Restricted stock unit awards
vest
immediately as of
the
grant
date,
subject
to
the
terms
and
conditions
of the
Directors Plan and
the
applicable
award
agreement. Director awards
are subject
to
mandatory
deferral
and
are not
settled
until
a
director’s
cessation
of
service. To the extent dividends are declared between the grant and ultimate settlement date, dividend equivalents are reinvested into additional restricted stock units with the same terms and conditions as the related award.
In addition,
directors
are eligible
to
receive matching
charitable
contributions
up
to
$5,000 per year, as
part
of
our
general
charitable
contribution
program.
Our non
-
employee
directors
do
not participate
in
our
employee
benefit
programs.
60
Directors may defer
up
to
100% of
their
cash
compensation under
our
Directors Deferred Compensation
Plan.
Contributions
to
this plan
are credi
ted
with
interest
on
a
monthly
basis,
based
on
the
applicable
interest
crediting
rate applicable
for
the
month
interest
is
to
be
posted.
The
interest
crediting
rate
is
the
annualized average
yield
on
the
United
States
Treasury bond
10-year constant
maturity
for
the
immediately preceding
calendar
quarter
plus
two
percent
(2%),
which
is
then
divided
by
12 to
determine
the monthly
interest
crediting
rate.
There are n
o
Company
contributions
to
this
plan
and no
above-market
or
preferential
earnings
on
compensation
deferred
pursuant to this plan.
Directors also
receive reimbursement
of
business
expenses
incurred
in
connection
with
their attendance
at
meetings.
As
discussed
above
in
“Compensation
Discussion
and
Analysis—Stock
Ownership
and
Retention Guideline
s
”
,
non-employee
directors
are required
to
hold
shares
with
a
value
at
least
equal
to
four times
their
annual
cash
retainer.
2017
Director
Compensation Table
The following table shows 2017 compensation for our non-employee directors during 2017. As described above, the Director Compensation Policy was amended effective August 1, 2017. Prior to that date, directors were compensation in accordance with the prior version of our Director Compensation Policy.
Name
|
Fees Earned or
Paid in Cash ($)
|
|
Stock Awards
($)
(1)
|
|
Other
Compensation($)
(2)
|
|
Total
Compensation($)
|
|
Mark Casady
|
|
77,083
|
|
|
114,774
|
|
|
5,000
|
|
|
196,857
|
|
Christine M. Cumming
|
|
77,083
|
|
|
114,774
|
|
|
-
|
|
|
191,857
|
|
Anthony Di lorio
|
|
81,250
|
|
|
114,774
|
|
|
-
|
|
|
196,024
|
|
William P. Hankowsky
|
|
81,250
|
|
|
114,774
|
|
|
-
|
|
|
196,024
|
|
Howard W. Hanna III
(3)
|
|
81,250
|
|
|
114,774
|
|
|
-
|
|
|
196,024
|
|
Leo I. Higdon
|
|
81,250
|
|
|
114,774
|
|
|
5,000
|
|
|
201,024
|
|
Charles J. Koch
|
|
111,250
|
|
|
114,774
|
|
|
-
|
|
|
226,024
|
|
Arthur F. Ryan
|
|
121,250
|
|
|
114,774
|
|
|
5,000
|
|
|
241,024
|
|
Shivan S. Subramaniam
(4)
|
|
94,167
|
|
|
114,774
|
|
|
5,000
|
|
|
213,941
|
|
Wendy A. Watson
(4)
|
|
113,333
|
|
|
114,774
|
|
|
5,000
|
|
|
233,107
|
|
Marita Zuraitis
|
|
77,083
|
|
|
114,774
|
|
|
-
|
|
|
191,857
|
|
|
(1)
|
Our non-employee directors were granted restricted stock units on
April
27, 2017,
the
date
of our
2017
annual
stockholders
meeting,
and on August 1, 2017 (which was a pro-rata grant of the $20,000 increase in equity retainer approved as of such date).
The
amounts
shown
in
this
column
reflect
the
grant
date
fair market
value of the
restricted
stock units
granted
to
the
directors
calculated
in
accordance with
FASB ASC Topic
718, using
the
valuation
methodology
and
assumptions
set
forth in
Note 17 to
the
Company’s consolidated
financial
statements
included
in
its
2017
Annual
Report
on
Form 10-K,
which
are hereby incorporated
by
reference.
As
of December
31,
2017,
each
of our
non-employee
directors
held
7,372.199 restricted
stock units. 4,233 of these units were vested on April 27, 2017, 2,717 of these units are scheduled to vest on April 24, 2018,
the
date
of our
2017 annual
stockholders
meeting, and 422.199 were vested at grant; in each case, however, the restricted stock units will
not
be
settled
until
the
cessation
of each
director’s
service.
|
|
|
(2)
|
Amounts
in
this
column
reflect
matching
charitable
contributions
made
by
the Company on
behalf of directors
during 2017.
|
|
|
(3)
|
Mr. Hanna elected
to
defer
50%
of the
fees paid
to
him
during
2017
pursuant
to
our
Directors
Deferred Compensation
Plan.
For a summary
of material
terms
of the
plan,
see
“
Director Compensation
”
above.
|
|
|
(4)
|
Each
of Mr. Subramaniam
and
Ms. Watson
elected
to
defer
all
of their
board fees earned
for 2017 pursuant
to
our
Directors
Deferred
Compensation
Plan.
For a summary
of the
material
terms
of the
plan, see
“
Director Compensation
”
above.
|
|
61
AUDIT M
ATTERS
PROPOSAL3:
RATIFICATION OF APPOINTMENT
OF OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING
FIRM
The
Audit
Committee
has
appointed
Deloitte
&
Touche
LLP (“Deloitte”),
an
independent
registered
public accounting
firm,
as
the
independent
auditors
to
perform
an
integrated
audit
of
the
Company
for
the fiscal
year ending
December 31,
2018. Deloitte
served
as
our
independent
auditors
for the
fiscal
year ended
December 31,
2017 and has served as our independent auditor since becoming a public company in 2014 and prior to that as a privately held company since 2000.
The Audit Committee periodically considers the rotation of the external auditor to ensure independence. In determining whether to retain Deloitte, the Audit Committee considers the firm’s independence, qualifications and past performance. In addition, the Audit Committee oversees the rotation of the lead audit partner as mandated by SEC requirements and is directly involved in the selection of a new lead audit partner. The Audit Committee also has oversight of the audit firm fee negotiation process and is responsible for approving audit fees.
The Board believes that the reappointment of Deloitte as the independent registered public accounting firm for fiscal year 2018 is in the best interests of the Company and its stockholders. Neither our
Bylaws nor
other
governing
documents
or
law require
stockholder
ratification
of
the selection
of
Deloitte
as
our
independent
registered
public
accounting
firm.
However, the
Board
believes
that
obtaining
stockholder
ratification
of
the
appointment
is
a
sound
corporate governance
practice.
If the
stockholders
do
not
vote
on
an
advisory
basis
in
favor
of
Deloitte,
the
Audit
Committee
will reconsider
the appointment and in doing so, assess the impact of changing the auditor and the appropriate timing for doing so. The Audit Committee
may retain
Deloitte
or
hire
another
firm without
resubmitting
the
matter
for
stockholders
to
approve.
The Audit Committee
retains
the
discretion
at
any time
to
appoint
a
different
independent
auditor.
Representatives
of
Deloitte
are expected
to
be
present
at
the
annual
meeting, available
to
respond
to
appropriate
questions,
and
will have
the
opportunity
to
make a
statement
if they
desire.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF DELOITTE
& TOUCHE LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR FISCAL YEAR 2018.
