UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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(Amendment No. )
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SYNOVUS FINANCIAL CORP.
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NoticeDear Fellow Shareholder:
On behalf of your Board of Directors, we are pleased to cordially invite you to attend the 20182020 Annual Meeting of Shareholders of Synovus Financial Corp. at 10:00 a.m. on Wednesday, April 22, 2020, at Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia. You are receiving this invitation and this Proxy Statement as a shareholder of record as of February 20, 2020.
Thursday,As the bank of here, we create value by leading and strengthening communities and serving the needs of our customers through real, personal relationships. We especially value our relationships with shareholders, and, as demonstrated throughout 2019, we remain committed to investments in growth that create long-term value. During this past year, we closed and integrated the largest acquisition in our history. We enhanced our operating model by more closely aligning our lines of business and key support teams to better meet customer needs, and expand and diversify sources of growth. We also made meaningful investments in technology and talent to lead new businesses and increase our presence in our new and existing geographic markets.
We continued to demonstrate that Here Matters everywhere we operate. Synovus team members volunteered 39,000 hours through 5,600 Here Matters outreach opportunities in 2019. Team members and the company contributed more than $1 million to the United Way throughout our footprint, and team members provided $110,500 in scholarships to 133 students through the Jack Parker Scholarship Fund. The company’s philanthropic giving was approximately $2.5 million to more than 500 non-profit and community agencies across our footprint.
In 2020, we are focusing on efficiency opportunities in areas such as third-party spending, real estate, and organizational effectiveness, and we will continue to execute on our strategic plan to achieve our long-term goals of strong organic balance sheet growth, top-tier profitability, and positive operating leverage. We are enhancing our corporate sustainability framework, which includes expanded oversight and governance by the Board of Directors and annual reporting of environmental, social and governance (ESG) metrics. In doing so, we are aligning with the Sustainability Accounting Standards Board’s framework to guide the development of our sustainability strategy and metrics.
We remain committed to sound corporate governance, a robust shareholder engagement program, and effectively stewarding your shareholder capital. We engaged our shareholders on a number of issues throughout 2019, including the 10-1 voting provisions and supermajority voting requirements in our charter and bylaws. As a result of that engagement and our own commitment to best practices in corporate governance, we have determined that eliminating these two requirements is in the best interests of Synovus and our shareholders. We believe both of these initiatives, if approved by our shareholders, will make us more attractive to investors and solidify our position as a corporate governance leader.
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 efficiency and sustainability efforts while offering our shareholders a convenient way to access important information about the matters on which we will vote at our annual meeting.
Thank you for your continued support of Synovus. We look forward to seeing you at the meeting.
Sincerely,
 |  Kessel D. Stelling Chairman and Chief Executive Officer |  |  Elizabeth W. Camp Lead Director |
Notice of the 2020 Annual Meeting of Shareholders
Wednesday, April 26, 201822, 2020
10:00 a.m.
Blanchard Hall, Synovus Bank, 1144 Broadway, Columbus, Georgia 31901
Items of Business:
| 1. | To elect as directors the |
| 2. | To approve amendments to Synovus’ Amended and Restated Articles of Incorporation and bylaws to eliminate 10-1 voting provisions; |
| 3. | To approve amendments to Synovus’ Amended and Restated Articles of Incorporation and bylaws to eliminate supermajority voting requirements; |
| 4. | To hold an advisory vote on the compensation of Synovus’ named executive officers as determined by the Compensation Committee; |
| 5. | To hold an advisory vote on the frequency of the advisory vote on executive compensation; |
| 6. | To ratify the appointment of KPMG LLP as Synovus’ independent auditor for the year |
| 7. | 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, 2018.20, 2020.
Annual Report:
A copy of the 20172019 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 20182020 Annual Meeting of Shareholders and the accompanying Proxy Statement are sent by order of the Board of Directors.
March 16, 2018[•], 2020
Allan E. Kamensky
Mary Maurice Young
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.
Table of Contents
This summary highlights information contained elsewhere in this Proxy Statement and in our Annual Report on Form10-K for the year ended December 31, 20172019 (the “2017“2019 Annual Report”) which accompanies this Proxy Statement. You should read the entire Proxy Statement and our 2017 2019 Annual Report carefully before voting. We are first furnishing the proxy materials to our shareholders on or about March 16, 2018.[•], 2020. In this Proxy Statement, the words “Synovus,” “the Company,” “we,” “us,” and “our” refer to Synovus Financial Corp. together with Synovus Bank and Synovus’ other wholly-owned subsidiaries, except where the context requires otherwise.
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 | ||
Approval of amendments to the Articles and bylaws to eliminate 10-1 voting provisions | FOR | Page [•] | ||
Approval of amendments to the Articles and bylaws to eliminate supermajority voting requirements | FOR | Page [•] | ||
Advisory vote on the compensation of our named executive officers as determined by the Compensation Committee | FOR | Page | ||
Advisory vote on the frequency of the advisory vote on executive compensation | FOR a vote EVERY YEAR | Page [•] | ||
Ratification of KPMG LLP as our independent auditor for the year | FOR | Page |
 | - 2020 Proxy Statement 1 |
2017
PROXY STATEMENT SUMMARY
2019 Financial Performance
Our 2017 financial results were in line with our 2017 guidance and overarching objectives. OurIn 2019, we continued to focus on sustainable growth enhanced profitability and greater efficiency led to broad-based improvement. This improvement was evident for the year throughefficiencies while fully integrating our performance in several key financial measurements—acquisition of FCB Financial Holdings, Inc., or FCB. Key profitability metrics, including earnings per share growth, return on average assets, return on average common equity, and the efficiency ratio, with eachand total revenue, improved from the previous year despite a challenging interest rate environment.
- 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, |
In addition, weWe continued to optimize capital in 2019, which was accomplished, in part, through issuances of subordinated debt and preferred stock. These efforts helped support $893 million in capital returned to shareholders while maintaining a similar total risk-based capital ratio compared to the prior year.
2 | | - 2020 Proxy Statement |
PROXY STATEMENT SUMMARY
In 2019, we experienced a one-year shareholder return meaningful levels of capital22.5% compared to our common shareholders in 2017 through commonthe KBW Regional Bank Index of 20.4%. Our stock dividends and share repurchases.continues to trade at a price/earnings discount relative to peers.
For additional information relating to our business and our subsidiaries, including a detailed description of our operating results and financial condition for 2017, 20162019 and 2015,2018, please refer to the summary on page 30[•] of this Proxy Statement and our 20172019 Annual Report that accompanies this Proxy Statement.
20172019 Compensation
The compensation of executivesDespite our improvement in 2017 reflects Synovus’these key profitability metrics and other strategic priorities, our earnings performance did not meet expectations. Compensation outcomes reflected this financial and operational performance, including payouts under our executive compensation program reflects our payannual incentive plan that were below target for performance philosophy. An overview of our compensation program is provided below.
| - 2018 Proxy Statement |
PROXY STATEMENT SUMMARY
2019.
Base Salaries
Short-Term Incentives
Form of Award | Payout Formula Measures | Qualitative Adjustment Factors | Payout Range | |||
Cash |
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Core Earnings (60%) , Adjusted | Quality of Financial Results (including Quality of Earnings, Credit Quality | 0% to 150% of Target |
| - 2020 Proxy Statement 3 |
PROXY STATEMENT SUMMARY
Long-Term Incentives
Form of Award | Vesting | Payout Formula Measures | Payout Range | |||
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PSUs (60% of award value) | 100% after 3 years | Weighted Average Return on Average Assets
| 0% to 150% of Award Amount | |||
MRSUs (40% of award value) | ⅓ per year over 3 years
| Total Shareholder Return
| 75% to 125% of Award Amount |
Both award vehicles are subject to possible downward discretionary adjustment based upon risk considerations—see page [•] of this Proxy Statement.
We believe that the compensation delivered to each named executive officer in 20172019 was fair, reasonable and reasonable.aligned with our performance and strategic objectives.
4 | | - 2020 Proxy Statement |
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’ 20182020 Annual Meeting of Shareholders, or Annual Meeting, which will be held on April 26, 2018,22, 2020, 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 20172019 Annual Report available to its shareholders via the Internet instead of mailing printed copies of these materials to each shareholder. On March 16, 2018,[•], 2020, 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 20172019 Annual Report. These proxy materials are being made available to our shareholders on or about March 16, 2018.[•], 2020. The Notice also provides instructions regarding how to access your proxy card to vote through the Internet or by telephone. The Proxy Statement and 20172019 Annual Report are also available on our website at investor.synovus.com/2018annualmeeting.2020annualmeeting.
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, 2018.20, 2020. 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, 118,680,13320, 2020, [•] 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) | FORthe approval of amendments to the Articles and bylaws to eliminate 10-1 voting provisions; |
| (3) | FOR the approval of amendments to the Articles and bylaws to eliminate supermajority voting requirements; |
| (4) | FOR the advisory vote on the compensation of Synovus’ named executive officers as determined by the Compensation Committee; |
| (5) | FOR the advisory vote on holding say-on-pay votes EVERY YEAR (as opposed to every two years or every three years); and |
| (6) | 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.
| - 2020 Proxy Statement 5 |
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 2 and 3 Approval of Amendments to the Articles and Bylaws to Eliminate 10-1 Voting Provisions and Supermajority Voting Requirements
ForThe affirmative vote by the holders of shares representing at least 66 2/3% of the votes entitled to be cast by the holders of all of the other proposals describedissued and outstanding shares of our common stock is required to approve each of Proposals 2 and 3. As a result, failure to vote your shares at the Annual Meeting, either in this Proxy Statement,person or by proxy, will have the same effect as a vote against Proposals 2 and 3.
Proposals 4 and 6 Advisory Vote on Executive Compensation and Ratification of KPMG LLP
The affirmative vote of a majority of the votes cast is required to approve each such proposal.of Proposals 4 and 6.
| - 2018 Proxy Statement |
VOTING INFORMATION
The option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders. The Compensation Committee (which administers Synovus’ executive compensation program) values the opinions expressed by shareholders in these votes and will continue to consider the outcome of these votes in making its decisions on executive compensation. However, because this vote is advisory and not binding on the Board of Directors or Synovus in any way, the Board may decide that it is in the best interests of our shareholders and Synovus to hold an advisory vote on executive compensation more or less frequently than the option approved by our shareholders.
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 36 but not with respect to any of the other proposals to be voted on at the Annual Meeting.
AbstentionsFor all proposals other than Proposal 2 and Proposal 3, abstentions and brokernon-votes will have no effect on any of the proposalsproposal to be considered at the Annual Meeting. For Proposal 2 and Proposal 3, abstentions and broker non-votes will have the same effect as votes against such proposals.
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, 2018.21, 2020. 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.
6 | | - 2020 Proxy Statement |
VOTING INFORMATION
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, 2018.21, 2020. 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.
Description of Voting Rights
We currently 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.not (the “10-1 Voting Provisions”). 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, 201820, 2020 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;20, 2016; 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,10-1 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, 2018.20, 2020. 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, 2018.20, 2020.
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.2020annualmeeting.
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,10-1 Voting Provisions fall, 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
| - 2020 Proxy Statement 7 |
VOTING INFORMATION
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.
Proposal 2 seeks shareholder approval to eliminate the 10-1 Voting Provisions for the reasons set forth in Proposal 2. However, even if Proposal 2 is approved at the Annual Meeting, the 10-1 Voting Provisions will apply to all proposals to be acted upon by our shareholders at 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.
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, 2018,21, 2020, 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, 2018,22, 2020, 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. 2020annualmeeting.
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, we2020annualmeeting. 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 28, 2020.
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, 2018,2020, the following ten 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,
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Jr., John L. Stallworth, Melvin T. Stith, Barry L. Storey and Philip W. Tomlinson.Teresa White. Please see “Certain Relationships and Related Transactions” on page 46[•] 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.
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Board Meetings and Attendance
The Board of Directors held elevennine meetings in 2017.2019. All directors attended at least 75% of Board and committee meetings held during their tenure during 2017.2019. The average attendance by incumbent directors at the aggregate number of Board and committee meetings they were scheduled to attend was approximately 98%94%. 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’ 20172019 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, digital, 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 | ||||||
 | | |||||||||
Tim E. Bentsen |  |  |  | | | | ||||
F. Dixon Brooke, Jr. | | | | | ||||||
Stephen T. Butler | | | | |||||||
Elizabeth W. Camp | | | | | | |||||
Diana M. Murphy | | | | |||||||
Harris Pastides | | | | |||||||
| | |||||||||
Joseph J. Prochaska, Jr. | | | | | | | ||||
John L. Stallworth | | | | |||||||
Kessel D. Stelling | | |||||||||
| ||||||||||
Barry L. Storey | | | | | ||||||
Teresa White | | | | |||||||
| 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 2017.2019. The Audit Committee’s report is on page 27[•] 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 five meetings in 2017.2019. The primary functions of Synovus’ Corporate Governance and Nominating Committee include:
Synovus’ Compensation Committee held fivesix meetings in 2017.2019. Its report is on page 40[•] 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 2017,2019, the Committee retained the services of Meridian Compensation Partners, LLC, or Meridian, to:
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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 her 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.
