UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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| o | Soliciting Material under |
SYNOVUS FINANCIAL CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
SYNOVUS FINANCIAL CORP. |
(Name of Registrant as Specified In Its Charter) |
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NoticeDear Fellow Shareholder:
On behalf of your Board of Directors, we are pleased to cordially invite you to attend the 20182019 Annual Meeting of Shareholders of Synovus Financial Corp. at 10:00 a.m. on Wednesday, April 24, 2019 at Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia. Shareholders of record as of February 21, 2019 are invited to attend.
Thursday,As the bank of here, we create value by leading and strengthening communities and serving the needs of our customers through relationships. We especially value our relationships with shareholders, and we are proud of our success in 2018. We delivered strong revenue, net income, and earnings per share growth, and increased our profitability and efficiency targets. We grew loans and deposits while diversifying our balance sheet and strengthening liquidity and credit quality. We completed the system-wide transition to a single brand, and announced and finalized the largest acquisition in our history. And we made significant progress in a range of areas — from talent acquisition to customer experience — that will make us even stronger in the future.
We continued to demonstrate that Here Matters everywhere we operate. Synovus team members volunteered nearly 30 thousand hours through more than 4,300 Here Matters opportunities in 2018. Team members and the company contributed more than $915,000 for the United Way, and team members provided $127,000 in scholarships to 126 students through the Jack Parker Scholarship Fund. The company’s philanthropic giving was approximately $2 million to more than 500 non-profits and agencies across our footprint.
The recognition we received in 2018 reflected our strong performance. We won 22 awards in the 2018 Greenwich Excellence Awards for Small Business Banking and Middle Market Banking and four awards in the 2018 Greenwich Best Brand Awards. For the fourth consecutive year, we were named one of America’s most reputable banks by American Banker and Reputation Institute, and again ranked in the top 10 among both customers and non-customers. We were also proud to be named one of American Banker’s “Best Banks to Work For” and to have two of our directors named to NACD’s Directorship 100.
In 2019, we will continue to execute on our strategic plan, including successfully integrating FCB, improving the customer experience, enabling organic growth, and developing the skills and capabilities of our team members.
We remain committed to sound corporate governance, a robust shareholder engagement program, and effectively stewarding your shareholder capital. As always, we will continue to cultivate our service-focused culture and reputation, which are our primary competitive advantages and the foundation of your trust.
Once again, we are providing proxy materials to our shareholders primarily through the Internet. By lowering the costs of our annual proxy campaign and saving paper, we believe this process contributes to our sustainability efforts while offering our shareholders a convenient way to access important information about the matters we will vote on at our annual meeting.
On behalf of our full Board, we would also like to thank Cathy Allen, Jerry Nix, Mel Stith and Phil Tomlinson for their years of dedicated service to our Company. They will be retiring in April, 26, 2018having reached the mandatory retirement age; their wisdom and commitment to advancing the interests of all of Synovus’ stakeholders are much appreciated and valued.
Thank you for your continued support of Synovus. We look forward to seeing you at the meeting.
Sincerely,
 |  Kessel D. Stelling Chairman, Chief Executive Officer and President |  |  Elizabeth W. Camp Lead Director |
Notice of the 2019 Annual Meeting of Shareholders
Wednesday, April 24, 2019
10:00 a.m.
Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia 31901
Items of Business:
| 1. | To elect as directors the |
| 2. | To hold an advisory vote on the compensation of Synovus’ named executive officers as determined by the Compensation Committee; |
| 3. | To ratify the appointment of KPMG LLP as Synovus’ independent auditor for the year |
| 4. | To transact such other business as may properly come before the meeting and any adjournment thereof. |
Who may vote:
You can vote if you were a shareholder of record on February 22, 2018.21, 2019.
Annual Report:
A copy of the 20172018 Annual Report accompanies this Proxy Statement.
Your vote is important. Please vote in one of the following ways:
| 1. | Use the toll-free telephone number shown on your proxy card; |
| 2. | Visit the Internet website listed on your proxy card; |
| 3. | Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope provided; or |
| 4. | Submit a ballot at the Annual Meeting. |
If you have questions about the matters described in this Proxy Statement, how to submit your proxy or if you need additional copies of this Proxy Statement, the enclosed proxy card or voting instructions, you should contact Innisfree M&A Incorporated, the Company’s proxy solicitor, toll-free at(888) 750-5834. Banks and brokers may call collect at(212) 750-5833.
This Notice of the 20182019 Annual Meeting of Shareholders and the accompanying Proxy Statement are sent by order of the Board of Directors.
March 16, 201812, 2019
Allan E. Kamensky
Secretary
YOUR VOTE IS IMPORTANT. WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE VOTE YOUR SHARES PROMPTLY BY TELEPHONE OR INTERNET OR BY SIGNING AND RETURNING YOUR EXECUTED PROXY CARD.
This summary highlights information contained elsewhere in this Proxy Statement and in our Annual Report on Form10-K for the year ended December 31, 20172018 (the “2017“2018 Annual Report”) which accompanies this Proxy Statement. You should read the entire Proxy Statement and our 2017 2018 Annual Report carefully before voting. We are first furnishing the proxy materials to our shareholders on or about March 16, 2018.12, 2019.
Annual Meeting of Shareholders
Synovus Bank
1144 Broadway
Columbus, Georgia 31901
| Synovus Bank 1144 Broadway Columbus, Georgia 31901 |
How to Cast Your Vote
You can vote by any of the following methods:
Meeting Agenda
Voting Matters
Matter | ||||||
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Election of | FOR each director nominee | Page | ||||
Advisory vote on the compensation of our named executive officers as determined by the Compensation Committee | FOR | Page | ||||
Ratification of KPMG LLP as our independent auditor for the year | FOR | Page | ||||
20172018 Financial Performance
Our 20172018 financial results were generally in line with our 20172018 guidance and overarching objectives. Our continued focus on sustainable growth, enhanced profitability and greater efficiency led to broad-based improvement. This improvement was evident for the year through our performance in several key financial measurements—earnings per share growth, return on average assets, return on average common equity and the efficiency ratio, with each measurement demonstrating substantial progress in 2018.
 | - 2019 Proxy Statement 1 |
- 2018 Proxy Statement
PROXY STATEMENT SUMMARY
measurement exhibiting notable progress. Moreover, during 2017, we achieved our previously established long-term targets of a 10+% earnings per share growth, 1.0+% adjusted return on average assets, 10.0+% adjusted return on average common equity and a sub 60% efficiency ratio.
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| (1) | For a reconciliation of the foregoingnon-GAAP financial measures, consisting of adjusted net income per diluted common share, adjusted return on average assets, adjusted return on average common equity, and adjusted efficiency ratio, please refer toAppendix B of this Proxy Statement. |
In addition, we continued to return meaningful levels of capital to our common shareholders in 20172018 through common stock dividends and share repurchases.
For additional information relating to our business and our subsidiaries, including a detailed description of our operating results and financial condition for 2018, 2017 2016 and 2015,2016, please refer to the summary on page 3034 of this Proxy Statement and our 20172018 Annual Report that accompanies this Proxy Statement.
2 | | - 2019 Proxy Statement |
2017
PROXY STATEMENT SUMMARY
2018 Compensation
2018 compensation outcomes reflected our performance:
Because all of our equity awards are granted in Synovus stock, the value of our CEO’s 2018 compensation, as well as the value of his historical equity grants, has fallen in alignment with our shareholders. In fact, as discussed in this Proxy Statement, the compensation of executives in 2017 reflects Synovus’our CEO aligns with our 2018 performance, including strong financial results and our executive compensation program reflects our pay for performance philosophy. An overview of our compensation program is provided below.
| - 2018 Proxy Statement |
PROXY STATEMENT SUMMARY
negative shareholder returns.
Base Salaries
Short-Term Incentives
Form of Award | Payout Formula Measures | Qualitative Adjustment Factors | Payout Range | |||
Cash |
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Core Earnings (60%) AdjustedPre-Provision Net Revenue (20%) Adjusted Efficiency Ratio (20%) | Quality of Earnings, Quality of Loan Growth (including consideration of concentration limits), Quality of Deposit Growth, Expense Management, | 0% to 150% of Target |
Long-Term Incentives
Form of Award | Vesting | Payout Formula Measures | Payout Range | |||
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Performance Stock Units
| 100% after 3 years | Weighted Return on Average Assets
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on Average Tangible Common Equity (as adjusted)(possible downward discretionary adjustment based upon risk considerations—see page | 0% to 150% of Award Amount | |||
Market Restricted Stock Units (40% of award value) | 1∕3 per year over 3 years (331∕3% per year) | Total Shareholder Return (possible downward discretionary adjustment based upon risk considerations—see page 41) | 75% to 125% of Award Amount |
We believe that the compensation delivered to each named executive officer in 20172018 was fair, reasonable and reasonable.aligned with our performance.
| - 2019 Proxy Statement 3 |
You received this Proxy Statement and the accompanying proxy card because the Board of Directors of Synovus is soliciting proxies to be used at Synovus’ 20182019 Annual Meeting of Shareholders, or Annual Meeting, which will be held on April 26, 2018,24, 2019, at 10:00 a.m., at Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia 31901. Proxies are solicited to give all shareholders of record an opportunity to vote on matters to be presented at the Annual Meeting. In the following pages of this Proxy Statement, you will find information on matters to be voted upon at the Annual Meeting or any adjournment of that meeting.
- 2018 Proxy Statement 3
VOTING INFORMATION
Internet Availability of Proxy Materials
As permitted by the federal securities laws, Synovus is making this Proxy Statement and its 20172018 Annual Report available to its shareholders via the Internet instead of mailing printed copies of these materials to each shareholder. On March 16, 2018,12, 2019, we mailed to our shareholders (other than those who previously requested electronic or paper delivery and other than those holding a certain number of shares) a Notice of Internet Availability, or Notice, containing instructions on how to access our proxy materials, including this Proxy Statement and the accompanying 20172018 Annual Report. These proxy materials are being made available to our shareholders on or about March 16, 2018.12, 2019. The Notice also provides instructions regarding how to access your proxy card to vote through the Internet or by telephone. The Proxy Statement and 20172018 Annual Report are also available on our website at investor.synovus.com/2018annualmeeting.2019annualmeeting.
If you received a Notice by mail, you will not receive a printed copy of the proxy materials by mail unless you request printed materials. If you wish to receive printed proxy materials, you should follow the instructions for requesting such materials contained on the Notice.
If you receive more than one Notice, it means that your shares are registered differently and are held in more than one account. To ensure that all shares are voted, please either vote each account over the Internet or by telephone or sign and return by mail all proxy cards.
Who Can Vote
You are entitled to vote if you were a shareholder of record of Synovus common stock as of the close of business on February 22, 2018.21, 2019. Your shares can be voted at the meeting only if you are present or represented by a valid proxy.
If your shares are held in the name of a bank, broker or other holder of record, you will receive voting instructions from such holder of record. You must follow the voting instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting will also be offered to shareholders owning shares through certain banks, brokers and other holders of record. If your shares are not registered in your own name and you plan to vote your shares in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the Annual Meeting in order to vote at the Annual Meeting.
Quorum and Shares Outstanding
A majority of the votes entitled to be cast by the holders of the outstanding shares of Synovus common stock must be present, either in person or represented by proxy, in order to conduct the Annual Meeting. This is referred to as a quorum. On February 22, 2018, 118,680,13321, 2019, 159,976,488 shares of Synovus common stock were outstanding.
Proxies
The Board has designated two individuals to serve as proxies to vote the shares represented by proxies at the Annual Meeting. If you properly submit a proxy but do not specify how you want your shares to be voted, your shares will be voted by the designated proxies in accordance with the Board’s recommendations as follows:
| (1) | FOR the election of each of the |
| (2) | FOR the advisory vote on the compensation of Synovus’ named executive officers as determined by the Compensation Committee; and |
| (3) | FORthe ratification of the appointment of KPMG LLP as Synovus’ independent auditor for the year |
The designated proxies will vote in their discretion on any other matter that may properly come before the Annual Meeting. At this time, we are unaware of any matters, other than as set forth above, that may properly come before the Annual Meeting.
4 | | - 2019 Proxy Statement |
VOTING INFORMATION
Required Votes
The number of affirmative votes required to approve each of the proposals to be considered at the Annual Meeting is described below:
Proposal 1 Election of 1411 Directors
To be elected, each of the 1411 director nominees named in this Proxy Statement must receive more votes cast “for” such nominee’s election than votes cast “against” such nominee’s election. If a nominee who currently is serving as a director does not receive the required vote forre-election, Georgia law provides that such director will continue to serve on the Board of Directors as a “holdover” director. However, pursuant to Synovus’ Corporate Governance Guidelines, each holdover director has tendered an irrevocable resignation that would be effective upon the Board’s acceptance of such resignation. In that situation, our Corporate Governance and Nominating Committee would consider the resignation and make a recommendation to the Board of Directors about whether to accept or reject such resignation and publicly disclose its decision within 90 days following certification of the shareholder vote.
All Other Proposals
For all of the other proposals described in this Proxy Statement, the affirmative vote of a majority of the votes cast is required to approve each such proposal.
| - 2018 Proxy Statement |
VOTING INFORMATION
Abstentions and BrokerNon-Votes
Under certain circumstances, including the election of directors, matters involving executive compensation and other matters considerednon-routine, banks and brokers are prohibited from exercising discretionary authority for beneficial owners who have not provided voting instructions to the bank or broker. This is generally referred to as a “brokernon-vote.” In these cases, as long as a routine matter is also being voted on, and in cases where the shareholder does not vote on such routine matter, those shares will be counted for the purpose of determining if a quorum is present, but will not be included as votes cast with respect to those matters. Whether a bank or broker has authority to vote its shares on uninstructed matters is determined by stock exchange rules. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions only with respect to Proposal 3 but not with respect to any of the other proposals to be voted on at the Annual Meeting.
Abstentions and brokernon-votes will have no effect on any of the proposals to be considered at the Annual Meeting.
How You Can Vote
If you hold shares in your own name, you may vote by proxy or in person at the Annual Meeting. To vote by proxy, you may select one of the following options:
Vote By Telephone
You can vote your shares by telephone by calling the toll-free telephone number (at no cost to you) shown on your proxy card. Telephone voting is available 24 hours a day, seven days a week, until 11:59 P.M., Eastern Time, on April 25, 2018.23, 2019. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Our telephone voting procedures are designed to authenticate the shareholder by using individual control numbers. If you vote by telephone, you do NOT need to return your proxy card. If you vote by telephone, all of your shares will be voted as one vote per share.
Vote By Internet
You can also choose to vote on the Internet. The website for Internet voting is shown on your proxy card. Internet voting is available 24 hours a day, seven days a week, until 11:59 P.M., Eastern Time, on April 25, 2018.23, 2019. You will be given the opportunity to confirm that your instructions have been properly recorded, and you can consent to view future proxy statements and annual reports on the Internet instead of receiving them in the mail. If you vote on the Internet, you do NOT need to return your proxy card.
Vote By Mail
If you choose to vote by mail, simply mark your proxy card, date and sign it, sign the certification (if applicable) and return it in the postage-paid envelope provided.
If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from such holder of record that you must follow for your shares to be voted. Please follow their instructions carefully. Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote in person at the Annual Meeting, you must request a legal proxy or broker’s proxy from your bank, broker or other nominee that holds your shares and present that proxy and proof of identification at the Annual Meeting.
| - 2019 Proxy Statement 5 |
VOTING INFORMATION
Description of Voting Rights
We have a voting structure under which a holder of our common stock may be entitled to exercise ten votes per share for each of his or her shares that satisfy certain prescribed criteria and one vote per share for each of his or her shares that does not. As provided in Synovus’ Articles of Incorporation and bylaws, holders of Synovus common stock meeting any one of the following criteria are entitled to ten votes on each matter submitted to a vote of shareholders for each share of Synovus common stock owned on February 22, 201821, 2019 which: (1) has had the same beneficial owner since April 24, 1986; or (2) has been beneficially owned continuously by the same shareholder since February 22, 2014;21, 2015; or (3) is held by the same beneficial owner to whom it was issued as a result of an acquisition of a company or business by Synovus where the resolutions adopted by Synovus’ Board of Directors approving the acquisition specifically grant ten votes per share; or (4) is held by the same beneficial owner to whom it was issued by Synovus, or to whom it was transferred by Synovus from treasury shares, and the resolutions adopted by Synovus’ Board of Directors approving such issuance and/or transfer specifically grant ten votes per share; or (5) was acquired under any employee, officer and/or director benefit plan maintained for one or more employees, officers and/or directors of Synovus and/or its subsidiaries, and is held by the same owner for whom it was acquired under any such plan; or (6) was acquired by reason of participation in a dividend reinvestment plan offered by Synovus and is held by the same owner who acquired it under such plan; or (7) is owned by a holder who, in addition to shares which are beneficially owned under the provisions of (1)-(6) above, is the owner of less than 162,723 shares of Synovus common stock (which amount is equal to 100,000 shares, as appropriately adjusted to reflect the change in shares of Synovus common stock by means of stock splits, stock dividends, any recapitalization or otherwise occurring since April 24,1986). For purposes of determining voting power under these provisions, any share of Synovus common stock acquired pursuant to stock options shall be deemed to have been acquired on the date the option was granted, and any shares of common stock acquired as a direct result of a stock split, stock dividend or other type of share distribution will be deemed to have been acquired and held continuously from the date on which shares with regard to such dividend shares were issued were acquired. Under these voting provisions, a shareholder may hold some shares that qualify for10-1 voting and some shares that do not. Holders of our common stock are entitled to one vote per share unless the holder can demonstrate that the shares meet one of the criteria above for being entitled to ten votes per share.
- 2018 Proxy Statement 5
VOTING INFORMATION
For purposes of the foregoing, any share of our common stock held in “street” or “nominee” name shall be presumed to have been acquired by the beneficial owner subsequent to April 24, 1986 and to have had the same beneficial owner for a continuous period of less than 48 months prior to February 22, 2018.21, 2019. This presumption shall be rebuttable by presentation to our Board of Directors by such beneficial owner of evidence satisfactory to our Board of Directors that such share has had the same beneficial owner continuously since April 24,1986 or such share has had the same beneficial owner for a period greater than 48 months prior to February 22, 2018.21, 2019.
In addition, for purposes of the foregoing, a beneficial owner of a share of our common stock is defined to include a person or group of persons who, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares (1) voting power, which includes the power to vote, or to direct the voting of such share of common stock, (2) investment power, which includes the power to direct the sale or other disposition of such share of common stock, (3) the right to receive, retain or direct the distribution of the proceeds of any sale or other disposition of such share of common stock, or (4) the right to receive or direct the disposition of any distributions, including cash dividends, in respect of such share of common stock.
Shares of Synovus common stock are presumed to be entitled to only one vote per share unless this presumption is rebutted by providing evidence to the contrary to Synovus. Shareholders seeking to rebut this presumption should complete and execute the certification appearing on their proxy card. Synovus reserves the right to request additional documentation from you to confirm the voting power of your shares. Because certifications must be in writing, if you choose to vote by telephone, all of your shares will be voted as one vote per share.Shareholders who do not certify on their proxies submitted by mail or internet that they are entitled to ten votes per share or who do not present such a certification if they are voting in person at the Annual Meeting will be entitled to only one vote per share.
For more detailed information on your voting rights, please refer to Synovus’10-1 Voting Instructions and the accompanying voting instruction worksheet that are available on our website at investor.synovus.com/2018annualmeeting.2019annualmeeting.
Synovus common stock is registered with the Securities and Exchange Commission, or SEC, and is traded on the New York Stock Exchange, or NYSE. Accordingly, Synovus’ common stock is subject to the provisions of a NYSE rule which, in general, prohibits a company’s common stock and equity securities from being authorized or remaining authorized for trading on the NYSE if the company issues securities or takes other corporate action that would have the effect of nullifying, restricting or disparately reducing the voting rights of existing shareholders of the company. However, the rule contains a “grandfather” provision, under which Synovus’ ten vote provision falls, which, in general, permits grandfathered disparate voting rights plans to continue to operate as adopted. The number of votes that each shareholder will be entitled to exercise at the Annual Meeting will depend upon whether each share held by the shareholder meets the requirements which entitle one share of Synovus common stock to ten votes on each matter submitted to a vote of shareholders. Such determination will be made by Synovus based on information possessed by Synovus at the time of the Annual Meeting.
Synovus Stock Plans
If you participate in the Synovus Dividend Reinvestment and Direct Stock Purchase Plan, the Synovus Employee Stock Purchase Plan and/or the Synovus Director Stock Purchase Plan, your proxy card represents shares held in the respective plan, as well as shares you hold directly in certificate form registered in the same name. If you hold shares of Synovus common stock through a 401(k) plan, you will receive a separate proxy card representing those shares of Synovus common stock.
6 | | - 2019 Proxy Statement |
VOTING INFORMATION
Revocation of Proxy
If you are a shareholder of record and vote by proxy, you may revoke that proxy at any time before it is voted at the Annual Meeting. You may do this by (1) signing another proxy card with a later date and returning it to us prior to the Annual Meeting, (2) voting again by telephone or on the Internet prior to 11:59 P.M., Eastern Time, on April 25, 2018,23, 2019, or (3) attending the Annual Meeting in person and casting a ballot.
If your Synovus shares are held by a bank, broker or other nominee, you must follow the instructions provided by the bank, broker or other nominee if you wish to change or revoke your vote.
Attending the Annual Meeting
The Annual Meeting will be held on Thursday,Wednesday, April 26, 2018,24, 2019, at 10:00 a.m. at Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia. Directions to Blanchard Hall may be obtained on our website at investor.synovus.com/2018annualmeeting. 2019annualmeeting.
To attend the Annual Meeting, you will need to bring:
If your shares are registered in your name and you received a Notice of Internet Availability of Proxy Materials, the Notice is your admission ticket. If your shares are registered in your name and you received proxy materials by mail, your admission ticket is attached to your proxy card. If you hold shares through an account with a bank or broker, you will need to contact your bank or broker and request a legal proxy. A legal proxy is an authorization from your bank or broker for you to vote the shares it holds in its name on your behalf. It also serves as your admission ticket.
Be sure to bring your admission ticket if you will be attending the meeting. If you do not have valid picture identification and an appropriate form of admission ticket, you will not be admitted to the Annual Meeting.
If you are unable to attend the meeting, you can listen to it live and view the slide presentation over the Internet at investor.synovus.com/2018annualmeeting.
Additionally, we2019annualmeeting. We will maintain copies of the slides and audio of the presentation for the Annual Meeting on our website for reference after the meeting. Information included on Synovus’ website, other than the Proxy Statement and form of proxy, is not a part of the proxy soliciting material.
Voting Results
You can find the voting results of the Annual Meeting in Synovus’ Current Report on Form8-K, which Synovus will file with the SEC no later than May 2, 2018.April 30, 2019.
If you have questions about the matters described in this Proxy Statement, how to submit your proxy or if you need additional copies of this Proxy Statement, the enclosed proxy card or voting instructions, you should contact Innisfree M&A Incorporated, the Company’s proxy solicitor, toll-free at(888) 750-5834. Banks and brokers may call collect at(212) 750-5833.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Corporate Governance Philosophy
The business affairs of Synovus are managed under the direction of the Board of Directors in accordance with the Georgia Business Corporation Code, as implemented by Synovus’ Articles of Incorporation and bylaws. The role of the Board of Directors is to effectively govern the affairs of Synovus for the benefit of its shareholders. The Board strives to ensure the success and continuity of Synovus’ business through the appointment of qualified executive management. It is also responsible for ensuring that Synovus’ activities are conducted in a responsible and ethical manner. Synovus and its Board of Directors are committed to following sound corporate governance.
Corporate Governance Highlights
Synovus’ Board and management believe that good corporate governance practices promote the long-term interests of all shareholders and strengthen Board and management accountability. Highlights of such practices include:
The Board, under the leadership of the Corporate Governance and Nominating Committee, will continue to actively monitor and consider additional changes to our corporate governance practices in the future.
Independence
The NYSE listing standards provide that a director does not qualify as independent unless the Board of Directors affirmatively determines that the director has no material relationship with Synovus. The Board has established categorical standards of independence to assist it in determining director independence which conform to the independence requirements in the NYSE listing standards. The categorical standards of independence are incorporated within our Corporate Governance Guidelines, are attached to this Proxy Statement asAppendix A and are also available in the Corporate Governance Section of our website at investor.synovus.com.
The Board has affirmatively determined that thirteena majority of its fourteen members are independent as defined by the listing standards of the NYSE and the categorical standards of independence set by the Board. Synovus’ Board has determined that, as of January 1, 2018,2019, the following thirteen directors are independent: Catherine A. Allen, Tim E. Bentsen, F. Dixon Brooke, Jr., Stephen T. Butler, Elizabeth W. Camp, Diana M. Murphy, Jerry W. Nix, Harris Pastides, Joseph J. Prochaska, Jr., John L. Stallworth, Melvin T. Stith, Barry L. Storey and Philip W. Tomlinson. In addition, the Board has affirmatively determined that Teresa White will be independent if elected to the Board at the Annual Meeting. Please see “Certain Relationships and Related
8 | | - 2019 Proxy Statement |
CORPORATE GOVERNANCE AND BOARD MATTERS
Transactions” on page 4651 of this Proxy Statement for a discussion of certain relationships between Synovus and its independent directors. These relationships have been considered by the Board in determining a director’s independence from Synovus under Synovus’ Corporate Governance Guidelines and the NYSE listing standards and were determined to be immaterial.
