UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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| ☐ | Soliciting Material Pursuant to §240.14a-12 |
THE BANK OF NEW YORK MELLON CORPORATION
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Dear Fellow Stockholder:
On behalf of our Board of Directors, we cordially invite you to our From any vantage point, and by any measure, 2020 was an unprecedented year replete with unique challenges. Through it all, BNY Mellon adapted and adjusted to ensure we continued to deliver on our commitments. Our priority throughout the year was — and continues to be — ensuring that we support our employees, clients, customers, communities and stockholders. As a dedicated corporate citizen and recognizing the massive impact of the COVID-19 pandemic, we continue to seek ways to provide support to frontline workers and communities at large. As part of these efforts, we committed over $20 million of aid to nonprofit partners across the globe to deliver relief from the COVID-19 pandemic and strengthen the wellbeing of underrepresented communities. Our support strategically focused on bolstering public health infrastructure, providing front-line relief and social service aid to those most affected by the COVID-19 pandemic. In addition, management and the Board of Directors closely collaborated throughout the year to ensure that we created a stable, healthy and supportive environment for our employees, especially our essential in-office staff. In 2020, some much needed light was shed on social justice and racial equality issues in our communities. We remain steadfast in our commitment to making and sustaining necessary, positive change to build and strengthen a diverse, equitable and inclusive culture. For example, to drive significant positive movement and accelerate progress with respect to our most underrepresented ethnic talent populations, and help position our firm as a competitive choice with Black and Latinx professionals, we set some concrete, short-term representation goals in the U.S. In addition, we are proud to have one of the most diverse Boards of Directors among our peers. We value the perspectives our directors bring to bear on these issues of great importance facing our business and the communities in which we operate. We believe that our director nominees will continue to partner with management to drive our commitment to social justice and racial equality initiatives in our communities.
We value
At this year’s Annual Meeting, you will be asked to vote on several items, including the election of directors, our
Your vote is important to us, and we hope that you will participate in the Annual Meeting
Looking forward, we are excited about the business opportunities we have to serve our clients and drive change as we advance, and to harness the lessons learned, from the challenges of 2020. Thank you for your |
Sincerely,
TODD GIBBONS
March |
JOSEPH J. ECHEVARRIA Chair of the Board
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| BNY Mellon Ø | | 1 |
| NOTICE OF ANNUAL MEETING | ||||
WEDNESDAY,TUESDAY, APRIL 15, 202013, 2021
9:00 a.m., Eastern timeTime
240 Greenwich Street, New York, New York 10286*Via Live Webcast Available At www.virtualshareholdermeeting.com/BK2021
Record Date: February 18, 202016, 2021
AGENDA |
BOARD RECOMMENDATION |
1. To elect the | FOR each director nominee | |
2. To provide an advisory vote for approval of the | FOR | |
3. To ratify the appointment of KPMG LLP as our independent auditor for | FOR | |
4. To consider a stockholder proposal regarding stockholder requests for a | ||
| AGAINST | |
We will also act on any other business that is properly raised.raised at the meeting.
Please note that the 2021 Annual Meeting of Stockholders will be held solely by means of remote communication. You will be able to attend the Annual Meeting, vote your shares and submit your questions, if any, during the meeting via a live webcast available at www.virtualshareholdermeeting.com/BK2021. Additional details, including instructions for accessing the live webcast for the Annual Meeting and obtaining technical support, can be found in the “Annual Meeting Q&A” section starting on page 94 of the 2021 Proxy Statement. |
March 3, 20202, 2021
By Order of the Board of Directors,
JAMES J. KILLERLANE III
Corporate Secretary
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IT IS IMPORTANT THAT YOU CAREFULLY READ YOUR PROXY STATEMENT AND VOTE.
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Important Notice Regarding the Availability of Proxy Materials for the
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| 2 | BNY Mellon Ø | |
| INTRODUCTION | ||||
2019 PerformanceThe following summary highlights certain information contained in this proxy statement and provides context related to the matters to be voted on at the 2021 Annual Meeting of Stockholders of The Bank of New York Mellon Corporation (the “company,” “BNY Mellon,” “we,” “our” or “us”). You should read the entire proxy statement carefully before voting.
Business Highlights
Established in 1784 by Alexander Hamilton, we were the first company listed on the New York Stock Exchange (NYSE: BK). With a history of more than 235 years, BNY Mellon is a global company that manages and services assets for financial institutions, corporations and individual investors in 35 countries. We power success across the financial world for individuals and institutions through unique insights, thinking and actions. Businesses, communities and global economies rely on us because we prioritize client experience, collaboration, innovation and resilience. As the “bank of banks,” our unique perspective, informed by one of the largest datasets in the world, powers the financial industry. At BNY Mellon, we understand the best way to succeed at anything is to Consider Everything.
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The information above is presented
Throughout the COVID-19 pandemic, we have remained focused on the health and wellbeing of our employees, providing continuity of service to our clients and maintaining our balance sheet strength while using it to support clients and markets. We were proud to provide contextthe infrastructure for several critical government programs for COVID-19 pandemic relief, including the Term Asset-Backed Securities Loan Facility, Municipal Liquidity Facility, Primary Dealer Credit Facility and the Payment Protection Program. Despite the unprecedented global market disruption, we stayed fully operational, demonstrating our resiliency and our capacity to support our clients when they needed us most. Our lower risk, fee-based business model positioned us relatively well for the operationchallenging environment and we generated significant capital.
In the early days of the COVID-19 pandemic, we were quick to initiate our business continuity plans and to restrict activities such as travel and in-person participation in events and large meetings. We quickly transitioned the vast majority of our compensationemployees, including our senior management and key personnel, to working from home, which opened up space for us to create social distancing for the small number of essential in-office staff. These essential in-office staff are primarily performing roles that cannot be done remotely. We are taking a conservative and measured approach in assessing how, and when, we will return employees to our offices when the COVID-19 pandemic subsides. This phased, enterprise-wide approach is principles-based, centrally coordinated and localized based on the situation. Our guiding principles are adherence to government/jurisdictional guidelines, facility preparedness, business function prioritization, and staff safety and wellbeing.
BNY Mellon’s holistic approach to employee wellbeing is designed to create a healthy, resilient and vibrant workforce and to support the health, wellbeing and safety of our employees in all our facilities. Our programs provide employees easy access to resources to help improve their physical health, emotional resilience, financial wellbeing and social connections. Our programs include:
A comprehensive Supporting You Now COVID-19 framework, which communicates the array of measures to support our employees during the COVID-19 pandemic. These measures include expanded employee assistance program benefits, telehealth coverage, increased back-up dependent care benefits, virtual babysitting services and toolkits for managers and employees to conduct supportive conversations around life balance needs.
Our Global Wellbeing Program, which is discussed throughout our Compensation Discussionuses multiple internal communication channels to promote employee wellbeing. We engage employees and Analysis beginningtheir covered spouses/domestic partners in various activities through a digital app and website that facilitates connecting and getting healthy with others. Ideally suited to a remote work scenario, this platform was adapted to better address employee needs during the COVID-19 pandemic, and offers activities including global team step challenges, healthy habit promotions and guided meditation and yoga sessions.
MeQuilibrium (“meQ”), a digital stress management program that we launched early in the COVID-19 pandemic and that focuses on page 37 of this proxy statement.developing personal resiliency. The meQ microsite helps improve employee mental health and wellbeing by providing quick tips for helping to manage the day-to-day anxiety caused by COVID-19.
| BNY Mellon Ø | | 3 |
| INTRODUCTION | ||||
Corporate Social ResponsibilityOur ‘It’s OK’ campaign, which aligned with World Mental Health Day in October. Our aim was to remind ourselves and our colleagues that it’s OK to pause to focus on self-care, to check in on a teammate or to take care of responsibilities outside of work.
BNY Mellon isIn addition to supporting our employees, we were committed to using our reach, market influence and resourcessupporting community initiatives. We committed over $20 million of aid to address pressing global issues. As a major global financial institution, we considernonprofit partners across the impacts that our business has onglobe to deliver relief from the environment and society and in turn, how climate-related risks and societal needs present opportunities for our company. We strive to contribute to sustainable economic growth that protects healthy markets, enhances our own business resiliency and longevity, and delivers positive impact for key stakeholders such as clients, employees, stockholders and communities.
We help our clients manage their environmental, social and governance (“ESG”) related risks and opportunities, such as those relating to climate, by continuing to develop and offer ESG products and services.
BNY Mellon’s Corporate Social Responsibility (“CSR”) strategy is built on three pillars that correspond with what is currently most relevant to the company and our stakeholders. The pillars are as follows:COVID-19 pandemic. Our community response included:
CulturePhilanthropic donations to the hardest-hit areas in support of global public health infrastructure through non-profit partners, including the CDC Foundation, the International Medical Corps and PurposeSave the Children.
Our purpose is guided
Commitments to local hospitals including: Brooklyn Hospital and New York-Presbyterian Hospital.
Providing 600 tablets to the NYC Health + Hospitals system. This commitment from our Technology team enables COVID-19 patients to connect with loved ones while they are in isolation at the hospital.
Supporting local organizations that provide front-line and direct relief in the COVID-19 outbreak, including by providing personal protective equipment, medical equipment, meals, shelter, transportation, sanitation items, educational supplies, childcare programs and financial support during the COVID-19 pandemic to first responders, healthcare, transit and other front-line workers, and some of our corecommunities’ most vulnerable populations.
While 2020 was a year of disruption and challenges, we have remained focused on our strategic priorities: driving growth, scaling and digitizing our operating model and evolving our high-performance culture. Integral to the advancement of these priorities are the values and behaviors that shape what we do and how we do it. To that end, in 2020, the company introduced a new set of client focus, integrity, teamwork,company values: Passion for Excellence, Integrity, Strength in Diversity, and excellence.Courage to Lead; as well as key behaviors supporting those values. Together, our purpose and values drive our culture, which is built on our commitment to diversity and inclusion, leadership and development, employee engagement and wellbeing, and community partnership.
Responsible Business
We believe responsible business is simply just good business. As a major global financial institution, we have an important role to play in contributing to market integrity. As such, we believe the trust of our clients, the transparency of our business, our technological resilience and providing ESG solutions to the global investing community are paramount.
Global Citizenship
As one of the most trusted financial institutions, we are committed to operating responsibly and sustainably. As we drive toward success, we integrate our commitment to environmental sustainability and human rights across the business. We also work to improve the effectiveness of our supply chain and seek suppliers whose corporate values align with ours. Additionally, we engage stakeholders on public policy initiatives important to our company.
This work is reported to the Corporate Governance, Nominating and Social Responsibility Committee (“CGNSR Committee”) of our Board of Directors (the “Board”). For additional information, see “Committees and Committee Charters” on page 28. For information on ourCSR-related policies, see “Helpful Resources” on page 87.impact.
| 4 | BNY Mellon Ø | |
| INTRODUCTION | ||||
Awards2020 Financial Performance Highlights
A detailed discussion of our 2020 performance can be found in “Management’s Discussion and RecognitionAnalysis of Financial Condition and Results of Operations” in our 2020 Annual Report to stockholders. The following presents certain information regarding our 2020 performance that the Human Resources and Compensation Committee (“HRC Committee”) of our Board of Directors (the “Board”) considered in approaching compensation decisions for 2020, as detailed in the “Compensation Discussion & Analysis” section of this proxy statement, which begins on page 49.
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Multi-Year Relative Total Stockholder Return (“TSR”)
2019
| BNY Mellon Ø | | 5 |
| INTRODUCTION | ||||
DIRECTOR NOMINEES & COMMITTEE MEMBERSHIPSRecognition and Awards
The strengthWe were honored to be the recipients of our Board rests upona number of awards and recognitions through 2020, including the variety of our directors’ experience, diversity, differing perspectives and institutional knowledge.
Global Custodian of the Year — Global Investor MENA Awards |
| Best Global Custodian for International Clients — The Asset Triple A Award | Alternatives Fund Services Project of the Year (EZOPS) — Global Custodian Magazine | Best in Collateral Management — The Asset Triple A Award | ||||||||
2020 Best Model Bank Award, Payment Operations — Celent Model Bank | Technology Innovation of the Year, ESG Data Analytics Application — Global Investment Group Investment Excellence | 2020 Best Places to Work for LGBTQ Equality, 100% Score — The Human Rights Campaign | 2020 Disability Equality Index Best Places To Work, 100% Score — Disability: IN | |||||||||
2020 Bloomberg Gender Equality Index — Bloomberg | 2020 DJSI North America Index — S&P Dow Jones Indices | 2020 FTSE4Good Russell Index — FTSE Russell | 2020 Fortune World’s Most Admired Companies — Fortune Magazine |
COMMITTEE MEMBERSHIPSEnvironmental, Social and Governance (“ESG”)
As one of the most trusted financial institutions, we are committed to operating responsibly and sustainably. We integrate our commitment to environmental sustainability and human rights across our business. We also work to improve the effectiveness of our supply chain and seek suppliers whose corporate values align with ours. Additionally, we engage with stakeholders on public policy initiatives important to our company. Our highlights in these areas include:
financial aid contributed to nonprofit partners across the globe in support of COVID-19 relief efforts and the wellbeing of underrepresented communities;
DIRECTOR NOMINEES & COMMITTEE MEMBERSHIPS The strengththe creation of our Board rests upon the variety of our directors' experience, diversity, differing perspectivesan ESG Data Analytics application as a cloud-based solution that mass-customizes investment portfolios to clients’ individual ESG factor preferences; and institutional knowledge. *Does not include Frederick O. Terrell, who is a nominee and does not currently serve on our Board. COMMITTEE MEMBERSHIPS Name and Occupation Linda Z. Cook Partner and Managing Director of EIG Global Energy Partners and CEO of Harbour Energy, Ltd. Joseph J. Echevarria Retired CEO of Deloitte LLP Thomas P. "Todd" Gibbons Interim Chief Executive Officer ("Interim CEO") of The Bank of New York Mellon Corporation Jeffrey A. Goldstein Chairman, SpringHarbor Holding Company LLC, Advisor Emeritus, Hellman & Friedman LLC, Senior Advisor, Canapi Ventures, and Former Under Secretary of the Treasury for Domestic Finance Edmund F. "Ted" Kelly Retired Chairman of Liberty Mutual Group Jennifer B. Morgan Co-Chief Executive Officer ("CEO") and Executive Board member of SAP SE Elizabeth E. Robinson Retired Global Treasurer of The Goldman Sachs Group, Inc. Samuel C. Scott III Retired Chairman, President & CEO of Ingredion Incorporated Frederick O. Terrell (2) Retired Executive Vice Chairman of Investment Banking and Capital Markets at Credit Suisse Group AG Alfred W. "Al" Zollar Executive Partner at Siris Capital Group, LLC Director Since 2016 2015 2019 2014 2004 2016 2016 2003 N/A 2019 0 3 0 0 0 0 0 1 1 2 (1) Financial expert within the meaning of the Securities and Exchange Commission ("SEC") rules. (2) Frederick O. Terrell is a nominee who does not currently serve on our Board. Subject to his election at our 2020 Annual Meeting, the CGNSR Committee will consider, and make a recommendation to the Board, regarding the appointment of Mr. Terrell to one or more Committees of the Board.
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Additional detail regarding the company’s Enterprise Environmental, Social and Governance (“Enterprise ESG”) strategy, including its commitments to culture and purpose, responsible business and global citizenship, and the Board’s oversight role, can be found starting on page 33.
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| 6 | BNY Mellon Ø | |
| INTRODUCTION | ||||
GOVERNANCEBoard Leadership and Composition
The 12 director nominees standing for election at the Annual Meeting contribute to the Board’s overall depth of experience, diversity, differing perspectives and institutional knowledge. 11 of the director nominees are independent, including the Chair of the Board, Joseph Echevarria. The only nominee who is a member of management is our Chief Executive Officer (“CEO”), Todd Gibbons.
| * | Does not include M. Amy Gilliland and K. Guru Gowrappan, each of whom is a nominee and currently does not serve on the Board. |
Our Board is committed to fostering and maintaining its diversity. In addition to valuing diversity of viewpoints, professional experience, tenure, education, skills and expertise, the Board also seeks to include directors with diverse backgrounds, including with respect to race, gender, ethnicity and sexual orientation, to capture the benefits inherent in diverse perspectives. As a result of this commitment, our Board has approved a slate of nominees for election at the 2021 Annual Meeting that is 25% female and over 41% diverse on the basis of race or ethnicity. In addition, four of the six standing committees of the Board are chaired by a diverse director based on race or gender.
Detailed information about each nominee’s qualifications, experience, skills and expertise along with select professional and community contributions can be found starting on page 14.
| BNY Mellon Ø | 2021 Proxy Statement | 7 |
| INTRODUCTION | ||||
Director Nominees and Committee Membership
Name and Occupation Linda Z. Cook Partner and Managing Director of EIG Global Energy Partners and CEO of Harbour Energy, Ltd. Joseph J. Echevarria Independent Chair of the Board of The Bank of New York Mellon Corporation; Retired CEO of Deloitte LLP Thomas P. "Todd" Chief Executive Officer of The Bank of New York Mellon Corporation M. Amy Gilliland(2) Senior Vice President of General Dynamics Corporation and President of General Dynamics Information Technology Jeffrey A. Goldstein Senior Advisor at Canapi Ventures, Advisor Emeritus at Hellman & Friedman LLC, and Former Under Secretary of the Treasury for Domestic Finance K. Guru Gowrappan(2) Executive Vice President of Verizon Communications Inc. and CEO of Verizon Media Group and Executive Vice President of Verizon Communications Inc. Ralph Izzo Chairman, President and CEO of Public Service Enterprise Group Incorporated Edmund F. "Ted" Kelly Retired Chairman of Liberty Mutual Group Elizabeth E. Robinson Retired Global Treasurer of The Goldman Sachs Group, Inc. Samuel C. Scott III Retired Chairman, President & CEO of Ingredion Incorporated Frederick O. Terrell Senior Advisor at Centerbridge Partners, L.P. Alfred W. "Al" Zollar Executive Partner at Siris Capital Group, LLC Director Since 2016 2015 2019 2014 2020 2004 2016 2016 2003 2020 2019 Independent Audit Corp. Gov., Nom. & Social Resp. Finance Human Res. & Comp. Risk Technology Other Current Public Company BoardsName and Occupation Linda Z. Cook Partner and Managing Director of EIG Global Energy Partners and CEO of Harbour Energy, Ltd. Joseph J. Echevarria Chairman of the Board of The Bank of New York Mellon Corporation; Retired CEO of Deloitte LLP Thomas P. "Todd" Gibbons Chief Executive Officer of The Bank of New York Mellon Corporation Jeffrey A. Goldstein Senior Advisor at Canapi Ventures, Advisor Emeritus at Hellman & Friedman LLC, and Former Under Secretary of the Treasury for Domestic Finance Ralph Izzo Chairman, President and CEO of Public Service Enterprise Group Incorporated Edmund F. "Ted" Kelly Retired Chairman of Liberty Mutual Group Jennifer B. Morgan Global Head of Portfolio Transformation and Talent of The Blackstone Group Inc. Elizabeth E. Robinson Retired Global Treasurer of The Goldman Sachs Group, Inc. Samuel C. Scott III Retired Chairman, President & CEO of Ingredion Incorporated Frederick O. Terrell Senior Advisor at Centerbridge Partners, L.P. Alfred W. "Al" Zollar Executive Partner at Siris Capital Group, LLC Director Since 2016 2015 2019 2014 2020 2004 2016 2016 2003 2020 2019 Independent Audit Corp. Gov., Nom. & Social Resp. Finance Human Res. & Comp. Risk Technology Other Current Public Company Boards 0 3 0 1 1 0 0 1 1 1 2
| (1) | Jennifer B. Morgan, an independent director and a member of the Board’s Audit Committee and Technology Committee, will not be standing for re-election at our 2021 Annual Meeting. |
| (2) | Ms. Gilliland and Mr. Gowrappan are nominees who currently do not serve on our Board. Subject to their election at our 2021 Annual Meeting, the CGNSR Committee will consider and make a recommendation to the Board regarding the appointments of Ms. Gilliland and Mr. Gowrappan to one or more committees of the Board. |
| (3) | Financial expert within the meaning of the Securities and Exchange Commission (“SEC”) rules. |
‘C’ indicates Committee Chair.
| 8 | BNY Mellon Ø | 2021 Proxy Statement |
| INTRODUCTION | ||||
Corporate Governance Highlights
We believe that the strength of our business reflects the high standards set by our governance structure. Several of our key governance practices are outlined below. For a detailed discussion of our corporate governance framework, please refer to “Corporate Governance and Board Information” beginning on page 22.
Robust Stockholder Rights | Active, Independent Board | Our Culture | ||
• Annual election of directors
• Special meeting rights for stockholders, individually or in a group, holding 20% of our outstanding common stock
• Written consent rights that allow stockholders representing at least the minimum number of votes that would be necessary to take action at a meeting to take the action without formally meeting
• Proxy access allows stockholders, individually or in a group of up to 20, holding 3% of our outstanding stock for at least 3 years, to nominate up to 20% of the Board
• Majority voting in uncontested director elections (each director must be elected by a majority of votes cast)
• A director who does not receive a majority of votes cast is required to tender his or herresignation upon certification of the vote
• No supermajority voting:stockholder actions require only a majority of votes cast (not a majority of shares present and entitled to vote)
• No “poison pill” |
• Active engagement with stakeholders
• Independent board
• Strong independent board leadership: The
• Our independent Chair may call aspecial meeting of the independent directors or full Board
• Board succession and refreshment
• High rate of attendance at Board and committee meetings, with average
• • Board and committees have access to independent legal, financial and other advisors • Independent directors have unlimited access to company officers and employees • Committees report on their activities to the Board at each Board meeting to ensure oversight and accountability |
• We arerisk-aware and
• Our codes of conduct, which apply to all employees and directors,
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• Innovative and evolving education and talent development at all levels, including
• Committed to a robust corporate governance framework as signatories
• • Endorsed the Business Roundtable’sStatement on the Purpose of a Corporation, publicly reinforcing our commitment to all our stakeholders
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| BNY Mellon Ø | |
| INTRODUCTION | ||||
Compensation Principles and Practices
Our compensation program is designed to compensate our executive officers for performance in a manner that is aligned with our stockholders’ interests and consistent with our high standards for risk management. For 2020, the HRC Committee determined to maintain its general approach to our annual compensation program. Accordingly, our 2020 executive compensation program continued to feature operating earnings per share (“OEPS”) as the key performance assessment metric for determining incentive awards. The following table summarizes the key components of our compensation program for 2020, and a detailed discussion, including with respect to the compensation decisions for our Named Executive Officers (“NEOs”), is provided in the “Compensation Discussion & Analysis” section of this proxy statement, which begins on page 49.
Program Feature | Practice | |
Balanced approach for incentive compensation | • Incentive compensation is earned on a combination of corporate and individual performance • Impact of the individual modifier permits incentive award increases of up to 50% and decreases down to $0, providing flexibility for greater differentiation based on individual performance and, if appropriate, business unit performance • Earnout on Performance Share Units (“PSUs”) granted in 2018, 2019 and 2020 tied to 3-year average revenue growth, as adjusted, and 3-year average operating margin, as adjusted, to augment the OEPS metric in our balanced scorecard with complementary top- and bottom-line metrics; Earnout on PSUs granted in 2021 tied to Return on Average Tangible Common Equity and relative Total Stockholder Return to focus on revenue growth, expense management, capital efficiency, and greater alignment with stockholder interests | |
Directly link pay to performance | • Incentive compensation deferred in the form of PSUs comprises 50% of target total incentive compensation for our CEO and comprises 45% for our other continuing NEOs • Incentive compensation deferred in the form of restricted stock units (“RSUs”) comprises 25% of target total incentive compensation for our continuing NEOs • Corporate component metric for incentive compensation based on OEPS reinforces management’s focus on company-wide performance and organic growth | |
Promote long-term stock ownership | • Deferred equity (PSUs and RSUs) comprises 75% of target total incentive compensation for our CEO and comprises 70% for our other continuing NEOs • PSUs cliff vest after the end of a three-year performance period, and RSUs vest in equal installments over three years • Robust policies prohibit hedging and pledging of company stock and derivative securities • Our CEO must acquire and retain company stock equal to six times base salary, and other NEOs must acquire and retain stock equal to four times base salary, plus, in each case, an additional amount equal to one times base salary to provide a cushion against stock volatility | |
| 10 | BNY Mellon Ø | 2021 Proxy Statement |
| INTRODUCTION | ||||
2020 Target Direct Compensation Structure*
| * | Calculations include annual target incentive compensation only to our continuing NEOs and exclude one-time awards made in connection with hiring or to promote continuity as discussed below. |
| BNY Mellon Ø | 2021 Proxy Statement | 11 |
| ITEM 1. ELECTION OF DIRECTORS | > Resolution | |||
Proposal
We are asking stockholders to elect the 1012 nominees named in this proxy statement to serve on theour Board of The Bank of New York Mellon Corporation (the “company,” “BNY Mellon,” “we” or “us”) until the 20212022 Annual Meeting of stockholdersStockholders or until their successors have been duly elected and qualified.
Background
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• The Board and | The Board recommends that you vote “FOR” each of the nominees described below.
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• The nominees have skills and expertise in a wide range of areas, including technology and cybersecurity, accounting, financial services and private equity, financial regulation,
• The nominees are able to devote the necessary time and effort to BNY Mellon matters. | ||||
Voting
We do not know of any reason why any nominee named in this proxy statement would be unable to serve as a director if elected. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as may be nominated in accordance with ourby-laws, as described on page 17. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Each director will be elected if more votes are cast “for” the director’s election than are cast “against” the director’s election. Abstentions and brokernon-votes are not counted as a vote cast either “for” or “against” the director’s election and therefore have no effect on voting outcomes. Pursuant to our Corporate Governance Guidelines, if any incumbent director fails to receive a majority of the votes cast, the director will be required to tender his or her resignation promptly after the certification of the stockholder vote. OurThe CGNSR Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject it, or whether other actions should be taken. More information on our voting standard and the CGNSR Committee’s consideration of tendered resignations is provided on page 1721 below.
We are unaware of any reason that a nominee named in this proxy statement would be unable to serve as a director if elected. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as may be nominated in accordance with our by-laws, as described on page 21. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
| BNY Mellon Ø | |
| ITEM 1. ELECTION OF DIRECTORS | > Nominees | |||
| Linda Z. Cook
Age
Independent Director since 2016
Partner and Managing Director, EIG Global Energy Partners and CEO of Harbour Energy, Ltd.
Retired Executive Committee Member and Director of Royal Dutch Shell plc
Committees:Human Resources and Compensation (Chair), Audit, Corporate Governance, Nominating and Social Responsibility
Other Current Public Company Board Service: None |
| Joseph J. Echevarria
Age
Independent Director since 2015; Lead Director from 2016 through September 2019; Chair since September 2019
Retired CEO of Deloitte LLP
Committees: Audit (Chair), Corporate Governance, Nominating and Social Responsibility, Finance
Other Current Public Company Board Service: Pfizer Inc., Unum Group, Xerox Corporation |
Ms. Cook is a Partner, Managing Director and member of the Executive Committee of EIG Global Energy Partners, an investment firm focused on the global energy industry, and CEO of Harbour Energy, Ltd., an energy investment vehicle. Ms. Cook joined EIG in 2014, after spending over 29 years with Royal Dutch Shell at various companies in the U.S., the Netherlands, the United Kingdom and Canada. At her retirement from Royal Dutch Shell, Ms. Cook was a member of the Executive Committee in the Netherlands headquarters and a member of the Board of Directors. Her primary executive responsibility was Shell’s global upstream Natural Gas business in addition to oversight for Shell’s global trading business, Shell Renewable Energy, and Shell’s Downstream R&D and Major Projects organizations. Ms. Cook previously was CEO of Shell Canada Limited, CEO of Shell Gas & Power and Executive VP of Finance, Strategy and HR for Shell’s global Exploration and Production business.
Ms. Cook chairs the Board of Directors of Chrysaor Holdings Limited, a private company in the oil and gas business. Ms. Cook has previously served on the Boards of Directors of KBR, Inc., The Boeing Company, Marathon Oil Corporation, Cargill Inc., Royal Dutch Shell plc, Royal Dutch Shell Petroleum Co. NV and Shell Canada Limited. Ms. Cook is also a member of the Society of Petroleum Engineers and is a Trustee of the University of Kansas Endowment Association. Ms. Cook earned a Bachelor of Science degree in Petroleum Engineering from the University of Kansas.
| Skills and Expertise: |
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Mr. Echevarria served as CEO of Deloitte LLP, a global provider of professional services, from 2011 until his retirement in 2014. Mr. Echevarria previously served in increasingly senior leadership positions during his36-year career at the firm, including U.S. Managing Partner for Operations, prior to being named CEO. In addition to the public company board service noted above, Mr. Echevarria currently serves as a Trustee and Senior Advisor to the President of the University of Miami. Mr. Echevarria previously served as Chairman of President Obama’s My Brother’s Keeper Alliance and as a Member of the Private Export Council, the principal national advisory committee on international trade. Mr. Echevarria earned his bachelor’s degree in business administration from the University of Miami.
| Skills and Expertise: |
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| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| Thomas P. “Todd” Gibbons
Age
Management Director since 2019
Committees: None
Other Current Public Company Board Service: None |
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Age
Other Current Public Company Board Service: None |
Mr. Gibbons has served as our Interim CEO since March 2020 and as our interim CEO from September 2019.2019 until March 2020. During his career at BNY Mellon, Mr. Gibbons has held leadership roles across risk, finance, client management and many of our businesses. Most recently, he served as Vice Chairman and CEO of Clearing, Markets and Client Management. Mr. Gibbons also served from 2008 through 2017 as BNY Mellon’s Chief Financial Officer. Previously, for nearly a decade, he was Chief Risk Officer of The Bank of New York Company, Inc., overseeing credit, operational and market risk management. Mr. Gibbons also served for one year as the Chief Financial Officer of The Bank of New York Company, Inc. Mr. Gibbons served as a director of PHH Corporation, a financial services company, from 2011 until 2017.
Mr. Gibbons is a member of our Executive Committee, the organization’s most senior management body. He also serves on the board of the Institute of International Finance and on the advisory board of Wake Forest University’s Business School.
He holds a B.S. in Business Administration from Wake Forest University and an MBA from Pace University.
| Skills and Expertise: |
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Ms. Gilliland is president of General Dynamics Information Technology (“GDIT”), a business unit of General Dynamics Corporation. GDIT provides technology networks and systems and professional services for U.S. defense, intelligence, federal agency, and state and local government customers. Before being named president in September 2017, Ms. Gilliland served as GDIT’s deputy for operations and was responsible for all aspects of the company’s business operations. Ms. Gilliland joined General Dynamics in 2005 and has served in a variety of leadership roles, including senior vice president of human resources and administration, chief of staff for the chief executive officer and staff vice president of strategic planning, staff vice president of investor relations, and director of strategic planning.
Prior to joining General Dynamics, Ms. Gilliland served in the U.S. Navy as a surface warfare and public affairs officer.
Ms. Gilliland earned a bachelor’s degree with distinction from the U.S. Naval Academy, a master’s degree from Cambridge University and a master’s degree in business administration from Georgetown University.
| Skills and Expertise: |
| BNY Mellon Ø | 2021 Proxy Statement | 15 |
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| Jeffrey A. Goldstein Age 65 Independent Director since 2014 Senior Advisor and member of the Investment Committee, Canapi Ventures; Advisor Emeritus, Hellman & Friedman LLC; and Former Under Secretary of the Treasury for Domestic Finance Committees: Finance (Chair), Human Resources and Compensation, Risk Other Current Public Company Board Service: Fidelity National Information Services, Inc. |
| K. Guru Gowrappan Age 40 Director Nominee Chief Executive Officer of Verizon Media Group and Executive Vice President, Verizon Communications Inc. Other Current Public Company Board Service: None |
Mr. Goldstein is a Senior Advisor and member of the ChairmanInvestment Committee of SpringHarbor Holding Company LLC,Canapi Ventures, a venture capital fund specializing in financial services advisertechnology companies and investor,an Advisor Emeritus at Hellman & Friedman LLC, a private equity firm, and Senior Advisor at Canapi Ventures, a venture capital fund specializing in financial technology companies. He was the CEO of SpringHarbor Financial Group LLC from December 2016 through 2018.firm. Mr. Goldstein was a Managing Director at Hellman & Friedman LLC from 2004 to 2009 and from 2011 to 2016 and a Senior Advisor from 2016 to 2019. He was Under Secretary of the Treasury for Domestic Finance and Counselor to the Secretary of the Treasury from 2009 to 2011.