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2019.
In 2017,2019, Synovus’ Chief AdministrativeHuman Resources Officer worked with the Chairman of the Compensation Committee to establish the agenda for Committeecommittee meetings. Management also preparesprepared background information for each committee meeting. Synovus’ Chief Administrative Officer and Chief Human Resources Officer and CEO generally attend all committee meetings by invitation of the Compensation Committee. However, the Compensation Committee while Synovus’ CEO attends some committee meetings by invitationregularly meets in executive session without members of management in attendance, and the 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 20172019 at the request of the Compensation Committee. In addition, the Committee regularly meets in executive session with no members of management in attendance.
Risk Committee
Synovus’ Risk Committee held eightseven meetings in 2017.2019. 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 meetheld two meetings in 2017.2019.
Compensation Committee Interlocks and Insider Participation
Ms. CampMessrs. Bentsen, Brooke, Butler, Prochaska and Messrs. Brooke, 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 2017.2019. None of these individuals is or has been an officer or employee of Synovus. In 2017,2019, 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.
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.
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In January 2019, with the Board’s approval, Synovus launched a refreshed three-year strategic plan, building upon our proven strong reputation, commitment to our communities, and relationship-centered approach while reflecting the unique considerations for us as a regional bank, as a recent acquirer, and as a more traditional bank moving more aggressively toward innovation. The strategy focuses not only on incremental gains, but on deliberate adjustments to our businesses and business model to drive sustained franchise value. It retains our legacy focus on our people and our customers, while embracing the acceleration of technology, digital and data capabilities that are critical to position us as a top quartile performing bank of the future. To guide our teams, we outlined six strategic areas of focus and are aligning our initiatives and execution with these areas:
The initiatives to support the strategic areas of focus are refined and adapted on an on-going basis. The Board monitors the execution of the strategic plan throughout the year at its regularly scheduled meetings 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’ 2017 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 strategy, reputation, liquidity, interest rates, LIBOR transition, credit, operations, regulatory compliance, litigation, capital management, information technology, information risk and resiliency, model risk management, third party vendors, 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 and contingency funding plan 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 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 39[•] of this Proxy Statement. The Corporate Governance and Nominating Committee oversees ESG-related risks and 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 20172019 Annual Report.
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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 eachCEO, and both 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 OfficerCEO 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 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 OfficerChairman and ChairmanCEO 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:
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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 and independent directors of Synovus meet separately at least four times a year after each regularly scheduled meetings of the Board of Directors and at such other times as may be requested by the Chairman of the BoardLead Director or any director. Synovus’ independent directors meet at least once a year. During 2017, Mr. Goodrich, as Lead Director until April 2017, and2019, Ms. Camp, as Lead Director, since April 2017, presided at the meetings ofnon-management and independent directors.
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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. ForIn 2019, as well as for four of the last fourprevious five 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 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
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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 16[•] 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 or her 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 47[•] 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; 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, ESG related matters 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:
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In 2019, we continued shareholder outreach efforts to better understand shareholder sentiment around our July 2018 announcement of the acquisition of FCB, resulting in us contacting approximately 125 current or target institutional investors throughout 2019. These outreach efforts included contacting many of Synovus largest shareholders, representing approximately 25% of our ownership base. This allowed us to better understand and address shareholder questions and concerns about the strategic rationale associated with the acquisition and our long-term growth strategy. Feedback and perspectives shared during these engagement meetings were discussed by executive management and the Board and influenced several changes. In fact, Proposal 2 and Proposal 3 are direct results of this engagement and the feedback we received as part of our shareholder outreach. In addition, we updated our website disclosure with respect to certain ESG-related matters in an effort to improve investor access to key information about our evolving ESG practices and oversight.
We look forward to continued enhancement of our shareholder engagement program in 2020. 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 and since that time, we have increased awareness of our regional presence, our financial capabilities, and our ability to meet the needs of customers and prospects.
Our name also represents a culture that has defined nearly every aspect of our company since our founding in 1888 on a simple act of kindness. The Synovus culture — relationship-based, service-focused, and grounded here — is our principal source of value creation with communities, customers, team members, and shareholders.
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 banking and financial service experts 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. |
As part of our purpose, value proposition and Our Customer Covenant, the Board is fully engaged in the Company’s ESG-related strategy, initiatives and policies. In January 2020, the Corporate Governance and Nominating Committee amended its charter to include oversight responsibility for these strategies, and we plan to launch a management-level committee, known as the ESG Oversight Council, by the second quarter of 2020, which will report to the Corporate Governance and Nominating Committee. The ESG Oversight Council will be comprised of key internal ESG stakeholders, including representatives of legal, investor relations, credit, facilities, vendor procurement, human resources, compliance and risk management, among others, as well as our Lead Director as an advisory member. We believe that this structure will best position us to monitor, manage and oversee all ESG-related risks and opportunities within the Company.
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 truly present in communities large and small. 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.
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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 our history as well as a conviction that is deeply held by our leadership: that strong communities have strong banks.
That conviction informs our sustainability commitments, too.
Our Sustainability Commitments
Environmental
Conservation and energy efficiency: Our conservation and energy efficiency efforts include company-wide implementation of low-flow/low-water use standards; use of recycled paper and electronic document storage; recycling; and installation of lighting and HVAC systems that limit energy use during non-business hours. At the end of 2019, Synovus had 144,000 square feet of LEED qualified space (2 Gold, 1 Silver and 1 eligible); 13 electric vehicle charging stations; and approximately 745,000 square feet of space (more than 25% of our footprint) fitted with LED lighting. We installed solar-LED lighting in the parking lot of one new Florida location in 2019. More than 186,000 consumer and commercial accounts received only electronic statements at year-end 2019, which helped reduce paper consumption and transportation-related emissions.
Environmental lending, investments, and considerations: Synovus had more than $220 million in solar energy loans outstanding as of year-end 2019. Additionally, we invested more than $17 million in solar energy properties through solar investment tax credit (ITC) transactions in 2019. Moreover, our loan policies consider a customer’s practices and policies related to environmental issues as part of the credit underwriting process. Our environmental procedures are administered by a third party with expertise in environmental due diligence.
Social Capital
Community relations and philanthropy: Team members and leaders serve on charitable organizations and support community endeavors throughout our footprint. In 2019, Synovus team members volunteered approximately 39,000 hours through 5,600 Here Matters opportunities. Team member and company contributions totaled more than $1 million to United Way chapters throughout our footprint, and team members provided $110,500 in scholarships to 133 students through the Jack Parker Scholarship Fund. In 2019, our philanthropic giving surpassed $2.5 million to more than 500 non-profits and agencies across our footprint.
Financial education: During the 2018-2019 school year, Synovus team members invested 3,500 hours in financial literacy education and training for 1,150 students at 11 schools in our hometown of Columbus, Georgia. Columbus team members have volunteered 17,700 hours with 4,900 students at 12 schools since 2014. In January 2020, Synovus launched Raise the Banner, our flagship financial literacy program focused on youth, enlisted soldiers and transitioning veterans, victims of domestic violence, people experiencing homelessness, senior adults, and others.
Access, affordability, and financial inclusion: Synovus Mortgage has committed $400 million to an Affordable Mortgage Program with approximately $180 million funded through the fourth quarter of 2019. Synovus made 170 community development loans in 2019 totaling approximately $300 million. We invested approximately $40 million in low-income housing properties through low-income housing tax credit transactions in 2019. We also have affordable housing specialists throughout our footprint focused solely on financial education and mortgage loan origination. Our most recent Community Reinvestment Act rating, from November 2017, was “Satisfactory.” We partner with Operation Hope to provide financial literacy and credit counseling to those in need, and our consumer products include no-fee retail checking options and a range of other products with flexible fee structures. As a buyer of goods and services, it is 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 $2.50 billion in credit outstanding to small businesses in 2019, including new loan originations of over $595 million. We opened nearly 13,000 new checking accounts for small business owners throughout our footprint, which provided $420 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.
Culture and workplace: Synovus has been recognized as one of the country’s “Most Reputable Banks” by American Banker and the Reputation Institute. We were named one of American Banker’s “Best Banks to Work for” in 2018, a 2019 Residential Diversity and Inclusion Leadership Award winner by the Mortgage Bankers Association (MBA), and one of the AJC’s Top Workplaces in Atlanta in 2020. Team member benefits include comprehensive health and wellness programs, retirement/401(k) match, tuition reimbursement, adoption assistance, and maternity and paternity leave.
We regularly administer team member engagement surveys, with an overall 85 percent engagement score in our most recent survey. We demonstrate our commitment to leadership and team member development through internal promotions and training and development opportunities. In 2019, 35 percent of new positions were filled by existing team members (as of December 1). We provide 100 percent tuition coverage for specialty banking school participation and we offer more than 100 leadership, compliance, regulatory and skills development courses.
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We have a strong policy against sexual harassment that extends to all inappropriate and unlawful conduct, regardless of its form and where or when it occurs, including conduct that occurs away from work and all forms of electronic communications, such as social media posts, text messages, or email. Any conduct believed to be in violation of the policy may be reported anonymously to our Ethics Hotline.
Inclusion and diversity (I&D): In 2018, we launched a CEO-sponsored initiative to increase minority representation in our company, female and minority representation in senior leadership, and improve inclusiveness through a number of initiatives, including revised job posting guidelines, leadership training, and the hiring of a diversity and inclusion director who reports to the Chief Strategy and Customer Experience Officer. We continued to make progress toward these objectives in 2019, with representation of women in senior leadership roles improving from 33 percent in the first quarter of 2019 to 36 percent at the end of 2019, and minorities in senior leadership roles improving from 8 percent in the first quarter to 12 percent at the end of 2019. We actively recruit at Latino organizations and historically black colleges and universities (HBCUs), and we are currently launching employee resource groups representing women, Hispanic, LGBTQ, African-American, and military team members.
The Compensation Committee of the Board of Directors conducted a comprehensive gender pay review and analysis during the last 18 months. Based on the results of the study, the Committee does not believe that there is systemic gender pay disparity at the Company, and appropriate safeguards are in place to prevent it from occurring in the future.
Additional Information about Corporate Governance
After careful planning and discussion, the Board recently amended the mandatory retirement age of the Board, effective with the Annual Meeting, 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 be 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.
| - 2020 Proxy Statement 19 |
- 2018 Proxy Statement 13
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 2017.2019.
Cash Compensation of Directors
As reflected in the “Fees Earned or Paid in Cash” column of the Director Compensation Table, during 2017,2019, non-management directors of Synovus received an annual cash retainer of $50,000,$55,000, 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 20172019 for the full year of service for the period from April 20, 201724, 2019 through April 26, 2018.22, 2020.
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 directors (Dr.Dr. Pastides and Messrs. Stallworth and Storey)Mr. Storey each elected to defer their 2017his 2019 cash compensation under this plan.
Equity Compensation of Directors
During 2017,2019, non-management directors also received awards of restricted stock units under the Synovus 2013 Omnibus Plan. On April 19, 2017,23, 2019, the Board approved grants of 1,7822,337 restricted stock units ($75,00085,000 grant date fair market value) to thenon-management members of the Board elected on April 20, 201724, 2019 to serve as directors for a term ending on April 26, 2018.22, 2020. 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 $5,000 per calendar quarter to make purchases of Synovus stock, and Synovus contributes an additional amount (equal to 15% of the directors’ cash contributions in 2017)2019). Participants in the Director Stock Purchase Plan are fully vested in all shares of Synovus stock purchased for their benefit under the Plan and may request that the shares purchased under the Plan be released to them at any time. Synovus’ contributions under this Plan are included in the “All Other Compensation” column of the Director Compensation Table below. Synovus’ contributions under the Director Stock Purchase Plan provide directors the opportunity to buy and maintain an equity interest in Synovus and to share in the capital appreciation of Synovus.
Director Stock Ownership Guidelines
Synovus’ Corporate Governance Guidelines require all directors over time to accumulate over time shares of Synovus stock equal in value to at least five times the value of their annual retainer. Directors have five years to attain this level of total stock ownership, but must attain a share ownership threshold of one times the amount of the director’s annual retainer within three years. These stock ownership guidelines are designed to align the interests of Synovus’ directors to that of Synovus’ shareholders and the long-term performance of Synovus. The restricted stock unit awards to directors and Synovus’ contributions under the Director Stock Purchase Plan assist and facilitate directors’ fulfillment of their stock ownership requirements. All of Synovus’ directors were in compliance with the guidelines as of December 31, 2017.2019.
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Director Compensation Table
The following table summarizes the compensation paid by Synovus tonon-management directors for the year ended December 31, 2017.2019.
