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
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CITIZENS FINANCIAL GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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LETTER FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER |
LETTER FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
March 5, 202111, 2022
Dear Stockholder,
On behalf of the Board of Directors, I am pleased to invite you to attend our annual meeting of stockholders to be held solely online via live webcast at www.meetingcenter.io/287753102 on Thursday, April 22, 2021,28, 2022, at 9:00 a.m. Eastern Time.Time at our headquarters located at One Citizens Plaza, Providence, Rhode Island 02903.
2020 wasCitizens delivered strong performance in 2021 against the backdrop of a year like no other. The COVID-19 pandemic,shifting economic and resulting reactionspublic health environment, demonstrating adaptability and stresses,resilience as we maintained our focus on serving our customers. We have required a new level of resilienceentered 2022 with good momentum, and adaptability. At the same time,strong foundation we have seen greater awareness and concern over racial equity and social justice, driven in part bybuilt through the disparate impactstransformation of the pandemic.bank since our IPO positions us for future success.
Against that backdrop, Citizens has risen to meet the many challenges it has faced, proving its resilience and agility by quickly adjusting strategic priorities, thoughtfully allocating financial and talent resources and accelerating existing digitizationOur efforts to meet shifting customer demands. Atbuild a stronger, more diversified business have served us well over the same time,course of the coronavirus pandemic. Our financial strength has allowed us to build out a broad set of capabilities and to invest in new technologies, digital solutions and data analytics to better serve our customers. We have a clear strategy, strong leadership team and outstanding culture that have enabled us to deliver good operational and financial results. We are positioned to play offense and further accelerate the execution of our strategic growth plans.
While the agenda ahead of us is highly ambitious, the Citizens has stepped upCredo will continue to promote social equityserve as our North Star, helping ensure we continue to perform our best and advance economic opportunity in underserved communities.
We navigated this difficult environment by livinghelp our valuescustomers, colleagues, communities, shareholders and supporting all of our stakeholders during a time of great uncertainty. Some ofthose we serve reach their potential – today and over the actions taken to support colleagues include offering additional benefits to ensure that colleagues maintain their wellness and work-life balance as well as providing premium pay and enhancing recognition awards. We helped support our customers and communities with payment assistance and funding. As we have done this, we have continued to deliver solid performance and mitigate emerging risks.
The next several years will present ongoing challenges that will require continued focus, discipline and strong execution. I remain confident that Citizens, led by an experienced board and management team with a proven track record, has the right elements in place to be successful as we continue our work towards becoming a top-performing bank.longer-term.
Your vote is important and, whether or not you plan to attend the meeting, we encourage you to access electronic voting via the Internet or utilize the automated telephone voting feature as described on your Notice of Internet Availability of Proxy Materials or proxy card. Alternatively, you may sign, date and return the proxy card in the envelope provided. You may also vote online at the meeting if you plan to attend.
Finally, I would like to thank Howard W. Hanna IIILee Higdon and Bud Koch for histheir service on our Board. Both Mr. Hanna has served onHigdon and Mr. Koch will retire from the Board since 2009 and will retire after histheir current term expiresterms expire at the Annual Meeting. We valueappreciate the insight that he shared from his extensive business expertise,they have provided and we will miss his contributions.their considerable contributions to the Board and the Company.
We thank you for your support of Citizens Financial Group, Inc.
Sincerely, |
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Bruce Van Saun Chairman of the Board and Chief Executive Officer |
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LETTER FROM THE LEAD INDEPENDENT DIRECTOR |
LETTER FROM THE LEAD INDEPENDENT DIRECTOR
March 5, 202111, 2022
Dear Stockholder,
Thank you for your investment in Citizens Financial Group, Inc. and confidence in the Board during what continues to be unprecedented times. 2020 was a challenging year, but one that has brought key issues into focus and has driven necessary conversations and action, and I am proud of the role Citizens has played in taking on those challenges and supporting its customers, colleagues and communities.
Board. I am pleased to be serving as Lead Independent Director and be working closely with my fellow Directors. During these exceptional timesDirectors as we felt it was more important than ever to hear frommove into 2022 focused on delivering strong results and executing well against our investorsstrategy.
Environmental, Social, and so we expanded our annual governance outreach program to encompass our top 50 stockholders. In our conversations, it was clear that our environmental, social, and governanceGovernance (“ESG”) practices areremain a priority. Aspriority for the Chair ofBoard and for our Nominating and Corporate Governance Committee, which overseesinvestors, as was evident from the conversations we had with stockholders throughout the year. During 2021, we continued to deliver on our commitment to corporate responsibility matters, I take pride inefforts to serve our customers well, provide a great place to work and build a career, strengthen our communities, and operate responsibly and sustainably, backed by strong governance. We published the progress that was made in 2020. This progress includes establishing a formal corporate responsibility governance framework, completingresults of our first ESG materiality assessment to identify our priority ESG topics, we aligned our corporate responsibility reporting to internationally recognized reporting frameworks and continuingplan to evolvefurther enhance this in 2022 with reporting aligned with the Task-Force on Climate-related Financial Disclosures (“TCFD”), and we adopted and published greenhouse gas emissions reduction targets. We also continuously review our ESG practices. We will reportgovernance practices and seek the outcomehighest standards of corporate governance in alignment with market practice. At our first ESG materiality assessment2022 Annual Meeting, we are requesting stockholder approval to amend our Certificate of Incorporation to eliminate supermajority voting requirements.
Diversity, Equity, and Inclusion also continue to be a priority for the company, both internally and in the communities we serve. During 2021, we sharpened our 2020 Corporate Responsibility Report, which will be alignedfocus on diverse hiring, continued to bothexpand development programs that are curated to build a strong pipeline of diverse emerging talent, and also launched required inclusion training for all colleagues. Additionally, we continued to execute on the Global Reporting Initiative and Sustainability Accounting Standards Board reporting frameworks.
A key element ofvarious initiatives funded through our ESG framework is human capital management. Our colleagues are at the heart of our Credo,$10 million social equity commitment and our ultimate goal is to create a diverse and inclusive environment where colleagues feel valued and want to build their careers. We remain committed to diverse recruiting initiatives within the Company and at the board level, to continuing to build an inclusive mindset, and to engaging with an independent third party that conducts a regular pay equity analysis.
Our$500 million commitment to our colleagues’ health and overall wellness has been a principal focus during the COVID-19 crisis. We implemented several compensation and benefits programs to support colleagues and their families in addition to shifting approximately 10,000 of our colleagues to a work from home environment and ensuring they had the necessary equipment and resources to continue to serve our customers. Our efforts to promote social equity include a commitment to strengthening the communities in which we operate. In 2020, we committed $10 million in grants and charitable support for immediate and long-term initiatives to support minority-owned small businesses, increasing awareness of racial disparities, and helping underserved communities through technology, education, and digital literacy initiatives. We will also provide an additional $500 million in incremental financing and capital for small businesses, housing, and other developmentdevelopments in predominatelypredominantly minority communities.
Our colleagues are central to our commitment to our communities and in 2021 volunteered more than 154,000 hours, and participated in our first Skills-Based Volunteer Day of Service. Our community giving program, Citizens Helping Citizens, is focused on three areas which we believe are core elements of fortifying our communities: Fighting Hunger, Financial Empowerment and Strengthening Communities through Economic and Workforce Development.
Serving our customers well is always top of mind. This past year we continued to deliver for our customers with several product features aimed at further enhancing customer experience. In addition, expanded capabilities and geographic coverage have allowed us to deepen existing customer relationships and broaden our customer base.
In the accompanying proxy statement, we share essential information about your Board’s role in shaping Citizens’ Credo, values, governance, and strategy. We hope you will take the time to read it. Whether or not you can attend the annual meeting, we welcome your participation with Citizens and thank you for your continued support.
Sincerely,
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Shivan Subramaniam Lead Independent Director and Chair, |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 2021
To the Stockholders of Citizens Financial Group, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the “Annual Meeting”) of Citizens Financial Group Inc., a Delaware corporation (the “Company”), will be held solely online via live webcast at www.meetingcenter.io/287753102 on April 22, 2021,
Date and Time Thursday, April 28, 2022, at 9:00 a.m. Eastern Time
Record Date February 28, 2022. Stockholders of record as of this date are entitled to notice of, and to vote at, the Annual Meeting. Admission To attend the meeting in person you will need proof of your stock ownership as of the record date and a form of government-issued photo identification. If you are the legal representative of a stockholder, you must also bring a letter from the stockholder certifying (a) the beneficial ownership you represent and (b) your status as a legal representative. We will determine in our sole discretion whether the letter presented for admission meets the above requirements. Admission is limited to stockholders, and guests are not permitted to attend the meeting. Masking requirements and other COVID-19 mitigation strategies will be implemented in line with local regulations as required.
OUR MISSION To help
Our full-year 2021 financial results demonstrate the strength and diversity of our business
2021 Highlights $188.4B Assets $128.2B Loans & Leases $154.4B Deposits 83% Loans-to-Deposit Ratio 71% Record Capital Markets Fees 18% Record Wealth Fees 9.9% CET1 Ratio 6% Tangible Book Value Per Share Net income available to common stockholders and * Results are presented on an Underlying basis, as applicable. See Appendix A for more information on Non-GAAP Financial Measures. Unless otherwise noted, references to balance sheet items above are on a period-end basis, loans and leases exclude loans held for sale; percentage increases are on a year-over-year basis versus 2020.
Board Nominees
election for the first time, with their election subject to the completion of our acquisition of Investors Bancorp, Inc. Additional information about the director nominees can be found beginning on page
Board Skills and Demographics We believe that
Van Saun Alexander Cumming Cummings Hankowsky * Committee Chair
Corporate Governance Highlights
Our Restated Certificate of Incorporation, or Charter, and Amended and Restated Bylaws provide that the Board shall consist of between five and twenty-five directors, excluding any directors elected by holders of preferred stock pursuant to provisions applicable only in the case of The Board has nominated Our Bylaws provide for the election of directors by a majority of the votes cast in an uncontested election. This means that the 13 individuals nominated for election to the Board must receive more “FOR” than “AGAINST” votes (among votes properly cast at the meeting, electronically or by proxy) to be elected. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the election of nominees. Proxies cannot be voted for a greater number of persons than the number of nominees named. There is no cumulative voting. If any nominee for any reason is unable to serve or will not serve, proxies may be voted for such substitute nominee as the proxy holder may determine. If the election of directors is a contested election, directors are elected by a plurality of the votes cast. Our Bylaws also provide that directors may be removed, with or without cause, by an affirmative vote of shares representing a majority of the outstanding shares then entitled to vote at an election of directors. Any vacancy occurring on our Board and any newly created directorship may be filled only by a vote of a majority of the remaining directors in office. Biographical information about the nominees for director, including information about their qualifications to serve as a director, is set forth below.
The following sections provide an overview of our board governance structure and processes including how we select directors and consider their independence Corporate Governance Guidelines Our Board has adopted Corporate Governance Guidelines which outline the Board’s expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Corporate Governance Guidelines are reviewed annually and address:
Our Corporate Governance Guidelines are available on the corporate governance section of our website at
Our Board has also adopted a Code of Business Conduct and Ethics (the “Code”), which sets forth key guiding principles concerning ethical conduct and is applicable to all of our directors, officers and employees. The Code addresses, among other things, conflicts of interest, protection of confidential information and compliance with laws, rules, and regulations, and describes the process by which any concerns about violations should be reported. The Code is available on the corporate governance section of our website at Meetings of the Board Our Board
Our Board utilizes the Securities and Exchange Commission (“SEC”) and New York Stock Exchange (“NYSE”) criteria to determine our director independence. Under the NYSE rules, the Board also broadly considers all other relevant facts and circumstances that bear on the materiality of each director’s relationship with the Company, including the potential for conflicts of interest. In addition, the Board considers whether the Company or one of its subsidiaries has a lending relationship, deposit relationship, or other banking or commercial relationship with a director, an immediate family member, or an entity with which the director or a family member is affiliated by reason of being a director, an officer or a significant stockholder thereof. Any such relationship must meet the following criteria: (i) it must be in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons; and (ii) with respect to extensions of credit by the Company or its subsidiaries to such entity: (a) such extensions of credit have been made in compliance with applicable law, including Federal Reserve Regulation O and Section 13(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (b) no event of default has occurred and is continuing beyond any period of cure. To assist the Board in its determination of director independence, the Nominating and Corporate Governance Committee annually evaluates each prospective and incumbent director using the foregoing standards and other factors as the Nominating and Corporate Governance Committee deems appropriate, and makes a recommendation to the Board regarding the independence or non-independence of each person. As We
Executive Sessions of our Non-Employee Directors The Company’s non-employee directors, who are all independent, participate in regularly scheduled executive sessions in which management does not participate. In addition, each of the Board committees, which are comprised solely of independent directors, hold regularly scheduled executive sessions. Our Lead Director, Mr. Subramaniam, presides at each executive session of the Board. Interested persons may make their concerns known directly to Mr. Subramaniam, his successor or the non-employee directors as a group by submitting their written correspondence to the Company’s Corporate Secretary located at 600 Washington Boulevard, Stamford, Connecticut 06901. The Corporate Secretary may facilitate such direct communication to the Lead Director or the non-employee directors as a group by reviewing, sorting and summarizing such communications. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
Board Selection, Nomination and Refreshment
Our Board has delegated responsibility for the selection and recommendation of director nominees to the Nominating and Corporate Governance Committee. Upon the Nominating and Corporate Governance Committee’s recommendation, a slate of directors is nominated by the Board and submitted to a stockholder vote annually. The Nominating and Corporate Governance Committee reviewsalso evaluates and recommends candidates for the self-assessment process annuallyBoard as vacancies or newly created positions occur. New candidates may be identified to serve on the Board through recommendations from independent directors or members of management, search firms or other sources, and approvesstockholders. Evaluations of prospective candidates typically include a review of the formcandidate’s background and qualifications, interviews with the Committee as a whole, one or more members of evaluation. SELF-ASSESSMENT QUESTIONNAIRE An external facilitator is engagedthe Committee, or one or more other Board members, and discussions within the Committee and the questionnaire is distributedfull Board.
The most qualified candidates are sought for all open board positions based on required criteria. The Board values diverse perspectives and qualities and the Committee considers self-identified diverse characteristics of directors and nominees in addition to each person’s background and experience when recommending candidates for election to the Board, re-nominating current directors and reviewing Board and committee composition. In order to support the Board’s desire for diverse representation, any firms engaged in the director search process are requested to include diverse individuals in its list of potential candidates.
Director Nominee Selection Process Assess Composition Committee assesses compostion considering director skills and experience, and diversity of prespectives and chararcteristics such as age, gender and race to determine a prospective director candidate profile. Source Candidates Committee works with a third-party search firm, directors and other stakeholders to identify candidates with the desired profile and who meet the required criteria for Board membership. Evaluate Candidates Slate of candidates is presented to the Committee for evaluation. Evaluations are based on the required criteria, each candidate's background qualifications, independence, performance and the overall composition and diversity of the committeesBoard. Recommend Committee members meet with the shortlisted candidates before making a recommendation to the Board that it nominate the candidate(s) it determines meet the required criteria and individual directors. QUESTIONNAIRE COMPLETED Each director completeswho will enhance the questionnaire providing their feedback. INDIVIDUAL DISCUSSIONS External facilitator holds interview withexpertise, experience, composition and overall strength of the Board. Review The Committee evaluates each director annually. In doing so, it considers their individual performance, skills, expertise, experience, diverse characteristics, as well as the composition of the Board as a whole. Required Criteria Demonstrated leadership Relevant background, experience and key skills Financially literate Risk management experience and other business experience and acumen Exhibit independent thought and judgement Time availability and commitment
Any stockholder who wishes to expand onrecommend a prospective candidate for the questionnaires. RESULTS COMPILED Results are anonymously compiledboard of directors for consideration by the external facilitator. REVIEW OF RESULTS Results are discussed with the Chairman, the Lead Director and the Nominating and Corporate Governance Committee Chair. RESULTS PRESENTED Results are presentedmay do so by submitting the name and qualifications of the prospective candidate in writing to the Board and each of its committees and action plans are developed. ACTIONS Action plans inform agenda planning and are used to enhance current practices and Board operations MONITORING Thefollowing address: Corporate Secretary, 600 Washington Boulevard, Stamford, Connecticut 06901. Stockholders must propose nominees for consideration by the Nominating and Corporate Governance Committee monitorsin accordance with the completionprocedures and other requirements set forth in our Bylaws. See “Information for Stockholders—2023 Annual Meeting and Stockholder Proposals.”
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
When reviewing the Board and committee composition during succession planning and in the recruitment and evaluation of action plans throughoutdirectors, the year. Strategy Culture Roles & Relationship with Membership & Responsibilities Management Structure Subjects ConsideredNominating and Corporate Governance Committee considers the skills and experience represented by the Board as Parta whole. The key skills and number of the Evaluation Process Include:nominees are outlined below.
Executive Leadership Experience operating in an executive leadership position demonstrates the abilities required to understand and direct business operations, analyze risk, manage human capital, oversee implementation of organizational change and deliver strategic plans. 13/13 Financial Services Industry Understanding the products and services we offer, our competitive environment and the regulatory framework in which we operate gives directors the ability to challenge and guide management, effectively overseeing the operation of our business and implementation of our strategic plan. 13/13 Financial Reporting/Audit/Capital Planning An understanding of financial reporting structures and internal controls to ensure accuracy and transparency in reporting, coupled with the ability to understand capital market transactions and strategic capital plans allows for robust challenge and oversight. 13/13 Risk Management Risk is inherent in the operation of our business. Having directors with experience and expertise in risk management allows the Board to provide challenge and guidance in its independent oversight of the design and implementation of the Company's risk management framework. 13/13 Compliance/Regulatory Operating in a heavily regulated industry, we value directors with legal and/or regulatory expertise as it assists the Board's understanding of the applicable requirements and how they pertain to the Company. 13/13 Technology/Information Security/Cybersecurity Technology is critical to all aspects of our business operations from delivery of our products and services to our customers, to making investments, to maximizing our human capital, and to delivering key strategic initiatives. As a financial services company with reliance on technology, we are exposed to information and cybersecurity risk on an ongoing basis. We value directors with technology, information security and/or cybersecurity expertise. 11/13 Mergers and Acquisitions Experience of mergers and acquisitions is valuable in making strategic decisions and executing them effectively. Having directors with this experience assists in the strong execution of mergers and acquisitions. 10/13 Human Capital Management Directors with an understanding of the impact of a company's employees and culture on productivity as well as experience in talent management and mobilizing strategic organizational change provide valuable insight to the Board and management. 13/13 Environmental, Social, and Governance We demonstrate our commitment to the communities in which we do business by serving our customers well, managing our operations responsibly, building a diverse culture and providing a great place for colleagues to work. Experience in ESG matters helps us deliver on the different dimensions of our corporate responsibility strategy.12/13
Mr. Cummings and Ms. Siekerka were identified as Board candidates in connection with the acquisition of Investors Bancorp, Inc. and will be appointed to the Board in accordance with the Merger Agreement. Before making its recommendation to the Board that it nominate Mr. Cummings and Ms. Siekerka for election to the Board by stockholders at the Annual Meeting, the Nominating and Corporate Governance Committee considered Mr. Cummings’ and Ms. Siekerka’s skills, experience, independence and diverse characteristics as well as that of the Board as a whole.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
Board, Committee and Director Evaluations
The Board, led by the Nominating and Corporate Governance Committee, conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. Under each committee’s charter, the committee evaluates and assesses its performance, skills and resources required to meet its obligations under its charter at least annually. In addition, all directors complete a self-evaluation. At least every three years, an independent third party is used to conduct the Board and committee evaluations.
Results of the evaluations are then presented to the Board and its committees and used to determine actions designed to enhance the operations of the Board and its committees going forward. Periodically, the Board will also complete peer evaluations. At least every three years, an independent third-party is used to conduct the Board, committee, director and peer evaluations.
1 REVIEW OF PROCESS The resultsNominating and Corporate Governance Committee reviews the self-assessment process annually and approves the form of all peer evaluationsevaluation. 2 SELF-ASSESSMENT QUESTIONNAIRE The questionnaire is distributed by an external facilitator to the Board, each of the committees and individual directors for their feedback. 3 INDIVIDUAL DISCUSSIONS External facilitator holds interview with each director to expand on the questionnaires. 4 RESULTS Results are anonymously compiled by the external facilitator and reviewed by the Chairman, Lead Director and Chair of the Nominating and Corporate Governance Committee Chair before being presented to the Board and each director receivesof its committees. 5 ACTIONS Action plans are prepared and used to inform agenda planning and are used to enhance current governance practices and Board operations. 6 MONITORING The Nominating and Corporate Governance Committee monitors the execution of the action plans throughout the year. BOARD AND COMMITTEES EVALUATIONS (ANNUAL) Subjects covered in the evaluation: Strategy Culture Roles and responsibilities Relationship with Management Membership and structure DIRECTOR SELF EVALUATIONS (ANNUAL) Subjects covered in the evaluation: Performance Contributions Skills PEER EVALUATIONS (PERIODICALLY) Subjects covered in the evaluation: Director participation and engagement Director judgement Board dynamics Overall performance ACTIONS TAKEN Results of the evaluations are used to determine actions designed to augment the operations of the Board and its committees. Examples of actions taken as a copyresult of their individual report.conducting the evaluations include enhancing board materials, streamlining agendas to allow for longer discussion time, and updating the board's education and training program.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
Each of our Board members participates in an annual training and continuing education program which includes both full board training and board committee training. Management incorporates director input to develop an annual schedule that covers a broad range of topics to enhance and strengthen the skills, knowledge and competencies of directors, both individually and collectively. Topics covered during 20202021 included cybersecurity, regulatory developments, industry trends, consumerdiversity, equity and inclusion, ESG, technology, compliance and anti-money laundering. The program encompasses presentations from internal and external speakers as well as site visits to key locations and regular meetings with management. In addition, directors are encouraged to avail themselves of educational programs offered through recognized independent providers.
The Board is responsible for guiding and ultimately approving the strategic direction of the Company and overseeing execution of the Company’s strategic plan. Every year the Board holds an offsite meeting dedicated to reviewing the Company’s long-term strategy which includes detailed discussions with management, investors, securities analysts and industry experts. In addition, the Board assesses the Company’s strategic, competitive and financial performance at each of its meetings to ensure continued alignment with the long-term strategy. The Company’s strategy of investing in the end-to-end digitization of the bank, strengthening fee-based businesses and expanding its solutions and capabilities over the past six years has positioned it for the future and placed it on the front foot when facing the challenges arising from the COVID-19 pandemic. During its 2020 strategy session, the Board evaluated the Company’s strategy in the context of the current economic environment and longer-term challenges and will continue to guide the Company through disciplined execution of its strategic plan.
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Board’s Role in Risk Oversight
The Board is responsible for oversight of the Company’s internal controls and risk management framework. This oversight includes evaluation of management’s systems of internal control, financial reporting and public disclosure, confirming the accuracy and completeness of financial results, reviewing and approving the Company’s enterprise-wide risk management governance framework and ensuring that risks to the Company are properly managed. A Another key element of Citizens enterprise-wide risk management governance frameworkBoard education is building and maintaining a strong risk management culture throughout the Company, a culture that is foundationalmentoring program in place where Board members serve as mentors to delivering the best possible banking experience for our customers and providing a great workplace for our colleagues.
The Board has delegated certain risk oversight duties to the Risk Committee, and with respect to financial controls, the Audit Committee, but eachmembers of the Board’s committees have risk oversight responsibilitiesexecutive team, and the Board receives independent reports from eachalso meet in small group sessions with members of its key committees at its meetings.
BOARD OF DIRECTORS Nominating & Corporate Governance Committee Compensation & HR Committee Audit Committee Risk Committee Oversees design, implementation and operation of the enterprise-wide risksenior management governance framework which sets standards for the identification, assessment, monitoring and control of material risks and related governance. Reviews and, as it deems appropriate, recommends to the Board the design and implementation of the Companys risk strategy and policy, risk appetite framework and specific risk appetites and limits. Serves as primary point of contact between the Board and management committees that have responsibility for risk management. Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk. Regular reporting on cybersecurity and cyber threats as they continue to evolve is provided to both committees and the Board. Oversees evaluation of systems of internal control, financial reporting and public disclosure. Reviews the accuracy and completeness of financial results. Oversees our Conduct Office, which monitors colleague behavior in relation to our Code of Business Conduct and Ethics, Sales Practices and other key policy considerations. Evaluates executive performance and reviews and approves executive compensation. Oversees and reviews compensation policies and practices, including an annual review of director compensation with assistance from its independent consultant and with any changes also approved by the Nominating and Corporate Governance Committee and the Board. Oversees talent management and succession planning atbelow the executive level and forwhich assists in deepening the organization overall, as well as the Companys Diversity, Equity and inclusion program. Oversees governance practices, independence and effectivenessBoard’s understanding of the Board. Oversees the Companys commitment to environmental, social and governance matters. Oversees the development and implementation of the board annual training and continuing education program.
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Cybersecurity Risk Oversight
Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk. The Audit Committee is responsible for overseeing our cybersecurity program under its risk oversight responsibilities as it relates to financial controls. The Risk Committee is responsible for oversight of management of cybersecurity risk consistent with the Company’s enterprise-wide risk management governance framework. Regular reporting on cybersecurity is provided to both committees as well as the Board.
COVID-19 Risk Oversight
During 2020, the Board took additional actions to ensure effective oversight of the Company’s management of the COVID-19 crisis and its resulting risks encompassing all aspects of the Company’s operations and stakeholders. In responding to the crisis, the Board’s oversight included management of risk associated with the health and safety of our customers and colleagues, provision of financial support to our customers and communities, the administration of the U.S. government’s Paycheck Protection and Small Business Administration programs, management of human capital, supply chain, fraud, cyber and technology, and capital allocation and management.
Actions taken at the peak of the crisis included holding weekly Board meetings with key members of management and two additional meetings of the Risk Committee. The additional meetings provided the Board with updates on issues and actions related to the pandemic and the Company’s response. Monitoring the risks associated with the ongoing COVID-19 pandemic continues to be a key focus of the Board’s risk oversight activity which includes discussion of macro-economic assumptions affecting models and credit risk management in addition to understanding, evaluating and monitoring new risks arising as the way of life and working adjusts to a new normal and presents different challenges and opportunities.business.
Our Board has six standing committees. Four of these committees (Audit, Compensation and HR, Nominating and Corporate Governance and Risk) meet on a regular basis. The Executive Committee meets as needed and is composed of our Chairman and Chief Executive Officer, Mr. Van Saun, our Lead Director and Chair of our Nominating and Corporate Governance Committee, Mr. Subramaniam, and Audit and Compensation and HR Committee member, Mr. Hankowsky. The Executive Committee may act on behalf of the Board and reports its actions to the full Board. The Equity Committee is composed of our Chairman and Chief Executive Officer and acts as needed to make equity grants (subject to certain limitations determined by the Compensation and HR Committee) between annual grant cycles and reports its actions to the Compensation and HR Committee. See “Compensation Matters—Compensation Discussion and Analysis—Section 5.4. Governance Policies and Practices—Process for Approval of Equity Grants.” In carrying out their duties, each committee of the Board is authorized to select, retain, terminate and approve fees and other retention terms of independent legal or other advisors as it deems appropriate without seeking approval of management or the full Board. The following table shows the current members of each of the four primary standing committees and the number of meetings held during fiscal 2020.2021.
DIRECTOR
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AUDIT
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COMPENSATION & HR
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NOMINATING & |
RISK
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Lee Alexander | Member |
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Christine M. Cumming |
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William P. Hankowsky | Member | Member |
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Leo I. Higdon | Member | Chair |
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Edward J. Kelly III |
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Charles J. Koch | Member |
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Robert G. Leary |
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Terrance J. Lillis | Member |
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Shivan Subramaniam |
| Member | Chair |
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Christopher J. Swift |
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Wendy A. Watson | Chair | Member |
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Marita Zuraitis |
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Number of meetings | 12 | 9 | 4 | 6 | |||||||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
DIRECTOR
| AUDIT
| COMPENSATION &
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NOMINATING &
| RISK
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Lee Alexander(1) |  |
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Christine M. Cumming |
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William P. Hankowsky | | |
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Howard W. Hanna III | |
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Leo I. Higdon | |  |
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Edward J. Kelly III |
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Charles J. Koch | |
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Robert G. Leary |
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Terrance J. Lillis | |
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Shivan Subramaniam |
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Christopher J. Swift(1) |
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Wendy A. Watson | | |
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Marita Zuraitis |
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Number of meetings | 12 | 9 | 4 | 8 | ||||
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| Audit Committee | ||||||
Members: Wendy A. Watson (Chair) Lee Alexander William P. Hankowsky
Leo I. Higdon Charles J. Koch Terrance J. Lillis
Meetings held in
| The Audit Committee reviews and, as it deems appropriate, recommends to the Board our internal accounting and financial controls and the accounting principles and auditing practices and procedures to be employed in preparation and review of our financial statements. The Audit Committee is also directly responsible for the appointment, compensation, retention and evaluation of the qualifications, independence and performance of our independent public auditors.
Each member of the Audit Committee meets the independence requirements of the NYSE and is financially literate, and each member of the Audit Committee is an independent director under Rule 10A-3 under the Exchange Act. In addition,
The Audit Committee charter is available on the corporate governance section of our website at
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Compensation & HR Committee
Members: Leo I. Higdon (Chair) William P. Hankowsky Edward J. Kelly III Shivan Subramaniam Wendy A. Watson Meetings held in 2021: 9
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| The Compensation and HR Committee establishes, implements and monitors our executive compensation plans and programs and determines compensation for our CEO and other executives. The Compensation and HR Committee also oversees our material compensation and benefit plans, makes recommendations to the Board on non-employee director compensation, and reviews talent management and succession plans as well as diversity, equity and inclusion programs.
Each member of the Compensation and HR Committee meets the independence requirements of the NYSE and Rule 10C-1 of the Exchange Act and is a “non-employee director” under Exchange Act Rule 16b-3.
The Compensation and HR Committee charter is available on the corporate governance section of our website at
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Nominating &
Members: Shivan Subramaniam (Chair)
Edward J. Kelly III Marita Zuraitis
Meetings held in
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| The Nominating and Corporate Governance Committee reviews and, as it deems appropriate, recommends to the Board policies and procedures relating to director and board committee nominations and corporate governance. It also oversees the development and implementation of the
Each member of the Nominating and Corporate Governance Committee meets the independence requirements of the NYSE.
The Nominating and Corporate Governance Committee charter is available on the corporate governance section of our website at about-us/investor-relations/corporate-governance.aspx.
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2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
| Risk Committee | ||||||
Members: Charles J. Koch (Chair) Christine M. Cumming Robert G. Leary
Christopher J. Swift Wendy A. Watson Marita Zuraitis
Meetings held in
| The Risk Committee reviews and, as it deems appropriate, recommends to the Board the design and implementation of our risk strategy and policy, risk appetite framework and specific risk appetites and limits. The Risk Committee also oversees our enterprise risk management governance framework and reviews the due diligence of any proposed strategic transaction. In addition, the Risk Committee oversees the Chief Risk Officer and the internal risk management function of the Company.
Each member of the Risk Committee meets the independence requirements of the NYSE. Mr. Koch qualifies as an expert, as required by federal banking regulations, having the experience in identifying, assessing and managing large, complex financial firms’ risk exposures relevant to the Company’s particular risks and commensurate with the Company’s structure, risk profile, complexity, activities and size. As required by the Risk Committee charter, the chair of the committee, Mr. Koch, is also a non-executive director who meets the criteria for independence specified by the Federal Reserve Board’s Enhanced Prudential Standards (12 CFR 252.33(a)(4)(ii)).
The Risk Committee charter is available on the corporate governance section of our website at
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Board’s Role in Risk Oversight
The Board is responsible for oversight of the Company’s internal controls and risk management framework. This oversight includes evaluation of management’s systems of internal control, financial reporting and public disclosure, confirming the accuracy and completeness of financial results, reviewing and approving the Company’s Enterprise-wide Risk Management Governance Framework (the “ERMG Framework”), and ensuring that risks to the Company are properly managed. A key element of Citizens’ ERMG Framework is building and maintaining a strong risk management culture throughout the Company.
The Board has delegated certain risk oversight duties to the Risk Committee, and with respect to financial controls, the Audit Committee, but each of the Board’s committees has risk oversight responsibilities and the Board receives independent reports from each of its key committees at its meetings.
The ERMG Framework, overseen by the Risk Committee, encompasses the policies, programs, and procedures which set the standards for the identification, assessment, monitoring, and control of material risks that could affect stockholder value, customers, colleagues or the safety and soundness of the Company. Foundational to the ERMG Framework is the Risk Appetite Framework which governs the Company’s approach to risk and serves to better inform the Company’s risk-taking strategy in its pursuit of strategic and financial goals. The Company’s Risk Appetite is embedded into key-decision making processes.