Mr. Goldstein worked at James D. Wolfensohn Inc. and successor firms for 15 years. When Wolfensohn & Co. was purchased by Bankers Trust in 1996, he served asco-chairman of BT Wolfensohn and as a member of Bankers Trust’s management committee. In 1999, Mr. Goldstein became a managing director of the World Bank. He also served as its Chief Financial Officer beginning in 2003. In July of 2009, President Barack Obama nominated Mr. Goldstein to be Under Secretary of the Treasury for Domestic Finance. In July 2011, Secretary of the Treasury Timothy F. Geithner awarded Mr. Goldstein with the Alexander Hamilton award, the Treasury Department’s highest honor for a presidential appointee. Earlier in his career, Mr. Goldstein taught economics at Princeton University and worked at the Brookings Institution. In addition to the public company board service noted above, Mr. Goldstein served on the boards of directors of Westfield Corporation from 2016 to 2018 and Edelman Financial Services, LLC from 2015 to 2018. Mr. Goldstein is on the Advisory Board of Promontory Financial Group, LLC and the Board of Trustees of Vassar College. Mr. Goldstein earned a Bachelor of Arts degree from Vassar College and a Master of Arts, Master of Philosophy and a Ph.D. in economics from Yale University.
| Skills and Expertise: |
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Mr. Gowrappan serves as CEO of Verizon Media Group, the media division of Verizon Communications, Inc., leading brands such as Yahoo! while serving a global audience of ~900 million monthly active users. Mr. Gowrappan joined Verizon in April 2018 as President and Chief Operating Officer of Oath, Inc. From 2015 until joining Verizon in 2018, he held the position of Global Managing Director at the Alibaba Group, a multinational e-commerce company, where he focused on international expansion for key consumer and enterprise products. Mr. Gowrappan was previously Chief Operating Officer at Quixey, a mobile technology company, where he led the Product, Business and Marketing organizations. He was also previously Chief Operating Officer for Growth and Emerging Initiatives at Zynga Inc., where he helped guide the mobile game development company through its initial public offering process.
Mr. Gowrappan serves on the Board of Directors of Tech:NYC. Mr. Gowrappan earned an M.S. in Computer Science from the University of Southern California and completed the Business Bridge Program with the Tuck School of Business at Dartmouth College. He also holds a bachelor’s degree from the University of Madras in Chennai, India.
| Skills and Expertise: |
| 16 | BNY Mellon Ø | |
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| Ralph Izzo Age 63 Independent Director since 2020 Chairman, President and Chief Executive Officer of Public Service Enterprise Group Incorporated Committees: Audit, Corporate Governance, Nominating and Social Responsibility Other Current Public Company Board Service: Public Service Enterprise Group Incorporated |
| Edmund F. “Ted” Kelly
Age
Independent Director of BNY Mellon and predecessor companies since 2004
Retired Chairman of Liberty Mutual Group
Committees: Human Resources and Compensation, Risk (Chair)
Other Current Public Company Board Service: None |
Mr. Izzo has served as Chairman and Chief Executive Officer of Public Service Enterprise Group Incorporated (“PSEG”), a publicly traded diversified energy holding company, since April 2007. He was the company’s president and chief operating officer and has been a member of the board of directors of PSEG since October 2006. Previously, Mr. Izzo was president and chief operating officer of Public Service Electric and Gas Company (“PSE&G”), an operating subsidiary of PSEG. Since joining PSE&G in 1992, Mr. Izzo has held several executive positions within the PSEG family of companies.
In addition to his current public company board service, Mr. Izzo served on the board of The Williams Companies, Inc. from 2013 to 2016. Mr. Izzo currently serves as the chair of the Nuclear Energy Institute and a member of the U.S. Department of Energy’s Fusion Energy Sciences Advisory Committee. He is also on the board of directors for the Edison Electric Institute, Nuclear Electric Insurance Limited, the New Jersey Chamber of Commerce, and the New Jersey Performing Arts Center. Mr. Izzo is on the advisory board for the University of Pennsylvania’s School of Engineering and Applied Sciences Mechanical Engineering and Applied Mechanics Department, a member of the Board of Trustees of the Peddie School and Princeton University’s Andlinger Center for Energy and the Environment Advisory Council, as well as a member of the Visiting Committee for the Department of Nuclear Engineering at Massachusetts Institute of Technology, the Columbia University School of Engineering Board of Visitors and the CEO Action for Diversity and Inclusion. In addition, he is a former chair of the Rutgers University Board of Governors and the New Jersey Chamber of Commerce.
Mr. Izzo received his Bachelor of Science and Master of Science degrees in mechanical engineering and his Doctor of Philosophy degree in mechanical engineering/applied physics from Columbia University. He also received a Master of Business Administration degree, with a concentration in finance, from the Rutgers Graduate School of Management.
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Mr. Kelly served as Chairman (from 2000 to 2013), President (from 1992 to 2010) and CEO (from 1998 to 2011) of Liberty Mutual Group, a multi-line insurance company. Mr. Kelly’s experience also includes senior-level management positions at Aetna Life & Casualty Company. Mr. Kelly was a director of Citizens Financial Group Inc., where he served as Chair of the Audit Committee and Chair of the Joint Risk Assessment Committee. Mr. Kelly was a director of EMC Corporation from 2007 until its merger with Dell Technologies Inc. in 2016. Mr. Kelly is also a member of the Board of TrusteesLife Trustee of the Boston Symphony Orchestra; a member of the Senior Advisory Council of the New England College of Business and Finance; a member of the Bretton Woods Committee; a director of The Learning Alliance; a past member of the Board of Trustees for Boston College and former President of the Boston Minuteman Council of the Boy Scouts of America. Mr. Kelly received a Bachelor of Arts degree from Queen’s University in Belfast and a Ph.D. from the Massachusetts Institute of Technology.
| Skills and Expertise: |
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Ms. Morgan has served as Co-CEO of SAP since October 2019 and as a member of the Executive Board of SAP since 2017. Previously, she was President of the SAP Cloud Business Group in 2019, President of SAP Americas and Asia Pacific Japan, Global Customer Operations, from 2017 to 2019, and President of SAP North America from 2014 to 2017. Ms. Morgan has served in several other leadership roles for SAP since joining the company in 2004, including as head of SAP North America’s public sector organization and president of its Regulated Industries business unit. In these roles, Ms. Morgan was a recognized thought-leader on government and public sector technology innovation, represented SAP to the U.S. Government and testified before Congress on technology and acquisition issues. Earlier in her career, Ms. Morgan served in various management roles at Siebel Systems and Accenture. Ms. Morgan is an executive advisory board member of James Madison University College of Business and a board member of NAF, an educationalnon-profit organization bringing education, business and community leaders together to transform the high school experience. Ms. Morgan earned a Bachelor of Business Administration degree from James Madison University.
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| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| Elizabeth E. Robinson
Age
Independent Director since 2016
Retired Global Treasurer of The Goldman Sachs Group, Inc.
Committees: Finance, Risk, Technology
Other Current Public Company Board Service: |
| Samuel C. Scott III
Age
Independent Director of BNY Mellon and predecessor companies since 2003
Retired Chairman, President and CEO of Ingredion Incorporated (formerly Corn Products International, Inc.)
Committees: Audit, Corporate Governance, Nominating and Social Responsibility (Chair), Human Resources and Compensation
Other Current Public Company Board Service: |
Ms. Robinson served as Global Treasurer, Partner and Managing Director of The Goldman Sachs Group, Inc., the global financial services company, from 2005 to 2015. Prior to that, Ms. Robinson served in the Financial Institutions Group within the Investment Banking Division of Goldman Sachs.
In addition to the public company board service noted above, Ms. Robinson serves on the Board of Directors of Russell Reynolds Associates and is the non-executive Chairman of the Board of Directors of BNY Mellon Government Securities Services Corp. Ms. Robinson chairs the Board of Trustees of Williams College and the Board of Directors of Every Mother Counts. She was, until August 2016, a director of Goldman Sachs Bank USA. Ms. Robinson received a Bachelor of Arts degree from Williams College and an MBA from Columbia University.
| Skills and Expertise: |
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Prior to his retirement in 2009, Mr. Scott served as Chairman (since 2001), CEO (since 2001) and President and Chief Operating Officer (since 1997) of Corn Products International, Inc., a leading global ingredients solutions provider now known as Ingredion Incorporated. Mr. Scott previously served as President of CPC International’s Corn Refining division from 1995 to 1997 and President of American Corn Refining from 1989 to 1997.
In addition to the public company board service noted above, Mr. Scott alsocurrently serves on the boardboards of The Chicago Council on Global Affairs.Affairs, Northwestern Medical Group and the Ringling College of Art and Design. Mr. Scott served on the board of Motorola Solutions, Inc. from 1993 until 2019, and was its lead director from 2015 to 2019.2019, and on the board of Abbott Laboratories from 2007 until 2020. Mr. Scott received both a Bachelor of Science degree and an MBA degree from Fairleigh Dickinson University.
| Skills and Expertise: |
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| 18 | BNY Mellon Ø | |
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| Frederick O. Terrell
Age
Independent
Committees:
Other Current Public Company Board Service: ViacomCBS Inc. |
| Alfred W. “Al” Zollar
Age
Independent Director since 2019
Executive Partner at Siris Capital Group, LLC
Committees:
Other Current Public Company Board Service: Nasdaq, Inc., Public Service Enterprise Group Incorporated |
Mr. Terrell is the retireda Senior Advisor with Centerbridge Partners, L.P., a multi-strategy private investment management firm. Mr. Terrell is a former Executive Vice Chairman of Investment Banking and Capital Markets at Credit Suisse, the global investment bank, andwhere he later served as Senior Advisor, from January 2018 to November 2018. From June 2010 to December 2017, Mr. Terrell served as Vice Chairman of Investment Banking and Capital Markets at Credit Suisse. In this capacity he was responsible for the Bank’s global relationships with some of its largest clients. Mr. Terrell was a member of Credit Suisse’s Investment Banking Committee, its Managing Director Promotion Committee and the Board of Trustees of the Credit Suisse America’sAmericas Foundation. He began his career as an Associate with The First Boston Corporation in 1983. From 1997 to 2008, he was Founder and Managing Partner of Provender Capital Group, LLC, which made private equity investments in emerging growth-oriented companies.
In addition to his public company board service noted above, Mr. Terrell is currently a member of the Board of Directors of the ViacomCBS Corporation and a member of the Investment Committee of the Rockefeller Foundation. He is a former member of the Board of Directors of the New York Life Insurance Company, Wellchoice, Inc. (formerly Empire Blue Cross Blue Shield), and Carver Bancorp Inc., where he served as Chairman of the Board.
He currently is currently a member of the Board of Directors of Mobility Capital Finance Inc., the Partnership Fund for New York City, Center forPlanet Word Museum, and a New American Security,member of the Economic Club of New York City and the Council on Foreign Relations. He is a former member of the University Council of Yale University and Board of Advisors for the Yale School of Management and Chairman of the Board of the Coro Foundation, New York Leadership Center. Mr. Terrell earned his BA degree from La Verne College, an MA degree from Occidental College and his MBA from the Yale School of Management. Mr. Terrell is a former Coro Foundation Fellow.
| Skills and Expertise: |
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Mr. Zollar has served as an Executive Partner at Siris Capital Group, LLC, a private equity firm specializing in value-orientedmid-market tech buyout investments, since February 2014. Prior to that, Mr. Zollar held various senior management positions at IBM Corporation during his34-year career at thethat company, including most recently as General Manager of IBM Tivoli Software.
In addition to the public company board service noted above, Mr. Zollar currently serves as a board member of Pulse Secure, LLC,Constant Contact, Inc., Stratus Technologies, Inc. and Electronics For Imaging, Inc. Mr. Zollar previously served as a Director of The Chubb Corporation from 2001 until 2016 and of Red Hat, Inc. from 2018 until 2019. Mr. Zollar is also a Harvard Fellow from the 2011 cohort of the Advanced Leadership Initiative at Harvard University, a member of the Executive Leadership Council and a lifetime member of the National Society of Black Engineers. Mr. Zollar serves on the boardboards of thenon-profitnon-profits EL Education.Education and Eagle Academy Foundation. Mr. Zollar earned his master’s degree in applied mathematics from the University of California, San Diego.
| Skills and Expertise: |
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| BNY Mellon Ø | | 19 |
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
Each of the nominees for election as director was elected as a director at our 2020 Annual Meeting of Stockholders, other than (i) Ms. Gilliland and Mr. Gowrappan, who currently do not serve on the Board, and (ii) Mr. Izzo, who joined the Board effective August 10, 2020. Our Board believes that the nominees meet the criteria outlined above and discussed in more detail in “Director Nomination Process” starting on page 25, and collectively exhibit the diversity and depth and breadth of experience to contribute to an engaged board capable of effectively and thoughtfully overseeing the company’s management. No current director or nominee has a family relationship to any other director, nominee for director or executive officer. Ms. Morgan, who was elected as a director at our 2020 Annual Meeting of Stockholders, will not be standing for re-election. The Board is grateful to Ms. Morgan for her dedication and invaluable contributions during her tenure as a director of the company.
Skills and Experience Finance - experience in understanding and overseeing financial reporting and internal controls Leadership - overseeing a company or a significant business unit giving him/her leadership qualities and the ability to identify and develop those qualities in others Technology - experience with companies that used or developed technology to improve quality and innovate products and services to increase client satisfaction Global - knowledge of the opportunities and challenges of a large company with a global footprint Governance - knowledge or expertise in current corporate governance trends and practices Risk - knowledge or expertise with respect to risk management processes across a large organization in a regulated industry Financial Services Experience - experience within or leading a financial services company Demographic Background Board Tenure Completed Years 3 4 5 1 n/a 6 n/a 0 5 15 3 3 16 N/A4 17 1 2 Gender Male Female Age Years Old 6162 64 64 46 65 40 63 63 64 74 48 51 75 65 6552 76 66 66 Race/Ethnicity African American/Black White/Caucasian Hispanic/Latino Asian Linda Z. cook Joseph j. echevarria Thomas p. "todd" gibbons M.Amy Gilliland* Jeffrey A. Goldstein K.guru Gowrappan* Ralph Izzo* Edmund F. "ted" Kelly Elizabeth E. Robinson Samuel C. Scott III Frederick O. Terrell Alfred w. "al" zollar
| * | Ms. Gilliland and Mr. |
The CGNSR Committee reviews potential director candidates and makes recommendations to the Board regarding individuals qualified to become Board members. The Board then nominates director candidates for election at Annual Meetings (or selects an individual or individuals to fill vacancies on the Board, as applicable). The CGNSR Committee utilizes Board-approved criteria set forth in our Corporate Governance Guidelines (see “Helpful Resources” on page 87), among other factors, in recommending nominees. Directors chosen to fill vacancies will hold office for a term expiring at the end of the next Annual Meeting.
In recommending nominees for election as directors, our CGNSR Committee considers the following with respect to Board composition:
The CGNSR Committee seeks individuals with leadership experience in a variety of contexts and, from company leaders, across a variety of industries. The CGNSR Committee will evaluate all candidates suggested by other directors or third-party search firms (which the company retains from time to time to help identify potential candidates) or recommended by a stockholder for nomination as a director in the same manner. For information on recommending a candidate for nomination as a director see “Contacting the Board” on page 32.
The Board and the CGNSR Committee have concluded that each of our current Board members should be recommended forre-nomination as a director. In considering whether to recommendre-nomination of a director for election at our Annual Meeting, the Board and the CGNSR Committee considered, among other factors:
Each of the nominees for election as director, other than Messrs. Gibbons and Terrell, was elected as a director at our 2019 Annual Meeting. Mr. Gibbons was identified by the CGNSR Committee as a qualified candidate due to his intimate familiarity with our business and operations in his role as Interim CEO along with the breadth of his skills and experience. Mr. Terrell was identified by the CGNSR Committee as a qualified candidate due to the depth and breadth of his skills and experience, including with respect to his financial services management experience. Our Board believes that the nominees meet the criteria described above, and collectively exhibit proper diversity and depth and breadth of experience to be an effective and engaged board capable of overseeing management of the company. No current director or nominee has a family relationship to any other director, nominee for director or executive officer.
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| ITEM 1. ELECTION OF DIRECTORS > Nominees |
Charles W. Scharf, who was elected at our 2019 Annual Meeting, resigned as Chair and CEO effective September 26, 2019. Edward P. Garden, John M. Hinshaw and Steven D. Black, each of whom was elected as a director at our 2019 Annual Meeting,
resigned effective June 10, 2019, December 6, 2019 and December 10, 2019, respectively. The Board is grateful to Messrs. Scharf, Garden, Hinshaw and Black for their dedication and contributions as directors of the company.
Under ourby-laws, in any uncontested election of directors, each director will be elected if more votes are cast “for” the director’s election than are cast “against” the director’s election, with abstentions and brokernon-votes not being counted as a vote cast either “for” or “against” the director’s election. A plurality standard will apply in any contested election of directors, which is an election in which the number of nominees for director exceeds the number of directors to be elected. Pursuant to our Corporate Governance Guidelines, if any incumbent director fails to receive a majority of the votes cast in any uncontested election, the director will be required to tender his or her resignation to the independent Chair or Lead Director (or such other director designated by the Board if the director failing to receive the majority of votes cast is the independent Chair or Lead Director) promptly after the certification of the stockholder vote.
OurThe CGNSR Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject it, or whether other actions should be taken. In considering whether to accept or reject the tendered resignation, the CGNSR Committee will consider whatever factors its members deem relevant, including any stated reasons for the “against” votes, the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to the company, and the mix of skills and backgrounds of the Board members.
The Board will act on the CGNSR Committee’s recommendation no later than 90 days following the certification of the election in question. In considering the recommendation of the CGNSR Committee, the Board will consider the factors considered by the CGNSR Committee and such additional information and factors as it deems relevant.
Following the Board’s decision, the company will publicly disclose such decision in a Current Report onForm 8-K filed with the SEC. If the Board does not accept the director’s resignation, it may elect to address the underlying stockholder concerns or to take such other actions as it deems appropriate and in the best interests of the company and its stockholders. A director who tenders his or her resignation pursuant to this provision will not vote on the issue of whether his or her tendered resignation will be accepted or rejected. If the Board accepts an incumbent director’s resignation pursuant to this provision, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board may fill the resulting vacancy pursuant to ourby-laws. If the Board does not accept an incumbent director’s resignation pursuant to this provision, he or she will continue to serve on the Board until the election of his or her successor.
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| ITEM 1. ELECTION OF DIRECTORS | > Corporate Governance and Board Information | |||
Our Corporate Governance Practices
We believe that the strength of BNY Mellon’s business reflects the high standards set by our governance structure. Itstructure, which provides guidance in managing the company from the Board on down for the benefit ofdown. This structure benefits all our stakeholders, including our stockholders, clients, employees and communities. Several of our key governance practices are outlined below.
INDEPENDENCE
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ü Our Board is composed entirely of independent directors (other than our
ü Ourindependent Chair(or if there is not an independent Chair, the Lead
• acting as a liaison between and among the other independent directors, the CEO and management generally;
• presiding over Board and stockholder meetings;
• the right to call a special meeting of the independent directors or the full Board;
• reviewing and approving Board meeting agendas, materials and schedules;
• leading executive sessions and meetings of independent directors;
• being available to meet with major stockholders and regulators as applicable; and
• consulting with the Chair of the
ü All Board committees are composed entirely ofindependent directors.
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ACTIVE ENGAGEMENT
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ü We had ahigh rate of director attendance at Board and committee meetings in
ü Weactively engage with our stakeholders through multiple initiatives, reaching out to investors representing over 50% of our outstanding common shares as well as proxy advisory firms and other stakeholders.
ü Stockholders and other interested parties candirectly contact our Board (see “Contacting the Board” on page
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
BOARD GOVERNANCE
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ü Our Corporate Governance Guidelines require that the CGNSR Committeeconsider enhanceddirector qualifications in connection with director nominations, including a nominee’s character and integrity, diversity characteristics and record of accomplishment in senior-level roles.
ü Our Board, each of our standing committees, and each of our individual directors conduct annualself-evaluations that have resulted in enhancements to Board functioning (see “Evaluation of Board and Committee Effectiveness” on page
ü Ourby-laws permit holders in the aggregate of 20% of our outstanding common stock tocall a special stockholdermeeting.
ü Our Restated Certificate of Incorporation, as amended, allows for action bywritten consent of stockholders representing at least the minimum number of votes that would be necessary to take the action at a meeting.
ü
ü
ü ü Our comprehensive Enterprise ESG program includes Board committee-level reporting and oversight, including with respect to environmental management, sustainability, diversity and inclusion, and governance.
ü We signed and committed to apply theCommonsense Principles 2.0, a public statement of corporate governance principles intended to provide a framework for sound, long-term-oriented governance.
ü We have endorsed theBusiness Roundtable’s Statement on the Purpose of a Corporation, publicly reinforcing our commitment to all stakeholders.
ü
ü Our Board participates ininformation sessions during regularly scheduled and special meetings, receiving business, regulatory and other updates from senior management, including risk executives and our General Counsel. In addition, our Board regularly receives reports from the chair of each standing committee to ensure oversight and transparency regarding the committee’s activities.
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| ROBUST PROGRAMS |
ü A significant portion of director compensation is paid indeferred stock units, which must be held as long as the director serves on the Board.
ü Ourcodes of conduct, which apply to our directors, as well as all of our employees,
ü We continue to enhance our robust
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| WHAT WE DON’T DO |
× No staggered board.
× No “poison pill” (stockholders’ rights plan).
× No supermajority voting. Action by stockholders requires only a majority of the votes cast (not a majority of the shares present and entitled to vote).
× No plurality voting in uncontested director elections. Each director must be elected by a majority of the votes cast.
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Recent Corporate Governance Developments
BasedOur strong corporate governance framework has been developed through contributions from our directors, who offer a diverse set of backgrounds, expertise and skills, and is informed by our engagement with our stockholders and other stakeholders. As a result of this dynamic, the Board has a well-established focus on stockholderlong-term business strategy and resiliency, leadership succession and corporate culture, and performance. This foundation positioned the Board to oversee and provide insight to management on the company’s response to the challenges, uncertainties and opportunities presented throughout 2020, including our impact on our communities and society more broadly. In addition to regular updates on the financial and operational impacts of the COVID-19 pandemic on our business, employees, clients and suppliers, the Board maintained a regular dialogue with management regarding its direction and action on matters related to social justice, diversity and inclusion, and public policy and advocacy. The Board also engaged with management throughout the year on the company’s environmental and sustainability performance and Enterprise ESG strategy, a component of which culminated in the publication of our inaugural Considering Climate at BNY Mellon report prepared in accordance with the TCFD guidelines. A discussion of the Board’s engagement overon ESG matters, including our diversity and inclusion initiatives, can be found starting on page 33.
For the past several years, our Board has also focused on Board refreshment and succession efforts. SevenIn addition to the two new director nominees who currently do not serve on our Board, six of the nine incumbent members of ourdirectors nominated for election at the 2021 Annual Meeting have been added to the Board began his or her tenure as a director in the last five years. Each of these new directors has added, and each of the new director nominees will add, experience and expertise to our Board, complementing and supplementing the experience, diversity and talents of our Board as a whole. Although the CGNSR Committee is principally involved in Board succession and recruitment, our entire Board plays a role in recruiting, interviewing and assessing candidates. Our Board’s succession planning is an ongoing, robust endeavor and will continue to focus on enhancing the diversity of our Board. The Board’s succession planning and director nomination efforts are discussed in detail starting on page 25.
Our Board, led by ourthe CGNSR Committee, continually seeks to improveevaluate our governance structures, and has recently madestructure, as highlighted by the following enhancements:recent developments:
that would be necessary to take the action at a meeting. |
A central focuscomponent of the development of our corporate governance framework is the identification and implementation of best practices through engagement with stakeholder groups. As a result of this engagement, in October 2018, we signed the Commonsense Principles 2.0, a public statement of corporate governance principles intended to provide a framework for sound, long-term-oriented governance, and, in doing so, committed to applying them to our business. The Commonsense Principles 2.0 address matters including the importance of director independence and stockholder rights. We have also endorsed the Business Roundtable’s Statement on the Purpose of the Corporation, which was issued in August 2019. The Statement on the Purpose of the Corporation publicly reinforces our commitment to all of our stakeholders in pursuing improvements in our performance. While we believe that our corporate governance policies are generally consistent with the Commonsense Principles 2.0 and the Business Roundtable’s Statement, we will continue to evaluate and, where necessary, make changes to align with best practices set forth in the principles and other governance developments. As part of this process, and consistent with the publication of the Considering
| BNY Mellon Ø | 2021 Proxy Statement |
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Climate at BNY Mellon report, we continue to review our governance practices against the TCFD guidelines to ensure that our Board remains well positioned to oversee the company’s Enterprise ESG strategy and climate-related commitments.
Director Nomination Process
The CGNSR Committee reviews potential director candidates and makes recommendations to the Board regarding individuals qualified to become Board members. The Board then nominates director candidates for election at Annual Meetings (or selects an individual or individuals to fill vacancies on the Board, as applicable). Directors chosen to fill vacancies hold office for a term expiring at the end of the next Annual Meeting.
In recommending a nominee for election as a director, the CGNSR Committee considers the following Board-approved criteria:
Annually, the CGNSR Committee reviews these criteria for director nominations and makes recommendations regarding any changes for the Board’s approval as needed. The CGNSR Committee seeks individuals with leadership experience in a variety of contexts and across a variety of industries. The CGNSR Committee’s candidate search and recruitment efforts are informed by a number of factors, including its regular review of the composition of the Board and committees, its consideration of the directors’ qualifications, skills and experience, and the results of the Board and committee evaluation process. In 2020, the CGNSR Committee augmented its focus on recruitment efforts, holding a number of special meetings to consider candidate profiles, identify complementary outlets for distinguishing potential candidates and discuss approaches to advancing engagement with prioritized individuals. Mr. Izzo was appointed as a director effective August 10, 2020 and was recommended to the CGNSR Committee by other directors. Ms. Gilliland and Mr. Gowrappan were identified as candidates by a third-party search firm retained to assist the CGNSR Committee in its search efforts.
The CGNSR Committee evaluates all candidates suggested by other directors or third-party search firms (which the company retains from time to time to help identify potential candidates) or recommended by a stockholder for nomination as a director in the same manner. For information on recommending a candidate for nomination as a director, see “Contacting the Board” on page 43.
Our Board is committed to fostering and maintaining its diversity. In addition to valuing diversity of viewpoints, professional experience, tenure, education, skills and expertise, the Board also seeks to include directors with diverse backgrounds—including with respect to race, gender, ethnicity and sexual orientation—to capture the benefits inherent in diverse perspectives. As a result of this commitment, our Board has approved a slate of nominees for election at the 2021 Annual Meeting that is 25% female and over 41% diverse on the basis of race or ethnicity.
As part of the director nomination process, the Board and the CGNSR Committee have concluded that each of our current Board members—other than Ms. Morgan, who will not stand for re-election—should be recommended for re-nomination as a director, and that each of the other nominees should be recommended for
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nomination as a director. In considering whether to nominate such other nominees for election at our Annual Meeting, the Board and the CGNSR Committee considered, among other factors, the criteria for the nomination of directors described above. In considering whether to recommend re-nomination of a director for election at our Annual Meeting, the Board and the CGNSR Committee reviewed, among other factors:
This year, on the basis of its review and the recommendation of the CGNSR Committee, the Board has determined that the re-nomination of Messrs. Kelly and Scott, who will each be 75 years of age or older at the time of the Annual Meeting, is in the best interests of the company.
Board Oversight of Company Culture
Our Board is committed to supporting and fostering the company’s strong cultural values. The Board, in conjunction with management, is responsible for ensuring that the company’s culture and its strategy are aligned. In 2020, the company introduced a new set of company values: Passion for Excellence, Integrity, Strength in Diversity, and Courage to Lead; as well as key behaviors supporting those values. The Board expects all directors, as well as officers and employees of the company, to conduct themselves in a manner consistent with our codes of conduct, which incorporate the values and behaviors foundational to our culture. The Board believes that our culture is fundamental to the conduct of the company’s business and the creation of a high performance environment, and is necessary for effective risk management, strong investor trust, and successful corporate governance.
Corporate Governance Guidelines and Codes of Conduct
Our Board has adopted Corporate Governance Guidelines covering, among other things, the duties and responsibilities and independence of our directors, the criteria and qualifications for nominating a director for election at the Annual Meeting, the Board’s role in overseeing executive compensation, compensation and expense reimbursements for independent directors, communications between stockholders and directors, the role of our independent Chair or Lead Director, and Board committee structures and assignments. The CGNSR Committee reviews the Corporate Governance Guidelines at least annually and makes recommendations to the Board regarding any updates. A discussion of governance developments, including recent changes to the Corporate Governance Guidelines approved by the Board, is provided on page 24.
In furtherance of the Board’s oversight of the company’s values, our Board has also adopted an Employee Code of Conduct, which applies to all of our employees and provides a framework to maintain the highest standards of professional conduct for the company. The Board has also adopted a Directors’ Code of Conduct to provide guidance to our directors in recognizing and addressing ethical issues, to provide mechanisms to report possible unethical conduct, and to foster a culture of honesty and accountability among directors. At least annually, the CGNSR Committee reviews the directors’ compliance with the Directors’ Code of Conduct (and, in the case of management directors, compliance with the Employee Code of Conduct).
Our Corporate Governance Guidelines, Employee Code of Conduct and Directors’ Code of Conduct are available on our website (see “Helpful Resources” on page 100). We intend to disclose any amendments to, or waivers from, our Employee Code of Conduct or our Directors’ Code of Conduct for the benefit of executive officers and directors, respectively, by posting such information on our website.
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Evaluation of Board and Committee Effectiveness
Annually, the Board and each of our standing committees conduct a self-evaluation aimed at continually enhancing Board and individual director performance. The Board and management then work together to take appropriate action in light of the results of the self-evaluations.
Design of Assessment Process CGNSR Committee and independent Chair (or Lead Director, as applicable) determine the process, scope and contents of the Board's annual performance evaluation. The process is generally designed to facilitate a multi-year perspective and year-over-year comparability of feedback and assessment results. Evaluation and Director Self- AssessmentSelf-Assessment Each director is provided with one evaluation questionnaire for the full Board and one for each standing committee on which such director serves. Each director also participates in annual, individual interviews guided by our General Counsel which allow each director an opportunityOpportunity to elaborate on theirhis or her questionnaire submissions and to provide candid reflection on their personal contributions, the performance of other directors and Board and committee effectiveness generally. Topics covered as part of the evaluation process: Director contribution and performance Board structure and size, and Board dynamics - Strategic priorities for the Board to focus oversight Range of business, professional and other backgrounds necessary for a director to serve the company Content and form of information provided to the Board by management Review and Presentation of Findings With the assistance of an independent, third-party consultant, the questionnaire responses and interview feedback are aggregated and a report is prepared for the Board and each Committee. Each standing committee self-evaluation is conducted by the respective committee Chairs in executive session at the next scheduled committee meeting after feedback is gathered. The independent Chair (or Lead Director, as applicable) leads an executive session of the full Board in which Board self-evaluation results are presented and the standing committee self-evaluations are reported. Follow-Up and Accountability Self evaluationSelf-evaluation results are compared to prior year results to track improvements and promote long-term accountability. Board and management take appropriate action as necessary to address additional considerations. Areas in which director feedback has led to further discussion and enhancements: -enhancement s: Adjustments to content,content. timing and style of Board presentation materials Allocation of timing among committee and Board meetings and executive sessions Board and management succession
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Succession Planning
SuccessionOur governance framework prioritizes senior leadership succession planning is a priority foras an important component of facilitating long-term, sustainable business practices. In accordance with our Corporate Governance Guidelines, the Board takes an active role in the oversight of CEO and our senior management withsuccession planning. The HRC Committee, as well as the goal of ensuring a strong pipeline of leaders for the future. The Human Resources and Compensation Committee (the “HRC Committee”), and ultimately the entirefull Board, reviewsregularly review the succession plan for our CEO on a regular basis.the CEO. This plan identifies a “readiness” level and ranking for internal candidates and incorporates flexibility for the Board to define an external hire as a succession option. ThereIn addition, the CGNSR Committee maintains and annually reviews a CEO emergency succession management plan. The Board’s independent Chair is also an emergencyengaged in these processes and consults with the HRC Committee and the CGNSR Committee on both the CEO succession plan and the CEO emergency succession management plan that is reviewed at least annually byplan.
