 |  | | During 2020 each director2022, the average Director participation in full Board and committee meetings on which they served was 97.5%. No Director attended at least 97%less than 75% of the formalBoard and committee meetings of the board and the committees on which he or she served.they served during the period of their service. |  |  | | All directorsthen-serving Huntington Directors attended the 2020 annual meeting2022 Annual Meeting of shareholders.Shareholders. |
The independent Directors regularly meet in executive session in conjunction with standing Board meetings. They are also able to meet in executive session on other occasions throughout the year. Director Onboarding and Continuing Director EducationHuntington provides robust onboarding for new directorsDirectors and comprehensive ongoing comprehensive education and training for all boardBoard members on key matters to foster boardBoard effectiveness. In addition, all boardBoard members are encouraged to participate in relevant external directorDirector education opportunities, including forums facilitating engagement with other public company directors. The boardBoard recognizes (i) the importance of fostering an atmosphere of continuous enhancement,education and engagement, long-term value creation, and strengthening shareholder confidence and (ii) that institutional investors and regulators expect directors at public companies to continually enhance their skills and remain abreast of companyCompany and industry matters. Director onboarding involves a combination of written materials, oral presentations, and meetings with members of the boardBoard and management. Among the topics typically covered during onboarding are companyCompany history, strategy, revenue streams, risks, safety and soundness, and corporate governance. In order toTo assist new directorsDirectors in learning more about Huntington’s business, the onboarding process includes meetings with business segments and control and support groups. This allows directorsVarious other activities are typically offered to new Directors, including tours of Huntington facilities and attending semi-annual Huntington Live events. All of this is designed to allow new Directors to better step into their oversight roles and begin making meaningful contributions to the boardBoard more quickly. | Huntington Bancshares Incorporated 2023 Proxy Statement | 54 |
Back to Contents In-house educational sessions facilitated by management are provided to all directorsDirectors throughout the year with a focus on topics specific to the companyCompany and the financial services industry. Continuing directorDirector education may be provided before, during, or after boardin conjunction with Board and committee meetings and as standalone information sessions outside of meetings. Subjects covered include, among others: • | Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) issues; | • | Fair lending responsibilities; | • | Avoidance of Unfair, Deceptive, or Abusive Acts or Practices (UDAAP); | • | Information security and cyber risks, including tabletop exercises; and | • | Legal, regulatory, and supervisory requirements and trends applicable to Huntington. |
Additional topics may be included asinclude:
ESG developments and leading practices; Shareholder base, engagement, and activism; Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) issues; Fair lending responsibilities; Avoidance of Unfair, Deceptive, or Abusive Acts or Practices (UDAAP); Information security and cyber risks, including tabletop exercises; and Legal, regulatory, and supervisory requirements and trends applicable to Huntington. As appropriate, additional topics related to complex products, services, or lines of business that have the potential to significantly impact the companyCompany and other topics as identified by the board of directorsBoard or executive management from time-to-time.may also be covered. External experts and facilitators are also sometimes invited to attend board or committee meetings to discuss leading practices or issues germane to Huntington, the financial services industry, or public companies in general. Outside experts bring an array of experience and perspectives and foster dialogue among boardBoard members on relevant topics. TheWhen there are in-person Board and committee meetings, the outside experts may also be invited to attend a boardBoard dinner the evening before the board meeting where they maycan engage informally with the directors.Directors. To assist with staying abreast of the latest developments, Huntington periodically provides board membersDirectors with external director education opportunities covering a range of issues facing the board to assist directors in staying abreast of the latest developments.Board. These external education opportunities are offered at various times of the year by professional organizations, educational institutions, and regulators at various facilities and locations and cover a range of important issues facing directors of financial institutions and/or public companies.companies generally. Insights gained from external continuing education programs are shared with the full boardBoard. Codes of directors.46 | Huntington Bancshares Incorporated |
EthicsTable of Contents
Corporate Governance and the Board
Corporate Governance Guidelines, Policies, and Procedures
Our board of directors believes that strong corporate governance is critical to Huntington’s long-term success. The board has adopted Corporate Governance Guidelines that detail board responsibilities, director qualifications, structures, and practices intended to enhance the board’s effectiveness. Huntington’s Code of Business Conduct and Ethics, which is overseen by the NESG Committee, applies to all of our employeescolleagues and, where applicable, to our directorsDirectors and to employeescolleagues and directors of our affiliates. Our employeescolleagues serving as chief executive officer, chief financial officer, corporate controller,CEO, CFO, Corporate Controller, and principal accounting officerPrincipal Accounting Officer are also bound by a Financial Code of Ethics for Chief Executive OfficerCEO and Senior Financial Officers. The Corporate Governance Guidelines, the Code of Business Conduct and Ethics, and the Financial Code of Ethics for Chief Executive OfficerCEO and Senior Financial Officers are posted on the Investor Relations pagesGovernance Documents page of Huntington’sour website at www.huntington.com.
Review, Approval,ir.huntington.com. Any amendments or Ratification of Transactionswaivers with Related Persons
The Nominating and Corporate Governance Committee of the board of directors oversees our Related Party Transactions Review Policy, referred to as the Policy. This written Policy covers “related party transactions”, including any financial transaction, arrangement, or relationship or any series of similar transactions, arrangements or relationships, either currently proposed or existing since the beginning of the last fiscal year in which we were or will be a participant, involving an amount exceeding $120,000 and in which a director, nominee for director, executive officer, or any of their immediate family members has or will have a direct or indirect material interest. The Policy requires our senior management and directors to notify the general counsel of any existing or potential “related party transactions.” Our general counsel reviews each reported transaction, arrangement, or relationship that constitutes a “related party transaction” with the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee determines whether or not “related party transactions” are fair and reasonable for us. The Nominating and Corporate Governance Committee also determines whether any “related party transaction” in which a director has an interest impairs the director’s independence. Approved “related party transactions” are subject to on-going review by our management on at least an annual basis. Loans to directors and executive officers and their related interests made and approved pursuantrespect to the termsFinancial Code of Federal Reserve Board Regulation O are deemedEthics for CEO and Senior Financial Officers would also be disclosed on our website.
We have also adopted a Service Provider Code of Conduct that sets forth our expectations with respect to be approved under this Policy. Any of these loans that become subject to specific disclosure in our annual proxy statement are reviewedservice providers. Areas covered by the NominatingService Provider Code of Conduct include ethical business practices, labor and Corporate Governance Committee at that time. The Nominatinghuman rights, health and Corporate Governance Committee would also considersafety, diversity, environmental responsibility, and review any material transactions with a shareholder having beneficial ownership of more than 5% of Huntington’s voting securities in accordance with the Policy. Indebtedness of Management. Many of our directorsprivacy and executive officers and their immediate family members are customers of our affiliated financial and lending institutions in the ordinary course of business. In addition, our directors and executive officers also may be affiliated with entities which are customers of our affiliated financial and lending institutions in the ordinary course of business. Loan transactions with directors, executive officers, and their immediate family members and affiliates have been made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers otherwise not affiliated with us. Such loans also have not involved more than the normal risk of collectability or presented other unfavorable features.confidentiality.
Certain Other Transactions. Paul McMahon, who is the son-in-law of director David L. Porteous, has been employed by The Huntington National Bank since 2006 and currently serves as a Commercial Portfolio Manager - Team Leader in the Commercial Banking Department. Mr. McMahon serves in a non-executive capacity four reporting levels below the Commercial Banking Director. He is one of more than 15,000 employees and is compensated in accordance with the employment compensation practices and policies applicable to all employees with equivalent qualifications and responsibilities in similar positions. For 2020, Mr. McMahon received base salary and incentive compensation totaling $191,400, as well as benefits generally available to all employees.
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Corporate Governance and the Board
Communication with the Board of Directors
Shareholders who wish to send communications to the board of directors may find information on the Board of Directors page in the About Us section of Huntington’s website at www.huntington.com.
Compensation of Directors
Our compensation philosophy for the board of directors is to provide a compensation arrangement to outside directors that reflects the significant time commitment and substantial contributions the directors are expected to make to the value creation and governance of Huntington.
The compensation levels and structure for directors are designed, with the input of the independent compensation consultant, to enable us to attract and retain high caliber talent at a national level and also to align the directors’ interests with those of the shareholders. The program is retainer based and paid in a combination of cash and equity. A meaningful portion of director compensation is paid in equity that is subject to holding requirements. Meeting fees in cash are paid only when the number of meetings exceed a certain threshold. The CEO does not receive compensation for his service as director.
The Compensation Committee performs a review of the compensation program for directors each year facilitated by the independent compensation consultant. No changes were made in 2020 as the Committee determined our director compensation continues to align with market practices.
Base Compensation
| Director Equity Compensation
A meaningful portion of director compensation is paid in equity that is subject to holding requirements.
Equity grants for directors are in the form of deferred stock units.
The deferred stock units are vested upon grant but not released to the director until six months following separation of service.
| Additional Retainers
|
| | * | An event fee is paid when, at Huntington’s request, a director attends or participates in an event or meeting in his or her capacity as a director. | ** | A $2,000 per meeting fee is paid only when meetings exceed 20 meetings in a calendar year for Audit Committee and Risk Oversight Committee, exceed eight meetings in a calendar year for other committees or exceed 15 meetings in a calendar year for the board. If the threshold for any committee (or the full board) is not exceeded, then no meeting fee is paid for that meeting. |
All fees payable in cash are paid in quarterly installments. A director may defer all or a portion of the cash and equity compensation payable to the director if he or she elects to participate in the Director Deferred Compensation Plan.
48 | Huntington Bancshares Incorporated |
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Corporate Governance and the Board
Director Compensation 2020
| Name(1) | | Fees
Earned
or Paid in
Cash(2) | | | Stock
Awards(3)(4) | | | Option
Awards | | | Non-Equity
Incentive Plan
Compensation | | | Change in
Pension Value
and Non-
qualified
Deferred
Compensation
Earnings | | | All Other
Compensation | | | Total | | | Lizabeth Ardisana | | | $121,500 | | | | $124,993 | | | | — | | | | — | | | | — | | | | — | | | $ | 246,493 | | | Alanna Y. Cotton | | | 112,000 | | | | 177,063 | | | | — | | | | — | | | | — | | | | — | | | | 289,063 | | | Ann B. (Tanny) Crane | | | 143,875 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 268,868 | | | Robert S. Cubbin | | | 150,250 | | | | 144,996 | | | | — | | | | — | | | | — | | | | — | | | | 295,246 | | | Steven G. Elliott | | | 159,625 | | | | 144,996 | | | | — | | | | — | | | | — | | | | — | | | | 304,621 | | | Gina D. France | | | 123,625 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 248,618 | | | J. Michael Hochschwender | | | 114,000 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 238,993 | | | John C. (Chris) Inglis | | | 133,000 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 257,993 | | | Peter J. Kight | | | 37,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 37,500 | | | Katherine M. A. (Allie) Kline | | | 114,125 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 239,118 | | | Richard W. Neu | | | 159,625 | | | | 144,996 | | | | — | | | | — | | | | — | | | | — | | | | 304,621 | | | Kenneth J. Phelan | | | 119,625 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 244,618 | | | David L. Porteous | | | 288,500 | | | | 124,993 | | | | — | | | | — | | | | — | | | | — | | | | 413,493 | | | Kathleen H. Ransier | | | 37,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 37,500 | |
(1) | Mr. Kight and Ms. Ransier served on the board in 2020 until April 22nd. | (2) | Amounts earned include fees deferred by participating directors under the Director Deferred Compensation Plan. | (3) | On May 1, 2020, grants of 16,919 deferred stock units were made to the chairpersons of the Audit, Compensation and Risk Oversight Committees, and grants of 14,585 deferred stock units were made to each other director under the 2018 Long-Term Incentive Plan. These awards were vested upon grant and are payable six months following separation from service. This column reflects the grant date fair value in accordance with FASB Topic 718 and is equal to the number of units times the fair market value (the closing price of a share of common stock) on the date of grant ($8.57 on May 1, 2020). Ms. Cotton also received a prorated grant of deferred stock units in the amount of 3,564 units on January 21, 2020 following her election to the board of directors in December 2019. The fair market value of this grant is based on the closing price of a share of common stock of $14.61 on January 21, 2020. These deferred stock unit awards will be credited with an additional number of deferred stock units to reflect reinvested dividend equivalents with respect to the period of time between the date of grant and the delivery of shares. |
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Corporate Governance and the Board
(4) | The Compensation Committee has granted deferred stock awards to non-employee directors each year since 2006. | | The directors’ deferred stock unit awards outstanding as of December 31, 2020 are set forth in the table below. | | |
Name | | Deferred Stock Awards
Outstanding | | Lizabeth Ardisana | | | 42,286 | | Alanna Y. Cotton | | | 18,841 | | Ann B. (Tanny) Crane | | | 107,185 | | Robert S. Cubbin | | | 49,582 | | Steven G. Elliott | | | 121,302 | | Gina D. France | | | 42,286 | | J. Michael Hochschwender | | | 42,286 | | John C. (Chris) Inglis | | | 42,286 | | Katherine M. A. (Allie) Kline | | | 24,956 | | Richard W. Neu | | | 128,433 | | Kenneth J. Phelan | | | 24,088 | | David L. Porteous | | | 123,816 | |
Director Deferred Compensation Plan
We offer a deferred compensation program which allows the members of the board to elect to defer receipt of all or a portion of the compensation payable to them in the future for services as directors. Cash amounts deferred will accrue interest, earnings and losses at the market rate of the investment option selected by the participant. The investment options consist of Huntington common stock and a variety of mutual funds that are generally available under and / or consistent with the types of investment options available under our tax-qualified 401(k) Plan for employees.
A director’s account will be distributed either in a lump sum or in annual installments, as elected by each director, following the age or date specified by the director at the time the deferral election was made, or the director’s termination as a director. All of the assets of the current and predecessor plans are subject to the claims of our creditors. The rights of a director or his or her beneficiaries to any of the assets of the plans are no greater than the rights of our unsecured general creditors. Only non-employee directors are eligible to participate in this plan.
As of December 31, 2020, the participating directors’ accounts under the current and predecessor plans were substantially comprised of Huntington common stock and had the values set forth in the table below.
Participating Directors | | Account Balance at
December 31, 2020 | | Ann B. (Tanny) Crane | | | $1,360,424 | | Robert S. Cubbin | | | 109,338 | | Steven G. Elliott | | | 275,929 | | Katherine M. A. (Allie) Kline | | | 25,266 | | Richard W. Neu | | | 1,874,057 | | David L. Porteous | | | 1,558,338 | |
In addition, Ms. France and Mr. Hochschwender hold shares of Huntington common stock in accounts under a FirstMerit Corporation deferred compensation plan valued at $382,017 and $811,420 respectively, as of December 31, 2020.
50 | Huntington Bancshares Incorporated |
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Corporate Governance and the Board
Stock Ownership GuidelinesThe HR and Compensation Committee has established a minimum ownership level guideline for directorsDirectors based on five times the annual retainer fee (excluding committee chairmanship retainers).for Directors at the time the requirement was adopted. Based on the retainer fee and the fair market value of our common stock on the date the guidelines were established, the guideline for directorsDirectors was set at 40,603 shares. Directors have five years to meet the minimum guidelines. Each directorDirector who has served at least five years has metmeets the guidelines. | Huntington Bancshares Incorporated 2023 Proxy Statement | 55 |
Table ofBack to Contents
Our Executive OfficersEach of our executive officers is listed below, along with a statement of his or hertheir business experience during at least the last five years. Executive officers are elected annually by the board of directors.Board.   | | STEPHEN D. STEINOUR , age 62,64, has served as our chairman, president,the Chairman, President, and chief executive officerCEO of Huntington and as chairman, president,President and chief executive officerCEO of The Huntington National Bank since January 14, 2009. Additional detail about Mr. Steinour’s business experience is set forth under Proposal 1 — Election of Directors above.. |  | | DONALD DENNIS, age 58, has served as Executive Vice President and Chief DEI & Culture Officer since May 2022. He previously served as Chief DEI Officer and Learning and Development Director since October 2020 and as Executive Vice President since January 2021. Mr. Dennis leads, develops, and implements DEI strategies, programs, policies, and metrics that successfully engage, develop, retain, and attract a diverse workforce. Prior to this role, he served as the Learning and Development Director. Before joining Huntington in 2018, he served in various roles at Nationwide Financial Services since 2009, including as AVP, Learning & Performance Excellence; Learning Solutions Director; and Enterprise Applications Director. He also held several technology management roles at Chase and BISYS Fund Services. |   | | ANDREW J. HARMENING, age 51, joined Huntington in April 2017 as senior executive vice president and consumer and business banking director. Prior to joining Huntington, Mr. Harmening served as vice chairman of the consumer banking division for Bank of the West from July 2015 to May 2017. He was previously senior executive vice president in the retail division of Bank of the West from August 2007 to July 2015. | | | |  | | PAUL G. HELLER , age 57,59, joined the companyCompany as chief technologySenior Executive Vice President and operations officerChief Technology and senior executive vice presidentOperations Officer in October 2012. Mr. Heller also has responsibility for corporate operations and payments, digital, phone bank, data organization, program office, and integration teams. Mr. Heller also oversaw home lending (including mortgage lending, consumer lending, and mortgage and consumer servicing) from January 2014 to May 2017. Previously, Mr. Heller was a managing directorManaging Director and corporate internet group executiveCorporate Internet Group Executive for JPMorgan Chase from December 1999 to October 2012. |  | | |  | | HELGA S. HOUSTON , age 59,61, has served as our chief risk officerSenior Executive Vice President and CRO since January 2012 and as senior executive vice presidentSenior Executive Vice President in corporate riskCorporate Risk from September 2011 through December 2011. Ms. Houston was with Bank of America from 1986 through 2008 serving in a variety of business and risk capacities, most recently as risk executiveRisk Executive for global consumerGlobal Consumer and small business banking. More recently,Small Business Banking. Ms. Houston was also a partner in an independent consulting firm. |  | | |  | | SCOTT D. KLEINMANMICHAEL S. JONES, age 51,54, has served as seniorSenior Executive Vice President and Chair, Minnesota and Colorado and Head of Corporate Ventures since joining Huntington as part of the TCF Merger in June 2021. He previously served as President and Chief Operating Officer of TCF Bank from October 2020 until the time of the TCF Merger. Prior to that, he had held numerous executive vice presidentroles within TCF and directorits predecessors since 2008. |  | SCOTT D. KLEINMAN, age 53, has served as Senior Executive Vice President and President of commercial bankingCommercial Banking since April 2020.July, 1, 2022. He is responsible for Huntington’s middle marketSpecialty Banking, Corporate Banking, Capital Markets, and corporate portfolio, including capital markets and institutional banking, specialty banking, commercial real estate, treasury management, and asset finance,Asset Finance, as well as credit, risk, and risk.digital. He served as Co-President of Commercial Banking upon the completion of the TCF Merger beginning in June 2021. He previously served as Director of Commercial Banking beginning in April 2020. Prior to that, he served as Executive Managing Director of Huntington Capital Markets and has held a variety of senior leadership roles in Huntington’s capital marketsCapital Markets and institutional banking business. He joined Huntington in 1991. |
 | | |  | | JANA J. LITSEY , age 59,61, has served as senior executive vice presidentSenior Executive Vice President and general counselGeneral Counsel of Huntington, and as senior executive vice president, general counsel,Senior Executive Vice President, General Counsel, and cashierCashier of The Huntington National Bank since joining Huntington in October 2017. Ms.Litsey’s responsibilities have expanded with the assumption of leadership responsibility for Public Affairs, Corporate Sourcing, Corporate Insurance, and ESG. Prior to joining Huntington, Ms. Litsey served in multiple leadership roles at Bank of America for over 20 years. Most recently, she served as the legal executive responsible for the defense of Bank of America’s domestic and international litigation, regulatory inquiries, enforcement actions, and internal investigations. |
52 | Huntington Bancshares Incorporated |
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Our Executive Officers
 | | SANDRA E. PIERCE, age 62,64, has served as senior executive vice president, private client groupSenior Executive Vice President, Private Client Group and regional banking director,Regional Banking Director, and chairChair of Michigan, since August 2016. Previously, Ms. Pierce served as Vice Chairman of FirstMerit and Chairman of FirstMerit, Michigan from February 2013 to August 2016. |
| | Huntington Bancshares Incorporated 2023 Proxy Statement | 56 |
Back to Contents   | | RICHARD POHLE , age 58,60, has served as executive vice presidentExecutive Vice President and chief credit officerChief Credit Officer since June 2019. He has held various credit leadership roles since joining Huntington in 2011, including senior commercial approval officer.Senior Commercial Approval Officer from September 2017 to June 2019. Prior to joining Huntington, he spent 26 years at KeyBank serving in various leadership roles. |  | | |  | | RAJEEV SYALBRANT J. STANDRIDGE, age 55,47, has served as senior executive vice presidentSenior Executive Vice President and chief human resources officerPresident of Consumer and Business Banking since April 2022. Prior to joining Huntington, Mr. Standridge served as Chief Retail Community Banking Officer for Truist Financial Corporation beginning in December 2019, upon the closing of the merger between BB&T Corporation and SunTrust Banks, Inc. Previously, he served as President of Community Bank Retail and Consumer Finance Businesses beginning in October 2018 at BB&T. He was BB&T's Lending Group Manager from August 2016 to October 2018 and BB&T's Group State and Regional President prior to that beginning in 2008. |  | RAJEEV SYAL, age 57, has served as Senior Executive Vice President and CHRO since September 2015. Prior to joining Huntington, Mr. Syal served as managing directorManaging Director and global headGlobal Head of human resourcesHuman Resources for the Markit Group Ltd., a global financial information services firm, from 2008 to 2015. Previously, Mr. Syal held increasingly senior roles at Bank of America and TD Bank and brings to Huntington more than 3335 years of global financial services experience. |  | | |  | | MARK E. THOMPSONJULIE C. TUTKOVICS, age 62,52, has served as senior executive vice presidentSenior Executive Vice President and Chief Marketing and Communications Officer since joining our companyJuly 2022 and previously as Executive Vice President and Chief Marketing and Communications Officer beginning in April 2009. Mr. Thompson’s current role is director of corporate operations and corporate services, which includes corporate real estate and facilities, consumer and commercial loan servicing, and trust, commercial, and consumer operations. From April 2009 to November 2010, he served as director of strategy and business segment performance. Previously Mr. Thompson served as executive vice president and deputy chief financial officer of RBS-ABN AMRO North America, from October 2007 to October 2008 and then returned to his role as executive vice president and chief financial officer of the retail and small business segment for RBS Citizens from November 2008 to March 2009. | | | |  | | JULIE C. TUTKOVICS, age 50, has served as executive vice president and chief marketing and communications officer since April 2017. Ms. Tutkovics joined Huntington in August 2016 upon Huntington’s acquisition of FirstMerit Corporation, where she served as executive vice presidentExecutive Vice President and chief marketing officer,Chief Marketing Officer, from November 2010 to August 2016. |  | | |  | | ZACHARY J. WASSERMAN , age 46,48, joined Huntington as chief financial officerCFO and senior executive vice president effective onSenior Executive Vice President in November 4, 2019. Previously, Mr. Wasserman served as senior vice presidentSenior Vice President and chief financial officerCFO for Visa, Inc. North America and Global Visa Consulting and Analytics since March 2016. From March 2012 to March 2016, he was senior vice presidentSenior Vice President and chief financial officerCFO for U.S. Consumer Services & Global Consumer Travel with American Express Company. |
| | Huntington Bancshares Incorporated 2023 Proxy Statement | 57 |
Back to Contents ESG | ESG
| Huntington and its colleagues pride themselves on being forward thinking, especially in the increasingly important area of ESG. As expectations grow and focuses change within the broad scope of ESG, we continue to enhance our practices so that we are supporting our communities, customers, colleagues, and other stakeholders while acting as good stewards for our communities and the environment. Further, we are continually finding better ways to provide shareholders with the transparent information they seek. |
Overview of ESGWith oversight from the Board, Huntington and its colleagues are committed to implementing strong ESG practices by living out our Purpose of making people’s lives better, helping businesses thrive, and strengthening the communities we serve. As a public company, our economic impact begins with our commitment to delivering sustainable, long-term shareholder value through top-tier performance, while maintaining an aggregate moderate-to-low, through-the-cycle risk appetite and well-capitalized position. As a regional bank, our economic impact includes helping individuals and families reach their goals of financial stability and homeownership; providing businesses, especially small and mid-sized businesses, with the resources to grow; serving and uplifting the underbanked; and working in partnership to create prosperous and resilient communities. We are focused on the ESG issues most impactful to our business and important to our stakeholders. Because we believe “purpose drives performance,” our enterprise ESG commitment is closely integrated with our core performance objectives. Led by executive management, we have adopted a performance management framework that incorporates governance, strategy, and operations grounded in the considerations most material to our stakeholders. This framework ensures that we formalize and standardize our approach to integrating ESG considerations into our Board and executive management decision-making and business strategy. Additionally, we are guided by our ESG stakeholder assessment, which has helped us focus our reporting on the topics of most importance to our stakeholders and business. ESG ReportingThis Proxy Statement provides only a high-level overview of our ESG initiatives. Our 2022 ESG Report will be issued later this year. Our 2021 ESG Report and 2022 Annual Report are, and the 2022 ESG Report is expected to be, available on the Investor Relations pages of Huntington’s website at ir.huntington.com. None of these reports are a part of, or incorporated by reference into, this Proxy Statement. Additionally, see the Forward-Looking Information subsection under General Information on Voting and the Annual Meeting for important information regarding these ESG disclosures.
| Huntington Bancshares Incorporated 2023 Proxy Statement | 58 |
Back to Contents ESG OversightOur commitment to ESG is integrated with our core performance objectives, and our ESG performance management framework ensures our most significant ESG considerations are integrated into relevant Board committee agendas for discussion, awareness, and governance actions. The ELT is accountable for executing the ESG strategy approved by the Board, including setting and delivering on short-and long-term performance goals, which are made public in our annual ESG report. The following represents how ESG is overseen and integrated throughout the Company: 
As shown in the above chart, each of the Board-level committees provide oversight of ESG matters as it pertains to their specific areas of expertise and focus. Additionally, Huntington expanded and renamed the Nominating and Corporate Governance Committee as the Nominating and ESG Committee in early 2022 to oversee our ESG practices and disclosures, and the Compensation Committee was renamed as the HR and Compensation Committee to reflect its oversight of human resource matters. Further, ESG is incorporated throughout management’s risk management structure, which includes specific working groups, teams, councils, and committees focused on different pieces of ESG and climate change. In addition to the oversight set forth above, we appointed a Chief ESG Officer in 2022 to bring even more focused leadership to all matters related to ESG. | Huntington Bancshares Incorporated 2023 Proxy Statement | 59 |
Back to Contents ESG Stakeholder AssessmentTo ensure that we focus our ESG strategic commitment on opportunities that are most important to our key stakeholders, Huntington completed an ESG Stakeholder assessment in 2017. Working with a third-party consultant, we started our process by considering key sustainability/ESG reporting frameworks, ratings, and rankings and developed a broad list of topics. We then narrowed our focus to issues that are most relevant to Huntington and in the regional banking sector generally. The prioritization process included leaders representing nearly every function within the Company. We also convened small group focus sessions organized around each of our key stakeholders. We deliberately took an integrated approach to conducting our assessment by directly considering our risk management priorities, overall corporate strategy, and Purpose. Our efforts focused on evaluating topics based on both their importance to key stakeholders and to Huntington and our ability to impact those topics. While we recognize that each issue in our assessment is important, the final results focus us on a relative prioritization of the most important issues. The assessment clearly defines the topics that are important, more important, and most important to Huntington’s stakeholders and our business priorities. The full list of topics—categorized using these priority levels—can be found in our most recent ESG Report. We expect to complete an updated ESG stakeholder assessment before our next ESG Report is published. In addition to the periodic stakeholder assessments, another avenue we use to learn about the importance of various ESG topics is through our shareholder outreach that takes place throughout the year. Information about some of this year's topics discussed during these engagements can be found under the Shareholder Outreach and Engagement subsection. ESG Focus AreasAt Huntington, we focus on the ESG issues that are most important to our business and our stakeholders. Our framework categorizes ESG into four broad categories most significant to our stakeholders: EconomicOur economic impact begins with a commitment to delivering sustainable, long-term shareholder value through financial performance, while maintaining an aggregate moderate-to-low, through-the-cycle risk appetite and a well-capitalized position. We align our corporate strategy to our Purpose of helping others and building upon our market-leading, purpose-driven bank through focused efforts on the ESG issues most important to our business and our stakeholders. EnvironmentalHuntington is committed to environmental stewardship. Our environmental strategy outlines our holistic approach to enhancing our environmental performance and reducing our carbon footprint. We demonstrate our commitment and transparency through our disclosures to CDP, a global initiative that allows us to track and submit data annually toward managing our carbon footprint and certain other aspects of our environmental impact, in addition to our reporting to the TCFD framework. SocialHuntington aspires to be a Category of One financial services institution: an organization unique in the combination of its culture and performance. Huntington had 19,920 average full-time equivalent colleagues during 2022, all of whom are encouraged to live out a shared Purpose of making our colleagues’ and customers’ lives better, helping businesses thrive, and strengthening the communities we serve. We believe that our diverse workforce, supported by a culture of inclusiveness, enriches the experience of colleagues, and enhances our ability to perform as a company. GovernanceOur Board and ELT are committed to executing on our long-term vision and aligning our strategic objectives with the interests of our stakeholders. Our Board members are accomplished leaders from diverse backgrounds, bringing the perspectives, skills, and experience necessary to use independent judgment that will effectively challenge and drive continued success. Our Board members approve the strategy, risk appetite, and ethical standards for the entire organization, and our ELT ensures our business and enterprise functions operate with high legal, ethical, and moral standards through clearly stated policies and procedures. Additionally, our leaders set the tone at the top and oversee compliance with our standards and direct the Company’s financial reporting and internal controls. | Huntington Bancshares Incorporated 2023 Proxy Statement | 60 |
Back to Contents Economic Highlights — Commitment to Our CommunityHuntington supports the creation of thriving, economically inclusive communities. We have the scale and reach of a super-regional bank and the local commitment and accountability to work closely with the families and neighborhoods we serve. This includes developing and fostering relationships across our footprint to understand and address the most pressing needs in our communities. 
Environmental Highlights — Commitment to Our EnvironmentEnergy conservation and environmental sustainability efforts are a priority for Huntington. Our commitment to creating an environmentally sustainable future is an extension of our corporate values that drive our everyday actions. We have been an active participant in CDP, a global initiative that allows us to track and submit data annually toward managing our carbon footprint and certain other aspects of our environmental impact. 
(1) Source: U.S. Small Business Administration. SBA loans subject to SBA eligibility. | Huntington Bancshares Incorporated 2023 Proxy Statement | 61 |
Back to Contents Social Highlights — Commitment to Our ColleaguesOur colleagues are our most important asset and the key to helping our stakeholders thrive. Our business is built on relationships, and our colleagues differentiate us. Huntington's culture unites all colleagues through a shared understanding that helps us work collaboratively to achieve our goals. 
Some other benefits available to our colleagues to help them thrive include: 401(k) Plan with employer contributions; Legal Plan providing access to a network of attorneys for expected and unexpected life matters; Child/elder emergency back-up care, ongoing child and family care, and special needs support through Bright Horizons; Tuition reimbursement and pre-imbursement for continuing education; Medical plans that include autism therapy and treatment and fertility services; Employee Assistance Program that provides counseling sessions; Huntington Cares Emergency Fund for financial hardship; and Telemedicine with 24/7 support for health needs. | Huntington Bancshares Incorporated 2023 Proxy Statement | 62 |
Back to Contents Governance Highlights — Commitment to Strong Governance and Risk Management PracticesThrough its adoption of best-in-class governance practices, our Board is leading with a positive and transparent “tone at the top.” 
Fair Play Banking and Other Sustainable Business PracticesOur ESG Program recognizes that sustainable business practices are crucial to our long-term success and shareholder value creation. One of the most critical ways we differentiate ourselves is by looking out for our customers through our Fair Play Banking philosophy, which we have had in place for more than a decade. The focus of this philosophy is to provide customers with transparent service that provides them with greater access to and control of their financial lives. We believe it is crucial to listen to and learn from our customers and bankers and use that feedback to inform the product development process. Our Fair Play Banking philosophy is broadly broken down into four areas: Product Development and Marketing; Sales and Service; Customer Advocacy, Experience, and Satisfaction; and Compliance. Shareholders are encouraged to read more about these in our most recent ESG Report. Our suite of Fair Play Banking products and features currently include: Instant Access gives consumer and business banking customers immediate access to up to $500 from check deposits; Standby Cash, giving qualifying customers immediate access to cash with a line of credit based primarily on their checking and deposit history rather than credit score; Savings Goal Getter helps customers achieve real savings through goal setting and tracking; Early Pay, which automatically gives customers with qualifying direct deposits access to their paychecks up to two days early, at no additional cost; $50 Safety Zone and 24-Hour Grace help protect consumers and businesses against overdraft fees; Huntington Heads Up® provides customers with real-time insights to help them make more informed decisions; All Day DepositSM gives customers the ability to make deposits until midnight Central Time when depositing through ATMs or
our Mobile App; Money Scout, which helps enrolled customers look out for money they can set aside to build their savings; and Asterisk Free Checking, providing checking accounts with no minimum balance requirements. | Huntington Bancshares Incorporated 2023 Proxy Statement | 63 |
Back to Contents In addition to our Fair Play Banking philosophy, we have implemented many other sustainable business practices that drive shareholder value through economic cycles and upon which we continue to build. These practices provide us with key advantages that differentiate us in our markets. | Long-Term Value Creation Our Purpose-driven culture that looks out for people; Our talented, diverse colleague base that embodies our Purpose and Values; Our “Welcome” brand promise that promotes inclusiveness in all that we do; Strong relationships with our customers and our ability to provide them with exceptional experiences; Our distinguished products and services; Our commitment to community involvement and leadership; and Our strong financial position, which allows us to continue to invest in our future. |
Our ESG foundation and commitments are thoroughly integrated into our performance objectives and core business strategies. By facilitating sustainable, long-term value creation, we are looking out for our shareholders, colleagues, customers, and communities. Environmental StrategyAt Huntington, we embrace high standards for environmental stewardship and strategy—for ourselves, our suppliers, and other third-party partners. Compliance with applicable environmental regulations and laws in the areas in which we operate is a minimum expectation. We also strive to be a leader in applying environmental best practices to accelerate positive change for the planet. Our Environmental Policy Statement and environmental strategy outline our holistic approach to enhancing our environmental performance and reducing our carbon footprint. We also have a formalized Climate Risk Policy Statement, which explains our approach to risk management, particularly climate risk management. Our environmental stewardship efforts align with and support certain aspects of well-recognized and respected frameworks, such as the U.N. Sustainable Development Goals, World Economic Forum agenda, and the Paris Agreement. We also reference guidance from the U.S. Climate Finance Working Group to help us understand and contribute to the transition to a low-carbon economy. We demonstrate our commitment and transparency through our disclosures to CDP and our reporting to the TCFD framework. We began to shift our environmental strategy in 2021 from focusing on reducing our operational emissions (Scope 1 and Scope 2) to understanding and analyzing the magnitude of our value chain emissions (Scope 3), which include our customers’ emissions, and have developed an exploratory net-zero carbon roadmap to chart a thoughtful and strategic approach towards achieving a net-zero future. We have also taken initial steps to evaluate anticipated decarbonization trends in our portfolios. This analysis will become more comprehensive over time, as will the Company’s goals and objectives. Huntington has taken steps to formalize our climate risk management practices and ensure that they are integrated into our existing, robust risk management program. We are developing a Climate Risk Management Framework that is intended to align with our Enterprise Risk Management structure. Our formal Climate Risk Program with multiple workstreams includes ongoing assessment of our seven Enterprise Risk Pillars. While climate-related risk issues have been an ongoing consideration for Huntington, our formal Climate Risk Program provides a structured approach to consistently identify, assess, manage, and report climate-related risks and their impact across the enterprise. The Company’s risk culture facilitates full institutional engagement in the identification, assessment, and mitigation of any material climate-related risks and future impacts associated with potential adverse environmental events on our stakeholders. Stakeholders should review our current and forthcoming ESG Reports for more information on our various environmental-based goals; progress towards those goals; and environmental performance, including energy efficiency, renewable energy, and GHG emissions. | Huntington Bancshares Incorporated 2023 Proxy Statement | 64 |
Back to Contents Human Capital Management and Talent Development and DEI InitiativesWe are committed to creating an inclusive, diverse environment by embracing different skills, backgrounds, and perspectives, both in our communities and at work. We believe Purpose-driven leadership facilitates progress in achieving a diverse, inclusive workforce. Our diverse and inclusive leadership structure is designed to ensure the alignment of DEI initiatives with our business goals, our corporate values, and the future of Huntington. Huntington’s DEI Strategy and Operating Plan encompasses four focus areas: Workplace Inclusion, Workforce Diversity, Community Engagement, and Supplier Diversity. As shown by the below graphic, this is an ongoing process, with each focus area enabling the others. These four focus areas are further described below. Workplace InclusionCreate an inclusive culture that fosters an authentic sense of belonging through consistent and sustained execution of the Huntington DEI strategy that is welcoming and open to all. Workforce DiversityEngage, develop, retain, and attract talent of all backgrounds that reflects the realities of our marketplace, our communities, and the relevant labor market. We embrace diversity as a responsibility shared among all colleagues, bringing our core value of inclusion to life by modeling inclusive behaviors, showing respect, and appreciating differences. Huntington’s Social Equity Colleague Plan, which was launched in 2020, seeks to continually improve the colleague experience by promoting progress in the areas of culture and inclusion, career development and advancement, and the colleague experience. Community EngagementPosition Huntington as a DEI leader with our colleagues, customers, and communities, fully leveraging our diverse talent and inclusive culture toward positive outcomes in our communities. Supplier DiversityDrive economic inclusion within our supply chain to purchase quality products and services from diverse businesses in alignment with our Purpose of making lives better, helping businesses thrive, and strengthening the communities we serve. In 2022, over 22% of our total addressable supplier spend was with diverse suppliers. | Huntington Bancshares Incorporated 2023 Proxy Statement | 65 |
Back to Contents Political ParticipationAn important part of Huntington’s commitment to community includes active participation in the civic and political processes that impact the lives of our customers, shareholders, and colleagues. As a financial holding company, Huntington is extensively regulated at the federal, state, and local levels. Because of the ways in which various regulations, laws, and legislation can impact Huntington, we believe it is critically important to take a constructive and active role in the public policy discussions that will shape the future of the industry and our business. As such, the Company monitors legislative activities and trends, and advances public policies that will support our ability to serve Huntington's customers and communities. All political activities conducted by or on behalf of the Company are managed by Huntington’s Government Relations department, which reports to the Chief Public Affairs Officer, who is responsible for the department’s policies, activities, and legal compliance. Moreover, the group is subject to the oversight of the Board's Community Development Committee. Huntington maintains policies and processes intended to ensure that all public affairs activities are conducted in accordance with those policies and applicable legal limits, as well as Huntington’s Code of Conduct and Ethics, which colleagues review and acknowledge on an annual basis. Government Relations reports at least annually to the Community Development Committee on significant policies, practices, and priorities that relate to the Company’s public policy objectives. We make our political spending available through our website at ir.huntington.com. Information Security and CybersecurityOur objective for managing information security and cybersecurity risk is to avoid or minimize the impacts of both internal and external threat events or other efforts to penetrate or otherwise compromise the confidentiality, integrity, or availability of our systems. We work to achieve this objective by hardening networks and systems against attack, and by diligently managing visibility and monitoring controls within our data and communications environment to recognize events and respond appropriately. To this end we employ a set of in-depth defense strategies, which include efforts to make us less attractive as a target and less vulnerable to threats. We also invest in threat analytics to bolster our rapid detection and response capabilities and conduct regular system testing, vulnerability scans, data collection, and colleague training. Huntington employs several teams of colleagues who are focused on protecting and enhancing our systems. Huntington’s Information Security Program supports corporate compliance with applicable federal and state regulations, the FFIEC Examination Guidance, and industry-accepted security standards such as the National Institute of Standards and Technology (NIST) Cybersecurity Framework and SP 800-53 control families, which are at the forefront of cybersecurity guidelines for federal agencies in the United States. Huntington’s Information Security Program is directed by the Chief Information Security Officer. To keep the Board apprised of the continually shifting landscape, the Chief Information Security Officer typically provides quarterly updates to the Technology Committee on information security and cybersecurity matters. The Technology Committee and Risk Oversight Committee share Board oversight of the efforts made to maximize information security and cybersecurity. Potential concerns related to information security and cybersecurity may also be escalated to the Technology Committee, as appropriate. As a complement to the overall Information Security Risk Management Program, we use several training methods including mandatory courses occurring at least annually and timely written communications and updates occurring throughout the year. Internal policies and procedures have been implemented to encourage the reporting of potential phishing attacks or other security risks. We also use third-party services to test the effectiveness of our information security and cybersecurity risk management framework. | Huntington Bancshares Incorporated 2023 Proxy Statement | 66 |
Back to Contents Compensation of Executive Officers | | | | | Proposal 2 | | | | | | |  | Advisory Approval of Executive Compensation | | Our executive compensation program places heavy emphasis on performance-based compensation, particularly in the form of long-term incentives. We continually strengthen our compensation practices based on our philosophy, market best practices, and feedback received from shareholders. We believe that our compensation policies and procedures strongly align the interests of executives and shareholders. We encourage our executives to focus on long-term performance withthrough long-term incentives and also stock ownership and retention requirements. We further believe that our culture focuses executives on sound risk management and appropriately rewards executives for performance. The resolution set forth below gives the shareholders the opportunity to vote on the compensation of our executives. Consideration of this resolution is required pursuant to Section 14A of the Securities Exchange Act of 1934. Upon the recommendation of the board of directors,Board, we ask shareholders to consider adoption ofand vote to adopt the following resolution: “RESOLVED, that the compensation paid to the named executive officers of Huntington Bancshares Incorporated as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including in the Summary Compensation Table, the Compensation Discussion and Analysis, the additional compensation tables, and the accompanying narrative disclosure, is hereby approved on an advisory, non-binding basis.” Because this is an advisory vote, it will not bind the board of directors;Board; however, the HR and Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. Shareholders are currently provided with an annual opportunity to vote on executive compensation. Accordingly, the next advisory vote to approve our executive compensation program is expected to occur at the 2024 Annual Meeting, depending on the outcome of Proposal 3 and the determination of the Board. 
|  | The board of directorsBoard recommends a vote FORthe adoption of the resolution regarding executive compensation, as set forth above. |
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Compensation of Executive Officers
Compensation Discussion & AnalysisTable of Contents
92 Executive Overview
| Our compensation philosophy is to pay for performance that creates long-term shareholder value. The Compensation Committee’s 2020 compensation program for executive officers emphasized performance-based compensation designed to drive profitable growth and returns within our through-the-cycle aggregate moderate-to-low risk profile while doing the right thing for our customers, colleagues, shareholders, and communities. | | |
Executive OverviewOur compensation philosophy is to pay for performance that creates long-term shareholder value. The HR and Compensation Committee’s 2022 compensation program for executive officers emphasized performance-based compensation designed to drive profitable growth and returns within our aggregate moderate-to-low, through-the-cycle risk appetite while doing the right thing for our colleagues, customers, communities, and shareholders. Named Executive OfficersThis Compensation Discussion and AnalysisCD&A describes Huntington’s executive compensation program for 20202022 for our CEO and the additional executive officers named in the Summary Compensation Table (the “named executive officers” or “NEOs”)NEOs), which include: | | | | | | | | |  | |  | |  | |  | |  |  Stephen D. Steinour Chairman, President, and CEO
| |  Zachary J. Wasserman |  Brant J. Standridge |  Paul G. Heller |  Scott D. Kleinman | Chairman, President,
and CEO | Chief Financial Officer | President, Consumer and Business Banking | Paul G. Heller
Chief Technology &and Operations Officer | | Andrew J. Harmening
Consumer & Business Banking Director
| | Jana J. Litsey
General Counsel
President, Commercial Bank |
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Compensation of Executive Officers
Our Approach to Compensation
Our Purpose, Our Vision, Our Strategy: Our Purpose is to make people’s lives better, help businesses thrive, and strengthen the communities we serve. Our Vision is to become the leading People-First, Digitally Powered Bank. Our Strategy is to create sustainable competitive advantage with focused investments in customer experience, product differentiation, and key growth initiatives. We manage the Company to create shareholder value over the long term through consistent, disciplined performance. Our compensation program seeks to align Our Purpose, Our Vision, and Our Strategy: • | Our strategy is to build the leading People-First, Digitally Powered bank. | • | We are focused on driving sustained,Strategy by ensuring a significant portion of compensation is stock-based and long-term financial performance for our shareholders. | • | We manage the company to create shareholder value over the long term through consistent, disciplined performance. | • | We believe the best way to achieve our long-term financial goals and generate sustainable, through-the-cycle returns is to fulfill our purpose - to make people’s lives better, help businesses thrive, and strengthen the communities we serve. |
Living Our Purpose in 2020:
• | As a result of our highly engaged colleagues and focus on our customers, we delivered solid results for 2020 in a challenging environment. | • | We focused on creating a sustainable competitive advantage with focused investment in customer experience, product differentiation, and key growth initiatives. | • | We grew revenues, average loans and average core deposits, and we added and deepened customer relationships. |
Seefocus. A critical foundation of our executive compensation philosophy is the Proxy Summary above for additional information aboutrequirement to own Huntington common stock, which aligns management’s interests with those of shareholders. We believe that this is an area where our strategy.CEO should lead by example, by having set a stock ownership requirement at an industry-leading 10X annual base salary.
2020 Key
2022 Compensation Elements | A significant portion of compensation is stock-based and long-term in focus. A critical foundation of our executive compensation philosophy is the requirement to own Huntington common stock, which aligns management’s interests with those of shareholders. | | |
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In 2020,2022, the HR and Compensation Committee maintained the essential design of our 2021 executive compensation program.program, but replaced grants of options with grants of RSUs based on analysis of peer data, feedback from shareholders, and consultation with our independent compensation consultant. The targetedtarget total direct compensation mix below illustrates the emphasis on variable, at-risk incentive-based compensation. Fixed compensation consists of base salaries. Variable, performance-basedincentive-based compensation includes our annual incentive payouts, in cash, the target value of PSUs, and the grant date fair value of stock options and RSUs. | | Target Compensation Mix | | Description | | CEO | CEO | Other NEOs
(1)
(Average) | | Description |  | | Base Salaries |  |  |  | | Fixed component representing 24% or less12.5% of targeted directaggregate total target compensation for our CEO and 24.8% for our other NEOs | | Annual Incentive Plan
(Management (Management Incentive Plan)Plan – “MIP”) |  |  | | | Annual incentive plan with overall adjusted performance at 95% of targetperformance-based compensation based on: PTPP Earnings per share (EPS) - target of $1.349Growth(2) • Operating leverage(1) - target of 1.10%
• Pretax Pre-Provision (PTPP) growthLeverage(2)- target of 2.6%
| | Long-Term Incentive Plan (“LTIP”) |  |  | | | Awards of long-term incentive grants comprised of: • PSUs (55% for CEO, 50% for other NEOs)
• NEOs; based on Relative and Absolute ROTCE(3) (2)for the cycle ending December 31, 2020
• Relative and Absolute ROTCE + “new revenue”new revenue adjuster for the cycle 2020three-year 2022 – 20222024 cycle)
• RSUs (20%(45% for CEO, 25%50% for other NEOs)
• Stock Options (25%)
| | | | | |
(1) Based on annualized base salaries. Excludes Mr. Standridge, who only received a partial-year salary beginning with his employment on April 11, 2022. Mr. Standridge did not receive a Huntington 2022 LTIP award, but he did receive a one-time grant of RSUs in order to compensate Mr. Standridge for certain equity payments he forfeited as a result of accepting the opportunity with Huntington. For additional detail, see 2022 Compensation Decisions for Each Named Executive Officer below. Including Mr. Standridge with his target MIP and target LTIP as a percentage of his base annualized salary, the non-CEO NEO compensation percentages would be: Base Salary (23.4%), Annual Incentive Plan (28.3%) and LTIP (48.3%). Note that some percentages may not add up to 100% due to rounding. (2) (1),(2),(3) | Non-GAAP, see Appendix A to this proxy statement for more information. |
Huntington’s 2020As discussed below, Huntington had strong financial performance in 2022 and, as a result, each of the three MIP metrics – EPS, PTPP Earnings Growth, and Operating Leverage – was achieved above target. MIP performance against the Management Incentive Plan (MIP) metrics was certifiedchosen by the HR and Compensation Committee at 95%was 184% of target. The named executive officers earned annual incentive awards ranging from 96%HR and Compensation Committee maintains the ability to 104.3% of his or her target award. Executive officers also received long-term incentive awards in 2020 compriseduse discretion based on its holistic evaluation of performance stock units (“PSUs”), restricted stock units (“RSUs”) and stock options.external factors that may impact results, which has historically been applied both positively and negatively. While Huntington displayed strong performance as a Company and among colleagues in 2022, management recommended that the HR and Compensation Committee apply negative discretion to reduce the final MIP performance factor from
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TableBack to Contents
184.0% of Contents Compensationtarget to 155.0% as management believed that it was more reflective of Executive Officersoverall performance, including consideration of the net impact of a higher than budgeted yield curve, and that it was believed to be more appropriate year-over-year.