The ERMG Framework is implemented through a Three Lines of Defense model which incorporates (1) front line units responsible for identifying, assessing, controlling, monitoring and reporting risk; (2) independent risk management which provides independent challenge and oversight of our overall risk profile; and (3) internal audit and credit review functions which evaluate the design and effectiveness of the Company’s risk framework. The model is designed to ensure effective management, control and oversight of all risks including Credit Risk, Interest Rate Risk, Liquidity Risk, Market Risk, Operational Risk, Security, Fraud, and Financial Crimes Risk, Technology Risk, Compliance Risk, Strategic Risk, and Reputation Risk.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
PoliciesBOARD OF DIRECTORS Risk Committee Audit Committee Compensation and Procedures for Related Person Transactions
We have adopted a written related person transaction policy. Under this policy our executive officers, directors and significant stockholders, including their immediate family members, are not permitted to enter into a related person transaction with us without the consent of our Nominating and Corporate Governance Committee. Subject to certain transactions pre-approved by theHR Committee Nominating and Corporate Governance Committee Oversees design, implementation and operation of the ERMG Framework, which sets standards for the identification, assessment, monitoring and control of material risks and related governance. Reviews and, as it deems appropriate, recommends to the Board the design and implementation of the Companys risk strategy and policy, risk appetite framework and specific risk appetites and limits. Oversees evaluation of systems of internal control, financial reporting, and public disclosure. Reviews the accuracy and completeness of financial results. Oversees our Conduct Office, which monitors colleague behavior in accordance with the policy, any request for us to enter into a transaction with an executive officer, director, significant stockholder or any of such persons’ immediate family members, in which the amount involved exceeds $120,000, is required to be presentedrelation to our Code of Business Conduct and Ethics, sales practices, and other key policy considerations. Evaluates executive performance, including risk performance, and approves compensation Establishes and Monitors compensation programs and performs an annual risk review of compensation plans. Reviews director compensation, with input from its independent consultant. Oversees talent management and succession planning at the executive level and for the organization overall, as well as diversity, equity and inclusion initiatives. Oversees governancepractices, independence and effectiveness of the Board. Oversees the Companys commitment to environmental, social, and governance matters. Oversees the development and implementation of the board annual training and continuing education program. Both the Risk and Audit Committees oversee the management of our cybersecurity risk. Regular reporting on cybersecurity and cyber threats as they continue to evolve is provided to both committees and the BoardBOARD OF DIRECTORS Risk Committee Audit Committee Compensation and HR Committee Nominating and Corporate Governance Committee Oversees design, implementation and operation of the ERMG Framework, which sets standards for review, considerationthe identification, assessment, monitoring and approval. Allcontrol of our directors, director nominees, executive officersmaterial risks and significant stockholders are required to report to our Nominatingrelated governance. Reviews and, Corporate Governance Committee any such related person transaction. In approving or rejecting the proposed transaction, our Nominating and Corporate Governance Committee will take into account, among other factorsas it deems appropriate, recommends to the commercial reasonablenessBoard the design and implementation of the terms,Companys risk strategy and policy, risk appetite framework and specific risk appetites and limits. Oversees evaluation of systems of internal control, financial reporting, and public disclosure. Reviews the benefit or perceived benefit, or lack thereof,accuracy and completeness of financial results. Oversees our Conduct Office, which monitors colleague behavior in relation to our Code of Business Conduct and Ethics, sales practices, and other key policy considerations. Evaluates executive performance, including risk performance, and approves compensation Establishes and Monitors compensation programs and performs an annual risk review of compensation plans. Reviews director compensation, with input from its independent consultant. Oversees talent management and succession planning at the Company, opportunity costs of alternate transactions,executive level and for the materiality and character of the related person’s direct or indirect interest and the actual or perceived conflict of interest of the related person.
Transactions with Executive Officers and Directors
We provide credit facilities from time to time to certain directors and executive officers and their immediate family members,organization overall, as well as their affiliated companies. These credit facilities (i) complied with our Regulation O policiesdiversity, equity and procedures, (ii) were made ininclusion initiatives. Oversees governance practices, independence and effectiveness of the ordinary courseBoard. Oversees the Companys commitment to environmental, social, and governance matters. Oversees the development and implementation of business, (iii) were made on substantially the same terms, including interest ratesboard annual training and collateral, as those prevailing atcontinuing education program. Both the time for comparable loans with persons not related toRisk and Audit Committees oversee the lender, and (iv) did not involve more than a normal risk of collectability or did not present other features unfavorable to the Company.
Under supplemental retirement arrangements relating to their prior service to Charter One, which we acquired in 2004, Mr. Charles Koch, a director, as well as his brother, Mr. John Koch, are entitled to receive monthly payments. Mr. Charles Koch and Mr. John Koch received approximately $877,500 and $744,900, respectively, under this arrangement during 2020.
Transactions with Other Related Persons
Based solely on Schedule 13G filings made with the SEC, BlackRock, Inc. (“BlackRock”), The Vanguard Group (“Vanguard”), State Street Corporation (“State Street”) and their affiliates are each considered a “Related Person” under our related person transaction policy because they each beneficially owned more than 5%management of our outstanding common stockcybersecurity risk. Regular reporting on cybersecurity and cyber threats as they continue to evolve is provided to both committees and the Board
Cybersecurity Risk Oversight
As a financial institution our operations rely on the secure processing, transmission and storage of December 31, 2020.
Our company pension plan uses BlackRock and its affiliates to provide investment management services. In connection with these services, we paid BlackRock approximately $280,000confidential information in fees during 2020.our network. In addition, our customers use personal computers, smartphones, tablets, and other mobile devices to access our products and services. As such, we have certain other ordinary course commercial relationships with BlackRock, Vanguard and State Street. All such relationships have been reviewed and determined notare subject to be material in accordance with our related person transaction policy.
Indemnificationa variety of Directors and Officers
We indemnify our directors and officers to the fullest extent permitted by Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.
There is currently no pending material litigation or proceeding involving any of our directors and executive officers for which indemnification is sought or which is adverse to the Company.cybersecurity risks.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk. The Audit Committee is responsible for overseeing our Cybersecurity Program under its risk oversight responsibilities as it relates to financial controls. The Risk Committee is responsible for oversight of the management of cybersecurity risk consistent with the ERMG Framework.
Under the guidance of our Chief Security Officer we maintain a comprehensive Cybersecurity Program (the “Program”) designed to protect our employees, customers, assets, premises, systems, and information against unauthorized access, misuse, alteration, or destruction that could result in substantial harm or inconvenience to our customers, and loss or reputational damage. The Program incorporates all of our security policies and covers the core elements of access control, infrastructure security, cybersecurity event and incident management, data protection, third-party vendor cyber risk oversight, payment security, and training and awareness. Independent assessment and benchmarking of the Program are regularly completed, and the Program is overseen and assessed by federal regulators. While we look to numerous frameworks to ensure the Program is maintained in line with regulatory expectations and industry best practices, the National Institute of Standards and Technology (“NIST”) cybersecurity framework is the primary standard against which we benchmark ourselves.
The Program is presented to the Risk Committee for approval annually by the Chief Security Officer in conjunction with an annual cybersecurity briefing. This briefing provides an overall assessment of the effectiveness of the Program and an outlook for the upcoming year. In addition to the annual cybersecurity briefing, the Chief Security Officer provides updates on cybersecurity to the Risk Committee at each of its meetings. The Audit Committee and Board also receive regular cybersecurity updates as part the reporting provided by the Technology/Cyber Oversight Committee, a management committee chaired by the Chief Executive Officer which provides executive oversight, guidance and transparency to key transformative initiatives designed to enhance our technology stability, cyber defenses and risk management capabilities. Further, to ensure the Board maintains the appropriate knowledge for providing effective oversight, it is provided with relevant cybersecurity training on an annual basis, with any additional training provided as requested.
The Board is responsible for guiding and ultimately approving the strategic direction of the Company and overseeing execution of the Company’s strategic plan. Every year the Board holds an offsite meeting dedicated to reviewing the Company’s long-term strategy. This review includes detailed discussions with management, investors, securities analysts and industry experts. At each of its meetings, the Board assesses the Company’s strategic, competitive and financial performance to ensure continued alignment with the long-term strategy. The Company’s strategy on investing in the end-to-end digitization of the bank, strengthening fee-based businesses and expanding its solutions and capabilities has been executed with focused discipline resulting in the Company delivering strong operational and financial results, positioning it with the ability to accelerate the execution of its strategic growth plans.
Board Oversight of Political Spending
We closely monitor and oversee all expenditures that could be used for political purposes in accordance with our Code of Business Conduct and Ethics and our Political Contributions Policy. The Company only makes contributions to political candidates or parties from the Citizens-sponsored Political Action Committees (“Citizens PACs”). The Citizens PACs raise funds on a voluntary basis from Citizens colleagues in order to make contributions in support of sound public policies that benefit the bank, its customers, and the communities we serve. The Citizens PAC contributions are overseen by senior management and made available in regular state and federal filings.
The Nominating and Corporate Governance Committee receives regular reporting on political contributions and other expenditures related to government advocacy, including lobbying activities and support for trade associations and other organizations.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
STOCKHOLDER OUTREACH WHAT WE DISCUSSED & WHAT WE DID Provision of stockholder rights to call a special meeting Diversity disclosures Board Composition Oversight of environmental, social and governance matters Executive compensation design Pay equity Human capital Provided stockholders the right to call a special meeting Increased colleague demographic disclosures and enhanced board disclosures to identify more diversity characteristics of individual directors Refreshed the Board with two new directors one of whom is racially diverse Completed a ESG materiality assessment and established an ESG governance framework with GRI and SASB aligned reporting to follow Introduced a relative metric for our PSU awards Made a formal commitment to pay equity and subsequently disclosed the results of our third party analysis Provided additional disclosure highlighting key elements of how we manage human capital
Stockholder OutreachSTOCKHOLDER ENGAGEMENT
Throughout the year we interact and communicate with our stockholders in a number of forums, including quarterly earnings presentations, investor conferences, press releases and SEC filings, stockholder dialogue, our proxy statement and the annual meeting of stockholders. On an annual basis, we proactively reach out to our largest stockholders to solicit feedback which we use to enhance our current practices. We also hold discussions with additional stockholders at their request. Feedback received is shared with the Board which discusses follow-up actions as appropriate. As we continue to navigate through these exceptional times it was important to us to maintain an open dialogue with investors and listen to their perspectives. During 2021, we conducted two outreach programs. In the Spring we reached out to 28 of our largest stockholders holding over 62 percent of our outstanding stock, and in the Fall we reached out to 25 of our largest stockholders holding over 65 percent of our outstanding stock. During the course of our engagements we ultimately met with multiple stockholders representing approximately 38 percent of our outstanding stock. These discussions focused on our progress on ESG matters, climate actions and reporting, human capital management, executive compensation, corporate governance, and board composition. Stockholder feedback, together with ongoing reviews of market and peer practice have resulted in several enhancements to our governance and compensation practices and related disclosure in recent years. Stockholders we have spoken to have expressed their support for the enhancements we have made to board diversity and disclosures, our executive compensation program, and stockholder rights, and have recognized the significant progress we have made in oversight and management of ESG matters and related reporting. |
STOCKHOLDER OUTREACH WHAT WE DISCUSSED & WHAT WE DID Stockholder rights Requesting stockholder approval to eliminate super majority voting requirementsDiversity disclosures Enhanced proxy disclosers to identify diversity characteristics of individual director and have enhanced disclosure to colleague demographics to further align with EEOC reportingBoard composition Increased racial and gender diversity of the BoardOversight of ESG matters Published results of our ESG materiality assessment, aligned reporting to GRI and SASB, and established reduction targets for scope 1 and 2 GHG emissionsPay equity Made a formal commitment to pay equity and subsequently disclosed the result of our third-party analysisHuman capital Provided additional discloser highlighting key elements of how we manage human capital |
We invite any stockholders in a number of forums, including quarterly earnings presentations, investor conferences, press releases and SEC filings, stockholder dialogue, our proxy statement and the annual meeting of stockholders.
On an annual basis, we proactively reach out to our largest stockholders to solicit feedback on corporate governance and executive compensation which we use to enhance our current practices. We also hold discussions with additional stockholders at their request. Feedback received is shared with the Board which discusses follow-up actions as appropriate.
As we continued to navigate through these exceptional times it was more important than ever to hear from our investors. Accordingly, we expanded our annual outreach program in 2020 to encompass our top 50 stockholders, who hold over 75 percent of our outstanding stock, and during the course of 2020 held meetings with multiple stockholders representing over 25 percent of our outstanding stock.
These discussions focused on the impact of the COVID-19 pandemic including how we have supported customers, colleagues and communities, human capital management, board and workforce diversity, our progress on ESG matters, and executive compensation.
As a result of stockholder feedback in recent years as well as ongoing reviews of market and peer practice, we have made several enhancements to our governance and compensation practices and related disclosure.
Stockholders who wish to contact our Board mayto send written correspondence, in care of the Corporate Secretary, to Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901. Communications may be addressed to the Lead Director or any alternate director, marked as confidential or otherwise. Communications which are addressed to the Board, an individual director or group of directors will be processed by the Office of the Corporate Secretary. Communications received that discuss business or other matters relevant to the activities of our Board, as determined by the Corporate Secretary, will be distributed to the addressees either in summary form or by delivering a copy of the communication. With respect to other correspondence received by the Company on behalf of one or more directors, the Board has requested that certain items, including the following, not be distributed to directors, because they generally fall into the purview of management, rather than the Board: junk mail and mass mailings, product and services complaints, product and services inquiries, resumes and other forms of job inquiries, solicitations for charitable donations, surveys, business solicitations and advertisements.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
Our executive officers are designated by, and serve at the discretion of, our Board. There are no family relationships among any of our directors or executive officers. Our executive officers are as follows:
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Bruce Van Saun , Chairman and Chief Executive Officer
| Bruce Van Saun’s biography and related information may be found above under “Corporate Governance Matters—Proposal |
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Mary Ellen Baker, Executive Vice President and Head of Business Services
| Mary Ellen Baker, age 64, has responsibility for |
has led numerous strategic projects in the areas of technology and operations, including supply chain, risk management, new technology implementation, and crisis response initiatives. Ms. Baker is a graduate of Western Michigan University.
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Brendan Coughlin, Executive Vice President and Head of Consumer Banking
| Brendan Coughlin, age 42, was appointed to the role of Head of Consumer Banking at Citizens Bank with responsibility for both national and regional banking |
Lending in June 2015. Previously, he was the head of marketing for Consumer Finance. Prior to joining Citizens, Mr. Coughlin worked at Bank of America and FleetBoston Financial in a variety of business areas, including corporate strategy, mortgage product management and retail distribution /M&A. Mr. Coughlin serves on the board of directors of uAspire, a national nonprofit aimed at increasing access to higher education among inner-city youth and actively represents the bank on the CBA Education Funding Committee, the nation’s most influential financial services trade organization for student lending. Mr. Coughlin received his bachelor’s degree from Boston College in finance and marketing and an M.B.A. from Babson College.
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| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
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| Malcolm Griggs, age 61, has been Executive Vice President and Chief Risk Officer since April 2016. Mr. Griggs joined the Company in December 2014 as Executive Vice President and Chief Credit Officer. He is responsible for all credit, market, regulatory, compliance and operational risk management for the Company. In March 2021, Mr. Griggs assumed the additional duties of General Counsel and Chief Legal Officer of the Company. Prior to joining Citizens, Mr. Griggs was head of business risk and controls for the U.S. Consumer and Commercial Banking business at Citigroup. Mr. Griggs has had a wide range of risk | |
management responsibility over his banking career, including senior risk positions at Morgan Stanley Private Bank, Bank of America, Wachovia, and as the first Chief Risk Officer at Fifth Third Bank. He also served on the national Board of Directors of the Risk Management Association, including serving as Chairman. He currently serves as President of the Board of the Rhode Island Philharmonic Orchestra and Music School. Mr. Griggs received his undergraduate and law degrees from the University of North Carolina at Chapel Hill. | ||||
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Beth Johnson, Executive Vice President and Chief Experience Officer
| Beth Johnson, age 50, was appointed to the role of Chief Experience Officer |
2013 as head of Corporate Strategy, Ms. Johnson was a senior leader at Bain and Company. She served as a partner and leader of its customer strategy and marketing practice, specializing in financial services and regularly | ||||
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Susan LaMonica,Executive Vice President and Chief Human Resources Officer
| Susan LaMonica, age 60, has been Chief Human Resources Officer since 2011 and is responsible for developing and driving people strategies to support Citizens’ business plans. She has responsibility for organizational development and culture, leadership and talent development, learning, |
the head of human resources for the investment banking and markets division globally, and before that served as the head of human resources for the consumer and commercial banking division. She also served as global head of development for the bank, leading the firm’s efforts around talent, leadership, learning, diversity, culture and organizational change. During her tenure she played a key role for human resources in a number of bank mergers. Before moving into human resources, Ms. LaMonica began her career with Chase Manhattan Bank, holding a number of roles in operations, risk and retail banking. Ms. LaMonica earned a B.S. in finance from Boston College and an M.B.A. in finance from New York University. | ||||
* The Company announced on February 28, 2022, that Polly N. Klane will become our General Counsel and Chief Legal Officer effective April 4, 2022, with Malcolm Griggs continuing in his capacity as Chief Risk Officer and member of the Citizens Executive Committee.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS | |||
 | Donald H. McCree III, Vice Chairman and Head of Commercial Banking
| Donald H. McCree III, age 60,has been Vice Chairman of our Commercial Banking Division since August 2015. Prior to joining the Company, Mr. McCree served in a number of senior leadership positions over the course of 31 years at J.P. Morgan Chase & Co. and its predecessor companies. Most recently, Mr. McCree was Head of Corporate Banking and Chief Executive Officer of Global Treasury Services at J.P. Morgan, where he was responsible for providing relationship banking services to commercial clients as well as treasury and trade finance solutions to small businesses, multinational corporations, financial |
services firms and government entities worldwide. Prior to becoming Head of Corporate Banking, Mr. McCree’s roles at J.P. Morgan included Head of Global Credit Markets, North American Co-Head of Fixed Income and Head of Wholesale Risk Management. He also served as Head of Treasury and Corporate Development and was based in London for several years, where he served as European Co-Head of Investment Banking and Head of European and Asian Syndicated Finance. Mr. McCree received his B.A. from the University of Vermont. | ||||
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C. Jack Read, Executive Vice President and Controller
| C. Jack Read, age 53, joined the Company in July 2018 as Executive Vice President and Controller, and assumed the position of Chief Accounting Officer in August 2018. Mr. Read’s responsibilities include oversight of SEC and Regulatory reporting, Corporate Tax, Finance Risk and Sarbanes Oxley. Mr. Read joined the Company from Mitsubishi UFJ Financial Group, Inc. (MUFG), where he served as Managing Director, Head of Operational Risk for the Americas from 2016 to 2018, Head of Financial Operations for the Americas from 2013 to 2015 and Corporate Tax Director from 2010 to 2012. Prior to joining MUFG, |
Mr. Read was a Managing Director in the Corporate Tax Department at J.P. Morgan Chase and at Washington Mutual, a predecessor entity. Mr. Read began his career in 1993 with KPMG becoming partner in the Tax Advisory division. Mr. Read holds a J.D. from Temple University Law School and a B.B.A. from the Isenberg School of Management at University of Massachusetts | ||||
 | Michael Ruttledge, Executive Vice President and Chief Information Officer Michael Ruttledge, age 58, is Chief Information Officer and Head of Technology Services for Citizens Financial Group. He oversees all aspects of the bank’s technology environment, from customer- and client-facing applications to the people, processes and infrastructure supporting Citizens’ day-to-day business operations. Mr. Ruttledge spearheaded our Next Generation Technology transformation to modernize the bank and deliver personalized, digital solutions for customers. He has delivered a major up-skilling initiative and strong culture of learning through immersive Engineering and Architecture |
Academies, digital credentialing and building of critical skills for the future such as AI, Blockchain, Modern API’s and Cloud. Before joining Citizens in 2019, he previously held the position of Chief Information Officer of American Express Co. He has more than 20 years of experience in infrastructure and engineering roles within the financial services industry including payments, merchant services, customer service, risk, fraud, banking and finance. During his career he has maintained a focus on developing the vision, strategy and innovative culture to execute new digital capabilities, big data, payments, and next generation analytics platforms that advance business strategies. He received a graduate degree in Information Systems from the University of Brighton in the United Kingdom. | ||||
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John F. Woods, Vice Chairman and Chief Financial Officer
| John F. Woods, age 57, joined the Company in February 2017. He assumed the position of Chief Financial Officer in March 2017 and was appointed Vice Chairman in February 2019. Mr. Woods has responsibility for our Financial Planning, |
Officer | ||||
Policies and Procedures for Related Person Transactions
The Board has adopted a written policy governing transactions with related persons. Under the Related Person Transaction Policy, our executive officers, directors, their immediate family members, and significant stockholders (each a “Related Person”), are not permitted to enter into a transaction with the Company without approval from our Nominating and Corporate Governance Committee. In accordance with the policy, any request to enter into a transaction with an executive officer, director, significant stockholder or any of such persons’ immediate family members, in which the amount involved exceeds $120,000, and in which the related person has a direct or indirect material interest is required to be presented to our Nominating and Corporate Governance Committee for review, consideration and approval.
Under the policy, the Nominating and Corporate Governance Committee has pre-approved transactions which do not pose a risk of creating conflicts of interest because they arise in the ordinary course of business, and the interests of the Related Person are not material even if the amount involved exceeds $120,000. Pre-approved transactions include those that do not require disclosure under Item 404(a) of Regulation S-K; transactions that are subject to other approval processes such as employment and compensation arrangements of, or lending to, executive officers and directors; and ordinary course banking, brokerage, investment, and financial services relationships, as well as other ordinary course of business relationships and transactions with any beneficial owner of between 5 percent and 20 percent of the Company’s voting securities that is not a natural person, and is a Related Person solely as a result of stock ownership, provided they are on non-preferential terms and the value does not exceed 1 percent of the consolidated gross revenues in a fiscal year of either the Company or the beneficial owner.
In approving or rejecting a proposed transaction, our Nominating and Corporate Governance Committee will take into account, among other factors it deems appropriate, (i) the commercial reasonableness of the terms, (ii) the benefit or perceived benefit, or lack thereof, to the Company, (iii) opportunity costs of alternate transactions, (iv) the materiality and character of the related person’s direct or indirect interest, and (v) the actual or perceived conflict of interest of the related person.
Transactions with Related Persons
We maintain ordinary course banking relationships with some of our directors and officers. This includes providing credit facilities from time to time to certain directors and executive officers and their immediate family members, as well as their affiliated companies. These credit facilities (i) complied with our Regulation O policies and procedures, (ii) were made in the ordinary course of business, (iii) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender, and (iv) did not involve more than a normal risk of collectability or did not present other features unfavorable to the Company.
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Under supplemental retirement arrangements relating to their prior service to Charter One, which we acquired in 2004, Mr. Charles Koch, a director, as well as his brother, Mr. John Koch, are entitled to receive monthly payments. Mr. Charles Koch and Mr. John Koch received approximately $877,500 and $744,900, respectively, under this arrangement during 2021.
For transactions with BlackRock, Inc., The Vanguard Group, Inc., Capital International Investors or State Street Corporation, each beneficial owners of more than 5% of our outstanding common stock as of December 31, 2021, and therefore considered “Related Persons” under the policy, see “Security Ownership of Certain Beneficial Owners and Management—Beneficial Owners of more than Five Percent”.
Indemnification of Directors and Officers
We indemnify our directors and officers to the fullest extent permitted by Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable. There is currently no pending material litigation or proceeding involving any of our directors and executive officers for which indemnification is sought or which is adverse to the Company.
2022
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We view our corporate responsibility efforts as a journey and
In 2021 we continued to make strong progress during 2020 – fulfillingon our responsibility as a bank to serve our customers well, provide a great place to work and build a career, strengthen our communities, and operate responsibly and sustainably, backed by strong governance. OurWhile good corporate responsibility framework alignscitizenship has always been core to our values and central to our Credo, and operates across six dimensions:we have implemented enhancements in all areas of ESG over the past five years to build upon our longstanding commitment to corporate responsibility.
2018 Published first corporate responsibility report First made CDP Climate Change Questionnaire response public 2019 Made public commitment to pay equity Implemented proxy access 2020 Established formal board and executive oversight of ESG Conducted ESG materiality assessment Committed $10 million in grants and charitable support for initiatives aimed at promoting social equity and $500 million in incremental financing and capital for small businesses, housing, and other development in predominantly minority communities Provided stockholders with the right to call a special meeting 2021 Published results of ESG materiality assessment Aligned reporting to GRI and SASB reporting frameworks Adopted and published GHG Scope 1 & 2 emissions reduction targets Launched Green Deposits Product Launched checking product feature Citizens Peace of MindTM 2022 During 2022 we expect to publish TCFD-aligned reporting Requested stockholder approval to amend our Certificate of Incorporation to eliminate supermajority voting
Our ESG Priorities and Strategy
During 2020, Citizens conducted its first materiality assessment to understand and prioritize the ESG topics that matter most to our stakeholders and our business. The objective of this assessment was to establish a strong foundation for our corporate responsibility strategy and disclosure efforts moving forward.
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Our materiality assessment reviewed a comprehensive set of ESG topics that intersect with our business. We interviewed our external stakeholders and completed a landscape review of industry trends and research to understand the importance of each ESG issue to our stakeholders. We also interviewed our executive team and surveyed internal subject matter experts to assess which topics have or may have the most significant impact on our business success. To ensure objectivity and a best practice approach, we engaged an independent firm to complete the assessment.
Through this process, we confirmed our priority issues—those deemed most critical to our business success and to the interests and expectations of our key stakeholder groups. We also confirmed five important issues which are increasing in visibility among stakeholders and which we aim to focus on in our corporate responsibility strategy.
Priority Issues |
· Climate Change · Data Privacy and · Diversity, Equity and Inclusion · Ethics and Compliance · Innovation and Technology · Talent Attraction, Development and Engagement | ||||
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Responsible Investment
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Data Privacy and Protection Diversity, Equity and Inclusion Ethics and Compliance Talent Attraction, Development, and Engagement Climate Change Responsible Investment Corporate Governance Community Development Innovation and Technology Financial Access and Inclusion Corporate Citizenship Colleague Wellness and Safety Fair and Responsible Banking Systematic Risk Management Environment Footprint ESG-Linked Products Public Policy Supply Chain LOW Stakeholder concern HIGH Priority issues Important issues LOW Impact on the company HIGH
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Strengthening ESG Oversight and Governance
The Board is committed to overseeing our corporate responsibility efforts. While environmental, social and governance matters fall under the purview of each of the Board committees as it relates to their individual oversight responsibilities, in 2020 the Nominating and Corporate Governance Committee undertook formalOverall responsibility for providing oversight of the Company’s commitment to ESG matters, including providing overall strategic direction on corporate responsibility and reporting. We also established an internalreporting, sits with the Nominating and Corporate Governance Committee; however, each of the Board committees have oversight responsibilities for ESG matters which fall under their purview. Board oversight is supported by a management governance structure withwhich includes an executive steering committee to guide our strategies, help integrate our efforts across lines of business, and monitor our progress.progress, and an ESG working group which helps shape strategies and oversees measurement, monitoring and reporting.
Refining Our
CEO and ExCo Approves CR strategies and reporting. ESG Priorities Through a Materiality Assessment
During 2020, we further enhanced ourExecutive Steering Committee Guides CR strategies; champions business line integration of key initiatives (KPIs) and long-term goals. ESG Working Group Helps shape strategies; oversees CR measurement, monitoring and reporting. CEO and ExCo Approves corporate responsibility efforts by completing our first ESG materiality assessment to identify the issues that represent the most significant opportunities and risks for the Company. The outcome of that assessment will be published in our 2020 Corporate Responsibility Report and will guide our strategies and reporting as we move forward on our journey.
Engaging Our Stakeholders
In addition to engaging various stakeholder groups in the materiality assessment we conducted in 2020, we regularly engage with our stakeholders throughout the year to inform ourreporting. ESG Executive Steering Committee Guides corporate responsibility effortsstrategies; champions business line integration of key initiatives (KPIs) and priorities. This engagement includes regular dialogue with our colleagues, customers, community groups, stockholders,long-term goals. ESG Working Group Helps shape strategies; oversees corporate responsibility measurement, monitoring and policymakers. reporting.
Aligning Our Reporting To Standard Frameworks
In 2021, we will publish our 2020 Corporate Responsibility Report which will highlight our progress on a variety of ESG topics and will be aligned with GRI and SASB frameworks. In addition to our annual Corporate Responsibility Report, we disclose our environmental performance each year through a response to the CDP.
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| ENVIRONMENTAL | ||
◾ Targets adopted to reduce our Scope 1 and 2 GHG emissions 30% by 2025 and 50% by 2035, based on our 2016 baseline. | ◾ Received a score of “B” on our 2021 CDP Climate Change Questionnaire response. | |
◾ Green Deposits product gives clients the opportunity to direct deposits to investments in sectors such as energy efficiency; renewable energy; green transport; sustainable food, agriculture, and forestry; waste management; and greenhouse gas reduction. | ◾ More than $429 million invested in renewable energy projects as of December 31, 2021 with ongoing exploration of opportunities to increase lending and investments in renewable energy and energy efficiency projects. | |
◾ Utilizing recommendations from the TCFD to inform and guide climate efforts and future disclosures. | ◾ Created new “Head of Sustainability” role within our Corporate Strategy division to advance our environmental sustainability efforts. | |
| SOCIAL | ||
Health and Well-being ◾ Competitive and comprehensive benefits and wellness package, which is continuously evaluated. ◾ Recent introduction of additional mental health resources as well as backup adult/childcare. ◾ Return to office strategy driven by colleague well-being. ◾ Continuation of heightened protocols in all locations. | Customers ◾ Office of Fair Banking integrated into product governance processes to ensure products are fair and inclusive ◾ Commercial Credit Policy includes an Environmental, Social, and Ethical (ESE) Screening. ◾ Clients provided with ESG-aligned investment solutions that include mutual funds and exchange-traded funds comprised of companies regarded to have strong ESG characteristics. ◾ Transparency and accessibility of banking increased with new checking product feature Citizens Peace of MindTM which helps customers avoid unexpected overdraft fees by providing automatic rebate if cured within 24-hours as well as real-time digital monitoring and low-balance alerts. ◾ Artificial Intelligence Governance Forum reviews key ethical considerations around the use of artificial intelligence/machine learning technologies including bias management, transparency, explainability, fairness, quality, privacy and overall soundness. | |
Diversity, Equity and Inclusion (“DE&I”) ◾ Continued execution of initiatives funded through our $10 million social equity commitment and our $500 million commitment to providing access to capital in minority communities. ◾ Diverse hire commitment, through which at least 50% of candidates interviewed for senior roles must be diverse. ◾ Executive DE&I scorecards reviewed quarterly to enhance transparency and accountability. ◾ Commitment to public disclosure on DE&I issues, including disclosure of pay equity analysis results and disclosure of colleague demographics to further align with EEOC reporting. ◾ Six active business resource groups, whose members play an important role in advancing business strategy and the DE&I strategy. | ||
Growth and Career Development ◾ Culture of continuous learning, which we believe is necessary for colleagues to thrive and feel a sense of accomplishment and purpose. ◾ Comprehensive development and training programs, including technical and skills-based programs and resources aligned with leadership competencies. ◾ Programs are designed to equip colleagues with the skills necessary to excel in their current roles and to enable them to be highly valuable contributors in the future. | Community ◾ Collegues volunteered more than 154,000 hours in our communities and participated in our first Skills-Based Volunteer Day of Service ◾ Community giving program focused on Fighting Hunger, Financial Empowerment and Strengthening Communities through Economic and Workforce Development ◾ Achieved a Community Reinvestment Act Rating of “Outstanding” from the Office of the Comptroller of the Currency for its most recent examination period. | |
| GOVERNANCE | ||
Board Independence ◾ 12 of 13 directors are independent ◾ Independent Lead Director with formally defined role and responsibilities | Stockholder Rights ◾ Annual election of directors with majority voting ◾ Non-classified board structure ◾ Proxy Access ◾ Shareholder right to call a special meeting ◾ Requesting stockholders approve the amendment to the Certificate of Incorporation to eliminate supermajority vote requirements | |
Board Composition ◾ 6 of 13 nominees are gender or racially diverse ◾ Board skills and experience aligned to strategy | ||
2022
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Greater awarenessWe are committed to reducing our operational impact on the environment, understanding and concern over racialmanaging the risks and opportunities for our business presented by climate change and resulting regulatory and market changes, and helping our customers plan for and manage climate change impact.
To better meet internationally recognized goals to foster climate resilience and limit global temperature increase, we have set targets to reduce our Scope 1 and 2 GHG emissions 30% by 2025 and 50% by 2035, based on our 2016 baseline. These reductions align with the recommendations of the Paris Agreement, which aims to limit average global temperature increase to well-below 2° Celsius compared to pre-industrial levels. Our environmental policy requires that we measure and track our environmental performance on our journey of continuous improvement. We have a data-gathering program that includes energy, water, paper, waste, recycling, greenhouse gas emissions, and business travel. We report our performance each year through the CDP (formerly Carbon Disclosure Project). Our most recent CDP Climate Change Questionnaire Response, which received a score of “B”, can be viewed on our website.
To meet the unique needs of the renewable energy industry, we provide equity investments to support a greener and social justice, drivenmore independent energy future through Citizens Asset Finance. We have participated in part by the disparatefunding of nine U.S. wind farm projects since mid-2015, with our investments totaling approximately $429 million at the end of 2021.
In 2021, we launched Green Deposits, a program that allows corporate clients to direct their cash reserves toward companies and projects that are expected to create a positive environmental impact. The Green Deposits solution gives clients the opportunity to direct deposits to investments in sectors such as energy efficiency; renewable energy; green transport; sustainable food, agriculture, and forestry; waste management; and greenhouse gas reduction. Citizens developed its Green Deposits Framework to identify eligible activities within the bank’s portfolio and ensure alignment with best practices and standards. The framework was created in line with eligibility criteria developed with the support of Sustainalytics, a Morningstar company, and leading provider of ESG research and data.
As one of our ESG priority topics, we know that focus on climate change is important to our business strategy and many of our stakeholders. We seek to understand the potential risks of climate change to our business and are working to identify, address and disclose the risks in our value chain including potential extreme weather impacts of climate change, or the pandemic,risks associated with regulatory or market changes that emerge as part of the transition to a lower-carbon economy. We have come to the forefrontadded staff focused on climate work, including a Head of 2020. Our commitment to help drive social equity and economic opportunity extends internally as well asSustainability role to our communitiesCorporate Strategy team to advance our efforts to mitigate climate risks and capitalize on opportunities presented by resulting market changes. We have assembled working groups in 2020 we announced a $10 million investmentour Commercial and Risk divisions to help drive social equitythis work and economic advancement in underserved communities acrossare using the recommendations from the TCFD to guide our footprint, which includes grants and charitable support for immediate and longer-term initiatives aimed at supporting minority-owned small businesses, increasing awareness of racial disparities and supporting underserved communities through technology, education and digital literacy initiatives. Our commitment also includes more than $500 million in incremental financing and capital for small businesses, housing and other developments in predominately minority communities.efforts.