In connection with the appointment of an interim CEO and an independent Chair in September 2019, our Board delegated to the independent Chair the power to form a subcommittee composed of independent directors to determine a timeline and undertake the process of identifying and recommending to the Board one or Lead Directormore CEO candidates. The independent members of the Board conducted a comprehensive search process including internal and external candidates, which culminated in the CGNSR Committee.announcement of Mr. Gibbons as our CEO in March 2020.
The Board and the HRC Committee also regularly engage in formal succession planning for the balance of our management Executive Committee members. This succession protocol includes identifying a rank and readiness level for potential internal candidates and strategically planning for external hires when desirable, such as, for example, for positions where for example, capability gaps are identified. The HRC Committee and the Board review the succession plans for all management Executive Committee positions.
Consistent with this emphasis on preparedness and succession planning, and in light of the separation of the CEO Search
and Chair positions, the CGNSR Committee has also adopted a Chair emergency succession management plan. The Board has delegated toChair emergency succession management plan, which was prepared in consultation with the independent Chair and the powerCEO, is designed to form asub-committee composed of independent directorsensure that appropriate steps can be taken to determine the timeline for and undertake the process of identifying and recommendingminimize disruption to the Board one or more CEO candidates. Thesub-committee hasand the authority to retain external advisors to assistcompany’s governance in the identificationevent of a pooltemporary or permanent absence of candidates for consideration.
Active Stockholder Engagement Program
We conduct extensive governance reviews and investor outreach throughout the year. Management reports regularly to the independent Chair.
Director Orientation and Continuing Education
As part of ongoing efforts to support Board and individual director effectiveness and performance, we have developed comprehensive orientation and continuing education programs for directors. The CGNSR Committee oversees these programs. The orientation process for a new director is tailored to specific needs of the director, and is designed to facilitate and expand a new director’s understanding of the company’s products and services, the director’s duties as a member of the Board, and the culture of our company and the Board. In light of the COVID-19 pandemic, in 2020 the Board and the CGNSR Committee oversaw the transition to a fully virtual orientation program for Messrs. Terrell and Izzo, leveraging the company’s existing technologies. We intend to implement a virtual orientation program for the new director nominees in the event they are elected at the Annual Meeting.
The new director orientation process generally progresses in the following stages:
Document Review Initially, a new director is provided with information through a set of documents covering, among other matters: organizational and leadership structure, business descriptions, Board and committee information, and governance materials and applicable policies. The director is also provided support and training for accessing and navigating the companys electronic board portal. Informational Modules The director then participates in a series of meetings with other directors to keep them informedand members of stockholders’ perspectives on a varietysenior management. Meetings are grouped into modules through which additional information and documentation are provided. Topics covered in the course of issues, including governance,each module include business strategy and performance,operations, corporate culture, finance and enable them to considerhuman resources, among others. Feedback and address those matters effectively. Through our investor engagement processGap-Filling As a director progresses through the modules, feedback is solicited from all participants. Any gaps identified are filled with additional information and/or meetings, as needed or desirable.
On an ongoing basis, directors are provided with a catalogue of continuing education programs covering a range of topics, delivered on an in-boardroom basis or through external providers. Directors are encouraged, including in 2019the annual Board and 2020, we reached out to over 50% of our stockholders.committee evaluation
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process, to provide feedback regarding topics they would like to cover in continuing education sessions. A list of programs administered by external providers is made available to the directors on a periodic basis, and we have a policy for the reimbursement of reasonable out-of-pocket expenses incurred by a director in connection with his or her participation in continuing education sessions.
Active Stockholder Engagement Program
We conduct extensive governance reviews and investor outreach throughout the year. Through our investor engagement process in 2020 and 2021, we reached out to stockholders holding over 50% of our outstanding common stock and held discussions with those that accepted our invitation. These discussions included
representatives from our Investor Relations, Enterprise ESG, Corporate Governance and Human Resources teams and addressed topics such as executive compensation, company strategy and response to the COVID-19 pandemic, corporate governance, diversity and inclusion and other issues relating to our Enterprise ESG strategy.
Management reports regularly to the independent directors regarding investor discussions and feedback to keep them informed of stockholders’ perspectives on a variety of issues, including governance, strategy and performance, and to enable them to consider and address those matters effectively. In recent years, stockholder feedback has played a significant role in company decisions such as the design and implementation of a stockholder written consent right.
In connection with
The Board’s independent directors review the appointmentBoard’s leadership structure and the selection of our Interim CEO,the Chair of the Board reviewed its leadership structure — consistingon an annual basis, or more frequently as necessary, to ensure the current arrangement best serves the interests of a combinedthe company at any given time. As part of this review, the independent directors evaluate whether they believe that the position of Chair andshould be held by the CEO, within which case an independent Lead Director — inis selected, or that the Chair and CEO roles should be separated. In light of the Board’s composition, the company’s size, the nature of the company’s business, the regulatory framework under which the company operates, the company’s stockholder base, the company’s peer group and other relevant factors. Ourfactors, the independent directors of the Board determined that in connection with the appointment of the Interim CEO, it was appropriate to separatemaintain a separation between the positionpositions of Chair and Interim CEO. As a result, the Board appointed Joseph J. Echevarria as independent Chair, and Mr. Gibbons, as Interimour CEO, continues to serve as anon-independent member of the Board.
The duties and responsibilities of our independent Chair are robust and include:
acting as a liaison between and among the other independent directors, the CEO and management generally;
presiding over Board and stockholder meetings;
the right to call a special meeting of the independent directors or the full Board;
reviewing and approving Board meeting agendas, materials and schedules;
leading executive sessions and meetings of independent directors;
being available to meet with major stockholders and regulators as applicable; and
consulting with the Chair of the HRC Committee on CEO performance, compensation and succession, and reviewing the emergency CEO succession management plan with the CGNSR Committee annually.
Our Corporate Governance Guidelines provide that the Board will select its Chair in the manner it considers to be in the best interests of the company at any given time. If the Board determines to appoint the CEO as Chair, then the Boardindependent directors will also appoint an independent Lead Director who will carry out the duties specified in our Corporate Governance Guidelines.
Independent Chair Duties and Responsibilities | ||
The duties and responsibilities of our independent Chair are robust and include: • acting as a liaison between and among the other independent directors, the CEO and management generally; • presiding over Board and stockholder meetings; • the right to call a special meeting of the independent directors or the full Board; • reviewing and approving Board meeting agendas, materials and schedules; • leading executive sessions and meetings of independent directors; • being available to meet with major stockholders and regulators as applicable; and • consulting with the Chair of the HRC Committee on CEO performance, compensation and succession, and reviewing the emergency CEO succession management plan with the CGNSR Committee annually. | ||
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Our Board has determined that 911 of our 1012 director nominees are independent. Our independent director nominees are Linda Z. Cook; Joseph J. Echevarria; M. Amy Gilliland; Jeffrey A. Goldstein; K. Guru Gowrappan; Ralph Izzo; Edmund F. “Ted” Kelly; Jennifer B. Morgan; Elizabeth E. Robinson; Samuel C. Scott III; Frederick O. TerrellTerrell; and Alfred W. “Al” Zollar. Our Interim CEO, Thomas P. “Todd” Gibbons, is not independent. The Board has also determined that each of Steven D. Black, Edward P. Garden and John M. Hinshaw,Jennifer B. Morgan, who areis not standing for re-election as directors this year, and Mark A. Nordenberg, who did not stand for reelection as a director last year, was independent duringat the period in 2019 in which he served as a director.2021 Annual Meeting, is independent.
Our Standards of Independence
For a director to be considered independent, our Board must determine that the director does not have any direct or indirect material relationship with us. Our Board has established standards (which are also includedoutlined in our Corporate Governance Guidelines) based on the specified categories and types of transactions, which conform to, or in some cases are more exacting than, the independence requirements of the New York Stock Exchange (“NYSE”). As part of the oversight of director independence determinations, the CGNSR Committee undertakes an initial review and makes recommendations regarding each director’s independence to the Board based on its application of these standards.
Our Board will also determine that a director is not independent if it finds that the director has material business arrangements with us that would jeopardize that director’s judgment. In making this determination, our Board reviews business arrangements between the company and the director and between the company and any other company for which the director serves as an officer or general partner, or of which the director directly or indirectly owns 10% or more of the equity. Our Board has determined that these arrangements will not be considered material if:
Our Board may also consider other factors as it may deem necessary to arrive at sound determinations as to the independence of each director, and such factors may override the conclusion of independence ornon-independence that would be reached simply by reference to the factors listed above.
In determining that Mr. Terrell and each of the directors other than Mr. Gibbons, including each former director other than Mr. Scharf, who served on our Board in 2019,2020, other than Mr. Gibbons, and each of the two new director nominees is independent, our Board reviewed thesethe standards described above, the corporate governance rules of the NYSE and the SEC, and the individual circumstances of each nominee, director or former director.director nominee.
The following categories or types of transactions, relationships and arrangements were considered by the Board in determining that a director is independent. None of these transactions, relationships andor arrangements rose to the level that would require disclosure under our related party transactions policy, which is described in more detail on page 84.31. In each case, the amounts involved were below the thresholds of the corporate governance rules of the NYSE and the SEC and our Corporate Governance Guidelines, including that none of the transactions described below were in an amount that exceeded the greater of $1 million or 2% of such other entity’s consolidated gross revenues:revenues for its last reported fiscal year:
| • | Purchases of goods or services in the ordinary course of business. The company and its subsidiaries purchased goods and services during the last three years from |
| • | Sales of goods or services in the ordinary course of business. The company and its subsidiaries provided various financial services |
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|
| • | Customer relationships. |
| • | Charitable contributions. We made (directly, through our subsidiaries or by the BNY Mellon Foundation or the BNY Mellon Foundation of Southwestern Pennsylvania) charitable contributions tonot-for-profit, charitable or |
tax-exempt organizations for which |
the thresholds set out in the corporate governance rules of the NYSE and the SEC and our Corporate Governance Guidelines. |
| • | Beneficial ownership or voting power. In the ordinary course of our investment management business, we beneficially own or have the power to vote (directly or through our subsidiaries or through funds advised by our subsidiaries) shares of |
Our Board, on the basis of the analysis and recommendations conducted by the CGNSR Committee, determined that none of the transactions, relationships andor arrangements described above constituted a material relationship between the respective director or nominee and our company or its subsidiaries for the purpose of the corporate governance rules of the NYSE and SEC and our Corporate Governance Guidelines. As such, our Board determined that these transactions, relationships and arrangements did not affect the independence of such director or nominee and did not impair theirhis or her ability to act in the stockholders’ best interests.
Business Relationships and Related Party Transactions Policy
The Board has adopted a policy on related party transactions (our “related party transactions policy”), which was reviewed by the CGNSR Committee. Our related party transactions policy provides that the CGNSR Committee, or another Board committee consisting solely of independent directors, must approve any transaction(s) in which we or any of our subsidiaries was, is or will be a participant, where the amount involved exceeds $120,000, and in which any “related person” had, has or will have a direct or indirect material interest, such transactions constituting related party transactions under SEC rules. A “related person” includes directors, nominees for director, executive officers, members of such persons’ immediate families, and greater than 5% beneficial owners (including BlackRock, Inc., Dodge & Cox, The Vanguard Group and Warren E. Buffet and Berkshire Hathaway, Inc., each of which is a beneficial owner of more than 5% of our outstanding common stock based on a review of such holder’s Schedule 13G filings). Consistent with SEC rules, our related party
transactions policy provides that certain transactions, including employment relationships and ordinary course non-preferential transactions, entered into with a related person are not considered to be related party transactions and are not required to be disclosed or approved by the CGNSR Committee. In 2020, there were no related party transactions that required CGNSR Committee approval or disclosure in this proxy statement.
In the ordinary course of business, we periodically have, and expect to continue to have, banking and other transactions, including asset management services, banking services, broker services and credit services, with related persons. Any loans to related persons, and any transactions involving financial products and services provided by the company to such persons and entities, are made in the ordinary course of business and on substantially the same terms, including interest rates and collateral (where applicable), as those prevailing at the time for comparable transactions with
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persons and entities not related to the company, and do not involve more than the normal risk of collectability or present other unfavorable features.
Our related party transactions policy provides that the CGNSR Committee may recommend to our Board from time to time adoption of resolutions pre-approving certain types or categories of transactions that the CGNSR Committee determines in good faith are in, or are not inconsistent with, our best interests and the best interests of our stockholders. While no related party transactions in 2020 required CGNSR Committee approval or proxy statement disclosure, the Board has adopted a resolution on recommendation from the CGNSR Committee pre-approving transactions that involve the sale or other provision of products and services (not subject to Regulation O or other specific regulatory requirements) by our company or its subsidiaries to directors and members of their immediate families, director-related companies, executive officers and members of their immediate families and beneficial owners of more than 5% of our common stock in the ordinary course and on terms generally offered in transactions with non-related persons. Transactions subject to Regulation O or other specific regulatory requirements are approved as required pursuant to such regulations.
Under the related party transactions policy, in making its determination to approve a related party transaction, the CGNSR Committee may take into consideration all relevant facts and circumstances available to it, including but not limited to:
The CGNSR Committee also may consider the impact on a director’s independence in the event the related person is a director or an immediate family member of a director.
Under the related party transactions policy, no member of the CGNSR Committee may participate in the review, consideration, approval or ratification of any related party transaction with respect to which such member or any of his or her immediate family members is the related person. The CGNSR Committee may approve only those related party transactions that are in, or are not inconsistent with, our best interests and the best interests of our stockholders, as the CGNSR Committee determines in good faith.
Under the related party transactions policy, if a related party transaction is identified after it is already ongoing or completed, it must be submitted to the CGNSR Committee promptly for ratification, applying the standards described above. In this circumstance, the CGNSR Committee will evaluate all options available, including ratification, amendment, termination or rescission of the transaction.
Our related party transactions policy does not limit or affect the application of our other policies applicable to our directors, executive officers and other related persons, including our Employee Code of Conduct and Directors’ Code of Conduct.
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Oversight of Environmental, Social and Governance Matters
BNY Mellon is committed to using our reach, market influence and resources to help address pressing global issues. As a major global financial institution, we consider the impact that our business has on the environment and society and, in turn, how climate-related risks and societal needs present opportunities for our company. We strive to contribute to sustainable economic growth that protects healthy markets, enhances our own business resiliency and longevity, and delivers positive impact for key stakeholders such as clients, employees, stockholders and communities. Our company-wide approach to ESG includes Enterprise ESG, embedding an ESG lens in the way we operate, and Client Solutions offering ESG products and services to help clients meet their goals.
BNY Mellon’s Enterprise ESG strategy is built on three pillars that correspond with what is currently most relevant to the company and our stakeholders:
Culture and Purpose
Our purpose is guided by our core values of passion for excellence, integrity, strength in diversity and courage to lead. Together, our purpose and values drive our culture, which is built on our commitment to diversity and inclusion, leadership and development, employee engagement and wellbeing, and community impact. Highlights include:
Responsible Business
We believe responsible business is simply good business. As a major global financial institution, we have an important role to play in contributing to market integrity. As such, we believe the trust of our clients, the transparency of our business, our technological resilience and providing ESG solutions to the global investing community are paramount. To fulfill our responsibility to our clients, our communities and the global financial system, we seek to manage risk responsibly and serve as a reliable custody and investment resource. Highlights include:
For a further discussion of our risk management oversight and practices, see “Oversight of Risk” starting on page 37.
Global Citizenship
As one of the most trusted financial institutions, we are committed to operating responsibly and sustainably. As we drive toward success, we integrate our commitment to environmental sustainability and human rights across the business. We also work to improve the effectiveness of our supply chain and seek suppliers whose corporate values align with ours. Additionally, we engage stakeholders on public policy initiatives important to our company. Highlights include:
| • | Launched Considering Climate at BNY Mellon Report, according to the TCFD guidelines. |
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Enterprise ESG Governance
The work of considering and integrating ESG issues across all levels of our enterprise extends from the highest level of leadership to employees across the globe.
Entity | Primary Responsibilities for Enterprise ESG Strategy | |
| CGNSR Committee | Consists of independent directors who regularly review our Enterprise ESG performance, monitor progress against long-term goals and provide guidance to management. | |
| Executive Committee | Responsible for progress and success; approves and monitors progress on long-term goals, anticipates market trends and future client needs, and drives business innovation. | |
| Management and Staff | • Enterprise ESG Team: Leads strategy development and governance processes, provides subject matter expertise, collaborates with company functions and departments to assist in development of ESG integration initiatives, manages public reporting and disclosures related to ESG activities, facilitates external stakeholder input, and collaborates with experts and facilitates on thought leadership. • Subject Matter Experts: Staff across varying areas of the company who manage the day-to-day execution of policies, practices and programs that relate to ESG across the business. • Employee Groups: Committees that engage local and regional employees in initiatives to support the company’s social or environmental impact; includes employee/business resource groups (“E/BRGs”), sustainability ambassadors, and volunteer and philanthropic fundraising committees. | |
We plan to publish our 14th annual report covering ESG topics in summer 2021. Past reports can be found on www.bnymellon.com/csr. For additional detail regarding the company’s governance as it relates to environmental sustainability and climate change-related matters, please see our Considering Climate at BNY Mellon report, which was prepared in accordance with the TCFD guidelines, available at https://www.bnymellon.com/us/en/about-us/global-impact/enterprise-esg/csr.html.
Spotlight on Diversity and Inclusion
Diversity and Inclusion (“D&I”) forms an integral component of our Culture & Purpose strategy. Our D&I efforts are aimed at considering and integrating ESG issues across all levels of our enterprise to ensure the highest level of leadership and engagement on a global employee basis.
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Our governance framework supports this mission by balancing appropriate levels of accountability at the Board and among senior management with adequate representation and input from our employees across the globe.
Entity | Primary Responsibilities for D&I Efforts | |
| HRC Committee | Consists of independent directors who are responsible for overseeing our programs for diversity and inclusion. | |
| Executive Committee | Sets goals to improve workforce diversity, with particular emphasis on diversifying our senior management ranks, and have their bonuses and incentives tied to performance against goals, including D&I goals. Executive ownership and accountability of D&I outcomes sustains the focus on gender equality and improving ethnic/racial representation in our U.S. workforce. | |
| Global Diversity and Inclusion Team and Diversity and Inclusion Advisory Council | • Global Diversity and Inclusion Team: Our Office of Global Diversity and Inclusion has appointed a global head and regional leads in EMEA, the Americas and India. These dedicated experts partner with our business leaders and employees, and engage stakeholders—including clients, investors and regulators—to share ideas and successes. • Diversity and Inclusion Advisory Council: This group of senior managers, representing all of our business, functions and regions, is interactive, results-oriented and forward-looking, serving as both a sounding board to the CEO and catalyst for change. Each member is also involved with each of our E/BRGs, some holding formal leadership roles, to ensure connectivity, alignment and governance across D&I groups. | |
| E/BRGs | Our E/BRG members drive our D&I strategy across business lines and regions, engaging employees globally as D&I champions and brand ambassadors. These groups provide our employees with opportunities to share, collaborate and support one another through shared interests, common attributes and cultural heritage. They offer mentoring and reverse mentoring programs; professional development workshops; leadership skill-building and cross-border teaming; volunteering and pro bono opportunities; and other activities that can raise an employee’s visibility, enhance professional capability and capacity, and build trusted working relationships with global colleagues, clients and partners. | |
The HRC Committee regularly engages with management on D&I matters. In 2020, the HRC Committee spent time discussing with management the overall D&I strategy and initiatives, including as it relates to goals for advancing diverse representation, particularly in more senior roles across the organization. Among other initiatives and updates, the HRC Committee also reviewed the company’s pay equity program.
Recognizing the societal unrest spurred by ongoing racial injustice in the first half of 2020, our senior leadership has strengthened our company’s commitment to diversity, inclusion and equity. Augmenting existing plans and initiatives, we have engaged in purpose-led action to accelerate progress. Highlights include:
meaningful dialogue on race relations, diversity, inclusion, equity, belonging, allyship and other topics that foster inclusivity. |
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Spotlight on Employee Wellbeing
BNY Mellon launched the Supporting You Now global campaign for employees, focused on highlighting Benefits & Wellbeing Resources in response to COVID-19:
adult dependents (for employees in the U.S., U.K. and Ireland). We also provided access to in-home caregivers and access to tutoring in India (employee subsidized) and tutoring discounts for employees in the U.S., U.K. and Ireland. |
For additional information on the oversight responsibilities of the standing committees of the Board, including the CGNSR Committee and the HRC Committee, see “Committees and Committee Charters” on page 39. For information on our ESG-related policies and related resources, see “Helpful Resources” on page 100.
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Successful management of our company requires the understanding, identification and management of risk. We oversee risk through multiple lines of defense.defense, as described in the below table.
Entity
|
Primary Responsibilities for Risk Management
| |
| Risk Committee, consisting entirely of independent directors | • Review and approval of
• Review and approval of the company’s risk appetite statement on an annual basis, and approval of any material amendment to the statement.
• Review of significant
• Evaluation of risk exposure and
• Review and evaluation of the company’s
• Review, with respect to risk management and compliance, of (1)
| |
| Audit Committee, consisting entirely of independent directors | • Review and discussion of policies with respect to risk assessment and risk management.
• Oversight responsibility with respect to the integrity of our company’s financial reporting and systems of internal controls regarding finance and accounting, as well as our financial statements.
• Coordinate with the Risk Committee to ensure each Committee has received and, when appropriate, discussed the information necessary to fulfill each Committee’s respective responsibilities and duties with respect to areas of common interest (including, among other matters, the company’s methods for identifying and managing risks).
• Review of periodic reports regarding corporate-wide compliance with laws and regulations.
• Review of any items escalated by the Risk Committee that have significant financial statement impact or require significant financial statement/regulatory disclosures.
• Review processes for managing and assessing risk through the Risk Committee and management-level risk committees. | |
| Management | • Chief Risk Officer: Implement an effective risk management framework and daily oversight of risk.
• Internal Audit: Provide reliable and timely information to our Board and management regarding our company’s effectiveness in identifying and appropriately controlling risks.
• Senior Risk and Control Committee: Review significant risk events, emerging risks and drivers of risk. Serve as the most senior management-level risk governance body at the company, and review on an ongoing basis the top risks. Provide oversight for all risk management, compliance and ethics activities and processes, including the risk framework.
| |
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
In addition, the Risk Committee reviews the appointment, performance and replacement of ourOur Chief Risk Officer andreports to the Risk Committee. The Risk Committee also reviews the Senior Risk and Control Committee’s activities, and any significant changes in its key responsibilities must be reported to the Risk Committee. Our company has also formed several risk managementsub-committees to identify, assess and manage risks. Each risk managementsub-committee reports its activities to the Senior Risk and Control Committee and any significant changes in the key responsibilities of anysub-committee, or a change in the Chair of anysub-committee, must be approved by our Chief Risk Officer and subsequently reported to the Senior Risk and Control Committee.
Our company also has a comprehensive internal risk framework, which facilitates risk oversight by our Risk Committee. Our risk management framework is designed to:
Our primary risk exposures as well as our risk management framework and methodologies are discussed in further detail on pages 5055 through 5661 in our 20192020 Annual Report. See “How We Address Risk and Control” on page 5470 below for a discussion of risk assessment as it relates to our compensation program.
Board Meetings and Committee Information
Board Meetings
Our Corporate Governance Guidelines provide that our directors are expected to attend our Annual Meeting of stockholdersStockholders and all regular and special meetings of our Board and committees on which they sit. All of our directors attended our 20192020 Annual Meeting of stockholders, eitherStockholders.
In 2020, our Board and senior leadership needed to respond quickly to the challenges presented by the COVID-19 pandemic, including ensuring the health and safety of our employees, contractors and directors, and protecting our business. In the first half of 2020, the Board convened several special meetings to discuss and address these challenges. During these special meetings, the Board received updates and reports from members of senior leadership regarding execution of the company’s COVID-19 pandemic response. The Board (and the independent directors) also convened
special meetings in person or via webcast.
connection with the CEO search and appointment, other senior leadership transitions, non-routine regulatory requirements and Board refreshment. Our Board held 1826 meetings in 2019. 2020.
Beginning in March 2020, the Board oversaw the transition to a fully remote meeting format, leveraging the company’s existing video communications technology and infrastructure.
Each incumbent director attended at least 75% of the aggregate number of meetings of our Board and of the committees on which he or she sat, and the average attendance rate for incumbent directors in 2020 was 99%approximately 95%.
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Committees and Committee Charters
Our Board has established six standing committees, and aeach consisting entirely of independent directors. A description of each standing committee is provided below. Each committee makes recommendations to our Board as appropriate and reports periodically to the entire Board. The charter for each committee isFour of the six standing committees are chaired by a diverse director. Additional information about the standing committees can be found in their charters, which are available on our website (see “Helpful Resources” on page 87)100).
Audit
6 Independent Members
| Joseph J. Echevarria (Chair), Linda Z. Cook, Ralph Izzo, Jennifer B. Morgan, Samuel C. Scott III,
Overseeing Independent Registered Public Accountant. Our Audit Committee has direct responsibility for the appointment, compensation, annual evaluation, retention and oversight of the work of the registered independent public accountants engaged to prepare an audit report or to perform other audit, review or attestation services for us. The Committee is responsible for thepre-approval of all audit and permittednon-audit services performed by our independent registered public accountants and each year, the Committee recommends that our Board request stockholder ratification of the appointment of the independent registered public accountants.
Overseeing Internal Audit Function. The Committee acts on behalf of our Board in monitoring and overseeing the performance of our internal audit function. The Committee reviews the organizational structure, qualifications, independence and performance of Internal Audit and the scope of its planned activities, at least annually. The Committee also approves the appointment of our internal Chief Auditor, who functionally reports directly to the Committee and administratively reports to the CEO, and annually reviews his or her performance and, as appropriate, replaces the Chief Auditor.
Overseeing Internal Controls over Financial Statements and Reports. The Committee oversees the operation of a comprehensive system of internal controls covering the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies. Quarterly, the Committee reviews a report from the company’s Disclosure Committee and reports concerning the status of our annual review of internal control over financial reporting, including (1) information about (a) any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect our ability to record, process, summarize and report financial information and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in our internal control over financial reporting, and (2) management’s responses to any such circumstance. The Committee also oversees our management’s work in preparing our financial statements, which will be audited by our independent registered public accountants.
Financial Planning and Analysis. The Committee reviews: (1) financial forecasts, operating budgets, capital expenditures and expense management programs, and progress relative to targets and relative to competitors; and (2) plans with regard to net interest revenue, investment portfolio activities and progress relative to such plans and activities.
Members and Financial Expert. The Committee consists entirely of directors who meet the independence requirements of listing standards of the NYSE,Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the Federal Deposit Insurance Corporation (“FDIC”). All members are financially literate within the meaning of the NYSE listing standards as interpreted by |
| * | Mr. Izzo joined the Audit Committee in August 2020, when he joined the Board. Mr. Terrell joined the committee in May 2020, and Mr. Zollar was a member of the committee until May 2020. Ms. Morgan is currently a member of the committee but will not be standing for re-election as a director at the 2021 Annual Meeting. |
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| our Board and are outside directors, independent of management, and are not large customers of the company, under the FDIC’s rules and regulations. Our Board has determined that (i) each of Messrs. Echevarria, |
Corporate Governance, Nominating and Social Responsibility Committee
4 Independent Members
| Samuel C. Scott III (Chair), Linda Z. Cook, Joseph J. Echevarria, Ralph Izzo*
Corporate Governance Matters. As further described on page
Oversight of Director Compensation and Benefits. The Committee reviewsnon-employee director compensation
ESG and Corporate Social Responsibility. The Committee promotes a culture that emphasizes and sets high standards for corporate citizenship and reviews corporate performance against those standards. The Committee is responsible for the oversight of the company’s
For additional information regarding the company’s commitment to ESG and corporate social responsibility and recent initiatives, see | |||
Finance
3 Independent Members
| Jeffrey A. Goldstein (Chair), Joseph J. Echevarria, Elizabeth E. Robinson
The Finance Committee assists the Board in fulfilling its responsibilities with respect to the monitoring and oversight of the company’s financial resources and strategies. The Committee’s responsibilities and duties include reviewing the company’s capital structure, annual capital plan, capital raising and capital distributions as well as the financial aspects of our recovery and resolution plans. In addition, the Committee is responsible for approving and recommending to our Board our annual capital plan submission | |||
| * | Mr. Izzo joined the CGNSR Committee in August 2020, when he joined the Board. |
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Human
5 Independent Members | Linda Z. Cook (Chair),
Compensation and Benefits. The HRC Committee is generally responsible for overseeing our employee compensation and benefit policies and programs, our management development and succession programs, the development and oversight of a succession plan for the CEO position and our diversity and inclusion programs. The Committee also administers and makes equity and/or cash awards under plans adopted for the benefit of our employees to the extent required or permitted by the terms of these plans, establishes any related performance goals and determines whether and the extent to which these goals have been attained. The Committee also evaluates and approves the total compensation of the CEO and all other executive officers and makes recommendations concerning equity-based plans, which recommendations are subject to the approval of our entire Board. The Committee also oversees certain retirement plans that we sponsor to ensure that: (1) they provide an appropriate level of benefits in a cost-effective manner to meet our needs and objectives in sponsoring such plans; (2) they are properly and efficiently administered in accordance with their terms to avoid unnecessary costs and minimize any potential liabilities to us; (3) our responsibilities as plan sponsor are satisfied; and (4) financial and other information with respect to such plans is properly recorded and reported in accordance with applicable legal requirements.
CEO Compensation. The Committee reviews and approves corporate goals and objectives relevant to the compensation of our CEO, reviews his performance in light of those goals and objectives, and determines and approves his compensation on the basis of its evaluation. With respect to the performance evaluation and compensation decisions regarding our CEO, the Committee reports its preliminary conclusions to the other independent directors of our full Board in executive session and solicits their input prior to finalizing
Executive Compensation. The Committee establishes the compensation of executive officers, oversees executive compensation and reviews the appointment, promotion, performance and potential of senior managers of the company.
Delegated Authority. The Committee has delegated to our CEO the responsibility for determining equity awards to certain employees, other than to himself or to our executive officers, who are eligible to receive grants under our 2019 Long-Term Incentive Plan (“LTIP”). This delegated authority extends to both annual equity awards and equity awards granted outside of the annual awards process(“off-cycle awards”). Our CEO’s delegated authority is subject to certain limitations, including the aggregate shares represented by plan awards that may be granted to any one individual in any calendar year (100,000, to any one individual, with a maximum of 1,000,000 aggregate shares represented by plan awards foroff-cycle awards in any
Management Involvement. Our management provides information and recommendations for the Committee’s decision-making process | |||
|
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| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Risk Committee
4 Independent Members | Edmund F. “Ted” Kelly (Chair), Jeffrey A. Goldstein, Elizabeth E. Robinson, Alfred W. “Al” Zollar*
See “Oversight of Risk” on page | |||
Technology
3 Independent
| Alfred W. “Al” Zollar (Chair)
Technology Planning and Strategy. The Technology Committee is responsible for reviewing and approving the company’s technology planning and strategy, reviewing significant technology investments and expenditures, and monitoring and evaluating existing and future trends in technology that may affect our strategic plans, including monitoring overall industry trends. The Committee receives reports from management concerning the company’s technology and approves related policies or recommends such policies to the Board for approval, as appropriate. The Committee also oversees risks associated with technology. For example, in addition to the cybersecurity program update that is provided to the full Board on an annual basis, the Technology Committee is regularly apprised of information security and cybersecurity matters through periodic and as-needed reporting from management. |
Compensation Consultants to the HRC Committee
The HRC Committee has the sole authority to retain, terminate and approve the fees and other engagement terms of any compensation consultant directly assisting the Committee,committee, and may select or receive advice from any compensation consultant only after taking into consideration all factors relevant to the consultant’s independence from management, including the factors set forth in the NYSE’s rules.
