UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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BB&T Corporation
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DEAR FELLOW SHAREHOLDER:
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of BB&T Corporation at 11:00 a.m. (EDT) on Tuesday, April 26, 2016,25, 2017. This year’s meeting will be held in Harrisburg, Pennsylvania at the Embassy Suites, 460Hilton Harrisburg, on One North Cherry Street, Winston-Salem, NC 27101. The matters scheduled for consideration at the meeting are described in detail in the 2016 Proxy Statement.Second Street. Shareholders as of the record date of February 17, 201615, 2017 are invited to attend.
We are again providing proxy materials to our common stock shareholders primarily through the Internet. We have found this process significantly lowers the cost of our annual proxy campaign. We urgehope this continues to offer you a convenient way to access our proxy materials. Please read this year’sthe 2017 proxy materials, which includestatement carefully because it contains important information about the matters we will vote on at our 2016 Proxy Statement and our Annual Reportannual meeting.
Separately, on Form 10-K that was filed with the Securities and Exchange Commission on February 25, 2016. Also included is a copybehalf of the 2015 Annual Report that contains financial highlights,Board of Directors, we would like to thank recently retired directors Edward C. Milligan and Edwin H. Welch, Ph.D., and recently retired members of Executive Management, Ricky K. Brown, Steven B. Wiggs and Cynthia A. Williams, for their service and contributions to our letter to shareholders,company. All were instrumental in executing our vision and additional information about BB&T.mission in the face of meaningful obstacles during the past several years. We benefited from their sound judgement and guidance.
We encourage you to vote through the Internet or by telephone as soon as possible. If you received the proxy materials by mail you may complete, sign, and return the enclosed proxy card. Even if you plan to attend the meeting, we strongly recommend thatencourage you to vote your shares in advance.
The agenda for this year’s Annual Meeting includesadvance by following the following items:
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Please refervoting instructions provided. Every vote is important and we look forward to the proxy statement for further details on the proposals to be voted on at the Annual Meeting. We trust that this presentation will satisfy your informational needs, and, at the same time, provide you with a better understanding of both the financial performance and strategic direction of BB&T.
hearing from you.
Sincerely,
Kelly S. King | Jennifer S. Banner | |||||
Chairman and Chief Executive Officer | Independent Lead Director |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
BB&T CORPORATION
Date: |
Time: |
Place: | ||
April | 11:00 a.m. EDT |
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AGENDA:
· | Election of the |
· | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for |
· | Advisory vote to approve BB&T’s executive compensation program, commonly referred to as a “say on pay” vote |
· | Advisory vote on the frequency of our “say on pay” vote |
· | Approval of amendments to the BB&T Corporation 2012 Incentive Plan, which include increasing the number of authorized shares, andre-approval of the Plan for purposes of Internal Revenue Code Section 162(m) |
· | A shareholder proposal requesting the elimination of supermajority voting provisions in BB&T Corporation’s articles and bylaws, if properly presented at the meeting |
· | Any other business that may properly be brought before the meeting |
Record date: You can vote if you were a shareholder of record on February
If you are attending the meeting, you will be asked to present your admission ticket and valid photo identification, such as a driver’s license, as described in the proxy statement.
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By Order of the Board of Directors, | ||||
Kelly S. King | ||||
Chairman and Chief Executive Officer |
March 16, 201615, 2017
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be
A copy of this proxy statement is available athttp://www.edocumentview.com/BBT. Also available at this website is the
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PROXY STATEMENTTABLE OF CONTENTS
Proxy Statement Summary |
This summary highlights information contained elsewhere in this proxy statement for BB&T Corporation, which we sometimes refer to as the “Corporation” or “BB&T.” This summary does not contain all the information that you should consider, and you should read this entire proxy statement carefully before you vote. Additional information regarding our 20152016 performance can be found in our Annual Report on Form10-K.
20162017 Annual Meeting of Shareholders
Time and Date | Location | Record Date | ||
April |
| February |
Proposals and Voting
Shareholders of record will vote on the following threesix proposals:
Proposals | Votes Required | Board Recommendation | More Information | |||
Election of | Majority of votes cast for each nominee | FOR EACH NOMINEE | Page | |||
Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for | Majority of votes cast | FOR | Page | |||
Advisory vote to approve BB&T’s executive compensation program, commonly referred to as a “say on pay” vote | Majority of votes cast | FOR | Page | |||
Advisory vote on the frequency of ���say on pay” votes | Majority of votes cast (in the absence of a majority, we will consider which frequency receives the most votes by shareholders) | EVERY YEAR | Page 80 | |||
Approval of amendments to the BB&T Corporation 2012 Incentive Plan, which include increasing the number of authorized shares, andre-approval of the Plan for purposes of Internal Revenue Code Section 162(m) | Majority of votes cast | FOR | Page 81 | |||
A shareholder proposal requesting the elimination of supermajority voting provisions in BB&T Corporation’s articles and bylaws, if properly presented at the meeting | Majority of votes cast | AGAINST | Page 90 |
BB&T Corporation | 2017 Proxy Statement 1
Proxy Statement Summary |
How to Vote
A proxy that is signed and dated, but which does not contain voting instructions, will be voted as recommended by our boardBoard of directors forDirectors on each proposal.
There are four ways In addition to vote:voting in person at the annual meeting, shareholders may also vote the following ways:
Voting By Proxy | ||||||
Voting Methods |
Internet | Telephone | ||||
Shareholders of Record (shares registered via Computershare) | www.envisionreports.com/BBT | Call 1-800-652-VOTE (8683) and follow the instructions on the proxy card | Sign, date and mail | |||
Beneficial Owners (shares owned through your bank or brokerage account) | www.proxyvote.com | |||||
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your voting instruction form |
BB&T Corporation | 2016 Proxy Statement 1
2015 Executive Compensation Overview
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We’ve been able to grow as a company without sacrificing our vision, mission and values. We remain dedicated to creating superior long-term economic rewards for our shareholders. This can be seen in our peer-leading dividend yields and net interest margins. We remain committed to paying healthy dividends to our shareholders, while net interest income constitutes the primary source of our revenue.
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2 BB&T Corporation | 20162017 Proxy Statement
Proxy Statement Summary |
Shareholder Engagement and Changes to our Compensation and Governance Programs
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•Performance Share Units—a new compensation vehicle •Total Shareholder Return—a new long-term incentive metric •Enhanced Mix of Long-Term Incentives—two-thirds of long-term incentives subject to robust performance criteria •Proxy Access—allows shareholders to have their nominees appear in our proxy statement. |
As described under “Corporate Governance Matters—Shareholder Engagement Program,” for the past several years we have conducted a formal shareholder engagement program to discuss issues of importance to our shareholders, with a focus on corporate governance and executive compensation. Historically, shareholders have indicated strong support of our compensation programs through their “say on pay” voting results, but at our last two annual meetings, we received a lower level of shareholder support for that proposal than in prior years. In particular, in 2016, we received 55% of votes in favor of our “say on pay” proposal.
What We Heard |
• Our shareholders wanted to see a significant portion of our long-term compensation be tied to robust performance objectives. • Shareholders suggested adding an additional performance-based metric to our long-term incentive program. • As a result of our asset size as compared to our peers, shareholders suggested that we consider adding larger banks to our peer group. • Even though we are above the median of our peers in terms of asset size, compensation should not be targeted above the median of our peers. • Shareholders expressed concerns that the 2015 Merger Incentive Award would become a regular part of our executive compensation program. • Shareholders suggested that we increase our CEO stock ownership guideline. • Shareholders requested that we adopt proxy access. • Shareholders requested that we publish our Corporate Social Responsibility report on our website. |
BB&T Corporation | 2017 Proxy Statement 3
Proxy Statement Summary |
What We Did |
As outlined below, the Compensation Committee, the Nominating and Corporate Governance Committee and the Board carefully considered the constructive feedback we received during our engagement sessions and enhanced our executive compensation and governance programs over the course of 2016 and continuing into 2017. These changes fit well within our overall compensation philosophy and the objectives of our executive compensation and governance programs. Compensation Changes Effective in 2016 • In June 2016, we retroactively added Total Shareholder Return (“TSR”) as a payment modifier that can decrease payments under the previously granted 2016-2018 Long-Term Incentive Performance (“LTIP”) awards based on BB&T’s TSR performance relative to its peer group. • We increased the CEO’s stock ownership requirement from 5x salary to 6x salary. • We made no 2016 base salary increases for our 2015 Named Executive Officers (“NEOs”). • We did not increase compensation target opportunities for our 2015 NEOs. • We revised the peer group to add one bank larger than us (Wells Fargo) and one bank closer in size (Citizens Financial). • We continue to reinforce that the 2015 Merger Incentive Award was a one-time event that will not be repeated. Compensation Changes Effective in 2017* • We added performance share units to the long-term incentive program to comprise 50% of equity awards. • We eliminated the use of stock options. • We adjusted the long-term incentive mix to provide for an equal mix of performance share units, LTIP, and restricted stock units, resulting intwo-thirds of long-term incentives being subject to robust performance criteria and all awards being subject to a performance hurdle. • We included Total Shareholder Return as a payment modifier in our long-term incentive program, that can increase or decrease the LTIP award and performance share unit award payouts based on BB&T’s TSR performance relative to its peer group. • We extended our risk-based forfeiture provision to all long-term incentive awards. Awards are subject to reduction or forfeiture if the Compensation Committee determines that there has been a significant negative risk outcome. • We made no increases in base salaries for our NEOs. Governance Changes Effective in 2016 • We adopted a proxy access bylaw that allows a shareholder or group of up to 20 shareholders that has held at least 3% of our common stock for at least three years to nominate up to 25% of the Board (but at least two directors) and have those nominees appear in our proxy statement, subject to notice and other specific requirements in our bylaws. • We published a Corporate Social Responsibility report on our website, highlighting our good stewardship of the natural resources entrusted to us, our promotion of our associates’ and communities’ well-being, and our coherent corporate governance program. |
* | See “Compensation Discussion and Analysis—Section 2—2017 Changes to Our Compensation Program” on page 44 for a detailed review of the compensation changes effective in 2017. |
4 BB&T Corporation | 2017 Proxy Statement
Proxy Statement Summary |
Performance Highlights
Strategic Accomplishments | ||
• 2016 was a strong and profitable year with record earnings, expansion into new markets and a healthy return to our shareholders. Our accomplishments in 2016 demonstrate the power of our vision, mission and values. • We extended our long-standing commitment to leadership development for our clients and communities through our BB&T Leadership Institute, Lighthouse Project community service initiative, and Financial Foundations course to increase the financial proficiency of high school students. • We ramped up our digital strategy by adding talent and technology to meet our clients’ evolving needs and expectations. • We have continued to grow our digital platform, U by BB&T, which allows clients to do business with us wherever they are on whatever device they choose. • We were able to approve a 7% increase in our quarterly dividend, achieve a 28.4% total return to | shareholders and were approved to conduct share repurchases totaling $840 million. Our dividend yield and long-term returns are among the best in the industry. • We successfully integrated our National Penn acquisition and began capitalizing on our earlier acquisitions of Susquehanna Bancshares and The Bank of Kentucky, allowing us to create new capital markets relationships in Philadelphia and Cincinnati. • We completed our second largest insurance acquisition – Swett & Crawford, a century-old wholesale broker with a strong and talented team of industry specialists. • We made important changes in our Executive Management team, adding five new leaders, creating the new positions of chief digital officer and chief client experience officer, and appointing new leadership to the role of chief information officer. • We invested approximately $1 billion in new infrastructure systems over the past
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2016—A Record Performance Year: | ||
• Record net income available to common shareholders of $2.3 billion. • Asset growth of 4.4% year-over-year. • Average non-interest bearing deposits increased 15% year-over-year, second highest growth rate in our peer group. • Record revenue of $11.0 billion, up 12.3% from 2015. • Nonperforming assets represented 0.57% of loan-related assets, best in our peer group (peer group average 0.99%). | • Strong capital and liquidity ratios. • Credit ratings that are among the highest in our industry. • Strong absolute total return to shareholders of 28.4%. • Total shareholder return exceeded peer average and S&P Financials Index for the 10, 15, and 20 year periods. • BB&T achieved a record stock price during the calendar year, which as of the record date was $48.26. |
Our Board of Directors believes that maintaining a strong corporate governance framework is essential to the continuing growth and success of
BB&T. Below are several notable features of our corporate governance framework:&T Corporation | 2017 Proxy Statement 5
Proxy Statement Summary |
Corporate Governance Highlights
Our Board of Directors believes that maintaining a strong corporate governance framework is essential to the continuing growth and success of BB&T. Below are several notable features of our corporate governance framework: | ||
Proxy Access | In 2016, we adopted a proxy access bylaw that allows a shareholder or group of up to 20 shareholders that has held at least 3% of our common stock for at least three years to nominate up to 25% of the Board (but at least two directors) and have those nominees appear in our proxy statement, subject to notice and other specific requirements in our bylaws. | |
Active, Independent Board of Directors | Fourteen of our |
Independent Lead Director | Our Lead Director serves an important governance function by providing strong leadership for thenon-management and independent directors. |
Strategic Direction and Planning | The Board |
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Stock Ownership Guidelines | By requiring our CEO to own stock equal to 6x his annual salary and directors to own stock equal to 5x their |
Pledging/Hedging of Shares | To reduce conflicts of interest, we have strong |
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Majority Voting for Director | All director nominees in uncontested elections must be elected by an affirmative vote of the majority of votes cast. |
Risk Oversight | We have developed a robust risk management organization, reporting to our Board, with the purpose of providing objective oversight of our risk-taking activities. | ||
Clawbacks and Executive Risk Scorecard | We make all executive awards (cash and equity) subject to recoupment and also may utilize our executive risk scorecard to |
Shareholder Engagement | We maintain a robust shareholder engagement program, actively seeking feedback from our shareholders to improve our governance and compensation practices. | ||
Statement of Political Activity | We publish on our website a Statement of Political Activity, |
We publish on our website a Corporate Social Responsibility Report, highlighting our good stewardship of the natural resources entrusted to us, our promotion of our associates’ and communities’ well-being, and our coherent corporate governance program. | |||
Board Committees | We have five standing board committees, as indicated in the |
6 BB&T Corporation | 20162017 Proxy Statement 3
Proxy Statement Summary |
BB&T BOARDOF DIRECTORSAND COMMITTEES
The table below shows for each of our directors, their memberships in standing committees and their independence status.
Independent | Audit | Compensation | Nominating and Corporate Governance | Executive | Risk | |||||||
Jennifer S. Banner± | ||||||||||||
K. David Boyer, Jr. | ||||||||||||
Anna R. | ||||||||||||
James A. | ||||||||||||
I. Patricia Henry** | ||||||||||||
Eric C. | ||||||||||||
Kelly S. King† | ||||||||||||
Louis B. Lynn, Ph.D. | ||||||||||||
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Charles A. Patton | ||||||||||||
Nido R. Qubein | ||||||||||||
William J. Reuter | ||||||||||||
Tollie W. Rich, Jr.** | ||||||||||||
Christine Sears | ||||||||||||
Thomas E. Skains | ||||||||||||
Thomas N. Thompson | ||||||||||||
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† | Chairman of the Board of Directors |
± | Independent Lead Director |
Member |
Chair |
Designated as the “Audit Committee Financial Expert” |
** | Serves on the Trust Committee of Branch Banking and Trust Company |
*** | Chairman of the Trust Committee of Branch Banking and Trust Company |
4 BB&T Corporation | 20162017 Proxy Statement 7
Proposal 1—Election of Directors |
PROPOSAL 1—ELECTIONOF DIRECTORS
We are asking you to reelect each of the eighteensixteen director nominees listed below to continue serving on our Board of Directors for aone-year term expiring at the Annual Meeting of Shareholders in 2017.2018. Each director nominee will require the affirmative vote of the majority of votes cast to be elected.
A properly executed proxy marked “FOR” any one of the eighteen nominees for director will be voted for each nominee indicated. A properly executed proxy marked ‘AGAINST” a nominee will be voted against that nominee for director. Marking the proxy card “ABSTAIN” for any of the nominees will have no effect on the vote.
Although our Board of Directors expects that each of the nominees will be available for election, if a vacancy in the slate of nominees occurs, it is intended that shares of BB&T common stock represented by proxies will be voted for the election of a substitute nominee, designated by the Board, or the Board may reduce the number of persons to be elected by the number of persons unable to serve. Holders of our common stock do not have cumulative voting rights in the election of directors.
The membership of our Board of Directors includes all of the board members of Branch Banking and Trust Company (our(“Branch Bank,” our banking subsidiary), and vice-versa, resulting in the two boards having identical memberships. Matching the membership of these two boards provides for transparency and information sharing between both boards, which allows for better risk management, provides for administrative efficiencies, and takes advantage of the talent and experience provided by the members of each board. This structure is also in line with that of many of the financial services companies found in our Peer Group.peer group.
A candidate for election as a director of BB&T is nominated based on his or her professional experience, recognized achievement in his or her respective field, an ability to contribute to our business, his or her experience in risk management, and the willingness to make the commitment of time and effort required of a BB&T director over an extended period of time. Sound judgment and community leadership are important characteristics that members of our Board of Directors should possess. Each of our nominees has been identified as possessing good business acumen, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. Sound judgment and community leadership are also important characteristics that our Board members possess. Each nominee alsoadditionally brings to us a strong and unique background and set of skills, to our Board of Directors, providing our Board with competence and experience in a wide variety of areas.
A Word of Appreciation
We would like to offer a word of thanks to directors Ronald E. Deal and John P. Howe III, M.D., who retired from our Board of Directors effective December 31, 2015. Mr. Deal has been a BB&T director since 1986, guiding BB&T through its transformation from a local North Carolina bank into one of the largest financial services institutions in the nation. Dr. Howe has been a BB&T director since 2005, and his leadership has been instrumental in executing the company’s vision and mission in the face of meaningful obstacles during one of the most pivotal periods of the company’s history.
We thank Mr. Deal and Dr. Howe for their many valuable contributions to BB&T, and we wish them well in their future endeavors.
8 BB&T Corporation | 20162017 Proxy Statement 5
Proposal 1—Election of Directors |
Director Commitment and Skills
COMMITMENTTO BB&T
We are proud of our directors’ devotion to BB&T. Our Board invests a substantial amount of time, effort and energy in planning and executing our vision, mission and values. While each Board member has other professional commitments, no Board member is part of more than onetwo other publicly-traded company Board.boards. We believe that this commitment to BB&T helps promote our vision to become “the Best of the Best.” The following skills matrix shows the diverse range of expertise our directors provide to BB&T.
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Qualifications | Experience | |||||||||||||||||||
Executive Leadership |
Public Company Director |
Audit Committee Financial Expert Qualified(1) |
Accounting |
Academia |
and Supervision |
Financial Services |
Other Bank or Bank | |||||||||||||
Jennifer S. Banner | ||||||||||||||||||||
K. David Boyer, Jr. | ||||||||||||||||||||
Anna R. Cablik | ||||||||||||||||||||
James A. Faulkner | ||||||||||||||||||||
I. Patricia Henry | ||||||||||||||||||||
Eric C. Kendrick | ||||||||||||||||||||
Kelly S. King | ||||||||||||||||||||
Louis B. Lynn, Ph.D. | ||||||||||||||||||||
Charles A. Patton | ||||||||||||||||||||
Nido R. Qubein | ||||||||||||||||||||
William J. Reuter | ||||||||||||||||||||
Tollie W. Rich, Jr. | ||||||||||||||||||||
Christine Sears | ||||||||||||||||||||
Thomas E. Skains | ||||||||||||||||||||
Thomas N. Thompson | ||||||||||||||||||||
Stephen T. Williams | ||||||||||||||||||||
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(1) | Indicates |
6 BB&T Corporation | 20162017 Proxy Statement 9
Proposal 1—Election of Directors |
Nominees for Election as Directors for aOne-Year Term Expiring in 2017
2018
The names of the nominees for election to our Board of Directors and their principal occupations, experience, and certain other information with respect to each nomineekey qualifications and skills is set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED BELOW. |
Jennifer S. Banner Knoxville, TN | | |||
Age: 57 Lead Director Tenure:
BB&T since 2003 •Branch Bank since 2013 Board Committees: •Executive •Risk Public Company Directorship: •Communications Sales & Leasing, Inc.
| Professional Experience: Ms. Banner has served as President and Chief Executive Officer of SchaadSource, LLC (a financial and administrative services company) since 2006, Chief Executive Officer of Schaad Companies, LLC (a diversified holding company) since 2008 and Chief Executive Officer of Schaad Family Office, LLC (a diversified holding company) since 2012.
Qualifications and Skills: Ms. Banner brings to BB&T experience as a Chief Executive Officer and skills in public accounting, as well as financial services, corporate governance and risk management experience from her prior service on the boards of directors of First Vantage Bank and First Virginia Banks, Inc. She
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K. David Boyer, Jr. Oakton, VA |
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Age: Tenure:
BB&T since 2009 •Branch Bank since 2013 Board Committees: •Executive •Risk | Professional Experience: Mr. Boyer has served as Chief Executive Officer of GlobalWatch Technologies, Inc. (a business intelligence, cybersecurity, information assurance, governance and compliance firm) since 2004. Mr. Boyer also has served as a director of Virginia Community Development Corporation (a tax credit fund manager supporting economic development in Richmond) since 2009 and as a Treasury Board Member for the Commonwealth of Virginia from
Qualifications and Skills: Prior to his election to the BB&T Board, Mr. Boyer served for over 11 years on Branch Bank’s local advisory board in Washington, D.C. This experience provided Mr. Boyer with a thorough understanding of BB&T’s banking organization, governance structure and its values and culture. Mr. Boyer has extensive experience with risk management, accounting and finance, as well as information technology services, information management,
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10 BB&T Corporation | 20162017 Proxy Statement 7
Proposal 1—Election of Directors |
Anna R. Cablik Marietta, GA |
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Age: Tenure:
BB&T since 2004 •Branch Bank since 2013 Board Committees: • Compensation •Nominating and Corporate Governance (Chair)
Public Company Directorship: •Georgia Power Company
| Professional Experience: Ms. Cablik has served as the President of Anasteel & Supply Company, LLC (a reinforcing steel fabricator) since 1994 and as President of Anatek, Inc. (a general contractor) since 1982.
Qualifications and Skills: Ms. Cablik brings entrepreneurial and business-building skills and experience to BB&T, having successfully founded and grown several businesses. Her extensive career managing a diverse portfolio of projects provides risk assessment skills and governance experience to the BB&T Board. Her public company director experience has provided her a broad understanding of corporate governance matters. Additionally, as the owner and operator of a company, Ms. Cablik has over 30 years of experience overseeing the preparation of financial statements and the review of accounting matters.
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James A. Faulkner Dahlonega, GA |
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Age: Tenure:
BB&T since 2013 •Branch Bank since 2000 Board Committees: •Audit
| Professional Experience: Mr. Faulkner is currently retired and previously served as a consultant to Branch Bank from 2000 through 2011.
Qualifications and Skills: Mr. Faulkner brings to BB&T significant financial services leadership, oversight and expertise stemming from his distinguished
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8 BB&T Corporation | 20162017 Proxy Statement 11
Proposal 1—Election of Directors |
I. Patricia Henry Stone Mountain, GA |
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Age: Tenure:
BB&T since 2013 •Branch Bank since 1999 Board Committees: •Audit
| Professional Experience: Ms. Henry is currently retired and previously was the Director of Strategic Projects for Miller Brewing from 2005 to 2008.
Qualifications and Skills: Ms. Henry brings extensive risk management, strategic planning and organizational development experience and skills to the BB&T Board. At Miller Brewing, Ms. Henry became the first woman to hold a lead management position at a major U.S. brewery when she was named Plant Manager of the Eden, North Carolina facility in 1995. In addition, Ms. Henry’s operational business background allows her to bring the perspective of a commercial client into BB&T’s boardroom. Her institutional knowledge and longstanding Branch Bank board service further qualify her to serve as a member of the BB&T Board.
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Eric C. Kendrick Arlington, VA |
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Age: Tenure:
BB&T since 2013 •Branch Bank since 2003 Board Committees: •Compensation •Nominating and Corporate Governance
| Professional Experience: Mr. Kendrick has served as the President of Mereck Associates, Inc. (a real estate management and development firm) since 1989. He is also President of Old Dominion Warehouse Corporation (a warehouse leasing and development firm) since 1991, President of Upton Corporation (a commercial property development company) since 1991, and President of Murteck Construction Company, Inc. (a general contractor) since 1991.