Citizens’ colleagues are atPhilanthropy
Through our Citizens Helping Citizens program, we invest our time, resources, and energy to support the heartcommunities where we live and work. We focus our philanthropic giving on three specific areas that we believe fortify the overall well-being of our Credocommunities: Fighting Hunger, Financial Empowerment and our ultimate goal is to create an environment where colleagues feel valuedStrengthening Communities through Economic and would like to build their careers, thereby contributing to the creation of long-term stockholder value. Citizens’ journey over the past few years has been one of accelerated progress and change, in step with rapidly evolving market and talent expectations. We have been on the path to digitization, transforming how we work, and establishing a different mix of necessary capabilities for the future, while at the same time facilitating continued evolutionWorkforce Development. Highlights of our culture.
Health, Safety, and Wellness
Colleague wellness has always been central to our consciousness and strategy and it was a priority when we were designing our Johnston, RI campus, which opened in 2018 and includes onsite fitness and wellness centers, as well as walking paths and various sports and recreation facilities. Our commitment to colleagues’ wellness – including physical, financial, and mental wellness – has continued to be a central focus during the COVID-19 crisis. In addition to ensuring that our colleagues had the necessary tools and resources to continue to serve our customers safely, we shifted approximately 10,000 of our colleagues to a work-from-home environment and implemented several programs to support their wellness and their ability to maintain work-life balance, including the below.2021 community efforts include:
Physical & mental wellness financial support Family support provision of necessary personal protective equipment and a safe work environment free covid-19 testing additional paid time off at no employee cost for required quarantine (up to 14 days) and recovery from covid-19 (up to 14 days) Virtual doctor visits Health Adocate - free counseling sessions available 24/7 meQuilibrium - online resiliency tool to help manage anxiety and stress No increases in medical premiums for 2021 Premium pay and increased overtime rates for colleagues who continued to serve customers in the branch or office Production-based incentive plan changes made for the second quarter to address lower production Increased overtime rates and provided recognition awards for colleagues supporting the Paycheck Protection Program Enhanced recognition programs to reward extraordinary colleague efforts through the crisis Five additional days of paid time off to address personal circumstances such as lack of childcare or the need to care for a family member Parental resources through LifeCare, including homework/ tutoring support for children Flexible work arrangements
| · | Extended our partnership with Local Initiatives Support Corporation to support a digital inclusion program in Boston, Philadelphia, Providence, Atlanta and Richmond. The program provides instruction and 1:1 coaching on how to access technology resources and build/apply digital skills to drive successful job searches and career advancement. |
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| · | Worked with national and local partners including Bankwork$, EVERFI, Girls Who Code and Year Up to support programming focused on upskilling, re-skilling, job training, career advancement and digital inclusion aimed at building wealth and preparing tomorrow’s workforce. |
In addition,
| · | Through our signature Champions in Action program, we awarded $350,000 to 10 organizations in 2021 focused on the topics of COVID-19 relief and Social Equity & Inclusion. This unrestricted funding and additional support from our media partners helps these organizations build capacity and raise awareness. |
| · | Joined Goalsetter, an innovative new app that encourages youth to save and invest, as one of its first ten corporate partners kicking off their One Stock, One Future campaign—a movement to get Black and Latinx teenagers involved in learning and investing early. The goal is to gift one million shares of stock to one million Black and Latinx youth across the United States. |
Volunteerism
Our colleagues are central to—and take great pride in—our comprehensive total rewards package includes competitive pay opportunities and benefits designedcommitment to support colleague wellness from various perspectives. This offering is regularly evaluatedour communities. Colleagues volunteered more than 154,000 hours in 2021 with more than 2,000 organizations. Additionally, nearly 60 colleagues lent their skills to ensure it continues to meet the needsten nonprofits during our first Skills-Based Volunteer Day of our colleagues. Through our comprehensive myWELLNESS hub, we provide resourcesService.
To continue to help our colleagues getsafely volunteer during a time when our communities needed it most, we worked with our partners to provide meaningful virtual opportunities for all our colleagues. During September’s Hunger Action Month, we supported our national partner Feeding America by engaging colleagues in a wellness challenge called Step Up to Fight Hunger that allowed them to translate wellness activities into meals donated to those facing hunger. Through the challenge our colleagues logged more than 648 million steps which generated a donation equivalent to 300,000 meals.
Community Development
We also work to strengthen communities by providing financial resources that foster development in our local communities. Our capital allows our community partners to advance their plans to expand affordable housing and stay healthycommunity services, revitalize communities, and fuel economic development. We provide support in the form of loans and equity investments. We fund development opportunities sponsored by Community Development Corporations, Community Development Enterprises, Community Development Financial Institutions and other public welfare investments leveraging tax-advantaged tools like Low-Income Housing and New Markets Tax Credits.
We continued to execute on our 2020 commitment to fund up to $50 million to Community Development Financial Institutions to provide working capital lines of credit, small business loans, microloans, and reconstruction loans to non-bankable Black- and Brown–owned businesses. We also continued to deliver on our 2020 commitment of $300 million in Low-Income Housing Tax Credit developments in predominantly minority census tracts at premium pricing. The premium we pay is used to help address the digital divide at no cost to residents, by providing features such as technology centers with computer workstations and internet connectivity.
Homeownership is a goal for many individuals and families, and we work with our customers to determine if home ownership is right for them, obtain a loan to fit their budget, and make an informed decision. Our Portfolio Loan Program provides first-time homeowners with lower rates and more flexible underwriting requirements. Low- to moderate-income individuals, and/or those purchasing a home in low- to moderate-income neighborhoods can qualify for the program, which allows a low down payment with no mortgage insurance. It can also be combined with approved community seconds, which are grants and subsidies provided by local organizations. In addition to offering innovative loan programs, we also help address a key element of the home purchase affordability gap by providing closing cost assistance grants to eligible low- and moderate-income homebuyers or those buying homes in low- to moderate-income tracts. To expand borrowing options for low- to moderate-income homeowners, we have created the Citizens GoalBuilder™ Home Equity Line of Credit. With lower credit limits and FICO requirements, GoalBuilder™ provides an affordable borrowing option to a wider range of customers using equity in their homes.
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Citizens has achieved a Community Reinvestment Act Rating of “Outstanding” from the Office of the Comptroller of the Currency for its most recent examination period.
We believe that our long-term success depends on our ability to attract, develop, and retain a high-performing workforce. Our ultimate goal is to create an environment where colleagues can thrive and maximize their potential. Our Board and the Compensation and HR Committee provide incentivesoversight of our human capital strategy and programs, with senior management providing regular updates on human capital matters to the Board and the Compensation and HR Committee directly, to facilitate that oversight.
Health and Well-being
Citizens is committed to supporting the health and well-being of our colleagues and their loved ones. We offer a competitive and comprehensive benefits program, which was complemented with several additional elements during 2020 to support colleagues’ physical, financial, and mental wellness during the pandemic. Those programs included additional paid time off to address personal circumstances and for completing wellness activities.COVID-19 quarantine and recovery, mental health and parental resources, and modifications to select compensation programs to take into consideration decreased production at the onset of the crisis. We continuously evaluate our programs and, in 2021, implemented additional mental and emotional health resources as well as emergency back-up child and adult care in order to help alleviate the stress associated with unexpected circumstances. In addition, in early 2022 we paid our branch colleagues a $500 bonus to recognize their continued dedication to serving our customers.
Our commitment to colleague health and well-being has also driven our return to office strategy. While our branch staff have been serving customers in-person throughout the pandemic, we have implemented a gradual return to office strategy for non-branch colleagues which incorporates flexibility for colleagues based on their unique needs. We also continue to implement heightened protocols in our branches and other work locations.
Talent Management and Succession Planning
The Company has a robust talent strategy, which includes the assessment of talent at various levels across the organization on a regular basis. As part of this strategy, the Board reviews the Company’s talent management and succession plans regularly. Talent management and succession plans for the CEO, including evaluations of successors and related development plans, are provided to the Compensation and HR Committee and to the Board at least annually. A similarly detailed review of talent management and succession plans for the CEO’s management team also occurs annually by the Compensation and HR Committee. The Board’s and Committee’s focus on this topictalent management also extends below the senior executive level. To that end, the Compensation and HR Committee reviews talent management and succession plans for our primary businesses and functions on a regular basis. In addition to focusing on potential successors and team strength, these deep dives also focus on the identification of emerging talent deeper in the organization. Board members also serve as formal mentors to certain members of our executive team and meet in small group sessions with high-potential leaders across the Company throughout the year.
Diversity, Equity, and Inclusion
Citizens isWe are committed to building deep partnerships amongwith our customers, colleagues, and communities andwhile fostering a culture where all stakeholders feel respected, valued, and heard and have a sense of belonging. A core tenet of our businessheard. Our DE&I strategy is growth and innovation andfocused on increasing diverse representation in our workforce (particularly in leadership roles), developing a hallmark of that strategy is to focus on the diversity of our colleagues, customers, and communities and the inclusivity of our culture. To that end, we have been on a multi-year journey to enhance awareness and improvediverse talent pipeline, embedding DE&I capabilities and opportunities within the bank andinclusive behaviors in our communities, which has accelerated since we became an independent public company in 2015. Our Compensationculture, and HR Committee directly oversees our diversity, equity and inclusion (“DE&I”) program.
As partfacilitating access to capital. Some key elements of that journey we have conducted a third-party audit to de-bias our people practices, have put into place several recruiting and development initiatives, and provide unconscious bias training. Information regarding colleague demographics can be found on our website. We acknowledge that there is an opportunity to further increase the representation of women and people of color at all levels of our organization, in particular in senior roles. To enable further progress, we have implemented partnerships with community organizations to help identify qualified diverse candidates and have expanded our diverse hire commitment, through which we interview a slate of at least 50% diverse candidates for senior openings. In addition, our development programs are designed to build a strong pipeline of diverse emerging talent internally. A key catalyst for change within our organization is our six business resource groups (“BRGs”), each of which is sponsored by senior leaders and which include the following: Citizens WIN (Women); Citizens Elev8 (Rising Professionals); Prism (Multi-Cultural); Citizens Pride (LGBTQ); Citizens Veterans; and Citizens Awake (Disability Awareness). 17% of our population was a member of at least one BRG as of 2020 year-end. BRG members serve as cultural ambassadors within the business to help formulate and influence our DE&I strategy and to identify and solve related issues. Our commitment to diversity, equity and inclusion also extends to our communities. Additional information regarding related initiatives can be found above in “—Supporting Social Equity in our Communities.”include the following:
| · | Continued execution of various initiatives funded through our $10 million social equity commitment and our $500 million commitment to incremental financing and capital for small businesses, housing, and other developments in predominantly minority communities, as well as pivoting our community efforts to support our social equity goals. |
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| · | Introduction of diversity scorecards for senior leaders to increase transparency and accountability, which are reviewed quarterly to track progress, identify any roadblocks, and ensure development plans are fully executed for diverse groups. |
| · | Recent expansion of our diverse hire commitment, through which at least 50% of candidates interviewed for senior roles must be diverse, and the development of strong partnerships with community organizations to help identify qualified diverse candidates. |
| · | Development programs that are specifically curated to build a strong pipeline of diverse emerging talent internally and the recent launch of required inclusion training for all colleagues. |
| · | Empowerment of our six business resource groups (“BRGs”), the members of which serve as cultural and community ambassadors and play an important role in advancing our business strategy and informing the DE&I agenda. Eighteen percent of our colleague population participates in at least one BRG, which include Citizens WIN (Women’s Impact Network), Citizens Elev8 (Rising Professionals), Prism (Multi-Cultural), Citizens Pride (LGBTQ), Citizens Veterans, and Citizens Awake (Disability Awareness). |
Commitment to Pay Equity
Part of our commitment to building a diverse, inclusive, and high-performing culture includes ensuring our compensation and benefits are fair and competitive for all colleagues. We continuously evaluate our practices and are committed to identifying opportunities to help ensure that all colleagues have equal opportunity to maximize their potential. Compensation decisions are based on a “pay-for-performance” philosophy, withphilosophy. This means compensation decisions are based on a blend of individual performance, business unit performance, and Citizens’ overall performance across variousa number of dimensions, including customer, risk and control, financial, and people. Managers also receive annual training that includes tools and resources to help them make appropriate compensation decisions during our annual review process. Rating and compensation recommendations submitted by managers are reviewed to ensure they are fair and equitable.
We engage an independent third-party expert to regularly review colleagueconduct an annual pay equity analysis to ensure thatassess whether equal pay is received for equal work throughout our organization, accounting fororganization. This review covers all of our operations and colleagues and considers factors that appropriately explain differences in pay such as performance, experience, and time in role in analyzing base salary, cash bonuses, and experience.equity awards of colleagues serving in similar roles. In the case that job-related factors do not explain a disparity, a pay adjustment is made. The results of our most recent analysis indicate that women are paid 99% of what men are paid and there is no pay disparity for people of color. Although these are strong results, we understand that the opportunity gap for women and people of color continues to exist and the programs described above in ““——Diversity, Equity, and Inclusion” have been designed to help facilitate, among other things, increasing the representation of women and people of color in senior and leadership roles over time.
Growth and Development
The world inCitizens supports a culture of continuous learning, which our business operateswe believe is changing rapidly in nearly every dimension, andcrucial for colleagues to build the skills required of our colleaguesnecessary to meet the evolving needs of customers are changing at an accelerated pace. The Company is in the midst of executing on a large-scale transformation agenda andthrive as part of the pathour organization and to end-to-end digitizationfeel a sense of accomplishment and transforming how we work, we are working to ensure colleagues are reframing their mindsets, behaviors, and capabilities for the future. We invest significant resources in colleaguepurpose. Our comprehensive development and offer varioustraining programs aimed at equippinginclude technical and skills-based programs as well as resources aligned with our leadership competencies and have been designed to be easily accessible and utilized by colleagues through the use of technology, social networking, and immersive new career experiences. Our skills-based programs include learning academies with badging and curated learning experiences that deepen the critical capabilities needed to drive our transformation, embed innovative mindsets, and exceed customer expectations. During 2021, we launched the Citizens Learning Hub which offers personalized learning suited to colleagues’ roles and interests, with nearly 90% of our colleague base logging on during 2021 to explore resources and engage in self-directed learning. Through our programs we aim to equip colleagues with the skills necessary to not only excel in their current roles, but to build competencies that will enable them to be highly valuable contributors now and in the future and ensure they are in step with changes in the market. Our programs build relevant critical skills such as leadership, agile, digital, innovation, data and analytics, and coaching and advising in order to effectively strengthen the necessary workforce capabilities for our organization. To enable development of these skills we have implemented resources, experiences, and technologies to facilitate quick consumption of new bodies of knowledge and skills. One example of this is learning academies which are enabled by our new learning experience platform to offer a collection of specifically curated learning experiences and content for a particular area of expertise, such as engineering. We have also reframed our performance management process in order to further enable colleague success with ongoing check-ins and feedback as another step toward colleagues being able to contribute at their highest potential.
Engagement and Communication
We use McKinsey & Company’s Organizational Health Index (“OHI”) survey to understand colleagues’ viewpoints about the Company on a wide range of factors to inform decisions regarding initiatives that will drive sustained top-tier performance and growth. In 2020, our OHI overall score reached the top quartile, reflecting a 15-point improvement since 2014. Our success depends on employees understanding how their work contributes to the Company’s overall strategy and we use a variety of platforms and forums to facilitate open and direct communication. These include communications from our CEO and management team through live stream forums, Let’s Connect sessions hosted by members of the management team, and engagement through our BRGs.careers evolve.
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Colleague Engagement
We are mindfulAs part of our impactcontinuous efforts to make Citizens a great place to build a career, we use McKinsey & Company’s Organizational Health Index (“OHI”) survey to understand colleagues’ viewpoints about the Company on a wide range of factors. In 2021, we maintained our strong overall OHI score despite the environmentcompetitive talent market and natural resourceshad 80% of our colleagues respond to the survey, our highest response rate to date. We use the results of this survey to refine our focus, address any gaps, and we measure sustainability with a goal of continual improvement. We are workingstrengthen our efforts to reduceimprove our energy consumptionorganizational effectiveness and colleague experience. The OHI survey includes several questions focused on DE&I and the amount of waste that enters landfill. We report our performance each year through the CDP.
Through Citizens Asset Finance we have provided equity investmentsresponses to these questions by various diverse colleague segments are reviewed in renewable energy. We have participated in the funding of eight U.S.-based wind farm projects since mid-2015, with our investments totaling approximately $403 million as of December 31, 2020.
Through our Citizens Helping Citizens program, we invest our time, resources and energyorder to support the communitiesunderstand where we live and work. Across our communities, we establish partnerships, volunteer our time and expertise and support initiativesaction may be necessary to strengthen resources.
We focus on three specific areas that we believe fortify the overall well-being of our communities: Fighting Hunger, Financial Empowerment and Strengthening Communities. Across our footprint we support food banks, pantries, and meal sites and invest in partnerships with hunger relief organizations like Feeding America to combat hunger issues throughout our communities. Our Citizens Helping Citizens Manage Money initiative is our financial empowerment program dedicated to providing our communities with the resources and tools to make informed financial decisions. And lastly, we support programs and organizations that strengthen communities through economic development, job training and small business development.
We also work to strengthen our communities by providing financial resources that enable development. Our Community Development loans and investments allow organizations to advance their plans to expand affordable housing and community services, revitalize communities and fuel economic development.
While the pandemic put some limitations on our colleagues’ ability to do in person volunteerism, we found innovative ways to volunteer virtually during 2020. To support our national partnership with Feeding America, we engaged colleagues in a wellness challenge that allowed our colleagues to translate steps into meals donated to those facing hunger. Through our “Step Up to Fight Hunger” challenge our colleagues logged more than 540 million steps which generated a donation equivalent to 837,000 meals.further inclusion efforts.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
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The Company provides this vote under Section 14A of the Exchange Act and in recognition of our stockholders’ vote in 20152021 recommending that we hold a non-binding, advisory vote on executive compensation each year. Following that vote, the Board affirmed that recommendation and electeddecided to hold futurecontinue holding “say-on-pay” advisory votes on an annual basis.
With this item, stockholders may submit an advisory vote on the compensation of our CEO and other named executive officers listed in the 20202021 Summary Compensation Table. We encourage stockholders to review the complete description of our executive compensation program provided in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables, and accompanying narrative, which describe the ways we seek to align the interests of our executives with those of our stockholders.
We ask our stockholders to vote on the following resolution at the Annual Meeting.
RESOLVED, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers in the 20202021 Summary Compensation Table, as disclosed pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and accompanying narrative).
Although the vote on this proposal is advisory and therefore non-binding, the Compensation and HR Committee will carefully consider the results of this vote when making future compensation decisions.
This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program and how we paid our named executive officers (“NEOs”) for 2020.2021. The Company’s NEOs for the 20202021 year are as follows:
Name of Executive | Position | |
Bruce Van Saun | Chairman and Chief Executive Officer | |
John F. Woods | Vice Chairman and Chief Financial Officer | |
Donald H. McCree III | Vice Chairman and Head of Commercial Banking | |
Malcolm Griggs | Executive Vice President, | |
| Executive Vice President and |
The CD&A is divided into fivefour sections:
Section 1: Executive Compensation Overview
Section 2: Determining ExecutiveNEO Compensation
Section 3: NEO Compensation for the 2020 Performance Year
Section 4: Other Compensation and Benefits
Section 5:4: Governance Policies and Practices
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
SECTION 1. EXECUTIVE COMPENSATION OVERVIEW
Executive Compensation Philosophy
The fundamental principles that guide the design and implementation of compensation programs for our NEOs include:
 | Attract, retain, motivate and reward high-caliber executives to deliver long-term business performance. | |
| Provide alignment between annual and long-term compensation for executives and the Company’s strategic plan. | |
| Support a culture where colleagues recognize the importance of serving customers well and are rewarded for superior performance. | |
| Encourage the creation of value over the long-term and align the rewards received by executives with returns to stockholders. | |
| Design compensation in a manner that promotes a culture of risk management and accountability. | |
Alignment of Pay and Performance & Material Changes during 2020
Our executive compensation program is designed to ensure that executive pay is aligned with Company performance and delivery to stockholders. Over the past six years, we have consistently demonstrated the ability to set a course, develop a plan, and execute well. This execution, led by our CEO, Bruce Van Saun, has resulted in consistently improving financial results and strong returns for our stockholders with Total Shareholder Return of 85% since our September 24, 2014 initial public offering through December 31, 2020, as compared to weighted peer average Total Shareholder Return of 62%.* We feel that the compensation for Mr. Van Saun and his team has been commensurate with this performance.
2020 has been a challenging year for the Company as it has been for most companies due to the economic impact of the COVID-19 pandemic, which was exacerbated by the implementation of the CECL accounting standards amidst the pandemic. Our management team has responded nimbly to the challenges presented, pivoting our strategy to best serve customers during this time and to ensure the safety and continued support of our colleagues and communities. Despite the challenges, our financial performance has continued to be solid, with strong performance relative to our peers on key metrics. Please see the earlier section titled “Proxy Statement Summary—Our Financial Performance.”Despite our strong 2020 relative performance, 2020 performance year variable compensation for all NEOs (including Mr. Van Saun) is down -11.1% as compared to 2019, in recognition of COVID-19 and decreased earnings. In addition, Mr. Van Saun’s 2020 performance year total compensation is down -9.5% as compared to 2019 and is also -9.0% below his target total compensation of $9.94 million. In comparison, variable compensation for all colleagues participating in our discretionary bonus program is down -6.3% on average. 2020 performance year compensation is illustrated in “—Section 3. NEO Compensation for the 2020 Performance Year.”
Within weeks following the March 2020 grant of our 2020 performance stock units (“PSUs”), the Average Return on Average Tangible Common Equity (“ROTCE”) and Cumulative Diluted Earnings Per Share (“Diluted EPS”) targets established for these awards no longer represented the expected performance of our Company over the next three years and were also not in line with market expectations. As a result and because the largest component of our executives’ compensation is awarded in the form of PSUs, our 2020 compensation program no longer provided the appropriate incentive and target compensation levels for our senior management team.
Following extensive discussions by the Compensation and HR Committee over the course of an eight-month period, on December 16, 2020, the Compensation and HR Committee modified the targets for the 2020 PSU awards consistent with analyst expectations as of December 15, 2020 and imposed a maximum payout of 100% of target (reduced from 150%).
* Peer average is market cap weighted and includes CMA, FITB, HBAN, KEY, MTB, PNC, RF, TFC and USB.
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The revised targets are intended to provide a meaningful incentive for the Company’s leadership team that aligns rewards with stockholder interests. The Compensation and HR Committee feels confident that the 2020 PSU modifications will help to effectively incent senior management and reward their efforts to enable the Company to emerge from this crisis and continue to deliver long-term value to stockholders. It should also be noted that in assessing final payouts under the 2018 PSUs no adjustments were made despite the impact of the pandemic on 2020 performance. For additional detail, see “—Variable Compensation Mix—2020 PSU Modification.”
Additional Changes in Light of Stockholder Feedback and Continuous Review of our Program
The Compensation and HR Committee considers the results of the Company’s advisory say-on-pay vote as one of various inputs in determining our stockholder outreach strategy for the upcoming year. Following the results of our advisory say-on-pay vote dropping slightly below 90% in April 2020, we expanded our stockholder outreach efforts to encompass our top 50 stockholders, who hold over 75 percent of our outstanding stock, including select stockholders that voted against say-on-pay. During the course of 2020 we held meetings with multiple stockholders, representing over 25 percent of our outstanding stock. As discussed in further detail in “Corporate Governance Matters—Stockholder Engagement—Stockholder Outreach” these conversations touched on various topics, including executive compensation.
In addition, throughout each year the Compensation and HR Committee’s independent consultant provides updates regarding executive compensation trends, best practices, and regulatory developments in order to assist the Compensation and HR Committee in determining whether any changes to our executive compensation program should be considered.
As a result of stockholder feedback and ongoing reviews of market and peer practice, we have made several changes to our compensation practices and related disclosure over the past few years, including the following actions:
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Modified executive pay mix. Our review of market practice over the course of the past few years has revealed that our executive team has a higher portion of their variable compensation awarded in the form of performance awards than peers. As a result, for 2020 the Compensation and HR Committee determined that the portion of variable compensation for NEOs and other senior management members awarded in PSUs should be reduced by 5%, with that 5% shifted into additional time-based restricted stock units. Even with this change, our Chief Executive Officer, Chief Financial Officer, and Heads of Consumer and Commercial Banking continue to have nearly two-thirds (64%) of their long-term awards granted in the form of PSUs.
Increase in stock ownership requirements. We increased our CEO’s stock ownership requirement to 6x base salary (from 5x) and directors’ stock ownership requirement to 5x annual cash retainer (from 4x) in 2019.
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Expanded disclosure of colleague demographics. We recently increased our level of disclosure with regard to colleague demographics on our company website.
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Highlights of our Pay Practices
We believe our pay practices demonstrate our commitment to alignment with stockholders’ interests and our dedication to maintaining a compensation program supported by strong corporate governance, as exemplified by the following practices:
What We Do | ||||||||||
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Pay for performance. A significant portion of our executives’ compensation is awarded in the form of awards that are earned based on a combination of Company, |
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  | Variable compensation funding and executive compensation awards dependent on risk performance indicators. Our overall variable compensation funding as well as individual executive compensation awards are determined based on a number of factors, including but not limited to, risk performance and | |||||||||
| | Pay subject to clawback. In addition to clawback required by law, we have a broad-based process through which events having a material adverse impact on the Company are reviewed for potential impact on compensation, including risk-based events. | |||||||||
| | Robust compensation plan governance. Our compensation plans are subject to a robust governance process that involves review by control partners, including risk, legal, human resources, and finance. The plans are subject to a risk review by the Compensation and HR Committee on an annual basis and by an independent third-party every three years to ensure impartiality and alignment with market practice. | |||||||||
| Stock ownership and retention guidelines. Our executives and directors are subject to stock ownership and retention guidelines (CEO - 6x base salary; Executive Committee members (including NEOs) - 3x base salary; Directors - 5x annual cash retainer). | |||||||||
| | Annual say-on-pay vote. We submit our executive compensation to an annual say-on-pay vote in order to elicit regular feedback from stockholders. | |||||||||
| | Stockholder engagement. We proactively engage with key stockholders in order to elicit their feedback on various topics, including executive compensation. | |||||||||
| | Independent compensation consultant. The Compensation and HR Committee engages an independent compensation consultant, who is not otherwise engaged by management. | |||||||||
2022
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| What We Don’t Do | ||||||||||
| No single trigger vesting of equity awards or cash payments. We do not provide for any single trigger vesting of equity awards or severance payments upon a change of control. Vesting and payments require a subsequent termination without cause or resignation with good reason. | |||||||||
 | No tax
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| | Prohibition against hedging and
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| | Dividend equivalents not paid on unearned or unvested | ||||||||
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Our equity plan prohibits option repricing and liberal share | |||||||
Changes Following Ongoing Review of our Program
Throughout each year, the Compensation and HR Committee continuously monitors our executive compensation program in light of trends, best practice, market conditions, and regulatory developments in order to determine whether any changes should be considered. This review is done in consultation with the Compensation and HR Committee’s independent consultant as well as Company management.
The Compensation and HR Committee also considers the results of the Company’s advisory say-on-pay vote. In 2021, we received support of over 92 percent on our say-on-pay vote. In addition, feedback from our stockholders is considered. On an annual basis, we proactively reach out to our largest stockholders to solicit feedback on various topics, including executive compensation, and also hold discussions with additional stockholders at their request. As we continued to navigate through these exceptional times it was more important than ever to hear from our investors. During 2021, we conducted two outreach programs, during the course of which we met with multiple stockholders representing approximately 38 percent of our outstanding stock. Stockholders we have spoken to have been supportive of our executive compensation program and related disclosures.
As a result of the ongoing review of compensation program and related disclosure, over the past few years we have taken the following actions:
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| the Compensation and HR Committee based on performance relative to several quantitative and qualitative metrics across four quadrants of performance (financial, customer, risk, and human capital), each of which is crucial to our long-term success. Maximum payout under the awards is limited to 125% of target. In the event that a recipient were to resign voluntarily prior to the vesting date, the award would be forfeited. As we look toward the future, the Compensation and HR Committee believes these awards are a critical tool to further incentivize Citizens’ strong emergence from this crisis and continued delivery of long-term value to stockholders. |
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| • | Expanded disclosure regarding how DE&I progress is considered in determining executive compensation. This proxy statement expands on how performance with regard to DE&I initiatives is considered in determining NEO compensation, including both how it generally fits within our methodology and the identification of specific 2021 DE&I accomplishments for each NEO. See “—Section 2. Determining NEO Compensation.” |
| • | Enhancements to executive performance and compensation disclosure. This proxy statement features simplified disclosure of each NEO’s key accomplishments and performance year compensation. See “—Section 2. Determining NEO Compensation.” |
| • | Disclosure of pay equity analysis results. We engage an independent third-party to regularly perform a pay equity analysis to assess whether equal pay is received for equal work throughout our organization, accounting for factors that appropriately explain differences in pay such as performance, time in role, and experience. In 2021, we began disclosing results of our most recent pay equity analysis, a practice we intend to continue. See “Corporate Responsibility—Human Capital Management—Commitment to Pay Equity.” |
Elements of our Executive Compensation Program
Our executive compensation program is composed of base salary, variable compensation (including short-term and long-term awards), and other benefits. The below chart reflects the proportion of NEOs’ 20202021 direct total compensation (excluding performance-based retention awards granted in May 2021) that is at-risk and not guaranteed (84%(87% for the CEO and 77%80% on average for other NEOs). In addition, the below table summarizes the key characteristics of each element of compensation.
Chief Executive Officer Salary, 13% PSUs, 38% Salary, 16%39% Cash, 25%26% RSUs, 21% 84%22% 87% At-Risk Other NEO Average PSUs, 27%32% Salary, 23%20% Cash, 27%26% RSUs, 23% 77%22% 80% At-Risk
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| Element of Pay | Objective | Key Characteristics | ||
| Base Salary | To attract and retain talented executives who can effectively lead the organization to achieve our strategic objectives. | Base salaries are intended to fairly compensate executives for the positions held. Salaries are reviewed annually and are subject to change at the Compensation and HR Committee’s discretion if, among other reasons, the executives’ responsibilities change materially or there are changes in the competitive market environment. | ||
| Variable Compensation | To support a culture where colleagues recognize the importance of serving customers well and are rewarded for their individual contributions and our collective success and to align compensation with stockholders’ interests. | Variable compensation is designed to reward achievement of long-term objectives and annual progress toward those objectives. The determination of overall funding for variable compensation is informed by a process that includes a comprehensive review of Company performance through multiple dimensions including the following: key financial performance measures, risk performance, delivery to stakeholders (customers, colleagues, stockholders, regulators, and community), progress on strategic initiatives, performance relative to peer companies (including relative performance improvement), and the amount of the pool as a percentage of our pre-tax, pre-incentive operating profit. | ||
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| Long-Term Awards | Granted in the form of performance stock units (“PSUs”) and restricted stock units (“RSUs”), long-term awards are intended to tie executive pay to the interests of stockholders by driving achievement of long-term objectives and to provide a retention incentive for executives. The value actually realized by executives varies based on stock price movement and, in the case of PSUs, other financial performance factors. | |||
| Short-Term Awards | The remaining portion of variable pay is delivered in | |||
Other Benefits | To give executives an opportunity to provide for their retirement and address other specific needs. | Our NEOs are eligible to participate in our Company-sponsored benefit programs, including our broad-based 401(k) plan and employee stock purchase plan, on the same terms and conditions that apply to all of our colleagues. In addition, we provide certain limited perquisites to our NEOs, which are described in further detail in “ | ||
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Variable Compensation Mix
The Compensation and HR Committee believes that our variable compensation mix delivers a meaningful portion of NEOs’ variable compensation in the form of long-term equity awards (60-70%), in line with regulatory expectations. Further, our CEO, CFO and Heads of Consumer and Commercial Banking have nearly two-thirds (64%) of their long-term awards granted in the form of PSUs. The Compensation and HR Committee reviews the variable compensation mix applicable to our executives on an annual basis prior to year-end.
The below chart reflects the elements of our variable compensation program (PSUs, RSUs, and annual cash bonuses), with the key design features of each described further below.
CEO, CFO, Heads of BusinessesBusiness Cash 30% PSUs 45% Cash 30% RSUs 25% 70% Long-Term Incentive Other NEOsChief Risk Officer & General Counsel PSUs 25% Cash 40% RSUs 35% 60% Long-Term Incentive
Element
| Key Design Features
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Performance Stock Units |
Performance Period: 3 years
Core Performance Metrics:
• Cumulative Diluted Earnings Per Share (50%) • Average Return on Average Tangible Common Equity (50%)
Modifier Metric:
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Payout Range:
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Vesting Date: 3rd anniversary of grant
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Restricted Stock Units |
Vesting: 3-year annual pro-rata
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Cash Bonus |
Paid annually, with executives having the option to defer up to 80% under the Company’s nonqualified deferred compensation
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Performance Stock Units Design & Target Setting
The Compensation and HR Committee reviews and determines PSU design annually in consultation with its compensation consultant. For the 20202021 grants, the Compensation and HR Committee determined that Cumulative Diluted Earnings Per Share (“Diluted EPS”) and Average Return on Average Tangible Common Equity (“ROTCE”) continued to be appropriate core metrics for the Company’s PSU awards because these metrics remain an integral element of the Company’s strategic plan.
| • | Diluted EPS: Diluted earnings per share is a common metric used by investors to evaluate the profitability of a company and shows the earnings (net income) we make on each outstanding share of common stock. |
We define “Diluted EPS” as net income divided by weighted average diluted common shares outstanding, as reported on an Underlying basis consistent with our external earnings reporting. See Appendix A for information on Non-GAAP Financial Measures and their calculation or reconciliation to GAAP financial measures.
| • | ROTCE: Return on average tangible common equity measures profitability by showing how much profit we generate (net income) with the money our stockholders have invested. |
We define “ROTCE” as net income available to common stockholders divided by average common equity excluding average goodwill (net of related deferred tax liabilities) and average other intangible assets, as reported on an Underlying basis consistent with our external earnings reporting. See Appendix A for information on Non-GAAP Financial Measures and their calculation or reconciliation to GAAP financial measures.