The HRC Committee has engaged Compensation Advisory Partners LLC (“CAP”) to serve as its independent compensation consultant. As discussed in greater detail in the “Compensation Discussion and& Analysis” beginning on page 3749 below, throughout the year, CAP assists the committee in its analysis and evaluation of compensation matters relating to our executive officers. CAP reports directly to the HRC Committee, attends thein-person, virtual and telephonic meetings of the committee, and meets with the Committeecommittee in executive session without management present. CAP also reviews and provides
input on committee meeting materials and advises on other matters considered by the Committee.committee.
The HRC Committee annually reviews the independence of its compensation consultant. CAP works with management in executing its services to the Committee,committee, but does not provide services to management withoutpre-approval by the committee Chair. In addition, CAP maintains, and has provided to the Committee,committee, a written policy designed to avoid and address potential conflicts of interest.
In 2019,Throughout 2020, in addition to serving as the HRC Committee’s independent compensation consultant, CAP also advised the CGNSR Committee with respect tonon-employee director compensation. The HRC Committee considered the company’s relationship with CAP, assessed the independence of CAP pursuant to SEC and NYSE rules, and concluded that there are no conflicts of interest that would prevent CAP from independently representing the HRC Committee.
|
| ** | Ms. Morgan is currently a member of the Technology Committee but will not be standing for re-election at the 2021 Annual Meeting. |
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Interested parties may send communications to our Board, or our independent directors or any Board committee through our independent Chair or, as applicable, Lead Director, in accordance with the procedures set forth on our website (see “Helpful Resources” on page 87)100).
Our Corporate Secretary is authorized to open and review any mail or other correspondence received that is addressed to the Board, or any individual director or any Board committee unless the item is marked “Confidential” or “Personal.”“Personal”. If so marked and addressed to the Board or a Board committee, it will be delivered unopened to the independent Chair or, as applicable, Lead Director.Director or committee chair. If so marked and addressed to an individual director, it will be delivered to the addressee unopened. If, upon opening an envelope or package not so marked, the Corporate Secretary determines that it contains a magazine, solicitation or advertisement, the contents may be discarded. Any written communication regarding accounting matters that is addressed to our Board is processed in accordance with procedures adopted by the Audit Committee with respect to the receipt, review and processing of, and any response to, such matters.
In addition, allAll directors are expected to attend each Annual Meeting of stockholders. While ourby-laws, consistent with Delaware law, permit stockholder meetings to occur by remote communication, we intend this to be used onlyStockholders, as discussed in exigent circumstances. Our Board believes that anin-person Annual Meeting provides an important opportunity for stockholders to ask questions.the “Board Meetings” section above.
Out of consideration for the health and wellbeing of our stockholders, employees, partners and communities, and in light of developments related to the COVID-19 pandemic, the 2021 Annual Meeting of Stockholders will be conducted solely by means of remote communication. A virtual stockholder meeting format is permitted by our by-laws, consistent with Delaware law. The meeting will be held via a live webcast with the Board, the director nominees who currently do not serve on our Board and certain members of management joining the webcast from remote locations. Our Board recognizes the importance of the Annual Meeting as a forum in which stockholders may engage with the directors and members of management, and the Annual Meeting will be conducted in a manner that enables stockholders to participate, vote and submit questions through the virtual meeting platform. Additional detail regarding the virtual Annual Meeting format can be found in the “Annual Meeting Q&A” section on page 94. |
| BNY Mellon Ø | | 43 |
ITEM 1. ELECTION OF DIRECTORS
| > Director Compensation | |||
Our Corporate Governance Guidelines provide that compensation for our independent directors’ services may include annual cash retainers; shares of our common stock; deferred stock units or options on such shares; meeting fees; fees for serving as a committee Chair; and fees for serving as a director of one of our subsidiaries. We also reimburse directors for their reasonableout-of-pocket expenses in connection with attendance at Board meetings. In the case ofmeetings, including airfare directors are reimbursed for their travel expenses not exceeding the first-class commercial rate. In addition, corporate aircraft may be used for directors in accordance with the company’s aircraft usage policy. Directors will also be reimbursed for reasonableout-of-pocket expenses (including tuition and registration fees) relating to attendance at seminars and training sessions relevant to their service on the Board and in connection with meetings or conferences which they attend at the company’s request.
Each year, the CGNSR Committee is responsible for reviewing and making recommendations to the Board regarding independent director compensation. The CGNSR Committee annually reviews independent director compensation to ensure that it is consistent with market practice and aligns our directors’ interests with those of long-term stockholders while not calling into question the directors’ objectivity. In undertaking its review, the CGNSR Committee utilizes benchmarking data regarding independent director compensation of the company’s peer group based on public filings with the SEC, as well as survey information analyzing independent director compensation at U.S. public companies. As discussed on page 42, CAP provides assistance to the CGNSR Committee by compiling the benchmarking data and survey information.
2020 Director Equity Compensation
Based on its review for 2019,2020, the CGNSR Committee recommended, and the Board approved, an annual equity award with a value of $155,000$185,000 for each independent director. The annual equity award iswas granted in the form of deferred stock units that vest on the earlier of one year after the date of the award or on the date of the next Annual Meeting of stockholders,Stockholders, and must be held for as long as the director serves on the Board. The units accrue dividends, which are reinvested in additional deferred stock units. This award of deferred stock units was granted shortly after the 20192020 Annual Meeting of Stockholders for directors elected orre-elected at such meeting.
For 2019, our independent directors received2020 Director Cash Retainers
Each non-employee director receives an annual cash retainer of $110,000, payable in quarterly installments in advance. In addition,for his or her service on the Board, as well as additional cash retainers if he or she serves as the independent Chair, as a Chair of the HRC Committee received an annual cash retainer of $25,000, the Chairs of the Audit Committee and the Risk Committee each received an annual cash retainer of $30,000, the Chairs of all other committees each
received an annual cash retainer of $20,000, eacha committee or as a member of the Audit Committee andor Risk Committees. The following table lists the Risk Committee received an annual membership fee of $10,000, and our Lead Director received an annual cash retainer of $50,000.amounts in effect for 2020:
In connection with the appointment of our Interim CEO, the CGNSR Committee recommended and the Board approved the appointment of an independent Chair. After receiving input from our external compensation and legal advisors, the CGNSR Committee recommended and the Board approved an annual cash retainer of $150,000 for the role of independent Chair of the Board.
| Type of Retainer |
Amount of Retainer | ||||
Annual Board Membership | $ | 110,000 | |||
Independent Chair | $ | 150,000 | |||
Audit or Risk Committee Membership | $ | 15,000 | |||
HRC Committee Chair | $ | 25,000 | |||
Audit Committee Chair* | $ | 30,000 | |||
Risk Committee Chair* | $ | 30,000 | |||
CGNSR Committee Chair | $ | 20,000 | |||
Finance Committee Chair | $ | 20,000 | |||
Technology Committee Chair | $ | 20,000 | |||
| * | Amount is in addition to the applicable committee membership retainer. |
2021 Director Compensation
In conducting its annual review for 2020,2021, the CGNSR Committee engaged CAP to review the design and competitiveness of our independent director compensation structure.structure and to advise on any developments in director compensation practices in light of the COVID-19 pandemic. After receiving this input from CAP, the CGNSR Committee determinedrecommended to recommend,the Board, and the Board approved, increasingmaintaining the value of the annual equity component of our independent directorexisting compensation to $185,000, which will be granted toframework for independent directors elected at the 2020 Annual Meeting in the form of deferred stock units on the same terms and conditions as the 2019 award.for 2021. We believe this increasecompensation framework for our independent directors is consistent with market practice, recognizes the critical role that our independent directors play in effectively managing the company and responding to stockholders, regulators and other key stakeholders, and will assistsupports us in attracting and retaining highly qualified director candidates. For similar reasons,
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| ITEM 1. ELECTION OF DIRECTORS > Director Compensation |
Stock Ownership Guidelines
As part of the CGNSR Committee’s annual review of the director compensation program, the CGNSR Committee also recommended, andexamines the Board approved, an increase in the cash fees paidstock ownership guidelines applicable to members for service on the Audit and Risk Committees of our Board from $10,000 to $15,000 for 2020.
independent directors. Under our Corporate Governance Guidelines, by the fifth anniversary of their service on the Board, directors are required to own a number of shares of our common stock with a market value of at least five times the annual cash retainer.
Our directors are not permitted to hedge, pledge or transfer any of their deferred stock units and are subject to a robust hedging and pledging policy as described in further detail under “Compensation Discussion and Analysis — & Analysis—Pay Practices — Practices—Hedging and Pledging” on page 5167 below. This policy prohibits our directors from hedging or pledging company securities owned directly or indirectly and from engaging in certain transactions involving our securities and requires directors topre-clear any transaction in company stock or derivative securities with our legal department (including gifts and other similar transactions).
Deferred Compensation
In the 2007 merger of The Bank of New York Company, Inc. and Mellon Financial Corporation (the “2007 merger”), we assumed the Deferred Compensation Plan forNon-Employee Directors of The Bank of New York Company, Inc. (the “Bank of New York Directors Plan”) and the Mellon Elective Deferred Compensation Plan for Directors (the “Mellon Directors Plan”). Under the Bank of New York Directors Plan, participating legacy Bank of New York directors continued to defer receipt of all or part of their annual retainer and committee fees earned through 2007. Under the Mellon Directors Plan, participating legacy Mellon directors continued to defer receipt of all or part of their annual retainer and fees
earned through 2007. Both plans are nonqualified plans, and neither plan is funded.
Although the Bank of New York Directors Plan and the Mellon Directors Plan continue to exist, all new deferrals of director compensation by any of the independent directors have been made under the Director Deferred Compensation Plan, which was adopted effective as of January 1, 2008. Under this plan, an independent director can direct all or a portion of his or her annual retainer or other fees into either (1) variable funds, credited with gains or losses that mirror market performance of market style funds or (2) the company’s phantom stock.
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| ITEM 1. ELECTION OF DIRECTORS > Director Compensation |
2020 Director Compensation Table
The following table provides information concerning the compensation of each independent director who served in 2019. Neither2020. Mr. Gibbons nor Mr. Scharf receiveddid not receive any compensation for his services as a director. Mr. Garden has advised us that, pursuant to his arrangement with Trian, he transferred to Trian, or holds for the benefit of Trian, all director compensation paid to him.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(6) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other ($)(7) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other ($)(3) | Total ($) | |||||||||||||||||||||||||||||||||||
Steven D. Black(1)(2) | $ | 132,500 |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 132,500 |
| ||||||||||||||||||||||||||||||
Linda Z. Cook | $ | 120,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 275,000 |
| $ | 150,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 335,000 | ||||||||||||||||||||
Joseph J. Echevarria(1) | $ | 200,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 355,000 |
| $ | 305,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 490,000 | ||||||||||||||||||||
Edward P. Garden(3) | $ | 77,500 |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 77,500 |
| ||||||||||||||||||||||||||||||
Jeffrey A. Goldstein(1) | $ | 140,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 295,000 |
| $ | 145,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 330,000 | ||||||||||||||||||||
John M. Hinshaw(1)(4) | $ | 140,000 |
| $ | 0 |
| $ | 0 |
| $ | 0 |
| $ | 140,000 |
| ||||||||||||||||||||||||||||||
Ralph Izzo(1) | $ | 27,500 | $ | 0 | $ | 0 | $ | 0 | $ | 27,500 | |||||||||||||||||||||||||||||||||||
Edmund F. “Ted” Kelly | $ | 150,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 305,000 |
| $ | 155,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 340,000 | ||||||||||||||||||||
Jennifer B. Morgan(1) | $ | 120,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 275,000 |
| $ | 125,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 310,000 | ||||||||||||||||||||
Mark A. Nordenberg(5) | $ | 65,000 |
| $ | 0 |
| $ | 0 |
| $ | 4,073 |
| $ | 69,073 |
| ||||||||||||||||||||||||||||||
Elizabeth E. Robinson(1) | $ | 120,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 156,250 |
| $ | 431,250 |
| $ | 125,000 | $ | 185,000 | $ | 0 | $ | 125,000 | $ | 435,000 | ||||||||||||||||||||
Samuel C. Scott III | $ | 140,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 965 |
| $ | 295,965 |
| $ | 145,000 | $ | 185,000 | $ | 0 | $ | 1,043 | $ | 331,043 | ||||||||||||||||||||
Frederick O. Terrell | $ | 55,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 240,000 | |||||||||||||||||||||||||||||||||||
Alfred W. “Al” Zollar | $ | 55,000 |
| $ | 155,000 |
| $ | 0 |
| $ | 0 |
| $ | 210,000 |
| $ | 145,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 330,000 | ||||||||||||||||||||
| (1) | Elected to defer all or part of cash compensation |
| (2) |
|
|
|
|
Amount shown represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (or “FASB ASC”) 718 Compensation-Stock Compensation for |
|
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Item 2. Advisory Vote on Compensation
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ITEM 2. ADVISORY VOTE ON COMPENSATION | > Resolution | |||
Proposal
We highly value dialogue and engagement with our stakeholders, including stockholders, employees, clients and the communities we serve, with respect to our executive compensation program. Consistent with that, and in accordance with SEC rules, we are asking our stockholders to approve the following resolution:
RESOLVED, that the stockholders approve the 20192020 compensation of the named executive officers (“NEOs”), as disclosed in this proxy statement pursuant to Item 402 of RegulationS-K of the SEC (including the Compensation“Compensation Discussion and& Analysis,” the compensation tables and other narrative executive compensation disclosures).
We highly value dialogue and engagement with our stockholders and other stakeholders, including employees, clients and the communities we serve, with respect to our executive compensation program.
Background
•
• Our approach to compensation continues to be designed to directly link pay to performance, | The Board recommends that you vote “FOR” the approval of the
|
Voting
Your vote on this resolution is advisory. Although the Board is not required to take any action in response, the Board values our stockholders’ opinions. As in prior years,and the Board intendsHRC Committee intend to evaluate the results of the 20202021 vote carefully when making future decisions regarding the compensation of our NEOs.
| BNY Mellon Ø | |
ITEM 2. ADVISORY VOTE ON COMPENSATION | > Compensation Discussion & Analysis | |||
Overview
In this Compensation Discussion & Analysis, we review the objectives and elements of the company’s executive compensation program, its alignment with company performance, and the 2020 compensation decisions for our NEOs. The company’s say-on-pay proposals over the previous three years have received an average of 97% support from stockholders, with last year’s say-on-pay proposal submitted to stockholders at our 2019 Annual Meeting receivedreceiving the strong support of 97%95% of our stockholders, which the HRC Committee believed conveyed a general endorsement of our executive compensation program and related compensation actions. As a result, afterstockholders. After considering the vote and other factors in its annual review of our programs, the HRC Committee determined to maintain its general approach to our annual compensation program for 2019.2020. Accordingly, our 20192020 executive compensation program continued to focus our management team on operating earnings per share (“OEPS”)feature OEPS as theirthe key performance assessment metric.metric for determining incentive awards. In addition, the HRC Committee determined to continue to base the earnout for the PSU awards made in 2020 on average operating margin and average revenue growth. Following company engagement with our stakeholders, the HRC Committee determined to revise the PSU metrics for the 2021 awards to include Return on Average Tangible Common Equity (“ROTCE”) and relative TSR which is designed to reinforce alignment with stockholder interests (as discussed in more detail on page 63).
2019Named Executive Officers
Our NEOs for 2020 are set forth in the table below.
Thomas P. “Todd” Gibbons Chief Executive Officer |
Robin Vince Vice Chair and CEO of Market Infrastructure |
Emily H. Portney Senior Executive Vice President and Chief Financial Officer (“CFO”) |
Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations |
Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management |
Michael P. Santomassimo Former Senior Executive Vice President and CFO |
Mitchell E. Harris Former Senior Executive Vice President and CEO of Investment Management |
Leadership Transition
The HRC Committee’s review of our 2020 compensation program and the individual compensation decisions made by the HRC Committee for our NEOs were informed by the transitions in a number of key leadership positions that occurred during 2020. In addition to appointing Mr. Gibbons as CEO, the Board appointed Mr. Vince to serve as Vice Chair of the company and CEO of Market Infrastructure and Ms. Portney to serve as CFO. Ms. Engle’s responsibilities were expanded to include the company’s operations function. Ms. Keating was appointed as an executive officer of the company, in recognition of the importance of Wealth Management to the long-term strategy of the company. Accordingly, the HRC Committee considered these new and expanded responsibilities of our NEOs in making compensation decisions. The discussion regarding “NEO Appointments and Compensation” begins on page 56.
| BNY Mellon Ø | 2021 Proxy Statement | 49 |
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
COVID-19 Pandemic Response
The company has implemented a number of policies and programs designed to support our operations and resiliency, as well as the safety and wellbeing of our employees and their families in light of the unprecedented circumstances surrounding the COVID-19 pandemic. A description of programs and resources provided to our employees during the COVID-19 pandemic can be found in the “Introduction” on page 3. Throughout the year, the HRC Committee met to discuss the company’s COVID-19 pandemic response and receive updates from management, and compensation decisions for 2020 considered management’s performance in maintaining the operations of the company and building a caring, healthy and resilient culture supportive of employee wellbeing.
In addition, the HRC Committee considered the impact of the COVID-19 pandemic on the company’s financial performance and the corresponding effect on the company’s incentive plan results and PSU earnout. Those decisions are discussed in more detail beginning on page 57.
2020 Key Compensation Practices
The following table summarizes the key features of our executive compensation program. As highlighted in the table, each component of the program is designed to compensate our executive officers for performance in a manner that is aligned with our stockholders’ interests and consistent with our high standards for risk management.
| Program Feature | Practice | |
Balanced approach for incentive compensation |
• Incentive compensation is earned on a combination of corporate and individual performance
• Impact of the individual modifier permits incentive award increases of up to 50% and decreases down to $0, providing flexibility for greater differentiation based on individual performance and, if appropriate, business unit performance
• Earnout on | |
Directly link pay to performance |
• Incentive compensation deferred in the form of PSUs comprises 50% of target total incentive compensation for our
• Incentive compensation deferred in the form of
• Corporate component metric for incentive compensation based on OEPS | |
Promote long-term stock ownership |
• Deferred equity (PSUs and RSUs)
• PSUs cliff vest after the end of a three-year performance period, and RSUs vest in equal installments over three years
• Robust policies prohibit hedging and pledging of company stock and derivative securities
• Our CEO must acquire and retain company stock equal to six times base salary, and other NEOs must acquire and retain stock equal to four times base salary, plus, in each case, | |
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Executive Pay Practice Highlights
The HRC Committee takes a rigorous approach to the review and consideration of the pay practices that we have adopted. Accordingly, there are certain practices that we undertake to ensure we serve our stockholders’ long-term interests or the interests of our other stakeholders and to align with our high risk management standards, and other practices that have not been implemented because we believe they do not serve these goals.
| What we do: | What we don’t do: | |
ü Directly link pay to performance
ü Require sustained financial performance to earn full amount of long-term awards
ü Promote long-term stock ownership through deferred equity compensation and stock ownership requirements
ü Balance risk and reward in compensation
ü Use a balanced approach for determining incentives with both corporate and individual goals
ü Balance incentives for short- and long-term performance with a mix of performance metrics, fixed and variable compensation and cash and equity
ü Conduct a robust stakeholder outreach program ü Comprehensive clawback and recoupment policies | × No fixed-term employment agreements
× No single-triggerchange-in-control benefits
× No excessive severance benefits
× No excessive perquisites or benefits
× No severance-related taxgross-ups
× No hedging, pledging or short sales of our stock
× No dividend equivalents paid on unearned incentive PSUs or RSUs | |
The “Risk Assessment” discussion beginning on page 61 and the “How We Address Risk and Controls” section on page 70 contain more information about our compensation risk management practices. Each of our pay practices, including with respect to our Clawback and Recoupment Policy, are described more fully beginning on page 68.
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20192020 Incentive Compensation Elements
We believe that the structure and elements of our 2020 incentive compensation program for our NEOs align the interests of our executives with the interests of our stockholders by focusing our executives on the achievement of sustainable, long-term growth for the company. The following chart provides an overview of these structural elements, including the relevant vesting and performance standards that provide a multi-year perspective on 2020 achievements. These pay components are unchanged from the prior year, except in the case of the performance metrics for the 2021 PSU awards, as discussed further on page 63.
Element | Performance Metrics | How It Pays | Links to Performance | |||||
Cash |
Award grant based on OEPS
| • Single cash payment in February 2021 |
• OEPS ties to organic growth, which we believe is
•
• Equity awards motivate and reward achievement of long-term growth and
| |||||
PSUs | Award earnout for 2021 grants to be based on ROTCE and relative TSR |
• Granted in February 2021
| ||||||
• Earned between 0% – 150% based on the achievement of performance metrics over 3-year period
| ||||||||
RSUs | Award grant based on OEPS | • Granted in February 2021 • RSUs vest in equal installments over three years
| ||||||
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2019 Incentive2020 Compensation Outcomes
The following table provides a summary of the HRC Committee’s key compensation decisions and the impact of performance on the compensation of our continuing NEOs for 2020.
Compensation Category | Key Decisions and Impact of Performance | |
| Base Salary and Target Incentive Decisions | ||
Base Salary | • No changes were made to the base salaries for Mr. Gibbons, Ms. Engle and Ms. Keating. • To reflect her new role as CFO of the company, the HRC Committee set Ms. Portney’s base salary at $600,000. • Upon joining the company as Vice Chair of the company and CEO of Market Infrastructure, Mr. Vince’s base salary was set at $750,000. | |
Target Incentives | • In August 2020, the HRC Committee approved an increase to Mr. Gibbons’ target incentive from $9.75 million to $13.25 million for 2020 to reflect his appointment as CEO. • In connection with their new and/or expanded roles, Ms. Portney’s target incentive was set at $4.4 million on an annualized basis, Ms. Engle’s target incentive was increased to $6.4 million, and Mr. Vince’s target incentive was set at $9.25 million, pro-rated for the portion of the year he was employed by the company. • Ms. Keating’s target incentive of $4.4 million was unchanged from the prior year. | |
Factors Considered | • Input from independent compensation consultant, CAP, on market trends, compensation program practices, and compensation levels. • Peer group and industry compensation practices with respect to the CEO, CFO, Vice Chair and Head of Technology and Operations positions. | |
Outcomes | ||
Objective Metrics | • Minimum Funding Requirement Met: Common equity Tier 1 ratio of at least 8.5% was met
• OEPS: 2020 OEPS was
| |
| • Approved corporate component of 95% | |
• Earnings during
• Impact of market outperformance is limited to 25% under our balanced scorecard
• Individual modifier provides greater differentiation based on individual performance by permitting incentive award increases of up to 50% and decreases down to $0, and individual NEO modifiers ranged from 98% to 110% | ||
|
| |
| • Earned at
• | |
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20192020 Performance Highlights
The following information summarizesgraphs below summarize key highlightsaspects of our 2019 performance.2020 performance that the HRC Committee considered in evaluating the 2020 performance of our named executive officers. For a more detailed discussion of our 20192020 performance, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20192020 Annual Report to stockholders.
| Reported EPS | OEPS* | |||
|
* For a reconciliation and explanation of this | |||
Multi-Year Relative |
| |||
|
| |||
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20192020 Target Direct Compensation Structure*
20192020 Target Incentive Compensation Elements*
PSUs are earned between 0% – 150% based on the achievement of performance metrics over a three-year performance period and cliff-vest after the three-year performance period.
RSUs generally vest in equal installments over three years.
| * | Calculations include annual target incentive compensation only to our continuing NEOs and exclude |
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NEO Appointments and Compensation
The HRC Committee oversaw a year of transition for our NEOs, including new appointments and expanded roles for some of our NEOs consistent with the company’s long-term strategy and focus on organic growth.
Mr. Gibbons was appointed CEO, effective March 30, 2020. Previously, he served as Interim CEO beginning on September 27, 2019. Following Mr. Gibbons’ appointment, the HRC Committee approved in August 2020 an increase to Mr. Gibbons’ target incentive from $9,750,000 to $13,250,000 for 2020. There was no change to his base salary of $1,250,000.
Ms. Portney was appointed CFO, effective July 19, 2020. She succeeded Michael Santomassimo, who resigned as CFO effective July 17, 2020. Prior to her appointment as CFO, Ms. Portney led the client management, sales and service teams for the company’s Asset Servicing business globally and oversaw the Americas region for the Asset Servicing business. On August 10, 2020, the HRC Committee approved a new compensation arrangement for Ms. Portney in connection with her appointment as CFO of the company. Ms. Portney’s base salary was set at $600,000 and her annualized target incentive was set at $4,400,000, establishing Ms. Portney’s 2020 annualized target direct compensation at $5,000,000.The amounts set forth in the “2020 Annual Target Direct Compensation Table” reflect Ms. Portney’s annualized target, and the amounts in the “Awarded 2020 Total Direct Compensation Table” reflect her effective 2020 base salary and target incentive level at a blended rate, taking into consideration the compensation levels that applied for the period prior to, and the increased compensation levels that applied for the period following, her appointment as CFO.
Mr. Vince was appointed Vice Chair of the company and CEO of Market Infrastructure, effective October 1, 2020. In connection with his appointment, the HRC Committee set his base salary at $750,000, effective upon the commencement of his employment with the company, and approved a target incentive for 2020 of $9,250,000, pro-rated for the portion of the year he was employed with the company (and to be paid in an amount not less than the pro-rated target). The HRC Committee also awarded a $500,000 cash sign-on bonus paid upon his start with the company, a buy-out award consisting of $3,948,159 in cash which was paid in January 2021, and an equity buy-out award of 98,337 RSUs granted in November 2020 that vests in two installments in connection with the forfeiture of awards from his previous employer. Mr. Vince may be entitled to receive additional buyout awards if he is required to forfeit certain other awards from his former employer as a result of his employment with the company. In addition, any equity awards that Mr. Vince is granted (other than RSUs granted in connection with his buyout award) prior to his turning 55 years old will continue to vest according to their terms if Mr. Vince complies with all applicable covenants and (i) his employment is terminated without cause, (ii) his employment is terminated pursuant to mutual agreement, or (iii) he voluntarily resigns as a result of a material and adverse change in duties, responsibilities or scope of his position except to the extent required by law or regulation. Also, in accordance with the terms of his offer letter, RSUs granted to Mr. Vince in connection with his buyout awards shall continue to vest unless his employment is terminated for cause. The amounts set forth in the “2020 Annual Target Direct Compensation Table” reflect Mr. Vince’s annualized target, and the amounts in the “Awarded 2020 Total Direct Compensation Table” reflect his compensation approved by the HRC Committee and are pro-rated for the portion of 2020 that Mr. Vince was employed by the company.
Ms. Engle was appointed Head of Technology and Operations in August 2020. Prior to this appointment, Ms. Engle served as Head of Technology. In connection with her appointment as Head of Technology and Operations, Ms. Engle’s target total direct compensation for 2020 was increased to $7,000,000, reflecting an unchanged base salary of $600,000 as compared to the prior year and an increased target incentive of $6,400,000 to reflect her expanded responsibilities.
Ms. Keating, Senior Executive Vice President and CEO of Wealth Management, was appointed an executive officer of the company effective October 1, 2020. Her base salary for 2020 was set at $600,000, and her target incentive was set at $4,400,000, both of which were unchanged from the period prior to her appointment.
In determining the appropriate levels of compensation described above for Mr. Gibbons, Ms. Portney, Mr. Vince, and Ms. Engle, the HRC Committee sought input and advice from its independent compensation consultant, CAP, on market trends and compensation program practices with respect to setting compensation levels for the CEO, CFO, Vice Chair and Head of Technology and Operations positions, including companies in our peer group and in our industry.
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CEO Transition and Compensation
Mr. Gibbons was appointed as Interim CEO and as a member of the Board, effective September 27, 2019. He succeeded Mr. Scharf, who resigned as CEO, Chairman of the Board and as a director of the company effective September 26, 2019.
Following Mr. Gibbons’ appointment, the HRC Committee designed a compensation package intended to align his compensation with his new position and create alignment with our stockholders’ interests, as discussed further below. In addition to the changes to Mr. Gibbons’ target direct compensation described below, Mr. Gibbons received a specialone-time award of 89,887 RSUs on October 28, 2019 in recognition of his appointment as Interim CEO, which will vest ratably in thirds over the next three years beginning on October 28, 2020. If Mr. Gibbons is not appointed permanent CEO and thereafter retires, the award will continue to vest according to its terms. Otherwise, any unvested portion of the award will be forfeited in the event he voluntarily retires.
In the first quarter of 2020 the Committee also madeone-time grants of RSUs to certain members of the Executive Committee (other than Mr. Gibbons), designed to provide for continuity among our management team during and beyond the search for and transition to a permanent CEO. These awards were not considered as part of direct compensation for 2019 and generally will vest in full on the third anniversary of the grant date, subject to the executive’s continued employment through such date, and are not eligible for retirement treatment. Messrs. Santomassimo and Owens and Ms. Engle each received 40,404 RSUs, which was in addition to their 2019 compensation.
2019 Annual Target Direct Compensation
In the first quarter of each year, the HRC Committee establishes annual target total direct compensation for each executive by considering competitive data, executive position and level of responsibility and, for executives other than our CEO, our CEO’s recommendation. Targets are reviewed annually but onlyand adjusted if determined to be appropriate by the HRC Committee. The HRC Committee may also adjust target compensation to reflect changes in or new responsibilities, as discussed above.
In 2019,2020, the total target direct compensation for each continuing NEO was as follows:
| Name | Salary | Target Incentive | Annual Target Total Direct Compensation | |||
Thomas P. “Todd” Gibbons Interim Chief Executive Officer | $800,000 | $7,575,000 | $8,375,000 | |||
Michael P. Santomassimo Chief Financial Officer (“CFO”) | $600,000 | $5,000,000 | $5,600,000 | |||
Mitchell E. Harris Chief Executive Officer of Investment Management | $650,000 | $7,350,000 | $8,000,000 | |||
Lester J. Owens Senior Executive Vice President & Head of Operations | $600,000 | $3,400,000 | $4,000,000 | |||
Bridget E. Engle Senior Executive Vice President & Chief Information Officer | $600,000 | $4,700,000 | $5,300,000 | |||
Name | Salary | Target Incentive | Annual Target Total Direct Compensation(1) | |||
Thomas P. “Todd” Gibbons Chief Executive Officer | $1,250,000 | $13,250,000 | $14,500,000 | |||
Robin Vince Vice Chair and CEO of Market Infrastructure | $750,000 | $9,250,000 | $10,000,000 | |||
Emily H. Portney Senior Executive Vice President and Chief Financial Officer | $600,000 | $4,400,000 | $5,000,000 | |||
Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations | $600,000 | $6,400,000 | $7,000,000 | |||
Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management | $600,000 | $4,400,000 | $5,000,000 | |||
In connection with his appointment as Interim CEO, Mr. Gibbons’ base salary was increased from $650,000 to $1,250,000 and his target incentive was increased from $6,850,000 to $9,750,000, establishing Mr. Gibbons’ 2019 annualized target direct compensation at $11 million, effective as of October 1, 2019.Accordingly, the amounts set forth in the above table reflect Mr. Gibbons’ effective 2019 base salary and target incentive level at a blended rate, taking into consideration the compensation levels that applied for the nine months prior to, and the increased compensation levels that applied during the three months following, his appointment as Interim CEO.Mr. Gibbons’ actual 2019 incentive award was delivered in a manner consistent with how we have historically awarded incentive compensation to our CEO — 25% in cash, 50% in PSUs and 25% in RSUs.In determining the appropriate adjustments to Mr. Gibbons’ compensation to reflect his appointment as Interim CEO,
| (1) | Amounts in this column reflect annualized targets for Mr. Vince and Ms. Portney. As discussed in more detail on page 56, their actual incentive award targets were pro-rated or blended based on the portion of the year they were in their new roles. |
One-Time Equity Awards
During 2020, the HRC Committee sought inputalso made one-time grants of RSUs to certain members of the Executive Committee (other than Mr. Gibbons), designed to provide for continuity among our management team during and advice from its independent compensation consultant, CAP,beyond the search for and transition to a permanent CEO. These awards generally will vest in full on market trendsthe third anniversary of the grant date, subject to the executive’s continued employment through such date, and compensation program practices as related to setting compensation levelsare not eligible for the Interim CEO position, for companies bothretirement vesting treatment. Ms. Engle received a grant of 40,404 RSUs in and outside of our peer group.