Qualifications and Skills: Mr. Kendrick brings to BB&T significant financial services industry experience and corporate governance perspective from his service on the boards of First Virginia Banks, Inc., where he served as a director from 1986 until it merged with BB&T in 2003, and Branch Bank, where he has served as director since
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12 BB&T Corporation | 20162017 Proxy Statement 9
Proposal 1—Election of Directors |
Kelly S. King Winston-Salem, NC |
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Age: Tenure:
BB&T since 2008 •Branch Bank since 1995 Board Committees: •Executive •Risk | Professional Experience: Mr. King has served as Chairman of BB&T since 2010;
Qualifications and Skills: Mr. King has forged a lifetime of leadership experience with BB&T, devoting
Mr. King is credited with leading BB&T to continued profitability and financial stability through the economic downturn beginning in 2008. His unwavering commitment to the company’s vision, mission and values has led to a nationally recognized associate volunteer program, called the Lighthouse Project. Since 2009, the Lighthouse Project completed more than 7,700 projects for the communities we serve.
Mr. King
Mr. King was named the Banker of the Year for 2015 byAmerican Banker magazine. His leadership steered the successful completion of our 2015 acquisition of Susquehanna Bancshares—a transaction that was named M&A Deal of the Year (Over $1B to $5B) byThe M&A Advisor. Mr. King was named bySNL Financial as one of its “Most Influential” in banking in 2015 & 2014. In 2011, he was ranked #3 “Best CEO” by sell-side analysts in a study byInstitutional Investor magazine. Since 2009, BB&T has led all U.S. banks in total awards for small business and middle market banking by Greenwich Associates.
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10 BB&T Corporation | 20162017 Proxy Statement 13
Proposal 1—Election of Directors |
Louis B. Lynn, Ph.D. Columbia, SC | | |||
Age: Tenure:
BB&T since 2013 •Branch Bank since 2006 Board Committees: •Compensation •Nominating and Corporate Governance
| Professional Experience: Dr. Lynn has served as the President and Chief Executive Officer of ENVIRO AgScience, Inc. (a defense contractor and provider of construction, construction management, and landscape and design services) since founding the firm in 1985.
Qualifications and Skills: Dr. Lynn possesses valuable oversight skills and
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BB&T Corporation | 2016 Proxy Statement 11
Charles A. Patton Hopewell, VA |
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Age: Tenure:
BB&T since 2013 •Branch Bank since 1998 Board Committees: •Executive •Risk (Chair) | Professional Experience: Mr. Patton has served as a consultant and manager of Patton Holdings, LLC (a real estate holding company) since 2007 and manager of PATCO Investments, LLC (emphasizing specialty lending and equity participations) since 1998.
Qualifications and Skills: Over the course of his extensive
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Nido R. Qubein High Point, NC | | |||
Age: Tenure:
BB&T since 1990 •Branch Bank since 2013 Board Committees: •Executive •Risk Public Company Directorship:
La-Z-Boy Incorporated | Professional Experience: Dr. Qubein has been a BB&T director since 1990 and a Branch Bank director since 2013. He has served as President of High Point University since 2005 where he transformed the institution from a small college to a thriving university. He is also Executive Chairman of Great Harvest Bread Company (a whole grain bread bakery franchising company) since 2001.
Qualifications and Skills: Dr. Qubein has written a dozen books on leadership, sales, communication and marketing and serves as advisor to businesses and organizations throughout the country on how to position their enterprises and create successful leadership programs. He is a business coach to CEOs and top executives. During his tenure on the BB&T Board, he has provided key leadership and made important contributions to the development and successful execution of BB&T’s strategy to be the “best of the best.” His many entrepreneurial ventures and service on more than 30 volunteer boards over the course of his career contribute governance and community service skills and experience to BB&T. He has been recognized nationally for his entrepreneurial and professional achievements including his induction in three halls of fame, receiving the University of Delaware’s Siegfried Entrepreneurship Award, and membership in the Horatio Alger Association for Distinguished Americans with such notable leaders like Starbuck’s Howard Schultz and General Colin Powell.
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William J. Reuter Lititz, PA
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Age: Tenure:
BB&T since 2015 •Branch Bank since 2015 Board Committees: •Executive •Risk | Professional Experience: Mr. Reuter is the retired Chairman and Chief Executive Officer of Susquehanna Bancshares, Inc., having served as Chief Executive Officer and Chairman from
Mr. Reuter brings extensive experience in the financial services industry, beginning his career with Susquehanna in 1973, when he joined one of its predecessor banks in Maryland.
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Tollie W. Rich, Jr. Cape Coral, FL |
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Age: Tenure:
BB&T since 2013 •Branch Bank since 2007 Board Committees: •Audit | Professional Experience: Mr. Rich Qualifications and Mr. Rich brings valuable perspective to the BB&T Board by combining financial industry leadership and expertise with significant corporate governance and supervisory experience. His extensive
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Christine Sears Harrisburg, PA |
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Age: Tenure:
BB&T since 2015 •Branch Bank since 2015 Board Committees: •Audit | Professional Experience: Ms. Sears has served as the President and Chief Executive Officer of Penn National Insurance since January 1, 2015. Prior to being appointed Penn National’s President and Chief Executive Officer, Ms. Sears served as Penn National’s Executive Vice President and Chief Operating Officer since 2010 after serving as Penn National’s Chief Financial Officer from 1999 to 2010. Qualifications and Skills: Ms. Sears joined Penn National in 1980 as a financial analyst and held various positions of increasing leadership in the company prior to being named the President and Chief Executive Officer. Her deep understanding of the insurance industry is very valuable to our Board of Directors as BB&T’s insurance operations are our largest source ofnon-interest income. Ms. Sears joined our Board in August 2015 as a part of the Susquehanna merger. Ms. Sears qualifies as an “audit committee financial expert” under SEC guidelines.
Ms. Sears is a Certified Public Accountant, holds the Chartered Property Casualty Underwriter designation from the
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Thomas E. Skains Charlotte, NC |
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Age: Tenure:
BB&T since 2009 •Branch Bank since 2013 Board Committees: •Executive (Chair) •Risk Public Company Directorship:
| Professional Experience: Mr. Skains
Qualifications and Skills: Mr. Skains brings extensive leadership and strategic planning experience to BB&T through his experience leading a major natural gas utility in the Southeast. Mr. Skains also brings a wealth of corporate governance and risk management expertise gained through his former role as the
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Thomas N. Thompson Owensboro, KY |
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Age: Tenure:
BB&T since 2008 •Branch Bank since 2013 Board Committees: •Compensation (Chair) •Nominating and
| Professional Experience: Mr. Thompson has served as President of Thompson Homes, Inc. (a home builder) since 1978 and served as a member of the Kentucky House of Representatives
Qualifications and Skills: As a former member of the Kentucky legislature, including serving as the Chairman of the House Banking and Insurance Committee, Mr. Thompson provides BB&T with a unique perspective on risk management and the regulation of the financial services industry. He also has valuable experience in the banking industry, having served as a director of AREA Bancshares, which was acquired by BB&T in 2002. Mr. Thompson also brings governance and community service skills and experience to the BB&T Board, having served as a director of various educational and community organizations.
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Stephen T. Williams Winston-Salem, NC |
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Age: Tenure:
BB&T since 2007 •Branch Bank since 2013 Board Committees: •Audit (Chair) |
Professional Experience: Mr. Williams has served as a consultant and manager of Williams Development Group, LLC (a real estate development company) since August 2013. He has served as President of A.T. Williams Oil Company (a family investment company) since 1995 and served as President and Chief Executive Officer of WilcoHess, LLC (an operator of gas stations, convenience stores, restaurants and travel centers) from 2001 through January 2014.
Qualifications and Skills: In addition to the management and oversight skills and experiences gained in serving as the top executive of A.T. Williams Oil Company and WilcoHess, Mr. Williams has a unique perspective on the needs of customers within BB&T’s footprint through his experience with the daily operations of a chain of over 400 gas stations, convenience stores, restaurants and travel centers in Alabama, Georgia, Tennessee, Virginia, Pennsylvania, and the Carolinas. In addition, Mr. Williams has gained experience in building ties between business and the local community through his involvement with community-oriented organizations such as the Winston-Salem Alliance. Mr. Williams qualifies as an “audit committee financial expert” under SEC guidelines.
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OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
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The Board of Directors periodically reviews BB&T’s corporate governance policies, practices and procedures to seeensure that we follow best practices and meet or exceed the requirements of applicable laws, regulations and rules. Our ultimate purpose is to create a strong, sound, and profitable financial services company with long-term, sustainable growth and value for itsour shareholders.
Key Corporate Governance Documents—Please visit our website atwww.bbt.investorroom.comto view the following documents: • Corporate Governance Guidelines • Board Committees and Charters • Codes of Ethics • Statement of Political Activity • Accounting, Securities and Legal Violations Policy • Corporate Social Responsibility Report |
A shareholder may also request a copy of any of these documents by contacting the Corporate Secretary, BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101.
Corporate Governance Guidelines
Our Corporate Governance Guidelines provide the framework for fulfillment of the Board’s corporate governance duties and responsibilities, taking into consideration corporate governance best practices and applicable laws and regulations. The Corporate Governance Guidelines address a number of matters applicable to directors, including director qualification standards and director independence requirements, share ownership guidelines, Board responsibilities, role of the independent Lead Director, retirement, meetings ofnon-management directors, and Boarddirector compensation. A link to our Corporate Governance Guidelines can be found in the section below entitled “Corporate Governance Materials.”
In determining director independence, our Board considers the New York Stock Exchange’s (“NYSE”) bright-line independence criteria. Consistent with NYSE rules, our Board of Directors also broadly considers all other relevant facts and circumstances that bear on the materiality of each director’s relationship with BB&T, including the potential for conflicts of interest, when determining director independence. To assist it in making independence determinations, our Board of Directors has adopted categorical standards which are contained in our Corporate Governance Guidelines. These director nomination and qualificationindependence standards reflect, among other items, the NYSE independence requirements and other applicable laws and regulations related to director independence, and address certain relationships that the Board has determined do not affect a director’s independence.
To assist our Board in its determination of director independence, theThe Nominating and Corporate Governance Committee assists the Board by annually evaluatesevaluating the independence of 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 each director’s occupation, other publicly held company directorships, personal and affiliate loan and non-loan transactions with BB&T and its subsidiaries, certain charitable contributions, relationships considered by the Nominating and Corporate Governance Committee in accordance with our Related Person Transactions Policy and Procedures, and other relevant direct and indirect relationships that may affect the prospective or incumbent director’s independence. Banking relationships with BB&T or any of
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its subsidiaries (including deposit, investment, lending and fiduciary) that are conducted in the ordinary course of business on substantially the same terms and conditions as otherwise available to nonaffiliated customers for comparable transactions are not considered material in determining independence.
After duly considering all such information, our Board of Directors has affirmatively determined that of the eighteensixteen members of the Board, the following sixteenfourteen directors have no disqualifying material relationships with BB&T or its subsidiaries and are independent: Messrs. Boyer, Faulkner, Kendrick, Lynn, Milligan, Patton, Reuter, Rich, Skains, Thompson Welch and Williams, and Mmes. Banner, Cablik, Henry and Sears. The following two directors were deemed not independent due to certain disqualifying relationships with BB&T: Messrs. King and Qubein.
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In assessingQubein.Each member of the independence of Thomas Skains,Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee has been determined by the Board considered his occupation asto be “independent” in accordance with the Chairman, Presidentrequirements of the NYSE and Chief Executive Officer of Piedmont Natural Gas Company, Inc. Branch Bank paid Piedmont Natural Gas approximately $228,000 in 2015, $280,000 in 2014 and $247,000 in 2013 for natural gas. Under Securities and Exchange Commission (“SEC”) rules, these transactions do not constitute Related Person Transactions because they involve the rendering of services by a public utility, at rates or charges fixed in conformity with law or governmental authority.our Corporate Governance Guidelines.
Our Board currently consists of eighteensixteen directors. While that number of Board members is greater than the number we have maintained historically, weWe believe the Board’s current size provides us with certain advantages. Over the last several years, financial institutions have faced increased regulatory and economic pressure. This has led to additional demands resulting in a greater time commitment on the part of our directors and executive officers. In response, we have expanded the numbersize of our Board committees and increased the responsibilities of each committee. The relatively large size of our Board has proved to beis an advantage when assigning an appropriate number of members to each committee in order to properly analyze and respond to increasingly complex developments, whether regulatory, economic, or otherwise. The larger Board anddiversity of viewpoints on each committee size also allows for more effective challenge to proposals from management and directors and increases the diversity of views available to consider.directors. In addition, the number of independent directors aids in maintaining the requisite independence standards of the Audit, Compensation, and Nominating and Corporate Governance committees. The Board believes that its current size and structure enables each directoris appropriate to effectively represent the interests of BB&T’sour shareholders.
CHAIRMANOFTHE BOARDAND CHIEF EXECUTIVE OFFICER
Our Board of Directors is led by the Chairman. Under our bylaws, the Chairman is elected by the Board and presides over each Board meeting and performs such other duties as may be incident to the office of Chairman. BB&T’sOur bylaws and Corporate Governance Guidelines each provide that the Chairman may also hold the position of Chief Executive Officer. BB&T’s Chairman and/orand Chief Executive Officer is not permitted to serve as a member of any standing Board committee, other than the Executive Committee and the Risk Committee. BB&T’sOur Corporate Governance Guidelines provide that when the position of Chairman of the Board is not held by an independent director, the Board will appoint an independent Lead Director.
It is the Board’s current belief that having a unified Chairman and Chief Executive Officer is appropriate and in the best interests of BB&T and our shareholders. The Board believes that combining the Chairman and Chief Executive Officer roles provides the following advantages to us:
our Chief Executive Officer is the director most familiar with BB&T’sour business and industry and is best situated to lead discussions on important matters affecting the business of BB&T;
combining the Chief Executive Officer and Chairman positions creates a firm link between management and the Board and promotes the development and implementation of corporate strategy; and
combining the roles of Chief Executive Officer and Chairman contributes to a more efficient and effective Board and does not undermine the independence of the Board.
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INDEPENDENT LEAD DIRECTOR
Jennifer S. Banner serves as the Board’s Lead Director. The role of the Lead Director is to assist the Chairman and the remainder of the Board in assuringensuring effective governance in overseeing the direction and management of BB&T. The Lead Director serves atwo-year term subject to election to the Board each year by our shareholders, and may serve for one subsequentone-year term at the discretion of the Board. As enumerated in our Corporate Governance Guidelines, several of the Lead Director’s specific responsibilities are to:
organize and preside over executive sessions;
preside at all Board meetings at which the Chairman is not present (including executive sessions);
take responsibility for feedback to/engagement with the Chief Executive Officer on executive sessions;
suggest matters and issues for inclusion on the Board agenda;
work with the Chairman and committee chairs to ensure that there is sufficient time for discussion of all agenda items; and
facilitate teamwork and communication among the independent directors and the Chairman.
In addition, if the Chairman of the Board should be unable to continue his or her responsibilities due to death, disability or other event, then the Lead Director shall call a special Board meeting within one week of the determination that the Chairman of the Board cannot continue his or her responsibilities, to elect a successor Chairman of the Board. Our Board believes that the Lead Director serves an important corporate governance function by providing separate leadership for thenon-management and independent directors. Jennifer S. Banner serves as the Board’s Lead Director.
EXECUTIVE SESSIONSOFTHE BOARD
Our Corporate Governance Guidelines require that non-management directors meet in regular executive sessions of the Board at least three times per year and at such other times as it deems necessary or advisable. The Corporate Governance Guidelines also require independent directors to meet in executive session (without non-independent directors present) at least annually. The Lead Director presides over the non-management and independent director executive sessions.
Strategic Direction and Planning
One of the Board’s most important and vital functions is to provide oversight, guidance and direction as to BB&T’s long-term strategy. Accordingly, in the first quarter of each Januaryyear, management provides to the Board a detailed report on BB&T’sour strategic plan, goals and initiatives for the upcoming year and beyond. The process includes an independent risk assessment to ensure all strategic activities are consistent with the boardBoard approved risk appetite parameters. Before it is approved, the Board engages in thorough and detailed discussions and deliberations over the strategic plan. The plan also includes reporting on management’s success in executing on the prior year’s strategic plan to ensure accountability.
Standing Board Committees, Membership and Attendance and Lead Director Responsibilities
Under our Corporate Governance Guidelines, directors are expected to attend all Board meetings, meetings of assigned committees, and annual meetings of shareholders. Each director is required to be sufficiently familiar with the business of BB&T, including our strategy, financial statements, capital structure, business risks and competition, to facilitate active and effective participation in such meetings. During 2015,2016, the full Board of Directors held ten meetings. Each of the directors attended more than 75% of the aggregate meetings of our Board of Directors’ meetings and assigned committee meetings heldthe committees on which they served in 2015 during the period for which he or she has been a director.2016. All of our directors serving at that time attended the Annual Meeting of Shareholders in 2015, with the exception of one director, who could not attend due to health-related reasons.
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Each member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee has been determined by the Board to be “independent” in accordance with the requirements of the NYSE (including the specific SEC and NYSE independence requirements for audit committee members and the specific NYSE independence requirements for compensation committee members) and BB&T’s Corporate Governance Guidelines. See “Director Independence” above.
2016.
It is also anticipated that the Board standing committees will perform additional duties that are not specifically set out in their respective charters as may be necessary or advisable in order for us to comply with certain laws, regulations or corporate governance standards, as the same may be adopted, amended or revised from time to time. TheWith respect to each standing committee, the current members, of each committee, the principal functions of each committee and the number of meetings held in 20152016 are shown below. Please refer to “Corporate Governance Materials”Also shown below forare the locationresponsibilities of the committee charters.our Lead Director.
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Independent Lead Director
Jennifer S. Banner | • Assists the Chairman and the remainder of the Board in ensuring effective governance in overseeing the direction and management of BB&T. • Organizes and sets the agenda and presides over executive sessions, which meet at least three times per year. • Presides at all Board meetings at which the Chairman is not present (including executive sessions). • Takes responsibility for feedback to/engagement with the Chief Executive Officer on executive sessions. • Suggests matters and issues for inclusion on the Board agenda. • Works with the Chairman and committee chairs to ensure that there is sufficient time for discussion of all agenda items. • Facilitates teamwork and communication among the independent directors and the Chairman. |
Audit Committee
Stephen T. Williams Chair
| Committee Members: James A. Faulkner, I. Patricia Henry,
• Assists the Board in its oversight of the integrity of our financial statements and disclosures. • Assists in oversight of BB&T’s internal control processes. • Monitors financial risks and exposures and reviews with management and the auditors the steps management has taken to monitor, minimize or control such risks or exposures. • Responsible for the appointment, compensation, retention and oversight of the work of the independent external auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. • Evaluates the qualifications, performance and independence of, the independent registered public accounting firm. • Oversees BB&T’s internal audit function and receives regular reports from the |
Compensation Committee
Chair
| Committee Members: Anna R. Cablik, Eric C. Kendrick, Louis B. Lynn
• Manages the duties of the Board related to executive compensation. • Reviews and approves BB&T’s compensation philosophy and practices. • Determines the compensation of the CEO and the highest levels of BB&T management. • Recommends Board compensation and benefits for directors. • Engages an independent compensation consultant to make recommendations relating to overall compensation philosophy, the peer financial group to be used for external comparison purposes, short-term and long-term incentive compensation plans, and related compensation matters. • Oversees risk management with respect to the design and administration of material incentive compensation arrangements. • Responsible for oversight and review of our compensation and benefit plans, including administering our executive |
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Executive Committee
Thomas E. Skains Chair
2016 | Committee Members: Jennifer S. Banner, K. David Boyer, Jr., Kelly S. King, Charles A. Patton, Nido R. Qubein, William J. Reuter
• Authorized to exercise all powers and authority of the Board in management of the business and affairs of the Corporation between Board meetings. |
Nominating and Corporate Governance Committee
Anna R. Cablik Chair
| Committee Members: Eric C. Kendrick, Louis B. Lynn, Thomas N. Thompson
• Reviews and recommends the composition and structure of the Board and its committees and evaluates the qualifications and independence of members of the Board on a periodic basis. • Considers the performance of incumbent directors in determining nominations forre-election. • Identifies and reviews qualified candidates for election as directors. • Administers BB&T’s Related Person Transactions Policy and Procedures. • Oversees annual self-assessments for board members. • Oversees Board Committee composition and executive management succession planning processes. • Reviews and monitors compliance with BB&T’s Codes of Ethics. • Oversees management’s integration of BB&T’s values and culture with its strategy and objectives. |
Risk Committee
Charles A. Patton Chair
| Committee Members: Jennifer S. Banner, K. David Boyer, Jr., Kelly S. King, Nido R. Qubein, William J. Reuter, Thomas E. Skains
• Reviews processes for identifying, assessing, monitoring and managing • Assesses the adequacy of BB&T’s risk management policies and procedures. • Receives periodic reports on our risks, approves BB&T’s risk management framework and periodically reviews and evaluates the adequacy and effectiveness of the risk management framework. • Discusses with management, including the Chief Risk Officer, our major risk exposures and reviews the steps management has taken to identify, monitor and control such exposures. • Approves statements defining BB&T’s risk appetite, monitors our risk profile and provides input to management regarding our risk appetite and risk profile. • Oversees management’s implementation and management of, and conformance with, BB&T’s significant risk management policies, procedures, limits and tolerances. |
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Majority Voting and Director Resignation PolicyPolicy; Director Retirement
Our articles of incorporation generally require each director to be elected by the majority of the votes cast at a meeting of shareholders. Under the currentour Director Resignation Policy, any director nominee who receives a greater number of votes “withhold” than votes “for” such election shall tender his or her resignation to the Board. The Nominating and Corporate Governance Committee will then consider all of the relevant facts and circumstances and recommend to the Board whether to accept, reject or otherwise act with respect to such resignation. The Board will act on the Committee’s recommendation within 130 days following certification of the shareholder vote and will publicly disclose its decision within this130-day timeframe. A director whose resignation is under consideration will abstain from participating in any recommendation or decision regarding that resignation. If a director’s resignation is not accepted, the director will continue to serve for the remainder of his or her term.
Currently, pursuant to North Carolina law and our bylaws, an incumbent director who is notre-elected remains in office until the director’s successor is elected and qualified or until his or her earlier resignation or removal. Under ourOur current majority voting standard, the Board retained its Director Resignation Policy to addressaddresses this “holdover” issue so thatby requiring any director who does not receive the requisite affirmative majority of the votes cast for his or herre-election must to tender his or her resignation to the Board pursuantBoard.
Our bylaws require directors to this Policy.retire at the end of the year in which the director becomes 72 years of age; provided, however, that a director may voluntarily elect to retire earlier.
We are very proud of our culture at BB&T, which has been deliberately developed and consistently articulated over the last 40-plusfor more than 40 years. In a rapidly changing and unpredictable world, we believe individuals and organizations need a clear set of fundamental principles to guide their actions. At BB&T, we know our business will, and should, experience constant change. Change is necessary for progress. In any context, our vision, mission and values, are unchanging because these principles are based on basic truths.
We are a mission-driven organization with a clearly defined set of values. We encourage our employees, who we commonly refer to as associates, to have a strong sense of purpose, a high level of self-esteem and the capacity to think clearly and logically. We believe a competitive advantage is largely in the minds of our associates and their capacity to turn rational ideas into actions that help us accomplish of our mission to make the world a better place to live by:
• | Helping ourclients achieve economic success and financial security; |
• | Creating a place where ourassociates can learn, grow and be fulfilled in their work; |
• | Making thecommunities in which we work better places to be; and |
• | Thereby optimizing the long-term return to ourshareholders, while providing a safe and sound investment. |
We realize our vision—“to create the best financial institution possible”—by meeting our responsibilities to our clients, associates, shareholders and communities. Our 10 values represent our over-arching beliefs. Our values are consistent with one another and integrated into a sound framework of character, judgment, success and happiness. Our focus on values grows from a belief that ideas matter and that an individual’s character is of critical significance.
Executive Management continually reinforces the BB&T culture | BB&T Values
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Ethics matter at BB&T. We believe that the ultimate success of BB&T is directly related to the extent that each one of our associates lives and works every day by adhering to our BB&T values. Our collective beliefs, behaviors, and results define our BB&T culture—a Culture of Ethics. We are keenly focused on always doing what is right in all interactions with our stakeholders—our clients, associates, senior leaders, directors, communities and shareholders. We also value and respect the opinions and insights of associates at all levels throughout the organization. Accordingly, we encourage associates to raise concerns with their managers, butand we also provide other channels such as regional associate relations managers, a BB&T Ethics Hotline and our “Raise a Concern” web reporting form. We appointed a Chief Ethics Officer in 2015 in furtherance of our commitment to and focus on ethics.
sound ethical practices.