- 2018 Proxy Statement 7
CORPORATE GOVERNANCE AND BOARD MATTERS
Board Meetings and Attendance
The Board of Directors held elevenfifteen meetings in 2017.2018. All directors attended at least 75% of Board and committee meetings held during their tenure during 2017.2018. The average attendance by incumbent directors at the aggregate number of Board and committee meetings they were scheduled to attend was approximately 98%97%. Although Synovus has no formal policy with respect to Board members’ attendance at its annual meetings, it is customary for all Board members to attend the annual meetings.meeting. All of Synovus’ then-current directors attended Synovus’ 20172018 annual meeting of shareholders.
Board meetings regularly include education presentations and training to enable theour directors to keep abreast of business and banking trends and market, regulatory and industry issues. These sessions are often conducted by outside experts in such subject areas as cybersecurity, evolving regulatory standards, risk management, emerging products and trends, economic conditions, technology and effective corporate governance. In addition, the Board is provided business-specific training on products and services and special risks and opportunities to Synovus. Moreover, theour directors periodically attend industry conferences, meetings with regulatory agencies and educational sessions pertaining to their service on the Board and its committees.
Synovus’ Board of Directors has five principal standing committees—an Audit Committee, a Corporate Governance and Nominating Committee, a Compensation Committee, a Risk Committee and an Executive Committee. Each committee has a written charter adopted by the Board of Directors that complies with the applicable listing standards of the NYSE pertaining to corporate governance. Copies of the committee charters are available in the Corporate Governance section of our website at investor.synovus.com. The Board has determined that each member of the Audit, Corporate Governance and Nominating, Compensation and Risk Committees is an independent director as defined by the listing standards of the NYSE and our Corporate Governance Guidelines. The following table shows the membership of the various committees as of the date of this Proxy Statement.
Audit Committee | Corporate Governance and Nominating Committee | Compensation Committee | Risk Committee | Executive Committee | ||||||
Catherine A. Allen |  |  | | |||||||
Tim E. Bentsen |  |  | | | | | ||||
F. Dixon Brooke, Jr. | | | | | ||||||
Stephen T. Butler | | | | |||||||
Elizabeth W. Camp | | | | | | | ||||
Diana M. Murphy | | | ||||||||
Jerry W. Nix | | | | | ||||||
Harris Pastides | | | | |||||||
Joseph J. Prochaska, Jr. | | | | | | |||||
John L. Stallworth | | | ||||||||
Kessel D. Stelling | | |||||||||
Melvin T. Stith | | | ||||||||
Barry L. Storey | | | | | ||||||
Philip W. Tomlinson | | | | | ||||||
| Chairperson Member | ||||||||||
| Chairperson | | Member |
Following the election of directors at the Annual Meeting, the Corporate Governance and Nominating Committee will recommend the reconstitution of these committees and appoint committee chairpersons after giving effect to any changes to the current composition of the Board.
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Audit Committee
Synovus’ Audit Committee held thirteentwelve meetings in 2017.2018. The Audit Committee’s report is on page 2731 of this Proxy Statement. The Board has determined that all four members of the Committee are independent and financially literate under the rules of the NYSE and that each of the four members of the Audit Committee is an “audit committee financial expert” as defined by the rules of the SEC. The primary functions of the Audit Committee include:
Corporate Governance and Nominating Committee
Synovus’ Corporate Governance and Nominating Committee held fivefour meetings in 2017.2018. The primary functions of Synovus’ Corporate Governance and Nominating Committee include:
Synovus’ Compensation Committee held five meetings in 2017.2018. Its report is on page 4045 of this Proxy Statement. The primary functions of the Compensation Committee include:
Information regarding the Compensation Committee’s processes and procedures for considering and determining executive officer compensation is provided in the “Executive Compensation—Compensation Discussion and Analysis” section of this Proxy Statement. Except to the extent prohibited by law or regulation, the Compensation Committee may delegate matters within its power and responsibility to individuals or subcommittees when it deems appropriate.
In addition, the Compensation Committee has the authority under its charter to retain outside advisors to assist the Committee in the performance of its duties. During 2017,2018, the Committee retained the services of Meridian Compensation Partners, LLC, or Meridian, to:
The Compensation Committee evaluated whether the work provided by Meridian raised any conflict of interest. The Compensation Committee considered various factors, including the six factors mandated by SEC rules, and determined that no conflict of interest was raised by the work of Meridian described in this Proxy Statement.
Meridian was engaged directly by the Compensation Committee, although the Compensation Committee also directed that Meridian work with Synovus’ management to facilitate the Compensation Committee’s review of compensation practices and management’s recommendations. Synovus’ Chief AdministrativeHuman Resources Officer and herhis staff developed executive compensation recommendations for the Compensation Committee’s consideration in conjunction with Synovus’ CEO and with the advice of Meridian. Meridian did not provide any other services to Synovus during 2017.2018.
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In 2017,2018, Synovus’ Chief AdministrativeHuman Resources Officer worked with the Chairman of the Compensation Committee to establish the agenda for Committeecommittee meetings. Management also prepares background information for each committee meeting. Synovus’ Chief Administrative Officer and Chief Human Resources Officer attendattends all committee meetings by invitation of the Compensation Committee, while Synovus’ CEO attends some committee meetings by invitation of the Compensation Committee. The CEO and other members of management do not have authority to vote on committee matters. Meridian attended all of the committee meetings held during 20172018 at the request of the Compensation Committee. In addition, the Compensation Committee regularly meets in executive session with nowithout members of management in attendance.
Risk Committee
Synovus’ Risk Committee held eightseven meetings in 2017.2018. The primary functions of Synovus’ Risk Committee include:
Executive Committee
The Executive Committee is comprised of the chairpersons of the principal standing committees of the Synovus Board and Synovus Bank Board, the Chief Executive Officer, the Chairman of the Board (if different from the Chief Executive Officer) and the Lead Director. During the intervals between meetings of Synovus’ Board of Directors, the Executive Committee possesses and may exercise any and all of the powers of Synovus’ Board of Directors in the management and direction of the business and affairs of Synovus with respect to which specific direction has not been previously given by the Board of Directors unless Board action is required by Synovus’ governing documents, law or rule. The Executive Committee did not meet in 2017.2018.
Compensation Committee Interlocks and Insider Participation
Ms. Camp and Messrs. Bentsen, Brooke, Butler, Stith, Storey and Tomlinson served on the Compensation Committee during 2017. In addition, Michael T. Goodrich served on the Compensation Committee until his retirement in April 2017.2018. None of these individuals is or has been an officer or employee of Synovus. In 2017,2018, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on Synovus’ Board or Compensation Committee.
Strategic Direction
One of our Board’s most important functions is to provide oversight and direction as to Synovus’ strategy, including business and organizational initiatives, potential growth opportunities, risks and challenges. As such, the Board incorporates strategic planning into each meeting agenda and monitors strategic progress and emerging risks quarterly through the Risk Committee. In the first quarter of each year, management provides the Board with a detailed rolling three-year review of the strategic plan, including the short term and long-term initiatives and targets. As a part of this process, the Board and its committees carefully consider whether the strategic plan aligns with Synovus’ risk appetite and risk profile. Moreover, the Board has an extended off-site session annually focused on a deeper dive into emerging industry trends and issues and the correlation to Synovus’ strategic direction. The Board monitors the execution of the strategic plan throughout the remainder of the year and continually assesses and guides management on the strategic direction and initiatives.
Risk Oversight
Under Synovus’ Corporate Governance Guidelines, the Board is charged with providing oversight of Synovus’ risk management processes. The Board does not view risk in isolation and considers risk in virtually every business decision and as part of the Company’s overall business strategy. While the Board oversees risk management, the Company’s management is charged with managing risk. The Board’s role in risk oversight is an integral part of Synovus’ overall enterprise risk management framework. For a more detailed description of Synovus’ enterprise risk management framework, see “Part I—Item 1. Business—Enterprise Risk Management” in Synovus’ 20172018 Annual Report.
The Risk Committee fulfills the overarching oversight role for overseeing the enterprise risk management and compliance processes, including approving the risk appetite of the Company, risk tolerance levels and risk policies and limits, monitoring key and emerging risks and reviewing risk assessments. In carrying out its responsibilities, the Risk Committee works closely with Synovus’ Chief Risk Officer and other members of Synovus’ enterprise risk management and compliance teams. The Risk Committee meets periodically with the Chief Risk Officer and other members of management and receives a comprehensive report on enterprise risk management and compliance matters, including management’s assessment of risk exposures (including risks related to liquidity, interest rates, credit, operations, regulatory compliance, information technology, information risk and resiliency, model risk management, M&A activity and future growth, among others) and the processes in place to monitor and control such exposures. The Risk Committee is also responsible for overseeing the investment policy and strategy of the Company. The Chairman of the Risk Committee also receives updates between meetings from the Chief Risk Officer, the Chief Executive Officer,CEO, the Chief Information Security Officer and the Chief Compliance Officer and other
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members of management relating to risk oversight and compliance matters. The Risk Committee provides a report on risk management to the full Board on at least a quarterly basis.
In addition, oversight of risk is allocated to all other committees of the Board, who meet regularly and report back to the Board. The Audit Committee oversees risks related to financial reporting, internal controls over financial reporting, thevaluation of investment securities and private equity investments, portfolio,internal and independent audit functions, legal matters, tax matters, credit matters and reputational risks relating to these areas. The Compensation Committee oversees risks related to incentive compensation, executive and director compensation, executive succession planning, talent retention and reputational risks relating to these areas. As a part of the risk governance process, the Chief Risk Officer provides an annual risk profile of our compensation plans to the Compensation Committee. For a discussion of the Compensation Committee’s review of Synovus’ senior executive officer compensation plans and employee incentive compensation plans and the risks associated with these plans, see “Compensation Framework: Compensation Policies, Compensation Process and Risk Considerations—Risk Considerations” on page 3944 of this Proxy Statement. The Corporate Governance and Nominating Committee oversees corporate governance-related
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risks, such as board composition and effectiveness, board succession planning, corporate governance policies, related party transactions, and reputational risks relating to these areas.
The Company believes that its enterprise risk framework, including the active engagement of management with the Board in the risk oversight function, supports the risk oversight function of the Board. For more information on the risks facing the Company, see the risk factors in “Part I—Item 1A. Risk Factors” in the 20172018 Annual Report.
Cybersecurity
Information security is a significant operational risk for financial institutions which may lead not only to financial losses, but may also negatively affect the reputation of and confidence in the Company. Synovus continues to enhance our information security program and capabilities to identify and mitigate threats to the confidentiality, availability, and integrity of our information systems. Below are some highlights of the elements of our information security program:
Leadership Structure of the Board
Our current Board leadership structure consists of:
Our Corporate Governance Guidelines and governance framework provide the Board with flexibility to select the appropriate leadership structure for Synovus. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of Synovus’ shareholders. In accordance with Synovus’ bylaws, our Board of Directors elects our Chief Executive Officer and our Chairman, and each of these positions may be held by the same person or may be held by two persons. Under our Corporate Governance Guidelines, the Board does not have a policy, one way or the other, on whether the roles of the Chairman and Chief Executive Officer should be separate and, if it is to be separate, whether the Chairman should be selected from thenon-employee directors or be an employee. However, our
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Corporate Governance Guidelines require that, if the Chairman of the Board is not an independent director, the Corporate Governance and Nominating Committee shall nominate, and a majority of the independent directors shall elect, a Lead Director. Under its charter, the Corporate Governance and Nominating Committee periodically reviews and recommends to the Board the leadership structure of the Board and, if necessary, nominates the Lead Director candidate from the independent directors. Currently, one individual serves as both our Chief Executive Officer and Chairman and, as a result, Synovus also has a Lead Director. The Board currently believes that the combination of these two roles provides more consistent communication and coordination throughout the organization, which results in a more effective and efficient implementation of corporate strategy and is important in unifying Synovus’ strategy behind a single vision.
The Chairman of the Board is responsible for chairing Board meetings and meetings of shareholders, setting the agendas for Board meetings in consultation with the Lead Director and providing information to Board members in advance of meetings and between meetings.
Pursuant to Synovus’ Corporate Governance Guidelines, the duties of the Lead Director include the following:
After careful consideration, the Corporate Governance and Nominating Committee has determined that Synovus’ current Board structure is the most appropriate leadership structure for Synovus and its shareholders at this time. Moreover, as part of the Board’s annual self-evaluation, the performance of the Chairman of the Board and Lead Director are evaluated, and the Board continues to believe that the current Board structure is appropriate and effective.
Meetings ofNon-Management and Independent Directors
Thenon-management directors of Synovus meet separately at least four times a year after regularly scheduled meetings of the Board of Directors and at such other times as may be requested by the Chairman of the Board or any director. Synovus’ independent directors meet at least once a year. During 2017, Mr. Goodrich, as Lead Director until April 2017, and2018, Ms. Camp, as Lead Director, since April 2017, presided at the meetings ofnon-management and independent directors.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Board and Committee Self-Evaluations
The Board and each Board committee conduct robust and thoughtful annual self-evaluations to assess the qualifications, attributes, skills and experience represented on the Board and its committees and to determine whether the Board and its committees are functioning effectively. The results of the self-evaluations are discussed by the Board and each committee, respectively, during executive session. For four of the last fourfive years, the Board has used an independent third party to conduct these evaluations.
The Board’s annual self-evaluation is a key component of its director nomination process and succession planning. In fact, the Corporate Governance and Nominating Committee uses the input from these self-evaluations to recommend changes to Synovus’ corporate governance practices and areas of focus for the following year and to plan for an orderly succession of the Board and its committees. The Board values the contributions of directors who have developed extensive experience and insight into Synovus during the course of their service on the Board and as such, the Board does not believe arbitrary term limits on directors’ service are appropriate. At the same time, the Board recognizes the importance of Board refreshment to help ensure an appropriate balance of experience and perspectives on the Board.
Consideration of Director Candidates
Synovus’ Corporate Governance Guidelines contain Board membership criteria considered by the Corporate Governance and Nominating Committee in recommending nominees for a position on Synovus’ Board. The Committee believes that, at a minimum, a director candidate must possess personal and professional integrity, sound judgment and forthrightness. A director candidate must also have sufficient time and energy to devote to the affairs of Synovus, be free from conflicts of interest with Synovus, must not have reached the retirement age for Synovus directors and be willing to
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make, and be financially capable of making, the required investment in Synovus’ stock pursuant to Synovus’ Director Stock Ownership Guidelines. The Committee also considers the following criteria when reviewing director candidates and existing directors:
The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. In addition to the criteria set forth above, the Committee considers how the skills and attributes of each individual candidate or incumbent director work together to create a board that is collegial, engaged and effective in performing its duties. Although the Board does not have a formal policy on diversity, the Board and the Committee believe that the background and qualifications of the directors, considered as a group, should provide a significant mix of experience, knowledge and abilities that will contribute to Board diversity and allow the Board to effectively fulfill its responsibilities. For a discussion of the specific backgrounds and qualifications of our director nominees, see “Proposals to be Voted on: Proposal 1—Election of 1411 Directors—Nominees for Election as Director” beginning on page 1620 of this Proxy Statement.
Identifying and Evaluating Nominees
The Corporate Governance and Nominating Committee has two primary methods for identifying director candidates (other than those proposed by Synovus’ shareholders, as discussed below). First, on a periodic basis, the Committee solicits ideas for possible candidates from a number of sources including members of the Board, SynovusSynovus’ executives and individuals personally known to the members of the Board. Second, the Committee, as authorized under its charter, retains at Synovus’ expense one or more search firms to identify candidates (and to approve such firms’ fees and other retention terms).
The Committee will consider all director candidates identified through the processes described above, as well as any candidates identified by shareholders through the process described below, and will evaluate each of them, including incumbents, based on the same criteria. The director candidates are evaluated at regular or special meetings of the Committee and may be considered at any point during the year. If based on the Committee’s initial evaluation a director candidate continues to be of interest to the Committee, the Chair of the Committee will interview the candidate and communicate his evaluation to the other Committee members and executive management. Additional interviews are conducted, if necessary, and ultimately the Committee will meet to finalize its list of recommended candidates for the Board’s consideration.
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Shareholder Candidates
The Corporate Governance and Nominating Committee will consider candidates for nomination as a director submitted by shareholders. Although the Committee does not have a separate policy that addresses the consideration of director candidates recommended by shareholders, the Board does not believe that such a separate policy is necessary as Synovus’ bylaws permit shareholders to nominate candidates and as one of the duties set forth in the Corporate Governance and Nominating Committee charter is to review and consider director candidates submitted by shareholders. The Committee will evaluateevaluates individuals recommended by shareholders for nomination as directors according to the criteria discussed above and in accordance with Synovus’ bylaws and the procedures described under “Shareholder Proposals and Nominations” on page 4752 of this Proxy Statement.
Communicating with the Board
Synovus’ Board provides a process for shareholders and other interested parties to communicate with one or more members of the Board, including the Lead Director, or thenon-management or independent directors as a group. Shareholders and other interested parties may communicate with the Board as follows:
Relevant communications are distributed to the Board, or to any individual director or directors, as appropriate, depending upon the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items that are unrelated to its duties and responsibilities be excluded, such as: business solicitations or advertisements; junk mail and mass mailings; resumes and other forms of job inquiries;
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spam; and surveys. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded. Any communication that is filtered out is made available to any director upon request.
These procedures are also available in the Corporate Governance section of our website at investor.synovus.com. Synovus’ process for handling shareholder and other communications to the Board has been approved by Synovus’ independent directors.
Shareholder Engagement
Synovus and our Board believe that accountability to our shareholders is key to sound corporate governance principles, and as such, regular and transparent communication with our shareholders is essential to our long-term success. Throughout 2017,the year, members of our management team metmeet regularly with a significant number of our shareholders to discuss our corporate strategy, financial performance, long-term objectives, credit risks, capital management, enterprise risk management, corporate governance and executive compensation. In regularly engaging with our shareholders, we provide perspective on our governance policies and executive compensation practices and seek input from these shareholders to ensure that we are addressing their questions and concerns.
Our on-going shareholder engagement program encompasses a number of initiatives, including:
In 2018, we significantly enhanced our shareholder outreach efforts as we tried to better understand shareholder sentiment around our July 2018 announcement of the acquisition of FCB, resulting in us contacting approximately 110 current or target institutional investors within 60 days of the deal announcement. These outreach efforts included contacting many of Synovus and FCB’s largest shareholders, representing approximately 40 million shares, or 24% of the combined company’s proforma ownership base. By pursuing a more robust engagement strategy, we were able to better understand and address shareholder questions and concerns about the strategic rationale associated with the acquisition and the Company’s long-term growth strategy. Opinions and perspectives expressed during these engagement meetings were discussed by executive management and the Board.
We look forward to continued enhancement of our shareholder engagement program in 2019. We are committed to an open dialogue where investor views and priorities may be gathered and discussed, thereby informing and guiding a deliberative decision making process with a diverse shareholder base in mind.
Our Name and Culture
Our name, Synovus, is a combination of two words — synergy and novus — that, together, represent the full range of financial capabilities we offer, geographic markets we serve, and our focus on the future. In 2018, our company completed the transition from 28 locally-branded divisions to the Synovus brand. The business rationale for that transition is straightforward: It will increase awareness of our regional presence, our financial capabilities, and our ability to meet the needs of customers and prospects.
The name also represents a culture that has defined nearly every aspect of our company since its founding in 1888. The Synovus culture — relationship-based, service-focused, and grounded here — is our principal source of value creation with communities, customers, team members, and shareholders. Adopting the Synovus name throughout the company will allow us to deploy this core competitive advantage even more effectively — and is a critical step toward building our future.
Our Purpose, Value Proposition, and Customer Covenant
Our purpose is to be the bank that leads and strengthens our communities and serves the needs of our customers through real, personal relationships. Our foundational value proposition is relationship banking delivered through expert bankers committed to an exceptional customer experience. Our Customer Covenant defines how we serve customers:
| We pledge to serve every customer with the highest levels of sincerity, fairness, courtesy, respect and gratitude, delivered with unparalleled responsiveness, expertise, efficiency and accuracy. We are in the business to create lasting relationships, and we will treat our customers like we want to be treated. We will offer the finest personal service and products delivered by caring team members who take 100 percent responsibility for meeting the needs of each customer. |
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Our Commitment to Communities
As the bank of here, we believe serving communities means more than taking deposits or providing loans and other financial products. It means being here, in one place, for the long term. It means engaging at a deeper level than simply doing business or earning the right to do the next transaction. It means connecting with people, and helping people connect, so that individuals and businesses can fulfill their potential and thrive where they are. That’s the best way we know to help ensure the growth of our communities — and therefore the long-term health of our company.
At Synovus, we call our community outreach program Here Matters. The name builds on our legacy of service as the bank of here, and focuses on education, needs-based opportunities, and health and wellness. Every year, team members put in thousands of hours volunteering at food pantries, reading to schoolchildren, repairing veterans’ houses and many more projects across our five-state footprint.
We know that compared to the overall need, the impact of Here Matters is modest. But it is very much an expression of a locally-focused civic duty that has driven our Company throughout its history as well as a conviction that is deeply held by our leadership: that strong communities have strong banks.
That conviction animates our sustainability commitments, too.
Our Sustainability Commitments
Environmental
Conservation: Our conservation efforts range from purchase of recycled paper to design and installation of energy-efficient signage and external and internal lighting. At the end of 2018, we had 144,000 square feet of LEED qualified space (2 Gold, 1 Silver and 1 eligible); 13 electric vehicle charging stations; and approximately 810,000 square feet of space (more than 25% of footprint) fitted with LED lighting. We have also reduced paper consumption and transportation-related emissions by providing electronic statements to more than 132,000 customer accounts.
Environmental Considerations in Lending: Our loan policies prohibit lending to customers that exhibit careless attitudes or practices toward environmental issues. Our environmental procedures are administered by a third party with expertise in environmental due diligence.
Community
Here Matters: In 2018, Synovus team members volunteered 29,950 hours through 4,316 Here Matters opportunities. Team member and company contributions totaled more than $915,000 for the United Way, and team members provided $127,000 in scholarships to 126 students through the Jack Parker Scholarship Fund. The Company’s philanthropic giving was approximately $2 million to more than 500 non-profits and agencies across our footprint.
Financial Education: During the 2017-2018 school year, Synovus team members spent 4,900 hours providing financial literacy education and training to 1,265 students at 10 schools in Columbus, Georgia.
Culture and People: We were proud to be named one of American Banker’s “Best Banks to Work for” in 2018. Team member benefits include comprehensive health and wellness programs, retirement/401(k) match, and tuition reimbursement. We are also focused on improving inclusion and diversity through a CEO-sponsored initiative to increase minority representation in the Company, female representation in leadership, and inclusiveness in six areas identified in a team member inclusion survey.
CRA, Community Development and Financial Inclusion: We received an overall CRA rating of “Satisfactory” on our latest exam (November 2017). We offer a $100 million Affordable Mortgage Program for first-time homebuyers and other borrowers who may require assistance to purchase a residence. Our consumer products include a no-fee retail checking account and a range of other products with flexible fee structures. As a buyer of goods and services, it is also the policy of Synovus to engage a diverse network of vendors, including qualified minority vendors.
Small Business Lending: We are focused on supporting small businesses throughout our communities. We had more than $2.65 billion in credit outstanding to small businesses in 2018, including new loan originations of over $600 million and more than 1,100 new small business credit card accounts. We opened more than 10,000 new checking accounts for small business owners throughout our footprint, which provided $350 million in new deposits for Synovus. Finally, our bankers and team members remain very active and engaged in supporting the business community through their involvement with over 100 chambers of commerce, which we supported through sponsorships, programs and activities totaling more than $740,000 in 2018.
Recognition
Reputation: In 2018, American Banker and The Reputation Institute again named Synovus one of America’s most reputable banks. Of 40 banks included in the annual Survey of Bank Reputations, Synovus ranked in the top 10 among both customers and non-customers. This was our fourth consecutive appearance in the top 10 of the most reputable bank list.
Best Places to Work: We were also named one of American Banker’s “Best Banks to Work For” in 2018. This list has long been dominated by smaller community banks, so our appearance on it was a strong validation of the people- and service-focused culture we work hard to cultivate.
Greenwich Excellence and Best Brand Awards: Synovus won 22 awards in the 2018 Greenwich Excellence Awards for Small Business Banking and Middle Market Banking. Among more than 600 U.S. banks evaluated by Greenwich Associates, 34 received awards for small business banking and 40 for middle market banking. Synovus also won 4 awards in the 2018 Greenwich Best Brand Awards for Small Business Banking and Middle Market
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Banking. Among more than 600 U.S. banks evaluated, 22 banks received awards for small business banking and 20 for middle market banking. Only one bank won more awards than Synovus.
Additional Information about Corporate Governance
After careful planning and discussion, in January 2018, the Board recently amended the mandatory retirement age of the Board, effective with the Annual Meeting,2018 annual meeting of shareholders, to the later of age 72 or seven years of Board service (but in no event shall a director serve after attaining age 75). The Board made this change as a part of a deliberative succession planning process, recognizing the upward trends in public board retirement ages and balancing the need for highly qualified candidates with the time and commitment required for director onboarding and education. We believe this change will beis in the best interests of our shareholders by ensuring a Board comprised of highly qualified individuals, highly committed and engaged in our Company’s long-term success.
Synovus has adopted Corporate Governance Guidelines which are regularly reviewed by the Corporate Governance and Nominating Committee. We have also adopted a Code of Business Conduct and Ethics which is applicable to all directors, officers and employees. In addition, we maintain procedures for the confidential, anonymous submission of any complaints or concerns about Synovus, including complaints regarding accounting, internal accounting controls or auditing matters. Shareholders may access Synovus’ Corporate Governance Guidelines, Code of Business Conduct and Ethics, each committee’s current charter, procedures for shareholders and other interested parties to communicate with the Lead Director or with thenon-management or independent directors individually or as a group and procedures for reporting complaints and concerns about Synovus, including complaints concerning accounting, internal accounting controls and auditing matters, in the Corporate Governance section of our website at investor.synovus.com.