For Mr. HarrisFebruary 2020, and Ms. Engle, target total direct compensation for 2019 remained unchanged compared to the prior year. ForKeating received a grant of 20,202 RSUs in February 2020 and a grant of 20,706 RSUs in August 2020. Mr. Santomassimo target total direct compensation includesreceived a salary increase from $500,000 to $600,000, effective March 1, 2019, and target incentive compensation increase from $3 million to $5 million,grant of 40,404 RSUs in part to better position his total target direct compensation in line with that of our peers.For Mr. Owens, target total direct compensationFebruary 2020, which was determinedforfeited in connection with his commencement of employment in February 2019.
resignation.
20192020 Incentive Awards
One hundred percent of the total incentive award for each NEO is conditional upon the company meeting a minimum funding requirement and is subject to reduction or elimination based on aan individual risk assessment.scorecard. Incentive awards, including the effect of the individual modifier, can range from 0% up to 150% of the individual’s target award.Thisaward.This allows the HRC Committee to differentiate payouts based on each NEO’s achievement of individual and business goals set in support of overall corporate objectives and tied directly to each individual’s areas of responsibility and leadership goals.
Minimum Funding Requirement
A common equity Tier 1 ratio of at least 8.5% was established as a minimum funding requirement for our incentive compensation. Payment of incentive compensation to any executive is conditioned upon our meeting this goal.Thisgoal.This threshold funding goal was met for 2020, with a common equity Tier 1 ratio of 11.5%13.1% at December 31, 2019,2020, calculated under the Advanced Approach.
Balanced Scorecard
We use a “balanced scorecard” approach for our incentive compensation determinations. Our approach is designed to be a comprehensive analysis by the HRC Committee of corporate and individual performance determined based on quantitative and qualitative metrics as appropriate. Our balanced scorecard provides for the following:
Corporate Component. The corporate component of the balanced scorecard is based on a single set of objective company-wide performance metrics that are designed to drive achievement of near-term business strategies. The HRC Committee establishes the applicable metric or metrics at the start of the performance period and has discretion to consider other factors to obtain a holistic picture of our performance. Consistent with its approach to the 2018 balanced scorecard design, the HRC Committee based 100% of the 2019 corporate component on OEPS.
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discretion to consider other factors to obtain a holistic picture of our performance (additional detail on the factors considered is provided below). Consistent with its approach to the 2019 balanced scorecard design, the HRC Committee based 100% of the 2020 corporate component on OEPS. |
Individual Modifier. The individual modifier portion of the balanced scorecard provides an opportunity to recognize and differentiate individual actions and contributions in final pay decisions. For 2019,2020, as in 2018,2019, the HRC Committee established the parameters of the individual modifier to permit incentive award increases of up to 50% and decreases down to $0, providing greaterflexibility for differentiation based on individual performance.
Risk Assessment.The HRC Committee determines the corporate component payout, then applies the individual modifier which may increase the total incentive award by up to 50% (subject to the maximum award payout of 150%) or decrease the total incentive award to $0. Finally, the HRC Committee has the discretion to reduce an individual’s corporate component, individual modifier and/or total incentive award based on an assessment of the individual’s risk profile,scorecard, as described in the “Risk Assessment” section on page 46.61.
As illustrated below, incentive awards are paid out in a combination of cash, PSUs (earned(which are earned between 0% – 150% based on the achievement of performance metrics over a three-year performance period and cliff-vest at the end of such period) and RSUs deferred(which vest in equal installments over three years. Percentages in the graphic below reflect Mr. Gibbons’ target incentive award.For Messrs. Santomassimo, Harris and Owens and Ms. Engle, incentive awards are paid 30% in cash, 45% in PSUs and 25% in RSUs.years).
| * | In calculating the number of PSUs and RSUs to grant, the HRC Committee divided the value of PSUs and RSUs awarded by |
Corporate Component
The corporate component metrics are reviewed annually by the HRC Committee to select a measure or set of measures that align with our strategy and are appropriate for measuring annual performance. The same corporate component metrics and goals apply to each NEO.
In February 2019,2020, the HRC Committee determined to maintain management’s focus on company-wide performance, including driving organic growth, which we believe is the key to ensure both revenue and costs are optimized. Organic growth emphasizes the expansion of our business independent of external factors such as market performance (including the impact of the COVID-19 pandemic). As a result, as in 2018,2019, the HRC Committee again established OEPS as the sole corporate component metric. The HRC Committee may also consider other factors (including, for example, our performance relative to our peers, market conditions, relative TSR and interest rate environment) in determining the earnout within the OEPS earnout range and also in determining the overall corporate component payout.
OEPS. Our 2019 OEPS budget was set at $4.52, and, inIn February 2019,2020, the HRC Committee established the guidelines below for a range of incentive payouts. Thesepayouts based on a comparison of 2020 OEPS to 2019 OEPS. The guidelines set by the HRC Committee include the intended upside and downside leverage, which is the amount by which each percentage point difference between our budgetedprior year and actualcurrent year OEPS is magnified to determine the OEPS earnout portion of the corporate component. No leverage is applied if OEPS growth is within 3% to 7% as compared against the prior year OEPS. As adopted by the HRC Committee for purposes of the corporate component metric, OEPS is defined as reported earnings per share excluding merger and integration, restructuring, litigation expense and other significant, unusual items considered by the HRC Committee in its discretion.
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Earnout Grid:
2020 OEPS | Percent of 2019 OEPS ($4.02) | Earnout Range as a Percent of Target | Intended Leverage | |||||
> | > | 150% | ||||||
$ | 107% — 115% | 100% | 3:1 | |||||
$ | 103% — 107% | 98% — 100% | 1:1 | |||||
$3.41 — $4.14 | 85% — 103% | 40% — 98% | 4:1 | |||||
< | < 85% | 0% | ||||||
HRC Committee Determinations
Our 2019 reported EPS2020 OEPS was $4.51$4.01,andourandour OEPS for 2019 was $4.02.
In February 2019,considering the company’s performance in 2020, the HRC Committee determined that it was appropriate to emphasizeadjust OEPS to account for the importanceimpact of organic growth over market-driven growthnot being able to engage in OEPS and, therefore,planned share buybacks due to includeregulatory restrictions adopted in response to the economic impact of the COVID-19 pandemic. The HRC Committee also determined to continue its practice of including only 25% of any market-driven impact on OEPS beyond that which was budgeted, for purposes of determining the corporate component. In February 2020, theOEPS. The HRC Committee considered the OEPS of $4.02, the aforementioned market impact adjustment, as well as an adjustment to account for the unexpected interest rate environment during 2019 (which was not aligned with budget assumptions), and inclusion of 25%other impacts of the gain from the successful sale of the company’s investment in Promontory Interfinancial Network during the year.COVID-19 pandemic on company performance but determined not to make any additional adjustments.
These considerations yielded a calculated OEPS for purposes of the corporate component of $4.41,$4.14, which corresponds to an Earnout Rangeearnout of 40 – 110%98% of target. Using the intended leverage in the table, our calculated 2019 performance equated to an earnout of 90%, and theThe HRC Committee further determined to reducedecrease the final earnout in its discretion to 85%95%.
Individual Modifier
In December 2019,February 2020, the HRC Committee approved individual modifier strategic and leadership objectives for our NEOs. The HRC Committee approved and recommended to the Board individual modifier strategic and leadership objectives for Ms. Portney in October 2020 in connection with her appointment as CFO. Strategic objectives were approved for Mr. GibbonsVince in December 2020 in connection with respect tothe commencement of his service as our Interim CEO, in addition to his original individual modifier strategic objectives approved in February 2019.employment. The HRC Committee had previously approved and recommended to the Board individual modifierdid not approve specific leadership objectives for Mr. Vince given his joining the company late in 2020. The strategic and leadership objectives for each of our NEOs including for Mr. Owens following his commencementinclude tailored goals related to the business function of employment, in February 2019. Thethe NEO and also include individual modifier strategic objectives for the continuing NEOs were set by our former CEO after discussion with the HRC Committee.goals related to leadership, talent and succession, and diversity and inclusion. None of the individual strategic and leadership objectives had any specific weighting; the objectives are intended to be used, together with other information the HRC Committee determines relevant, to develop a holistic evaluation of individual performance.
In December 20192020, January 2021 and January 2020,February 2021, the HRC Committee reviewed and considered each continuing NEO’s performance, including considering recommendations and performance assessments from our Interim CEO (who in turn had received input from various sources) for each of the other NEOs. In the first quarter of 2020,2021, the HRC Committee determined each continuing NEO’s individual modifier. For Mr. Gibbons, the HRC Committee reviewed his performance self-assessment and finalized its decision after reporting its preliminary evaluation to the other independent directors and soliciting their input. For each of the other continuing NEOs, the HRC Committee reviewed his or her performance self-assessment, considered the December 20192020, January 2021, and February 20202021 feedback from our Interim CEO, considered applicable business unit performance, and finalized its decision after soliciting input from the other independent directors.
In determining the individual modifier for Mr. Gibbons, the HRC Committee considered the following key results:
Based on the above strategic and leadership results, the HRC Committee approved an individual modifier of 100% for Mr. Gibbons.
The HRC Committee then granted Mr. Gibbons 25% of his total incentive award in the form of cash, 50% in the form of PSUs and 25% in the form of RSUs.
In determining the individual modifier for Mr. Santomassimo, the HRC Committee considered the following key results:
Based on the foregoing, the HRC Committee approved an individual modifier of 100% for Mr. Santomassimo.
The HRC Committee then granted Mr. Santomassimo 30% of his total incentive award in the form of cash, 45% in the form of PSUs and 25% in the form of RSUs.
In determining the individual modifier for Mr. Harris, the HRC Committee considered the following key results:
Based on the above strategic and leadership results, the HRC Committee approved an individual modifier of 90% for Mr. Harris.
The HRC Committee then granted Mr. Harris 30% of his total incentive award in the form of cash, 45% in the form of PSUs and 25% in the form of RSUs.
In determining the individual modifier for Mr. Owens, the HRC Committee considered the following key results:
Based on the above strategic and leadership results, the HRC Committee approved an individual modifier of 120% for Mr. Owens.
The HRC Committee then granted Mr. Owens 30% of his total incentive award in the form of cash, 45% in the form of PSUs and 25% in the form of RSUs.
In determining the individual modifier for Ms. Engle, the HRC Committee considered the following key results:
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Based on the above strategic and leadership results,determinations below, the HRC Committee approved an individual modifiergranted Mr. Gibbons 97% of 115% for Ms. Engle.
The HRC Committee then granted Ms. Engle 30% of herhis target total incentive award (25% of which was in the form of cash, 50% in the form of PSUs and 25% in the form of RSUs). The remaining NEOs were granted percentages ranging from 93% to 105% of their target total incentive awards (30% of which was in the form of cash, 45% in the form of PSUs and 25% in the form of RSUs.RSUs).
Name | Key Results | Corporate Component | Individual Modifier | % of Target Earned | ||||||||||
Thomas P. “Todd” Gibbons Chief Executive Officer | Strategic: adjusting for the impact of the COVID-19 pandemic, OEPS exceeded prior year; sustained investments through cost discipline and productivity gains; led the company’s COVID-19 pandemic response focusing on support and execution, creating stress scenarios for the firm and establishing a firmwide control exceptions management process ahead of transition to work from home; all resiliency efforts met or exceeded 2020 outcomes despite the COVID-19 pandemic, natural disasters in Tennessee and unprecedented market volatility; focused improvement on the client experience, investing in developing deep and credible relationships with clients
Leadership: executed a smooth leadership transition in Asset Management; led the firm in the adoption of rigorous diversity and inclusion goals; worked closely with Board on succession planning and continuing director refreshment | 95 | % | 102 | % | 97 | % | |||||||
Robin Vince Vice Chair and CEO of Market Infrastructure | Strategic: developed relationships with key internal and external stakeholders; developed an initial understanding of the company’s major business lines and operations, in particular for Clearance and Collateral Management, Treasury Services, Markets and Pershing | 95 | % | 100 | % | 100 | %(1) | |||||||
Emily H. Portney Senior Executive Vice President and Chief Financial Officer | Strategic: executed strategic initiatives designed to promote growth in strong partnership with risk management; continued to advance initiatives with respect to third party governance and financial reporting; began rollout of technology solutions designed to enhance financial reporting systems
Leadership: managed a smooth CFO transition; improved employee engagement with a focus on attracting, retaining and developing diverse talent | 95 | % | 110 | % | 105 | % | |||||||
Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations | Strategic: enhanced the stability, resiliency and cybersecurity of the firm’s infrastructure; met all resiliency targets despite the COVID-19 pandemic; strengthened risk culture through fully integrated risk management and information security programs; successfully completed merger of operations and technology functions to increase efficiency and resiliency
Leadership: significantly increased employee satisfaction scores within group; successfully built and launched engagement site for technology employees; developed systems to reinforce culture of active and continuous learning; continued to focus recruiting efforts to promote diversity | 95 | % | 105 | % | 100 | % | |||||||
Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management | Strategic: delivered growth from client base; successfully enhanced products and solutions for wealth management clients; continued to leverage and improve technology solutions for an improved client and advisor experience
Leadership: met goals for executive succession management planning; improved wealth management leadership structure with a focus on diversity; lead cross-firm initiative to reduce silos and increase organic growth | 95 | % | 98 | % | 93 | % | |||||||
| (1) | Per the terms of Mr. Vince’s offer letter, he received 100% of his target incentive of $9,250,000, prorated for the portion of the year he was employed. |
In addition to the individual compensation decisions described above, the HRC Committee awarded Mr. Harris, who retired in October 2020, an annual incentive of $1,608,264 in cash and 84,862 RSUs after taking into consideration his years of service to the company. In addition, because Mr. Harris is over the age of 60, his previously granted equity awards will continue to vest according to their terms so long as Mr. Harris complies with all applicable covenants. Upon Mr. Santomassimo’s resignation in July 2020, he forfeited all unvested equity awards and was not awarded any incentive compensation for 2020.
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Awarded 20192020 Total Direct Compensation(1)
Based on the corporate component and individual modifier determinations described above, the total direct compensation awarded to each of our continuing NEOs in respect of 20192020 was as follows:
Named Executive Officers
| Awarded Salary | Awarded Incentive Compensation
| Total % of Target
| Awarded Total Compensation(1)
| ||||||||||||||||||||
Cash |
PSUs(2) |
RSUs(2) | ||||||||||||||||||||||
Thomas P. “Todd” Gibbons Interim Chief Executive Officer | $ | 800,000 | $ | 1,609,688 | $ | 3,219,374 | $ | 1,609,688 | 85 | % | $ | 7,238,750 | ||||||||||||
Michael P. Santomassimo Chief Financial Officer | $ | 583,333 | $ | 1,275,000 | $ | 1,912,500 | $ | 1,062,500 | 85 | % | $ | 4,833,333 | ||||||||||||
Mitchell E. Harris Chief Executive Officer of Investment Management | $ | 650,000 | $ | 1,686,825 | $ | 2,530,237 | $ | 1,405,688 | 77 | % | $ | 6,272,750 | ||||||||||||
Lester J. Owens Senior Executive Vice President & Head of Operations | $ | 534,092 | $ | 1,040,400 | $ | 1,560,600 | $ | 867,000 | 102 | % | $ | 4,002,092 | ||||||||||||
Bridget E. Engle Senior Executive Vice President & Chief Information Officer | $ | 600,000 | $ | 1,378,275 | $ | 2,067,412 | $ | 1,148,563 | 98 | % | $ | 5,194,250 | ||||||||||||
Named Executive Officers | Awarded Salary | Awarded Incentive Compensation | Total % of Target | Awarded Total Compensation(1) | ||||||||||||||||||
Cash |
PSUs(2) |
RSUs(3) | ||||||||||||||||||||
Thomas P. “Todd” Gibbons Chief Executive Officer | $ | 1,250,000 | $ | 3,209,813 | $ | 6,419,624 | $ | 3,209,813 | 97 | % | $14,089,250 | |||||||||||
Robin Vince Vice Chair and CEO of Market Infrastructure | $ | 187,500 | $ | 697,541 | $ | 1,046,312 | $ | 581,284 | 100 | % | $2,512,637 | |||||||||||
Emily H. Portney Senior Executive Vice President and Chief Financial Officer | $ | 539,583 | $ | 1,083,926 | $ | 1,625,890 | $ | 903,272 | 105 | % | $4,152,671 | |||||||||||
Bridget E. Engle(3) Senior Executive Vice President and Head of Technology and Operations | $ | 600,000 | $ | 1,915,200 | $ | 2,872,800 | $ | 1,596,000 | 100 | % | $6,984,000 | |||||||||||
Catherine M. Keating(3) Senior Executive Vice President and CEO of Wealth Management | $ | 600,000 | $ | 1,228,920 | $ | 1,843,380 | $ | 1,024,100 | 93 | % | $4,696,400 | |||||||||||
Michael P. Santomassimo(4) Former Senior Executive Vice President and Chief Financial Officer | $ | 475,000 | — | — | — | — | $ 475,000 | |||||||||||||||
Mitchell E. Harris Former Senior Executive Vice President and CEO of Investment Management | $ | 499,809 | $ | 1,608,264 | $ | — | $ | 3,752,617 | 95 | % | $5,860,690 | |||||||||||
The amounts reported as Awarded Total Direct Compensation differ substantially from the amounts determined under SEC rules as reported for |
PSUs are earned between 0% – 150% based on the achievement of performance metrics over the |
| (3) | In addition to the incentive award disclosed in the table, Ms. Engle received $1,878,382 and Ms. Keating received $1,724,777 in RSUs described in more detail on page 57. |
| (4) | Mr. Santomassimo resigned in July 2020, did not receive an annual incentive award and forfeited all unvested equity. Mr. Santomassimo also received $1,878,382 in RSUs that were forfeited upon his resignation. |
Risk Assessment
We use aIn connection with its incentive compensation determinations, the HRC Committee assesses an individual risk scorecard for each NEO to formally connect our NEOs’ compensation andwith appropriate levels of risk-taking. The risk scorecard takes into account liquidity, operational, reputational, market, credit and technology risk categories by measuring:
maintenance of an appropriate compliance program, including adhering to our compliance rules and programs;
protection of the company’s reputation, including reviewing our business practices to ensure that they comply with laws, regulations and policies, and that business decisions are free from actual or perceived conflicts;
management of operational risk, including managing operational losses and maintaining proper controls;
compliance with all applicable credit, market and liquidity risk limits, including understanding and monitoring risks associated with relevant businesses and new client acceptance, as well as appropriately resolving or escalating risk issues to minimize losses; and
meeting the company’s Internal Audit expectations, including establishing an appropriate governance culture, achieving acceptable audit results and remediating control issues in a timely manner.
The HRC Committee’s review of the risk scorecard results for each continuing NEO was taken into account by the HRC Committee in determining each of the corporate component and individual modifier elements of the balanced scorecard. The HRC Committee has the ability to reduce or fully eliminate the incentive award if the risk scorecard result is significantly below expectation. In addition, in the event that the NEO’s risk scorecard rating is lower than acceptable risk tolerance, any unvested RSUs and PSUs will be subject to review and potential forfeiture, as determined by our HRC Committee. No downward adjustments were made for 2019.
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The risk scorecard results for each continuing NEO were taken into account by the HRC Committee in determining each of the corporate component and individual modifier elements of the balanced scorecard, as well as the total incentive award. The HRC Committee has the ability to reduce or fully eliminate an NEO’s incentive award if the executive’s risk scorecard result is significantly below expectation. In addition, in the event that the NEO’s risk scorecard rating is lower than our acceptable risk tolerance, any previously awarded but unvested RSUs and PSUs will be subject to review and potential forfeiture, as determined by the HRC Committee. No downward adjustments were made to any continuing NEO’s incentive award for 2020 as a result of the risk assessment.
Reduction, Forfeiture or Clawback in Certain Circumstances
The company may cancel or claw back all or any portion of the RSUs and PSUs that constitute a portion of our NEOs’an NEO’s incentive award and may claw back some or all of an incentive award paid to our NEOsan NEO in the form of cash if the NEO engages in conduct prohibited by our forfeiture and recoupment policy or our cash recoupment policy, respectively. For more information on these forfeiture and recoupment policies, see page 51.68.
PSUs
As part of our incentive compensation program, we grant PSUs each year based on prior-year performance. We considerto enhance the alignment of compensation with stockholder interests and to motivate and reward achievement of long-term growth. The PSUs granted during a giveneach year to beare part of the total incentive compensation award for the prior year’s compensation;year and are determined based on company and individual performance for the prior year as described above; for example, we consider the February 20192020 PSU grant to be part of 2018 earned compensation.2019 incentive compensation award. PSUs cliff vest after the end of three-year performance periods based on achievement of company performance metrics and continued service, with certain exceptions. The PSUs granted in 20172018, which vested in February 2021, were earned at 75%85%, as described below. The PSUs granted in 20182019 and 2019 are earned2020, which will vest in 2022 and 2023, respectively, will earn between 0% — 150%, in each case based on the achievement of performance metrics over the applicable three-year performance period. Granting awards annually with overlapping, multi-year performance periods allows the HRC Committee to annually review and update, as appropriate, the structure and performance metrics that we use in our PSU program.
Recent PSUs
Our recent PSU awards, including all awards outstanding for any portion of 2020,2021, are illustrated below:
February 2017 PSUs
As previously disclosed in our 2018 proxy statement, the PSUs granted in February 2017 were to be earned between 0% — 150% based on 2019 OEPS, with the potential of a negative risk modifier should risk-weighted assets (“RWA”) grow at an unacceptable rate. Two sets of 2019 OEPS targets werepre-established for these awards (one set for a “normalizing” rate scenario, where the daily average Fed target rate is greater than or equal to 125 basis points in 2019, and an alternative set for a “flat” rate scenario), and the HRC Committee has discretion to determine the final earnout percentage.
The average Fed target rate exceeded 125 basis points in 2019, so the “normalizing” rate targets were used. Our 2019 OEPS was $4.02, which calculates to an earnout range of 50 — 100% for the 2017 PSUs. In February 2020, the HRC Committee determined to exercise its discretion in determining the final earnout percentage by considering both the benefit of the lower effective tax rate and the gain from the sale of the company’s investment in Promontory Interfinancial Network. Accordingly, after consideration of these factors, the HRC Committee determined that an earnout of 75% was appropriate.
The HRC Committee also reviewed the three-year compound annual growth rate of our RWA from December 31, 2016 to December 31, 2019. As of an applicable date, RWA is generally defined as the standardized risk-weighted assets based on existing assumptions at the commencement of the performance period and as reported in the company’s
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SEC filings. From December 31, 2016February 2018 PSUs
As previously disclosed in our 2019 proxy statement, the PSUs granted in February 2018 were to be earned between 0% — December 31, 2019, RWA had a compound annual growth rate of 0.50%, resulting in no risk modifier being applied150% based on RWA growth. Asaverage revenue growth (as adjusted) and average operating margin (as adjusted), each over a result,three-year performance period commencing in 2018. The final payout determination was to be made by the finalHRC Committee in its discretion after considering any relevant adjustments, including market-related impacts.
At the end of the 2018-2020 performance period, the HRC Committee determined adjusted average operating margin and average revenue growth to be 32.6% and $236 million, respectively. In its determination, the HRC Committee reflected the equity market and currency translation adjustments included in the metric definitions and an additional discretionary adjustment as contemplated by the award terms for interest rates due to the unexpected effects of the COVID-19 pandemic. The HRC Committee set the resulting earnout percentage forat 85% by considering the February 2017 PSUs was 75%.noted factors and the Company’s overall performance relative to its peers.
February 20192020 PSUs
PSUs granted in February 2019,2020, the amounts of which were determined based on 20182019 performance as discussed in last year’s proxy statement, are earned based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year performance period commencing in 2019.2020. In connection with establishing the performance metrics for the 20192020 PSUs, the HRC Committee considered the fact that OEPS had been used as the sole performance metric for the corporate component of the 20182019 balanced scorecard and, similar to its approach to the 20182019 PSUs, determined that use of average revenue growth and average operating margin would serve as complementary performance metrics that are consistent with the company’s emphasis on organic growth over market-related factors.
TheIn its planning process, the HRC Committee determined that the earnout percentage for the February 20192020 PSUs willis to be determined based on the following table, with the final earnout percentage subject to the HRC Committee’s discretion:
Average Revenue Growth, as adjusted ($ in millions)
| ||||||||||||||||||||||||||||||
Average Operating Margin, as adjusted
| $0
| $150
| $200
| $250
| $300
| $375
| ||||||||||||||||||||||||
36% or greater | 85% | 109% | 125% | 150% | 150% | 150% | ||||||||||||||||||||||||
35% | 75% | 90% | 100% | 115% | 134% | 150% | ||||||||||||||||||||||||
34% | 50% | 73% | 84% | 100% | 116% | 133% | ||||||||||||||||||||||||
33% | 43% | 62% | 71% | 85% | 99% | 100% | ||||||||||||||||||||||||
32% | 25% | 36% | 42% | 50% | 58% | 66% | ||||||||||||||||||||||||
31% or less | 0% | 29% | 33% | 40% | 47% | 53% | ||||||||||||||||||||||||
Average Revenue Growth, as adjusted ($ in millions)
| ||||||||||||||||||||||||||||||
Average Operating Margin, as adjusted
| $0
| $150
| $200
| $250
| $300
| $375
| ||||||||||||||||||||||||
34% or greater | 85% | 109% | 125% | 150% | 150% | 150% | ||||||||||||||||||||||||
33% | 75% | 90% | 100% | 115% | 134% | 150% | ||||||||||||||||||||||||
32% | 50% | 73% | 84% | 100% | 116% | 133% | ||||||||||||||||||||||||
31% | 43% | 62% | 71% | 85% | 99% | 100% | ||||||||||||||||||||||||
30% | 25% | 36% | 42% | 50% | 58% | 66% | ||||||||||||||||||||||||
29% or less | 0% | 29% | 33% | 40% | 47% | 53% | ||||||||||||||||||||||||
February 2021 PSUs
In February 2021, the HRC Committee determined to revise the metrics for determining the PSU earnout. The 2021 PSU earnout (which will occur in 2024) will be based on ROTCE and relative TSR. In determining the metrics for the February 2021 PSU grants, the HRC Committee considered the long-term business strategy and priorities of the company, the use of both absolute and relative metrics, feedback received during stakeholder engagement and market practice. The HRC Committee believes that the metrics approved reinforce operational performance and alignment with stockholder interests. PSUs granted in February 2021, the amounts of which were determined based on 2020 performance as discussed above, will be earned over a three-year performance period commencing in 2021.
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Other Compensation and Benefits Elements
Retirement and Deferred Compensation Plans
AfterIn connection with the 2007 merger, in 2007, we assumed certain existing arrangements affecting the provision of retirement benefits to certain of our NEOs, maintaining qualified andnon-qualified defined benefit and defined contribution plans in which eligible employees, including our NEOs, may participate. Our NEOs are eligible to participate in deferred compensation plans, which enable eligible employees to defer the payment of taxes on a portion of their compensation until a later date. To limit pension accruals, we froze all accruals under the Legacy BNY SERP as of December 31, 2014 and under our other U.S. defined benefit pension plans (including the BNY MellonTax-Qualified Retirement Plan and the Legacy BNY Excess Plan) as of June 30, 2015. For a description of these plans and our NEOs’ participation therein, see “Pension“2020 Pension Benefits” and “Nonqualified“2020 Nonqualified Deferred Compensation” below.
Perquisites
Our NEOs are eligible to participate in company-wide benefit plans. In addition, we provide the following limited benefits, consistent with market practices, that are reportable under SEC rules as perquisites (see footnotes to the “2020 Summary Compensation TableTable” below):
Our policy regarding corporate aircraft usage provides that the CEO should make reasonable use of the company aircraft for security purposes and to make the most efficient use of his time, including with respect to personal travel. The HRC Committee receives and reviews an aircraft usage report on a semi-annual basis.
Mr. Gibbons is covered by a legacy life insurance policy assumed by the company in the 2007 merger.
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HRC Committee Role and Process
The HRC Committee structures the process for determining individual NEO compensation to ensure that compensation is linked with performance and appropriately aligns executives’ interests with stockholders’ interests. Below is a summary of the process cycle undertaken by the HRC Committee to establish compensation targets, monitor performance and progress, and make final determinations regarding compensation for our NEOs.
Stakeholder EngagementFeedback
We believe it is important to consider feedback and input from our stakeholders, including stockholders, employees, clients and the communities we serve.
We have consistently received support for our executive compensation program, with an average of 97% stockholder approval at our 2019, 2018 and 2017 Annual Meetings of 97%, 98% and 98%, respectively.Stockholders during the prior three years. We continue to actively engage with our stakeholders throughout the year (including webcastingyear.
For direct stockholder feedback on our Annual Meetingexecutive compensation framework and other issues of importance to allow broader stockholder participation).
In advance of our 2020 Annual Meeting and as a result ofinvestors, we have continued our annual investor engagement process we reachedduring 2020 and 2021, reaching out to investors representing over 50% of our outstanding common shares and we actively engaged with other stakeholders on governance and performance matters. We further engaged stockholders and analysts at industry conferences, in meetings at our offices or at our stockholders’ offices and through conference calls during the year.
HRC Committee Role and Process
In the first quarter of 2019, for each NEO, the HRC Committee approved base salary levels; established target amounts for the 2019 incentive award to be earned or granted, as applicable, in the first quarter of 2020 based on 2019 performance; and granted the PSU and RSU components of awards earned for 2018 performance.
In setting 2019 compensation targets, the HRC Committee, assisted by its independent compensation consultant, considered a variety of factors over multiple meetings, including our financial performance and data concerning peer companies’ executive compensation programs. Factors were considered holistically, and no one factor had an assigned or specific quantifiable impact on the target compensation levels established by the HRC Committee.
In addition, in October 2019, in connection with the appointment of Mr. Gibbons as Interim CEO, the HRC Committee approved changes to his compensation to reflect his increased responsibilities and role, as further described on page 41.
During the year, the HRC Committee received regular updates on performance forecasts versus performance goals, regulatory and legislative developments and other relevant matters. In the first quarter of 2020, the HRC Committee evaluated 2019 corporate performance, using a combination of financial and qualitative measures, as well as each continuing NEO’s individual performance to make 2019 incentive compensation determinations as described above. During this period, the HRC Committee also determined the payoutproxy advisory firms and other stakeholders. See “Active Stockholder Engagement Program” on page 29 for PSUs granted in February 2017 in accordance with the terms of such awards, as described above.
The HRC Committee also provided each continuing NEO with incentive compensation targets for their 2020 incentive award, with the actual award amount to be determined in the first quarter of 2021 based on prior-year performance.
With respect to our CEO, the HRC Committee reports its preliminary conclusions and compensation decisions, andadditional information on the process used by the HRC Committee, to the other independent members of our Board in executive session and solicits their input prior to finalizing determinations. With respect to our other NEOs, the HRC Committee also advises and discusses compensation decisions and the process used by the HRC Committee with the other independent directors.outreach.
Role of Compensation Consultants
The HRC Committee has retained CAP as its independent compensation consultant. CAP regularly attends HRC Committee meetings and assists the committee in its analysis and evaluation of compensation matters related to our executives. For more information on CAP and its role as independent compensation consultant to the HRC Committee, see page 31.42.
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Benchmarking
Peer Group
The HRC Committee and our management use a peer group to provide a basis for assessing relative company performance and to provide a competitive reference for pay levels and practices. In evaluating and selecting companies for inclusion in the peer group, the HRC Committee targets complex financial companies with which we typically compete for executive talent and business.