We maintain three separate Board-approved Codes of Ethics that apply to our associates, senior financial officers and Directors. BB&T’s Code of Ethics for Associates helps each of our associates understand the basic principles thatThese Codes govern our corporate conduct, and the conduct of our associates generally. We similarly maintain aeach Code of Ethics for Directors, which governs the conduct of our directors generally. The Board also has adopted the Code of Ethics for Senior Financial Officers, which incorporates the Code of Ethics for Associates and also considersis specifically tailored to recognize the importance of each of these individualsgroups in maintaining a strong culture based on our values and adherence to our financial and regulatory reporting. For a copy of our Codes of Ethics, please refer to “Corporate Governance Materials” below.ethical business practices. Any future waivers or substantive amendments of the Codes of Ethics applicable to our Directors and certain of our executive officers will be disclosed on our website.
SALES PRACTICES
Communications with the Board of Directors
Any shareholder or other interested party desiring to contact the Board of Directors or any individual director servingAt BB&T, our performance is driven by our culture. Our culture is based on the Board (including any specific non-management directorcentral theme of “The Client Comes First.” We believe relationships are built on trust, and over time. We believe in understanding our clients’ needs and then explaining our products and services that may meet those needs. Where there is a need and we have a solution, we believe the client will decide whether to “buy” or non-management directors asnot. We don’t want to ever incent an associate to try to make a group) maysale happen. We do, so by written communication mailed to: Board of Directors, care of the Secretary, BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101. Any proper communication so received will be processed by the Secretary as agent for the Board or an individually named director. Unless, in the judgment of the Secretary, the matter is not intended or appropriate for the Board (and subject to any applicable regulatory requirements), the Secretary will prepare a summary of the communication for prompt delivery to each member of the Board or,however, as appropriate, want to reward and recognize our associates for doing the member(s) of the Board named in the communication.right thing (i.e., helping our clients).
Shareholder Engagement Program
OurWe have a formal shareholder engagement program designed to build and maintain relationships with our largest shareholders. This engagement consists of a year-round dialogue with our shareholders, and regular reports to our Executive Management and Board of Directors. A summary of our shareholder engagement program is a formal and coherent system for building and maintaining relationships with our shareholders. Since 2009, we’ve engaged in a recurring dialogue with a number of our larger shareholders concerning corporate governance and executive compensation issues. In 2015, we expanded our shareholder engagement program and contacted 37 of our 50 largest shareholders, representing 38% of our outstanding shares. Our Compensation Committee Chair led meetings with four of our largest shareholders. We also reached out to each of the three shareholders that had submitted proposals at our 2013, 2014 and 2015 annual meetings. In addition, we met with certain of the proxy advisory firms followed by some of our largest shareholders.set forth below:
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The goals of our shareholder engagement program include, but are not limited to:
The conversations centered on
We are committed to ongoing shareholder engagement and expect to continue our shareholder engagement program. We believe that our shareholder engagement program allows Executive Management and the Board to gather information about investor concerns and make educated and deliberate decisions that are balanced and appropriate for our diverse shareholder base and that are in the best interests of BB&T. For additional information regarding
GOVERNANCE PROGRAM ENHANCEMENTS
Our continued engagement has led to several changes to our outreachgovernance practices over the past several years.
Most recently, some of our shareholders have expressed support for proxy access, which allows director nominees of shareholders to be included with our proxy materials under certain circumstances. As a result, in 2016 we amended our bylaws to provide for proxy access.
As another example, last year we began publishing a Corporate Social Responsibility report on our website in response to shareholder requests for insight into our efforts in 2015, please seethis area.
COMPENSATION PROGRAM ENHANCEMENTS
In addition, our engagement efforts have prompted several enhancements to our executive compensation program. Please refer to our discussion of compensation-related changes made in response to discussions with our shareholders on page 39 under “Shareholder Engagement” withinEngagement and Changes to our Compensation Discussion and Analysis section.Program”.
Based on input received during our shareholder engagement process, on December 20, 2016, our Board of Directors amended our bylaws to provide for proxy access. Subject to the proxy access requirements in our amended bylaws:
For further information on proxy access, see “Proposals for 2018 Annual Meeting of Shareholders—Director nominations for inclusion in our proxy statement (Proxy Access).”
Environmental,Nominating and Corporate Governance Committee Director Nominations
The Nominating and Corporate Governance Committee is responsible for selecting individuals who demonstrate the highest personal and professional integrity, have demonstrated exceptional ability and judgment and who are expected to be the most effective in serving the long-term interests of BB&T and its shareholders.
A director candidate is nominated to stand for election based on his or her professional experience, recognized achievement in his or her respective field, an ability to contribute to our business, his or her experience in risk management, and the willingness to make the commitment of time and effort required of a BB&T director over an extended period of time. A director must be “financially literate,” as defined by the Board,
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and should understand the intricacies of a public company. A director should possess good judgment, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. Other factors will be taken into consideration to ensure that the overall composition of our Board is appropriate, such as occupational and geographic diversity and age. An important goal of the Board is to include members with diverse backgrounds, skills, and characteristics that, taken as a whole, will help ensure a strong and effective governing body. The Nominating and Corporate Governance Committee annually assesses these factors in the director selection and nomination process.
Director nominees are recommended to the Board of Directors annually by the Nominating and Corporate Governance Committee for election by the shareholders. The Nominating and Corporate Governance Committee considers candidates submitted by directors and shareholders, subject to the requirements set forth below, and it may consider candidates submitted by a third-party search firm hired for the purpose of identifying director candidates. The Nominating and Corporate Governance Committee conducts an extensive due diligence process to review potential director candidates and their individual qualifications, and all such candidates, including those submitted by shareholders, will be evaluated by the Nominating and Corporate Governance Committee using the Board membership criteria described above. The Committee then reports to the Board its recommendations concerning each director nominee. The Board considers the Nominating and Corporate Governance Committee’s recommendations and selects director nominees to be submitted by BB&T to shareholders for approval at the next annual meeting of shareholders.
Pursuant to our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee also will consider qualified director nominees recommended in writing by shareholders when such recommendations are submitted with the information set forth in Article II, Section 10 of the Corporation’s bylaws and policies regarding director nominations. The written notice must include the following information:
The written notice also must be submitted in accordance with the general procedures for shareholder nominations (including deadlines for the notice to be received by the Secretary), which are summarized under the caption “Voting and Other Information-Proposals for 2018 Annual Meeting of Shareholders” below. Shareholders may submit, in writing, the names and qualifications of potential director nominees to the Corporate Secretary, BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101, for delivery to the Chair of the Nominating and Corporate Governance Committee for consideration.
Corporate Social and GovernanceResponsibility Report
We understand that it is important to our shareholders that we minimize our environmental impact, promote positive social efforts, and implement transparent governance practices. In order to emphasizeBB&T was a winner of the Financial Services Roundtable award for Corporate Social Responsibility Leadership in 2016. This award emphasizes the positive impact of companies in areas of financial education, support of social causes, products that assist the underserved, and protecting the environment.
BB&T Corporation | 2017 Proxy Statement 27
Corporate Governance Matters |
We’ve shown our commitment to these areas, we expect to issue an annual causes through the following:
Environmental | Education | Community Service | ||
• Bank-wide conservation initiatives, including reducing the volume of paper used, purchasing recycled paper and environmentally-friendly cleaning products and recycling nearly 16.4 million tons of paper in 2015 | • Through our Financial Foundations program, powered by EverFi, we teach high school students throughout our footprint how to comprehend and work with the principles of personal finance at no cost to schools or taxpayers | • BB&T Lighthouse Project completed more than 9,000 community service projects since 2009 (helping 13 million people), including financial help to local charities while our associates provide hands-on support for community projects including landscaping, facility renovations and meal preparation | ||
• We are an advocate for the environment and sustainable design in new building construction, utilizing recycled content and energy efficient appliances | • Provide comprehensive educational opportunities to our associates through BB&T University and BB&T Banking School at Wake Forest University | • Launched our homeless outreach program in 2012, supporting emergency housing, food, transportation and medical care for homeless families in our community |
Our full Corporate Social and Governance report beginning in 2016.Responsibility Report is on our website. This publication will highlighthighlights our endeavors to act as good stewards of the natural resources entrusted to us and to promote the well-being of our associates and communities.
Statement of Political Activity
The Board of Directors oversees BB&T’s political strategy, political contributions and lobbying expenses. BB&T periodically participates in policy debates on issues to support our interests and sponsors employee political action committees, or PACs, which allow associates to voluntarily pool their financial resources to support federal and state candidates who support legislation important to us, and our shareholders, clients and communities. All PAC expenditures are a matter of public record and are available for review on the websites of the Federal Election Commission and various state election offices. It is our policy not to use corporate funds to make contributions to political candidates, political parties or committees or political committees organized for the advancement of political candidates, including Super PACs or independent expenditure committees. In response to feedback we received during our shareholder engagement program in 2013, we have posted on our website a Statement of Political Activity which describes our Board and management oversight process for political contributions and political activity by the Corporation, including the activities of our Government Affairs Group. Please refer to “Corporate Governance Materials” below for its location.PACs.
Board Skills and Training Program
The Board Skills and Training Program (the “Training Program”) provides a formal framework designed to support the directors’ performance of their responsibilities as members of the Board and Board committees. The Training Program is based on knowledge, skills and resources curricula developed for the Board and each Board committee and individual learning plans are created for each director. Courses of general application are offered to the full Board while others are tailored to the specific requirements of the various Board committees. The directors’ participation is considered by the Nominating and Corporate Governance Committee in its annual evaluation of directors’ performance.
Policy for Accounting and Legal Complaints
The Audit Committee oversees a policy that governs the reporting of (a) associate of:
We have engaged an independent service provider to receive and track all such complaints. Any verified complaint is referred to our General Counsel, who is responsible for reviewing those complaints in accordance with our whistleblower procedures and reporting all relevant information regarding the nature of the complaint to
2428 BB&T Corporation | 20162017 Proxy Statement
Corporate Governance Matters |
breach of fiduciary duty arising under federal or state law, or (iii) a similar material violation when such evidence is obtained by an attorney authorized to appear or practice before the SEC. We have engaged an independent service provider to receive and track all such complaints. Most verified complaints are referred to BB&T’s General Counsel, who is responsible for reviewing those complaints in accordance with BB&T’s whistleblower procedures and reporting all relevant information regarding the nature of the complaint to the Audit Committee. OurThe General Counsel investigates or causes to be investigated all matters referred pursuant to this policy and maintains a record of such complaints that includes the tracking of the receipt of their referral, investigation and resolution. Generally, if such a complaint is raised by an attorney in our legal department, then the complaint will be referred to our Chief Executive Officer. The General Counsel (or the Chief Executive Officer, as the case may be) periodically prepares a summary report of such complaints for the Audit Committee, which oversees the consideration of all reported complaints covered by this policy. The telephone number for reporting complaints as described in this section is800-432-1911. Please refer to “Corporate Governance Materials” below for the location of BB&T’s Accounting, Securities
Board Skills and Legal Violations Policy.
Director NominationsTraining Program
The NominatingBoard Skills and Corporate Governance Committee is responsible for selecting individuals who demonstrateTraining Program provides a formal framework designed to support the highest personal and professional integrity, have demonstrated exceptional ability and judgment and who are expected to be the most effective in serving the long-term interestsdirectors’ performance of BB&T and its shareholders.
A director candidate is nominated to stand for election based on his or her professional experience, recognized achievement in his or her respective field, an ability to contribute to our business, his or her experience in risk management, and the willingness to make the commitmenttheir responsibilities as members of time and effort required of a BB&T director over an extended period of time. A director must be “financially literate,” as defined by the Board and should understandBoard committees. The courses are provided by bothin-house experts and outside consultants on a wide range of topics to enhance the intricaciesdirectors’ knowledge in areas important in carrying out their responsibilities as directors. Courses of a public company. A director should possess good judgment, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. Other factors will be taken into consideration to assure that the overall composition of our Board is appropriate, such as occupational and geographic diversity and age. An important goal is to include members with diverse backgrounds, skills, and characteristics that, taken as a whole, will help ensure a strong and effective governing body. The Nominating and Corporate Governance Committee annually assesses the effectiveness of these factors in the director selection and nomination process.
Director nomineesgeneral application are recommendedoffered to the full Board while others are tailored to the specific requirements of Directors annuallythe various Board committees. The directors’ participation is considered by the Nominating and Corporate Governance Committee for election by the shareholders. The Nominating and Corporate Governance Committee considers candidates submitted by directors, as well as self-nominations and, from time to time, it may consider candidates submitted by a third-party search firm hired for the purpose of identifying director candidates. The Nominating and Corporate Governance Committee conducts an extensive due diligence process to review potential director candidates and their individual qualifications, and all such candidates, including those submitted by shareholders, will be evaluated by the Nominating and Corporate Governance Committee using the Board membership criteria described above.
The Nominating and Corporate Governance Committee also will consider qualified director nominees recommended by shareholders when such recommendations are submitted in accordance with Article II, Section 10 of the Corporation’s bylaws and policies regarding director nominations. Shareholders may submit, in writing, the names and qualifications of potential director nominees to the Secretary, BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101, for delivery to the Chair of the Nominating and Corporate Governance Committee for consideration. The written notice must include the following information about the nominee: (i) the nominee’s full name and residential address; (ii) the nominee’s age; (iii) the nominee’s principal occupation(s) during the past five years; (iv) the nominee’s previous and/or current memberships on all public
BB&T Corporation | 2016 Proxy Statement 25
company boards of directors; (v) the number and types of securities of the Corporation beneficially owned, if any, by the nominee; (vi) any agreements, understandings or arrangements between the nominee and any other person or persons with respect to the nominee’s nomination or service on the Board of Directors or the capital stock or business of BB&T; (vii) any bankruptcy filings of the nominee or any affiliate of the nominee; (viii) any criminal convictions of the nominee or any affiliate of the nominee; (ix) any civil actions or actions by the Securities and Exchange Commission or other regulatory agency against the nominee or an affiliate of the nominee whereby they were found to have violated any Federal or State securities law; and (x) a signed statement by the nominee consenting to serve as a director if elected. The written notice also must be submitted in accordance with the general procedures for shareholder nominations (including deadlines for the notice to be received by the Secretary), which are summarized under the caption “Other Matters-Proposals for 2017 Annual Meeting of Shareholders” below. Any shareholder desiring to recommend a nominee for consideration by the Nominating and Corporate Governance Committee prior to the 2017 Annual Meeting must do so in accordance with our policies and bylaws.
Once a director nominee has been recommended, whether by a shareholder or otherwise, the Nominating and Corporate Governance Committee, in accordance with our Corporate Governance Guidelines, reviews the background and qualifications of the nominee. The Nominating and Corporate Governance Committee reports to the Board, in writing, its recommendations concerning each director nominee. The Board then considers the Nominating and Corporate Governance Committee’s recommendations and finally selects those director nominees to be submitted by BB&T to shareholders for approval at the next annual meeting of shareholders.
BB&T’s vision, mission and values are the foundation for the risk management framework utilized at BB&T and therefore serve as the basis on which the risk appetite and risk strategy are built. In keeping with the belief that consistent values drive long-term behaviors, the Risk Management Organization (RMO) has its own risk values that establish the guiding principles of our day-to-day activities:
We believe managing risk is the responsibility of every associate.
Our business units and corporate support groups are responsible for proactively identifying risk and managing the inherent risksevaluation of their business.
We manage risk with a balanced approach which includes quality, profitability, and growth.
We ensure the appropriate return for the risk taken.
We utilize accurate and consistent risk management practices.
We thoroughly analyze risk quantitatively and qualitatively with judgments clearly identified.
We believe high quality risk management results in lower cost of capital.
We measure what we want to manage and we manage what we measure.
performance.
26 BB&T Corporation | 2016 Proxy Statement
As illustrated below, BB&T executes on its risk values through a risk management framework based on a “three lines of defense” model:
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BB&T places significant emphasis on risk management and has a stand-alone Board-level Risk Committee which oversees risk reporting to the Board of Directors and functions as a significant part of our risk management framework. Among other things, the Risk Committee approves the Corporation’s risk appetite statements, monitors the Corporation’s risk profile, and provides input to management regarding the Corporation’s risk appetite and risk profile. The other key functions of the Risk Committee are listed in the section above entitled, “Board Committees, Membership and Attendance.”
The RMO is led by the Chief Risk Officer (CRO) and is responsible for facilitating effective risk management oversight, measurement, monitoring, reporting, and consistency. The CRO has direct access to the Corporation’s Board of Directors and Executive Management to communicate any risk issues (current or emerging) as well as the performance of the risk management activities throughout the enterprise. The CRO also chairs the Risk Management Committee (RMC), which provides oversight on a fully integrated view of risks across BB&T, including strategic, compliance, credit, liquidity, market, operational, and reputation risks.
The BB&T RMO is further expanded and strengthened through the designation of five Senior Risk Officers, or SROs. The Chief Commercial Credit Risk Officer, the Chief Retail Credit Risk Officer, the Chief Market and Liquidity Risk Officer, the Deputy Chief Risk Officer, and the Chief Regulatory and Compliance Risk Officer, together are responsible for ongoing aggregation, integration, correlation and reporting of the risks across our organization. Key to this effort is a bottoms-up risk identification and disclosure process that begins with the first line of defense. This business risk assessment process allows the SROs to report risks horizontally across various lines of business to identify emerging risk themes and evaluate strategies to mitigate, reduce, or avoid identified inherent risks. SROs communicate risks on a regular basis to enterprise level risk committees.
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COMPENSATION HOLDBACK/CLAWBACK
We maintain a pay-for-performance philosophy which governs our incentive compensation programs. Our Compensation Committee administers all aspects of the executive compensation program as applicable to Executive Management, including risk management. For additional detail, please refer to “Risk Management” within Section 4 of the Compensation Discussion and Analysis.
At the direction of the Compensation Committee, management has established the management compensation committee as well as processes and controls for the design and evaluation of incentive plans utilized for associates outside of Executive Management. The management compensation committee is responsible for exercising authority to modify payments and impose or release “holdbacks” from incentive compensation arrangements, based on a risk review or regulatory requirements. The management compensation committee also has the authority to prescribe prospective changes to incentive compensation arrangements to ensure their balance, consistent with BB&T’s safety and soundness. Risk and control functions are involved in the design, oversight, and administration of the incentive compensation programs used by the Corporation.
We have employed risk balancing in the design of incentive programs. For instance, our Compensation Committee, at its sole discretion, may reduce incentives and bonuses based on risk outcomes. See “Executive Risk Scorecard” within Section 3, and “Compensation Clawbacks” within Section 4 of the Compensation Discussion and Analysis.
Management Succession Planning
Management succession planning is a priority of the Board of Directors. Our Corporate Governance Guidelines provide that the Board of Directors is responsible for ensuring that we have developed an Executive Management succession plan, including procedures for Chief Executive Officer selection in the event of an emergency or the retirement of the CEO. This plan is reviewed and evaluated by the Board at least annually. The Lead Director leadsfacilitates the Board’s review and evaluation of BB&T’sour Executive Management succession plan. As part of the plan, our Chairman and Chief Executive Officer, Kelly S. King,CEO makes available his recommendations and evaluations of potential successors, along with a review of any development plans of such individuals. This process establishes procedures for planning and responding to events involving an absence of the CEO, whether for the short- or long-term, and allows the Board to exercise its judgment and discretion with regard to the selection of a new CEO.
Corporate Governance MaterialsRisk Oversight
Our vision, mission and values are the foundation for the risk management framework utilized at BB&T and therefore serve as the basis on which the risk appetite and risk strategy are built. Our Risk Management Organization (RMO) provides independent oversight and guidance for risk-taking across the enterprise. In keeping with the belief that consistent values drive long-term behaviors, our RMO has its own risk values that establish the guiding principles of ourday-to-day activities:
BB&T Corporation | 2017 Proxy Statement 29
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As illustrated below, we execute on our risk values through a risk management framework based on the following “three lines of defense:”
• | First Line of Defense: Risk management begins with the business units and corporate support groups, the point at which risk is originated and where risks must be managed. Business unit managers in the first line identify, assess, control, and report their respective group’s risk profile. |
• | Second Line of Defense: The RMO provides independent oversight and aggregates, integrates, and correlates risk information into a holistic picture of the Corporation’s risk profile and concentrations. |
• | Third Line of Defense: Audit Services (BB&T’s internal audit function) evaluates the design and effectiveness of the risk management framework and its results. |
We place significant emphasis on risk management and maintain a separate Board-level Risk Committee which oversees risk reporting to the Board of Directors and functions as a significant part of our risk management framework. Among its responsibilities, the Risk Committee monitors our risk profile, approves risk appetite statements, and provides input to management regarding our risk appetite and risk profile.
The RMO is led by the Chief Risk Officer (CRO) and is responsible for facilitating effective risk management oversight, measurement, monitoring, reporting, and consistency. The CRO has direct access to our Board of Directors and Executive Management to communicate any risk issues (current or emerging) as well as the performance of the risk management activities throughout the enterprise. The CRO also chairs the Risk Management Committee (RMC), which provides oversight on a fully integrated view of risks across our organization, including strategic, compliance, credit, liquidity, market, operational, and reputation risks.
Communications with the Board of Directors
Any shareholder or other interested party may also request a copycontact the Board of Directors or any individual director(s) may do so by written communication mailed to: Board of these documents by contacting theDirectors, c/o Corporate Secretary, BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101. Any proper communication so received will be processed by the Secretary as agent for the Board or any individually named director. Unless, in the judgment of the Secretary, the matter is not intended or appropriate for the Board, the Secretary will prepare a summary of the communication for prompt delivery to the appropriate member(s) of the Board.
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Stock Ownership Information |
The table below sets forth the beneficial ownership of BB&T common stock by all directors, the NEOs,named executive officers in this proxy statement (or NEOs), all directors and executive officers of BB&T as a group and each person who is known to be the beneficial owner of more than five percent of our common stock as of February 17, 2016.15, 2017. Unless otherwise indicated, all persons listed below have sole voting and investment powers over all shares beneficially owned. Applicable percentage ownership is based on 780,470,501808,517,616 shares of BB&T common stock outstanding as of February 17, 2016.15, 2017.