Strong Financial and Operational PerformanceStrategic Business Objective | |  | Compensation Component or
Metric | | | 20202022 Actual Results | Aligning pay with performance | | | Earnings per share (EPS)
Adjusted EPS Performance measure for annual incentive | | | $0.691.425(1) | Managing expense growth | | Focusing on quality revenue | Operating leverage
Adjusted PTPP Earnings Growth Performance measure for annual incentive | | | Positive operating leverage on an adjusted basis84%(1) | Focusing on quality revenue | | Managing expense growth | Pretax pre-provision earnings growth (PTPP Growth)
Adjusted Operating Leverage Performance measure for annual incentive | | | 4.0%24.26%(2)(1) | Achieving long-term profitable growth and returns | | | Adjusted ROTCE Performance measure for performance share units | | | 8.9%21.5%(3)(1) |
| Non-GAAP, see Appendix A to this proxy statement for more information. |
(1) | Non-GAAP, see page 85 of the company’s Form 10-K for the year ended December 31, 2020 for more information. |
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Long-Term FocusWith long-term incentives comprising the most significant portion of compensation and consisting primarily of performance-based awards, combined with our robust stock ownership and holding requirements, Huntington’s compensation program for executives is long-term focused and aligned withaligns the interests of our executives with those of our shareholders. Long-term incentives make up the most significant portion of total NEO compensation, a majority of the aggregate value of which consists of performance-based awards, and we combine that with our robust stock ownership requirements.
Risk Management CultureThe HR and Compensation Committee’s oversight responsibility includes the relationship among risk takers, risk management, and compensation. We regularly monitor our incentive arrangements for colleagues at all levels, and strive to enhance incentive risk management in light of developing best practices and regulatory guidance. Risk assessment of incentive compensation is discussed in greaterFor additional detail, below under “Risksee Risk Assessment of Incentive Compensation”.Compensation below. We have a legacyIntegrity is at the heart of strong customer serviceour organizational identity, and we require that all of our colleagues follow both the letter and intent of our Code of Business Conduct and Ethics. Moreover, Huntington maintains a robust Recoupment and Clawback Policy which is a tool for recovery of incentive compensation in applicable situations. Colleagues at all levels in the organization are also subject to this policy. Incentive compensation subjectour robust Recoupment Policy, which serves as a tool to possible clawback or recoupment includes any cash incentive or equity compensation,recover vested or unvested.unvested incentive compensation in applicable situations. In general, situations that trigger a review under this policy involve misconduct or behaviors or actions outside the bounds of the company’sCompany’s overall risk appetite and governance structure. The HR and Compensation Committee would makeis responsible for making any compensation recoupment or clawback determination with respect to executive officers. Additional detail about the See below under Recoupment and Clawback Policy can be found later in this discussion.of Incentive Compensation for additional details.
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Back to Contents The Importance of Stock OwnershipHuntington is committed to a culture of stock ownership, which aligns management’s interests with those of shareholders. The requirement to own Huntington common stock is a critical foundation of our executive compensation philosophy. Mr. Steinour’s commitment to this principle, and to the company,Company, is evidenced by his significant personal investment in Huntington. Since joining Huntington in January 2009, Mr. Steinour has purchased over 1.651.6 million shares of Huntington common stock in open market transactions. As of January 31, 2021,2023, Mr. Steinour directly or indirectly beneficially owned shares of Huntington common stock equal to approximately 75X100X his base salary, significantly exceeding our industry-leading practice 10X salary ownership guideline requirementsrequirement for the CEO. Each other ELT member at the senior executive officervice president level, including each of our NEOs, has an ownership guideline ranging from 2X toof 3X their salary. In addition, executive officers are subject to a holding requirement equal to 50% of net shares received upon the exercise of a stock option or upon the release of full value awards. This amount of shares must be held until retirement or other departure from the company. Our directors and colleagues collectively represent a top 10 shareholder. See additional detail under “StockStock Ownership & Holding Requirements.”Requirements. Table of Contents
Compensation of Executive Officers
Highlights of 20202022 Performance and Impact on Executive CompensationPutting our Purpose Into ActionWe delivered targeted TCF cost synergies as announced, while driving revenue synergies. 2020 — Living Our Purpose
The COVID-19 pandemic has causedWe grew PPNR(3) to $3.1 billion, or 88%, over 2021, reflecting higher net interest income (FTE) and continuesfee income.
We acquired Capstone Partners, a top tier middle market investment bank and advisory firm, which will add scale in key verticals and significant capabilities to cause significant, unprecedented disruption that affects daily livingHuntington allowing us to serve our customers throughout their full business lifecycle. We acquired Digital Payments Torana, now Huntington ChoicePay, enhancing Fair Play and negatively impactsproviding seamless, efficient digital disbursement options to our National Settlements customers, with opportunities to expand. We continued to execute on our strategy to make targeted investments in product innovation, brand positioning and marketing, service and customer experience, and digital engagement, and we are proud to say Huntington ranked Highest in Customer Satisfaction with Mobile Banking Apps among Regional Banks four years in a row by J.D. Power in 2022.(1)We also saw an increase of two million checking households since 2010, and were named #1 among our competitors in the global economy. Huntington’s 2020 performance was most significantly impactedcategories of “Trust”, “Net Promoter Score (NPS)”, and “Customer Focused” by COVID-19, the resulting recession2021 Brand Tracking Market Study.(2) We increased digital checking acquisition from 14% in 2017 to 46% as of November 2022. We joined the Partnership for Carbon Accounting Financials (PCAF) in 2022 to harmonize emissions data and climate reporting. We continued to receive recognition for our colleague-focused efforts as an employer and were selected as a winner of the impact of Current Expected Credit Losses (CECL), which impacted the provision for credit losses andprestigious APEX Award by Training Magazine. (1) J.D. Power 2022 U.S. Banking Mobile App Satisfaction Study; among banks with $75B to $200B in turn the EPS results. Despite a challenging year, Huntington reported increases in revenue and PTPP, both at record levels. In addition, through strong leadership actions and behaviors, Huntington has actively worked to meet the needs of its customers, communities and colleagues and the company delivered significant achievements. Please see the Proxy Summarydeposits. Visit jdpower.com/awards for more details. (2) 2021 Brand Tracking Market Study. In market bank competitors: BAC, CFG, FITB, JPM, KEY, PNC, USB. (3) Non-GAAP, see Appendix A to this proxy statement for more information. See the Proxy Summary section for additional information about Living Our Purpose in 2020.our strategy. | 2022 Highlights Earnings per common share increased $0.55 to $1.45 from 2021. Total assets increased 5% to $183 billion at December 31, 2022 from $174 billion at December 31, 2021. Total revenue increased 21% to $7.3 billion. Period-end total gross loan and lease balances increased $8.3 billion, or 7%, year-over-year. Net income attributable to Huntington Bancshares Incorporated increased 73% to $2.2 billion. Period-end total gross deposit balances increased $4.7 billion, or 3% year-over-year. Year-end dividend yield of 4.40% based on last paid dividend rate. |
| |  | | 2020 Highlights –
• Net income was $817 million, and earnings per common share (EPS) for the year were $0.69.
• Fully taxable equivalent total revenue increased 3%(1) to $4.8 billion.
• Return on tangible common equity was 8.9%(2)
• Return on assets was 0.70%
• Achieved positive operating leverage on an adjusted basis(3) for the eighth consecutive year
• Efficiency ratio of 56.9%(3)
• End-of-year dividend yield of 4.8%
(1)
Non-GAAP, see page 50 of the company’s Form 10-K for the year ended December 31, 2020 for more information.
(2),(3)
Non-GAAP, see Appendix A to this proxy statement for more information.
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Back to Contents Pay for Performance AlignmentTotal CEO Compensation(1) ($MM)
vs. Tangible Book Value per Common Share(2) | Total CEO Compensation(1) ($MM)
vs. Pretax Pre-Provision Earnings(3) ($MM) | | |  |  |
(1) | Salary plus annual and long-term incentives. | (2) | Non-GAAP, see page 85 of the company’s Form 10-K for the year ended December 31, 2020 for more information. | (3) | Non-GAAP, see Appendix A to this Proxy Statement for more information. |
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Compensation of Executive Officers
Consideration of “Say-on-Pay”/Shareholder OutreachWe are pleased 96% of the votes cast for our “say-on-pay” advisory vote at our 2020 annual meeting and 95% or morethat 91.5% of votes cast at eachour annual meeting since 2013in 2022 were in favor of our executive“say-on-pay” advisory vote, and that support has averaged 95% at annual meetings held in the last ten years. Historical Say-on-Pay VoteBased on the “say-on-pay” votes and investor feedback received, the HR and Compensation Committee utilized the same compensation programs. Nevertheless, we strivemetrics in 2022, but replaced grants of options with RSUs in order to further strengthen the alignment between pay and long-term performance. We continue to monitor emerging trends and best practices and seek ways to enhance our compensation programs as part of our ongoing mission to continually strengthen our compensation practices based on our philosophy, market best practices, and feedback received from shareholders. shareholders throughout the year. During 2020,2022, we continued our biannual shareholder outreach to shareholders, extending invitations to investors collectively owning greater than 50%approximately 60% of our outstanding common stock. Westock, and held conversationsmeetings on a variety of topics with shareholdersinvestors owning in the aggregate approximately 21%over 20% of our outstanding common stock. Based on the “say-on-pay” votes and other feedback, the Compensation Committee maintained the essential designstock as of our compensation program for 2020. We will continue to monitor emerging trends and best practices and seek ways to improve our compensation programs.December 31, 2022. Historical Say-on-Pay Vote
Key Compensation & Governance Practices What We Do | |  What We Don’t Do | • Significant stock ownership and hold until retirement policies applicable to executive officers and colleagues receiving equity awards several reporting levels below the executive officers reinforce alignment between shareholders and senior management
• Significant emphasis on performance-based compensation, with majority of compensation dependent upon long-term performance
• Balanced portfolio of metrics that drive annual and long-term goals in a risk appropriate manner
• All incentive compensation subject to Recoupment and Clawback Policy
• Performance Share Units comprise 55% of total annual LTI grant value for CEO and 50% for other NEOs
• Independent compensation consultant provides expert guidance and support to the Compensation Committee
• Biannual shareholder engagement to exchange viewpoints with our investors
• Annual assessment of compensation programs against peers and best practices
| | • No repricing of stock options without shareholder approval
• No excise tax gross-ups upon change in control
• No single-trigger vesting of equity awards upon change in control
• No hedging or pledging of Huntington securities by executives
• No dividend or dividend equivalents paid on equity grants prior to vesting
• No incentive plans encourage excessive risk
|
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Compensation of Executive Officers
Design and Structure of 2020 Executive Compensation
Program Features Our Business and Our Compensation PhilosophyPhilosophy and Decision-Making ProcessWe provide a balanced and straightforward total compensation package for executive officers whichthat includes both fixed and variable performance-based elements. Our compensation philosophy balancesis to pay for performance by making a majority of our executives’ pay variable and based on performance that we believe will create long-term shareholder value, and to balance risk and reward with a mix of base pay, short-term incentives and long-term incentives, with greater emphasis on long-term incentives. The use of both short-term and long-term incentives ensures that the ultimate compensation delivered is dependent uponreflects achievement of our annual business goals, as well as delivering long-term shareholder value. Our performance and evaluation process considers company,corporate, business segment, and individual performance, as well as performance relative to industry peers. We also consider individual performance, including performance on DEI metrics that encompass our People Leader | Huntington Bancshares Incorporated 2023 Proxy Statement | 72 |
Back to Contents Quotient, or PLQ, introduced in 2020. The PLQ is based on a combination of quantitative and qualitative measures and is intended to reinforce the development of a diverse and inclusive workplace. Our target pay levels are designed to be competitive with market practice. Sincepractices in order to engage, develop, retain, and attract colleagues in a competitive labor market. Because a majority of our pay is variable and based on performance, our actual pay positioning will vary appropriately to reflect ouractual performance. We also maintain robust stock ownership guidelinesrequirements for executives and impose a “hold until retirement” requirementin order to further ensure alignment of up to 50%our compensation program with the long-term interests of the net shares issued upon the exercise of options or release of RSUs and PSUs.our shareholders. While overall compensation policies generally apply to all executives, we recognize the need to differentiate compensation by individual, reflecting on his or her role, performance, experience, and expected contributions. Base salaries and incentive targets are the primary means for differentiating compensation opportunities to reflect executive role and scope of responsibility. For example, Mr. Steinour has a higher base salary and higher potential incentive award opportunities due to his responsibilities as CEO. He is also held to a higher stock ownership guideline, reflecting his increased stake in our performance. Guiding Principles | Guiding Principles | | | Focus on long-term shareholder alignment | | A significant portion of compensation is stock-based and long-term in focusfocus. We maintain robust stock ownership requirements for our CEO and other executives. | Balanced and holistic approach | | Our program includes fixed and performance-based elements, short-term and long-term performance incentives, and considers corporate, business segment, individual, and relative performanceperformance. | Align pay and performance | | Total compensation is expected to vary each year and may evolve over the long-term to reflectin line with our performance and key objectives over the long-term. | Maintain a through-the-cyclean aggregate moderate-to-low, through-the-cycle risk profileappetite | | We monitor our programs, controls, and governance practices for consistency with our aggregate moderate-to-low, through-the-cycle moderate-to-low risk profile appetite. See “RiskRisk Assessment of Incentive Plans”Compensation | Assure appropriate positioning in the market | | Our target pay levels are designed to be competitive with market practicepractice. | Reflect internal equity | | We differentiate compensation by individual, reflecting his or hertheir role, experience, performance, and expected contributions |
| | | Reinforcing our Values In addition to rewarding executive officers for achievement of financial goals, the HR and Compensation Committee applies its discretion to reinforce behaviors and values that contribute to the company’sCompany’s long-term success. Our valuesValues and our purposePurpose work together to guide how we develop our business strategy and achieve our goals. Our colleagues are our most important asset and the key to fulfilling our purpose to make people’s lives better, help businesses thrive, and strengthen the communities we serve. Performance reviews for allcolleagues focus equally (50-50) on WHAT a colleague does (goals) and HOW a colleague does it (behaviors supporting our Values). For executives, including our NEOs, this includes utilizing the PLQ to evaluate their performance on DEI metrics. This balanced focus is intended to encourage expected behaviors consistent with our valuesValues in support of our purpose.Purpose. See Human Capital Management and Talent Development and DEI Initiatives within the ESGsection. |
62 | Huntington Bancshares Incorporated2023 Proxy Statement | 73 |
Back to Contents Key Compensation and Governance PracticesThe foundation of our executive compensation program is a philosophy of maintaining responsible governance and practices that align the interests of our executives with those of our shareholders. This guiding principle provides us with the framework from which we built our compensation program, and which continues to inform its continuous improvement. Below are some examples of how we ensure that our compensation program achieves our corporate goals and aligns with our compensation philosophy: What We Do | | What We Don’t Do |  | Significant stock ownership policy applicable to executive officers and next level executives receiving equity awards to reinforce alignment between shareholders and senior management | |  | No repricing of previously-granted stock options without shareholder approval | | Significant emphasis on performance-based compensation, with the majority dependent upon long-term performance | | | No perquisite or excise tax gross-ups upon change in control | | Balanced portfolio of metrics that drive annual and long-term goals in a risk appropriate manner | | | No single-trigger vesting of equity awards upon change in control | | All incentive compensation, including vested and paid compensation, is subject to a robust Recoupment Policy that allows us to recover vested or unvested incentive compensation in the event inappropriate risk taking or other activities take place | | | No hedging or pledging of Huntington securities by executives | | PSUs comprise 55% of total annual LTI grant value for CEO and 50% for other NEOs | | | No dividend or dividend equivalents paid on equity grants prior to vesting | | Annual equity-based awards made on a pre-established date to avoid any appearance of coordination with the release of material non-public information | | | No incentive plans encourage excessive risk-taking | | Independent compensation consultant provides expert guidance and support to the HR and Compensation Committee | | | | | Shareholder engagement to exchange viewpoints with our investors | | | | | Annual assessment of compensation programs to compare them to those of our peers and market best practices | | | | | Limited perquisites representing a small component of compensation | | | |
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Compensation of Executive Officers
Risk Assessment of Incentive CompensationThe HR and Compensation Committee oversees the company’sCompany’s compensation policies and practices and the relationship among risk, risk management, and compensation. The HR and Compensation Committee’s oversight is supported by the Incentive Compensation Oversight Committee (the “Oversight Committee”), an executive levelexecutive-level management committee. The Oversight Committee consists of senior managementleaders from Human Resources, Finance, Legal, Credit Administration, and Risk Management and is co-chaired by the chief human resources officerCHRO and the chief risk officer.CRO. The Oversight Committee reports directly to the HR and Compensation Committee. Under the direction of the Oversight Committee, Huntington performs an annual risk assessment of eachits incentive plan. Theplans. Aided by an independent third-party consultant, the review includes economic analysis as well asand evaluation of plan design features, risk balancing mechanisms, and governance policies and practices, and adherence to incentive compensation guiding principles developed by the Oversight Committee. A key tool for managing incentive compensation risk is an annual enterprise-level significant risk events review process overseen by the chief risk officer.CRO. This year-end significant risk events review may result in incentive payment adjustmentsreductions where warranted. | Huntington Bancshares Incorporated 2023 Proxy Statement | 74 |
Back to Contents Huntington uses a variety of plan design features to balance risk and rewards.reward. Governance policies and practices also play an important role in managing incentive plan risk. We regularly monitor our incentive compensation arrangements for employeescolleagues at all levels and strive to enhance our risk review in light of developing best practices and regulatory guidance. The HR and Compensation Committee receives in-depth reviews of select business unit incentive plans chosen by the committeethey choose or that are recommended by management.management for review. | | | | | | | Key broad-based incentive plan design features &and controls include: • Recoupment / clawback provisions
• Management discretion to reduce or eliminate awards
• Annual risk-based review of plans and awards
| | Other features and controls used in various plans include: • Multiple performance criteria
• Risk-related performance criteria
• Hold-until-retirement or other termination provisions for equity grantsDeferrals paid over time
| | |
| | | Balancing Risk and Reward for Executive Officers For executive officers, our compensation philosophy balances risk and reward with a mix of base pay, short-term incentives, and long-term incentives, with greatergreatest emphasis on long-term incentives. We maintain robust stock ownership guidelines for executives and impose a “hold until retirement” requirement of up to 50% of the net shares issued upon the exercise of options or release of RSUs and PSUs.executives. Our Recoupment / Clawback Policy covers executive officers andall colleagues. In addition, the board of directorsBoard retains discretion to reduce or eliminate incentive awards for executive officers. |
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Compensation of Executive Officers
Components of 20202022 Compensation
The HR and Compensation Committee’s 2022 compensation program for executive officers emphasized performance-based compensation designed to drive profitable growth and returns within our aggregate moderate-to-low, through-the-cycle risk appetite, while doing the right thing for our colleagues, customers, communities, and shareholders. The three primary components of executive compensation are base salary, annual incentive awards, and equity-based long-term incentive awards. Benefits comprisemake up a smaller component of overall pay. The purpose and features of each component are summarized below. | | Huntington Bancshares Incorporated 2023 Proxy Statement | 75 |
Back to Contents | CEO Targeted
Direct
Compensation | | Other NEO
Targeted Direct
Compensation
(Average) (1) | | Purpose and Key Features | | | | Base Salary
| Base Salary | 
|  |  | 
| | Set within a competitive range of market practicepractices to attract and retain top talent | | | | | Varies depending upon the executive’s role, performance, experience, and contribution | | | | | Foundation from which incentives and other benefits are determined |  | | | Annual Incentive
(Management (Management Incentive Plan)Plan — “MIP”) |  |  | | Motivates and rewards for achieving or exceeding annual strategic financial strategic and operational goals that ultimately support sustained long-term profitable growth and value creation | | 
| | 
| | Reflects companyCompany performance on key measures, adjusted for business unit and individual performance, including risk management | | | Each NEO has a targetTarget opportunity expressed as a percentage of base salary reflective of theeach NEO’s role | | | Tied directly to performance in year for which reported | | | Awards are paid in cash.cash | | Long-Term Incentive
(Equity (Equity Grants) |  |  | | Motivates and rewards for delivering long-term sustained performance aligned with shareholder interests | | 
| | 
| | Grants are comprised of performance share units (PSUs), time- based restricted stock units (RSUs),PSUs and stock optionstime-based RSUs | | | | | | Awards are based on multiple factors, including competitive market data, overall company performance, business segment performance, individual performance, and historical equity grants | Benefits | | | | Benefits | | | | Same broad-based benefit programs generally available to all employeescolleagues | | | | | | | | A limited number of additional benefits within typical market practice are offered and as needed to attract and retain executive talent | (1) Based on annualized base salaries. |
Compensation Outcomes for 20202022 Timing of Compensation DecisionsShortly after each year-end, the HR and Compensation Committee reviews the company’sCompany’s prior year performance and approves payment of annual incentive awards tied directly to the prior year’s performance. These awardspayments are based on metrics that were chosen by the HR and Compensation Committee early inat the preceding year. During the second quarterbeginning of the year, theplan year. The HR and Compensation Committee will make decisions with respect to base salary adjustments andalso approves annual equity-based long-term incentives based on performance and on other factors discussed below.below and makes decisions with respect to base salary adjustments. 64 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
With respect to the incentive compensation amounts reported for 20202022 in the Summary Compensation Table: •Annual incentives based on 20202022 performance are reported under the “Non-Equity Incentive Plan” column.
•Annual long-term incentives granted on May 1, 2020during the year are reported as equity awards under the columns “Stock Awards” and “Option Awards”. These awards were determined based on a multi-faceted approach that includes company and individual performance and contributions, retention value of current equity ownership, historical long-term incentive compensation awards and the market-based framework the independent consultant developed.column.
Decisions with respect to base salary adjustments, annual incentive awards under the Management Incentive Plan (MIP)MIP, and annual equity grants are discussed below. | Huntington Bancshares Incorporated 2023 Proxy Statement | 76 |
Back to Contents Base SalaryFollowing the HR and Compensation Committee’s annual review of current salaries, previous salary increases, and competitive market data, none of thethree NEOs received a base salary increaseincreases in 2020. Conversely, the CEO requested a2022. The HR and Compensation Committee approved merit-based and market competitive base salary reduction in an effort to reflect the economic uncertainties related to the COVID-19 pandemic. In April, the Committee approved a temporary 10% reduction inincreases for Mr. Steinour’s salary for the remainder of 2020. Mr. Steinour’sWasserman, whose salary was restoredincreased $75,000 (12%) to $1.1 million effective January 1, 2021.$700,000, for Mr. Heller, whose salary was increased $100,000 (16%) to $725,000, and for Mr. Kleinman, whose salary was increased $50,000 (8.3%) to $650,000. Annual Incentive AwardHuntington’s annual incentive awards under MIP reflect company performance on key short-term measures, adjusted at the discretion of the CEO and the Compensation Committee, for business segment and individual performance. Each executive has an annual target incentive opportunity under MIP expressed as a percentage of his or her base salary. The specific threshold, target, and maximum opportunity for each executive is reflective of the executive’s role and competitive market practice. For 2020, the CEO’s target incentive was equal to 175% of his unadjusted base salary. For the other participating NEOs, the 2020 MIP target was equal to 100% -115% of base salary. These targets were determined to be market competitive based on Huntington’s asset size and consistent with 2019 targets.
| 2020Each year our Board conducts a rigorous planning and budgeting exercise for the coming fiscal year. One of the outcomes of that exercise is planned financial targets, which are then used by the HR and Compensation Committee to set targets for executive compensation. Huntington’s annual incentive awards under the MIP Target | | | 
CEO
| 175%
reflect Company performance over the course of one year on key short-term measures. Each executive has an annual target incentive opportunity under the MIP expressed as a percentage of their base salary. The specific threshold, target, and maximum opportunity for each executive is reflective of the executive’s role and competitive market practices. For 2022, the CEO’s target incentive was equal to 200% of his base salary. For the other participating NEOs, the 2022 MIP target was equal to 115% - 150% of base salary | | | 
Other NEOs earned during the year. These targets were determined to be market competitive based on Huntington’s asset size.
| 100%-
115%
of base salary |  |
Metrics and Performance. The HR and Compensation Committee considers the appropriate corporate performance metrics for each year.year based on short-term corporate goals and priorities. To measure 20202022 performance, the HR and Compensation Committee, consistent with 2021, again selected the metrics of earnings per share, operating leverage,EPS, PTPP Earnings Growth, and pretax pre-provision earnings growth (PTPP Growth) as a percentage. These same metrics were used for the 2019 plan year.Operating Leverage. These three performance metrics were chosen from among the list of available criteria under the MIP, and represented key short-term strategic areas of focus intended to support profitable growth and returns. The choice of metrics also reflected a balanced approach to measuring success. Annual Incentive Metric | | Why We Chose This Metric | Earnings per share (EPS)EPS(1) | | Strong alignment with shareholder value creation | Pretax pre-provision earnings growth (PTPP Growth)PTPP Earnings Growth(1) | | A core operating performance indicator and adds a growth component | Operating leverage(1) | | Ensures that our incentives are aligned with our commitment to shareholders to grow revenue faster than expenses |
| PTPP Growth is the percentage growth on a year over year basis of pretax pre-provision earnings. Pretax pre-provision earnings in a particular year is calculated by taking the sum of GAAP revenue and the fully taxable equivalent interest adjustment, excluding securities gains, and subtracting GAAP noninterest expense, excluding amortization of intangibles. |
Non-GAAP, see Appendix A to this proxy statement for more information. Table of Contents
Compensation of Executive Officers
For the 2022 plan year our EPS, PTPP Earnings Growth, and Operating Leverage targets were each set in January with reference to the annual financial budget, with targets for EPS, PTPP Earnings Growth, and Operating Leverage set at higher levels than the previous year’s plan target and higher than actual performance for 2021. Targets were set with reference to internal forecasts at levels deemed to be challenging, but achievable by the HR and Compensation Committee. For each metric, the HR and Compensation Committee determined a threshold, target, and maximum level of achievement based on the company’sCompany’s operating plan for 2020. MIP allows for awards to be earned under2022, with each plan criterion,performance measure independent of achievement of the other criteria. We interpolate between the threshold, target, and maximum goals to ensure sound incentive compensation arrangements and appropriate pay for performance alignment. MIP funding may range from 25%0% of target to 200% of target. Each year our board of directors goes through a rigorous planning and budgeting exercise for the coming fiscal year. One of the outcomes of that exercise is planned financial targets, which are then used for compensation target setting. The Compensation Committee approves the compensation targets at the beginning of the plan year, when the results are substantially uncertain. For the 2020 plan year our EPS target was set at a level higher than the previous year’s plan target and actual performance for 2019. The Operating Leverage target was also set at a level higher than the previous year’s target. The PTPP Earnings Percentage Growth target for 2020 was set below the prior year’s percentage growth target, however it represented absolute PTPP Earnings Growth over the prior year. The 2020 target for this metric reflected projected lower non-interest income growth than we experienced in 2019.
Adjustments for Extraordinary Events.EventsIn determining whether a performance goal has been met, the HR and Compensation Committee willmay include or exclude “extraordinary events”“Extraordinary Events,” as defined in the MIP, or any other objective events or occurrences, in either establishing the performance goal based on the qualifying performance criteria or in determining whether the performance goal has been achieved; provided, however, that the HR and Compensation Committee retains the discretion to adjust awards upward or downward based on the HR and Compensation Committee’s evaluation of such events or other factors. 2020
2022 Performance Awards ResultsThe company’s 2020Company’s 2022 performance was reviewed in accordance with the MIP and certified by the HR and Compensation Committee in January 2021.2023. Consistent with prior years, 20202022 performance results were adjusted for “extraordinary events”. For 2020, performance“Extraordinary Events,” which for 2022 was adjusted for the impact ofMortgage Servicing Right hedging, or MSR hedging, as shown below: | Huntington Bancshares Incorporated 2023 Proxy Statement | 77 |
Back to Contents Activity Adjusted for | Adjustment to Financial Performance | Rationale for Adjustment | Net MSR Hedging Gains | -$5.4 million | The HR and Compensation Committee has consistently adjusted for MSR hedging (both positively and negatively) over the last five years because this hedging reduces volatility and risk to the organization and the failure to make the adjustment could incentivize greater risk-taking. | Net Adjustment | -$5.4 million | |
As discussed herein, Huntington had strong financial performance in 2022 and, as a donation to the Columbus Foundation, franchise repositioning and TCF acquisition costs. Huntington’s performance against tworesult, each of the three MIP metrics –— EPS, PTPP Earnings Growth, and Operating leverage and PTPP growth –Leverage — was achieved above target. EPS, the third metric, was below threshold due to higher than budgeted credit losses driven both by the recession and CECL accounting. Based onAs adjusted, MIP performance against the metrics as adjusted, MIP performancechosen by the Committee was 85.3%184.0% of target. The HR and Compensation Committee maintains the ability to use discretion based on its holistic evaluation of performance and external factors that may impact results. HR and Compensation Committee discretion has historically been applied both positively and negatively. For 2020, givenWhile Huntington displayed strong performance as a Company and among colleagues in 2022, management recommended that the company’s navigation of impacts arising from the pandemicHR and associated economic challenges, theCompensation Committee appliedapply negative discretion to adjustreduce the final MIP performance upwardfactor from 184.0% of target performance to recognize155.0% as management believed that it was more reflective of overall performance, including consideration of the company’s accomplishments in 2020 given the pandemicnet impact of a higher than budgeted yield curve, and the resulting economic challenges. The company actively workedthat it was believed to meet the needs of its customers, communities and colleagues, contributing to positive operating leverage for the eighth consecutive year, increased revenues (7% annually), and continued investment in our revenue-driving businesses. Average loans increased 6%, and average core deposits increased 11%. A record year of mortgage originations and continued strong auto, RV, and marine loan originations, as well as the $6 billion of PPP loans, helped drive our 2020 results. After the discretionary adjustment, the Committee certified 2020 performance against the performance metrics at 95% of target.be more appropriate year-over-year. 66 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
The table below provides the schedule of metrics and goals that the HR and Compensation Committee approved for 2020,2022, along with the company’sCompany’s performance against the goals, as determined by the Committee, and the final approved funding of the plan.plan: Metric | | Weight | | 2022 Performance | | Calculated Performance Factor | Threshold | | Target | | Maximum | Adjusted EPS(1) | |  | |  | | 152.1% | Adjusted PTPP Earnings Growth(1) | |  | |  | | 200.0% | Adjusted Operating Leverage(1) | |  | |  | | 200.0% | % of Target | | 100.0% | | | | | | | | 184.0% | Final Approved Funding | | | | | | | | | | 155.0% | (1) Non-GAAP, see Appendix A to this proxy statement for more information. |
| | | | | 2020 Performance | | Calculated
Performance Factor | | Metric | | Weight | | Threshold | | Target | | Maximum | | | EPS | |  | |  | | 0% | | PTPP Earnings Growth | |  | |  | | 124% | | Operating Leverage | |  | |  | | 132% | | % of Target | | 100.0% | | | | | | | | 85.3% | | Final Approved Funding | | | | | | | | | | 95% |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 78 |
Back to Contents Long-Term Incentive CompensationDetermining LTI Grant Value.ValueThe HR and Compensation Committee engaged theits independent compensation consultant to develop long-term incentiveassist in developing LTI award ranges based on competitive market practice to serve as guidelines for annual grants. These awards were determined based on a multi-faceted approach that includes Company performance, individual performance and potential, retention value of current equity ownership, historical long-term incentive compensation awards, and the market-based framework the independent consultant developed. In addition to these guidelines,factors, when determining award ranges for individual executive officers, the HR and Compensation Committee considers the impact on potential total compensation. Award opportunities are within a range defined by a low to high percentage of base salary to allow for awards to vary in order to reflect individual performance. PERCENTAGE RANGE FOR POTENTIAL EQUITY GRANTS Position | Percentage of Base Salary | Threshold | | Target | | Maximum | CEO | | 250.0% | | 500.0% | | 1,000.0% | Other NEOs(1) | | 107.5% | | 215.0% | | 430.0% | (1) Excludes Mr. Standridge, who did not receive a 2022 PSU award. Mr. Standridge received a one-time equity grant in connection with the commencement of his employment with the Company to compensate him for certain equity payments he forfeited as a result of accepting the opportunity with Huntington. For additional information, see 2022 Compensation Decisions for each Named Executive Officer below. |
Value Range for Potential Equity Grants
| Position | | Threshold | | Target | | Maximum | | CEO | | 212.5% | | 425.0% | | 850.0% | Chief Technology & Operations Officer;
Consumer and Business Banking Director | | 107.5% | | 215.0% | | 430.0% | | Other NEOs | | 100.0% | | 200.0% | | 400.0% |
Determination of individual LTI Grants.GrantsThe HR and Compensation Committee independently evaluated the CEO’s performance for the purpose of determining a 2020 long-term incentive2022 LTI award and assessed the competitive pay positioning that would result from the awards to be consistent with our pay-for-performance philosophy. In determining award values for the other NEOs, the HR and Compensation Committee considered the CEO’s performance assessments for each NEO, as well as additional input from the CEO, and the market guidelines provided by the consultant. Consistent with the company’sCompany’s philosophy, the CEO’s evaluation was based on a holistic approach that included individual performance and contributions, retention value of current equity ownership, historical long-term incentive compensation awards, and the market-based framework the independent consultant developed. The key factors included in the evaluation of each NEO are discussed under “2020 Compensation Decisions for each Named Executive Officer.” TheHR and Compensation Committee approved awards in 20202022 for the NEOs (other than the CEO)CEO and Mr. Standridge) as recommended by the CEO.
LTI Grant Vehicles.VehiclesFor the 20202022 annual LTI grants, management proposed, and the HR and Compensation Committee approved, the strategy set forth below. All equity vehicles are subject to our Share Ownership and Share Holding Policy provisions for the executive leadership team: 50% of net shares released upon vesting or exercise are required to be held to retirement or other departure from the company.below: Table of Contents
Compensation of Executive Officers
2020
2022 Long-Term Incentive Program HighlightsVehicle | Vehicle | | % of Total LTI Value | | Key Design Features | | | CEO | | Other NEOs (1) | | | Performance Share Units (PSUs) | |  | |  | PSUs | |  | |  | | •Performance Measurement Period: 3 years
•Relative Return on Tangible Common Equity (ROTCE)
•Absolute ROTCE Performance Threshold
•ModifierUp to 20% modifier for “New Revenue”new revenue
•Share Payout Range:0-150% of target, potentially up to 180% based on new revenue modifier
| RSUs | | Restricted Stock Units (RSUs) | |  | |  | | •Vesting: 50% after year 3 and 50% after year 4
| Stock Options(1) Excludes Mr. Standridge, who did not receive a 2022 PSU award. |
| |  Huntington Bancshares Incorporated 2023 Proxy Statement | |  | | •Vesting: 4-year annual pro-rata
•Option Term: 10 years
79 |
Back to Contents PSUs — Performance Metrics. With assistance from the independent consultant, the HR and Compensation Committee selected ROTCE, the same metric used in 2021, as the metric for the 20202022 PSU grant, measured on both a relative and an absolute basis, consistent with the 2019 grant.basis. |  | | Why We Chose ROTCE as the PSU Metric •The companyCompany believes ROTCE is a key factor to long-term profitable growth and returns.
•There is a strong correlation of higher ROTCEsROTCE to higher market price-to-tangible book value (P/TBV) valuations for the common stock of publicly tradedpublicly-traded bank holding companies.
•The PSU awards are denominated in stock, which provides an inherent tie to share price performance and overall shareholder returns.
| | | |
The relative ROTCE target is set at the 55thpercentile to ensure that target payout is not made unless Huntington outperformsHuntington’s performance is superior to that of the peer group.group median. The peer group for relative performance comparisons consists of the 20202022 benchmarking peers as discussed under “Market Referencing” Market Referencing below. In addition, a minimum three-year average absolute ROTCE of 6% must be achieved to receive a payout. PayoutFull payout at maximum performance is subject to an increase of up to 20% for revenue earned incremental to the budget from new sources intended to create shareholder value but not envisioned in the then-current strategic initiatives when the PSU was granted. Sources of new, unplanned revenue include new lines of business, new product innovation, and newly developed strategic partnerships. New, unplanned revenue will be measured cumulatively over the three-year PSU cycle. As reflected in the table below, the HR and Compensation Committee determined a threshold, target, and maximum level of relative achievement for the three-year performance cycle, along with an absolute performance threshold. In calculating performance to determine whether a performance goal has been achieved, the HR and Compensation Committee will adjust for Extraordinary“Extraordinary Events,” as defined in the 2018 Long-Term Incentive Plan. 68 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
| PSU Metric | Threshold | Threshold | Target | Target | | Maximum | Relative ROTCE | | 30th Percentile | | 55th Percentile | | 70th Percentile | Absolute ROTCE — Performance Threshold | | 6.00% | | — | | — |
ROTCE results are measured annually, adjusted for extraordinarysignificant items by utilizing S&P Core ROTCE data for all companies, and averaged using year-end reported amounts. The range of potential payouts, 0% to 150% of the target number of share units (not inclusive of the new revenue modifier), was consistent with the design of PSUs awarded in the prior year,2021, and determined to be within competitive market practice, and reasonable from an annual share run rate and dilution perspective. With the potential adjustment for new revenue, the maximum awards could reach 180% of target (150% Xx 120% = 180%). BenefitsExecutive officers participate in the same broad-based benefit programs generally available to all colleagues. A limited number of additional benefits are offered to executive officers and certain other officers, and are designed to represent a modest portion of total compensation. Following is a list of the additional benefits and compensation elements offered to executive officers during 2020.2022. Deferred Compensation:CompensationOur Executive Deferred Compensation Plan, a non-qualified plan, provides a vehicle for participants to defer receipt of cash or stock tountil a time when taxes may be atlater date in excess of IRS qualified plan limitations, but does not have a more personally beneficial rate and / or to save for long-term financial needs. This plan is discussed in more detail following the Non-Qualified Deferred Compensation 2020 table below.company match. PerquisitesPerquisites: AHuntington utilizes a very limited number of perquisites are utilized at Huntington; they representrepresenting a small component of compensation. Through 2019 we offered an incurred expense reimbursement allowance for tax and financial planning toWe provide our NEOs, up to 2% of base salary per year. This practice has been discontinued beginning in 2020. For the chief executive officer, we provideCEO with security monitoring of his personal residence,residences and for security, personal safety, and efficiency, use of our cars and drivers for security, personal safety, and efficiency. In addition, the CEO is permitted personal use of the corporate aircraft. The use of the corporate aircraft provides an environment that permits our CEO to perform confidential work while on personal trips, which would otherwise be impossible on commercial aircraft. In addition, certain trips, even though they may contain significant work components, do not qualify as “business use” under IRS rules, and therefore must be included as perquisites despite the significant amount of work performed on the trip.