AUDIT
COMMITTEE
REPORT
The
purpose
of the Audit
Committee (the “Committee”)
is to assist Citizens
Financial
Group,
Inc.’s (the “Company”) Board
of Directors (the “Board”)
in
its oversight of (i) the integrity of the financial statements
of the Company, (ii) the appointment,
compensation,
qualifications,
independence,
performance and retention of the Company’s
independent
external auditor, (iii) the performance of the Company’s internal
audit
function, and
(iv) compliance
by the Company
with
legal
and
regulatory requirements.
The
Committee operates pursuant to a Charter that was
last amended
and
restated by the Board
on February 16, 2018. As set forth
in
the Charter,
management of the Company
is primarily responsible
for the adequacy
and
effectiveness of the Company’s
financial
reporting process, systems
of internal accounting
and
financial
controls. Deloitte
& Touche
LLP
(“Deloitte”),
the Company’s
independent auditor for
2017, is responsible
for
expressing
opinions
on the conformity
of the Company’s
audited financial
statements
with
generally
accepted
accounting
principles.
In this
context,
the
Audit
Committee
has
reviewed
and
discussed
with
management
and
Deloitte
the audited
financial
statements
for
the
year ended
December 31,
2017.
62
T
he
Audit
Committee
has
discussed with
Deloitte
the
matters
that
are required
to
be
discussed
under
the Public Company Accounting Oversight Board (“
PCAOB”) standards.
Deloitte
has provided
to
the
Committee
the
written
disclosures
and
the
PCAOB-required
letter
regarding
the independent
accountant’s
communications
with
the
Committee
concerning
independence,
and
the Committee
has
discussed
with
Deloitte
their
independence giving consideration to the provision of audit and non-audit services and fees paid to
the firm.
Based
on
the
review and
discussions
referred to
above,
the
Audit
Committee
recommended
to
the
Board that
the
audited
financial
statements
for
the
year ended
December 31,
2017 be
included
in
the Company’s
2017 Annual
Report
on
Form
10-K,
for
filing
with
the
Securities
and
Exchange Commission.
This
report
is
provided
by
the
following
independent
directors,
who
comprise
the Committee:
|
|
Wendy
A.
Watson
(Chair)
|
Anthony
Di lorio
|
William
P.
Hankowsky
|
Howard
W.
Hanna
III
|
Leo
I.
Higdon
|
Charles J.
Koch
|
February 16,
2018
PRE-APPROVAL
OF INDE
PENDENT
AUDITOR
SERVICES
The
Audit
Committee approves
in
advance
all
audit,
audit-related,
tax,
and
other
services performed by
the
independent
auditors.
The
Audit
Committee
pre-approves
specific
categories
of
services up
to pre-established
fee
thresholds.
Unless the
type
of
service has
previously
been
pre-approved,
the Audit
Committee
must
approve
that
specific
service before
the
independent
auditors
may perform it.
In addition,
separate
approval
is
required
if
the
amount
of
fees
for
any pre-approved
category
of service exceeds
the
fee
thresholds
established
by
the
Audit
Committee.
The
Audit
Committee
may delegate
to
the
chair
or
any independent
member
of
the
committee
pre-approval
authority
with respect
to
permitted
services,
provided
that
the
member
must
report
any pre-approval
decisions
to the
Audit
Committee
at
its
next
scheduled
meeting.
All
fees
described
below
were pre-approved
by the
Audit
Committee.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING
FIRM FEES
The
following
table
presents
fees
paid
by
the
Company
for
services performed
by
its
independent registered
public
accounting
firm,
Deloitte,
and
its
affiliates
for
the
years ended December 31,
2017 and
2016.
|
|
2017
|
|
|
2016
|
Audit
fees
|
|
$
|
5,403,129
|
|
|
$
|
5,578,140
|
Audit-related
fee
s
(1)
|
|
|
1,056,944
|
|
|
|
1,067,069
|
Tax
fees
(2)
|
|
|
393,107
|
|
|
|
61,156
|
All
other
fees
(3)
|
|
|
5,685
|
|
|
|
5,700
|
Total
|
|
$
|
6,858,865
|
|
|
$
|
6,712,065
|
|
(1)
|
Includes required compliance services associated with several of the Company’s lending programs (e.g., Ginnie Mae, Housing and Urban Development (HUD), Uniform Single Attestation Program (USAP) and the Family Education Loan Program) and Statement on Standards for Attestation Engagements (SSAE) No. 16 reports for the Company’s cash management and investment management clients, and services provided in conjunction with the Company’s debt offerings.
|
|
(2)
|
Includes aggregate fees billed for tax services, including tax compliance, planning and consulting.
|
|
(3)
|
Represents
fee
for
access
to
the
independent
accounting
firm’s
on-line
research library.
|
63
SECTION
16(A) BENEFICIAL
OWN
ERSHIP
REPORTING
COMPLIANCE
Under
Section
16(a)
of
the
Exchange
Act,
the
Company’s
directors
and
executive
officers
and
persons who
beneficially
own
more
than
10% of
the
outstanding
shares
of
common
stock
are required
to report
their
beneficial
ownership
of
the
common
stock
and
any changes
in
that
beneficial
ownership to
the
SEC
and
the
NYSE.
Based
solely
on
its
review of
the
copies
of
such
forms
received
by
it,
or written
representations
from
certain
reporting
persons,
the
Company
believes
that
these
filing requirements
were satisfied
by
all
of
its
directors
and
officers
and
10% or
more
beneficial
owners
of Company
stock
during
2017.
SECURITY
OWNERSHIP
OF CERTAIN
BENEFICIAL
OWNERS
AND
MANAGEMENT
The
following
table
indicates
information
as
of
March 2, 2018 regarding
the
beneficial
ownership
of our
common
stock
by:
•
each
person
whom
we know
to
own
beneficially
more
than
5% of
our
common
stock;
•
each
of
the
directors
and
named
executive
officers
individually;
and
•
all
directors
and
executive
officers
as
a
group.
In accordance
with
SEC
rules,
beneficial
ownership
includes
sole
or
shared
voting
or
investment power
with
respect
to
securities
and
includes
the
shares
issuable
pursuant
to
restricted
stock
units that
will become
vested
within
60 days
of
the
date
of
determination,
which
in
the
case
of
the following
table
is
March 2, 2018. Under
these
rules,
one
or
more
persons
may be
a
deemed beneficial
owner
of
the
same
securities
and
a
person
may be
deemed
a
beneficial
owner
of
securities to
which
such
person
has
no
economic
interest.
Unless otherwise
indicated,
the
persons
or
entities identified
in
this
table
have
sole
voting
and
investment
power
with
respect
to
all
shares
shown
as beneficially
owned
by
them,
subject
to
applicable
community
property
laws.
The
percentage
of
beneficial
ownership
is
based
on
487,717,012 shares
of
our
common
stock outstanding
as
of
March 2, 2018.
64
Information
with
respect
to
beneficial
ownership
has
been
furnished
by
each
director,
officer,
or beneficial
owner
of
more
than
5% of
the
shares
of
our
common
stock.
Except
as
otherwise
noted below,
the
address
for
each
person
listed
on
the
table
is
c/o
Citizens
Financial
Group,
Inc.,
600 Washington
Boulevard,
Stamford,
Connecticut
06901.