Name of Beneficial Owner/Number of Persons in Group | Shares of Common Stock Beneficially Owned(1) | Shares of Common Stock Subject to a Right to Acquire(2) | Percentage of Stock | Shares of Common Stock Beneficially Owned(1) | Shares of Common Stock Subject to a Right to Acquire(2) | Percentage of Stock | |||||||||||||||||||
Directors and Executive Officers | |||||||||||||||||||||||||
Jennifer S. Banner | 22,746 | 27,489 | * | 27,869 | 9,007 | * | |||||||||||||||||||
K. David Boyer, Jr. | 11,550 | 9,203 | * | 11,920 | 8,620 | * | |||||||||||||||||||
Anna R. Cablik | 16,432 | 33,166 | * | 22,095 | 26,811 | * | |||||||||||||||||||
James A. Faulkner | 36,827 | (3) | 1,115 | * | 38,544 | (3) | 1,114 | * | |||||||||||||||||
I. Patricia Henry | 13,933 | 1,115 | * | 14,926 | 1,114 | * | |||||||||||||||||||
Eric C. Kendrick | 164,743 | (4) | 1,115 | * | 168,102 | (4) | 1,114 | * | |||||||||||||||||
Kelly S. King | 388,366 | (5) | 1,232,173 | * | 444,313 | (5) | 678,429 | * | |||||||||||||||||
Louis B. Lynn, Ph.D. | 4,717 | 1,115 | * | 9,427 | 1,114 | * | |||||||||||||||||||
Edward C. Milligan | 57,445 | 1,115 | * | ||||||||||||||||||||||
Charles A. Patton | 67,939 | 1,115 | * | 72,695 | 1,114 | * | |||||||||||||||||||
Nido R. Qubein | 95,690 | (6) | 33,666 | * | 59,563 | (6) | 26,811 | * | |||||||||||||||||
William J. Reuter | 41,488 | 35,280 | * | 44,914 | 35,280 | * | |||||||||||||||||||
Tollie W. Rich, Jr. | 115,615 | (7) | 1,115 | * | 120,128 | (7) | 1,114 | * | |||||||||||||||||
Christine Sears | 9,018 | 1,058 | * | 12,444 | 1,058 | * | |||||||||||||||||||
Thomas E. Skains | 14,263 | (8) | 9,203 | * | 19,787 | (8) | 8,620 | * | |||||||||||||||||
Thomas N. Thompson | 551,451 | (9) | 22,722 | * | 556,574 | (9) | 22,139 | * | |||||||||||||||||
Edwin H. Welch, Ph.D. | 20,050 | (10) | 1,697 | * | |||||||||||||||||||||
Stephen T. Williams | 381,342 | (11) | 22,722 | * | 386,782 | (10) | 22,139 | * | |||||||||||||||||
Daryl N. Bible | 82,257 | 299,614 | * | 107,815 | 172,483 | * | |||||||||||||||||||
Ricky K. Brown | 159,839 | (12) | 490,212 | * | 194,216 | (11) | 465,768 | * | |||||||||||||||||
Barbara F. Duck | 105,638 | 118,683 | * | ||||||||||||||||||||||
Donna C. Goodrich | 70,307 | (12) | 157,731 | * | |||||||||||||||||||||
Christopher L. Henson | 165,972 | (13) | 491,025 | * | 200,958 | (13) | 226,671 | * | |||||||||||||||||
Clarke R. Starnes III | 82,723 | 218,830 | * | 108,872 | 137,772 | * | |||||||||||||||||||
Directors and Executive Officers as a group (30 persons) | 2,804,377 | (14) | 4,098,300 | * | |||||||||||||||||||||
Directors and Executive Officers as a group (29 persons) | 2,951,019 | (14) | | 2,339,664 | * | ||||||||||||||||||||
Beneficial Owners Holding More Than 5% | |||||||||||||||||||||||||
BlackRock, Inc.(15) 55 East 52nd Street New York, NY 10022 | 42,031,540 | - | 5.40% | 50,369,498 | — | 6.23% | |||||||||||||||||||
The Vanguard Group, Inc.(16) 100 Vanguard Blvd. Malvern, PA 19355 | 44,752,781 | - | 5.73% | 52,538,406 | — | 6.50% |
BB&T Corporation | 20162017 Proxy Statement 2931
Stock Ownership Information |
* | Less than 1%. |
(1) | As reported to BB&T by the directors and executive officers, and includes shares held by spouses, minor children, Individual Retirement Accounts (IRAs), affiliated companies, partnerships and trusts as to which each such person has beneficial ownership. With respect to executive officers, also includes shares allocated to such persons’ individual accounts under the BB&T Corporation 401(k) Savings Plan, the BB&T CorporationNon-Qualified Defined Contribution, and Individual Retirement Accounts (IRAs). With respect to shares pledged, our Corporate Governance Guidelines limit pledging activity so that share pledges by directors and members of Executive Management are limited to those shares in excess of each individual’s shares ownership requirement (share pledges which existed prior to December 1, 2013 are exempt from this requirement). |
(2) | Amount includes options to acquire shares of BB&T common stock that are or become exercisable within sixty days of February |
(3) | Amount includes 5,900 shares pledged as security. |
(4) | Amount includes |
(5) | Amount includes |
(6) | Amount includes 8,641 shares held by spouse with sole investment and voting powers and |
(7) | Amount includes |
(8) | Amount includes |
(9) | Amount includes 3,814 shares held by his son. Amount also includes |
(10) | Amount includes |
(11) | Amount includes 287 shares held by spouse with sole investment and voting powers. The information for Mr. Brown’s beneficial ownership is as of his December 15, 2016 retirement date. |
(12) | Amount includes |
(13) | Amount includes 7 shares held as custodian for minor children. |
(14) | Amount includes an aggregate of |
(15) | Based upon information contained in the Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on |
(16) | Based upon information contained in the Schedule 13G filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 10, |
Section 16(a) Beneficial Ownership Reporting Compliance
Under the federal securities laws, our directors and certainexecutive officers subject to Section 16 (“Section 16”) of our executive officersthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to report their beneficial ownership of BB&T common stock and any changes in that ownership to the SEC. Specific deadlines for such reporting have been established by the SEC. WeBased solely on a review of copies of such reports, and written representations from each reporting person that no other reports are required, to report in this Proxy Statement any failure towe believe that for 2016 all reporting persons filed the required reports on a timely file these reports that occurred in 2015. To the best of our knowledge, during 2015, all of the filing requirements were satisfiedby our directors and executive officers subject tobasis under Section 16, except that Robert J. Johnson, Jr. inadvertently filed one late Form 4 with respect to one disposition transaction in connection with a reallocation of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In making this statement, we have relied on the written representations of our directors and executive officers subject to Section 16 and copies of the reports that have been filed with the SEC.his 401(k) plan portfolio.
3032 BB&T Corporation | 20162017 Proxy Statement
Proposal 2—Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm For |
PROPOSAL 2—RATIFICATIONOFTHE APPOINTMENTOF PRICEWATERHOUSECOOPERS LLPAS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20162017
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. To execute on this responsibility, the Committee engages in a comprehensive annual evaluation of the independent registered public accounting firm’s qualifications, performance and independence. The Audit Committee has carefully considered the selection of PricewaterhouseCoopers LLP (“PwC”) as itsthe independent registered public accounting firm to audit and report on the consolidated financial statements of BB&T and the effectiveness of our internal control over financial reporting.
In accordance with SEC rules, audit partners are subject to rotation requirements to limit the number of consecutive years of service an individual partner may provide us with audit services. For lead and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years. In connection with this mandated rotation, the Audit Committee is directly involved in the selection of any new lead engagement partner. The current lead PwC engagement partner was designated commencing with the 2015 audit and is eligible to serve in that capacity through the end of the 2019 audit.
Our shareholders are being asked to ratify the appointment of PwC for 20162017 because we value our shareholders’ views on BB&T’sour independent registered public accounting firm and as a matter of good corporate governance. Representatives of PwC are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire and are expected to be available to respond to questions posed by the shareholders. If shareholders do not ratify the decision of the Audit Committee to reappoint PwC as our independent registered public accounting firm for 2016,2017, the Audit Committee will reconsider its decision.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE “FOR”
PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS BB&T’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.2017.
The following table shows the aggregate fees incurred by the Corporation for professional services by PwC for fiscal years 20152016 and 2014:2015:
2015 ($) | 2014 ($) | 2016 ($) | 2015 ($) | |||||
Audit Fees | 9,146,000 | 8,185,000 | 9,056,000 | 9,146,000 | ||||
Audit-Related Fees | 3,558,000 | 4,447,000 | 2,844,000 | 3,558,000 | ||||
Tax Fees | 176,000 | 431,000 | 269,000 | 176,000 | ||||
All Other Fees | 4,578,000 | 4,883,000 | 51,000 | 4,578,000 | ||||
Total | 17,458,000 | 17,946,000 | 12,220,000 | 17,458,000 |
Audit Fees. This category includes fees billed for professional services for the integrated audits of the Corporation’s consolidated financial statements, including the audits of the effectiveness of our internal control over financial reporting, reviews of the financial statements included in our quarterly reports on Form10-Q, statutory audits or other financial statement audits of subsidiaries, and comfort letters and consents related to SEC registration statements.
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Proposal 2—Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm For |
Audit-Related Fees. This category includes fees billed for assurance and related services that are reasonably related to the performance of the audit of our consolidated financial statements and effectiveness of internal controls and are not reported under the audit fees category above. These services consist of fees for service organization control reports, other attestation engagements traditionally performed by the independent accounting firm,pre-implementation assessments of internal controls for a new enterprise resource planning system and related business processes, controls assessments as part of our regulatory reporting initiatives, due diligence services related to proposed acquisitions, and audits of our employee benefit plans.
Tax Fees. This category includes fees billed fortax-related services rendered, including tax compliance, tax planning, and tax advice.
All Other Fees. This category includes fees billed for advisory services provided in conjunction with the Corporation’s regulatory reporting initiatives, mortgage advisory services, advisory services related to our adoption of a new enterprise resource planning system and other advisory services.
The Audit Committee considered the compatibility of thenon-audit services performed by, and fees paid to, PwC in 20152016 and determined that such services and fees are compatible with the independence of PwC.
Audit Committee Pre-Approval Policy
Under the terms of its charter, the Audit Committee mustpre-approve all services (including the fees and terms of such services) to be performed for us by our independent registered public accounting firm, subject to ade minimis exception for permittednon-audit services that are approved by the Audit Committee prior to the completion of the audit and otherwise in accordance with the terms of applicable SEC rules. The Audit Committee may delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grantpre-approvals of audit and permittednon-audit services, as long as the decisions of such subcommittee(s) to grantpre-approvals are presented to the full Audit Committee at its next scheduled meeting. In 2015,2016, all of the services provided by our independent registered public accounting firm were reviewed and approved by the Audit Committee.
3234 BB&T Corporation | 20162017 Proxy Statement
The Audit Committee of the Board of Directors is currently composed of sixfive independent directors and operates under a charter adopted by the Audit Committee on January 26, 2016.24, 2017. The SEC and the NYSE have established standards relating to audit committee membership and functions. With regard to such membership standards, the Board has determined that Stephen T. Williams meets the requirements of an “audit committee financial expert” as defined by the SEC and has the requisite financial literacy and accounting or related financial management expertise required generally of an audit committee member under the applicable standards of the SEC and NYSE.
The primary duties and responsibilities of the Audit Committee are to monitor: (i) the integrity of the financial statements of the Corporation; (ii) the independent registered public accounting firm’s qualifications and independence; (iii) the performance of the Corporation’s internal audit function and independent auditors; and (iv) compliance by the Corporation with legal and regulatory requirements. While the Audit Committee has the duties and responsibilities set forth above and those set forth in its charter, our management is responsible for the internal controls and the financial reporting process, and the independent registered public accounting firm is responsible for performing an integrated audit of our financial statements and of the effectiveness of our internal control over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board and issuing a report thereon.
In the performance of its oversight function, the Audit Committee has performed the duties required by its charter, including meeting and holding discussions with management, the independent registered public accounting firm and the internal auditor, and has reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee has also discussed with the independent registered public accounting firm its views on fraud risks and how it demonstrates its independence and skepticism. Finally, the Audit Committee also has discussed with the independent registered public accounting firm the matters required to be discussed by the Public Company Accounting Oversight Board’s Auditing Standard No. 16 (Communications with Audit Committees).
The Audit Committee has received the written disclosures and the letters from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board, as currently in effect, regarding the independent registered public accounting firm’s communications with the Audit Committee, and the Audit Committee has discussed with the independent registered public accounting firm its independence. The Audit Committee also has considered whether the provision of anynon-audit services by our independent registered public accounting firm is compatible with maintaining the independence of the auditors.
Based upon a review of the reports by, and discussions with, management and the independent registered public accounting firm, and the Audit Committee’s review of the representations of management and the Report of Independent Registered Public Accounting Firm, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form10-K for the year ended December 31, 2015,2016, filed with the SEC on February 25, 2016.
21, 2017.
Submitted by the Audit Committee of the Board of Directors, whose current members are:
Stephen T. Williams, Chair | ||||
James A. Faulkner | Tollie W. Rich, Jr. | |||
I. Patricia Henry | Christine Sears |
BB&T Corporation | 20162017 Proxy Statement 3335
Proposal 3—Vote on an Advisory Resolution to Approve BB&T’s Executive Compensation Program |
PROPOSAL 3—VOTEONAN ADVISORY RESOLUTIONTO APPROVE BB&T’S
EXECUTIVE COMPENSATION PROGRAM
This year, we are again providingProposal 3 asks shareholders the opportunity to cast an advisory vote to approve ourpay-for-performance executive compensation program. The large majority of our shareholders have approved this proposal each year since 2011, when we first asked shareholders to vote on this item.
The Compensation Committee and the Board believe that our executive compensation program, as described in the Compensation Discussion and Analysis, and other sections of this proxy statement, reflects apay-for-performance culture at BB&T that is rooted in our values. The Compensation Committee and the Board believe that the executive compensation program is well designed, and effective in aligning the interests of the executives with both the short-term and long-term interests of our shareholders, while reducing incentives for unnecessary and excessive risk taking. In making a decision on whether to approve our pay practices for our named executive officers, the Board askswe ask that shareholders consider the following:
The performance measures we use (EPS, ROA, ROCE and ROCE)TSR) are objective criteria established as key drivers of sustained and longer-term shareholder value and reflect our philosophy of closely linking pay with performance.
In reviewing compensation, the Compensation Committee utilizes an executive risk scorecard which can be used to adjust downward, if necessary, the short-term and long-term incentive compensation of each member of Executive Management in connection with negative risk outcomes.
We have long-standingincreased the stock ownership requirement for our CEO to 6x base salary. Other NEOs must maintain stock ownership requirements for our NEOs,of at least 3x base salary. These measures effectively aligningalign their interests with those of our shareholders and givinggive executives a greater financial interest in our company.
We greatly value shareholder engagement. We have,engagement and will continue to incorporate feedback we receive into our compensation and corporate governance programs.
We encourage you to review the complete description of our executive compensation programs provided on the following pages in the “Compensation Discussion and Analysis,” the compensation tables and accompanying narratives.
The Board strongly supports our executive pay practices and asks shareholders to support its executive compensation program through the following resolution:
“Resolved, that the shareholders approve BB&T’s overall executive compensation program, as described in the Compensation Discussion and Analysis, the compensation tables and the related narratives and other materials in this Proxy Statement.”
36 BB&T Corporation | 2017 Proxy Statement
Proposal 3—Vote on an Advisory Resolution to Approve BB&T’s Executive Compensation Program |
Your vote on this proposal, which is required by Section 14A of the Exchange Act, is “advisory,” and will serve as anon-binding recommendation to the Board. The Compensation Committee will seriously consider the outcome of this vote when determining future executive compensation arrangements. Unless the Board determines otherwise, the next advisory vote to approve the compensation of our named executive officers will be held at our 2017 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 3—VOTE ON AN ADVISORY RESOLUTION TO APPROVE BB&T’S EXECUTIVE COMPENSATION PROGRAM.
34 BB&T Corporation | 20162017 Proxy Statement 37
Compensation Discussion and Analysis |
COMPENSATION DISCUSSIONAND ANALYSIS
In this Compensation Discussion and Analysissection we describe our performance-based executive compensation program and philosophy in the context of the 2015our compensation decisions related to the Chief Executive Officer and each of the other executive officers named in the 20152016 Summary Compensation Table (the named executive officers or “NEOs”). Each NEO is a member of our 13 person “Executive Management” team that manages and leads BB&T’s operations:operations. Ricky K. Brown served as a member of the Executive Management team until his retirement in 2016.
Name | Title | Years of Service at BB&T | ||
Kelly S. King | Chairman and Chief Executive Officer | |||
Christopher L. Henson | President and Chief Operating Officer | |||
Ricky K. Brown | Former Senior Executive Vice President and President, Community Banking (retired December 15, 2016) | |||
Clarke R. Starnes III | Senior Executive Vice President and Chief Risk Officer | |||
Daryl N. Bible | Senior Executive Vice President and Chief Financial Officer | |||
Barbara F. Duck | Senior Executive Vice President and Chief Information Officer | 29 | ||
Donna C. Goodrich | Senior Executive Vice President and Deposit, Payment and Operations Services Manager | 31 |
The Compensation Discussion and Analysis is organized into fourfive sections:
Section 1—Executive Summary
Section 2—20152017 Changes to Our Compensation Program (page 44)
Section 3—4—BB&T’s Executive Compensation Process (page 58)
Section 4—5—Other Aspects of BB&T’s Executive Compensation Program and Governance Practices (page 62)
38 Section 1—Executive Summary
About BB&T
BB&T is strong, profitable and remains committed to helping its shareholders, clients, communities and associates achieve economic success and financial security. By staying true to the vision, mission and values that have guided BB&T for over 140 years, we are well positioned for future opportunities. Led by our CEO, Kelly S. King, in 2015 we met substantially all of our strategic objectives and performed well in a challenging year for the financial services industry. We believe the financial and strategic accomplishments made in 2015, as well as our continued significant investment in important infrastructure projects, will benefit the Corporation and our shareholders in the coming years. | 2017 Proxy Statement
Compensation Discussion and Analysis |
Business Overview
Shareholder Engagement and Changes to our Compensation Program
As described under “Corporate Governance Matters—Shareholder Engagement Program,” for the past several years we have conducted a formal shareholder engagement program to discuss issues of importance to our shareholders, with a focus on corporate governance and executive compensation. Historically, shareholders have indicated strong support of our compensation programs through their “say on pay” voting results, but at our last two annual meetings, we received a lower level of shareholder support for that proposal than in prior years. In particular, in 2016, we received 55% of votes in favor of our “say on pay” proposal.
Following the 2016 Annual Meeting, the Compensation Committee discussed the feedback we received from shareholders on our executive compensation program. Based on this feedback and a desire to be responsive to our shareholders, the Committee met in June and made an immediate retroactive change to our 2016-2018 LTIP. The Committee also began a comprehensive review of our executive compensation programs, including further discussions with our shareholders, in anticipation of making broader program changes in 2017. Below is a summary of the feedback we received from shareholders and the actions taken by the Committee during 2016 and 2017 in response.
What We Heard | ||
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Compensation Discussion and Analysis |
What We Did | ||
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• Compensation Changes Effective in 2017*
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• We adjusted the long-term incentive mix to provide for an equal mix of performance share units, LTIP, and restricted stock units, resulting intwo-thirds of long-term incentives being subject to robust performance criteria and all awards being subject to a performance hurdle. • • We extended our risk-based forfeiture provision to all long-term incentive awards. Awards are subject to reduction or forfeiture if the Compensation Committee determines that there has been a significant negative risk outcome. • We made no increases in base salaries for our NEOs.
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The Compensation Committee recognizes that executive compensation practices in the banking industry continue to evolve due to feedback from regulators and shareholders. The Compensation Committee closely monitors changes in market compensation practices and is responsive to feedback it receives on our programs. The Committee may make additional changes to our program in furtherance of its commitment to provide a compensation program that is competitive, performance-based, risk-balanced and aligned with the goals of our shareholders and regulatory expectations.
3640 BB&T Corporation | 20162017 Proxy Statement
Compensation Discussion and Analysis |
2016 BB&T Performance Philosophyand Achievements
COMPENSATION COMMITTEE’S APPROACH
2016 Strategic Accomplishments | ||
• 2016 was a strong and profitable year with record earnings, expansion into new markets and a healthy return to our shareholders. Our accomplishments in 2016 demonstrate the power of our vision, mission and values. • We extended our long-standing commitment to leadership development for our clients and communities through our BB&T Leadership Institute, Lighthouse Project community service initiative, and Financial Foundations course to increase the financial proficiency of high school students. • We ramped up our digital strategy by adding talent and technology to meet our clients’ evolving needs and expectations. • We have continued to grow our digital platform, U by BB&T, which allows clients to do business with us wherever they are on whatever device they choose. • We were able to approve a 7% increase in our quarterly dividend, achieve a 28.4% total return to | shareholders and were approved to conduct share repurchases totaling $840 million. Our dividend yield and long-term returns are among the best in the industry. • We successfully integrated our National Penn acquisition and began capitalizing on our earlier acquisitions of Susquehanna Bancshares and The Bank of Kentucky, allowing us to create new capital markets relationships in Philadelphia and Cincinnati. • We completed our second largest insurance acquisition – Swett & Crawford, a century-old wholesale broker with a strong and talented team of industry specialists. • We made important changes in our Executive Management team, adding five new leaders, creating the new positions of chief digital officer and chief client experience officer, and appointing new leadership to the role of chief information officer. • We invested approximately $1 billion in new infrastructure systems over the past three years, positioning us for future growth. | |
2016 Financial Achievements | ||
• Record net income available to common shareholders of $2.3 billion. • Asset growth of 4.4% year-over-year. • Average non-interest bearing deposits increased 15% year-over-year, second highest growth rate in our peer group. • Record revenue of $11.0 billion, up 12.3% from 2015. • Nonperforming assets represented 0.57% of loan-related assets, best in our peer group (peer group average 0.99%). | • Strong capital and • Credit ratings that are among the • Strong absolute total return to shareholders of • Total shareholder return exceeded peer average and S&P Financials Index for the 10, 15, and 20 year periods. • BB&T achieved a record stock price during the calendar year, which as of the record date was $48.26. | |
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Compensation Discussion and Analysis |
20152016 Target Pay HighlightsDecisions and Performance AlignmentSignificant “Performance-Based” Percentage of Compensation
EXECUTIVE PAY—ALIGNEDWITH PERFORMANCE
2015 was a solidThe charts below for Kelly King and profitable year with many notable strategicour other NEOs illustrate the target compensation established for 2016, consisting of base salary, annual incentive awards, 2016-2018 LTIP awards and differentiating accomplishments, including BB&T’s successful integration of several significant acquisitionsRSU and infrastructure investments. We continued our strong performance relative to our peers, but performance was down from 2014 on some ofstock option awards granted in 2016. The charts also show the metrics that drive our executive incentive programs. Accordingly, the payout percentages for our variable pay awards (short and long-term) were lower for 2015 than in 2014. A significant portionlarge percentage of our pay continues to be at risk based on our future performance. BelowNEO compensation that is a summary of the most notable 2015 pay outcomesvariable and decisions:performance-based.
2015 PAY HIGHLIGHTS
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38 BB&T Corporation | 2016 Proxy Statement
PERFORMANCE METRICSPerformance Metrics
The Compensation Committee regularly considers a variety of financial metrics when evaluating performance and making compensation decisions, as indicated below. By assessing different metrics over short, medium and long-term periods, the Compensation Committee is able to obtain a broad and accurate assessment of our performance against specific compensation goals and relative to the Peer Group.peer group.
Growth Metrics | Return Metrics | Capital Metrics | ||
• Deposits •Earnings Per Share* •Loans | • Net Interest Margin •Return on Assets* •Return on Common Equity* •Total Shareholder Return* | • NetCharge-Offs /Average Loans •Non-Performing Assets / Loans • Common Equity Tier 1 Ratio | ||
* | Metric used in BB&T’spay-for-performance compensation plans. |
ThreeFour of these metrics are used directly in BB&T’s executive incentive plans: returncompensation program:
42 BB&T Corporation | 2017 Proxy Statement
Compensation Discussion and Analysis |
The Compensation Committee believes these metrics are key drivers of sustained and longer-term shareholder value. The Compensation Committee also grants a meaningful portion of compensation through equity awards and maintains rigorous stock ownership guidelines to ensure executives are closely aligned with our stock performance.
Total Shareholder Return (“TSR”), a metric that has become increasingly popular with institutional shareholders and proxy advisory firms in recent years, is evaluated by the Compensation Committee. TSR measures stock price appreciation plus common stock dividend payments over a particular time period. The Compensation Committee monitors and considers TSR in assessing our performance, but does not include it as a direct measure in our incentive plans because one- and three-year TSR reflect shorter-term horizons, are volatile, are influenced by situations outside the control of executives (such as global market conditions), and may not reflect our core performance. The Compensation Committee believes that TSR is more useful as a longer-term performance metric as the market is most effective at differentiating the performance of companies over the long-run. Our consistent superior financial performance over time has increased long-term value for our shareholders, as shown below.
BB&T Corporation | 2016 Proxy Statement 39
Sound Compensation and Governance Practices
The Compensation Committee has implemented strong governance practices that reinforce our principles, support sound risk management and are shareholder aligned:
What we do | What we don’t do | |||||
pay for performance; | we don’t offer incentives that would provide payouts for negative returns | |||||
beginning in 2017, two-thirds of long-term incentives, including 50% of equity awards, | we don’t reprice stock options | |||||
incorporate both absolute and relative performance goals into our incentive plans | we don’t provide dividends on unvested equity awards to our NEOs | |||||
we don’t offer broad-based perquisites such as personal club memberships, corporate housing, and personal use of company aircraft | ||||||
base compensation decisions on | we don’tgross-up payments for excise taxes | |||||
we don’t permit hedging or speculative trading of BB&T common stock | ||||||
✓ | Î | we don’t award stock options (beginning in 2017) | ||||
✓ | restrict pledging of BB&T common stock | |||||
review tally sheets and risk scorecards for each executive | ||||||
retain an independent compensation consultant who performs services solely for the Compensation Committee | ||||||
✓ | provide a pension plan for eligible associates, which provides us with an important retention tool for our NEOs (as demonstrated by their average tenure of 30 years) |
Shareholder and Regulatory Feedback
SHAREHOLDER ENGAGEMENT
For the past several years we have conducted a formal shareholder engagement program to help us identify issues of importance to our shareholders, with a focus on corporate governance and executive compensation. Historically, shareholders have indicated strong support of our compensation programs through their “say on pay” voting results, but at our 2015 Annual Meeting, we received a lower level of shareholder support than in the past for that proposal. In response, we expanded our shareholder engagement program by reaching out to 37 of our 50 largest shareholders, representing 38% of our outstanding shares, as well as to the shareholder proponents who made proposals at the 2015 Annual Meeting. We also met with certain of the proxy advisory firms followed by some of our largest shareholders. The Compensation Committee Chair led the meetings with four of our largest institutional shareholders.
The feedback received on our executive compensation programs and philosophy was generally very favorable. As to executive compensation, the general sentiment was that our program is appropriate and well designed. Several governance and compensation points were raised by shareholders and this feedback proved influential in a number of subsequent decisions and actions, as outlined below and on page 55.
40 BB&T Corporation | 20162017 Proxy Statement 43
Compensation Discussion and Analysis |
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We are committed to ongoing shareholder engagement and expect to continue our shareholder engagement program. Consistent with the recommendation of our Board of Directors and the preference of our shareholders, BB&T believes that it is appropriate to conduct annual say on pay votes regarding our executive compensation programs.