| Huntington Bancshares Incorporated 2023 Proxy Statement | 80 |
Back to Contents Use of the corporate aircraft after remote business meetings also allows our CEO the flexibility to travel efficiently throughout our footprint for work without having to keep a specific schedule that he would if he had commercial flight arrangements for his subsequent personal travel. Huntington’s culture is one of extremely limited perquisites; however, because of the need for a corporate aircraft. aircraft for business purposes given our large and expanded footprint and all the benefits that accrue to Huntington from our CEO using that corporate aircraft instead of commercial flight, the HR and Compensation Committee and Board feel that Huntington benefits substantially from the availability of the corporate aircraft for the CEO’s personal travel when necessary. The CEO’s usage of the corporate aircraft is reviewed by the HR and Compensation Committee at least annually. In limited circumstances, personal usage of corporate aircraft by other executive officers may be permitted subject to approval by the CEO. Personal use of the corporate aircraft is in accordance with Huntington’s Aircraft Usage Policy, and thePolicy. The value of all personal use of corporate aircraft is included in the income of the user pursuant to IRS rules and regulations. We also provide relocation benefits to senior level colleagues to facilitate transition when moving their residence to a new work location. Employment Agreement:AgreementOnly one executive officer, theour CEO, has an employment agreement with us, which is described under “Mr.Mr. Steinour’s Employment Agreement”Agreement below. Severance Arrangements:ArrangementsHuntington has change-in-control agreements, referred to as Executive Agreements, with each of our NEOs. The objectives of the Executive Agreements are to provide severance protections for the NEOs in the event of a qualifying termination of employment in connection with a change-in-control of Huntington and to encourage their continued employment in the event of any actual or threatened change-in-control of Huntington. The Executive Agreements are further described under “Potential Payments upon Termination of Employment or Change in Control”Control below. (Frozen) Supplemental Pension:Pension The CEO is a participantMessrs. Steinour and Kleinman are participants in the frozen pension plan, and Mr. Steinour is a participant in the frozen supplemental defined benefit plan (both were frozen on December31, 2013). These plans are further discussed under the Pension Benefits 20202022 table below. (Frozen) Supplemental Savings:Savings The NEOsMessrs. Steinour and Heller were eligible to participatefor, and participated in, a supplemental defined contribution plan that was frozen on December31, 2019. This plan is further discussed following the Non-QualifiedNonqualified Deferred Compensation 20202022 table below. Table of Contents
Compensation of Executive Officers
2020
2022 Compensation Decisions for each Named Executive OfficerIn addition to rewarding executives for achievement of financial goals, the HR and Compensation Committee applies its discretion to reinforce behaviors and values that contribute to the company’sCompany’s long-term success. When evaluating base salary increases, adjusting MIP awards for business segment and individual performance, and determining the grant-date valueamount of long-term incentive compensation awards, the CEO and HR and Compensation Committee considered the performance of each executive under the following common factors: | | | | Common Performance Factors: •Financial and operating results
•Organization,PLQ, people, culture, diversity, equity and inclusionDEI
•Risk management and key metrics
•Strategic planning and execution
•Customers, community, and stakeholder relations
| | | |
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Compensation of Executive Officers
Further, the HR and Compensation Committee differentiated compensation for the NEOs other than the CEO by taking into consideration the CEO’s evaluation of each executive’s performance, role, and relative contribution to overall companyCompany performance. Although there were no predetermined quantifiable goals against which business unit and individual performance were evaluated independently for purposes of determining compensation, highlights of the specific 20202022 individual and business unit performance considered by the HR and Compensation Committee for each NEO are set forth below.below: | | | | | | | | |  |  | Stephen D. Steinour Chairman, President and Chief Executive Officer | | 2020 Compensation Decisions | | | | Base Salary Increase | | N/A | | | | MIP | | | | | | Target Opportunity | $ | 1,925,000 | | | | | MIP Award | $ | 1,830,000 | | | | LTI | | | | | | Target Value | $ | 4,675,000 | | | | LTI Award | $ | 4,500,000 | | | | | | | | | | | In determining appropriate compensation for the CEO, the Compensation Committee considered Mr. Steinour’s outstanding leadership in 2020, including the following significant accomplishments: Strong financial performance in a challenging environment • Delivered fully taxable equivalent revenue growth of 3%(1) over 2019. • Delivered Pretax, Pre-Provision Earnings growth of 4%(2) over 2019. • Increased tangible book value per share 3%(3) year-over-year. • Increased average core deposits 11% year-over-year. • Increased average loans and leases 6% year-over-year. • Delivered positive operating leverage on an adjusted basis(4) for the eighth consecutive year. • Declared $621 million of cash dividends on common shares. Strong Leadership • Developed new strategic plan for building the Leading People-First, Digitally Powered Bank, with focused investment in customer experience, product differentiation, and key growth initiatives. • Huntington announced a definitive agreement under which the TCF Financial Corporation will combine in a merger with Huntington to create a top 10 U.S. regional bank, subject to regulatory approval, the approval by shareholders of each company and customary closing conditions. • Huntington is committed to being a recognized leader in creating a workplace that is welcoming, inclusive and respectful to all. Huntington has received numerous awards in recognition of its commitment to advancing diversity and inclusion in the workplace and the community. See the inside of the back cover for a list of 2020 awards and recognitions. • Signatory to the CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace by cultivating a trusting environment where all ideas are welcome and employees feel comfortable and empowered to discuss diversity and inclusion initiatives. Over 1,600 CEOs and Presidents have pledged to act on supporting a more inclusive workplace for employees, communities and society at large. (1) Non-GAAP, see page 50 of the company’s Form 10-K for the year ended December 31, 2020 for more information. (2),(3),(4) Non-GAAP, see Appendix A to this proxy statement for more information. |
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Compensation of Executive Officers
| | | | | | | | | |  | Zachary J. Wasserman Chief Financial Officer | | 2020 Compensation Decisions | | | | Base Salary Increase | | N/A | | | | MIP | | | | | | Target Opportunity | $ | 625,000 | | | | MIP Award | $ | 725,000 | | | | LTI | | | | | | Target Value | $ | 1,250,000 | | | | LTI Award | $ | 1,250,000 | | | | | | | | | | | The Compensation Committee, in determining appropriate compensation for Mr. Wasserman, considered the following significant 2020 accomplishments: Strong financial performance in a challenging environment • Delivered fully taxable equivalent revenue growth of 3%(1) over 2019. • Delivered Pretax, Pre-Provision Earnings growth of 4%(2) over 2019. • Increased tangible book value per share 3%(3) year-over-year. • Increased average core deposits 11% year-over-year. • Increased average loans and leases 6% year-over-year. • Delivered positive operating leverage on an adjusted basis(4) for the eighth consecutive year. • Declared $621 million of cash dividends on common shares. Strong leadership • Instrumental in development of new strategic plan for building the Leading People-First, Digitally Powered Bank, with focused investment in customer experience, product differentiation, and key growth initiatives. • Provided significant leadership in Huntington’s innovation initiatives and partnerships with other leading companies, including BillGo and other FinTechs, to improve our products and customer experiences. • Led significant investor engagement during 2020, leveraging virtual formats for more meetings (up 18% over 2019) and more productive meetings with institutional investors, and continued participation in conferences and institutional investor events. (1) Non-GAAP, see page 50 of the company’s Form 10-K for the year ended December 31, 2020 for more information. (2),(3),(4) Non-GAAP, see Appendix A to this proxy statement for more information. |
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Back to Contents | | | | | | Stephen D. Steinour Chairman, President and Chief Executive Officer | 2022 Compensation Decisions | Base Salary | $ | 1,100,000 | Base Salary Increase | | N/A | MIP | | | Target Opportunity | $ | 2,200,000 | MIP Award | $ | 3,410,000 | LTI | | | Target Opportunity | $ | 5,500,000 | LTI Award | $ | 5,500,000 | In determining appropriate compensation for Mr. Steinour, the HR and Compensation Committee considered the following significant 2022 accomplishments: | Strong financial performance in a challenging environment | Increased total assets to $183 billion as of December 31, 2022, compared to $174 billion as of December 31, 2021. Increased earnings per common share to $1.45, an increase of $0.55 from 2021. Grew 2022 pre-provision net revenue(1) to $3.1 billion, up $1.4 billion, or 88% from 2021. Maintained solid credit quality with net charge-offs of 0.11% of average total loans and leases. | Strong Leadership | Executed on our strategic plan for building the leading People-First, Digitally Powered Bank, with focused investment in customer experience, product differentiation, and key growth initiatives. Led the Company to a record year in terms of financial performance while providing for appropriate reserves in light of potential economic headwinds. Demonstrated our commitment to Huntington’s communities through $16 billion in investments from Huntington’s $40 billion Community Plan, focused on affordable housing, small business, community development lending and investing, and racial and social equity. Set the tone at the top to create a workplace that is welcoming, inclusive, and respectful to all as shown by the diversity of newly-hired and promoted colleagues, the diversity of our Board and Executive Leadership Team, and by Huntington receiving numerous awards recognizing its commitment. |
(1) Non-GAAP, see Appendix A to this proxy statement for more information. Table of Contents
Compensation of Executive Officers
| | | | | | | | | |  | Paul G. Heller Chief Technology and Operations Officer | | 2020 Compensation Decisions | | | | | | | | | | Base Salary Increase | | N/A | | | | MIP | | | | | | | Target Opportunity | $ | 718,750 | | | | | MIP Award | $ | 750,000 | | | | | LTI | | | | | | | Target Value | $ | 1,343,750 | | | | | LTI Award | $ | 1,500,000 | | | | | | | | | | | The Compensation Committee, in determining appropriate compensation for Mr. Heller, considered the following significant 2020 accomplishments: • Implemented contingency plan enabling a sustained remote work environment. • Launched numerous significant enhancements to our mobile and online access, including “The Hub” and “Huntington Heads Up”®. • Launched new products aligned with our Fair Play philosophy including 24 Hour Grace® for Business and $50 Safety ZoneSM. • Upgraded entire network of ATMs. • Provided significant leadership in the development of the comprehensive omni-channel plan and roadmap. • The company was ranked highest in Customer Satisfaction with Mobile Banking Apps among Regional Banks, 2 Years in a Row by J.D. Power. • Implemented increased efforts around cyber-security. • Active leadership in the Columbus Collaboratory, a rapid innovation and insights partnership that focuses on delivering business value through advanced analytics and cyber security solutions. |
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Back to Contents | | | | | | Zachary J. Wasserman Chief Financial Officer, Senior Executive Vice President | 2022 Compensation Decisions | Base Salary | $ | 700,000 | Base Salary Increase | | 12% | MIP | | | Target Opportunity | $ | 776,250 | MIP Award | $ | 1,400,000 | LTI | | | Target Opportunity | $ | 1,343,750 | LTI Award | $ | 2,000,000 | In determining appropriate compensation for Mr. Wasserman, the HR and Compensation Committee considered the following significant 2022 accomplishments: | Strong financial performance in a challenging environment | Increased total assets to $183 billion as of December 31, 2022, compared to $174 billion as of December 31, 2021. Increased earnings per common share to $1.45, an increase of $0.55 from 2021. Grew 2022 pre-provision net revenue(1) to $3.1 billion, up $1.4 billion, or 88% from 2021. Maintained solid credit quality with net charge-offs of 0.11% of average total loans and leases. | Strong Leadership | Continued execution of our strategic plan and ongoing initiative to build the nation’s leading People-First, Digitally-Powered Bank, with focused investment in digital capabilities, customer experience, product differentiation, and key growth priorities. Provided significant leadership to Huntington’s innovation initiatives and partnerships, including overseeing the acquisition and integration of Torana (now Huntington ChoicePay). Drove significant investor engagement, including developing and leading our first Investor Day in over ten years. Set strong tone at the top promoting Huntington’s DEI initiatives, including serving as executive sponsor for the LGBTA Business Resource Group. |
(1) Non-GAAP, see Appendix A to this proxy statement for more information. Table of Contents
Compensation of Executive Officers
| | | | | | | | | | |  | Andrew J. Harmening Consumer and Business Banking Director | | 2020 Compensation Decisions | | | | Base Salary Increase | | N/A | | | | MIP | | | | | | Target Opportunity | $ | 718,750 | | | | | MIP Award | $ | 750,000 | | | | | LTI | | | | | | | Target Value | $ | 1,343,750 | | | | | LTI Award | $ | 1,500,000 | | | | | | | | | | | The Compensation Committee, in determining appropriate compensation for Mr. Harmening, considered the following significant 2020 accomplishments: • Managed the branch and retail business in the COVID environment to ensure the safety of our colleagues, while still meeting the needs of our customers. • Increased average core deposits by 11% year-over-year. • Launched new products aligned with our Fair Play philosophy including 24 Hour Grace® for Business and $50 Safety ZoneSM to help customers manage their long-term financial health. • Provided significant leadership in the development of the comprehensive omni-channel plan and roadmap. • Continued growth in small business lending program — the company was the nation’s largest originator, by volume of SBA 7(a) loans during SBA fiscal year 2020 for the third consecutive year, and for the 12th year in a row, the largest originator, by volume of SBA 7(a) loans within our footprint states.* • Commitment to customers — The company was ranked highest in Customer Satisfaction with Mobile Banking Apps among Regional Banks, 2 Years in a Row by J.D. Power. • Home lending business achieved record mortgage originations for the second consecutive year. • Strong performance with diversity initiatives. • Launched Lift Local BusinessSM, a new $25 million, micro small-business lending pilot focused on serving minority, women and veteran-owned businesses. |
* | Largest by number of 7(a) loans for SBA fiscal years 2018-2020; Source U.S. Small Business Administration. |
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Back to Contents | | | | | | Brant J. Standridge President, Consumer and Business Banking, Senior Executive Vice President | 2022 Compensation Decisions | Base Salary | $ | 725,000 | Base Salary Increase | | N/A | MIP | | | Target Opportunity | $ | 1,087,500 | MIP Award | $ | 1,750,000 | LTI | | | Target Opportunity | $ | N/A | LTI Award | $ | 4,573,872 | Brant J. Standridge joined Huntington as President, Consumer and Business Banking and Senior Executive Vice President, effective April 11, 2022. In determining appropriate compensation for Mr. Standridge, the HR and Compensation Committee considered the following significant 2022 accomplishments: Continued advancing Huntington’s reputation for leading and disruptive product innovation by overseeing and enhancing products aligned with our Fair Play philosophy, including Stand-By Cash, Early Pay, Return Item Grace, and Instant Access. Strengthened Huntington’s brand positioning and customer experience track record, ranking first in Trust, NPS, Customer-Focused, and Overall Customer Satisfaction in a market study among our peers.(1) Received national recognition for customer experience in service and mobile, including the Highest in Customer Satisfaction with Mobile Banking Apps among Regional banks from J.D. Power for the fourth year in a row in 2022.(2) Led Business Banking to be #1 in the nation in number of SBA 7(a) loans from October 1, 2017 to September 30, 2022(3), including #1 in Colorado, a key expansion market; grew 49% year-over-year growth in SBA 7a production. Established a focused strategy for Consumer and Business Banking, linking capital allocation to customer-centric value creation and five key pillars of sustainable differentiation. Key stakeholder in Operation Accelerate, partnering with Huntington’s technology team to achieve scale, increase efficiency, and digitize the customer and colleague experience. Set a strong tone at the top reinforcing a workplace that is welcoming and inclusive, including service as the Executive Sponsor of Huntington’s Emerging Professionals Business Resource Group. Actively engaged as a leader in banking industry through service on the Board of Directors for the Consumer Bankers Association. | (1) 2021 Brand Tracking Market Study. In market bank competitors: BAC, CFG, FITB, JPM, KEY, PNC, USB (2) J.D. Power 2022 U.S. Banking Mobile App Satisfaction Study; among banks with $75B to $200B in deposits. Visit jdpower.com/awards for more details (3) Source: U.S. Small Business Administration (SBA). SBA loans subject to SBA eligibility. In order to compensate Mr. Standridge for certain cash and equity payments and benefits that Mr. Standridge forfeited as a result of accepting the opportunity with Huntington, Mr. Standridge received a one-time grant of RSUs, with 209,827 shares vesting over two years and 121,613 vesting over four years, and, subject to repayment in the event of a voluntary termination of employement within 24 months of joining the Company, a cash signing bonus of $1,670,000, $120,000 of which was paid in April 2022, and $1,550,000 of which was paid in February 2023. Mr. Standridge was eligible to participate in the 2022 MIP with a target award opportunity of 150% of base salary, and will be eligible to participate in the 2023 LTIP with a target award opportunity equal to 250% of base salary, consisting of a mix of RSUs and PSUs. He also received standard relocation benefits plus up to three months of temporary housing. Similar to our other NEOs, he is party to an Executive Agreement (for additional detail, see Potential Payments upon Termination of Employment or Change In Control below). |
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Compensation of Executive Officers
| | | | | | | | | |  | Jana J. Litsey General Counsel | | 2020 Compensation Decisions | | | | Base Salary Increase | | N/A | | | | MIP | | | | | | Target Opportunity | $ | 625,000 | | | | | MIP Award | $ | 600,000 | | | | | LTI | | | | | | | Target Value | $ | 1,250,000 | | | | | LTI Award | $ | 1,250,000 | | | | | | | | | | | The Compensation Committee, in determining appropriate compensation for Ms. Litsey, considered the following significant 2020 accomplishments: • Oversaw legal efforts around acquisitions and divestitures including Huntington’s announcement of a definitive agreement to merge with TCF Financial Corporation subject to regulatory approval, the approval by shareholders of each company, and customary closing conditions. • Oversaw the Legal team’s support and guidance in responding to pandemic-related developments and programs, including compliance with the requirements of the SBA’s Paycheck Protection Program and actions taken to support Huntington’s colleagues and customers. • Provided strong leadership in managing the litigation docket and resolutions. • Provided legal advice and counsel concerning Huntington’s innovation initiatives, investments, and partnership opportunities. • Assumed leadership responsibility for Public Affairs and the Corporate Procurement and Corporate Insurance functions. • Executive sponsor of Huntington’s ESG program and report. • Executive sponsor for the Asian Business Resource Group. • Recognized at the 2020 Chambers Diversity & Inclusion Awards for her work to further the advancement of diversity and inclusion, by Chambers and Partners an independent research company that ranks the most outstanding law firms and lawyers throughout the world, as one of 14 lawyers shortlisted and “highly commended” for the D&I Lawyer of the Year award. |
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Back to Contents | | | | | | Paul G. Heller Chief Technology and Operations Officer, Senior Executive Vice President | 2022 Compensation Decisions | Base Salary | $ | 725,000 | Base Salary Increase | | 16% | MIP | | | Target Opportunity | $ | 795,417 | MIP Award | $ | 1,400,000 | LTI | | | Target Opportunity | $ | 1,343,750 | LTI Award | $ | 2,250,000 | In determining appropriate compensation for Mr. Heller, the HR and Compensation Committee considered the following significant 2022 accomplishments: | Key stakeholder in Strategic Plan and ongoing initiative to build the nation’s leading People-First, Digitally-Powered Bank. Led Operation Accelerate, Huntington’s strategic approach to scale, increase efficiency, and digitize the customer and colleague experience. Assumed leadership of the Enterprise Payments team, a key segment for strategic fee growth and increasing wallet share. Oversaw systems and technology integration of Torana (now Huntington ChoicePay), Capstone, and Huntington’s newly opened Huntington Tower in Downtown Detroit. Continued to lead Huntington’s technology development and support, resulting in Huntington being ranked Highest in Customer Satisfaction with Mobile Banking Apps among Regional Banks from J.D. Power for the fourth year in a row.(1) Key participant in Huntington’s first Investor Day in over ten years. Co-Chaired Huntington’s Pelotonia engagement, achieving $36.8 million in donations in the grassroots efforts to raise cancer research funds. Active community leadership with Board participation at COSI and Catholic Social Services.. | (1) J.D. Power 2022 U.S. Banking Mobile App Satisfaction Study; among banks with $75B to $200B in deposits. Visit jdpower.com/awards for more details. |
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Back to Contents | | | | | | Scott D. Kleinman President, Commercial Bank, Senior Executive Vice President | 2022 Compensation Decisions | Base Salary | $ | 650,000 | Base Salary Increase | | 8.3% | MIP | | | Target Opportunity | $ | 728,333 | MIP Award | $ | 1,250,000 | LTI | | | Target Opportunity | $ | 1,290,000 | LTI Award | $ | 1,750,000 | In determining appropriate compensation for Mr. Kleinman, the HR and Compensation Committee considered the following significant 2022 accomplishments: | Key stakeholder in Strategic Plan and ongoing initiative to build the nation’s leading People-First, Digitally-Powered Bank. Drove consistent growth and industry leading expertise in the Commercial Bank, resulting in top rankings in Specialty Banking, Asset Finance, Capital Markets and Treasury Management nationwide. Led Commercial Bank to achieve three national 2022 Greenwich Excellence awards for Best Brand and four national 2022 Greenwich Excellence awards for Cash Management in U.S. Middle Market Banking. Oversaw acquisition and integration of Capstone Partners, contributing to a record year in capital markets fees. Key participant in Huntington’s first Investor Day in over ten years. Co-Chaired Huntington’s Pelotonia engagement, achieving $36.8 million in donations in the grassroots efforts to raise cancer research funds. Active community leadership as Board member and Finance Committee Chair of the Franklin Park Conservatory, Finance Committee member of Jewish Columbus, and Chair of American Bankers Association Securities Association. |
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Table ofBack to Contents
Compensation of Executive Officers
Recently Completed PSU Performance Cycles2017 - 2019 – 2021 Cycle.
In April 2020,2022, the HR and Compensation Committee determined the final award values for the PSU awards granted in 2017,2019, which had a three-year performance cycle that ended on December 31, 2019.2021. These awards were paidsettled in shares of stock reported on a Form 4 report filed for each participating executive officer.Huntington stock. The metricsmetric for this cycle werewas three-year relative TSRROTCE targeted at the 5055th percentile performance for the selected peer group, and return on tangible common equity targeted at 14% (subjectsubject to scaling based on TCE ratio achievement) averaged over the three years, alla minimum absolute ROTCE of 6%, adjusted for significant items.items by utilizing S&P Core ROTCE data for all companies. During the period January 1, 20172019 through December 31, 2019,2021, relative ROTCE was above maximum performance, with absolute adjusted ROTCE and relative TSR were both above maximum performance.at 16.40%. 2019 – 2021 CYCLE (JANUARY 1, 2019 THROUGH DECEMBER 31, 2021) Metric | | Target | | Result | Relative ROTCE | | 55th percentile performance for the selected peer group | | 70.8 percentile | Absolute ROTCE – Performance Threshold | | 6% | | 16.40% | | | Final Award | | 150% of target |
2017 – 20192020 - 2022 Cycle (January 1, 2017 through
December 31, 2019) Metric | | Target | | Result | | Relative TSR | | 50th percentile performance for the selected peer group | | 71.1% | | Absolute ROTCE | | 14% (subject to scaling for TCE ratio achievement) | | 17% | | | | Final Award | | 150% of Target | |
2018 - 2020 Cycle. December 31, 20202022 marked the end of the three-year performance cycle for PSU awards granted in 2018.2020. The HR and Compensation Committee expects to certify the results and determine the final values for these PSU awards in April 2021.2023. The metric for this cycle was relative ROTCE targeted at the 5055th percentile performance for the selected peer group with a minimum average absolute ROTCE of 6% required for payout with a potential adjustment for new revenue, all adjusted for significant items. During the period January 1, 2018 through December 31, 2020, average adjusteditems by utilizing S&P Core ROTCE and absolute adjusted ROTCE were both above target performance.data for all companies.
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Compensation of Executive Officers
Executive Compensation Decision-Making Process
Who is Involved in Compensation Design and DecisionsRole of HR and Compensation Committee | | Role of Management | | Role of Compensation Consultant | • The HR and Compensation Committee provides independent oversight of our executive compensation.
• The HR and Compensation Committee develops and approves our executive compensation with input from our management and the independent compensation consultant.
• From time to time, the HR and Compensation Committee consults with other committees of the boardBoard and may obtain the approval of the full board of directorsBoard with respect to certain executive and directorDirector compensation matters.
| | | • Our management provides information and may make recommendations to the HR and Compensation Committee with respect to the amount and form of executive compensation.
• Our CEO, CFO, and CFOCHRO make recommendations to the HR and Compensation Committee when it sets specific financial measures and goals for determining incentive compensation.
• Our CEO providesand CHRO provide input and makesmake recommendations to the HR and Compensation Committee regarding the performance and compensation of histhe CEO’s direct reports, which include the NEOs.
• The CEO consultsand CHRO consult in advance with the chairs of the respective boardBoard committees regarding recommendations for key control positions.positions, such as the CRO and CCO.
• The CEO does not make recommendations to the HR and Compensation Committee regarding his own compensation, other than requests in certain years that the Compensation Committee defer consideration of a base salary or target incentive increase for him.compensation.
| | | • The HR and Compensation Committee has engaged an independent compensation consultant, Pearl Meyer, & Partners LLC, to provide advice with respect to the amount and form of executive and director compensation.
• Services provided by the compensation consultant during 20202022 included:
• review of our selected peer group,
• benchmarking compensation and performance for the executive officers and the Board,
• analysis and assistance with proxy sections related to change-in-control payments and pay-versus-performance disclosure,
establishing total compensation guidelines, including targets for shortshort- and long-term incentive plans, and modeling payouts under various performance scenarios, • review of, and recommendations for changes to, the directorDirector compensation program, and
• research and presentation of market trends and practices related to incentive plan design and other executive compensation-related programs.
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Compensation of Executive Officers
Independent Compensation Consultant
The HR and Compensation Committee engaged Pearl Meyer, & Partners, LLC, an independent compensation consulting firm, to provide advisory services related to executive and directorDirector compensation. The individual consultant managing the relationship with Huntington (the compensation consultant) reports directly to the HR and Compensation Committee and is evaluated by the HR and Compensation Committee on an annual basis. The compensation consultant is available as needed for expert guidance and support, provides updates on emerging trends and best practices, and regularly attends meetings of the HR and Compensation Committee. Services provided by the compensation consultant during 20202022 included reviewing our selected peer group, benchmarking compensation and performance, and establishing total compensation guidelines, including targets for shortshort- and long-term incentive plans and modeling payouts under various performance scenarios. During 20202022, the compensation consultant did not provide any services other than advice and recommendations related to executive and director compensation.Director compensation and related proxy disclosure. The HR and Compensation Committee has received representations from the compensation consultant with respect to independence, including with respect to: the fees received by the compensation consulting firm from Huntington as a percentage of total revenue of the consulting firm; the policies or procedures maintained by the compensation consulting firm designed to prevent a conflict of interest; any business or personal relationship between the compensation consultant and any HR and Compensation Committee member; any business or personal relationship between the compensation consultant and our executive officers; and any Huntington stock owned by the compensation consultant. Based on review of these representations and the services provided by the compensation consultant, the HR and Compensation Committee has determined that the compensation consultant is independent and that the consultant’s work has not created any conflicts of interest.
Procedures for Determining Executive CompensationAlthough the HR and Compensation Committee makes independent determinations on all matters related to compensation of executive officers, certain members of management are requested to attend committee meetings and provide input to the HR and Compensation Committee. Input may be sought from the chief executive officer,CEO, Human Resources, Legal, Finance, and Risk Management colleagues and others as needed to ensure the HR and Compensation Committee has the information and perspective it needs to carry out its duties. In particular, the HR and Compensation Committee will seek input from the chief executive officerCEO on matters relating to strategic objectives, companyCompany performance goals, and input on his assessment of the other executive officers. The chief human resources officerCHRO and representatives of Human Resources work with the chairChair of the HR and Compensation Committee to ensure he or she hasthey have the background, information, and data needed to facilitate meetings. | Huntington Bancshares Incorporated 2023 Proxy Statement | 88 |
Back to Contents The HR and Compensation Committee also receives updates from the chief financial officerCFO and other members of executive management throughout the year as appropriate. The HR and Compensation Committee also meets with representatives of the Audit Committee and Risk Oversight Committee as appropriate in making determinations. The Chair of the Audit Committee chair is consulted when the HR and Compensation Committee certifies companyCompany performance against the established incentive plan performance goals. The HR and Compensation Committee may delegate all or a portion of its duties and responsibilities to a subcommittee of the HR and Compensation Committee, or, if provided for in the terms of a particular compensation plan, to a management committee in accordance with the terms of such plan. The HR and Compensation Committee delegates some responsibilities to management to assist in development of design considerations, with permission to work with the HR and Compensation Committee’s compensation consultant to develop proposals for the HR and Compensation Committee’s consideration. The HR and Compensation Committee may not, however, delegate the determination of compensation for executive officers to management. From time to time, the HR and Compensation Committee may obtain the approval of the board of directorsBoard with respect to certain executive and directorDirector compensation matters. The HR and Compensation Committee takes risk into account when determining compensation and supports an executive compensation philosophy that balances risk and reward with a mix of base pay, short-term incentives, and long-term incentives, with greater emphasis on long-term incentives. The HR and Compensation Committee’s role in the oversight of incentive compensation risk is discussed under “TheThe Board’s Role in Risk Oversight” Oversight above. 78 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
Market ReferencingThe HR and Compensation Committee regularly reviews peer and industry information concerning levels of compensation and performance as a competitive frame of reference. The HR and Compensation Committee uses this information and analysis as a benchmarking reference for setting pay opportunities and making pay decisions, such as changes to base salaries, annual incentive awards, and long-term incentive grants. A key source of information is a peer group of regional banks similar to Huntington in terms of size and business model. |  | | | | | | | | Peer Banks for 2019
BB&T Corporation (TFC)*
CIT Group Inc. (CIT)
Citizens Financial Group,
Inc. (CFG)
Comerica Incorporated
(CMA)
Fifth Third Bancorp (FITB)
KeyCorp (KEY)
M&T Bank Corporation
(MTB)
Regions Financial
Corporation (RF)
SunTrust Banks, Inc. (TFC)*
Zions Bancorporation (ZION)
| |  | | Peer Banks for 2020
CIT Group Inc. (CIT)
Citizens Financial Group,
Inc. (CFG)
Comerica Incorporated (CMA)
Fifth Third Bancorp (FITB)
First Horizon National
Corporation (FHN)
KeyCorp (KEY)
M&T Bank Corporation (MTB)
People’s United Financial,
Inc. (PBCT)
PNC Financial Services Group,
Inc. (PNC)
Regions Financial Corporation (RF)
Truist Financial Corporation (TFC)
Zions Bancorporation (ZION)
|
* | SunTrust Banks, Inc. was merged into BB&T Corporation which is now Truist Financial Corporation (TFC). |
The peer banks are chosenreviewed each year using an objective process recommended by the independent compensation consultant and approved by the HR and Compensation Committee. The process begins with the selection of U.S. based publicly tradedU.S.-based publicly-traded commercial banks considering asset size as of the prior year-end. A number offew banks with relevant asset size are eliminated due to significant differences in business model, including international presence or focus, a focus on different services, or off-shore headquarters. The 2019 peer group of 10 companies was reduced to nine due to the merger of SunTrust Banks, Inc. into BB&T Corporation, which occurred in December 2019. model. At the recommendation of the independent compensation consultant, the HR and Compensation Committee widenedselected banks with asset sizes between 0.25x and 4.0x of the Company’s current asset size range(approximately $40 billion to $695 billion), excluding banks that are non-commercial, distressed, or have significant business differences, including international presence or focus, unique headquarters locations, or a focus on different services. Preference is also given to banks in order to increase the size of thecurrent peer group or banks identified as our peers by third-party proxy advisors. Given our positioning in terms of asset size and market capitalization within our peer group, we determined to make no changes for 2020. This resulted in the addition of First Horizon National Corporation, People’s United Financial, Inc., and PNC Financial Services Group, Inc. to the peer group. 2022. The resulting group consistedremains consisting of twelveeleven bank holding companies; sevensix larger and five smaller in terms of total assets, positioning Huntington betweenslightly below the 25th and the 50th percentilemedian for asset size. The HR and Compensation Committee chose the twelveeleven peers to represent the most appropriate market comparators for Huntington in terms of industry and size. The independent compensation consultant also provided the HR and Compensation Committee with industry surveysanalysis reflective of Huntington’s size and business profile as appropriate to supplement the peer group data. When using survey data, the information was reflective of Huntington’s size and industry. This included utilizing size adjustedsize-adjusted comparisons representing data from companies that fell closest to our asset size.size, including market capitalization, employees, and number of branches. Set forth below are the peers utilized for the 2021 and 2022 peer groups. Peer Banks for 2021 and 2022 | Citizens Financial Group, Inc. (CFG) Comerica Incorporated (CMA) Fifth Third Bancorp (FITB) First Horizon National Corporation (FHN) | | KeyCorp (KEY) M&T Bank Corporation (MTB) The PNC Financial Services Group, Inc. (PNC)
Regions Financial Corporation (RF) | | Truist Financial Corporation (TFC) U.S. Bancorp (USB) Zions Bancorporation, National Association (ZION) |
The HR and Compensation Committee also relied on the independent compensation consultant to provide a broader industry perspective of emerging trends and best practices. Among the peer and industry data considered in 20202022 were three-year total shareholder return relative to peers, three-year relative performance in incentive measures, and realizable pay over the prior three years relative to peers. With the assistance of the independent compensation consultant, the HR and Compensation Committee performs a pay and performance analysis on an annual basis to review the appropriateness of the company’sCompany’s executive compensation program. The Compensation Committee determined that the pay and performance analyses for the year 2019 and for the period 2017 - 2019 reflected appropriate alignment between actual pay and relative performance. | Huntington Bancshares Incorporated 2023 Proxy Statement | 89 |
Table ofBack to Contents
Compensation of Executive Officers
20202022 Total Shareholder Return of Huntington and Peers
* 
Other Policies &and Practices
Stock Ownership & Holding RequirementsTo reinforce the importance of stock ownership to the company’sCompany’s compensation philosophy, the HR and Compensation Committee has imposed ownership requirements since 2006. Executive officers subject to the policy are required to meet and maintain a dollar value of ownership based on a multiple of salary. Ownership levels are evaluated as of September 30 each year based on then current stock prices. The executive officer’s current base salary is multiplied by his or hertheir assigned multiple and compared to current holdings, valued based on a 30-day average closing stock price. Executive officers generally have five years to meet their ownership levels and thereafter must continue to meet the requirements on an on-going basis. Executive officers continue to be subject to a holding requirement equal to 50% of net shares received upon the exercises of a stock option or upon the release of full value awards. This amount of shares must be held until retirement or other departure from the company. The Compensation Committee may permit a discretionary hardship exemption from the ownership and / or holding requirements, on a case-by-caseongoing basis. As of January 31, 2021,2023, each ofNEO who has served at least five years meets the named executive officers exceeded his or her ownership guidelines. In addition to the executive officers,NEOs listed below, stock ownership requirements extend to approximately 7060 additional executive leadersexecutives. NEO OWNERSHIP COMPARED TO GUIDELINES Executive | Multiple | Ownership Guideline | Market Value of Shares Owned(1) | Steinour | 10X | $11,000,000 | $109,960,904 | Wasserman | 3X | 2,100,000 | 2,147,988 | Standridge(2) | 3X | 2,175,000 | 5,207,574 | Heller | 3X | 2,175,000 | 6,940,391 | Kleinman | 3X | 1,950,000 | 3,280,434 | (1) Value of shares owned as reported in this column is based on the closing price of a share of Huntington common stock on January 31, 2023 ($15.17). Shares that count toward the share ownership requirement include unvested time-based RSUs and shares held in Huntington benefit plans, but do not include unexercised stock options or unvested PSUs. (2) Mr. Standridge is within his five-year window to comply with his applicable requirements. |
Hedging and the shareholding requirements extend to approximately 1,500 additional senior leaders.NEO Ownership Compared to Guidelines
| Executive | | Multiple | | Ownership
Guideline | | Market Value
of Shares
Owned(1) | | | Steinour | | | 10X | | | $11,000,000 | | | $88,333,226 | | | Wasserman | | | 3X | | | 1,875,000 | | | 1,889,068 | | | Heller | | | 3X | | | 1,875,000 | | | 6,963,013 | | | Harmening | | | 3X | | | 1,875,000 | | | 2,358,924 | | | Litsey | | | 2X | | | 1,250,000 | | | 1,602,013 | |
(1) | Value of shares owned as reported in this column is based on the closing price of a share of Huntington common stock on January 29, 2021 ($13.225). Shares that count toward the share ownership requirement include unvested time-based RSUs and shares acquired and / or held: upon vesting or exercise of equity awards; pursuant to Huntington benefit plans; via open market purchase; and by an immediate family member sharing the same household. |
80 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
Hedging & Pledging Prohibition
The HR and Compensation Committee has a policy prohibiting hedging and pledging activity in equity securities of Huntington. The policy applies to Huntington’s directors,Directors, executive officers, other members of Huntington’s executive leadership team,ELT, and other officers subject to Section 16 of the Securities Exchange Act. The hedging and pledging prohibitions apply with respect to any shares ofinterests in Huntington equity securities owned by the covered persons, directly or indirectly, whether granted by Huntington as compensation or otherwise acquired and held. Prohibited hedging activity includes purchasingusing financial instruments (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, options, and exchange funds) or otherwise engaging in transactions that are designed to, or have the effect of, hedging or offsetting any decrease in the market value of Huntington securities. Huntington equity securities may not be pledged as collateral for a loan or held in a margin account.
Annual Long-Term Incentive Award Grant PracticesThe 2018 Long-Term Incentive Plan permits the HR and Compensation Committee to designate a grant date effective following the date of the committeeits action. The HR and Compensation Committee has adopted a practice of granting equity awards on a pre-established date to avoid coincidingany appearance of coordination with quarterly trading blackouts. Since 2012 we have grantedthe release of material non-public information. We grant our annual long-term incentiveLTI awards effective May 1 each year. The exercise price for each stock option award is equalin March in order to improve the fair market value of a share of common stock on the grant date.incentive-setting process and better align with peers. Under the company’sCompany’s stock plan, fair market value is | Huntington Bancshares Incorporated 2023 Proxy Statement | 90 |
Back to Contents generally defined as the closing price on the applicable date. We prohibit the repricing of previously-granted stock options.options without shareholder approval.
Recoupment / Clawbackof Incentive CompensationWe have multiple overlapping ways to hold our colleagues, including our NEOs, accountable and recover compensation. These include (i)terms of our 2018 Long-Term Incentive Plan, (ii) terms of our Annual Incentive Plan, (iii) our Recoupment Policy, Our Recoupment / Clawback Policy (Recoupment Policy) is a tool for recovery (iv) the Sarbanes-Oxley Act, and (v) the Dodd-Frank Act. The following types of incentive compensation in appropriate situations to the extent permitted (or required) by law and by the company’s plans, policies, and agreements. In addition, we have included clawback provisions in incentive plans for executive officers and for all employees. Our NEOs are subject to recoupmentrecoupment:
any bonus or other cash incentive payment, including commissions, previously paid or payable, and clawback as set forth below. Incentive Compensation subject to possible clawbackany equity compensation, vested or recoupment includes:unvested (including without limitation, performance shares and PSUs, restricted stock and RSUs and stock options), and net proceeds of any exercised or vested equity awards.
Tool | Compensation Covered | | Conduct Covered | | Consequence | (a)Long-Term Incentive Compensation | | All equity awards made under the 2018 Long-Term Incentive Plan, except following a change in control. | | A serious breach of conduct or solicitation of customers or potential customers with whom the participant had contact during the participant’s employment with us. | | Termination of any outstanding vested or unvested award in whole or in part, or repayment of any benefit received if such conduct or activity occurs within three years following the exercise or payment of an award, and awards may be forfeited upon termination of employment for cause. | Annual Incentive Compensation | | Awards made under the Annual Incentive Plan. | | Restatement of financial statements because of a material financial reporting violation; taking of unnecessary or excessive risk, manipulation of earnings; or engaging in any misconduct described in the Recoupment Policy. | | Repayment of any amount previously paid in excess of what would have been paid under the restated financial statements or such other amount in accordance with the Dodd-Frank Act, and potential termination of the participant’s participation in the plan in accordance with the Recoupment Policy. | Recoupment Policy (Misconduct or Performance) | | Any bonus or other cash incentive payment, including commissions, previously paid or payable and | (b) | any equity compensation, vested or unvested, (including without limitation, performance shares and performance share units, restricted stock and restricted stock units and stock options), and net proceeds of any exercised or vested equity awards. | | Misconduct, including fraud, intentional misconduct, gross negligence, or manipulation of earnings; and Performance, including taking of excessive risk outside the bounds of the Company’s risk governance structure. | | Potential reimbursement or forfeiture of incentive compensation. | Recoupment Policy (Restatement of Financials) | | Any bonus or other cash incentive payment, including commissions, previously paid or payable and any equity compensation, vested or unvested, and net proceeds of any exercised or vested equity awards. | | Restatement caused by gross negligence, intentional misconduct, or fraud. | | Potential repayment of all or a portion or of any incentive compensation paid based on results that were restated if it would have been less had the financial statements been correct. | Sarbanes- Oxley Act | | Incentive compensation paid to the CEO and CFO only within the 12-month period following the release of financial information that subsequently was restated. | | Misconduct resulting in required restatement of any financial reporting required under securities laws. | | Reimbursement of bonus, incentive-based or equity-based compensation received within the 12-month period following the public release of financial information that was restated. | Dodd-Frank
Act | | Incentive compensation during the three-year period preceding the date on which the restatement is required from any current or former executive officers or any other individual specified in the Dodd-Frank Act. | | Restatement of any Company financial statements because of a material financial reporting violation. | | Recovery of the amount in excess of the incentive compensation payable under the Company’s restated financial statements. |
The policy is applicableOn October 26, 2022, the SEC added Exchange Act Rule 10D-1, requiring listing exchanges to all colleagues, includingadopt listing standards that require listed issuers to adopt clawback polices and comply with disclosure requirements. In February 2023, the named executive officers. In general, situations that trigger a review under this policy involve behaviors or actions outside the bounds of the company’s overall risk appetite and governance structure. In determining whetherNasdaq Stock Market Marketplace Rules were revised to require reimbursement or forfeiture of an executive officer’s incentive compensation, the Compensation Committee shall take into account such considerations as it deems appropriate, such as the extent to which the employee’s actions or inactions were in violation of the code of conduct; whether the action or inaction could reasonably be expected to cause financial or reputational harmimplement Rule 10D-1. We will address any clawback policies required by Nasdaq Stock Market Marketplace Rules prior to the company; the egregiousness of the conduct; the tax consequenceseffective date.
| Huntington Bancshares Incorporated 2023 Proxy Statement | 91 |
Back to the affected employee; and other factors as the Committee deems appropriate under the circumstances. For employees who areContents Recoupment DisclosureDuring 2022, we did not executive officers, the decisiontake any action to recoup or clawback incentive compensation is made by the CEO jointly with the chief human resources officer, and reported to the Committee. Specific provisions apply in the event of a financial restatement. If it is determined by the board of directors that gross negligence, intentional misconduct or fraud by an employee or former employee caused or partially caused the company to have to restate all or a portion of its financial statements, the board, in its sole discretion, may, to the extent permitted by law and the company’s benefit plans, policies and agreements, and to the extent it determines in its sole judgment that it is in the best interests of the company to do so, require repayment of a portion or all ofrecover any incentive compensation if (1) the amount or vesting of the incentive compensation was calculated based upon, or contingent on, the achievement of financial or operating results that were the subject of or affected by the restatement; and (2) the amount or vesting of the Incentive Compensation would have been less had the financial statements been correct.
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Compensation of Executive Officers
Further, pursuant to Section 954 of the Dodd-Frank Act, if the company is required to restatefrom any of its financial statements because of a material financial reporting violation, the company shall recover the amount in excess of the incentive compensation payable under the company’s restated financial statements,our NEOs or such other amount required under the Dodd-Frank Act or any other applicable law or policy. The company shall recover this amount from any current or former employee who received incentive compensation during the three-year period preceding the date on which the restatement is required, or from any other individual specified in the Dodd-Frank Act.executives.
Stock Plans. We have forfeiture and recoupment provisions in the 2018 Long-Term Incentive Plan specific to awards under this plan. Except following a change in control event, should the Compensation Committee determine that a participant has committed a serious breach of conduct or has solicited or taken away customers or potential customers with whom the participant had contact during the participant’s employment with us, the Compensation Committee may terminate any outstanding award, in whole or in part, whether or not yet vested. If such conduct or activity occurs within three years following the exercise or payment of an award, the Compensation Committee may require the participant or former participant to repay to us any gain realized or payment received upon exercise or payment of such award. A serious breach of conduct includes, without limitation, any conduct prejudicial to or in conflict with Huntington or any securities law violations including any violations under the Sarbanes-Oxley Act of 2002. In addition, awards may be forfeited upon termination of employment for cause.
Annual Incentive Plan. The Management Incentive Plan (MIP) provides that if Huntington is required to restate any of its financial statements because of a material financial reporting violation, Huntington will recover the amount in excess of the award payable under Huntington’s restated financial statements, or such other amount required under the Dodd-Frank Act. In addition, if the Compensation Committee determines that a participant took unnecessary or excessive risk, manipulated earnings, or engaged in any misconduct described in our Recoupment Policy, the Committee may terminate the participant’s participation in the plan and require repayment of any amount previously paid in accordance with the Recoupment Policy, any other applicable policies and any other applicable laws and regulations.
Tax &and Accounting ConsiderationsSection 162(m) of the Internal Revenue Code limits the tax deductibility of compensation for certain executive officers that is more than $1 million. Prior to the enactment of the Tax CutsThe HR and Jobs Acts of 2017, Section 162(m) provided an exemption from this deduction limitation for compensation that qualified as “performance-based” compensation. However, among other changes to Section 162(m), the exemption for performance-based compensation was repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017. The Compensation Committee continues to have the flexibility to pay non-deductible compensation if it believes it is in the best interests of the Company.
Huntington also takes into consideration Internal Revenue Code Section 409A with respect to non-qualifiednonqualified deferred compensation programs, and ASC 718, “Compensation - Stock Compensation” in administering its equity compensation program. 82 | Huntington Bancshares Incorporated |
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Compensation of Executive Officers
Report of the HR and Compensation CommitteeThe HR and Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review and discussion, the HR and Compensation Committee recommended to the board of directorsBoard that the Compensation Discussion and Analysis be included in Huntington’s proxy statement for its 2021 annual meeting2023 Annual Meeting of shareholders.Shareholders. Submitted by the HR and Compensation Committee Robert S. Cubbin, Chair
Steven G. Elliott
Gina D. France
J. Michael Hochschwender
 |  |  |  | Robert S. Cubbin,
Chair | Gina D. France | J. Michael
Hochschwender | Kenneth J. Phelan |
Compensation Committee Interlocks and Insider Participation
We have no compensation committee interlocks. In addition, no member of the Compensation Committee has served as one of our officers or employees.