As a complement to our absolute metrics and following conversations with stockholders, the Compensation and HR Committee modified our PSU design commencing in 2020 to include relative TSR as a metric.metric commencing with 2020 grants. Diluted EPS and ROTCE remain our core metrics for the reasons described above, with the payout percentage multiplied by 110% if our TSR during the performance period is in the top quartile of our peer group or by 90% if our TSR is in the bottom quartile of our peer group as illustrated below, subject to a maximum payout of 150% of target.target (including application of the TSR modifier). Information regarding our peer group is discussed below in “—Section 5.4. Governance Policies and Practices—Compensation Peer Group.”
stepStep 1: calculate core metric payouts stepCalculate Core Metrics Payouts Step 2: apply relative modifierApply Relative Modifier (if applicable) stepStep 3: compensationCompensation & hr committee approves final award payout %50% 3-year cumulative dilutedHR Committee Approves Final Awards Payout % 50% 3-Year Cumulative Diluted EPS + 50% 3-year average3-Year Averaged ROTCE x top quartile 3-year tsr:* Top Quartile 3-Year TSR: 110% of payout Or bottom quartile 3-year tsr:Payout OR Bottom Quartile 3-Year TSR: 90% of payoutPayout = 20202021 PSU award payoutAward Payout %
Targets for Diluted EPS and ROTCE for 2020 PSU awards were set by the Compensation and HR Committee, together with management in February 2020, following the consideration of historic performance, market conditions, analyst expectations, the competitive landscape, and internal goals at the time.
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2020Targets for Diluted EPS and ROTCE for 2021 PSU Modification
One impact of the economic downturn resulting from the pandemic and related market conditions, which was exacerbated by the implementation of the CECL accounting standards amidst the pandemic, was that the 2020-22 targets associated with our executive team’s 2020 PSUs no longer represented the expected performance of our Company over the next three years andawards were also not in line with market expectations. As a result and because the largest component of our executives’ compensation is awarded in the form of PSUs, our 2020 compensation program no longer provided the appropriate incentive and target compensation levels for senior management.
The Compensation and HR Committee began discussing this issue in April 2020, and discussions continued over an eight-month period during the course of four regularly scheduled meetings and two additional special meetings. One key point discussed was that because the Company’s PSUs primarily utilize absolute metrics, they are less forgiving in an economic downturn than many of our peers’ awards that feature exclusively relative metrics or a combination of absolute and relative metrics. In addition, the level of performance required to meet threshold payout level for our awards has historically been quite high as compared to threshold level at our peers and other financial services companies utilizing absolute return metrics. Prior to modification of the 2020 PSUs those awards had the ROTCE threshold set at 92% of target. By way of comparison, the average threshold as a percent of target was 68% for select financial services companies that utilize absolute return measures, as identified by the Compensation and HR Committee’s independent consultant. Originally, our intention behind setting such a high threshold level to achieve any payout was to work toward aggressively closingCommittee, together with management in February 2021, following the gap between the Company and our peers in termsconsideration of absolute financial metrics. However, these targets did not take into consideration the economic impact of a pandemic or loss provisions under CECL during the height of a pandemic, therefore rendering achievement of thehistoric performance, goals impractical in the current environment.
Following these discussions, on December 16, 2020, the Compensation and HR Committee modified the targets for these awards consistent withmarket conditions, analyst expectations, as of December 15, 2020the competitive landscape, and imposed a maximum payout of 100% of target (reduced from 150%). The revised targets are intended to provide a meaningful incentive forinternal goals at the Company’s leadership team that aligns rewards with stockholder interests, encouraging the management team to focus on executing our strategic plan through the crisis and long-term value creation. The Compensation and HR Committee feels confident that the 2020 PSU modifications will help to effectively incent senior management and reward their efforts to enable the Company to emerge from this crisis and continue to deliver value to stockholders.
These awards (prior to and following modification) will become vested in March 2023, will be settled in shares of Company common stock, and these modifications are being made to all holders of 2020 PSU grants. Additionally, the +/-10% relative TSR modifier continues to apply to the modified awards; however, in no case will the earned award be greater than 100% of the target number of shares.time.
SECTION 2: DETERMINING EXECUTIVENEO COMPENSATION
The Compensation and HR Committee continues to believe that it is important to retain its discretion to determine executive compensation in order to ensure that we continue to build stockholder value while promoting the stability and growth of the Company. More specifically, the Compensation and HR Committee exercises structured discretion in making these decisions, which is informed by a number of qualitative and quantitative performance metrics across various dimensions.
The This process for determining compensation provides the Compensation and HR Committee believesflexibility to make appropriate compensation decisions in years that present exigent macroeconomic conditions, as was the case during 2020, without having to override our methodology. In addition, we believe that reviewing multiple dimensions of performance in determining payand allowing the Compensation and HR Committee to exercise discretion facilitates management’s focus on Company performance overall, and mitigatesthereby mitigating the risk of disproportionate focus on certain elements of performance. Further, because long-term equity awards represent 60-70% of annual variable compensation for our NEOs, we believe this helps to ensure long-term alignment with stockholders’ interests.
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The below diagram reflects the inputs considered by the Compensation and HR Committee in determining compensation for our NEOs. These inputs represent both objective and subjective considerations, and the Compensation and HR Committee does not favor one measure over another or apply a particular formula or weighting. Under “Performance Considerations” in the graphic below we have listed the various lenses through which performance is evaluated in determining executive pay, which go beyond financial and business delivery goals to include various other facets of performance that we feel are integral to the Company’s long-term success. Among the Human Capital performance considerations is progress on and commitment to DE&I initiatives. For each NEO, the Compensation and HR Committee specifically reviews performance relative to DE&I initiatives. Some key achievements of our NEOs that were considered by the Compensation and HR Committee in making 2021 compensation decisions, including DE&I-related accomplishments, are disclosed below in “Section 2.—Determining NEO Compensation—NEO 2021 Performance Year Compensation.” It should also be noted that the Risk Committee and Audit Committee review performance and approve compensation for the Chief Risk Officer and Chief Audit Executive, respectively.
After executive compensation decisions are made, the total variable compensation amount for each executive is awarded in accordance with the predetermined pay mix applicable to each executive, as further described earlier in “Section 1. Executive Compensation Overview—Variable Compensation Mix.”
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Determining NEO Compensation Step 1: performance considerationsPerformance Considerations Step 2: market practiceMarket Practice & other considerationsOther Considerations Step 3: final decisionFinal Decision The Compensation and HR Committee considers various aspects of Company and individual performance that collectively indicate our Company's success, including: The Compensation and HR Committee also considers the following information in making executive compensation decisions: Once all inputs are reviewed, the Compensation and HR Committee exercises its structured discretion based on members' judgment to determine variable compensation and salary for each NEO that is consistent with Company performance. financialFinancial & business delivery customer outcomes strategic initiative human capital risk & control e.g., financialBusiness Delivery Financial performance compared to our budget/strategic plan, consensus, and peers including(including growth rate andrate), quality of earnings e.g.,Customer Outcomes Customer satisfaction, deepening of existing customer relationships, new customer acquisition Strategic Initiatives M&A execution and relationship deepening e.g., execution ofintegration, digitization, technology initiatives, cost savings initiatives and M&A activities e.g., diversityHuman Capital Diversity, equity, and inclusion talent development,and ESG initiatives, colleague attraction and retention, and colleague culture survey results e.g., deliveryRisk & Control Delivery against regulatory expectations, and control environment, peer datarisk culture Peer Data & compensation history ceo & chro recommendations risk rating by chief risk officer independent compensation consultant input target compensation (for ceo)Compensation History Compensation paid to executivesexecutive in similar roles by our peer group as well as additional organizations with which we compete for talent, although we do not benchmark compensation at a specified level. Each NEO's compensation history and year-over-year position are also considerations for variable pay decisions. CEO & CHRO Recommendations The CEO's perspective on executive performance and pay as well as additional context from the Chief Human Resources Officer, regarding executives other than themselves. Risk Ratings by Chief Risk Officer Risk ratings assigned to executives by the Chief Risk Officer as part of the annual risk review process, based on feedback from second line of defense Risk partners. Independent Compensation Consultant Input The perspective of Compensation Advisory Partners, the independent compensation consultant to the Compensation and HR Committee, with regard to Company performance and market pay practices. Target Compensation (for CEO) For the CFO his target compensation amount is considered, which was increased from $9.0MM to $9.94MM in June 2019 in line with peer group median. The CEO's target compensation did not change in 2020. However, this target is intended to serve only as a reference point.
In addition,point.Determining NEO Compensation Step 1: Performance Considerations Step 2: Market Practice & Other Considerations Step 3: Final Decision The Compensation and HR Committee considers various aspects of Company and individual performance that collectively indicate our Companys success, including: The Compensation and HR Committee also considers the Risk Committee and Audit Committee review performance and approve compensation for the Chief Risk Officer and Chief Audit Executive, respectively.
Afterfollowing information in making executive compensation decisionsdecisions: Once all inputs are made, the total variable compensation amount for each executive is awarded in accordance with the predetermined pay mix applicable to each executive, as further described earlier in “—Section 1. Executive Compensation Overview—Variable Compensation Mix.”
Assessment of 2018 PSUs
On February 10, 2021,reviewed, the Compensation and HR Committee assessedexercises its structured discretion based on members judgment to determine variable compensation and salary for each NEO that is consistent with Company performance. Financial & Business Delivery Financial performance compared to our budget/ strategic plan, consensus, and peers (including growth rate), quality of earnings Customer Outcomes Customer satisfaction, deepening of existing customer relationships, new customer acquisition Strategic Initiatives M&A execution and integration, digitization, technology initiatives, cost savings initiatives Human Capital Diversity, equity, and inclusion and ESG initiatives, colleague attraction and retention, colleague survey results Risk & Control Delivery against regulatory expectations, control environment, risk culture Peer Data & Compensation History Compensation paid to executives in similar roles by our peer group as well as additional organizations with which we compete for talent, although we do not benchmark compensation at a specified level. Each NEOs compensation history and year-over-year position are also considerations for variable pay decisions. CEO & CHRO Recommendations The CEOs perspective on executive performance and pay as well as additional context from the performance levelChief Human Resources Officer, regarding executives other than themselves. Risk Ratings by Chief Risk Officer Risk ratings assigned to executives by the Chief Risk Officer as part of PSUs granted in 2018 relatingthe annual risk review process, based on feedback from second line of defense Risk partners. Independent Compensation Consultant Input The perspective of Compensation Advisory Partners, the independent compensation consultant to the 2017Compensation and HR Committee, with regard to Company performance year (“2018 PSU Award”). Halfand market pay practices. Target Compensation (for CEO) For the CEO his target compensation amount is considered, which is $9.94MM. However, this target is intended to serve only as a reference point.Determining NEO Compensation Step 1: Performance Considerations Step 2: Market Practice & Other Considerations Step 3: Final Decision The Compensation and HR Committee considers various aspects of each 2018 PSU Award has been earnedCompany and individual performance that collectively indicate our Company's success, including: The Compensation and HR Committee also considers the following information in making executive compensation decisions: Once all inputs are reviewed, the Compensation and HR Committee exercises its structured discretion based on achievementmembers' judgment to determine variable compensation and salary for each NEO that is consistent with Company performance. Financial & Business Delivery Financial performance compared to our budget/strategic plan, consensus, and peers (including growth rate), quality of pre-established Diluted EPS goalsearnings Customer Outcomes Customer satisfaction, deepening of existing customer relationships, new customer acquisition Strategic Initiatives M&A execution and half has been earnedintegration, digitization, technology initiatives, cost savings initiatives Human Capital Diversity, equity, and inclusion and ESG initiatives, colleague attraction and retention, colleague survey results Risk & Control Delivery against regulatory expectations, control environment, risk culture Peer Data & Compensation History Compensation paid to executive in similar roles by our peer group as well as additional organizations with which we compete for talent, although we do not benchmark compensation at a specified level. Each NEO's compensation history and year-over-year position are also considerations for variable pay decisions. CEO & CHRO Recommendations The CEO's perspective on executive performance and pay as well as additional context from the Chief Human Resources Officer, regarding executives other than themselves. Risk Ratings by Chief Risk Officer Risk ratings assigned to executives by the Chief Risk Officer as part of the annual risk review process, based on achievementfeedback from second line of pre-established ROTCE goals,defense Risk partners. Independent Compensation Consultant Input The perspective of Compensation Advisory Partners, the independent compensation consultant to the Compensation and HR Committee, with an overall maximum payout of 150% of target.regard to Company performance and market pay practices. Target Compensation (for CEO) For the CFO his target compensation amount is considered, which $9.94MM. However, this target is intended to serve only as a reference point.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
TheNEO 2021 Performance Year Compensation and HR Committee approved a final payout percentage of 118.9% of target based on the results reflected in the below table. Average ROTCE results represent a 30% improvement over the period as compared to our ROTCE as of December 31, 2017 and cumulative Diluted EPS results represent a CAGR of 16% over the period. In assessing final payouts under the 2018 PSUs no adjustments were made despite the impact of the pandemic on 2020 performance.
The below table also reflects the ROTCE and Diluted EPS thresholds, targets and maximums for the 2018 PSU Award. In addition, performance results for the period of 2015-2017 reflected below are intended to illustrate the rigor of the targets in light of the Company’s ongoing execution of its turnaround plan at the time the targets were established.
| Metric |
2015-2017 Results
| 2018 PSU Award Targets
|
2018-2020 Normalized*
|
2018 PSU Award Final Payout (% of Target)
| |||||||||||||||||||||||||||||||
Threshold
| Target
| Maximum
| |||||||||||||||||||||||||||||||||
3-Year Average ROTCE
|
8.02%
|
10.64%
|
12.27%
|
13.23%
|
12.69%
|
115.7%
|
118.9%
| ||||||||||||||||||||||||||||
3-Year Cumulative Diluted EPS
|
$6.12
|
$8.41
|
$10.87
|
$11.84
|
$11.42
|
122.2%
| |||||||||||||||||||||||||||||
*2020 normalized results calculated using the incurred loss methodology for credit provisioning for consistency with earlier years. See Appendix A for more information on Non-GAAP Financial Measures and their calculation or reconciliation to GAAP financial measures.
SECTION 3. NEO COMPENSATION FOR THE 2020 PERFORMANCE YEAR
The below table reflects how the Compensation and HR Committee views the direct compensation earned by each of our NEOs for performance during 2020.2021. The amounts reported in this table differ from those reported in the 20202021 Summary Compensation Table, primarily due to SEC reporting rules forthe depiction of equity awards. First, the table below includes equity awards granted in March 20212022 relating to 20202021 performance, whereas, due to SEC rules, the 20202021 Summary Compensation Table includes equity grants made in 2021 for 2020 performance. Secondly, the table below excludes the PSU retention awards granted to management in May 2021 because those grants were made for 2019 performance. Second, SEC rules require the valuepurposes of an equity award modificationretention as opposed to be included in the Summary Compensation Tablecompensation for the year in which the modification occurs. As a result, the 2020 Summary Compensation Table includes the modification value for the 2020 PSUs as well as the original grant date value for 2020 PSUs, essentially reflecting these awards twice.
On the basis reflected below, 2020 variable compensation for all NEOs (including Mr. Van Saun) is down -11.1% as compared to 2019. In addition, Mr. Van Saun’s 2020 total compensation is down -9.5% as compared to 2019 and is also -9.0% below his target total compensation of $9.94 million. In comparison, variable compensation for all colleagues participating in our discretionary bonus program is down -6.3% on average.2021 performance year.
Variable Compensation | Total Compensation |
Variable Compensation | Total Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Base Salary | Cash(1) | Restricted Stock Units(2) | Performance Stock Units(2) | Total Variable | % Chg | Total Direct | % Chg | Base Salary | Cash(1) | Restricted Stock Units(2) | Performance Stock Units(2) | Total Variable | % Chg vs. | Total Direct | % Chg vs. | ||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Van Saun | $ | 1,487,000 |
| $ | 2,268,900 |
| $ | 1,890,750 |
| $ | 3,403,350 |
| $ | 7,563,000 |
|
| -11.2 | % | $ | 9,050,000 |
|
| -9.5 | % | $ | 1,487,000 |
| $ | 2,928,900 |
| $ | 2,440,750 |
| $ | 4,393,350 |
| $ | 9,763,000 |
|
| 29.1 | % | $ | 11,250,000 |
|
| 24.3 | % | ||||||||||||||||
John F. Woods | $ | 700,000 |
| $ | 852,000 |
| $ | 710,000 |
| $ | 1,278,000 |
| $ | 2,840,000 |
|
| -9.1 | % | $ | 3,540,000 |
|
| -7.5 | % | $ | 700,000 |
| $ | 1,105,000 |
| $ | 837,500 |
| $ | 1,507,500 |
| $ | 3,450,000 |
|
| 21.5 | % | $ | 4,150,000 |
|
| 17.2 | % | ||||||||||||||||
Donald H. McCree III | $ | 700,000 |
| $ | 864,000 |
| $ | 720,000 |
| $ | 1,296,000 |
| $ | 2,880,000 |
|
| -12.7 | % | $ | 3,580,000 |
|
| -10.5 | % | $ | 700,000 |
| $ | 1,065,000 |
| $ | 887,500 |
| $ | 1,597,500 |
| $ | 3,550,000 |
|
| 23.3 | % | $ | 4,250,000 |
|
| 18.7 | % | ||||||||||||||||
Brendan Coughlin | $ | 625,000 |
| $ | 637,500 |
| $ | 531,250 |
| $ | 956,250 |
| $ | 2,125,000 |
|
| 49.1 | % | $ | 2,750,000 |
|
| 34.1 | % | ||||||||||||||||||||||||||||||||||||||||
Malcolm Griggs | $ | 535,000 |
| $ | 596,000 |
| $ | 521,500 |
| $ | 372,500 |
| $ | 1,490,000 |
|
| -11.0 | % | $ | 2,025,000 |
|
| -8.0 | % | $ | 535,000 |
| $ | 746,000 |
| $ | 652,750 |
| $ | 466,250 |
| $ | 1,865,000 |
|
| 25.2 | % | $ | 2,400,000 |
|
| 18.5 | % | ||||||||||||||||
Susan LaMonica | $ | 535,000 |
| $ | 586,000 |
| $ | 512,750 |
| $ | 366,250 |
| $ | 1,465,000 |
|
| -11.2 | % | $ | 2,000,000 |
|
| -8.0 | % | ||||||||||||||||||||||||||||||||||||||||
| (1) | The cash portion of |
| (2) | The number of Company shares subject to these awards was determined based on the Company’s closing share price on the grant date. Because these awards were granted in March |
In addition, this excludes the PSU retention awards because those are not considered compensation for the 2021 performance year. |
| |||
| (3) | The summary compensation table value associated with the modification of performance targets for the 2020 PSU is excluded from 2020 performance year compensation and year-over-year comparisons. |
As discussed above in “—Section 2. Determining Executive CompensationCompensation””, the Compensation and HR Committee’s determination of executive compensation is based on various inputs, including Company and individual performance across various dimensions. The Compensation and HR Committee determined that the compensation amounts reflected in the preceding table were appropriate due to 20202021 Company performance described earlier in the “Proxy Statement Summary—Our FinancialStrategy and Performance”section and the following key achievements.
Bruce Van Saun, Chairman and Chief Executive Officer:
|
Led the effort to update the Company’s strategy in the wake of the pandemic and impact on customer needs and behaviors, including significant shifts to digital channels. Intense focus on expanding and accelerating our digital capabilities, investing in growth initiatives, fostering innovation and developing strong leaders.
Continued focus on additional efficiency actions to self-fund investments in our business despite an ongoing challenging economic backdrop, including incremental organizational simplification efforts, end-to-end digitization, and continued focus on our “Tapping our Potential” (“TOP”) Program.
Launched a number of programs to help customers navigate the crisis. In Consumer launched loan forbearance programs and kept our branches open for business, and in Commercial used our strong balance sheet to provide additional funding and/or loan modifications. Executed well on the Paycheck Protection Program (“PPP”), ultimately delivering approximately $5 billion in new loans, which helped 54,000 businesses and positively impacted over 500,000 jobs in the US. Our success in addressing customer needs can be seen by improvement in customer loyalty and satisfaction scores, including a 10-point increase in the Net Promoter Score for Business Banking as a result our of strong execution of the PPP.
Continued progress on the regulatory front, including a Technology control environment upgrade that was the culmination of several years of focus, risk programs that are successfully embedded into the business, an effective control environment and maturing conduct risk culture, and satisfactory regulatory ratings.
Prioritized the health and overall wellness of our colleagues throughout the crisis as well as establishing the right organizational culture, with the Company achieving first quartile results in McKinsey’s Organizational Health Index (“OHI”) survey. These results represent our continuous focus on human capital management initiatives since our initial public offering as well as our “colleague first” approach and leadership’s flexibility and empathy throughout the crisis.
Executed a smooth transition of leadership in the Consumer Banking business following the retirement of Brad Conner and continued progress in attracting and retaining top talent across the organization, including hiring a new Head of Wealth Management and Head of Investor Relations as well as continued talent investments in Technology and Digital.
* See Appendix A for information on Non-GAAP Financial Measures and their calculation or reconciliation to GAAP financial measures.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
John F. Woods, Vice Chairman and Chief Financial Officer:
Consistently led an enterprise change agenda throughout the year including the Company’s multi-faceted transformation initiatives.
Supported solid financial performance despite an unprecedented year of challenges, with record levels of fees, revenues, PPNR and liquidity, and continued the success of our TOP efficiency initiatives in order to self-fund investments in our business, with our TOP 6 program achieving approximately $225 million of pre-tax run-rate benefit in 2020.
Delivered on capital and liquidity needs through timely and efficient debt capital market transactions, including a sub-debt exchange offer and other transactions that materially increased qualifying capital and helped achieve a significant drop in deposit funding costs while simultaneously increasing deposit levels significantly.
Supported framework and evaluation of COVID-19 impacts and implications for strategy, allocating resources to fund organic development of customer capabilities, and identifying ways to address strategic gaps through inorganic opportunities.
Built out the innovation platform, including establishing a related internal technology framework and streamlining the process and related tools available to crowd source ideas more quickly and with increased ease.
Donald H. McCree III, Vice Chairman, Head of Commercial Banking:
Continued to deliver on our trusted advisor agenda. Delivered record years in high yield, M&A, and capital markets with the scale and complexity of transactions increasing. In addition, began to see solid sales momentum in our core treasury services, benefiting from our multi-year investment program, and our liquidity/deposit capabilities have been transformed.
Reorganized and launched six fully integrated investment banking led industry verticals resulting in increased expertise for our clients, increased pitch differentiation, and improved win rates. Successfully closed and integrated Trinity Capital, which brought new M&A advisory capabilities in the restaurant franchise space and continued to expand our client base in expansion markets.
Provided a high level of support to help our clients navigate through the disruption by implementing continuous client communication plans, redeploying resources to deliver PPP, accelerating decision making, and implementing enhanced cash burn analyses.
Responded aggressively to credit challenges, which not only helped our clients but also provided accurate and comprehensive analytics allowing us to triage the portfolio, drive corporate finance advisory and capital raising, and offer forbearance where appropriate.
Malcolm Griggs, Executive Vice President and Chief Risk Officer:
Continued effective delivery of the Company’s risk agenda. Strong risk management culture continues to be embedded in all divisions, governance programs continue to operate in an efficient and effective manner, the control environment and regulatory compliance areas remain strong, and we have enhanced our oversight capabilities for fraud and cyber security.
Successful implementation of CECL reserving methodologies, modeling of multiple economic scenarios in light of the economic impact of COVID-19, and implementation of detailed customer-impact analyses (including an industry leading cash-burn analysis for Commercial customers and forbearance analyses for Consumer customers, each performed quarterly) in order to improve the loan loss reserving process and provide early identification of customers needing extra attention and support. The Risk team was also key to the successful execution of the PPP.
|
Bruce Van Saun
Chairman and Chief Executive Officer
| Year | Base Salary |
Variable Compensation
|
Total Compensation
| |||||||||||||||
Cash Bonus
| RSUs | PSUs | Total |
YoY % Change
| Total |
YoY % Change
| ||||||||||||||
2021 | $1,487,000 | $2,928,900 | $2,440,750 | $4,393,350 | $9,763,000 | +29.1% | $11,250,000 | +24.3% | ||||||||||||
2020 | $1,487,000 | $2,268,900 | $1,890,750 | $3,403,350 | $7,563,000 | -11.2% | $9,050,000 | -9.5% | ||||||||||||
| Key Achievements | ||||||||
| Financial | Customer | Strategic | People | Risk | ||||
• Executed a strong technology agenda that has positioned our technology for the • Signed or completed several noteworthy acquisitions to build scale, expand geographic reach, and accelerate our strategic agenda, including the acquisition of HSBC East Coast Branches and Investors Bancorp in the NY Metro area. • Continued progress on strengthening our risk • Successfully evolved several senior leaders’ positions within the bank and continued to attract high caliber talent across the organization despite the ongoing “war for talent” and maintained our strong score in McKinsey’s Organizational Health Index survey (OHI) with our highest colleague participation to date. • Continued focus on DE&l with the execution of | ||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
|
John F. Woods
Vice Chairman and Chief Financial Officer
| Year | Base Salary |
Variable Compensation
|
Total Compensation
| |||||||||||||||
Cash Bonus
| RSUs | PSUs | Total |
YoY % Change
| Total |
YoY % Change
| ||||||||||||||
2021 | $700,000 | $1,105,000 | $837,500 | $1,507,500 | $3,450,000 | +21.5% | $4,150,000 | +17.2% | ||||||||||||
2020 | $700,000 | $852,000 | $710,000 | $1,278,000 | $2,840,000 | -9.1% | $3,540,000 | -7.5% | ||||||||||||
| Key Achievements | ||||||||
| Financial | Customer | Strategic | People | Risk | ||||
• Supported solid financial performance and continued the success of our TOP efficiency initiatives in order to self-fund investments in our business and offset revenue headwinds, with the TOP program exceeding 2021 investor commitments of $425 million pre-tax run rate improvement. • Executed several initiatives to further improve our capital and balance sheet position, including several debt capital market transactions, managing the deposit cost down over the past 18 months to close the cost gap to peers, and development of retail loans securitization capabilities to reduce capital consumption and increase returns. • Elevated the M&A agenda with the successful execution of multiple concurrent bank and fee-based transactions and provided leadership in the integration phase as the chair of the M&A Integration Steering Committee. • Effectively managing several top financial risks at the Company including liquidity, interest rate/ALM, Capital/CCAR, and controls over financial reporting. • Stepped up to co-sponsor the corporate DE&I agenda, providing oversight on formulation and execution of DE&I strategy and initiatives. | ||||||||
|
Donald H. McCree Ill
Vice Chairman and Head of Commercial Banking
| Year | Base Salary |
Variable Compensation
|
Total Compensation
| |||||||||||||||
Cash Bonus
| RSUs | PSUs | Total |
YoY % Change
| Total |
YoY % Change
| ||||||||||||||
2021 | $700,000 | $1,065,000 | $887,500 | $1,597,500 | $3,550,000 | +23.3% | $4,250,000 | +18.7% | ||||||||||||
2020 | $700,000 | $864,000 | $720,000 | $1,296,000 | $2,880,000 | -12.7% | $3,580,000 | -10.5% | ||||||||||||
| Key Achievements | ||||||||
| Financial | Customer | Strategic | People | Risk | ||||
• Delivered record financial performance in Commercial driven by strong fee generation and robust deposit growth. • Successfully positioned Commercial Banking for future growth through the successful acquisitions of JMP Group LLC, Willamette Management Associates, and the signed deal for DH Capital, each of which broaden capabilities and talent. • Deepened our coverage model and client advisory agenda, including the continued build out of industry verticals, the launch of a new lower middle market strategy, expansion of talent in M&A, Corporate Finance and the South and West Coast, which has resulted in strong new client acquisition, uptiering of client relationships, and above budget Corporate Finance revenues. • Continued as executive sponsor of PRISM, the bank’s multi-cultural business resource group, and improved representation of women and people of color in senior level roles since the start of the year and achieved strong diverse representation in the Commercial junior programs, with participants in this program typically becoming a feeder into senior leader roles over time. | ||||||||
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Formed
|
Brendan Coughlin
Executive Vice President and Head of Consumer Banking
| Year | Base Salary |
Variable Compensation
|
Total Compensation
| |||||||||||||||
Cash Bonus
| RSUs | PSUs | Total |
YoY % Change
| Total |
YoY % Change
| ||||||||||||||
2021
|
$625,000
|
$637,500
|
$531,250
|
$956,250
|
$2,125,000
|
+49.1%
|
$2,750,000
|
+34.1%
| ||||||||||||
| Key Achievements | ||||||||
| Financial | Customer | Strategic | People | Risk | ||||
• Mr. Coughlin continues to execute the change agenda that he introduced upon assuming the role of Head of Consumer Banking in 2020, including acceleration of digital adoption with enhanced digital capabilities for customers and the achievement of major technology milestones to modernize the bank and position it for sustained growth, including a new Student Lending originations platform, HELOC FastlineTM, and expansion of Citizens Pay, each contributing to the achievement of our highest Consumer NPS score to date. • Strong execution of growth agenda with the entrance into agreements to acquire HSBC East Coast branches and their digital bank as well as Investors Bancorp, which will collectively expand the Company’s consumer bank across four important markets (Metro NYC, NJ, Washington DC, and South Florida). • Material progress repositioning our deposit franchise resulting in industry-leading low-cost deposit growth and strong primary household growth and the successful launch of a new Wealth business strategy resulting in record performance in 2021 and scaling at a rate faster than market. • Continued focus on DE&I with the addition of several diverse colleagues to the Consumer senior management team in strategic, mission-critical roles. | ||||||||
|
Malcolm Griggs
Executive Vice President, Chief Risk Officer & General Counsel
| Year | Base Salary |
Variable Compensation
|
Total Compensation
| |||||||||||||||
Cash Bonus
| RSUs | PSUs | Total |
YoY % Change
| Total |
YoY % Change
| ||||||||||||||
2021 | $535,000 | $746,000 | $652,750 | $466,250 | $1,865,000 | +25.2% | $2,400,000 | +18.5% | ||||||||||||
2020 | $535,000 | $596,000 | $521,500 | $372,500 | $1,490,000 | -11.0% | $2,025,000 | -8.0% | ||||||||||||
| Key Achievements | ||||||||
| Financial | Customer | Strategic | People | Risk | ||||
• Took on the role of Chief Legal Officer/General Counsel in addition to Chief Risk Officer duties, providing strong leadership to both organizations. • Continued to deliver on the Company’s risk agenda, balancing risk and return. Further streamlined and improved risk governance, continued to develop and enhance stress scenarios for capital planning and reserve models, maintained excellent credit quality while meeting customers needs through the pandemic, and maintained strong risk oversight in second line of defense and effective regulatory relationships. • Provided legal support for acquisitions, including contracts, compliance analysis, and integration planning. Improved the efficiency of legal processes and provided legal team members with additional development opportunities. • Strong execution of the diverse hire commitment in the fulfillment of open Legal and Risk roles, with diverse candidates ultimately hired for at least half of open roles in each function. | ||||||||
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Performance Assessment of 2019 PSUs
On February 25, 2022, the Compensation and HR Committee approved the performance assessment of PSUs granted in 2019 relating to the 2018 performance year (“2019 PSU Award”). Half of each 2019 PSU Award was earned based on achievement of pre-established Diluted EPS goals and half was earned based on achievement of pre-established ROTCE goals, with an overall maximum payout of 150% of target.
The Compensation and HR Committee approved a new Non-Financial Risk department to deepenfinal payout percentage of 70.3% of target based on the integration of complianceresults reflected in the below table. The pandemic was not foreseen when these awards were made, and operational risk in order to more effectively anticipatehad a dramatic impact on performance, which impacted this payout. The below table also reflects the ROTCE and prevent operational process weaknesses that could lead to compliance errors.
Susan LaMonica, Executive Vice PresidentDiluted EPS thresholds, targets, and Chief Human Resources Officer:maximums for the 2019 PSU Award.
| Metric |
2016-2018 Results
| 2019 PSU Award Targets
| 2019-2021 Normalized*
| 2019 PSU Award Final Payout (% of Target)
| ||||||||||
Threshold
| Target
| Maximum
| ||||||||||||
3-Year Average ROTCE
|
10.15%
|
12.41%
|
13.45%
|
14.71%
|
12.41%
|
50.0%
| 70.3% | |||||||
3-Year Cumulative Diluted EPS
|
$8.07
|
$10.14
|
$12.67
|
$14.06
|
$11.96
|
90.6%
| ||||||||
Supported an unprecedented*Normalized results for 2020 and ongoing level of change at an accelerated pace driven by2021 have been calculated using the crisis andincurred loss methodology for credit provisioning for consistency with earlier years. In normalizing results, the Company’s transformation, including moving approximately 10,000 colleagues to remote work while ensuring the safety of critical staff that needed to continue to come into the office, supporting the execution of the PPP by securing approximately 1,000 external resources and training approximately 1,400 people within a few weeks, implementing hazard pay programs and special benefit programs, pivoting to provide effective colleague and community support remotely, and frequently communicating with colleagues regarding ongoing developments.