REGULATORY CONSIDERATIONSIN SETTING COMPENSATION
Banking regulators continue to regularly provide input on and influence the compensation practices and incentive compensation at the largest financial institutions in the United States, focusing on the risks intrinsic to the design and implementation of compensation plans as well as the reasonableness of each element of compensation. While we have for many years, focused our compensation philosophy on performance-based compensation, certainregulatory guidance has influenced changes were made to our compensation programs over the last few years primarily as a result of regulatory guidance. Regulators influenced the following modifications of our compensation program:
Our NEOs are evaluated on individual risk performance, which has been integrated into the NEO’s annual performance evaluation through use of the executive risk scorecard.
Our NEO performance-based incentive plans have changed in response to regulatory requests including:
reduced maximum payout levels for Annual Incentive Awards from 200% to 125%,
reduced maximum payout levels for LTIP awards from 200% to 125%,
reduced emphasis on stock options, and
added risk-based performance condition(s) for vesting of stock options and RSUs granted to NEOs.
years. The Compensation Committee continues to assess our pay practices to balance risks with our commitment to linking NEO pay to BB&T’sour performance while maintaining compensation programs that are market competitive and shareholder aligned.
Section 2—2017 Changes to Our Compensation Program
In February 2017, the Compensation Committee, taking into account shareholder feedback, made significant enhancements to our executive compensation program. These changes significantly increased the amount of long-term incentives subject to robust performance criteria and better aligned our compensation with market practice. The Compensation Committee’s changes enhance the long-term incentive program as follows:
Enhanced Mix of Long-Term Incentives and Elimination of Stock Options |
The Compensation Committee enhanced the mix of the long-term incentives as follows:
• | Granted PSUs Representing 50% of Equity Awards: In 2017, 50% of the equity awards granted are in the form of Performance Share Units (“PSUs”) with the remaining equity awards granted in the form of Restricted Stock Units (“RSUs”). |
• | Eliminated Stock Options: In consideration of shareholder feedback and to reinforce our focus on PSUs, in 2017 we eliminated the use of stock options. |
• | Included a TSR Payment Modifier in the LTIP:The 2017-2019 Long-Term Incentive Performance Award (“LTIP”) incorporates a total shareholder return (“TSR”) modifier that can increase or decrease payments based on BB&T’s TSR performance. |
• | Realigned the Long-Term Incentive Mix:For 2017, two-thirds of long-term incentives (PSUs and LTIP) are subject to robust performance criteria. |
• | Subjected 100% of Long-Term Incentives to a Performance Hurdle: For 2017, all long-term incentives are subject to a performance hurdle and risk-based vesting criteria. |
This enhanced mix in the long-term incentive program is demonstrated by the comparison of 2016 and 2017 target opportunities set forth below for our Chief Executive Officer, Kelly S. King. The target opportunities are stated as a percentage of base salary.
2016 | 2017 | |||||||||||
Name | LTIP | RSUs | Stock Options | LTIP | RSUs | PSUs | ||||||
Kelly S. King | 160% | 224% | 56% | 146% | 147% | 147% |
44 BB&T Corporation | 2017 Proxy Statement
Compensation Discussion and Analysis |
New Compensation Vehicle – Performance Share Units (PSUs) |
Our PSUs include the following design features:
• | Performance Period: Three years. |
• | Vesting requirements and forfeiture: Three-year cliff vesting subject to BB&T exceeding a performance hurdle and adjustments for negative risk outcomes. Before vesting, 100% of the award is subject to reduction or forfeiture if there is an aggregate operating loss for the performance period or if a negative risk outcome occurs as determined by the Compensation Committee. |
• | Performance Metrics: |
• | Return on Common Equity: Payouts will be based on BB&T’s return on common equity (“ROCE”) performance relative to our peer group as follows (payout percentages will be interpolated for results between the 25th and 62 1⁄2 percentiles). |
2017 PSU Performance Matrix*
Level of Achievement | Percentile Performance of BB&T ROCE Relative to Peer Group ROCE | Payout Percent of Participant’s Target Award Opportunity | ||
Threshold | 25th | 50% | ||
Target | 50th | 100% | ||
Maximum | 62 1⁄2 or greater | 125% |
* | In addition, BB&T must first meet or exceed a 3% average ROCE performance hurdle in order for the payout to be earned. |
If the performance hurdle is met and after calculating the PSU payouts based on relative ROCE performance, the payouts are then subject to increase or decrease based on a TSR modifier measuring our TSR percentile performance relative to our peer group.
• | Total Shareholder Return Modifier: Payouts calculated based on relative ROCE performance are subject to a TSR modifier (increase or decrease) based on our TSR percentile performance relative to our peer group for the three-year performance period. Payments under the 2017 PSUs will be adjusted as follows (modified payments would be interpolated for results between the 25th and 75th percentiles): |
Percentile Performance of BB&T TSR Relative to Peer Group TSR | TSR Modifier | |
< 25th | 20% reduction | |
50th | No adjustment | |
³ 75th | 20% increase* |
* | Subject to overall payout cap of 125% of the PSUs. |
• | Maximum Payments: The maximum payout level for the 2017 PSUs is 125% of the PSUs awarded. |
• | No Dividends: Dividends are not paid on unvested PSUs. |
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Compensation Discussion and Analysis |
Enhanced Long-Term Incentive Performance Award (LTIP) |
Compensation Actions for 2016We also further enhanced our LTIP by adding the following design features:
• | TSR Modifier: 2017-2019 LTIP awards are subject to a TSR modifier based on our TSR percentile performance relative to our peer group TSR for the three-year performance period. The 2017-2019 LTIP will continue to measure and reward BB&T’s return on common equity performance relative to the Company’s peer group over the three-year performance period. Payments are subject to increase or decrease in an identical manner as the 2017 PSUs with an overall payment cap of 125% of the target award. |
As part of its regular review, the Compensation Committee has taken the following actions for 2016 in regards to NEO compensation. These actions are all in furtherance of the Compensation Committee’s commitment to implementing a strategy to provide target compensation opportunities that are aligned with the median of the Peer Group.
No base salary increases;
• | Vesting and Forfeiture: Three-year cliff vesting subject to BB&T exceeding a performance hurdle and adjustment for negative risk outcomes. Before vesting, 100% of the award is subject to reduction or forfeiture if there is an aggregate operating loss for the performance period or if a negative risk outcome occurs as determined by the Compensation Committee. |
Other 2017 Compensation Decisions |
No change in compensation award opportunities or payout levels;
• | No Salary Increases: We made no increases in base salaries for our NEOs in 2017. |
No special awards; and
Added Wells Fargo and Citizens Financial to the 2016 Peer Group to better reflect our growth in recent years.
The Compensation Committee recognizes that executive compensation practices in the banking industry are continuing to evolve due to feedback from regulators and shareholders. The Compensation Committee intends to closely monitor changes in market compensation practices as well as feedback on our programs from our shareholders and regulators. Accordingly, the Committee may make additional changes to our program in furtherance of its commitment to provide a compensation program that is competitive, performance-based, risk-balanced and aligned with the goals of our shareholders and regulatory expectations.
Section 2—20153—2016 Executive Compensation Program and Pay Decisions
Compensation Philosophy
The Compensation Committee structures BB&T’sour overall compensation program for Executive Management with an emphasis on long-term, performance-based compensation. Our executive compensation, philosophy is based on the following guiding principles:
Compensation and reward systems are designed to award performance over different time horizons to support and drive our strategic goals and produce positive business results;
Total compensation is based on a mix of performance goals and aligned with shareholder interests by providing a significant percentage of compensation in equity and setting stock ownership requirements for Executive Management;
Significant amounts of compensation are linked to the achievement of set performance goals;
Total compensation opportunities are established relative to organizations with which we compete for both talent and shareholder investment and at levels that enable us to attract and retain executives critical to our long-term success; and
BB&T compensation programs are designed to align with BB&T’s values and objectives and assist BB&T in supporting its associate value proposition. Specifically, compensation programs are designed to accomplish the following:
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Compensation Discussion and Analysis |
2016 Compensation Program Elements
Our executive total compensation is heavily performance-based.performance-based, with base salary representing the only fixed element. Below is a summaryare the four components of our regular pay components, their purpose and key program features.executives’ current compensation:
Compensation Element | Key Features | ||||||
| Base Salary | • Based on scope of leadership responsibilities, years of experience, performance and contributions to BB | |||||
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Annual Incentive Awards | • Cash incentive rewarding annual corporate performance • Rewards financial results that are expected to have a meaningful | • EPS (weighted at 60%)
• ROA relative to our peer group (weighted at 40%) •Performance levels (threshold, target, maximum) are established relative to Board approved EPS internal | |||||
Incentive Stock Awards | • Rewards sustainable, long-term appreciation of BB&T’s stock • Aligns NEO compensation with appreciation of BB&T’s stock price |
•Stock options and RSUs vest ratably over • Awarded 20% in stock options and 80% in RSUs (in 2017 we eliminated stock options to • 100% of the unvested award is subject to adjustment and/or forfeiture for any negative risk outcomes, including if the minimum performance criteria are not • Dividends are not paid on unvested | |||||
LTIP Awards | • Rewards achievement of superior relative three-year average | • LTIP Awards are | • Historical payments were based on BB&T ROCE performance relative to |
• Payments under the 2016-2018 LTIP award were revised based on shareholder feedback; subject to potential reduction based on our TSR performance relative to our peer group for the performance period
See “Section 2—2017 Changes to Our Compensation Program” for a detailed review of the compensation changes effective in 2017.
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Compensation Discussion and Analysis |
AnalysisSummary of Overall Compensation
The table below summarizes the actual NEO compensation paid for the 20152016 performance year, which consists of base salary, annual incentive awards, 2014-2016 LTIP awards and illustrates how the Compensation Committee viewed NEO compensationRSU and stock option awards granted in 2015. The table also compares total compensation2016. Additional detail for 2015 to 2014.each of these items follows this table.
20152016 COMPENSATION OVERVIEW TABLE
Name | Salary(1) ($) | Annual Incentive Awards(2) ($) | Option Awards(3)(4) ($) | Restricted Stock Unit Awards(3)(4) ($) | LTIP (2013- 2015)(5) ($) | 2015 ($) | 2015 Total with ($) | 2014 ($) | Salary ($) | Annual ($) | Option Awards(1)(2) ($) | Restricted Stock Unit Awards(1)(2) ($) | LTIP ($) | 2016 ($) | ||||||||||||||||||||||||||||||||||||||||||||
Kelly S. King | 1,056,250 | 1,572,160 | 591,499 | 2,365,971 | 2,009,603 | 7,595,483 | 8,625,483 | 7,200,244 | 1,075,000 | 2,253,469 | 601,998 | 2,407,982 | 2,087,500 | 8,425,949 | ||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Henson | 691,250 | 685,921 | 241,938 | 967,730 | 830,134 | 3,416,973 | 3,866,973 | 3,179,536 | 700,000 | 978,250 | 244,998 | 979,981 | 856,771 | 3,760,000 | ||||||||||||||||||||||||||||||||||||||||||||
Ricky K. Brown | 691,250 | 685,921 | 241,938 | 967,730 | 830,134 | 3,416,973 | 3,866,973 | 3,179,536 | 666,583 | 931,550 | 244,998 | 979,981 | 842,848 | 3,665,960 | ||||||||||||||||||||||||||||||||||||||||||||
Clarke R. Starnes III | 582,500 | 511,316 | 184,069 | 736,270 | 629,544 | 2,643,699 | 2,978,699 | 2,516,515 | 590,000 | 729,388 | 186,437 | 745,747 | 649,688 | 2,901,260 | ||||||||||||||||||||||||||||||||||||||||||||
Daryl N. Bible | 582,500 | 511,316 | 184,069 | 736,270 | 629,544 | 2,643,699 | 2,978,699 | 2,516,515 | 590,000 | 729,388 | 186,437 | 745,747 | 649,688 | 2,901,260 | ||||||||||||||||||||||||||||||||||||||||||||
Barbara F. Duck | 507,083 | 545,115 | 147,052 | 588,200 | 466,944 | 2,254,394 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Donna C. Goodrich | 507,083 | 545,115 | 147,052 | 588,200 | 466,944 | 2,254,394 |
(1) |
Amounts reflect the value the Compensation Committee sought to deliver through the restricted stock unit and stock option awards granted in February |
The principal differences between this table and the Summary Compensation Table are that the Summary Compensation Table includes information on the grant date fair value of restricted stock unit awards and includes the change in pension value and nonqualified deferred compensation earnings as well as all other compensation. The components included in the table above are considered by the Compensation Committee when making compensation determinations. |
In 2015 we continued to perform well against our Peer Group, however, our overall performance results were not as strong under the Annual Incentive Award and LTIP as compared to 2014. As a result, the payout percentages for these plans were lower for 2015 than for 2014. Increases in 2015 total compensation paid under our regular compensation program resulted primarily from payments under the 2013-2015 LTIP (the LTIP target award opportunities were increased in 2013 relative to the 2012 levels).
2014 | 2015(1) | |||||||||||||||
Absolute Performance | Relative to Peer Group | Absolute Performance | Relative to Peer group | |||||||||||||
EPS (Annual Incentive) | $2.90 | N/A | $2.73 | (2) | N/A | |||||||||||
ROA (Annual Incentive) | 1.22 | % | 84th Percentile | 1.14 | % | 88th Percentile | ||||||||||
Average 3-year ROCE (LTIP) | 10.31 | % | 72nd Percentile | 9.73 | % | 61st Percentile |
A special, one-time Merger Incentive was provided to recognize the strategically significant Susquehanna merger and incentivize a successful integration. The Merger Incentive is not a part of our regular compensation program and is not expected to be used again. Based on shareholder feedback, the Compensation CommitteeBase Salary
The following table shows base salaries for each of our NEOs for 2016. Based upon a review of market practices salaries remain unchanged from 2015, except for Ms. Duck and Ms. Goodrich (both new NEOs in 2016), whose salaries were increased effective February 2016 to reflect their additional responsibilities.
Name | 2016 ($) | % | ||
Kelly S. King | 1,075,000 | — | ||
Christopher L. Henson | 700,000 | — | ||
Ricky K. Brown | 700,000 | — | ||
Clarke R. Starnes III | 590,000 | — | ||
Daryl N. Bible | 590,000 | — | ||
Barbara F. Duck | 510,000 | 7.4 | ||
Donna C. Goodrich | 510,000 | 7.4 |
4448 BB&T Corporation | 20162017 Proxy Statement
Compensation Discussion and Analysis |
paid the award 50% in RSUs and 50% in cash. As a result of approving the Merger Incentive, the Compensation Committee removed estimated Susquehanna earnings from the EPS component of the Annual Incentive Award reducing EPS performance to $2.66. See the Merger Incentive discussion beginning on page 52.
Base Salary
The following table shows base salaries for each of our NEOs for 2015 as compared to 2014:
Name | 2015 Base Salary ($)(1) | 2014 Base Salary ($) | Increase ($) | Percentage Increase | ||||||||||
Kelly S. King | 1,075,000 | 1,000,000 | 75,000 | 7.50% | ||||||||||
Christopher L. Henson | 700,000 | 665,000 | 35,000 | 5.26% | ||||||||||
Ricky K. Brown | 700,000 | 665,000 | 35,000 | 5.26% | ||||||||||
Clarke R. Starnes III | 590,000 | 560,000 | 30,000 | 5.36% | ||||||||||
Daryl N. Bible | 590,000 | 560,000 | 30,000 | 5.36% |
In its deliberations on the 2015 base salary increases, the Compensation Committee considered the competitive analyses provided by its independent compensation consultant that base salaries for our NEOs had remained unchanged since 2013.
Annual Incentive
Our Annual Incentive Award is a cash incentive based on the achievement of annual corporate performance goals established annually by the Compensation Committee. Performance goals are based upon our internal earnings plan and performance relative to our peer group.
The amount paid under the Annual Incentive Award is determined by a formula based on our: (1) EPS (against preset performance goals) and (2) ROA (as compared to our Peer Group)peer group).
In 2015,2016, EPS was weighted at 60%, while ROA was weighted at 40%.
The EPS performance level was adjusted downward (from $2.73 to $2.66) in lightEach of our named executive officers has a target award opportunity which represents the Merger Incentive and to avoid the appearance that NEOs were being rewarded twice for the Susquehanna merger.
The 2015amount of Annual Incentive Award paid outreceived if we achieve the performance goals at approximately 76% of the target awardperformance level. The table below summarizes the Annual Incentive Award opportunity based on our EPSfor 2016 at target level of award. For 2016, target opportunities did not increase from 2015, except for Mrs. Duck and ROA performance and reflecting the downward adjustmentMrs. Goodrich, whose targets were adjusted to the EPS performance measure.reflect increased responsibilities.
Name | 2016 Target Annual Incentive Opportunity (as a % of base salary) | |
Kelly S. King | 195% | |
Christopher L. Henson | 130% | |
Ricky K. Brown | 130% | |
Clarke R. Starnes III | 115% | |
Daryl N. Bible | 115% | |
Barbara F. Duck | 100% | |
Donna C. Goodrich | 100% |
We have historically used EPS and ROA as the performance measures for Annual Incentive Awards because the Compensation Committee believes EPS and ROA have a meaningful bearing on long-term increases in shareholder value and are valuable barometers for our performance. EPS and ROA have a strong long-term correlation with shareholder returns. These measures also reflect the fundamental risk level and financial soundness of the business.
BB&T Corporation | 20162017 Proxy Statement 4549
Compensation Discussion and Analysis |
Each executive has a target award opportunity (expressed as a percentage of base salary) which represents the amount of the Annual Incentive Award if we achieve the performance goals at the target performance level. The table below summarizes the Annual Incentive award opportunity for 2015 versus 2014.
Name | 2015 Target Annual Incentive Opportunity | 2014 Target Annual Incentive Opportunity | ||
Kelly S. King | 195% | 175% | ||
Christopher L. Henson | 130% | 100% | ||
Ricky K. Brown | 130% | 100% | ||
Clarke R. Starnes III | 115% | 100% | ||
Daryl N. Bible | 115% | 100% |
The Compensation Committee increased the 2015 target award opportunities to provide competitive pay to these seasoned executives and to align total target compensation with the median level of the members of the Peer Group most aligned with us in terms of asset size and market capitalization. This increase was also intended to offset some of the lost upside caused by the maximum award opportunities for the Annual Incentive Award and LTIP being reduced below the median peer practice for comparable awards as a result of regulatory feedback.
Additional changes were made to the structure of the 2015 Annual Incentive versus 2014, as outlined below.
2016 ANNUAL INCENTIVE AWARD PERFORMANCE MANDATRIX EPS DOWNWARD ADJUSTMENT
EPS for 2015 was $2.73. In approving the Merger Incentive payment, the Compensation Committee decided that the estimated earnings attributable to the legacy Susquehanna operations following the merger (which occurred on August 1, 2015) should be removed from the Annual Incentive’s EPS performance measure. The Compensation Committee felt this adjustment was important to avoid the perception that Executive Management was being rewarded twice for the Susquehanna merger. However, the Compensation Committee also determined that the Susquehanna merger was a differentiating event where we outperformed our peers, and accordingly, believe it was fair to include our full earnings for the compensation elements that measure our performance relative to the Peer Group. See the Merger Incentive discussion beginning on page 52.
The tables below summarize the performance matrix and payout levels under the Annual Incentive Award.
46 BB&T Corporation | 2016 Proxy Statement
EPS PERFORMANCE (60%OF ANNUAL INCENTIVE AWARD)
EPS (60% of Annual Incentive Award) | ROA (40% of Annual Incentive Award) | |||||||||||||||
Level of Achievement | EPS Performance Measure | Payout as % of Participant’s Target Award Opportunity | Method for Setting the Payout % | Performance | Payout as % of Participant’s Target Award | Performance Relative to Peer Group | Payout as % of Participant’s Target Award | Total Payout as % of Target | ||||||||
Below Threshold | Less than $2.65 | 0% | Less than $2.65 | 0% | Less than 25th Percentile | 0% | Min – 0% | |||||||||
Threshold | $2.65 | 25% | 10% below target | $2.65 | 25% | 25th Percentile | 50% | |||||||||
Target | $2.95 | 100% | Internal profit plan | $2.95 | 100% | 50th Percentile | 100% | |||||||||
Maximum | $3.10 | 150%1 | 5% above target | $3.10 | 150%(1) | 75th Percentile | 150%(1) | Max – 125% | ||||||||
Actual | $2.73 | 45.83% | ||||||||||||||
Excluding SUSQ earnings | $2.66 | 27.22% | ||||||||||||||
Actual Results | $2.87(2) | 79.2% | 1.16%, or 92nd Percentile(2) | 150% | ||||||||||||
Weighting | 60% | 40% | ||||||||||||||
Payout per Measure | Payout per Measure | 47.5% | 60% | |||||||||||||
Total Annual Incentive Payout: 107.5% | Total Annual Incentive Payout: 107.5% |
(1) | Annual Incentive Award combines EPS and ROA performance, with the final payout capped at 125% of the target award opportunity. |
ROA PERFORMANCE (40%OF ANNUAL INCENTIVE AWARD)
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2015 ANNUAL INCENTIVE AWARD RESULTS
The 2015 Annual Incentive Awards paid out at approximately 76.33% of the target award opportunity, based on BB&T’s 2015 EPS and ROA results as summarized below:
2015 ANNUAL INCENTIVE PAYOUT CALCULATION
Performance Level | Payout Ratio | Item Weight | Annual Incentive Award Payout | |||||
EPS | $2.66 | 27.22% | 60% | 16.33% | ||||
ROA | 1.14% | 150% | 40% | 60% | ||||
Total | 76.33%(1) |
The EPS and ROA performance presented herein includes adjustments to BB&T’s GAAP net income by the Compensation Committee. |
BB&T Corporation | 2016 Proxy Statement 47
Based on these results, executives received the following Annual Incentive Award payouts.
20152016 ANNUAL INCENTIVE AWARD PAYMENTS
Name(1) | Threshold 2015 ($) | Targeted 2015 ($) | Maximum 2015 ($) | Actual 2015 Annual ($) | ||||
Kelly S. King | 308,953 | 2,059,688 | 2,574,610 | 1,572,160 | ||||
Christopher L. Henson | 134,794 | 898,625 | 1,123,281 | 685,921 | ||||
Ricky K. Brown | 134,794 | 898,625 | 1,123,281 | 685,921 | ||||
Clarke R. Starnes III | 100,481 | 669,875 | 837,344 | 511,316 | ||||
Daryl N. Bible | 100,481 | 669,875 | 837,344 | 511,316 |
Name(1) | 2016 ($) | |
Kelly S. King | 2,253,469 | |
Christopher L. Henson | 978,250 | |
Ricky K. Brown(2) | 931,550 | |
Clarke R. Starnes III | 729,388 | |
Daryl N. Bible | 729,388 | |
Barbara F. Duck | 545,115 | |
Donna C. Goodrich | 545,115 |
(1) | The Annual Incentive Awards for the officers covered by Section 162(m) of the Code were paid from a pool based on BB&T’s |
(2) | Amounts for Mr. Brown reflect his retirement effective December 15, 2016. |
Long-Term Incentives
BB&T’s long-term incentive program provides compensation awarded under the shareholder-approved BB&T Corporation 2012 Incentive Plan (the “2012 Incentive Plan”). TheseFor 2016, these awards arereflected a mix of cash and equity and include the following components:
Incentive |
RSUs—represents 80% of incentive stock award
Stock Options—represents 20% of incentive stock award
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Executives have a defined target award opportunity for each long-term component, expressedProgram and LTIP Program, as a percentage of base salary. None of the long-term incentive award opportunities increased for 2015.
Long-Term Incentives | ||||||
Name | LTIP | RSUs | Stock Options | |||
Kelly S. King | 160% | 224% | 56% | |||
Christopher L. Henson | 100% | 140% | 35% | |||
Ricky K. Brown | 100% | 140% | 35% | |||
Clarke R. Starnes III | 90% | 126% | 32% | |||
Daryl N. Bible | 90% | 126% | 32% |
INCENTIVE STOCK PROGRAM SUMMARYdiscussed below.
2015 Incentive Stock Awards for each NEO include nonqualified stock options (20% of award) and RSUs (80% of award).
Stock options and RSUs vest ratably over three years.
Award vesting is subject to BB&T exceeding a performance hurdle and adjustments for any negative risk outcomes.
4850 BB&T Corporation | 20162017 Proxy Statement
Compensation Discussion and Analysis |
INCENTIVE STOCK PROGRAM
Up to 100% of unvested RSUs andThe 2016 Incentive Stock Awards for each NEO included nonqualified stock options (20% of award) and RSUs (80% of award). The 2016 Incentive Stock Awards are subject to reduction or forfeiture if the Compensation Committee determines that there has been a significant negative risk outcome as a result of a corporate or individual action, or BB&T has incurred an annual operating loss for the year.