| Huntington Bancshares Incorporated 2023 Proxy Statement | 92 |
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Compensation of Executive Officers
Executive Compensation TablesSummary Compensation 2020
2022The following table sets forth the compensation paid by us and by our subsidiaries for each of the last three fiscal years ended December 31, 2020,2022, to our principal executive officer, principal financial officer, and the three other most highly compensatedhighly-compensated executive officers serving at the end of 2020.2022. Name and
Principal
Position(1) | Year | Salary ($) | | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and
Non-Qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6)(7) | Total ($) | Stephen D. Steinour Chairman, President and CEO | 2022 | 1,100,000 | | — | 5,499,988 | — | 3,410,000 | — | 474,987 | 10,484,975 | 2021 | 1,098,106 | | — | 3,937,478 | 1,312,498 | 2,800,000 | — | 471,096 | 9,619,178 | 2020 | 1,037,500 | | — | 3,374,995 | 1,125,000 | 1,830,000 | 203,536 | 436,651 | 8,007,682 | Zachary J. Wasserman Chief Financial Officer Senior Executive Vice President
| 2022 | 671,875 | | 50,000 | 1,999,980 | — | 1,400,000 | — | 8,644 | 4,130,499 | 2021 | 625,000 | | 50,000 | 1,199,986 | 400,000 | 1,150,000 | — | 15,417 | 3,440,403 | 2020 | 625,000 | | 1,500,000 | 937,489 | 312,499 | 725,000 | — | 69,587 | 4,169,575 | Brant J. Standridge President, Consumer & Business Banking, Senior Executive Vice President | 2022 | 513,542 | (8) | 120,000 | 4,573,872 | — | 1,750,000 | — | 79,032 | 7,036,446 |
| | | | | | | | | | Paul G. Heller Chief Technology & Operations Officer, Senior Executive Vice President | 2022 | 687,500 | | — | 2,249,992 | — | 1,400,000 | — | 8,644 | 4,346,136 | 2021 | 625,000 | | — | 1,499,991 | 499,997 | 1,250,000 | — | 8,545 | 3,883,533 | 2020 | 625,000 | | — | 1,124,992 | 374,999 | 750,000 | — | 10,445 | 2,885,436 | Scott D. Kleinman President, Commercial Banking, Senior Executive Vice President | 2022 | 631,250 | | — | 1,749,996 | — | 1,250,000 | — | 16,869 | 3,648,115 | | | | | | | | | | | | | | | | | | | | | (1) Mr. Steinour also serves as President and CEO of Huntington Bank, and served as Chairman of Huntington Bank until June 9, 2021, in connection with the TCF Merger. Mr. Standridge joined Huntington as President, Consumer and Business Banking on April 11, 2022. In accordance with SEC rules, no amounts are reported for Mr. Kleinman for 2020 or 2021, because he was not an NEO for those years. (2) In connection with Mr. Wasserman joining Huntington in 2019, Mr. Wasserman received a signing bonus of $1,500,000 payable in January 2020, and a three-year cash payment of $50,000 per year commencing in May 2021 to compensate him for certain cash and equity payments and benefits which he forfeited due to accepting employment with Huntington. In connection with Mr. Standridge joining Huntington in April 2022, Mr. Standridge received a signing bonus of $1,670,000, $120,000 of which was paid in April 2022 and $1,550,000 of which was paid in February 2023 and is subject to recoupment if Mr. Standridge terminates his employment with Huntington voluntarily or for cause within 24 months of employment. |
Name and
Principal
Position(1) | | Year | | Salary | | Bonus(2) | | Stock Awards(3) | | Option Awards(4) | | Non-Equity Incentive Plan Compensation(5) | | Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings(6) | | All Other Compensation(7) | | Total(8) | | | Stephen D. Steinour | | 2020 | | 1,037,500 | | — | | 3,374,995 | | 1,125,000 | | 1,830,000 | | 203,536 | | 436,651 | | 8,007,682 | | | Chairman, President | | 2019 | | 1,100,000 | | — | | 3,374,985 | | 1,125,000 | | 1,425,000 | | 196,578 | | 267,122 | | 7,488,685 | | | and CEO | | 2018 | | 1,100,000 | | — | | 3,749,981 | | 1,250,000 | | 2,025,000 | | 0 | | 431,934 | | 8,556,915 | | | Zachary J. Wasserman | | 2020 | | 625,000 | | 1,500,000 | | 937,489 | | 312,499 | | 725,000 | | — | | 69,587 | | 4,169,575 | | | Chief Financial Officer | | 2019 | | 72,115 | | — | | 1,649,999 | | | | 775,000 | | — | | 125,976 | | 1,848,090 | | | and Senior Executive Vice President | | | | | | | | | | | | | | | | | | | | | Paul G. Heller | | 2020 | | 625,000 | | — | | 1,124,992 | | 374,999 | | 750,000 | | — | | 10,445 | | 2,885,436 | | | Chief Technology & | | 2019 | | 625,000 | | — | | 1,012,481 | | 337,499 | | 650,000 | | — | | 40,837 | | 2,665,817 | | | Operations Officer, Senior Executive Vice President | | 2018 | | 625,000 | | — | | 1,049,985 | | 349,998 | | 800,000 | | — | | 71,793 | | 2,896,776 | | | Andrew J. Harmening | | 2020 | | 625,000 | | — | | 1,124,992 | | 374,999 | | 750,000 | | — | | 10,445 | | 2,885,436 | | | Consumer & Business | | 2019 | | 625,000 | | 600,000 | | 944,980 | | 314,999 | | 625,000 | | — | | 40,745 | | 3,150,724 | | | Banking Director, | | 2018 | | 615,385 | | 650,000 | | 899,989 | | 300,000 | | 720,000 | | — | | 56,537 | | 3,241,911 | | | Senior Executive Vice President | | | | | | | | | | | | | | | | | | | | | Jana J. Litsey | | 2020 | | 625,000 | | 300,000 | | 937,489 | | 312,499 | | 600,000 | | — | | 10,445 | | 2,785,433 | | | General Counsel, | | 2019 | | 586,539 | | 325,000 | | 809,979 | | 270,000 | | 480,000 | | — | | 35,937 | | 2,507,455 | | | Senior Executive Vice President | | 2018 | | 525,000 | | 400,000 | | 674,981 | | 224,999 | | 525,000 | | — | | 32,221 | | 2,382,202 | |
(1) | Mr. Steinour also serves as Chairman, President and Chief Executive Officer of The Huntington National Bank. Mr. Wasserman joined Huntington as Chief Financial Officer on November 4, 2019. On March 5, 2021, Mr. Harmening notified Huntington of his resignation from his position as Consumer & Business Banking Director and Senior Executive Vice President, effective April 1, 2021, to become the chief executive officer of another publicly traded company. | (2) | In connection with Mr. Wasserman joining Huntington in 2019, Mr. Wasserman was offered a signing bonus of $1,500,000 payable in January 2020 to compensate him for certain cash and equity payments and benefits which he forfeited due to accepting employment with Huntington. Mr. Wasserman’s signing bonus is subject to forfeiture in the event of his departure within 24 months of payment. In 2020 Ms. Litsey received the fourth and final installment of a signing bonus agreed upon when she joined Huntington in 2017 to compensate her for lost opportunity with her previous employer. |
84 | Huntington Bancshares Incorporated2023 Proxy Statement | 93 |
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Compensation of Executive Officers
(3) | The amounts in this column are the grant date fair values of awards of restricted stock unitsRSUs and performance share unitsPSUs determined for accounting purposes in accordance with FASB ASC Topic 718. The performance share unitsPSUs are valued at target. The assumptions made in the valuation are discussed in Note 1716 “Share-Based Compensation” of the Notes to Consolidated Financial Statements for our financial statements for the year ended December 31, 2020. These awards were granted on May 1, 2020. |
| | | Time-Vesting
RSUs | | Performance-Based
PSUs (Target) | | Total Stock
Awards | | | | Stephen D. Steinour | $899,996 | | $ 2,474,999 | | $ 3,374,995 | | | | Zachary J. Wasserman | 312,496 | | 624,993 | | 937,489 | | | | Paul G. Heller | 374,997 | | 749,995 | | 1,124,992 | | | | Andrew J. Harmening | 374,997 | | 749,995 | | 1,124,992 | | | | Jana J. Litsey | 312,496 | | 624,993 | | 937,489 | |
2022. The grant date fair value of the 2022 awards is set forth below: |
| Time-Vesting
RSUs ($) | Performance-Based
PSUs (Target) ($) | Total Stock
Awards ($) | Stephen D. Steinour | 2,474,994 | 3,024,994 | 5,499,988 | Zachary J. Wasserman | 999,990 | 999,990 | 1,999,980 | Brant J. Standridge | 4,573,872 | — | 4,573,872 | Paul G. Heller | 1,124,996 | 1,124,996 | 2,249,992 | Scott D. Kleinman | 874,998 | 874,998 | 1,749,996 | The grant date fair value of the PSUs awarded in 2022, assuming the highest level of performance, is set forth below: |
| Dollar Value of
PSUs at Maximum Performance ($) | Stephen D. Steinour | 5,444,989 | Zachary J. Wasserman | 1,799,982 | Brant J. Standridge | — | Paul G. Heller | 2,024,993 | Scott D. Kleinman | 1,574,996 | Mr. Standridge did not receive a PSU award in 2022 because he joined Huntington in April 2022. |
(4) The amounts in this column are annual cash incentive awards earned under the MIP for 2022. (5) The amount in this column for the 2022 fiscal year represents the change in the actuarial present value of accumulated benefit from December 31, 2021 to December 31, 2022, under two defined benefit pension plans: the performance share units assumingRetirement Plan and the highest levelSRIP. These plans were closed to new hires after December 31, 2009, and were frozen as of performanceDecember 31, 2013. Benefits are based on levels of compensation and years of credited service as of December 31, 2013. The valuation method used to determine the present values, and all material assumptions applied, are discussed in 17 “Benefit Plans” of the Notes to Consolidated Financial Statements for the fiscal year ended December 31, 2022. The change in present value for Messrs. Steinour and Kleinman under each plan is detailed below. Messrs. Wasserman, Heller, and Standridge were not eligible to participate in these plans, as they began their employment after participation was closed to new hires. Additional detail about these plans is set forth in the discussion following the table of Pension Benefits 2022 below. There were no above-market or preferential earnings on non-qualified deferred compensation. | Change in Present
Value Retirement Plan
($) | Change in Present
Value SRIP
($) | Total Change in
Present Value
($) | Stephen D. Steinour | (27,675) | (285,952) | (313,627) | Scott D. Kleinman | (46,063) | — | (46,063) |
| | Huntington Bancshares Incorporated 2023 Proxy Statement | Dollar Value of
Performance Share Units at
Maximum Performance | | Stephen D. Steinour | $ 4,454,998 | | Zachary J. Wasserman | 1,124,987 | | Paul G. Heller | 1,349,991 | | Andrew J. Harmening | 1,349,991 | | Jana J. Litsey | 1,124,98794 |
Back to Contents (6) All other compensation as reported in this column includes: our contributions to the Huntington 401(k) Plan (a defined contribution plan); perquisites and personal benefits valued at incremental cost to us; and premiums for group term life insurance. These amounts are detailed below. | Amounts
Contributed to
401(k) Plan
($) | Perquisites and Personal
Benefits
($) | Group Term
Life Insurance
($) | Total All Other Compensation
($) | Stephen D. Steinour | 8,000 | | 466,343 | | 644 | | 474,987 | Zachary J. Wasserman | 8,000 | | — | | 644 | | 8,644 | Brant J. Standridge | — | | 78,388 | | 644 | | 79,032 | Paul G. Heller | 8,000 | | — | | 644 | | 8,644 | Scott D. Kleinman | 8,000 | | 8,225 | | 644 | | 16,869 |
(7) In the ordinary course of business, Huntington maintains a number of automobiles and has access to a corporate aircraft as needed to provide efficient and secure business transportation for senior management. When it is not otherwise needed for business travel, a corporate aircraft may be available to the CEO for personal usage for reasons of security, efficiency, personal safety, and health and safety concerns. The amount reported for use of the corporate plane reflects the aggregate incremental cost to Huntington for Mr. Steinour’s personal use of the plane during 2022. The incremental amount was $427,735 based on an hourly rate consisting of variable charges for crew, landing and parking, fuel and oil, radio maintenance and repairs, supplies, and outside services. For efficiency and security, Mr. Steinour is also permitted personal use of automobiles, driven by Huntington security personnel, including for commuting, which permits him to work while traveling. The incremental cost of this usage to Huntington for 2022 was based on a rate per mile for fuel and maintenance and overtime costs for the drivers, totaling $10,799. Other perquisites and personal benefits for Mr. Steinour consisted of security monitoring of his personal residences, totaling $27,809. Perquisites and personal benefits for Mr. Standridge consisted of $78,388 of moving allowance expenses. Mr. Kleinman’s total All Other Compensation includes $8,225 in restricted stock cash dividends. (8) Amounts shown for Mr. Standridge include wages paid by Huntington from the start of his employment with Huntington on April 11, 2022. (4) | The amounts in this column are the grant date fair values of awards of stock options determined for accounting purposes in accordance with FASB ASC Topic 718. The assumptions made in the valuation are discussed in Note 17 “Share-Based Compensation” of the Notes to Consolidated Financial Statements for the year ended December 31, 2020. The following table presents the assumptions used in the option pricing model for the 2020 option awards granted on May 1, 2020. |
| | Risk-Free Interest Rate | 0.48% | | Expected Volatility | 39.69% | | Expected Term | 6.5 Years | | Expected Dividend Yield | 6.76% |
(5) | The amounts in this column are annual cash incentive awards earned under the Management Incentive Plan for 2020. | (6) | The amount in this column for the 2020 fiscal year represents the change in the actuarial present value of accumulated benefit from December 31, 2019 to December 31, 2020, under two defined benefit pension plans: the Retirement Plan and the Supplemental Retirement Income Plan, referred to as the SRIP. These plans were closed to new hires after December 31, 2009 and were frozen as of December 31, 2013. Benefits are based on levels of compensation and years of credited service as of December 31, 2013. The valuation method used to determine the present values, and all material assumptions applied, are discussed in Note 18 “Benefit Plans” of the Notes to Consolidated Financial Statements for the fiscal year ended December 31, 2020. The change in present value for Mr. Steinour under each plan is detailed below. None of the other named executive officers are eligible to participate in these plans as they were employed after participation was closed to new hires. Additional detail about these plans is set forth in the discussion following the table of Pension Benefits 2020 below. There were no above-market or preferential earnings on non-qualified deferred compensation. |
| | | | Change in Present
Value Retirement Plan
($) | | Change in Present
Value SRIP
($) | | Total Change in
Present Value
($) | | | | Stephen D. Steinour | | 26,086 | | 177,450 | | 203,536 | |
Table of Contents
Compensation of Executive Officers
(7) | All other compensation as reported in this column includes: our contributions to the Huntington 401(k) Plan, a defined contribution plan; perquisites and personal benefits valued at incremental cost to us; and premiums for group term life insurance. These amounts are detailed below. |
| | | | Amounts
Contributed to
401(k) Plan
($) | | Perquisites
and Personal
Benefits
($) | | Group Term
Life Insurance
($) | | Total All Other
Compensation
($) | | | | Stephen D. Steinour | | 10,000 | | 426,205 | | 445 | | 436,651 | | | | Zachary J. Wasserman | | 10,000 | | 59,142 | | 445 | | 69,587 | | | | Paul G. Heller | | 10,000 | | 0 | | 445 | | 10,445 | | | | Andrew J. Harmening | | 10,000 | | 0 | | 445 | | 10,445 | | | | Jana J. Litsey | | 10,000 | | 0 | | 445 | | 10,445 | |
| In the ordinary course of business, Huntington maintains a number of automobiles and has access to a corporate aircraft as needed to provide efficient and secure business transportation for senior management. When it is not otherwise needed for business travel, a corporate aircraft may be available to the chief executive officer for personal usage for reasons of security, personal safety, and efficiency. The COVID-19 pandemic heightened personal health and safety concerns contributing to an increased use of the corporate plane by certain executive officers for personal reasons. The amount reported for use of the corporate plane reflects the aggregate incremental cost to Huntington for personal use of the plane during 2020. The incremental amount was $419,080 based on an hourly rate consisting of variable charges for crew, landing and parking, fuel and oil, radio maintenance and repairs, supplies and outside services. For efficiency and security Mr. Steinour is also permitted personal use of the automobiles, driven by Huntington security personnel, including for commuting, which permits him to work while traveling. The incremental cost of this usage to Huntington for 2020 was based on a rate per mile for fuel and maintenance and overtime costs for the drivers. Other perquisites and personal benefits for Mr. Steinour consisted of security monitoring of his personal residence. Perquisites and personal benefits for Mr. Wasserman consisted of relocation expenses totaling $49,822 and personal use of the corporate aircraft. | (8) | This column shows the total of all compensation for the fiscal year as reported in the other columns of this table. |
86 | Huntington Bancshares Incorporated2023 Proxy Statement | 95 |
Back to Contents Table of Contents
Compensation of Executive Officers
Grants of Plan-Based Awards 2020
2022The table below sets forth potential opportunities for annual cash incentive awards under the Management Incentive PlanMIP and awards of RSUs and PSUs and stock options for 2020.2022. Name | Grant Date | Date of
Board or
Committee
Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts
Under Equity Incentive
Plan Awards(2) | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)(3) | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | Exercise
or Base
Price of
Option
Awards
($/Sh) | Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(4) | Threshold
($) | Target
($) | Maximum
($) | Threshold
(#) | Target
(#) | Maximum
(#) | Stephen D. Steinour | | | | | | | | | | | | Annual Incentive | | | 1,100,000 | 2,200,000 | 4,400,000 | | | | | | | | PSUs | 3/1/2022 | 2/4/2022 | | | | 105,108 | 210,215 | 378,387 | | | | 3,024,994 | RSUs | 3/1/2022 | 2/4/2022 | | | | | | | 171,994 | | | 2,474,994 | Zachary J. Wasserman | | | | | | | | | | | Annual Incentive | | | 388,125 | 776,250 | 1,552,500 | | | | | | | | PSUs | 3/1/2022 | 2/4/2022 | | | | 34,746 | 69,492 | 125,086 | | | | 999,990 | RSUs | 3/1/2022 | 2/4/2022 | | | | | | | 69,492 | | | 999,990 | Brant J. Standridge | 543,750 | 1,087,500 | 2,175,000 | | | | | | | | Annual Incentive | 4/11/2022 | 3/14/2022 | | | | | | | 331,440 | | | 4,573,872 | Paul G. Heller | | | | | | | | | | | Annual Incentive | | | 397,709 | 795,417 | 1,590,834 | | | | | | | | PSUs | 3/1/2022 | 2/4/2022 | | | | 39,090 | 78,179 | 140,722 | | | | 1,124,996 | RSUs | 3/1/2022 | 2/4/2022 | | | | | | | 78,179 | | | 1,124,996 | Scott D. Kleinman | | | | | | | | | | | Annual Incentive | | | 364,167 | 728,333 | 1,456,666 | | | | | | | | PSUs | 3/1/2022 | 2/4/2022 | | | | 30,403 | 60,806 | 109,451 | | | | 874,998 | RSUs | 3/1/2022 | 2/4/2022 | | | | | | | 60,806 | | | 874,998 | (1) Each of the NEOs participated in the 2022 MIP. The award opportunities presented in the table represent the potential payout range based on percentages of salary at threshold, target, and maximum levels of corporate performance. Awards are subject to adjustment for individual and business unit performance and the discretion of the HR and Compensation Committee. Actual awards earned for 2022 are reported in the Summary Compensation Table under the column headed “Non-Equity Incentive Compensation.” The annual incentive plan is further explained in Executive Compensation Program Features — Compensation Outcomes for 2022 — Annual Incentive Award in the CD&A of this Proxy Statement. (2) Each of the NEOs, except Mr. Standridge, received a PSU award in 2022. These columns reflect the potential number of PSUs to be vested upon satisfaction of the applicable performance conditions as of December 31, 2024, at threshold, target, and maximum performance. The vesting is subject to the NEO’s continued service through the vesting date. See Executive Compensation Program Features — Compensation Outcomes for 2022 — Long-Term Incentive Compensation in the CD&A of this Proxy Statement for a description of the terms of these awards. Any vested units will convert to shares of our common stock on a one-for-one basis. PSUs that do not vest will be forfeited. (3) The HR and Compensation Committee awarded RSUs to each of the NEOs. For Messrs. Steinour, Wasserman, Heller, and Kleinman, RSU awards vest over a period of four years, with 50% of the award vesting on the third anniversary of the grant date, and 50% on the fourth anniversary of the grant date. 70% of the award of 209,827 RSUs granted on April 11, 2022 to Mr. Standridge in connection with his joining Huntington vests on the second anniversary of the grant date, and the remaining 30% vests on the third anniversary of the grant date. 20% of the award of 121,613 RSUs granted on April 11, 2022 to Mr. Standridge in connection with his joining Huntington vests on the first anniversary of the grant date, 20% vests on the second anniversary of the grant date, 40% vests on the third anniversary of the grant date, and 20% vests on the fourth anniversary of the grant date. Any vested units will convert to shares of our common stock on a one-for-one basis. RSUs that do not vest will be forfeited. (4) The amounts in this column are the grant date fair values, for accounting purposes, of the awards of PSUs (at target) and RSUs determined in accordance with FASB ASC Topic 718. |
| | | | | Date of
Board or | | Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards(1) | | Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2) | | All Other
Stock
Awards:
Number of
Shares of
Stock or | | All Other
Option
Awards:
Number of
Securities
Underlying | | Exercise
or Base
Price of
Option | | Grant
Date
Fair
Value of
Stock
and
Option | | | Name | | Grant
Date | | Committee
Action | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | Units
(#)(3) | | Options
(#)(4) | | Awards
($/Sh)(5) | | Awards
($)(6) | | | Stephen D. Steinour | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Incentive | | | | | | 962,500 | | 1,925,000 | | 3,850,000 | | | | | | | | | | | | | | | | | PSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | 144,399 | | 288,798 | | 519,836 | | | | | | | | 2,474,999 | | | Options | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | | | 760,135 | | 8.57 | | 1,125,000 | | | RSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | 105,017 | | | | | | 899,996 | | | Zachary J. Wasserman | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Incentive | | | | | | 312,500 | | 625,000 | | 1,250,000 | | | | | | | | | | | | | | | | | PSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | 36,464 | | 72,928 | | 131,270 | | | | | | | | 624,993 | | | Options | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | | | 211,148 | | 8.57 | | 312,499 | | | RSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | 36,464 | | | | | | 312,496 | | | Paul G. Heller | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Incentive | | | | | | 359,375 | | 718,750 | | 1,437,500 | | | | | | | | | | | | | | | | | PSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | 43,757 | | 87,514 | | 157,525 | | | | | | | | 749,995 | | | Options | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | | | 253,378 | | 8.57 | | 374,999 | | | RSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | 43,757 | | | | | | 374,997 | | | Andrew J. Harmening | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Incentive | | | | | | 359,375 | | 718,750 | | 1,437,500 | | | | | | | | | | | | | | | | | PSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | 43,757 | | 87,514 | | 157,525 | | | | | | | | 749,995 | | | Options | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | | | 253,378 | | 8.57 | | 374,999 | | | RSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | 43,757 | | | | | | 374,997 | | | Jana J. Litsey | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Incentive | | | | | | 312,500 | | 625,000 | | 1,250,000 | | | | | | | | | | | | | | | | | PSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | 36,464 | | 72,928 | | 131,270 | | | | | | | | 624,993 | | | Options | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | | | 211,148 | | 8.57 | | 312,499 | | | RSUs | | 5/1/2020 | | 4/21/2020 | | | | | | | | | | | | | | 36,464 | | | | | | 312,496 | |
(1) | Each of the named executive officers participated in the 2020 cycle of the Management Incentive Plan, our annual incentive plan. The award opportunities presented in the table are based on percentages of salary and threshold, target and maximum levels of corporate performance. Awards are subject to adjustment for individual and business unit performance. Actual awards earned for 2020 are reported in the Summary Compensation Table under the column headed “Non-Equity Incentive Compensation”. | (2) | Each of the named executive officers is a participant in the PSU award cycle commencing in 2020. These columns reflect the potential number of PSUs to be vested upon satisfaction of the applicable performance conditions as of December 31, 2022, at threshold, target and maximum performance. | (3) | The Compensation Committee awarded RSUs to each of the named executive officers. These RSU awards vest over a period of four years, with 50% of the award vesting on the three-year anniversary of the date of grant and 50% of the award vesting on the four-year anniversary of the date of grant. | (4) | The Compensation Committee awarded stock options to each of the named executive officers. These stock options vest in four equal annual increments beginning one year from the date of grant. | (5) | Each stock option reported has a per share exercise price equal to the closing price of a share of Huntington common stock on the grant date, as reported on the Nasdaq Stock Market. | (6) | The amounts in this column are the grant date fair values, for accounting purposes, of the awards of PSUs (at target), RSUs and stock options determined in accordance with FASB ASC Topic 718. |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 96 |
Table ofBack to Contents
Compensation of Executive Officers
Outstanding Equity Awards at Fiscal Year-End 2020
2022The following table sets forth details about the unexercised stock options and unvested awards of RSUs and PSUs held by the named executive officersNEOs as of December 31, 2020.2022. Name | Grant Date | Option Awards | | | | | | | Stock Awards | | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise
Price
($)(2) | Option Expiration
Date | Number of Shares or Units of Stock That Have
Not Vested
(#)(3) | | Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested ($)(4) | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units, or Other Rights
That Have Not Yet
Vested(#)(5) | Equity Incentive
Plan Awards: Market or Payout Value
of Unearned Shares, Units, or Other
Rights That Have Not Vested
($)(6) | Stephen D. Steinour | 5/1/2015 | 268,055 | — | 10.89 | 5/1/2025 | — | | | | | 5/1/2016 | 325,313 | — | 10.06 | 5/1/2026 | — | | | | | 5/1/2017 | 266,903 | — | 13.09 | 5/1/2027 | — | | | | | 5/1/2018 | 484,496 | — | 14.81 | 5/1/2028 | — | | | | | 5/1/2019 | 441,753 | 147,252 | 13.77 | 5/1/2029 | 38,726 | | 546,038 | | | 5/1/2020 | 380,067 | 380,068 | 8.57 | 5/1/2030 | 118,295 | | 1,667,963 | 585,564 | 8,256,451 | 3/26/2021 | 82,859 | 248,580 | 16.08 | 3/26/2031 | 69,639 | | 981,910 | 344,714 | 4,860,470 | 3/1/2022 | — | — | — | — | 178,093 | | 2,511,112 | 326,504 | 4,603,709 | Zachary J. Wasserman | 5/1/2020 | — | 105,574 | 8.57 | 5/1/2030 | 41,074 | | 579,150 | 147,868 | 2,084,940 | 3/26/2021 | 25,252 | 75,758 | 16.08 | 3/26/2031 | 26,529 | | 374,055 | 95,505 | 1,346,624 | 3/1/2022 | — | — | — | — | 71,956 | | 1,014,583 | 107,934 | 1,521,875 | Brant J. Standridge | 4/11/2022 | | | | | 214,960 | | 3,030,940 | | | 4/11/2022 | | | | | 124,588 | | 1,756,693 | | | Paul G. Heller | 5/1/2017 | 74,733 | | 13.09 | 5/1/2027 | | | | | | 5/1/2018 | 135,658 | | 14.81 | 5/1/2028 | | | | | | 5/1/2019 | 132,525 | 44,176 | 13.77 | 5/1/2029 | 14,522 | | 204,764 | | | 5/1/2020 | | 126,689 | 8.57 | 5/1/2030 | 49,290 | | 694,983 | 177,442 | 2,501,939 | 3/26/2021 | 31,565 | 94,697 | 16.08 | 3/26/2031 | 33,161 | | 467,572 | 119,382 | 1,683,286 | 3/1/2022 | | | | | 80,951 | | 1,141,413 | 121,427 | 1,712,120 | Scott D. Kleinman | 5/1/2015 | 8,054 | | 10.89 | 5/1/2025 | | | | | | 5/1/2016 | 13,133 | | 10.06 | 5/1/2026 | | | | | | 5/1/2017 | 10,676 | | 13.09 | 5/1/2027 | | | | | | 5/1/2018 | 21,802 | | 14.81 | 5/1/2028 | | | | | | 5/1/2019 | 22,087 | 7,363 | 13.77 | 5/1/2029 | 3,388 | | 47,770 | | | 2/28/2020 | | | | | 5,783 | | 81,540 | | | 5/1/2020 | | 101,351 | 8.57 | 5/1/2030 | 39,431 | | 555,977 | 141,954 | 2,001,546 | 2/26/2021 | | | | | 4,154 | | 58,571 | | | 3/26/2021 | 25,252 | 75,758 | 16.08 | 3/26/2031 | 26,529 | | 374,055 | 95,505 | 1,346,624 | 3/1/2022 | | | | | 62,962 | | 887,768 | 94,443 | 1,331,651 |
| | | | | Option Awards | | Stock Awards | | | Name | | Grant
Date | | Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable(1) | | Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable(1) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#)(2) | | Market Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units,
or Other
Rights That
Have not
Yet
Vested(#)(4) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units,
or Other
Rights That
Have not
Vested
($)(4) | | | Stephen D. Steinour | | 5/1/2014 | | 311,097 | | | | 9.0800 | | 5/1/2021 | | | | | | | | | | | | | 5/1/2015 | | 277,237 | | | | 10.8900 | | 5/1/2025 | | | | | | | | | | | | | 5/1/2016 | | 335,253 | | | | 10.0600 | | 5/1/2026 | | | | | | | | | | | | | 5/1/2017 | | 200,177 | | 66,726 | | 13.0900 | | 5/1/2027 | | 77,618 | | 980,311 | | | | | | | | | 2/28/2018 | | | | | | | | | | 8,466 | | 106,929 | | | | | | | | | 5/1/2018 | | 242,248 | | 242,248 | | 14.8100 | | 5/1/2028 | | 76,355 | | 964,367 | | 209,980 | | 2,652,043 | | | | | 2/28/2019 | | | | | | | | | | 19,074 | | 240,899 | | | | | | | | | 5/1/2019 | | 147,251 | | 441,754 | | 13.7700 | | 5/1/2029 | | 71,099 | | 897,974 | | 195,522 | | 2,469,439 | | | | | 5/1/2020 | | | | 760,135 | | 8.5700 | | 5/1/2030 | | 108,593 | | 1,371,527 | | 298,631 | | 3,771,714 | | | Zachary J. Wasserman | | 11/4/2019 | | | | | | | | | | 83,378 | | 1,053,065 | | | | | | | | | 5/1/2020 | | | | 211,148 | | 8.5700 | | 5/1/2030 | | 37,706 | | 476,221 | | 75,411 | | 952,443 | | | Paul G. Heller | | 5/1/2014 | | 11,013 | | | | 9.0800 | | 5/1/2021 | | | | | | | | | | | | | 5/1/2015 | | 64,202 | | | | 10.8900 | | 5/1/2025 | | | | | | | | | | | | | 5/1/2016 | | 82,949 | | | | 10.0600 | | 5/1/2026 | | | | | | | | | | | | | 5/1/2017 | | 56,049 | | 18,684 | | 13.0900 | | 5/1/2027 | | 21,733 | | 274,493 | | | | | | | | | 2/28/2018 | | | | | | | | | | 3,861 | | 48,766 | | | | | | | | | 5/1/2018 | | 67,829 | | 67,829 | | 14.8100 | | 5/1/2028 | | 26,724 | | 337,524 | | 53,449 | | 675,061 | | | | | 2/28/2019 | | | | | | | | | | 8,901 | | 112,417 | | | | | | | | | 5/1/2019 | | 44,175 | | 132,526 | | 13.7700 | | 5/1/2029 | | 26,661 | | 336,732 | | 53,324 | | 673,477 | | | | | 5/1/2020 | | | | 253,378 | | 8.5700 | | 5/1/2030 | | 45,247 | | 571,468 | | 90,494 | | 1,142,937 | | | Andrew J. Harmening | | 5/1/2017 | | 30,026 | | 10,009 | | 13.0900 | | 5/1/2027 | | 11,643 | | 147,050 | | | | | | | | | 2/28/2018 | | | | | | | | | | 2,903 | | 36,665 | | | | | | | | | 5/1/2018 | | 58,139 | | 58,140 | | 14.8100 | | 5/1/2028 | | 22,906 | | 289,306 | | 45,814 | | 578,626 | | | | | 2/28/2019 | | | | | | | | | | 5,321 | | 67,206 | | | | | | | | | 5/1/2019 | | 41,230 | | 123,691 | | 13.7700 | | 5/1/2029 | | 24,884 | | 314,282 | | 49,769 | | 628,578 | | | | | 5/1/2020 | | | | 253,378 | | 8.5700 | | 5/1/2030 | | 45,247 | | 571,468 | | 90,494 | | 1,142,937 | | | Jana J. LItsey | | 2/28/2018 | | | | | | | | | | 2,540 | | 32,074 | | | | | | | | | 5/1/2018 | | 43,604 | | 43,605 | | 14.8100 | | 5/1/2028 | | 17,180 | | 216,979 | | 34,359 | | 433,959 | | | | | 2/28/2019 | | | | | | | | | | 7,630 | | 96,365 | | | | | | | | | 5/1/2019 | | 35,340 | | 106,021 | | 13.7700 | | 5/1/2029 | | 21,329 | | 269,383 | | 42,659 | | 538,779 | | | | | 5/1/2020 | | | | 211,148 | | 8.5700 | | 5/1/2030 | | 37,706 | | 476,221 | | 75,411 | | 952,443 | |
(1) | Huntington Bancshares Incorporated 2023 Proxy Statement | 97 |
Back to Contents (1) Awards of stock options become exercisable in four equal annual increments from the date of grant and are fully vestedgrant. date. (2) Represents the closing market price of our common stock on the fourth anniversary. | (2) | The awardsdate of the stock option award.(3) Awards of RSUs granted on May 1 each year through 2020, March 26, 2021, or March 1, 2022, vest over a period of four years, with 50% of the award vesting on the three-yearthird anniversary of the grant date, of grant and 50% of the award vesting on the fourth anniversary of the date of grant. Each other awardgrant date. Awards of RSUs reflected in this column, other than with respectgranted to Mr. Wasserman, was granted in partial paymentKleinman on February 28, 2020 and February 26, 2021, as part of annual incentive earned under the MIP and vestsCapital Markets Incentive Plan, vest in three equal increments over a period of three years commencing on the first anniversary of the grant date. 70% of the award of 209,827 RSUs granted on April 11, 2022 to Mr. Standridge in connection with his joining Huntington vests on the second anniversary of the grant date, and the remaining 30% vests on the third anniversary of grant.the grant date. 20% of the award of 121,613 RSUs granted on April 11, 2022 to Mr. Standridge in connection with his joining Huntington vests on the first anniversary of the grant date, 20% vests on the second anniversary of the grant date, 40% vests on the third anniversary of the grant date, and 20% vests on the fourth anniversary of the grant date. Awards reflect the impact of dividend reinvestment. |
dividends accrued on the award shares, which are not paid unless and until the awards vest, as applicable. 88 | Huntington Bancshares Incorporated |
(4) Table of Contents
Compensation of Executive Officers
(3) | The market value of the awards of RSUs that have not yet vested was determined by multiplying the closing price of a share of Huntington common stock on December 31, 202030, 2022 ($12.63)14.10) by the number of units. | (4) | (5) The PSUs reported in these columns will vest subject to achievement of the applicable performance goals as of the end of a three-year performance period. Each PSU is equal to one share of common stock. The number of PSUs and the market value reported were determined on the basis of achieving 180% of target performance goals. goals for the awards granted in 2020, 180% of target performance goals for the awards granted in 2021, and 150% of target performance goals for the awards granted in 2022. Performance for the PSUs granted on May 1, 2020 will be determined and certified by the HR and Compensation Committee in April 2023, and reflect the impact of dividend reinvestment. (6) The market value of the awards of PSUs that have not yet vested was determined by multiplying the closing price of a share of Huntington common stock on December 31, 202030, 2022 ($12.63)14.10) by the number of units. The PSUs granted on May 1, 2018 vested on December 31, 2020; awards will be released effective May 1, 2021 after final award values are determined and certified by the Compensation Committee. Awards reflect the impact of dividend reinvestment. |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 98 |
Back to Contents Option Exercises and Stock Vested 20202022The table below sets forth the number of shares that were acquired upon the exercise of options and the vesting of RSUs in 2020.2022. Also included are shares acquired from the vesting of PSU awards for the cycle that ended December 31, 2019.2021. These shares were released on April 21, 2020.May 1, 2022. Not reflected are shares to be received for the three-year PSU performance cycle that ended on December 31, 2020;2022, performance for which will be certified by the HR and Compensation Committee expects to certify the results and determine the final award values effective May 1, 2021.in April 2023. Name | Option Awards | | Stock Awards | Number of
Shares Acquired
on Exercise
(#) | Value Realized
on Exercise
($)(1) | Number of Shares
Acquired on Vesting
(#) | Value Realized
on Vesting
($)(1) | Stephen D. Steinour | | 19,122 | | 55,130 | | 400,287 | | 5,287,555 | Zachary J. Wasserman | | 79,180 | | 442,748 | | 51,338 | | 789,573 | Brant J. Standridge | | — | | — | | — | | — | Paul G. Heller | | 73,285 | | 344,102 | | 118,116 | | 1,564,318 | Scott D. Kleinman | | 50,676 | | 348,144 | | 33,015 | | 478,334 | (1) The value realized upon exercise of options reflects the difference between the market value of the shares on the exercise date and the exercise price of the options. The value realized upon vesting of stock awards (RSUs and PSUs) was determined by multiplying the number of shares by the market value on the vesting date. Mr. Steinour deferred 280,671 shares acquired upon vesting pursuant to the terms of the EDCP described below. |
| | | Option Awards | | Stock Awards | | | Name | | Number of Shares
Acquired on
Exercise
(#) | | Value Realized
on Exercise
($)(1) | | Number of Shares
Acquired on Vesting
(#) | | Value
Realized on
Vesting
($)(1) | | | Stephen D. Steinour | | 558,552 | | 3,309,204 | | 357,511 | | 4,540,225 | | | Zachary J. Wasserman | | — | | — | | 19,811 | | 365,411 | | | Paul G. Heller | | — | | — | | 93,450 | | 1,314,922 | | | Andrew J. Harmening | | — | | — | | 42,159 | | 537,556 | | | Jana J. Litsey | | — | | — | | 13,101 | | 166,921 | |
(1) | The value realized upon exercise of options reflects the difference between the market value of the shares on the exercise date and the exercise price of the options. The value realized upon vesting of stock awards (RSUs and PSUs) was determined by multiplying the number of shares by the market value on the vesting date. Mr. Steinour deferred 155,156 shares and Ms. Litsey deferred 8,657 shares, respectively, acquired upon vesting pursuant to the terms of the Executive Deferred Compensation Plan described below. |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 99 |
Table ofBack to Contents
Compensation of Executive Officers
Nonqualified Deferred Compensation 20202022The named executive officersNEOs were eligible to defer compensation during 2020 on a non-qualified basis2022 under the Executive Deferred Compensation Plan, referred to as the EDCP.EDCP, a nonqualified plan. An additional plan providing for deferral of compensation on a non-qualified basis was frozen as of December 31, 2019: the Huntington Supplemental 401(k) Plan (formerly the Huntington Supplemental Stock Purchase and Tax Savings Plan and Trust) referred to as the Huntington Supplemental Plan. For each named executive officer,NEO, information about participation in the Supplemental PlanEDCP and the EDCPHuntington Supplemental Plan is contained in the table below. Name | Executive
Contributions in
Last Fiscal Year
($)(1) | Registrant
Contributions in
Last Fiscal Year
($) | Aggregate
Earnings (Loss) in
Last Fiscal Year
($) | Aggregate
Withdrawals/ Distributions
($) | Aggregate Balance at
Last Fiscal
Year End
($)(2) | Stephen D. Steinour | | | | | | EDCP | | 3,690,825 | | — | | (1,297,672) | | — | | 39,428,866 | Huntington Supplemental Plan | | — | | — | | (60,942) | | — | | 1,242,226 | Zachary J. Wasserman | | | | | | | | | | | EDCP | | 33,594 | | — | | (23,410) | | — | | 88,066 | Huntington Supplemental Plan | | — | | — | | — | | — | | — | Brant J. Standridge | | | | | | | | | | | EDCP | | — | | — | | — | | — | | — | Huntington Supplemental Plan | | — | | — | | — | | — | | — | Paul G. Heller | | | | | | | | | | | EDCP | | 750,000 | | — | | (313,326) | | — | | 1,643,516 | Huntington Supplemental Plan | | — | | — | | (10,156) | | — | | 128,282 | Scott D. Kleinman | | | | | | | | | | | EDCP | | — | | — | | — | | — | | — | Huntington Supplemental Plan | | — | | — | | — | | — | | — | (1) The amounts shown in this column are included in the “Salary” column in the Summary Compensation Table for Messrs. Steinour, Wasserman, and Heller. (2) The year-end balances in this column reflect the impact of employer matching contributions made under the Huntington Supplemental Plan and reported as compensation for the named executive officers for 2019 in the Summary Compensation Table under “All Other Compensation” as follows: $32,800 for Mr. Steinour and $13,800 for Mr. Heller. |
| Name | | Executive
Contributions
in Last
Fiscal Year
($) | | | Registrant
Contributions
in Last
Fiscal Year
($) | | | Aggregate
Earnings (Loss)
in Last
Fiscal Year
($) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate
Balance at
Last Fiscal
Year End
($)(1) | | | Stephen D. Steinour | | | | | | | | | | | | | | | | | | | | | | EDCP | | | 1,329,690 | | | | — | | | | (1,984,835 | ) | | | 0 | | | | 24,647,175 | | | Supplemental Plan | | | — | | | | — | | | | (110,124 | ) | | | 0 | | | | 1,024,229 | | | Zachary J. Wasserman | | | | | | | | | | | | | | | | | | | | | | EDCP | | | 31,250 | | | | — | | | | 5,504 | | | | 0 | | | | 36,755 | | | Supplemental Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | Paul G. Heller | | | | | | | | | | | | | | | | | | | | | | EDCP | | | 227,500 | | | | — | | | | (5,233 | ) | | | 0 | | | | 112,624 | | | Supplemental Plan | | | — | | | | — | | | | 116,797 | | | | 0 | | | | 596,815 | | | Andrew J. Harmening | | | | | | | | | | | | | | | | | | | | | | EDCP | | | 375,000 | | | | — | | | | 22,709 | | | | 0 | | | | 710,199 | | | Supplemental Plan | | | — | | | | — | | | | (5,832 | ) | | | 0 | | | | 81,464 | | | Jana J. LItsey | | | | | | | | | | | | | | | | | | | | | | EDCP | | | 83,718 | | | | — | | | | 1,721 | | | | 0 | | | | 876,950 | | | Supplemental Plan | | | — | | | | — | | | | 6,878 | | | | 0 | | | | 45,162 | |
(1) | The year-end balances in this column reflect the impact of employer matching contributions made under the Supplemental 401(k) Plan and reported as compensation for the named executive officers for 2019 and 2020 in the Summary Compensation Table under “All Other Compensation” as follows: $68,539 for Mr. Steinour, $0 for Mr. Wasserman, $30,146 for Mr. Heller, $36,569 for Mr. Harmening, and $12,262 for Ms. Litsey.Huntington Bancshares Incorporated 2023 Proxy Statement | 100 |
Back to Contents The Executive Deferred Compensation PlanThe EDCP provides senior officers designated by the HR and Compensation Committee the opportunity to defer up to 90% of base salary, annual bonusincentive compensation, and certain equity awards. An election to defer can only be made on an annual basis and is generally irrevocable. Generally, contributionsContributions to this plan generally consist of compensation deferred by the participants. Deferrals of common stock are held as common stock until distribution. Cash amounts deferred will accrue interest, earnings, and losses based on the performance of the investment option selected by the participant and tracked by a book-keepingbookkeeping account. Contributions canEquity awards will accrue earnings and losses based on the performance of Huntington stock unless diversified, which may be investeddone after vesting. Investment options in investment optionsthe EDCP are similar to those available under the 401(k) Plan. 90 | Huntington Bancshares Incorporated |
Table of Contents
Compensation of Executive Officers
At the time of each deferral election, a participant elects the method and timing of account distribution to be effective upon a separation of service. In addition, a participant may elect an in-service distribution. Accounts distributed upon a separation of service may be distributed in a single lump sum payment or in installments. A participant may request a hardship withdrawal prior to a separation of service. In addition, for amounts earned and vested on or before December 31, 2004, a participant may obtain an in-service withdrawal subject to a 10% penalty and suspension of future contributions for at least 12 months. Cash that is deferred is paid out in cash, except that any cash that is invested in our common stock atAt the time of distribution, amounts for which Huntington common stock is the investment selected will be distributed in-kind, while all other selected investments are distributed in shares. Common stock that is deferred is distributed in kind.cash. The Huntington Supplemental 401(k) PlanThe purpose of the Huntington Supplemental Plan, which was frozen as of December 31, 2019, was to provide a supplemental savings program for eligible employeescolleagues (as determined by the HR and Compensation Committee) who may otherwise be limited by Internal Revenue Code limits to the Huntington 401(k) Plan, a tax qualified 401(k) plan referred to as the 401(k) Plan.plan. Eligible individuals could elect to participate in the Supplemental Plan and designate the percentage of base pay to be contributed to the Huntington Supplemental Plan — between 1% and 75% of base pay — prior to the beginning of each Plan year. All contributions to the Huntington Supplemental Plan were made on a pretaxpre-tax basis. We then matched contributions up to 100% on the first 4% of base compensation over the 401(k) Plan eligible compensation. Under the Huntington Supplemental Plan, employee contributions could be invested in any of the available investment alternatives similar to the 401(k) Plan. Our matching contributions were invested in Huntington common stock but could be diversified at any time. A participant cannot receive a distribution of any part of their Huntington Supplemental Plan account until his or hertheir employment terminates. Once employment terminates, shares of common stock in a participant’s account are to be distributed to the participant in-kind. Distributions from the Huntington Supplemental Plan are subject to federal and state income tax withholding. The table below sets forth the rate of return for the one-year period ending December 31, 2020 for each of the investment options under the Supplemental Plan and the EDCP.
| AF EUROPAC GROWTH R6 | | 25.27% | | VANG INST TR 2020 | | 12.09% | | | FID EXTD MKT IDX | | 32.16% | | VANG INST TR 2025 | | 13.34% | | | FID US BOND IDX | | 7.80% | | VANG INST TR 2030 | | 14.10% | | | FID 500 INDEX | | 18.40% | | VANG INST TR 2035 | | 14.80% | | | FID TOTAL INTL IDX | | 11.07% | | VANG INST TR 2040 | | 15.44% | | | HUNTINGTON STOCK | | (11.12)% | | VANG INST TR 2045 | | 16.17% | | | PGIM TOTAL RTN BD R6 | | 8.10% | | VANG INST TR 2050 | | 16.33% | | | PIM LOW DUR INST | | 3.41% | | VANG INST TR 2055 | | 16.36% | | | TRP INST SM CAP STK | | 25.00% | | VANG INST TR 2060 | | 16.40% | | | VANG EQUITY INC ADM | | 3.13% | | VANG INST TR 2065 | | 16.18% | | | VANG INFL PROT INST | | 11.05% | | VANG INST TR INCOME | | 10.18% | | | VANG GROWTH IDX ADM | | 40.19% | | VANG TREASURY MM | | 0.47% | | | VANG INST TR 2015 | | 10.42% | | VANG WELLINGTON ADM | | 10.68% | |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 101 |
Table ofBack to Contents
Compensation of Executive Officers
Pension Benefits 20202022Huntington’sThe Retirement Plan and Supplemental Retirement Income Plan, the SRIP were frozen as of December 31, 2013. Only employeescolleagues hired before January 1, 2010, are eligible to participate in these plans, as frozen. Mr.plans. Messrs. Steinour isand Kleinman are the only named executive officerNEOs participating in these plans. The table below presents information for the named executive officersMessrs. Steinour and Kleinman under the Retirement Plan and the SRIP.
Name | Plan Name | Number of Years
of Credited Service
(#)(1) | Present Value of
Accumulated Benefit
($)(2) | Payments During
Last Fiscal Year
($) | Stephen D. Steinour | Retirement Plan | 5 | 166,784 | — | SRIP | 5 | 1,002,774 | — | Scott D. Kleinman | Retirement Plan | 22.5 | 546,756 | — | (1) Years of credited service reported in the table are the final years of credited service, frozen as of December 31, 2013. (2) This column reflects the actuarial present value of the NEO’s accumulated benefit under the Retirement Plan and the SRIP as of December 31, 2022. The valuation method used to determine the benefit figures shown, and all material assumptions applied, are discussed in Note 17 “Benefit Plans” of the Notes to Consolidated Financial Statements for the fiscal year ended December 31, 2022. |
| Name | | Plan Name | | | Number of Years
of Credited
Service
(#)(1) | | | | Present Value
of Accumulated
Benefit
($)(2) | | | | Payments
During Last
Fiscal Year
($) | | | Stephen D. Steinour | | | | | | | | | | | | | | | | | | Retirement Plan | | | 5.0000 | | | | 181,955 | | | | 0 | | | | | SRIP | | | 5.0000 | | | | 1,320,727 | | | | 0 | | | Zachary J. Wasserman | | | | | | | | | | | | | | | | | | Retirement Plan | | | N/A | | | | N/A | | | | N/A | | | | | SRIP | | | N/A | | | | N/A | | | | N/A | | | Paul G. Heller | | | | | | | | | | | | | | | | | | Retirement Plan | | | N/A | | | | N/A | | | | N/A | | | | | SRIP | | | N/A | | | | N/A | | | | N/A | | | Andrew J. Harmening | | | | | | | | | | | | | | | | | | Retirement Plan | | | N/A | | | | N/A | | | | N/A | | | | | SRIP | | | N/A | | | | N/A | | | | N/A | | | Jana J. Litsey | | | | | | | | | | | | | | | | | | Retirement Plan | | | N/A | | | | N/A | | | | N/A | | | | | SRIP | | | N/A | | | | N/A | | | | N/A | | | | | | | | | | | | | | | | | | | | | Retirement Plan | | | N/A | | | | N/A | | | | N/A | | | | | SRIP | | | N/A | | | | N/A | | | | N/A | |
(1) | Years of credited service reported in the table are the final years of credited service, frozen as of December 31, 2013. | | | (2) | This column reflects the actuarial present value of the executive officer’s accumulated benefit under the Retirement Plan and the SRIP as of December 31, 2020. The valuation method used to determine the benefit figures shown, and all material assumptions applied, are discussed in Note 18 “Benefit Plans” of the Notes to Consolidated Financial Statements for the fiscal year ended December 31, 2020. |
The NEOs other than Mr. SteinourMessrs. Wasserman, Standridge, and Heller were hired after January 1, 2010 and are not eligible to participate in the Retirement Plan.Plan or the SRIP. Eligibility for participation in the SRIP is limited to employeescolleagues eligible to participate in the Retirement Plan who (a) have been nominated by the HR and Compensation Committee; and (b) earn compensation in excess of the limitation imposed by Internal Revenue Code Section 401(a)(17) or whose benefit exceeds the limitation of Code Section 415(b).
Benefits under both the Retirement Plan and the SRIP are based on levels of compensation and years of credited service. Benefits under the SRIP, however, are not limited by Code Sections 401(a)(17) and 415(b). Code Section 401(a)(17) limits the annual amount of compensation that may be taken into account when calculating benefits under the Retirement Plan. For 2020,2022, this limit was $285,000.$305,000. Code Section 415415(b) limits the annual benefit amount that a participant may receive under the Retirement Plan. For 2020,2022, this amount was $230,000.$245,000. 92 | Huntington Bancshares Incorporated |
Table of Contents
Compensation of Executive Officers
The benefit formula under the Retirement Plan was previously revised for benefits earned beginning on January 1, 2010. While the change did not affect the benefit earned under the Retirement Plan through December 31, 2009, there was a reduction in future benefits. The benefit earned in the Retirement Plan prior to January 1, 2010 is based on compensation earned in the five consecutive highest years of service. For service on and after January 1, 2010 and through December 31, 2013, the benefit earned in the Retirement Plan is based on compensation earned each year. For executives who are eligible for retirement or early retirement, the benefit earned in the SRIP is based on compensation earned in the five consecutive highest years of service and the Retirement Plan formula in effect on December 31, 2009. For executives who are not eligible for retirement or early retirement, the accrued benefit under the SRIP is based on the Retirement Plan formula in effect on and after January 1, 2010. Compensation consists of base salary and 50% of overtime, bonuses, incentives, and commissions paid pursuant to plans with a measurement period of one year or less. Bonuses are taken into account in the year paid rather than earned. A participant who is at least 55 years of age with at least 10 years of service may retire and receive an early retirement benefit, reduced to reflect the fact that he or shethey will be receiving payments over a longer period of time. Mr. Steinour is eligible for early retirement under the Retirement Plan and the SRIP. The years of credited service have been capped for participants to the actual years of service with us through December 31, 2013, the date the plans were frozen. The maximum years of credited service recognized by the Retirement Plan and the SRIP is 40. Benefit figures shown are computed on the assumption that participants retire at age 65, the normal retirement age specified in the plans. The normal form of benefit under the Retirement Plan is a life annuity. The Retirement Plan offers additional forms of distribution that are actuarially equivalent to the life annuity. Benefits with a present value greater than the applicable dollar limit under Code Section 402(g) ($19,50020,500 for 2020)2022) are paid from the SRIP in the form of a life annuity. The SRIP also offers additional forms of distribution that are actuarially equivalent to the life annuity. Benefits with a present value equal to or less than the applicable dollar limit under Code Section 402(g) are paid in the form of a lump sum distribution. | Huntington Bancshares Incorporated 2023 Proxy Statement | 102 |
Back to Contents Payments upon Termination of Employment or Change in ControlEach of our named executive officersthe NEOs has a change in controlchange-in-control agreement with us referred to as an Executive Agreement. The purposes of these agreements are to encourage retention of our key executives and to provide protection from termination related to a change in control of our company.Company. These agreements do not include a “golden parachute” excise tax gross-up provision or a right to terminate employment as a result of a change-in control.change-in-control. In addition, these agreements contain restrictions relating to the disclosure of confidential information and competing with Huntington (three-year non-competition for the chief executive officer,CEO, and one-year non-competition for the other named executive officers,NEOs, post termination). Huntington has an employment agreement with Mr. Steinour pursuant to which Mr. Steinour will continue to serve as Huntington’s presidentPresident and chief executive officerCEO through December 31, 2022.2025. The agreement was entered into as of December 1, 2012, for an initial term that ended on December 31, 2016, subject to three-year renewal periods upon expiration of the initial term and each renewal term, unless either party gives timely notice of nonrenewal. Mr. Steinour’s employment agreement provides for certain payments to him upon termination in certain situations other than a change in control. In addition, each of the named executive officersNEOs has outstanding RSU awards, and Messrs. Steinour, Wasserman, Heller, and Kleinman have outstanding PSU awards whichthat may be subject to accelerated vesting upon involuntary termination (not for cause), death, or disability. Table of Contents
Compensation of Executive Officers
Executive AgreementsUnder the Executive Agreements, change in control generally includes: the acquisition by any person of beneficial ownership of 25% or more of our outstanding voting securities; • | the acquisition by any person of beneficial ownership of 25% or more of our outstanding voting securities; | • | a change in the composition of the board of directors if a majority of the new directors were not appointed or nominated by the directors currently sitting on the board of directors or their subsequent nominees; | • | a merger involving our company where our shareholders immediately prior to the merger own less than 51% of the combined voting power of the surviving entity immediately after the merger; | • | the dissolution of our company; and | • | a disposition of assets, reorganization, or other corporate event involving our company which would have the same effect as any of the above-described events. |
a change in the composition of the Board if a majority of the new Directors were not appointed or nominated by the Directors currently sitting on the Board or their subsequent nominees; a merger involving our Company where our shareholders immediately prior to the merger own less than 51% of the combined voting power of the surviving entity immediately after the merger; the dissolution of our Company; and a disposition of assets, reorganization, or other corporate event involving our Company that would have the same effect as any of the above-described events. Under each Executive Agreement, we, or our successor, will provide severance benefits to the executive officer if histheir employment is terminated (other than on account of the officer’s death or disability or for cause): by us, at any time within 24 months after a change in control; • | by us, at any time within 24 months after a change in control; | • | by us, at any time prior to a change in control but after commencement of any discussions with a third party relating to a possible change in control involving such third party if the executive officer’s termination is in contemplation of such possible change in control and such change in control is actually consummated within 12 months after the date of such executive officer’s termination; | • | by the executive officer voluntarily with good reason at any time within 24 months after a change in control of our company; and | • | by the executive officer voluntarily with good reason at any time after commencement of change in control discussions if such change in control is actually consummated within 12 months after the date of such officer’s termination. |
by us, at any time prior to a change in control but after commencement of any discussions with a third party relating to a possible change in control involving such third party if the executive officer’s termination is in contemplation of such possible change in control and such change in control is actually consummated within 12 months after the date of such executive officer’s termination; by the executive officer voluntarily with good reason at any time within 24 months after a change in control of our company; and by the executive officer voluntarily with good reason at any time after commencement of change in control discussions if such change in control is actually consummated within 12 months after the date of such officer’s termination. Good reason generally means the assignment to the executive officer of duties which are materially different from such duties prior to the change in control, a reduction in such officer’s salary or benefits, or a demand to relocate to an unacceptable location, made by us or our successor either after a change in control or after the commencement of change in control discussions if such change or reduction is made in contemplation of a change in control and such change in control is actually consummated within 12 months after such change or reduction. An executive officer’s determination of good reason will be conclusive and binding upon the parties if made in good faith. | Huntington Bancshares Incorporated 2023 Proxy Statement | 103 |
Back to Contents In addition to any accrued salary and annual cash incentive payable as of termination, severance payments and benefits under the Executive Agreements consist of: • | a lump-sum cash payment equal to three times annual base salary for the chief executive officer and two and one-half times annual base salary for each of the other named executive officers; | • | a lump-sum cash payment equal to three times for the chief executive officer, and two and one-half times for the other named executive officers, of the greater of the executive’s target annual incentive award for the calendar year during which the change in control occurs or the immediately preceding calendar year, provided the executive was a participant in the Management Incentive Plan during the calendar year, or the immediately preceding calendar year; | • | a pro-rata annual incentive award paid upon a change in control under the Management Incentive Plan based on either the actual level of year-to-date performance, or the target award as a percent of base salary for the plan year preceding the change in control, whichever is greater, in accordance with the terms of the Management Incentive Plan; | • | 36 months of continued insurance benefits for the chief executive officer, and 30 months for the other named executive officers; | • | fees for outplacement services for the executive up to a maximum amount equal to 15% of the executive’s annual base salary plus reimbursement for job search travel expenses up to $5,000; |
94 | Huntington Bancshares Incorporated |
Compensationa lump-sum cash payment equal to three times for the CEO, and two and one-half times for the other NEOs, of Executive Officersthe greater of the executive’s target annual incentive award for the calendar year during which the change in control occurs or the immediately preceding calendar year, provided the executive was a participant in the MIP during the calendar year, or the immediately preceding calendar year;
a pro rata annual incentive award paid upon a change in control under the MIP based on either the actual level of year-to-date performance, or the target award as a percent of base salary for the plan year preceding the change in control, whichever is greater, in accordance with the terms of the MIP; • | stock options, restricted stock, RSU, and PSU awards under our stock and incentive plans become vested according to the terms of the plans; and | • | other benefits to which the executive was otherwise entitled including perquisites, benefits, and service credit for benefits. |
36 months of continued insurance benefits for the CEO, and 30 months for the other NEOs; fees for outplacement services for the executive up to a maximum amount equal to 15% of the executive’s annual base salary plus reimbursement for job search travel expenses up to $5,000; stock options, restricted stock, RSU, and PSU awards under our stock and incentive plans become vested according to the terms of the plans; and other benefits to which the executive was otherwise entitled including perquisites, benefits, and service credit for benefits. The Executive Agreements also provide for 36 months of additional service credited for purposes of retirement benefits for the chief executive officerCEO and 30 months for the other named executive officers.NEOs. Because the Retirement Plan and the SRIP were frozen as of December 31, 2013, this provision will not operate to increase accrued benefits under these plans. Additional service and compensation earned after the freeze date are not included in the calculation of benefits under the Executive Agreements. The additional service period will count for purposes of determining vesting or entitlement to early retirement benefits under these plans. The chief executive officerCEO and Mr. Kleinman are participants in the Retirement Plan; the CEO is the only NEO participating in the Retirement Plan and the SRIP. The Executive Agreements have a best-net-benefit clause which replaced the excise tax gross-ups. If an executive triggers the excise tax, the individual will either be “cut-back” to an amount that is $1 less than such amount that would cause the excise tax, or the executive will have the opportunity to pay the excise tax himself,themselves, depending on the result that provides the better after-tax result. For a period of five years after any termination of the executive officer’s employment, we will provide the executive officer with coverage under a standard directors’ and officers’ liability insurance policy at our expense, and will indemnify, hold harmless, and defend the officer to the fullest extent permitted under Maryland law against all expenses and liabilities reasonably incurred by the officer in connection with or arising out of any action, suit, or proceeding in which hethe officer may be involved by reason of having been a directorDirector or officer of our companyCompany or any subsidiary. In the event an executive officer is required to enforce any of the rights granted under his Executive Agreement, we, or our successor, will pay the cost of counsel (legal and accounting). In addition, the executive officer is entitled to prejudgment interest on any amounts found to be due in connection with any action taken to enforce such officer’s rights under the Executive Agreement. As a condition to receiving the payments and benefits under the Executive Agreements, the executive officer will be required to execute a release. Severance benefits payable in a lump sum will be paid not later than 45 business days following the date the executive’s employment terminates, subject to applicable laws and regulations. The Executive Agreements are extended annually and are subject to an extension for 24 months upon a change in control. An Executive Agreement will terminate if the executive officer’s employment terminates under circumstances that do not trigger benefits under the agreement. We may elect not to renew an agreement upon 30 days prior written notice. The estimated payments and benefits that would be paid in the event each named executive officerNEO terminated employment on December 31, 20202022 and became entitled to benefits under his or hertheir Executive Agreement are set forth below. For purposes of quantifying these benefits, we assumed that a change in control occurred on December 31, 20202022, and that the executive officer’s employment was terminated on that date without cause. The closing price of a share of our common stock on December 31, 2020,30, 2022, the last business day of the year, was $12.63.$14.10. | Name | | Cash
Severance(1) | | Pro-Rata
Bonus
Value(2) | | Total Out-
placement
Value(3) | | Total
Welfare
Value(4) | | Additional
Retirement
Value(5) | | Performance
Contingent
Equity
Value(6) | | Time-Based
Equity Accel.