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The Compensation Committee is responsible for the oversight and administration of the Synovus director compensation program. The Compensation Committee reviews the director compensation program annually with the assistance of its independent compensation consultant, who provides a report evaluating the program relative to peer and broader market practices. The following is a description of the director compensation program for 2017.2018.
Cash Compensation of Directors
As reflected in the “Fees Earned or Paid in Cash” column of the Director Compensation Table, during 2017,2018, non-management directors of Synovus received an annual cash retainer of $50,000, with
DirectorsExecutive Committee members do not receive any additional compensation for their service on that committee. In addition, directors who are employees of Synovus do not receive any additional compensation for their service on the Board.
By paying directors an annual retainer, Synovus compensates each director for his or her role and judgment as an advisor to Synovus, rather than for his or her attendance or effort at individual meetings. In so doing, directors with added responsibility are recognized with higher cash compensation. For example, members of the Audit Committee and Risk Committee receive a higher cash retainer based upon the enhanced duties, time commitment and responsibilities of service on that committee.those committees. The Board believes that this additional cash compensation is appropriate. In addition, directors may from time to time receive compensation for serving on advisory committees of the Synovus Board.
The members of the Board are compensated each April for their service on the Board from the date of the annual meeting to the following year’s annual meeting. As such, the Board was compensated in 20172018 for the full year of service for the period from April 20, 201726, 2018 through April 26, 2018.24, 2019.
Directors may elect to defer all or a portion of their cash compensation under the Synovus Directors’ Deferred Compensation Plan. The Directors’ Deferred Compensation Plan does not provide directors with an “above market” rate of return. Instead, the deferred amounts mirror the return of one or more investment funds selected by the director. In so doing, the plan is designed to allow directors to defer the income taxation of a portion of their compensation and to receive an investment return on those deferred amounts. All deferred fees are payable only in cash. Three directorsOne director (Dr. Pastides and Messrs. Stallworth and Storey)Pastides) elected to defer their 2017his 2018 cash compensation under this plan.
Equity Compensation of Directors
During 2017,2018, non-management directors also received awards of restricted stock units under the Synovus 2013 Omnibus Plan. On April 19, 2017,25, 2018, the Board approved grants of 1,7821,411 restricted stock units ($75,000 grant date fair market value) to thenon-management members of the Board elected on April 20, 201726, 2018 to serve as directors for a term ending on April 26, 2018.24, 2019. The director restricted stock units become fully vested and transferable upon the earlier to occur of the completion of three years of service following the grant date and the date the holder reaches mandatory retirement, as set forth in the Corporate Governance Guidelines. These restricted stock unit awards are designed to create equity ownership and to focus directors on the long-term performance of Synovus.
Synovus’ 2011 Director Stock Purchase Plan is anon-qualified, contributory stock purchase plan pursuant to which qualifying Synovus directors may purchase, with the assistance of contributions from Synovus, presently issued and outstanding shares of Synovus stock. Under the terms of the Director Stock Purchase Plan, qualifying directors may elect to contribute up to $5,000 per calendar quarter to make purchases of Synovus stock, and Synovus contributes an additional amount (equal to 15% of the directors’ cash contributions in 2017)2018). Participants in the Director Stock Purchase Plan are fully vested in all shares of Synovus stock purchased for their benefit under the Plan and may request that the shares purchased under the Plan be released to them at any time. Synovus’ contributions under this Plan are included in the “All Other Compensation” column of the Director Compensation Table below. Synovus’ contributions under the Director Stock Purchase Plan provide directors the opportunity to buy and maintain an equity interest in Synovus and to share in the capital appreciation of Synovus.
Director Stock Ownership Guidelines
Synovus’ Corporate Governance Guidelines require all directors over time to accumulate over time shares of Synovus stock equal in value to at least five times the value of their annual retainer. Directors have five years to attain this level of total stock ownership, but must attain a share ownership threshold of one times the amount of the director’s annual retainer within three years. These stock ownership guidelines are designed to align the interests of Synovus’ directors to that of Synovus’ shareholders and the long-term performance of Synovus. The restricted stock unit awards to directors and Synovus’ contributions under the Director Stock Purchase Plan assist and facilitate directors’ fulfillment of their stock ownership requirements. All of Synovus’ directors were in compliance with the guidelines as of December 31, 2017.2018.
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DIRECTOR COMPENSATION
The following table summarizes the compensation paid by Synovus tonon-management directors for the year ended December 31, 2017.2018.
Name** | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | ||||||||
Catherine A. Allen | $ | 75,000 | $ | 75,000 | $ | 2,625 | (3) | $ | 152,625 | |||
Tim E. Bentsen | 105,000 | 75,000 | 3,000 | (3) | 183,000 | |||||||
F. Dixon Brooke, Jr. | 75,000 | 75,000 | 9,250 | (3)(4) | 159,250 | |||||||
Stephen T. Butler | 70,000 | 75,000 | 7,600 | (3)(4) | 152,600 | |||||||
Elizabeth W. Camp | 120,000 | 75,000 | 1,500 | (3) | 196,500 | |||||||
Diana M. Murphy | 60,000 | 75,000 | 3,300 | (3)(4) | 138,300 | |||||||
Jerry W. Nix | 85,000 | 75,000 | — | 160,000 | ||||||||
Harris Pastides | 75,000 | 75,000 | 11,700 | (3)(4) | 161,700 | |||||||
Joseph J. Prochaska, Jr. | 95,000 | 75,000 | — | 170,000 | ||||||||
John L. Stallworth | 60,000 | 75,000 | 4,600 | (4) | 139,600 | |||||||
Melvin T. Stith | 60,000 | 75,000 | — | 135,000 | ||||||||
Barry L. Storey | 70,000 | 75,000 | 5,650 | (4) | 150,650 | |||||||
Philip W. Tomlinson | 75,000 | 75,000 | 6,000 | (3)(4) | 156,000 | |||||||
| Name** | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | ||||||||||||
| Catherine A. Allen | $ 70,000 | $ 75,000 | $ 1,500 | (3) | $ 146,500 | |||||||||||
| Tim E. Bentsen | 90,000 | 75,000 | 3,000 | (3) | 168,000 | |||||||||||
| F. Dixon Brooke, Jr. | 75,000 | 75,000 | 9,300 | (3)(4) | 159,300 | |||||||||||
| Stephen T. Butler | 60,000 | 75,000 | 8,200 | (3)(4) | 143,200 | |||||||||||
| Elizabeth W. Camp | 110,000 | 75,000 | 1,500 | (3) | 186,500 | |||||||||||
| Diana M. Murphy | 41,260 | — | 1,750 | (3)(4) | 43,010 | |||||||||||
| Jerry W. Nix | 85,000 | 75,000 | — | 160,000 | ||||||||||||
| Harris Pastides | 70,000 | 75,000 | 10,350 | (3)(4) | 155,350 | |||||||||||
| Joseph J. Prochaska, Jr. | 85,000 | 75,000 | — | 160,000 | ||||||||||||
| John L. Stallworth | 41,260 | — | 1,400 | (4) | 42,660 | |||||||||||
| Melvin T. Stith | 60,000 | 75,000 | — | 135,000 | ||||||||||||
| Barry L. Storey | 70,000 | 75,000 | 4,600 | (4) | 149,600 | |||||||||||
| Philip W. Tomlinson | 70,000 | 75,000 | 6,000 | (3)(4) | 151,000 | |||||||||||
**Mr. Stelling does not receive any additional compensation for serving as a director. His 2018 compensation is described under the Summary Compensation Table found on page 46 of this Proxy Statement.
| (1) |
| (2) | The grant date fair value of the |
| (3) | Includes contributions made by Synovus under Synovus’ Director Stock Purchase Plan of the following amounts for the following directors: $1,500 for |
| (4) | Includes compensation of |
| - 2019 Proxy Statement 19 |
- 2018 Proxy Statement 15
| Proposal 1 | Election of |
Number
Pursuant to Synovus’ bylaws, the Board shall consist of not less than 8 nor more than 25 directors with such number to be set either by the Board or shareholders representing at least 662⁄∕3% of the votes entitled to be cast by the holders of all of Synovus’ issued and outstanding shares. Currently, the size of the Board is set at 14 members but effective at the Annual Meeting, the size of the Board shall be 11 members. Proxies cannot be voted at the Annual Meeting for a greater number of persons than the 1411 nominees named in this Proxy Statement.
Four of our current directors, Catherine A. Allen, Jerry W. Nix, Melvin T. Stith and Philip W. Tomlinson, have reached the mandatory retirement age for directors established under our Corporate Governance Guidelines and will not stand for re-election at the Annual Meeting. We thank these directors for their loyal and outstanding service to the Board and Synovus.
Nominees for Election as Director
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The 1411 nominees for director named in this Proxy Statement were selected by the Corporate Governance and Nominating Committee based upon a review of the nominees and consideration of the director qualifications described under “Corporate Governance and Board Matters—Consideration of Director Candidates—Director Qualifications” on page 1213 of this Proxy Statement and described below. With respect to the nomination of continuing directors forre-election, the Corporate Governance and Nominating Committee also considers the individual’s contributions to the Board and its committees. AllTen of the 1411 nominees currently serve as a director. The nominees for director include sevenfive current and former chief executive officers, at least 129 persons who could be recognized as “audit committee financial experts,” twoa current or former deanspresident of a national universities,university, and a former partner of a global auditing firm. The nominees collectively have over 200 years ofextensive experience in banking and financial services as well as significant experience in insurance, investment management, commercial real estate, risk management, and accounting. In addition, each of the nominees has:
| ✓ | Demonstrated business acumen and financial literacy; |
| ✓ | A high degree of engagement and commitment; |
| ✓ | A reputation for high integrity, judgment, professionalism and adherence to high ethical standards; |
| ✓ | Extensive experience in the public, private ornot-for-profit sectors; |
| ✓ | Leadership and expertise in their respective fields; |
| ✓ | Strategic thinking; and |
| ✓ | Involvement in educational, charitable and community organizations. |
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PROPOSALS TO BE VOTED ON
Our directors also have a wide range of other qualifications, skills and experiences that align with our long-term corporate strategy. In fact, the Corporate Governance and Nominating Committee has identifiedconsidered a number of specific areas, experiences and qualifications that are desirable and currently represented byin evaluating the nominees:
ThirteenTen of the 1411 nominees for election named below are considered independent under the NYSE rules and Synovus’ director independence standards. For additional information about our director independence requirements, consideration of director candidates, director tenure, leadership structure of our Board and other corporate governance matters, see “Corporate Governance and Board Matters” on page 78 of this Proxy Statement.
The following table sets forth information regarding the 1411 nominees for election to the Board.
| Name | Age | Year First Elected Director | Principal Occupation | Committees | ||||||||
| Catherine A. Allen | 71 | 2011 | Chairman and Chief Executive Officer, The Santa Fe Group | CGN, R | ||||||||
| Tim E. Bentsen | 64 | 2014 | Partner, Retired, KPMG LLP | E, A (Chair), R | ||||||||
| F. Dixon Brooke, Jr. | 70 | 2017 | Chief Executive Officer and President, Retired, EBSCO Industries, Inc. | A, C | ||||||||
| Stephen T. Butler | 67 | 2012 | Chairman of the Board, W.C. Bradley Company | CGN | ||||||||
| Elizabeth W. Camp | 66 | 2003 | President and Chief Executive Officer, DF Management, Inc. | E, C (Chair), CGN, R | ||||||||
| Diana M. Murphy | 61 | 2017 | Managing Director, Rocksolid Holdings, LLC | CGN | ||||||||
| Jerry W. Nix | 72 | 2012 | Vice Chairman, Executive Vice President and Chief Financial Officer, Retired, Genuine Parts Company | A, CGN (Chair) | ||||||||
| Harris Pastides | 64 | 2014 | President, University of South Carolina | CGN, R | ||||||||
| Joseph J. Prochaska, Jr. | 67 | 2011 | Executive Vice President and Chief Accounting Officer, Retired, MetLife, Inc. | E, A, R (Chair) | ||||||||
| John L. Stallworth | 65 | 2017 | Partner, Genesis II | R | ||||||||
| Kessel D. Stelling | 61 | 2010 | Chairman of the Board, Chief Executive Officer and President, Synovus Financial Corp. | E (Chair) | ||||||||
| Melvin T. Stith | 71 | 1998 | Interim President, Norfolk State University and Dean, Retired, Martin J. Whitman School of Management, Syracuse University | C | ||||||||
| Barry L. Storey | 58 | 2013 | Principal, BLS Holdings Group, LLC | C, CGN | ||||||||
| Philip W. Tomlinson | 71 | 2008 | Chairman of the Board and Chief Executive Offer, Retired, Total System Services, Inc. | C, R | ||||||||
Name | Age | Year First Elected Director | Principal Occupation | Committees |
Tim E. Bentsen | 65 | 2014 | Partner, Retired, KPMG LLP | E, A (Chair), C, R |
F. Dixon Brooke, Jr. | 71 | 2017 | Chief Executive Officer and President, Retired, EBSCO Industries, Inc. | A, C |
Stephen T. Butler | 68 | 2012 | Chairman of the Board and Chief Executive Officer, Retired, W.C. Bradley Company | C, CGN |
Elizabeth W. Camp | 67 | 2003 | President and Chief Executive Officer, DF Management, Inc. | E, C (Chair), CGN, R |
Diana M. Murphy | 62 | 2017 | Managing Director, Rocksolid Holdings, LLC | CGN |
Harris Pastides | 65 | 2014 | President, University of South Carolina | CGN, R |
Joseph J. Prochaska, Jr. | 68 | 2011 | Executive Vice President and Chief Accounting Officer, Retired, MetLife, Inc. | E, A, R (Chair) |
John L. Stallworth | 66 | 2017 | Partner, Genesis II | R |
Kessel D. Stelling | 62 | 2010 | Chairman of the Board, Chief Executive Officer and President, Synovus Financial Corp. | E (Chair) |
Barry L. Storey | 59 | 2013 | Principal, BLS Holdings Group, LLC | C, CGN |
Teresa White | 52 | — | President, Aflac US | - |
| A: | Audit Committee |
| C: | Compensation Committee |
| CGN: | Corporate Governance and Nominating Committee |
| E: | Executive Committee |
| R: | Risk Committee |
| - 2019 Proxy Statement 21 |
- 2018 Proxy Statement 17
PROPOSALS TO BE VOTED ON
The business experience and other specific skills, attributes and qualifications of each of the nominees is as follows:
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PROPOSALS TO BE VOTED ON
| | Elizabeth W. Camp is President and Chief Executive Officer of DF Management, Inc., a private investment and commercial real estate management company, a position she has held since 2000. Previously and for 16 years, Ms. Camp served in various capacities, including President and Chief Executive Officer, of Camp Oil | |
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- 2018 Proxy Statement 19
PROPOSALS TO BE VOTED ON
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| - 2019 Proxy Statement 23 |
PROPOSALS TO BE VOTED ON
 | Joseph J. Prochaska, Jr. is the former Executive Vice President and Chief Accounting Officer of MetLife, Inc., a public insurance and financial services company, a position he held from 2005 until his retirement in 2009. From 2003 to 2005, he served as MetLife’s Senior Vice President and Chief Accounting Officer. From 1992 to 2003, Mr. Prochaska served in various executive leadership positions at Aon Corporation, including Senior Vice President and Controller, Executive Vice President and Chief Financial Officer of Aon Group, Inc. and President of Aon’s Financial Services Group. From 1975 to 1992, he served in various executive leadership positions at Shand, Morahan & Co., Inc. and Evanston Insurance Company, including Chief Financial Officer, Chairman and Chief Executive Officer. In addition, Mr. Prochaska’s background includes experience with a major accounting firm in Chicago, Illinois as a certified public accountant. He holds a bachelor’s degree in accounting from the University of Notre Dame. Mr. Prochaska currently serves on the board of several private companies and is a member of the audit committee for one of these companies. He has also received the designation of a Governance Fellow by the |
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24 | | - 2019 Proxy Statement |
PROPOSALS TO BE VOTED ON
 | Teresa White |
The Board of Directors unanimously recommends that you vote “FOR” each of the 1411 nominees.
| - 2019 Proxy Statement 25 |
- 2018 Proxy Statement 21
PROPOSALS TO BE VOTED ON
| Proposal 2 | Approval of Advisory Vote on the Compensation of our Named Executive Officers as Determined by the Compensation Committee |
Synovus believes that our compensation policies and procedures for our named executive officers are competitive, are focused on pay for performance principles and are strongly aligned with the long-term interests of our shareholders. Synovus also believes that both we and our shareholders benefit from responsive corporate governance policies and constructive and consistent dialogue. Each year, as required by Section 14A of the Securities Exchange Act, we give you, as a shareholder, the opportunity to endorse the compensation for our named executive officers. The proposal described below, commonly known as a “Say on Pay” proposal, gives you the opportunity to approve, on an advisory basis, such compensation as described in this Proxy Statement.
In deciding how to vote on this proposal, the Board encourages you to read the “Executive Compensation—Compensation Discussion and Analysis” section of this Proxy Statement and the tabular and narrative disclosure which follows it. In those sections, we discuss each element of compensation, including base salaries, short-term incentives, long-term incentives and retirement benefits. We also discuss our policies and other factors which affect the decisions of our Compensation Committee.
In many cases, we are required to disclose in the executive compensation tables accounting or othernon-cash estimates of future compensation. Because of this, we encourage you to read the footnotes and narratives which accompany each table in order to understand anynon-cash items.
We believe our executive compensation is aligned with shareholders because:
We believe that the compensation delivered to each named executive officer in 20172018 was fair, reasonable and reasonable.aligned with performance.
Unless the Board modifies its policy on the frequency of future “Say on Pay” advisory votes, the next “Say on Pay” vote will be held at the 20192020 annual meeting of shareholders. The next advisory vote on the frequency of “Say on Pay” proposals is scheduled to occur at the 2020 annual meeting of shareholders.
The Board of Directors unanimously recommends that you vote “FOR” the advisory vote on the compensation of the named executive officers as determined by the Compensation Committee.
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PROPOSALS TO BE VOTED ON
| Proposal 3 | Ratification of Appointment of the Independent Auditor |
The Audit Committee has appointed the firm of KPMG LLP as the independent auditor to audit the consolidated financial statements of Synovus and its subsidiaries for the fiscal year ending December 31, 20182019 and Synovus’ internal control over financial reporting as of December 31, 2018.2019. KPMG has been appointed continuously since 1975. Although shareholder ratification of the appointment of Synovus’ independent auditor is not required by our bylaws or otherwise, we are submitting the selection of KPMG to our shareholders for ratification to permit shareholders to participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select a different independent auditor for Synovus.
The Audit Committee annually reviews KPMG’s independence and performance in connection with the determination to retain KPMG. In conducting its review this year, the Audit Committee considered, among other things:
| • | KPMG’s independence (see “Audit Committee Report” beginning on page 31 of this Proxy Statement). |
Based on the results of its review this year, the Audit Committee concluded that KPMG is independent and that it is in the best interests of Synovus and its shareholders to appoint KPMG LLP to serve as Synovus’ independent auditor for 2018.2019.
Synovus’ Audit Committee oversees the process for, and ultimately approves, the selection of the independent auditor’s lead engagement partner at the five-year mandatory rotation period. At the Audit Committee’s instruction, KPMG selects candidates to be considered for the lead engagement partner role, who are then interviewed by members of Synovus’ senior management. After discussing the results of senior management’s interviews, the members of the Audit Committee, as a group, interview the candidates. The Audit Committee then considers the appointment and votes on the selection.
Representatives of KPMG will be present at the Annual Meeting with the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders present at the meeting.
The Board of Directors unanimously recommends that you vote “FOR” ratification of the appointment of KPMG LLP as the independent auditor for the year 2018.
- 2018 Proxy Statement 232019.
| - 2019 Proxy Statement 27 |
The following table sets forth the name, age and position of each executive officer of Synovus as of the date of this Proxy Statement.
Name | Age | |||||
Position with Synovus | ||||||
Kessel D. Stelling(1) | 62 | Chairman of the Board, Chief Executive Officer and President | ||||
Kevin S. Blair(2) | 48 | Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer | ||||
Robert W. Derrick(3) | 55 | Executive Vice President and Chief | ||||
Mark G. Holladay | 63 | Executive Vice President and Chief Risk Officer | ||||
Jill K. Hurley | 39 | |||||
Chief Accounting Officer | ||||||
| (1) | As Mr. Stelling is a director of Synovus, relevant information pertaining to his positions with Synovus is set forth under the caption “Nominees for Election as Director” beginning on page |
| Kevin S. Blair was elected Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer in December 2018, having previously served as Executive Vice President and Chief Financial Officer |
| Mark G. Holladay was elected Executive Vice President and Chief Risk Officer of Synovus in October 2008. From 2000 to 2008, Mr. Holladay served as Executive Vice President and Chief Credit Officer of Synovus. From 1974 until 2000, Mr. Holladay served in various capacities with |
| (5) | Jill K. Hurley was elected Chief Accounting Officer in August 2018. Prior to joining Synovus, |
28 | |
| - 2018 Proxy Statement |
STOCK OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth ownership of shares of Synovus common stock by each director, each director nominee, each executive officer named in the Summary Compensation Table and all directors and executive officers as a group as of DecemberJanuary 31, 2017.2019.
| Name | Shares of Common Stock Beneficially Owned(1) | Percentage of Outstanding Shares of Common Stock Beneficially Owned | Restricted Stock Units(2) | Total(2) | ||||||||||||
| Catherine A. Allen | 12,841 | (3) | * | 5,622 | 18,463 | |||||||||||
| Tim E. Bentsen | 7,355 | (4) | * | 5,622 | 12,977 | |||||||||||
| Kevin S. Blair | 6,325 | * | 27,276 | 33,601 | ||||||||||||
| F. Dixon Brooke, Jr. | 58,423 | (5) | * | 1,782 | 60,215 | |||||||||||
| Stephen T. Butler | 945,905 | (6) | * | 5,622 | 951,527 | |||||||||||
| Elizabeth W. Camp | 23,077 | * | 5,622 | 28,699 | ||||||||||||
| Allen J. Gula, Jr. | 53,321 | * | 20,964 | 74,285 | ||||||||||||
| Allan E. Kamensky | 51,185 | (7) | * | 13,045 | 64,230 | |||||||||||
| Diana M. Murphy | 2,704 | * | — | 2,704 | ||||||||||||
| Jerry W. Nix | 7,063 | * | 5,622 | 12,685 | ||||||||||||
| Harris Pastides | 6,594 | * | 5,622 | 12,216 | ||||||||||||
| Joseph J. Prochaska, Jr. | 11,364 | (8) | * | 5,622 | 16,986 | |||||||||||
| J. Barton Singleton | 54,718 | * | 13,045 | 67,763 | ||||||||||||
| John L. Stallworth | 603 | * | — | 603 | ||||||||||||
| Kessel D. Stelling | 249,939 | (9) | * | 98,012 | 347,951 | |||||||||||
| Melvin T. Stith | 11,608 | (10) | * | 5,622 | 17,230 | |||||||||||
| Barry L. Storey | 30,704 | (11) | * | 5,622 | 36,326 | |||||||||||
| Philip W. Tomlinson | 21,580 | * | 5,622 | 27,202 | ||||||||||||
| Directors and Executive Officers as a Group (25 persons) | 1,816,978 | 1.5% | 300,994 | 2,117,972 | ||||||||||||
Name | Shares of Common Stock Beneficially Owned(1) | Percentage of Outstanding Shares of Common Stock Beneficially Owned | Restricted Stock Units(2) | Total(2) | ||||||||
Catherine A. Allen | 15,444 | (3) | * | 5,116 | 20,560 | |||||||
Tim E. Bentsen | 11,953 | (4) | * | 5,116 | 17,069 | |||||||
Kevin S. Blair | 16,344 | (5) | * | 39,010 | 55,354 | |||||||
F. Dixon Brooke, Jr. | 58,955 | (6) | * | 3,271 | 62,226 | |||||||
Stephen T. Butler | 948,605 | (7) | * | 5,116 | 953,721 | |||||||
Elizabeth W. Camp | 28,686 | * | 5,116 | 33,802 | ||||||||
Allen J. Gula, Jr. | 58,667 | (8) | * | 15,928 | 74,595 | |||||||
Mark G. Holladay | 58,961 | (9) | * | 13,103 | 72,064 | |||||||
Diana M. Murphy | 5,275 | * | 1,434 | 6,709 | ||||||||
Jerry W. Nix | 9,110 | * | 5,116 | 14,226 | ||||||||
Harris Pastides | 9,267 | * | 5,116 | 14,383 | ||||||||
Joseph J. Prochaska, Jr. | 14,411 | (10) | * | 5,116 | 19,527 | |||||||
J. Barton Singleton | 61,053 | * | 13,103 | 74,156 | ||||||||
John L. Stallworth | 1,118 | * | 1,434 | 2,552 | ||||||||
Kessel D. Stelling | 287,921 | (11) | * | 88,471 | 376,392 | |||||||
Melvin T. Stith | 13,083 | (12) | * | 5,116 | 18,199 | |||||||
Barry L. Storey | 32,897 | (13) | * | 5,116 | 38,013 | |||||||
Philip W. Tomlinson | 24,132 | * | 5,116 | 29,248 | ||||||||
Teresa White | - | * | - | - | ||||||||
Directors and Executive Officers as a Group (21 persons) | 1,658,184 | 1.0 | % | 230,647 | 1,888,831 | |||||||
| * | Less than one percent of the outstanding shares of Synovus stock. |
| (1) | Beneficial ownership is determined under the rules and regulations of the SEC, which provide that a person is deemed to beneficially own all shares of common stock that such person has the right to acquire within 60 days. Share numbers in this column include restricted stock units that will vest within 60 days of |
Name | ||||||
Number of RSUs vesting within 60 days | ||||||
Kevin S. Blair | 7,033 | |||||
Allen J. Gula, Jr. | 15,326 | |||||
Mark G. Holladay | 10,023 | |||||
J. Barton Singleton | 10,023 | |||||
Kessel D. Stelling | 66,272 | |||||
In addition, the executive officers other than our executive officers named in the Summary Compensation Table had rights to acquire an aggregate of 2,173 shares of Synovus stock through restricted stock units that will vest within 60 days.