Other features of our RSUs and stock options are described below:
Restricted Stock Units:
RSU awards are granted as a contingent share of BB&T common stock that is not earned or issued until specific conditions are met. RSUs vest 33 1/3% per year following each of the first three anniversaries of the date of grant, subject to the Compensation Committee’s performance review. For retirement eligible individuals, RSU vesting is generally accelerated upon retirement. No dividends are paid on the shares underlying the RSUs until the units vest and shares are issued. The Compensation Committee determined that the three-year vesting schedule is generally consistent with Peer Group practices. The Compensation Committee believes that the retentive features and perceived value of RSUs are enhanced in a volatile stock market, which the financial services industry has experienced.experienced over the past several years. The RSUs have the following features:
Stock Options:Stock options awarded for 2016 have the following characteristics:
Stock options historically have been an important part of our equity program. The Compensation Committee believes that stock options are inherently performance-based and effectively align the interests of the recipients with those of the shareholders because stock options only have value if our stock price increases relative to the stock price on the date of the award. Stock option awards
20152016 INCENTIVE STOCK AWARDS
The 2015 Incentive Stock Awards are detailed in the following table:
Name | Non- Qualified | Delivered Value of Stock | RSUs (#) | Delivered Value of RSUs ($)(2)(3) | Total Delivered Value of Options and RSUs ($) | |||||
Kelly S. King | 120,714 | 591,499 | 61,904 | 2,365,971 | 2,957,470 | |||||
Christopher L. Henson | 49,375 | 241,938 | 25,320 | 967,730 | 1,209,668 | |||||
Ricky K. Brown | 49,375 | 241,938 | 25,320 | 967,730 | 1,209,668 | |||||
Clarke R. Starnes III | 37,565 | 184,069 | 19,264 | 736,270 | 920,339 | |||||
Daryl N. Bible | 37,565 | 184,069 | 19,264 | 736,270 | 920,339 |
Name | Total Delivered Value of Stock Options and RSUs ($)(1) | |
Kelly S. King | 3,009,980 | |
Christopher L. Henson | 1,224,979 | |
Ricky K. Brown | 1,224,979 | |
Clarke R. Starnes III | 932,184 | |
Daryl N. Bible | 932,184 | |
Barbara F. Duck | 735,252 | |
Donna C. Goodrich | 735,252 |
(1) |
BB&T Corporation | 20162017 Proxy Statement 4951
Compensation Discussion and Analysis |
LTIP PROGRAM SUMMARY
LTIP awards reward performance measured by ourusing both an absolute performance goal for ROCE performance and a relative to our Peer GroupROCE performance goal over a three year performancethree-year cycle. Each year begins a new three-year performance cycle, and performance measures and payout range are established at the beginning of the cycle,cycle. We must achieve an average absolute ROCE of at least 3% for the three-year performance period. Only if this absolute performance goal is reached is ROCE performance relative to the peer group measured. Payouts are determined in accordance with the performance matrix set forth below. As described in more detail below, the 2016-2018 LTIP was retroactively adjusted and payments are subject to reduction based on TSR performance relative to our peer group for the performance period.
LTIP awards have historically been paid in cash, but at the discretion of the Compensation Committee, establishes the performance measures and payout range. The Compensation Committee believes that measuring ROCE over a three-year period relative to the Peer Group provides a valuable measure of company performance over time.
LTIP awards are payable,may be paid in the Compensation Committee’s discretion, in the form of shares of BB&T common stock, cash or a combination of both. LTIP awards have historically been paid in cash. The Compensation Committee believes that with approximately 64% of the NEOs’ long-term incentive compensation currently consisting of equity, it iswas appropriate to pay the 2014-2016 LTIP awards in cash, rather than additional equity, especially in light of the substantial BB&T common stock holdings of each of the NEOs.
The 2014-2016 LTIP award is calculated as follows:
Target Award Opportunity | X | 3-Year Average Salary | X | Performance Scale Payout % |
2013-20152014-2016 LTIP Cycle (Paid in March 2016)2017)
The performance matrix for the 2013-20152014-2016 LTIP award follows. Under the matrix, our actual ROCE performance relative to the Peer Grouppeer group translates to a corresponding payout percentage on a simple interpolation basis.
2013-2015 LTIP CYCLE PERFORMANCE MATRIX
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Our average ROCE performance for 2013-20152014-2016 was 9.73%9.14%, which placed us in the 61st64th percentile of the Peer Groupour peer group and generated a payout of 123%125% of the target award opportunity. Our ROCE performance includes adjustments to our GAAP net income approved by the Compensation Committee. Please refer to Annex A for a GAAP reconciliation.
50 BB&T Corporation | 2016 Proxy Statement
Based on these results, executives received the following 2013-2015 LTIP payouts:
2013-2015 LTIP CYCLE PAYMENTS
Name | Threshold($)(1) | Target($) | Maximum($) | Actual LTIP Payment, Based on 2013-2015 Performance($)(2) | ||||||||
Kelly S. King | 814,000 | 1,628,000 | 2,442,000 | 2,009,603 | ||||||||
Christopher L. Henson | 336,250 | 672,500 | 1,008,750 | 830,134 | ||||||||
Ricky K. Brown | 336,250 | 672,500 | 1,008,750 | 830,134 | ||||||||
Clarke R. Starnes III | 255,000 | 510,000 | 765,000 | 629,544 | ||||||||
Daryl N. Bible | 255,000 | 510,000 | 765,000 | 629,544 |
2015-2017 LTIP Cycle (Payable in 2018)
Our 2015-2017 LTIP awards use a ROCE performance hurdle in addition to assessing our average ROCE performance relative to the Peer Group. If our average ROCE performance is not at least 3%, then the hurdle is not cleared and no payout is earned. If the ROCE hurdle is cleared, then our ROCE performance relative to the Peer Group is measured per the performance matrix below. In establishing the ROCE performance hurdle, the Compensation Committee determined that 3% average three-year ROCE was the minimum level of performance where a payout would be justified, irrespective of our relative Peer Group performance.
Also consistent with LTIP awards made in 2014, the maximum payout level for the 2015-2017 LTIP awards is 125% of the target award opportunity.
2015-20172014-2016 LTIP CYCLE PERFORMANCE MATRIX
Level of Achievement | Percentile Performance of BB&T ROCE Relative to Peer Group ROCE | Payout Percent of Participant’s Target Award Opportunity | ||
Threshold | 50% | |||
60% | ||||
70% | ||||
80% | ||||
90% | ||||
Target | 100% | |||
110% | ||||
120% | ||||
Maximum | 62 | 125% | ||
Actual Performance | 9.14%, or 64th percentile | 125% |
BB&T Corporation | 2016 Proxy Statement 51
Merger Incentive
On June 23, 2015, the Compensation Committee adopted the Merger Completion Incentive Program (the “Merger Incentive”), a unique, one-time incentive opportunity to reward significant strategic achievements related to the successful acquisition and conversion of Susquehanna, an $18.3 billion asset bank headquartered in Central Pennsylvania. At the time the Merger Incentive was approved, the Susquehanna merger had not yet closed as regulatory approval was still pending. Successfully closing and converting the Susquehanna merger were seen as critical strategic goals representing a significant investment in BB&T’s future growth and success.
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Objective and Purpose of Merger Incentive
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Award Features
One-time, special incentive, not intended to be a regular component of our compensation program
Full Compensation Committee discretion to choose the form of payment (cash and/or equity) and to reduce payments (including to zero) based on its assessment of BB&T’s overall performance
Award opportunities reflect a modest component of executives’ total 2015 compensation (Merger Incentive award opportunity was set at approximately 50% of each NEO’s Annual Incentive Award target award opportunity)
Award contingent on successful operational conversion, defined as the time BB&T’s computer systems became the current and primary systems of record for Susquehanna’s transactional and accounting data (conversion is also when Susquehanna’s bank and ATM signage change to BB&T and legacy Susquehanna customers begin operating within the BB&T environment)
Award contingent on conversion occurring before June 23, 2016
52 BB&T Corporation | 20162017 Proxy Statement
Compensation Discussion and Analysis |
Based on these results, executives received the following 2014-2016 LTIP payouts:
Payout Considerations2014-2016 LTIP CYCLE PAYMENTS
Name | Actual LTIP Payment, Based on 2014-2016 Performance($)(1) | |
Kelly S. King | 2,087,500 | |
Christopher L. Henson | 856,771 | |
Ricky K. Brown | 842,848 | |
Clarke R. Starnes III | 649,688 | |
Daryl N. Bible | 649,688 | |
Barbara F. Duck | 466,944 | |
Donna C. Goodrich | 466,944 |
During December 2015,
(1) | Under the approved formula, the actual payment is based on the actual average salary paid over the three-year performance cycle. |
Changes to our 2016-2018 LTIP (Payable in 2019)
In June 2016, we made a retroactive change to our 2016-2018 LTIP. This change was made as part of our Compensation Committee’s commitment to strengthen ourpay-for-performance program and based on input received from shareholders as part of our shareholder engagement program. Several shareholders recommended that we incorporate an additional performance measure into our long-term compensation program. In response to this feedback, the Compensation Committee, conductedin consultation with our compensation consultant, retroactivity approved a thorough evaluation ofchange to our 2016-2018 LTIP originally granted on February 23, 2016.
As modified, payments under the conversion results2016-2018 LTIP are subject to reduction based on our TSR percentile performance relative to our peer group TSR for the three-year performance period. Consistent with prior LTIP awards, the 2016-2018 LTIP will continue to measure and reward our ROCE performance relative to our peer group over the three-year performance period. Payments under the 2016-2018 LTIP are subject toreduction only, based on our performance relative to our peer group as well as BB&T’s overall performance. The following factors were considered:follows:
Successful and Well-Executed Conversion
The Compensation Committee considered in-depth reports detailing the conversion results, including but not limited to:
Conversion of nearly 900,000 deposit accounts and 140,000 loans
Conversion of 245 bank branches and 300 ATMs
Dissolution or merger of thirty-three subsidiaries and non-consolidated legal entities
Establishment of new call center in Lititz, Pennsylvania
Limited client issues that were resolved quickly
On track to achieve targeted cost savings from the merger
Based on its review of the conversion, the Compensation Committee determined that the Susquehanna conversion was successful and well executed.
Evaluation of BB&T’s Overall Performance
The Compensation Committee also considered our financial performance and strategic initiatives, including, but not limited to, the following:
BB&T’s financial strength and ability to obtain regulatory approval for several acquisitions reinforced the positive impact from significant investments in people, processes, systems, capital, liquidity and risk management
Relative to
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< 25th | 20% reduction | |
³ 25th and < 40th | 10% reduction | |
³ 40th | no reduction |
The Susquehanna and National Penn regulatory approvals took only eight months and four months, respectively, from announcement, in an environment where other banks experienced significant delays (multi-year, inAs a result, the instance2016-2018 LTIP award will be calculated as follows:
Target Award Opportunity | X | 3-Year Average Salary | X | Performance Scale Payout % | – | % Reduction Based on Relative TSR Performance |
Also consistent with the 2014-2016 LTIP awards, the maximum payout level for the 2016-2018 LTIP awards is 125% of one peer) in achieving approval for acquisitionsthe target award opportunity.
Management was able to achieve virtually all strategic objectives with no delays in ongoing strategic projects (including key infrastructure investments) and strategies, or compromise of BB&T’s vision, mission or values
BB&T increased its quarterly common stock dividend by 12.5% in 2015
BB&T Corporation | 20162017 Proxy Statement 53
Compensation Discussion and Analysis |
Overall, our TSR performance relative to the Peer Group improved as of December 31, 2015 versus 2014
BB&T successfully rolled out U by BB&T, a groundbreaking mobile and online banking platform
Historical Compensation Factors
As context for the granting of this one-time incentive and the determination of whether to make payments under the incentive, the Compensation Committee considered several historical compensation issues involving Executive Management that stemmed from regulatory feedback:
In 2013, BB&T reduced the maximum payout level for the 2014 annual incentive plan from 150% to 125% (which followed a reduction to the 2013 annual incentive’s maximum payout level from 200% to 150% as a result of similar regulatory feedback). A subsequent peer review made clear that the overwhelming majority of our peers all retained substantially higher payout opportunities, and that this compensation element was below market practice. Additionally, an unintended plan design feature caused reduced payouts under our 2014 annual incentive plan for Executive Management (such reductions were not applied to non-Executive Management associates).
Also in 2013, the maximum payout level for the 2014-2016 LTIP was reduced from 150% to 125% (which followed a reduction to the maximum payout level for the 2012-2014 LTIP from 200% to 150% as a result of similar regulatory feedback). A subsequent peer review made clear that the overwhelming majority of our peers granted long-term incentives with substantially higher payout opportunities, and that this compensation element was below market.
Further, the 2012-2014 LTIP used, for the first time, a performance band structure. However, the structure unintentionally did not provide interpolation between performance band levels. As a result, BB&T’s ROCE performance (72nd percentile relative to peers) missed the 75th percentile maximum payout by only three percentage points, but yielded a target level payout instead of a nearly maximum payout.
Prior to its consideration of whether to establish the Merger Incentive, the Compensation Committee considered all three of these issues and debated a simple special cash bonus, as BB&T’s culture strongly supports doing what is right and fair, especially in regard to compensation matters. The Compensation Committee believed that such payments would have been consistent with BB&T’s corporate values of justice, but ultimately refrained from doing so because such award would not be performance based and, therefore, would have been at odds with the Compensation Committee’s pay-for-performance philosophy.
Accordingly, the most important contextual point is that this special, one-time Merger Incentive is not a part of our normal compensation philosophy and is not expected to be used again, and in considering whether to payout the Merger Incentive, the Compensation Committee was mindful of these historical compensation matters.
54 BB&T Corporation | 2016 Proxy Statement
Shareholder Feedback
At the Compensation Committee’s direction, we conducted an expanded shareholder engagement program in the fall of 2015. The Chair of the Compensation Committee led a number of the shareholder meetings. One of the topics for discussion was the Merger Incentive. After hearing our explanation of the rationale for the Merger Incentive, shareholders were generally supportive of the award and expressed that the amounts seemed reasonable.
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Other Considerations
In addition, the Committee recognized several accolades about BB&T and the acquisition.Bloomberg Markets magazine rated BB&T as one of the top 15 strongest banks in the world and one of the three strongest in the United States.American Banker magazine named CEO Kelly S. King banker of the year for 2015 for steering BB&T “…through an extended period of industry adversity, while providing a blueprint for large-scale M&A.” In addition, SNL Financial named Mr. King one of its “Most Influential” in banking in 2015 and 2014.
Payouts
On December 31, 2015, after considering the above factors and reviewing year-end information, including final 2015 TSR, the Compensation Committee determined that the Susquehanna conversion was successful and BB&T’s overall performance for 2015 was solid and, accordingly, decided to pay the full award opportunity under the Merger Incentive. Based on shareholder feedback and a desire to ensure that payouts would be subject to the continued success of the acquisition and BB&T as a whole, the Committee determined to pay the awards in a combination of RSUs and cash. RSU awards are subject to forfeiture if BB&T experiences a negative operating loss or a significant negative risk outcome (including any arising out of the Susquehanna merger) during the vesting period.
BB&T Corporation | 2016 Proxy Statement 55
The following table outlines the award opportunities and final payouts:
Name | Total Award ($) | Cash Awarded ($) | RSUs Awarded ($) | RSUs Awarded1(#) | ||||||||||||
Kelly S. King | 1,030,000 | 515,000 | 515,000 | 13,620 | ||||||||||||
Christopher L. Henson | 450,000 | 225,000 | 225,000 | 5,950 | ||||||||||||
Ricky K. Brown | 450,000 | 225,000 | 225,000 | 5,950 | ||||||||||||
Clarke R. Starnes | 335,000 | 167,500 | 167,500 | 4,430 | ||||||||||||
Daryl N. Bible | 335,000 | 167,500 | 167,500 | 4,430 | ||||||||||||
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Total: | $ | 2,600,000 | $ | 1,300,000 | $ | 1,300,000 | 34,380 |
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Performance Adjustments and Considerations
The Compensation Committee retains discretion to make adjustments to our performance, as well as the reported results from members of our Peer Group,peer group, for purposes of making performance-based compensation awards.
In February, the Compensation Committee receives preliminary performance information for the prior year, and historically has made adjustments to our reported results (e.g., net income) to ensure that the applicable compensatory plans fairly compensate participants for core BB&T performance.
The Compensation Committee may also make adjustments to the reported performance of Peer Grouppeer group members for awards that measure our performance relative to the Peer Group.
Reconciliation of adjustments that the Compensation Committee made for the purposes of certifying 20152016 performance are included in Annex A to this proxy statement.
Unless otherwise indicated, discussions of 20152016 performance for compensation purposes in this proxy statement include these adjustments made by the Compensation Committee.
Pension PlanPerquisites Practices
The NEOs receive limited perquisites and other personal benefits that the Compensation Committee believes are reasonable and consistent with our overall compensation program. Our NEOs do not receive perquisites such as personal club memberships, corporate housing or personal travel on the company’s aircraft.
Retirement Benefits
PENSION PLAN
We provide the BB&T Corporation Pension Plan, atax-qualified defined benefit retirement plan for eligible associates (the “Pension Plan”). We are among the few remaining companies that offersoffer a traditional pension plan.
We also provide an excess benefit plan, the BB&T CorporationNon-Qualified Defined Benefit Plan (the “Excess Plan”), to augment the benefits payable under the Pension Plan to the extent that such benefits are curtailed by application of certain tax limitations. The Compensation Committee believes that the benefits provided by the Excess Plan assureensure that we will receive the executive retention benefits of the Pension Plan.
The Pension Plan and the Excess Plan are broad-based benefits and the NEOs participate in the Pension Plan and the Excess Planboth plans on the same basis as other similarly situated associates.
The Pension Plan and the Excess Plan provide retirement benefits based on length of service and salary level prior to retirement with benefits increasing substantially as a participant approaches retirement.
FourFive of the fivesix active NEOs have spent substantially all of their professional careers at BB&T and have built up significant benefits under the Pension Plan. ThreeFor example, Mr. King has 44 years of the five NEOs are retirement eligible.
5654 BB&T Corporation | 20162017 Proxy Statement
Compensation Discussion and Analysis |
We believe the retirement benefits provided by the Pension Plan are meaningful to all associates, but especially to those who devote substantial service to BB&T. Moreover, we view the Pension Plan and the Excess Plan as important retention tools for the NEOs and other highly compensated associates in the later stages of their careers because these retirement benefits could not easily be replicated upon the associate’s departure from the CorporationBB&T prior to retirement. The Compensation Committee believes that while the overall retirement benefits provided to the NEOs are in line withreasonable relative to those provided by its Peer Group,peer group, the Pension Plan and Excess Plan provide us with a competitive advantage in attracting and retaining talent in light of the high number of companies that have frozen or abandoned traditional pension plans in recent years.
Perquisites Practices
The NEOs receive limited perquisites and other personal benefits that the Compensation Committee believes are reasonable and consistent with our overall compensation program. Executive Management, including the NEOs, do not receive perquisites such as personal club memberships, corporate housing or personal travel on the company’s airplane.
Other Employee Benefits
ASSOCIATE BENEFIT PLANS
During 2015,2016, we maintained various employeeassociate benefit plans that constitute a portion of the total compensation package available to the NEOs and all eligible associates of BB&T. These plans consist of the following:
the BB&T Corporation 401(k) Savings Plan, which in 20152016 permitted associates to contribute up to 50% of their cash compensation, on atax-deferred basis, within certain IRS compensation deferral amount limits applicable totax-qualified retirement plans, with BB&T matching deferrals up to 6% of their compensation;
the BB&T CorporationNon-Qualified Defined Contribution Plan, which is designed to augment the benefits under the BB&T Corporation 401(k) Savings Plan to the extent such benefits are curtailed by the application of certain limits imposed by the Internal Revenue Code (during 2015,2016, eligible participants in theNon-Qualified Defined Contribution Plan were permitted to defer up to 50% of their cash compensation with certain participants eligible to receive a matching contribution of up to 6% of their compensation);
a medical plan that provides coverage for all eligible associates; and
We also provide disability insurance for the benefit of our associates (including each of the NEOs) which, in the event of disability, pays an associate 50% of the associate’s monthly compensation, subject to a cap of $35,000 per month. Under this program, associates may select greater disability coverage with a benefit that pays 60% of their monthly compensation; however, associates are required to pay the additional premium (over that already paid by us to receive the standard 50% coverage) to receive this heightened level of coverage. If a member of Executive Management, including a NEO, became disabled and the insurance benefit was limited due to the monthly cap, we would provide supplemental payments to the member of Executive Management to bring the monthly payment up to the selected coverage level.
The employeeassociate benefits for the NEOs discussed in this subsection are determined by the same criteria applicable to all of our associates. In general, benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death, and to provide a reasonable level of retirement income based on years of service with BB&T. These benefits help keep us competitive in attracting and retaining associates. We believe that our employeeassociate benefits are generally on par with benefits provided by the Peer Groupour peer group and consistent with industry standards.
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Section 3—4—BB&T’s Executive Compensation Process
Role of Compensation Committee
The Compensation Committee administers BB&T’s compensation program for Executive Management, including each of the NEOs. The Compensation Committee’s authority and responsibilities are set forth in its charter and include, but are not limited to:
reviewing and approving the compensation for the Chief Executive Officer, the remaining NEOs and other members of Executive Management;
selecting and approving the performance metrics and goals for all Executive Management compensation programs and evaluating performance at the end of each performance period; and
approving Annual Incentive Award opportunities, Incentive Stock Awards and LTIP award opportunities.
In making compensation decisions, the Compensation Committee uses several resources and tools, including the services of its independent compensation consultant, Compensation Advisory Partners and, as of October 2015, Meridian Compensation Partners LLC. The Committee also considers summary analyses of total compensation delineating each compensation element (“tally sheets”), executive risk scorecards provided by our Chief Risk Officer, competitive benchmarking and other analyses, as further described below.
In addition, theThe Compensation Committee periodically receives reports from our Chief Risk Officer regarding our risk environment and risk management practices, from our Chief Compliance Officer regarding compliance and risk matters and from our General Auditor, the head of our internal audit function, regarding our internal controls andcontrols. In addition, the Compensation Committee regularly reviews the minutes of the Risk Committee of the Board of Directors. The purpose of these reports and review is to allow the Compensation Committee to evaluate our current risk environment and internal control positions relevant to incentive compensation, and to take these issues into consideration when determining incentive compensation.
The Chief Executive Officer also is involved in compensation determinations for other members of Executive Management, (includingother than himself, including compensation for each of the NEOs)NEOs, and makes recommendations to the Compensation Committee on base salary and the other compensation elements. We believe that the Chief Executive Officer is in the best possible position to assess the performance of the other members of Executive Management, and he accordingly plays an important role in the compensation setting process. However,Ultimately, however, decisions about individual compensation elements and total compensation including those related to the Chiefof all members of Executive Officer,Management are ultimately made by the Compensation Committee, using its judgment, focusingbased primarily on the executive officer’s performance and BB&T’sour overall performance, particularly in light of the business environment in which the results were achieved.
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The following table illustrates the Compensation Committee’s executive compensation process timeline at BB&T. In addition, the Compensation Committee regularly receives updates with respect to ouron-going shareholder engagement efforts. The Compensation Committee’s independent compensation consultant attends and participates in Committee meetings from time to time throughout the year.
Executive Compensation Process | ||||
February Teleconference | • | Receive risk management update on risk appetite and events that could impact incentive compensation | ||
• | Joint meeting among the Compensation, Audit and Risk Committees | |||
• | Review executive risk scorecards for the prior year | |||
• | Review projected financial results with proposed adjustments for incentive plans | |||
• | Receive update from BB&T’s General Auditor regarding the effectiveness of internal controls | |||
• | Receive a report from BB&T’s Chief Compliance Officer regarding compliance and risk matters | |||
February Meeting | • | Approve financial results and | ||
• | Determine payments/vesting for incentive plans with performance periods completed the prior year (Annual Incentive Awards, LTIP, and Incentive Stock Awards) | |||
• | Approve peer group for the current year | |||
• | Determine compensation for the current year—base salary increases (if any), cash incentive plans (Annual Incentive Awards and LTIP) and Incentive Stock Awards | |||
• | Review and approve the draft Compensation Discussion and Analysis and the draft Compensation Committee Report on Executive Compensation sections of the proxy statement | |||
• | Review tally sheets | |||
June Meeting | • | Review projected financial results with proposed adjustments for incentive plans | ||
October Meeting | • | Receive risk management update on risk appetite and events that could impact incentive compensation | ||
• | Joint meeting among the Compensation, Audit and Risk Committees | |||
• | Review projected financial results with proposed adjustments for incentive plans | |||
• | Review of Executive Management compensation with the Compensation Committee’s independent compensation consultant | |||
• | Conduct amid-year review of current executive risk scorecards | |||
December Meeting | • | Review projected financial results with proposed adjustments for incentive plans | ||
• | Conduct annual review of director compensation | |||
• | Consider retaining the Compensation Committee’s independent compensation consultant for the upcoming year |
Role of Compensation Consultant
The Compensation Committee engages an independent compensation consultant to provide market reference perspective and serve as an advisor. The independent compensation consultant serves at the request of, and reports directly to, the Compensation Committee. Further, the Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and other retention terms, including the
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authority to limit the amount of fees the independent compensation consultant may earn from other services provided to BB&T. For January to October 2015, theThe Compensation Committee has retained Meridian Compensation Advisory
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Partners to act as the Committee’s independent compensation consultant. In this capacity, Meridian Compensation Advisory Partners performed a review of our executive compensation programs, provided peer group analysis,analyses, and advised on regulatory developments, corporate governance and best practice trends.