Name of
Beneficial Owner
|
Number
of
Shares
|
%
|
|
|
|
5%
Stockholders
|
|
|
BlackRock,
Inc.**
|
45,083,378
|
9.2
|
The
Vanguard
Group,
Inc***
|
52,520,774
|
10.7
|
State
Street
Corporation****
|
26,729,538
|
5.4
|
Directors
and Named
Executive
Officers
|
|
|
Bruce
Van
Saun
|
481,107
|
*
|
Brad
L.
Conner
|
117,312
|
*
|
John
J.
Fawcett*****
|
48,634
|
*
|
Stephen
T.
Gannon
|
39,935
|
*
|
Donald
H.
McCree
|
86,515
|
*
|
John Woods
|
23,532
|
*
|
Mark Casady
|
17,119
|
*
|
Christine
M.
Cumming
|
9,790
|
*
|
Anthony
Di lorio
|
25,419
|
*
|
William
P.
Hankowsky
|
27,919
|
*
|
Howard
W.
Hanna
III
|
21,919
|
*
|
Leo
I.
Higdon
|
14,962
|
*
|
Charles J.
Koch
|
32,919
|
*
|
Arthur
F.
Ryan
|
57,919
|
*
|
Shivan
S.
Subramaniam
|
32,919
|
*
|
Wendy
A.
Watson
|
12,919
|
*
|
Marita Zuraitis
|
14,919
|
*
|
All
directors
and
executive
officers
as
a
group
(
20
persons)
|
1,104,383
|
*
|
|
**
|
Represents
shares
beneficially
owned
by
BlackRock,
Inc.
55 East
52nd
St,
New York,
NY 10055. BlackRock,
Inc.
has
sole
voting
power
with
respect
to
38,278,832 shares and
sole
dispositive
power with
respect
to
45,083,378 shares.
The
foregoing
information
is
based
solely
on
a
Schedule
13G filed
by
BlackRock with
the
SEC
on
January 29, 2018 regarding
its
holdings
as
of
December 31,
2017.
|
|
***
|
Represents
shares
beneficially
owned
by
The
Vanguard
Group,
Inc.,
100 Vanguard
Blvd., Malvern,
PA 19355. The
Vanguard
Group,
Inc.
has
sole
voting
power
with
respect
to
698,486 shares,
sole
dispositive
power
with
respect
to
51,752,104 shares,
shared
voting
power
with respect
to
99,757 shares
and
shared
dispositive
power
with
respect
to
768,670 shares.
The foregoing
information
is
based
solely
on
a
Schedule
13G filed
by
The
Vanguard
Group,
Inc.
with the
SEC
on
February 9, 2018 regarding
its
holdings
as
of
December 31,
2017.
|
|
|
****
|
Represents
shares
beneficially
owned
by
State
Street
Corporation,
State
Street
Financial
Center, One
Lincoln
Street,
Boston,
MA 02211. State
Street
Corporation
has
shared
voting
and
shared
dispositive
power
with
respect
to
26,729,538 shares. The
foregoing
information
is
based
solely
on
a
consolidated
Schedule
13G filed
by
State
Street Corporation
with
the
SEC
on
February 14, 2018 regarding
its
holdings
as
of
December 31,
2017.
|
|
|
*****
|
As of March 17
,
2017 when Mr. Fawcett left the Company’s employment.
|
|
65
INFORMATION
FO
R STOCKHOLDERS
QUESTIONS AND ANSWERS
ABOUT THE
PROXY
MATERIALS AND THE
ANNUAL MEETING
This
proxy
statement
and
proxy
card
are furnished
in
connection
with
the
solicitation
of
proxies
to be
voted
at
our
Annual
Meeting,
which
will be
held
on
April 26, 2018, at
9:00 a.m.
Eastern
Time,
at the
Company’s
headquarters
located
at
One
Citizens
Plaza,
Providence,
Rhode
Island
02903.
Why
am I receiving
this
proxy
statement and proxy
card?
You
have
received
these
proxy
materials
because
our
board
of
directors
is
soliciting
your
proxy
to vote
your
shares
at
the
Annual
Meeting.
This
proxy
statement
describes
issues
on
which
we would like you
to
vote
at
our
Annual
Meeting.
It also
gives
you
information
on
these
issues
so
that
you
can make an
informed
decision.
Because
you
own
shares
of
our
common
stock,
our
board
of
directors
has
made
this
proxy
statement and
proxy
card
available
to
you
on
the
Internet,
in
addition
to
delivering
printed
versions
of
this proxy
statement
and
proxy
card
to
certain
stockholders
by
mail.
When
you
vote
by
using
the
Internet
or
(if
you
received
your
proxy
card
by
mail)
by
signing
and returning
the
proxy
card,
you
appoint
each
of
Bruce
Van
Saun,
Stephen
T.
Gannon
and
Robin
S. Elkowitz
(with
full
power
of
substitution)
as
your
representatives
at
the
Annual
Meeting.
They
will vote
your
shares
at
the
Annual
Meeting
as
you
have
instructed
them
or,
if
an
issue
that
is
not
on
the proxy
card
comes
up
for
vote,
in
accordance
with
their
best
judgment.
This
way, your
shares
will be voted
whether
or
not
you
attend
the
Annual
Meeting.
Even
if
you
plan
to
attend
the
Annual
Meeting, we encourage
you
to
vote
in
advance
by
using
the
Internet
or
(if
you
received
your
proxy
card
by mail)
by
signing
and
returning
your
proxy
card.
If you
vote
by
using
the
Internet,
you
do
not
need
to return
your
proxy
card.
Why
did I receive
a Notice
of
Internet
Availability of
Proxy
Materials
in
the
mail
instead of
a printed
set of
proxy
materials?
Pursuant
to
rules
adopted
by
the
SEC,
we are permitted
to
furnish
our
proxy
materials
over
the Internet
to
our
stockholders
by
delivering
a
Notice
in
the
mail.
If you
received
a
Notice
by
mail,
you will not
receive a
printed
copy
of
the
proxy
materials
in
the
mail.
Instead,
the
Notice
instructs
you on
how
to
access
and
review the
proxy
statement
and
annual
report
over
the
Internet.
The
Notice also
instructs
you
on
how
to
electronically
access
and
review all
of
the
important
information contained
in
this
proxy
statement
and
the
annual
report
and
how
you
may submit
your
proxy
over the
Internet.
If you
received
a
Notice
by
mail
and
would
like to
receive a
printed
copy
of
our
proxy materials,
you
should
follow
the
instructions
for
requesting
these
materials
contained
in
the
Notice.
Stockholders
who
receive a
printed
set
of
proxy
materials
will not
receive the
Notice
but
may still access
our
proxy
materials
and
submit
their
proxies
over
the
Internet
by
following
the
instructions provided
on
their
proxy
card.
Who
is
entitled
to vote?
Holders
of
our
common
stock
at
the
close
of
business
on
March 2, 2018 (the
record
date)
are entitled to
vote.
In accordance
with
Delaware law,
a
list
of
stockholders
entitled
to
vote
at
the meeting
will be
available
in
electronic
form
at
the
Annual
Meeting
site
on
April 26, 2018 and
will be
accessible
in electronic
form
for
ten
days
before
the
meeting
at
our
principal
place
of
business
located
at
One Citizens
Plaza,
Providence,
Rhode
Island
02903, between
the
hours
of
9:00 a.m.
and
5:00 p.m. Eastern
Time.
66
How many votes
is
each
share
of
common
stock entitled
to?
Holders
of
common
stock
are entitled
to
one
vote
per
share.
As
of
March 2, 2018, there
were 487,717,012 shares
of
our
common
stock
outstanding.
What is
the
difference
between
a stockholder of
record
and a “street
name”
holder?