Sharpened our focus on diversity,average tangible common equity and inclusion (“DE&I”), expanding our diverse slate commitment, completing a successful independent third-party audit of our policies and proceduresaverage common shares outstanding were adjusted to identify any unconscious bias, increasing reporting capabilities and frequency around DE&I metricsreflect planned common stock repurchases that were contemplated when goals were set, but which were forgone due to Federal Reserve prohibitions in response to the COVID-19 pandemic. See Appendix A for each division, continuing to grow our business resource groups to approximately 3,000 colleagues, and announcing a $10 million investment aimed at enhancing awareness, creating access to capital and improving capabilities and opportunities for underserved communities.
Accelerated focusmore information on the ESG agenda, including completing our first ESG materiality study, establishing an ESG governance structure and educating leaders on the topic.Non-GAAP Financial Measures.
Successfully led initiatives to strengthen the Company’s organizational health and culture as evidenced by a top quartile OHI score in 2020 that reflects a 15-point improvement since 2014. Continued to support Modern Operating Model, Next Generation Technology, and Digital initiatives through facilitating an ongoing infusion of talent and the build-out of related structural changes and leadership and development programs.
SECTION 4:3: OTHER COMPENSATION AND BENEFITS
Severance
Each of our active NEOs is party to an employment agreement that sets forth his or her compensation and benefits, including severance benefits available in certain circumstances. For details, see “Termination of Employment and Change of Control” below.
Nonqualified Deferred Compensation Plan
The CFG Voluntary Executive Nonqualified Deferred Compensation Plan was adopted effective as of January 1, 2009 and does not offer any matching contributions or provide for above-market earnings. During 2020, Mr.2021, Messrs. Van Saun wasand Coughlin were the only NEONEOs who participated in the CFG Voluntary Executive Nonqualified Deferred Compensation Plan. For a description of the material terms of this deferred compensation plan, see the narrative following the 20202021 Nonqualified Deferred Compensationtable below.
Pension Plan
The CFG Pension Plan, a tax-qualified, non-contributory defined benefit pension plan was closed to new participants effective January 1, 2009 and frozen to all participants and benefit accruals effective December 31, 2012. Mr. Coughlin has a benefit under this plan because he was hired prior to 2009. For a description of the material terms of the CFG Pension Plan, see the narrative following the 2021 Pension Benefits table below.
401(k) Plan
We maintain a qualified defined contribution 401(k) plan for all of our colleagues. Colleagues may defer up to 50% of their eligible pay to the plan up to Internal Revenue Code limits. After colleagues have completed one full year of service, colleaguethey are eligible to receive Company contributions are matched at 100% up to an overall limit of 4% and colleagues receive an additional non-elective Company contribution equal to 2% of eligible earnings,the plan subject to limits set by the Internal Revenue Service. ForDuring 2021, colleagues with 401(k) eligible pay of at least $500,000 willdid not receive the matching or non-elective Company contributions. Our NEOs are entitled to participate in our 401(k) plan on the same basis as colleagues generallycontributions and as a result, will not be eligible to receivenon-elective Company 401(k) contributions in 2021. For colleagues with eligible pay below $500,000, their Company matching contributions will continue with no changes in 2021 and the additional non-elective Company contribution will bewere reduced to 1% of eligible earnings, subject to limits set by the Internal Revenue Service.for other
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
colleagues. Our NEOs are entitled to participate in our 401(k) plan on the same basis as colleagues generally and, as a result, were not be eligible to receive Company 401(k) contributions in 2021. For 2022, we have reinstated Company matching contributions for high earners and have also implemented a 1.5% core contribution for all colleagues.
Health and Welfare Benefit Plans
NEOs are eligible to participate in Company-sponsored benefit programs, offered on the same terms and conditions as those made generally available to all of our colleagues, including medical, dental, vision, and short-term and long-term disability plans.
Perquisites and Other Benefits
We provide our executives, including our NEOs, with financial planning services if desired by the executives. Our executives, including our NEOs, are also covered by relocation and matching charitable contribution programs that generally cover our colleagues. In addition,colleagues generally. Mr. Van Saun uses the Company car for limited personal use for travel between his home and his primary office location so that he can most efficiently use that time for business purposes.
At During 2021, the onsetCompensation and HR Committee approved an annual allowance of the COVID-19 crisis in the Northeast, the Board in conjunction with the Chief Risk Officer and Chief Human Resources Officer, directed Mr. Van Saun that he should not take commercial airline transportation, including for personal purposes. This decision was made for the protection of$100,000 relating to Mr. Van Saun’s health and safety to supportpersonal use of the effective management of Citizens throughout the crisis. Accordingly, theCompany aircraft, consistent with peer banks with similar policies. The full incremental cost to the Company of two trips on the Company aircraft during which Mr. Van Saun travelled with family membersSaun’s personal use has been reflected in the “All Other Compensation” column of the 20202021 Summary Compensation Table. In addition, on a few occasions during 2021 family members of each of Mr. Van Saun and Mr. Woods accompanied them on business trips aboard the Company aircraft; however, these trips resulted in no incremental cost to the Company.
SECTION 5.4. GOVERNANCE POLICIES AND PRACTICES
Compensation and HR Committee Interlocks and Insider Participation
None of the members of the Compensation and HR Committee who served during 20202021 are current or former officers or employees of the Company or any of our subsidiaries. No Company executive officer served on the compensation committee of another entity that employed an executive officer who also served on our Board. No Company executive officer served as a director of an entity that employed an executive officer who also served on our Compensation and HR Committee.
Compensation Consultants
The Compensation and HR Committee retained Compensation Advisory Partners, LLC (“CAP”) to provide guidance and advice on compensation-related matters during 2020.2021. CAP has been directly selected and retained by the Compensation and HR Committee to provide a broad set of services pertaining to the compensation of our executives and our directors. The Compensation and HR Committee does not engage CAP for any additional services outside of executive and director compensation consulting, and they are not separately engaged by management for any services. In connection with CAP’s retention and on an annual basis, the Compensation and HR Committee conducts an assessment of potential conflicts of interest, considering various factors including the six factors mandated by the New York Stock Exchange rules, and no conflicts of interest relating to its services have been identified.
In addition, management retains McLagan to provide market compensation data, which is referenced by the Compensation and HR Committee when making executive compensation decisions as discussed earlier in “—Section 2. Determining ExecutiveNEO Compensation.”
Compensation Peer Group
As mentioned earlier in “—Section 2. Determining ExecutiveNEO Compensation”, the Compensation and HR Committee refers to peer data as a reference point in making compensation decisions and to better understand whether our pay practices remain competitive, although we do not benchmark a specific percentile for executive compensation. In determining the appropriate positioning of our compensation relative to that of peers, the Compensation and HR Committee focuses on how well the Company has performed relative to internal targets and peers, including the rate of growth in various metrics relative to peers.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
The Compensation and HR Committee reviews the compensation peer group annually in consultation with its compensation consultant, with the Compensation and HR Committee making any adjustments to the peer group based on the advice of management and its compensation consultant. The peer group consists of companies with which the Company competes for talent and stockholder investments, and which are generally similar in size and business mix.
During the 2019Compensation and HR Committee’s 2021 review of our peer group, the Compensation and HR Committeeit was determined that Huntington Bancshares and Truist Financial should be included in the compensationbelow peer group startingcontinues to be appropriate for the Company and will continue in 2020. This peer group change corresponds with identical changes that have been made to our financial peer group also for 2020. This decision was confirmed duringeffect until the 2020 review of our peer group, as a result of which no additional changes were made.next annual review.
Comerica Corporation | KeyCorp |
Regions Financial
| ||
Fifth Third Bancorp |
M&T Bank Corporation
|
Truist Financial
| ||
Huntington Bancshares
|
PNC Financial Services | U.S. Bancorp |
Clawback and Forfeiture Process
The Company maintains a firm-wide process through which events (referred to as “Trigger Events”) are reviewed to determine whether they should have an impact on a colleague’s compensation from previous years or for the current year. This process applies to all our colleagues, including our NEOs. The Accountability Review Panel (“ARP”) consists of the direct reports to our CEO with our Chief Risk Officer serving as chair and meets on a regular basis to consider whether specific Trigger Events should result in compensation adjustments for involved colleagues. Trigger Events include not only any financial restatements, but also events having a material impact on the Company that have arisen as a result of certain colleague behavior, including failure to adequately consider risk. Potential actions by the ARP include current-year compensation adjustments, forfeiture of unvested awards, or clawback. This process is in addition to any clawback or recovery rights under applicable law.
The Compensation and HR Committee monitors regulatory developments relating to clawback and forfeiture and will continue to evaluate our practices in order to ensure they drive appropriate behavior and discourage inappropriate risk taking, as well as comply with applicable law.
Stock Ownership and Retention Guidelines
The Company maintains stock ownership and retention guidelines in order to further align the long-term interests of our executives with those of our stockholders. Our stock ownership guidelines require that our executives hold shares having an aggregate value equal to a multiple of executives’ annual base salary, as reflected below.
Position | Multiple of Salary | |
Chief Executive Officer |
6x salary | |
| Executive Committee members (including NEOs) | 3x salary | |
| Other Executive Officers | 1x salary |
Shares that count for purposes of ownership under the guidelines include (i) shares or units for which receipt has been deferred (including shares held through our 401(k) plan, shares purchased under our tax-qualified employee stock purchase program, unvested RSUs, and shares or units held through a deferred compensation plan
|
| |||
maintained by the Company), (ii) shares held in a trust for an immediate family member, provided the executive or director retains investment control, and (iii) restricted stock and unvested RSUs (that may only be settled in shares) that are subject to time-based vesting conditions only. Unexercised options (whether vested or
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
unvested), performance awards (including performance-based restricted stock and performance-based units), and unvested RSUs that may only be settled in cash would not count towards the satisfaction of these guidelines.
Each executive has five years from the date he or she becomes subject to these guidelines to achieve compliance. In addition, executives are required to hold 50% of the net shares acquired as a result of settlement of compensatory awards until he or she is in compliance with his or her applicable ownership requirement. As of December 31, 2020,2021, each of our NEOs was in compliance with his or her applicable ownership requirement.
Prohibition on Hedging and Pledging
We prohibit our colleagues and directors, including our NEOs and other executive officers, from engaging in any hedging transactions (including transactions involving options, puts, calls, prepaid variable forward contracts, equity swaps, collars and exchange funds or other derivatives) that are designed to hedge or offset a decrease in the market value of the Company’s equity securities or pledging their ownership in our securities (including equity- basedequity-based awards), which would undermine the risk alignment embedded in our executive compensation program.
Process for Approval of Equity Grants
We do not grant equity awards in anticipation of the release of material, non-public information, nor do we time the release of material, non-public information based on equity grant dates. The Compensation and HR Committee has delegated the authority to make off-cycle equity grants under the Citizens Financial Group, Inc. 2014 Omnibus Plan (“Omnibus Plan”) to participants other than our executives to the Equity Committee of the Board, which is comprised of our Chairman and CEO, subject to limits designated by the Compensation and HR Committee, as described above in “Corporate Governance Matters—Board Governance and Oversight—Committees of the Board.”
Tax Deductibility of Compensation
Under Section 162(m) of the Internal Revenue Code, a public company generally may not deduct compensation in excess of $1 million paid to its CEO and other covered officers. In setting executive compensation, the Compensation and HR Committee considers the factors identified in more detail in “—Section 2. Determining ExecutiveNEO Compensation.”
The Compensation and HR Committee has reviewed and discussed the CD&A included in this proxy statement with members of management, and based on such review and discussions, the Compensation and HR Committee recommended to the Board that the CD&A be included in this proxy statement.
The Compensation and Human Resources Committee |
Leo I. Higdon (Chair) |
William P. Hankowsky |
Edward J. Kelly III |
Shivan Subramaniam |
Wendy A. Watson |
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
20202021 Summary Compensation Table
This 20202021 Summary Compensation Table reflects the compensation of our NEOs in accordance with SEC reporting rules, which require that cash awards be disclosed in the year in which they are earned and that equity grants be disclosed in the year of grant (regardless of whether they were earned for performance during that year or the prior year).
In addition, the SEC rules require the value of an equity award modification to be included in the Summary Compensation Table for the year in which the modification occurs. As a result, the 2020 Summary Compensation Table below includes the modification value for the 2020 PSUs as well as the original grant date value for 2020 PSUs, essentially presenting these awards twice (see “Compensation Discussion and Analysis—Section 3. NEO Compensation for the 2020 Performance Year”).
Name and Principal Position | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | All Other Compensation ($)(5) | Total ($) | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Change in ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Van Saun, | 2020 | 1,487,000 | 2,268,900 | 10,422,527 | 156,896 | 14,335,323 | 2021 | 1,487,000 | 2,928,900 | 7,840,912 | - | 173,264 | 12,430,076 | |||||||||||||||||||||||||||||||||||||||
Chairman & | 2019 | 1,487,000 | 2,553,900 | 5,749,060 | 108,482 | 9,898,442 | 2020 | 1,487,000 | 2,268,900 | 10,422,527 | - | 156,896 | 14,335,323 | |||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2018 | 1,487,000 | 2,463,900 | 5,259,033 | 196,000 | 9,405,933 | 2019 | 1,487,000 | 2,553,900 | 5,749,060 | - | 108,482 | 9,898,442 | |||||||||||||||||||||||||||||||||||||||
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John F. Woods, | 2020 | 700,000 | 852,000 | 3,825,899 | 35,001 | 5,412,900 | 2021 | 700,000 | 1,105,000 | 3,005,551 | - | 26,015 | 4,836,566 | |||||||||||||||||||||||||||||||||||||||
Vice Chairman & | 2019 | 700,000 | 937,500 | 2,099,972 | 33,621 | 3,771,093 | 2020 | 700,000 | 852,000 | 3,825,899 | - | 35,001 | 5,412,900 | |||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2018 | 700,000 | 900,000 | 1,889,986 | 64,859 | 3,554,845 | 2019 | 700,000 | 937,500 | 2,099,972 | - | 33,621 | 3,771,093 | |||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Donald H. McCree III, | 2020 | 700,000 | 864,000 | 4,040,136 | 30,700 | 5,634,836 | 2021 | 700,000 | 1,065,000 | 3,033,796 | - | 20,000 | 4,818,796 | |||||||||||||||||||||||||||||||||||||||
Vice Chairman, | 2019 | 700,000 | 990,000 | 2,327,448 | 5,600 | 4,023,048 | ||||||||||||||||||||||||||||||||||||||||||||||
Vice Chairman & | 2020 | 700,000 | 864,000 | 4,040,136 | - | 30,700 | 5,634,836 | |||||||||||||||||||||||||||||||||||||||||||||
Head of Commercial Banking | 2018 | 700,000 | 997,500 | 2,222,468 | 12,602 | 3,932,570 | 2019 | 700,000 | 990,000 | 2,327,448 | - | 5,600 | 4,023,048 | |||||||||||||||||||||||||||||||||||||||
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Malcolm Griggs, | 2020 | 532,692 | 596,000 | 1,531,928 | 44,100 | 2,704,720 | 2021 | 535,000 | 746,000 | 1,199,100 | - | 25,000 | 2,505,100 | |||||||||||||||||||||||||||||||||||||||
Executive Vice President, | 2020 | 532,692 | 596,000 | 1,531,928 | - | 44,100 | 2,704,720 | |||||||||||||||||||||||||||||||||||||||||||||
Chief Risk Officer & General Counsel | 2019 | 525,000 | 670,000 | 983,978 | - | 41,800 | 2,220,778 | |||||||||||||||||||||||||||||||||||||||||||||
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Brendan Coughlin, | 2021 | 625,000 | 637,500 | 1,181,250 | 0 | - | 2,443,750 | |||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President & | 2019 | 525,000 | 670,000 | 983,978 | 41,800 | 2,220,778 | ||||||||||||||||||||||||||||||||||||||||||||||
Chief Risk Officer (1) | 2018 | 519,231 | 710,368 | 878,958 | 71,194 | 2,179,751 | ||||||||||||||||||||||||||||||||||||||||||||||
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Susan LaMonica, | 2020 | 532,692 | 586,000 | 1,508,971 | 44,100 | 2,671,763 | ||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President & | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Human Resources Officer (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Head of Consumer Banking | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) |
|
|
Amounts in this column reflect the cash portion of annual variable compensation awards for the 2021, 2020, |
Amounts in this column for |
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
For PSUs granted and modified in 2020,2021, the amounts above were calculated based on the probable outcome of the performance conditions as of the service inception date, and date of modification, respectively, and represent the value of the target number of units granted consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the service inception date under FASB ASC 718. Maximum payout level for our 2020annual 2021 PSUs is 100%150% of target, whichtarget; maximum payout of our retention PSUs is the numberlimited to 125% of units represented in the table.target. For a breakdown of all awards granted during 2020,2021, see the 20202021 Grants of Plan-Based Awards table.
| (4) | The only NEO eligible to participate in our Pension Plan is Mr. Coughlin. The amount shown in this column for 2021 for Mr. Coughlin reflects the aggregate change in actuarial present value of his accumulated benefit under our Pension Plan from January 1, 2021 to December 31, 2021. The pension value for Mr. Coughlin decreased by $6,977 during 2021; this includes a decrease of $11,337 due to changes in assumptions underlying the present value calculations and an increase of $4,360 due to the effect of Mr. Coughlin being one year closer to his assumed retirement age. Because the present value of Mr. Coughlin’s accumulated benefit decreased in 2021, zero is reflected in the table above consistent with SEC rules. See commentary following the 2021 Pension Benefits table for more details on the assumptions used to determine the present value. |
| (5) | The below table reflects |
Name | 401(k) Company Contribution ($) | Charitable Matching Contribution ($) | Personal ($) | Personal ($) | Financial Planning ($) | Total ($) | Charitable Matching Contribution ($) | Personal Use ($) | Other ($) | Total ($) | ||||||||||
Bruce Van Saun | 17,100 | 52,000 | 25,447 | 38,349 | 24,000 | 156,896 | 50,000 | 78,959 | 44,305 | 173,264 | ||||||||||
John F. Woods | 17,100 | 1,000 | - | - | 16,901 | 35,001 | 9,000 | - | 17,015 | 26,015 | ||||||||||
Donald H. McCree III | 5,700 | 25,000 | - | - | - | 30,700 | 20,000 | - | - | 20,000 | ||||||||||
Malcolm Griggs | 17,100 | 27,000 | - | - | - | 44,100 | 25,000 | - | - | 25,000 | ||||||||||
Susan LaMonica | 17,100 | 27,000 | - | - | - | 44,100 | ||||||||||||||
Brendan Coughlin | - | - | - | - | ||||||||||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
20202021 Grants of Plan-Based Awards
Estimated Future Payouts Under Equity Incentive | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(1) | Estimated Future Payouts Under Equity Incentive | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(1) | |||||||||||||||||||||||
| Plan Awards | Plan Awards
| |||||||||||||||||||||||||||
| Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | Grant Date | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||
| Bruce Van Saun | 3/2/2020 | (2) | 63,872 | 127,746 | 191,618 | - | 4,285,878 | 3/1/2021 | (2) | - | - | - | 42,680 | 1,890,724 | ||||||||||||||
| 12/16/2020 | (2) | 63,872 | 127,746 | 127,746 | - | 4,434,064 | 3/1/2021 | (3) | 38,412 | 76,825 | 115,236 | - | 3,450,211 | |||||||||||||||
| 3/2/2020 | (3) | - | - | - | 51,098 | 1,702,585 | 5/13/2021 | (4) | 37,892 | 50,525 | 63,156 | - | 2,499,977 | |||||||||||||||
| John F. Woods | 3/2/2020 | (2) | 23,446 | 46,893 | 70,338 | - | 1,573,260 | 3/1/2021 | (2) | - | - | - | 16,027 | 709,996 | ||||||||||||||
| 12/16/2020 | (2) | 23,446 | 46,893 | 46,893 | - | 1,627,656 | 3/1/2021 | (3) | 14,424 | 28,848 | 43,272 | - | 1,295,564 | |||||||||||||||
| 3/2/2020 | (3) | - | - | - | 18,757 | 624,983 | 5/13/2021 | (4) | 15,156 | 20,210 | 25,262 | - | 999,991 | |||||||||||||||
| Donald H. McCree III | 3/2/2020 | (2) | 24,758 | 49,519 | 74,278 | - | 1,661,362 | 3/1/2021 | (2) | - | - | - | 16,252 | 719,964 | ||||||||||||||
| 12/16/2020 | (2) | 24,758 | 49,519 | 49,519 | - | 1,718,804 | 3/1/2021 | (3) | 14,626 | 29,255 | 43,882 | - | 1,313,842 | |||||||||||||||
| 3/2/2020 | (3) | - | - | - | 19,807 | 659,969 | 5/13/2021 | (4) | 15,156 | 20,210 | 25,262 | - | 999,991 | |||||||||||||||
| Malcolm Griggs | 3/2/2020 | (2) | 7,540 | 15,081 | 22,620 | - | 505,968 | 3/1/2021 | (2) | - | - | - | 11,772 | 521,500 | ||||||||||||||
| 12/16/2020 | (2) | 7,540 | 15,081 | 15,081 | - | 523,462 | 3/1/2021 | (3) | 4,204 | 8,408 | 12,612 | - | 377,603 | |||||||||||||||
| 3/2/2020 | (3) | - | - | - | 15,081 | 502,499 | 5/13/2021 | (4) | 4,546 | 6,063 | 7,578 | - | 299,997 | |||||||||||||||
| Susan LaMonica | 3/2/2020 | (2) | 7,426 | 14,855 | 22,282 | - | 498,385 | |||||||||||||||||||||
| Brendan Coughlin | 3/1/2021 | (2) | - | - | - | 8,041 | 356,216 | |||||||||||||||||||||
| 12/16/2020 | (2) | 7,426 | 14,855 | 14,855 | - | 515,617 | 3/1/2021 | (3) | 7,236 | 14,475 | 21,712 | - | 650,072 | |||||||||||||||
| 3/2/2020 | (3) | - | - | - | 14,855 | 494,969 | 5/13/2021 | (4) | 2,652 | 3,536 | 4,420 | - | 174,961 | |||||||||||||||
| (1) | Amounts in this column reflect the grant date fair value of awards calculated in accordance with FASB ASC 718, using the valuation methodology and assumptions set forth in Note |
| (2) | Represents RSUs granted under the Omnibus Plan for performance year 2020 that vest ratably over three years. Cash dividends on unvested RSUs are accrued during the vesting period, but accrued dividends are only paid if and when the awards vest. |
| (3) | Represents PSUs granted under the Omnibus Plan for performance year |
| (4) | Represents the PSU retention awards granted in |
|
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Outstanding Equity Awards at 20202021 Fiscal Year-End
The following table shows, for each NEO, the outstanding equity awards held as of December 31, 2020.2021. These awards include RSUs and PSUs granted in years 2018, 2019, 2020, and 2020.2021.
Stock Awards | ||||||||||||||||
| Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||
Bruce Van Saun | ||||||||||||||||
2018 RSUs (2) | 11,505 | 411,419 | - | - | ||||||||||||
2018 PSUs (3) | 102,648 | 3,670,692 | - | - | ||||||||||||
2019 RSUs (4) | 29,595 | 1,058,317 | - | - | ||||||||||||
2019 PSUs (5) | - | - | 83,239 | 2,976,627 | ||||||||||||
2020 RSUs (6) | 51,098 | 1,827,264 | - | - | ||||||||||||
2020 PSUs (7) | - | - | 95,809 | 3,426,130 | ||||||||||||
John F. Woods | ||||||||||||||||
2018 RSUs (2) | 4,134 | 147,832 | - | - | ||||||||||||
2018 PSUs (3) | 36,889 | 1,319,151 | - | - | ||||||||||||
2019 RSUs (4) | 10,810 | 386,566 | - | - | ||||||||||||
2019 PSUs (5) | - | - | 30,405 | 1,087,283 | ||||||||||||
2020 RSUs (6) | 18,757 | 670,750 | - | - | ||||||||||||
2020 PSUs (7) | - | - | 35,169 | 1,257,643 | ||||||||||||
Donald H. McCree III | ||||||||||||||||
2018 RSUs (2) | 4,862 | 173,865 | - | - | ||||||||||||
2018 PSUs (3) | 43,379 | 1,551,233 | - | - | ||||||||||||
2019 RSUs (4) | 11,981 | 428,441 | - | - | ||||||||||||
2019 PSUs (5) | - | - | 33,699 | 1,205,076 | ||||||||||||
2020 RSUs (6) | 19,807 | 708,298 | - | - | ||||||||||||
2020 PSUs (7) | - | - | 37,138 | 1,328,055 | ||||||||||||
Malcolm Griggs | ||||||||||||||||
2018 RSUs (2) | 3,365 | 120,332 | - | - | ||||||||||||
2018 PSUs (3) | 12,008 | 429,406 | - | - | ||||||||||||
2019 RSUs (4) | 8,864 | 316,977 | - | - | ||||||||||||
2019 PSUs (5) | - | - | 9,972 | 356,599 | ||||||||||||
2020 RSUs (6) | 15,081 | 539,297 | - | - | ||||||||||||
2020 PSUs (7) | - | - | 11,310 | 404,446 | ||||||||||||
Susan LaMonica | ||||||||||||||||
2018 RSUs (2) | 3,560 | 127,306 | - | - | ||||||||||||
2018 PSUs (3) | 12,705 | 454,331 | - | - | ||||||||||||
2019 RSUs (4) | 8,837 | 316,011 | - | - | ||||||||||||
2019 PSUs (5) | - | - | 9,942 | 355,526 | ||||||||||||
2020 RSUs (6) | 14,855 | 531,215 | - | - | ||||||||||||
2020 PSUs (7) | - | - | 11,140 | 398,366 | ||||||||||||
|
|
|
Stock Awards | ||||||||||||||||
| Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||
| Bruce Van Saun | ||||||||||||||||
| 2019 RSUs (2) | 14,797 | 699,158 | - | - | ||||||||||||
| 2019 PSUs (3) | 78,022 | 3,686,540 | - | - | ||||||||||||
| 2020 RSUs (4) | 34,065 | 1,609,571 | - | - | ||||||||||||
| 2020 PSUs (5) | - | - | 127,746 | 6,035,999 | ||||||||||||
| 2021 RSUs (6) | 42,680 | 2,016,630 | - | - | ||||||||||||
| 2021 PSUs (7) | - | - | 76,825 | 3,629,981 | ||||||||||||
| 2021 PSUs (8) | - | - | 50,525 | 2,387,306 | ||||||||||||
| John F. Woods | ||||||||||||||||
| 2019 RSUs (2) | 5,405 | 255,386 | - | - | ||||||||||||
| 2019 PSUs (3) | 28,499 | 1,346,578 | - | - | ||||||||||||
| 2020 RSUs (4) | 12,504 | 590,814 | - | - | ||||||||||||
| 2020 PSUs (5) | - | - | 46,893 | 2,215,694 | ||||||||||||
| 2021 RSUs (6) | 16,027 | 757,276 | - | - | ||||||||||||
| 2021 PSUs (7) | - | - | 28,848 | 1,363,068 | ||||||||||||
| 2021 PSUs (8) | - | - | 20,210 | 954,923 | ||||||||||||
| Donald H. McCree III | ||||||||||||||||
| 2019 RSUs (2) | 5,990 | 283,028 | - | - | ||||||||||||
| 2019 PSUs (3) | 31,587 | 1,492,486 | - | - | ||||||||||||
| 2020 RSUs (4) | 13,204 | 623,889 | - | - | ||||||||||||
| 2020 PSUs (5) | - | - | 49,519 | 2,339,773 | ||||||||||||
| 2021 RSUs (6) | 16,252 | 767,907 | - | - | ||||||||||||
| 2021 PSUs (7) | - | - | 29,255 | 1,382,299 | ||||||||||||
| 2021 PSUs (8) | - | - | 20,210 | 954,923 | ||||||||||||
| Malcolm Griggs | ||||||||||||||||
| 2019 RSUs (2) | 4,432 | 209,412 | - | - | ||||||||||||
| 2019 PSUs (3) | 9,347 | 441,646 | - | - | ||||||||||||
| 2020 RSUs (4) | 10,053 | 475,004 | - | - | ||||||||||||
| 2020 PSUs (5) | - | - | 15,081 | 712,577 | ||||||||||||
| 2021 RSUs (6) | 11,772 | 556,227 | - | - | ||||||||||||
| 2021 PSUs (7) | - | - | 8,408 | 397,278 | ||||||||||||
| 2021 PSUs (8) | - | - | 6,063 | 286,477 | ||||||||||||
| Brendan Coughlin | ||||||||||||||||
| 2019 RSUs (2) | 2,296 | 108,486 | - | - | ||||||||||||
| 2019 PSUs (3) | 4,843 | 228,832 | - | - | ||||||||||||
| 2019 RSUs (9) | 14,168 | 669,438 | - | - | ||||||||||||
| 2020 RSUs (4) | 5,401 | 255,197 | - | - | ||||||||||||
| 2020 PSUs (5) | - | - | 8,103 | 382,867 | ||||||||||||
| 2021 RSUs (6) | 8,041 | 379,937 | - | - | ||||||||||||
| 2021 PSUs (7) | - | - | 14,475 | 683,944 | ||||||||||||
| 2021 PSUs (8) | - | - | 3,536 | 167,076 | ||||||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| (1) |
|
These amounts reflect RSUs granted in March 2019 for the 2018 performance year under the Omnibus Plan, which had |
These amounts reflect PSUs granted in March 2019 for the 2018 performance year under the Omnibus Plan, which were |
These amounts reflect RSUs granted in March 2020 for the 2019 performance year under the Omnibus Plan, which had |
These amounts reflect PSUs granted in March 2020 for the 2019 performance year under the Omnibus Plan, and then subsequently modified in December 2020, which |
| (6) | These amounts reflect RSUs granted in March 2021 for the 2020 performance year under the Omnibus Plan, which had three remaining equal installments scheduled to vest on March 1, 2022, 2023, and 2024. |
| (7) | These amounts reflect PSUs granted in March 2021 for the 2020 performance year under the Omnibus Plan, which are scheduled to vest on March 1, 2024 following the end of the three-year performance period of January 1, 2021 through December 31, 2023, based half on ROTCE and half on Diluted EPS in addition to a +/-10% TSR relative modifier. For more detail, see “Compensation Discussion and Analysis—Section 1. Executive Compensation Overview—Variable Compensation Mix.” |
| (8) | These amounts reflect PSU retention awards granted in May 2021, which are scheduled to vest on May 13, 2023, following the end of the two-year performance period of January 1, 2021 through December 31, 2022, based on performance relative to several quantitative and qualitative metrics across the four quadrants of performance (financial, customer, risk, and human capital).Based on performance through December 31, 2021, amounts in this column reflect target level of performance. |
| (9) | This amount reflects an RSU award granted to Mr. Coughlin in June 2019, which is scheduled to vest in a single installment on the third anniversary of the grant date, June 18, 2022. |
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Stock Vested in 20202021
Stock Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Vesting(#)(1) | Value Realized on Vesting($)(2) | Number of Shares Acquired on Vesting(#)(1) | Value Realized on Vesting($)(2) | ||||||||||||
Bruce Van Saun |
| 164,778 |
|
| 5,221,815 |
|
| 145,984 |
|
| 6,469,816 |
| ||||
John F. Woods |
| 42,497 |
|
| 1,346,730 |
|
| 52,681 |
|
| 2,334,769 |
| ||||
Donald H. McCree III |
| 69,125 |
|
| 2,190,571 |
|
| 60,835 |
|
| 2,696,047 |
| ||||
Malcolm Griggs |
| 25,855 |
|
| 819,345 |
|
| 24,833 |
|
| 1,100,906 |
| ||||
Susan LaMonica |
| 27,775 |
|
| 880,190 |
| ||||||||||
Brendan Coughlin |
| 12,867 |
|
| 570,440 |
| ||||||||||
| (1) | Amounts reflect Company shares issued under the Omnibus Plan in connection with the vesting of equity-based awards in |
| (2) | The values reflected in this column were calculated by multiplying the number of shares that vested by the closing price of a Company share on the NYSE on each applicable vesting date during |
2021 Pension Benefits
| Name | Plan Name | Number of Years Credited Service (2) | Present Value of Accumulated Benefits($) (3) | |||||||||
Bruce Van Saun |
| - |
|
| - |
|
| - |
| |||
John F. Woods |
| - |
|
| - |
|
| - |
| |||
Donald H. McCree III |
| - |
|
| - |
|
| - |
| |||
Malcolm Griggs |
| - |
|
| - |
|
| - |
| |||
Brendan Coughlin(1) |
| CFG Pension Plan |
|
| 8.3553 |
|
| 162,120 |
| |||
| (1) | Mr. Coughlin is the |
| (2) | After December 31, 2012, there were no further benefit accruals under the CFG Pension Plan. Therefore, an eligible colleague’s actual years of service may be more than such colleague’s years of credited service under the CFG Pension Plan. |
| (3) | For Mr. Coughlin, the present value of accumulated benefits at December 31, 2021 was calculated using the same actuarial assumptions used by the Company for GAAP financial reporting purposes, except where different assumptions are required. The following are the key assumptions used: (i) a discount rate of 3.01%; (ii) a retirement age of 62, as required (the earliest unreduced retirement age under the CFG Pension Plan); (iii) the mortality assumption reflects generational mortality improvement using Scale MP-2021 for males; and (iv) no pre-retirement decrements, as required. |
We sponsor the CFG Pension Plan (formerly RBS Americas Pension Plan) (“Pension Plan”), which is a non-contributory defined benefit pension plan that is qualified under Section 401(a) of the Internal Revenue Code. The Pension Plan was closed to new hires and re-hires effective January 1, 2009 and frozen to all participants and benefit accruals effective December 31, 2012. Regular full-time and part-time colleagues of the Company who were hired before January 1, 2009 and completed one year of service were eligible for benefits under the Pension Plan.