Value(7) | | Scale Back
Amount, if
Applicable(8) | | Final
Benefit(9) | | Steinour | | 9,075,000 | | 1,925,000 | | 170,000 | | 56,220 | | 0 | | 12,445,898 | | 7,648,156 | | 0 | | 31,320,274 | | Wasserman | | 3,125,000 | | 725,000 | | 98,750 | | 48,779 | | 0 | | 1,202,935 | | 2,386,547 | | 0 | | 7,587,011 | | Heller | | 3,359,375 | | 750,000 | | 98,750 | | 56,795 | | 0 | | 3,466,337 | | 2,710,114 | | 0 | | 10,441,371 | | Harmening | | 3,359,375 | | 750,000 | | 98,750 | | 56,473 | | 0 | | 3,254,335 | | 2,454,692 | | 0 | | 9,973,625 | | Litsey | | 3,125,000 | | 625,000 | | 98,750 | | 46,850 | | 0 | | 2,662,042 | | 1,948,284 | | 0 | | 8,505,926 |
(1) | Multiple of base salary and target annual incentive, payable in a lump sum. | | | | (2) | Reflects bonuses as payable under the terms of the Management Incentive Plan for a change-in-control. |
2021Huntington Bancshares Incorporated 2023 Proxy Statement | 95104 |
Back to Contents Name | Cash Severance
$(1) | Pro Rata Bonus
Value
$(2) | Total Out- placement Value
$(3) | Total Welfare Value
$(4) | Additional Retirement Value
$(5) | Performance Contingent Equity
Value
$(6) | Time-Based Equity Accel. Value
$(7) | Scale Back Amount, if Applicable
$(8) | Final
Benefit
$(9) | Steinour | 9,900,000 | 3,410,000 | 170,000 | 59,423 | — | 17,720,629 | 7,857,392 | — | 39,117,444 | Wasserman | 3,762,500 | 1,400,000 | 110,000 | 67,758 | — | 4,953,438 | 2,551,612 | — | 12,845,308 | Standridge | 4,531,250 | 1,750,000 | 113,750 | 68,066 | — | — | 4,787,633 | — | 11,250,699 | Heller | 3,896,875 | 1,400,000 | 113,750 | 56,350 | — | 5,897,346 | 3,223,901 | (89,231) | 14,498,991 | Kleinman | 3,493,750 | 1,250,000 | 102,500 | 76,886 | 205,921 | 4,679,821 | 2,568,582 | — | 12,377,460 | (1) Multiple of base salary and target annual incentive, payable in a lump sum. (2) Reflects bonuses as payable under the terms of the MIP for a change in control. (3) Reflects 15% of base salary plus $5,000 for job search travel. (4) Reflects 36 and 30-months of benefits for the CEO and other NEOs, respectively. (5) Present value of accelerated vesting of retirement benefits and additional 36 and 30 months of credited service under the Retirement Plan and SRIP for the CEO and other NEOs, respectively. Mr. Steinour is the only NEO participating in the SRIP. He has ten years of vesting / eligibility service and has attained early retirement eligibility as of December 31, 2022. As a result, there is no additional benefit to him as a result of a change in control. Mr. Kleinman is currently vested in his Retirement Plan benefits but has not reached early retirement eligibility. The amount reflects the additional value that would result from attaining early retirement eligibility once the additional months are added to his age. (6) For PSUs, full values of the 2020, 2021, and 2022 awards based on the estimated performance as of December 31, 2022; includes dividend equivalents. (7) In-the-money value of time-based unvested stock options and RSUs; includes dividend equivalents. (8) Mr. Steinour would not be subject to excise taxes if terminated following a change in control of Huntington on December 31, 2022; Mr. Heller would be in a better after-tax position by scaling his payments back to the Safe Harbor; and Messrs. Wasserman, Standridge, and Kleinman would be in a better after-tax position when paying the excise tax liability themselves. (9) The total benefit to the executive under a change in control of the Company and termination of employment. |
Table of Contents
Compensation of Executive Officers
(3) | Reflects 15% of base salary plus $5,000 for job search travel. | (4) | Reflects 36 and 30-months of benefits for the CEO and other named executive officers, respectively. | (5) | Value of additional 36 months of credited service under the SRIP for the CEO. Mr. Steinour is the only named executive officer participating in that plan. He has ten years of vesting / eligibility service and has attained early retirement eligibility as of December 31, 2020. As a result, there is no additional benefit to him as a result of the change-in-control. | (6) | For performance share units (PSUs), prorated values of the 2018 awards, and full values of the 2019 and 2020 awards based on the estimated performance as of December 31, 2020; includes dividend equivalents. | (7) | In-the-money value of time-based unvested stock options and RSUs; includes dividend equivalents. | (8) | Messrs. Steinour and Heller would not be subject to excise taxes if terminated following a change-in-control of Huntington on December 31, 2020; Messrs. Wasserman and Harmening and Ms. Litsey would be in a better after-tax position when paying the excise tax liability themselves. | (9) | The total benefit to the executive under a change-in-control of the company and termination of employment. |
Mr. Steinour’s Employment AgreementMr. Steinour’s employment agreement provides for certain payments upon a termination of his employment without “cause” or for “good reason” (each as defined in the agreement). The potential payments under these agreements are described and quantified below. Upon termination without “cause” or for “good reason”,reason,” Mr. Steinour is entitled to payment of the following amounts: • | accrued amounts consisting of unpaid base salary through termination, earned but unpaid annual incentive payments for the prior period, accrued and unused paid time off, and incurred but unreimbursed business expenses; | • | a pro-rata incentive payment in respect of the fiscal year of the company in which the date of termination occurs, with such amount to equal the amount determined by the Compensation Committee based on the company’s actual performance for the fiscal year in which the date of termination occurs and otherwise on a basis no less favorable than annual incentive award determinations are made by the Compensation Committee for the company’s executive officers; and | • | a severance payment equal to two times the sum of (x) his annual base salary and (y) the higher of the target incentive payment for the year of termination or the incentive payment paid or payable with respect to the prior fiscal year; and |
Mr. Steinour would also be entitled to payment and provision of any other amounts or benefits to which he was otherwise entitled.
If Mr. Steinour had terminated employment with us without “cause” or for “good reason” as of December 31, 2020, he would have been entitled to, in addition to accrued amounts consisting of unpaid base salary through termination, earned but unpaid annual incentive payments for the prior period, accrued and benefits, unused paid time off, and incurred but unreimbursed business expenses;
a pro rata annual incentive payment equal to $1,830,000 and a severance payment equal to $6,050,000. If Mr. Steinour had terminated employment asin respect of December 31, 2020, due to death or disability, he or his estate would have been entitled to a pro rata annual incentive payment for the fiscal year of the Company in which the date of termination (basedoccurs, with such amount to equal the amount determined by the HR and Compensation Committee based on the company’sCompany’s actual performance for the fiscal year in which the date of termination occurs and otherwise on a basis no less favorable than annual incentive award determinations are made by the HR and Compensation Committee for the company’sCompany’s executive officers)officers; and
a severance payment equal to $1,830,000two times the sum of (x) his annual base salary and (y) the higher of the target incentive payment for the year of termination or the incentive payment paid or payable with respect to the prior fiscal year. Mr. Steinour would also be entitled to payment and provision of any other amounts or benefits to which he was otherwise entitled. If Mr. Steinour had his employment terminated by us without “cause” or if he terminated employment with us for “good reason” as of December 31, 2022, he would have been entitled to, in addition to accrued obligationsamounts and benefits.benefits, a pro rata annual incentive payment equal to $3,410,000 and a severance payment equal to $9,020,000. If Mr. Steinour had terminated employment as of December 31, 20202022, due to death or disability, he or his estate would have been entitled to a pro-rated annual incentive payment for the year of termination as described above equal to $3,410,000 and accrued obligations and benefits. If Mr. Steinour had terminated employment as of December 31, 2022 without “good reason” and due to his retirement, he would have been entitled to a pro ratapro-rated annual incentive payment for the year of termination equal to $1,830,000.$3,410,000. Severance benefits and payments are subject to execution and non-revocation of a release of claims. 96 | Huntington Bancshares Incorporated2023 Proxy Statement | 105 |
Back to Contents Table of Contents
Compensation of Executive Officers
RSUs and PSUs — Potential Accelerated VestingEach of the named executive officersNEOs has outstanding RSU awards, and Messrs. Steinour, Wasserman, Heller, and Kleinman have outstanding PSU awards, which are subject to full or partial accelerated vesting upon involuntary termination (not for cause), death, or disability.specified circumstances. The table below sets forth the value of the shares and accumulated dividends that would have been payable under outstanding grants of RSUs and PSUs to the respective officersNEOs upon involuntary termination (not for cause), death, disability, or disabilityretirement as of December 31, 2020.2022. Name | Award Type(1) | For Cause(2) | Involuntary Termination (Not for Cause)
($)(3) | Death
($)(4) | Disability
($)(5) | Retirement ($)(6) | Stephen D. Steinour | RSU | — | 5,707,023 | 5,707,023 | 5,707,023 | 5,707,023 | PSU | — | 10,356,317 | 10,356,317 | 10,356,317 | 10,356,317 | Zachary J. Wasserman | RSU | — | 583,077 | 1,967,788 | 1,386,287 | — | PSU | — | 1,995,263 | 2,921,007 | 2,671,642 | — | Brant J. Standridge | RSU | — | 1,087,138 | 4,787,633 | 4,787,633 | — | Paul G. Heller | RSU | — | 824,441 | 2,508,733 | 1,728,058 | 824,441 | PSU | — | 2,393,898 | 3,466,539 | 3,154,825 | 2,393,898 | Scott D. Kleinman(7) | RSU | — | 693,553 | 2,019,783 | 1,434,850 | — | PSU | — | 1,906,673 | 2,747,862 | 2,498,497 | — | (1) In the event accelerated vesting applies to a prorated award rather than the full award, the proration is based on the number of months from the grant date to the month of termination. The PSUs are prorated at target and adjusted to reflect the lesser of target or the most recent performance result reported to the HR and Compensation Committee. Dividends are reinvested and accumulated as additional award shares. (2) There is full forfeiture of any unvested awards in the event of termination for cause. (3) Involuntary termination (not for cause) results in accelerated vesting of a prorated number of shares, unless the executive meets the “normal retirement” provision, the award was made as an incentive to join the Company upon hiring, or the award is an incentive-based RSU, which results in continued vesting following termination. (4) Termination in the event of death results in acceleration in full for all awards. (5) Termination due to disability results in accelerated vesting of a prorated number of shares for awards granted prior to 3/1/2022 and accelerated vesting of awards granted starting on 3/1/2022, unless the executive meets the “normal retirement” provision which result in continued vesting post-termination. (6) Awards for Mr. Steinour provide for continued vesting based on the original vesting schedule following his retirement or voluntary termination because he meets the criteria for “normal retirement”. Mr. Heller’s awards provide for prorated vesting following his retirement or voluntary termination because he meets the criteria for “early retirement”. Messrs. Wasserman, Standridge, and Kleinman do not meet any retirement provisions and therefore any unvested equity awards would be forfeited upon voluntary termination or retirement. (7) Amounts for Mr. Kleinman’s RSU awards include $14,102 in cash dividends. |
Each of our NEOs other than Mr. Steinour also participates in our Transition Pay Plan available generally to all salaried colleagues that provides for certain cash severance payments in the event of a termination of employment in specified circumstances. | Name | | Award Type(1) | | For Cause(2) | | Involuntary
Termination
(Not for
Cause)($)(3) | | Death($)(4) | | Disability($)(5) | | Stephen D. Steinour | | RSU | | — | | 4,562,008 | | 4,562,008 | | 4,562,008 | | | | PSU | | — | | 8,893,196 | | 8,893,196 | | 8,893,196 | | Zachary J. Wasserman | | RSU | | — | | 182,655 | | 1,529,286 | | 1,105,984 | | | | PSU | | — | | 317,493 | | 952,443 | | 317,493 | | Paul G. Heller | | RSU | | — | | 584,542 | | 1,681,400 | | 1,008,177 | | | | PSU | | — | | 1,505,042 | | 2,491,475 | | 1,505,042 | | Andrew J. Harmening | | RSU | | — | | 441,027 | | 1,425,977 | | 530,322 | | | | PSU | | — | | 1,378,674 | | 2,350,141 | | 1,378,674 | | Jana J. Litsey | | RSU | | — | | 298,813 | | 1,091,023 | | 352,635 | | | | PSU | | — | | 1,110,649 | | 1,925,181 | | 1,110,649 |
(1) | In the event accelerated vesting applies to a prorated award rather than the full award, the proration is based on the number of months from the grant date to the month of termination. The PSUs are prorated at target and adjusted to reflect the lesser of target or the most recent performance result reported to the Compensation Committee. Dividends are reinvested and accumulated as additional award shares. | (2) | There is full forfeiture of any unvested awards in the event of termination for cause. | (3) | Involuntary termination (not for cause) results in accelerated vesting of a prorated number of shares unless the executive meets the “normal retirement” provisions which result in continued vesting post-termination. | (4) | Termination in the event of death results in acceleration in full for all awards. | (5) | Termination due to disability results in accelerated vesting of a prorated number of shares for all awards. |
| | Huntington Bancshares Incorporated 2023 Proxy Statement | 106 |
Back to Contents Pay Versus Performance DisclosureIn accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive “Compensation Actually Paid” (“CAP”) and certain performance measures for the fiscal years listed below. The CD&A describes the compensation setting process for our executive officers, which is done independently of the disclosure requirements. Pay Versus Performance TableThe following table provides the information required for our NEOs for each of the fiscal years ended December 31, 2022, December31, 2021, and December 31, 2020 along with the required financial information required for each fiscal year: | | | | | Year-end value of
$100 invested on 12/31/2019 in(6): | | | Year | Summary Compensation Table Total for Stephen
D. Steinour
($) | Compensation Actually Paid to Stephen D.
Steinour(1)(2)(3)
($) | Average Summary Compensation Table Total for Non-CEO
NEOs(5)
($) | Average Compensation Actually Paid to
Non-CEO
NEOs(1)(2)(3)(4)(5)
($) | HBAN
($) | KBW Bank Index
($) | GAAP Net Income
(in millions)
($) | Adjusted ROTCE(7) (%) | 2022 | 10,484,973 | 9,975,350 | 4,790,298 | 4,903,828 | 108.06 | 89.69 | 2,238 | 21.50 | 2021 | 9,619,178 | 21,291,057 | 4,985,771 | 7,843,730 | 113.00 | 124.06 | 1,295 | 19.10 | 2020 | 8,007,682 | 5,386,257 | 3,181,470 | 3,289,294 | 88.94 | 97.52 | 817 | 8.90 | (1) Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate CAP include: |
| 2022 | 2021 | 2020 | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Total Compensation from Summary Compensation Table | 10,484,973 | 4,790,298 | 9,619,178 | 4,985,771 | 8,007,682 | 3,181,470 | Adjustments for Pension | | | | | | | Adjustment Summary Compensation Table Pension | — | — | — | — | (203,536) | — | Amount added for current year service cost | — | — | — | — | — | — | Amount added for prior service cost impacting current year | — | — | — | — | — | — | Total Adjustments for Pension | — | — | — | — | (203,536) | — | Adjustments for Equity Awards | | | | | | | Adjustment for grant date values in the Summary Compensation Table | (5,499,987) | (2,643,460) | (5,249,976) | (899,994) | (4,499,995) | (1,374,990) | Year-end fair value of unvested awards granted in the current year | 7,062,267 | 3,086,231 | 7,400,201 | 2,169,533 | 7,797,601 | 2,355,939 | Year-over-year difference of year-end fair values for unvested awards granted in prior years | (1,056,021) | (232,212) | 7,137,162 | 1,121,351 | (1,714,840) | (361,670) | Fair values at vest date for awards granted and vested in current year | — | — | — | — | — | — | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | (1,015,882) | (98,874) | 2,384,491 | 443,854 | (4,000,655) | (511,456) |
| | | | Huntington Bancshares Incorporated 2023 Proxy Statement | 107 |
Table ofBack to Contents
Compensation of Executive Officers
| 2022 | 2021 | 2020 | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Stephen D. Steinour
($) | Average of Non-CEO NEOs
($) | Forfeitures during current year equal to prior year-end fair value | — | — | — | — | — | — | Dividends or dividend equivalents not otherwise included in total compensation | — | 1,845 | — | 23,216 | — | — | Total Adjustments for Pension | (509,623) | 113,530 | 11,671,879 | 2,857,959 | (2,417,889) | 107,824 | Compensation Actually Paid
(as calculated) | 9,975,350 | 4,903,828 | 21,291,057 | 7,843,730 | 5,386,257 | 3,289,294 | (2) The following summarizes the valuation assumptions used for stock option awards included as part of CAP: - Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/Full Year End (“FYE”) date. - Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. - Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. - Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. - Represents annual dividend yield on each vest/FYE date. |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 108 |
Back to Contents (3) The following tables illustrates the valuation assumptions as of the vesting date for awards that vested in each of 2020, 2021, and 2022: | For Stock Options Vesting in | | | Weighted Average Fair Value of Full Value Awards Vesting in | | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | Expected volatility | 39% - 46% | 38% - 44% | 33% - 35% | | | | | | Expected dividend yield | 4.0% - 4.7% | 3.9% - 4.1% | 7.0% | | For Restricted Share and Restricted Stock Units | $14.08 | $14.80 | $9.58 | Expected term, in years | 3.0 - 4.5 | 3.0 - 4.5 | 3.0 - 4.5 | | For Performance Share Awards | $13.15 | $15.32 | $8.57 | Risk-free interest rate | 2.6% - 2.9% | .2% - .9% | .3% - .4% | | | | | |
(4) For FY21, Thomas Shafer and Michael Jones joined the Company through a mid-year acquisition and their values are calculated in line with the other NEOs with the initial value of their equity awards for FY21 effective 12/31/20 based on Huntington’s stock price. (5) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: 2022: Zachary Wasserman, Paul Heller, Brant Standridge, Scott Kleinman. 2021: Zachary Wasserman, Paul Heller, Thomas Shafer, Michael Jones. 2020: Zachary Wasserman, Paul Heller, Andrew Harmening, Jana Litsey. (6) Reflects return on $100 investment over 12/31/19-12/31/22, 12/31/19-12/31/21, and 12/31/19-12/31/20 for 2022, 2021, and 2020, respectively. (7) Non-GAAP, see Appendix A to this proxy statement for more information. Tabular List of Financial Performance MeasuresAs described in greater detail in the CD&A, we have a significant focus on pay-for-performance. The most important financial performance measures used to link CAP (as calculated in accordance with the SEC rules), to our NEOs in 2022 to our performance were: Narrative Disclosure: Pay Versus Performance TableThe graphs below provide a description of CAP (as calculated in accordance with the SEC rules) and the following measures: Huntington’s cumulative TSR and S&P 500 Banks cumulative TSR; Huntington’s Net Income; and the Company Selected Measure, which for Huntington is Adjusted ROTCE. | Huntington Bancshares Incorporated 2023 Proxy Statement | 109 |
Back to Contents * Non- GAAP, see Appendix A to this proxy statement for more information Pay Ratio DisclosureWe are providing this disclosure pursuant to a rule adopted by the SEC implementing a mandate of the Dodd-Frank Act. The rule requires disclosure of the median annual total compensation of all employees,colleagues, excluding the CEO, the annual total compensation of the CEO, and the ratio of these amounts. For purposes of this disclosure, annual total compensation for both the median employee and the CEO is determined in accordance with the definition of annual total compensation as disclosed in the Summary Compensation Table. In accordance with the rule, we determined a new median employee for 2020, after using2022 following the samedeparture of last year's median employee for 2017, 2018 and 2019.who was selected in 2020. The median employee for 20202022 was determined from among the company’s employeesCompany’s colleagues (excluding the CEO) using a consistently applied compensation measure. The consistently applied compensation measure was 20202022 W-2 Box 1 data as reflected in the company’sCompany’s payroll records for each colleague (full-time, part-time, seasonal, or temporary, and on long-term leave, but excluding the CEO) employed as of December 31, 2020.2022. The median employee servesserved in a bank branchbusiness banking position responsible for retainingreviewing, structuring, and growing consumer andclosing certain business customer relationships.loans. The median employee’s annual total compensation for 20202022 was determined for purposes of this disclosure. This ratio is a reasonable estimate calculated in a manner consistent with SEC Regulation S-K Item 402(u). | Median Employee Annual Total Compensation | | $ | 60,841 | | | CEO Annual Total Compensation | | $ | 8,007,682 | | | Ratio | | | 132:1 | |
| | | Median Employee Annual Total Compensation | $ | 67,563 | CEO Annual Total Compensation | $ | 10,484,975 | Ratio | | 155:1 |
98 | Huntington Bancshares Incorporated |
Table of Contents
Audit Matters
| | | | | | Huntington Bancshares Incorporated 2023 Proxy Statement | 110 |
Back to Contents Frequency of Future Advisory Votes on Executive CompensationProposal 3Advisory resolution to approve, on a non-binding basis, the frequency of future advisory votes on executive compensationAt this annual meeting, shareholders will have the opportunity to consider the frequency of future shareholder advisory votes on executive compensation (“say-on-pay votes”), as disclosed pursuant to Item 402 of Regulation S-K. Shareholders may vote on a non-binding, advisory basis to recommend that say-on-pay votes occur every one, two, or three years, or shareholders may abstain from voting on this proposal. The proposal regarding the frequency of say-on-pay votes is advisory and will not bind the Board. This advisory vote is required pursuant to Section 14A of the Exchange Act. Shareholders last considered the frequency of say-on-pay votes in 2017. Following that vote, the Board determined that it would include a say-on-pay vote in its proxy materials pursuant to Section 14A of the Exchange Act on an annual basis until the next vote on the frequency of such say-on-pay votes. Upon the recommendation of the Board, we ask shareholders to consider the following resolution and vote for Option 1: “RESOLVED, that the shareholders determine, on an advisory basis, that the preferred frequency with which the shareholders shall have an advisory vote on the executive compensation of the Company’s named executive officers, as set forth in the Company’s proxy statement, is every: Option 1 — 1 Year; Option 2 — 2 Years; Option 3 — 3 Years; or Option 4 — Abstain from voting.” The HR and Compensation Committee and the Board recognize the importance of receiving regular input from shareholders on important issues such as executive compensation. Accordingly, the Board recommends that say-on-pay votes continue to occur every year. Pursuant to SEC regulations, shareholders are provided with an opportunity to vote on the frequency of say-on-pay votes every six years. Accordingly, the next advisory vote regarding the frequency of say-on-pay votes is expected to occur at the 2029 Annual Meeting of Shareholders. |  | The Board recommends that shareholders vote to recommend that the shareholder advisory vote on executive compensation occur every 1 YEAR. |
| | | | | Huntington Bancshares Incorporated 2023 Proxy Statement | | 111 |
Back to Contents Audit MattersProposal 4Ratification of the Appointment of Independent Registered Public Accounting Firm | Ratification of the Appointment of Independent Registered Public Accounting Firm | | Following assessment of the qualifications, performance, and independence of PricewaterhouseCoopers LLP,PwC, our current auditors, the Audit Committee has again selected PricewaterhouseCoopers LLPPwC to serve as our independent registered public accounting firm for 2021.2023. We are asking shareholders to ratify the appointment of PricewaterhouseCoopers LLPPwC because we value our shareholders’ views on the company’sCompany’s independent registered public accounting firm selection and as a matter of good corporate governance. The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm. The Audit Committee regularly evaluates the qualifications, performance, and independence of the independent registered public accounting firm, and whether the independent registered public accounting firm should be rotated. PricewaterhouseCoopers LLP PwC has served as our independent registered public accounting firm since 2015. The Audit Committee and the board of directorsBoard believe that the continued retention of PricewaterhouseCoopers LLPPwC to serve as our independent registered public accounting firm is in the best interests of the companyCompany and its investors.shareholders. The Audit Committee will reconsider the appointment of PricewaterhouseCoopers LLPPwC if its selection is not ratified by the shareholders. Unless otherwise directed, the shares represented by a property submitted proxy will be voted FOR ratification of The Audit Committee may also reconsider the appointment of PricewaterhouseCoopers LLP.PwC at any time even if the selection is ratified by shareholders.
| |  board of directorsBoard recommends a vote FORthe ratification of the appointment of PricewaterhouseCoopers LLP.PwC.
|
Representatives of PricewaterhouseCoopers LLP regularly attend meetings of the Audit Committee and will be present at the 2021 annual meeting. These representatives will have an opportunity at the annual meeting to make a statement if they desire to do so and also will be available to respond to appropriate shareholder questions.
2021 | Huntington Bancshares Incorporated 2023 Proxy Statement | 99112 |
Back to Contents Table of Contents
Audit Matters
Audit Fees, Audit-Related Fees, Tax Fees, and All Other FeesThe table below reflects the aggregate fees and out of pocketout-of-pocket expenses billed by PricewaterhouseCoopers LLPPwC for services rendered for us for 20192021 and 2020.2022. | | | Year ended | | | | December 31, | | December 31, | | Fees Billed by PricewaterhouseCoopers LLP | | 2020 | | 2019 | | Audit Fees(1) | | $ 7,411,313 | | $6,298,448 | | Audit-Related Fees(2) | | 446,000 | | 1,458,555 | | Tax Fees(3) | | 1,230,604 | | 1,145,750 | | All Other Fees(4) | | 621,393 | | 173,330 | | Total | | $ 9,709,310 | | $9,076,083 |
| | (1) | Audit fees are fees for professional services rendered for the integrated audits of our annual consolidated financial statements, including the audit of the effectiveness of our internal control over financial reporting, quarterly reviews of the condensed consolidated financial statements included in Form 10-Q filings, and services that are normally provided by PricewaterhouseCoopers LLP in connection with statutory/subsidiary financial statement audits, attestation reports required by statute or regulation and comfort letters and consents related to SEC filings. Increases in audit fees for 2020 primarily related to post-implementation procedures over accounting standards adopted in the period. | | | (2) | Audit-related fees generally include fees for assurance and related services that are traditionally performed by the independent registered public accounting firm. These services include attestation and agreed-upon procedures which address accounting, reporting, and control matters that are not required by statute or regulation, pension plan audits, and service organization control examinations and pre-implementation procedures over accounting standards yet to be adopted. These services are normally provided in connection with the recurring audit engagement. | | | (3) | The tax-related services were all in the nature of tax compliance, tax consulting, and tax planning. | | | (4) | All other fees were generally for non-tax advisory and consulting services including those rendered in connection with compliance and governance assessments. |
Fees Billed by PwC | | Year ended | December 31,
2022 | December 31,
2021 | Audit Fees(1) | | $ | 8,567,078 | $ | 9,614,388 | Audit-Related Fees(2) | | | 651,400 | | 673,000 | Tax Fees(3) | | | 2,169,616 | | 2,061,779 | All Other Fees(4) | | | 99,461 | | 4,461 | Total | | $ | 11,487,555 | $ | 12,353,628 | (1) Audit fees are fees for professional services rendered for the integrated audits of our annual consolidated financial statements, including the audit of the effectiveness of our internal control over financial reporting, quarterly reviews of the condensed consolidated financial statements included in Form 10-Q filings, and services that are normally provided by PwC in connection with statutory/subsidiary financial statement audits, attestation reports required by statute or regulation, and comfort letters and consents related to SEC filings. (2) Audit-related fees generally include fees for assurance and related services that are traditionally performed by the independent registered public accounting firm. These services include attestation and agreed-upon procedures that address accounting, reporting, and control matters that are not required by statute or regulation; pension plan audits; and service organization control examinations. These services are normally provided in connection with the recurring audit engagement. (3) The tax-related services were all in the nature of tax compliance, tax consulting, and tax planning. Of these amounts for 2022, $1,969,616 represents fees for tax compliance services and $200,000 represents tax consulting and tax planning services; and for 2021, $1,711,779 represents fees for tax compliance services and $350,000 represents tax consulting and tax planning services. (4) All other fees were generally for non-tax advisory and consulting services including those rendered in connection with compliance and governance assessments. |
Pre-Approval Policies and ProceduresThe Audit Committee is responsible for the audit fee negotiations associated with the retention of the independent registered public accounting firm. The Audit Committee has a policy that it will pre-approve all audit and non-audit services provided by the independent registered public accounting firm and will not engage the independent registered public accounting firm to perform any specific non-audit services prohibited by law or regulation. The Audit Committee has given general pre-approval for specified audit, audit-related, and tax services. The term of any general pre-approval is 12 months from the date of pre-approval unless the Audit Committee specifically provides for a different term. The Audit Committee will annually review the services for which general pre-approval is given. The Audit Committee may revise the list of general pre-approved services from time to time, based upon subsequent determinations. Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee. Pre-approval fee levels for all services to be provided by the independent registered public accounting firm are established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee. The Audit Committee may delegate pre-approval authority to a member of its committee, andCommittee; the Audit Committee has currently delegated pre-approval authority to its chair.Chair. The decisions of the chairChair or other member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting. All of the services covered by the fees disclosed above were pre-approved by the Audit Committee or its chair. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public accounting firm to management. The All the services covered by the fees disclosed above were pre-approved by the Audit Committee or its Chair. Further, the Audit Committee has considered and determined that the services described above are compatible with maintaining the independent registered public accounting firm’s independence. 100 | | | | Huntington Bancshares Incorporated2023 Proxy Statement | 113 |
Back to Contents Oversight of the Independent AuditorTableThe Audit Committee is responsible for the appointment, compensation, retention, and oversight of Contents
the independent registered public accounting firm. This also includes an evaluation of whether rotating independent registered public accounting firms is warranted. Additionally, the Audit MattersCommittee reviews the experience and qualifications of the lead audit partner and other senior members of the audit team. In its most recent review of PwC, the Audit Committee considered several factors, including: The qualifications of the audit team and the quality of work provided by PwC; PwC’s independence and objectivity, including a consideration of the non-audit fees and services; Appropriateness of PwC’s audit and non-audit fees; Assessment of performance of the lead audit partner and audit team; Tenure of the auditor; and The impact of changing auditors. After considering the above factors, the Audit Committee has determined that retention of PwC at this time is in the best interests of the Company and its shareholders. PwC Attendance at the Annual MeetingRepresentatives of PwC regularly attend meetings of the Audit Committee and will be present at the 2023 Annual Meeting. These representatives will have an opportunity at the annual meeting to make a statement if they so desire and will also be available to respond to appropriate shareholder questions. Report of the Audit CommitteeThe primary responsibility of the Audit Committee, which is comprised entirely of independent Directors, is to oversee the integrity of Huntington’s consolidated financial statements. In carrying out its duties, the Audit Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 20202022, with Huntington management and with Huntington’s independent registered public accounting firm, PricewaterhouseCoopers LLP.PwC. This discussion included the selection, application, and disclosure of critical accounting policies, as well as the independent registered public accounting firm’s views on fraud risks and how it demonstrates its independence and skepticism. The Audit Committee has also reviewed and discussed with PricewaterhouseCoopers LLPPwC its judgment as to the quality, not just the acceptability, of Huntington’s accounting principles and such other matters required to be discussed under auditing standards generally accepted in the United States, including the applicable requirements of the Public Company Accounting Oversight Board (PCAOB)PCAOB and the Securities and Exchange Commission.SEC. The Audit Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLPPwC required by the applicable requirements of the PCAOB in Rule 3526 regarding PricewaterhouseCoopers LLP’sPwC’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLPPwC its independence from Huntington. Based on this review and discussion, and a review of the services provided by PricewaterhouseCoopers LLPPwC during 2020,2022, the Audit Committee believes that the services provided by PricewaterhouseCoopers LLPPwC in 20202022 are compatible with, and do not impair, PricewaterhouseCoopers LLP’sPwC’s independence. Based on these reviews and discussions, the Audit Committee recommended to the board of directorsBoard that the audited consolidated financial statements be included in Huntington’s Annual Report on Form 10-K for the year ended December 31, 20202022, which was filed with the SEC on February 26, 2021.17, 2023. Submitted by the Audit Committee Richard W. Neu, Chair
Ann B. (Tanny) Crane
Robert S Cubbin
Gina D. France
 |  | |  | |  | |  | 2021 Proxy StatementRichard W. Neu, Chair | 101 | Ann B. (Tanny) Crane | | Robert S. Cubbin | | Gina D. France | | Jeffrey L. Tate |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 114 |
Table ofBack to Contents
Ownership of Voting Stock | Ownership of
Voting Stock | This section provides shareholders with an understanding of the ownership of our Directors, nominees for Director, executive officers, and largest shareholders. We believe that shareholders’ interests are better served when our Directors, nominees for Director, and executive officers hold a meaningful number of shares of the Company. Holding such shares more closely aligns the interests of these individuals with those of our shareholders. |
Security Ownership ofDirectors and Executive OfficersThe table below sets forth the beneficial ownership of Huntington common stock by each of our directors,Directors, nominees for director,Director, executive officers named in the Summary Compensation Table, and the directorsDirectors and all executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. Generally, the rules attribute beneficial ownership of securities to persons who possess sole or shared voting power and / and/or investment power with respect to those securities, including shares whichthat could be acquired within 60 days. Ownership reported is as of January 31, 2021.2023. The table also sets forth additional share interests not reportable as beneficially owned. | | | Beneficial Ownership | | | | | | | | Shares of | | | | | | | | | | Common | | Percent | | Additional | | | | | | Stock Beneficially | | of | | Share | | Total Share | | Name of Beneficial Owner | | Owned(1)(2)(3)(4) | | Class | | Interests(5)(6) | | Interests | | Lizabeth Ardisana | | 31,802 | | * | | 42,791 | | 74,593 | | Alanna Y. Cotton | | — | | * | | 19,066 | | 19,066 | | Ann B. (Tanny) Crane | | 127,348 | | * | | 107,979 | | 235,328 | | Robert S. Cubbin | | 64,020 | | * | | 50,174 | | 114,195 | | Steven G. Elliott | | 22,933 | | * | | 122,239 | | 145,172 | | Gina D. France | | 75,350 | | * | | 42,791 | | 118,141 | | Andrew J. Harmening | | 199,141 | | * | | — | | 199,141 | | Paul G. Heller | | 726,414 | | * | | — | | 726,414 | | J. Michael Hochschwender | | 134,054 | | * | | 42,791 | | 176,845 | | John C. (Chris) Inglis | | 7,142 | | * | | 42,791 | | 49,933 | | Katherine M. A. (Allie) Kline | | 2,277 | | * | | 25,254 | | 27,531 | | Jana J. Litsey | | 92,815 | | * | | 26,280 | | 119,094 | | Richard W. Neu | | 268,822 | | * | | 129,370 | | 398,191 | | Kenneth J. Phelan | | — | | * | | 24,375 | | 24,375 | | David L. Porteous | | 711,885 | | * | | 124,610 | | 836,495 | | Stephen D. Steinour(7) | | 5,936,518 | | * | | 1,908,705 | | 7,845,224 | | Zachary J. Wasserman | | 20,311 | | * | | — | | 20,311 | | Directors and All Executive Officers as a Group (24 in the group) | | 10,603,066 | | 1.04% | | 3,526,180 | | 14,129,246 |
Name of Beneficial Owner | Beneficial Ownership | Additional
Share
Interests(5)(6) | Total
Share
Interests | Shares of Common
Stock Beneficially
Owned(1)(2)(3)(4) | | Percent
of
Class | Lizabeth Ardisana | 31,802 | | * | 67,077 | 98,879 | Alanna Y. Cotton | 8,335 | | * | 41,257 | 49,592 | Ann B. (Tanny) Crane | 154,133 | | * | 134,432 | 288,565 | Robert S. Cubbin | 64,797 | | * | 78,094 | 142,891 | Gina D. France | 78,063 | | * | 67,077 | 145,140 | Paul G. Heller | 683,676 | | * | — | 683,676 | J. Michael Hochschwender | 139,816 | | * | 67,077 | 206,893 | Richard H. King | 73,758 | | * | 14,877 | 88,635 | Scott D. Kleinman | 206,662 | | * | — | 206,662 | Katherine M. A. (Allie) Kline | 3,283 | | * | 47,991 | 51,274 | Richard W. Neu | 305,025 | | * | 159,869 | 464,894 | Kenneth J. Phelan | 39,431 | | * | 48,610 | 88,041 | David L. Porteous | 655,014 | | * | 151,063 | 806,077 | Roger J. Sit | 319,807 | | * | 14,877 | 334,684 | Brant J. Standridge | — | | * | — | — | Stephen D. Steinour | 6,360,629 | | * | 2,811,051 | 9,171,680 | Jeffrey L. Tate | 65,952 | | * | 14,877 | 80,829 | Gary H. Torgow | 987,114 | | * | — | 987,114 | Zachary J. Wasserman | 51,006 | | * | — | 51,006 | Directors and All Executive Officers as a Group (27 in the group) | 12,889,940 | | * | 4,743,441 | 17,633,381 | * Indicates less than 1% of outstanding shares. |
| | | * | Indicates less than 1% of outstanding shares.Huntington Bancshares Incorporated 2023 Proxy Statement | 115 |
Back to Contents | | | This column consists of shares for which the directorsDirectors and executives, directly or indirectly, have the power to vote or to dispose, or to direct the voting or disposition thereof, and also includes shares for which the person has the right to acquire beneficial ownership within 60 days.days from January 31, 2023. Except as otherwise noted, none of the named individuals shares with another person either voting or investment power as to the shares reported. None of the shares reported are pledged as security. | | | | Figures for the executive officers include the number of shares of common stock whichthat could have been acquired within 60 days of January 31, 2021,2023, by the exercise of stock options and the vesting of time-based RSUs awarded under our employee and director equity plans as set forth below. |
| | | RSUs | Options | | Stephen D. Steinour | | — | | 2,332,308 | | Zachary J. Wasserman | | — | | 50,505 | | Brant J. Standridge | | — | | — | | Paul G. Heller | | — | | 406,048 | | Scott D. Kleinman | | 7,860 | | 126,258 | | Directors and Executive Officers as a Group (27 in the group) | | 21,293 | | 4,680,809 | (3) Figures include 55,261 shares, 516 shares, 70,000 shares, 9,622 shares, 27,634 shares, 3,472,046 shares, and 1,114 shares, owned by the immediate family members or trusts of Mr. Cubbin, Mr. Hochschwender, Mr. Neu, Mr. Porteous, Mr. Sit, Mr. Steinour, and Mr. Torgow, respectively; 11,076 shares held jointly by Ms. Crane and her spouse; 397,443 shares owned jointly by Mr. Porteous and his spouse; and 152,572 shares held indirectly by Mr. Sit through Sit Investment Associates. (4) Figures include the following shares of common stock held as of January 31, 2023, in Huntington’s deferred compensation plans for Directors, including a legacy FirstMerit Corporation plan: 8,335 shares for Ms. Cotton, 56,676 shares for Ms. Crane, 9,536 shares for Mr. Cubbin, 33,321 shares for Ms. France, 70,774 shares for Mr. Hochschwender, 2,174 shares for Mr. King, 3,283 shares for Ms. Kline, 190,025 shares for Mr. Neu, 19,431 shares for Mr. Phelan, 125,591 shares for Mr. Porteous, 12,808 shares for Mr. Sit, and 4,463 shares for Mr. Tate. Figures also include the following shares of common stock held as of January 31, 2023, in certain of Huntington’s deferred compensation plans for colleagues, which include the 401(k) Plan, the Huntington Supplemental Plan, and the TCF Supplemental Plan: 7,128 shares for Mr. Heller, 314 shares for Mr. Kleinman, 131,654 shares for Mr. Steinour, and 259,881 shares for all executive officers as a group. (5) Figures in this column for Mr. Steinour and all executive officers as a group are shares held in the Executive Deferred Compensation Plan, for which the executive officers have vested ownership interests but do not have the power to vote or dispose of the shares, or the right to acquire such shares within 60 days. Prior to the distribution of shares from this plan to the participants, voting for the shares allocated to the accounts of participants is directed by the Company. (6) Figures in this column for the Directors consist of the vested deferred stock units granted to the Directors. These deferred stock units will be settled in shares of common stock six months following separation from service or one year from the date of grant, whichever is later. |
102 | Huntington Bancshares Incorporated2023 Proxy Statement | 116 |
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Security Ownership of Voting Stock
| | RSUs | | Options | | Andrew J. Harmening | 5,630 | | 129,395 | | Paul G. Heller | 8,411 | | 326,217 | | Jana J. Litsey | 6,430 | | 78,944 | | Stephen D. Steinour | 18,218 | | 1,513,263 | | Zachary J. Wasserman | 0 | | 0 | | Directors and Executive Officers as a Group (24 in the group) | 81,710 | | 2,874,185 |
| | (3) | Figures include 55,260 shares, 70,000 shares, 10,136 shares, and 2,795,466 shares, owned by the immediate family members or family trusts of Mr. Cubbin, Mr. Neu, Mr. Porteous, and Mr. Steinour, respectively; 2,326 shares held jointly by Ms. Crane and her spouse; 7,142 shares owned jointly by Mr. Inglis and his spouse; and 392,031 shares owned jointly by Mr. Porteous and his spouse. | | | (4) | Figures include the following shares of common stock held as of January 31, 2021, in Huntington’s deferred compensation plans for directors, including a legacy FirstMerit Corporation plan: 112,072 shares for Ms. Crane, 8,760 shares for Mr. Cubbin, 22,933 shares for Mr. Elliott, 30,608 shares for Ms. France, 65,012 shares for Mr. Hochschwender, 2,277 shares for Ms. Kline, 153,822 shares for Mr. Neu, and 124,858 shares for Mr. Porteous. Figures also include the following shares of common stock held as of January 31, 2021, in Huntington’s deferred compensation plans for employees, which include the 401(k) Plan, Supplemental 401(k) Plan and Executive Deferred Compensation Plan: 4,495 shares for Mr. Harmening, 6,548 shares for Mr. Heller, 930 shares for Ms. Litsey, 169,568 shares for Mr. Steinour and 286,019 shares for all executive officers as a group. | | | (5) | Figures in this column for Ms. Litsey, Mr. Steinour, and all executive officers as a group are shares held in the Executive Deferred Compensation Plan, for which the executive officers have vested ownership interests but do not have the power to vote or dispose of the shares, or the right to acquire such shares within 60 days. Prior to the distribution of shares from this plan to the participants, voting for the shares allocated to the accounts of participants is directed by the company. | | | (6) | Figures in this column for the directors consist of the vested deferred stock units granted to the directors. These deferred stock units will be settled in shares of common stock six months following separation from service. | | | (7) | Mr. Steinour also owns 20,000 depositary shares each representing a 1/40th ownership interest in a share of Huntington’s Series D Non-Cumulative Perpetual Preferred Stock. Mr. Steinour is the only director or officer to hold preferred stock. |
Certain Beneficial OwnersAs of December 31, 2020,2022, we knew of no person who was the beneficial owner of more than 5% of our outstanding shares of common stock, except as follows: Name and Address
of Beneficial Owner | | Shares of Common Stock
Beneficially Owned | | Percent of Class | The Vanguard Group, Inc.(1)
100 Vanguard Boulevard
Malvern, PA 19355 | | 113,297,155 | | 11.08% | BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 | | 83,646,254 | | 8.2% | Boston Partners(3)
One Beacon Street, 30th Floor
Boston, MA 02108 | | 57,284,205 | | 5.6% | State Street Corporation(4)
State Street Financial Center
One Lincoln Street
Boston, MA 02111 | | 55,058,660 | | 5.39% |
Name and Address of Beneficial Owner | Shares of Common Stock
Beneficially Owned | Percent of Class | The Vanguard Group, Inc.(1)
100 Vanguard Boulevard
Malvern, PA 19355 | | 169,503,604 | | 11.75% | BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 | | 136,929,645 | | 9.5% | T. Rowe Price Associates, Inc.(3)
100 E. Pratt Street
Baltimore, MD 21202 | | 75,907,624 | | 5.3% | State Street Corporation(4)
State Street Financial Center
One Lincoln Street Boston, MA 02111 | | 74,198,903 | | 5.14% | (1) This information is based on a Schedule 13-G/A filed by The Vanguard Group, Inc. on February 9, 2023. The Vanguard Group, Inc. has shared voting power for 2,018,191 of the shares, sole dispositive power for 163,344,157 of the shares, and shared dispositive power for 6,159,447 of the shares. These shares were acquired and are held by The Vanguard Group, Inc. in the ordinary course of business. (2) This information is based on an amendment to Schedule 13-G filed by BlackRock, Inc. on January 27, 2023. BlackRock, Inc. has sole voting power for 125,375,557 of the shares and sole dispositive power for all the shares. These shares were acquired and are held by BlackRock, Inc. in the ordinary course of business. (3) This information is based on an amendment to Schedule 13-G filed by T. Rowe Price Associates, Inc. on February 14, 2023. T. Rowe Price Associates, Inc. has sole voting power for 42,861,448 of the shares and sole dispositive power for 75,907,624 the shares. These shares were acquired and are held by T. Rowe Price Associates, Inc. in the ordinary course of business. (4) This information is based on a Schedule 13-G/A filed by State Street Corporation on January 31, 2023. State Street Corporation has shared voting power for 66,905,587 of the shares and shared dispositive power for 74,060,013 of the shares. These shares were acquired and are held by State Street Corporation in the ordinary course of business. |
| | (1) | This information is based on an amendment to Schedule 13-G/A filed by The Vanguard Group, Inc. on February 10, 2021. The Vanguard Group, Inc. has shared voting power for 1,626,115 of the shares, sole dispositive power for 108,807,374 of the shares, and shared dispositive power for 4,489,781 of the shares. These shares were acquired and are held by The Vanguard Group, Inc. in the ordinary course of business. | | | (2) | This information is based on an amendment to Schedule 13-G/A filed by BlackRock, Inc. on January 29, 2021. BlackRock Inc. has sole voting power for 74,832,440 of the shares and sole dispositive power for all of the shares. These shares were acquired and are held by BlackRock, Inc. in the ordinary course of business. | | | (3) | This information is based on an amendment to Schedule 13-G/A filed by Boston Partners on February 11, 2021. Boston Partners has sole voting power for 48,288,782 of the shares, shared voting power for 63,875 of the shares, and sole dispositive power for all of the shares. These shares were acquired and are held by Boston Partners in the ordinary course of business. | | | (4) | This information is based on a Schedule 13-G filed by State Street Corporation on February 10, 2021. State Street Corporation has shared voting power for 50,492,321 of the shares and shared dispositive power for 55,022,177 of the shares. These shares were acquired and are held by State Street Corporation in the ordinary course of business. | | |
Table of Contents
Additional Management Proposal
| | | | | | Proposal 4 | | | | | | | | Approval of the Amended and Restated 2018 Long-Term Incentive Plan | | The board of directors is asking shareholders to approve the Amended and Restated 2018 Long-Term Incentive Plan (the “Amended 2018 Plan”). Long-term incentives are a critical component of our pay for performance compensation philosophy. Equity grants are intended to reward colleagues for long-term sustained performance that is aligned with shareholder interests. Equity grants also support our strong culture of significant stock ownership.