Many of
our
stockholders
hold
their
shares
through
a
broker,
bank
or
other
nominee
rather
than directly
in
their
own
name.
As
summarized
below,
there
are some
differences
between
shares
held of
record
and
those
owned
beneficially.
Stockholder
of
Recor
d
.
If your
shares
are registered
directly
in
your
name
with
the
Company’s transfer
agent,
Computershare,
you
are considered,
with
respect
to
those
shares,
the
stockholder
of record,
and
these
proxy
materials
are being
sent
directly
to
you
by
the
Company.
As
the
stockholder of
record,
you
have
the
right
to
grant
your
voting
proxy
directly
to
certain
officers
of
Citizens Financial
Group,
Inc.
or
to
vote
in
person
at
the
Annual
Meeting.
The
Company
has
enclosed
or
sent a
proxy
card
for
you
to
use.
You
may also
vote
on
the
Internet,
as
described
below
under
the heading
“How do
I vote?”
Beneficial
Owner
or
“Street
Name” Holde
r
.
If your
shares
are held
in
an
account
at
a
broker,
bank
or other
nominee,
like many of
our
stockholders,
you
are considered
the
beneficial
owner
of
shares held
in
street
name,
and
these
proxy
materials
were forwarded
to
you
by
that
organization.
As
the beneficial
owner,
you
have
the
right
to
direct
your
broker,
bank
or
other
nominee
how
to
vote
your shares,
and
you
are also
invited
to
attend
the
Annual
Meeting.
Since
a
beneficial
owner
is
not
the
stockholder
of
record,
you
may not
vote
your
shares
in
person
at the
Annual
Meeting
unless
you
obtain
a
“legal
proxy”
from
the
broker,
bank,
or
other
nominee
that is
the
stockholder
of
record
of
your
shares
giving
you
the
right
to
vote
the
shares
at
the
Annual Meeting.
If you
do
not
wish
to
vote
in
person
or
you
will not
be
attending
the
Annual
Meeting,
you may vote
by
proxy.
You
may vote
by
proxy
by
completing,
signing
and
returning
the
proxy
card
or
by using
the
Internet
or
by
telephone,
as
described
below
under
the
heading
“How do
I vote?”.
How do I vote?
Stockholders
of
record
may vote
by
using
the
Internet
or
(if
you
received
a
proxy
card
by
mail)
by mail
as
described
below.
Stockholders
also
may attend
the
meeting
and
vote
in
person.
If you
hold shares
through
a
bank
or
broker,
please
refer to
your
proxy
card,
Notice
or
other
information forwarded
by
your
bank
or
broker
to
see
which
voting
options
are available
to
you.
|
•
|
You
may vote
by
using
the
Interne
t
.
The
address
of
the
website
for
Internet
voting
can
be found
on
your
proxy
card
or
Notice.
Internet
voting
is
available
24 hours
a
day
and
will be accessible
until
11:59 p.m.
Eastern
Time
on
April
25,
2018. Easy-to-follow
instructions allow
you
to
vote
your
shares
and
confirm
that
your
instructions
have
been
properly recorded.
|
|
|
•
|
You
may vote
by
telephon
e
.
Dial the
number
listed
on
your
proxy
card
or
your
voting instruction
form.
You
will need
the
control
number
included
on
your
proxy
card
or
voting instruction
form.
|
|
|
•
|
You
may vote
by
mai
l
.
If you
received
a
proxy
card
by
mail
and
choose
to
vote
by
mail, simply
mark your
proxy
card,
date
and
sign
it,
and
return
it
in
the
postage-paid
envelope.
|
|
67
The
method
you
use
to
vote
will not
limit
your
right
to
vote
at
the
Annual
Meeting
if
you
decide
to attend
in
person.
Written
ballots
will be
passed
out
to
anyone
who
wants
to
vote
at
the
Annual Meeting.
If you
hold
your
shares
in
“street
name,”
you
must
obtain
a
proxy,
executed
in
your
favor, from
the
holder
of
record
to
be
able
to
vote
in
person
at
the
Annual
Meeting.
What if
I change
my mind
after
I return
my proxy?
You
may revoke
your
proxy
and
change
your
vote
at
any time
before
the
polls
close
at
the
Annual Meeting.
You
may do
this
by:
|
•
|
submitting
a
subsequent
proxy
by
using
the
Internet,
telephone
or
by
mail
with
a
later date;
|
|
|
•
|
sending
written
notice
of
revocation
to
our
Corporate
Secretary,
Citizens
Financial
Group, Inc.,
600 Washington
Boulevard,
Stamford,
Connecticut
06901; or
|
|
|
•
|
voting
in
person
at
the
Annual
Meeting.
|
If you
hold
shares
through
a
bank
or
broker,
please
refer to
your
proxy
card,
Notice
or
other information
forwarded
by
your
bank
or
broker
to
see
how
you
can
revoke
your
proxy
and
change
your vote.
Attendance
at
the
meeting
will not
by
itself
revoke
a
proxy.
How many votes
do you
need
to hold
the
Annual
Meeting?
The
presence,
in
person
or
by
proxy,
of
the
holders
of
a
majority
of
the
total
voting
power
of
all outstanding
securities
entitled
to
vote
at
the
Annual
Meeting
will constitute
a
quorum.
If a
quorum
is present,
we can
hold
the
Annual
Meeting
and
conduct
business.
On
what items
am I voting?
You
are being
asked
to
vote
on
three items:
|
1.
|
the
election
of
each
of
the
twelve
directors
nominated
by
the
Board
and
named
in
the proxy
statement
to
serve until
the
2019 annual
meeting
or
until
their
successors
are duly elected
and
qualified;
|
|
|
2.
|
advisory
vote
to
approve
the
Company’s
executive
compensation,
commonly
referred to
as a
“say on
pay” vote;
and
|
|
|
3.
|
ratification
of
the
appointment
of
Deloitte
&
Touche
LLP
as
our
independent
registered public
accounting
firm for
fiscal
year 2018.
|
|
No
cumulative
voting
rights
are authorized,
and
dissenters’
rights
are not
applicable
to
these matters.
How does the
board of
directors
recommend
that I vote?
The
Board
recommends
that
you
vote
as
follows:
|
1.
|
FOR
the
twelve
director
nominees;
|
|
2.
|
FOR
the
approval,
on
an
advisory
basis,
of
the
Company’s
executive
compensation;
and
|
|
3.
|
FOR
the
ratification
of
the
appointment
of
our
independent
registered
public
accounting firm.
|
|
68
How may I vote
in
the
election
of
directors,
and how
many votes
must the
nominees
receive
to be
elected?
With
respect
to
the
election
of
directors,
you
may:
|
•
|
vote
FOR
the
twelve
nominees
for
director;
|
|
•
|
vote
FOR
any of
the
nominees
for
director
and
vote
AGAINST or
ABSTAIN from
voting
on the
other
nominees
for
director;
|
|
|
•
|
vote
AGAINST the
twelve
nominees
for
director;
or
|
|
•
|
ABSTAIN from
voting
on
all
of
the
nominees
for
director.
|
Our Bylaws provide
for
the
election
of
directors
by
an
affirmative
majority
of
the
votes
cast
in
an uncontested
election.
This
means
each
of
the
twelve
individuals
nominated
for
election
to
the
board of
directors
must
receive more
votes
cast
“FOR” than
“AGAINST” (among
votes
properly
cast
in person,
electronically
or
by
proxy)
to
be
elected.