Name** | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | ||||||||
Tim E. Bentsen | $ | 105,000 | $ | 85,000 | $ | 3,000 | (3) | $ | 193,000 | |||
F. Dixon Brooke, Jr. | 80,000 | 85,000 | 9,250 | (3)(4) | 174,250 | |||||||
Stephen T. Butler | 75,000 | 85,000 | 7,800 | (3)(4) | 167,800 | |||||||
Elizabeth W. Camp | 115,000 | 85,000 | 1,500 | (3) | 201,500 | |||||||
Diana M. Murphy | 80,000 | 85,000 | 3,000 | (3) | 168,000 | |||||||
Harris Pastides | 95,000 | 85,000 | 5,550 | (3)(4) | 185,550 | |||||||
Joseph J. Prochaska, Jr. | 110,000 | 85,000 | — | 195,000 | ||||||||
John L. Stallworth | 80,000 | 85,000 | 3,800 | (3)(4) | 165,800 | |||||||
Barry L. Storey | 75,000 | 85,000 | 6,075 | (4) | 166,075 | |||||||
Teresa White | 70,000 | 85,000 | — | 155,000 | ||||||||
| 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 2019 compensation is described under the Summary Compensation Table found on page [•] of this Proxy Statement.
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| (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 |
| - 2020 Proxy Statement 21 |
- 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 1411 members. Proxies cannot be voted at the Annual Meeting for a greater number of persons than the 1411 nominees named in this Proxy Statement.
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 12[•] 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. AllEach of the 14 nominees currently serveserves 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,” two current ora 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, operations, 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 7[•] 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 | 66 | 2014 | Partner, Retired, KPMG LLP | E, A, C (Chair), R |
F. Dixon Brooke, Jr. | 72 | 2017 | Chief Executive Officer and President, Retired, EBSCO Industries, Inc. | A, C |
Stephen T. Butler | 69 | 2012 | Chairman of the Board and Chief Executive Officer, Retired, W.C. Bradley Company | C, CGN |
Elizabeth W. Camp | 68 | 2003 | President and Chief Executive Officer, DF Management, Inc. | E, CGN (Chair), R |
Diana M. Murphy | 63 | 2017 | Managing Director, Rocksolid Holdings, LLC | A, CGN |
Harris Pastides | 64 | 2014 | President, Retired, University of South Carolina | E, CGN, R (Chair) |
Joseph J. Prochaska, Jr. | 69 | 2011 | Executive Vice President and Chief Accounting Officer, Retired, MetLife, Inc. | E, A (Chair), C, R |
John L. Stallworth | 67 | 2017 | Partner, Genesis II | CGN, R |
Kessel D. Stelling | 63 | 2010 | Chairman of the Board and Chief Executive Officer, Synovus Financial Corp. | E (Chair) |
Barry L. Storey | 60 | 2013 | Principal, BLS Holdings Group, LLC | C, CGN |
Teresa White | 53 | 2019 | President, Aflac US | R |
| A: | Audit Committee |
| C: | Compensation Committee |
| CGN: | Corporate Governance and Nominating Committee |
| E: | Executive Committee |
| R: | Risk Committee |
| - 2020 Proxy Statement 23 |
- 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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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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The Board of Directors unanimously recommends that you vote “FOR” each of the 1411 nominees.
| - 2020 Proxy Statement 27 |
- 2018 Proxy Statement 21
PROPOSALS TO BE VOTED ON
| Proposal 2 | Approval of Amendments to Synovus’ Articles and Bylaws to Eliminate 10-1 Voting Provisions |
Introduction
After careful consideration and following engagement with, and feedback from, many of our shareholders, our Board has unanimously determined that it would be advisable and in the best interests of Synovus and its shareholders to amend Synovus’ Articles and bylaws to eliminate our 10-1 Voting Provisions. The proposed amendments to the Articles and bylaws would eliminate all of the 10-1 Voting Provisions in the Articles and bylaws and provide for one vote for each share of issued and outstanding Synovus common stock, as described below (the “Proposed 10-1 Voting Amendments”).
The Board is now recommending that the shareholders adopt the Proposed 10-1 Voting Amendments to eliminate Synovus’ 10-1 Voting Provisions. The form of the Proposed 10-1 Voting Amendments is attached to this Proxy Statement as Appendix B-1, with respect to the Articles, and Appendix B-2, with respect to the bylaws.
Background and Current 10-1 Voting Provisions
As discussed above, our Articles and bylaws currently provide that holders of Synovus common stock that satisfy certain criteria are entitled to ten votes for each qualifying share of Synovus common stock. In particular, the 10-1 Voting Provisions entitle shareholders to ten votes per share for each share that they have beneficially owned continuously for over four years. The 10-1 Voting Provisions also provide ten votes per share for smaller shareholders as well as shares that meet any of the other criteria for being entitled to ten votes per share. The 10-1 Voting Provisions and each of the criteria for being entitled to ten votes per share are more fully described in the “Voting Information – Description of Voting Rights” section of this Proxy Statement.
Our 10-1 Voting Provisions have been in place since 1986. We believe these provisions were originally designed to support the Board’s commitment to Synovus’ long-term growth and performance by providing certain shareholders, such as those with long-term stock ownership, with potentially greater influence over Synovus’ affairs through greater voting power. We also believe that these provisions were intended to minimize the adverse effect of speculative investors with short-term goals that potentially could impair management’s ability to focus on long-term business goals and strategies. In addition, we believe these 10-1 Voting Provisions, in combination with other defensive measures, were designed to discourage unsolicited efforts to obtain voting control of the company without first providing the Board an opportunity to evaluate whether such change in control would be in the best interests of all shareholders.
Reasons for the Proposed 10-1 Voting Amendments
The Board is committed to strong corporate governance and recognizes that the elimination of the 10-1 Voting Provisions would be consistent with generally held views of good corporate governance. The elimination of the 10-1 Voting Provisions would bring Synovus in line with the vast majority of other public companies that have a one share, one vote voting structure and align our governance with best practice in terms of our voting structure and shareholder rights.
The Board also considered the views of our shareholders and the investor community. Over the last couple of years, our management has discussed this issue with a number of our investors, proactively trying to understand the evolving position of our investors on this voting structure. In addition, many of our investors increasingly focused on the 10-1 Voting Provisions during the pendency of our merger with FCB due to the required shareholder vote that was necessary to consummate the merger. During this time, many investors voiced confusion around the origins and implementation of the 10-1 Voting Provisions and concern about the implications of the 10-1 Voting Provisions.
As a result, in 2019, our management team conducted targeted outreach with a meaningful portion of our shareholder base and also other potential investors to discuss our corporate governance practices and 10-1 Voting Provisions in particular. While most of our shareholders had a generally positive view of our corporate governance practices, we learned that most disfavor or had a negative view of our 10-1 Voting Provisions. In addition, influential groups such as ISS and Glass Lewis generally disfavor enhanced voting rights for any group of shareholders.
In connection with its recommendation of the adoption of the 10-1 Voting Amendments, the Board also considered the following factors:
| • | The 10-1 Voting Amendments Fully Align Voting Power With Economic Ownership. Under the 10-1 Voting Provisions, the economic interests of our shareholders may be different than their voting power. If the 10-1 Voting Amendments are adopted, all holders of Synovus common stock will have voting power aligned with their economic ownership, and any disparity between voting power and economic ownership will be eliminated. |
| • | The 10-1 Voting Amendments Reduce Confusion Over the Distribution of Voting Power. The Board believes that the elimination of the 10-1 Voting Provisions will reduce confusion over the distribution of voting power among our shareholders. Currently, all 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. As a result, from time to time, there has been confusion among our shareholders regarding their voting power relative to other Synovus shareholders. This confusion has translated into few shareholders actually exercising 10-1 voting rights despite the fact that they may be entitled to enhanced voting rights. For example, at the 2019 annual shareholders’ meeting only approximately 5% of the total voted shares certified that they were entitled to ten votes per share. |
| • | The 10-1 Voting Amendments Reflect the Reduced Frequency of Time-Phase Voting Systems. We are only aware of three other U.S. public companies that maintain a time-phase voting structure. While time-phased voting rights were more prevalent in the 1980s when our 10-1 Voting Provisions were adopted, most companies that had time-phase voting structures have since eliminated these voting structures and have recognized a one share, one vote standard as best practice. |
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PROPOSALS TO BE VOTED ON
| • | The 10-1 Voting Amendments Reduce Administrative Burdens on Synovus. Each year, Synovus team members must administer the 10-1 Voting Provisions and calculations to determine the total number of votes held by Synovus’ shareholders. We currently rely on a self-certification process for determining which shares are entitled to ten votes per share. This self-certification process requires further review of each proxy to determine if a shareholder has certified that they are entitled to 10 votes per share. The 10-1 Voting Provisions adds increased complexity that requires additional time and cost to manage and implement. |
Description of the Proposed 10-1 Voting Amendments
The Board has adopted and declared advisable, and recommends that shareholders adopt, the Proposed 10-1 Voting Amendments. If the Proposed 10-1 Voting Amendments are adopted, each holder of Synovus common stock would be entitled to one vote for each share of Synovus common stock held by such holder (regardless of the length of time such shares has been beneficially owned, the number of shares beneficially owned by such holder or any other possible criteria) with respect to matters properly submitted to the shareholders for their vote, consent, waiver, release or other action. The full text of the Proposed 10-1 Voting Amendments are set forth in Appendix B-1, with respect to the Articles, and Appendix B-2, with respect to the bylaws. The description of the Proposed 10-1 Voting Amendments is qualified in its entirety by reference to Appendices B-1 and B-2.
If Synovus’ shareholders adopt the Proposed 10-1 Voting Amendments, the amendment and the elimination of the 10-1 Voting Provisions will become effective upon the filing of the amendment to the Articles with the Secretary of State of the State of Georgia, which we plan to do promptly after the Annual Meeting. The Proposed 10-1 Voting Amendments to the bylaws will become effective upon approval of this proposal.
If Synovus’s shareholders do not adopt the Proposed 10-1 Voting Amendment, the 10-1 Voting Provisions will remain in effect.
Additional Effects of the Proposed 10-1 Voting Amendment
Although the Board believes that the adoption of this proposal is in the best interests of Synovus and its shareholders, the Board recognizes that there are disadvantages to shareholders who currently have shares that qualify for ten votes per share or who anticipate receiving shares that qualify for ten votes per share in the near future. If this proposal is approved by the requisite vote, those shareholders who are entitled to cast ten votes per share will experience an immediate dilution of their voting power. This will reduce the ability of these shareholders to influence the outcome of most matters submitted to a vote of shareholders, including director elections, the approval or disapproval of amendments to the Articles, mergers, or other extraordinary transactions that may involve a change of control of us, or approval of other proposals of the Board or shareholders. On the other hand, holders of one-vote shares will experience an increase in their relative voting power.
If the proposal is adopted, we may be more susceptible to a takeover bid or other hostile actions because less voting control will be vested in long-term holders (including our directors and executive officers) of our common stock. However, the Board believes that there are other more appropriate mechanisms that can be utilized by the Board to protect the interests of our shareholders consistent with the Board’s fiduciary duties under Georgia law.
Furthermore, if the proposal is adopted, we expect that the voting power of our directors and executive officers as a group would be reduced from approximately 6.7% of the total voting power to approximately 1.1% of the total voting power, a portion of which is disclaimed. This expectation assumes the same voting power certified at our 2019 annual shareholders’ meeting and that all shares of common stock held by the directors and executive officers of Synovus qualify for ten votes per share as set forth above.
The Board does not expect that the liquidity or trading price of the Synovus common stock will be adversely affected as a result of the elimination of 10-1 voting.
The Board of Directors unanimously recommends that you vote “FOR” approval of the amendments to Synovus’ Articles and bylaws to eliminate the 10-1 Voting Provisions.
| - 2020 Proxy Statement 29 |
PROPOSALS TO BE VOTED ON
| Proposal 3 | Approval of Amendments to Synovus’ Articles and Bylaws to Eliminate Supermajority Voting Requirements |
Introduction
After careful consideration, the Board has unanimously determined that it would be advisable and in the best interests of Synovus and its shareholders to amend the Articles and bylaws to remove the supermajority voting thresholds, as described below (the “Proposed Supermajority Amendments”). The Board is now recommending that the shareholders adopt the Proposed Supermajority Amendments to remove the supermajority voting thresholds. The form of the Proposed Supermajority Amendments is attached to this Proxy Statement as Appendix C-1, with respect to the Articles, and Appendix C-2, with respect to the bylaws.
Current Supermajority Voting Thresholds
Currently, the Articles and bylaws provide that an affirmative vote by the holders of shares representing at least 66 2/3% of the votes entitled to be cast by the holders of all of the Synovus issued and outstanding common stock is required for our shareholders to take or approve, as applicable, the actions listed below.
We refer to these standards as the “Supermajority Voting Requirements” and the actions listed above that currently require a supermajority shareholder vote as the “Supermajority Actions.”
Please note that the Board has authority to take some of the actions listed above without shareholder approval, namely fixing the size of the Board, calling special shareholders’ meetings and, in most circumstances, amending our bylaws. However, if and when our shareholders desire to take these actions without Board action, our shareholders may only do so by adhering to the Supermajority Voting Requirements.
Rationale for the Proposed Supermajority Amendments
As previously noted, our Board is committed to strong corporate governance and recognizes that elimination of the Supermajority Voting Requirements is consistent with generally held views of evolving corporate governance practices. Our Board has listened to the views of our shareholders and the investor community on this issue and has also considered the limited benefits of the Supermajority Voting Requirements. In addition, our Board acknowledges that many other public companies have transitioned away from these kinds of supermajority voting provisions. In view of these considerations, the Board has unanimously determined to eliminate the Supermajority Voting Requirements as proposed.