The board of directors approved the Amended 2018 Plan for grants of stock options, restricted stock, restricted stock units, stock appreciation rights, deferred stock units, long-term performance awards and other stock-based awards. The Amended 2018 Plan was adopted in January 2021, subject to shareholder approval.
Approval of the Amended 2018 Plan is needed to replenish the pool of shares we have for granting stock-based compensation to executives, other colleagues, non-employee directors, and consultants. If shareholder approval is not obtained, Huntington will not be able to grant equity awards after the shares authorized and reserved for issuance under the existing 2018 Long-Term Incentive Plan (the “2018 Plan”), are depleted.
The Amended 2018 Plan is being submitted to the shareholders for approval in order to comply with the applicable requirements of The Nasdaq Stock Market, Inc. Shareholder approval is also necessary under the federal income tax rules with respect to the qualification of incentive stock options.
Huntington believes that its equity based compensation plans have made a significant contribution to its success in attracting and retaining key employees and directors.
The board of directors recommends a vote FOR the approval of the Amended 2018 Plan.
| | |
| | 104 | Huntington Bancshares Incorporated2023 Proxy Statement | 117 |
Back to Contents Table of Contents
Additional Management Proposal
| | | | | The Amended 2018 Plan incorporates key corporate governance practices: | | | | • | Minimum Vesting Requirements — time-based vesting awards have a minimum three year cliff or gradual vesting requirement and cannot vest before the first anniversary of grant, except that such awards may vest earlier than three years in extraordinary circumstances discussed in the Amended 2018 Plan, and also that the Compensation Committee may provide for the grant of time-based awards that become fully vested earlier than mandated in such other circumstances that the Committee believes to be in our best interest with respect to Awards representing no more than 5% of shares available to grant under the Amended 2018 Plan; | | | | | | • | “Double trigger” CIC Vesting — the Amended 2018 Plan requires a “double trigger” for accelerated vesting of awards in the event of a change in control; | | | • | No Repricing without Shareholder Approval — the price of any option may not be altered or repriced, whether through amendment, exchange, cancellation and replacement, taking any action that would be treated as a repricing under the rules and regulations of the principal securities exchange on which the shares of Huntington stock are traded, or any other means, without shareholder approval; | | | • | No Cash Buyout without Shareholder Approval — cash buyouts or cancellations of outstanding stock options and stock appreciation rights in exchange for cash or shares where the option price exceeds the fair market value of the shares are prohibited without shareholder approval; | | | • | Fair Market Value Stock Options — stock options and stock appreciation rights must be granted at not less than 100% of the fair market value on the date of grant; | | | • | No Reload Options — reload options are not permitted; | | | • | No Current Dividends on Awards — no ability of participants to receive current dividend payments with respect to any stock option or stock appreciation right until the participant has acquired the underlying shares by exercising vested awards, and no ability of participants to receive current dividend payments with respect to any restricted stock, restricted stock units, deferred stock units, and other incentive awards, and performance-based awards, until the shares underlying such awards have become both vested and payable; | | | • | Robust Forfeiture Provisions — forfeiture provisions enable the Compensation Committee to cancel awards and/or to require payback of any gains/awards which are tainted by misconduct of the participant; | | | • | No Liberal Share Counting — liberal share counting is not permitted; | | | • | Reasonable Expected Share Pool Life — internal modeling suggests our share pool will last approximately three to four years based on reasonable assumptions; | | | • | Sensible Potential Shareholder Dilution — the overall cumulative potential dilution to shareholders of current outstanding awards and the shares made available for grant under the Amended 2018 Plan is approximately 6.3% of the fully-diluted outstanding; further, the annual rate at which we grant equity from existing plans has been reasonable (three-year average of 1.0% using the basic weighted common shares outstanding); and | | | • | Independent Administration — it is administered by a committee of independent directors. | | | | |
Table of Contents
Additional Management Proposal
Purposes of the Amended 2018 Plan
When first approved by shareholders, the 2018 Plan reserved for issuance a maximum aggregate number of shares of common stock equal to the sum of (i) 25 million (25,000,000) shares plus (ii) the number of shares authorized but not issued or subject to awards under the prior plan. The Amended 2018 Plan reserves for issuance a maximum aggregate number of shares of Huntington’s common stock equal to the sum of (i) thirty million (30,000,000), plus (ii) the number of shares that are authorized, but not issued or subject to outstanding awards under the 2018 Plan as of the date of approval of the Amended 2018 Plan by the shareholders. Shares available for issuance under the Amended 2018 Plan will be reduced by the number of shares covered by all awards granted under the Amended 2018 Plan, on a one-for-one basis. As of December 31, 2020, there remained approximately 4.9 million (4,900,000) shares available for issuance under the 2018 Plan. Huntington expects that the shares remaining available under the 2018 Plan will not be sufficient for Huntington to award annual equity grants to its colleagues in 2021. Approval of the Amended 2018 Plan is necessary to enable Huntington to continue to utilize equity awards to attract and retain key talent. Huntington also believes a sufficient reserve of shares is necessary to attract and retain key employees. The Amended 2018 Plan also clarifies certain other administrative practices.
The Amended 2018 Plan is designed to provide Huntington flexibility in its ability to motivate, attract, and retain the services of participants who make significant contributions to Huntington’s success and creation of shareholder value. Additional objectives of the Amended 2018 Plan are to:
• | help optimize the profitability and growth of Huntington through stock-based incentives which are consistent with Huntington’s objectives and which align the interests of the participants to those of the shareholders; | | | • | induce participants to strive for the highest level of performance; and | | | • | promote teamwork. |
Additional Information about the Amended 2018 Plan
The information about the Amended 2018 Plan which follows is subject to, and qualified in its entirety by reference to, the Amended 2018 Plan document, which is attached to this proxy statement as Appendix A. We urge you to carefully read the Amended 2018 Plan document in its entirety.
The Amended 2018 Plan reserves for issuance a maximum aggregate number of shares of Huntington’s common stock equal to the sum of (i) thirty million (30,000,000), plus (ii) the number of shares that are authorized, but not issued or subject to outstanding awards under the 2018 Plan as of the date of approval of the 2018 Plan by the shareholders. As of December 31, 2020, approximately 4.9 million (4,900,000) shares of common stock previously authorized and approved for issuance under the 2018 Plan are not subject to outstanding awards and remain available for the issuance of additional awards. The shares remaining under the 2018 Plan would be incorporated into the Amended 2018 Plan and would be reduced by the full number of shares covered by all awards; accordingly, the total number of shares available for awards upon approval of the Amended 2018 Plan would be no more than thirty-four million nine hundred thousand (34,900,000). This amount is equal to approximately 3.4% of Huntington’s shares outstanding, with a market value of $462,000,000 as of January 31, 2021. Any shares issued under the Amended 2018 Plan may be authorized and unissued shares, shares purchased in the open market, or shares held in treasury stock. Upon shareholder approval of the Amended 2018 Plan, no additional awards will be made under the 2018 Plan. Awards settled solely in cash shall not reduce the number of shares available for Awards.
No awards may be made on or after December 31, 2030. All shares authorized under the Amended 2018 Plan are available for grants of full value awards. The shares authorized for issuance under the Amended 2018 Plan and the number of shares subject to any specific award are subject to adjustment for stock dividends, stock splits, spin offs, mergers or other reorganizations as necessary to prevent dilution or enlargement of participants’ rights. Only shares that are subject to an award that terminates, expires, or lapses for any reason will be available for future grants of awards. Otherwise, the maximum number of shares available for issuance under the Amended 2018 Plan is reduced by the full number of shares covered by all awards granted under the Amended 2018 Plan. Further, unless otherwise required by applicable law or regulation, any shares granted through the assumption of or in substitution for outstanding awards granted by a company that is merged, consolidated with, or acquired by Huntington will not be subject to the share limitations of the Amended 2018 Plan.
106 | Huntington Bancshares Incorporated |
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Additional Management Proposal
Administration. The Compensation Committee will administer the Amended 2018 Plan. The Compensation Committee shall have full power to:
• | select the participants; | | | • | determine the sizes and types of awards; | | | • | determine the terms and conditions of awards (which need not be consistent among participants); | | | • | construe and interpret the Amended 2018 Plan and any agreement or instrument entered into under the Amended 2018 Plan; | | | • | establish, amend, or waive rules and regulations for the Amended 2018 Plan’s administration; | | | • | require a participant to make any representations or agreements that the compensation committee deems necessary or advisable to comply with or qualify for advantageous treatment under applicable securities, tax, or other laws; and | | | • | amend the terms and conditions of any outstanding award to the extent such terms and conditions are within the discretion of the Compensation Committee as provided in the Amended 2018 Plan. |
The Compensation Committee may correct any defect, supply any omission or reconcile any inconsistency in the Amended 2018 Plan or any award in the manner and to the extent it shall deem desirable to carry the Amended 2018 Plan into effect. Further, the Compensation Committee shall make all other determinations which may be necessary or advisable for the administration of the Amended 2018 Plan.
Limitations on Awards
• | The maximum aggregate number of shares which may be subject to options and stock appreciation right awards (whether settled in cash, shares, or a combination thereof), on a combined basis, shall be 10 million shares over any five-year period. | | | • | The maximum aggregate cash equivalent value of all awards of restricted stock, restricted stock units, and deferred stock units, on a combined basis, that may be granted to any participant for any calendar year is $12 million. | | | • | The maximum aggregate cash or cash equivalent value of any other stock-based awards made under the Amended 2018 Plan is $12 million. | | | • | The maximum aggregate cash or cash equivalent value of a long-term performance award is $12 million at the date of grant. | | | • | The maximum aggregate cash equivalent value of awards granted to non-employee directors during the term of the Amended 2018 Plan is $10 million. |
Minimum Vesting Condition. Any award granted under the Amended 2018 Plan must not vest before the first anniversary of the date of grant and have a minimum vesting period of not less than three years. However, such awards may vest earlier than three years in extraordinary circumstances discussed in the Amended 2018 Plan, and up to 5% of all shares available for grants of awards granted under the Amended 2018 Plan may have vesting periods of less than such mandated time-periods. Notwithstanding the foregoing, each grant or sale of deferred stock will be subject to a deferral period of not less than one year, as determined by the Compensation Committee at the date of grant.
Eligibility. Persons eligible to participate in the Amended 2018 Plan are any employee and any non-employee director, and any consultant of Huntington or its subsidiaries. As of December 31, 2020, Huntington and its subsidiaries had approximately 15,600 employees and 12 non-employee directors who could be eligible to participate in the Amended 2018 Plan. Participants are selected by the Compensation Committee, which also administers the 2018 Plan. Although there can be no assurance as to the number of participants selected by the Compensation Committee, the Compensation Committee approved equity awards under the 2018 Plan for 1,611 employees in 2020. Employees are eligible to receive all types of awards under the Amended 2018 Plan. Non-employee directors and consultants are eligible to receive all types of awards under the Amended 2018 Plan other than incentive stock options.
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Types of Awards. Each award will be evidenced by a written award agreement setting forth the applicable terms and provisions. The types of the awards that may be granted under the Amended 2018 Plan are described below.
Stock Options. Grants of stock options are subject to the following restrictions and limitations:
• | The Compensation Committee may not grant an option to a participant if the sum of the number of shares then subject to all options held by such participant plus the shares then owned or deemed to be owned under the Code by such participant would constitute more than 10% of the total combined voting power of all of our classes of stock. | | | • | The Compensation Committee may not grant incentive stock options to any employee if the aggregate fair market value of shares underlying all incentive stock options granted under any of our plans exercisable for the first time by such employee during any calendar year exceeds $100,000. Any excess will be deemed a non-qualified stock option. | | | • | The option price for each grant must be at least 100% of the fair market value of a share of our common stock on the date the option is granted. Generally, the fair market value of a share on any given date will be the closing price for which a share was sold on The Nasdaq Stock Market on that date. | | | • | No option may be exercisable on or after the tenth anniversary date of its grant. | | | • | Reload options are not permitted under the Amended 2018 Plan. | | | • | Dividends or dividend equivalents may not be paid with respect to any option. Dividends will be paid only on the shares that a participant has acquired by exercising vested options. |
The Compensation Committee may provide that if a participant has not exercised an option the day before the option would expire, and the fair market value of shares underlying such option exceeds, the exercise option, such option shall be automatically exercised immediately before it would otherwise expire.
If shares acquired upon exercise of incentive stock options are disposed of by a participant prior to either two years from the date of grant or one year from the date of exercise, or otherwise in a “disqualifying disposition” under the Code, the participant must notify Huntington in writing. Further, in such event, the participant will also cooperate with respect to any tax withholding obligations resulting from such disqualifying disposition.
Restricted Stock Awards. Each restricted stock agreement will specify the number of restricted shares granted, the period of restriction, and such other provisions as the Compensation Committee may determine. Other restrictions the Compensation Committee may impose include a stipulated purchase price, restrictions based upon achievement of specific performance objectives (corporate wide, business, and/or individual), qualifying performance criteria, a performance cycle, any time-based restrictions, and/or any restrictions under applicable federal or state securities laws.
At the Compensation Committee’s discretion, during the period of restriction, participants may exercise full voting rights with respect to the restricted shares and may be credited with regular cash dividends paid on such shares. Such dividends may not be paid currently and instead may either be accrued as contingent cash obligations or converted into additional shares of restricted stock, subject to the same vesting conditions as the original grant and upon such terms as the Compensation Committee establishes. Shares of restricted stock will become freely transferable by the participant after the last day of the applicable period of restriction.
Restricted Stock Units (RSUs). Each RSU agreement will specify the number of RSUs granted, the form of payment of the RSU, the period of restriction, and such other provisions as the Compensation Committee may determine. Other restrictions the Compensation Committee may impose include a stipulated purchase price, restrictions based upon achievement of specific performance objectives (corporate wide, business, and/or individual), qualifying performance criteria, a performance cycle, time-based restrictions, and/or any restrictions under applicable federal or state securities laws.
Prior to the distribution of shares (if any) under an RSU, participants holding RSUs may not exercise any voting rights and will not be entitled to any dividends or dividend equivalents with respect to the RSUs, unless otherwise determined by the
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Compensation Committee in its discretion. If dividend equivalents are awarded with respect to RSUs, such dividend equivalents may not be paid currently and instead may either be accrued as contingent cash obligations or be converted into additional RSUs, subject to the same vesting conditions as the original grant and upon such terms as the Compensation Committee establishes. Participants have no right to transfer any rights with respect to restricted stock units during the period of restriction.
Stock Appreciation Rights (SARs). A SAR will represent a right to receive a payment in cash, shares, or a combination thereof, equal to the excess of the fair market value of a specified number of shares on the date the SAR is exercised over an amount which will be no less than the fair market value on the date the SAR was granted (or the option price for SARs granted in tandem with an option).
SARs granted in tandem with the grant of a stock option may be exercised for all or part of the shares subject to the related option upon the surrender of the right to exercise the equivalent portion of the related option. SARs granted in tandem with the grant of a stock option may be exercised only with respect to the shares for which the related option is then exercisable.
With respect to stock appreciation rights granted in tandem with an incentive stock option, such SAR will expire no later than the expiration of the underlying incentive stock option. In addition, the value of the payout with respect to such stock appreciation right may be for no more than 100% of the difference between the exercise price for the underlying option and the fair market value of the shares subject to the option at the time the stock appreciation right is exercised. SARs granted independently from the grant of a stock option may be exercised upon the terms and conditions stated in the applicable award agreement. Participants shall not be entitled to any dividends or dividend equivalents with respect to any SAR. Participants will be paid dividends only on shares that they have acquired by exercising vested SARs.
Deferred Stock Units. Each deferred stock unit grant or sale will constitute the agreement by Huntington to deliver shares to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions during the deferral periods as the Compensation Committee may specify. Each such grant or sale may be made without additional consideration or in consideration of a payment that is less than the fair market value of the shares on the date of grant.
During the deferral period, the participant will have no rights of ownership in the shares of deferred stock units and will have no right to vote them. The Compensation Committee may, at or after the date of grant, authorize payment of dividend equivalents on any shares underlying deferred stock units during the deferral period. If dividend equivalents are awarded with respect to shares underlying deferred stock units, such dividend equivalents may not be paid currently and instead may either be accrued as contingent cash obligations or converted to shares of additional deferred stock units subject to the same vesting conditions as the original grant and upon such other terms as the Committee establishes.
Other Incentive Awards. The Committee may from time to time grant other incentive awards, including shares and other awards under the Amended 2018 Plan that are valued in whole or in part by reference to, or are otherwise based upon shares and payable in cash, shares, or a combination of cash and shares. The Committee, in its sole discretion, shall determine the terms and conditions of such awards, which shall be consistent with the terms and purposes of the Amended 2018 Plan, including the minimum vesting requirements and the prohibitions on the current payments of any dividends or dividend equivalents with respect to such Awards.
Long-Term Performance Awards. Long-term performance awards may be in the form of shares and/or cash in amounts and upon terms as determined by the Compensation Committee. The Compensation Committee will set performance objectives which, depending upon the extent to which they are met, will determine the number of shares and/or value of long-term performance awards that will be paid to a participant. The Compensation Committee will establish performance cycles, which are no less than one year, for each award and may impose other conditions and restrictions, including restrictions based upon achievement of specific performance objectives (corporate wide, business, and/or individual), qualifying performance criteria, any time-based restrictions, or any restrictions under applicable federal or state securities laws.
For any performance cycle, the Committee may authorize payment of dividend equivalents on any shares of underlying performance awards. Such dividend equivalents may not be paid currently and instead shall either be accrued as contingent cash obligations or be converted into shares subject to the same performance-based
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conditions as the original grant of performance awards and upon such other terms as the Committee establishes. No dividend equivalents may be paid on any shares underlying performance awards that failed to vest or that have been forfeited by the participant. After the end of a performance cycle, the participant will be entitled to receive payments of the amount of shares and/or cash earned by the participant over the performance cycle; provided, however, that except in the case of a change in control, the Compensation Committee has the discretion to reduce or eliminate an award that would otherwise be payable based on the Committee’s evaluation of all facts and circumstances. Payment of awards will be made in the form of cash or in shares of common stock, or in a combination thereof which have an aggregate fair market value equal to the value of the earned award at the close of the cycle. The Compensation Committee may place restrictions on shares of common stock awarded. Except in the case of a change in control, a participant must remain employed by Huntington until the date of payment in order to be entitled to a payment of a long-term performance award unless the Compensation Committee, in its discretion, provides for a partial or full payment to a participant who is not employed at the time of payment.
Restrictions on Transfer. In general, no award granted under the Amended 2018 Plan may be sold, transferred, pledged, assigned, or otherwise alienated, other than by will or by the laws of descent and distribution.
Change in Control. Except as otherwise provided in the Amended 2018 Plan, any award agreement or any employment agreement between Huntington and a participant, upon a Change in Control all outstanding awards which are subject to a Period of Restriction or are not fully vested shall become fully exercisable and all restrictions thereon shall terminate if:
• | within 12 months after a Change in Control of the company occurs, the participant’s service has been terminated by the company (provided that such termination is for a reason other than for cause); or | | | • | (1) the company previously terminated the participant’s service without cause during the year before the Change in Control was consummated but after a third party or the company had taken steps reasonably calculated to effect a Change in Control, and (2) it is reasonably demonstrated by the participant that such termination of service was in connection with or in anticipation of a Change in Control. |
In addition, the Committee may determine and provide through an award agreement, or other means, the treatment of partially completed Performance Cycles (if any) for any awards outstanding upon a Change in Control. Further, the Committee, as constituted before such Change in Control, is authorized, and has sole discretion, as to any award, either at the time such award is granted hereunder or any time thereafter, to take any one or more of the following actions: (i) provide for the cancellation of any Option or SAR for an amount of cash equal to the difference between the exercise price and the then Fair Market Value of the Shares covered thereby had such Option or SAR been currently exercisable, but only upon prior approval of the company’s shareholders of such action; (ii) make such adjustment to any such award then outstanding as the Committee deems appropriate to reflect such Change in Control; or (iii) cause any such award then outstanding to be assumed, by the acquiring or surviving corporation, after such Change in Control.
Performance-Based Awards
The Compensation Committee will establish the “qualifying performance criteria” applicable to the performance cycle for each so designated covered employee. For purposes of the Amended 2018 Plan, “qualifying performance criteria” will be any of the following performance criteria:
(a) | revenue and income measures (which include sales, revenues, net income, earnings per share, non-interest income to total revenue ratio, non-interest income growth, interest income, net operating profit, interest income, pretax pre-provision (pretax income on a tax equivalent basis adjusted for provision expense, security gains and losses, and amortization of intangibles), adjusted net income after capital charges, economic value added, and earnings before interest, taxes, depreciation and amortization; | | | (b) | expense and efficiency measures (which include “efficiency ratio” (the ratio of total non-interest operating expenses (less amortization of intangibles) divided by total revenues (less net security gains), net interest margin, gross margins, operating margins, net-income margins, non-interest expense, and operating efficiencies); |
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(c) | operating measures (which include productivity ratios, loan growth, deposit growth, customer profitability, and market share); | | | (d) | return measures (which include return on average equity, tangible common equity or return on tangible common equity, return on average assets, return on capital (actual or targeted), share price, share price growth, and total shareholder return); | | | (e) | credit quality measures (which include non-performing asset ratio, net charge-off ratio, and reserve coverage of non-performing loans); | | | (f) | leverage measures (which include debt-to-equity ratio and net debt); | | | (g) | risk measures (which include interest-sensitivity gap levels, regulatory compliance, satisfactory audit results, maintenance of required common equity levels (including common equity tier 1 levels), and financial ratings); | | | (h) | achievement of balance sheet, income statement, or cash-flow statement objectives. | | | (i) | achievement of strategic objectives, goals, or milestones (which include customer satisfaction and employee satisfaction survey results); | | | (j) | technology or innovation goals or objectives; | | | (k) | consummation of acquisitions, dispositions, projects or other specific events or transactions; | | | (l) | acquisition integration or disposition management goals or objectives; | | | (m) | product, customer or market-related objectives (including product revenues, revenue mix, product growth, customer growth, number or type of customer relationships, customer satisfaction, cross-selling goals, associate satisfaction, market share, branding); and | | | (n) | any other objective goals established by the Committee. |
Qualifying performance criteria may be expressed in terms of (i) attaining a specified absolute level of the criteria, or (ii) a percentage increase or decrease in the criteria compared to a pre-established target, previous years’ results, or a designated market index or comparison group, all as determined by the Committee. Qualifying performance criteria also may be expressed in the form of a “multiplier” that may be a number or percentage that is to be multiplied by the amount otherwise payable under an award in order to calculate the total amount payable under an award. The value of such multiplier will be determined by satisfaction of performance goals related to the qualifying performance criteria. The qualifying performance criteria may be measured on an absolute basis or relative to an established target, to previous year or other comparable period or periods’ results, to a designated comparison group or groups, or to one or more designated external or internal indices or benchmarks, and may be applied either to the company as a whole or to a business unit or subsidiary, in each case as determined by the Committee. Any specific metrics listed within the categories described above are intended to be illustrative and are not intended to be construed as limitations on the more general metrics. Qualifying performance criteria may be different for different Participants, as determined in the discretion of the Committee.
In determining whether a performance goal has been met, the Compensation Committee may include or exclude “extraordinary events” (as defined below), or any other events or occurrences of a similar nature in establishing the performance goal based on qualifying performance criteria and may consider any extraordinary event in determining whether a performance goal based on the qualifying performance criteria has been achieved.
Awards may be paid to participants only after the Compensation Committee has certified in writing that the performance goals have been met. Extraordinary events are:
• | changes in tax law, generally accepted accounting principles or other such laws or provisions affecting reported financial results, including unforeseen and extraordinary changes in statutes and regulations that govern the company and its industry; | | | • | accruals or charges relating to reorganization and restructuring programs; | | | • | special gains or losses or other financial impact in connection with mergers and acquisitions involving the company or any of its significant subsidiaries, the purchase or sale of branches or significant portions of the company or any of its significant subsidiaries, or the sale of securities and investments of the company; |
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• | write-downs or write-offs of assets, including intangible assets such as goodwill and mortgage servicing rights (MSR) and valuation adjustments related to the impact of hedging (including MSR hedging); | | | • | litigation or claim matters; | | | • | expenses relating to unplanned regulatory actions; | | | • | any other significant items as discussed in Management’s discussion and analysis of financial condition and results of operation appearing or incorporated by reference in the Annual Report on Form 10-K filed with the Securities and Exchange Commission; | | | • | gains or losses on the early repayment of debt; or | | | • | any other unforeseen events of occurrences of a similar nature as set forth by the Compensation Committee. |
Federal Income Tax Consequences of the Amended 2018 Plan
The following summary describes the federal income tax consequences of awards under the Amended 2018 Plan, generally, based on Management’s understanding of current federal income tax laws. The summary does not address foreign, state, or local tax laws, and such tax laws may vary from federal income tax laws. The exact federal income tax treatment of awards under the Amended 2018 Plan will vary depending upon the specific facts and circumstances involved and participants are advised to consult their personal tax advisors with regard to all consequences arising from the grant or exercise of awards and the disposition of any acquired shares.
Options and SARs. In general, a recipient of an option or SAR granted under the Amended 2018 Plan will not have regular taxable income at the time of grant.
Upon exercise of a nonqualified stock option or SAR, the optionee generally must recognize taxable income in an amount equal to the fair market value on the date of exercise of the shares exercised, minus the exercise price. The tax basis for the shares purchased is their fair market value on the date of exercise. Any gain or loss recognized upon any later sale or other disposition of the acquired shares generally will be capital gain or loss. The character of such capital gain or loss (short-term or long-term) will depend upon the length of time that the optionee holds the shares prior to the sale or disposition.
An optionee generally will not be required to recognize any regular taxable income upon the exercise of an incentive stock option, provided that the optionee does not dispose of the shares issued to him or her upon exercise of the option within the two-year period after the date of grant and within one year after the receipt of the shares by the optionee. The optionee will have alternative minimum taxable income equal to the amount by which the fair market value of the shares on the exercise date exceeds the purchase price. An optionee will recognize ordinary taxable income upon the exercise of an incentive stock option if such optionee uses the broker-assisted cashless exercise method. Provided the optionee does not recognize regular taxable income upon exercise, the tax basis for the shares purchased is equal to the exercise price. Upon a later sale or other disposition of the shares, the optionee must recognize long-term capital gain or ordinary taxable income, depending upon whether the optionee holds the shares for specified holding periods.
Restricted Stock. In general, a participant who receives restricted stock will not recognize taxable income upon receipt, but instead will recognize ordinary income when the shares are no longer subject to restrictions. Alternatively, unless prohibited by the Compensation Committee, a participant may elect under section 83(b) of the Code to be taxed at the time of receipt, provided the participant provides the Compensation Committee with ten days’ prior written notice of his or her intent to do so. In all cases, the amount of ordinary income recognized by the participant will be equal to the fair market value of the shares at the time income is recognized, less the amount of any price paid for the shares. In general, any gain recognized thereafter will be capital gain.
RSUs. In general, a participant who is awarded RSUs will not recognize taxable income upon receipt. When a participant receives payment for an award of RSUs in shares or cash, the fair market value of the shares or the amount of cash received will be taxed to the participant at ordinary income rates. However, if any shares used to pay out RSUs are nontransferable and subject to a substantial risk of forfeiture, the taxable event is deferred until either the restriction on transferability or the risk of forfeiture lapses. In such a case, a participant, unless
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prohibited by the Compensation Committee, may elect under section 83(b) of the Code to be taxed at the time of receipt, provided the participant provides the Compensation Committee with ten days’ prior written notice of his or her intent to do so. In general, any gain recognized thereafter will be capital gain.
Deferred Stock Units. In general, a participant who receives an award of deferred stock will not recognize taxable income upon receipt, but instead will be subject to tax at ordinary income rates on the fair market value of any nonrestricted stock on the date that such stock is transferred to the participant under the award, reduced by any amount paid by the participant for such stock. In general, any gain recognized thereafter will be capital gain.
Withholding Requirements. A participant may satisfy tax withholding requirements under federal and state tax laws in connection with the exercise or receipt of an award by electing to have shares withheld in an amount that does not exceed the maximum individual statutory tax withholding rate in a given jurisdiction, or such other amount that does not trigger adverse accounting treatment under ASC 718 or any successor thereto, or by delivering to us already-owned shares, having a value equal to the amount required to be withheld.
Potential Tax Deduction Limits. We generally will be entitled to a tax deduction in connection with an award made under the Amended 2018 Plan only to the extent that the participant recognizes ordinary income from the award. Code Section 162(m) denies a deduction to any publicly traded company for compensation paid to certain “covered employees” (generally, anyone who has ever been our chief executive officer, chief financial officer or one of the three highest compensated officers in any fiscal year beginning after December 31, 2016) in a taxable year to the extent that compensation paid to a covered employee exceeds $1 million. Historically, compensation paid to any covered employees that qualified as “performance-based” compensation under Code Section 162(m) could be excluded from the $1 million limit. Effective for tax years beginning after December 31, 2017, the performance-based compensation exclusion has been repealed, unless transition relief available for written binding contracts that were in effect (and not subsequently modified) as of November 2, 2017. It is possible that compensation attributable to awards, when combined with other types of compensation paid to a covered employee, may exceed $1 million. The Compensation Committee has also reserved the right, with respect to any award or awards, to determine that ensuring full income tax deductibility of compensation under Code Section 162(m) is not desired after consideration of the goals of our executive compensation philosophy and whether it is in our best interests to have such award so qualified.
Code Section 409A Compliance. Code Section 409A provides that covered amounts deferred under a nonqualified deferred compensation plan are includable in the participant’s gross income to the extent not subject to a substantial risk of forfeiture and not previously included in income, unless certain requirements are met, including limitations on the timing of deferral elections and events that may trigger the distribution of deferred amounts.
Based on proposed regulations and other guidance issued under Code Section 409A, the awards under the 2018 Plan could be affected. In general, if an award either (1) meets the requirements imposed by Code Section 409A or (2) qualifies for an exception from coverage of Code Section 409A, the tax consequences described above will continue to apply. If an award is subject to Code Section 409A and does not comply with the requirements of Code Section 409A, then amounts deferred in the current year and in previous years will become subject to immediate taxation to the participant, and the participant will be required to pay (1) a penalty equal to interest at the underpayment rate plus 1% on the tax that should have been paid on the amount of the original deferral and any related earnings and (2) in addition to any regular tax, an excise tax equal to 20% of the original deferral and any earnings credited on the deferral.
Huntington has designed the Amended 2018 Plan so that awards are intended to either comply with, or be exempt from coverage of, Code Section 409A. Huntington intends to continue to review the terms of the Amended 2018 Plan and may, subject to the terms of the Amended 2018 Plan, adopt additional amendments to comply with current and additional guidance issued under Section 409A of the Code.
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Other Provisions
Nothing in the Amended 2018 Plan limits our right to terminate any participant’s employment at any time, with or without cause, nor confers upon any participant any right to continued employment with us. The Amended 2018 Plan does not give any participant any interest, lien or claim against any specific asset of Huntington, and thus, the participant will have only the rights of a general unsecured creditor of Huntington. We have the right to deduct or withhold, or require the participant to remit an amount sufficient to satisfy federal, state and local taxes, domestic or foreign, required to be withheld with respect to any taxable event arising under the Amended 2018 Plan. The participant may elect to have us withhold shares having a fair market value in an amount that does not exceed the maximum individual statutory tax rate in a given jurisdiction, or such other amount that does not trigger adverse accounting treating under ASC 718 or any successor thereto. Alternatively, the participant may deliver shares to satisfy the tax withholding obligation related to the transaction. Participants may name beneficiaries to receive his or her benefits under the Amended 2018 Plan in case the participant dies before he or she receives such benefit.
The Compensation Committee may permit or require a participant to defer receipt of an award which would otherwise be due the participant. In that event, the Compensation Committee may establish procedures for payment of such deferred awards, including the payment of interest or dividend equivalents. Except following a change in control, in the event the Compensation Committee determines that a participant has committed a serious breach of conduct (which includes, without limitation, any conduct prejudicial to or in conflict with Huntington or any securities law violations including any violations under the Sarbanes-Oxley Act of 2002) or has solicited or taken away customers or potential customers with whom the participant had contact during the participant’s employment with Huntington, the Compensation Committee may terminate any outstanding award, in whole or in part, whether or not yet vested. In addition, if such conduct or activity occurs within three years of the exercise or payment of an award, the Compensation Committee may require the participant or former participant to repay to us any gain realized or payment received upon exercise or payment of such award.
Except in the case of a change in control or where shareholder approval is required, the Compensation Committee or the Board of Directors will have the authority to alter, suspend, or terminate the Amended 2018 Plan in whole or in part at any time. Shareholder approval is required to change the stated maximum limits on shares and cash awards, change the minimum option price of an option, change the eligible participants, or reprice or alter the option price of stock options or stock appreciation rights, or buy out or cancel in exchange for cash stock options or stock appreciation rights when the option price exceeds the fair market value of the underlying shares.
It is not possible to state in advance the exact number, types, or values of awards that may be made or the identity of the employees and directors who may receive awards under the Amended 2018 Plan. It is also not possible to determine the awards that might have been paid in 2020 if the Amended 2018 Plan had then been in effect because the Compensation Committee has discretion to determine the sizes and types of awards to be granted under the Amended 2018 Plan. Any actual awards, however, which are made to our named executive officers and directors will be reported as required in our future proxy statements.
A vote in favor of adopting the Amended 2018 Plan will constitute approval of all terms of the Amended 2018 Plan, including the adoption of all qualifying performance criteria identified above, the eligible employees, and the maximum award payable to a participant.
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Equity Compensation Plan Information
The following table sets forth information about Huntington common stock authorized for issuance under our existing equity compensation plans as of December 31, 2020.
| | | Number of Securities | | | Plan Category(1) | | Number of
Securities to
be Issued Upon
Exercise of
Outstanding
Options,
Warrants, and
Rights(2)
(a) | | Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants, and
Rights(3)
(b) | | Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a))(4)
(c) | | | Equity compensation plans approved by security holders | | 34,078,476 | | $4.80 | | 4,853,276 | | | Equity compensation plans not approved by security holders | | 756 | | $15.53 | | — | | | Total | | 34,079,232 | | $4.80 | | 4,853,276 | |
(1) | All equity compensation plan authorizations for shares of common stock provide for the number of shares to be adjusted for stock splits, stock dividends, and other changes in capitalization. The Huntington 401(k) Plan, a broad-based plan qualified under Code Section 401(a) which includes Huntington common stock as one of a number of investment options available to participants, is excluded from the table. | | | (2) | The numbers in this column (a) reflect shares of common stock to be issued upon exercise of outstanding stock options and the vesting of outstanding awards of RSUs and PSUs and the release of deferred stock units. The shares of common stock to be issued upon exercise or vesting under equity compensation plans not approved by shareholders include an inducement grant issued outside of the Company’s stock plans, and awards granted under the following plans which are no longer active and for which we have not reserved the right to make subsequent grants or awards: employee and director stock plans of Unizan Financial Corp., Camco Financial Corporation, and FirstMerit Corporation assumed in the acquisitions of these companies. | | | (3) | The weighted-average exercise prices in this column are based on outstanding options and do not take into account unvested awards of RSUs and PSUs and unreleased deferred stock units as these awards do not have an exercise price. | | | (4) | The number of shares in this column (c) reflects the number of shares remaining available for future issuance under Huntington’s 2018 Plan, excluding shares reflected in column (a). The number of shares in this column (c) does not include shares of common stock to be issued under the following compensation plans: the Executive Deferred Compensation Plan, which provides senior officers designated by the Compensation Committee the opportunity to defer up to 90% of base salary, annual bonus compensation and certain equity awards, and up to 90% of long-term incentive awards; the Supplemental 401(k)Plan under which voluntary participant contributions made by payroll deduction are used to purchase shares; and the Director Deferred Compensation Plan under which directors may defer their director compensation and such amounts may be invested in shares of common stock. These plans do not contain a limit on the number of shares that may be issued under them. |
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General Information on Voting and The
the Annual MeetingProposals by Shareholders for 2022 Annual Meeting
If a shareholder wishes to submit a proposal for possible inclusion in our annual meeting proxy statement and form of proxy for our 2022 annual meeting, the proposal must be submitted to the Secretary, Huntington Bancshares Incorporated, Huntington Center, 41 South High Street, Columbus, Ohio 43287. The Secretary must receive your proposal on or before the close of business on November 11, 2021.
In addition, our bylaws establish advance notice procedures as to (1) business to be brought before an annual meeting of shareholders other than by or at the direction of our board of directors, and (2) the nomination, other than by or at the direction of our board of directors, of candidates for election as directors. Any shareholder who wishes to submit a proposal to be acted upon at next year’s annual meeting or who wishes to nominate a candidate for election as a director should request a copy of these bylaw provisions by sending a written request addressed to the Secretary, Huntington Bancshares Incorporated, Huntington Center, 41 South High Street, Columbus, Ohio 43287. To be timely, such advance notice must set forth all information required under the bylaws and must be delivered to the Secretary at this address not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting. If the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, notice by the shareholder to be timely must be delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. For the 2022 annual meeting, unless the date of the meeting is before March 22, 2022 or after May 21, 2022, such notice must be received between October 12, 2021, and November 11, 2021.
General Information About the Meeting
| General
Information
on Voting
and the
Annual
Meeting | Proxy StatementThis section provides shareholders with information on how to participate in and vote at the 2023
Annual Meeting, as well as on other topics.
We are providing this proxy statementProxy Statement in connection with the solicitation by the board of directorsBoard of Huntington Bancshares Incorporated, a Maryland corporation, of proxies to be voted at our 2021 annual meeting 2023 Annual Meeting
of shareholdersShareholders to be held on April 21, 2021,19, 2023, and at any adjournment. We are sending or making this proxy statementProxy Statement available to our shareholders on or about March 11, 2021.9, 2023. |
General Information About the MeetingVoting ProceduresHolders of common stock at the close of business on February 17, 2021,the Record Date, are entitled to vote at the annual meeting. As of that date, there were 1,022,385,5831,449,636,645 shares of common stock outstanding and entitled to vote. Holders of any series of our Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, and Series H Preferred Stockpreferred stock are not entitled to vote. Each holder of common stock is entitled to cast one vote (i) for each Director nominee and (ii) on each other matter submitted at the annual meeting, and any postponements or adjournments thereof, for each share of stock held of record at the close of business on February 17, 2021.the Record Date. The shares represented by a properly executed and submitted proxy will be voted as directed, provided we receive the proxy prior to or at the meeting. A properly 116 | Huntington Bancshares Incorporated |
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General Information on Voting and The Annual Meeting
executed proxy without specific voting instructions will be voted FOR each nominee listed under Proposal 1 — Election of Directors, FOR Proposal 2 — Advisory Approval of Executive Compensation, FOR 1 YEAR for Proposal 3 -— Advisory, Non-Binding Recommendation on the Frequency of Future Advisory Votes on Executive Compensation, and FOR Proposal 4 — Ratification of the Appointment of Independent Registered Public Accounting Firm, and FOR Proposal 4 – Approval of Amended and Restated 2018 Long-Term Incentive Plan.Firm. A properly executed and submitted proxy will also confer discretionary authority to vote on any other matter whichthat may properly come before the meeting or any adjournmentpostponements or postponementadjournments of the meeting and to otherwise represent the shareholder at the annual meeting with all powers he, she, or it would possess if personally present at the meeting. We are not currently aware of any matters that may properly be presented other than those described in this Proxy Statement. If any matters not described in the Proxy Statement are properly presented at the meeting, the proxies may vote in their discretion on such matters. If the meeting is adjourned, the proxies can vote your common stock at the adjournment as well, unless you have revoked your proxy instructions. You may vote by executing and returning your proxy card in the envelope provided, or by voting electronically over the internet or by telephone. Please refer to the proxy card for information on voting electronically. If you plan to attend the virtual meeting, while we encourage you to vote in advance of the meeting, you may vote during the virtual meeting at http://www.meetingcenter.io/208317683.meetnow.global/M2GTLL2. Shareholders who hold their shares in street name should refer to the voting instructions provided by their Broker. We encourage shareholders to vote their shares over the internet or by telephone. Shareholders should also consider enrolling in electronic delivery of proxy materials. In addition to reducing our expenses, these actions help us reduce our paper usage and emissions from transportation. If you are not currently awarea colleague of any matters that may properly be presented other than those described inHuntington or its affiliated entities and are receiving this proxy statement. If any matters not describedProxy Statement as a result of your participation in the Huntington 401(k) Plan or the TCF 401(k) Plan, you must provide voting instructions to the respective plan trustee. A proxy statement are properly presented atand instruction card have been provided so that you may instruct the meeting, the proxies will use their own judgment to determinetrustees how to vote your shares. If the meeting is adjourned, the proxies can vote your common stock at the adjournment as well, unless you have revoked your proxy instructions.shares held under these plans. | Huntington Bancshares Incorporated 2023 Proxy Statement | 118 |
Back to Contents Revoking Your ProxyIf your common stock is held in street name, you must follow the instructions of your broker, bank or other nomineeBroker to revoke your voting instructions. If you are a holder of record and wish to revoke your proxy instructions, you must advise our secretarySecretary in writing before the proxies vote your common stock at the meeting,meeting; deliver later dated proxy instructions that are received prior to the meeting; or attend the meeting and vote your shares in person.at the meeting. Expenses of SolicitationWe will pay the expenses of this proxy solicitation, including the reasonable charges and expenses of brokerage firms and othersBrokers for forwarding solicitation material to their customers who are beneficial owners. In addition to soliciting proxies by mail and via the Internet, our employeesinternet, Huntington colleagues, without additional compensation, may also solicit proxies by telephone, andemail, facsimile, letter, or in person. We have retained Morrow Sodali LLC, 470 West Ave.,333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902, to assist in the solicitation of proxies for a fee of $10,000 plus reimbursement of expenses. Vote Required and Broker VotingA quorum is required to conduct business at the annual meeting. Shareholders entitled to cast a majority of all the votes entitled to be cast at the annual meeting, present in person or by proxy, will constitute a quorum. Proposal 1: a nomineeThe following table provides the vote requirement for election to the boardeach of directors at a meeting of shareholders at which a quorum is present will be elected only if the number of votes cast “for” such nominee’s election exceeds the total number of votes cast “against” or affirmatively “withheld” as to such nominee’s election; provided, however, that if, on either the date of the company’s proxy statement for the meeting or on the date of the meeting, the number of nominees exceeds the number of directors to be elected, the directors shall be elected by a plurality of all the votes cast at the meeting. Each of Proposals 2, 3 and 4 requires the affirmative vote of a majority of all votes cast on the matter by the holders of common stock at a meeting at which a quorum is present.this year’s proposals: Broker Voting
Proposal | | Voting Options | | Effect of Abstentions and Broker Non-Votes | | Vote Required for Approval | Proposal 1: Election of Directors | | FOR, AGAINST, or ABSTAIN for each Director nominee | | Abstentions and Broker non-votes have no effect | | The number of votes cast “for” each nominee’s election exceeds the total number of votes cast “against” such nominee’s election.* | Proposal 2: Advisory Approval of Executive Compensation | | FOR, AGAINST, or ABSTAIN | | Abstentions and Broker non-votes have no effect | | A majority of all votes cast must be “for” this proposal. | Proposal 3: Advisory Recommendation on the Frequency of Future Advisory Votes on Executive Compensation | | 1 YEAR, 2 YEARS, 3 YEARS, or ABSTAIN | | Abstentions and Broker non-votes have no effect | | The option that receives the highest number of votes cast by shareholders will be considered the preferred frequency.** | Proposal 4: Ratification of the Appointment of Independent Registered Public Accounting Firm | | FOR, AGAINST, or ABSTAIN | | Abstentions have no effect | | A majority of all votes cast must be “for” this proposal. | * The vote of a majority of the total of votes cast for and against a nominee at a meeting at which a quorum is present is necessary for the election of a Director. Provided, however, that if, on either the date of the Company’s proxy statement for the meeting or on the date of the meeting, the number of nominees exceeds the number of Directors to be elected, the Directors shall be elected by a plurality of all the votes cast at the meeting. In the event of plurality voting, shareholders would be given the option to vote “for” or affirmatively withhold votes from nominees. In such case, the Director nominees receiving the highest number of affirmative “for” votes will be elected Directors and “withhold” votes will have no effect. ** The option of 1 Year, 2 Years, or 3 Years that receives a majority of all the votes cast at a meeting at which a quorum is present will be the frequency for the advisory vote on executive compensation that has been recommended by shareholders. In the event that no option receives a majority of the votes cast, we will consider the option that receives the most votes to be the option selected by shareholders. In either case, this vote is advisory and not binding on the Board or the Company in any way, and the Board may determine that it is in the best interests of the Company to hold an advisory vote on executive compensation more or less frequently than the option recommended by our shareholders. |
Under the laws of Maryland, our state of incorporation, abstentions and brokerBroker non-votes are counted for purposes of determining the presence or absence of a quorum but are not counted as votes cast at the meeting. Broker non-votes occur when brokersBrokers, who hold their customers’ shares in street name, submit proxies for such shares on some matters, but not others. Generally, this would occur when brokersBrokers have not received any instructions from their customers. In these cases, the brokers,Brokers, as the holders of record, are permitted to vote on “routine” matters, which typically include the ratification of the independent registered public accounting firm, but not on non-routine matters. Brokers are no longernot permitted to vote on the election of directorsDirectors or on matters related to executive compensation without instructions from their customers. Broker non-votes and abstentions Table of Contents
General Information on Voting and The Annual Meeting
will have no effect on the election of any directorDirector, the advisory approval of executive compensation, or the approvaladvisory recommendation on the frequency of the other matters described above sincefuture advisory votes on executive compensation because they are not counted as votes cast at the meeting, but votes affirmatively “withheld” from the election of any nominee will have the effect of a vote against that nominee’s election as a director.meeting. | Huntington Bancshares Incorporated 2023 Proxy Statement | 119 |
Back to Contents Attending the Virtual Annual MeetingYou may access the annual meeting live via the Internetinternet at http://www.meetingcenter.io/208317683meetnow.global/M2GTLL2 at the meeting date and time, where Huntington shareholders as of the Record Date will be able to listen to the meeting, submit questions, and vote online. The password for the meeting is HBAN2021. You are entitled to attend the annual meeting via the meeting website only if you were a shareholder of record at the close of business on the record date of February 17, 2021, orRecord Date; you held your shares beneficially in the name of a bank, broker, trustee or other nomineeBroker as of the record date,Record Date; or you hold a valid proxy for the annual meeting. If you were a shareholder of record at the close of business on the record date,Record Date, you will be able to attend the annual meeting online, asksubmit a question, and vote by visiting the annual meeting website and following the instructions on your proxy card, along with the procedures set forth below. We expect that the vast majority of beneficial holders will be able to fully participate at our annual meeting, including the ability to submit questions and/or vote at the meeting, using the control number received with their voting instruction form or proxy card. IfPlease note, however, that there is no guarantee this option will be available for every type of beneficial holder voting control number, and we encourage you hold your sharesto follow the procedures described below to ensure access to the meeting. The inability to provide this option to any or all beneficial holders shall in no way impact the validity of common stock in “street name” and wantthe annual meeting. Beneficial holders who wish to attendsubmit questions and/or vote at the annual meeting online by webcast (withare encouraged to visit the abilitymeeting website as soon as possible to ask a question and/determine whether the control number on their voting instruction form or vote, ifproxy card will permit access. If your control number does not permit access or you chooseprefer to do so),register in advance of the annual meeting, you must first register by obtainingobtain a signed legal proxy from your bank, broker, trustee or other nomineeBroker giving you the right to vote the shares and submittingsubmit proof of such legal proxy along with your name and email address to legalproxy@ computershare.comlegalproxy@computershare.com or Computershare, Huntington Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001, no later than April 19, 202114, 2023, at 5:00 p.m., Eastern Time. You will receive a confirmation of your registration by email with instructions for accessing the Huntington specialannual meeting website. You mayGuests will also be permitted to attend the virtual annual meeting but are not permitted to submit questions in advance of the meeting by visiting www.meetingcenter.io/208317683. If you hold your shares in street name, you must have registered first. You may also submit questions during the live audio webcast of the annual meeting via the annual meeting website. To ensure the annual meeting is conducted in a manner that is fair to all shareholders, we may exercise discretion in determining the order in which questions are answered and the amount of time devoted to any one question.
or vote. Technical assistance will be available for shareholders who experience an issue accessing the annual meeting. Contact information for technical support will appear on the annual meeting website prior to the start of the annual meeting. Proxies
Shareholders of RecordA holder of common stock may vote by proxy or at the annual meeting via the annual meeting website.meeting. If you hold your shares of common stock in your name as a holder of record, to submit a proxy, you as a holder of common stock, may use one of the following methods:methods to submit a proxy: • | By telephone:telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions. | | | • | Through the Internet:internet: by visiting the website indicated on the accompanying proxy card and following the instructions. | | | • | By completing and returning the accompanying proxy card in the enclosed postage-paid envelope: the envelope requires no additional postage if mailed inwithin the United States. If you intend to submit your proxy by mail, your completed proxy card must be received prior to the annual meeting. |
If you intend to submit your proxy by telephone or via the Internet, you must do so by 11:59 p.m., Eastern Time, on the day before the meeting. If you intend to submit your proxy by mail, your completed proxy card must be received prior to the annual meeting.