Abstentions
and
broker
non-votes
are not considered
votes
cast
for
the
foregoing
purpose,
and
will have
no
effect
on
the
election
of
nominees. If the
election
of
directors
is
not
an
uncontested
election,
then
the
directors
are elected
by
a plurality
of
the
votes
cast.
What happens
if
a nominee
does not
receive
a majority of
“FOR”
votes?
If a
nominee
does
not
receive a
majority
of
“FOR” votes,
he
or
she
shall
tender
to
the
Board,
via
the Chair of
the
Nominating
and
Corporate
Governance
Committee,
his
or
her
resignation.
The Nominating
and
Corporate
Governance
Committee
will consider
the
resignation
and
make a recommendation
to
the
Board
whether
to
accept
or
reject
the
tendered
resignation
no
later
than
60 days
following
the
date
of
the
Annual
Meeting
in
accordance
with
the
specific
requirements
outlined in
our
Corporate
Governance
Guidelines.
What happens
if
a nominee
is
unable
to stand for
election?
If a
nominee
is
unable
to
stand
for
election,
the
Board
may either:
|
•
|
reduce
the
number
of
directors
that
serve on
the
Board;
or
|
|
•
|
designate
a
substitute
nominee.
|
If the
Board
designates
a
substitute
nominee,
shares
represented
by
proxies
voted
for
the
nominee who
is
unable
to
stand
for
election
will be
voted
for
the
substitute
nominee.
How may I cast
my advisory
vote
for
the
proposal to approve
the
Company’s executive compensation?
With
respect
to
this
proposal,
you
may:
|
•
|
vote
FOR
the
approval,
on
an
advisory
basis,
of
the
Company’s
executive
compensation;
|
|
•
|
vote
AGAINST the
approval,
on
an
advisory
basis,
of
the
Company’s
executive compensation;
or
|
|
|
•
|
ABSTAIN from
voting
on
the
proposal.
|
In accordance
with
applicable
law,
this
vote
is
“advisory,”
meaning
it
will serve as
a recommendation
to
the
Board,
but
will not
be
binding.
The
Compensation
Committee
will carefully consider
the
outcome
of
this
vote
when
determining
future
executive
compensation
arrangements. Abstentions
and
broker
non-votes
will not
count
as
votes
cast.
69
How may I vote
for
the
proposal to ratify
the
appointment
of
our
independent
registered public accounting
firm,
and how
many votes
must this
proposal receive
to pass?
With
respect
to
this
proposal,
you
may:
|
•
|
vote
FOR
the
ratification
of
the
accounting
firm;
|
|
•
|
vote
AGAINST the
ratification
of
the
accounting
firm;
or
|
|
•
|
ABSTAIN from
voting
on
the
proposal.
|
In order
to
pass,
the
proposal
must
receive the
affirmative
vote
of
a
majority
of
the
votes
cast
at
the Annual
Meeting
by
the
holders
who
are present
in
person
or
by
proxy.
Abstentions
will not
count
as votes
cast.
What happens
if
I sign
and return
my proxy
card but do not
provide
voting
instructions?
If you
return
a
signed
card
but
do
not
provide
voting
instructions,
your
shares
will be
voted
as follows:
|
1.
|
FOR
the
twelve
director
nominees;
|
|
2.
|
FOR
the
approval,
on
an
advisory
basis,
of
the
Company’s
executive
compensation;
and
|
|
3.
|
FOR
the
ratification
of
the
appointment
of
our
independent
registered
public
accounting firm.
|
Will
my shares
be
voted
if
I do not
vote
by using
the
Internet,
telephone
or
by signing
and returning
my proxy
card?
If you
do
not
vote
by
using
the
Internet,
telephone
or
(if
you
received
a
proxy
card
by
mail)
by signing
and
returning
your
proxy
card,
then
your
shares
will not
be
voted
and
will not
count
in deciding
the
matters
presented
for
stockholder
consideration
at
the
Annual
Meeting.
If your
shares
are held
in
street
name
through
a
bank
or
broker,
your
bank
or
broker
may vote
your shares
under
certain
limited
circumstances
if
you
do
not
provide
voting
instructions
before
the Annual
Meeting,
in
accordance
with
the
NYSE
rules
that
govern
banks
and
brokers.
These circumstances
include
voting
your
shares
on
“routine
matters,”
such
as
the
ratification
of
the appointment
of
our
independent
registered
public
accountants
described
in
this
proxy
statement. With
respect
to
the
proposal
to
ratify the
appointment
of
our
independent
registered
public accounting
firm,
therefore,
if
you
do
not
vote
your
shares,
your
bank
or
broker
may vote
your
shares on
your
behalf
or
leave
your
shares
unvoted.
The
election
of
directors
and
approval,
on
an
advisory
basis,
of
the
Company’s
executive compensation
are not
considered
routine
matters
under
the
NYSE
rules
relating
to
voting
by
banks and
brokers.
When
a
proposal
is
not
a
routine
matter
and
the
brokerage
firm has
not
received
voting instructions
from
the
beneficial
owner
of
the
shares
with
respect
to
that
proposal,
the
brokerage firm cannot
vote
the
shares
on
that
proposal.
This
is
called
a
“broker
non-vote.”
Broker
non-votes that
are represented
at
the
Annual
Meeting
will be
counted
for
purposes
of
establishing
a
quorum, but
not
for
determining
the
number
of
shares
voted
for
or
against
the
non-routine
matter.
We
encourage
you
to
provide
instructions
to
your
bank
or
brokerage
firm by
voting
your
proxy.
This action
ensures
your
shares
will be
voted
at
the
meeting
in
accordance
with
your
wishes.
70
What is
the
vote
required
for
each
proposal to pass, and what is
the
effect
of
abstentions or withheld
votes
and uninstructed
shares
on
the
proposals?
Our Bylaws provide
for
the
election
of
directors
by
an
affirmative
majority
of
the
votes
cast
in
an uncontested
election.
This
means
that
the
twelve
individuals
nominated
for
election
to
the
board
of directors
must
receive more
votes
“FOR” than
“AGAINST” (among
votes
properly
cast
in
person, electronically
or
by
proxy)
to
be
elected.
Abstentions
and
broker
non-votes
are not
considered
votes cast
for
the
foregoing
purpose,
and
will have
no
effect
on
the
election
of
nominees.
If the
election of
directors
is
not
an
uncontested
election
then
the
directors
are elected
by
a
plurality
of
the
votes cast.
For
each
other
proposal
to
pass
in
accordance
with
our
Bylaws,
the
proposal
must
receive the affirmative
vote
of
a
majority
of
the
votes
cast
in
person,
electronically
or
by
proxy
at
the
Annual Meeting.
Abstentions
and
broker
non-votes
are not
counted
as
votes
cast.
What do I need
to show to attend the
Annual
Meeting
in
person?
You
will need
proof
of
your
share
ownership
(such
as
a
recent
brokerage
statement
or
letter
from your
broker
showing
that
you
owned
shares
of
the
Company’s
common
stock
as
of
March 2, 2018 if you
hold
your
shares
through
a
broker)
and
a
form
of
government-issued
photo
identification.
If you do
not
have
proof
of
ownership
and
valid
photo
identification,
you
may not
be
admitted
to
the Annual
Meeting.
If you are the legal representative of a stockholder, you must also bring a letter from the stockholder certifying (a) the beneficial ownership you represent and (b) your status as a legal representative. We will determine in our sole discretion whether the letter presented for admission meets the above requirements.
No
cameras,
laptops,
tablets,
recording
equipment, large
bags,
backpacks,
briefcases,
and
similar items are permitted
in
the
meeting
room. Cell phones may not be used during the meeting and we reserve the right to remove individuals who do not adhere to these requirements.