The benefit under the Pension Plan for colleagues is currently calculated using a formula based on a colleague’s “average gross compensation” (defined under the Pension Plan as a participant’s average eligible compensation during five years of employment (whether or not consecutive) prior to December 31, 2012 yielding the highest average), subject to limitations imposed by the Internal Revenue Service. Eligible compensation generally includes all taxable compensation, other than certain equity-based and non-recurring amounts. The formula generally provides for a benefit of 1% of average gross compensation multiplied by each year of the participant’s credited service, with such benefit percentage varying depending on the colleague’s hire date and retirement date, as specified under the Pension Plan. Benefits under the Pension Plan are generally payable in the form of a monthly annuity, though benefits under the Pension Plan may be received as a lump sum payment.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
2020A participant’s pension benefit under the Pension Plan vests in full upon the earlier of completion of five years of service or the attainment of normal retirement date. Normal retirement date is the later of attainment of age 65 or the fifth anniversary of the date the participant commenced participation in the Pension Plan. Participants may begin receiving full retirement benefits on the first day of the month coincident with or immediately following the normal retirement date and may be eligible for reduced benefits if retiring after attainment of age 55 with a minimum of five years of vesting service. Participants who retire after attainment of age 62 with a minimum of twenty years of vesting service are eligible to receive unreduced retirement benefits. Mr. Coughlin became a participant in the Pension Plan on September 1, 2005. Mr. Coughlin will be eligible to receive unreduced early retirement benefits under the Pension Plan commencing at age 62 provided that he remains actively employed at Citizens through age 55.
2021 Nonqualified Deferred Compensation
Name | Executive Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Balance at Last FY ($) | Executive Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Balance at Last FYE ($) | ||||||||||||||||||
Bruce Van Saun(1) |
| 1,963,820 |
|
| 1,828,830 |
|
| 13,232,005 |
|
| 2,196,675 |
|
| 1,849,748 |
|
| 17,278,428 |
| ||||||
John F. Woods |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||
Donald H. McCree III |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||
Malcolm Griggs |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||
Susan LaMonica |
| - |
|
| - |
|
| - |
| |||||||||||||||
Brendan Coughlin(1) |
| 12,500 |
|
| 17,994 |
|
| 138,786 |
| |||||||||||||||
| (1) | The material terms of the CFG Voluntary Executive Nonqualified Deferred Compensation Plan are described in the narrative below. Executive contributions for Mr. Van Saun in the last fiscal year include the deferred portion of his |
| (2) | For |
We sponsor the CFG Voluntary Executive Nonqualified Deferred Compensation Plan, which does not offer any matching contributions or provide for above-market earnings. During 2020, Mr.2021, Messrs. Van Saun and Coughlin were the only NEOs who participated in the CFG Voluntary Executive Nonqualified Deferred Compensation Plan andPlan. Mr. Van Saun elected to defer 10% of his base salary and 80%75% of the cash portion of his variable compensation award for the 20202021 performance year. Mr. Coughlin elected to defer 2% of his base salary in 2021.
Under the CFG Voluntary Executive Nonqualified Deferred Compensation Plan, eligibility is limited to colleagues who have total compensation in the immediately preceding year equal to or exceeding the Internal Revenue Code Section 401(a)(17) limit for the relevant plan year. Participants are permitted to defer between 1% and 80% of their base salary and annual cash bonus. Participants select the allocation of their accounts among investment indices available under the plan. Our Board has the power to amend the plan at any time, as long as the amount accrued to the date of amendment in any account under the plan is not decreased or otherwise restricted. In addition, following a termination of employment, participants in the CFG Voluntary Executive Nonqualified Deferred Compensation Plan are entitled to receive amounts that have been deferred under that plan.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
We have entered into an employment agreement with each of our NEOs, the material terms of which are summarized below, including severance provisions. In addition, the treatment of equity-based awards held by our NEOs upon a termination of employment and change of control are summarized below. Please see the Potential Payments Tabletable below for quantification of estimated payments and benefits to which our NEOs would be entitled under various termination scenarios and upon a change of control, in each case, assuming such event occurred on December 31, 2020.2021.
Equity Awards
Equity awards under the Omnibus Plan granted to our NEOs have the following treatment upon termination of employment. Provisions relating to the treatment of Bruce Van Saun’s equity-based awards upon termination of employment (including following a change of control of the Company) are included below in the description of his employment agreement.
| • | Termination |
RSU Awards -If a participant’s employment with the Company is terminated by the Company without “cause” (as defined in award agreements), or by reason of “disability” or “retirement” (as defined in
|
| |||
award agreements), vesting and settlement of awards will continue as originally scheduled subject to the participant not engaging in “detrimental activity” (as defined in award agreements), or “competitive activity” (as defined in award agreements) in the case of disability or retirement, during the remaining vesting period. If a participant voluntarily resigns or is terminated by the Company for cause, unvested awards will be forfeited. All unvested awards will become vested on the date of a participant’s death.
PSU Awards -In the event of a termination by reason of disability or retirement, awards will continue to vest in accordance with the original schedule subject to actual performance and will not be pro-rated based on service, provided the participant does not engage in detrimental activity or competitive activity. In the event of an involuntary termination by the Company of the grantee without cause, awards will continue to vest in accordance with the original schedule subject to actual performance and will not be pro-rated based on service, provided that the termination does not occur prior to the first anniversary of the performance period start date and the participant does not engage in detrimental activity; if the termination occurs prior to the first anniversary of the performance period start date, awards will be forfeited. If a participant voluntarily resigns or is terminated for cause, unvested awards will be forfeited. Awards will become vested at target on the date of a participant’s death and will not be subject to pro-ration based on service. PSU retention awards granted to our NEOs in May 2021 have the same termination treatment as annual PSU awards except that any unvested awards would be immediately forfeited in the event of a voluntary resignation, including for reason of retirement.
| • | Change of Control Omnibus Plan Provisions |
In the event of a “change of control” (as defined in the Omnibus Plan and summarized below), except as otherwise provided in the applicable award agreement, the Compensation and HR Committee may provide for:
continuation or assumption of outstanding awards under the Omnibus Plan by the Company (if we are the surviving corporation) or by the surviving corporation or its parent;
substitution by the surviving corporation or its parent of awards with substantially the same terms and value as such outstanding awards under the Omnibus Plan;
acceleration of the vesting (including the lapse of any restrictions, with any performance criteria or conditions deemed met at target) or the right to exercise outstanding awards immediately prior to the date of the change of control and the expiration of awards not timely exercised by the date determined by the Compensation and HR Committee; or
in the case of outstanding stock options and SARs, cancelation in consideration of a payment in cash or other consideration equal to the intrinsic value of the award. The Compensation and HR Committee may, in its sole discretion, terminate without the payment of any consideration, any stock options or SARs for which the exercise or hurdle price is equal to or exceeds the per share value of the consideration to be paid in the change of control transaction.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Committee may, in its sole discretion, terminate without the payment of any consideration, any stock options or SARs for which the exercise or hurdle price is equal to or exceeds the per share value of the consideration to be paid in the change of control transaction. |
Under the Omnibus Plan, except as otherwise provided in a participant’sthe applicable award agreement, change of control generally means the occurrence of one or more of the following events:
the acquisition of more than 50% of the combined voting power of our outstanding securities (other than by an employee benefit plan or trust maintained by the Company);
the replacement of the majority of our directors during any 12-month period;
the consummation of our merger or consolidation with another entity (unless our voting securities outstanding immediately before such transaction continue to represent at least 50% of the combined voting power and total fair market value of the securities of the surviving entity, or if applicable, the ultimate parent thereof, outstanding immediately after such transaction); or
the transfer of our assets having an aggregate fair market value of more than 50% of the fair market value of the Company and our subsidiaries immediately before such transfer, but only to the extent that in connection with such transfer or within a reasonable period thereafter, our stockholders receive distributions of cash and/or assets having a fair market value that is greater than 50% of the fair market value of the Company and our subsidiaries immediately before such transfer.
|
| |||
RSU and PSU Award Agreements
Upon a change of control, PSUs will be assessed to determine the actual number earned as of the date of the change of control and the earned portion will remain subject to time-based vesting conditions until the end of the original vesting period. If within 12 months following a change of control, the participant’s employment is terminated by the Company without cause or the participant resigns for “good reason” (as defined in award agreements), RSUs and PSUs will fully vest and be settled immediately following the termination, with the level of performance for PSUs measured as of the change of control.
Severance
The severance to which our NEOs are entitled in various circumstances is governed by their employment agreements, which are described below in “—Employment Agreements with Our NEOs.” None of our NEOs’ employment agreements provide for excise tax gross-ups in connection with a change of control.
In addition to severance pay, under our severance practice our NEOs would also be entitled to receive benefits under our then-existing health and welfare plans for one month at active colleague rates, prior to the start of the COBRA continuation period. Outplacement services would also be offered for 12 months. We may amend or terminate this practice at any time.
Employment Agreements with Our NEOs
The material terms of the agreements entered into with our NEOs are summarized below.
Employment Agreement with Mr. Van Saun
In light of UK and European remuneration regulations ceasing to apply to the Company in late 2015, we entered into an amended employment agreement with Mr. Van Saun on May 5, 2016. The Compensation and HR Committee’s objective was to put into place an arrangement that balanced its former obligations under Mr. Van Saun’s prior agreement and achieved the following positive results for the Company: (i) motivates and rewards Mr. Van Saun for the achievement of our strategic objectives; (ii) provides additional retentive value; and (iii) aligns terms and conditions more closely with US market practice.
TheThis agreement had an initial five-year term that was extended automatically for a subsequent two-year term, which willwas scheduled to expire on May 5, 2023. ThereIn June 2021, a simple addendum to the agreement was entered into between the Company and Mr. Van Saun which will extend the term of the contract beyond its expiration in
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
May 2023 until terminated by either party. In addition to extending the term of the contract, the addendum also puts an obligation on the Company to provide Mr. Van Saun six-months’ notice in the event the Company chooses to terminate his employment without cause, which is no further opportunity for automatic renewal. Inreciprocal to Mr. Van Saun’s obligation to provide six-month notice in the event of Mr. Van Saun’s voluntary resignation, he would be required to providea resignation. Otherwise, the Company at least six months noticeterms of the agreement continued in order to effectuate an orderly handover of duties.effect with no changes.
Pursuant to the agreement, Mr. Van Saun is entitled to receive an annual base salary of $1,487,000 and has a target total compensation opportunity of $9.94 million, which was most recently increased from $9.0 millionamended in June 2019 in light of the subsequent increases to median CEO compensation in our peer group.2019. No changes were made to Mr. Van Saun’s target total compensation opportunity in 2020.2020 or 2021. The form and terms of Mr. Van Saun’s variable compensation are to be determined annually by the Compensation and HR Committee. In addition, Mr. Van Saun is eligible to participate in employee benefits available to the Company’s senior executives generally.
|
| |||
Under the terms of his agreement, Mr. Van Saun is also entitled to the following payments and benefits upon termination of employment in various scenarios, in each case, subject to execution and non-revocation of a release in our favor:
| Termination without cause or resignation for good reason absent a change of control | Mr. Van Saun would receive a lump sum cash severance payment equal to two times his base salary and would also receive a pro-rata portion of his target cash bonus for the year of termination to be paid when cash bonuses are paid to other executives, in each case, subject to an orderly handover of duties. In addition, his outstanding unvested equity awards would continue to vest on their original schedule, with PSUs subject to actual performance and, in each case, subject to Mr. Van Saun not engaging in detrimental activity for 12 months post-termination. | |
| Termination without cause or resignation for good reason following a change of control | In the event of a qualifying termination of employment occurring within 24 months following a change of control, Mr. Van Saun would receive a lump sum cash severance payment equal to three times the sum of his base salary and his target cash bonus for the year of termination, plus a pro-rata portion of his target cash bonus for the year of termination. Upon the change of control, Mr. Van Saun’s PSUs would be frozen at target performance level, but not accelerated. Following the subsequent qualifying termination, all of Mr. Van Saun’s outstanding equity awards would immediately vest and be paid. The agreement also provides that if any payments or benefits to Mr. Van Saun (whether or not under the employment agreement) would be considered parachute payments pursuant to Internal Revenue Code Section 280G, these payments and benefits would be reduced to the extent necessary to avoid triggering the excise tax under Internal Revenue Code Section 4999 unless he would be better off (on an after-tax basis) if he received all payments and benefits due and paid all excise and income taxes. The employment agreement does not provide any gross-up for excise taxes. | |
| Resignation without Good Reason | Mr. Van Saun Because Mr. Van Saun currently meets the Company’s retirement rule (age plus years of service equals or exceeds 65, with a minimum of five years of service), his outstanding unvested equity | |
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| Death | Mr. Van Saun’s estate would receive his base salary through the end of the month in which his death occurs as well as a pro-rata portion of his target cash bonus. In addition, his outstanding equity awards would immediately vest and be paid, with PSUs vesting at target level. | |
| Disability | Mr. Van Saun would continue to receive his base salary up to the date he becomes eligible for long-term disability benefits under the Company’s plan (currently, six months from the date of disability) and, in addition, his outstanding unvested equity awards would continue to vest on their original schedule, with PSUs subject to actual performance and, in each case, subject to Mr. Van Saun not engaging in competitive activity during the remaining vesting period or specified detrimental activity for 12 months post-termination. | |
|
| |||
Mr. Van Saun is subject to a perpetual confidentiality covenant. In addition, Mr. Van Saun is subject tocovenant and also non-competition and non-solicitation covenants. The non-competition covenant applies for six months post- termination,post-termination, concurrent with any notice period, in the event of a termination without cause or resignation for good reason. For this purpose, competitors are defined to include the following companies: J.P. Morgan Chase, Bank of America Corporation, Citigroup Inc., Wells Fargo & Company, U.S. Bancorp, Regions Financial Corporation, M&T Bank Corporation, PNC Financial Services Group, Fifth Third Bancorp, SunTrust Banks, Inc., Comerica Corporation, KeyCorp, BB&T Corporation, Capital One Financial Corp. and TD Bank Financial Group. The non-solicitation covenant prohibits solicitation of colleagues as well as customers and prospective clients for 12 months post-termination, concurrent with any notice period, in the event of a termination without cause or resignation for good reason.
The agreement includes the following definitions of cause and good reason:
“Cause” includes: (i) any indictment for, conviction of, plea of guilty or nolo contendere to by Mr. Van Saun for the commission of: (a) any felony, (b) any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S. C. § 1829; or (c) a misdemeanor involving dishonesty; (ii) if Mr. Van Saun willfully commits a material breach of his obligations under his employment agreement or repeats or continues after written warning any material breach of his obligations under his employment agreement, or is, in the opinion of the Board, guilty of gross misconduct which brings him or the Company or any of its affiliates into disrepute; (iii) if Mr. Van Saun is guilty of dishonesty in the conduct of his duties under his employment agreement, gross incompetence, willful neglect of duty, or of mismanagement of his financial affairs through failure to observe the Company’s rules and procedures for the operation of bank accounts and/or borrowing; (iv) if Mr. Van Saun commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors; or (v) if, as a result of any default on the part of Mr. Van Saun, he is prohibited by law from acting as an officer of the Company or any of its affiliates.
“Good Reason” includes a material breach of the employment agreement by the Company, or a substantial diminution or other substantial adverse change, not consented to by Mr. Van Saun, in the nature or scope of his responsibilities, authorities, powers, functions or duties or in his base salary, except that removal of the role of Chairman of the Company from his duties shall not amount to good reason.
Employment Agreements with Other NEOs
Each of Messrs. Woods, McCree, and Griggs, and Ms. LaMonicaCoughlin has entered into an employment agreement with the Company. These agreements generally provide for the terms of each executive’s compensation arrangement, including salary and variable compensation, vacation and eligibility for other health and welfare benefits. Under each executive’s agreement, the executive is subject to a notice period with regard to his or her intent to resign (120 days for Messrs. Woods, McCree, and McCreeCoughlin and 90 days for Mr. Griggs and Ms. LaMonica)Griggs). In addition, each of the agreements contains covenants regarding the non-solicitation of customers and colleagues that apply for 12 months following a termination of employment for any reason.
The agreements provide that the executive is entitled to a minimum payment of 26 weeks of base salary in the event he or she is made redundant or is terminated by the Company without “cause” (as defined in the agreements), subject to the execution and non-revocation of a release in favor of the Company. This level of severance is
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
consistent with severance available to all executives. In addition, the agreements each provide for double trigger severance in the event of a qualifying termination following a change of control. The decision to provide this severance was made in 2017 following a review of peer practice and to achieve parity among members of senior management. In the event of a termination by the Company without “cause” (as defined in the agreements)cause or resignation by the executive with “good reason” (as defined in the agreements) within 24 months following a change of control, each of Messrs. Woods, McCree, and Griggs and Ms. LaMonicaCoughlin will receive severance consisting of: (i) two times the sum of his or her current base salary and average cash bonus received during the prior three years, plus (ii) a pro-rata cash bonus for the year in which termination occurs, also based on the average cash bonus during the prior three years.
|
| |||
The agreements in place for Messrs. Woods and McCree also provide that, for purposes of calculating retirement eligibility under the Company’s various plans, each executive will be credited with an additional five years of service. PursuantAlso, pursuant to Mr. Woods’ agreement, his target variable compensation is $2.7 million and when he joined the Company he was granted a $7 million buy-out award in order to compensate him for the bonus which would have otherwise been paid to him by his former employer for the 2016 year and the value of awards he forfeited in connection with his resignation. Of that amount, $3 million was paid in cash on March 31, 2017 and $4.66 million was granted in the form of RSUs with a three year vesting schedule (all of which was vested as of December 31, 2020), with the increase in award value from $4 million to $4.66 million due to the difference between the initial valuation and the grant date values.million.
The agreements include the following definitions of cause and good reason:
“Cause” includes (i) any conviction (including a plea of guilty or of nolo contendere or entry into a pre-trial diversion program) for the commission of a felony or any conviction of any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829; (ii) an act of gross misconduct, fraud, embezzlement, theft or material dishonesty with the executive’s duties or in the course of employment with the Company or an affiliate; (iii) failure on the part of executive to perform his or her employment duties in any material respect, which is not cured to the reasonable satisfaction of the Company within 30 days after the executive receives written notice of such failure; (iv) the executive’s violation of the provisions of his or her employment agreement relating to non-solicitation, confidentiality, ownership of materials, duty to return Company property or intellectual property rights; and/or (v) the executive makes any material false or disparaging comments about the Company or any Company affiliate, or any Company or Company affiliate employee, officer, or director, or engages in any such activity which in the opinion of the Company is not consistent with providing an orderly handover of the executive’s responsibilities.
“Good Reason” includes a material diminution in the executive’s authority, duties, or responsibilities, a material diminution in the executive’s base salary other than a general reduction in base salary that affects all similarly situated colleagues, or a relocation of the executive’s principal place of employment by more than 50 miles from his or her current principal place of employment, unless the new principal place of employment is closer to the executive’s home address.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
Potential Payments Table
The following table summarizes estimated payments and benefits that would be provided to our NEOs pursuant to their employment agreements, our severance practice and the terms of outstanding awards, in connection with a termination of employment under various scenarios or a change of control, assuming such event occurred on December 31, 2020.2021.
For a summary of the material terms of the outstanding equity awards, the severance to which NEOs would be entitled, and the terms and conditions of our NEOs’ employment agreements, see “—Equity Awards”, “—Severance” and “—Employment Agreements with ourOur NEOs” above.
| Name | Voluntary Termination ($) | Voluntary Termination with Good Reason ($) | Not for Cause Termination ($) | For Cause Termination ($) | Change in Control Not for Cause Termination ($) | Change in Control Good Reason Resignation ($) | Change in Control Only (No Related Termination) ($) | Death ($) | Disability ($) | Retirement ($) | Voluntary Termination ($)(13) | Voluntary Termination with Good Reason ($) | Not for Cause Termination ($) | For Cause Termination ($) | Change in Control Not for Cause Termination ($) | Change in Control Good Reason Resignation ($) | Change in Control Only (No Related Termination) ($) | Death ($) | Disability ($) | Retirement ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Van Saun | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Payment |
| 4,159,650 | (6) |
| 5,509,900 | (7) |
| 5,509,900 | (7) |
| - |
|
| 14,604,600 | (8) |
| 14,604,600 | (8) |
| - |
|
| 2,535,900 | (9) |
| 743,500 | (10) |
| 4,159,650 | (6) |
| 5,369,650 | (6) |
| 5,509,900 | (7) |
| 5,509,900 | (7) |
| - |
|
| 14,604,600 | (8) |
| 14,604,600 | (8) |
| - |
|
| 2,535,900 | (9) |
| 743,500 | (10) |
| 5,369,650 | (6) | ||||||||||||||||||||
Equity Awards(1)(2) |
| 15,504,749 |
|
| 15,504,749 |
|
| 15,504,749 |
|
| - |
|
| 15,504,749 |
|
| 15,504,749 |
|
| - |
|
| 15,504,749 |
|
| 15,504,749 |
|
| 15,504,749 |
|
| - |
|
| 17,677,879 |
|
| 20,065,185 |
|
| - |
|
| 20,065,185 |
|
| 20,065,185 |
|
| - |
|
| 20,065,185 |
|
| 20,065,185 |
|
| 17,677,879 |
| ||||||||||||||||||||
Health Benefits(3) |
| - |
|
| 1,345 |
|
| 1,345 |
|
| - |
|
| 1,345 |
|
| 1,345 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 944 |
|
| 944 |
|
| - |
|
| 944 |
|
| 944 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Outplacement Services(4) |
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Total |
| 19,664,399 |
|
| 21,023,278 |
|
| 21,023,278 |
|
| - |
|
| 30,117,978 |
|
| 30,117,978 |
|
| - |
|
| 18,040,649 |
|
| 16,248,249 |
|
| 19,664,399 |
|
| 5,369,650 |
|
| 23,196,007 |
|
| 25,583,313 |
|
| - |
|
| 34,678,013 |
|
| 34,678,013 |
|
| - |
|
| 22,601,085 |
|
| 20,808,685 |
|
| 23,047,529 |
| ||||||||||||||||||||
John F. Woods | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Payment |
| - |
|
| - |
|
| 350,000 | (11) |
| - |
|
| 4,089,500 | (12) |
| 4,089,500 | (12) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 350,000 | (11) |
| - |
|
| 4,294,500 | (12) |
| 4,294,500 | (12) |
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Equity Awards(1)(5) |
| - |
|
| - |
|
| 3,974,009 |
|
| - |
|
| 5,650,902 |
|
| 5,650,902 |
|
| - |
|
| 5,650,902 |
|
| 5,650,902 |
|
| 5,650,902 |
|
| - |
|
| - |
|
| 6,120,671 |
|
| - |
|
| 7,483,739 |
|
| 7,483,739 |
|
| - |
|
| 7,483,739 |
|
| 7,483,739 |
|
| 6,528,816 |
| ||||||||||||||||||||
Health Benefits(3) |
| - |
|
| - |
|
| 1,198 |
|
| - |
|
| 1,198 |
|
| 1,198 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,256 |
|
| - |
|
| 1,256 |
|
| 1,256 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Outplacement Services(4) |
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Total |
| - |
|
| - |
|
| 4,332,491 |
|
| - |
|
| 9,748,884 |
|
| 9,748,884 |
|
| - |
|
| 5,650,902 |
|
| 5,650,902 |
|
| 5,650,902 |
|
| - |
|
| - |
|
| 6,479,211 |
|
| - |
|
| 11,786,779 |
|
| 11,786,779 |
|
| - |
|
| 7,483,739 |
|
| 7,483,739 |
|
| 6,528,816 |
| ||||||||||||||||||||
Donald H. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
McCree III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Donald H. McCree III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Payment |
| - |
|
| - |
|
| 350,000 | (11) |
| - |
|
| 4,251,500 | (12) |
| 4,251,500 | (12) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 350,000 | (11) |
| - |
|
| 4,319,000 | (12) |
| 4,319,000 | (12) |
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Equity Awards(1)(5) |
| - |
|
| - |
|
| 4,468,605 |
|
| - |
|
| 6,239,405 |
|
| 6,239,405 |
|
| - |
|
| 6,239,405 |
|
| 6,239,405 |
|
| 6,239,405 |
|
| - |
|
| - |
|
| 6,462,005 |
|
| - |
|
| 7,844,303 |
|
| 7,844,303 |
|
| - |
|
| 7,844,303 |
|
| 7,844,303 |
|
| 6,889,381 |
| ||||||||||||||||||||
Health Benefits(3) |
| - |
|
| - |
|
| 1,265 |
|
| - |
|
| 1,265 |
|
| 1,265 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,339 |
|
| - |
|
| 1,339 |
|
| 1,339 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Outplacement Services(4) |
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Total |
| - |
|
| - |
|
| 4,827,154 |
|
| - |
|
| 10,499,454 |
|
| 10,499,454 |
|
| - |
|
| 6,239,405 |
|
| 6,239,405 |
|
| 6,239,405 |
|
| - |
|
| - |
|
| 6,820,628 |
|
| - |
|
| 12,171,926 |
|
| 12,171,926 |
|
| - |
|
| 7,844,303 |
|
| 7,844,303 |
|
| 6,889,381 |
| ||||||||||||||||||||
Malcolm Griggs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Payment |
| - |
|
| - |
|
| 267,500 | (11) |
| - |
|
| 2,992,000 | (12) |
| 2,992,000 | (12) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 267,500 | (11) |
| - |
|
| 3,082,000 | (12) |
| 3,082,000 | (12) |
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Equity Awards(1)(5) |
| - |
|
| - |
|
| 1,881,512 |
|
| - |
|
| 2,420,809 |
|
| 2,420,809 |
|
| - |
|
| 2,420,809 |
|
| 2,420,809 |
|
| 2,420,809 |
|
| - |
|
| - |
|
| 2,681,343 |
|
| - |
|
| 3,078,621 |
|
| 3,078,621 |
|
| - |
|
| 3,078,621 |
|
| 3,078,621 |
|
| 2,792,144 |
| ||||||||||||||||||||
Health Benefits(3) |
| - |
|
| - |
|
| 859 |
|
| - |
|
| 859 |
|
| 859 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 906 |
|
| - |
|
| 906 |
|
| 906 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Outplacement Services(4) | - |
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| - |
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||||||
Total |
| - |
|
| - |
|
| 2,157,155 |
|
| - |
|
| 5,420,952 |
|
| 5,420,952 |
|
| - |
|
| 2,420,809 |
|
| 2,420,809 |
|
| 2,420,809 |
|
| - |
|
| - |
|
| 2,957,033 |
|
| - |
|
| 6,168,811 |
|
| 6,168,811 |
|
| - |
|
| 3,078,621 |
|
| 3,078,621 |
|
| 2,792,144 |
| ||||||||||||||||||||
Susan LaMonica | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brendan Coughlin | Brendan Coughlin |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Payment |
| - |
|
| - |
|
| 267,500 | (11) |
| - |
|
| 2,970,000 | (12) |
| 2,970,000 | (12) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 312,500 | (11) |
| - |
|
| 2,675,000 | (12) |
| 2,675,000 | (12) |
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Equity Awards(1)(5) |
| - |
|
| - |
|
| 1,902,897 |
|
| - |
|
| 2,434,112 |
|
| 2,434,112 |
|
| - |
|
| 2,434,112 |
|
| 2,434,112 |
|
| 2,434,112 |
|
| - |
|
| - |
|
| 2,191,833 |
|
| - |
|
| 2,875,777 |
|
| 2,875,777 |
|
| - |
|
| 2,875,777 |
|
| 2,875,777 |
|
| 2,039,263 |
| ||||||||||||||||||||
Health Benefits(3) |
| - |
|
| - |
|
| 822 |
|
| - |
|
| 822 |
|
| 822 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,377 |
|
| - |
|
| 1,377 |
|
| 1,377 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Outplacement Services(4) |
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 7,284 |
|
| - |
|
| 7,284 |
|
| 7,284 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||||||||||
Total |
| - |
|
| - |
|
| 2,178,503 |
|
| - |
|
| 5,412,218 |
|
| 5,412,218 |
|
| - |
|
| 2,434,112 |
|
| 2,434,112 |
|
| 2,434,112 |
|
| - |
|
| - |
|
| 2,512,994 |
|
| - |
|
| 5,559,438 |
|
| 5,559,438 |
|
| - |
|
| 2,875,777 |
|
| 2,875,777 |
|
| 2,039,263 |
| ||||||||||||||||||||
| (1) | These amounts reflect the value of equity-based awards expected to vest, with values determined by multiplying the number of shares subject to outstanding awards by |
| (2) | For a description of the treatment of Mr. Van Saun’s outstanding equity awards, please see “—Termination of Employment and Change of Control—Employment Agreements with |
| (3) | These amounts reflect the cost of COBRA benefit continuation coverage for one month under the plan in which the particular executive is enrolled, less the monthly active colleague rate for those benefits. This represents the benefit received by the NEOs as a result of receiving coverage at active colleague rates for one month, when they would have otherwise been required to elect COBRA to receive continued coverage. |
|
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| (4) | These amounts reflect the cost for us to provide outplacement services for executive level colleagues for 12 months under our outplacement policy. |
| (5) | For a description of the treatment of outstanding equity awards held by NEOs other than Mr. Van Saun, please see “—Termination of Employment and Change of Control—Equity Awards.” |
| (6) | This amount includes a pro-rata portion of Mr. Van Saun’s |
| (7) | This amount reflects the sum of (i) two times Mr. Van Saun’s base salary and (ii) a pro-rata portion of his target cash bonus for |
| (8) | This amount reflects (i) three times the sum of Mr. Van Saun’s (a) base salary and (b) |
| (9) | This amount reflects a pro-rata portion of Mr. Van Saun’s target cash bonus for |
| (10) | This amount reflects six months of base salary, which would be paid to Mr. Van Saun prior to his receipt of long-term disability benefits. |
| (11) | This amount reflects 26 weeks of base salary. |
| (12) | This amount reflects (i) two times the sum of (a) base salary and (b) the average cash bonus paid for 2021, 2020, |
| (13) | Voluntary termination for purposes of this table differs from “Retirement” in that it assumes our NEOs terminate voluntarily and engage in competitive activity by becoming employed by another financial services company, as opposed to truly retiring. |
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
The Company acknowledges that there are inherent risks associated with executive compensation and has taken a multi-faceted approach to manage those risks, including the following:
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
Based on the Compensation and HR Committee’s most recent review of our compensation policies and practices for all of our colleagues, it has concluded that our compensation policies and practices are not reasonably likely to have a material adverse impact on the Company.
SEC Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing this disclosure regarding the relationship of the annual total compensation of our colleagues and the annual total compensation of Bruce Van Saun, our Chief Executive Officer.
In accordance with the rule, we are using the same median employee identified in the proxy statement for last year’s annual meeting of stockholders because there has been no change in our employee population or our employee compensation arrangements that we believe would significantly impact the pay ratio disclosure.
For 2020, our last completed fiscal year, the median of the annual total compensation of all colleagues of our Company (other than our CEO) was $69,582, and the annual total compensation of our CEO, as reported in the 2020 Summary Compensation Table included in this proxy statement, was $14,335,323. Based on this information, for 2020 the reasonably estimated ratio of the annual total compensation of Mr. Van Saun, our Chief Executive Officer, to the median of the annual total compensation of all colleagues, calculated in a manner consistent with Item 402(u) of Regulation S-K, was 206 to 1.
These amounts have been calculated in accordance with the requirements of Item 402(u) of Regulation S-K and, for our CEO, is consistent with the amount reported in the “Total” column of our 2020 Summary Compensation Table included in this proxy statement.
Supplemental Pay Ratio
In addition to the required pay ratio calculation, we have calculated an alternative pay ratio that compares compensation for our median employee to our CEO compensation excluding the $4,434,064 value attributable to the modification of his 2020 PSU award, as further described in “Compensation Discussion and Analysis—Section 1. Executive Compensation Overview—Variable Compensation Mix—2020 PSU Modification.” When calculated without this value, our CEO’s adjusted pay is $9,901,259, resulting in an alternative pay ratio of 142 to 1.
| CEO Pay Ratio | CEO 2020 Total Compensation | Median Employee 2020 Total Compensation | Pay Ratio | |||
SEC Calculated Pay Ratio | $14,335,323 | $69,582 | 206:1 | |||
Supplemental Pay Ratio | $9,901,259 | $69,582 | 142:1 | |||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
SEC rules require us to disclose the ratio of the annual total compensation of our CEO, Bruce Van Saun, to our median employee’s annual total compensation. For the year ended December 31, 2021:
| • | The annual total compensation for Mr. Van Saun as reported in the 2021 Summary Compensation Table was $12,430,076. |
The annual total compensation of our median employee was $82,418 (see below for additional detail).
The resulting ratio of Mr. Van Saun’s annual total compensation to that of our median employee is 151 to 1.
The pay ratio rules allow issuers to use the same median employee for comparison purposes for up to three years. Since we last identified our median employee as of November 30, 2018, a new median employee was selected as of November 30, 2021. To identify our median employee we reviewed our employee population as of November 30, 2021 and the amount of their compensation for the period of January 1, 2021 through November 30, 2021 as would be reported to the Internal Revenue Service in Box 1, which we determined reasonably reflects the compensation of our employees. This calculation included all of our part-time and full time-employees as of such date, and we did not annualize the compensation for any of our employees who were only employed for part of the year. In addition, because all our colleagues are located in the United States, as is our CEO, we did not make any cost-of-living adjustments in identifying the median employee. Once we identified our median employee, we calculated and combined all of the elements of this employee’s compensation for the full 2021 year in accordance with the requirements of Item 402 of Regulation S-K.