• mix of businesses (e.g., asset management, asset servicing and clearing services) and other financial services companies with similar business models that operate in a similar regulatory environment;
• relative size in terms of revenue, market capitalization and assets under management, as well as total assets and net income;
• position as competitors for customers and clients, executive talent and investment capital; and
• global presence. | BlackRock, Inc. The Charles Schwab Corporation Franklin Resources, Inc. JPMorgan Chase & Co. Morgan Stanley Northern Trust Corporation The PNC Financial Services Group, Inc. Prudential Financial, Inc. State Street Corporation U. S. Bancorp Wells Fargo & Company |
The 20192020 peer group selected by the HRC Committee was unchanged from 2018.2019.
Compensation Benchmarking
Compensation information is collected from the peer group proxy statements to provide data forassist the HRC Committee to assessin assessing the competitiveness of targeted and actual compensation. Peer group information is also used to analyze market trends and compensation program practices. For certain NEOs, data relating to the peer group is supplemented with industry data from surveys conducted by national compensation consulting firms and other data to assess the compensation levels and practices in the businesses and markets in which we compete for executive talent. Peer group data and other information provided to the HRC Committee by CAP was used by the HRC Committee as a consideration in setting 20192020 target compensation levels for our continuing NEOs.
Financial Performance Benchmarking
The peer group is also used to provide the HRC Committee with relative financial performance assessments. The metrics reviewed include revenue growth, EPS growth, operating margin, return on equity, return on tangible common equity, as well asand TSR on aone- and three-year basis. This analysis provides additional context for the HRC Committee in theirits review of compensation outcomes as well as compensation program design.
Peer group data reviewed by the HRC Committee was considered holistically and was used as an input, but not the sole input, of theirfor the committee’s compensation decisions.
Stock Ownership Guidelines
Under our stock ownership guidelines, each NEO is required to own a number of shares of our common stock with a value equal to a multiple of base salary within five years of becoming a member of our Executive Committee. The officer cannot sell or transfer to a third party any shares until he or she achieves the applicable ownership guideline.
| Stock Ownership Requirement(1) | Stock Retention | |||||
| CEO | Must six times base salary | 50% of netafter-tax shares must be held until age 60 | ||||
| Other NEOs | Must four times base salary | 50% of netafter-tax shares must be held for one year after vesting date | ||||
All of our NEOs are also expected to hold, as an administrative practice, an additional amount of company stock above their guideline amount equal to one times base salary in order to provide a cushion against stock volatility. |
| (2) | Applies to shares received from the vesting of RSUs, PSUs, restricted stock and other long-term equity awards granted after appointment to the Executive Committee and that were unvested as of, or granted after, August |
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Our CEO is subject to asix-times base salary, and our other NEOs are subject to a four-times base salary, ownership guideline. All of our NEOs are also expected to hold, as an administrative practice, an additional amount of company shares above their guideline amount equal to one times base salary in order to provide a cushion against stock volatility. Ms. EngleMr. Vince has until June 2022, and Mr. OwensOctober 2025, Ms. Portney has until February 2024 to meet the stock ownershipJuly 2025, and administrative guidelines,Ms. Keating has until July 2023, which in each case is five years from becoming a member of the Executive Committee.Committee, to meet the stock ownership and administrative guidelines outlined above. As of the record date, all of our other continuing NEOsMr. Gibbons and Ms. Engle meet the stock ownership and administrative guidelines. To determine each NEO’s ownership stake for purposes of the guidelines, we include shares owned directly, shares held in our employee stock purchase and retirement plans and shares held in certain trusts. We also include 50% of unvested restricted stock and RSUs that do not have performance conditions or for which the applicable performance conditions have been met. Unearned performance shares, awards that remain subject to performance conditions and stock options are not counted toward compliance with the stock ownership guidelines.
In addition, NEOs are subject to a retention requirement relating to shares received from the vesting of RSUs, PSUs, restricted stock and other long-term equity awards that were granted after their respective appointment to the Executive Committee and that were unvested as of, or granted after, August 2012. For the CEO, 50% of the netafter-tax shares from these awards must be held until age 60; for other NEOs, 50% of the netafter-tax shares must be held for one year from the vesting date (excluding shares from certain awards granted to Ms. Engle in connection with her commencement of employment in 2017).
Hedging and Pledging
OurWe have a robust policy regarding transactions in company securities according to which our executive officers, including each of our NEOs, and directors are prohibited from engaging in hedging transactions with respect to company securities and from pledging company securities beneficially owned by them. In addition, executive officers and directors are prohibited from engaging in short sales of our stock, purchasing our stock on margin and buying or selling any puts, calls or other options involving our securities (other than any stock options that may be granted pursuant to our compensation program). Prior to engaging in any transaction in company stock or derivative securities (including transactions in employee benefit plans and gifts), our executives and directors are required topre-clear such transaction with our legal department and obtain that department’s affirmative approval to enter into the transaction.
Ournon-executive officer employees (who are not subject to the policies applicable to our executive officers and directors described above) are subject to policies and procedures designed to ensure that transactions in company stock are conducted in compliance with the applicable rules and regulations and are free from conflicts of interest. All employees are prohibited from the following with respect to company securities:
engaging in short sale transactions;
engaging in short-term trading;
purchasing company securities on margin; and
engaging in any derivative transaction involving or having its value based on company securities.
Clawback and Recoupment Policy
In addition to forfeiture provisions based on risk outcomes during the vesting period, we have a comprehensive forfeiture and recoupment policy administered by the HRC Committee that applies to equity awards granted to our employees, including the NEOs. Under the policy, the company may cancel all or any portion of unvested equity awards and require repayment of any shares of common stock (or values thereof) or amounts (including dividends and dividend equivalent payments) that were acquired from the award if:
the executive directly or indirectly engages in conduct, or it is discovered that the executive engaged in conduct, that is materially adverse to the interests of the company, including failure to comply with the company’s rules or regulations, fraud or conduct contributing to any financial restatements or irregularities;
during the course of employment, the executive engages in solicitation and/or diversion of customers or employees and/or competition with the company;
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following termination of employment withClawback and Recoupment
In addition to forfeiture provisions included in our incentive award agreements for executives based on risk outcomes during the company for any reason, the executive violates any post-termination obligations or duties owedvesting period, we have comprehensive forfeiture and recoupment policies that apply to the company under any agreement with the company;
any compensation otherwise payable or paid to the executive is required to be forfeited and/or repaid to the company pursuant to applicable regulatory requirements; or
with respect toequity and cash incentive awards granted after 2018, the executive violates any obligation under the applicable award agreement (including failing to satisfy notice requirements, breachingnon-competition ornon-solicitation provisions while any portion of the award is outstanding or breaching the confidentiality ornon-disparagement provisions).
We also have a cash recoupment policy, which provides that the company may claw back some or all of a cash incentive award made to our employees (including NEOs) if the company determines within three years of the award date that there is a reasonable belief that the employee has engaged in conduct that is materially adverseemployees. Material provisions applicable to the company’s interests (including failing to comply with the company’s rules or regulations or engaging in fraud or other conduct that directly or indirectly causes or contributes to a financial restatement or other irregularity of BNY Mellon during the award performance period). The company may similarly forfeit, reduce or require repayment of a cash incentive award if (1) required by any applicable law, (2) the employee engages in competition with the company during the course of employment, or (3) the employee violates any post-termination obligations or duties owed to the company under any agreement with the company.
NEOs (U.S.-based) are summarized below. The company continues to monitor regulatory requirements as may be applicable to its recoupment policies.
If... | Then... | |||
Risk-Based Forfeiture | ||||
...the risk scorecard rating is lower than our acceptable risk tolerance |  | ...unvested RSUs and PSUs will be subject to review and potential forfeiture, as determined by the HRC Committee | ||
Equity Award Cancellation | ||||
...the individual directly or indirectly engages in conduct, or it is discovered that the individual engaged in conduct, that is adverse to the interests of the company, including failure to comply with the company’s rules or regulations, fraud, or conduct contributing to any financial restatements or irregularities | | ...the company may cancel all or any portion of unvested equity awards and require repayment of any shares of common stock (or values thereof) or amounts (including dividends and dividend equivalent payments) that were acquired from the award | ||
...during the course of employment, the individual engages in solicitation and/or diversion of customers or employees and/or competition with the company | ||||
...following termination of employment with the company for any reason, the individual violates any post-termination obligations or duties owed to the company under any agreement with the company | ||||
...any compensation otherwise payable or paid to the individual is required to be forfeited and/or repaid to the company pursuant to applicable regulatory requirements | ||||
...with respect to awards granted after 2018, the individual violates any obligation under the applicable award agreement (including failing to satisfy notice requirements, breaching non-competition or non-solicitation provisions while any portion of the award is outstanding or breaching the confidentiality or non-disparagement provisions) | ||||
Cash Recoupment | ||||
...the company determines within three years of the award date that there is a reasonable belief that the individual has engaged in conduct that is adverse to the company’s interests (including failing to comply with the company’s rules or regulations or engaging in fraud or other conduct that directly or indirectly causes or contributes to a financial restatement or other irregularity of the company during the award performance period) | | ...the company may claw back some or all of a cash incentive award made to the individual | ||
...(1) required by any applicable law, (2) an employee engages in competition with the company during the course of employment, or (3) an employee violates any post-termination obligations or duties owed to the company under any agreement with the company |
Severance Benefits
Stockholder Approval of Future Executive Severance Arrangements. In July 2010, the Board adopted a policy regardingthat, unless an arrangement receives prior stockholder approval, of future executive severance arrangements. The policy provides that the company will not enter into a future severance arrangement with an executive that provides for severance benefits (as defined in the policy) in an amount exceeding 2.99 times the sum of annual base salary and target bonus for the year of termination (or, if greater, for the year before the year of termination), unless such arrangement receives stockholder approval..
| 68 | BNY Mellon Ø | 2021 Proxy Statement |
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Executive Severance Plan. The Bank of New York Mellon Corporation Executive Severance Plan (the “Executive Severance Plan”) was adopted in July 2010 and amended in August 2016 and February 2018. Under the Executive Severance Plan, participants terminated by the company without “cause” are eligible to receive severance in the amount of one times base salary and may be eligible for apro-rata annual bonus for the year of termination, as determined on acase-by-case basis. If apro-rata annual bonus is awarded, it will be paid at year end after an evaluation of corporate and individual performance, (including business unit performance, as applicable), among other considerations. The following table sets forth the severance benefits available under the Executive Severance Plan.
Reason for Termination | Severance Payment | Bonus | Benefit Continuation | Outplacement Services | ||||||||||||||||
By the company without “cause” | 1 times base salary | Pro-rata annual bonus paid at year end at the discretion of management and the HRC Committee | 1 year | 1 year | ||||||||||||||||
By the company without two years following a “change in control” | 2 times base salary and 2 times target annual bonus | Pro-rata target annual bonus for the year of termination | 2 years | 1 year | ||||||||||||||||
Executive Severance Plan participants are selected by the HRC Committee and include each of our continuing NEOs. To receive benefits under the plan, thea participant must sign a release and waiver of claims in favor of the company and agree not to compete against the company, or solicit our customers and employees, for so long as they arehe or she is receiving benefits under the plan.
We do not provide any severance-related taxgross-ups. If any payment under the Executive Severance Plan would cause a participant to become subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986 (“IRC”), then payments and benefits will be reduced to the amount that would not cause the participant to be subject to the excise tax if such a reduction would put the participant in a betterafter-tax position than if the participant were to pay the tax. In addition, the amount of payments and benefits payable under the plan will be reduced to the extent necessary to comply with our policy regarding stockholder approval of future executive severance arrangements as described above.
Confidentiality, Notice, and Restrictive Covenants Agreements. The obligations and duties applicable to each of our NEOs include certain covenants pursuant to a Confidentiality, Notice, and Restrictive Covenants Agreement entered into with the company, each of whichcompany. Each such agreement requires written notice of the executive’s resignation of employment for any reason and provides for an indefinitenon-disclosure of confidential information covenant,includes covenants regarding the executive’s protection of confidential information (including indefinite non-disclosure of confidential information), non-solicitation obligations (includingnon-solicitation of company employees andnon-interference with any company relationships with customers, clients or employees) for at least one year following the expiration of the applicable notice period, and assignment of inventions to the company.
Separation Arrangements with Mr. Scharf
In connection with his resignation as Chairman and CEO, Mr. Scharf did not receive any severance payments or benefits under the Executive Severance Plan or otherwise, and under the terms of the applicable award agreements forfeited all equity and other incentive awards that were unvested as of September 26, 2019, the effective date of his resignation. Mr. Scharf did not receive an incentive award for 2019. The company waived the requirement that Mr. Scharf provide 90 days’ advance written notice of his resignation; however, Mr. Scharf will remain bound by the terms of his confidentiality andnon-solicitation obligations with the company.
Tax Considerations
The HRC Committee considers certain tax implications when designing our executive compensation programs and certain specific awards. We generally design our compensation programs so that compensation paid to the NEOs can qualify for available income tax deductions. However, the HRC Committee believes that stockholders’ interests may best be served by offering compensation that is not fully deductible, where appropriate, to attract, retain and motivate talented executives. Accordingly, the HRC Committee has discretion to authorize compensation that does not qualify for income tax deductibility.
| BNY Mellon Ø | |
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
How We Address Risk and Control
On an annual basis, our Chief Risk Officer meets with the HRC Committee to review the company’s compensation plans and arrangements, including those in which members of the Executive Committee participate, to ensure they are well-balanced and do not encourage imprudent risk-taking.
WeUsing a risk-related performance evaluation program with adjustments determined by a senior management committee responsible for control functions and later reviewed by the HRC Committee, we identify employees who, individually or as a group, are responsible for activities that may expose us to material amounts of risk, using a risk-related performance evaluation program with adjustments determined by a senior management committee responsible for control functions, with such adjustments later reviewed by the HRC Committee.risk. The incentive compensation of identified employees is directly linked to risk-takingrisk management either through a “risk scorecard” or through the inclusion of a standard risk goal as part of our performance management process. This approach allows the HRC Committee the ability to fully eliminate an incentive award if risk performance is below acceptable standards.
With respect to our NEOs, there are several controls intended to link incentive compensation to appropriate risk-taking. As a threshold matter, a common equity Tier 1 ratio for the company of at least 8.5% was established as a minimum funding requirement for our incentive compensation. OurPayment of incentive compensation is conditional upon the company meeting this goal. The HRC Committee’s incentive compensation determinations are also takes into accountbased on a risk assessment for both the company as a whole and for each individual. In addition, all of our NEOs’ equity awards are subject to 100% forfeiture during, and clawback following, the vesting period and all of their cash incentives are subject to 100% clawback within three years following the awardgrant date, in each case based on ongoing risk assessments under our comprehensive recoupment policy.
We are also subject to regulation by various U.S. and international governmental and regulatory agencies with respect to executive compensation matters and the consideration ofhow risk in the context of compensation.factors into and is affected by compensation decisions. Our programs have been designed to comply with these regulations, and the HRC Committee regularly monitors new and proposed regulations as they develop to determine if additional action is required.
Based on the above, we believe that our compensation plans and practices are well-balanced and do not encourage imprudent risk-taking that threatens our company’s value or createcreates risks that are reasonably likely to have a material adverse effect on the company.
The HRC Committee has reviewed and discussed the foregoing Compensation“Compensation Discussion and Analysis& Analysis” with management. On the basis of such review and discussions, the HRC Committee recommended to the Board that the Compensation“Compensation Discussion and Analysis& Analysis” be included in the company’s 20192020 Annual Report and this proxy statement.
By: The Human Resources and Compensation Committee
| Linda Z. Cook, Chair |
| Edmund F. “Ted” Kelly |
| Jeffrey A. Goldstein |
| Samuel C. Scott III |
| Frederick O. Terrell |
| BNY Mellon Ø | |
| ITEM 2. ADVISORY VOTE ON COMPENSATION | > Executive Compensation Tables and Other Compensation Disclosures | |||
2020 Summary Compensation Table
The “2020 Summary Compensation TableTable” and “2020 Grants of Plan-Based AwardsAwards” Table, on this page 5571 and on page 56,73, are in accordance with SEC rules and do not reflect the manner in which our HRC Committee thinks about and determines compensation. In particular, the SEC rules require that we report equity-based awards for the year that they are granted, even though the equity-based portion of our incentive compensation is awarded for services performed the prior year.
Name and Principal Position | Year | Salary | Bonus | Stock Awards(1)(2) | Option Awards | Non-Equity Incentive Plan Compensation |
Change in | All Other Compensation(4) | Total Compensation | |||||||||||||||||||||||||||
Thomas P. “Todd” Gibbons Interim Chief Executive Officer |
| 2019 |
| $ | 800,000 |
| $ | — |
| $ | 9,531,679 |
| $ | — |
| $ | 1,609,688 |
| $ | 527,375 |
| $ | 56,959 |
| $ | 12,525,701 |
| |||||||||
| 2018 |
| $ | 650,000 |
| $ | — |
| $ | 4,609,078 |
| $ | — |
| $ | 2,157,750 |
| $ | — |
| $ | 36,850 |
| $ | 7,453,678 |
| ||||||||||
| 2017 |
| $ | 650,000 |
| $ | — |
| $ | 5,722,582 |
| $ | — |
| $ | 1,943,100 |
| $ | 360,812 |
| $ | 107,248 |
| $ | 8,783,742 |
| ||||||||||
Michael P. Santomassimo(5) Chief Financial Officer |
| 2019 |
| $ | 583,333 |
| $ | — |
| $ | 3,326,455 |
| $ | — |
| $ | 1,275,000 |
| $ | — |
| $ | 25,667 |
| $ | 5,210,455 |
| |||||||||
| 2018 |
| $ | 500,000 |
| $ | — |
| $ | 740,050 |
| $ | — |
| $ | 1,350,000 |
| $ | — |
| $ | 23,750 |
| $ | 2,613,800 |
| ||||||||||
Bridget E. Engle(5) Senior Executive Vice President & Chief Information Officer |
| 2019 |
| $ | 600,000 |
| $ | — |
| $ | 2,729,796 |
| $ | — |
| $ | 1,378,275 |
| $ | — |
| $ | 20,400 |
| $ | 4,728,471 |
| |||||||||
| 2018 |
| $ | 600,000 |
| $ | — |
| $ | 2,388,988 |
| $ | — |
| $ | 2,585,000 |
| $ | — |
| $ | 17,500 |
| $ | 5,591,488 |
| ||||||||||
| 2017 |
| $ | 339,611 |
| $ | — |
| $ | 7,309,402 |
| $ | — |
| $ | 2,350,000 |
| $ | — |
| $ | 12,192 |
| $ | 10,011,205 |
| ||||||||||
Mitchell E. Harris Chief Executive Officer of Investment Management |
| 2019 |
| $ | 650,000 |
| $ | — |
| $ | 4,889,928 |
| $ | — |
| $ | 1,686,825 |
| $ | 149,022 |
| $ | 27,000 |
| $ | 7,402,775 |
| |||||||||
| 2018 |
| $ | 650,000 |
| $ | — |
| $ | 6,229,333 |
| $ | — |
| $ | 1,984,500 |
| $ | — |
| $ | 26,750 |
| $ | 8,890,583 |
| ||||||||||
| 2017 |
| $ | 650,000 |
| $ | — |
| $ | 4,220,202 |
| $ | — |
| $ | 2,626,155 |
| $ | 104,837 |
| $ | 26,500 |
| $ | 7,627,694 |
| ||||||||||
Lester J. Owens(5) Senior Executive Vice President & Head of Operations |
| 2019 |
| $ | 534,092 |
| $ | — |
| $ | 3,662,024 |
| $ | — |
| $ | 1,040,400 |
| $ | — |
| $ | 2,130,253 |
| $ | 7,366,769 |
| |||||||||
Charles W. Scharf Former Chairman & Chief Executive Officer |
| 2019 |
| $ | 956,442 |
| $ | — |
| $ | 13,286,267 |
| $ | — |
| $ | — |
| $ | — |
| $ | 31,528 |
| $ | 14,274,237 |
| |||||||||
| 2018 |
| $ | 1,250,000 |
| $ | — |
| $ | 3,875,777 |
| $ | — |
| $ | 4,193,750 |
| $ | — |
| $ | 83,858 |
| $ | 9,403,385 |
| ||||||||||
| 2017 |
| $ | 572,917 |
| $ | — |
| $ | 14,741,565 |
| $ | — |
| $ | 1,754,000 |
| $ | — |
| $ | 39,528 |
| $ | 17,108,010 |
| ||||||||||
Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2)(3) | Option Awards | Non-Equity Incentive Plan Compensation |
Change in | All Other Compensation(5) | Total Compensation | |||||||||||||||||||||||||||
Thomas P. “Todd” Gibbons Chief Executive Officer |
| 2020 |
| $ | 1,250,000 |
| $ | — |
| $ | 4,535,332 |
| $ | — |
|
| $3,209,813 |
|
| $297,241 |
|
| $98,169 |
|
| $ 9,390,555 |
| |||||||||
| 2019 |
| $ | 800,000 |
| $ | — |
| $ | 9,531,679 |
| $ | — |
|
| $1,609,688 |
|
| $527,375 |
|
| $56,959 |
|
| $12,525,701 |
| ||||||||||
| 2018 |
| $ | 650,000 |
| $ | — |
| $ | 4,609,078 |
| $ | — |
|
| $2,157,750 |
|
| $ — |
|
| $36,850 |
|
| $ 7,453,678 |
| ||||||||||
Robin Vince(6) Vice Chair & Chief Executive Officer of Global Market Infrastructure |
| 2020 |
| $ | 187,500 |
| $ | 500,000 |
| $ | 3,451,629 |
| $ | — |
|
| $697,541 |
|
| $ — |
|
| $66,905 |
|
| $ 4,903,575 |
| |||||||||
Emily H. Portney(6) Chief Financial Officer |
| 2020 |
| $ | 539,583 |
| $ | — |
| $ | 1,249,093 |
| $ | — |
|
| $1,083,926 |
|
| $ — |
|
| $19,342 |
|
| $ 2,891,944 |
| |||||||||
Bridget E. Engle Chief Operations & Technology Officer |
| 2020 |
| $ | 600,000 |
| $ | — |
| $ | 4,898,744 |
| $ | — |
|
| $1,915,200 |
|
| $ — |
|
| $26,250 |
|
| $ 7,440,194 |
| |||||||||
| 2019 |
| $ | 600,000 |
| $ | — |
| $ | 2,729,796 |
| $ | — |
|
| $1,378,275 |
|
| $ — |
|
| $20,400 |
|
| $ 4,728,471 |
| ||||||||||
| 2018 |
| $ | 600,000 |
| $ | — |
| $ | 2,388,988 |
| $ | — |
|
| $2,585,000 |
|
| $ — |
|
| $17,500 |
|
| $ 5,591,488 |
| ||||||||||
Catherine M. Keating(6) Chief Executive Officer of Wealth Management |
| 2020 |
| $ | 600,000 |
| $ | — |
| $ | 3,200,044 |
| $ | — |
|
| $1,228,920 |
|
| $ — |
|
| $26,250 |
|
| $ 5,055,214 |
| |||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Mitchell E. Harris Former Chief Executive Officer of Investment Management |
| 2020 |
| $ | 499,809 |
| $ | — |
| $ | 3,696,513 |
| $ | — |
|
| $1,608,264 |
|
| $ 22,121 |
|
| $71,246 |
|
| $ 5,897,953 |
| |||||||||
| 2019 |
| $ | 650,000 |
| $ | — |
| $ | 4,889,928 |
| $ | — |
|
| $1,686,825 |
|
| $149,022 |
|
| $27,000 |
|
| $ 7,402,775 |
| ||||||||||
| 2018 |
| $ | 650,000 |
| $ | — |
| $ | 6,229,333 |
| $ | — |
|
| $1,984,500 |
|
| $ — |
|
| $26,750 |
|
| $ 8,890,583 |
| ||||||||||
Michael P. Santomassimo Former Chief Financial Officer |
| 2020 |
| $ | 475,000 |
| $ | — |
| $ | 4,672,431 |
| $ | — |
|
| $ — |
|
| $ — |
|
| $48,865 |
|
| $ 5,196,296 |
| |||||||||
| 2019 |
| $ | 583,333 |
| $ | — |
| $ | 3,326,455 |
| $ | — |
|
| $1,275,000 |
|
| $ — |
|
| $25,667 |
|
| $ 5,210,455 |
| ||||||||||
| 2018 |
| $ | 500,000 |
| $ | — |
| $ | 740,050 |
| $ | — |
|
| $1,350,000 |
|
| $ — |
|
| $23,750 |
|
| $ 2,613,800 |
| ||||||||||
| (1) | The amount for Mr. Vince reflects his cash sign-on bonus. |
| (2) | The amounts disclosed in this column include the grant date fair value of RSUs and PSUs granted in 2020, 2019 |
The amounts disclosed in this column are computed in accordance with FASB ASC Topic 718 (“ |
The |
|
Name |
Perquisites |
Contributions | Insurance Premiums(c) | New Hire Payments(d) | Total | |||||||||||||||
Thomas P. “Todd” Gibbons | $ | 16,859 |
| $ | 30,000 |
| $ | 10,100 |
| $ | — |
| $ | 56,959 |
| |||||
Michael P. Santomassimo | $ | — |
| $ | 25,667 |
| $ | — |
| $ | — |
| $ | 25,667 |
| |||||
Bridget E. Engle | $ | — |
| $ | 20,400 |
| $ | — |
| $ | — |
| $ | 20,400 |
| |||||
Mitchell E. Harris | $ | — |
| $ | 27,000 |
| $ | — |
| $ | — |
| $ | 27,000 |
| |||||
Lester J. Owens | $ | — |
| $ | 24,682 |
| $ | — |
| $ | 2,105,571 |
| $ | 2,130,253 |
| |||||
Charles W. Scharf | $ | 17,528 |
| $ | 14,000 |
| $ | — |
| $ | — |
| $ | 31,528 |
| |||||
| BNY Mellon Ø | |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| (5) | The items comprising “All Other Compensation” for 2020 are: |
Name |
Perquisites | Contributions to Defined Contribution Plans(b) | Insurance Premiums(c) | New Hire Payments(d) | Total | ||||||||||||||||||||
Thomas P. “Todd” Gibbons | $ | 48,819 | $ | 39,250 | $ | 10,100 | $ | — | $ | 98,169 | |||||||||||||||
Robin Vince | $ | — | $ | 3,750 | $ | — | $ | 63,155 | $ | 66,905 | |||||||||||||||
Emily H. Portney | $ | — | $ | 19,342 | $ | — | $ | — | $ | 19,342 | |||||||||||||||
Bridget E. Engle | $ | — | $ | 26,250 | $ | — | $ | — | $ | 26,250 | |||||||||||||||
Catherine M. Keating | $ | — | $ | 26,250 | $ | — | $ | — | $ | 26,250 | |||||||||||||||
Mitchell E. Harris | $ | 47,000 | $ | 24,246 | $ | — | $ | — | $ | 71,246 | |||||||||||||||
Michael P. Santomassimo | $ | 34,615 | $ | 14,250 | $ | — | $ | — | $ | 48,865 | |||||||||||||||
| (a) | “Perquisites and Other Personal Benefits” for Mr. Gibbons |
| (b) | “Contributions to Defined Contribution Plans” consist of matching and non-elective contributions under our 401(k) plan and |
| (c) | Represent taxable payments made by us for Mr. Gibbons’ universal life insurance policy. |
| (d) | New hire payments for Mr. |
Because Ms. Portney, Ms. Keating and Mr. |
| 72 | BNY Mellon Ø | 2021 Proxy Statement |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
2020 Grants of Plan-Based Awards
Estimated Future Payouts |
Estimated Future Payouts |
All Other | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards(3) | |||||||||||||||||||||||||||||||||||
Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Number of Shares of Stock or Units (#) |
Grant | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(4) | ||||||||||||||||||||
Thomas P. “Todd” Gibbons | EICP | — | — | td,893,750 | td,840,625 | EICP | — | — | $3,312,500 | $4,968,750 | ||||||||||||||||||||||||||||||
PSUs | 2/11/2019 | — | 65,718 | 98,577 | $3,417,993 | PSUs | 2/10/2020 | — | 65,037 | 97,556 | $3,023,570 | |||||||||||||||||||||||||||||
RSUs | 2/11/2019 | 36,510 | td,898,885 | RSUs | 2/10/2020 | 32,518 | td,511,762 | |||||||||||||||||||||||||||||||||
RSUs | 10/28/2019 | 89,887 | $4,214,801 | |||||||||||||||||||||||||||||||||||||
Michael P. Santomassimo | EICP | — | — | td,500,000 | td,250,000 | |||||||||||||||||||||||||||||||||||
PSUs | 2/11/2019 | — | 41,116 | 61,674 | td,138,443 | |||||||||||||||||||||||||||||||||||
RSUs | 2/11/2019 | 22,842 | td,188,012 | |||||||||||||||||||||||||||||||||||||
Robin Vince | EICP | — | — | $697,541 | td,046,312 | |||||||||||||||||||||||||||||||||||
RSUs | 11/2/2020 | 98,337 | $3,451,629 | |||||||||||||||||||||||||||||||||||||
Emily H. Portney | EICP | — | — | td,037,250 | td,555,875 | |||||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 26,868 | td,249,093 | |||||||||||||||||||||||||||||||||||||
Bridget E. Engle | EICP | — | — | td,410,000 | td,115,000 | EICP | — | — | td,920,000 | td,880,000 | ||||||||||||||||||||||||||||||
PSUs | 2/11/2019 | — | 26,243 | 39,365 | td,364,898 | PSUs | 2/10/2020 | — | 41,765 | 62,648 | td,941,655 | |||||||||||||||||||||||||||||
RSUs | 2/11/2019 | 26,243 | td,364,898 | RSUs | 2/10/2020 | 23,203 | td,078,707 | |||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 40,404 | $1,878,382 | |||||||||||||||||||||||||||||||||||||
Catherine M. Keating | EICP | — | — | td,320,000 | td,980,000 | |||||||||||||||||||||||||||||||||||
PSUs | 2/10/2020 | — | 19,833 | 29,750 | $922,036 | |||||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 11,900 | $553,231 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 20,202 | $939,191 | |||||||||||||||||||||||||||||||||||||
RSUs | 8/10/2020 | 20,706 | $785,586 | |||||||||||||||||||||||||||||||||||||
Mitchell E. Harris | EICP | — | — | td,205,000 | $3,307,500 | EICP | — | — | td,692,910 | td,539,365 | ||||||||||||||||||||||||||||||
PSUs | 2/11/2019 | — | 60,441 | 90,662 | $3,143,536 | PSUs | 2/10/2020 | — | 51,115 | 76,673 | td,376,336 | |||||||||||||||||||||||||||||
RSUs | 2/11/2019 | 33,578 | td,746,392 | RSUs | 2/10/2020 | 28,397 | td,320,177 | |||||||||||||||||||||||||||||||||
Lester J. Owens | EICP | — | — | td,020,000 | td,530,000 | |||||||||||||||||||||||||||||||||||
PSUs | 2/12/2019 | — | 16,086 | 24,129 | $ 849,984 | |||||||||||||||||||||||||||||||||||
RSUs | 2/12/2019 | 53,218 | td,812,039 | |||||||||||||||||||||||||||||||||||||
Charles W. Scharf(5) | EICP | — | — | $3,812,500 | $5,718,750 | |||||||||||||||||||||||||||||||||||
PSUs | 2/11/2019 | — | 170,304 | 255,456 | $8,857,511 | |||||||||||||||||||||||||||||||||||
RSUs | 2/11/2019 | 85,152 | $4,428,756 | |||||||||||||||||||||||||||||||||||||
Michael P. Santomassimo(5) | EICP | — | — | td,500,000 | td,250,000 | |||||||||||||||||||||||||||||||||||
PSUs | 2/10/2020 | — | 38,636 | 57,954 | td,796,188 | |||||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 21,464 | $ 997,861 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/10/2020 | 40,404 | $1,878,382 | |||||||||||||||||||||||||||||||||||||
| (1) | Represents the cash portion of incentive compensation amounts to be paid for performance during |
| (2) | Represents the portion of the NEO’s incentive compensation award granted in the form of PSUs under the LTIP for performance during |
| (3) | For |
|
| (4) | The aggregate grant date fair value of awards presented in this column is calculated in accordance with ASC 718. |
| (5) | Upon his voluntary termination from the company in |
| BNY Mellon Ø | 2021 Proxy Statement | 73 |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
2020 Outstanding Equity Awards at FiscalYear-End
The market value of unvested or unearned awards is calculated using a $50.33$42.44 per share value, which was the closing price per share of our common stock on the NYSE on December 31, 20192020 (the last trading day of the year).