In keeping with its responsibilities in managing our compensation program, the Compensation Committee periodically reviews its outside advisors. Last year, the Compensation Committee met with several compensation consulting firms as part of a governance review of executive compensation providers. After considering the services offered by several firms, the Compensation Committee determined to retain Meridian Compensation Partners in October 2015 as its new independent compensation consultant.
The Compensation Committee determined that, based on an assessment of NYSE factors, the consulting firms retained wereits review, Meridian Compensation Partners is independent and that its engagement of these firms did not present any conflicts of interest. In making this determination, the Compensation Committee noted that Meridian Compensation Partners (a) the consultants provideprovides no other services to BB&T other than compensation consulting, (b) has no personal or business relationships exist between the consultants andwith members of our Board or executive officers, (c) the consultants dodoes not directly own any shares of BB&T stock, and (d) the consultants retainretains a written policy designed to avoid conflicts of interest that may arise. Each consultantMeridian Compensation Partners also determined that it was independent from our management and confirmed this in a written statement delivered to the Chair of the Compensation Committee.
During 2015,2016, the compensation consultantsconsultant provided the following services to the Compensation Committee:
reviewed our company’s total compensation philosophy for reasonableness and appropriateness;
reviewed overall compensation levels;
reviewed our total executive compensation program and advised the Compensation Committee of plans or practices that may be changed to improve effectiveness;
provided market and peer data and recommendations on Executive Management compensation;
assisted in analyzing the risk impact of our compensation practices including with respect to the Merger Incentive;
reviewed public disclosure on compensation, including the draft Compensation Discussion and Analysis and related tables and compensation disclosures for our proxy statement; and
advised the Compensation Committee regarding the compensation of outside directors.
In order for a compensation consultant to provide effective advice, the Compensation Committee expects them to interact with our management from time to time. These interactions generally involve, among other things:
obtaining compensation and benefits data, as well as other relevant information that is not available from public sources;
working with management to understand the scope of the various executive jobs in order to provide accurate benchmarking; and
conferring with management so that factual and data analyses are accurate andup-to-date.
This process enables the compensation consultant to identify any areas where further research or analysis may be necessary, while allowing it to discuss any changes to the compensation program or refine recommendations before finalizing its reports to the Compensation Committee.
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BenchmarkingPeer Group and Competitive Analyses
The Compensation Committee uses a peer group to perform competitive assessments of executive compensation as well as to measure performance under our annual and long-term incentive plans. The Compensation Committee approves a group of publicly-traded banks or financial services holding companies each year to serve as the peer group. In evaluating our peer group for 2016, the Compensation Committee considered a number of factors, including asset size and market capitalization. Given the limited number of banks of our size and market cap, we are positioned in the top quartile of our peer group. Based on feedback received from our shareholders and our independent compensation consultant’s advice, the Compensation Committee added two banks to the group in 2016: one larger bank (Wells Fargo) and one bank closer to BB&T in size (Citizens Financial Group). Even with the addition of the two new banks, we remain near the 75th percentile of the peers in both asset size and market capitalization.
BB&T 2016 PEER GROUP | ||||
v Citizens Financial | vPNC | |||
v Comerica | vRegions | |||
v Fifth Third | vSunTrust | |||
v Huntington | v U.S. Bancorp | |||
v KeyCorp | v Wells Fargo | |||
v M&T | v Zions |
The Compensation Committee determined that this group would be used for the relative performance comparisons in our annual incentive awards (ROA) and our LTIP (ROCE, TSR). The Committee also reviewed the incentive plan design practices of this group when evaluating potential changes to our program for 2016 and 2017.
The compensation structure for Executive Management, which includes the NEOs, emphasizes variable pay based on performance. We generally compare each element of compensation against whatas well as total compensation relative to the peer group. The Compensation Committee determines is a reasonable grouping of publicly traded bank or financial services holding companies (identified below, the “Peer Group”).
Throughout 2015 and continuing into 2016, the Compensation Committee has carefully consideredconsiders its benchmarking practices. The Compensation Committee reevaluated the peer group for 2016 and decided to add one larger bank (Wells Fargo) and one bank closer in size (Citizens Financial). The nature of the market limits the number of larger peers with a reasonably comparable business model. During our shareholder engagement program we received feedbackOur shareholders have told us that shareholders preferredthey prefer that compensation opportunities generally not be targeted above the median of the Peer Group,peer group, irrespective of our relative size. Accordingly, the Compensation Committee will be closely monitoringconsiders the peer and market compensation practices with a goal of targeting market median.Based on this goal and our prior benchmarking analyses, the Compensation Committee may make additional changes todid not increase the executive compensation program (or awards) in furtherance of its commitment to provide a compensation program that is competitive, performance-based, risk balanced and aligned with the goals of our shareholders and regulatory expectations. The Compensation Committee is committed to implementing a strategy in 2016 to provide target compensation opportunities that are aligned with the median of the Peer Group.
In evaluating ourfor any 2015 Peer Group, the Compensation Committee considered a number of factors, including that our asset size and market capitalization areNEOs in the top quartile of our Peer Group. Also considered was the independent compensation consultant’s advice that the most significant correlating factors for compensation levels of financial services institutions are asset size and market capitalization. Accordingly, for 2015 the Compensation Committee considered the compensation positioning relative to the members of the Peer Group most comparable to us in terms of asset size and market capitalization (which we refer to as the “Comparable Size Peers” as indicated in the table below) in addition to positioning relative to the overarching Peer Group. Our asset size approximates the median asset size of our Comparable Size Peers.
Comparable Size Peers appear in burgundy.
In considering the NEOs’ total compensation opportunities for 2015, the Compensation Committee’s objective was to target total compensation opportunities near the median of the Comparable Size Peers, which resulted in an overall compensation opportunity positioning above the median of the Peer Group. In making this determination, the Compensation Committee specifically considered that it was important to maintain the competitiveness of pay opportunities in light of the significant regulatory, competitive and economic challenges facing the financial services industry and the high demand for our talented, long-tenured and highly marketable Executive Management team. Also considered was that regulatory pressure has resulted in our executive compensation program shifting away from peer practice in several important aspects, possibly compromising the competitiveness of our compensation program.
2016.
In addition to the external Peer Grouppeer group analysis, the Compensation Committee also reviews detailed tally sheets for each executive and reviews the total compensation of the Executive Management team relative to one another. This practice is consistent with our compensation philosophy of rewarding our employeesassociates based upon their level of responsibility within the Company.
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Executive Risk Scorecard
We utilize an executive risk scorecard which the Compensation Committee may use to adjust, if necessary, the short-term and long-term incentive compensation of each member of Executive Management (which includes(including the NEOs). The executive risk scorecard:
allows for evaluation of both corporate and individual results that can be compared to stated risk appetites in all risk categories;
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presents the positive and negative risk outcomes that have influenced each risk category and includes recommended actions with respect to significant negative outcomes;
is used in conjunction with the recommendations of the Chief Risk Officer, the CEO and the Committee’s own insight and evaluation;
is included as part of our risk review process in which 100% of each Executive Manager’s short-term and long-term compensation for 20152016 is subject to potential adjustment;
was developed by our Senior Risk and Compliance Officers; and
is reviewed by the independent compensation consultant.
The Compensation Committee believes that the executive risk scorecard is an important element to ensure that incentive compensation at the Executive Management level is risk balanced. The use of this risk scorecard has been discussed with our regulators as an additional way to conform to incentive compensation guidance and best practices.
Section 4—5—Other Aspects of BB&T’s Executive Compensation Program and Governance Practices
In addition to the key components of our executive compensation program described in Section 2 above, other significant policies, plans and factors influence executive compensation, including the compensation of the NEOs. These items provide meaningful value to members of Executive Management, including the NEOs, while at the same time promoting the retention of these highly valued executives and aligning their interests with those of the shareholders.
Stock Ownership Guidelines for Executive Management
The Compensation Committee believes that members of Executive Management, including the NEOs, should accumulate meaningful equity stakes in BB&T over time to further align their economic interests with the interests of shareholders, thereby promoting our objective of increasing shareholder value.
The table below summarizes the stock ownership guidelines for our NEOs. Each of our NEOs currently exceeds these guidelines.
Name | Stock Ownership Guidelines | Approximate Stock Value to be held Under Stock Ownership Guidelines | ||
Kelly S. King | $ | |||
Christopher L. Henson | 3x Base Salary | $2,100,000 | ||
Ricky K. Brown | 3x Base Salary | $2,100,000 | ||
Clarke R. Starnes III | 3x Base Salary | $1,770,000 | ||
Daryl N. Bible | 3x Base Salary | $1,770,000 |
$1,530,000 | ||||
Donna C. Goodrich | 3x Base Salary | $1,530,000 |
Risk Management
The Compensation Committee annually considers whether our executive compensation program encourages unnecessary or excessive risk taking. In reviewing the program for risk, the goal of the Compensation Committee is to design a compensation program to encourage prudent risk management and discourage inappropriate risk-
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Risk Management
In establishing and reviewing the executive compensation program, the Compensation Committee annually considers whether the program encourages unnecessary or excessive risk taking. The goal of the Compensation Committee is to establish a compensation program designed to encourage prudent risk management and discourage inappropriate risk-takingtaking by granting a diverse portfolio of compensation to theour NEOs and other members of Executive Management that is expected to reward the creation of shareholder value over time. To help achieve this goal, the Compensation Committee considers the risk profile of the primary compensation elements. The Compensation Committee believes that because thehaving fixed base salaries of the NEOs and the other members of Executive Management are fixed in amount they do not encouragediscourages inappropriate risk-taking. In addition, by having a significant proportion of compensation provided to the NEOs and other members of Executive Management is in the form of equity awards that have performance and retention features that extend over a period of years. Theseveral years, the Compensation Committee believes that these awards do not encourage unnecessary or excessiveimprudent risk-taking because thetheir ultimate value of the awards is tied to our stock price. In addition,Also, because awards are subject to long-term vesting schedules they help ensure that the NEOs and other members of Executive Management have significant value tied to long-term stock price performance. Also,Additionally, LTIP awards are based on our performance over a three-year period, which encourages theencouraging our NEOs to focus on long-term performance in addition to annual results, further reducing risk-taking that is likely to produce only short-term benefits and allowing sufficient time for risk outcomes to emerge.
The Compensation Committee is responsible for exercising authority to modify payments and impose or release “holdbacks” from Executive Management’s incentive compensation arrangements, based on a risk review or regulatory requirements. When determining incentive compensation and consistent with regulatory guidance, the Compensation Committee evaluates our current risk environment and internal control positions relevant to incentive compensation, and reviews the reports, including executive risk scorecards, provided by our Chief Risk Officer. The Compensation Committee also receives reports from our General Auditor, the head of BB&T’s internal audit function, regarding the effectiveness of our overall system of internal controls. Please also refer to the below discussion of the Compensation Committee’s broad clawback ability and, in Section 3, the use of an executive risk scorecard to adjust compensation, if necessary, for negative risk outcomes.
In addition, and consistent with our compensation philosophy of rewarding the NEOs based on the long-term success of BB&T, our Codes of Ethics and Insider Trading Policy prohibit all associates, including the NEOs, from speculative trading in BB&T common stock (including prohibitions on buying call options and selling put options for our common stock) and place limitations on a NEO’s ability to conduct short-term trading, thus encouraging long-term ownership of common stock. Our Corporate Governance Guidelines contain a similar prohibition applicable to members of Executive Management and also prohibit members of Executive Management from entering into hedging strategies and limit pledging activity. See “Pledging/Hedging of Shares” below.
Compensation Clawbacks
and Forfeiture Provisions
Our Board believes that the current structure of BB&T’s incentive compensation recoupment practices is appropriate, effective, and provides a balanced approach to risk management, and properly aligns the interests of our Executive Management and shareholders.
Our 2012 Incentive Plan and award agreements contain broad language regarding clawbacks and makemakes all awards under the 2012 Incentive Plan subject to recoupment, forfeiture or reduction to the extent determined by the Compensation Committee. Any and all amounts payable under the 2012 Incentive Plan or paid under the 2012 Incentive Plan are subject to clawback, forfeiture, and reduction to the extent determined by the Compensation Committee as necessary to comply with applicable law and/or policies adopted by BB&T. When determining incentive compensation and consistent with regulatory guidance, the Compensation Committee evaluates our current risk environment and internal control positions relevant to incentive compensation, and reviews the executive risk scorecards and other reports, provided by our Chief Risk Officer and our Chief Compliance Officer. The Compensation Committee also receives reports from our General Auditor, the head of BB&T’s internal audit function, regarding the effectiveness of our overall system of internal controls.
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Responsible Equity Grant Practices
Generally, the timing of our regular annual equity awards is determined months in advance of the actual grants in order to coincide with the regular February meetings of the Board and the Compensation Committee. The grant date is established when the grants and all key terms are approved by the Board or the Compensation Committee, as the case may be. TheConsistent with prior years, the exercise price for each stock option grant in 20152016 was the market closing price on the date of grant. For the 20152016 Incentive Stock Awards, the Compensation Committee also used the closing price of our common stock on the grant date to determine the number of restricted stock unit awards. In addition, the 2012 Incentive Plan includes prohibitions on the direct and indirect repricing of stock options without shareholder approval. We are required to recognize the expense of all share-based awards (such as stock options and restricted stock units) in our income statement over the award’s minimum required service period.
Pledging/Hedging of Shares
Consistent with our compensation philosophy of rewarding the NEOs based on the long-term success of BB&T, our Codes of Ethics and Insider Trading Policy prohibit all associates, including the NEOs, from speculative trading in BB&T common stock (including prohibitions on buying call options and selling put options for our common stock) and place limitations on a NEO’s ability to conduct short-term trading, thus encouraging long-term ownership of common stock. Our Corporate Governance Guidelines contain a similar prohibition applicable to members of Executive Management and also prohibit members of Executive Management, including
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the NEOs, from entering into hedging strategies that protect against downside risk in our common stock. Furthermore, our Corporate Governance Guidelines limit pledging activity so that future share pledges by directors and members of Executive Management are limited to those shares in excess of each individual’s share ownership requirements.
Employment AgreementsTax Considerations
In establishing total compensation for the executive officers, the Compensation Committee considers the effect of Section 162(m) of the Internal Revenue Code. Section 162(m) generally disallows a federal income tax deduction for compensation over $1 million paid for any fiscal year to the Chief Executive Officer and the three other highest paid executive officers other than the Chief Financial Officer (referred to as “covered employees”) unless the compensation qualifies as performance-based.
Our compensation philosophy and policies are generally intended to comply with Section 162(m) to the extent the Compensation Committee determines appropriate. In typical years, when establishing and administering our compensation programs, the Committee generally intends that performance-based compensation will be deductible under Section 162(m). However, our Compensation Committee retains the flexibility to pay compensation that is not deductible under Section 162(m) if the Committee determines it is in our best interest to do so. For 2016, our Annual Incentive Award and LTIP award programs are intended to be eligible for the performance-based exemption available under Section 162(m) and therefore be deductible for federal income tax purposes. The rules and regulations promulgated under Section 162(m) are complicated, however, and may change from time to time, sometimes with retroactive effect. As such, there can be no guarantee that all amounts intended to comply with the requirements of Section 162(m) will so qualify.
As referenced in Section 3 above, the Compensation Committee employed a performance-based compensation structure for the Annual Incentive Award that we refer to as a “162(m) Pool,” and retained the ability to exercise negative discretion to reduce Annual Incentive Award payments to the covered employees. Under the 162(m) Pool structure, with the exception of Ms. Duck, the Annual Incentive Awards for the covered employees were paid from a 162(m) Pool equal to 1.5% of BB&T’s 2016 income before taxes(pre-tax income), pursuant to a percentage of the pool assigned, within the first 90 days of 2016, to each covered employee (45.6% for Mr. King, 19.8% for Mr. Henson, 14.8% for Mr. Starnes). Under the 2012 Incentive Plan, each covered employee’s Annual Incentive Award payment was also subject to a $7.5 million cap on the size of each individual payment.
Under the 162(m) Pool, the Compensation Committee can exercise negative discretion (but not upward discretion) in determining the actual Annual Incentive Award payment amounts to the covered employees. Through its exercise of negative discretion, for 2016, the Compensation Committee approved Annual Incentive Award payment amounts to covered employees that were below each covered employee’s assigned percentage of the 162(m) Pool. Because the 2016 Annual Incentive Award awards to the covered employees were subject only to the negative discretion of the Compensation Committee to reduce potential awards payments, such awards are expected to qualify as “performance-based compensation” for Section 162(m) purposes and therefore should not be subject to the $1 million compensation deduction cap.
Conclusion
BB&T and the Compensation Committee review all elements of our compensation program for the NEOs, including a tally sheet for each NEO delineating each element of the NEO’s compensation. In designing the various elements of the total compensation program, we have taken great care to select elements that are performance-based and to use a variety of performance metrics that, on the whole, will encourage the
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achievement of short-term and long-term shareholder value while enabling us to retain our talented executives. We usebelieve the total compensation for each NEO is reasonable, and we continue to improve upon our program so that its components and features are consistent with market standards and comparable programs of the peer group. The compensation program for the NEOs is based on our financial performance and links executive performance to our annual financial and operational results and the long-term financial interests of the shareholders. We further believe that our compensation philosophy is consistent with our corporate culture and objectives and has served, and will continue to serve, as a reasonable basis for administering our total compensation program, both for the NEOs and for all of our associates, for the foreseeable future.
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Compensation Committee Report on Executive Compensation
The Compensation Committee is composed entirely ofnon-employee directors, each of whom has been determined in the Board’s business judgment to be independent based on the categorical standards for independence adopted by the Board, which include the applicable NYSE independence standards. The Compensation Committee is responsible for oversight and review of our compensation and benefit plans, including administering our executive incentive plan, fixing the compensation for the Chief Executive Officer and reviewing and approving the compensation for the other members of Executive Management.
The Compensation Discussion and Analysis section of this proxy statement is management’s report on BB&T’s compensation program and, among other things, explains the material elements of the compensation paid to the Chief Executive Officer and the other NEOs. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based on this review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form10-K for the year ended December 31, 2016.
Submitted by the Compensation Committee of the Board of Directors, whose current members are:
Thomas N. Thompson, Chair | Eric C. Kendrick | |||||
Anna R. Cablik | Louis B. Lynn, Ph.D. |
Compensation Committee Interlocks and Insider Participation
The directors who constituted the Compensation Committee during some or all of 2016 were Anna R. Cablik, Eric C. Kendrick, Louis B. Lynn, Ph.D., Thomas N. Thompson and Edwin H. Welch, Ph.D. None of the individuals who served as a member of the Compensation Committee during 2016 was at any time an officer or an employee of BB&T or any of its subsidiaries or, except as set forth under “Transactions With Executive Officers and Directors—Related Person Transactions,” had any relationship with us requiring disclosure under SEC regulations.
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COMPENSATIONOF EXECUTIVE OFFICERS
2016 SUMMARY COMPENSATION TABLE
Name and Principal Position (a)
| Year | Salary ($) | Stock (1) ($) | Option (1) ($) | Non-Equity Plan (2) ($) | Change in (3) ($) | All Other (4) | Total ($) | ||||||||||||||||
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | |||||||||||||||||
Kelly S. King | 2016 | 1,075,000 | 2,122,925 | 601,998 | 4,340,969 | 3,189,647 | 279,544 | 11,610,083 | ||||||||||||||||
Chairman and Chief | 2015 | 1,056,250 | 2,583,019 | 591,499 | 4,096,763 | 3,070,931 | 298,430 | 11,696,892 | ||||||||||||||||
Executive Officer | 2014 | 1,000,000 | 2,050,870 | 559,998 | 3,400,276 | 6,803,966 | 303,653 | 14,118,763 | ||||||||||||||||
Christopher L. Henson | 2016 | 700,000 | 863,971 | 244,998 | 1,835,021 | 1,975,680 | 150,858 | 5,770,528 | ||||||||||||||||
President and Chief | 2015 | 691,250 | 1,069,201 | 241,938 | 1,741,055 | 1,173,107 | 136,024 | 5,052,575 | ||||||||||||||||
Operating Officer | 2014 | 665,000 | 852,383 | 232,747 | 1,350,812 | 2,863,816 | 142,711 | 6,107,469 | ||||||||||||||||
Ricky K. Brown | 2016 | 666,583 | 863,971 | 244,998 | 1,774,398 | 2,127,763 | 130,958 | 5,808,671 | ||||||||||||||||
Senior Executive Vice | 2015 | 691,250 | 1,069,201 | 241,938 | 1,741,055 | 1,574,421 | 136,024 | 5,453,889 | ||||||||||||||||
President and President, Community Banking (Retired)(5) | 2014 | 665,000 | 852,383 | 232,747 | 1,350,812 | 3,561,848 | 142,711 | 6,805,501 | ||||||||||||||||
Clarke R. Starnes III | 2016 | 590,000 | 657,466 | 186,437 | 1,379,076 | 1,704,775 | 103,852 | 4,621,606 | ||||||||||||||||
Senior Executive Vice | 2015 | 582,500 | 810,227 | 184,069 | 1,308,360 | 1,139,457 | 109,304 | 4,133,917 | ||||||||||||||||
President and Chief Risk Officer | 2014 | 560,000 | 648,063 | 176,959 | 1,071,738 | 2,794,286 | 114,974 | 5,366,020 | ||||||||||||||||
Daryl N. Bible | 2016 | 590,000 | 657,466 | 186,437 | 1,379,076 | 583,745 | 103,852 | 3,500,576 | ||||||||||||||||
Senior Executive Vice | 2015 | 582,500 | 810,227 | 184,069 | 1,308,360 | 408,120 | 109,304 | 3,402,580 | ||||||||||||||||
President and Chief Financial Officer | 2014 | 560,000 | 648,063 | 176,959 | 1,071,738 | 647,239 | 114,974 | 3,218,973 | ||||||||||||||||
Barbara F. Duck | 2016 | 507,083 | 518,569 | 147,052 | 1,012,059 | 850,478 | 76,598 | 3,111,839 | ||||||||||||||||
Senior Executive Vice President and Chief Information Officer | ||||||||||||||||||||||||
Donna C. Goodrich | 2016 | 507,083 | 518,569 | 147,052 | 1,012,059 | 1,052,288 | 76,598 | 3,313,649 | ||||||||||||||||
Senior Executive Vice President and Deposit, Payment and Operations | ||||||||||||||||||||||||
Services Manager |
(1) | The amounts in column (d) and (e) reflect the grant date fair value of the restricted stock unit ($28.30 per RSU in 2016) and stock option ($3.87 per option in 2016) awards, respectively, received in each year. The assumptions used in the calculation of these amounts for awards granted in 2016, 2015, and 2014 are included in Note 10 “Shareholders’ Equity” in the “Notes to Consolidated Financial Statements” included within BB&T’s Annual Report on Form10-K for the fiscal year ended December 31, 2016. As discussed in the Compensation Discussion and Analysis, the outstanding restricted stock units and stock options remain subject to vesting criteria and accordingly, the NEO may never receive any value from such award. |
BB&T Corporation | 2017 Proxy Statement 65
Compensation of Executive Officers |
(2) | Column (f) contains Annual Incentive Award and LTIP payments, as indicated in the following table. Payments under each award occur when specific performance measures are achieved, as described in the “Compensation Discussion and Analysis” section above, rather than upon the date of grant. |
2016 Information
Name | 2016 Annual ($) | 2014-2016 ($) | ||||||
Kelly S. King | 2,253,469 | 2,087,500 | ||||||
Christopher L. Henson | 978,250 | 856,771 | ||||||
Ricky K. Brown | 931,550 | 842,848 | ||||||
Clarke R. Starnes III | 729,388 | 649,688 | ||||||
Daryl N. Bible | 729,388 | 649,688 | ||||||
Barbara F. Duck | 545,115 | 466,944 | ||||||
Donna C. Goodrich | 545,115 | 466,944 |
(3) | The amounts listed in column (g) are attributable to changes in the present value of the benefits under the BB&T Corporation Pension Plan and the BB&T CorporationNon-Qualified Defined Benefit Plan, as applicable, for each of the NEOs. The benefits the NEOs, including Mr. King, receive are calculated in the same manner as all plan participants. Mr. King’s increase in 2014 relative to the other listed years is primarily driven by his years of service, age, compensation and accounting changes regarding mortality tables and discount rates. Due to Mr. King’s long tenure, he receives the maximum credit for years of service under the plans. Additionally, Mr. King would receive his retirement benefits immediately upon retirement. Consistent with all plan participants, the calculations for these benefits generally reference the highest levels of compensation over a five-year consecutive period in theten-year period before retirement. |
(4) | The detail relating to “All Other Compensation” for 2016 found in column (h) to the Summary Compensation Table is as follows: |
Name | 401(k) Matching Contribution($) | NQDC Matching Contribution($) | Perquisites ($)* | |||
Kelly S. King | 15,900 | 263,644 | — | |||
Christopher L. Henson | 15,900 | 117,063 | 17,895 | |||
Ricky K. Brown | 15,900 | 115,058 | — | |||
Clarke R. Starnes III | 15,900 | 87,952 | — | |||
Daryl N. Bible | 15,900 | 87,952 | — | |||
Barbara F. Duck | 15,900 | 60,698 | — | |||
Donna C. Goodrich | 15,900 | 60,698 | — |
* | Pursuant to SEC rules, we have not reported perquisites to those NEOs where the value of the perquisites, in aggregate, is less than $10,000. Mr. Henson’s perquisites for 2016 consist of (a) the installation and maintenance of a residential security system and (b) spousal participation in limited corporate events, including travel. |
(5) | Retired, effective December 15, 2016. |
NARRATIVETO 2016 SUMMARY COMPENSATION TABLE
As indicated in the 2016 Summary Compensation Table, salary as a percentage of total annual compensation for each of the NEOs in 2016 was as follows: Mr. King—9.3%; Mr. Henson—12.1%; Mr. Brown—11.5%; Mr. Starnes—12.8%; Mr. Bible—16.9%; Mrs. Duck—16.3%; and Mrs. Goodrich—15.3%.