This column includes shares held by spouses, minor children, Individual Retirement Accounts (IRAs) and trusts as to which each such person has beneficial ownership. With respect to directors, this column also includes shares allocated to such director’s individual accounts under the Synovus 2011 Director Stock Purchase Plan; with respect to executive officers, this column includes shares allocated to such person’s individual accounts under the Synovus 2011 Employee Stock Purchase Plan, Synovus’ 401(k) savings plan and IRAs.
None of the shares of Synovus stock held by these other executive officers were pledged or otherwise held in a margin account.
| (2) | While shares held in the “Restricted Stock Units” column do not represent a right of the holder to receive our common stock within 60 days, these amounts are being disclosed because we believe they further our goal of aligning directors and executive management with shareholder interests. These restricted stock units are in the form of restricted stock units, MRSUs and PSUs. In addition, this column includes the accrued dividend equivalent rights related to these restricted stock units. Shares in the “Total” column include these shares as well as shares deemed to be beneficially owned pursuant to the rules and regulations of the SEC. |
| (3) | In addition, Ms. Allen beneficially owns |
| (4) | Includes |
| (5) | In addition, Mr. Blair beneficially owns 2,000 shares of Preferred Stock. |
| (6) | Includes 7,668 shares held by his spouse. |
| Includes 56,857 shares held in a family partnership in which Mr. Butler’s spouse has shared investment and voting powers, 242,267 shares held in various trusts in which Mr. Butler has shared investment and voting powers and 633,897 shares held in a family trust in which Mr. Butler shares a pecuniary interest but as to which Mr. Butler disclaims beneficial ownership. In addition, Mr. Butler beneficially owns 2,000 shares of Preferred Stock. |
| - 2019 Proxy Statement 29 |
- 2018 Proxy Statement 25
STOCK OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
| In addition, Mr. Gula beneficially owns 2,000 shares of Preferred Stock. |
| (9) | In addition, Mr. Holladay beneficially owns 4,000 shares of Preferred Stock. |
| (10) | Includes |
| Includes |
| Includes 25 shares held jointly by his spouse and his child. |
| Includes |
Pursuant to Synovus’ Articles of Incorporation and bylaws, certain shares of Synovus common stock are entitled to ten votes per share, including shares which (1) have been beneficially owned continuously by the same shareholder since February 22, 2014;21, 2015; (2) have been held by the same beneficial owner to whom the shares were issued as a result of an acquisition of a company or business by Synovus where the resolutions adopted by Synovus’ Board of Directors approving the acquisition specifically grant ten votes per share to such shares; (3) have been acquired under any employee, officer and/or director benefit plan maintained for one or more employees, officers and/or directors of Synovus and/or its subsidiaries and have been held by the same owner for whom it was acquired under any such plan; (4) have been acquired by reason of participation in a dividend reinvestment plan offered by Synovus and have been held by the same owner for whom the shares were acquired under any such plan; or (5) have been owned by a holder who, in addition to certain other shares, is the owner of less than 162,723 shares of Synovus common stock. Applying these standards, we believe that all of the shares of Synovus common stock set forth in the table above are entitled to ten votes per share.
Based upon the total voting power certified at Synovus’ 2017 Annual Meeting2018 annual meeting of Shareholders,shareholders and based on the assumption that all shares of Synovus common stock held by the directors and executive officers of Synovus qualify for ten votes per share as set forth above, (1) the voting power of each of the directors and named executive officers, other than Messrs. Butler and Stelling, would represent less than 1% of the total voting power, (2) Mr. Butler’s beneficial ownership would represent approximately 4.6%3.4% of the total voting power, 3.1%2.3% of which is disclaimed by Mr. Butler, (3) Mr. Stelling’s beneficial ownership would represent approximately 1.2%1.0% of the total voting power, and (4) directors and executive officers as a group would represent approximately 8.8%6.0% of the total voting power, 3.1%2.3% of which is disclaimed by Mr. Butler.
The total voting power represented by the common shares owned by directors, named executive officers and directors and executive officers as a group may be determined only at the time of a shareholder meeting due to the need to obtain certifications as to beneficial ownership of common shares held in “street” or “nominee” name.
The following table sets forth the number of shares of Synovus common stock held by the only known holders of more than 5% of the outstanding shares of Synovus common stock as of December 31, 2017.2018.
Name and Address of Beneficial Owner | Shares of Synovus Stock Beneficially Owned as of 12/31/18 | Percentage of Outstanding Shares of Synovus Stock Beneficially Owned as of 12/31/18(1) | ||||
BlackRock, Inc. 40 East 52nd Street New York, New York 10022 | 15,241,685 | (2) | 13.1% | |||
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvem, Pennsylvania 19355 | 12,051,007 | (3) | 10.4% | |||
Synovus Trust Company, N.A.(4) 1148 Broadway Columbus, Georgia 31901 | 5,981,459 | (5) | 5.2% | |||
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| (1) | The ownership percentages set forth in this column are based upon Synovus’ issued and outstanding shares as of December 31, |
| (2) | This information is based upon information included in a Schedule 13G filed with the SEC on January |
| (3) | This information is based upon information included in a Schedule 13G filed with the SEC on |
| (4) | The shares of Synovus stock held by Synovus Trust Company are voted by the Vice President of Operations of Synovus Trust Company. |
| (5) | As of December 31, 2018, the banking, brokerage, investment advisory and trust company subsidiaries of Synovus, including Synovus Bank through its wholly owned subsidiary, Synovus Trust Company, N.A., held in various fiduciary or advisory capacities a total of 5,980,399 shares of Synovus stock as to which they possessed sole or shared voting or investment power. Of this total, Synovus Trust Company held 5,439,165 shares as to which it possessed sole voting power, 5,754,524 shares as to which it possessed sole investment power, 28,814 shares as to which it possessed shared voting power and 206,791 shares as to which it possessed shared investment power. The other banking, brokerage, investment advisory and trust subsidiaries of Synovus held 1,060 shares as to which they possessed sole investment power. Synovus and its subsidiaries disclaim beneficial ownership of all shares of Synovus stock which are held by them in various fiduciary, advisory, non-advisory or agency capacities. |
| | - |
The Audit Committee of the Board of Directors is comprised of four directors, each of whom the Board has determined to be an independent director as defined by the listing standards of the NYSE and the categorical standards of independence set by the Board. The duties of the Audit Committee are summarized in this Proxy Statement under “Corporate Governance and Board Matters — Committees of the Board” beginning on page 89 and are more fully described in the Audit Committee charter adopted by the Board of Directors. A copy of the Audit Committee charter is available in the Corporate Governance section of our website at investor.synovus.com.
One of the Audit Committee’s primary responsibilities is to assist the Board in its oversight responsibility regarding the integrity of Synovus’ financial statements and systems of internal controls. Management is responsible for Synovus’ accounting and financial reporting processes, the establishment and effectiveness of internal controls and the preparation and integrity of Synovus’ consolidated financial statements. KPMG LLP, Synovus’ independent auditor, is responsible for performing an independent audit of Synovus’ consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing opinions on whether those financial statements are presented fairly in conformity with accounting principles generally accepted in the United States and on the effectiveness of Synovus’ internal control over financial reporting. The Audit Committee is directly responsible for the compensation, appointment and oversight of KPMG LLP. The function of the Audit Committee is not to duplicate the activities of management or the independent auditor, but to monitor and oversee Synovus’ financial reporting process.
In discharging its responsibilities regarding the financial reporting process, the Audit Committee:
| • | Discussed with KPMG LLP the matters required to be discussed by PCAOB Auditing Standard No. 1301,Communications with Audit Committees; |
The Audit Committee has discussed with Synovus’ internal auditors and KPMG LLP the overall scope and plans for their respective audits. The Audit Committee regularly meets with Synovus’ internal auditors and KPMG, with and without management present, to discuss the results of their examinations and their observations and recommendations regarding Synovus’ internal controls.
Based upon the review and discussions referred to in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements referred to above be included in Synovus’ Annual Report on Form10-K for the year ended December 31, 20172018 filed with the Securities and Exchange Commission.
The Audit Committee
Tim E. Bentsen, Chair
F. Dixon Brooke, Jr.
Jerry W. Nix
Joseph J. Prochaska, Jr.
KPMG LLP Fees and Services
The following table presents fees for professional audit services rendered by KPMG LLP for the audit of Synovus’ annual consolidated financial statements for the years ended December 31, 20172018 and December 31, 20162017 and fees billed for other services rendered by KPMG during those periods.
| 2017 | 2016 | |||||||
| Audit Fees(1) | $ | 2,898,185 | $ | 2,557,040 | ||||
| Audit Related Fees(2) | 270,000 | 267,079 | ||||||
| Tax Fees(3) | 301,726 | 188,856 | ||||||
| All Other Fees(4) | — | 77,000 | ||||||
|
|
|
| |||||
| $ | 3,469,911 | $ | 3,089,975 | |||||
- 2018 Proxy Statement 27
2018 | 2017 | |||||
Audit Fees(1) | $ | 2,923,204 | $ | 2,898,185 | ||
Audit Related Fees(2) | 516,032 | 270,000 | ||||
Tax Fees(3) | 290,913 | 301,726 | ||||
All Other Fees | — | — | ||||
$ | 3,730,149 | $ | 3,469,911 | |||
AUDIT COMMITTEE REPORT
| (1) | Audit fees consisted of fees for professional services provided in connection with the audits of Synovus’ consolidated financial statements and internal control over financial reporting, reviews of quarterly financial statements, issuance of comfort letters and other SEC filing matters, and audit or attestation services provided in connection with other statutory or regulatory filings. |
| (2) | Audit related fees consisted principally of fees for assurance, attestation and related services that are reasonably related to the performance of the audit or review of Synovus’ financial statements and are not reported above under the caption “Audit Fees.” |
| (3) | Tax fees consisted of fees for tax consulting and compliance, tax advice and tax planning services. |
|
AUDIT COMMITTEE REPORT
Policy on Audit CommitteePre-Approval
The Audit Committee has the responsibility for appointing, setting the compensation for and overseeing the work of Synovus’ independent auditor. In recognition of this responsibility, the Audit Committee has established a policy topre-approve all audit and permissiblenon-audit services provided by the independent auditor in order to assure that the provision of these services does not impair the independent auditor’s independence. Synovus’ Audit CommitteePre-Approval Policy addresses services included within the four categories of audit and permissiblenon-audit services, which include Audit Services, Audit Related Services, Tax Services and All Other Services.
The Audit Committee uses a combination of two approaches topre-approve audit and permittednon-audit services performed by the independent auditor: classpre-approval and specificpre-approval.Class pre-approval. Class pre-approval is reserved for certain limited audit, audit-related and tax services, as approved by the Audit Committee each year. All other services performed by the independent auditor must be specificallypre-approved by the Audit Committee. For instance, the annual audit services engagement terms and fees are subject to the specificpre-approval of the Audit Committee. In addition, the Audit Committee must specifically approve permissiblenon-audit services classified as All Other Services.
Prior to engagement, management submits to the Committee for approval a detailed list of the Audit Services, Audit Related Services and Tax Services that it recommends the Committee engage the independent auditor to provide for the fiscal year. Each service is allocated to the appropriate category and where specificpre-approval is required, the specific service is accompanied by a budget estimating the cost of that service. The Committee will, if appropriate, approve both the list of Audit Services, Audit Related Services and Tax Services, the classification of the service and where specificpre-approval is required, the budget for such services.
The Committee is informed at each Committee meeting as to the services actually provided by the independent auditor pursuant to thePre-Approval Policy. Any proposed service that is not separately listed in thePre-Approval Policy or any service exceeding thepre-approved fee levels must be specificallypre-approved by the Committee. The Audit Committee has delegatedpre-approval authority (on engagements not exceeding $100,000) to the Chairman of the Audit Committee. The Chairman must report anypre-approval decisions made by him to the Committee at its next scheduled meeting.
All of the services described in the table above under the captions “Audit Fees,” “Audit Related Fees,” “Tax Fees” and “All Other Fees” were approved by the Committee pursuant to legal requirements and the Committee’s Charter andPre-Approval Policy.
32 | | |
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Compensation Discussion and Analysis
CD&A Overview
The following Compensation Discussion and Analysis, or CD&A, describes our compensation program for our named executive officers, who are listed in the table below:
Name | Title | |
Kessel D. Stelling | Chairman of the Board, Chief Executive Officer and President | |
Kevin S. Blair | Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer | |
Allen J. Gula, Jr. | Executive Vice President and Chief Operations Officer (Retired Effective December 31, 2018) | |
J. Barton Singleton | Executive Vice President and President, Financial Management Services | |
Mark G. Holladay | Executive Vice President and Chief Risk Officer |
Specifically, the CD&A addresses:
For additional information about the Compensation Committee and its charter, its processes and procedures for administering executive compensation, the role of compensation consultants and other governance information, please see “Corporate Governance and Board Matters—Committees of the Board—Compensation Committee” on page 910 of this Proxy Statement.
| ||
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Executive Summary
Synovus 2017 Performance
Our 20172018 financial results were generally in line with our 20172018 guidance and overarching objectives. Our continued focus on sustainable growth, enhanced profitability and greater efficiency led to broad-based improvement. This improvement was evident for the year through our performance in several key financial measurements—earnings per share growth, return on average assets, return on average common equity and the efficiency ratio, with each measurement exhibiting notable progress. Moreover, during 2017,demonstrating substantial progress in 2018. In fact, we achieved our previously establishedbegan 2018 by establishing new long-term targets of a 10+including 10.0+% compounded annual growth in earnings per share growth, 1.0+over three years, a 1.45+% adjusted return on average assets, 10.0+17.0+% adjusted return on average tangible common equity and a sub 60%an adjusted tangible efficiency ratio.
ratio of less than 50%. During 2018 we either exceeded, or were on track to exceed, each of these recently established targets.
| • | Earnings growth—Net income available to common shareholders was |
| • | Revenue growth—Total revenues were |
| • | Profitability—Return on average assets was 1.35% in 2018 compared to 0.89% in |
| • | Efficiency—Non-interest expense was |
| • | Loan portfolio growth and diversification—Total loans ended the year at $25.95 billion, a $1.16 billion or 4.7% increase from 2017. Total average loans |
| • | Deposit growth—Total average deposits were |
| • | Credit quality—Credit quality continued to improve. Thenon-performing assets ratio ended the year at |
| • | Capital management—Our capital ratios continue to be well above regulatory requirements. The common equity Tier 1 ratio ended the year at |
*For a reconciliation of the foregoingnon-GAAP financial measures, including adjusted net income per diluted common share, adjusted total revenues, adjustednon-interest income, adjusted return on average assets, adjustednon-interest expense, adjusted efficiency ratio, average core transaction deposit accounts, adjustednet-charge off ratio, deposits, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, and tangible book value per common share, please refer toAppendix B of this Proxy Statement.
Despite our strong financial and operating results in 2018, we experienced a negative shareholder return for several reasons. Bank stocks in general declined during 2018, as a result of uncertainties the future interest rate environment and fear that the U.S. economy could slip into a recession in the near future. For example, the KBW Regional Bank Index declined 20% during 2018. Although bank stocks fell during 2018, our stock declined more than most. We announced our acquisition of FCB on July 24, 2018. Merger announcements in the banking industry often experience negative market reaction due to the risks surrounding such mergers, and our stock was not an exception. In the weeks preceding our announcement of the FCB acquisition, our stock was trading at a 52-month high and we were trading at a price/earnings multiple which exceeded that of our peers. According to post-announcement feedback from investors and industry analysts, part of the reason for this premium multiple was speculation that Synovus could be a seller instead of a buyer in the market. In the days following the announcement of the FCB acquisition, our stock fell 6.5% on a relative basis to the KBW Regional Bank Index and continued to decline during the year. At the end of 2018, our stock was trading at a price/earnings discount compared to our peers. Despite this decline, we continue to believe that the FCB acquisition is in the best interests of our shareholders and are committed to the successful integration of FCB and the realization of the anticipated benefits of the FCB acquisition.
For additional information relating to our business and our subsidiaries, including a detailed description of our operating results and financial condition for 2017, 2016 and 2015, please refer to our 20172018 Annual Report that accompanies this Proxy Statement.
34 | | - 2019 Proxy Statement |
2017
EXECUTIVE COMPENSATION
2018 Compensation
2018 compensation outcomes reflected our performance:
The impact of executivesour total shareholder return in 2017 reflects Synovus’2018 is not reflected in the amounts that appear in the Summary Compensation Table because SEC rules require that equity awards be reflected at their target value on the date of grant, which occurred in February prior to the announcement of our acquisition of FCB. Because all of our equity awards are granted in Synovus stock, the value of our CEO’s 2018 compensation, as well as the value of his historical equity grants, has fallen in alignment with our shareholders.
The following graph illustrates the alignment of our CEO’s compensation with our 2018 performance, including strong financial results and negative shareholder returns. The graph compares the target value of our CEO’s 2018 compensation (which was not increased from 2017) with the realizable value at the end of 2018.
* Realizable compensation includes the actual annual incentive paid for 2018 performance and the value of 2018 equity grants as of December 31, 2018 (based on one tranche of MRSUs paying out at 75% of target and assuming target payouts for PSUs and remaining MRSU tranches).
Executive Compensation Governance
We continue to maintain strong governance features in connection with our executive compensation program, which reflects our pay for performance philosophy.as outlined in the table below and further discussed in this CD&A.
WHAT WE DO | |||
✓ | Pay for Performance - See page 37 | ||
✓ | Mitigate Risk in Incentive Programs - See page 44 | ||
✓ | Require Meaningful Share Ownership and Retention of Shares until Retirement - See page 43 | ||
✓ | Review Tally Sheets - See page 44 | ||
✓ | Provide Reasonable “Double Trigger” Change in Control Provisions - See page 42 | ||
✓ | Retain an Independent Compensation Consultant - See page 44 | ||
✓ | Maintain Clawback Policy Covering Inaccurate Financials and Material Risk Management Failures - See page 43 | ||
✓ | Risk-Based Forfeiture Provisions Included in Equity Awards - See page 41 | ||
| |
✗ | No Employment Contracts - See page 42 |
✗ | No Option Repricing - See page 44 |
✗ | No Hedging of Synovus Equity Securities by Executive Officers and Directors - See page 43 |
✗ | No Pledging of Synovus Equity Securities by Executive Officers and Directors - See page 43 |
✗ | No Personal Use of Aircraft – See page 41 |
| - |
EXECUTIVE COMPENSATION
Total Direct Compensation Pay Mix
CEO TARGET TOTAL DIRECT COMPENSATION | OTHER NEOs TARGET TOTAL DIRECT COMPENSATION | |
 |  |
Base Salaries
Short-Term Incentives
Form of Award | Payout Formula Measures | Qualitative Adjustment Factors | Payout Range | |||
Cash |
|
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| |||
Core Earnings (60%) AdjustedPre-Provision Net Revenue (20%) Adjusted Efficiency Ratio (20%) | Quality of Earnings, Quality of Loan Growth (including consideration of concentration limits), Quality of Deposit Growth, Expense Management, | 0% to 150% of Target |
Long-Term Incentives
Form of Award | Vesting | Payout Formula Measures | Payout Range | |||
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Performance Stock Units
| 100% after 3 years | Weighted Return on Average Assets
| ||||
|
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| 0% to 150% of Award Amount | |||
Market Restricted Stock Units (40% of award value) | 1∕3 per year over 3 years (33 1∕3% per year) | Total Shareholder Return (possible downward discretionary adjustment based upon risk considerations—see page 41) | 75% to 125% of Award Amount |
We believe that the compensation delivered to each named executive officer in 20172018 was fair, reasonable and reasonable.aligned with our performance.
36 | | - 2019 Proxy Statement |
- 2018 Proxy Statement
31
EXECUTIVE COMPENSATION
Results of 20162017 Advisory Vote to Approve Executive Compensation
At the 20172018 annual meeting of shareholders, we held an advisory vote on executive compensation for 2016.2017. Over 96% of the votes cast were in favor of this advisory proposal. The Compensation Committee considered this favorable outcome and believed the results conveyed our shareholders’ support of our executive compensation programs and did not make any specific changes to our executive compensation programs as a result of this vote. At the Annual Meeting, we will again hold an annual advisory vote to approve executive compensation paid in 2017.2018. The Compensation Committee will continue to consider the results from this year’s and future advisory votes on executive compensation.
Compensation Philosophy and Key Considerations
Synovus has established a compensation program for our executives that is performance-oriented and designed to support our strategic goals. Our compensation philosophy, as well as how our program aligns with the philosophy, is described in the table below.
Compensation Philosophy and Key Considerations | How Our Program Aligns with Our Philosophy | |
Competitive Program: | ||
• markets in which we seek executive talent. • Competitive pay opportunities facilitate recruitment, retention and motivation of top level executive talent. | • market pay practices. | |
Emphasis on Performance: | ||
• short and long-term performance. • Pay outcomes vary based on performance: average pay for average performance, above average pay for above average performance and below average pay for lower performance. • Compensation generally should be earned by executives while actively employed. | •
| |
Support Strategic Goals: Compensation plans are designed to support corporate strategic goals and drive the creation of shareholder value. | • performance through both revenue growth and expense management, while performance shares are based on increasing ROAA and Return on Average Tangible Common Equity, or ROATCE, performance. • Long-term incentives also reward shareholder value creation by providing all awards in equity and varying payouts of MRSUs based on shareholder return. | |
Alignment with Long-Term Shareholders: Executives should have meaningful equity stakes that focus them on creating long-term shareholder value. | • over multiple years. • Stock ownership guidelines as well as requirement to retain 50% of net shares until retirement ensure strong and increasing alignment with shareholders. • Corporate our stock by directors and executive officers. | |
Discourage Excessive Risk-Taking: Plans should ensure executives are not incentivized to take unnecessary or excessive risks that threaten the value of Synovus. | • Officer to discuss a risk assessment of our plans. • Both the annual and long-term incentive plans have specific methods for evaluating risk performance and adjusting payouts if necessary. | |
| ||
- |
EXECUTIVE COMPENSATION
Elements and Mix of Compensation for Past Fiscal Year
Synovus has a performance-oriented executive compensation program that is designed to support our corporate strategic goals, including growth in earnings and growth in shareholder value. The elements of our regular total compensation program and the objectives of each element are identified in the following table and discussed in more detail below:
Compensation Element | Objective | Key Features | |||
Base Pay | Compensate an executive for performing his or her job on a daily basis. | Fixed cash salary generally targeted within a range of the median (50th percentile) of identified list of peer companies (companies with similar size and scope of banking operations) for similar positions. In establishing salaries, the Committee also considers each executive’s performance, experience and responsibilities as well as internal equity considerations. | |||
Short-Term Incentives | • |
Provide an incentive for executives to meet critical annual goals that support our long-term strategy.
| The formulaic performance goals under our cash-based annual incentive plan for | ||
• | Promote pay for performance. | ||||
• | Ensure a competitive program given the marketplace prevalence of short-term incentive compensation. | ||||
Long-Term Incentives | • |
Provide an incentive for our executives to provide exceptional shareholder return to Synovus’ shareholders by tying a significant portion of their compensation opportunity to growth in shareholder value.
| We granted PSUs and MRSUs in | ||
• | Align the interests of executives with shareholders by awarding executives equity in Synovus. | ||||
• |
| ||||
• | Include a vesting schedule designed to retain our executives. | ||||
Perquisites | • | Small component of pay intended to provide an economic benefit to executives to promote their recruitment and retention. | Perquisites in 2018 were limited to financial planning, and the value of life insurance coverage for certain officers and, in addition, transportation services, a housing allowance and security alarm monitoring for Mr. Stelling. Perquisites did not include auto allowances, club dues or personal travel on corporate aircraft. | ||
• | Align our compensation plan with competitive practices. | ||||
Retirement Plans | Defined contribution plans designed to provide income following an executive’s retirement, combined with a deferred compensation plan to replace benefits lost under Synovus’ qualified plans. | Plans offered include a 401(k) savings plan and a deferred compensation plan. | |||
Change of Control Agreements | Provide orderly transition and continuity of management following a change of control of Synovus. | Upon “double trigger” (change of control followed by qualifying termination within two years), agreements provide for three times the executive’s base salary and bonus. As of June 2012, the Compensation Committee has committed that any new change of control agreements will not permit excise tax | |||
2017 CEO Compensation Changes
In 2016 and early 2017, the Committee evaluated the CEO’s compensation relative to his performance, the Company’s performance and compensation levels of peers CEOs. In evaluating the Company’s performance, the Committee considered Synovus’ top quartile shareholder returns relative to peers.
The Committee discussed potential changes to Mr. Stelling’s compensation based on the following objectives:
- 2018 Proxy Statement 33
EXECUTIVE COMPENSATION
Based on its review, the Committee determined to increase Mr. Stelling’s target compensation opportunity in February 2017. Specifically, the Committee increased his base salary from $995,000 to $1,125,000, established his award bonus target at 125%, and granted him 30,041 PSUs and 30,041 MRSUs. For additional information, see “Short-Term Incentive Decisions in 2017” below for details regarding the CEO’s 2017 annual incentive payout and “Long-Term Incentive Decision in 2017” below for details regarding the PSUs and MRSUs. The changes positioned the CEO’s total target compensation between the 50th and 75th percentile of the Company’s peers.
The graph below provides Synovus’ shareholder return relative to peers since the beginning of 2014 and the CEO’s compensation, as calculated in the Summary Compensation Table (SCT), over the same time period.