We request that you vote by telephone, over the Internet or by completing and signing the accompanying proxy card and returning it as soon as possible in the enclosed postage-paid envelope. Ifso that we can be assured of a holder’s shares are held in “street name” by a bank, broker, trustee or other nominee, the holder should check the instructions provided by that firm to determine whether the holder may vote by telephone or the Internet.quorum.
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General Information on Voting and The Annual Meeting
Shares Held in Street NameIf your shares are held in “street name”street name through a bank, broker, trustee or other nominee,Broker, you must instruct the bank, broker, trustee or other nomineeBroker on how to vote your shares. Your broker, bank or other nominee will vote your shares only if you provide specific instructions on howShareholders should refer to vote by following the voting instructions provided by their Broker to you by your bank, broker, trustee or other nominee. direct the voting of their shares in advance of the meeting. You may not vote your shares held in a brokerage or other account in “street name”street name by returning a proxy card directly to Huntington orHuntington. Shareholders holding through a Broker who wish to vote at the annual meeting should also review the procedure previously set forth. Submitting Questions for the Annual MeetingShareholders as of the Record Date may submit questions in advance of the meeting by voting atvisiting meetnow.global/M2GTLL2. Questions may also be submitted during the annual meeting via the annual meeting website unless you obtainwebsite. To ensure the annual meeting is conducted in a legal proxy from your bank, broker, trusteemanner that is fair to all shareholders, we may exercise discretion in determining the number of questions each shareholder may submit, the order in which questions are answered, and the amount of time devoted to any one question. We intend to answer questions pertinent to Company matters as time allows during the meeting. Questions that are substantially similar may be grouped and answered once to avoid repetition. Shareholder questions related to personal or customer matters; that are not pertinent to annual meeting matters; or that contain derogatory references to individuals, use offensive language, or are otherwise out of order or not suitable for the conduct of the annual meeting will not be addressed during the meeting. | Huntington Bancshares Incorporated 2023 Proxy Statement | 120 |
Back to Contents Proposals by Shareholders for the 2024 Annual MeetingShareholders wishing to submit a proposal, including nominations for directorship or items of business as part of next year’s annual meeting, should review the following table, which summarizes the process. The following table is qualified in its entirety by reference to SEC Rules 14a-8 and 14a-19(b) and our Bylaws. | | Proposals Submitted for Inclusion in our 2024 Proxy
Statement (i.e., SEC Rule14a-8) | | Nominees and Other Proposals Outside SEC Rule 14a-8 to be
Presented at the 2024 Annual Meeting (i.e., advance notice) | Type of Proposal | | SEC rules permit shareholders to submit proposals to us for inclusion in our proxy statement by satisfying the requirements set forth in SEC Rule 14a-8. | | Pursuant to the Company’s Bylaws, shareholders may present nominees or proposals directly at the annual meeting (and not for inclusion in the Company’s proxy statement) by satisfying the requirements set forth in our Bylaws. | When We Must Receive
the Proposal* | | Under SEC Rule 14a-8, the proposal typically must be received not less than 120 calendar days before the first anniversary of the date of the proxy statement released to shareholders for the prior year’s annual meeting. This means, for the 2024 Annual Meeting, no later than the close of business on November 10, 2023. | | Pursuant to the Company’s Bylaws, nominations and other proposals outside SEC Rule 14a-8 typically must be received no earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the prior year’s annual meeting. This means, for the 2024 Annual Meeting, such notice must be received between October 11, 2023, and November 10, 2023. | What to Include in the
Proposal | | The information necessary to be in compliance with SEC Rule 14a-8; however, submission of a proposal does not guarantee inclusion within our proxy statement. | | The information set forth in the Company’s Bylaws. In addition to complying with the advance notice provisions of our Bylaws, shareholders who intend to solicit proxies in support of director nominees, other than the Company’s nominees, must also comply with the additional requirements of SEC Rule 14a-19(b). SEC Rule 14a-19 requires, among other things, that a shareholder provide notice that includes certain information, which notice must be received by the Company’s Secretary no later than February 19, 2024, which is 60 calendar days prior to the anniversary of this year’s meeting date. Among other things, Rule 14a- 19 requires the shareholder to provide a statement that he, she, or it intends to solicit the holders of shares representing at least 67% of the voting power of the Company’s shares entitled to vote on the election of Directors in support of Director nominees other than the Company’s nominees. | Where to Send the
Proposal | | Huntington Bancshares Incorporated Huntington Center, 41 South High Street Columbus, Ohio 43287 Attention: Secretary | * Should the 2024 Annual Meeting be advanced or delayed more than 30 days from the first anniversary of the date of the 2023 Annual Meeting, then alternate deadlines apply. |
Recommendations for DirectorshipShareholders and other nominee. If yourparties may also recommend candidates for directorship to be considered by the NESG Committee at any time outside our Bylaws. To do so, a written notice should be sent to the Secretary at Huntington Bancshares Incorporated, Huntington Center, 41 South High Street, Columbus, Ohio 43287. The notice should indicate the name, age, and address of the person recommended; the person’s principal occupation or employment for the last five years; other public company boards on which the person serves; whether the person would qualify as independent as the term is defined under the Marketplace Rules of the Nasdaq Stock Market; and the class and number of shares of common stock are held in street name, you must registerHuntington securities owned by submitting proofthe person. The NESG Committee may require additional information to determine the qualifications of such legal proxy along with yourthe person recommended. The notice should also state the name and email address of, and the class and number of shares of Huntington securities owned by, the person or persons making the recommendation. Any such shareholder recommendation would be considered no differently than recommendations from any other source. There have been no material changes to legalproxy@ computershare.com orthe shareholder recommendation process since we last disclosed this item. | Huntington Bancshares Incorporated 2023 Proxy Statement | 121 |
Back to Contents Other MattersInspector of ElectionWe have engaged Computershare Huntington Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001, no later than April 19, 2021 at 5:00 p.m., Eastern Time, to votecount the shares represented by proxies and cast at the meeting viaonline ballot and to act as Inspector of Election. A representative from Computershare will be present at the Huntington meeting website.meeting. Other MattersBusinessAs of the date of this proxy statement,Proxy Statement, we know of no other business that may properly be brought before the meeting, or any postponements or adjournments thereof, other than procedural matters relating to the proposals described in the Notice of Annual Meeting and this proxy statement.Proxy Statement. Should any other matter requiring a vote of the shareholders arise, a properly submitted proxy confers upon the person or persons designated to vote the shares discretionary authority to vote the same with respect to any such other matter in the discretion of such persons.persons and otherwise to represent the shareholder at the meeting with all powers he, she, or it would possess if personally present at the meeting. Other Documents AvailableHuntington’s 20202022 Annual Report was furnished to shareholders concurrently with this proxy material.Proxy Statement. Huntington’s Form 10-K for 20202022 will be furnished, without charge, to Huntington shareholders upon written request to Investor Relations, Huntington Bancshares Incorporated, Huntington Center, 41 South High Street, Columbus, Ohio 43287. In addition, Huntington’s Form 10-K for 20202022 and certain other reports filed with the Securities and Exchange CommissionSEC can be found on the Investor Relations pages of Huntington’s website at www.huntington.com.ir.huntington.com. If you are an employee of Huntington or its affiliated entities and are receiving this proxy statement as a result of your participation in the Huntington 401(k) Plan you must provide voting instructions to the plan trustee. A proxy and instruction card has been provided so that you may instruct the trustee how to vote your shares held under this plan.
HouseholdingThe Securities and Exchange CommissionSEC has adopted “householding” rules whichthat permit companies and intermediaries, such as brokers,Brokers, to satisfy delivery requirements for proxy statements, notices of internet availability of proxy materials, and annual reports (annual(collectively, “annual meeting materials)materials”) with respect to two or more shareholders sharing the same address by delivering one copy of annual meeting materials to these shareholders. Unless we have received contrary instructions, we will deliver only one copy of the annual meeting materials to multiple security holders sharing an address. If we sent only one set of these documents to your household and one or more of you would prefer to receive your own set, we will deliver promptly upon requestdeliver additional copies of the annual meeting materials. Pleasematerials upon request. You may contact our transfer agent, Computershare, to receive additional copies of the annual meeting materials. Also please contact Computershare if you would like to request separate copies of future annual meeting materials or if you are receiving multiple copies of annual meeting materials and you would like to request delivery of just one copy. You may contact Computershare by telephone at (877) 282-11681-800-725-0674 or by mail at Computershare, Investor Services, P.O.PO Box 505000, Louisville, KY 40233-5000.43006, Providence, RI 02940-3006. If you hold your shares in “street name”,street name, please contact your bank, broker or other holder of recordBroker to request information about householding. Forward-Looking InformationThis Proxy Statement contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. All forward-looking statements speak only as of the date they are made and are based on information available at that time. Huntington does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. | Huntington Bancshares Incorporated 2023 Proxy Statement | 122 |
Back to Contents See also the other reports filed with the SEC, including discussions under the “Forward-Looking Statements” and “Risk Factors” sections of Huntington’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC and available on its website at www.sec.gov. The ESG-based objectives, plans, targets, goals, and commitments contained within this Proxy Statement are aspirational and considered forward-looking statements; as such, we make no guarantees or promises that they will be achieved or successfully executed. Statistics and metrics included in these disclosures are estimates and may be based on assumptions. Information Not Incorporated into This Proxy StatementInformation contained on or accessible through our website at www.huntington.com or ir.huntington.com, including but not limited to our various ESG reports, 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. Some of these statements and reports contain cautionary statements regarding forward-looking information that should be carefully considered. Our statements and reports about our objectives may include statistics or metrics that are estimates, make assumptions based on developing standards that may change, and provide aspirational goals that are not intended to be promises or guarantees. The statements and reports may also change at any time, and we undertake no obligation to update them, except as required by law. Service Mark, Trademark, and Copyright Information  ®, Huntington®, Huntington®, Huntington Welcome®, 24-Hour Grace®, $50 Safety ZoneSM, Money ScoutSMand Lift Local BusinessSMare federally registered service marks of© 2023 Huntington Bancshares Incorporated. Third-party product, service and business names are trademarks and/or service marks of their respective owners.
| Huntington Bancshares Incorporated 2023 Proxy Statement | 123 |
Table ofBack to Contents
Appendix A: Non-GAAP Reconciliation | Appendix A:
Non-GAAP
Reconciliation | This section includes reconciliation for the non-GAAP numbers provided within this Proxy Statement. |
Operating Leverage Reconciliation
The following table reconcilesWe believe certain non-GAAP financial measures, including adjusted return on average tangible shareholders’ equity and pre-provision net revenue, to be helpful in understanding our results of operations. In addition, certain adjustments are made to GAAP financial measures, including adjusted operating leverage. Theearnings per share, adjusted operating leverage, measure excludesand adjusted pretax pre-provision earnings, which are utilized by the effect of certain items, as specified inHR and Compensation Committee that reflect adjustments approved by the table. We believe that this measure is usefulHR and Compensation Committee. The tables below provide a reconciliation to investors because it provides a greater understanding of ongoing operations and enhances comparability of results with prior periods.the closest GAAP financial measure.
Adjusted EPS($ in millions except per share amounts) | Dollar Amount | | Diluted EPS | | Net income applicable to common shares | $2,125 | | $1.450 | | Adjustments: | | | | | Net MSR gains | (5) | | | | Impact of discretionary bonus reduction | (41) | | | | Tax impact of adjustments | 10 | | | | Adjusted net income applicable to common shares | $2,089 | | $1.425 | |
Adjusted Operating Leverage($ in millions) | | 2022 Actual | | | 2021 Actual | | YoY Change | | Net interest income | $ | 5,273 | | $ | 4,102 | | | | | | FTE adjustment | | 31 | | | 25 | | | | | | FTE net interest income | | 5,304 | | | 4,127 | | | | | | Noninterest income | | 1,981 | | | 1,889 | | | | | | Less: Securities gains (losses) | | — | | | 9 | | | | | | Less: Net gain (loss) MSR hedging | | 5 | | | 2 | | | | | | Adjusted noninterest income | | 1,975 | | | 1,879 | | | | | | Adjusted total revenue | | 7,279 | | | 6,006 | | $ | 1,274 | 21.21 | % | Noninterest expense | | 4,201 | | | 4,375 | | | | | | Less: Impact of discretionary bonus reduction | | (41 | ) | | — | | | | | | Adjusted noninterest expense | $ | 4,242 | | $ | 4,375 | | $ | (134) | (3.06 | %) | Adjusted operating leverage | | | | | | | | | 24.26 | % |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 124 |
Back to Contents | ($ in millions) | | 2020
Actual | | | 2019
Actual | | | Y/Y Change | | Net interest income | | $ | 3,224 | | | $ | 3,213 | | | | | | | | | FTE adjustment | | | 21 | | | | 26 | | | | | | | | | FTE net interest income | | | 3,245 | | | | 3,239 | | | | | | | | | | | | | | | | | | | | | | | | | Noninterest income | | | 1,591 | | | | 1,454 | | | | | | | | | Less: Securities gains (losses) | | | (1 | ) | | | (24 | ) | | | | | | | | Less: Net gain (loss) MSR hedging | | | 1 | | | | (14 | ) | | | | | | | | Adjusted noninterest income | | | 1,591 | | | | 1,464 | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted total revenue | | $ | 4,836 | | | $ | 4,703 | | | $ | 133 | | 2.8 | % | | | | | | | | | | | | | | | | | | Noninterest expense | | $ | 2,795 | | | $ | 2,721 | | | $ | 24 | | 2.7 | % | | | | | | | | | | | | | | | | | | Adjusted Operating Leverage | | | | | | | | | | | | | 0.1 | % |
Adjusted Pretax Pre-Provision Earnings (PTPP) Reconciliation($ in millions) | | 2022 | | 2021 | | YoY Change | FTE net interest income | | $ | 5,304 | | $ | 4,127 | | | | | Adjusted noninterest income | | | 1,975 | | | 1,879 | | | | | Add: 2021 net MSR gain | | | | | | 2 | | | | | Adjusted total revenue | | | 7,279 | | | 6,007 | | | | | Adjusted noninterest expense | | | 4,242 | | | 4,375 | | | | | Less: Amortization expense | | | 54 | | | 48 | | | | | Adjusted noninterest expense, less amortization | | | 4,188 | | | 4,327 | | | | | Pretax pre-provision earnings, adjusted | | $ | 3,091 | | $ | 1,680 | $ | 1,411 | 84.0 | % |
The following table reconciles our pretax pre-provision earnings. We believe that this measure is useful to investors because it provides a greater understanding of earnings from ongoing operations and enhances comparability of results with prior periods.
| ($ in millions) | | 2020 | | | 2019 | | | 2018 | | | FTE net interest income | | $ | 3,245 | | | $ | 3,240 | | | $ | 3,219 | | | Noninterest income | | | 1,592 | | | | 1,454 | | | | 1,321 | | | FTE total revenue | | | 4,836 | | | | 4,693 | | | | 4,540 | | | Noninterest expense | | | 2,795 | | | | 2,721 | | | | 2,647 | | | Pretax Pre-Provision Earnings | | $ | 2,041 | | | $ | 1,972 | | | $ | 1,893 | |
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Adjusted ROTCE($ in millions) | | | 2022 | | 2021 | | 2020 | | Average common shareholders’ equity | | $ | 16,096 | $ | 14,569 | $ | 10,618 | | Less: intangible assets and goodwill | | | 5,688 | | 4,108 | | 2,201 | | Add: Net of tax effect of intangible assets | | | 47 | | 48 | | 44 | | Average tangible common shareholders’ equity (A) | | | 10,455 | | 10,509 | | 8,462 | | Net income available to common | | | 2,125 | | 1,153 | | 717 | | Add: amortization of intangibles | | | 54 | | 48 | | 41 | | Add: deferred tax | | | (12) | | (10) | | (9 | ) | Adjusted net income available to common (B) | | $ | 2,167 | $ | 1,191 | $ | 749 | | Return on average tangible shareholders’ equity (B / A) | | | 20.7% | | 11.3% | | 8.9% | | | | | | | | | | | ($ in millions) | | | 2022 | | 2021 | | 2020 | | Adjusted net income available to common (B) | | $ | 2,167 | $ | 1,191 | $ | 749 | | Return on average tangible shareholders’ equity (B / A) | | | 20.7% | | 11.3% | | 8.9% | | Add: Acquisition-related net expenses, after tax (C) | | $ | 76 | $ | 813 | $ | — | | Adjusted net income available to common (annualized) (D) | | | 2,243 | | 2,004 | | 749 | | Adjusted return on average tangible shareholders’ equity (D / A) | | | 21.5% | | 19.1% | | 8.9% | |
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Appendix A: Non-GAAP Reconciliation
Efficiency Ratio
The following table illustrates the calculation of our efficiency ratio. The efficiency ratio measure excludes the effect of certain items, as specified in the table. We believe that this measure is useful to investors because it provides a metric by which to understand our expense structure compared to total revenue.
| ($ in millions) | | 2020 | | | 2019 | | | Noninterest expense | | $ | 2,795 | | | $ | 2,721 | | | Less: Amortization of intangibles | | | (41 | ) | | | (49 | ) | | Adjusted noninterest expense (A) | | $ | 2,754 | | | $ | 2,672 | | | | | | | | | | | | | FTE net interest income | | $ | 3,245 | | | $ | 3,240 | | | Noninterest income | | | 1,592 | | | | 1,454 | | | Less: securities losses (gains) | | | 1 | | | | 24 | | | Adjusted revenue (B) | | $ | 4,837 | | | $ | 4,718 | | | | | | | | | | | | | Efficiency ratio (A / B) | | | 56.9 | % | | | 56.6 | % |
ROTCE
The following table illustrates the calculation of our return on tangible common equity (ROTCE). The ROTCE measure excludes the effect of certain items, as specified in the table. We believe that this measure is useful to investors because it provides them with perspective on how effectively we are managing shareholders’ capital.
| ($ in millions) | | 2020 | | | 2019 | | | Average common shareholders’ equity | | $ | 10,619 | | | $ | 10,357 | | | Less: intangible assets and goodwill | | | (2,201 | ) | | | (2,246 | ) | | Net of tax effect of intangible assets | | | 44 | | | | 54 | | | Average tangible common shareholders’ equity (A) | | $ | 8,462 | | | $ | 8,164 | | | | | | | | | | | | | Net income | | $ | 717 | | | $ | 1,337 | | | Net of amortization of intangibles | | | 41 | | | | 49 | | | Net of deferred tax | | | (9 | ) | | | (10 | ) | | Adjusted net income (B) | | $ | 749 | | | $ | 1,376 | | | | | | | | | | | | | Return on average tangible shareholders’ equity (B / A) | | | 8.9 | % | | | 16.9 | % |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
HUNTINGTON BANCSHARES INCORPORATED
AMENDED AND RESTATED
2018 LONG-TERM INCENTIVE PLAN
Article 1. Establishment, Effective Date, and Term
1.1 | ESTABLISHMENT OF THE PLAN. Huntington Bancshares Incorporated a Maryland corporation, previously established the 2023 Proxy Statement | 125 |
Back to Contents Pre-Provision Net Revenue (PPNR)($ in millions) | | | 2022 | | | 2021 | | YoY Change | Total revenue (GAAP) | | $ | 7,254 | | $ | 5,991 | | | FTE adjustment | | | 31 | | | 25 | | | Total revenue (FTE) (a) | | | 7,285 | | | 6,016 | | | Less: net gain/(loss) on securities | | | — | | | 9 | | | Total revenue (FTE), excluding net gain/(loss) on securities (b) | | | 7,285 | | | 6,007 | | | Noninterest expense (GAAP) (c) | | | 4,201 | | | 4,375 | | | Less: Notable items | | | 95 | | | 711 | | | Noninterest expense, excluding notable items (d) | | | 4,106 | | | 3,664 | | | PPNR (a-c) | | $ | 3,084 | | $ | 1,641 | | 88% |
| Huntington Bancshares Incorporated 2023 Proxy Statement | 126 |
Back to Contents GlossaryAcronym/Term | Definition | 401(k) Plan | Huntington 401(k) Plan | 2018 Long-Term Incentive Plan (the “Prior Plan”), that became effective upon shareholder approval at the 2018 annual meeting. The Prior Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Deferred Stock Units, and Long-Term Performance Awards and other incentive Awards. The Corporation desires to amend and restate the Plan to provide for an additional number of Shares to be available for the grant of Awards and to clarify certain other administrative items. | | | 1.2 | EFFECTIVE DATE.This amendment and restatement of the Prior Plan (such restatement hereinafter referred to as the “Plan”), if approved by the majority of votes cast by the Corporation’s shareholders at the 2021 annual meeting shall become effective on the date of approval by the shareholders at the 2021 annual meeting with respect to Awards granted on or after such date (the “Effective Date”). If so approved by the majority of votes cast by the Corporation’s shareholders, the Plan shall continue to serve as the successor to the Prior Plan; provided however, that all Awards under the Prior Plan and any other predecessor plan outstanding on the Effective Date shall continue in full force and effect in accordance with their terms, and no provision of this Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of those Prior Plan or other predecessor plan Awards with respect to their acquisition of Shares thereunder. The Plan shall remain in effect as provided in Article 1.4 herein. No Awards will be made under the Plan unless shareholder approval is obtained. Instead, Awards will be granted under the terms of the Prior Plan. | | | 1.3 | OBJECTIVES OF THE PLAN. The objectives of the Plan are to help optimize the profitability and growth of the Corporation through stock-based incentives which are consistent with the Corporation’s objectives and which link the interests of Participants to those of the Corporation’s shareholders; to induce Participants to strive for the highest level of performance; and to promote teamwork among Participants. | | | | The Plan is further intended to provide flexibility to the Corporation in its ability to motivate, attract, and retain the services of Participants who make significant contributions to the Corporation’s success and the creation of shareholder value and to allow Participants to share in the success of the Corporation. | | | 1.4 | DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as described in Article 1.2 herein, and shall remain in effect, subject to the right of the Board of Directors (“Board”), or a Committee delegated by the Board, to amend or terminate the Plan at any time pursuant to Article 18 herein. However, in no event may an Award be granted under the Plan on or after December 31, 2030. |
Article 2. Definitions of Terms
| As used in the Plan, the following words shall have the meanings stated after them, unless otherwise specifically provided. In the Plan, words used in the singular shall include the plural, and words used in the plural shall include the singular. The gender of words used in this Plan shall include whatever may be appropriate under any particular circumstances. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
2.1 | “AWARD” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Deferred Stock Units, Long-Term Performance Awards, or other incentive Awards described in Section 10.7 of the Plan. | Board | | | 2.2 | “AWARD AGREEMENT” means a written or electronic statement or agreement prepared by the Corporation setting forth the terms and provisions applicable to Awards granted under this Plan. | | | | 2.3 | “BENEFICIAL OWNER” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. | | | | 2.4 | “BOARD” OR “BOARD OF DIRECTORS” means the Board of Directors of Huntington Bancshares Incorporated. Incorporated | Broker | | Brokerage firms, banks, trustees, other nominees, or similar entities | 2.5CCO | “CAUSE” unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement, shall be as defined in any employment agreement between the Corporation and a Participant; provided however, that if there is no such employment agreement, “Cause” means any of the following:Chief Credit Officer | CD&A | | Compensation Discussion and Analysis | CDP | (a) | The Participant shall have been charged with a felony or committed an intentional act of gross misconduct, moral turpitude, fraud, embezzlement, theft, dishonesty, misappropriation, or criminal conduct, andFormerly known as the Corporation shall have determined that such act is materially harmful to the Corporation;Carbon Disclosure Project | CECL | | Current Expected Credit Losses | CEO | (b) | Any federal or state governmental or regulatory body having regulatory authority over the business of the Corporation (i) entered any order against the Participant, or (ii) ordered or directed the Corporation to terminate or suspend the Participant’s employment; orChief Executive Officer | CFO | | Chief Financial Officer | CHRO | (c) | After being notified in writing by the Corporation to cease any particular activity, the Participant shall have continued such activity and the Corporation shall have determined that such act is materially harmful to the Corporation; orChief Human Resources Officer | Company | | | | (d) | The Participant has acted during the course of (i) the Participant’s employment or (ii) the Participant’s separation of employment in a manner that the Corporation, as determined pursuant to its policies and procedures, this Plan, an Award Agreement, and/or any other written agreement between the Participant and the Corporation, has deemed not to be in the best interest of the Corporation and/or in furtherance of the colleague’s job responsibilities. | | | | 2.6 | “CHANGE IN CONTROL” means, with respect to the Corporation, the occurrence of any of the following: | | | | | (a) | Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (“the Exchange Act”) as in effect as of the date of this Plan) becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing 25% or more of the combined voting power of the Corporation’s then-outstanding securities entitled to vote generally in the election of directors (“voting securities”); provided, however, that, for purposes of this Section 2.6, the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation of any of its Subsidiaries; | | | | | (b) | Individuals who, as of the Effective Date, constitute the Board of Directors of the Corporation (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that, any individual becoming a director subsequent to the date hereof whose election, or nomination for election, was approved by a vote of at least a majority of the directors comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; | | | | | (c) | The consummation of a merger, statutory share exchange, consolidation or similar corporate transaction involving the Corporation, other than any such transaction in which the voting securities of the Corporation immediately prior to the transaction continue to represent (either by remaining outstanding or being converted into securities of the “surviving entity,” which for purposes of this Agreement shall include the corporation or other entity resulting from such transaction and/or the corporation or |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
| | other entity that, as a result of the transaction, owns the Corporation or all or substantially all of the Corporation’s assets, either directly or indirectly) more than 50% of the combined voting power of the Corporation or surviving entity resulting from such transaction immediately after the transaction with another entity; | | | | | (d) | consummation of a sale, exchange, lease, mortgage, pledge, transfer, or other disposition (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Corporation which shall include, without limitation, the sale of assets or earning power aggregating more than 50% of the assets or earning power of the Corporation on a consolidated basis, other than any such transaction in which a majority of the voting securities of the surviving entity are, immediately following consummation of such transaction, beneficially owned by the individuals and entities that were the beneficial owners of the Corporation’s voting securities immediately prior to the transaction; | | | | | (e) | The consummation of a liquidation or dissolution of the Corporation; | | | | | (f) | The consummation of a reorganization, reverse stock split, or recapitalization of the Corporation which would result in any of the foregoing; or | | | | | (g) | The consummation of a transaction or series of related transactions having, directly or indirectly, the same effect as any of the foregoing. | | | | | Notwithstanding the foregoing, if the payment of any Award may be considered “deferred compensation” under Code Section 409A, and the payment of such Award is triggered by a Change in Control, the events described above shall not constitute a Change in Control unless they constitute a change in ownership or effective control of the Corporation, or a change in the ownership of a substantial portion of the assets of the Corporation, as described under Code Section 409A; or in the case of a liquidation or dissolution of the Corporation, such liquidation or dissolution complies with the procedures set forth in Treasury Regulation Section 1.409A-3(j)(4)(ix)(A). | | | | 2.7 | “CODE” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. | | | | 2.8 | “COMMITTEE” means the Compensation Committee of the Board, as specified in Article 3 herein, or such other committee appointed by the Board to administer the Plan. | | | | 2.9 | “CONSULTANT” means any consultant, agent, advisor, or independent contractor who renders services to the Corporation or one of its affiliates. | | | | 2.10 | “CORPORATION” means Huntington Bancshares Incorporated a Maryland corporation, together with any and all Subsidiaries, and any successor thereto as provided in Article 22 herein. | CRO | | Chief Risk Officer | 2.11DEI | “RESERVED”Diversity, Equity, and Inclusion | EDCP | | | 2.12 | “DEFERRAL PERIOD” means the period of time during which a Deferred Stock Unit is subject to deferral limitations under Article 10 herein. | | | | 2.13 | “DEFERRED STOCK UNIT” means an Award granted to a Participant pursuant to Article 10 herein of the right to receive Shares, or, if provided by the Committee, an alternative form of payment, at the end of a specified Deferral Period. | | | | 2.14 | “DIRECTOR” means any individual who is a member of the Board of Directors of Huntington Bancshares Incorporated. | | | | 2.15 | “DIRECTOR DEFERRED COMPENSATION PLAN” means the Huntington Bancshares Incorporated DirectorExecutive Deferred Compensation Plan effective January 1, 2017, including any amendments thereto or any successor thereof. | ELT | | Executive Leadership Team | 2.16EPS | “DISABILITY” or “DISABLED” unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement, shall be as defined in any employment agreement between the Corporation and a Participant; provided however, that if there is no such employment agreement, “Disability” or “Disabled” shall be defined in the same manner as under the Corporation’s long-term disability plan.Diluted Earnings Per Share | ESG | | Environmental, Social, and Governance | 2.17Exchange Act | “DODD-FRANK ACT” means the Dodd-Frank Wall Street Reform and Consumer Protection Act and any guidance thereunder. | | | | 2.18 | “EFFECTIVE DATE” shall have the meaning ascribed to such term in Article 1.2 herein. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
2.19 | “EMPLOYEE” means any employee of the Corporation. Directors who are not employed by the Corporation shall not be considered Employees under this Plan. | | | 2.20 | “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. | Federal Reserve | The Board of Governors of the Federal Reserve System | FFIEC | Federal Financial Institutions Examination Council | GAAP | Generally Accepted Accounting Principles in the United States | GHG | Greenhouse Gas | GRI | Global Reporting Initiative | HR and Compensation Committee | Human Resources and Compensation Committee | Huntington | Huntington Bancshares Incorporated | Huntington Bank | The Huntington National Bank | Huntington Supplemental Plan | Huntington Supplemental 401(k) Plan (formerly the Huntington Supplemental Stock Purchase and Tax Savings Plan and Trust), as amended | IRS | Internal Revenue Service | LTI | Long-Term Incentive | LTIP | Long-Term Incentive Plan | MIP | Management Incentive Plan | NESG Committee | Nominating and ESG Committee | NEO | Named Executive Officer | OCC | Office of the Comptroller of the Currency | PCAF | Partnership for Carbon Accounting Financials | PCAOB | Public Company Accounting Oversight Board | Pearl Meyer | Pearl Meyer & Partners, LLC | PPNR | Pre-Provision Net Revenue | PSU | Performance Stock Unit |
| | | 2.21 | “EXECUTIVE DEFERRED COMPENSATION PLAN” means the Huntington Bancshares Incorporated Executive Deferred Compensation Plan, effective January 1, 2012, including any amendments thereto or any successor thereof.2023 Proxy Statement | 127 |
Back to Contents Acronym/Term | Definition | PTPP | Pre-Tax Pre-Provision | 2.22PwC | “EXTRAORDINARY EVENTS” means, with respect to the Corporation, any of the following: (i) changes in tax law, generally accepted accounting principles or other such laws or provisions affecting reported financial results, including unforeseen and extraordinary changes in statutes and regulations that govern the Corporation and its industry; (ii) accruals or charges relating to reorganization and restructuring programs; (iii) special gains, losses, or other financial impact in connection with the mergers and acquisitions involving the Corporation or any of its significant subsidiaries, the purchase or sale of branches or significant portions of the Corporation or any of its significant subsidiaries, or the sale of securities and investments of the Corporation; (iv) write-downs or write-offs of assets, including intangible assets such as goodwill and mortgage servicing rights (MSR) and valuation adjustments related to the impact of hedging (including MSR hedging); (v) litigation or claim matters; (vi) expenses relating to unplanned regulatory actions; (vii) any other significant item as discussed in management’s discussion and analysis of financial condition and results of operation appearing or incorporated by reference in the annual report on Form 10-K filed with the Securities and Exchange Commission; (viii) gains and losses on the early repayment of debt; or (ix) any other unforeseen events or occurrences of a similar nature as set forth by the Committee.PricewaterhouseCoopers LLP | Record Date | February 15, 2023 | 2.23Retirement Plan | “FAIR MARKET VALUE” shall be, on any given date, (1) the closing price at which the Shares were quoted on the NASDAQ Stock Market or such other established securities market on which the Shares are listed, or, if there were no reported sales of Shares on such date, then, unless otherwise required under Code Section 422, the business day immediately preceding such date; or (2) if the Shares are not listed for trading on a national exchange or if (1) above does not apply the price that the Committee in good faith determines through any reasonable valuation method that a Share might change hands between a willing buyer and a willing seller, neither being under compulsion to buy or to sell and both having reasonable knowledge of the relevant facts. Notwithstanding the above, for purposes of broker-facilitated cashless exercises of Awards involving Shares under theHuntington Bancshares Retirement Plan “Fair Market Value” shall mean the real-time selling price of such Shares as reported by the broker facilitating such exercises. | ROTCE | Return on Average Tangible Common Equity | 2.24RSU | “INCENTIVE STOCK OPTION” OR “ISO” means an option to purchase Shares granted under Article 6 herein and which is designated as an IncentiveRestricted Stock Option and which is intended to meet the requirements of Code Section 422. Unit | SASB | Sustainability Accounting Standards Board | 2.25SEC | “INSIDER” shall mean any person subject to the reporting requirements of Section 16 of theSecurities Exchange Act. Commission | SRIP | Supplemental Retirement Income Plan, as amended | 2.26TCF or TCF Financial | “LONG-TERM PERFORMANCE AWARD” means an Award to a Participant pursuant to Article 11 herein.TCF Financial Corporation | TCF Bank | TCF National Bank | 2.27TCF Merger | “NONEMPLOYEE DIRECTOR” means an individual who is a memberMerger of the Board but who is not an Employee. TCF Financial Corporation into Huntington Bancshares Incorporated and TCF National Bank into The Huntington National Bank | TCF Supplemental Plan | TCF 401K Supplemental Plan, as amended | 2.28TCFD | “NONQUALIFIED STOCK OPTION” OR “NQSO” means an option to purchase Shares granted under Article 6 herein and which is not intended to meet the requirements of Code Section 422.Task Force on Climate-Related Financial Disclosures | TSR | | 2.29 | “OPTION” means an Incentive Stock Option, or a Nonqualified Stock Option granted to a Participant pursuant to Article 6 herein. | | | 2.30 | “OPTION PRICE” means the price at which a Share may be purchased by a Participant pursuant to an Option. | | | 2.31 | “PARTICIPANT” means an Employee, Director, or Consultant, provided however, that Nonemployee Directors and Consultants may not be Participants in any ISO granted under the Plan. | | | 2.32 | “PERFORMANCE CYCLE” shall mean the period that is no less than one year designated by the Committee during which the performance objectives or goals must be met for Awards granted under the Plan. | | | 2.33 | “PERIOD OF RESTRICTION” means the period during which the transfer of Shares of Restricted Stock or Restricted Stock Units is limited in some way, which may be the achievement of performance objectives or the passage of time, or both, such that the Shares or RSUs are subject to a substantial risk of forfeiture. A |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
| | restriction based on the passage of time shall have a minimum one (1) year restriction period and shall not fully lapse until the date that is three (3) years after the date of grant except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of Awards with a time-based Period of Restriction shorter than mandated with respect to Awards representing no more than 5% of Shares available for grants (and subject to adjustment) under Article 4 of this Plan in such other circumstances that the Committee determines are in the best interests of the Corporation. | | | | 2.34 | “PERSON” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as described in Section 13(d) thereof. | | | | 2.35 | “PRIOR PLAN” shall mean the Huntington Bancshares Incorporated 2018 Long-Term Incentive Plan which originally became effective on the date of the 2018 annual meeting of the Corporation’s shareholders. | | 2023 Proxy Statement | | | 2.36 | “QUALIFYING PERFORMANCE CRITERIA” means any one or more of the following performance criteria upon which the achievement of specific, pre-established, performance goals for each Participant are based as determined by the Committee in connection with the grant and certification of Awards: | | | | | (a) | revenue and income measures (which include sales, revenues, net income, earnings per share, non-interest income to total revenue ratio, non-interest income growth, interest income, net operating profit, interest income, pretax pre-provision (pretax income on a tax equivalent basis adjusted for provision expense, security gains and losses, and amortization of intangibles), adjusted net income after capital charges, economic value added, and earnings before interest, taxes, depreciation and amortization; | | | | | (b) | expense and efficiency measures (which include “efficiency ratio” (the ratio of total non-interest operating expenses (less amortization of intangibles) divided by total revenues (less net security gains)), net interest margin, gross margins, operating margins, net-income margins, non-interest expense, operating efficiencies); | | | | | (c) | operating measures (which include productivity ratios, loan growth, deposit growth, customer profitability, and market share); | | | | | (d) | return measures (which include return on average equity, tangible common equity or return on tangible common equity, return on average assets, return on capital (actual or targeted), share price, share price growth, and total shareholder return); | | | | | (e) | credit quality measures (which include non-performing asset ratio, net charge-off ratio, and reserve coverage of non-performing loans); | | | | | (f) | leverage measures (which include debt-to-equity ratio and net debt); | | | | | (g) | risk measures (which include interest-sensitivity gap levels, regulatory compliance, satisfactory audit results, maintenance of required common equity levels (including common equity tier 1 levels), and financial ratings); | | | | | (h) | achievement of balance sheet, income statement, or cash-flow statement objectives; | | | | | (i) | achievement of strategic objectives, goals, or milestones (which include customer satisfaction and employee satisfaction survey results); | | | | | (j) | technology or innovation goals or objectives; | | | | | (k) | consummation of acquisitions, dispositions, projects or other specific events or transactions; | | | | | (l) | acquisition integration or disposition management goals or objectives; | | | | | (m) | product, customer or market-related objectives (including product revenues, revenue mix, product growth, customer growth, number or type of customer relationships, customer satisfaction, cross-selling goals, associate satisfaction, market share, branding); and | | | | | (n) | any other goals established by the Committee. | | | | | Qualifying Performance Criteria may be expressed in terms of (i) attaining a specified absolute level of the criteria, or (ii) a percentage increase or decrease in the criteria compared to a pre-established target, previous years’ results, or a designated market index or comparison group, all as determined by the Committee. Qualifying Performance Criteria also may be expressed in the form of a “multiplier” that may be a number or percentage that is to be multiplied by the amount otherwise payable under an Award in order to calculate the total amount payable under an Award. The value of such multiplier will be determined |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
| by satisfaction of performance goals related to the Qualifying Performance Criteria. The Qualifying Performance Criteria may be measured on an absolute basis or relative to an established target, to previous year or other comparable period or periods’ results, to a designated comparison group or groups, or to one or more designated external or internal indices or benchmarks, and may be applied either to the Corporation as a whole or to a business unit or subsidiary, in each case as determined by the Committee. Any specific metrics listed within the categories described above are intended to be illustrative and are not intended to be construed as limitations on the more general metrics. Qualifying Performance Criteria may be different for different Participants, as determined in the discretion of the Committee. The Committee may include or exclude Extraordinary Events or any other events or occurrences in establishing the performance goal based on the Qualifying Performance Criteria and may use any Extraordinary Event in determining whether the performance goal has been achieved. | | | | 2.37 | “RESTRICTED STOCK” means an Award granted to a Participant pursuant to Article 7 herein. | | | | 2.38 | “RESTRICTED STOCK UNIT” OR “RSU” means an Award granted to a Participant pursuant to Article 8 herein and which is settled (i) by the delivery of one (1) Share for each RSU, (ii) in cash in an amount equal to the Fair Market Value of one (1) Share for each RSU, or (iii) in a combination of cash and Shares, as determined by the Committee. The Award of an RSU represents the promise of the Corporation to deliver Shares, cash, or a combination thereof, as applicable, at the end of the Period of Restriction (or such later date as determined by the Committee) in accordance with and subject to the terms and conditions of the applicable Award Agreement, and is not intended to constitute a transfer of property within the meaning of Code Section 83(b). | | | | 2.39 | “RETIREMENT” with respect to an Award shall have the meaning set forth in the Participant’s Award Agreement, unless it is otherwise defined in any other agreement between the Corporation and a Participant. | | | | 2.40 | “SHARES” means the shares of common stock of the Corporation. | | | | 2.41 | “STOCK APPRECIATION RIGHT” OR “SAR” means an Award, granted alone or in connection with a related Option, designated as a SAR, pursuant to Article 9 herein. | | | | 2.42 | “SUBSIDIARY or “SUBSIDIARIES” means any corporation or other entity whose financial statements are consolidated with the Corporation, or any corporation or other entity that would otherwise satisfy the definition of “service recipient” under Code Section 409A. With respect to Incentive Stock Options, the term Subsidiary or Subsidiaries shall include only those entities that qualify under Code Section 424(f) as a “subsidiary corporation” of the Corporation. | | | | Article 3. Administration | | | | 3.1 | AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the Committee, except as limited by law or by the Charter or Bylaws of the Corporation. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have full power to: | | | | | (a) | select the Participants who shall participate in the Plan; | | | | | (b) | determine the sizes and types of Awards; | | | | | (c) | determine the terms and conditions of Awards (which need not be consistent among Participants) in a manner consistent with the Plan, including, without limitation, (i) the exercise or purchase price of Shares pursuant to any Award, (ii) the Fair Market Value of Shares or other property where applicable, (iii) the method of payment for Shares purchased pursuant to any Award, (iv) the method for satisfaction of any tax withholding obligation arising in connection with an Award, including the withholding or delivery of Shares, (v) the timing, terms and conditions of the exercisability or vesting of any Award or any Shares acquired pursuant thereto, including how such terms relate to a Change in Control, (vi) the time of the expiration of any Award, (vii) the effect of a Participant’s termination of service on any of the foregoing, and (viii) all other terms, conditions, and restrictions applicable to any Award or Shares acquired pursuant thereto consistent with the terms of the Plan; | | | | | (d) | delegate authority to the Corporation’s Chief Executive Officer and to the Chief Human Resources Officer to grant Awards under the Plan to any Participant other than (i) an executive who is subject to Section 16 of the Exchange Act, (ii) anyone who is an Executive Leadership Team Member of the Corporation, or (iii) a Director. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
| (e) | construe and interpret the Plan and any agreement or instrument entered into under the Plan as they apply to Participants; | | | | | (f) | establish, amend, or waive rules and regulations for the Plan’s administration as they apply to Participants; | | | | | (g) | require, whether or not provided for in the pertinent Award Agreement, of any Participant, the making of any representations or agreements that the Committee may deem necessary or advisable in order to comply with, or qualify for advantageous treatment under, applicable securities, tax, or other laws; and | | | | | (h) | (subject to the provisions of Article 18 herein) amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. | | | | | The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan. As permitted by law, the committee may delegate its authority as identified herein. | | | | 3.2 | DECISIONS BINDING. All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Board shall be final, conclusive, and binding on all persons, including the Corporation, its shareholders, Employees, Participants, and their estates and beneficiaries. | | | | Article 4. Shares Subject to The Plan and Maximum Awards | | | | 4.1 | NUMBER OF SHARES AVAILABLE FOR GRANTS AND MAXIMUM AWARDS. When first approved by shareholders, the Prior Plan reserved for issuance a maximum aggregate number of Shares equal to the sum of (i) 25 million (25,000,000) Shares plus (ii) the number of Shares authorized but not issued or subject to awards under the previous plan. Subject to adjustment as provided in this Article 4 herein, the maximum aggregate number of Shares hereby reserved for issuance to Participants under the Plan shall be no more than the sum of (i) thirty million (30,000,000), plus (ii) the number of Shares that are authorized, but not issued or subject to outstanding Awards under the Prior Plan as of the Effective Date. As of December 31, 2020, there were approximately 4.9 million (4,900,000) shares that were authorized, but not issued or subject to outstanding Awards under the Prior Plan. The Shares issued under the Plan may be authorized and unissued Shares or Shares purchased on the open market. | | | | | The following rules shall apply to grants of Awards under the Plan: | | | | | (a) | The maximum aggregate number of Shares which may be subject to (1) one or more Option Awards pursuant to Article 6, (2) one or more SAR Awards (whether settled in cash, Shares, or a combination thereof) pursuant to Article 9, or (3) any combination of Option Awards or SAR Awards to a Participant shall be ten million (10,000,000) Shares over any five (5) year period. | | | | | (b) | The maximum aggregate cash Award or cash equivalent value of an Award of Shares at the date of grant that may be paid with respect to any specified Performance Cycle to a Participant pursuant to any Long-Term Performance Award pursuant to Article 11 shall be twelve million dollars ($12,000,000). | | | | | (c) | The maximum aggregate cash equivalent value at the date of grant of (1) Awards of Restricted Stock pursuant to Article 7, (2) Awards of RSUs pursuant to Article 8 (whether settled in cash, Shares, or a combination thereof, whether vesting of the RSUs is time-based, performance-based, or a combination thereof), (3) Awards of Deferred Stock Units under Article 10, or (4) any combination thereof that may be awarded to a Participant for any calendar year shall be twelve million dollars ($12,000,000). | | | | | (d) | Notwithstanding the foregoing, the maximum aggregate cash equivalent value at the date of grant of Awards granted to Nonemployee Directors during the term of this Plan shall be $10,000,000. | | | | | The limitations set forth above shall apply only with respect to Awards granted under this Plan, and limitations on awards granted under any other incentive plan maintained by the Corporation shall be governed solely by the terms of such other plan. | | | | 4.2 | REDUCTION OF SHARES AND LAPSED AWARDS. The maximum number of Shares available for issuance under the Plan shall be reduced by the full number of Shares covered by Option Awards and SAR Awards granted under the Plan. This reduction shall include the full number of Shares covered by any Option or SAR, regardless of whether (1) any Shares are tendered in payment of any Option or SAR, (2) any such Option, SAR, or other Award covering Shares under the Plan ultimately is settled in cash or by delivery of |
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| Shares (either by share netting, an attestation process, or actual delivery), (3) Shares were used to satisfy the purchase price of an Award or to satisfy any tax withholdings, or (4) Shares were repurchased by the Company with Option or SAR proceeds. The maximum number of Shares available for issuance under the Plan shall be reduced by one (1) Share for every Share covered by all other Awards granted under the Plan. If, however, any Award granted under this Plan terminates, expires, is forfeited because any performance or time-based vesting requirements were not satisfied, or lapses for any reason, any Shares subject to such Award shall again be available for a grant of an Award under the Plan. For the avoidance of doubt, Awards payable and settled solely in cash shall not reduce the number of Shares available for Awards under the Plan. | | | 4.3 | ADJUSTMENTS IN AUTHORIZED SHARES. In the event that any dividend (other than normal cash dividends) or other distribution (whether in the form of cash, Shares, other securities or other property), stock split or a combination or consolidation of the outstanding Shares is declared with respect to the Shares, the authorized number of Shares that may be delivered under the Plan and that may be subject to outstanding Awards set forth in Article 4.1 shall be increased or decreased proportionately, and the Shares then subject to each Award shall be increased or decreased proportionately without any change in the aggregate purchase price or exercise price thereof. | | | | In the event that Shares shall be changed into or exchanged for a different number or class of shares of stock or securities of the Corporation or of another corporation, whether through recapitalization, reorganization, reclassification, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Corporation, issuance of warrants or other rights to purchase Shares or other securities of the Corporation, or any other similar corporate transaction or event affects the Shares such than an equitable adjustment would be necessary to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the authorized number of Shares that may be delivered under the Plan and that may be subject to outstanding Awards set forth in Article 4.1 shall be adjusted proportionately, and an equitable adjustment shall be made to each Share subject to an Award such that no dilution or enlargement of the benefits or potential benefits occurs. Each such Share then subject to each Award shall be adjusted to the number and class of shares into which each outstanding Share shall be so exchanged such that no dilution or enlargement of the benefits occurs, all without change in the aggregate purchase price for the Shares then subject to each Award. | | | | Action by the Committee pursuant to this Article 4.3 may include adjustment to any or all of: (i) the number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards or be delivered under the Plan; (ii) the number and type of Shares (other securities or other property) subject to outstanding Awards; (iii) the purchase price or exercise price of a Share under any outstanding Award or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments the Committee determines to be equitable. Any adjustment of Options or SARs, however, shall be made in a manner to avoid being considered a modification within the meaning of Code Section 424(h)(3) and Code Section 409A. | | | | Awards may be granted, in the discretion of the Committee, in substitution for similar awards held by individuals who become Employees, Nonemployee Directors, or Consultants as a result of (i) a merger, consolidation, or acquisition by the Corporation of another entity or (ii) the acquisition by the Corporation of substantially all of the assets of another entity. Unless otherwise required by applicable law or regulation, Shares granted through the assumption of or in substitution for outstanding awards granted by a company that is merged or consolidated with, or acquired by, the Corporation shall not be subject to the Share limitations of Article 4.1. | | | Article 5. Eligibility and Participation | | | 5.1 | ELIGIBILITY. Persons eligible to participate in this Plan include any Employee, Nonemployee Director, and Consultant, including any Employee who is a member of the Board. | | | 5.2 | ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, Nonemployee Directors, and Consultants, those to whom Awards shall be granted and shall determine the nature and amount of each Award. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