Description of the Proposed Supermajority Amendments
The Board has adopted and declared advisable, and recommends that the shareholders adopt, the Proposed Supermajority Amendments. If the Proposed Supermajority Amendments are adopted, the Supermajority Actions described above, will require the affirmative vote of a majority of the votes entitled to be cast by the holders of all of the issued and outstanding common stock of Synovus.
The full text of the Proposed Supermajority Amendments is set forth in Appendix C-1, with respect to the Articles, and Appendix C-2, with respect to the bylaws. The description of the Proposed Supermajority Amendments in this Proxy Statement is qualified in its entirety by reference to Appendices C-1 and C-2.
If our shareholders adopt the Proposed Supermajority Amendments, they will become effective upon the filing of the Proposed Supermajority Amendments to the Articles with the Secretary of State of the State of Georgia, which we plan to do promptly after the Annual Meeting. The Proposed Supermajority Amendments to the bylaws will become effective upon approval of this proposal.
If our shareholders do not adopt the Proposed Supermajority Amendments, the Supermajority Voting Requirements will remain in effect.
The Board of Directors unanimously recommends that you vote “FOR” approval of the amendments to Synovus’ Articles and bylaws to eliminate the Supermajority Voting Requirements.
30 | | - 2020 Proxy Statement |
PROPOSALS TO BE VOTED ON
| Proposal 4 | 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 20172019 was fair, reasonable and reasonable.aligned with our performance and strategic objectives.
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 2019 annual meeting of shareholders. The next advisory vote on the frequency of “Say on Pay” proposals is scheduled to occur at the 20202021 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.
| ||
| - |
PROPOSALS TO BE VOTED ON
| Proposal | Advisory Vote on Frequency of Approval of Compensation of our Named Executive Officers as Determined by the Compensation Committee |
In addition to the advisory approval of our executive compensation program, we are also seeking a non-binding determination from our shareholders as to the frequency with which shareholders would have an opportunity to provide an advisory approval of our executive compensation program. We are providing shareholders the option of selecting a frequency of one, two or three years, or abstaining. For the reasons described below, we recommend that our shareholders select a frequency of one year, or an annual vote.
As described in Proposal 4 above, our shareholders are being provided the opportunity to cast an advisory vote on Synovus’ executive compensation program. The advisory vote on executive compensation described in Proposal 4 above is referred to as a “say-on-pay vote.”
This Proposal 5 affords shareholders the opportunity to cast an advisory vote on how often Synovus should include a say-on-pay vote in its proxy materials for future annual shareholders meetings (or any special shareholders meeting for which Synovus must include executive compensation information in the proxy statement for that meeting). Under this Proposal 5, shareholders may vote to have the say-on-pay vote every year, every two years or every three years.
We provided our shareholders with the opportunity to cast a say-on-pay vote every year from 2009 through 2019. An annual advisory vote on executive compensation will allow our shareholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. An annual vote better corresponds with the presentation of compensation information in this Proxy Statement. We, therefore, request that our shareholders select “EVERY YEAR” when voting on the frequency of advisory votes on executive compensation.
We have included this proposal in our Proxy Statement pursuant to the requirements of Section 14A of the Securities Exchange Act of 1934. The option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders. The Compensation Committee (which administers the Company’s executive compensation program) values the opinions expressed by shareholders in these votes and will continue to consider the outcome of these votes in making its decisions on executive compensation. However, because this vote is advisory and not binding on our Board or Synovus in any way, the Board may decide that it is in the best interests of our shareholders and Synovus to hold an advisory vote on executive compensation more or less frequently than the option approved by our shareholders.
The next advisory vote on the frequency of “Say on Pay” proposals is scheduled to occur at the 2026 annual meeting of shareholders.
The Board of Directors unanimously recommends that you vote “EVERY YEAR” to hold an advisory vote on executive compensation (as opposed to every two years or every three years).
32 | | - 2020 Proxy Statement |
PROPOSALS TO BE VOTED ON
| Proposal 6 | 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, 20182020 and Synovus’ internal control over financial reporting as of December 31, 2018.2020. KPMG has been appointed continuously since 1975.1975 as our independent auditor. 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:
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 2018.2020.
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 232020.
| - 2020 Proxy Statement 33 |
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) | 63 | Chairman of the Board and Chief Executive Officer | ||||
Kevin S. Blair(2) | 49 | President and Chief Operating Officer | ||||
Robert W. Derrick(3) | 56 | Executive Vice President and Chief | ||||
Andrew J. Gregory, Jr. | 44 | Executive Vice President and Chief Financial Officer | ||||
Mark G. Holladay | 64 | Executive Vice President and Chief Risk Officer | ||||
Jill K. Hurley | 40 | |||||
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 |
| (2) |
| (3) | Robert W. Derrick was elected Executive Vice President and Chief Credit Officer in |
| 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 |
| (6) | Jill K. Hurley was elected Chief Accounting Officer in August 2018. Prior to joining Synovus, |
34 | |
| - 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, 2017.2020.
| 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) | ||||||||
Tim E. Bentsen | 14,734 | (3) | * | 5,772 | 20,506 | |||||||
Kevin S. Blair | 38,414 | (4) | * | 58,965 | 97,379 | |||||||
F. Dixon Brooke, Jr. | 49,323 | (5) | * | 5,772 | 55,095 | |||||||
Stephen T. Butler | 951,330 | (6) | * | 5,772 | 957,102 | |||||||
Elizabeth W. Camp | 31,286 | * | 5,772 | 37,058 | ||||||||
Robert W. Derrick | 3,822 | * | 7,284 | 11,106 | ||||||||
Andrew J. Gregory, Jr. | — | * | 9,120 | 9,120 | ||||||||
Mark G. Holladay | 57,371 | (7) | * | 18,191 | 75,562 | |||||||
Kevin J. Howard | 43,540 | * | 16,928 | 60,468 | ||||||||
Diana M. Murphy | 6,032 | * | 3,875 | 9,907 | ||||||||
Harris Pastides | 11,956 | * | 5,772 | 17,728 | ||||||||
Joseph J. Prochaska, Jr. | 16,271 | (8) | * | 5,772 | 22,043 | |||||||
John L. Stallworth | 1,802 | * | 3,875 | 5,677 | ||||||||
Kessel D. Stelling | 312,765 | (9) | * | 101,050 | 413,815 | |||||||
Barry L. Storey | 34,787 | (10) | * | 5,772 | 40,559 | |||||||
Teresa White | — | * | 2,394 | 2,394 | ||||||||
Directors and Executive Officers as a Group (17 persons) | 1,574,412 | 1.1 | % | 264,495 | 1,838,907 | |||||||
| * | 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 | 24,767 | |||||
Robert W. Derrick | 2,235 | |||||
Mark G. Holladay | 7,804 | |||||
Kevin J. | 7,539 | |||||
Kessel D. Stelling | 59,620 | |||||
In addition, the executive officers other than our executive officers named in the Summary Compensation Table had rights to acquire an aggregate of 504shares 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) |
| Includes |
| (4) | In addition, Mr. Blair beneficially owns 2,000 shares of Series D Preferred. |
| (5) | Includes 7,668 shares held by his spouse. |
| (6) | 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 Series D Preferred. |
- 2018 Proxy Statement 25
STOCK OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
| (7) | In addition, Mr. Holladay beneficially owns 4,000 shares of Series D Preferred. |
| (8) | Includes |
| (9) | Includes |
| Includes 14,285 shares held in a family trust in which Mr. Storey has shared investment and voting powers. In addition, Mr. Storey beneficially owns |
| - 2020 Proxy Statement 35 |
STOCK OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
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;20, 2016; (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 Meeting2019 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%4.1% of the total voting power, 3.1%2.7% of which is disclaimed by Mr. Butler, (3) Mr. Stelling’s beneficial ownership would represent approximately 1.2%1.3% of the total voting power, and (4) directors and executive officers as a group would represent approximately 8.8%6.7% of the total voting power, 3.1%2.7% 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, 2017.2019.
Name and Address of Beneficial Owner | Shares of Synovus Stock Beneficially Owned as of 12/31/19 | Percentage of Outstanding Shares of Synovus Stock Beneficially Owned as of 12/31/19(1) | ||||
BlackRock, Inc. 40 East 52nd Street New York, New York 10022 | 15,061,016 | (2) | 10.2% | |||
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 13,469,903 | (3) | 9.2% | |||
|
| |||||||
| ||||||||
| ||||||||
| (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 |
| (3) | This information is based upon information included in a Schedule 13G filed with the SEC on February |
36 | | |
- |
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 8[•] 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:
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, 20172019 filed with the Securities and Exchange Commission.
The Audit Committee
Joseph J. Prochaska, Jr., Chair
Tim E. Bentsen Chair
F. Dixon Brooke, Jr.
Diana M. Murphy
| - 2020 Proxy Statement 37 |
Jerry W. Nix
Joseph J. Prochaska, Jr.TABLE OF CONTENTS
AUDIT COMMITTEE REPORT
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, 20172019 and December 31, 20162018 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
2019 | 2018 | |||||
Audit Fees(1) | $ | 3,968,908 | $ | 2,923,204 | ||
Audit Related Fees(2) | 315,444 | 516,032 | ||||
Tax Fees(3) | 223,067 | 290,913 | ||||
All Other Fees(4) | 1,780 | — | ||||
$ | 4,509,199 | $ | 3,730,149 | |||
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. Audit fees increased in 2019 due to additional audit procedures related to the FCB acquisition, implementation of FASB’s new standard with respect to current expected credit losses, and procedures related to registration statements. |
| (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. |
| (4) | All other fees consisted of subscription-based services including software licenses for |
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 Chartercharter andPre-Approval Policy.
38 | | |
- |
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 and Chief Executive Officer | |
Kevin S. Blair | President and Chief Operating Officer | |
Andrew J. Gregory, Jr. | Executive Vice President and Chief Financial Officer | |
Kevin J. | Executive Vice President and Chief | |
Mark G. Holladay | ||
Executive Vice President and Chief Risk Officer | ||
Robert W. Derrick | Executive Vice President |
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 9[•] of this Proxy Statement.
| - 2020 Proxy Statement 39 |
EXECUTIVE COMPENSATION
Executive Summary
2019 Financial Performance
Our 2019 performance included the accomplishment of and continued progress on strategic priorities. We successfully completed our acquisition and integration of FCB, including the introduction of new teams and products to our South Florida markets. We also reorganized our operating model to better serve our customers, which resulted in strong gains in several business lines and banker productivity. Outside of the merger, we continued to add new private wealth, brokerage, and trust teams to complement the strong commercial lending offerings we already offer, and we brought on new talent to lead new businesses and expand our presence in existing markets. We added new leadership and a revised strategy to our treasury and payments business, a catalyst for deepening many long-standing commercial customer relationships. We continued to invest in technology, including the February launch of My Synovus, our new mobile/digital banking platform, and the spring introduction of an online mortgage application tool. In September, we announced a new structured finance team, which builds on the expertise of Global One Financial, the insurance premium finance lender we acquired in 2016. Throughout the year, we developed a stronger value proposition for the mass affluent customer segment and will launch the program and its related solutions in the first quarter of 2020. We realized broad-based loan, deposit and fee-based revenue growth across all business lines with an emphasis on organic production. We continued our commitment to deliver value to shareholders through $725 million in share repurchases and $168 million in common dividends, including a 20% increase in our quarterly dividend relative to 2018.
Despite these positive developments, our earnings were negatively impacted by net interest income that was lower than expected due, in part, to a declining interest rate environment.
- 2018 Proxy Statement 29
EXECUTIVE COMPENSATION
Executive Summary
Synovus 2017 Performance
Our 2017 financial results were in line with our 2017 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, 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.
| • | Earnings growth—Net income available to common shareholders for 2019 was |
| • |
| • |
| • |
| • | Loan |
| • | Credit quality—Credit quality remained solid in 2019 with the ratios for non-performing assets and non-performing loans improving to 0.37% and 0.27%, respectively, and total past dues were at 0.33%. Net charge-offs for 2019 were 16 basis points compared to |
| • | Deposit growth—Total deposits were $38.41 billion at December 31, 2019, an increase of $11.69 billion, or 43.7%, compared to year-end 2018, driven by the acquisition of FCB which contributed $10.93 billion in total deposits. Adjusting December 31, 2018 for the |
| • | Capital |
*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, 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.
For additional information relatingrelated to our business and our subsidiaries, including a detailed description of our operating results and financial condition for 2017, 2016 and 2015,2019, please refer to our 20172019 Annual Report that accompanies this Proxy Statement.
2017* For a reconciliation of the foregoing non-GAAP financial measures to the most comparable GAAP measures, please refer to Appendix D of this Proxy Statement.