Who
bears the
cost of
the
proxy
materials?
The
Company
pays
for
preparing,
printing
and
mailing
this
proxy
statement
and
the
annual
report. Officers and
employees
of
the
Company
may solicit
the
return
of
proxies,
but
will not
receive additional
compensation
for
those
efforts.
The
Company
will request
that
brokers,
banks, custodians,
nominees
and
other
fiduciaries
send
proxy
materials
to
all
beneficial
owners
and
upon request
will reimburse
them
for
their
expenses.
Solicitation
may be
made
by
mail,
telephone
or other
means.
Can I receive
future
proxy
materials and annual
reports
electronically?
Yes.
Instead
of
receiving
future
paper
copies
in
the
mail,
you
can
elect
to
receive our
future
annual reports
and
proxy
materials
electronically.
Opting
to
receive your
proxy
materials
electronically
will save
us
the
cost
of
producing
and
mailing
documents
to
your
home
or
business
and
will reduce
the environmental
impact
of
our
annual
meetings. If you
are a
stockholder
of
record
and
wish
to
enroll
in
the
electronic
proxy
delivery service for future
meetings,
you
may do
so
by
going
to
the
website
provided
on
your
proxy
card
and
following the
prompts.
OTHER BUSINESS
The
Board
is
not
aware of
any other
matters
to
be
presented
at
the
Annual
Meeting.
If any other matter
proper
for
action
at
the
meeting
should
be
presented,
the
holders
of
the
accompanying
proxy will vote
the
shares
represented
by
the
proxy
on
such
matter
in
accordance
with
their
best judgment.
If any matter
not
proper
for
action
at
the
meeting
should
be
presented,
the
holders
of
the proxy
will vote
against
consideration
of
the
matter
or
the
proposed
action.
71
2019
ANNUAL MEETING
AND
STOCKHOLDER PROPOSALS
The
Company
will review for
inclusion
in
next
year’s proxy
statement
stockholder
proposals submitted
pursuant
to
SEC
Rule
14a-8 that
are received
by
November
9,
2018. In order
for
a stockholder
proposal
or
director
nomination
to
be
considered
for
inclusion
in
our
proxy
materials
for our
annual
meeting
of
stockholders,
expected
to
be
held
in
April
2019, the
proposal
or
director nomination
must
be
received
by
our
Corporate
Secretary,
Citizens
Financial
Group,
Inc.,
600 Washington
Boulevard,
Stamford,
Connecticut
06901, on
or
before
the
close
of
business
on November
9,
2018, and
must
comply
with
the
rules
and
regulations
promulgated
by
the
SEC.
These stockholder
notices
also
must
comply
with
the
requirements
of
our
Bylaws and
will not
be
effective otherwise.
Our Bylaws impose
some
procedural
requirements
on
stockholders
who
wish
to
nominate
directors, propose
that
a
director
be
removed,
propose
any repeal
or
change
in
our
Bylaws or
propose
any other
business
to
be
brought
before
an
annual
or
special
meeting
of
stockholders.
Under
these
procedural
requirements,
in
order
to
bring
a
proposal
before
a
meeting
of
stockholders, a
stockholder
must
deliver
timely notice
of
a
proposal
pertaining
to
a
proper
subject
for presentation
at
the
annual
meeting
to
our
Corporate
Secretary.
To
be
timely,
a
stockholder’s
notice
for
proposals
outside
of
SEC
Rule
14a-8 must
be
delivered
to
the Corporate
Secretary at
600 Washington
Boulevard,
Stamford,
Connecticut,
06901 not
less
than
120 days
or
more
than
150 days
prior
to
the
first
anniversary of
the
preceding
year’s annual
meeting. Therefore,
to
be
presented
at
our
annual
meeting
of
stockholders
to
be
held
in
2019, such
a
proposal must
be
received
on
or
after
November
28,
2018, but
not
later
than
December 27,
2018. In the
event that
the
date
of
the
annual
meeting
of
stockholders
to
be
held
in
2018 is
advanced
by
more
than 30 days
or
delayed
by
more
than
70 days
from
the
anniversary date
of
this
year’s annual
meeting
of stockholders,
such
notice
by
the
stockholder
must
be
so
received
no
earlier than
120 days
prior
to the
annual
meeting
of
stockholders
to
be
held
in
2019 and
not
later
than
70 days
prior
to
such
annual meeting
of
stockholders
to
be
held
in
2019 or
10 days
following
the
day
on
which
public announcement
of
the
date
of
such
annual
meeting
is
first
made.
A
stockholder’s
notice
to
the
Corporate
Secretary shall
set
forth
(i)
as
to
each
person
whom
the stockholder
proposes
to
nominate
for
election
or
reelection
as
a
director
all
information
relating
to such
person
that
is
required
to
be
disclosed
in
solicitations
of
proxies
for
election
of
directors,
or
is otherwise
required,
in
each
case
pursuant
to
Regulation
14A under
the
Securities
Exchange
Act
of 1934 (as
amended,
together
with
the
rules
and
regulations
promulgated
thereunder,
the
“Exchange Act”)
including
such
person’s
written
consent
to
being
named
in
the
proxy
statement
as
a
nominee and
to
serving
as
a
director
if
elected,
(ii)
as
to
any other
business
that
the
stockholder
proposes
to bring
before
the
meeting,
a
brief
description
of
the
business
desired
to
be
brought
before
the meeting,
the
text
of
the
proposal
or
business
(including
the
text
of
any resolutions
proposed
for consideration
and
in
the
event
that
such
business
includes
a
proposal
to
amend
the
Bylaws,
the
text of
the
proposed
amendment),
the
reasons
for
conducting
such
business
and
any material
interest
in such
business
of
such
stockholder
and
the
beneficial
owner,
if
any,
on
whose
behalf
the
proposal
is made
and
(iii)
as
to
the
stockholder
giving
the
notice
and
the
beneficial
owner,
if
any,
on
whose behalf
the
proposal
is
made:
|
•
|
the
name
and
address
of
such
stockholder
(as
they
appear
on
the
Company’s
books)
and any such
beneficial
owner;
|
|
|
•
|
the
number
of
shares
of
capital
stock
of
the
Company
that
are held
of
record
or
are beneficially
owned
by
such
stockholder
and
by
any such
beneficial
owner;
|
|
|
•
|
a
description
of
any agreement,
arrangement
or
understanding
between
or
among
such stockholder
and
any such
beneficial
owner,
any of
their
respective
affiliates
or
associates, and
any other
person
or
persons
(including
their
names)
in
connection
with
the
proposal
of such
nomination
or
other
business;
|
|
72
|
•
|
a
description
of
any agreement,
arrangement
or
understanding
(including,
regardless
of the
form
of
settlement,
any derivative,
long
or
short
positions,
profit
interests,
forwards, futures,
swaps,
options,
warrants,
convertible
securities,
stock
appreciation
or
similar rights,
hedging
tra
nsactions
and
borrowed
or
loaned
shares)
that
has
been
entered
into
by or
on
behalf
of,
or
any other
agreement,
arrangement
or
understanding
that
has
been made,
the
effect
or
intent
of
which
is
to
create
or
mitigate
loss
to,
manage
risk or
benefit of
share
price
changes
for,
or
increase
or
decrease
the
voting
power
of,
such
stockholder or
any such
beneficial
owner
or
any such
nominee
with
respect
to
the
Company’s securities;
|
|
|
•
|
a
representation
that
the
stockholder
is
a
holder
of
record
of
stock
of
the
Company entitled
to
vote
at
such
meeting
and
intends
to
appear
in
person
or
by
proxy
at
the meeting
to
bring
such
nomination
or
other
business
before
the
meeting;
|
|
|
•
|
a
representation
as
to
whether
such
stockholder
or
any such
beneficial
owner
intends
or
is part
of
a
group
that
intends
to
(i)
deliver
a
proxy
statement
and/or
form
of
proxy
to holders
of
at
least
the
percentage
of
the
voting
power
of
the
Company’s
outstanding capital
stock
required
to
approve
or
adopt
the
proposal
or
to
elect
each
such
nominee and/or
(ii)
otherwise
to
solicit
proxies
from
stockholders
in
support
of
such
proposal
or nomination;
|
|
|
•
|
any other
information
relating
to
such
stockholder,
beneficial
owner,
if
any,
or
director nominee
or
proposed
business
that
would
be
required
to
be
disclosed
in
a
proxy
statement or
other
filing
required
to
be
made
in
connection
with
the
solicitation
of
proxies
in
support of
such
nominee
or
proposal
pursuant
to
Section
14 of
the
Exchange
Act;
and
|
|
|
•
|
such
other
information
relating
to
any proposed
item
of
business
as
the
Company
may reasonably
require
to
determine
whether
such
proposed
item
of
business
is
a
proper matter
for
stockholder
action.