Base Pay Decisions in 20172018
In addition to the increase for Mr. Stelling did not receive a base salary increase in 2018 as described above, theabove. The Compensation Committee awarded 2%3% base salary increases (rounded up to the nearest $250) for Synovus’ other named executive officers, effective July 19, 2017.25, 2018, except for the Company’s CFO who received a 5% increase based upon market comparisons. While the Committee reviewed market comparisons and recognized that some cash salaries were below the market median, base salary increases were generally limited to 2% to remain consistent with the base salary percentage increases received by other team members at Synovus. As a result, individual performance was not a factor used in determining base pay for Synovus’ named executive officers in 2017.2018.
38 | | - 2019 Proxy Statement |
EXECUTIVE COMPENSATION
Short-Term Incentive Decisions in 20172018
In 2017,We target our short-term incentive plan opportunities to approximate the median of peer performance. Each year, the Compensation Committee determines the appropriate performance measures that best support our business strategy and establish target goals based upon management’s confidential business plan and corresponding annual budget for that year.
We used three performance measures for the formulaic performance goals forunder our cash-based short-term incentive plan were based 60% on corefor 2018. Core earnings 20% on(60%) and adjustedpre-provision net revenue (20%) were selected as measures of earnings and 20%revenue growth during the year with pre-provision net revenue being selected to focus on the quality of revenue growth. The adjusted efficiency ratio. In addition,(20%) was selected as a measure of expense management and how well we all are managing each dollar of revenue.
The qualitative factors are designed to provide the Compensation Committee with a comprehensive review of the Company’s operating results for the year and the flexibility to make any adjustments to the formulaic payout as the Committee also reviewed performance on severaldeems appropriate. The qualitative factors, including:which are listed below, are designed to provide the Compensation Committee with an overview of items deemed critical to the Company’s success, including implementation of the Company’s business strategy, the Company’s continued safety and soundness and management of Company risk. The specific qualitative factors reviewed by the Compensation Committee in 2018 included: quality of earnings, quality of loan growth (including consideration of concentration limits), quality of deposit growth, expense management, single bank conversion,implementation of Synovus brand strategy, credit quality (including the nonperforming assets ratio, nonperforming loans ratio and netcharge-off ratio), execution on diversity and inclusion initiatives, financial impact of strategic investments, external factors (including the impact of Federal Reserve rate increases vs.as compared to budget assumptions), regulatory compliance, risk management, total shareholder return and individual performance.
Actual payouts under the plan may vary from 0% to 150% of the target based upon Synovus and each executive’s performance in these areas compared to the performance goals. Target awards for 2017,2018, expressed as a percentage of base salary, were 125% for Mr. Stelling, 75% for Mr. Blair, 70% for Mr. Gula and 60% for each of Messrs. KamenskySingleton and Singleton.Holladay.
The following chart summarizes the performance goals in each category for threshold, target and maximum payouts as well as the actual performance:
| Weight | Threshold | Target | Maximum | Actual | Percent of Target | Weighted Results | ||||||||||||||||||||||
| Core Earnings1 | 60% | $250M | $283M | $300M | $322.1M | 150.00% | 90.00% | |||||||||||||||||||||
| AdjustedPre-Provision Net Revenue1 | 20% | $442M | $493M | $521M | $516.7M | 142.26% | 28.45% | |||||||||||||||||||||
| Adjusted Efficiency Ratio1 | 20% | 62.14% | 59.57% | 58.32% | 59.40% | 106.80% | 21.36% | |||||||||||||||||||||
| 139.81% | ||||||||||||||||||||||||||||
Weight | Threshold | Target | Maximum | Actual | Percent of Target | Weighted Results | |||||||
Core Earnings1 | 60% | $391M | $420M | $445M | $441.6M | 143% | 85.91% | ||||||
Adjusted Pre-Provision Net Revenue1 | 20% | $575M | $606M | $627M | $621.5M | 137% | 27.37% | ||||||
Adjusted Efficiency Ratio1 | 20% | 59.2% | 57.9% | 57.0% | 56.51% | 150% | 30.00% | ||||||
143.28% | |||||||||||||
| (1) | The amounts excludenon-recurring items and certain items that are not indicative of ongoing operations. For a reconciliation of core earnings, adjustedpre-provision net revenue and adjusted efficiency ratio to GAAP measures, please refer toAppendix B of this Proxy Statement. |
|
EXECUTIVE COMPENSATION
The Compensation Committee considered the following discretionary factors, which can be used for upward or downward adjustments, prior to awarding annual incentives:
| • | Quality of Financial Results—Quality of earnings is scored as high based on the factors that drove core earnings, sustainability of earnings, and minimal impact ofnon-recurring items included in the determination of core earnings, adjustedpre-provision net revenue, and the adjusted efficiency ratio. |
| • | Credit Quality/Quality of Loan Growth—We continued to diversify andde-risk the loan portfolio. Commercial real estate loans now represent |
| • | Quality of Deposit Growth—We had solid growth in average deposits in 2018, which were up 3.8%. Average core |
| • | Expense Management—Total adjustednon-interest expense* was |
| • |
| • | Financial Impact of Strategic Investments— |
| • | Execution on Diversity Initiatives—A number of diversity initiatives were implemented in 2018, including revised job posting guidelines, leadership training and the hiring of a diversity and inclusion director. |
| • | External Factors—The actual results reflect |
| • | Risk Management/Regulatory Compliance—The Compensation Committee viewed the Company’s risk management and regulatory compliance as satisfactory based on reviews of our regulatory compliance scorecard and our risk management scorecard. |
| • | Total Shareholder Return—The Company’sone-year and three-year total shareholder return was |
| • | Individual Performance—The Compensation Committee also reviewed individual performance as reflected in performance evaluations. |
| - 2019 Proxy Statement 39 |
EXECUTIVE COMPENSATION
Although not specifically listed as a discretionary factor, the Company also announced the acquisition of FCB during 2018 and successfully closed the transformational acquisition on January 1, 2019.
*For a reconciliation of the foregoingnon-GAAP financial measures to the most comparable GAAP measure, including core earnings, adjustednon-interest expense, adjusted efficiency ratio, and average core deposits, and average core transaction accounts, please refer toAppendix B of this Proxy Statement.
In determining the annual incentive payouts, the Compensation Committee balanced several factors, including strong results on our formulaic goals, the impact of interest rate increases on those results, the successful implementation of our single brand implementation and the transformational acquisition of FCB. Based on the results of the performance goals and consideration of the discretionary factors described above, including strong individual performance as reflected in his performance evaluation, the Compensation Committee approved an annual incentive award payout of 139.81%131.7% of target for Mr. Stelling. Based on the results of the performance goals and consideration of the discretionary factors listed above, the Compensation Committee approved payouts ranging from 135%130% to 145%136.7% of target for each of the Company’s other named executive officers. The annual short-term incentive award payout amount for each named executive officer is set forth in the“Non-Equity “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table set forth on page 4146 of this Proxy Statement.
Long-Term Incentive Decisions in 20172018
In 2017, weThe Company grants all long-term incentive awards in equity to link the value of the awards to Company performance. We granted long-term incentives through a combinationour named executive officers two types of 50% PSUsawards in 2018: performance stock units and 50% MRSUs. Allmarket restricted stock units. Both awards are performance-based, based upon different measures of corporate performance.
We made two changes to our long-term incentive awards are linkedprogram in 2018.
The Committee increased the weight on PSUs to further strengthen the performance-based nature of our program. The Committee added ROATCE as a performance measure given its increasing focus in our communications with shareholders and due to its incorporation of both earnings and capital management.
Individual long-term incentive award amounts were determined after the Compensation Committee reviewed market comparisons for similarly-situated positions. The Compensation Committee granted Mr. Stelling PSUs and MRSUs as described in “2017 CEO Compensation Changes”“2018 Compensation” above. The Compensation Committee also granted the Company’s other named executive officers long-term incentive awards for 20172018 as set forth in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the Grants of Plan-Based Awards Table on page 4247 of this Proxy Statement. As described below, both PSUs and MRSUs are subject to downward discretion adjustment if the Compensation Committee determines risks were not properly considered in achieving the performance results.
Performance Stock Units (PSUs)
The PSUs have both a performance vesting component and a service vesting component. Under the performance vesting component for 2018, Synovus’ weighted average ROAA (as adjusted) and ROATCE (as adjusted) is measured over a three-year performance period. The performance goal approved by the Committee is based upon the Company’s objectives under its strategic plan. The actual payout of the PSUs may range from 0% to 150% of the target amount based upon Synovus’ weighted average ROAA (as adjusted) and ROATCE (as adjusted) during the performance period compared to the performance formula approved by the Compensation Committee. The performance formula weights both measures equally, but places a higher weighting on the third year of the performance period. The service vesting component specifies that shares earned based on performance results will vest after three years of service.
The performance targets set by the Compensation Committee are based upon assumptions that are contained in our confidential business plan for the three-year performance period. Because these performance targets are based on our non-public business plan, the Company does not publicly disclose the actual performance targets until the completion of the performance period.
- 2018 Proxy Statement 35
EXECUTIVE COMPENSATION
Payout for 2015-2017 PSUs2016-2018 PSUs.. The following charts show the calculation of the payout for the PSUs granted in 2015,2016, which paid out at 98.48%107.45% of target on February 19, 201811, 2019 based on a weighted average ROAA (as adjusted) of 0.921%1.025% for the 2015-20172016-2018 performance period:
ROAA (as adjusted) Performance Calculation
| Year | Weighting | Return on Assets | ||||||
| 2015 | 25% | 0.820% | ||||||
| 2016 | 25% | 0.863% | ||||||
| 2017 | 50% | 1.00% | ||||||
| 3-Year Weighted Average ROAA (as adjusted) | 0.921% | |||||||
Year | Weighting | Return on Average Assets (as adjusted)1 | ||||
2016 | 25% | 0.873% | ||||
2017 | 25% | 1.036% | ||||
2018 | 50% | 1.096% | ||||
3-Year Weighted Average ROAA (as adjusted) | 1.025% | |||||
| (1) | Return on Average Assets (as adjusted) excludesnon-recurring items and certain other items that are not indicative of ongoing operations. For a reconciliation of ROAA to the most comparable GAAP measure, please refer toAppendix B of this Proxy Statement. |
40 | | - 2019 Proxy Statement |
EXECUTIVE COMPENSATION
Performance Goals and Payout Calculation
Threshold | Target | Maximum | Actual | |||||||||
Performance Criteria 3-Year ROAA (as adjusted) | 0.835% | 1.00% | 1.1675% | 1.025% | ||||||||
Payout (as a Percentage of Target) | 50% | 100% | 150% | 107.45% | ||||||||
| Threshold | Target | Maximum | Actual | |||||||||||||
| Performance Criteria3-Year ROAA (as adjusted) | 0.785% | 0.925% | 1.065% | 0.921% | ||||||||||||
| Payout (as a Percentage of Target) | 50% | 100% | 150% | 98.48% | ||||||||||||
Market Restricted Stock Units (MRSUs)
The MRSUs have a service-based vesting component as well as a Total Shareholder Return Multiplier. Under the service-based vesting component, the MRSUs vestone-third each year over a three-year period subject to each executive’s continued employment with Synovus. Under the Total Shareholder Return Multiplier, the “target” amount of MRSUs which vest each year will be adjusted upward or downward up to 25% based upon Synovus’ total shareholder return during each year. MRSUs align executives’ interests directly with shareholders while supporting retention, and were granted in lieu of including any time-based restricted stock in our executive compensation program. The following chart shows the actual payout amounts for previously-granted MRSUs that were granted or that vested during 2017:2018. The tranches of MRSUs granted in 2016, 2017 and 2018 that were based primarily on our 2018 total shareholder return each vested at 75% of target.
Grant Date | Vesting Date/ Percent | Total Shareholder Return (TSR) | Payout Percentage (based upon TSR) | ||||
2/19/2015 | 2/19/2016 (33 1∕3%) | +7.6% | 107.6% | ||||
2/19/2017 (33 1∕3%) | +49.7% | 125% | |||||
2/19/2018 (33 1∕3%) | +20.9% | 120.9% | |||||
2/11/2016 | 2/11/2017 (33 1∕3%) | +45.8% | 125% | ||||
2/11/2018 (33 1∕3%) | +22.2% | 122.2% | |||||
2/11/2019 (33 1∕3%) | -26.9% | 75% | |||||
2/9/2017 | 2/9/2018 (33 1∕3%) | +22.5% | 122.5% | ||||
2/9/2019 (33 1∕3%) | -27.1% | 75% | |||||
2/9/2020 (33 1∕3%) | TBD | TBD | |||||
2/8/2018 | 2/8/2019 (33 1∕3%) | -27.6% | 75% | ||||
2/8/2020 (33 1∕3%) | TBD | TBD | |||||
2/8/2021 (33 1∕3%) | TBD | TBD | |||||
Potential Reductions to Equity Awards Due to Risk Concerns
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|
| ||||||||||
Both the PSUs and MRSUs are subject to downward adjustment if future results suggest risk was not properly considered in achieving the results on which the number of units awarded were based. The Compensation Committee will consider if reductions are warranted if any of the following occur during the vesting period: (1) Synovus or a line of business experiences a material loss, (2) Synovus or an individual executive fails to comply with risk policies or properly address risk concerns, or (3) regulatory capital falls below regulatory capital requirements. The Compensation Committee did not exercise downward discretion with respect to the PSUs or MRSUs that vested during 2017.2018.
Perquisites, which are not tied to performance, are a small part of our executive compensation program. Perquisites are offered to align our compensation program with competitive practices because similar positions at Synovus’ competitors offer similar perquisites. The perquisites offered by Synovus in 20172018 were limited to the payment of club dues, financial planning an auto allowance and security alarm monitoringthe actuarial value of salary continuation life insurance coverage for certain officers. In addition, perquisites included transportation services and a housing allowance for Mr. Stelling and relocation assistance for Mr. Blair.Stelling. The Company’s incremental cost of providing these benefits is included as “All Other Compensation” in the Summary Compensation Table and is
|
EXECUTIVE COMPENSATION
described in more detail in footnotes 3 and 4 of the Summary Compensation Table on page 4146 of this Proxy Statement. Considered both individually and in the aggregate, we believe that the perquisites we offer to our named executive officers are reasonable and appropriate.
The Company did not provide auto allowances or reimbursements for club dues to executives in 2018. In addition, the Committee suspended the personal use of aircraft by the Company’s executives in 2009, although the Committee may approve exceptions to that policy. No exceptions were approved during 2017.2018.
Retirement and Deferred Compensation Plans
Our compensation program also includes retirement plans designed to provide income following an executive’s retirement. Synovus’ compensation program is designed to reflect Synovus’ philosophy that compensation generally should be earned while actively employed. Although retirement benefits are paid following an executive’s retirement, the benefits are earned while employed. We have chosen to use defined contribution retirement plans because we believe that defined benefit plans are difficult to understand and communicate, and contributions to defined benefit plans often depend upon factors that are beyond Synovus’ control, such as the earnings performance of the assets in such plans compared to actuarial assumptions inherent in such plans. Synovus offered two qualified defined contribution retirement plansa 401(k) savings plan to its employees in 2017: a profit sharing plan and a 401(k) savings plan. The profit sharing plan was merged into the 401(k) savings plan effective December 29, 2017.2018. The 401(k) savings plan offers an employer matching contribution of up to 4%5% of compensation (5% beginning on January 1, 2018).compensation.
| - 2019 Proxy Statement 41 |
EXECUTIVE COMPENSATION
In addition to these plans,the 401(k) savings plan, the Deferred Compensation Plan, or the Deferred Plan, replaces benefits foregone under the qualified plans401(k) savings plan due to legal limits imposed by the Internal Revenue Service, or IRS. The Deferred Plan does not provide “above market” interest. Instead, participants in the Deferred Plan can choose to invest their accounts among mutual funds that are the same as the mutual funds that are offered in the 401(k) savings plan. The executives’ Deferred Plan accounts are held in a rabbi trust, which is subject to claims by Synovus’ creditors. The employer matching contribution to the Deferred Plan for 20172018 for named executive officers is set forth in the “All Other Compensation” column in the Summary Compensation Table, and the earnings on the Deferred Plan accounts during 20172018 for named executive officers is set forth in the “Aggregate Earnings in Last FY” column in the Nonqualified Deferred Compensation Table. Mr. Stelling also participates in a deferred compensation plan entered into with Riverside Bank, or the Riverside Plan, prior to Riverside Bank’s acquisition by Synovus. The obligations under the Riverside Plan, which was initially effective January 1, 2003, were assumed by Synovus Bank when Synovus consolidated its banking charters in 2010. Under the Riverside Plan, the beginning benefit amount specified in the plan is increased by 3% for each year of service attained by Mr. Stelling. The total benefit amount under the Riverside Plan is payable to Mr. Stelling in monthly payments over a period of 15 years following his attainment of age 65 or in a single lump sum payment in the event of his death or disability. The total benefit amount under the Riverside Plan as of December 31, 20172018 is included in Mr. Stelling’s balance in the Nonqualified Deferred Compensation Table and Synovus’ contribution to the Riverside Plan for 20172018 is included in the “All Other Compensation” column in the Summary Compensation Table.
Employment and Termination Agreements
Synovus does not generally enter into employment agreements with its executives, except in unusual circumstances such as acquisitions. None of the named executive officers have employment agreements. Synovus uses change of control arrangements with its executives to ensure: (1) the retention of executives and an orderly transition during a change of control, (2) that executives would be financially protected in the event of a change of control so they continue to act in the best interests of Synovus while continuing to manage Synovus during a change of control, and (3) a competitive compensation package because such arrangements are common in the market and it was determined that such agreements were important in recruiting executive talent. The change of control agreements in place for the named executive officers provide for a lump sum payment equal to three years of base salary and the affected executive’s average bonus for the past three years, as well as three years of health and welfare benefits. These payments and benefits are paid only in the event of a “double trigger,” requiring a change of control followed by termination of an executive’s employment by Synovus for any reason other than “cause,” death or disability, or by the executive for “good reason,” within two years of the change of control. For more information, see “Potential Payouts upon Termination or Change of Control” on page 49 of this Proxy Statement. In June 2012, the Committee adopted a policy prohibiting taxgross-ups from any new change of control agreements.
Competitive Market Data
The Compensation Committee historically has evaluated comparative data relating to total direct compensation (salary, short-term incentive opportunities, and long-term incentive opportunities) to assess the executive compensation practices of competitor companies. The Compensation Committee continued this practice in 2017,2018, with the assistance of Meridian. Findings from this comparative evaluation were used to assist the Compensation Committee in establishing the compensation opportunities for executives in 2017.2018.
The Compensation Committee continued to use a peer group of 18 banks as part of its evaluation. The peer group consists of eight banks with higher assets and ten banks with lower assets than Synovus and does not include any banks with more than three times Synovus’ assets. As part of its evaluation of market practices, the Compensation Committee reviewed the most recent proxy data available for the banks listed below, as well as data appropriate to our industry
- 2018 Proxy Statement 37
EXECUTIVE COMPENSATION
and company size from external market surveys. When reviewing this data, the Compensation Committee focused on total direct compensation opportunities, not necessarily the amount of compensation actually paid, which varies depending upon each companies’ performance results.
Associated Banc-Corp. | Huntington Bancshares, Inc. | |
BOK Financial Corp. | New York Community Bancorp, Inc. | |
Bank United, Inc. | People’s United Financial, Inc. | |
Comerica Inc. | Popular, Inc. | |
Commerce Bancshares, Inc. | Prosperity Bancshares Inc. | |
Cullen/Frost Bankers, Inc. | TCF Financial Corp. | |
East West Bancorp, Inc. | Webster Financial Corp. | |
First Horizon National Corp. | Wintrust Financial Corporation | |
Hancock Holding Company | Zions Bancorporation |
42 | | - 2019 Proxy Statement |
EXECUTIVE COMPENSATION
Compensation Framework: Compensation Policies, Compensation Process and Risk Considerations
Compensation Policies
Stock Ownership/Retention Guidelines
To align the interests of its executives with shareholders, Synovus implemented stock ownership guidelines for its executives. Under the guidelines, executives are required to maintain ownership of Synovus common stock equal to at least a specified multiple of base salary, as set forth in the table below:
Named Executive Officer |
| |||||
Chief Executive Officer | 5x | |||||
All other executive officers | 3x | |||||
The guidelines are reviewed at the beginning of each calendar year. Executives have a five-year grace period to fully achieve the guideline with an interim three-year goal. Until the guideline is achieved, executives are required to retain all net shares received upon the exercise of stock options or vesting of other stock-based awards, excluding shares used to pay an option’s exercise price and any taxes due upon exercise or vesting of an award. In determining compliance, the guidelines allow consideration of any stock options or other stock-based awards granted to executives, including restricted stock units. In the event of a severe financial hardship, the guidelines permit the development of an alternative ownership plan by the Chairman of the Board of Directors and Chairman of the Compensation Committee.
All current executives were in compliance with the guidelines (with applicable grace periods) as of December 31, 2017.2018.
Hold Until Retirement Provision
Synovus has also adopted a “hold until retirement” policy that applies to all unexercised stock options and unvested restricted stock and restricted stock unit awards. Under this policy, executives that have attained the stock ownership guidelines described above are also required to retain ownership of 50% of all stock acquired through Synovus’ equity compensation plans (after taxes and transaction costs) until their retirement or other termination of employment. The “hold until retirement” requirement further aligns the interests of our executives with shareholders.
Our 2013 Omnibus Plan and award agreements contain language that makes all awards to executives subject to a recoupment or clawback policy approved by the Compensation Committee. The Compensation Committee initially approved a clawback policy on January 22, 2014, pursuant to which2014. In 2018, the Compensation Committee updated and strengthened the policy. Under the updated policy, any incentive compensation paid to Synovus’ executive officers that is based upon materially inaccurate performance metrics or financial statements, or that results from any risk-related actionsmaterial failures in the management of Company financial, operational, or reputational risks that result in or are reasonably expected to result in a material adverse impact to Synovus or a business unit, are subject to clawback at the Committee’s discretion.clawback.
Anti-Hedging Policy
Synovus does not allow directors or executive officers to hedge the value of Synovus equity securities held directly or indirectly by the director or executive officer. Synovus’ policy prohibits the purchase or sale of puts, calls, options or other derivative securities based on Synovus’ securities, as well as hedging or monetization transactions, such aszero-cost collars and forward sale contracts or other derivative securities based on Synovus securities.
Anti-Pledging Policy
Synovus’ Corporate Governance Guidelines and Insider Trading Policy prohibit pledges of our stock by directors and executive officers.
| - 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the deductibility of compensation paid by a publicly-traded corporation to certain named executive officers for amounts in excess of $1 million. Prior to the enactment of H.R. 1, formerly known as the Tax Cuts and Jobs Act of 2017, performance-based compensation that met certain conditions was exempt from the deduction limitation. The 2017 annual cash incentive opportunities and PSU and MRSU awards granted to our executive officers prior to the law’s enactment were initially designed in a manner intended to be exempt from the deduction limitation of Section 162(m) because they are paid based on the achievement ofpre-determined performance goals established by the Compensation Committee pursuant to our shareholder-approved equity incentive plan.
The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
Despite the Compensation Committee’s efforts to structure executive annual cash incentives and PSU and MRSU awards granted prior to 2018 in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, no assurance can be given that this compensation will satisfy the requirements for exemption due to uncertainties as to the application and interpretation of Section 162(m) and the transition relief. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it believes the benefits of doing so outweigh the loss of a tax deduction.
| - 2019 Proxy Statement 43 |
EXECUTIVE COMPENSATION
Accounting Considerations
We account for all compensation paid in accordance with generally accepted accounting principles. The accounting treatment has generally not affected the form of compensation paid to named executive officers.
No Option Repricing
Our 2013 Omnibus Plan prohibits the repricing of stock options and stock appreciation rights without shareholder approval.
Timing of Equity Awards
If the Compensation Committee is taking action to approve equity awards on or near the date that Synovus’ annual earnings are released, the Committee has established the grant date for equity awards to executives as: (a) the last business day of the month in which earnings are released or, if later, (b) two complete business days following the date of the earnings release. This policy ensures that the annual earnings release has time to be absorbed by the market before equity awards are granted.
Compensation Process
Role of Compensation Committee and Compensation Consultant in Compensation Process
The roles of the Compensation Committee and its compensation consultant in the compensation process are described in detail beginning on page 910 of this Proxy Statement under “Corporate Governance and Board Matters—Committees of the Board—Compensation Committee.”
Role of the Executive Officers in the Compensation Process
Synovus’ Chief Executive Officer generally attends Compensation Committee meetings by invitation of the Compensation Committee. The Chief Executive Officer provides management perspective on issues under consideration by the Committee and makes proposals regarding the compensation of the named executive officers, other than himself. The Chief Executive Officer does not have authority to vote on Compensation Committee matters. The Compensation Committee regularly meets in executive session without any executive officers present. For more information regarding Compensation Committee meetings, please refer to page 910 of this Proxy Statement under “Corporate Governance and Board Matters—Committees of the Board—Compensation Committee.”
Tally Sheets
The Compensation Committee historically has used annual tally sheets to add up all components of compensation for the Chief Executive Officer (and for the other named executive officers on a less frequent basis), including base salary, bonus, long-term incentives, accumulative realized and unrealized stock options and restricted stock gains, the dollar value of perquisites and the total cost to the Company, and earnings and accumulated payment obligations under Synovus’ nonqualified deferred compensation program. Tally sheets also provide estimates of the amounts payable to each executive upon the occurrence of potential future events, such as a change of control, retirement, voluntary or involuntary termination, death and disability. Tally sheets are used to provide the Compensation Committee with total compensation amounts for each executive so that the Committee can determine whether the amounts are in line with our compensation strategy. The Compensation Committee reviewed tally sheets for the Chief Executive Officer and for Synovus’ other named executive officers in October 20172018 and concluded that their total compensation is fair and reasonable.