The Citizens Financial Group, Inc. Non-Employee Director Compensation Policy (“Director Compensation Policy”) governs the compensation of our non-employee directors. The Director Compensation Policy is reviewed on an annual basis by the Compensation and HR Committee, together with its independent compensation consultant, CAP, who reviews our program to ensure consistency with sound governance practices and makes recommendations, as appropriate. The Compensation and HR Committee reviews market data and recommendations provided by CAP and considers their advice on industry best practice when making decisions regarding director compensation. Any changes to director compensation are approved by the Compensation and HR Committee in addition to the Nominating and Corporate Governance Committee and the full Board.
Given the economic environment, no changes were made to director compensation asAs a result of the review of director compensation in April 2020 review2021, directors’ annual cash retainer increased by $10,000 to $100,000. This change was approved by the Compensation and HR Committee, the Nominating and Corporate Governance Committee, and the existingfull Board and was effective as of our annual meeting of stockholders held on, April 22, 2021. The director compensation program has continued in effect untilprovides additional compensation for leadership positions on the next scheduled annual review, in April 2021.Board, including lead director and committee chair roles. Below is a summary of the elements of our director compensation program:program, as amended:
| Element of Compensation | Amount | |
Annual Retainer (cash) | $ | |
Annual Restricted Stock Unit Award (equity) | $130,000 | |
Lead Director Retainer (cash) | $40,000 | |
Audit Committee Member Retainer (cash) | $10,000 | |
Audit Committee Chair Retainer (cash) | $35,000 | |
Risk Committee Chair Retainer (cash) | $30,000 | |
Compensation and HR Committee Chair Retainer (cash) | $25,000 | |
Nominating & Corporate Governance Committee Chair Retainer (cash) | $20,000 | |
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
On the date of each annual meeting of our stockholders, each non-employee director receives a grant of RSUs under the Citizens Financial Group, Inc. 2014 Non-Employee Directors Compensation Plan (“Directors Plan”), having a fair market value of $130,000, as compensation for their service until the next annual meeting. RSUs vest immediately as of the grant date, subject to the terms and conditions of the Directors Plan and the applicable award agreement. Director RSUs are not settled until a director’s cessation of service. To the extent dividends are declared between the grant and ultimate settlement date, dividend equivalents are reinvested into additional RSUs with the same terms and conditions as the related award.
Non-employee directors are subject to stock ownership guidelines requiring that they hold shares with a value at least equal to five times their annual cash retainer within five years following their service start date. As mentioned above, director RSUs are subject to mandatory deferral and are not settled until a director’s cessation of service. The types of awards that count toward meeting this requirement are consistent with those applicable to executives, as discussed above in “Compensation Discussion and Analysis—Section 5.4. Governance Policies and Practices—Stock Ownership and Retention Guidelines.”
Directors may defer up to 100% of their cash compensation under our Directors Deferred Compensation Plan. Contributions to this plan are credited with interest on a monthly basis, based on the applicable interest crediting rate. The interest crediting rate is the annualized average yield on the United States Treasury bond 10-year constant maturity for the immediately preceding calendar quarter plus two percent (2%), which is then divided by 12 to determine the monthly interest crediting rate. There are no Company contributions to this plan and no above-market or preferential earnings on compensation deferred pursuant to this plan.
Directors are also eligible to receive matching charitable contributions as part of our general matching charitable contribution program. Under this program, to the extent directors choose to make charitable
|
| |||
contributions to qualifying charitable organizations the Company matches those contributions dollar-for-dollar up to an annual limit of $5,000. Our non-employee directors do not participate in our employee benefit programs. In addition, directors receive reimbursement of business expenses incurred in connection with their attendance at meetings.
20202021 Director Compensation Table
The following table shows compensation for our non-employee directors during 2020.2021. As described above, therethe Director Compensation Policy was amended effective April 22, 2021. Prior to that date, directors were no changes tocompensated in accordance with the prior version of our Director Compensation Policy during 2020.Policy.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(3) | Other Compensation($)(4) | Total Compensation($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(4) | Other Compensation($)(5) | Total Compensation($) | ||||||||||||||||||||||||
Mark Casady(1) | 30,000 | 2,831 | 5,000 | 37,831 | ||||||||||||||||||||||||||||
Lee Alexander(1) | 98,333 | 162,622 | 5,000 | 265,955 | ||||||||||||||||||||||||||||
Christine M. Cumming | 90,000 | 152,887 | - | 242,887 | 96,667 | 148,085 | - | 244,752 | ||||||||||||||||||||||||
William P. Hankowsky | 100,000 | 152,887 | - | 252,887 | 106,667 | 148,085 | - | 254,752 | ||||||||||||||||||||||||
Howard W. Hanna III | 100,000 | 152,887 | 5,000 | 257,887 | 33,333 | 4,057 | 5,000 | 42,390 | ||||||||||||||||||||||||
Leo I. Higdon | 125,000 | 152,887 | 5,000 | 282,887 | 131,667 | 148,085 | 5,000 | 284,752 | ||||||||||||||||||||||||
Edward J. Kelly III | 90,000 | 145,877 | - | 235,877 | 96,667 | 143,767 | 5,000 | 245,434 | ||||||||||||||||||||||||
Charles J. Koch | 130,000 | 152,887 | 5,000 | 287,887 | 136,667 | 148,085 | 5,000 | 289,752 | ||||||||||||||||||||||||
Robert G. Leary | 60,000 | 136,270 | - | 196,270 | ||||||||||||||||||||||||||||
Robert Leary | 96,667 | 137,848 | 5,000 | 239,515 | ||||||||||||||||||||||||||||
Terrance J. Lillis | 100,000 | 145,877 | 5,000 | 250,877 | 106,667 | 143,767 | 5,000 | 255,434 | ||||||||||||||||||||||||
Shivan Subramaniam | 150,000 | 152,887 | 5,000 | 307,887 | 156,667 | 148,085 | 5,000 | 309,752 | ||||||||||||||||||||||||
Wendy A. Watson(2) | 135,000 | 152,887 | 5,000 | 292,887 | ||||||||||||||||||||||||||||
Christopher J. Swift(1) | 89,167 | 162,622 | 5,000 | 256,789 | ||||||||||||||||||||||||||||
Wendy A. Watson(3) | 141,667 | 148,085 | 5,000 | 294,752 | ||||||||||||||||||||||||||||
Marita Zuraitis | 90,000 | 152,887 | - | 242,887 | 96,667 | 148,085 | - | 244,752 | ||||||||||||||||||||||||
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS | |||
| (1) | Mr. |
| (2) | Mr. Hanna left the Board at the conclusion of our April |
During |
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Amounts in this column reflect matching charitable contributions made by the Company on behalf of directors during |
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As required by Section 14A of the Exchange Act, stockholders will have an opportunity to cast an advisory vote regarding their preference as to how frequently the Company should seek future advisory votes on the compensation of our named executive officers. This proposal is typically known as a “say-on-frequency” vote and is required every six years. At our 2015 Annual Meeting, when this vote was initially held, stockholders voted in favor of an annual advisory vote on executive compensation. The Board affirmed that recommendation and has held say-on-pay votes annually since that time.
The Board is in favor of continuing annual say-on-pay votes because it provides stockholders the opportunity to provide the Company with prompt feedback regarding emerging trends in compensation as well as any changes to our compensation program.
By voting with respect to this proposal, stockholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation every year, every 2 years, or every 3 years.
We ask our stockholders to vote on the following resolution at the Annual Meeting:
RESOLVED, that the stockholders advise the Company to include an advisory vote with respect to the compensation of the Company’s named executive officers pursuant to Section 14A of the Securities Exchange Act every year, every 2 years, or every 3 years as reflected by their votes for each of these alternatives in connection with this resolution.
Although our Board recommends holding this vote every year, stockholders have the option to specify one of the following four choices for this proposal on the Proxy Card: every “1 year,” every “2 years,” every “3 years,” or “Abstain.” In voting on this resolution, you should select every year, every 2 years, or every 3 years based on your preference as to the frequency with which an advisory vote on executive compensation should be held. If you have no preference you should abstain.
Because your vote is advisory, it will not be binding upon the Board. However, the Board will consider the outcome of the vote when considering the frequency of advisory stockholder approval of the compensation of the Company’s named executive officers.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - AUDIT MATTERS | |||
Ratify the Appointment of Deloitte & Touche LLP (“Deloitte”)
| ||||
The Audit Committee has appointed Deloitte, an independent registered public accounting firm, as the independent auditor to perform an integrated audit of the Company for the fiscal year ending December 31, 2021.2022. Deloitte served as our independent auditor for the fiscal year ended December 31, 20202021 and has served as our independent auditor since becoming a public company in 2014 and prior to that as a privately held company since 2000.
The Audit Committee periodically considers the rotation of the external auditor to ensure independence. In determining whether to retain Deloitte, the Audit Committee considered, among other things, the firm’s independence, objectivity, professional skepticism, qualifications, expertise and performance on the Company’s audit which is evaluated annually. The Audit Committee has oversight of the audit firm fee negotiation process and is responsible for approving audit fees. It also oversees the rotation of the lead audit partner as mandated by SEC requirements and is directly involved in the selection of a new lead audit partner. The currentA new lead audit partner was appointedidentified in 20162020. The transition process was overseen by the Audit Committee during the course of 2021 in preparation for the 2017 audit. Under the Audit Committee’s oversight, a new lead audit partner has been selectedpartner’s formal appointment in February 2022, and the transition to the new lead audit partner will begin during the 2021 audit in preparation for their appointment, which will begin in conjunction with thefiscal year 2022 audit. The Audit Committee also has oversight of the audit firm fee negotiation process and is responsible for approving audit fees.
The Board believes that the reappointment of Deloitte as the independent registered public accounting firm for fiscal year 20212022 is in the best interests of the Company and its stockholders. Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of Deloitte as our independent registered public accounting firm, however, the Board believes that obtaining stockholder ratification of the appointment is a sound corporate governance practice. If the stockholders do not vote in favor of Deloitte, the Audit Committee will reconsider the appointment and in doing so, assess the impact of changing the auditor and the appropriate timing for doing so. The Audit Committee may retain Deloitte or hire another firm without resubmitting the matter for stockholders to approve. The Audit Committee retains the discretion at any time to appoint a different independent auditor.
Representatives of Deloitte are expected to be present at the Annual Meeting, available to respond to appropriate questions and will have the opportunity to make a statement if they desire.
The purpose of the Audit Committee is to assist Citizens Financial Group, Inc.’s Board of Directors in its oversight of (i) the integrity of the financial statements of the Company, (ii) the appointment, compensation, retention and evaluation of the qualifications, independence and performance of the Company’s independent external auditor, (iii) the performance of the Company’s internal audit function, and (iv) compliance by the Company with legal and regulatory requirements.
The Audit Committee operates pursuant to a Charter that was last amended and restated by the Board on February 14, 2019. As set forth in the Charter, management of the Company is primarily responsible for the adequacy and effectiveness of the Company’s financial reporting process, systems of internal accounting and financial controls. Deloitte, the Company’s independent auditor for 2020,2021, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of the Company’s internal control over financial reporting.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - AUDIT MATTERS | |||
In this context, the Audit Committee has reviewed and discussed with management and Deloitte the audited financial statements for the year ended December 31, 2020.2021.
The Audit Committee has discussed with Deloitte the matters that are required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) standards, including critical audit matters that arose during the year, and SEC and NYSE requirements. Deloitte has provided to the Audit Committee the written disclosures and the PCAOB-required letter regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Deloitte their independence giving consideration to the provision of audit and non-audit services and fees paid to the firm.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 20202021 be included in the Company’s 20202021 Annual Report on Form 10-K, for filing with the SEC. This report is provided by the following independent directors, who comprise the Audit Committee:
Wendy A. Watson (Chair) Lee Alexander William P. Hankowsky
| Leo I. Higdon Charles J. Koch Terrance J. Lillis | |
February | ||
PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES
The Audit Committee approves in advance all audit, audit-related, tax, and other services performed by the independent auditors. The Audit Committee pre-approves specific categories of services up to pre-established fee thresholds. Unless the type of service has previously been pre-approved, the Audit Committee must approve that specific service before the independent auditors may perform it. In addition, separate approval is required if the amount of fees for any pre-approved category of service exceeds the fee thresholds established by the Audit Committee. The Audit Committee may delegate to the Chair or any independent member of the Audit Committee pre-approval authority with respect to permitted services, provided that the member must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. All fees described below were pre-approved by the Audit Committee.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
The following table presents fees paid by the Company for services performed by its independent registered public accounting firm, Deloitte, and its affiliates for the years ended December 31, 20202021 and 2019.2020.
| 2020 | 2019 | |||||||
Audit fees | $ | 5,384,000 |
| $ | 5,743,000 |
| ||
Audit-related fees(1) |
| 882,000 |
|
| 960,391 |
| ||
Tax fees(2) |
| 362,255 |
|
| 487,513 |
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All other fees(3) |
| - |
|
| 132,000 |
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|
|
|
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Total | $ | 6,628,255 |
| $ | 7,322,904 |
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| 2021 | 2020 | |||||||
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Audit fees | $ | 5,169,000 |
| $ | 5,384,000 |
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Audit-related fees(1) |
| 890,000 |
|
| 882,000 |
| ||
Tax fees(2) |
| 721,528 |
|
| 362,255 |
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All other fees |
| - |
|
| - |
| ||
|
|
|
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Total | $ | 6,780,528 |
| $ | 6,628,255 |
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| (1) | Includes required compliance services associated with several of the Company’s lending programs (e.g., Ginnie Mae, Housing and Urban Development (HUD), Uniform Single Attestation Program (USAP) and the Family Education Loan Program) and Statement on Standards for Attestation Engagements (SSAE) No. 18 reports for the Company’s cash management and investment management clients, and services provided in conjunction with the Company’s 401k and Pension audits. |
| (2) | Includes aggregate fees billed for tax services, including tax compliance, planning and consulting. |
|
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - MANAGEMENT PROPOSAL | |||
Management Proposal to Amend the Company’s Certificate of Incorporation to Eliminate Supermajority Vote Requirements
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The Board is seeking stockholder approval to amend Article 11 of our Restated Certificate of Incorporation (the “Charter”). The amendments to Article 11 will reduce the vote required to repeal or amend in any respect Section 4.02 of Article 4 (Voting Rights), and Articles 6 (Board of Directors), 7 (Meetings of Stockholders), 8 (Indemnification) and 11 (Amendments) from not less than 75% of the total voting power of all outstanding securities of the Company entitled to vote, to a majority of the voting power of the Company.
If adopted, the amendment will become effective upon the filing of the amended Charter with the Secretary of State of the State of Delaware.
In conjunction with the proposed amendments to the Charter, the Board has approved amendments to the Company’s Bylaws which will reduce the vote required to repeal or amend in any respect Articles 2 (Meetings of Stockholders), 3 (Directors), 4 (Officers) and Section 6.06 of Article 6 (Amendments) of the Bylaws from 75% of the total voting power of all outstanding securities of the Company entitled to vote or a majority of the Board of Directors, to a majority of the voting power of the Company or a majority of the Board of Directors.
The changes to the Bylaws are subject to and will become effective upon stockholder approval of the proposed changes to the Charter and the filing of the amended Charter with the Secretary of State of the State of Delaware.
Proposed Changes
The proposed amended provisions of the Charter are outlined as follows:
ARTICLE 11 - AMENDMENTS
Section 11.01. Amendments. The Corporation reserves the right to amend this Certificate of Incorporation in any manner permitted by the Delaware Law and all rights and powers conferred upon stockholders, directors and officers herein are granted subject to this reservation.Notwithstanding the foregoing, the provisions set forth in in Section 4.02 and Articles 6, 7, 8, and this Article 11 may not be repealed or amended in any respect, and no other provision may be adopted, amended or repealed which would have the effect of modifying or permitting the circumvention of the provisions set forth in any of Section 4.02 and Articles 6, 7, 8, and this Article 11, unless such action is approved by the affirmative vote of the holders of not less than 75% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - MANAGEMENT PROPOSAL | |||
Board Consideration of Supermajority Vote Requirements
While serving as a takeover defense, supermajority vote requirements also ensure that a large majority of shareholders are aligned with the corporate action in question, however, the Board recognizes that such a condition can result in minority stockholders blocking actions that are in the best interests of the Company’s stockholders and supported by the majority of them.
The Board believes that eliminating supermajority vote requirements in favor of a simple majority vote standard will reduce the risk of minority stockholders blocking proposed corporate actions requiring stockholder approval while maintaining the protections afforded by ensuring alignment of actions with a majority of stockholders. The proposed amendment also makes it easier for stockholders to approve future amendments to the Charter.
Over 70 percent of the S&P 500 do not have supermajority vote requirements, consistent with corporate governance best practices. Eliminating supermajority voting provisions in our Charter further enhances existing stockholder rights and the Company’s strong corporate governance policies which are highlighted on page 7 of this Proxy Statement, and the Board strongly recommends that stockholders approve the proposed changes to the Charter as described above.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - SECTION 16(A) REPORTS AND BENEFICIAL STOCK OWNERSHIP | |||
Under Section 16(a) of the Exchange Act, the Company’s directors and executive officers and persons who beneficially own more than 10% of the outstanding shares of common stock are required to report their beneficial ownership of the common stock and any changes in that beneficial ownership to the SEC and the NYSE. Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, the Company believes that these filing requirements were satisfied by all of its directors and officers and 10% or more beneficial owners of Company stock during 2021 with the exception of a gift of the pecuniary interest in shares to family members made by Mr. Hankowsky which was not reported timely on a Form 5.
The following table indicatestables indicate information regarding the beneficial ownership of our common stock by:
· each person whom we know to own beneficially more than 5% of our common stock;
· each of the directors, nominees and named executive officers individually; and
· all directors, nominees and executive officers as a group.
In accordance with SEC rules, beneficial ownership includes sole or shared voting or investment power with respect to securities and includes the shares issuable pursuant to restricted stock units and performance stock units that will become vested within 60 days of the date of determination. Under these rules, one or more persons may be a deemed beneficial owner of the same securities and a person may be deemed a beneficial owner of securities to which such person has no economic interest. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
The number of shares and percentage of beneficial ownership of each person in the table below whom we know to beneficially own more than 5% of our common stock are as of December 31, 2020.2021. The number of shares and percentage of beneficial ownership for each of the directors and named executive officers individually and all directors and executive officers as a group in the table below are as of February 26, 2021.28, 2022. As of February 26, 2021,28, 2022, there were 425,106,419422,142,765 shares of our common stock outstanding.
Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of more than 5% of the shares of our common stock. Except as otherwise noted below, the address for each person listed on the table is c/o Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - SECTION 16(A) REPORTS AND BENEFICIAL STOCK OWNERSHIP | |||
| NAME OF BENEFICIAL OWNER | NUMBER OF SHARES | % | ||
5% Stockholders | ||||
The Vanguard Group, Inc(1)
|
48,912,586
|
11.5
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BlackRock, Inc.(2)
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40,484,257
|
9.5
| ||
Capital International Investors(3)
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35,167,375
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8.2
| ||
State Street Corporation(4)
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23,575,378
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5.5
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Invesco Ltd.(5)
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21,482,962
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5.0
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Directors and Named Executive Officers
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Bruce Van Saun
|
845,713
|
*
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Malcolm Griggs
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78,447
|
*
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Susan LaMonica
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120,398
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*
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Donald H. McCree III
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206,423
|
*
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John F. Woods
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121,265
|
*
| ||
Lee Alexander
|
772
|
*
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Christine M. Cumming
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24,019
|
*
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William P. Hankowsky
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52,313
|
*
| ||
Howard W. Hanna III
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36,148
|
*
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Leo I. Higdon
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30,191
|
*
| ||
Edward J. Kelly III
|
11,714
|
*
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Charles J. Koch | 101,148
|
*
| ||
Robert G. Leary
|
6,792
|
*
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Terrance J. Lillis
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12,714
|
*
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Shivan Subramaniam
|
59,148
|
*
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Christopher J. Swift
|
772
|
*
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Wendy A. Watson
|
27,148
|
*
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Marita Zuraitis
|
29,148
|
*
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All directors and executive officers as a group (23 persons)
|
1,988,073
|
*
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Beneficial Ownership of Directors, Nominees and Named Executive Officers
| NAME | SHARES OF COMMON STOCK(1) | RESTRICTED STOCK UNTS(2) (3) | TOTAL | % | ||||||||||||||||
Bruce Van Saun | 773,126 | 124,079 | 897,205 | * | ||||||||||||||||
Brendan Coughlin | 29,485 | 12,521 | 42,006 | * | ||||||||||||||||
Malcolm Griggs | 63,832 | 22,731 | 86,563 | * | ||||||||||||||||
Donald H. McCree III | 177,099 | 49,597 | 226,696 | * | ||||||||||||||||
John F. Woods | 97,415 | 45,499 | 142,914 | * | ||||||||||||||||
Lee Alexander | 0 | 3,903 | 3,903 | * | ||||||||||||||||
Christine M. Cumming | 2,416 | 25,179 | 27,595 | * | ||||||||||||||||
Kevin Cummings | 0 | 0 | 0 | * | ||||||||||||||||
William P. Hankowsky | 30,710 | 25,179 | 55,889 | * | ||||||||||||||||
Leo I. Higdon | 8,588 | 25,179 | 33,767 | * | ||||||||||||||||
Edward J. Kelly III | 0 | 15,196 | 15,196 | * | ||||||||||||||||
Charles J. Koch | 79,545 | 25,179 | 104,724 | * | ||||||||||||||||
Robert G. Leary | 0 | 10,116 | 10,116 | * | ||||||||||||||||
Terrance J. Lillis | 1,000 | 15,196 | 16,196 | * | ||||||||||||||||
Michele N. Siekerka | 0 | 0 | 0 | * | ||||||||||||||||
Shivan Subramaniam | 37,545 | 25,179 | 62,724 | * | ||||||||||||||||
Christopher J. Swift | 0 | 3,903 | 3,903 | * | ||||||||||||||||
Wendy A. Watson | 5,545 | 25,179 | 30,724 | * | ||||||||||||||||
Marita Zuraitis | 7,545 | 25,179 | 32,724 | * | ||||||||||||||||
All directors, nominees and executive officers as a group (24 persons) | 1,507,517 | 539,191 | 2,046,708 | * | ||||||||||||||||
| * | Less than 1% |
| (1) | Includes the following shares beneficially owned for the indicated director or officer: |
| - | For Mr. McCree, amount includes 145,588 shares held by trusts for his children |
| - | For Mr. Hankowsky, amount includes 83 shares held for the benefit of his children and to which he disclaims beneficial ownership |
| - | For Mr. Subramaniam, amount includes 4,000 shares held by his children. |
| (2) | Amounts in this column for executive officers reflect restricted stock units, including performance-based restricted stock units, which will vest and be distributed in an equivalent number of shares of our common stock within 60 days of February 28, 2022. |
| (3) | Amounts in this column for directors reflect restricted stock units granted to directors under the Director Compensation Policy. These restricted stock units are vested. However, settlement in an equivalent number of shares of our common stock is deferred until the director ceases to serve on the Board. |
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - SECTION 16(A) REPORTS AND BENEFICIAL STOCK OWNERSHIP | |||
Beneficial Ownership of Stockholders Holding More Than Five Percent
| NAME | NUMBER OF SHARES | % | ||
The Vanguard Group, Inc(1)
|
49,015,558
|
11.5
| ||
BlackRock, Inc.(2)
|
40,372,501
|
9.5
| ||
Capital International Investors(3)
|
30,845,906
|
7.2
| ||
State Street Corporation(4)
|
24,290,700
|
5.7
|
| (1) | Represents shares beneficially owned by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355. The Vanguard Group, Inc. has no sole voting power with respect to any shares, sole dispositive power with respect to |
| (2) | Represents shares beneficially owned by BlackRock, Inc., 55 East 52nd St, New York, NY 10055. BlackRock, Inc. has sole voting power with respect to |
| (3) | Represents shares beneficially owned by Capital International Investors, 333 South Hope Street, 55th Fl, Los Angeles, CA 90071. Capital International Investors has sole voting power with respect to |
| (4) | Represents shares beneficially owned by State Street Corporation, State Street Financial Center, One Lincoln Street, Boston, MA 02111. State Street Corporation has shared voting power with respect to |
|
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
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This proxy statement and proxy card are furnished in connection with the solicitation of proxies to be voted at our Annual Meeting, which will be held solely online via live webcast atwww.meetingcenter.io/287753102 on April 22, 2021,28, 2022, at 9:00 a.m. Eastern Time.
Can I attendTime at the Annual Meeting in-person?Company’s headquarters located at One Citizens Plaza, Providence, Rhode Island 02903.
We continue to monitor the effects of the COVID-19 pandemic and are committed to the safety and security of our colleagues, stockholders and board members. Due tomembers and should circumstances change, the ongoing natureCompany may update the format of the situation, we have made the decision to hold our 2021 Annual Meeting solely online via live webcast and therefore you will not be able to attend in person.
How do I attend the Annual Meeting virtually withto be held solely by remote communication, in a virtual-only format. In this event, updates to the ability to ask questions and vote?
Stockholdersformat of Record
If you are a registered holder you can virtually attend the Annual Meeting with the abilitywill be notified by means of a press release, public filings and updates to ask questions and vote your shares by visiting www.meetingcenter.io/287753102our website at the meeting date and time and entering the control number included in your Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy card and the password “CFG2021”. The Annual Meetinghttps://investor.citizensbank.com/about-us/investor-relations/annual-meeting.aspx. Any changes will begin promptly at 9:00 a.m. Eastern Time. We encourage you to access the meeting prior to the start time leaving ample time to complete the online check-in procedures.
Beneficial Owner or “Street Name” Holder
If you hold your shares through a bank, broker or other intermediary and wish to attendbe announced not less than 10 days before the Annual Meeting withand we strongly recommend you monitor our website to confirm the ability to ask questions and vote your shares at the meeting, you have two registration options available.
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The Annual Meeting will begin promptly at 9:00 a.m. Eastern Time. We encourage you to access the meeting prior to the start time leaving ample time to complete the online check-in procedures.
How do I obtain a legal proxy and register it in advance?
If you hold your shares in street name through a bank or broker or other intermediary, you must first obtain a legal proxy, executed in your favor, from the holder of record. A legal proxy can be obtained by logging onto the voting site listed on your Notice or other information forwarded by your bank or broker and clicking on “Vote at the meeting”, or, by requesting one through your bank or broker or other intermediary that holds your shares. Once you have received your legal proxy, you must submit a request to register it in accordance with the instructions below.
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Requests for registration should be directed to Computershare by email or mail at the following addresses:
Email: legalproxy@computershare.com
Mail: Computershare, Citizens Financial Group, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001
Requests to register must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on April 20, 2021. Requests should include your name, email address and an imageformat of the legal proxy in your name from the broker, bank or other intermediary that holds your shares. By completing this process, you will receive a new control number. In order to vote at the meeting you must use this new control number to join the meeting and not the one provided on your Notice or other information forwarded by your bank or broker.
How can I submit questions and comments at the meeting?
Questions and comments may be submitted in advance of the meeting or during the live webcast. Questions and comments can be submitted in advance by emailing them to CFG2021AnnualMeeting@citizensbank.com up until 5 p.m. Eastern Time on April 21, 2021. Alternatively, once you have logged into the live webcast, questions and comments can be submitted through the Q&A function during the meeting.
Each stockholder is limited to a total of no more than three questions or comments, no more than one of which may be on a single topic. All questions and comments will be reviewed by a moderator to ensure they are appropriate to the business of the meeting before being relayed to the Chairman. Questions will be read out by the moderator in the order they are received. Duplicate questions will be not be addressed and the Company reserves the right to paraphrase questions for clarity.
What questions would be considered not to be appropriate to the business of the meeting?
The views and comments of all stockholders are welcome. However, the purpose of the meeting will be observed and questions that fall into the following categories will not be addressed at the meeting:
Irrelevant to the business of the Company or the conduct of its operations;
Related to pending or threatened litigation;
Derogatory references that are not in good taste;
Unduly prolonged;
Substantially repetitious of those made by other stockholders; or
Related to personal grievances.
Who do I contact if I have technical issues accessing the meeting?
The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. You should ensure that you have a strong WiFi connection at the location you intend to participate from, and we encourage you to access the meeting prior to the start time. If you require assistance joining the meeting, please use the support function on the Annual Meeting login page.your attendance.
Why am I receiving this proxy statement and proxy card?
You have received these proxy materials because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement describes issues on which we would like you to vote at our Annual Meeting. It also gives you information on these issues so that you can make an informed decision.
Because you own shares of our common stock, our Board of Directors has made this proxy statement and proxy card available to you on the Internet, in addition to delivering printed versions of this proxy statement and proxy card to certain stockholders by mail.
When you vote by using the Internet or (if you received your proxy card by mail) by signing and returning the proxy card, you appoint each of Bruce Van Saun, Stephen T. GannonMalcolm Griggs and Robin S. Elkowitz or any of them (each with full power of substitution) as your representatives at the Annual Meeting. They will vote your shares at the
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Annual Meeting as you have instructed them or, if an issue that is not on the proxy card comes up for vote, in accordance with their best judgment. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we encourage you to vote in advance by using the Internet or (if you received your proxy card by mail) by signing and returning your proxy card. If you vote by using the Internet, you do not need to return your proxy card.
Why did I receive a Notice of Internet Availability of Proxy Materials in the mail instead of a printed set of proxy materials?
Pursuant to rules adopted by the SEC, we are permitted to furnish our proxy materials over the Internet to our stockholders by delivering a Notice in the mail. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review the proxy statement and annual report over the Internet. The Notice also instructs you on how to electronically access and review all of the important information contained in this proxy statement and the annual report and how you may submit your proxy over the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials contained in the Notice.
Stockholders who receive a printed set of proxy materials will not receive the Notice but may still access our proxy materials and submit their proxies over the Internet by following the instructions provided on their proxy card.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
Who is entitled to vote?
Holders of our common stock at the close of business on February 26, 202128, 2022 (the record date) are entitled to vote. In accordance with Delaware law, a list of stockholders entitled to vote at the meeting will be available in electronic form on the Annual Meeting webcast site on April 22, 2021 and will be accessible in electronic form for ten days before the meeting at our principal place of business located at One Citizens Plaza, Providence, Rhode Island 02903, between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time.
How many votes is each share of common stock entitled to?
Holders of common stock are entitled to one vote per share. As of February 26, 2021,28, 2022, there were 425,106,419422,142,765 shares of our common stock outstanding.
What is the difference between a stockholder of record and a “street name” holder?
Many of our stockholders hold their shares through a broker, bank or other intermediary rather than directly in their own name. As summarized below, there are some differences between shares held of record and those owned beneficially.
Stockholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Computershare, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent directly to you by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to certain officers of Citizens Financial Group, Inc. or to vote online at the Annual Meeting. The Company has enclosed or sent a proxy card for you to use. You may also vote onby using the Internet or by telephone, as described below under the heading “How do I vote?”.
Beneficial Owner or “Street Name” Holder. If your shares are held in an account at a broker, bank or other intermediary, like many of our stockholders, you are considered the beneficial owner of shares held in street name, and these proxy materials were forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank or other intermediary how to vote your shares, and you are also invited to attend the Annual Meeting.
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If you do not wish to vote online at the Annual Meeting, or you will not be attending, you may vote by proxy. You may vote by proxy by completing, signing and returning the voting instruction form or by using the Internet or by telephone, as described below under the heading “How do I vote?”. The method you use to vote will not limit your right to vote at the Annual Meeting if you decide to attend the meeting.
How do I vote?
As described below, stockholders of record may vote by using the Internet, by telephone, or (if you received a proxy card by mail) by mail. Stockholders also may attend the virtual meeting and vote online.vote. If you hold shares in street name through a bank or broker or other intermediary, please refer to your proxy card, Notice or other information forwarded by your bank or broker to see which voting options are available to you.
| • | You may vote by using the Internet. The address of the website for Internet voting can be found on your proxy card or Notice. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on April |
| • | You may vote by telephone. Dial the number listed on your proxy card, Notice or other information forwarded by your bank or broker. You will need the control number included on your proxy card, Notice or other information forwarded by your bank or broker. |
| • | You may vote by mail. If you received a proxy card by mail and choose to vote by mail, simply mark your proxy card, date and sign it, and return it in the postage-paid envelope provided. |
| • | You may vote at the meeting. Stockholders may also attend the meeting |
The method you use to vote will not limit your right to vote at the Annual Meeting if you decide to attend the meeting virtually.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
What if I change my mind after I return my proxy?
You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by:
submitting a subsequent proxy by using the Internet, telephone or by mail with a later date;
sending written notice of revocation to our Corporate Secretary, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901; or
voting online at the Annual Meeting.
If you hold shares through a bank, broker or other intermediary, please refer to your proxy card, Notice or other information forwarded by your bank, broker or other intermediary to see how you can revoke your proxy and change your vote.
Attendance at the meeting will not by itself revoke a proxy.
How many votes do you need to hold the Annual Meeting?
The presence, onlinein person or by proxy, of the holders of a majority of the total voting power of all outstanding securities entitled to vote at the Annual Meeting will constitute a quorum. If a quorum is present, we can hold the Annual Meeting and conduct business.
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On what items am I voting?
You are being asked to vote on four items:
| 1. | the election of each of the thirteen director nominees nominated by the Board and named in the proxy statement to serve until the |
| 2. | advisory vote to approve the Company’s executive compensation, commonly referred to as a “say-on- pay” vote; |
| 3. |
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ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year |
| 4. | a management proposal to amend the Company’s Certificate of Incorporation to eliminate supermajority vote requirements. |
No cumulative voting rights are authorized, and dissenters’ rights are not applicable to these matters.
How does the board of directors recommend that I vote?
The Board recommends that you vote as follows:
| 1. | FOR the thirteen director nominees; |
| 2. | FOR the approval, on an advisory basis, of the Company’s executive compensation; |
| 3. |
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FOR the ratification of the appointment of our independent registered public accounting |
| 4. | FOR the management proposal to amend the Company’s Certificate of Incorporation to eliminate supermajority vote requirements. |
How may I vote in the election of directors, and how many votes must the nominees receive to be elected?