|
|
AN
N
UAL R
E
PORT
FOR 2017
T
h
e
f
iscal
2
0
17 A
n
nu
a
l
Report
to
Sto
c
kholder
s
is
being
mail
e
d
with
t
hi
s
proxy
st
a
tement
t
o
th
o
se stock
h
olde
r
s
t
hat
rece
i
ve
d a
copy
of
the
p
rox
y
materials
i
n
the
mail.
Stockholders
that
received
the Notice
of
Internet
Availability
of
Proxy Materials can
access
this
proxy
statement
and
our
fiscal
2017 Annual
Report
at
www.edocumentview.com/CFG.
Requests
for
copies
of
our
Annual
Report
to Stockholders
may also
be
directed
to
Investor
Relations,
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Group,
Inc.,
600 Washington
Boulevard,
Stamford,
Connecticut
06901.
73
HOUSEHOLDING OF ANNUAL
DISCLOSURE DOCUMENTS
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BY
ORDER
OF THE
BOARD
OF DIRECTORS
|
|
Robin
S.
Elkowitz
|
Executive
Vice
President,
Deputy
General Counsel
and
Secretary
|
Stamford,
Connecticut
March 9, 2018
74
APPENDIX A
Key performance metrics, non-GAAP financial measures and reconciliations
(in millions, except share, per-share and ratio data)
|
|
QUARTERLY TRENDS
|
|
|
FULL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
4Q17 Change
|
|
|
|
|
|
|
|
|
|
|
2017 Change
|
|
|
|
4Q17
|
|
|
3Q13
|
|
|
3Q13
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
$/bps
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
$/bps
|
|
|
%
|
|
Total revenue, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (GAAP)
|
A
|
$
|
1,484
|
|
|
$
|
1,153
|
|
|
$
|
331
|
|
|
|
29
|
%
|
|
$
|
5,707
|
|
|
$
|
5,255
|
|
|
$
|
452
|
|
|
|
9
|
%
|
Less: Notable items
|
|
|
17
|
|
|
|
—
|
|
|
|
17
|
|
|
|
100
|
|
|
|
6
|
|
|
|
67
|
|
|
|
(61
|
)
|
|
|
(91
|
)
|
Total revenue, Adjusted/Underlying (non-GAAP)
|
B
|
$
|
1,467
|
|
|
$
|
1,153
|
|
|
$
|
314
|
|
|
|
27
|
%
|
|
$
|
5,701
|
|
|
$
|
5,188
|
|
|
$
|
513
|
|
|
|
10
|
%
|
Noninterest expense, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense (GAAP)
|
C
|
$
|
898
|
|
|
$
|
788
|
|
|
$
|
110
|
|
|
|
14
|
%
|
|
$
|
3,474
|
|
|
$
|
3,352
|
|
|
$
|
122
|
|
|
|
4
|
%
|
Less: Notable items
|
|
|
40
|
|
|
|
—
|
|
|
|
40
|
|
|
|
100
|
|
|
|
55
|
|
|
|
36
|
|
|
|
19
|
|
|
|
53
|
|
Noninterest expense, Adjusted/Underlying (non-GAAP)
|
D
|
$
|
858
|
|
|
$
|
788
|
|
|
$
|
70
|
|
|
|
9
|
%
|
|
$
|
3,419
|
|
|
$
|
3,316
|
|
|
$
|
103
|
|
|
|
3
|
%
|
Net income, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
E
|
$
|
666
|
|
|
$
|
144
|
|
|
$
|
522
|
|
|
NM
|
|
|
$
|
1,652
|
|
|
$
|
1,045
|
|
|
$
|
607
|
|
|
|
58
|
%
|
Add: Notable items, net of income tax expense (benefit)
|
|
|
(317
|
)
|
|
|
—
|
|
|
|
(317
|
)
|
|
|
(100
|
)
|
|
|
(340
|
)
|
|
|
(19
|
)
|
|
|
(321
|
)
|
|
NM
|
|
Net income, Adjusted/Underlying (non-GAAP)
|
F
|
$
|
349
|
|
|
$
|
144
|
|
|
$
|
205
|
|
|
|
142
|
%
|
|
$
|
1,312
|
|
|
$
|
1,026
|
|
|
$
|
286
|
|
|
|
28
|
%
|
Net income available to common stockholders, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders (GAAP)
|
G
|
$
|
666
|
|
|
$
|
144
|
|
|
$
|
522
|
|
|
NM
|
|
|
$
|
1,638
|
|
|
$
|
1,031
|
|
|
$
|
607
|
|
|
|
59
|
%
|
Add: Notable items, net of income tax expense (benefit)
|
|
|
(317
|
)
|
|
|
—
|
|
|
|
(317
|
)
|
|
|
(100
|
)
|
|
|
(340
|
)
|
|
|
(19
|
)
|
|
|
(321
|
)
|
|
NM
|
|
Net income available to common stockholders, Adjusted/Underlying (non-GAAP)
|
H
|
$
|
349
|
|
|
$
|
144
|
|
|
$
|
205
|
|
|
|
142
|
%
|
|
$
|
1,298
|
|
|
$
|
1,012
|
|
|
$
|
286
|
|
|
|
28
|
%
|
Efficiency ratio and efficiency ratio, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
|
C/A
|
|
60.52
|
%
|
|
|
68.49
|
%
|
|
|
(797
|
)
|
|
bps
|
|
|
|
60.87
|
%
|
|
|
63.80
|
%
|
|
|
(293
|
)
|
|
bps
|
|
Efficiency ratio, Adjusted/Underlying (non-GAAP)
|
D/B
|
|
58.50
|
|
|
|
68.49
|
|
|
|
(999
|
)
|
|
bps
|
|
|
|
59.96
|
|
|
|
63.92
|
|
|
|
(396
|
)
|
|
bps
|
|
Return on average tangible common equity and return on average tangible common equity, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common equity (GAAP)
|
I
|
$
|
19,624
|
|
|
$
|
19,627
|
|
|
$
|
(3
|
)
|
|
—%
|
|
|
$
|
19,618
|
|
|
$
|
19,698
|
|
|
$
|
(80
|
)
|
|
—%
|
|
Less: Average goodwill (GAAP)
|
|
|
6,887
|
|
|
|
6,876
|
|
|
|
11
|
|
|
—
|
|
|
|
6,883
|
|
|
|
6,876
|
|
|
|
7
|
|
|
—
|
|
Less: Average other intangibles (GAAP)
|
|
|
2
|
|
|
|
9
|
|
|
|
(7
|
)
|
|
|
(78
|
)
|
|
|
2
|
|
|
|
2
|
|
|
|
—
|
|
|
—
|
|
Add: Average deferred tax liabilities related to goodwill (GAAP)
|
|
|
531
|
|
|
|
325
|
|
|
|
206
|
|
|
|
63
|
|
|
|
534
|
|
|
|
502
|
|
|
|
32
|
|
|
|
6
|
|
Average tangible common equity
|
J
|
$
|
13,266
|
|
|
$
|
13,067
|
|
|
$
|
199
|
|
|
|
2
|
%
|
|
$
|
13,267
|
|
|
$
|
13,322
|
|
|
$
|
(55
|
)
|
|
—%
|
|
Return on average tangible common equity
|
G/J
|
|
19.92
|
%
|
|
|
4.34
|
%
|
|
|
1,558
|
|
|
bps
|
|
|
|
12.35
|
%
|
|
|
7.74
|
%
|
|
|
461
|
|
|
bps
|
|
Return on average tangible common equity, Adjusted/Underlying (non-GAAP)
|
H/J
|
|
10.43
|
|
|