Our compensation program is reviewed by several different groups to ensure that the risks involved with the program are appropriately assessed and managed. The compensation risks are first reviewed by the management team that designs, implements and administers the program. Incentive compensation programs are also reviewed by the Executive Risk Committee, a management committee chaired by our Chief Risk Officer. As a part of
- 2018 Proxy Statement 39
EXECUTIVE COMPENSATION
this process, management completes a thorough risk assessment for each plan, assessing the administrative, strategic and financial risk of each compensation plan, ensuring consistency in the review and administration of each plan and producing an overall risk assessment rating for each plan. Moreover, management reviews each plan for alignment with Synovus’ strategic objectives and assesses whether the payouts are equitable for value generated to Synovus and whether the plans encourage unnecessary risk-taking by Synovus’ participants. During 2017, the Committee requested that management formally document the Company’s process and procedures for assessing risk in our incentive compensation program. Management engaged an external advisor to assist with the Committee’s request. The documentation, including specific roles and responsibilities, regarding the Company’s risk assessment process were then reviewed with the Compensation Committee. In addition, in 2017,2018, the Compensation Committee met with the Chief Risk Officer to review a comprehensive risk assessment of our compensation plans.
Synovus’ employee incentive plans are broadly classified by business unit: incentive plans for Synovus’ banking divisions and incentive plans for Synovus’ Financial Management Services division. All of the plans were assessed for risk factors in different categories, including financial risks, strategic risks, and administrative risks. Each plan was assigned a level of risk ranking from “1” (highest(lowest risk) to “5” (lowest(highest risk) for each risk category. Any plan that received a “1”“4” or “2”“5” in any category was modified through the implementation of additional controls to ensure appropriate mitigation of risks. After the implementation of such controls, no plans were ranked higher than a “3.” After reviewing the incentive plans and the Company’s risk assessment process, the Compensation Committee concluded that there were no unnecessary risks under the plans and there were no risks arising from the Company’s compensation policies and practices that were likely to have a material adverse effect on the Company.
44 | | - 2019 Proxy Statement |
CD&A
Synovus’ Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and, based on such review and discussions, has recommended to the Board that the Compensation Discussion and Analysis be included in Synovus’ 20172018 Annual Report and in this Proxy Statement.
The Compensation Committee
Elizabeth W. Camp, Chair
Tim E. Bentsen
Stephen T. Butler
F. Dixon Brooke, Jr.
Melvin T. Stith
Barry L. Storey
Philip W. Tomlinson
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The table below summarizes the compensation for each of our named executive officers for each of the last three fiscal years.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
| Kessel D. Stelling | 2017 | $ | 1,106,000 | — | $ | 2,546,275 | — | $ | 1,966,078 | — | $ | 342,275 | (2)(3) | $ | 5,960,628 | |||||||||||||||||||||
Chairman, Chief Executive Officer and President | 2016 | 985,769 | — | 1,810,106 | — | 1,094,500 | — | 322,526 | 4,212,901 | |||||||||||||||||||||||||||
| 2015 | 962,269 | — | 1,791,521 | — | 1,221,419 | — | 251,413 | 4,226,662 | ||||||||||||||||||||||||||||
| Kevin S. Blair | 2017 | 579,865 | — | 1,018,561 | — | 637,819 | — | 804 | (4) | 2,237,049 | ||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer* | 2016 | 205,673 | 325,000 | 337,584 | — | 458,722 | — | 38,718 | 1,365,697 | |||||||||||||||||||||||||||
| Allen J. Gula, Jr. | 2017 | 458,710 | — | 458,382 | — | 438,440 | — | 21,208 | (2)(3)(4) | 1,376,740 | ||||||||||||||||||||||||||
Executive Vice President and Chief Operations Officer | 2016 | 447,218 | — | 452,539 | — | 318,403 | — | 28,127 | 1,246,287 | |||||||||||||||||||||||||||
| 2015 | 434,192 | — | 460,691 | — | 370,955 | — | 17,575 | 1,283,413 | ||||||||||||||||||||||||||||
| Allan E. Kamensky | 2017 | 440,789 | — | 285,218 | — | 387,875 | — | 18,902 | (2)(3)(4) | 1,132,784 | ||||||||||||||||||||||||||
Executive Vice President, General Counsel and Secretary | 2016 | 429,746 | — | 281,565 | — | 278,687 | — | 24,811 | 1,014,809 | |||||||||||||||||||||||||||
| 2015 | 417,229 | — | 286,675 | — | 305,539 | — | 6,000 | 1,015,443 | ||||||||||||||||||||||||||||
| J. Barton Singleton** | 2017 | 425,354 | — | 285,218 | — | 361,386 | — | 1,662 | (3)(4) | 1,073,620 | ||||||||||||||||||||||||||
Executive Vice President and President, Financial Management Services | 2015 | 390,606 | — | 288,675 | — | 316,953 | — | 6,000 | 1,000,234 | |||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||
Kessel D. Stelling Chairman, Chief Executive Officer and President | 2018 | $ | 1,125,000 | — | $ | 2,526,069 | — | $ | 1,852,000 | — | $ | 365,141 | (2)(3) | $ | 5,868,210 | ||||||||||
2017 | 1,106,000 | — | 2,546,275 | — | 1,966,078 | — | 342,275 | 5,960,628 | |||||||||||||||||
2016 | 985,769 | — | 1,810,106 | — | 1,094,500 | — | 322,526 | 4,212,901 | |||||||||||||||||
Kevin S. Blair Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer* | 2018 | 598,117 | — | 1,010,466 | — | 631,375 | — | — | 2,239,958 | ||||||||||||||||
2017 | 579,865 | — | 1,018,561 | — | 637,819 | — | 804 | 2,237,049 | |||||||||||||||||
2016 | 205,673 | 325,000 | 337,584 | — | 458,722 | — | 38,718 | 1,365,697 | |||||||||||||||||
Allen J. Gula, Jr.** Executive Vice President and Chief Operations Officer, Retired | 2018 | 469,473 | — | 454,760 | — | 434,868 | — | 18,779 | (2) | 1,377,880 | |||||||||||||||
2017 | 458,710 | — | 458,382 | — | 438,440 | — | 21,208 | 1,376,740 | |||||||||||||||||
2016 | 447,218 | — | 452,539 | — | 318,403 | — | 28,127 | 1,246,287 | |||||||||||||||||
J. Barton Singleton** Executive Vice President and President, Financial Management Services | 2018 | 435,334 | — | 454,760 | — | 350,027 | — | 26,086 | (2) | 1,266,207 | |||||||||||||||
2017 | 425,354 | — | 285,218 | — | 361,386 | — | 1,662 | 1,073,620 | |||||||||||||||||
Mark G. Holladay** Executive Vice President and Chief Risk Officer | 2018 | 383,517 | — | 454,760 | — | 308,364 | — | 18,396 | (2)(4) | 1,164,906 | |||||||||||||||
2016 | 365,336 | — | 281,565 | — | 236,919 | — | 22,455 | 906,276 | |||||||||||||||||
| * | Mr. Blair was named Executive Vice President and Chief Financial Officer effective August 17, |
| ** | Mr. Singleton was not a named executive officer in |
| (1) | Amounts reflect the grant date fair value of stock awards for each of the last three fiscal years computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the PSU, MRSU and restricted stock unit awards are set forth in Note |
| (2) | Amount includes company contributions by Synovus to nonqualified deferred compensation plans of |
| (4) | Amount includes |
46 | | - 2019 Proxy Statement |
- 2018 Proxy Statement 41
SUMMARY COMPENSATION TABLE
Grants of Plan-Based Awards for Fiscal Year 20172018
The table below sets forth the short-term and long-term incentive compensation (granted in the form of cash-based awards, PSUs and MRSUs) awarded to the named executive officers for 2017.2018. There were no stock options granted to the named executive officers for 2017.2018.
| | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) |
| | Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
| | Grant Date Fair Value of Stock Awards(3) ($) |
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| Name | Grant Date | | Action Date |
| | Threshold ($ | ) | | Target ($ | ) | | Maximum ($ | ) | | Threshold (# | ) | | Target (# | ) | | Maximum (# | ) | ||||||||||||||||||
| Kessel D. Stelling | | 2-9-17 (Cash Incentive) |
| 2-9-17 | $ | 703,125 | $ | 1,406,250 | $ | 2,109,375 | — | — | — | — | ||||||||||||||||||||||||||
| 2-9-17 (PSUs) | 2-9-17 | — | — | — | 15,021 | 30,041 | 45,062 | $ | 1,250,006 | |||||||||||||||||||||||||||||||
| 2-9-17 (MRSUs) | 2-9-17 | — | — | — | 22,531 | 30,041 | 37,551 | 1,296,269 | ||||||||||||||||||||||||||||||||
| Kevin S. Blair | | 2-9-17 (Cash Incentive) |
| 2-9-17 | 219,938 | 439,875 | 659,813 | — | — | — | — | |||||||||||||||||||||||||||||
| 2-9-17 (PSUs) | 2-9-17 | — | — | — | 6,009 | 12,017 | 18,026 | 500,027 | ||||||||||||||||||||||||||||||||
| 2-9-17 (MRSUs) | 2-9-17 | — | — | — | 9,013 | 12,017 | 15,021 | 518,534 | ||||||||||||||||||||||||||||||||
| Allen J. Gula, Jr. | | 2-9-17 (Cash Incentive) |
| 2-9-17 | 162,386 | 324,771 | 487,156 | — | — | — | — | |||||||||||||||||||||||||||||
| 2-9-17 (PSUs) | 2-9-17 | — | — | — | 2,704 | 5,408 | 8,112 | 225,027 | ||||||||||||||||||||||||||||||||
| 2-9-17 (MRSUs) | 2-9-17 | — | — | — | 4,056 | 5,408 | 6,760 | 233,355 | ||||||||||||||||||||||||||||||||
| Allan E. Kamensky | | 2-9-17 (Cash Incentive) |
| 2-9-17 | 133,750 | 267,500 | 401,250 | — | — | — | — | |||||||||||||||||||||||||||||
| 2-9-17 (PSUs) | 2-9-17 | — | — | — | 1,683 | 3,365 | 5,648 | 140,018 | ||||||||||||||||||||||||||||||||
| 2-9-17 (MRSUs) | 2-9-17 | — | — | — | 2,524 | 3,365 | 4,206 | 145,200 | ||||||||||||||||||||||||||||||||
| J. Barton Singleton | | 2-9-17 (Cash Incentive) |
| 2-9-17 | 129,067 | 258,133 | 387,199 | — | — | — | — | |||||||||||||||||||||||||||||
| 2-9-17 (PSUs) | 2-9-17 | — | — | — | 1,683 | 3,365 | 5,048 | 140,018 | ||||||||||||||||||||||||||||||||
| 2-9-17 (MRSUs) | 2-9-17 | — | — | — | 2,524 | 3,365 | �� | 4,206 | 145,200 | |||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock Awards(3) ($) | |||||||||||||||||||||
Name | Grant Date | Action Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||
Kessel D. Stelling | 2-8-18 (Cash Incentive) | 2-8-18 | $ | 703,125 | $ | 1,406,250 | $ | 2,109,375 | — | — | — | — | |||||||||||
2-8-18 (PSUs) | 2-8-18 | — | — | — | 15,880 | 31,760 | 47,640 | $ | 1,500.025 | ||||||||||||||
2-8-18 (MRSUs) | 2-8-18 | — | — | — | 15,880 | 21,173 | 26,466 | 1,026.044 | |||||||||||||||
Kevin S. Blair | 2-8-18 (Cash Incentive) | 2-8-18 | 233,935 | 461,869 | 692,804 | — | — | — | — | ||||||||||||||
2-8-18 (PSUs) | 2-8-18 | — | — | — | 6,352 | 12,704 | 19,056 | 600.010 | |||||||||||||||
2-8-18 (MRSUs) | 2-8-18 | — | — | — | 6,352 | 8,470 | 10,588 | 410,456 | |||||||||||||||
Allen J. Gula, Jr. | 2-8-18 (Cash Incentive) | 2-8-18 | 167,257 | 334,514 | 501,771 | — | — | — | — | ||||||||||||||
2-8-18 (PSUs) | 2-8-18 | — | — | — | 2,859 | 5,717 | 8,576 | 270,030 | |||||||||||||||
2-8-18 (MRSUs) | 2-8-18 | — | — | — | 2,859 | 3,812 | 4,765 | 184,730 | |||||||||||||||
J. Barton Singleton | 2-8-18 (Cash Incentive) | 2-8-18 | 132,939 | 265,877 | 398,816 | — | — | — | — | ||||||||||||||
2-8-18 (PSUs) | 2-8-18 | — | — | — | 2,859 | 5,717 | 8,576 | 270,030 | |||||||||||||||
2-8-18 (MRSUs) | 2-8-18 | — | — | — | 2,859 | 3,812 | 4,765 | 184,730 | |||||||||||||||
Mark G. Holladay | 2-8-18 (Cash Incentive) | 2-8-18 | 117,115 | 234,230 | 351,345 | — | — | — | — | ||||||||||||||
2-8-18 (PSUs) | 2-8-18 | — | — | — | 2,859 | 5,717 | 8,576 | 270,030 | |||||||||||||||
2-8-18 (MRSUs) | 2-8-18 | — | — | — | 2,859 | 3,812 | 4,765 | 184,730 | |||||||||||||||
| (1) | Reflects threshold, target and maximum payout opportunities under the annual incentive plan based on |
| (2) | Reflects threshold, target and maximum number of shares that may be earned under awards of PSUs and MRSUs. The PSUs have a three-year service requirement (100% vest after three years of service) and a three-year performance period. Based upon Synovus’ weighted average ROAA and ROATCE during the performance period, the actual payout of the performance stock units can range from 0% to 150% of the target amount. The MRSUs have a three-year service requirement |
| (3) | Amounts reflect the grant date fair value of long-term incentive awards computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the long-term incentive awards are set forth in Note |
| ||
| - |
SUMMARY COMPENSATION TABLE
Outstanding Equity Awards at 20172018 FiscalYear-End
The table below identifies the option awards and stock awards held by the named executive officers and outstanding on December 31, 2017.2018.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date | Grant Date | Number of Shares or Units of Stock That | Market Shares or Units That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||||||||||||||||||||||||||||
| Kessel D. Stelling | 2-9-17 | 30,348 | (3) | $ | 1,454,883 | |||||||||||||||||||||||||||||||
| 2-9-17 | 30,348 | (4) | 1,454,883 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 23,713 | (3) | 1,136,801 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 35,565 | (4) | 1,704,986 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 10,813 | (3) | 518,375 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 32,422 | (4) | 1,554,311 | |||||||||||||||||||||||||||||||||
| Kevin S. Blair | 2-9-17 | 12,140 | (3) | 581,992 | ||||||||||||||||||||||||||||||||
| 2-9-17 | 12,140 | (4) | 581,992 | |||||||||||||||||||||||||||||||||
| 8-10-16 | 7,040 | (3) | 337,498 | |||||||||||||||||||||||||||||||||
| Allen J. Gula, Jr. | 2-9-17 | 5,462 | (3) | 261,848 | ||||||||||||||||||||||||||||||||
| 2-9-17 | 5,462 | (4) | 261,848 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 5,928 | (3) | 284,188 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 8,888 | (4) | 426,091 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 2,784 | (3) | 133,465 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 8,331 | (4) | 399,388 | |||||||||||||||||||||||||||||||||
| Allan E. Kamensky | 2-9-17 | 3,398 | (3) | 162,900 | ||||||||||||||||||||||||||||||||
| 2-9-17 | 3,398 | (4) | 162,900 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 3,688 | (3) | 176,803 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 5,529 | (4) | 265,060 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 1,733 | (3) | 83,080 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 5,183 | (4) | 248,473 | |||||||||||||||||||||||||||||||||
| J. Barton Singleton | 2-9-17 | 3,398 | (3) | 162,900 | ||||||||||||||||||||||||||||||||
| 2-9-17 | 3,398 | (4) | 162,900 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 3,688 | (3) | 176,803 | |||||||||||||||||||||||||||||||||
| 2-11-16 | 5,529 | (4) | 265,060 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 1,733 | (3) | 83,080 | |||||||||||||||||||||||||||||||||
| 2-19-15 | 5,183 | (4) | 248,473 | |||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date | Grant Date | Number of Shares or Units of Stock That Have Not Vested(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||||||||||||||||||
Kessel D. Stelling | — | — | — | 2-8-18 | — | — | 21,498 | (3) | $ | 687,721 | ||||||||||||||||
— | — | — | 2-8-18 | — | — | 32,248 | (4) | 1,031,614 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 20,608 | (3) | 659,250 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 30,909 | (4) | 988,779 | ||||||||||||||||||
— | — | — | 2-11-16 | — | — | 12,084 | (3) | 386,567 | ||||||||||||||||||
— | — | — | 2-11-16 | 38,923 | (4) | $ | 1,245,147 | — | — | |||||||||||||||||
Kevin S. Blair | — | — | — | 2-8-18 | — | — | 8,599 | (3) | 275,082 | |||||||||||||||||
— | — | — | 2-8-18 | — | — | 12,898 | (4) | 412,607 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 8,245 | (3) | 263,758 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 12,363 | (4) | 395,492 | ||||||||||||||||||
— | — | — | 8-10-16 | — | — | 3,591 | (3) | 114,876 | ||||||||||||||||||
Allen J. Gula, Jr. | — | — | — | 2-8-18 | — | — | 3,869 | (3) | 123,769 | |||||||||||||||||
— | — | — | 2-8-18 | — | — | 5,803 | (4) | 185,638 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 3,710 | (3) | 118,683 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 5,561 | (4) | 177,896 | ||||||||||||||||||
— | — | — | 2-11-16 | — | — | 3,025 | (3) | 96,770 | ||||||||||||||||||
— | — | — | 2-11-16 | 9,726 | (4) | 311,135 | — | — | ||||||||||||||||||
J. Barton Singleton | — | — | — | 2-8-18 | — | — | 3,869 | (3) | 123,769 | |||||||||||||||||
— | — | — | 2-8-18 | — | — | 5,803 | (4) | 185,638 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 2,308 | (3) | 73,833 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 3,460 | (4) | 110,685 | ||||||||||||||||||
— | — | — | 2-11-16 | — | — | 1,883 | (3) | 60,237 | ||||||||||||||||||
— | — | — | 2-11-16 | 6,050 | (4) | 193,540 | — | — | ||||||||||||||||||
Mark G. Holladay | — | — | — | 2-8-18 | — | — | 3,869 | (3) | 123,769 | |||||||||||||||||
— | — | — | 2-8-18 | — | — | 5,803 | (4) | 185,638 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 2,308 | (3) | 73,833 | ||||||||||||||||||
— | — | — | 2-9-17 | — | — | 3,460 | (4) | 110,685 | ||||||||||||||||||
— | — | — | 2-11-16 | — | — | 1,883 | (3) | 60,237 | ||||||||||||||||||
— | — | — | 2-11-16 | 6,050 | (4) | 193,540 | — | — | ||||||||||||||||||
| (1) | Includes additional stock awards credited by reason of such awards earning dividend equivalents. MRSUs and PSUs also vest in the event of death, disability or retirement after age 65 with 10 or more years of service. |
| (2) | Market value is calculated based on the closing price of Synovus’ common stock on December |
| (3) | MRSUs have a three-year service requirement |
| (4) | PSUs have a three-year service requirement (100% vest after three years of service) and a three-year performance period. Based upon Synovus’ weighted average ROAA (and ROATCE for the 2018 grants) during the performance period, the payout of the performance stock units may range from 0% to 150% of the target amount. In accordance with SEC rules, the number of unearned PSUs reflected in the table is based on an assumed achievement at the target performance level. PSUs granted in 2016 shown at 107.45% of target based upon 2016-2018 performance results. |
48 | | - 2019 Proxy Statement |
SUMMARY COMPENSATION TABLE
Option Exercises and Stock Vested for Fiscal Year 20172018
The following table sets forth the number and corresponding value realized during 20172018 with respect to restricted stock units that vested for each named executive officer. No named executive officer exercised stock options during 2017.2018.
| Option Awards | Stock Awards | |||||||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||||||
| Kessel D. Stelling | — | — | 63,966 | $ | 2,687,694 | |||||||||||||||
| Kevin S. Blair | — | — | 4,383 | 190,135 | ||||||||||||||||
| Allen J. Gula, Jr. | — | — | 15,144 | 636,382 | ||||||||||||||||
| Allan E. Kamensky | — | — | 13,912 | 580,905 | ||||||||||||||||
| J. Barton Singleton | — | — | 12,460 | 523,466 | ||||||||||||||||
Option Awards | Stock Awards | |||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||
Kessel D. Stelling | — | — | 72,091 | $ | 3,584,659 | |||||||
Kevin S. Blair | — | — | 9,196 | 444,387 | ||||||||
Allen J. Gula, Jr. | — | — | 17,462 | 870,858 | ||||||||
J. Barton Singleton | — | — | 10,861 | 541,664 | ||||||||
Mark G. Holladay | — | — | 10,861 | 541,664 | ||||||||
| (1) | Reflects the fair market value of the underlying shares as of the vesting date. |
- 2018 Proxy Statement 43
SUMMARY COMPENSATION TABLE
Nonqualified Deferred Compensation for Fiscal Year 20172018
The table below provides information relating to the activity in the deferred compensation plans for the named executive officers in 2017.2018.
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | |||||||||||||||
| Kessel D. Stelling | $ | 220,050 | $ | 277,952 | $ | 93,464 | — | $ | 2,365,853 | (4) | ||||||||||
| Kevin S. Blair | — | — | — | — | — | |||||||||||||||
| Allen J. Gula, Jr. | 31,085 | 20,285 | 25,476 | — | 185,509 | |||||||||||||||
| Allen E. Kamensky | 21,584 | 17,979 | 10,151 | — | 102,879 | |||||||||||||||
| J. Barton Singleton | — | — | 17,119 | — | 122,182 | |||||||||||||||
Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | ||||||||||
Kessel D. Stelling | $ | 112,500 | $ | 301,741 | $ | (96,410 | ) | — | $ | 2,683,685 | (4) | ||||
Kevin S. Blair | — | — | — | — | — | ||||||||||
Allen J. Gula, Jr. | 18,779 | 18,779 | (19,601 | ) | — | 204,466 | |||||||||
J. Barton Singleton | 30,473 | 26,086 | (12,431 | ) | — | 166,310 | |||||||||
Mark G. Holladay | 11,505 | 11,505 | (38,358 | ) | — | 669,538 | |||||||||
| (1) | The amounts included in this column are included in the Summary Compensation Table for |
| (2) | The amounts included in this column are included in the Summary Compensation Table for |
| (3) | Of the balances reported in this column, the amounts of |
| (4) | Theyear-end balance for Mr. Stelling includes |
The Deferred Plan replaces benefits lost by executives under the qualified retirement plans due to IRS limits. Executives are also permitted to defer all or a portion of their base salary or short-term incentive award. Amounts deferred under the Deferred Plan are deposited into a rabbi trust, and executives are permitted to invest their accounts in mutual funds that are generally the same as the mutual funds available in the qualified 401(k) plan. Deferred Plan participants may elect to withdraw their accounts as of a specified date or upon their termination of employment. Distributions can be made in a single lump sum or in annual installments over a2-10 two to ten year period, as elected by the executive. Each named executive officer except for Mr. Blair is 100% vested and will therefore receive his account balance in Synovus’ nonqualified deferred compensation plan upon his termination of employment for any reason.
The material terms and provisions of the Riverside Plan are described on page 3742 of this Proxy Statement.
Potential Payouts upon Termination or Change of Control
Synovus has entered into change of control agreements with its named executive officers. Under these agreements, benefits are payable upon the occurrence of two events (also known as a “double trigger”). The first event is a change of control and the second event is the termination of an executive’s employment by Synovus for any reason other than “cause,” death, or disability, or by the executive for “good reason,” within two years following the date of the change of control. “Change of control” is defined, in general, as the acquisition of 20% of Synovus’ stock by any “person” as defined under the Securities Exchange Act of 1934, turnover of more thanone-third of the Board of Directors of Synovus, or a merger of Synovus with another company if the former shareholders of Synovus own less than 60% of the surviving company. For purposes of these agreements, “good reason” means a material adverse reduction in an executive’s position, duties or responsibilities, relocation of the executive more than 35 miles from where the executive is employed, or a material reduction in the executive’s base salary, bonus or other employee benefit plans.
In the event payments are triggered under the agreements, each named executive will receive three times his or her base salary as in effect prior to the termination, three times a percentage of his or her base salary equal to the average short-term incentive award percentage earned over the previous three calendar years prior to the termination, as well as a pro rata short-term incentive award calculated at target for the year of termination. These amounts
| - 2019 Proxy Statement 49 |
SUMMARY COMPENSATION TABLE
are paid to the named executive in a singlelump-sum cash payment. Each named executive will also receive health and welfare benefits for a three year period. In addition, executives who entered into agreements prior to the prohibition on taxgross-ups adopted by the Compensation Committee (see page 37)42) will receive an amount that is designed to“gross-up” “gross-up” the executive for any excise taxes that are payable by the executive as a result of the payments under the agreement, but only if the total change of control payments to the executive exceed 110% of the applicable IRS cap. The following table quantifies the estimated amounts that would be payable under the change of control agreements, assuming the triggering events occurred on December 31, 2017.2018. In addition to the amounts set forth in the table below, executives would also receive a distribution of their deferred
|
SUMMARY COMPENSATION TABLE
compensation vested account balance shown above in the Nonqualified Deferred Compensation Table upon their separation of employment on December 31, 2017.2018.