40 | | - 2020 Proxy Statement |
EXECUTIVE COMPENSATION
2019 Compensation
The2019 compensation of executives in 2017 reflects Synovus’outcomes reflected our performance and our executive compensation program which reflects our pay for performance philosophy.
|
EXECUTIVE COMPENSATION
as described below:
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 |
|
|
| |||
Core Earnings (60%) , Adjusted | Quality of Financial Results (including Quality of Earnings, Credit Quality | 0% to 150% of Target |
Long-Term Incentives
Form of Award | Vesting | Payout Formula Measures | Payout Range | |||
|
|
| ||||
PSUs (60% of award value) | 100% after 3 years | Weighted Average Return on Average Assets
| 0% to 150% of Award Amount | |||
MRSUs (40% of award value) | ⅓ per year over 3 years
| Total Shareholder Return
| 75% to 125% of Award Amount |
Both award vehicles are subject to possible downward discretionary adjustment based upon risk considerations—see page [•] of this Proxy Statement.
We believe that the compensation delivered to each named executive officer in 20172019 was fair, reasonable and reasonable.aligned with our performance and our strategic objectives.
| - 2020 Proxy Statement 41 |
- 2018 Proxy Statement
31
Executive Compensation Governance
WHAT WE DO | |
✓ | Pay for Performance - See page [•] |
✓ | Mitigate Risk in Incentive Programs - See page [•] |
✓ | Require Meaningful Share Ownership and Retention of Shares until Retirement - See page [•] |
✓ | Review Tally Sheets - See page [•] |
✓ | Provide Reasonable “Double Trigger” Change in Control Provisions - See page [•] |
✓ | Retain an Independent Compensation Consultant - See page [•] |
✓ | Maintain Clawback Policy Covering Inaccurate Financials and Material Risk Management Failures - See page [•] |
✓ | Include Risk-Based Forfeiture Provisions in Equity Awards - See page [•] |
EXECUTIVE COMPENSATION
WHAT WE DON’T DO | |
✗ | No Employment Contracts - See page [•] |
✗ | No Option Repricing - See page [•] |
✗ | No Hedging of Synovus Equity Securities by Executive Officers and Directors - See page [•] |
✗ | No Pledging of Synovus Equity Securities by Executive Officers and Directors - See page [•] |
✗ | No Personal Use of Aircraft – See page [•] |
Results of 20162019 Advisory Vote to Approve Executive Compensation
At the 20172019 annual meeting of shareholders, we held an advisory vote on executive compensation for 2016.2018. Over 96%98% 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 2017.2019. 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 ROATCE performance. • The qualitative component of the annual incentive plan includes an assessment of progress on key strategic priorities outlined at the beginning of the year. See “Corporate Governance and Board Matters – Strategic Direction” on page [•] of this Proxy Statement for a discussion of these priorities. • Long-term incentives also reward shareholder value creation by providing all awards in equity and varying payouts of MRSUs based on shareholder return. | |
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EXECUTIVE COMPENSATION
Compensation Philosophy and Key Considerations | How Our Program Aligns with Our Philosophy | |
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. • Our Corporate of 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. |
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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 | |||
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 2019 were limited to financial planning, relocation benefits, and 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 two to 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 | |||
| - 2020 Proxy Statement 43 |
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 20172019
In addition to the increase for Mr. Stelling described above, thedid not receive a base salary increase in 2019. Mr. Gregory’s base salary was determined in connection with his hire in June based upon market comparisons. Mr. Blair received a base salary increase of 9.7% in February to reflect his new role as Chief Operating Officer and a 3% increase in July. The Compensation Committee awarded 2%3% base salary increases (rounded up to the nearest $250) for Synovus’ other named executive officers effectivein July, 19, 2017.except for the Company’s Chief Risk Officer 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 significant factor used in determining base pay for Synovus’ named executive officers in 2017.2019.
Short-Term Incentive Decisions in 20172019
In 2017, the formulaic performance goals forWe target our cash-based short-term incentive plan wereopportunities to approximate the median of peer practices. Each year, the Compensation Committee determines the appropriate performance measures that best support our business strategy and establishes target goals based 60% on core earnings, 20% on adjustedpre-provision net revenueupon management’s confidential business plan and 20% on adjusted efficiency ratio. In addition, the Committee also reviewed performance on several qualitative factors, including: quality of earnings, quality of loan growth (including consideration of concentration limits), quality of deposit growth, expense management, single bank conversion, credit quality (including the nonperforming assets ratio, nonperforming loans ratio and netcharge-off ratio), financial impact of strategic investments, external factors (including the impact of Federal Reserve rate increases vs.corresponding annual budget assumptions), regulatory compliance, risk management, total shareholder return and individual performance. for that year.
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 2017,2019, expressed as a percentage of base salary, were 125% for Mr. Stelling, 80% for Mr. Blair, 75% for Mr. Blair,Gregory, 70% for Mr. GulaHoward and 60% for each of Messrs. KamenskyHolladay and Singleton.Derrick. In connection with his hire, Mr. Gregory received a $200,000 signing bonus and was guaranteed to receive an annual incentive for 2019 of not less than $365,250 pursuant to the terms of his offer letter.
Formulaic Performance Goals
We used three financial performance measures for the formulaic performance goals under our short-term incentive plan for 2019. Core earnings (60%) and adjusted revenue (20%) were selected as measures of earnings and revenue growth during the year. The adjusted tangible efficiency ratio (20%) was selected as a measure of expense management and how well we all are managing each dollar of revenue.
The following chart summarizes the performance goals in each category for threshold, target and maximum payoutsgoals for each formulaic performance measure as well as the actual performance:performance and resulting payout calculation:
| 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% | $606.6M | $656.0M | $707.5M | $631,361M | 75.06% | 45.04% | ||||||
Adjusted Revenue1 | 20% | $1,918.4M | $1,945.8M | $1,973.2M | $1,950,780M | 109.09% | 21.82% | ||||||
Adjusted Tangible Efficiency Ratio1 | 20% | 51.95% | 50.52% | 49.05% | 51.82% | 54.55% | 10.91% | ||||||
77.76% | |||||||||||||
| (1) | The amounts excludenon-recurring items and certain items that are not indicative of ongoing operations. For a reconciliation of core earnings, adjusted |
Qualitative Performance Factors
The qualitative factors are designed to provide the Compensation Committee with the opportunity to adjust payouts based on a holistic review of the Company’s performance for the year, including the quality of our financial results and our performance on key strategic priorities. The qualitative factors are established at the beginning of the year and are designed to provide the Compensation Committee with an overview of items deemed critical to the Company’s success. Based upon the results of the qualitative factors, the Committee determines whether adjustments (either upward or downward) to the formulaic performance result are appropriate in finalizing individual incentive payouts.
The factors chosen by the Compensation Committee at the beginning of 2019 based upon the Company’s strategic plan, and the key results for each factor, are summarized below:
|
EXECUTIVE COMPENSATION
The 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 |
| • | Credit Quality/Quality of Loan Growth— |
| • | Quality of Deposit Growth— |
| • | Expense Management—Total non-interest expense was $1.10 billion, $30.9 million above budget, and adjustednon-interest expense* was |
44 | | - 2020 Proxy Statement |
EXECUTIVE COMPENSATION
| • |
| • |
| • | Strategic Initiatives: Inclusion and Diversity—Previously implemented diversity initiatives resulted in meaningful progress in 2019, with increases in women and minorities in leadership roles, as discussed under “Corporate Governance and Board Matters – Our Sustainability Commitments – Human Capital” on page [•] of this Proxy Statement. |
| • | Strategic Initiatives: Customer, Technology and Team Member Measures—Overall branch satisfaction increased during 2019. Digital adoption by consumers also increased during the year. We conducted a team member engagement survey in 2019 and are now implementing initiatives in response to the survey results. |
| • | External Factors— |
| • | 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 five-year total shareholder return was |
| • | Individual Performance—The Compensation Committee also reviewed individual performance as reflected in performance evaluations. |
*For a reconciliation of the foregoingnon-GAAP financial measures to the most comparable GAAP measure, including core earnings, adjustednon-interest expense, adjusted efficiency ratio, average core deposits, and average core transaction accounts, please refer toAppendix BD of this Proxy Statement.
Based on the results of the performance goals and consideration of the discretionaryqualitative 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%75% of target for Mr. Stelling. Based on the results of the performance goalsStelling and consideration of the discretionary factors listed above, the Committee approved payouts ranging from 135% to 145%between 75% and 85% of target for each of the Company’s other named executive officers. The Committee considered the recommendation of the CEO when determining payouts for named executive officers other than the CEO. (Based on the terms of his offer letter which was negotiated to recruit him from another employer, Mr. Gregory received a payout at 100% of target for 2019). 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 41[•] of this Proxy Statement.
Long-Term Incentive Decisions in 20172019
In 2017, we granted long-term incentives through a combination of 50% PSUs and 50% MRSUs. All of ourThe Company grants all long-term incentive awards are linkedin equity to Synovus’ futurelink the value of the awards to Company performance. We granted our named executive officers two primary types of awards in 2019: performance stock units, or PSUs, and market restricted stock units, or MRSUs. The percentage of PSUs is weighted at 60% to further strengthen the performance-based nature of our program.
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 describedto Mr. Stelling in “2017 CEO2019 based on market comparisons. The Compensation Changes” above. The Committee also granted the Company’s other named executive officers long-term incentive awards for 20172019 based upon market comparisons as set forth in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the Grants of Plan-Based Awards Table on page 42[•] of this Proxy Statement. Mr. Blair also received a grant of MRSUs in December 2019 in connection with his promotion to President and Chief Operating Officer. 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.
Mr. Gregory was not employed with us at the time of the annual grant but received a grant of restricted stock units with a grant date value of approximately $300,000 in connection with his hire pursuant to the terms of his offer letter.
Performance Stock Units (PSUs)
The PSUs have both a performance vesting component and a service vesting component. Under the performance vesting component for 2019, Synovus’ weighted average ROAA (as adjusted) and ROATCE (as adjusted) is measured over a three-year performance period. The Committee uses ROAA as a performance goal approvedmeasure because it is a measure frequently used by theinvestors to calculate how efficiently banks are using their assets to generate profit. The Committee is based upon the Company’s objectives underalso uses ROATCE as a performance measure given its strategic plan.increasing focus in our communications with shareholders and due to its incorporation of both earnings and capital management. 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 PSUs2017-2019 PSUs.. The following charts show the calculation of the payout for the PSUs granted in 2015,2017, which paid out at 98.48%150% of target on February 19, 20189, 2020 based on a weighted average ROAA (as adjusted) of 0.921%1.131% for the 2015-20172017-2019 performance period: The performance goals for the 2017-2019 performance period represented significant improvement relative to our 2016 results.
| - 2020 Proxy Statement 45 |
EXECUTIVE COMPENSATION
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 | ||||
2017 | 25% | 1.035% | ||||
2018 | 25% | 1.139% | ||||
2019 | 50% | 1.174% | ||||
3-Year Weighted Average ROAA (as adjusted) | 1.131% | |||||
| (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 |
Performance Goals and Payout Calculation
| Threshold | Target | Maximum | Actual | Threshold | Target | Maximum | Actual | |||||||||||||||||||||
| Performance Criteria3-Year ROAA (as adjusted) | 0.785% | 0.925% | 1.065% | 0.921% | 0.780% | 0.955% | 1.030% | 1.131% | ||||||||||||||||||||
| Payout (as a Percentage of Target) | 50% | 100% | 150% | 98.48% | 50% | 100% | 150% | 150% | ||||||||||||||||||||
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’in direct relationship to the total shareholder return during each year.experienced by our shareholders. 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 2017:2019.
Grant Date | Vesting Date/ Percent | Total Shareholder Return (TSR) | Payout Percentage (based upon TSR) | ||||
2/11/2016 | 2/11/2017 (33 ⅓%) | +45.8% | 125% | ||||
2/11/2018 (33 ⅓%) | +22.2% | 122.2% | |||||
2/11/2019 (33 ⅓%) | -26.9% | 75% | |||||
2/9/2017 | 2/9/2018 (33 ⅓%) | +22.5% | 122.5% | ||||
2/9/2019 (33 ⅓%) | -27.1% | 75% | |||||
2/9/2020 (33 ⅓%) | +8.0% | 108% | |||||
2/8/2018 | 2/8/2019 (33 ⅓%) | -27.6% | 75% | ||||
2/8/2020 (33 ⅓%) | +8.4% | 108.4% | |||||
2/8/2021 (33 ⅓%) | TBD | TBD | |||||
2/7/2019 | 2/7/2020 (33 ⅓%) | +9.3% | 109.3% | ||||
2/7/2021 (33 ⅓%) | TBD | TBD | |||||
2/7/2022 (33 ⅓%) | TBD | TBD | |||||
Potential Reductions to Equity Awards Due to Risk Concerns
|
|
| ||||||||||
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 2017.2019.
Perquisites
Perquisites which are not tied to performance, are a small part of our executive compensation program. Perquisites are offered to increase the productivity of our executives and align our compensation program with competitive practices because similar positions at Synovus’ competitors offer similar perquisites. The perquisites offered by Synovus in 20172019 were limited to the payment of club dues, financial planning, an auto allowancerelocation benefits, 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
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EXECUTIVE COMPENSATION
described in more detail in footnotes 3 and 45 of the Summary Compensation Table on page 41[•] 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.
46 | | - 2020 Proxy Statement |
EXECUTIVE COMPENSATION
The Company did not provide auto allowances or reimbursements for club dues to executives in 2019. 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 2017.2019.