Article 6. Stock Options | | | | 6.1 | GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. | | | | | No Option shall be granted to any Employee, Nonemployee Director, or Consultant if, upon the granting of such Option, the number of Shares then subject to all Options to purchase held by the Employee, Nonemployee Director, or Consultant, as the case may be, plus the Shares then owned by such Employee, Nonemployee Director, or Consultant would constitute more than ten (10%) of the total combined voting power of all classes of stock of the Corporation. For the purpose of the preceding sentence, an Employee, Nonemployee Director, or Consultant shall be deemed to own all Shares which are attributable to him or her under Code Section 424(d), including, without limiting the generality of the foregoing, shares owned by his or her brothers, sisters, spouse, ancestors, and lineal descendants. | | | | | The Committee may not grant ISOs under the Plan to any Employee which would permit the aggregate Fair Market Value (determined on the date of grant) of Shares with respect to which ISOs (under this and any other plan of the Corporation) are exercisable for the first time by such Employee during any calendar year to exceed one hundred thousand dollars ($100,000). Any excess shall be deemed a NQSO. No ISO shall be granted to a Nonemployee Director or Consultant. | | | | | If Shares acquired upon exercise of an Incentive Stock Option are disposed of by a Participant prior to the expiration of either two (2) years from the date of grant of such Incentive Stock Option or one year from the transfer of Shares to such Participant pursuant to the exercise of such Incentive Stock Option, or in any other disqualifying disposition within the meaning of Code Section 422, such Participant shall notify the Corporation in writing of the date and terms of such disposition and shall cooperate with the Corporation with respect to any tax withholding required or resulting from such disqualifying dispositions. A disqualifying disposition by a Participant shall not affect the status of any other Incentive Stock Option granted under the Plan as an Incentive Stock Option. | | | | 6.2 | AWARD AGREEMENT. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains, the date of grant, vesting restrictions, if any, and such other provisions as the Committee shall determine. The Award Agreement also shall specify whether the Option is intended to be an ISO or an NQSO. Notwithstanding the foregoing, an Option shall have a minimum one (1) year vesting period and shall become fully vested no earlier than the date that is three (3) years after the date of grant of such Option, except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of Options with a time-based Period of Restriction shorter than mandated to the extent that the Shares underlying such Award and all other Awards granted under this Plan total no more than 5% of all Shares available for grants (subject to adjustment) under Article 4 of this Plan. | | | | 6.3 | OPTION PRICE. The Option Price for each grant of an Option under this Plan shall be determined by the Committee but shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted; provided, however, that for Options granted through the assumption of or in substitution for outstanding awards granted by a company that is merged or consolidated with, or acquired by, the Company, the Option Price shall be determined by the Committee in its sole discretion and, if applicable, consistent with Code Section 424(a). | | | | 6.4 | DURATION OF OPTIONS. Each Option granted to an Employee, Nonemployee Director, or Consultant shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no Option shall be exercisable on or later than the tenth (10th) anniversary date of its grant. | | | | 6.5 | EXERCISE OF OPTIONS. | | | | | (a) | General. Except as otherwise provided in this Plan, Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance determine, which need not be the same for each grant or for each Participant. Options granted under this Article 6 shall be exercised by the delivery to the Corporation of written or other notice acceptable to the Corporation setting forth the number of Shares with respect to which the |
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| | Option is to be exercised. The Committee also may provide, in an Award Agreement or otherwise, that if a Participant has not exercised an Option the day before the Option would expire, and the Fair Market Value of the Shares underlying such Option exceeds the Option Price, such Option shall be automatically exercised immediately before it would otherwise expire. | | | | | (b) | Method of Exercise. The Option Price upon exercise of any Option shall be payable to the Corporation in full either: (a) in cash or its equivalent; (b) by tendering previously acquired Shares, including by attestation, having an aggregate Fair Market Value equal to the total Option Price; (c) by authorizing the Corporation to withhold from the total number of Shares as to which the Option is being exercised the number of Shares having a Fair Market Value on the date of exercise equal to the total Option Price; (d) by a combination of (a), (b), and (c); (e) subject to applicable securities laws and restrictions, through a broker-facilitated cashless exercise procedure acceptable to the Committee, or (f) by any other means which the Committee determines to be consistent with the Plan’s purpose and applicable law. | | | | 6.6 | EXERCISE UPON TERMINATION OF EMPLOYMENT. Except as otherwise provided in this Plan or as otherwise provided in the Award Agreement or by the Committee, in the event that the employment of a Participant is terminated for any reason other than death, Disability, or Retirement, the rights under each then outstanding unvested Option granted to the Participant pursuant to the Plan shall be forfeited and any vested Option shall terminate upon the earlier of (1) the expiration of such Option, or (2) sixty (60) days after the Participant’s termination of employment, unless such termination of employment was for Cause. | | | | | In the event that the employment of a Participant is terminated by reason of Retirement, each then outstanding Option of such Participant shall continue to be exercisable at such times and be subject to such restrictions and conditions, including expiration, as set forth in the applicable Award Agreement. Notwithstanding any other provision in the Plan to the contrary, in the event of the Retirement of a Participant, each then outstanding vested ISO not exercised within three (3) months of termination of employment shall automatically convert to an NQSO. | | | | | In the event that the employment of a Participant is terminated by reason of death or Disability, all such Participant’s then outstanding Options shall become exercisable in full, and the Participant or (in the case of a Participant’s death) the executor or administrator of such Participant’s estate or a person or persons who have acquired the Options directly from such Participant by bequest, inheritance, or by reason of written designation as a beneficiary on a form proscribed by the Corporation, shall have until the earlier of (i) the expiration dates of such Options or (ii) thirteen (13) months after the Participant’s date of death or Disability, to exercise such Options. Notwithstanding any other provision in the Plan to the contrary, in the event of the Disability of a Participant, each then outstanding vested ISO not exercised within twelve (12) months of termination of employment shall automatically convert to an NQSO. | | | | | Notwithstanding any provision of the Plan to the contrary, if a Participant’s employment is terminated for Cause, the rights under each then outstanding Option granted to the Participant pursuant to the Plan shall immediately terminate, regardless of whether the Participant otherwise would have qualified for Disability or Retirement. | | | | | In addition to the foregoing, the Committee may include such provisions in the Award Agreement entered into with each Participant as it deems advisable (which may be more restrictive than described above), which provisions need not be uniform among all Options issued pursuant to this Article 6, and which may reflect distinctions based on the reasons for termination of employment. | | | | 6.7 | EXERCISE UPON TERMINATION OF DIRECTORSHIP OR CONSULTANCY. Except as otherwise provided in this Plan, if a Participant’s status as a Nonemployee Director or Consultant ceases for any reason other than Retirement or death, any outstanding NQSO granted to such Participant under the Plan shall terminate thirteen (13) months after the termination of such Participant’s status as a Nonemployee Director or Consultant, as the case may be; provided, however, that no Option shall be exercisable after its expiration date. | | | | | If a Participant’s status as a Nonemployee Director or Consultant ceases by reason of Retirement, then all such Participant’s outstanding Options shall become exercisable in full, and such Participant may exercise such Options until their expiration date. | | | | | If a Participant’s status as a Nonemployee Director or Consultant ceases by reason of death, or a Participant who was a Nonemployee Director or Consultant dies after Retirement, all such Participant’s |
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| then outstanding Options shall become exercisable in full, and the executor or administrator of such Participant’s estate or a person or persons who have acquired the Options directly from such Participant by bequest, inheritance, or by reason of written designation as a beneficiary on a form proscribed by the Corporation, shall have until the expiration dates of such Options or thirteen (13) months after the Participant’s date of death, whichever first occurs, to exercise such Options. | | | 6.8 | RESTRICTIONS ON SHARE TRANSFERABILITY. In addition to the foregoing, the Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. | | | 6.9 | DIVIDENDS AND OTHER DISTRIBUTIONS. Participants shall not be entitled to dividends or dividend equivalents with respect to an Option. | | | 6.10 | NON-TRANSFERABILITY OF OPTIONS. No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution. Further, all ISOs granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant. | | | Article 7. Restricted Stock | | | 7.1 | GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to Participants in such amounts as the Committee shall determine. | | | 7.2 | RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock granted, and such other provisions as the Committee shall determine. | | | 7.3 | OTHER RESTRICTIONS. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock, restrictions based upon the achievement of specific performance objectives (Corporation-wide, business unit, and/or individual), Qualifying Performance Criteria, a Performance Cycle, time-based restrictions, and/or restrictions under applicable federal or state securities laws. Notwithstanding the foregoing, the Period of Restriction under any Restricted Stock Agreement shall have a minimum one (1) year period of restriction and may not fully lapse until the date that is three (3) years after the date of grant of such Restricted Stock, except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of Restricted Stock with a time-based Period of Restriction shorter than mandated to the extent that the Shares underlying such Award and all other Awards granted under this Plan total no more than 5% of all Shares available for grants (subject to adjustment) under Article 4 of this Plan. | | | | The Corporation shall either retain the certificates representing Shares of Restricted Stock in the Corporation’s possession or shall hold the Shares of Restricted Stock electronically with its transfer agent in the name of applicable Participants and for the benefit of applicable Participants until such time as all conditions and/or restrictions applicable to such Shares have been satisfied. | | | | Except as otherwise provided in this Article 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after the last day of the applicable Period of Restriction. | | | 7.4 | VOTING RIGHTS. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares. | | | 7.5 | DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may, at the discretion of the Committee, be credited with regular cash dividends paid with respect to the underlying Shares while they are so held. Such dividends shall not be paid currently and instead shall either be accrued as contingent cash obligations or be converted into |
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| additional Shares of Restricted Stock subject to the same vesting conditions as the original grant and upon such terms as the Committee establishes. For the avoidance of doubt, such dividend equivalents shall not be paid unless and until the Shares underlying such Awards vest. | | | 7.6 | NONTRANSFERABILITY. During any Period(s) of Restriction, the Participant shall have no right to transfer any rights with respect to its Award of Shares of Restricted Stock. | | | Article 8. Restricted Stock Units | | | 8.1 | GRANT OF RSUs. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant RSUs to Participants in such amounts as the Committee shall determine. | | | 8.2 | AWARD AGREEMENT. Each RSU shall be evidenced by an Award Agreement that shall specify the Period(s) of Restriction, the number of RSUs granted, the form of payment of the RSU, and such other provisions as the Committee shall determine. | | | 8.3 | OTHER RESTRICTIONS. The Committee shall impose such other conditions and/or restrictions on any RSUs granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each RSU, restrictions based upon the achievement of specific performance objectives (Corporation-wide, business unit, and/or individual), Qualifying Performance Criteria, a Performance Cycle, time-based restrictions, and/or restrictions under applicable federal or state securities laws. Notwithstanding the foregoing, the Period of Restriction under any Restricted Stock Unit Award Agreement shall have a minimum one (1) year period of restriction and may not fully lapse until the date that is three (3) years after the date of grant of such RSU, except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of RSUs with a time-based Period of Restriction shorter than mandated to the extent that the Shares underlying such Award and all other Awards granted under this Plan total no more than 5% of all Shares available for grants (subject to adjustment) under Article 4 of this Plan. | | | 8.4 | VOTING RIGHTS. Prior to the distribution of Shares (if any) under an RSU, Participants holding RSUs may not exercise any voting rights with respect to such RSUs. | | | 8.5 | DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction, unless otherwise determined by the Committee in its discretion, Participants holding RSUs shall not be entitled to any dividends or dividend equivalents with respect to such RSUs. Notwithstanding the foregoing, if dividend equivalents are awarded with respect to any RSUs, such dividend equivalents may not be paid currently and instead shall either be accrued as contingent cash obligations or be converted into RSUs subject to the same performance-based conditions as the original grant and upon such other terms as the Committee establishes. For the avoidance of doubt, such dividend equivalents shall not be paid unless and until the Shares underlying such Awards vest. | | | 8.6. | NONTRANSFERABILITY. During any Period(s) of Restriction, the Participant shall have no right to transfer any rights with respect to his or her Award of RSUs. | | | Article 9. Stock Appreciation Rights | | | 9.1 | GRANT OF SARs. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant SARs to Participants in such amounts as the Committee shall determine. A SAR shall represent a right to receive a payment in cash, Shares, or a combination thereof, equal to the excess of the Fair Market Value of a specified number of Shares on the date the SAR is exercised over an amount (the “SAR exercise price”) which shall be no less than the Fair Market Value on the date the SAR was granted (or the Option Price for SARs granted in tandem with an Option), as set forth in the applicable Award Agreement. | | | 9.2 | AWARD AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement that shall specify the SAR exercise price, the duration of the SAR, the number of Shares to which the SAR pertains, whether the SAR is granted in tandem with the grant of an Option or is freestanding, the form of payment of the SAR upon exercise, and such other provisions as the Committee shall determine. SARs granted under this Article |
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| 9 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve and which shall be set forth in the applicable Award Agreement, which need not be the same for each grant or for each Participant. Notwithstanding the foregoing, a SAR shall have a minimum of one (1) year vesting period and shall not fully vest until the date that is three (3) years after the date of grant of such SAR, except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of SARs with a time-based Period of Restriction shorter than mandated to the extent that the Shares underlying such Award and all other Awards granted under this Plan total no more than 5% of all Shares available for grants (subject to adjustment) under Article 4 of this Plan. | | | 9.3 | DURATION OF SAR. Each SAR granted to a Participant shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no SAR shall be exercisable on or later than the tenth (10th) anniversary date of its grant. | | | 9.4 | EXERCISE. SARs shall be exercised by the delivery to the Corporation of written or other notice of exercise acceptable to the Corporation, setting forth the number of Shares with respect to which the SAR is to be exercised. The date of exercise of the SAR shall be the date on which the Corporation shall have received notice from the Participant of the exercise of such SAR. SARs granted in tandem with the grant of an Option may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. SARs granted in tandem with the grant of an Option may be exercised only with respect to the shares for which its related Option is then exercisable. | | | | With respect to SARs granted in tandem with an ISO, (a) such SAR will expire no later than the expiration of the underlying ISO, (b) the value of the payout with respect to such SAR may be for no more than 100% of the difference between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time such SAR is exercised, and (c) such SAR may be exercised only when the Fair Market Value of the Shares subject to the underlying ISO exceeds the Option Price of the ISO. | | | | SARs granted independently from the grant of an Option may be exercised upon the terms and conditions contained in the applicable Award Agreement. In the event the SAR shall be payable in Shares, a certificate for the Shares acquired upon exercise of an SAR shall be issued in the name of the Participant, or the Corporation shall transfer the Shares electronically from its transfer agent to the Participant, as soon as practicable following receipt of notice of exercise. No fractional Shares will be issuable upon exercise of the SAR and, unless provided in the applicable Award Agreement or otherwise determined by the Committee, the Participant will receive cash in lieu of fractional Shares. | | | 9.5 | EXERCISE UPON TERMINATION OF EMPLOYMENT OR SERVICE. Each Participant’s Award Agreement shall set forth the extent to which the Participant shall have the right to exercise a SAR following termination of the Participant’s employment or service with the Corporation. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into the Participants, need not be uniform among all SARs issued pursuant to this Article 9, and may reflect distinctions based on the reasons for termination of employment or service. | | | 9.6 | DIVIDENDS AND OTHER DISTRIBUTIONS: Participants shall not be entitled to dividends or dividends equivalent with respect to SARs. | | | 9.7 | NON-TRANSFERABILITY. Unless otherwise determined by the Committee in its discretion, no SAR granted under this Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, SARs granted in tandem with an ISO granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant. | | | Article 10. Deferred Stock Units and Other Incentive Awards | | | 10.1 | GRANT OF DEFERRED STOCK UNITS. Subject to the terms and provisions of the Plan, the Committee may authorize the grant or sale of Deferred Stock Units to Participants in such amounts the Committee shall determine. Each such grant or sale shall constitute the agreement by the Corporation to deliver Shares to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of |
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| such conditions during the Deferral Period as the Committee may specify. Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Fair Market Value of the Shares at the date of grant. | | | 10.2 | AWARD AGREEMENT. Each grant or sale of Deferred Stock Units shall be evidenced by an Award Agreement, which shall specify the form of payment of the Award and contain such terms and provisions, consistent with this Plan, as the Committee may approve. | | | 10.3 | DEFERRAL PERIOD. Each such grant or sale shall be subject, except (if the Committee shall so determine) in the event of a Change in Control or other similar transaction or event, to a Deferral Period of not less than one (1) year, as determined by the Committee at the date of grant. | | | 10.4 | VOTING RIGHTS. During the Deferral Period, the Participant shall have no rights of ownership in the Shares of Deferred Stock Units and shall have no right to vote them. | | | 10.5 | DIVIDENDS. During the Deferral Period (or Period of Restriction for any other incentive Award described in Section 10.7), the Committee may, at or after the date of grant, authorize payment of dividend equivalents on any Shares underlying Deferred Stock Units or other incentive Awards described in Section 10.7. If dividend equivalents are awarded with respect to any Deferred Stock Units or other incentive Awards, such dividend equivalents shall not be paid currently and instead shall either be accrued as contingent cash obligations or be converted into Shares of performance-based Deferred Stock Units or other incentive Awards subject to the same performance-based conditions as the original grant and upon such other terms as the Committee establishes. For the avoidance of doubt, such dividend equivalents shall not be paid unless and until the Shares underlying such Awards vest. | | | 10.6 | NON-TRANSFERABILITY. During the Deferral Period, no Shares underlying Deferred Stock Units may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. | | | 10.7 | OTHER INCENTIVE AWARDS. The Committee may from time to time grant other incentive Awards, including Shares and other Awards under the Plan that are valued in whole or in part by reference to, or are otherwise based upon the Fair Market Value of Shares and are payable in cash, Shares, or a combination of cash and Shares. The Committee, in its sole discretion, shall determine the terms and conditions of such Awards, which shall be consistent with the terms and purposes of the Plan. Accordingly, the Period of Restriction under any such other incentive Award Agreement shall have a minimum one (1) year period of restriction and may not fully lapse until the date that is three (3) years after the date of grant of such Award, except as otherwise may be provided in the Award Agreement for (a) Retirement, (b) involuntary terminations of employment without Cause, (c) death, or (d) Disability. Notwithstanding the foregoing, the Committee may provide for the grant of other incentive Awards with a time-based Period of Restriction shorter than mandated to the extent that the Shares underlying such Award and all other Awards granted under this Plan total no more than 5% of all Shares available for grants (subject to adjustment) under Article 4 of this Plan. If any dividend equivalents are granted with respect to other incentive Awards, they will be paid in the manner described under Section 10.5 of this Plan. | | | Article 11. Long-Term Performance Awards | | | 11.1 | LONG-TERM PERFORMANCE AWARDS. Subject to the terms and provisions of the Plan, a Participant shall have the opportunity to receive an Award of cash, Shares, or a combination thereof, in such amounts and upon such terms and at such times as determined by the Committee in its sole discretion. | | | 11.2 | TERMS OF LONG-TERM PERFORMANCE AWARDS. The Committee shall set performance objectives in its discretion which, depending on the extent to which they are met, will determine the number of Shares and/or value of Long-Term Performance Awards that will be paid to the Participant. The Committee shall establish the Performance Cycle for each Long-Term Performance Award (which shall be no less then one year) and shall impose such other conditions and/or restrictions on any Long-Term Performance Awards as it may deem advisable including, without limitation, restrictions based upon the achievement of specific performance objectives (Corporation-wide, business unit, and/or individual), Qualifying Performance Criteria, time-based restrictions, and/or restrictions under applicable federal or state securities laws. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
11.3 | EARNING OF LONG-TERM PERFORMANCE AWARDS. Subject to the terms of this Plan and Article 11, after the applicable Performance Cycle has ended, the Participant shall be entitled to receive a payment of the number of Shares and/or cash earned by the Participant over the applicable Performance Cycle. Notwithstanding the satisfaction of the performance objectives, except in the case of a Change in Control, the Committee has the discretion to reduce or eliminate a Long-Term Performance Award that would otherwise be paid to any Participant based on the Committee’s evaluation of Extraordinary Events or other factors. | | | 11.4 | FORM AND TIMING OF PAYMENT OF LONG-TERM PERFORMANCE AWARDS. Payment of Long-Term Performance Awards shall be made as soon as practical following the close of the applicable Performance Cycle in a manner designated by the Committee, in its sole discretion. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay Long-Term Performance Awards in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value of the Long-Term Performance Awards at the close of the applicable Performance Cycle. Such Shares may be granted subject to any restrictions deemed appropriate by the Committee. | | | 11.5 | REQUIREMENT OF EMPLOYMENT. Except as otherwise provided in this Plan and as specified in Article 17, a Participant must remain in the employment of the Corporation until the payment of a Long-Term Performance Award in order to be entitled to payment; provided, however, that the Committee may, in its sole discretion, provide for a partial or full payment in the event the Participant is not so employed. | | | 11.6 | DIVIDEND EQUIVALENTS. For any Performance Cycle, the Committee may authorize payment of dividend equivalents on any Shares underlying Performance Awards. Such dividend equivalents may not be paid currently and instead shall either be accrued as contingent cash obligations or be converted into Shares subject to the same performance-based conditions as the original grant of Performance Awards and upon such other terms as the Committee establishes. For the avoidance of doubt, such dividend equivalents shall not be paid unless and until the Awards vest. Notwithstanding anything herein to the contrary, no dividend equivalents may be paid on any Shares underlying Performance Awards that failed to vest or that have been forfeited by the Participant. | | | 11.7 | NON-TRANSFERABILITY. A Long-Term Performance Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. | | | Article 12. Establishment and Certification of Awards | | | 12.1 | ESTABLISHMENT OF QUALIFYING PERFORMANCE CRITERIA. At such time deemed appropriate by the reasonable estimation of the Committee, the Committee shall, in its sole discretion, for each such Performance Cycle, determine and establish in writing one or more performance goals based on one or more Qualifying Performance Criteria applicable to the Performance Cycle for each Participant. The Committee may establish any number of differing Performance Cycles, performance goals, Qualifying Performance Criteria, and Awards for Participants running concurrently, in whole or in part. | | | 12.2 | CERTIFICATION OF ACHIEVEMENT OF QUALIFYING PERFORMANCE CRITERIA AND AMOUNT OF AWARDS. After the end of each Performance Cycle, or such earlier date if the Qualifying Performance Criteria are achieved, the Committee shall certify in writing, prior to the payment of any Award to a Participant, that the performance goal based on the Qualifying Performance Criteria for the Performance Cycle and all other material terms of the Plan were satisfied. This certification will include certification of the multiplier to be applied to the amount otherwise payable under an Award to determine the number of Shares or amount of cash to be paid to a Participant under an Award. | | | 12.3 | MAXIMUM AWARD TO PARTICIPANTS. The maximum aggregate number of Shares that may be subject to an Award and the maximum amount of compensation (whether represented by Shares, cash, or a combination thereof) that may be payable to a Participant shall be governed by Article 4 of this Plan. | | | 12.4 | TAX AND SECURITY LAWS. In the event that applicable tax and securities laws change to permit the Committee discretion to alter any terms of the Plan without obtaining shareholder approval of such changes, the Committee shall have the sole discretion to make such changes without obtaining shareholder approval. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
Article 13.Beneficiary Designation
| Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Corporation, and will be effective only when filed by the Participant in writing with the Corporation during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s brokerage account established for the Participant under this Plan. If the Participant designated a beneficiary for the brokerage account, benefits will be distributed to such beneficiary. Otherwise, benefits will be distributed in accordance with the beneficiary procedures under the brokerage account. |
Article 14.Deferrals
14.1 | PARTICIPANT-INITIATED DEFERRALS. Unless otherwise provided by the Committee, a Participant may elect to defer payment of the Participant’s Award under the Plan if deferral of an Award under the Plan is permitted pursuant to the terms of the Executive Deferred Compensation Plan or the Director Deferred Compensation Plan, as applicable, and the deferral complies with the terms of the Executive Deferred Compensation Plan and Director Deferred Compensation Plan, as applicable, and is completed under a procedure that is intended to comply with Code Section 409A and any guidance thereunder. |
14.2 | COMMITTEE-INITIATED DEFERRALS. Notwithstanding any provision of the Plan to the contrary, any payment due under this Plan to an “Executive Officer” under the Dodd-Frank Act shall not be made until such period specified under the Dodd-Frank Act, if applicable. If during this deferral period, (1) the Corporation experiences a financial loss or (2) the Committee learns of inappropriate risk-taking activities by the Participant, the Committee will reduce the amount of the payment otherwise due to the Participant, in accordance with the procedures set forth in the Dodd-Frank Act. In addition, except in the situation of a Change in Control, the Committee may defer payment of an Award for such period as the Committee may determine. Any such deferrals of payment under this paragraph shall be made in compliance with the Executive Deferred Compensation Plan or the Director Deferred Compensation Plan, as applicable, all applicable federal and state banking regulations, including the Dodd Frank Act, and in a manner that is intended to comply with Code Section 409A and any guidance thereunder. |
Article 15.Discretion to Reduce Awards and Delay Payment
| Except as specifically provided in this Plan or an Award Agreement, the Committee has no discretion to reduce or eliminate an Award settled in Shares that would otherwise be paid to any Participant. Notwithstanding any provision of this Plan to the contrary, except in the event of a Change in Control, the Committee has the discretion to reduce or eliminate an Award settled in cash that would otherwise be paid to any Participant based on the Committee’s evaluation of Extraordinary Events or other factors described in Article 20. Also notwithstanding any provision of this Plan to the contrary, the Committee, in its sole discretion, may delay making payment to a Participant of Shares or cash with respect to an Award, if the Committee reasonably believes that the making of the payment violates federal securities laws. In such circumstances, the payment will be made at the earliest date at which the Committee believes that the making of the payment will not cause the securities law violation. Additionally, if the Committee reasonably believes that the exercise of an Option would violate any applicable laws, government regulations, requirements of any securities exchange on which the Corporation’s Shares are traded, or any insider trading policy of the Corporation, the Committee, in its sole discretion, may prohibit any Participant from exercising an Option for such period of time that the Committee considers necessary to avoid such violation. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
Article 16.Effect of Change in Control
| Except as otherwise provided in the Plan, any Award Agreement granted hereunder, or any employment agreement between the Corporation and a Participant, upon a Change in Control all outstanding Awards which are subject to a Period of Restriction or are not fully vested shall become fully exercisable and all restrictions thereon shall terminate if: |
| (a) | within 12 months after a Change in Control of the Corporation occurs, the Participant’s service has been terminated by the Corporation (provided that such termination is for a reason other than for Cause); or | | | | | (b) | (1) the Corporation previously terminated the Participant’s service without Cause during the year before the Change in Control was consummated but after a third party or the Corporation had taken steps reasonably calculated to effect a Change in Control, and (2) it is reasonably demonstrated by the Participant that such termination of service was in connection with or in anticipation of a Change in Control. |
| Notwithstanding the foregoing, the Committee may determine and provide through an Award Agreement, or other means, the treatment of partially completed Performance Cycles (if any) for any Awards outstanding upon a Change in Control. Further, the Committee, as constituted before such Change in Control, is authorized, and has sole discretion, as to any Award, either at the time such Award is granted hereunder or any time thereafter, to take any one or more of the following actions: (i) provide for the cancellation of any Option or SAR for an amount of cash equal to the difference between the exercise price and the then Fair Market Value of the Shares covered thereby had such Option or SAR been currently exercisable, but only upon prior approval of the Corporation’s shareholders of such action; (ii) make such adjustment to any such Award then outstanding as the Committee deems appropriate to reflect such Change in Control; or (iii) cause any such Award then outstanding to be assumed, by the acquiring or surviving corporation, after such Change in Control. |
Article 17.Rights of Employees
17.1 | EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way the right of the Corporation to terminate any Participant’s employment at any time, with or without Cause, nor confer upon any Participant any right to continue in the employ of the Corporation. |
17.2 | PARTICIPATION. No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award. |
Article 18. | Amendment, Modification, Extension, Renewal, and Termination |
| Subject to the requirements of Code Section 409A, Code Section 424, and the Plan, the Committee may modify, extend, or renew outstanding Awards, or accept the surrender of outstanding Awards (to the extent not previously exercised and to the extent such surrender does not require shareholder approval as described below) granted under the Plan and authorize the granting of new Awards under the Plan in substitution of such Awards, and the modified, extended, renewed, or substituted Awards may have any provisions that are authorized by the Plan. The Board or Committee may at any time and from time to time, alter, amend, suspend, or terminate the Plan in whole or in part. Notwithstanding any provision to the contrary, however, the Committee shall not have the authority to, without shareholder approval, (1) change the limits set forth in Article 4.1, (2) change the minimum Option Price, (3) change eligible Participants to receive Awards, (4) reprice or alter the Option Price of any Option or exercise price of any SAR, previously awarded to any Participant, whether through amendment, exchange, cancellation and replacement grant, taking any action that would be treated as a repricing under the rules and regulations of the principal securities exchange on which the Shares are traded, or any other means, (5) buy out or cancel an existing Option or SAR (or accept the surrender thereof) in exchange for an amount of cash or Shares when the Fair Market Value of the Shares covered by the Option or SAR is less than the Option Price or exercise |
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| price of the SAR, or (6) permit the purchase of Shares subject to any unvested Option or SAR or waive the vesting requirement of any unvested Award except as a result of (a) a Change in Control, (b) the death of a Participant, or (c) a Participant’s separation from service with the Corporation as defined in accordance with Code Section 409A) due to Retirement or involuntary termination without Cause. Notwithstanding any provision of the Plan to the contrary, if the Committee determines that any Award may or does not comply with Code Section 409A, the Corporation may amend the Plan and the affected Award Agreement, or take any other action, without the Participant’s consent, that the Committee believes necessary or appropriate to (1) exempt the Plan and any Award from the application of Code Section 409A, or (2) comply with the requirements of Code Section 409A. |
Article 19.Withholding
19.1 | TAX WITHHOLDING.The Corporation shall have the power and the right to deduct or withhold, or require a Participant to remit to the Corporation, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan. |
19.2 | SHARE WITHHOLDING.With respect to withholding required upon the exercise of Options, upon the lapse of restrictions on Restricted Stock, RSUs, SARs, or Deferred Stock Units, or upon any other taxable event arising as a result of Awards granted hereunder, Participants may elect to satisfy the tax withholding requirement, in whole or in part, by (i) having the Corporation withhold Shares having a Fair Market Value on the date the tax is to be determined in an amount that does not exceed the maximum individual statutory tax rate in a given jurisdiction, or such other amount that does not trigger adverse accounting treatment under ASC 718 or any successor thereto, as determined by the Committee, or (ii) the delivery of shares to the Corporation (including attestation) having a Fair Market Value equal to the amount of the tax withholding obligations related to the transaction. All such elections shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. Delivery or withholding of fractional Shares shall not be permitted. |
Article 20.Forfeiture
| Except on or after a Change in Control or as otherwise provided in the applicable Award Agreement, and notwithstanding any other provisions in the Plan, in the event of: | | | | (1) a serious breach of conduct by a Participant or former Participant (including, without limitation, any conduct prejudicial to or in conflict with the Corporation or any securities laws violations including any violations under the Sarbanes-Oxley Act of 2002), or | | | | (2) any activity of a Participant or former Participant in which the Participant or former Participant solicits or takes away customers or potential customers with whom the Participant or former Participant had contact with or responsibility for during the Participant’s or former Participant’s employment with the Corporation (individually and collectively referred to as “Misconduct”), | | | | the Committee shall (a) terminate any outstanding Award granted to the Participant, in whole or in part, whether or not vested, and (b) if such Misconduct occurs within three (3) years of the exercise or payment of an Award, require the Participant or former Participant to repay the Corporation any gain realized or payment received upon the exercise or payment of such Award (with such gain or repayment valued as of the date of exercise or payment), without regard to when such Misconduct is actually discovered by the Corporation. Such termination or repayment obligation shall be effective as of the date specified by the Committee. Any repayment obligation may be satisfied in Shares or cash or a combination thereof (based upon the Fair Market Value of the Shares on the day prior to the repayment) and the Committee may provide for an offset of any future payments owed by the Corporation to such person if necessary to satisfy the repayment obligation. The determination of whether any Participant or former Participant has engaged in a serious breach of conduct or any prohibited solicitation shall be determined by the Committee in good faith and in its sole discretion. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
| Further, notwithstanding any provision of the Plan to the contrary, if the Corporation is required to restate any of its financial statements because of a material financial reporting violation, the Corporation shall recover the amount in excess of the Award payable under the Corporation’s restated financial statements, or such other amount required under the Dodd-Frank Act or any other applicable law or policy. The Corporation shall recover this amount from any current or former Participant who received a payment under this Plan during the three-year period preceding the date on which the restatement is required, or from any other individual specified in the Dodd-Frank Act. In addition, if the Committee determines that a Participant (1) took unnecessary or excessive risk, (2) manipulated earnings, or (3) engaged in any misconduct described in the Huntington Bancshares Incorporated Recoupment Policy (the “Recoupment Policy”), the Committee shall terminate the Participant’s participation in this Plan and require repayment of any amount previously paid under this Plan in accordance with the terms of the Recoupment Policy, any other applicable policy of the Corporation, and any other applicable laws and regulations. |
Article 21.Indemnification
| Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Corporation against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Corporation’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Corporation an opportunity at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Corporation’s Charter or Bylaws, as a matter of law, or otherwise, or any power that the Corporation may have to indemnify them or hold them harmless. |
Article 22.Successors
| All obligations of the Corporation under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Corporation, whether the existence of such successor is the result of a direct or indirect purchase of all or substantially all of the business and/or assets of the Corporation, or a merger, consolidation, or otherwise. |
Article 23.Unfunded Plan
| The Plan shall be unfunded and the Corporation shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Any liability of the Company to any person with respect to any Awards under the Plan shall be based solely upon any contractual obligations that may be effected pursuant to the Plan. Except as provided herein, no such obligation of the Corporation shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Corporation. |
Article 24.Notification Under Code Section 83(B)
| If the Participant, in connection with the exercise of any Option, or the grant of Shares from an Award of SARs, or Restricted Stock, desires to make the election permitted under Code Section 83(b) to include in such Participant’s gross income in the year of transfer the amounts specified in Code Section 83(b), then such Participant shall notify the Corporation of the desired election within ten (10) days before the filing of the notice of the election with the Internal Revenue Service in addition to any filing and notification required under regulations issued under Code Section 83(b). The Committee may, in connection with the grant of an Award or at any time thereafter before such an election being made, prohibit a Participant from making the election described above. |
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Appendix B: Amended and Restated 2018 Long-Term Incentive Plan
Article 25.Other Plans
| Nothing in this Plan shall be construed as limiting the authority of the Committee, the Board of Directors, the Corporation or any Subsidiary to establish any other compensation plan, or as in any way limiting its or their authority to pay bonuses or supplemental compensation to any persons employed by the Company or a Subsidiary, whether or not such person is a Participant in this Plan and regardless of how the amount of such compensation or bonus is determined. |
Article 26.Legal Construction
26.1 | GENDER AND NUMBER.Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. |
26.2 | SEVERABILITY. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included, but only if the intent of the Plan can be implemented without such severed provision. |
26.3 | REQUIREMENTS OF LAW.The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. |
26.4 | GOVERNING LAW.In order to benefit Participants by establishing a uniform application of law with respect to the administration of the Plan, the Plan and all agreements hereunder shall be interpreted in accordance with Ohio law, except to the extent superseded by federal law and without regard to any choice of law provisions. Any suit, action, or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with this Plan, shall be brought in any court of the State of Ohio and of the United States for the Southern District of Ohio. The Corporation, each Participant, and any related parties irrevocably and unconditionally consent to the exclusive jurisdiction of such courts in any such litigation related to this Plan and any agreements hereunder, such parties irrevocably and unconditionally waive any objection that venue is improper or that such litigation has been brought in an inconvenient forum. |
26.5 | CODE SECTION 409A.Anything under the Plan or an Award Agreement to the contrary notwithstanding, to the extent applicable, it is intended that Awards under the Plan be administered, interpreted, and construed in a manner necessary to comply with Code Section 409A or, to the extent administratively practicable, an exception to Code Section 409A. An Award that provides for a “deferral of compensation” subject to Code Section 409A shall comply with the provisions of Code Section 409A, and the Plan and all applicable Awards shall be construed and applied in a manner consistent with this intent. In furtherance thereof, any amount constituting a “deferral of compensation” under Treasury Regulation Section 1.409A-1(b) that is payable to a Participant upon a Retirement or other termination of service will be payable only if such event qualifies as a separation from service of the Participant (within the meaning of Treasury Regulation Section 1.409A-1(h)). Further, any amount constituting a “deferral of compensation” under Treasury Regulation Section 1.409A-1(b) that is payable to a Participant upon the Participant’s separation from service (other than due to the Participant’s death), occurring while the Participant shall be a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i) and the Corporation’s Executive Deferred Compensation Plan (or any successor thereto)) of the Company or Subsidiary, shall not be paid until the earlier of (a) the date that is six months following such separation from service or (b) the date of the Participant’s death following such separation from service. The grant of Options and SARs shall be granted under terms and conditions consistent with Treasury Regulation Section 1.409A-1(b)(5) such that any such Award does not constitute a “deferral of compensation” under Code Section 409A. It is further intended that distribution events under an Award qualify as permissible distribution events for purposes of Code Section 409A or an applicable exception, and this Plan and Award Agreements shall be interpreted accordingly. Neither the Corporation nor any Participant may accelerate or delay payment, settlement, or exercise of any Award except to the extent permitted under Code Section 409A or an applicable exception. |
26.6 | NO LIABILITY WITH RESPECT TO ADVERSE TAX TREATMENT.Notwithstanding any provision of this Plan to the contrary, in no event shall the Corporation or any Subsidiary be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S., foreign, state, local, or other tax or withholding treatment or (ii) avoid adverse tax or withholding treatment under U.S., foreign, state, local, or other law, including, without limitation, Code Section 409A. |
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|  | Awards and Recognitions | |
| • | One of America’s Most Responsible Companies 2020 by Newsweek. | | | | | | | • | Ranked highest in Customer Satisfaction with Mobile Banking Apps among Regional Banks, 2 years in a row, by J.D. Power. | | | | | | | • | One of the Best Employers for Women 2020 (third consecutive year) by Forbes. | | | | | | | • | One of America’s Best Employers for Diversity 2020 (third consecutive year) by Forbes. | | | | | | | • | Great Place to Work Certified September 2019 – September 2020 | | | | | | | • | One of the Best Places to Work for Disability Inclusion with a 100 percent score on the Disability Equality Index (DEI) – 2020, 2019, 2018, and 2017. | | | | | | | • | One of the Best Places to Work for LGBTQ Equality 2020, 2019, 2018, 2017, 2016, 2015, and 2014 by the Human Rights Campaign Foundation. | | | | | | | • | Recognized on the Diversity Best Practices Inclusion Index, by Diversity Best Practices | | | | | | | • | #1 Nationally for SBA 7(a) Loan Origination by Volume (3rd year in a row).* | | | | | | | • | #1 for SBA 7(a) Loan Origination by Volume within its footprint (12th year in a row).* | | | | | | | • | Earned 2020 ATD Best Award by the Association of Talent Development | |
| * | Largest by number of 7(a) loans for SBA fiscal years 2018-2020; Source U.S. Small Business Administration. | |
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0000049196 5 2022-01-01 2022-12-31 Table of Contents
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Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. |  |
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A | Proposals – The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. |
1. | Election of Directors: |  |
| 01 - Lizabeth Ardisana | | 02 - Alanna Y. Cotton | | 03 - Ann B. Crane | | 04 - Robert S. Cubbin | | 05 - Steven G. Elliott | | 06 - Gina D. France | | 07 - J. Michael Hochschwender | | 08 - John C. Inglis | | 09 - Katherine M. A. Kline | | 10 - Richard W. Neu | | 11 - Kenneth J. Phelan | | 12 - David L. Porteous | | 13 - Stephen D. Steinour | | | | |
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| | | 01 | | 02 | | 03 | | 04 | | 05 | | 06 | | 07 | | 08 | | 09 | | 10 | | 11 | | 12 | | 13 | | ☐ | For All EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ |
| | For | | Against | | Abstain | | | | | For | | Against | | Abstain | | 2. | An advisory resolution to approve, on a non-binding basis, the compensation of executives as disclosed in the accompanying proxy statement. | | ☐ | | ☐ | | ☐ | | 3. | The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | 4. | Approval of the Amended and Restated 2018 Long-Term Incentive Plan. | | ☐ | | ☐ | | ☐ | | 5. | Any other business that properly comes before the meeting. | | | | | | |
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The 2021 Annual Meeting of Shareholders of Huntington Bancshares Incorporated will be held on
Wednesday April 21, 2021, at 2:00 p.m. Eastern Time, virtually via the internet at www.meetingcenter.io/208317683.
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The password for this meeting is – HBAN2021
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Proxy – Huntington Bancshares Incorporated |  |
Proxy Solicited by the Board of Directors for Annual Meeting – April 21, 2021
The undersigned shareholder of Huntington Bancshares Incorporated, a Maryland corporation (“Huntington”), hereby appoints Kenneth K. Bellaire, Elizabeth B. Moore, and Erin F. Siegfried, or any of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the Huntington Annual Meeting of Shareholders to be held on Wednesday April 21, 2021, virtually via the internet at 2:00 p.m. Eastern Time, and any adjournment or postponement thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of Shareholders and of the accompanying Proxy Statement, the terms of each of which are incorporated by reference, and revokes any proxy heretofore given with respect to such meeting.
Huntington’s Board of Directors recommends a vote FOR each of the nominees for director and FOR proposals 2, 3 and 4.
IF THIS PROXY IS PROPERLY EXECUTED AND NO DIRECTION IS MADE, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST: FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN; FOR AN ADVISORY RESOLUTION TO APPROVE, ON A NON-BINDING BASIS, THE COMPENSATION OF EXECUTIVES AS DISCLOSED IN THE ACCOMPANYING PROXY STATEMENT; FOR THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021; AND FOR APPROVAL OF THE AMENDED AND RESTATED 2018 LONG-TERM INCENTIVE PLAN. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
Participants in the Huntington 401(K) Plan: This card also constitutes voting instructions to the Trustee of the Huntington 401(K) Plan (the “Plan”), Fidelity Management Trust Company. IF NO DIRECTION IS MADE, THE TRUSTEE WILL VOTE THE PARTICIPANT’S SHARES IN THE SAME PROPORTION ON EACH PROPOSAL AS IT VOTES THE SHARES CREDITED TO PARTICIPANTS’ ACCOUNTS FOR WHICH IT HAS RECEIVED VOTING INSTRUCTIONS.
(Items to be voted appear on reverse side)
Change of Address – Please print new address below. | |
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3%
46%
ESG
Strategic Planning / M&A