|
4.34
|
|
|
|
609
|
|
|
bps
|
|
|
|
9.79
|
|
|
|
7.60
|
|
|
|
219
|
|
|
bps
|
|
Return on average total tangible assets and return on average total tangible assets, Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets (GAAP)
|
K
|
$
|
151,111
|
|
|
$
|
117,386
|
|
|
$
|
33,725
|
|
|
|
29
|
%
|
|
$
|
149,953
|
|
|
$
|
143,183
|
|
|
$
|
6,770
|
|
|
|
5
|
%
|
Less: Average goodwill (GAAP)
|
|
|
6,887
|
|
|
|
6,876
|
|
|
|
11
|
|
|
—
|
|
|
|
6,883
|
|
|
|
6,876
|
|
|
|
7
|
|
|
|
—
|
|
Less: Average other intangibles (GAAP)
|
|
|
2
|
|
|
|
9
|
|
|
|
(7
|
)
|
|
|
(78
|
)
|
|
|
2
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
Add: Average deferred tax liabilities related to goodwill (GAAP)
|
|
|
531
|
|
|
|
325
|
|
|
|
206
|
|
|
|
63
|
|
|
|
534
|
|
|
|
502
|
|
|
|
32
|
|
|
|
6
|
|
Average tangible assets
|
L
|
$
|
144,753
|
|
|
$
|
110,826
|
|
|
$
|
33,927
|
|
|
|
31
|
%
|
|
$
|
143,602
|
|
|
$
|
136,807
|
|
|
$
|
6,795
|
|
|
|
5
|
%
|
Return on average total tangible assets
|
E/L
|
|
1.83
|
%
|
|
|
0.52
|
%
|
|
|
131
|
|
|
bps
|
|
|
|
1.15
|
%
|
|
|
0.76
|
%
|
|
|
39
|
|
|
bps
|
|
Return on average total tangible assets, Adjusted/Underlying (non-GAAP)
|
F/L
|
|
0.96
|
|
|
|
0.52
|
|
|
|
44
|
|
|
bps
|
|
|
|
0.91
|
|
|
|
0.75
|
|
|
|
16
|
|
|
bps
|
|
Net income per average common share - basic and diluted,
Adjusted/Underlying:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding - basic (GAAP)
|
M
|
|
492,149,763
|
|
|
|
599,998,324
|
|
|
|
(107,848,561
|
)
|
|
|
(18
|
%)
|
|
|
502,157,440
|
|
|
|
522,093,545
|
|
|
|
(19,936,105
|
)
|
|
|
(4
|
%)
|
Average common shares outstanding - diluted (GAAP)
|
N
|
|
493,788,007
|
|
|
|
599,998,324
|
|
|
|
(106,210,317
|
)
|
|
|
(18
|
)
|
|
|
503,685,091
|
|
|
|
523,930,718
|
|
|
|
(20,245,627
|
)
|
|
|
(4
|
)
|
Net income per average common share - basic (GAAP)
|
G/M
|
$
|
1.35
|
|
|
$
|
0.26
|
|
|
$
|
1.09
|
|
|
NM
|
|
|
$
|
3.26
|
|
|
$
|
1.97
|
|
|
$
|
1.29
|
|
|
|
65
|
|
Net income per average common share - diluted (GAAP)
|
G/N
|
|
1.35
|
|
|
|
0.26
|
|
|
|
1.09
|
|
|
NM
|
|
|
|
3.25
|
|
|
|
1.97
|
|
|
|
1.28
|
|
|
|
65
|
|
Net income per average common share - basic, Adjusted/Underlying (non-GAAP)
|
H/M
|
|
0.71
|
|
|
|
0.26
|
|
|
|
0.45
|
|
|
|
173
|
|
|
|
2.59
|
|
|
|
1.94
|
|
|
|
0.65
|
|
|
|
34
|
|
Net income per average common share - diluted, Adjusted/Underlying (non-GAAP)
|
H/N
|
|
0.71
|
|
|
|
0.26
|
|
|
|
0.45
|
|
|
|
173
|
|
|
|
2.58
|
|
|
|
1.93
|
|
|
|
0.65
|
|
|
|
34
|
|
75
Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
X
02S3UB 1 U P X +
q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Annual Meeting Proxy Card
.
B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
+
IMPORTANT ANNUAL MEETING INFORMATION
A For Against Abstain
2. Advisory vote on executive compensation.
For Against Abstain
3. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2018. 01 - Bruce Van Saun 04 - Anthony Di lorio 07 - Leo I. (“Lee”) Higdon 02 - Mark Casady 05 - William P. Hankowsky 08 - Charles J. (“Bud”) Koch 03 - Christine M. Cumming 06 - Howard W. Hanna III 09 - Arthur F. Ryan 1. Election of Directors: 10 - Shivan S. Subramaniam 11 - Wendy A. Watson 12 - Marita Zuraitis
For Against Abstain For Against Abstain For Against Abstain Proposals — The Board of Directors recommends a vote FOR all nominees in Proposal 1 and FOR Proposals 2 and 3.
MMMMMMMMMMMM MMMMMMMMMMMMMMM
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext
000004
MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE______________ SACKPACK_____________
MMMMMMM
3 7 2 6 0 0 1
MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
MMMMMMMMM
C 1234567890 J N T
C123456789 JNT 1upx 3726001
76
q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
.
Notice of 2018 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting – April 26, 2018
Bruce Van Saun, Stephen T. Gannon and Robin S. Elkowitz or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Citizens Financial Group, Inc. to be held on April 26, 2018 at 9:00 a.m. Eastern Time, at One Citizens Plaza, Providence, Rhode Island 02903 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted as specified by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees in Proposal 1 and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Items to be voted appear on reverse side.)
Proxy – Citizens Financial Group, Inc. Change of Address
— Please print your new address below.
Comments
— Please print your comments below.
C Non-Voting Items Meeting Attendance
Mark the box to the right if you plan to attend the Annual Meeting.
Citizens Financial Group, Inc. 2018 Annual Meeting of Stockholders April 26, 2018, at 9:00 a.m. Eastern Time. One Citizens Plaza, Providence, Rhode Island 02903. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND B.
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