3x Base Salary | Average 3-Yrs Short- Term Incentive Award | Pro-Rata Target Short- Term Incentive Award | Health & Welfare Benefits | Stock Award Vesting(1) | Excise Tax Gross- up(2) | Total | ||||||||||||||||||||||
| Kessel D. Stelling | $ | 3,375,000 | $ | 3,541,050 | $ | 1,406,250 | $ | 67,284 | $ | 7,824,239 | $ | 1,828,615 | $ | 18,042,438 | ||||||||||||||
| Kevin S. Blair | 1,759,500 | 469,260 | 439,875 | 67,284 | 1,501,482 | 0 | 4,237,401 | |||||||||||||||||||||
| Allen J. Gula, Jr. | 1,391,874 | 870,896 | 324,771 | 67,284 | 1,766,828 | 223,006 | 4,644,659 | |||||||||||||||||||||
| Allan E. Kamensky | 1,337,499 | 738,614 | 267,500 | 67,284 | 1,099,216 | 0 | 3,510,113 | |||||||||||||||||||||
| J. Barton Singleton | 1,265,355 | 612,549 | 258,133 | 67,284 | 1,099,216 | 198,695 | 3,501,232 | |||||||||||||||||||||
3x Base Salary | Average 3-Yrs Short- Term Incentive Award | Pro-Rata Target Short- Term Incentive Award | Health and Welfare Benefits | Stock Award Vesting(1) | Excise Tax Gross- up(2) | Total | |||||||||||||||
Kessel D. Stelling | $ | 3,375,000 | $ | 4,623,750 | $ | 1,406,250 | $ | 74,484 | $ | 4,911,737 | — | $ | 14,391,221 | ||||||||
Kevin S. Blair | 1,847,745 | 1,163,910 | 461,869 | 74,484 | 1,461,815 | — | 5,009,823 | ||||||||||||||
Allen J. Gula, Jr. | 1,433,631 | 1,189,914 | 334,514 | 74,484 | 992,297 | — | 4,024,840 | ||||||||||||||
J. Barton Singleton | 1,329,384 | 864,099 | 265,877 | 74,484 | 734,266 | — | 3,268,110 | ||||||||||||||
Mark G. Holladay | 1,171,149 | 890,073 | 234,230 | 74,484 | 734,266 | — | 3,104,202 | ||||||||||||||
| (1) | Estimated by multiplying number of stock awards that vest upon change of control by fair market value on December 31, |
| (2) | Excise taxes on vesting of PSU awards estimated by including full value of awards. Excise taxes on vesting of restricted stock unit and MRSU awards estimated by multiplying amount of awards that vest upon change of control by 1% for each month of accelerated vesting. Total estimated excise tax amount divided by 43.55%, which percentage is designed to calculate the amount ofgross-up payment necessary so that executive is placed in the same position as though excise tax did not apply. Nogross-up payment is made if change of control payment does not exceed IRS cap by 110% |
Executives who receive these benefits are subject to a confidentiality obligation with respect to secretnon-public and confidential information about Synovus they possess. There are no provisions regarding a waiver of this confidentiality obligation. No perquisites or other personal benefits are payable under the change of control agreements.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. The CEO to median employee pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies.
We identified the median employee from a list of all employees (full time(full-time and part-time) employed as of December 31, 2017. We determined the median employee based on each employee’s annual earnings (consisting of salaries, bonuses and commissions), annualizing earnings for employees who were not employed for a full year in 2017. The median employee identified in 2017 received a promotion in 2018, so we substituted the employee immediately below the previously-identified employee as our new median employee. After identifying the new median employee, we added compensation under our Company sponsored broad-based employee benefit plans to the earnings of the new median employee for 2018 and to the CEO’s total compensation as reflected in the Summary Compensation Table for 2018 (adding $21,324$25,498 to the CEO’s compensation amount). Based on the foregoing, the CEO’s 20172018 annual total compensation is $5,981,952$5,893,708 and the median annual total compensation of all employees (except for the CEO) is $59,877,$61,782, resulting in a CEO pay ratio of approximately 10095 to 1.
50 | | - 2019 Proxy Statement |
- 2018 Proxy Statement 45
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transaction Policy
Synovus’ Board of Directors has adopted a written policy for the review, approval or ratification of certain transactions with related parties of Synovus, which policy is administered by the Corporate Governance and Nominating Committee. Transactions that are covered under the policy include any transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships, in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year; (2) Synovus is a participant; and (3) any related party of Synovus (such as an executive officer, director, nominee for election as a director or greater than 5% beneficial owner of Synovus stock, or their immediate family members) has or will have a direct or indirect interest.
Among other factors considered by the Committee when reviewing the material facts of related party transactions, the Committee must take into account whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. Certain categories of transactions have standingpre-approval under the policy, including the following:
The policy does not apply to certain categories of transactions, including the following:
Related Party Transactions in the Ordinary Course
During 2017,2018, Synovus’ executive officers and directors (including their immediate family members and organizations with which they are affiliated) were also banking customers of Synovus and/or its subsidiaries. The lending relationships with these directors and officers (including their immediate family members and organizations with which they are affiliated) were made in the ordinary course of business and on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with persons not related to the lender and do not involve more than normal collection risk or present other unfavorable features. In addition to these lending relationships, some directors and their affiliated organizations provide services or otherwise do business with Synovus and its subsidiaries, and we in turn provide services, including retail brokerage and other financial services, or otherwise do business with the directors and their organizations, in each case in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with other nonaffiliated persons.
For purposes of determining director independence, the Board considered the lending and/or other financial services relationships provided to each of Messrs. Bentsen, Brooke, Butler, Nix, Pastides, Prochaska, Stallworth, Stith, Storey,our directors and Tomlinson and Ms. Allen, Ms. Camp and Ms. Murphy,nominees, their immediate family members and/or their affiliated organizations during 20172018 and determined that none of the relationships constitute a material relationship with Synovus. The services provided to these directors and nominees were in the ordinary course of business and on substantially the same terms as those available to unrelated parties. These relationships meet the Board’s categorical standards for independence. See “Corporate Governance and Board Matters—Independence.”
Other Related Party Transactions
From January to April 2018, Stephen T. Butler served as the executive chairman of W.C. Bradley Co. Mr. Butler retired as executive chairman of W.C. Bradley Co. in April 2018. As such, pursuant to our Related Party Transaction Policy and applicable SEC rules, we no longer consider W.C. Bradley Co. a related party not do we consider Mr. Butler to have a material interest in any of Synovus’ transactions involving W.C. Bradley Co.
Nonetheless, Synovus leased various properties in Columbus, Georgia from W.C. Bradley Co. for office space and storage during 2017. During 2017, Stephen T. Butler was the executive chairman and a director of W.C. Bradley Co.2018. The aggregate rent paid for this leased space was $3,193,715.$3,308,635. The terms of the lease agreements are comparable to those provided for between similarly situated unrelated third parties in similar transactions.
Synovus iswas a party to a Joint Ownership Agreement with TSYS and W.C.B. Air L.L.C. pursuant to which they jointly ownowned or lease aircraft.leased aircraft during the first quarter of 2018. During that time, W.C. Bradley Co. ownsowned all of the limited liability interests of W.C.B. Air. ThePursuant to the Joint Ownership Agreement, the parties have each agreed to pay fixed fees for each hour they flyflew the aircraft owned and/or leased pursuant to the Joint Ownership Agreement. Synovus paid $1,612,544$2,137,941 for its business relatedbusiness-related use of the aircraft during 2017.2018. The charges payable by Synovus in connection with its use of this aircraft approximate charges available to unrelated third parties in the State of Georgia for use of comparable aircraft for commercial purposes.
| - 2019 Proxy Statement 51 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 2018, W.C.B. Air LLC exited the Joint Ownership Agreement with TSYS and Synovus. Synovus paid W.C.B. Air LLC $614,500 in exchange for half of its interest in the Joint Ownership Agreement. In addition, Synovus sold certain real property located in Columbus, Georgia to W.C. Bradley Co. in June 2018 for $1.5 million. The purchase price for both of these transactions was based upon a number of factors and was on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances.
In each of the foregoing transactions, the Board considered the extent of Mr. Butler’s interest in the transaction, determining that each of the transactions between Synovus and W.C. Bradley Co. and its affiliates were comparable to those provided by between similarly situated unrelated third parties in similar transactions. Moreover, the payments to W.C. Bradley Co. by Synovus and its subsidiaries and the payments to Synovus and its subsidiaries by W.C. Bradley Co. represent less than 2% of W.C. Bradley Co.’s 20172018 gross revenues. The Board considered these transactions, individually and in the aggregate, and determined that Mr. Butler is independent pursuant to the Synovus’ categorical standards of independence.
In addition, in 2018, Synovus and its wholly owned subsidiaries paid to Communicorp, Inc., a wholly-owned subsidiary of Aflac Incorporated, $834,421 for printing, marketing and promotional services, which payments are comparable to payments between similarly situated unrelated third parties for similar services. Teresa White, a director nominee, is President of Aflac US. The payments to Communicorp by Synovus and its subsidiaries represent less than 0.004% of Aflac’s 2018 gross revenues. The Board considered these transactions and determined that Mr. ButlerMs. White is independent pursuant to the Synovus Financial Corp. Independence Standards.Synovus’ categorical standards of independence.
| - 2018 Proxy Statement |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Synovus’ officers and directors, and persons who own more than ten percent of Synovus stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish Synovus with copies of all Section 16(a) forms they file.
To Synovus’ knowledge, based solely on its review of the copies of such forms received by it, and written representations from certain reporting persons that no Forms 5 were required for those persons, Synovus believes that during the fiscal year ended December 31, 20172018 its officers, directors and greater than ten percent beneficial owners timely complied with all applicable Section 16(a) filing requirements, except that Ms. McDaniel had one Form 4 that was filed late.requirements.
SHAREHOLDER PROPOSALS AND NOMINATIONS
In order for a shareholder proposal to be considered for inclusion in Synovus’ Proxy Statement for the 20192020 annual meeting of shareholders, the written proposal must be received by the Corporate Secretary of Synovus at the address below. The Corporate Secretary must receive the proposal no later than November 16, 2018.13, 2019. The proposal will also need to comply with the SEC’s regulations under Rule14a-8 regarding the inclusion of shareholder proposals in company sponsored proxy materials. Proposals should be addressed to:
Corporate Secretary
Synovus Financial Corp.
1111 Bay Avenue, Suite 500
Columbus, Georgia 31901
For a shareholder proposal that is not intended to be included in Synovus’ Proxy Statement for the 20192020 annual meeting of shareholders, or if you want to nominate a person for election as a director, you must provide written notice to the Corporate Secretary at the address above. The Secretary must receive this notice not earlier than December 27, 201826, 2019 and not later than January 26, 2019.25, 2020. The notice of a proposed item of business must provide information as required in the bylaws of Synovus which, in general, require that the notice include for each matter a brief description of the matter to be brought before the meeting; the reason for bringing the matter before the meeting; your name, address, and number of shares you own beneficially or of record; and any material interest you have in the proposal.
The notice of a proposed director nomination must provide information as required in the bylaws of Synovus which, in general, require that the notice of a director nomination include your name, address and the number of shares you own beneficially or of record; the name, age, business address, residence address and principal occupation of the nominee; and the number of shares owned beneficially or of record by the nominee, as well as information on any hedging activities or derivative positions held by the nominee with respect to Synovus shares. It must also include the information that would be required to be disclosed in the solicitation of proxies for the election of a director under federal securities laws. You must submit the nominee’s consent to be elected and to serve as well as a statement whether each nominee, if elected, intends to tender promptly following such person’s failure to receive the required vote for election orre-election, an irrevocable resignation effective upon acceptance by the Board of Directors, in accordance with Synovus’ Corporate Governance Guidelines. A copy of the bylaw requirements will be provided upon request to the Corporate Secretary at the address above.
52 | | - 2019 Proxy Statement |
- 2018 Proxy Statement 47
A copy of Synovus’ 20172018 Annual Report accompanies this Proxy Statement or, in the case of shareholders who receive Notice and Access, is available on the website with the Proxy Statement. Additional copies of the 20172018 Annual Report, without exhibits, will be furnished, without charge, by writing to the Corporate Secretary, Synovus Financial Corp., 1111 Bay Avenue, Suite 500, Columbus, Georgia 31901. The 20172018 Annual Report is also available at investor.synovus.com under the “Financial Information” tab.
Solicitation ofProxiesof Proxies
Synovus will pay the cost of soliciting proxies. Proxies may be solicited on behalf of Synovus by directors, officers or employees by mail, in person or by telephone, facsimile or other electronic means, for which they will receive no additional compensation. Synovus will reimburse brokerage firms, nominees, custodians, and fiduciaries for theirout-of-pocket expenses for forwarding proxy materials to beneficial owners. In addition, we have retained Innisfree M&A Incorporated to assist in the solicitation of proxies with respect to shares of our common stock held of record by brokers, nominees and institutions and, in certain cases, by other holders. Such solicitation may be made through the use of mails,mail, by telephone or by personal calls. The anticipated cost of the services of Innisfree is $20,000 plus expenses.
The Securities and Exchange Commission’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single proxy statement to those shareholders. This method of delivery, often referred to as householding, should reduce the amount of duplicate information that shareholders receive and lower printing and mailing costs for companies. Synovus and certain intermediaries are householding proxy materials for shareholders of record in connection with the Annual Meeting. This means that:
| ||
| - |
Appendix A: Synovus Financial Corp. Director Independence Standards
The following independence standards have been approved by the Board of Directors and are included within Synovus’ Corporate Governance Guidelines.
A majority of the Board of Directors will be directors that the Board of Directors has affirmatively determined meet the criteria for independence required by the NYSE and the Corporate Governance Guidelines.
A. Categorical Standards for Director Independence
The Corporate Governance and Nominating Committee will make recommendations to the Board annually as to the independence of directors as defined by the NYSE. To be considered independent under the NYSE Listing Standards, the Board must determine that a director does not have any direct or indirect material relationship with the Company. The Board has established the following standards to assist it in determining director independence. A director is not independent if:
The following relationships will not be considered to be material relationships that would impair a director’s independence:
| 1. | Such relationships are in the ordinary course of business of the Company and are on substantially the same terms as those prevailing at the time for comparable transactions withnon-affiliated persons; and |
| - 2019 Proxy Statement A-1 |
- 2018 Proxy Statement
A-1
APPENDIX A: SYNOVUS FINANCIAL CORP. DIRECTOR INDEPENDENCE STANDARDS
| 2. | With respect to extensions of credit by the Company’s subsidiaries: |
| (a) | such extensions of credit have been made in compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve, Sections 23A and 23B of the Federal Reserve Act and Section 13(k) of the Securities Exchange Act of 1934; and |
| (b) | no event of default has occurred under the extension of credit. |
For relationships not described above or otherwise not covered in the above examples, a majority of the Company’s independent directors, after considering all of the relevant circumstances, may make a determination whether or not such relationship is material and whether the director may therefore be considered independent under the NYSE Listing Standards. The Company will explain the basis of any such determinations of independence in the next proxy statement.
For purposes of these independence standards an “immediate family member” includes a person’s spouse, parents, children, siblings, mothers andfathers-in-law, sons anddaughters-in-law, brothers andsisters-in-law, and anyone (other than domestic employees) who shares such person’s home.
For purposes of these independence standards “Company” includes any parent or subsidiary in a consolidated group with the Company.
B. Additional Criteria for Independent Audit Committee and Compensation Committee Members
In addition to being independent as determined under the Categorical Standards for Independence set forth in “A” above,
A-2 | | |
| - |
Appendix B: Reconciliation ofNon-GAAP Financial Measures
Non-GAAP Financial Measures-Synovus 20172018 Financial Performance
The measures entitled adjustednon-interest income; adjustednon-interest expense; adjusted total revenues; adjusted efficiency ratio; average core deposits; average core transaction deposits; average core transaction non-interest bearing deposits; adjusted return on average assets; adjusted net income per common share, diluted; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible book value per common share; and adjusted netcharge-off ratioshare are not measures recognized under GAAP and therefore are considerednon-GAAP financial measures. The most comparable GAAP measures are totalnon-interest income; totalnon-interest expense; total revenues; efficiency ratio; total average deposits; return on average assets; net income per common share, diluted; return on average common equity; and book value per common share; and netcharge-off ratio,share, respectively. Thesenon-GAAP financial measures should not be considered as substitutes for the respective comparable GAAP measures and may not be comparable to other similarly titled measures at other companies.
The computations of adjustednon-interest income; adjustednon-interest expense; adjusted total revenues; adjusted efficiency ratio; average core deposits; average core transaction deposits; average core transaction non-interest bearing deposits; adjusted return on average assets; adjusted net income per common share, diluted; adjusted return on average common equity; return on average tangible common equity; adjusted return on average tangible common equity; and tangible book value per common share; and adjusted netcharge-offshare ratio and the reconciliations of these measures to their respective GAAP measures are set forth in the tables below:
Years Ended December 31, | ||||||
(dollars in thousands) | 2018 | 2017 | ||||
Adjusted Non-interest Income | ||||||
Total non-interest income | $ | 280,093 | 345,327 | |||
Subtract: Cabela’s Transaction Fee | — | (75,000 | ) | |||
Add: Investment securities losses, net | 1,296 | 289 | ||||
Add: Decrease in fair value of private equity investments, net | 4,743 | 3,093 | ||||
Adjusted non-interest income | $ | 286,132 | 273,709 | |||
Adjusted Non-interest Expense | ||||||
Total non-interest expense | $ | 829,455 | 821,313 | |||
Subtract: Discounts to fair value for ORE accelerated dispositions | — | (7,082 | ) | |||
Subtract: Asset impairment charges related to accelerated disposition of corporate real estate and other properties | — | (1,168 | ) | |||
Subtract: Earnout liability adjustments | (11,652 | ) | (3,759 | ) | ||
Add/Subtract: Litigation settlement/contingency expense | 4,026 | (701 | ) | |||
Add/Subtract: Restructuring charges, net | 51 | (7,014 | ) | |||
Subtract: Valuation adjustment to Visa derivative | (2,328 | ) | — | |||
Subtract: Loss on early extinguishment of debt, net | — | (23,160 | ) | |||
Subtract: Merger-related expense | (10,065 | ) | (110 | ) | ||
Subtract: Amortization of intangibles | (1,167 | ) | (1,059 | ) | ||
Adjusted non-interest expense | $ | 808,320 | 777,260 | |||
Adjusted Total Revenues and Adjusted Efficiency Ratio | ||||||
Adjusted non-interest expense | $ | 808,320 | 777,260 | |||
Net interest income | $ | 1,148,413 | 1,023,309 | |||
Add: Tax equivalent adjustment | 553 | 1,124 | ||||
Add: Total non-interest income | 280,093 | 345,327 | ||||
Add: Investment securities losses, net | 1,296 | 289 | ||||
Total FTE revenues | $ | 1,430,355 | 1,370,049 | |||
Subtract: Cabela’s Transaction Fee | — | (75,000 | ) | |||
Add: Decrease in fair value of private equity investments, net | 4,743 | 3,093 | ||||
Adjusted total revenues | $ | 1,435,098 | 1,298,142 | |||
Efficiency ratio | 57.99% | 59.95 | ||||
Adjusted efficiency ratio | 56.33% | 59.87 | ||||
Years Ended December 31, | ||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
| AdjustedNon-interest Income | ||||||||
| Totalnon-interest income | $ | 345,327 | 273,194 | |||||
| Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | |||||
| Add/subtract: Investment securities losses (gains), net | 289 | (6,011 | ) | |||||
| Add: Decrease in fair value of private equity investments, net | 3,093 | 1,026 | ||||||
|
|
|
| |||||
| Adjustednon-interest income | $ | 273,709 | 268,209 | |||||
| AdjustedNon-interest Expense | ||||||||
| Totalnon-interest expense | $ | 821,313 | 755,923 | |||||
| Subtract: 3Q17 discounts to fair value for completed or planned ORE accelerated dispositions | (7,082 | ) | — | |||||
| Subtract: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | (1,168 | ) | — | |||||
| Subtract: Earnout liability adjustments | (3,759 | ) | — | |||||
| Subtract: Litigation settlement/contingency expense | (701 | ) | (2,511 | ) | ||||
| Subtract: Restructuring charges, net | (7,014 | ) | (8,267 | ) | ||||
| Subtract: Fair value adjustment to Visa derivative | — | (5,795 | ) | |||||
| Subtract: Loss on early extinguishment of debt, net | (23,160 | ) | (4,735 | ) | ||||
| Subtract: Merger-related expense | (110 | ) | (1,636 | ) | ||||
| Subtract: Amortization of intangibles | (1,059 | ) | (521 | ) | ||||
|
|
|
| |||||
| Adjustednon-interest expense | $ | 777,260 | 732,458 | |||||
| Adjusted Total Revenues and Adjusted Efficiency Ratio | ||||||||
| Adjustednon-interest expense | $ | 777,260 | 732,458 | |||||
|
|
|
| |||||
| Net interest income | $ | 1,023,309 | 899,180 | |||||
| Add: Tax equivalent adjustment | 1,124 | 1,285 | ||||||
| Totalnon-interest income | 345,327 | 273,194 | ||||||
| Add/Subtract: Investment securities losses (gains), net | 289 | (6,011 | ) | |||||
|
|
|
| |||||
| Total FTE revenues | $ | 1,370,049 | 1,167,648 | |||||
| Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | |||||
| Add: Decrease in fair value of private equity investments, net | 3,093 | 1,026 | ||||||
|
|
|
| |||||
| Adjusted total revenues | $ | 1,298,142 | 1,168,674 | |||||
| Efficiency ratio | 59.95 | % | 64.74 | |||||
| Adjusted efficiency ratio1 | 59.87 | % | 62.67 | |||||
|
- 2018 Proxy Statement
B-1
Years Ended December 31, | ||||||
(in thousands) | 2018 | 2017 | ||||
Average Core Deposits | ||||||
Average total deposits | $ | 26,344,118 | 25,374,388 | |||
Subtract: Average brokered deposits | (1,817,120 | ) | (1,624,381 | ) | ||
Average core deposits | $ | 24,526,998 | 23,750,007 | |||
Years Ended December 31, | ||||||
(dollars in thousands) | 2018 | 2017 | ||||
Adjusted Return on Average Assets | ||||||
Net income | $ | 428,476 | 275,474 | |||
Add: Earnout liability adjustments | 11,652 | 3,759 | ||||
Subtract/Add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items | (9,148 | ) | 42,334 | |||
Subtract/Add: Litigation settlement/contingency expenses | (4,026 | ) | 701 | |||
Subtract/Add: Restructuring charges, net | (51 | ) | 7,014 | |||
Add: Valuation adjustment to Visa derivative | 2,328 | — | ||||
Add: Loss on early extinguishment of debt, net | — | 23,160 | ||||
Add: Merger-related expense | 10,065 | 110 | ||||
Add: Amortization of intangibles | 1,167 | 1,059 | ||||
Add: Provision expense on loans transferred to loans held-for-sale | — | 27,710 | ||||
Add: Discounts to fair value for ORE accelerated dispositions | — | 7,082 | ||||
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties | — | 1,168 | ||||
Add: Investment securities losses, net | 1,296 | 289 | ||||
Add: Decrease in fair value of private equity investments, net | 4,743 | 3,093 | ||||
Subtract: Cabela’s Transaction Fee | — | (75,000 | ) | |||
Subtract/Add: Tax effect of adjustments | (1,283 | ) | 1,337 | |||
Adjusted net income | $ | 445,219 | 319,290 | |||
Total average assets | $ | 31,668,847 | 30,787,288 | |||
Return on average assets | 1.35% | 0.89 | ||||
Adjusted return on average assets | 1.41% | 1.04 | ||||
Adjusted Net Income per Common Share, Diluted | ||||||
Net income available to common shareholders | $ | 410,478 | 265,236 | |||
Add: Earnout liability adjustments | 11,652 | 3,759 | ||||
Subtract/Add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items | (9,148 | ) | 42,334 | |||