With respect to the election of directors, you may:
vote FOR the thirteen nominees for director;
vote FOR any of the nominees for director and vote AGAINST or ABSTAIN from voting on the other nominees for director;
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
vote AGAINST the thirteen nominees for director; or
ABSTAIN from voting on all of the nominees for director.
Our Bylaws provide for the election of directors by an affirmative vote of a majority of the votes cast in an uncontested election. This means each of the thirteen individuals nominated for election to the Board of Directors must receive more votes cast “FOR” than “AGAINST” (among votes properly cast, online, electronically or by proxy) to be elected. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will have no effect on the election of nominees. If the election of directors is a contested election, then the directors are elected by a plurality of the votes cast.
What happens if a nominee does not receive a majority of “FOR” votes?
If a nominee does not receive a majority of “FOR” votes, he or she shall tender to the Board, via the Chair of the Nominating and Corporate Governance Committee, his or her resignation. The Nominating and Corporate Governance Committee will consider the resignation and make a recommendation to the Board whether to accept or reject the tendered resignation no later than 60 days following the date of the Annual Meeting in accordance with the specific requirements outlined in our Corporate Governance Guidelines.
What happens if a nominee is unable to stand for election?
If a nominee is unable to stand for election, the Board may either:
reduce the number of directors that serve on the Board; or
designate a substitute nominee.
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If the Board designates a substitute nominee, shares represented by proxies voted for the nominee who is unable to stand for election will be voted for the substitute nominee.
How may I cast my advisory vote for the proposal to approve the Company’s executive compensation?
With respect to this proposal, you may:
vote FOR the approval, on an advisory basis, of the Company’s executive compensation;
vote AGAINST the approval, on an advisory basis, of the Company’s executive compensation; or
ABSTAIN from voting on the proposal.
In accordance with applicable law, this vote is “advisory,” meaning it will serve as a recommendation to the Board but will not be binding. The Compensation and HR Committee will carefully consider the outcome of this vote when determining future executive compensation arrangements. Abstentions and broker non-votes will not count as votes cast.
How may I cast my advisory vote on the frequency of future advisory votes on executive compensation?
With respect to this proposal, you may cast:
an advisory vote on the frequency of future advisory votes on executive compensation EVERY YEAR;
an advisory vote on the frequency of future advisory votes on executive compensation EVERY TWO YEARS;
an advisory vote on the frequency of future advisory votes on executive compensation EVERY THREE YEARS; or
ABSTAIN from voting on the proposal.
Unlike the other proposals you are voting on, there is no threshold vote that must be obtained for this proposal to “pass.” Rather, the Board will take into consideration the outcome of the vote in setting a policy with respect to the frequency of future advisory votes on executive compensation. Abstentions and broker non-votes will not count as votes cast.
How may I vote for the proposal to ratify the appointment of our independent registered public accounting firm, and how many votes must this proposal receive to pass?
With respect to this proposal, you may:
vote FOR the ratification of the accounting firm;
vote AGAINST the ratification of the accounting firm; or
ABSTAIN from voting on the proposal.
In order to pass, the proposal must receive the affirmative vote of a majority of the votes cast at the Annual Meeting by the stockholders who are present onlinein person or by proxy. Abstentions will not countbe counted as votes cast.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
How may I vote for the proposal to amend the Company’s Certificate of Incorporation to eliminate supermajority vote requirements, and how many votes must this proposal receive to pass?
With respect to this proposal, you may:
vote FOR the amendment of the Company’s Certificate of Incorporation to eliminate supermajority vote requirements;
vote AGAINST the amendment of the Company’s Certificate of Incorporation to eliminate supermajority vote requirements; or
ABSTAIN from voting on the proposal.
In order to pass, the proposal must receive the affirmative vote of holders of not less than seventy-five percent of our outstanding common stock as of the record date for the Annual Meeting. As a result, abstentions and broker non-votes, if any, will have the same effect as votes against the proposal.
What happens if I sign and return my proxy card but do not provide voting instructions?
If you return a signed card but do not provide voting instructions, your shares will be voted as follows:
| 1. | FOR the thirteen director nominees; |
| 2. | FOR the approval, on an advisory basis, of the Company’s executive compensation; |
| 3. |
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FOR the ratification of the appointment of our independent registered public accounting |
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| 4. | FOR the management proposal to amend the Company’s Certificate of Incorporation to eliminate supermajority vote requirements. |
Will my shares be voted if I do not vote by using the Internet, telephone or by signing and returning my proxy card?
If you do not vote by using the Internet, telephone or (if you received a proxy card by mail) by signing and returning your proxy card, then your shares will not be voted and will not count in deciding the matters presented for stockholder consideration at the Annual Meeting.
If your shares are held in street name through a bank or broker or other intermediary and you do not provide voting instructions before the Annual Meeting, your bank or broker may vote your shares under certain limited circumstances in accordance with the NYSE rules that govern banks and brokers. These circumstances include voting your shares on “routine matters,” such as the ratification of the appointment of our independent registered public accountants described in this proxy statement. With respect to the proposal to ratify the appointment of our independent registered public accounting firm, therefore, if you do not vote your shares, your bank or broker may vote your shares on your behalf or leave your shares unvoted.
The election of directors, approval, on anthe advisory basis, ofvote to approve the Company’s executive compensation, and frequencythe approval of future advisory votes on executive compensationthe amendment to the Company’s Certificate of Incorporation to eliminate supermajority vote requirements are not considered routine matters under the NYSE rules relating to voting by banks and brokers. When a proposal is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. This is called a “broker non-vote.” Broker non-votes that are represented at the Annual Meeting will be counted for purposes of establishing a quorum, but not for determining the number of shares voted for or against the non-routine matter.
We encourage you to provide instructions to your bank or brokerage firm by voting your proxy. This action ensures your shares will be voted at the meeting in accordance with your wishes.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
Who bears the cost of the proxy materials?
The Company pays for preparing, printing and mailing this proxy statement and the annual report. Officers and employees of the Company may solicit the return of proxies but will not receive additional compensation for those efforts. The Company will request that brokers, banks, custodians, nominees and other fiduciaries send proxy materials to all beneficial owners and upon request will reimburse them for their expenses. Solicitation may be made by mail, telephone or other means.
Can I receive future proxy materials and annual reports electronically?
Yes. Instead of receiving future paper copies in the mail, you can elect to receive our future annual reports and proxy materials electronically. Opting to receive your proxy materials electronically will save us the cost of producing and mailing documents to your home or business and will reduce the environmental impact of our annual meetings. If you are a stockholder of record and wish to enroll in the electronic proxy delivery service for future meetings, you may do so by going to the website provided on your proxy card and following the prompts.
Can I ask questions or make comments at the Annual Meeting?
Questions and comments can be made at the meeting, no more than one of which may be on a single topic. Only questions and comments appropriate to the business of the meeting will be considered.
What questions would be considered not to be appropriate to the business of the meeting?
The views and comments of all stockholders are welcome. However, the purpose of the meeting will be observed and questions that fall into the following categories will not be addressed at the meeting:
Irrelevant to the business of the Company or the conduct of its operations;
Related to pending or threatened litigation;
Derogatory references that are not in good taste;
Unduly prolonged;
Substantially repetitious of those made by other stockholders; or
Related to personal grievances.
The Board is not aware of any other matters to be presented at the Annual Meeting. If any other matter proper for action at the meeting should be presented, the holders of the accompanying proxy will vote the shares represented by the proxy on such matter in accordance with their best judgment. If any matter not proper for action at the meeting should be presented, the holders of the proxy will vote against consideration of the matter or the proposed action.
20222023 ANNUAL MEETING AND STOCKHOLDER PROPOSALS
In order for a stockholder proposal or director nomination submitted pursuant to SEC Rule 14a-8 to be considered for inclusion in our proxy materials for our annual meeting of stockholders, expected to be held in April 2022,
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2023, the proposal or director nomination must be received by our Corporate Secretary, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901, on or before the close of business on November 10, 2021,11, 2022, and must comply with the rules and regulations promulgated by the SEC. These stockholder notices must also comply with the requirements of our Bylaws and will not be effective otherwise.
Our Bylaws impose procedural requirements on stockholders who wish to nominate directors, generally or under the proxy access provisions, propose that a director be removed, propose any repeal or change in our Bylaws or propose any other business to be brought before an annual or special meeting of stockholders. Under these procedural requirements, in order to bring a proposal before a meeting of stockholders, a stockholder must deliver timely notice of a proposal pertaining to a proper subject for presentation at the annual meeting to our Corporate Secretary.
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
For proposals outside of SEC Rule 14a-8, to be timely, a stockholder’s notice must be delivered to the Corporate Secretary at 600 Washington Boulevard, Stamford, Connecticut, 06901 not less than 120 days or more than 150 days prior to the first anniversary of the preceding year’s annual meeting. Therefore, to be presented at our annual meeting of stockholders to be held in 2022,2023, such a proposal must be received on or after November 23, 2021,29, 2022, but not later than December 23, 2021.29, 2022. In the event that the date of the annual meeting of stockholders to be held in 20222023 is advanced by more than 30 days or delayed by more than 70 days from the anniversary date of this year’s annual meeting of stockholders, such notice by the stockholder must be so received no earlier than 120 days prior to the annual meeting of stockholders to be held in 20222023 and not later than 70 days prior to such annual meeting of stockholders to be held in 20222023 or 10 days following the day on which public announcement of the date of such annual meeting is first made.
Director nominations submitted for inclusion in our proxy materials under the proxy access provisions of our Bylaws must comply with the notice, ownership and other requirements of Article 2, Section 2.10(c). For director nominations and proposals of other business, pursuant to Article 2, Section 2.10(a), a stockholder’s notice to the Corporate Secretary shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (as amended, together with the rules and regulations promulgated thereunder, the “Exchange Act”) including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected, (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the text of the proposed amendment), the reasons for conducting such business and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:
the name and address of such stockholder (as they appear on the Company’s books) and any such beneficial owner;
the number of shares of capital stock of the Company that are held of record or are beneficially owned by such stockholder and by any such beneficial owner;
a description of any agreement, arrangement or understanding between or among such stockholder and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such beneficial owner or any such nominee with respect to the Company’s securities;
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a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to attend onlinein person or by proxy at the meeting to bring such nomination or other business before the meeting;
a representation as to whether such stockholder or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Company’s outstanding capital stock required to approve or adopt the proposal or to elect each such nominee, and/or (ii) otherwise to solicit proxies from stockholders in support of such proposal or nomination;
2022 | CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
any other information relating to such stockholder, beneficial owner, if any, or director nominee or proposed business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee or proposal pursuant to Section 14 of the Exchange Act; and
such other information relating to any proposed item of business as the Company may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
The fiscal 20202021 Annual Report on Form 10-K is being mailed with this proxy statement to those stockholders receiving a copy of the proxy materials in the mail. Stockholders receiving the Notice of Internet Availability of Proxy Materials can access this proxy statement, our fiscal 20202021 Annual Report on Form 10-K and our 2020 Letter to Shareholders2021 Annual Review at www.edocumentview.com/CFG. Requests for copies of our Annual Report on Form 10-K may also be directed to Investor Relations, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901.
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
In some cases, stockholders holding their shares in a brokerage or bank account who share the same surname and address and have not given contrary instructions receive only one copy of our annual report and this proxy statement. This reduces the volume of duplicate information received at your household and helps to reduce costs and environmental impact. If you would like to have additional copies of these documents mailed to you, please call or write to Investor Relations at (203) 900-6854 or 600 Washington Boulevard, Stamford, Connecticut 06901. If you want to receive separate copies of the proxy statement, annual report to stockholders or Notice of Internet Availability of Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record holder.
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Stamford, ConnecticutCAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS
March 5,
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This Proxy Statement contains “forward looking statements” — that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “pending,” “believe,” “seek,” “see,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include the failure to consummate the Investors Bancorp transaction or to make or take any filing or other action required to consummate any such transaction on a timely matter or at all. These or other uncertainties may cause our actual future results to be materially different from those expressed in our forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the United States Securities and Exchange Commission.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - INFORMATION FOR STOCKHOLDERS | |||
INFORMATION NOT INCORPORATED BY REFERENCE
Information contained on or accessible through our website at citizensbank.com is not and shall not be deemed to be a part of this proxy statement by reference or otherwise incorporated into any other filings we make with the SEC, except to the extent we specifically incorporate such information by reference.
| BY ORDER OF THE BOARD OF DIRECTORS |
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| Robin S. Elkowitz |
| Executive Vice President, Deputy General Counsel and Secretary |
Stamford, Connecticut
March 11, 2022
2022
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - APPENDIX A | |||
This document contains non-GAAP financial measures denoted as “Underlying” or “Normalized” results. Underlying or Normalized Results. These results for any given reporting period exclude certain items that may occur in that period which managementManagement does not consider indicative of the Company’s on-going financial performance. Where there is a reference to these metrics in that paragraph, all measures that follow are on the same basis, when applicable. We believe these non-GAAP financial measures provide useful information to investors because they are used by management to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe theseour Underlying results or results excluding the impact of certain items in any given reporting period reflect our on-going financial performance and increase comparability of period-to-period results, and, accordingly, are useful to consider in addition to our GAAP financial results.
The following reconciliation tables present reconciliationsprovide computations and more information on the computation of our non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by such companies. We caution investors not to place undue reliance on such non-GAAP financial measures, but to consider them with the most directly comparable GAAP financial measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under GAAP.
For additional information on our use of non-GAAP financial measures, see page 40 of our 2020 Annual Report on Form 10-K, in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Introduction—Non-GAAP Financial Measures” of Part II, Item 7.
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - APPENDIX A | |||
Non-GAAP financial measures and reconciliations
(in millions, except share, per-share and ratio data)
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| QUARTERLY TRENDS | FULL YEAR | 2021 Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 Change | 2020 Change | 2021 | 2020 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 4Q20 | 3Q13 | 3Q13 | 2020 | 2019 | 2019 | $/bps | % | |||||||||||||||||||||||||||||||||||||||||||||||
| $/bps | % | $/bps | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue (GAAP) | A | $1,707 | $1,153 | $554 | 48 | % | $6,905 | $6,491 | $414 | 6 | % | A | $ | 6,647 | $ | 6,905 | $ | (258) | (4%) | |||||||||||||||||||||||||||||||||||
| Less: Notable items | — | — | — | — | — | — | — | — | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
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| Total revenue, Underlying (non-GAAP) | B | $1,707 | $1,153 | $554 | 48 | % | $6,905 | $6,491 | $414 | 6 | % | B | $ | 6,647 | $ | 6,905 | $ | (258) | (4%) | |||||||||||||||||||||||||||||||||||
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| Noninterest expense (GAAP) | C | $1,012 | $788 | $224 | 28 | % | $3,991 | $3,847 | $144 | 4 | % | C | $ | 4,081 | $ | 3,991 | $ | 90 | 2% | |||||||||||||||||||||||||||||||||||
| Less: Notable items | 42 | — | 42 | 100 | 125 | 68 | 57 | 84 | 105 | 125 | (20) | (16) | ||||||||||||||||||||||||||||||||||||||||||
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| Noninterest expense, Underlying (non-GAAP) | D | 970 | 788 | 182 | 23 | 3,866 | 3,779 | 87 | 2 | D | $ | 3,976 | $ | 3,866 | $ | 110 | 3% | |||||||||||||||||||||||||||||||||||||
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| Pre-provision profit: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue (GAAP) | A | $1,707 | $1,153 | $554 | 48 | % | $6,905 | $6,491 | $414 | 6 | % | |||||||||||||||||||||||||||||||||||||||||||
Less: Noninterest expense (GAAP) | C | 1,012 | 788 | 224 | 28 | 3,991 | 3,847 | 144 | 4 | |||||||||||||||||||||||||||||||||||||||||||||
| Net income, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Pre-provision profit (GAAP) | $695 | $365 | $330 | 90 | % | $2,914 | $2,644 | $270 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (GAAP) | E | $ | 2,319 | $ | 1,057 | $ | 1,262 | 119% | ||||||||||||||||||||||||||||||||||||||||||||||
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| Pre-provision profit, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying (non-GAAP) | B | $1,707 | $1,153 | $554 | 48 | % | $6,905 | $6,491 | $414 | 6 | % | |||||||||||||||||||||||||||||||||||||||||||
Less: Noninterest expense, Underlying (non-GAAP) | D | 970 | 788 | 182 | 23 | 3,866 | 3,779 | 87 | 2 | |||||||||||||||||||||||||||||||||||||||||||||
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| Pre-provision profit, Underlying (non-GAAP) | $737 | $365 | $372 | 102 | % | $3,039 | $2,712 | $327 | 12 | % | ||||||||||||||||||||||||||||||||||||||||||||
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| Net income, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (GAAP) | E | $456 | $144 | $312 | 217 | % | $1,057 | $1,791 | ($734 | ) | (41 | %) | ||||||||||||||||||||||||||||||||||||||||||
| Add: Notable items, net of income tax benefit | 24 | — | 24 | 100 | 83 | 17 | 66 | NM | 78 | 83 | (5) | (6) | ||||||||||||||||||||||||||||||||||||||||||
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| Net income, Underlying (non-GAAP) | F | $480 | $144 | $336 | 233 | % | $1,140 | $1,808 | ($668 | ) | (37 | %) | F | $ | 2,397 | $ | 1,140 | $ | 1,257 | 110% | ||||||||||||||||||||||||||||||||||
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| Net income available to common stockholders, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders (GAAP) | G | $424 | $144 | $280 | 194 | % | $950 | $1,718 | ($768 | ) | (45 | %) | G | $ | 2,206 | $ | 950 | $ | 1,256 | 132% | ||||||||||||||||||||||||||||||||||
| Add: Notable items, net of income tax benefit | 24 | — | 24 | 100 | 83 | 17 | 66 | NM | 78 | 83 | (5) | (6) | ||||||||||||||||||||||||||||||||||||||||||
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| Net income available to common stockholders, Underlying (non-GAAP) | H | $448 | $144 | $304 | 211 | % | $1,033 | $1,735 | ($702 | ) | (40 | %) | H | $ | 2,284 | $ | 1,033 | $ | 1,251 | 121% | ||||||||||||||||||||||||||||||||||
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| Operating leverage: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue (GAAP) | A | $6,905 | $6,491 | $414 | 6.38 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Noninterest expense (GAAP) | C | 3,991 | 3,847 | 144 | 3.73 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio and efficiency ratio, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating leverage | 2.65 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | C/A | 61.40% | 57.80% | 360 | bps | |||||||||||||||||||||||||||||||||||||||||||||||||
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| Operating leverage, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue, Underlying (non-GAAP) | B | $6,905 | $6,491 | $414 | 6.39 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Noninterest expense, Underlying (non-GAAP) | D | 3,866 | 3,779 | 87 | 2.30 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio, Underlying (non-GAAP) | D/B | 59.82 | 55.99 | 383 | bps | |||||||||||||||||||||||||||||||||||||||||||||||||
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| Operating leverage, Underlying (non-GAAP) | 4.09 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity and return on average tangible common equity, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Efficiency ratio and efficiency ratio, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | C/A | 59.28 | % | 68.49 | % | (921 | ) bps | 57.80 | % | 59.28 | % | (148 | ) bps | |||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio, Underlying (non-GAAP) | D/B | 56.83 | 68.49 | (1,166 | ) bps | 55.99 | 58.23 | (224 | ) bps | |||||||||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity and return on average tangible common equity, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common equity (GAAP) | I | $20,547 | $19,627 | $920 | 5 | % | $20,438 | $20,325 | $113 | 1 | % | I | $ | 21,025 | $ | 20,438 | $ | 587 | 3% | |||||||||||||||||||||||||||||||||||
| Less: Average goodwill (GAAP) | 7,050 | 6,876 | 174 | 3 | 7,049 | 7,036 | 13 | — | 7,062 | 7,049 | 13 | - | ||||||||||||||||||||||||||||||||||||||||||
| Less: Average other intangibles (GAAP) | 60 | 9 | 51 | NM | 64 | 71 | (7 | ) | (10 | ) | 54 | 64 | (10) | (16) | ||||||||||||||||||||||||||||||||||||||||
| Add: Average deferred tax liabilities related to goodwill (GAAP) | 377 | 325 | 52 | 16 | 376 | 371 | 5 | 1 | 381 | 376 | 5 | 1 | ||||||||||||||||||||||||||||||||||||||||||
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| Average tangible common equity | J | $13,814 | $13,067 | $747 | 6 | % | $13,701 | $13,589 | $112 | 1 | % | J | $ | 14,290 | $ | 13,701 | $ | 589 | 4% | |||||||||||||||||||||||||||||||||||
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Return on average tangible common equity | G/J | 12.20 | % | 4.34 | % | 786 bps | 6.93 | % | 12.64 | % | (571 | ) bps | G/J | 15.44% | 6.93% | 851 | bps | |||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity, Underlying (non-GAAP) | H/J | 12.89 | 4.34 | 855 | 7.53 | 12.76 | (523 | ) | H/J | 15.98 | 7.53 | 845 | bps | |||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding - basic (GAAP) | K | 425,669,451 | 427,062,537 | (1,393,086) | -% | |||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding - diluted (GAAP) | L | 427,435,818 | 428,157,780 | (721,962) | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - basic (GAAP) | G/K | $ | 5.18 | $ | 2.22 | $ | 2.96 | 133 | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - diluted (GAAP) | G/L | 5.16 | 2.22 | 2.94 | 132 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - basic, Underlying (non-GAAP) | H/K | 5.37 | 2.42 | 2.95 | 122 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - diluted, Underlying (non-GAAP) | H/L | 5.34 | 2.41 | 2.93 | 122 | |||||||||||||||||||||||||||||||||||||||||||||||||
Tangible book value per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares - at period-end (GAAP) | K | 427,209,831 | 433,121,083 | (5,911,252 | ) | (1 | %) | M | 422,137,197 | 427,209,831 | (5,072,634) | (1%) | ||||||||||||||||||||||||||||||||||||||||||
Common stockholders’ equity (GAAP) | $20,708 | $20,631 | $77 | — | $ | 21,406 | $ | 20,708 | $ | 698 | 3 | |||||||||||||||||||||||||||||||||||||||||||
Less: Goodwill (GAAP) | 7,050 | 7,044 | 6 | — | 7,116 | 7,050 | 66 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Less: Other intangible assets (GAAP) | 58 | 68 | (10 | ) | (15 | ) | 64 | 58 | 6 | 10 | ||||||||||||||||||||||||||||||||||||||||||||
Add: Deferred tax liabilities related to goodwill (GAAP) | 379 | 374 | 5 | 1 | 383 | 379 | 4 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
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Tangible common equity | L | $13,979 | $13,893 | $86 | 1 | % | N | $ | 14,609 | $ | 13,979 | $ | 630 | 5% | ||||||||||||||||||||||||||||||||||||||||
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Tangible book value per common share | L/K | $32.72 | $32.08 | $0.64 | 2 | % | N/M | $ | 34.61 | $ | 32.72 | $ | 1.89 | 6% | ||||||||||||||||||||||||||||||||||||||||
| CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - APPENDIX A | |||
Non-GAAP financial measures and reconciliations - Excluding the impact
Normalized for change in accounting principle and Impact of PPP loansshare repurchases halted due to COVID-19 by Regulators
(in millions, except share, per-share and ratio data)
| QUARTERLY TRENDS | ||||||||||||||||||||
| 4Q20 Change | ||||||||||||||||||||
| 4Q20 | 4Q19 | 4Q19 | ||||||||||||||||||
| $/bps | % | |||||||||||||||||||
Total loans, excluding the impact of PPP loans: | ||||||||||||||||||||
Total loans (GAAP) | A | $123,090 | $119,088 | $4,002 | 3 | % | ||||||||||||||
Less: PPP loans | 4,106 | — | 4,106 | 100 | ||||||||||||||||
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Total loans, excluding the impact of PPP loans (non-GAAP) | B | $118,984 | $119,088 | ($104 | ) | — | % | |||||||||||||
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Allowance for credit losses (GAAP) | D | $2,670 | $1,296 | $1,374 | 106 | % | ||||||||||||||
Ratios: | ||||||||||||||||||||
Allowance for credit losses to total loans (GAAP) | D/A | 2.17 | % | 1.09 | % | 108 bps | ||||||||||||||
Allowance for credit losses to total loans, excluding the impact of PPP loans (non-GAAP) | D/B | 2.24 | % | 1.09 | % | 115 bps | ||||||||||||||
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Non-GAAP financial measures and reconciliations - Normalized for change in accounting principle
(in millions, except share, per-share and ratio data)
| FULL YEAR | 3-Year Average | FULL YEAR | 3-Year Average | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2018-2020 | 2015-2017 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2019-2021 | 2016-2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders, Normalized: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders (GAAP) | A | $950 | $1,718 | $1,692 | $1,638 | $1,031 | $833 | A | $2,206 | $950 | $1,718 | $1,692 | $1,638 | $1,031 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Restructuring charges, net of tax expense (benefit) | — | — | — | — | — | 16 | — | — | — | — | — | �� | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Special items, net of income tax expense (benefit) | — | — | — | — | — | 15 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Notable items, net of income tax expense (benefit) | 83 | 17 | 16 | (340 | ) | (19 | ) | — | 78 | 83 | 17 | 16 | (340) | (19) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Effect of change in accounting principle, net of income tax expense (benefit) | 686 | — | — | — | — | — | (616) | 686 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Net income available to common stockholders, Normalized (non-GAAP) | B | $1,719 | $1,735 | $1,708 | $1,298 | $1,012 | $864 | B | $1,668 | $1,719 | $1,735 | $1,708 | $1,298 | $1,012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Return on average tangible common equity and return on average tangible common equity, Normalized: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common equity (GAAP) | C | $20,438 | $20,325 | $19,645 | $19,618 | $19,698 | $19,354 | C | $21,025 | $20,438 | $20,325 | $19,645 | $19,618 | $19,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Average goodwill (GAAP) | 7,049 | 7,036 | 6,912 | 6,883 | 6,876 | 6,876 | 7,062 | 7,049 | 7,036 | 6,912 | 6,883 | 6,876 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Average other intangibles (GAAP) | 64 | 71 | 14 | 2 | 2 | 4 | 54 | 64 | 71 | 14 | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Average deferred tax liabilities related to goodwill (GAAP) | 376 | 371 | 359 | 534 | 502 | 445 | 381 | 376 | 371 | 359 | 534 | 502 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average tangible common equity | D | $13,701 | $13,589 | $13,078 | $13,267 | $13,322 | $12,919 | D | $14,290 | $13,701 | $13,589 | $13,078 | $13,267 | $13,322 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Add: Effect of change in accounting principle | 344 | — | — | — | — | — | 380 | 344 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Impact of share repurchases halted due to COVID-19 by Regulators | 660 | 370 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average tangible common equity, Normalized (non-GAAP) | E | $14,045 | $13,589 | $13,078 | $13,267 | $13,322 | $12,919 | E | $14,010 | $13,675 | $13,589 | $13,078 | $13,267 | $13,322 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Return on average tangible common equity | A/D | 6.93 | % | 12.64 | % | 12.94 | % | 12.35 | % | 7.74 | % | 6.45 | % | 10.84 | % | 8.85 | % | A/D | 15.44% | 6.93% | 12.64% | 12.94% | 12.35% | 7.74% | 11.67 | % | 11.01% | |||||||||||||||||||||||||||||||||||||||||||
| Return on average tangible common equity, Normalized (non-GAAP)1 | B/E | 12.24 | 12.76 | 13.06 | 9.79 | 7.60 | 6.69 | 12.69 | 8.02 | B/E | 11.91 | 12.58 | 12.76 | 13.06 | 9.79 | 7.60 | 12.41 | % | 10.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 1Totals may be effected due to rounding | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FULL YEAR | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2018-2020 | 2015-2017 | FULL YEAR | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share—basic and diluted and net income per average common share—basic and diluted, Normalized: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding—basic (GAAP) | F | 427,062,537 | 449,731,453 | 478,822,072 | 502,157,440 | 522,093,545 | 535,599,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding—diluted (GAAP) | G | 428,157,780 | 451,213,701 | 480,430,741 | 503,685,091 | 523,930,718 | 538,220,898 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share—basic (GAAP) | A/F | $2.22 | $3.82 | $3.54 | $3.26 | $1.97 | $1.55 | $9.58 | $6.78 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share—diluted (GAAP) | A/G | 2.22 | 3.81 | 3.52 | 3.25 | 1.97 | 1.55 | 9.55 | 6.77 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share—basic, Normalized (non-GAAP) | B/F | 4.03 | 3.86 | 3.57 | 2.59 | 1.94 | 1.61 | 11.46 | 6.14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share—diluted, Normalized (non-GAAP) | B/G | 4.02 | 3.84 | 3.56 | 2.58 | 1.93 | 1.61 | 11.42 | 6.12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2019-2021 | 2016-2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Normalized: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average common shares outstanding - basic (GAAP) | F | 425,669,451 | 427,062,537 | 449,731,453 | 478,822,072 | 502,157,440 | 522,093,545 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Impact of share repurchases halted due to COVID-19 by Regulators | 14,801,122 | 5,895,475 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average common shares outstanding - basic (non-GAAP) | G | 410,868,329 | 421,167,062 | 449,731,453 | 478,822,072 | 502,157,440 | 522,093,545 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average common shares outstanding - diluted (GAAP) | H | 427,435,818 | 428,157,780 | 451,213,701 | 480,430,741 | 503,685,091 | 523,930,718 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Impact of share repurchases halted due to COVID-19 by Regulators | 14,801,122 | 5,895,475 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average common shares outstanding - diluted (non-GAAP) | I | 412,634,696 | 422,262,305 | 451,213,701 | 480,430,741 | 503,685,091 | 523,930,718 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Net income per average common share - basic (GAAP) | A/F | $5.18 | $2.22 | $3.82 | $3.54 | $3.26 | $1.97 | $11.22 | $8.77 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - diluted (GAAP) | A/H | 5.16 | 2.22 | 3.81 | 3.52 | 3.25 | 1.97 | 11.19 | 8.74 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - basic, Normalized (non-GAAP) | B/G | 4.06 | 4.08 | 3.86 | 3.57 | 2.59 | 1.94 | 12.00 | 8.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per average common share - diluted, Normalized (non-GAAP)1 | B/I | 4.04 | 4.07 | 3.84 | 3.56 | 2.58 | 1.93 | 11.96 | 8.07 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1Totalsmay be effected due to rounding | 1Totalsmay be effected due to rounding |
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C123456789000000000.000000 ext 000000000.000000 ext 000004 000000000.000000 ext 000000000.000000 extENDORSEMENT_LINE______________ SACKPACK_____________ 000000000.000000 ext 000000000.000000 ext MR A SAMPLEDESIGNATION (IF ANY) ADD 1ADD2 ADD 3 Your vote matters – here’s how to vote!ADD 4 You may vote online or by phone instead of mailing this card.ADD 5 OnlineADD 6
Go to www.investorvote.com/CFG or scan the QR code — login details are located in the shaded bar below.
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Sign up for electronic delivery at www.investorvote.com/CFG Using a black ink pen, mark your votes with an X as shown in this example. Sign up for electronic delivery at Please do not write outside the designated areas. www.investorvote.com/CFGAnnual Meeting Proxy Card 1234 5678 9012 345IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A Proposals — The Board of Directors recommends a vote FOR all nominees in Proposal 1, FOR Proposal 2, for 1 YEAR inFOR Proposal 3 and
FOR Proposal 4.
1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain
+ 01—Bruce Van Saun 02—Lee Alexander 03—Christine M. Cumming
06—Edward J. (“Ned”)
04—Kevin Cummings* 05—William P. Hankowsky 05—Leo I. (“Lee”) Higdon
Kelly III
07—Charles J. (“Bud”) Koch 08—Robert G. Leary 09—08—Terrance J. Lillis
09—Michele N. Siekerka* 10—Shivan Subramaniam 11—Christopher J. Swift 12—Wendy A. Watson
13—Marita Zuraitis
*The elections of Mr. Cummings and Ms. Siekerka are subject to the completion of the Investors Bancorp, Inc. acquisition. Should the acquisition not close by the Annual Meeting, their elections by stockholders will not be considered at the Annual Meeting. For Against Abstain 1 Year 2 Years 3 YearsFor Against Abstain
2. Advisory vote on executive compensation. 3. Advisory vote on the frequency of future advisory votes on executive compensation.4. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2021.
2022. 4. Management Proposal to amend the Company’s Certificate of Incorporation to Eliminate Supermajority Vote Requirements. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below.
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.C 1234567890J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE ANDMR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND1 U P X 4 9 2 3 5 9 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND03E7PC
The 2021 Annual Meeting of Shareholders of Citizens Financial Group, Inc. will be held onThursday April 22, 2021, at 9:00 a.m. Eastern Time, virtually via the internet at www.meetingcenter.io/287753102.To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form.The password for this meeting is — CFG2021Small steps make an impact.Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/CFGIFProxy Card 1234 5678 9012 345 qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
The 2022 Annual Meeting of Stockholders of Citizens Financial Group, Inc. will be held on Thursday April 28, 2022, at 9:00 a.m. One Citizens Plaza, Providence, Rhode Island 02903 Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/CFG qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy – Citizens Financial Group, Inc.
Notice of 20212022 Annual Meeting of Stockholders
Proxy Solicited by Board of Directors for Annual Meeting – April 22, 2021
28, 2022 Bruce Van Saun, Stephen T. GannonMalcolm Griggs and Robin S. Elkowitz or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Citizens Financial Group, Inc. to be held on April 22, 202128, 2022 at 9:00 a.m. Eastern Time, virtually via the internet or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted as specified by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees in Proposal 1, FOR Proposal 2, for 1 YEAR inFOR Proposal 3 and FOR Proposal 4.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.(Items (Items to be voted appear on reverse side)
C Non-Voting Items
Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting.
The Board recommends a vote FOR each of the nominees
The Board recommends FOR approval of the Company’s executive compensation