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, 2017.2019. The 401(k) savings plan offers an employer matching contribution of up to 4%5% of compensation (5% beginning on January 1, 2018).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 20172019 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 20172019 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, 20172019 is included in Mr. Stelling’s balance in the Nonqualified Deferred Compensation Table and Synovus’ contribution to the Riverside Plan for 20172019 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 two to three years of base salary and the affected executive’s average bonus for the past three years, as well as two to 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 [•] 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 2017,2019, 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 2017.2019.
TheFor 2019, the Compensation Committee continued to useused a peer group of 1816 banks as part of its evaluation. The peer group consists of eight banks with higher assets and teneight 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. | IBERIABANK Corp. | |
Bank United, Inc. | M&T BankCorp. | |
Comerica Inc. | New York Community Bancorp, Inc. | |
Cullen/Frost Bankers, Inc. | People’s United Financial, Inc. | |
First Horizon National Corp. | Popular, Inc. | |
FNB Corp. | Regions Financial Corp. | |
Hancock | Zions Bancorporation |
| - 2020 Proxy Statement 47 |
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 |
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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, 2017.2019.
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.
Clawback Policy
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,in 2014 pursuant to whichand Compensation Committee updated and strengthened the policy in 2018. 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. The anti-hedging policy does not extend to all team members of Synovus but is limited to our directors, executive officers and certain other designated insiders.
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.
48 | | - 2020 Proxy Statement |
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 9[•] 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 9[•] 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 forand 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 20172019 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, the Compensation Committee met with the Chief Risk Officer to review a comprehensive risk assessment of our 2019 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.
| - 2020 Proxy Statement 49 |
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’ 20172019 Annual Report and in this Proxy Statement.
The Compensation Committee
Elizabeth W. Camp,
Tim E. Bentsen, Chair
F. Dixon Brooke, Jr.
Melvin
Stephen T. Stith
Butler
Joseph J. Prochaska, Jr.
Barry L. Storey
Philip W. Tomlinson
50 | | |
| - |
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 and Chief Executive Officer | 2019 | $ | 1,125,000 | — | $ | 2,553,319 | — | $ | 1,054,688 | — | $ | 457,436 | (2)(3) | $ | 5,190,443 | ||||||||||
2018 | 1,125,000 | — | 2,526,069 | — | 1,852,000 | — | 365,141 | 5,868,210 | |||||||||||||||||
2017 | 1,106,000 | — | 2,546,275 | — | 1,966,078 | — | 342,275 | 5,960,628 | |||||||||||||||||
Kevin S. Blair* President and Chief Operating Officer | 2019 | 673,763 | — | 1,803,032 | — | 403,219 | — | 44,196 | (2) | 2,924,210 | |||||||||||||||
2018 | 598,117 | — | 1,010,466 | — | 631,375 | — | — | 2,239,958 | |||||||||||||||||
2017 | 579,865 | 1,018,561 | — | 637,819 | — | 804 | 2,237,049 | ||||||||||||||||||
Andrew J. Gregory, Jr.** Executive Vice President and Chief Financial Officer | 2019 | 228,365 | 200,000 | (4) | 300,001 | — | 365,250 | — | 65,111 | (5) | 1,158,727 | ||||||||||||||
Kevin J. Howard*** Executive Vice President and Chief Wholesale Banking Officer | 2019 | 446,579 | — | 510,718 | — | 248,069 | — | 25,243 | (2)(5) | 1,230,609 | |||||||||||||||
Mark G. Holladay Executive Vice President and Chief Risk Officer | 2019 | 398,491 | — | 459,616 | — | 203,224 | — | 30,819 | (2)(5) | 1,092,150 | |||||||||||||||
2018 | 383,517 | — | 454,760 | — | 308,364 | — | 18,396 | 1,164,906 | |||||||||||||||||
2017 | 374,725 | — | 285,218 | — | 329,741 | — | 20,836 | 1,010,520 | |||||||||||||||||
Robert W. Derrick**** Executive Vice President and Chief Credit Officer | 2019 | 320,195 | — | 286,020 | — | 143,234 | — | 7,055 | (2)(5) | 756,504 | |||||||||||||||
| * | Mr. Blair was named Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer on December 12, 2018. Mr. Blair served as Interim Chief Financial Officer until Mr. Gregory’s appointment on June 24, 2019. Mr. Blair was named President and Chief Operating Officer on December 12, 2019. |
| ** | Mr. Gregory was named Executive Vice President and Chief Financial Officer |
| *** | Mr. |
| **** | Mr. Derrick was named Executive Vice President and Chief Credit Officer on January 14, 2019. |
| (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 |
| (2) | Amount includes company contributions by Synovus to nonqualified deferred compensation plans of |
| (3) | Amount includes contributions by Synovus under the 2011 Synovus Director Stock Purchase Plan of $3,000 for Mr. Stelling. Amount also includes incremental costs of perquisites totaling |
| (4) | Mr. Gregory received a one-time cash bonus of $200,000 in connection with his hire designed to partially compensate him for incentives forfeited from his former employer. |
| (5) | Amount includes |
| - 2020 Proxy Statement 51 |
- 2018 Proxy Statement 41
SUMMARY COMPENSATION TABLE
Grants of Plan-Based Awards for Fiscal Year 20172019
The table below sets forth the short-term and long-term incentive compensation (granted in the form of cash-based awards, PSUs, MRSUs and MRSUs)RSUs) awarded to the named executive officers for 2017.2019. There were no stock options granted to the named executive officers for 2017.2019.
| | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) |
| | Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
| | Grant Date Fair Value of Stock Awards(3) ($) |
| ||||||||||||||||||||||||||||||||
| 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) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards(3) ($) | |||||||||||||||||||||||||
Name | Grant Date | Action Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||
Kessel D. Stelling | 2-7-19 (Cash Incentive) | 2-7-19 | $ | 703,125 | $ | 1,406,250 | $ | 2,109,375 | — | — | — | — | ||||||||||||||||
2-7-19 (PSUs) | 2-7-19 | — | — | — | 20,086 | 40,172 | 60,258 | $ | 1,500,022 | |||||||||||||||||||
2-7-19 (MRSUs) | 2-7-19 | — | — | — | 20,086 | 26,781 | 33,476 | 1,053,297 | ||||||||||||||||||||
Kevin S. Blair | 2-7-19 (Cash Incentive) | 2-7-19 | 278,100 | 556,200 | 834,300 | — | — | — | — | |||||||||||||||||||
2-7-19 (PSUs) | 2-7-19 | — | — | — | 10,043 | 20,086 | 30,129 | 750,011 | ||||||||||||||||||||
2-7-19 (MRSUs) | 2-7-19 | — | — | — | 10,043 | 13,391 | 16,739 | 526,668 | ||||||||||||||||||||
12-12-19 (MRSUs) | 12-12-19 | — | — | — | 9,338 | 12,451 | 15,564 | 526,553 | ||||||||||||||||||||
Andrew J. Gregory, Jr. | 6-24-19 (Cash Incentive) | 6-3-19 | 356,250 | (4) | 356,250 | 534,375 | — | — | — | — | ||||||||||||||||||
6-24-19 (RSUs) | 6-3-19 | — | — | — | — | — | — | 8,974 | 300,001 | |||||||||||||||||||
Kevin J. Howard | 2-7-19 (Cash Incentive) | 2-7-19 | 162,225 | 324,450 | 486,675 | — | — | — | — | |||||||||||||||||||
2-7-19 (PSUs) | 2-7-19 | — | — | — | 4,018 | 8,035 | 12,053 | 300,027 | ||||||||||||||||||||
2-7-19 (MRSUs) | 2-7-19 | — | — | — | 4,018 | 5,357 | 6,696 | 210,691 | ||||||||||||||||||||
Mark G. Holladay | 2-7-19 (Cash Incentive) | 2-7-19 | 122,971 | 245,941 | 368,912 | — | — | — | — | |||||||||||||||||||
2-7-19 (PSUs) | 2-7-19 | — | — | — | 3,616 | 7,231 | 10,847 | 270,006 | ||||||||||||||||||||
2-7-19 (MRSUs) | 2-7-19 | — | — | — | 3,616 | 4,821 | 6,026 | 189,610 | ||||||||||||||||||||
Robert W. Derrick | 2-7-19 (Cash Incentive) | 2-7-19 | 98,880 | 197,760 | 296,640 | — | — | — | — | |||||||||||||||||||
2-7-19 (PSUs) | 2-7-19 | — | — | — | 2,250 | 4,500 | 6,750 | 168,030 | ||||||||||||||||||||
2-7-19 (MRSUs) | 2-7-19 | — | — | — | 2,250 | 3,000 | 3,750 | 117,990 | ||||||||||||||||||||
| (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 |
| (4) | Mr. Gregory’s minimum bonus amount was established at target for 2019 under his initial hire agreement. |
52 | | - |
SUMMARY COMPENSATION TABLE
Outstanding Equity Awards at 20172019 FiscalYear-End
The table below identifies the option awards and stock awards held by the named executive officers and outstanding on December 31, 2017.2019.
| 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 | |||||||||||||||||||||||||||||||||
Stock Awards | |||||||||||||||
Name | 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 | 2-7-19 | — | — | 27,477 | (3) | $ | 1,077,098 | ||||||||
2-7-19 | — | — | 41,216 | (4) | 1,615,667 | ||||||||||
2-8-18 | — | — | 14,819 | (3) | 580,905 | ||||||||||
2-8-18 | — | — | 33,338 | (4) | 1,306,850 | ||||||||||
2-9-17 | — | — | 10,655 | (3) | 417,676 | ||||||||||
2-9-17 | 47,931 | (4) | 1,878,895 | — | — | ||||||||||
Kevin S. Blair | 2-7-19 | — | — | 13,738 | (3) | 538,530 | |||||||||
2-7-19 | — | — | 20,607 | (4) | 807,794 | ||||||||||
12-12-19 | — | — | 12,451 | (3) | 488,079 | ||||||||||
2-8-18 | — | — | 5,928 | (3) | 232,378 | ||||||||||
2-8-18 | — | — | 13,333 | (4) | 522,654 | ||||||||||
2-9-17 | — | — | 4,266 | (3) | 167,227 | ||||||||||
2-9-17 | 19,170 | (4) | 751,464 | — | — | ||||||||||
Andrew J. Gregory, Jr. | 6-24-19 | 9,052 | (5) | 354,838 | — | — | |||||||||
Kevin J. Howard | 2-7-19 | — | — | 5,495 | (3) | 215,404 | |||||||||
2-7-19 | — | — | 8,243 | (4) | 323,126 | ||||||||||
2-8-18 | — | — | 1,777 | (3) | 69,658 | ||||||||||
2-8-18 | — | — | 3,998 | (4) | 156,722 | ||||||||||
2-9-17 | — | — | 1,197 | (3) | 46,922 | ||||||||||
2-9-17 | 5,363 | (4) | 210,210 | — | — | ||||||||||
Mark G. Holladay | 2-7-19 | — | — | 4,945 | (3) | 193,844 | |||||||||
2-7-19 | — | — | 7,417 | (4) | 290,746 | ||||||||||
2-8-18 | — | — | 2,669 | (3) | 104,625 | ||||||||||
2-8-18 | — | — | 5,998 | (4) | 235,122 | ||||||||||
2-9-17 | — | — | 1,197 | (3) | 46,922 | ||||||||||
2-9-17 | 5,363 | (4) | 210,210 | — | — | ||||||||||
Robert W. Derrick | 2-7-19 | — | — | 3,076 | (3) | 120,579 | |||||||||
2-7-19 | — | — | 4,615 | (4) | 180,908 | ||||||||||
2-8-18 | 1,112 | (5) | 43,950 | — | — | ||||||||||
2-9-17 | 646 | (5) | 25,323 | — | — | ||||||||||
| (1) | Includes additional stock awards credited by reason of such awards earning dividend equivalents. MRSUs, PSUs and RSUs 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 and 2019 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 2017 shown at 150% of target based upon 2017-2019 performance results. |
| (5) | RSUs have a three-year service requirement and vest 33.3% each year over three years. |
| - 2020 Proxy Statement 53 |
SUMMARY COMPENSATION TABLE
Option Exercises and Stock Vested for Fiscal Year 20172019
The following table sets forth the number and corresponding value realized during 20172019 with respect to restricted stock units that vested for each named executive officer. No named executive officer exercised stock options during 2017.2019.
| 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 | — | — | 61,549 | $ | 2,297,678 | |||||||
Kevin S. Blair | — | — | 8,034 | 296,041 | ||||||||
Andrew J. Gregory, Jr. | — | — | — | — | ||||||||
Kevin J. Howard | — | — | 9,035 | 337,283 | ||||||||
Mark G. Holladay | — | — | 9,359 | 349,381 | ||||||||
Robert W. Derrick | — | — | 2,173 | 81,130 | ||||||||
| (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 20172019
The table below provides information relating to the activity in the deferred compensation plans for the named executive officers in 2017.2019.
| 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 | $ | 386,116 | $ | 283,343 | — | $ | 3,465,644 | (4) | |||||
Kevin S. Blair | 44,196 | 44,196 | 5,568 | — | 93,961 | ||||||||||
Andrew J. Gregory, Jr. | 13,154 | — | 590 | — | 13,743 | ||||||||||
Kevin J. Howard | 24,393 | 24,393 | 19,214 | — | 157,911 | ||||||||||
Mark G. Holladay | 21,206 | 21,206 | 164,192 | — | 876,141 | ||||||||||
Robert W. Derrick | 34,010 | 6,510 | 10,545 | — | 85,622 | ||||||||||
| (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 37[•] 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.