Add: Preferred stock redemption charge | 4,020 | — | ||||
Subtract/Add: Litigation settlement/contingency expense | (4,026 | ) | 701 | |||
Subtract/Add: Restructuring charges, net | (51 | ) | 7,014 | |||
Add: Valuation adjustment to Visa derivative | 2,328 | — | ||||
Add: Loss on early extinguishment of debt, net | — | 23,160 | ||||
Add: Merger-related expense | 10,065 | 110 | ||||
APPENDIX B: RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
Years Ended December 31, | ||||||||
| (in thousands) | 2017 | 2016 | ||||||
| Average Core Deposits and Average Core Transaction Deposit Accounts | ||||||||
| Average total deposits | $ | 25,374,388 | 23,880,021 | |||||
| Subtract: Average brokered deposits | (1,624,381 | ) | (1,306,217 | ) | ||||
|
|
|
| |||||
| Average core deposits | $ | 23,750,007 | 22,573,804 | |||||
| Subtract: Average state, county, and municipal (SCM) deposits | (2,123,104 | ) | (2,295,266 | ) | ||||
| Subtract: Average time deposits, excluding SCM deposits | (3,136,847 | ) | (3,145,027 | ) | ||||
|
|
|
| |||||
| Average core transaction deposit accounts | $ | 18,490,056 | 17,133,511 | |||||
| Average core transactionnon-interest bearing deposits | $ | 6,593,727 | 6,203,475 | |||||
| Average core transaction interest bearing demand deposits | $ | 3,969,111 | 3,337,751 | |||||
| Average core transaction money market accounts, excluding brokered deposits | $ | 7,102,148 | 6,806,876 | |||||
| Average core transaction savings deposits | $ | 825,070 | 785,409 | |||||
|
|
|
| |||||
| Average core transaction deposit accounts | $ | 18,490,056 | 17,133,511 | |||||
Years Ended December 31, | ||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
| Adjusted Return on Average Assets | ||||||||
| Net income | $ | 275,474 | 246,784 | |||||
| Add: Earnout liability adjustments | 3,759 | — | ||||||
| Add: Income tax expense related to effects of Federal Tax Reform | 47,181 | — | ||||||
| Add: Litigation settlement/contingency expenses | 701 | 2,511 | ||||||
| Add: Restructuring charges, net | 7,014 | 8,267 | ||||||
| Add: Fair value adjustment to Visa derivative | — | 5,795 | ||||||
| Add: Loss on early extinguishment of debt, net | 23,160 | 4,735 | ||||||
| Add: Merger-related expense | 110 | 1,636 | ||||||
| Add: Amortization of intangibles | 1,059 | 521 | ||||||
| Add: 3Q17 provision expense on loans transferred to loansheld-for-sale | 27,710 | — | ||||||
| Add: 3Q17 discounts to fair value for completed or planned ORE accelerated dispositions | 7,082 | — | ||||||
| Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | 1,168 | — | ||||||
| Add/Subtract: Investment securities losses (gains), net | 289 | (6,011 | ) | |||||
| Add: Decrease in fair value of private equity investments, net | 3,093 | 1,026 | ||||||
| Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | |||||
| Subtract: Income tax benefit related topre-2017 R&D credits and state taxes | (4,847 | ) | — | |||||
| Add/Subtract: Tax effect of adjustments | 1,337 | (6,838 | ) | |||||
|
|
|
| |||||
| Adjusted net income | $ | 319,290 | 258,426 | |||||
| Total average assets | $ | 30,787,288 | 29,480,950 | |||||
| Return on average assets | 0.89 | % | 0.84 | |||||
| Adjusted return on average assets | 1.04 | % | 0.88 | |||||
| Adjusted Net Income per Common Share, Diluted | ||||||||
| Net income available to common shareholders | $ | 265,236 | 236,546 | |||||
| Add: Earnout liability adjustments | 3,759 | — | ||||||
| Add: Income tax expense related to effects of Federal Tax Reform | 47,181 | — | ||||||
| Add: Litigation settlement/contingency expense | 701 | 2,511 | ||||||
| Add: Restructuring charges, net | 7,014 | 8,267 | ||||||
| Add: Fair value adjustment to Visa derivative | — | 5,795 | ||||||
| Add: Loss on early extinguishment of debt, net | 23,160 | 4,735 | ||||||
| Add: Merger-related expense | 110 | 1,636 | ||||||
B-2 | | |
- |
APPENDIXAppendix B: RECONCILIATION OFReconciliation of Non-GAAP Financial MeasuresNON-GAAP FINANCIAL MEASURES
Adjusted Net Income per Common Share, Diluted (continued)
Years Ended December 31, | ||||||
(in thousands, except per share data) | 2018 | 2017 | ||||
Add: Amortization of intangibles | 1,167 | 1,059 | ||||
Add: Provision expense on loans transferred to loans held-for-sale | — | 27,710 | ||||
Add: Discounts to fair value for ORE accelerated dispositions | — | 7,082 | ||||
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties | — | 1,168 | ||||
Add: Investment securities losses, net | 1,296 | 289 | ||||
Add: Decrease in fair value of private equity investments, net | 4,743 | 3,093 | ||||
Subtract: Cabela’s Transaction Fee | — | (75,000 | ) | |||
Subtract/Add: Tax effect of adjustments | (1,283 | ) | 1,337 | |||
Adjusted net income available to common shareholders | $ | 431,241 | 309,052 | |||
Weighted average common shares outstanding-diluted | 118,378 | 122,012 | ||||
Adjusted net income per common share, diluted | $ | 3.64 | 2.53 | |||
Years Ended December 31, | ||||||
(dollars in thousands) | 2018 | 2017 | ||||
Adjusted Return on Average Common Equity, Return on Average Tangible Common Equity, and Adjusted Return on Average Tangible Common Equity | ||||||
Net income available to common shareholders | $ | 410,478 | 265,236 | |||
Add: Earnout liability adjustments | 11,652 | 3,759 | ||||
Subtract/Add: Income tax (benefit) expense, net related to Federal Tax Reform, SAB 118, State Tax Reform, and adjusted portion of other discrete items | (9,148 | ) | 42,334 | |||
Add: Preferred stock redemption charge | 4,020 | — | ||||
Subtract/Add: Litigation settlement/contingency expense | (4,026 | ) | 701 | |||
Subtract/Add: Restructuring charges, net | (51 | ) | 7,014 | |||
Add: Valuation adjustment to Visa derivative | 2,328 | — | ||||
Add: Loss on early extinguishment of debt, net | — | 23,160 | ||||
Add: Merger-related expense | 10,065 | 110 | ||||
Add: Amortization of intangibles | 1,167 | 1,059 | ||||
Add: Provision expense on loans transferred to loans held-for-sale | — | 27,710 | ||||
Add: Discounts to fair value for ORE accelerated dispositions | — | 7,082 | ||||
Add: Asset impairment charges related to accelerated disposition of corporate real estate and other properties | — | 1,168 | ||||
Add: Investment securities losses, net | 1,296 | 289 | ||||
Add: Decrease in fair value of private equity investments, net | 4,743 | 3,093 | ||||
Subtract: Cabela’s Transaction Fee | — | (75,000 | ) | |||
Subtract/Add: Tax effect of adjustments | (1,283 | ) | 1,337 | |||
Adjusted net income available to common shareholders | $ | 431,241 | 309,052 | |||
Net income available to common shareholders | $ | 410,478 | 265,236 | |||
Add: Amortization of intangibles | 893 | 667 | ||||
Net income available to common shareholders excluding amortization of intangibles | $ | 411,371 | 265,903 | |||
Total average shareholders’ equity less preferred stock | $ | 2,821,311 | 2,844,570 | |||
Subtract: Goodwill | (57,315 | ) | (57,779 | ) | ||
Subtract: Other intangible assets, net | (10,424 | ) | (12,030 | ) | ||
Total average tangible shareholders’ equity less preferred stock | $ | 2,753,572 | 2,774,761 | |||
Return on average common equity | 14.55% | 9.32 | ||||
Adjusted return on average common equity | 15.29% | 10.86 | ||||
Return on average tangible common equity | 14.94% | 9.58 | ||||
Adjusted return on average tangible common equity | 15.66% | 11.14 | ||||
Years Ended December 31, | ||||||||
| (in thousands, except per share data) | 2017 | 2016 | ||||||
| Add: Amortization of intangibles | 1,059 | 521 | ||||||
| Add: 3Q17 provision expense on loans transferred to loansheld-for-sale | 27,710 | — | ||||||
| Add: 3Q17 discounts to fair value for competed or planned ORE accelerated dispositions | 7,082 | — | ||||||
| Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | 1,168 | — | ||||||
| Add/Subtract: Investment securities losses (gains), net | 289 | (6,011 | ) | |||||
| Add: Decrease in fair value of private equity investments, net | 3,093 | 1,026 | ||||||
| Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | |||||
| Subtract: Income tax benefit related topre-2017 R&D credits and state taxes | (4,847 | ) | — | |||||
| Add/Subtract: Tax effect of adjustments | 1,337 | (6,838 | ) | |||||
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| Adjusted net income available to common shareholders | $ | 309,052 | 248,188 | |||||
| Weighted average common shares outstanding-diluted | 122,012 | 125,078 | ||||||
| Adjusted net income per common share, diluted | $ | 2.53 | 1.98 | |||||
| Years Ended December 31, | ||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||
| Adjusted Return on Average Common Equity and Adjusted Return on Average Tangible Common Equity | ||||||||
| Net income available to common shareholders | $ | 265,236 | 236,546 | |||||
| Add: Earnout liability adjustments | 3,759 | — | ||||||
| Add: Income tax expense related to effects of Federal Tax Reform | 47,181 | — | ||||||
| Add: Litigation settlement/contingency expense | 701 | 2,511 | ||||||
| Add: Restructuring charges, net | 7,014 | 8,267 | ||||||
| Add: Fair value adjustment to Visa derivative | — | 5,795 | ||||||
| Add: Loss on early extinguishment of debt, net | 23,160 | 4,735 | ||||||
| Add: Merger-related expense | 110 | 1,636 | ||||||
| Add: Amortization of intangibles | 1,059 | 521 | ||||||
| Add: 3Q17 provision expense on loans transferred to loansheld-for-sale | 27,710 | — | ||||||
| Add: 3Q17 discounts to fair value for completed or planned ORE accelerated dispositions | 7,082 | — | ||||||
| Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | 1,168 | — | ||||||
| Add/Subtract: Investment securities losses (gains), net | 289 | (6,011 | ) | |||||
| Add: Decrease in fair value of private equity investments, net | 3,093 | 1,026 | ||||||
| Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | |||||
| Subtract: Income tax benefit related topre-2017 R&D credits and state taxes | (4,847 | ) | — | |||||
| Add/Subtract: Tax effect of adjustments | 1,337 | (6,838 | ) | |||||
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| Adjusted net income available to common shareholders | $ | 309,052 | 248,188 | |||||
| Total average shareholders’ equity less preferred stock | $ | 2,844,570 | 2,813,526 | |||||
| Subtract: Goodwill | (57,779 | ) | (32,151 | ) | ||||
| Subtract: Other intangible assets, net | (12,030 | ) | (269 | ) | ||||
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| Total average tangible shareholders’ equity less preferred stock | $ | 2,774,761 | 2,781,106 | |||||
| Return on average common equity | 9.32 | % | 8.41 | |||||
| Adjusted return on average common equity | 10.86 | % | 8.82 | |||||
| Return on average tangible common equity | 9.58 | % | 8.52 | |||||
| Adjusted return on average tangible common equity | 11.14 | % | 8.92 | |||||
| - 2019 Proxy Statement B-3 |
- 2018 Proxy Statement
B-3
December 31, | ||||||
(in thousands, except per share data | 2018 | 2017 | ||||
Tangible Book Value per Common Share | ||||||
Total shareholders’ equity | $ | 3,133,602 | 2,961,566 | |||
Subtract: Preferred Stock, no par value | (195,140 | ) | (125,980 | ) | ||
Common equity | 2,938,462 | 2,835,586 | ||||
Subtract: Goodwill | (57,315 | ) | (57,315 | ) | ||
Subtract: Other intangible assets, net | (9,875 | ) | (11,254 | ) | ||
Tangible Common Equity | $ | 2,871,272 | 2,767,017 | |||
Common shares outstanding | 115,866 | 118,897 | ||||
Book value per common share | $ | 25.36 | $ | 23.85 | ||
Tangible book value per common share | 24.78 | 23.27 | ||||
APPENDIX B: RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
| (dollars in thousands) | Year Ended December 31, 2017 | |||
| Adjusted NetCharge-off Ratio | ||||
| Net charge-offs | $ | 69,675 | ||
| Subtract: Charge-offs on loans transferred toheld-for-sale during 3Q17 | (34,235 | ) | ||
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| Net charge-offs, excluding charge-offs on loans transferred toheld-for-sale | $ | 35,440 | ||
| Average total loans | $ | 24,384,519 | ||
| Netcharge-off ratio, as reported | 0.29 | % | ||
| Adjusted net chargeoff-ratio, excluding 3Q17 transfers toheld-for-sale | 0.15 | % | ||
(in thousands, except per share data) | December 31, | |||||||
| 2017 | 2016 | |||||||
| Tangible Book Value per Common Share | ||||||||
| Total shareholders’ equity | $ | 2,961,566 | 2,927,924 | |||||
| Subtract: Series C Preferred Stock | (125,980 | ) | (125,980 | ) | ||||
| Common equity | 2,835,586 | 2,801,944 | ||||||
| Subtract: Goodwill | (57,315 | ) | (59,678 | ) | ||||
| Subtract: Other intangible assets, net | (11,254 | ) | (13,223 | ) | ||||
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| Tangible Common Equity | $ | 2,767,017 | 2,729,043 | |||||
| Common shares outstanding | 118,897 | 122,266 | ||||||
| Book value per common share | $ | 23.85 | $ | 22.92 | ||||
| Tangible book value per common share | 23.27 | 22.32 | ||||||
Non-GAAP Financial Measures-IncentiveMeasures - Incentive Plans
The measures entitled core earnings, adjustedpre-provision net revenue, and adjusted efficiency ratio are not measures recognized under GAAP and therefore are considerednon-GAAP financial measures. We usenon-GAAP financial measures in our incentive plans, specifically weighted average return on average assets, as adjusted, for our long-term incentive plan and core earnings, adjustedpre-provision net revenue, and adjusted efficiency ratio for our short-term incentive plan. The most comparable GAAP measures are return on average assets, net income, income before income taxes, and efficiency ratio, respectively. We believe that thesenon-GAAP financial measures more accurately reflect our core performance so that participants are neither rewarded nor penalized for items that arenon-recurring, unusual or not indicative of ongoing operations. Return on average assets, as adjusted, core earnings and adjustedpre-provision net revenue are measures utilized by management to evaluate operating results exclusive of items that are not indicative of ongoing operations, items that impactperiod-to-period comparisons, and items that impact comparisons to other financial institutions. The adjusted efficiency ratio is a measure utilized by management to measure the results from expense management, exclusive of items that are not indicative of ongoing operations as well as items that impactperiod-to-period comparisons. Thesenon-GAAP financial measures should not be considered as substitutes for net income, income before income taxes, and the efficiency ratio determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.
B-4 | | |
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APPENDIXAppendix B: RECONCILIATION OFReconciliation of Non-GAAP Financial MeasuresNON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures used to determine the PSUs granted under our long-term incentive plan:
The following table reconciles return on average assets, as adjusted, to return on average assets.
Years Ended December 31, | |||||||||
(dollars in thousands) | 2018 | 2017 | 2016 | ||||||
Net income | $ | 428,476 | $ | 275,474 | $ | 246,784 | |||
Adjustments: | |||||||||
Subtract/Add: Litigation settlement/contingency expense | (4,026 | ) | 701 | 2,511 | |||||
Subtract: Cabela’s Transaction Fee | (75,000 | ) | — | ||||||
Add/Subtract: Loss (gain) on sale/disposition of assets exceeding 1% of pre-tax income | — | 35,960 | (6,079 | ) | |||||
Subtract/Add: Restructuring charges, net | (51 | ) | 7,014 | 8,267 | |||||
Add: Changes in accounting or tax laws | — | 47,181 | — | ||||||
Subtract: Changes in income tax rates | (83,643 | ) | — | — | |||||
Add: Dilutive impact of mergers and acquisitions for the first 12 months following acquisition date | — | — | 1,100 | ||||||
Add: Single Brand expenses and related asset impairment charges | 4,573 | 2,129 | 384 | ||||||
Add: Valuation adjustment to Visa derivative | 2,328 | — | 5,795 | ||||||
Add: Loss on early extinguishment of debt, net | — | 23,160 | 4,735 | ||||||
Total adjustments | (80,819 | ) | 41,145 | 16,713 | |||||
Tax effect of adjustments | (664 | ) | 2,233 | (6,184 | ) | ||||
Adjusted net income | $ | 346,993 | $ | 318,852 | $ | 257,313 | |||
Average assets | 31,668,847 | 30,787,288 | 29,480,950 | ||||||
Return on average assets | 1.35 | % | 0.89 | % | 0.84 | % | |||
Return on average assets, as adjusted | 1.096 | % | 1.036 | % | 0.873 | % | |||
Weighting per year | 50 | % | 25 | % | 25 | % | |||
3-Year weighted average return on average assets, as adjusted | 1.025 | % | |||||||
| Years Ended December 31, | ||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2015 | |||||||||
| Net income | $ | 275,474 | $ | 246,784 | $ | 226,082 | ||||||
| Adjustments: | ||||||||||||
| Add: Litigation settlement/contingency expense | 701 | 2,511 | 5,110 | |||||||||
| Subtract/Add: (Gain) loss on sale/disposition assets | (37,332 | ) | (68 | ) | 1,937 | |||||||
| Add: Restructuring charges | 7,014 | 8,267 | 36 | |||||||||
| Add: Changes in accounting or tax laws | 47,181 | — | — | |||||||||
| Add: Earnout liability adjustments | 3,759 | — | — | |||||||||
| Add: Merger-related expense | 110 | 1,636 | — | |||||||||
| Total adjustments | 21,433 | 12,346 | 7,083 | |||||||||
| Tax effect of adjustments | 10,918 | (4,568 | ) | (2,621 | ) | |||||||
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| Adjusted net income | $ | 307,825 | $ | 254,562 | $ | 230,544 | ||||||
| Average assets | 30,787,288 | 29,480,950 | 28,098,958 | |||||||||
| Return on average assets | 0.89 | % | 0.84 | % | 0.80 | % | ||||||
| Return on average assets, as adjusted | 1.000 | % | 0.863 | % | 0.820 | % | ||||||
| Weighting per year | 50 | % | 25 | % | 25 | % | ||||||
| 3-Year weighted average return on average assets, as adjusted | 0.921 | % | ||||||||||
Non-GAAP financial measures used to determine payments under the cash-based short-term incentive plan:
The computations of core earnings, adjustedpre-provision net revenue, and adjusted efficiency ratio and the reconciliation of these measures to net income, income before taxes, and efficiency ratio are set forth in the tables below.
(in thousands) | Year Ended December 31, 2018 | ||
Core Earnings | |||
Net income | $ | 428,476 | |
Subtract: Income tax benefit, net related to effects of SAB 118, State Tax Reform, and adjusted portion of other discrete items | (9,148 | ) | |
Subtract: Restructuring charges, net | (51 | ) | |
Add: Earnout liability adjustments | 11,652 | ||
Subtract: Litigation settlement/contingency expense | (4,026 | ) | |
Add: Merger-related expense | 10,065 | ||
Add: Valuation adjustment to Visa derivative | 2,328 | ||
Add: Amortization of intangibles | 1,167 | ||
Add: Investment securities losses, net | 1,296 | ||
Deduct: Tax effect of adjustments | (168 | ) | |
Core Earnings | $ | 441,591 | |
| - 2019 Proxy Statement B-5 |
| (in thousands) | Year Ended December 31, 2017 | |||
| Core Earnings | ||||
| Net income before preferred dividends | $ | 275,474 | ||
| Deduct: Cabela’s Transaction Fee | (75,000 | ) | ||
| Add: Income tax expense related to effects of Federal Tax Reform | 47,181 | |||
| Add: Loss on early extinguishment of debt | 23,160 | |||
| Add: 3Q17 provision expense on loans transferred to loansheld-for-sale | 27,710 | |||
| Add: 3Q17 discounts to fair value for completed or planned other real estate accelerated dispositions | 7,082 | |||
| Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | 1,168 | |||
| Add: Restructuring charges, net | 7,014 | |||
| Add: Earnout liability adjustments | 3,759 | |||
| Add: Litigation settlement/contingency expense | 701 | |||
| Add: Merger-related expense | 110 | |||
| Add: Amortization of intangibles | 1,059 | |||
| Add: Investment securities losses, net | 289 | |||
| Deduct: Tax effect of adjustments | 2,415 | |||
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| Core Earnings | $ | 322,122 | ||
- 2018 Proxy Statement
B-5
(in thousands) | Year Ended December 31, 2018 | ||
Adjusted Pre-Provision Net Revenue | |||
Income before income taxes | $ | 547,354 | |
Add: Provision for loan losses | 51,697 | ||
Add: Valuation adjustment to Visa derivative | 2,328 | ||
Subtract: Restructuring charges, net | (51 | ) | |
Add: Earnout liability adjustments | 11,652 | ||
Subtract: Litigation settlement/contingency expense | (4,026 | ) | |
Add: Merger-related expense | 10,065 | ||
Add: Amortization of intangibles | 1,167 | ||
Add: Investment securities losses, net | 1,296 | ||
Adjusted Pre-Provision Net Revenue | $ | �� 621,482 | |
(dollars in thousands) | Year Ended December 31, 2018 | ||
Adjusted Efficiency Ratio | |||
Total non-interest expense | $ | 829,455 | |
Deduct: Valuation adjustment to Visa derivative | (2,328 | ) | |
Add: Restructuring charges, net | 51 | ||
Deduct: Earnout liability adjustments | (11,652 | ) | |
Add: Litigation settlement/contingency expense | 4,026 | ||
Deduct: Merger-related expense | (10,065 | ) | |
Deduct: Amortization of intangibles | (1,167 | ) | |
Adjusted Non-Interest Expense | $ | 808,320 | |
Net interest income | $ | 1,148,413 | |
Taxable equivalent adjustment | 553 | ||
Total non-interest income | 280,093 | ||
Add: Investment securities losses, net | 1,296 | ||
Total revenues | $ | 1,430,355 | |
Efficiency Ratio (total non-interest expense divided by total revenues) | 57.99% | ||
Adjusted Efficiency Ratio (adjusted non-interest expense divided by total revenues) | 56.51% | ||
APPENDIX B: RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
| (in thousands) | Year Ended December 31, 2017 | |||
| AdjustedPre-Provision Net Revenue | ||||
| Income before income taxes | $ | 480,138 | ||
| Add: Provision for loan losses | 67,185 | |||
| Deduct: Cabela’s Transaction Fee | (75,000 | ) | ||
| Add: Loss on early extinguishment of debt | 23,160 | |||
| Add: 3Q17 discounts to fair value for completed or planned other real estate accelerated dispositions | 7,082 | |||
| Add: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | 1,168 | |||
| Add: Restructuring charges | 7,014 | |||
| Add: Earnout liability adjustments | 3,759 | |||
| Add: Litigation settlement/contingency expense | 701 | |||
| Add: Merger-related expense | 110 | |||
| Add: Amortization of intangibles | 1,059 | |||
| Add: Investment securities losses, net | 289 | |||
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| AdjustedPre-Provision Net Revenue | $ | 516,665 | ||
| (dollars in thousands) | Year Ended December 31, 2017 | |||
| Adjusted Efficiency Ratio | ||||
| Totalnon-interest expense | $ | 821,313 | ||
| Deduct: Loss on early extinguishment of debt | (23,160 | ) | ||
| Deduct: Foreclosed real estate expense and other credit costs | (13,292 | ) | ||
| Deduct: 3Q17 asset impairment charges related to accelerated disposition of corporate real estate and other properties | (1,168 | ) | ||
| Deduct: Restructuring charges | (7,014 | ) | ||
| Deduct: Earnout liability adjustments | (3,759 | ) | ||
| Deduct: Litigation settlement expenses | (701 | ) | ||
| Deduct: Merger-related expense | (110 | ) | ||
| Deduct: Amortization of intangibles | (1,059) | |||
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| AdjustedNon-Interest Expense | $ | 771,050 | ||
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| Net interest income | $ | 1,023,309 | ||
| Taxable equivalent adjustment | 1,124 | |||
| Totalnon-interest income | 345,327 | |||
| Add: Investment securities losses, net | 289 | |||
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| Total revenues | $ | 1,370,049 | ||
| Deduct: Cabela’s Transaction Fee | (75,000) | |||
| Add: Decrease in fair value of private equity investments, net | 3,093 | |||
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| Adjusted Revenues | $ | 1,298,142 | ||
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| Efficiency Ratio | 59.95 | % | ||
| (totalnon-interest expense divided by total revenues) | ||||
| Adjusted Efficiency Ratio | 59.40 | %(1) | ||
| (adjustednon-interest expense divided by adjusted revenues) | ||||
B-6 |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, 2017 Annual Report and Voting Instructions are available at
investor.synovus.com/2018annualmeeting.
E38259-P01430-Z71688
SYNOVUS FINANCIAL CORP.
BLANCHARD HALL, SYNOVUS BANK, 1144 BROADWAY, COLUMBUS, GEORGIA 31901
2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 26, 2018
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
By signing on the reverse side, I hereby appoint Kevin S. Blair and Liliana C. McDaniel as Proxies, each of them singly and each with power of substitution, and hereby authorize them to represent and to vote as designated on the reverse side all the shares of common stock of Synovus Financial Corp. held on record by me or with respect to which I am entitled to vote on February 22, 2018 at the 2018 Annual Meeting of Shareholders to be held on April 26, 2018 or any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF THIS PROXY IS SIGNED AND RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
The Board of Directors is not aware of any matters likely to be presented for action at the 2018 Annual Meeting of Shareholders other than the matters listed herein. However, if any other matters are properly brought before the Annual Meeting, the persons named in this Proxy or their substitutes will vote upon such other matters in accordance with their best judgment. This Proxy is revocable at any time prior to its use.
By signing on the reverse side, I acknowledge receipt of NOTICE of the ANNUAL MEETING and the PROXY STATEMENT and hereby revoke all Proxies previously given by me for the ANNUAL MEETING.
IN ADDITION TO VOTING AND SIGNING THE PROXY, YOU MUST ALSO COMPLETE AND SIGN THE CERTIFICATION BELOW TO BE ENTITLED TO TEN VOTES PER SHARE.
To the best of my knowledge and belief, the information provided herein is true and correct. I understand that the Board of Directors of Synovus Financial Corp. may require me to provide additional information or evidence to document my beneficial ownership of these shares and I agree to provide such evidence if so requested.
(Continued and to be marked, dated, and signed on the other side)
DESCRIPTION OF VOTING RIGHTS
In accordance with the Company’s Articles of Incorporation and Bylaws, shares of the Company’s Common Stock that meet certain criteria are entitled to 10 votes per share. A complete description of the criteria under which shares are entitled to 10 votes per share is included in the Proxy Statement for the Annual Meeting and atinvestor.synovus.com/2018annualmeeting.
Shares of Common Stock are presumed to be entitled to one vote per share unless this presumption is rebutted by providing evidence to the contrary to the Company and its Board of Directors.Shareholders desiring to rebut this presumption should complete and execute the certification below. The Company and its Board of Directors reserve the right to require evidence to support the certification.
Certification
Under the penalties of perjury, I do solemnly swear that I am entitled to the number of votes set forth below:
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