Option Awards |
Stock Awards(2) |
Option Awards |
Stock Awards(2) | |||||||||||||||||||||||||||||||||
Number of Securities
| Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity or Other | Equity or Other |
Number of Securities | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity or Other | Equity or Other | |||||||||||||||||||||||
Name |
Year of | Exercisable | Unexercisable |
Year of | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||
Thomas P. | 2017 | 14,472 | $728,376 |
2018 |
9,431 |
$400,252 | ||||||||||||||||||||||||||||||
2018 | 18,862 | $949,324 |
2019 |
84,264 |
$3,576,164 | |||||||||||||||||||||||||||||||
2019 | 126,397 | $6,361,561 |
2020 |
32,518 |
td,380,064 | |||||||||||||||||||||||||||||||
2017-2019 | 83,327.462(4) | $4,193,871 |
2018-2020 |
46,836.800(4) |
td,987,754 | |||||||||||||||||||||||||||||||
2018-2020 | 53,337.622(3) | td,684,483 |
2019-2021 |
69,639.982(3) |
td,955,521 | |||||||||||||||||||||||||||||||
2019-2021 | 67,410.237(3) | $3,392,757 |
2020-2022 |
67,188.244(3) |
td,851,469 | |||||||||||||||||||||||||||||||
Michael P. Santomassimo | 2017 | 4,793 | td41,232 | |||||||||||||||||||||||||||||||||
2018 | 4,240 | td13,399 | ||||||||||||||||||||||||||||||||||
2019 | 22,842 | td,149,638 | ||||||||||||||||||||||||||||||||||
2018-2020 | 6,660.918(3) | $335,244 | ||||||||||||||||||||||||||||||||||
Robin Vince |
2020 |
98,337 |
$4,173,422 | |||||||||||||||||||||||||||||||||
Emily H. Portney |
2018 |
5,937 |
td51,966 | |||||||||||||||||||||||||||||||||
2019 |
18,950 |
$804,238 | ||||||||||||||||||||||||||||||||||
2019-2021 | 42,174.736(3) | $2,122,654 |
2020 |
26,868 |
$1,140,278 | |||||||||||||||||||||||||||||||
Bridget E. Engle | 2017 | 18,352 | $923,656 |
2018 |
6,843 |
$290,417 | ||||||||||||||||||||||||||||||
2018 | 13,687 | $688,867 |
2019 |
17,495 |
$742,488 | |||||||||||||||||||||||||||||||
2019 | 26,243 | $1,320,810 |
2020 |
63,607 |
$2,699,481 | |||||||||||||||||||||||||||||||
2018-2020 | 21,502.411(3) | $1,082,216 |
2018-2020 |
18,881.254(4) |
$801,320 | |||||||||||||||||||||||||||||||
2019-2021 |
27,809.154(3) |
$1,180,220 | ||||||||||||||||||||||||||||||||||
2020-2022 |
43,146.470(3) |
$1,831,136 | ||||||||||||||||||||||||||||||||||
Catherine M. Keating |
2018 |
6,120 |
td59,733 | |||||||||||||||||||||||||||||||||
2019 |
4,307 |
td82,789 | ||||||||||||||||||||||||||||||||||
2020 |
52,808 |
td,241,172 | ||||||||||||||||||||||||||||||||||
2019-2021 |
11,411.682(3) |
$484,312 | ||||||||||||||||||||||||||||||||||
2019-2021 | 26,918.756(3) | $1,354,821 |
2020-2022 |
20,489.021(3) |
$869,554 | |||||||||||||||||||||||||||||||
Mitchell E. Harris | 2012 | 31,621 | — | td2.03 | 2/22/2022 |
2012 |
31,621 |
0 |
td2.03 |
2/22/2022 | ||||||||||||||||||||||||||
2017 | 10,673 | $537,172 |
2018 |
12,746 |
$540,940 | |||||||||||||||||||||||||||||||
2018 | 25,492 | td,283,012 |
2019 |
22,385 |
$950,019 | |||||||||||||||||||||||||||||||
2019 | 33,578 | td,689,981 |
2020 |
28,397 |
td,205,169 | |||||||||||||||||||||||||||||||
2017-2019 | 61,450.750(4) | $3,092,816 |
2018-2020 |
63,300.978(4) |
td,686,494 | |||||||||||||||||||||||||||||||
2018-2020 | 72,087.689(3) | $3,628,173 |
2019-2021 |
64,048.056(3) |
td,718,199 | |||||||||||||||||||||||||||||||
2019-2021 | 61,997.354(3) | $3,120,327 | ||||||||||||||||||||||||||||||||||
Lester J. Owens | 2019 | 53,218 | td,678,462 | |||||||||||||||||||||||||||||||||
2019-2021 | 16,500.214(3) | $830,456 | ||||||||||||||||||||||||||||||||||
Charles W. Scharf | 2017 | 0 | $0 | |||||||||||||||||||||||||||||||||
2018 | 0 | $0 | ||||||||||||||||||||||||||||||||||
2019 | 0 | $0 | ||||||||||||||||||||||||||||||||||
2017-2019 | 0 | $0 | ||||||||||||||||||||||||||||||||||
2018-2020 | 0 | $0 | ||||||||||||||||||||||||||||||||||
2019-2021 | 0 | $0 | ||||||||||||||||||||||||||||||||||
Mitchell E. Harris |
2020-2022 |
52,805.742(3) |
td,241,076 | |||||||||||||||||||||||||||||||||
2018 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
2019 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
2020 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
2018-2020 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
2019-2021 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
2020-2022 |
0 |
$0 | ||||||||||||||||||||||||||||||||||
| (1) | Refers to the year of grant for stock options and RSUs and to the performance period for PSUs. |
| 74 | BNY Mellon Ø | |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| (2) | RSUs vest in accordance with the following schedule: |
Year of Grant | ||
|
Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested on 2/ | |
|
| |
2019 |
Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested 1/ | |
2020 | Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested 1/3 on 2/10/2021, 1/3 vesting on 2/10/2022 and 1/3 vesting on 2/10/2023. For |
PSUs are earned and vest in accordance with the following schedule:
Year of Grant | ||
|
| |
2018 |
Earned, between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/26/2021). | |
2019 |
Earned, between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/11/2022). | |
2020 | Earned between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/10/2023). |
| (3) | Includes accrued dividends on the PSUs granted in |
| (4) | Includes accrued dividends on the PSUs granted in |
20192020 Option Exercises and Stock Vested
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise(#) | Value Realized ($) | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting ($) | Number of Shares Acquired on Exercise(#) | Value Realized ($) | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting ($) | ||||||||||||||||||||||||||||
Thomas P. “Todd” Gibbons |
| 318,556 |
| $ | 6,326,331 |
|
| 107,114 |
| $ | 5,676,429 |
| — | $ | — | 128,532 | $ | 5,504,669 | ||||||||||||||||||
Robin Vince | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||
Emily H. Portney | — | $ | — | 18,612 | $ | 761,235 | ||||||||||||||||||||||||||||||
Bridget E. Engle | — | $ | — | 33,944 | $ | 1,531,575 | ||||||||||||||||||||||||||||||
Catherine M. Keating | — | $ | — | 8,275 | $ | 327,384 | ||||||||||||||||||||||||||||||
Mitchell E. Harris | — | $ | — | 80,700 | $ | 3,648,999 | ||||||||||||||||||||||||||||||
Michael P. Santomassimo |
| — |
| $ | — |
|
| 14,573 |
| $ | 729,316 |
| — | $ | — | 14,527 | $ | 661,145 | ||||||||||||||||||
Bridget E. Engle |
| — |
| $ | — |
|
| 56,538 |
| $ | 2,996,291 |
| ||||||||||||||||||||||||
Mitchell E. Harris |
| — |
| $ | — |
|
| 94,821 |
| $ | 5,025,203 |
| ||||||||||||||||||||||||
Lester J. Owens |
| — |
| $ | — |
|
| — |
| $ | — |
| ||||||||||||||||||||||||
Charles W. Scharf |
| — |
| $ | — |
|
| 12,247 |
| $ | 648,969 |
| ||||||||||||||||||||||||
| BNY Mellon Ø | | 75 |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Name | Plan Name(1) | Number of Years Credited Service (#) |
Present | Payments During Last Fiscal Year ($) | Plan Name(1) | Number of Years Credited Service (#) |
Present | Payments During Last Fiscal Year ($) | ||||||||||||||
Thomas P. “Todd” Gibbons | BNY Mellon Tax-Qualified Retirement Plan |
| 28.08 |
| $ | 1,315,709 |
| $ | 0 |
| BNY Mellon Tax-Qualified Retirement Plan | 28.08 | $1,370,112 | $0 | ||||||||
| Legacy BNY Excess Plan | 28.08 | $2,228,515 | $0 | |||||||||||||||||||
Legacy BNY Excess Plan |
| 28.08 |
| $ | 2,139,526 |
| $ | 0 |
| Legacy BNY SERP | 27.58 | $3,852,737 | $0 | |||||||||
Legacy BNY SERP |
| 27.58 |
| $ | 3,698,888 |
| $ | 0 |
| |||||||||||||
Mitchell E. Harris | BNY MellonTax-Qualified Retirement Plan |
| 10.75 |
| $ | 429,916 |
| $ | 0 |
| BNY Mellon Tax-Qualified Retirement Plan | 10.75 | $ 440,104 | $0 | ||||||||
Legacy Mellon IRC Section 401(a)(17) Plan |
| 10.75 |
| $ | 630,096 |
| $ | 0 |
| |||||||||||||
| Legacy Mellon IRC Section 401(a)(17) Plan | 10.75 | $ 642,029 | $0 | |||||||||||||||||||
| (1) | Benefit accruals under the Legacy BNY SERP were frozen as of December 31, 2014, and benefit accruals under the Legacy BNY Excess Plan, Legacy Mellon IRC Section 401(a)(17) Plan and BNY MellonTax-Qualified Retirement Plan were frozen as of June 30, 2015. |
| (2) | The present values shown above are based on benefits earned as of December 31, |
BNY Mellon Retirement Plans
All of thesethe plans listed in the table above are closed to new participants and were frozen as of December 31, 2014 for the Legacy BNY SERP and as of June 30, 2015 for the BNY MellonTax-Qualified Retirement Plan, the Legacy BNY Excess Plan and the Legacy Mellon IRC Section 401(a)(17) Plan. Benefits for Legacy BNY participants under the BNY MellonTax-Qualified Retirement Plan, the Legacy BNY Excess Plan and the Legacy BNY SERP were determined under a career average pay formula for service on and after January 1, 2006 and under a final average pay formula for service prior to 2006. Benefits for Legacy Mellon participants under the BNY MellonTax-Qualified Retirement Plan and the Legacy Mellon IRC Section 401(a)(17) Plan were determined under a final average pay formula.
The BNY MellonTax-Qualified Retirement Plan was amended effective January 1, 2009, to change the benefit formula for participants under age 50 as of December 31, 2008 and for new participants to a cash balance formula for service earned on and after January 1, 2009. Plan participants who were age 50 or older as of December 31, 2008 continued to earn benefits through June 30, 2015 under the provisions of the legacy plan in which they participated as of that date. Because Mr. Gibbons and Mr. Harris were over age 50 as of December 31, 2008, they continued to earn benefits under the provisions of the legacy plans in which they participate.
Because Mr. Gibbons and Mr. Harris have attained at leastis over age 55, they are eachhe is eligible for immediate retirement under the BNY MellonTax-Qualified Retirement Plan. Mr. Gibbons is eligible to retire with unreduced benefits under the BNY MellonTax-Qualified Retirement Plan and the Legacy BNY Excess Plan. Since
Mr. Gibbons is over age 60, he is also entitled to an unreduced benefit from the Legacy BNY
SERP upon retirement. Mr. Harris is eligible to retireretired in October 2020 with a reduced benefit, currently 99.58% of hisan unreduced benefit under both the BNY MellonTax-Qualified Retirement Plan and the Legacy Mellon IRC Section 401(a)(17) Plan. Messrs. Santomassimo and OwensEffective upon Mr. Harris’ retirement in October 2020, there are no NEOs who participate in the Legacy Mellon IRC Section 401(a)(17) Plan. Additionally, since Ms. Portney, Mr. Vince, Ms. Engle and Ms. EngleKeating do not participate in any retirement plan that provides for specified payments and benefits (other than defined contribution plans) and accordingly,, they are not included in the Pension Benefits table above.
BNY MellonTax-Qualified Retirement Plan — Plan—Legacy BNY Provisions. The Legacy BNYTax-Qualified Retirement Plan (the “Legacy BNY Plan”) formula is a career average pay formula subject to IRC limits on eligible pay for determining benefits. Benefits are based on eligible base pay prior to the plan freeze effective June 30, 2015. Employees who participated in the Legacy BNY Plan prior to January 1, 2006 may choose between a monthly benefit and a lump sum at retirement, while other participants will receive monthly benefits at retirement.
BNY MellonTax-Qualified Retirement Plan — Plan—Legacy Mellon Provisions. The Legacy MellonTax-Qualified Retirement Plan formula is a final average pay formula subject to IRC limits on eligible pay for determining benefits. Benefits are based on eligible base pay prior to the plan freeze effective June 30, 2015. Benefits are paid as an annuity.
Legacy BNY Excess Plan. This plan is an unfunded nonqualified plan designed to provide the same benefit to Legacy BNY employees as under the BNY MellonTax-Qualified Retirement Plan to the extent their benefits are limited under such plan as a result of IRC limits on accrued benefits and eligible base pay. Benefits are paid in a lump sum.
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ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Legacy BNY SERP. This plan is an unfunded nonqualified plan that provides benefits according to a benefit formula similar to that of the BNY MellonTax-Qualified Retirement Plan benefit formula but includes an annual bonus (capped at 100% of base salary after 2005) for senior executives who were selected to participate in the plan by The Bank of New York’s board of directors prior to July 8, 2003. Benefits are paid in a lump sum. Participants are entitled to
benefits in this plan only if they terminate service on or after age 60.
Legacy Mellon IRC Section 401(a)(17) Plan. This plan is an unfunded nonqualified plan designed to provide the same benefit to Legacy Mellon employees as under the BNY MellonTax-Qualified Retirement Plan to the extent their benefits are limited under such plan as a result of IRC limits on accrued benefits and eligible base pay. Benefits are paid as an annuity. Effective upon Mr. Harris’ retirement in October 2020, there are no NEOs who participate in the plan.
2020 Nonqualified Deferred Compensation
The following table provides information with respect to each defined contribution or other plan that provides for nonqualified deferred compensation in which the NEOs participate. For 2019,2020, each of our NEOs participated in the BNY Mellon 401(k) Benefits Restoration Plan, and Mr. Harris participated in the BNY Mellon Deferred Compensation Plan and the Mellon Elective Deferred Compensation Plan for Senior Officers. Each of these plans is described below.
Name | Executive Contributions in Fiscal Year 2019 | Registrant Contributions in Fiscal Year 2019(1) | Aggregate Earnings in Fiscal Year 2019 | Aggregate Withdrawals/ Distributions | Aggregate Balance at End of Fiscal Year | Executive Contributions in Fiscal Year 2020 | Registrant Contributions in Fiscal Year 2020(1) | Aggregate Earnings in Fiscal Year 2020 | Aggregate Withdrawals/ Distributions | Aggregate Balance at End of Fiscal Year 2020 | ||||||||||||||||||||
Thomas P. “Todd” Gibbons | $0 | $10,400 | $8,942 | $0 | $51,117 | $ | 0 | $ | 19,300 | $ | 13,290 | $ | 0 | $ | 83,707 | |||||||||||||||
Michael P. Santomassimo | $0 | $6,067 | $1,282 | $0 | $14,203 | |||||||||||||||||||||||||
Robin Vince | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
Emily Portney | $ | 0 | $ | 5,092 | $ | 1,919 | $ | 0 | $ | 11,411 | ||||||||||||||||||||
Bridget E. Engle | $0 | $6,400 | $999 | $0 | $15,227 | $ | 0 | $ | 6,300 | $ | 3,527 | $ | 0 | $ | 25,054 | |||||||||||||||
Lester J. Owens | $0 | $5,082 | $0 | $0 | $5,082 | |||||||||||||||||||||||||
Catherine Keating | $ | 0 | $ | 6,300 | $ | 2,647 | $ | 0 | $ | 15,627 | ||||||||||||||||||||
Mitchell E. Harris(2) | $0 | $7,400 | $85,250 | $277,041 | $2,473,319 | $ | 0 | $ | 4,296 | $ | 87,367 | $ | 0 | $ | 2,564,982 | |||||||||||||||
Charles W. Scharf(3) | $0 | $0 | $403 | $0 | $0 | |||||||||||||||||||||||||
Michael Santomassimo | $ | 0 | $ | 0 | $ | 5,646 | $ | 0 | $ | 19,849 | ||||||||||||||||||||
| (1) | These amounts represent company contributions under the BNY Mellon 401(k) Benefits Restoration Plan and are included in the |
| (2) | Amounts for Mr. Harris reflect aggregate balances and earnings in the |
|
| BNY Mellon Ø | | 77 |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
BNY Mellon Nonqualified Deferred Compensation Plans
BNY Mellon 401(k) Benefits Restoration Plan. The BNY Mellon 401(k) Benefits Restoration Plan is a nonqualified plan designed for the purpose of providing deferred compensation on an unfunded basis for eligible employees. The deferred compensation provided under the BNY Mellon 401(k) Benefits Restoration Plan is intended to supplement the benefit provided under the BNY Mellon 401(k) Savings Plan, our 401(k) Plan for employees not accruing benefits in our defined benefit pension plans where the employee’s retirement contributions under the 401(k) Plan are limited due to the maximums imposed on “qualified” plans by Section 401(a)(17) of the IRC. Pursuant to the BNY Mellon 401(k) Benefits Restoration Plan, we set up a notional account that is credited with an amount, if any, ofnon-discretionarynon-elective company contributions that would have been credited to each eligible employee’s 401(k) Plan account absent those tax limitations, including for prior years in which the BNY Mellon 401(k) Benefits Restoration Plan was not yet in effect. The amounts credited to the notional accounts generally vest after three years of service, as defined and calculated under the 401(k) Plan. As of December 31, 2019,2020, all of our NEOs were eligible to participate in the BNY Mellon 401(k) Benefits Restoration Plan. Due to an amendment to the BNY Mellon 401(k) Savings Plan effective January 1, 2021, no NEOs will be eligible to earn non-elective contributions after December 31, 2020. Therefore, no additional benefits will be earned under the BNY Mellon 401(k) Benefits Restoration Plan after December 31, 2020.
BNY Mellon Deferred Compensation Plan. The BNY Mellon Deferred Compensation Plan permits eligible employees, including our NEOs, to defer receipt of cash bonus/incentive amounts above the Social Security wage base (which was $132,900$137,700 in 2019)2020) until a later date while employed, upon retirement or after retirement not to exceed age 70. Changes are permitted
to the payment election once annually; however, they
must comply with the regulations contained in The American Jobs Creation Act of 2004. Deferred compensation may be paid in a lump sum or annual payments over 2 to 15 years. If an executive terminates employment prior to age 55, his or her benefit is paid in a lump sum shortly after termination. Investment alternatives, based on a selection of variable rate options, must be selected when the executive makes a deferral election and may be changed each quarter for future deferrals. Previously deferred amounts may generally be reallocated among the investment options at the beginning of each quarter. The plan is a nonqualified unfunded plan. As of December 31, 2019, Mr. Harris is the only NEO that participates in the plan.
Mellon Elective Deferred Compensation Plan for Senior Officers. The Mellon Elective Deferred Compensation Plan for Senior Officers is a nonqualified, unfunded plan that permitted executives including Mr. Harris, to defer receipt of earned salary and cash bonus/incentive amounts above the Social Security wage base until a later date while employed, upon retirement or after retirement not to exceed age 70. Deferred compensation may be paid in a lump sum or annual payments over 2 to 15 years. If an executive terminates employment prior to age 55, his benefit is paid in a lump sum shortly after termination. The executive may allocate his deferrals to receive earnings based on multiple variable rates or a declared rate (for 2019, 3.41%2020, 3.32%). Previously deferred amounts allocated to the declared rate must remain in the declared rate. Although the plan is unfunded, funds have been set aside in an irrevocable grantor trust for the purpose of paying benefits under the plan to participants. Effective upon Mr. Harris’ retirement in October 2020, there are no NEOs who are eligible to participate in the plan. Mr. Harris’ deferred compensation will be paid out according to the terms of the plan and his prior elections.
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ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Potential Payments upon Termination or Change in Control
The following discussion summarizes anythe arrangements, agreements and policies of the company relating to potential payments to our NEOs upon termination or change in control.
Retirement Benefits
As shown in the “2020 Pension BenefitsBenefits” and the “2020 Nonqualified Deferred CompensationCompensation” Tables above, we provide qualified andnon-qualified pension retirement benefits and qualified andnon-qualified defined contribution retirement benefits (with the specific plans varying depending on when participation began).
In addition, we provide accelerated or continued vesting of equity awards for participants who are eligible for retirement, with the eligibility dependent on the individual’s age and length of service and the terms of the applicable plan and award agreements. At December 31, 20192020 and using the same assumptions as used for the Table“Table of Other Potential PaymentsPayments” below, our NEOs were eligible to receive accelerated or continued vesting of stock awards in the following amounts: for Mr. Gibbons, $13,831,431;$11,011,921; and for Mr. Harris, $13,398,865. Messrs. OwensVince, $4,173,422. In accordance with the terms of Mr. Vince’s offer letter, any equity awards that Mr. Vince is granted (other than RSUs granted in connection with his buyout award) prior to his turning 55 years old will continue to vest according to their terms if Mr. Vince complies with all applicable covenants and Santomassimo(i) his employment is terminated without cause, (ii) his employment is terminated pursuant to mutual agreement, or (iii) he voluntarily resigns as a result of a material and adverse change in duties, responsibilities or scope of his position except to the extent required by law or regulation. Also, in accordance with the terms of his offer letter, RSUs granted to Mr. Vince in connection with his buyout awards shall continue to vest unless his employment is terminated for cause. Ms. Portney, Ms. Engle, and Ms. EngleKeating are not included above because they are not retirement-eligible. Accelerated or continued vesting is not provided on termination by the company for cause.
Pursuant to the standard retirement vesting provisions in our LTIP and the applicable award agreements, Mr. Harris is eligible to vest in the unvested portions of his February 2018, February 2019 and February 2020 PSU and RSU awards. At December 31, 2020, and using the same assumptions as used for the “Table of Other Potential Payments” beginning on page 80, the estimated value of such vesting was $10,351,752. Subsequent to his retirement in October 2020, Mr. Harris vested in 12,746, 11,193, and 9,466 shares
underlying his February 2018, February 2019 and February 2020 RSU awards, respectively. On February 8, 2021, Mr. Harris (i) became vested in 58,506 shares underlying his earned February 2018 PSU award (plus dividend equivalent units thereon) and (ii) was granted 84,862 RSUs, each based on the company’s and his individual performance as described on page 60. The number of shares under the February 2019 and February 2020 PSU awards in which Mr. Harris will vest will be based on the company’s actual performance as determined by the HRC Committee at the end of the applicable performance periods.
Other Potential Payments upon Termination or Change in Control
Change in Control and Severance Arrangements. Since 2010, our Board has implemented a “Policy Regarding Stockholder Approval of Future Senior Officer Severance Arrangements.” The policy provides that the company will not enter into a future severance arrangement with a senior executive that provides for severance benefits (as defined in the policy) in an amount exceeding 2.99 times the sum of the senior executive’s annual base salary and target bonus for the year of termination (or, if greater, for the year before the year of termination), unless such arrangement receives approval of the stockholders of the company.
Under the Executive Severance Plan, if an eligible participant is terminated by the company without “cause” (as defined in the plan), the participant is eligible to receive a severance payment equal to one times the participant’s base salary for the year of termination (or, if greater, for the year before the year
of termination) and benefit continuation and outplacement services for one year.
The participant is also eligible for apro-rata annual bonus for the year of termination in the company’s sole discretion. If a participant’s employment is terminated by the company without cause or if the participant terminates his or her employment for “good reason” (as defined in the plan) within two years following a “change in control” (as defined in the plan), then instead of receiving the benefits described above, the participant is eligible to receive a severance payment equal to two times the sum of the participant’s base salary and target annual bonus for the year of termination (or, if greater, for the year before the year of termination), apro-rata target annual bonus for the year of termination, benefit continuation for two years and outplacement services for one year.
| BNY Mellon Ø | 2021 Proxy Statement | 79 |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
The payments and benefits under the plan are subject to the participant signing a release and waiver of claims in favor of the company and agreeing not to compete against the company, or solicit our customers and employees, for so long as they arethe participant is receiving benefits under the plan. If any payment under the plan would cause a participant to become subject to the excise tax imposed under Section 4999 of the IRC, then payments and benefits will be reduced to the amount that would not cause the participant to be subject to the excise tax if such a reduction would put the participant in a betterafter-tax position than if the participant were to pay the tax.
Payments and benefits that are payable under the plan will be reduced to the extent that the amount of such payments or benefits would exceed the amount permitted to be paid under the company’s “Policy Regarding Stockholder Approval of Future Senior Officer Severance Arrangements” and such amounts are not approved by the company’s stockholders in accordance with the policy.
Unvested Equity Awards. Equity awards granted to our NEOs through December 31, 20192020 were granted under the LTIP or its predecessor. Each award is evidenced by an award agreement that sets forth the terms and conditions of the award and the effect of any termination event or a change in control on unvested equity awards. Accordingly, theThe effect of a termination event or change in control on outstanding equity awards varies by executive officer and type of award.
|
Table of Other Potential Payments. The following table is based on the following:
The actual amounts that would be payable in these circumstances can only be determined at the time of the executive’s separation, would include payments or benefits already earned or vested, and may differ from the amounts set forth in the tables below. In some cases a release may be required before amounts would be payable. Although we may not have any contractual obligation to make a cash payment or provide other benefits to any NEO in the event of his or her death or upon the occurrence of any other event, a cash payment may be made or other benefit may be provided in our discretion. The incremental benefits that would be payable upon certain types of termination of employment as they pertain to the NEOs are described below. Mr. ScharfSantomassimo is not included in the table below as he did not receive any payments in connection with his resignation. Mr. Harris is not included in the table due to his retirement in October 2020.
| 80 | BNY Mellon Ø | |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Named Executive Officer | By Company Without Cause | Termination in Connection with Change of Control | Death | By Company Without Cause | Termination in Connection with Change of Control | Death | ||||||||||||||||||
Thomas P. “Todd” Gibbons | ||||||||||||||||||||||||
Cash Severance(1) |
| $1,250,000 |
|
| $10,075,000 |
|
| $— |
| $1,250,000 | $15,750,000 | $— | ||||||||||||
Pro-rated Bonus(1) |
| $3,219,376 |
|
| $3,787,500 |
|
| $— |
| $6,419,626 | $6,625,000 | $— | ||||||||||||
Health and Welfare Benefits |
| $748 |
|
| $1,496 |
|
| $— |
| $1,497 | $2,994 | $— | ||||||||||||
Additional Stock Award Vesting(2) |
| $4,551,877 |
|
| $4,551,877 |
|
| $4,551,877 |
| $2,636,056 | $2,636,056 | $2,636,056 | ||||||||||||
TOTAL |
| $9,022,001 |
|
| $18,415,873 |
|
| $4,551,877 |
| $10,307,179 | $25,014,050 | $2,636,056 | ||||||||||||
Michael P. Santomassimo | ||||||||||||||||||||||||
Robin Vince | ||||||||||||||||||||||||
Cash Severance(1) | $750,000 | $11,675,000 | $— | |||||||||||||||||||||
Pro-rated Bonus(1) | $1,278,825 | $1,278,825 | $— | |||||||||||||||||||||
Health and Welfare Benefits | $17,377 | $34,754 | $— | |||||||||||||||||||||
Additional Stock Award Vesting(2) | $— | $— | $— | |||||||||||||||||||||
TOTAL | $2,046,202 | $12,988,579 | $— | |||||||||||||||||||||
Emily H. Portney | ||||||||||||||||||||||||
Cash Severance(1) |
| $600,000 |
|
| $6,700,000 |
|
| $— |
| $600,000 | $5,003,250 | $— | ||||||||||||
Pro-rated Bonus(1) |
| $2,337,500 |
|
| $2,750,000 |
|
| $— |
| $1,987,198 | $1,901,625 | $— | ||||||||||||
Health and Welfare Benefits |
| $19,130 |
|
| $38,260 |
|
| $— |
| $17,592 | $35,184 | $— | ||||||||||||
Additional Stock Award Vesting(2) |
| $2,557,358 |
|
| $4,075,100 |
|
| $4,075,100 |
| $2,262,023 | $2,262,023 | $2,262,023 | ||||||||||||
TOTAL |
| $5,513,988 |
|
| $13,563,360 |
|
| $4,075,100 |
| $4,866,813 | $9,202,082 | $2,262,023 | ||||||||||||
Bridget E. Engle | ||||||||||||||||||||||||
Cash Severance(1) |
| $600,000 |
|
| $6,370,000 |
|
| $— |
| $600,000 | $8,240,000 | $— | ||||||||||||
Pro-rated Bonus(1) |
| $2,526,838 |
|
| $2,585,000 |
|
| $— |
| $3,511,200 | $3,520,000 | $— | ||||||||||||
Health and Welfare Benefits |
| $19,265 |
|
| $38,530 |
|
| $— |
| $17,239 | $34,478 | $— | ||||||||||||
Additional Stock Award Vesting(2) |
| $5,405,203 |
|
| $5,405,203 |
|
| $5,405,203 |
| $7,776,188 | $7,776,188 | $7,776,188 | ||||||||||||
TOTAL |
| $8,551,306 |
|
| $14,398,733 |
|
| $5,405,203 |
| $11,904,627 | $19,570,666 | $7,776,188 | ||||||||||||
Mitchell E. Harris | ||||||||||||||||||||||||
Catherine M. Keating | ||||||||||||||||||||||||
Cash Severance(1) |
| $650,000 |
|
| $9,385,000 |
|
| $— |
| $600,000 | $6,040,000 | $— | ||||||||||||
Pro-rated Bonus(1) |
| $3,092,513 |
|
| $4,042,500 |
|
| $— |
| $2,253,020 | $2,420,000 | $— | ||||||||||||
Health and Welfare Benefits |
| $12,571 |
|
| $25,142 |
|
| $— |
| $16,531 | $33,062 | $— | ||||||||||||
Additional Stock Award Vesting(2) |
| $— |
|
| $— |
|
| $— |
| $4,091,382 | $4,091,382 | $4,091,382 | ||||||||||||
TOTAL |
| $3,755,084 |
|
| $13,452,642 |
|
| $— |
| $6,960,933 | $12,584,444 | $4,091,382 | ||||||||||||
Lester J. Owens | ||||||||||||||||||||||||
Cash Severance(1) |
| $600,000 |
|
| $4,940,000 |
|
| $— |
| |||||||||||||||
Pro-rated Bonus(1) |
| $1,907,400 |
|
| $1,870,000 |
|
| $— |
| |||||||||||||||
Health and Welfare Benefits |
| $19,265 |
|
| $38,530 |
|
| $— |
| |||||||||||||||
Additional Stock Award Vesting(2) |
| $2,726,358 |
|
| $2,726,358 |
|
| $2,726,358 |
| |||||||||||||||
TOTAL |
| $5,253,023 |
|
| $9,574,888 |
|
| $2,726,358 |
| |||||||||||||||
| (1) | Amounts shown assume that no NEO received payment from any displacement program, supplemental unemployment plan or other separation benefit other than the Executive Severance Plan. Amounts have been calculated in accordance with the terms of the applicable agreements. For terminations by the company without cause, amounts will be paid in installments over aone-year period following termination. For terminations in connection with a change of control, amounts will be paid in a lump sum. |
| (2) | The value of |
| BNY Mellon Ø | | 81 |
ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Set forth below is the annual total compensation of our median employee, the annualizedannual total compensation of Mr. Gibbons, and the ratio of those two values:
The 2019 annual total compensation of the median employee of BNY Mellon (other than our CEO) was $63,202;
| • | The 2020 annual total compensation of the median employee of BNY Mellon (other than our CEO) was $77,487(1); |
The 2019 annualized total compensation of our Interim CEO, Mr. Gibbons, was $13,437,888; and
| • | The 2020 annual total compensation of our CEO, Mr. Gibbons, was $9,392,052(2); and |
For 2019,2020, the ratio of the annual total compensation of Mr. Gibbons to the median annual total compensation of all our employeesmedian employee was 213121 to 1.