54 | | - 2020 Proxy Statement |
SUMMARY COMPENSATION TABLE
In the event payments are triggered under the agreements, each named executive will receive three timesa specified multiple of his or her base salary as in effect prior to the termination three timesplus 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. The severance multiple is 2x for Mr. Derrick and 3x for other named executive officers. These amounts 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.number of years equal to the severance multiple. In addition, executives who entered into agreements prior to the prohibition on taxgross-ups adopted by the Compensation Committee (see page 37)[•]) 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, 2017.2019. 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, 2017.2019.
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 | |||||||||||||||||||||
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 | $ | 5,062,500 | $ | 1,406,250 | $ | 74,484 | $ | 6,250,793 | — | $ | 16,169,027 | ||||||||
Kevin S. Blair | 2,085,750 | 2,029,914 | 556,200 | 74,484 | 3,257,638 | — | 8,003,986 | ||||||||||||||
Andrew J. Gregory, Jr. | 1,425,000 | — | 356,250 | 74,484 | 354,838 | — | 2,210,572 | ||||||||||||||
Kevin J. Howard | 1,390,500 | 1,084,590 | 324,450 | 74,484 | 951,972 | — | 3,825,966 | ||||||||||||||
Mark G. Holladay | 1,229,706 | 954,990 | 245,941 | 74,484 | 1,011,399 | — | 3,516,520 | ||||||||||||||
Robert W. Derrick | 659,200 | 207,744 | 197,760 | 49,656 | 370,400 | — | 1,484,760 | ||||||||||||||
| (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, 2017.2019. 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 2017.2019. After identifying the median employee, we added compensation under our Company sponsored broad-based employee benefit plans to the earnings of the median employee for 2019 and to the CEO’s total compensation as reflected in the Summary Compensation Table for 2019 (adding $21,324$32,552 to the CEO’s compensation amount). Based on the foregoing, the CEO’s 20172019 annual total compensation is $5,981,952$5,222,995 and the median annual total compensation of all employees (except for the CEO) is $59,877,$65,896, resulting in a CEO pay ratio of approximately 10079 to 1.
| - 2020 Proxy Statement 55 |
- 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 2017,2019, 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 20172019 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.”
W.C. Bradley Co.Other Related Party Transactions
In 2019, Synovus leased various properties in Columbus, Georgia from W.C. Bradley Co.and its wholly owned subsidiaries paid to Communicorp, Inc., a wholly-owned subsidiary of Aflac Incorporated, $427,442 for office spaceprinting, marketing and storage during 2017. During 2017, Stephen T. Butler was the executive chairman and a director of W.C. Bradley Co. The aggregate rent paid for this leased space was $3,193,715. The terms of the lease agreementspromotional services, which payments are comparable to those provided forpayments between similarly situated unrelated third parties infor similar transactions.
Synovusservices. Teresa White, a director, is a party to a Joint Ownership Agreement with TSYS and W.C.B. Air L.L.C. pursuant to which they jointly own or lease aircraft. W.C. Bradley Co. owns allPresident of the limited liability interests of W.C.B. Air. The parties have each agreed to pay fixed fees for each hour they fly the aircraft owned and/or leased pursuant to the Joint Ownership Agreement. Synovus paid $1,612,544 for its business related use of the aircraft during 2017. 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.
Aflac US. The payments to W.C. Bradley Co.Communicorp by Synovus and its subsidiaries and the payments to Synovus and its subsidiaries by W.C. Bradley Co. represent less than 2%0.002% of W.C. Bradley Co.’s 2017Aflac’s 2019 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.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
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, 20172019, its officers, directors and greater than ten percent beneficial ownersshareholders timely complied with all applicable Section 16(a) filing requirements, except that Ms. McDaniel hadtwo of such Section 16(a) reports were filed late (one for Mr. Butler and one Form 4 that was filed late.for Mr. Storey).
SHAREHOLDER PROPOSALS AND NOMINATIONS
In order for a shareholder proposal to be considered for inclusion in Synovus’ Proxy Statement for the 20192021 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.[•], 2020. 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 20192021 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, 201823, 2020 and not later than January 26, 2019.22, 2021. 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.
| - 2020 Proxy Statement 57 |
- 2018 Proxy Statement
47
A copy of Synovus’ 20172019 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 20172019 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 20172019 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:
58 | | |
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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 |
| - 2020 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 | | - 2020 Proxy Statement |
Appendix B-1: Amendment to Synovus’ Amended and Restated Articles of 1986, as amended, and“non-employee directors” as such term is defined under Rule16b-3 promulgated under the Exchange Act.
Incorporation to Eliminate 10-1 Voting Provisions
| 1. | The name of the corporation is Synovus Financial Corp. (the “Corporation”). The Corporation is organized under the laws of the State of Georgia. |
| 2. | In connection with the Corporation’s decision to eliminate the 10-1 voting provisions in its Articles of Incorporation, paragraphs (b), (c), (d), (e), and (f) of Article 4 of the Articles of Incorporation are hereby deleted in their entirety, and the second paragraph of Article 4 is hereby amended to read as follows: |
“Every holder of common stock of the corporation shall be entitled to one (1) vote in person or by proxy on each matter submitted to a vote at a meeting of shareholders for each share of the common stock held by such holder as of the record date of such meeting.”
| 3. | The amendment was duly adopted by the Board of Directors of the Corporation on December 12, 2019. |
| 4. | The amendment was duly approved by the shareholders of the Corporation on April 22, 2020 in accordance with the provisions of O.C.G.A. §14-2-1003. |
| 5. | These Articles of Amendment shall be effective at Eastern Time on April , 2020. |
IN WITNESS WHEREOF, Synovus Financial Corp. has caused these Articles of Amendment to be executed by its duly authorized officer on this day of April, 2020.
SYNOVUS FINANCIAL CORP. | |||
| | |||
By: | |||
Name: | |||
Title: | |||
| - |
Appendix B-2: Amendment to Synovus’ Bylaws to Eliminate 10-1 Voting Provisions
THIS AMENDMENT to the Bylaws of Synovus Financial Corp, a Georgia corporation (the “Corporation”), is duly adopted by resolutions adopted by the Corporation’s Board of Directors on December 12, 2019 and duly approved by the shareholders of the Corporation on April 22, 2020.
Article II, Section 7 of the Bylaws of the Corporation is hereby amended to read as follows:
“Quorum, Voting and Proxy. Shareholders representing a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation shall constitute a quorum at a shareholders’ meeting. Any shareholder may be represented and vote at any shareholders’ meeting by proxy, which such shareholder has duly executed in writing or by any other method permitted by the Official Code of Georgia Annotated, filed with the Secretary of the corporation on or before the date of such meeting; provided, however, that no proxy shall be valid for more than 11 months after the date thereof unless otherwise specified in such proxy. Every holder of common stock of the corporation shall be entitled to one (1) vote in person or by proxy on each matter submitted to a vote at a meeting of shareholders for each share of the common stock held by such holder as of the record date of such meeting.”
IN WITNESS WHEREOF, the Corporation has caused this amendment to be executed by its duly authorized officer on this day of April, 2020.
SYNOVUS FINANCIAL CORP. | |||
Name: | |||
Title: | |||
B-2 | | - 2020 Proxy Statement |
Appendix C-1: Amendment to Synovus’ Amended and Restated Articles of Incorporation to Eliminate Supermajority Voting Requirements
| 1. | The name of the corporation is Synovus Financial Corp. (the “Corporation”). The Corporation is organized under the laws of the State of Georgia. |
| 2. | In connection with the Corporation’s decision to eliminate the super majority voting requirements in its Articles of Incorporation, Article 11 of the Articles of Incorporation is hereby amended to read as follows: |
“The shareholder vote required to: (i) approve: (a) any merger or consolidation of the corporation with or into any other corporation; or (b) the sale, lease, exchange or other disposition of all, or substantially all, of the assets of the corporation to or with any other corporation, person or entity, with respect to which the approval of the corporation’s shareholders is required by the provisions of the corporate laws of the State of Georgia; (ii) fix, from time to time, the number of members of the Board of Directors of the corporation; (iii) remove a member of the Board of Directors of the corporation; (iv) call a special meeting of the shareholders of the corporation; (v) alter, delete, rescind or amend any provision of the corporation’s bylaws, as amended; and (vi) alter, delete, rescind or amend any provision of the corporation’s Articles of Incorporation, as amended, shall be the affirmative vote by the holders of shares representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding common stock of the corporation.”
| 3. | The amendment was duly adopted by the Board of Directors of the Corporation on December 12, 2019. |
| 4. | The amendment was duly approved by the shareholders of the Corporation on April 22, 2020 in accordance with the provisions of O.C.G.A. §14-2-1003. |
| 5. | These Articles of Amendment shall be effective at Eastern Time on April , 2020. |
IN WITNESS WHEREOF, Synovus Financial Corp. has caused these Articles of Amendment to be executed by its duly authorized officer on this day of April, 2020.
SYNOVUS FINANCIAL CORP. | |||
By: | |||
Name: | |||
Title: | |||
| - 2020 Proxy Statement C-1 |
Appendix C-2: Amendment to Synovus’ Bylaws to Eliminate Supermajority Voting Requirements
| 1. | Article II, Section 3 is amended to read as follows: |
“Special Meetings. A special meeting of the shareholders of the corporation, for any purpose or purposes whatsoever, may be called at any time by the Chairman of the Board, the Chief Executive Officer, a majority of the Board of Directors, or one or more shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation. Such a call for a special meeting must state the purpose of the meeting. Unless otherwise determined by the Board of Directors, the Chairman of the Board or the Chief Executive Officer shall act as chairman at all special meetings. This section, as it relates to the call of a special meeting of the shareholders of the corporation by one or more shareholders representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation shall not be altered, deleted or rescinded except upon the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation.”
| 2. | Article II, Section 8 is amended to read as follows: |
“Voting Rights. The voting rights of shares of common stock of the corporation shall not be altered, deleted or rescinded except upon the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation.”
| 3. | Article III, Section 1 is amended to read as follows: |
“Number. The Board of Directors of the corporation shall consist of not less than 8 nor more than 25 Directors. The number of Directors may vary between said minimum and maximum, and within said limits, (i) the Board of Directors or (ii) the shareholders representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation may, from time to time, by resolution fix the number of Directors to comprise said Board. This section, as it relates to, from time to time, fixing the number of Directors of the corporation by (i) the Board of Directors or (ii) the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation, shall not be altered, deleted or rescinded except upon the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation.”
| 4. | Article III, Section 9 is amended to read as follows: |
“Removal. Any one or more Directors or the entire Board of Directors may be removed from office, with or without cause, by the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation at any shareholders’ meeting with respect to which notice of such purpose has been given. This section, as it relates to the removal of Directors of the corporation by the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation, shall not be altered, deleted or rescinded except upon the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation.”
| 5. | Article IX is amended to read as follows: |
“MERGERS, CONSOLIDATIONS, AND OTHER DISPOSITIONS OF ASSETS.
The affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation shall be required to approve any merger or consolidation of the corporation with or into any corporation, and the sale, lease, exchange or other disposition of all, or substantially all, of the assets of the corporation to or with any other corporation, person or entity, with respect to which the approval of the corporation’s shareholders is required by the provisions of the corporate laws of the State of Georgia. This Article shall not be altered, deleted or rescinded except upon the affirmative vote of the shareholders representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation.”
| 6. | Article XI is amended to read as follows: |
“AMENDMENT
Except as otherwise specifically provided herein, the bylaws of the corporation may be altered, amended or added to by the affirmative vote of the shareholders of the corporation representing at least a majority of the votes entitled to be cast by the holders of all of the issued and outstanding shares of common stock of the corporation present and voting therefor at a shareholders’ meeting or, subject to such limitations as the shareholders may from time to time prescribe, by a majority vote of all the Directors then holding office at any meeting of the Board of Directors.”
C-2 | | - 2020 Proxy Statement |
IN WITNESS WHEREOF, the Corporation has caused this amendment to be executed by its duly authorized officer on this day of April, 2020.