Employment Agreements. We have entered into employment agreements with each member of Executive Management, including each NEO, to secure the services of key talent within the highly competitive financial services industry. Generally, the employment agreements are entered into with high-performing and long-term potential senior employees and are structured to carefully balance the individual financial goals of the executives relative to the needs of BB&T and its shareholders. AllThe employment agreements
66 BB&T Corporation | 2017 Proxy Statement
Compensation of Executive Officers |
provide that the NEOs have entered intoare guaranteed minimum annual salaries equal to their current annual base salaries and continued participation in incentive compensation plans that BB&T or Branch Bank may from time to time extend to its similarly situated officers. During the term of the employment agreements, witheach NEO is entitled to participate in and receive, on the same basis as other similarly situated officers of BB&T. Each employment agreement with the NEOs includes provisions: (a) generally prohibiting the executive&T and Branch Bank, pension and welfare benefits and other benefits such as sick leave, vacation, group disability and health, life and accident insurance and similarnon-cash compensation that BB&T or Branch Bank may from competing against us (or working for a competitor) if the executive leaves BB&T; (b) providing for payments if the executive is terminated by us for other than “Just Cause” or if the executive voluntarily terminates his employment with us for “Good Reason;” and (c) generally providing for payments under various termination scenarios following a “Change of Control.” These arrangements set compensation and benefits payabletime to the NEOs in certain termination and merger and acquisition scenarios, giving them some certainty regarding their individual outcomes under these circumstances. Specifically, we believe the “Change of Control” provisions appropriately minimize the distraction of the NEOs in the event of a significant merger and acquisition scenario, allowing themtime extend to remain objective and focused on maximizing shareholder value.
its officers.
The employment agreements for the NEOs provide that, under certain circumstances upon leaving the employment of BB&T and Branch Bank, the executive may not compete in the banking business, directly or indirectly, against the Corporation, Branch Bank and their affiliates. This prohibition generally precludes the NEO from working for a direct competitor with a banking presence within the continental United States. Additionally, the employment agreements for the NEOs prohibit the executive from soliciting or assisting in the solicitation of any of our depositors, customers, or affiliates, or inducing any of our associates to terminate their employment with BB&T or its affiliates. These noncompetition and nonsolicitation provisions generally will be effective until theone-year anniversary of the NEO’s termination. These noncompetition provisions generally are not effective if the NEO terminates employment after a “Change of Control.”
64 BB&T Corporation | 2016 Proxy Statement
The employment agreements have terms of 36 months that automatically extend monthly by an additional month, absent contrary notice by either party. The term of any employment agreement ends when such NEO reaches age 65, with the exception of Mr. King, whose employment agreement does not contain that provision. Information provided by the independent compensation consultant showed that providing a three-year contract term is a common practice within the financial services industry. The Compensation Committee believes that a three-year term provides appropriate incentives for retention, protections against unjustified terminations, and is in line with other financial services companies. The employment agreements provide for reductions in payments to the extent necessary to avoid exceeding the limits established by Section 280G of the Code. Payments in excess of these limits are often referred to as “excess parachute payments,” and exceeding the Section 280G limits generally triggers an excise tax on the payments.
The Compensation Committee approves Executive Management’s employment agreements and then reviews the agreements on an as-needed basis, based on market trends or on changes in our business environment. The employment agreements for each of the NEOs are described in greater detail under the section “Compensation of Executive Officers – Narrative to 2015 Summary Compensation Table” and the section “Compensation of Executive Officers – Potential Payments Upon Termination or Change of Control.”
Tax Considerations
SECTION 162(M)
In establishing total compensation for the executive officers, the Compensation Committee considers the effect of Section 162(m) of the Internal Revenue Code. Section 162(m) generally disallows a tax deduction for compensation over $1 million paid for any fiscal year to the Chief Executive Officer and the three other highest paid executive officers other than the Chief Financial Officer (“Covered Employees”) unless the compensation qualifies as performance-based.
Our compensation philosophy and policies are generally intended to comply with Section 162(m) to the extent the Compensation Committee determines appropriate. In typical years, when establishing and administering our compensation programs, the Compensation Committee generally intends that performance-based compensation will be deductible under Section 162(m). However, the Compensation Committee retains the flexibility to pay compensation that is not deductible under Section 162(m) if the Compensation Committee determines it is in the best interest of the Corporation to do so. For example, vesting of the 2015 RSUs generally accelerates upon retirement for retirement-eligible grantees who are Covered Employees, including the NEOs, and therefore the awards will not be deductible under Section 162(m).
ANNUAL INCENTIVE AWARD 162(M) POOLAND 2015-2017 LTIP AWARDS
As discussed in Section 2 – Components of Executive Compensation, the Compensation Committee employed a performance-based compensation structure for the Annual Incentive Award that is sometimes referred to as a “162(m) Pool,” and retained the ability to exercise negative discretion to reduce Annual Incentive Award payments to the Covered Employees.
Under the 162(m) Pool structure, the Annual Incentive Awards for the Covered Employees were paid from a 162(m) Pool equal to 1.5% of BB&T’s 2015 income before taxes (pre-tax income), pursuant to a percentage of the pool assigned, within the first 90 days of 2015, to each Covered Employee (45.4% for Mr. King, 19.9% for Mr. Henson, 19.9% for Mr. Brown, and 14.8% for Mr. Starnes). Under the 2012 Incentive Plan, each Covered Employee’s Annual Incentive Award payment was also subject to a $7.5 million cap on the size of each individual payment. Under the 162(m) Pool, the Compensation Committee can exercise negative discretion (but not upward discretion) in determining the actual Annual Incentive Award payment amounts to the Covered Employees. For
BB&T Corporation | 2016 Proxy Statement 65
2015, the Compensation Committee approved in February 2016, through its exercise of negative discretion, actual Annual Incentive Award payment amounts to Covered Employees that were below each Covered Employee’s assigned percentage of the 162(m) Pool. Because the 2015 Annual Incentive Award awards to the Covered Employees were subject only to the negative discretion of the Compensation Committee to reduce potential awards payments, such awards are expected to qualify as “performance-based compensation” for Section 162(m) purposes and therefore should not be subject to the $1 million compensation deduction cap.
The 2015-2017 LTIP cycle awards similarly are expected to qualify as “performance-based compensation” for Section 162(m) purposes because they are subject only to the negative discretion of the Compensation Committee to reduce potential payments. The Compensation Committee expects that the amounts paid, if any, to the Covered Employees in 2018 for the 2015-2017 LTIP awards will not be subject to the Section 162(m) $1 million compensation deduction limit. The rules and regulations promulgated under Section 162(m) are complicated, however, and may change from time to time, sometimes with retroactive effect. As such, there can be no guarantee that all amounts intended to comply with the requirements of Section 162(m) will so qualify.
Conclusion
BB&T and the Compensation Committee review all elements of our compensation program for the NEOs, including a tally sheet for each NEO delineating each element of the NEO’s compensation. In designing the various elements of the total compensation program, we have taken great care to select elements that are performance-based and to use a variety of performance metrics that, on the whole, will encourage the achievement of short-term and long-term shareholder value while enabling us to retain our talented executives. We believe the total compensation for each NEO is reasonable and the components of our compensation program for the NEOs are consistent with market standards and with comparable programs of the Peer Group. The compensation program for the NEOs is based on our financial performance and links executive performance to our annual financial and operational results and the long-term financial interests of the shareholders. We further believe that the foregoing compensation philosophy is consistent with our corporate culture and objectives and has served, and will continue to serve, as a reasonable basis for administering our total compensation program, both for the NEOs and for all of our associates, for the foreseeable future.
66 BB&T Corporation | 2016 Proxy Statement
Compensation Committee Report on Executive Compensation
The Compensation Committee is composed entirely of non-employee directors, each of whom has been determined in the Board’s business judgment to be independent based on the categorical standards for independence adopted by the Board, which include the applicable NYSE standards. The Compensation Committee is responsible for oversight and review of our compensation and benefit plans, including administering our executive incentive plan, fixing the compensation for the Chief Executive Officer and reviewing and approving the compensation for the other members of Executive Management.
The Compensation Discussion and Analysis section of this proxy statement is management’s report on the Corporation’s compensation program and, among other things, explains the material elements of the compensation paid to the Chief Executive Officer and the other NEOs. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based on this review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
Submitted by the Compensation Committee of the Board of Directors, whose current members are:
Compensation Committee Interlocks and Insider Participation
The directors who constituted the Compensation Committee during some or all of 2015 were Anna R. Cablik, John P. Howe III, M.D., Eric C. Kendrick, Louis B. Lynn, Ph.D., Tollie W. Rich, Jr. and Edwin H. Welch, Ph.D. None of the individuals who served as a member of the Compensation Committee during 2015 was at any time an officer or an employee of BB&T or any of its subsidiaries or had any relationship with us requiring disclosure under SEC regulations.
BB&T Corporation | 2016 Proxy Statement 67
COMPENSATIONOF EXECUTIVE OFFICERS
2015 SUMMARY COMPENSATION TABLE
Name and Principal Position (1) (a) | Year | Salary ($) | Stock (2)(3) | Option (2)(4) | Non-Equity Plan (5) | Change in (6) ($) | All Other (7) | Total ($) | ||||||||||||||||
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | |||||||||||||||||
Kelly S. King | 2015 | 1,056,250 | 2,583,019 | 591,499 | 4,096,763 | 3,070,931 | 298,430 | 11,696,892 | ||||||||||||||||
Chairman and Chief | 2014 | 1,000,000 | 2,050,870 | 559,998 | 3,400,276 | 6,803,966 | 303,653 | 14,118,763 | ||||||||||||||||
Executive Officer | 2013 | 996,250 | 1,984,529 | 557,897 | 4,058,587 | 4,040,976 | 355,386 | 11,993,625 | ||||||||||||||||
Christopher L. Henson | 2015 | 691,250 | 1,069,201 | 241,938 | 1,741,055 | 1,173,107 | 136,024 | 5,052,575 | ||||||||||||||||
Chief Operating Officer | 2014 | 665,000 | 852,383 | 232,747 | 1,350,812 | 2,863,816 | 142,711 | 6,107,469 | ||||||||||||||||
2013 | 661,250 | 823,258 | 231,437 | 1,713,520 | 593,804 | 160,939 | 4,184,208 | |||||||||||||||||
Ricky K. Brown | 2015 | 691,250 | 1,069,201 | 241,938 | 1,741,055 | 1,574,421 | 136,024 | 5,453,889 | ||||||||||||||||
Senior Executive Vice | 2014 | 665,000 | 852,383 | 232,747 | 1,350,812 | 3,561,848 | 142,711 | 6,805,501 | ||||||||||||||||
President and President, Community Banking | 2013 | 661,250 | 823,258 | 231,437 | 1,713,520 | 951,910 | 158,914 | 4,540,289 | ||||||||||||||||
Clarke R. Starnes III | 2015 | 582,500 | 810,227 | 184,069 | 1,308,360 | 1,139,457 | 109,304 | 4,133,917 | ||||||||||||||||
Senior Executive Vice | 2014 | 560,000 | 648,063 | 176,959 | 1,071,738 | 2,794,286 | 114,974 | 5,366,020 | ||||||||||||||||
President and Chief Risk Officer | 2013 | 557,500 | 626,646 | 176,166 | 1,356,240 | 867,220 | 129,045 | 3,712,817 | ||||||||||||||||
Daryl N. Bible | 2015 | 582,500 | 810,227 | 184,069 | 1,308,360 | 408,120 | 109,304 | 3,402,580 | ||||||||||||||||
Senior Executive Vice | 2014 | 560,000 | 648,063 | 176,959 | 1,071,738 | 647,239 | 114,974 | 3,218,973 | ||||||||||||||||
President and Chief Financial Officer | 2013 | 557,500 | 626,646 | 176,166 | 1,356,240 | 220,843 | 145,229 | 3,082,624 |
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2015 Information ($) | 2014 Information ($) | 2013 Information ($) | ||||||||||||||
Name | 2015 Annual Incentive Award | 2013-2015 LTIP | Merger Incentive | 2014 Annual Incentive Award | 2012-2014 LTIP | 2013 Annual Incentive Award | 2011-2013 LTIP | |||||||||
Kelly S. King | 1,572,160 | 2,009,603 | 515,000 | 1,614,638 | 1,785,638 | 2,002,861 | 2,055,726 | |||||||||
Christopher L. Henson | 685,921 | 830,134 | 225,000 | 613,562 | 737,250 | 759,644 | 953,876 | |||||||||
Ricky K. Brown | 685,921 | 830,134 | 225,000 | 613,562 | 737,250 | 759,644 | 953,876 | |||||||||
Clarke R. Starnes III | 511,316 | 629,544 | 167,500 | 516,684 | 555,054 | 640,456 | 715,784 | |||||||||
Daryl N. Bible | 511,316 | 629,544 | 167,500 | 516,684 | 555,054 | 640,456 | 715,784 |
BB&T Corporation | 2016 Proxy Statement 69
NARRATIVE TO 2015 SUMMARY COMPENSATION TABLE
The following narrative focuses on NEO compensation for 2015. For a discussion that focuses on compensation for 2014 and 2013, please refer to the proxy statements for the annual meeting of shareholders that occurred on April 28, 2015 and April 29, 2014, respectively. Copies of prior years’ proxy statements are available for review on the SEC’s website at www.sec.gov.
All Other Compensation. The detail relating to the “All Other Compensation” for 2015 found in column (h) to the 2015 Summary Compensation Table is as follows:
COMPONENTSOF ALL OTHER COMPENSATION
Name | 401(k) Match(1)($) | NQDC Match(2)($) | ||
Kelly S. King | 15,900 | 282,529 | ||
Christopher L. Henson | 15,900 | 120,124 | ||
Ricky K. Brown | 15,900 | 120,124 | ||
Clarke R. Starnes III | 15,900 | 93,404 | ||
Daryl N. Bible | 15,900 | 93,404 |
Compensation Program. As indicated in the 2015 Summary Compensation Table, salary as a percentage of total annual compensation (set forth in column (i) of the 2015 Summary Compensation Table) for each of the NEOs in 2015 were as follows: Mr. King—9.0%; Mr. Henson—13.7%; Mr. Brown—12.7%; Mr. Starnes—14.1%; and Mr. Bible—17.1%.
Perquisites.Pursuant to SEC rules, we have not reported perquisites to NEOs because the value of the perquisites, in aggregate, is less than $10,000.
Change in Pension Value and Non-Qualified Deferred Earnings. For information regarding the formula for calculation of the pension values, see the discussion included in the “Narrative to 2015 Pension Benefits Table” below. Eligible associates are permitted to defer a percentage (up to 50% in 2015) of their cash compensation under the Non-Qualified Defined Contribution Plan. All cash compensation is eligible for deferral unless otherwise limited by Code Section 409A. Plan participants may select from deemed investment funds under the Non-Qualified Defined Contribution Plan that are identical to the investment funds offered in the BB&T Corporation 401(k) Savings Plan (the “401(k) Plan”) with the exception that no deemed investments in BB&T common stock are permitted. Participants make an election upon entering the plan regarding the timing of plan distributions. The two allowable distribution elections are distribution upon termination or distribution upon reaching age 65. The Non-Qualified Defined Contribution Plan also allows for an in-service hardship withdrawal based on facts and circumstances that meet Internal Revenue Service guidelines.
401(k) Plan. The BB&T 401(k) Plan is maintained to provide a means for most associates of BB&T and its subsidiaries to defer and save a percentage (up to 50% in 2015, subject to IRS limitations) of their annual cash compensation on a pre-tax basis for retirement. The 401(k) Plan provides for BB&T to match 100% of a participant’s deferrals up to 6% of his or her compensation. Our contributions to each of the NEOs during 2015 under the 401(k) Plan are included under the “All Other Compensation” column in the 2015 Summary Compensation Table above.
Employment Agreements. We and our wholly owned subsidiary, Branch Bank, have entered into employment agreements with each member of Executive Management, including each NEO. The employment agreements generally provide a 36 month term that is automatically extended monthly for an additional month, absent contrary
70 BB&T Corporation | 2016 Proxy Statement
notice by either party. The employment agreements provide that the NEOs are guaranteed minimum annual salaries equal to their current annual base salaries and continued participation in incentive compensation plans that BB&T or Branch Bank may from time to time extend to its similarly situated officers. During the term of the employment agreements, each NEO is entitled to participate in and receive, on the same basis as other similarly situated officers of BB&T and Branch Bank, pension and welfare benefits and other benefits such as sick leave, vacation, group disability and health, life and accident insurance and similar non-cash compensation that BB&T or Branch Bank may from time to time extend to its officers.
For a discussion of the potential payments that would be provided to each of the NEOs under their respective employment agreements in the event of such NEO’s termination, including in connection with a Change of Control, please refer to the “Potential Payments Upon Termination or Change of Control” section below. For a further discussion of the employment agreements of our NEOs, please see “Employment Agreements” within Section 4 of the Compensation Discussion and Analysis.
BB&T Corporation | 20162017 Proxy Statement 7167
Compensation of Executive Officers |
20152016 GRANTSOFOf PLAN-BASED AWARDS
Estimated Future Payouts Under Non-Equity Incentive Plan | Estimated Future Payouts Under Equity Incentive Plan Awards(6) | Exercise or Base Price of Option Awards ($/Sh)(7) | Grant Date Fair Value of Stock and Option Awards ($)(8) | Estimated Future Payouts Under Non-Equity Incentive Plan | Estimated Future Payouts Under Equity Incentive Plan Awards(5) | Exercise or Base Price of Option Awards ($/Sh)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (k) | (l) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (k) | (l) | ||||||||||||||||||||||||||||||||||||||||||||
Kelly S. King | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/24/2015 | 120,714 | 38.22 | 591,499 | 2/23/2016 | 155,555 | $32.10 | 601,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/24/2015 | 61,904 | 2,127,021 | 2/23/2016 | 75,015 | 2,122,925 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/24/2015 | 308,953 | 2,059,688 | 2,574,610 | 2/23/2016 | 314,438 | 2,096,250 | 2,620,313 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015-2017 LTIP(1) | 2/24/2015 | 884,011 | 1,768,021 | 2,210,026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger Incentive(2) | 12/31/2015 | 515,000 | 13,620 | 455,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 711,208 | 1,778,021 | 2,222,526 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher L. Henson | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/24/2015 | 49,375 | 38.22 | 241,938 | 2/23/2016 | 63,307 | $32.10 | 244,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/24/2015 | 25,320 | 869,995 | 2/23/2016 | 30,529 | 863,971 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/24/2015 | 134,794 | 898,625 | 1,123,281 | 2/23/2016 | 136,500 | 910,000 | 1,137,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015-2017 LTIP(1) | 2/24/2015 | 360,349 | 720,697 | 900,871 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger Incentive(2) | 12/31/2015 | 225,000 | 5,950 | 199,206 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 289,445 | 723,613 | $904,516 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ricky K. Brown | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/24/2015 | 49,375 | 38.22 | 241,938 | 2/23/2016 | 63,307 | $32.10 | 244,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/24/2015 | 25,320 | 869,995 | 2/23/2016 | 30,529 | 863,971 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/24/2015 | 134,794 | 898,625 | 1,123,281 | 2/23/2016 | 136,500 | 910,000 | 1,137,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015-2017 LTIP(1) | 2/24/2015 | 360,349 | 720,697 | 900,871 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger Incentive(2) | 12/31/2015 | 225,000 | 5,950 | 199,206 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 289,445 | 723,613 | 904,516 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Clarke R. Starnes III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/24/2015 | 37,565 | 38.22 | 184,069 | 2/23/2016 | 48,175 | $32.10 | 186,437 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/24/2015 | 19,264 | 661,911 | 2/23/2016 | 23,232 | 657,466 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/24/2015 | 100,481 | 669,875 | 837,344 | 2/23/2016 | 101,775 | 678,500 | 848,125 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015-2017 LTIP(1) | 2/24/2015 | 273,332 | 546,663 | 683,329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger Incentive(2) | 12/31/2015 | 167,500 | 4,430 | 148,316 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 219,565 | 548,913 | 686,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daryl N. Bible | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/24/2015 | 37,565 | 38.22 | 184,069 | 2/23/2016 | 48,175 | $32.10 | 186,437 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/24/2015 | 19,264 | 661,911 | 2/23/2016 | 23,232 | 657,466 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/24/2015 | 100,481 | 669,875 | 837,344 | 2/23/2016 | 101,775 | 678,500 | 848,125 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015-2017 LTIP(1) | 2/24/2015 | 273,332 | 546,663 | 683,329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger Incentive(2) | 12/31/2015 | 167,500 | 4,430 | 148,316 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 219,565 | 548,913 | 686,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Barbara F. Duck | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/23/2016 | 37,998 | $32.10 | 147,052 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/23/2016 | 18,324 | 518,569 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/23/2016 | 76,063 | 507,083 | 633,854 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 178,919 | 447,297 | 559,121 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Donna C. Goodrich | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 2/23/2016 | 37,998 | $32.10 | 147,052 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/23/2016 | 18,324 | 518,569 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Award | 2/23/2016 | 76,063 | 507,083 | 633,854 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016-2018 LTIP(1) | 2/23/2016 | 178,919 | 447,297 | 559,121 |
(1) | LTIP awards are a component of the 2012 Incentive Plan. LTIP awards may be paid in the form of cash or stock at the discretion of the Compensation Committee. However, since 1996 awards have been paid only in cash. For that reason, LTIP awards are disclosed under the “Estimated Future Payouts UnderNon-Equity Incentive Plan Awards” columns of this table. When the threshold, target and maximum payments were established in |
(2) |
The amounts shown in column (c) reflect the minimum payment level possible under the applicable award. For the Annual Incentive Award, the minimum payment is 15% of the target amount, which is presented in column (d). For the LTIP, the minimum payment is |
The amounts shown in column (d) reflect the target payment level under the applicable award. Please see the Compensation Discussion and Analysis for additional detail on the structure of the LTIP and Annual Incentive Award. |
The amounts shown in column (e) reflect the maximum payment level possible under the applicable award. For the Annual Incentive Award and the LTIP, the maximum payment is 125% of the target amount, which is presented in column (d). Please see the Compensation Discussion and Analysis for additional detail on the structure of the LTIP and Annual Incentive Award. |
If the performance criteria applicable to |
In accordance with the 2012 Incentive Plan, the option exercise price is the closing price of BB&T Common Stock on the date of grant. |
This column reflects the grant date fair value, computed in accordance with SEC rules, of stock options and restricted stock units granted in |
NARRATIVE TO 2015 GRANTS OF PLAN-BASED AWARDS TABLE
For a discussion of the awards presented in the 2015 Grants of Plan-Based Awards table and the material terms of the awards, please refer to “Section 2—2015 Executive Compensation Program and Pay Decisions.”
7268 BB&T Corporation | 20162017 Proxy Statement
Compensation of Executive Officers |
20152016 OUTSTANDING EQUITY AWARDSAT FISCAL YEAR-END