Background
We previously identified our median employee (who is located in the U.S.) using our world-wide employee population (without exclusions) as of October 31, 20172020 and measuring compensation based on total pay actually received over the period November 1, 20162019 – October 31, 2017. There has been no change in our employee population, our employee compensation arrangements or our median employee’s circumstances that we believe would significantly impact our pay ratio disclosure. Therefore, as permitted by SEC rules, we calculated the 2019 pay ratio set forth above using the same median employee that we used to calculate our 2018 pay ratio.2020.
As required by SEC rules, we calculated 20192020 annual total compensation for our median employee using the same methodology that we use to determine our NEOs’ annual total compensation for the “2020 Summary Compensation Table. We annualized the compensation Mr. Gibbons received as Interim CEO by increasing his salary and incentive equal to what he would have received if he had been CEO for the full year.Table”.
The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
| (1) | The median employee’s total compensation includes the value of company-paid benefits applicable to the median employee. |
| (2) | For purposes of the CEO pay ratio disclosure, Mr. Gibbons’ annual total compensation includes the amount reported in the “Total” column of the “2020 Summary Compensation Table” on page 71, plus the value of company-paid benefits applicable to Mr. Gibbons. |
| 82 | BNY Mellon Ø | |
| ITEM 3. RATIFICATION OF KPMG LLP | > Resolution | |||
Proposal
We are asking stockholders to ratify the Audit Committee’s appointment of KPMG LLP (“KPMG”) as our independent registered public accountants for the year ending December 31, 2020.2021.
Background
The Audit Committee and the Board believe that the continued retention of KPMG to serve as our independent registered public accounting firm for the 20202021 fiscal year is in the best interests of the company and its stockholders.
Our Audit Committee has direct responsibility:
• For the selection, appointment, compensation, retention and oversight of the work of our independent registered public accountants engaged to prepare an audit report or to perform other audit, review or attestation services for us.
• To negotiate and approve all audit engagement fees and terms and allnon-audit engagements of the independent registered public accountants.
• To annually evaluate KPMG, including its qualifications and independence, and to replace KPMG as our independent registered public accountant, as appropriate.
• To discuss with management the timing and process for implementing the five-year mandatory rotation of the lead engagement partner. |
The Board recommends that you vote“FOR” ratification of the appointment of KPMG LLP as our independent
|
KPMG or its predecessors have served as our independent registered public accounting firm since the merger in 2007 and previously served as the independent registered public accountant of Mellon since 1972. As in prior years, in 2019,2020, the Audit Committee engaged in a review of KPMG in connection with considering whether to recommend that stockholders ratify the selection of KPMG as BNY Mellon’s independent auditor for 2020.2021. In that review, the Audit Committee considered the continued independence of KPMG; the breadth and complexity of BNY Mellon’s business and its global footprint and the resulting demands placed on its auditing firm; KPMG’s demonstrated understanding of the financial services industry in general and BNY Mellon’s business in particular; and the professionalism of KPMG’s team, including their exhibited professional skepticism, objectivity and integrity.
To assist the Audit Committee with its review, management prepares an annual assessment of KPMG that includes (1) an analysis of KPMG’s known legal risks and significant proceedings that may impair KPMG’s ability to perform BNY Mellon’s annual audit, (2) the results of a survey of management and Audit Committee members regarding KPMG’s overall performance and (3) KPMG’s fees and services compared to services provided by KPMG and other auditing firms to peer companies. In addition, KPMG provides to, and reviews with, the Audit Committee an analysis of KPMG’s independence, including the policies that KPMG follows with respect to rotating key audit personnel so that there is a newpartner-in-charge at least every five years.
We expect that representatives of KPMG will be present at the Annual Meeting to respond to appropriate questions, and they will have the opportunity to make a statement if they desire.
Voting
Adoption of this proposal requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting by the holders of our common stock voting in personelectronically at the Annual Meeting or by proxy. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted “for” the ratification of the selection of KPMG as our independent registered public accountants for the year ending December 31, 2020.2021.
If the selection of KPMG is not ratified by our stockholders, the Audit Committee will reconsider the matter. If selection of KPMG is ratified, the Audit Committee in its discretion may still direct the appointment of a different independent registered public accountant at any time during the year if it determines that such a change is in the best interests of the company and our stockholders.
| 84 | BNY Mellon Ø | |
| ITEM 3. RATIFICATION OF KPMG LLP | > Report of the Audit Committee | |||
On behalf of our Board, the Audit Committee oversees the operation of a comprehensive system of internal controls with respect to the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies and the qualifications, performance and independence of our independent registered public accounting firm. The Committee’s function is one of oversight, since management is responsible for preparing our financial statements, and our independent registered public accountants are responsible for auditing those statements.
Accordingly, the Audit Committee has reviewed and discussed with management the audited financial statements for the year ended December 31, 20192020 and management’s assessment of internal control over financial reporting as of December 31, 2019.2020. The Audit Committee has also discussed with KPMG the conduct of the audit of our financial statements, as well as the quality of the company’s accounting principles and the reasonableness of critical accounting estimates and judgments. KPMG issued its unqualified report on our financial statements and the operating effectiveness of our internal control over financial reporting.
The Committee has also discussed with KPMG the matters required to be discussed in accordance with Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard, Communications with Audit Committees. The Committee has also received the written disclosures and the letter from KPMG required by applicable PCAOB standards regarding the independent accountants’ communications with the Audit Committee concerning auditor independence, and has conducted a discussion with KPMG regarding its independence. The Audit Committee has determined that KPMG’s provision ofnon-audit services is compatible with its independence.
Based on these reviews and discussions, the Audit Committee recommended to the Board that our audited financial statements for the year ended December 31, 20192020 be included in our 20192020 Annual Report.
By: The Audit Committee
Joseph J. Echevarria, Chair
Linda Z. Cook
Ralph Izzo
Jennifer B. Morgan
Samuel C. Scott III
Alfred W. “Al” ZollarFrederick O. Terrell
| BNY Mellon Ø | | 85 |
| ITEM 3. RATIFICATION OF KPMG LLP | > Services Provided by KPMG LLP | |||
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
We have been advised by KPMG that it is an independent public accounting firm registered with the PCAOB and that it complies with the auditing, quality control and independence standards and rules of the PCAOB and the SEC. The appointment of KPMG as our independent registered public accounting firm for the 20192020 fiscal year was ratified at our 20192020 Annual Meeting.Meeting of Stockholders. The following table reflects the fees earned by KPMG for services provided to us for 20192020 and 2018:2019:
Description of Fees | Amount of Fees Paid to KPMG for 2019 | Amount of Fees Paid to KPMG for 2018 | Amount of Fees Paid to KPMG for 2020 | Amount of Fees Paid to KPMG for 2019 | ||||||||
Audit Fees(1) | $21,101,000 | $20,834,000 | $ | 21,905,000 |
| $ | 21,101,000 |
| ||||
Audit-Related Fees(2) | $23,122,000 | $23,356,000 | $ | 22,711,000 |
| $ | 23,122,000 |
| ||||
Tax Fees(3) | $2,464,000 | $2,097,000 | $ | 2,189,000 |
| $ | 2,464,000 |
| ||||
All Other Fees(4) | $48,000 | $231,000 | $ | 637,000 |
| $ | 48,000 |
| ||||
Total | $46,735,000 | $46,518,000 | $ | 47,442,000 |
| $ | 46,735,000 |
| ||||
| (1) | Includes fees for professional services rendered for the audit of our annual financial statements for the fiscal year (including services relating to the audit of internal control over financial reporting under the Sarbanes-Oxley Act of 2002), for reviews of the financial statements included in our quarterly reports on Form10-Q and for other services that only our independent registered public accountant can reasonably provide. |
| (2) | Includes fees for services that were reasonably related to performance of the audit of the annual financial statements for the fiscal year, other than |
| (3) | Includes fees for tax return preparation and tax planning. |
| (4) | Includes fees for regulatory and other advisory services. |
Other Services Provided by KPMG LLP
KPMG also provided services to entities associated with us that were charged directly to those entities and accordingly were not included in the amounts disclosed in the table above. These amounts included $14.5 million for 2020 and $14.2 million for 2019 and $13.9 million for 2018 for the audits and tax compliance services for mutual funds, collective funds and other funds advised by us. Also excluded from the amounts disclosed in the table above are fees billed by KPMG to joint ventures or equity method investments in which we have an interest of 50% or less.
Our Audit Committee has establishedpre-approval policies and procedures applicable to all services provided by our independent registered public accountants. In accordance with SEC rules, ourpre-approval policy has two different approaches topre-approving audit and permittednon-audit services performed by our independent registered public accountants. Proposed services may bepre-approved pursuant to policies and procedures established by the Audit Committee that are detailed as to a particular class of service without consideration by the Audit Committee of the specificcase-by-case services to be performed (“classpre-approval”). If a class of service has not received classpre-approval, the service will require specificpre-approval by the Audit Committee before it is provided by our independent registered public accountants (“specificpre-approval”). A list of services that has received classpre-approval from our Audit Committee (or its delegate) is attached to our Audit and PermittedNon-Audit ServicesPre-Approval Policy. A copy of our Audit and PermittedNon-Audit ServicesPre-Approval Policy, a copy of which is available on our website (see “Helpful Resources” on page 87)100). For 2019,2020, 100% of the fees associated with the independent registered public accounting firm services werepre-approved by the Audit Committee.
Proposal and Background
Arjuna Capital, on behalf of Adam Seitchik, c/o Arjuna Capital, 1 Elm Street, Manchester, MA 01944, the beneficial owner of more than $2,000 of our common stock, has given notice that it intends to introduce the following resolution at the Annual Meeting. In accordance with the applicable proxy regulations, the text of the proponent’s proposal and supporting statement, for which we accept no responsibility, are set forth immediately below:
Gender/Racial Pay Equity
Whereas:The World Economic Forum estimates the gender pay gap costs the economy 1.2 trillion dollars annually. The median income for women working full time in the United States is 80 percent that of men. This disparity can equal half a million dollars over a career. Intersecting race, the gap for African American and Latina women is 60 percent and 55 percent. At the current rate, women overall will not reach pay equity until 2059, African American women until 2130, and Latina women until 2224.
United States companies have begun reporting statistically adjusted equal pay numbers, assessing the pay of men and women, minorities andnon-minorities, performing similar jobs, but mostly ignoremedianpay gaps. Regulation in the United Kingdom mandates disclosure of median gender pay gaps. Bank of New York Mellon reported a 20 percent median base pay gap and a 22 percent bonus pay gap for its London branch, but has not published its global median pay gap.
Bank of New York Mellon reports women and minorities earn 99 percent the compensation received by men andnon-minorities on an equal pay basis. Yet, that statistically adjusted number is only half the story, failing to consider how discrimination affects opportunity. The objective of this proposal —medianpay gap disclosure — addressesthe structural bias that affects the jobs women and minorities hold, particularly when white men hold most higher paying jobs.
Women account for 41 percent of our company’s global workforce, but only 25 percent of senior leadership.Mercerfinds female executives are 20 to 30 percent more likely to leave financial services careers than other careers. Actively managing pay equity “is associated with higher current female representation at the professional through executive levels and a faster trajectory to improved representation.”
Research fromMorgan Stanley, McKinsey,andRobeco Samsuggests diverse leadership leads to superior stock performance and return on equity.McKinseystates, “the business case for the advancement and promotion of women is compelling.” Best practices include “tracking and eliminating gender pay gaps.”
Public policy risk is of concern in the United States. The Paycheck Fairness Act pends before Congress. California, Massachusetts, New York, and Maryland have strengthened pay legislation. The Congressional Joint Economic Committee reports 40 percent of the wage gap may be attributed to discrimination.
Resolved:Shareholders request Bank of New York Mellon report on the company’sglobal mediangender/racial pay gap, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.
The gender pay gap is defined as the difference between male and femalemedianearnings expressed as a percentage of male earnings (Organization for Economic Cooperation and Development).
Supporting Statement:A report adequate for investors to assess company strategy and performance would include the percentageglobal medianpay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation.
| BNY Mellon Ø | |
ITEM 4. STOCKHOLDER PROPOSAL REGARDING | ||||
Voting
Adoption of this proposal requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting by the holders of our common stock voting in person or by proxy. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted “against” the stockholder proposal regarding a pay equity report.
Board’s Response
|
|
At BNY Mellon, we already implement a variety of best practices to address pay equity and are taking steps to ensure that we attract, retain and support more talented female and racially diverse professionals, and the requested metric in the proposal would not accurately represent our record of promoting diversity and inclusion across our organization and the industry more broadly. Our remuneration policies and practices aim to compensate all employees fairly and equitably based on performance, and our Board and senior leadership team oversee pay equity on an ongoing basis. We are committed to fair and equitable compensation practices and regularly review our compensation programs to ensure that employees receive equal pay for equal work. In 2019, we reviewed compensation received by women and it was equal to, on average, 99% of that received by men. Our review also found that compensation received by minority employees in 2019 was, on average, more than 100% ofnon-minority employees. Salary ranges are developed based on independent, external market data and provided to managers to guide compensation decisions. Managers determine where individual compensation should be positioned within these ranges based on numerous factors, including performance and internal pay equity. Notably, BNY Mellon was awarded the second-highest grade among the companies surveyed in Arjuna Capital’s 2019 Gender Pay Scorecard. A comparison of compensation of male and female and minority andnon-minority employees at the median without adjusting for applicable factors (including their different roles, performance or locations) is not a common metric for pay equity comparisons in the U.S. and would provide a misleading portrayal of our compensation practices. For
example, if a company had a significant concentration of employees in lower cost locations with high male representations, it may lead to a low global gender pay gap. In fact, efforts by that company to increase its female representation in these lower cost locations would result in a higher gender pay gap, which does not provide support for the right actions and behaviors. Instead, we believe that measuring, tracking and analyzing data, information and programs focused on increasing representation, development, mobility and promotion in thoughtful and sustainable ways is far more effective to drive the long-term change needed.
We recognize that a company-wide median pay gap is likely to persist until there is a more balanced representation of men and women and minorities andnon-minorities at every level of our organization, but particularly at more senior levels. Senior leadership is focused on the impact that advancement decisions can have on pay equity in the workplace because fair advancement practices lead to more women and diverse candidates in management and leadership positions. Accordingly, we maintain robust policies and programs to advance our diversity and inclusion goals at the senior levels of BNY Mellon. For example, we ensure equitable work distribution so that women and racial minorities within our organization have the same opportunities to work on important matters with major clients. We provide equal access to, and promote diversity for, the various types of activities that lead to advancement, including mentoring, networking and marketing events. We embed diversity and inclusion in our talent review processes, succession benches and development plans to improve promotion-readiness and advancement of top diverse talent. Our six Employee and Business Resource Groups (“E/BRGs”) — spanning a broad spectrum of diversity attributes, including multigenerational, people with disabilities, multicultural, LGBT+, veterans and returning military, and gender — have more than 12,000 members, collectively, and play an essential role in developing and retaining a diverse workforce and strengthening our inclusive culture. In addition, we invest in and position our high performing, high potential diverse talent for external development and leadership opportunities, which exposes them to valuable peer networks and enables them to leverage experts in other industries as coaches, mentors and sponsors.
We also offer a number of benefits and flexible arrangements to support job satisfaction and employee retention. We have taken a number of active steps in 2019 in furtherance of our continued efforts to support families. In the U.S., we increased our parental leave from 12 weeks to 16 weeks. Internationally, we also increased our global maternity company paid leave to 16 weeks in all countries, and lastly, we ensured incentive eligibility for employees on paid leaves, including maternity/parental leaves. We believe that our commitment to equality is demonstrated by action and results, and we will continue to devote our resources to close the current median pay gap both by creating a more balanced workforce and by ensuring that our employees receive equal pay for equal work.
Diverse senior leadership requires diverse talent pipelines, and our commitment to gender and racial equality is evidenced at every level of BNY Mellon, from our Board through our senior leadership to our new hires. Assuming the election of all director nominees at this year’s Annual Meeting, female and minority directors will represent 70 percent of our Board. Women represent 41 percent of our total global workforce and 44 percent of our U.S. workforce, including 18 percent of our executive leadership, 29 percent of our senior leadership (i.e., Director level and above) and 35 percent of ourmid-level leadership (i.e., Vice President levels). Ethnic minorities represent 35 percent of our U.S. workforce, including 24 percent of our executive leadership, 24 percent of our senior leadership and 32 percent of ourmid-level leadership. We are committed to continuing to increase the representation of women and diverse employees throughout our organization, with women candidates accounting for 40 percent of all new hires globally, up from 39 percent in 2018, and diverse candidates accounting for 48 percent of all new hires in the U.S., up from 42 percent in 2018. We require diverse candidate slates for all roles, at all levels, and have enhanced talent sourcing and recruiting partnerships, capabilities and systems in support of driving slate diversity. We set goals to improve workforce diversity in our employee population and hold Executive Committee members and hiring managers accountable for achieving this improvement. To reinforce our commitment to diversity and inclusion in our workforce, the individual performance goals for key management include specific targets for advancing women and ethnic minority representation in our senior leadership ranks, and their variable compensation is tied in part to performance against these diversity and inclusion goals.
In addition to advancing equality within BNY Mellon, we also actively support diversity and inclusion initiatives throughout the financial services sector and across industry lines. For example, BNY Mellon was a driving force behind the formation of the Wall Street Women’s Alliance, a network dedicated to creating a culture that enables women to advance toC-suite roles in the financial services industry. In addition, Newton Investment Management, one of our subsidiaries, was part of a stakeholder working group that developed a whitepaper offering asset owners, managers and other investment firms guidance and case studies to help avoid loss of performance continuity
through leaves of absence, which disproportionately impact women, and minimize turnover of diverse talent in portfolio management. We are active in the U.S. and UK 30% Clubs cross-industry mentoring programs, where BNY Mellon senior leaders participate as mentors to top emerging women leaders. True to our belief in diversity, inclusion and equality, we signed a corporate amicus brief filed with the U.S. Supreme Court in support of extending federal anti-discrimination protections to LGBT+ workers. On a global level, we signed on to the United Nations Human Rights Office’s LGBTI Standards of Conduct for Business, which tackle discrimination and violence against the LGBT+ community and encourage faster global progress toward equality, and joined hundreds of companies from a broad range of industries in signing a business statement supporting transgender equality. In further support of inclusion and equality across gender identities and expression, we introduced a suite of resources —Transgender Guidelines: Gender Transition, Identity and Expression— to assist employees in our APAC, EMEA and U.S. regions undergoing or planning gender transition and to help managers and employees better engage with and support transgender or transsexual colleagues.
In order to further the principles in our Equal Employment Opportunity Statement, our Gender Equality Statement and our diversity and inclusion program more broadly, hold ourselves publicly accountable and celebrate our commitment to diversity and gender equality, we publicly share information regarding our diversity and inclusion strategy, workforce demographics, hiring statistics, diversity efforts and our inclusive culture in our CSR Report(https://www.bnymellon.com/us/en/who-we-are/csr/) and on our corporate website (https://bnymellon.com/diversity).
We remain committed to promoting diversity in the workplace as evidenced by the ongoing efforts described above and the demonstrable progress we have made and continue to make. This proposal calls for the creation of a report that would be costly, time consuming and misleading — diverting resources from the significant work we are already doing to increase the representation of women at every level and ensure that equal work is recognized and rewarded with equal pay. As such, we believe this proposal fails to enhance our existing dedication to promoting diversity and gender equality at BNY Mellon, and that implementation is therefore not in the best interests of our stockholders. Accordingly, we recommend that you vote AGAINST this proposal.
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Proposal and Background
John Chevedden, on behalf of Kenneth Steiner, c/o John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, the beneficial owner of more than $2,000 of our common stock, has given notice that he intends to introduce the following resolution at the Annual Meeting. In accordance with the applicable proxy regulations, the text of the proponent’s proposal and supporting statement and any graphics, for which we accept no responsibility, are set forth immediately below:
Proposal [5] — Let Shareholders Vote on Bylaw and Charter Amendments4—Improve Shareholder Written Consent
Shareholders request that the Boardour board of Directorsdirectors take the steps necessary to adoptenable 10% of shares to request a bylawrecord date to initiate written consent.
Currently it takes the formal backing 25% of all shares that requiresnormally cast ballots at the annual meeting to do so little ask for a record date for written consent.
Plus any amendmentaction taken by written consent would still need 65% supermajority approval from the shares that normally cast ballots at the annual meeting. This 65% vote requirement gives overwhelming supermajority protection to management that will remain unchanged.
Enabling 10% of shares to apply for a record date for written consent makes sense because scores of companies do not even require 1% of stock ownership to do so little as request a record date.
Taking action by written consent is a means shareholders can use to raise important matters outside the bylaws or charter, that is approvednormal annual meeting cycle like the election of a new director.
Now more than ever shareholders need to have the option to take action outside of a shareholder meeting since online shareholder meetings are a shareholder engagement wasteland.
With the near universal use of online annual shareholder meetings which can be only 10-minutes long, shareholders no longer have the right for engagement with other shareholders, management and directors at a shareholder meeting. Special shareholder meetings can now be online meetings which has an inferior format to even a Zoom meeting.
Shareholders are also severely restricted in making their views known at online shareholder meetings because all challenging questions and comments can be screened out by the board, shall be subject to anon-binding shareholder vote as soon as practical unless such amendment is already subject to a binding vote.management.
It is important that bylaw and charter amendments take into consideration the impact that such amendments can have on limiting the rights of shareholders and/or on reducing the accountability of directors and managers. For example, Directors could adoptto bar constructive criticism Goodyear management hit the mute button right in the middle of a narrowly crafted exclusive forum bylaw to suitformal shareholder proposal presentation at its 2020 shareholder meeting.
Plus AT&T management would not even allow the unique circumstances facing the company.
A proxy advisor recently adopted a policy to vote against directors who unilaterally adopt bylaw provisions or amendments to the articles of incorporation that materially diminish shareholder rights. This proposal is consistent with, “BNY Mellon regularly engages with and solicits the feedback of its stockholders and is proud of its track record of responsiveness to stockholders.” A shareholder vote is the best formproponents of shareholder engagement.proposals to read their proposals by telephone at the 2020 AT&T online annual meeting during the pandemic.
If our directorsPlease see:
AT&T investors denied a dial-in as annual meeting goes online
https://whbl.com/2020/04/17/att-investors-denied-a-dial-in-as-annual-meeting-goes-online/1007928/
Imagine the control a management like AT&T could have over an online special shareholder meeting.
Online meetings also give management a blank check to make false statements because shareholders who are opposednot physically present cannot challenge false statements.
Nowmore than ever shareholders need to this proposal then it would be useful for our directorshave the option to give recent examplestake action outside of companies whose directors took the initiative and adopted bylaws that primarily benefitted shareholders. Aa shareholder vote is the best form ofmeeting since online shareholder meetings are a shareholder engagement because every shareholder has an opportunity to be heard.wasteland.
Please vote to improve shareholder engagement:Proposal 4—Improve Shareholder Written Consent
Let Shareholders Vote on Bylaw and Charter Amendments — Proposal [5]
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ITEM
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Voting
Adoption of this proposal requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting by the holders of our common stock voting in personelectronically at the Annual Meeting or by proxy. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted “against” the stockholder proposal regardingby-law and charter amendments. requests for a record date to initiate written consent.
Board’s Response
After careful consideration of this proposal, we have concluded that it is not in the best interests of our stockholders. We therefore recommend that you vote AGAINST this proposal for the following reasons:
The Board recommends a vote “AGAINST” the stockholder The Our existing written consent provisions were designed carefully, with considerable stockholder feedback, and were supported overwhelmingly by stockholders at our 2019 Annual Meeting. Following receipt of a stockholder proposal regarding enhancing stockholder written consent rights from the same proponent for our 2018 Annual Meeting, our Board committed to understanding stockholder perspectives in this area and included the topic as a focus of its corporate governance agenda for that year. In devising written consent provisions that would best serve the interests of the company and our stockholders, the
safeguards that The existing written consent provisions set forth in our Restated Certificate of Incorporation were carefully designed to empower stockholders while providing appropriate protection against the risk that a small minority of stockholders would be
The following table shows information relating to the number of shares authorized for issuance under our equity compensation plans as of December 31,
Beneficial Ownership of Shares by Holders of More Than 5% of Outstanding Stock As of February
We and our affiliates engage in ordinary course brokerage, asset management or other transactions or arrangements with, and may provide ordinary course financial services to, holders of 5% or more of our outstanding common stock, including asset servicing, clearing, issuer services, treasury services, global markets, broker-dealer, liquidity investment and credit services. These transactions are negotiated on anarm’s-length basis and contain terms and conditions that are substantially similar to those offered to other customers under similar circumstances. Please also refer to the “Business Relationships and Related Party Transactions Policy” starting on page 31 for additional information.
Beneficial Ownership of Shares by Directors and Executive Officers The table below sets forth the number of shares of our common stock beneficially owned as of the close of business on February
Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors and executive officers and any beneficial owner of more than 10% of any class of our equity securities to file with the SEC initial reports of beneficial ownership and reports of changes in ownership of any of our securities. These reports are made on documents referred to as Forms 3, 4 and 5. Our directors and executive officers must also provide us with copies of these reports. We have reviewed the copies of the reports that we have received and written representations that no Form 5 was required from the individuals required to file the reports. Based on this review, we believe that during ��
The Board is soliciting your proxy for our The format of our Annual Meeting has been designed to ensure that stockholders are afforded the same opportunity to participate as they would at an in-person meeting. Accordingly, all the members of our Board and certain members of management are expected to be available for questions, and we are committed to acknowledging each relevant question we receive pursuant to our Rules of Conduct (see “How Can I Submit A Question At The Annual Meeting?” below for additional information).
The recording, distribution or reproduction of the Annual Meeting, or any portion of the Annual Meeting, for any reason is strictly prohibited.
We ask that all stockholders provide their name and contact details when submitting a question through the virtual meeting platform so that we may address any individual concerns or follow up matters directly. If you have a question of personal interest that is not of general concern to all stockholders, or if a question posed at the Annual Meeting was not otherwise answered, we encourage Once you login to the virtual meeting platform at www.virtualshareholdermeeting.com/BK2021, you may select the “Q&A” button on the bottom right side of the virtual meeting platform interface and then type your question into the “Submit a Question” field and click “Submit”. Please note that stockholders will need
The electronic method of delivery will enable us to reduce our environmental impact, decrease our postage and printing expenses and expedite delivery of proxy materials to you, and we encourage you to take advantage of the availability of the proxy materials on the Internet. If you received a Notice and would like to receive a copy of our proxy materials, follow the instructions contained in the Notice to request a copy electronically or in paper form on a one-time or ongoing basis. Stockholders who do not receive the Notice will receive either a paper or electronic copy of this proxy statement and the 2020 Annual Report, which will be sent on or about March 2, 2021.
In addition, if other matters are properly presented for voting at the Annual Meeting, the proxy holders are also authorized to vote on such matters as they shall determine in their sole discretion. As of the date of this proxy statement, we have not received notice of any other matters that may be properly presented for voting at the Annual Meeting.
delivering a written notice of revocation to our Corporate Secretary at 240 Greenwich Street, New York, NY
submitting another signed proxy card with a later date;
submitting another proxy by telephone or over the Internet at a later date; or
attending the Annual Meeting and voting
Abstentions and brokernon-votes are not treated as votes cast, will not have the effect of a vote for or against a proposal or for or against a director’s election, and will not be counted in determining the number of votes required for approval or election.
Stockholder Proposals for Stockholder proposals intended to be included in our proxy statement and voted on at our Pursuant to ourby-laws, in order for any business not included in the notice of meeting for the
How Our Board Solicits Proxies; Expenses of Solicitation We will pay all costs of soliciting proxies. We have retained Georgeson, Inc. to assist with the solicitation of proxies for a fee of approximately Forwarding the Notice of Internet Availability to Forwarding printed materials by mail to beneficial owners who specifically request such materials, and Obtaining beneficial owners’ voting instructions. We may also use our officers and employees, at no additional compensation, to solicit proxies either personally or by telephone, Internet, letter or facsimile. To reduce the expense of delivering duplicate proxy materials to our stockholders, we are relying on SEC rules that permit us to deliver only one proxy statement to multiple stockholders who share an address unless we receive contrary instructions from any stockholder at that address. This practice, known as “householding,” reduces duplicate mailings, saves printing and postage costs as well as natural resources and will not affect dividend check mailings. If you wish to receive a separate copy of the
As of the date of this proxy statement, we do not know of any other matters that may be presented for action at the meeting. Should any other business properly come before the meeting, the persons named on the enclosed proxy will, as stated therein, have discretionary authority to vote the shares represented by such proxy in accordance with their best judgment. March By Order of the Board,
James J. Killerlane III Corporate Secretary
Annual Meeting
Corporate Governance
The Bank of New York Mellon Corporation
Reconciliation of net income and diluted EPS The following table reconciles our net income applicable to common shareholders of The Bank of New York Mellon Corporation and diluted earnings per common share. These measures exclude the effects of certain items, as specified in the table. We believe that these measures are useful to permit investors
The Bank of New York Mellon Corporation 240 Greenwich Street New York, NY 10286 +1 212 495 1784 www.bnymellon.com
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| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY | ||||
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The Board of Directors recommends a vote FOR all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, | ||||||||||||||||||||||||||||||||||||||||||
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1d. M. Amy Gilliland | ☐ | ☐ | ☐ |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and the 20192020 Annual Report to Shareholders are available at www.proxyvote.com.
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Proxy — THE BANK OF NEW YORK MELLON CORPORATION (the “Corporation”)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned hereby appoints James J. Killerlane III, Zachary J. Levine and Blair F. Petrillo or any of them, each with full power of substitution, as attorneys and proxies of the undersigned to vote all The Bank of New York Mellon Corporation Common Stock which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Corporation to be held on Tuesday, April 13, 2021, at 9:00 a.m., via live webcast at www.virtualshareholdermeeting.com/BK2021 and at any adjournment of such meeting, as fully and effectually as the undersigned could do if personally present, and hereby revokes all previous proxies for said meeting. Where a vote is not specified, the proxies will vote the shares represented by this Proxy FOR the election of all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, and AGAINST Proxy Item 4, and will vote in their discretion on such other matters that may properly come before the meeting and at any adjournment of such meeting.
Participants in the 401(k), ESOP, Deferred Share Award and/or Deferred Compensation Plans: Your vote will provide voting instructions to the trustee of the plan to vote the proportionate interest as of the record date. If no instructions are given by the vote cut-off date of April 8, 2021 at 11:59 EDT, the trustee will vote, subject to review by the voting fiduciary, unvoted shares in the same proportion as voted shares. Consequently, a failure to sign and return a ballot is not equivalent to voting with respect to any of the propositions on the ballot.
Participants in the UK Stock Accumulation Plan (“SAP”): If voting instructions are properly provided, shares will be voted in accordance with those instructions. If you properly sign and return the attached ballot but fail to provide a specific voting direction for a particular proposition on the ballot, then any shares you hold in the SAP will be voted in accordance with the recommendation of the Board of Directors on such proposition. If you do not properly sign and return the ballot or provide instructions by telephone or Internet, then for shares held in the SAP, no vote will be recorded. Consequently, a failure to provide instructions is not equivalent to voting with respect to any proposition on the ballot.
This proxy is solicited on behalf of the Board of Directors of the Corporation, and may be revoked prior to its exercise. The Board of Directors recommends votes FOR the election of all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, and AGAINST Proxy Item 4.
(Continued and to be marked, dated and signed, on the reverse side.)