SYNOVUS FINANCIAL CORP. | |||
Name: | |||
Title: | |||
| - 2020 Proxy Statement C-3 |
Appendix B:D: Reconciliation ofNon-GAAP Financial Measures
Non-GAAP Financial Measures-Synovus 2017 Measures - Synovus 2019 Financial Performance
The measures entitled adjustednon-interest income; adjustednon-interest expense; expense, adjusted total revenues;revenue, adjusted tangible efficiency ratio; average core deposits; average core transaction deposits; average core transaction non-interest bearing deposits; adjusted return on average assets;ratio, adjusted net income per common share, diluted; adjusteddiluted, return on average tangible common equity;equity, and adjusted return on average tangible common equity; tangible book value per common share; and adjusted netcharge-off ratioequity are not measures recognized under GAAP and therefore are considerednon-GAAP financial measures. The most comparable GAAP measures to these measures are totalnon-interest income; totalnon-interest expense; expense, total revenues;FTE revenue, efficiency ratio; total average deposits; return on average assets;ratio-FTE, net income per common share, diluted;diluted, and return on average common equity; book value per common share;equity, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Synovus to assist management and netcharge-off ratio, respectively. Thesenon-GAAPinvestors in evaluating Synovus’ operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as substitutesa substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the respective comparable GAAPway our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies.
The computations Adjusted total revenue is a measure used by management to evaluate total revenue exclusive of adjustednet investment securities losses as well as gains on sale and changes in fair value of private equity investments, net. Adjusted non-interest income; adjustednon-interest expense; expense and the adjusted total revenues; adjustedtangible efficiency ratio; average core deposits; average core transaction deposits; average core transaction non-interest bearing deposits; adjusted returnratio are measures utilized by management to measure the success of expense management initiatives focused on average assets; adjustedreducing recurring, controllable operating costs. Adjusted net income per common share, diluted; adjusteddiluted is a measurement used by management to evaluate operating results exclusive of items that management believes are not indicative of ongoing operations and impact period-to-period comparisons. The return on average tangible common equity;equity is a measure used by management to compare Synovus’ performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The adjusted return on average tangible common equity;equity is a measure used by management in the same manner as the return on average tangible book value per common share;equity except it is exclusive of items that are not indicative of ongoing operations and adjusted netcharge-off ratio and the reconciliationsimpact period-to-period comparisons. The computations of these measures to their respective GAAP measures are set forth in the tables below:below.
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 | |||||
Years Ended December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Adjusted non-interest expense | ||||||
Total non-interest expense | $ | 1,098,968 | $ | 829,455 | ||
Subtract: Earnout liability adjustments | (10,457 | ) | (11,652 | ) | ||
Subtract: Merger related expense | (56,580 | ) | (10,065 | ) | ||
Add: Litigation settlement/contingency expense | — | 4,026 | ||||
Subtract/add: Restructuring charges, net | (1,230 | ) | 51 | |||
Subtract: Valuation adjustments to Visa derivative | (3,611 | ) | (2,328 | ) | ||
Subtract: Loss on early extinguishment of debt, net | (4,592 | ) | — | |||
Adjusted non-interest expense | $ | 1,022,498 | $ | 809,487 | ||
Adjusted total revenue and adjusted tangible efficiency ratio | ||||||
Adjusted non-interest expense | $ | 1,022,498 | $ | 809,487 | ||
Subtract: Amortization of intangibles | (11,603 | ) | (1,167 | ) | ||
Adjusted tangible non-interest expense | 1,010,895 | 808,320 | ||||
Net interest income | 1,595,803 | 1,148,413 | ||||
Add: Tax equivalent adjustment | 3,025 | 553 | ||||
Add: Total non-interest income | 355,900 | 280,093 | ||||
Total FTE revenue | $ | 1,954,728 | $ | 1,429,059 | ||
Add: Investment securities losses, net | 7,659 | 1,296 | ||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | |||
Adjusted total revenue | $ | 1,950,780 | $ | 1,435,098 | ||
Efficiency ratio-FTE | 56.22% | 58.04% | ||||
Adjusted tangible efficiency ratio | 51.82 | 56.33 | ||||
|
- 2018 Proxy Statement
B-1
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 | ||||||
Years Ended December 31, | ||||||
(in thousands, except per share data) | 2019 | 2018 | ||||
Adjusted net income per common share, diluted | ||||||
Net income available to common shareholders | $ | 540,899 | $ | 410,478 | ||
Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118 | 4,402 | (9,148 | ) | |||
Add: Earnout liability adjustments | 10,457 | 11,652 | ||||
Add: Preferred stock redemption charge | — | 4,020 | ||||
Add: Merger-related expense | 56,580 | 10,065 | ||||
Subtract: Litigation settlement/contingency expense | — | (4,026 | ) | |||
Add/subtract: Restructuring charges, net | 1,230 | (51 | ) | |||
Add: Valuation adjustment to Visa derivative | 3,611 | 2,328 | ||||
Add: Loss on early extinguishment of debt, net | 4,592 | — | ||||
Add: Investment securities losses, net | 7,659 | 1,296 | ||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | |||
Subtract: Tax effect of adjustments | (9,343 | ) | (1,008 | ) | ||
Adjusted net income available to common shareholders | $ | 608,480 | $ | 430,349 | ||
Weighted average common shares outstanding, diluted | 156,058 | 118,378 | ||||
Net income per common share, diluted | $ | 3.47 | $ | 3.47 | ||
Adjusted net income per common share, diluted | 3.90 | 3.64 | ||||
D-2 | | |
- |
APPENDIX B: RECONCILIATION OFNON-GAAPAppendix D: Reconciliation of Non-GAAP Financial Measures FINANCIAL MEASURES
Adjusted Net Income per Common Share, Diluted (continued)
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 | ) | |||||
|
|
|
| |||||
| 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 | ) | |||||
|
|
|
| |||||
| 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 | ) | ||||
|
|
|
| |||||
| 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 | |||||
- 2018 Proxy Statement
B-3
Years Ended December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Return on average tangible common equity and adjusted return on average tangible common equity | ||||||
Net income available to common shareholders | $ | 540,899 | $ | 410,478 | ||
Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118 | 4,402 | (9,148 | ) | |||
Add: Preferred stock redemption charge | — | 4,020 | ||||
Add: Earnout liability adjustments | 10,457 | 11,652 | ||||
Add: Merger-related expense | 56,580 | 10,065 | ||||
Subtract: Litigation settlement/contingency expense | — | (4,026 | ) | |||
Add/subtract: Restructuring charges, net | 1,230 | (51 | ) | |||
Add: Valuation adjustment to Visa derivative | 3,611 | 2,328 | ||||
Add: Loss on early extinguishment of debt, net | 4,592 | — | ||||
Add: Investment securities losses, net | 7,659 | 1,296 | ||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | |||
Subtract: Tax effect of adjustments | (9,343 | ) | (1,008 | ) | ||
Adjusted net income available to common shareholders | $ | 608,480 | $ | 430,349 | ||
Add: Amortization of intangibles | 8,598 | 893 | ||||
Adjusted net income available to common shareholders excluding amortization of intangibles | $ | 617,078 | $ | 431,242 | ||
Net income available to common shareholders | $ | 540,899 | $ | 410,478 | ||
Add: Amortization of intangibles | 8,598 | 893 | ||||
Net income available to common shareholders excluding amortization of intangibles | $ | 549,497 | $ | 411,371 | ||
Total average shareholders’ equity less preferred stock | $ | 4,384,458 | $ | 2,821,311 | ||
Subtract: Goodwill | (487,126 | ) | (57,315 | ) | ||
Subtract: Other intangible assets, net | (65,553 | ) | (10,424 | ) | ||
Total average tangible shareholders’ equity less preferred stock | $ | 3,831,779 | $ | 2,753,572 | ||
Return on average common equity | 12.34% | 14.55% | ||||
Return on average tangible common equity | 14.34 | 14.94 | ||||
Adjusted return on average tangible common equity | 16.10 | 15.66 | ||||
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 | ) | ||
|
| |||
| 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 | ) | ||||
|
|
|
| |||||
| 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 return on average assets, as adjusted, core earnings, adjustedpre-provision net revenue, and adjusted tangible 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 tangible efficiency ratio for our short-term incentive plan. The most comparable GAAP measures to these measures are return on average assets, net income, income before income taxes,total FTE revenue, and efficiency ratio,ratio-FTE, 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 and core earnings and adjustedpre-provision net revenue are measures utilizedmeasurements used by management to evaluate operating results exclusive of items that management believes are not indicative of ongoing operations items thatand impactperiod-to-period comparisons, and items that impact comparisons to other financial institutions. Adjusted revenue is a measure used by management to evaluate total revenue exclusive of net investment securities losses as well as gains on sale and changes in fair value of private equity investments, net. The adjusted tangible efficiency ratio is a measure utilized by management to measure the results fromsuccess of expense management exclusive of items that are not indicative of ongoing operations as well as items that impactperiod-to-period comparisons.initiatives focused on reducing recurring, controllable operating costs. Thesenon-GAAP financial measures should not be considered as substitutes for return on average assets, net income, income before income taxes,total FTE revenue, and the efficiency ratioratio-FTE determined in accordance with GAAP and may not be comparable to other similarly titled measures at other companies.
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APPENDIX B: RECONCILIATION OFNON-GAAPAppendix D: Reconciliation of Non-GAAP Financial Measures 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) | 2019 | 2018 | 2017 | ||||||
Net income | $ | 563,780 | $ | 428,476 | $ | 275,474 | |||
Adjustments: | |||||||||
Subtract: Cabela’s Transaction Fee | — | — | (75,000 | ) | |||||
Add: Loss on sale/disposition assets | — | — | 35,960 | ||||||
Add/Subtract: Changes in accounting or tax laws | 4,402 | (9,148 | ) | 42,334 | |||||
Subtract: Changes in income tax rates | (81,821 | ) | (83,643 | ) | — | ||||
Add: Merger-related expense | 56,580 | 10,065 | 110 | ||||||
Add: Earnout liability adjustments | 10,457 | 11,652 | 3,759 | ||||||
Subtract/add: Litigation settlement/contingency expense | — | (4,026 | ) | 701 | |||||
Add/subtract: Restructuring charges, net | 1,230 | (51 | ) | 7,014 | |||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | 3,093 | |||||
Add: Investment securities losses, net | 7,659 | 1,296 | 289 | ||||||
Add: Valuation adjustment to Visa derivative | 3,611 | 2,328 | — | ||||||
Add: Loss on early extinguishment of debt, net | 4,592 | — | 23,160 | ||||||
Total adjustments | (4,897 | ) | (66,784 | ) | 41,420 | ||||
Subtract/add: Tax effect of adjustments | (9,341 | ) | (1,008 | ) | 1,729 | ||||
Adjusted net income | $ | 549,542 | $ | 360,684 | $ | 318,623 | |||
Average assets | 46,791,930 | 31,668,847 | 30,787,288 | ||||||
Return on average assets | 1.20% | 1.35% | 0.89% | ||||||
Return on average assets, as adjusted | 1.174% | 1.139% | 1.035% | ||||||
Weighting per year | 50% | 25% | 25% | ||||||
3-Year weighted average return on average assets, as adjusted | 1.131% | ||||||||
D-4 | | - 2020 Proxy Statement |
| 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 | % | ||||||||||
Appendix D: Reconciliation of Non-GAAP Financial Measures
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 tangible efficiency ratio and the reconciliation of these measures to net income, income before taxes,total FTE revenue, and efficiency ratioratio-FTE are set forth in the tables below.
Years Ended December 31, | ||||||
(in thousands, except per share data) | 2019 | 2018 | ||||
Core earnings | ||||||
Net income | $ | 563,780 | $ | 428,476 | ||
Add/subtract: Income tax expense (benefit), net related to State Tax Reform and SAB 118 | 4,402 | (9,148 | ) | |||
Add: Earnout liability adjustments | 10,457 | 11,652 | ||||
Add: Merger-related expense | 56,580 | 10,065 | ||||
Subtract: Litigation settlement/contingency expense | — | (4,026 | ) | |||
Add/subtract: Restructuring charges, net | 1,230 | (51 | ) | |||
Add: Valuation adjustment to Visa derivative | 3,611 | 2,328 | ||||
Add: Loss on early extinguishment of debt, net | 4,592 | — | ||||
Add: Investment securities losses, net | 7,659 | 1,296 | ||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | |||
Subtract: Tax effect of adjustments | (9,343 | ) | (1,008 | ) | ||
Core earnings | $ | 631,361 | $ | 444,327 | ||
Years Ended December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Adjusted revenue and adjusted tangible efficiency ratio | ||||||
Adjusted non-interest expense | $ | 1,022,498 | $ | 809,487 | ||
Subtract: Amortization of intangibles | (11,603 | ) | (1,167 | ) | ||
Adjusted tangible non-interest expense | 1,010,895 | 808,320 | ||||
Net interest income | 1,595,803 | 1,148,413 | ||||
Add: Tax equivalent adjustment | 3,025 | 553 | ||||
Add: Total non-interest income | 355,900 | 280,093 | ||||
Total FTE revenue | $ | 1,954,728 | $ | 1,429,059 | ||
Add: Investment securities losses, net | 7,659 | 1,296 | ||||
Subtract/add: Gain on sale and (increase) decrease in fair value of private equity investments, net | (11,607 | ) | 4,743 | |||
Adjusted revenue | $ | 1,950,780 | $ | 1,435,098 | ||
Efficiency ratio-FTE | 56.22% | 58.04% | ||||
Adjusted tangible efficiency ratio | 51.82 | 56.33 | ||||
| - 2020 Proxy Statement D-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
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) | ||||
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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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