UNITED STATES
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a party other than the Registrant o
Check the appropriate box:
o | Preliminary Proxy Statement | |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
x | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material |
Fulton Financial Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
x | No fee | |||
Fee paid previously with preliminary materials | ||||
o | Fee computed on table | |||
P.O. Box 4887
One Penn Square
Lancaster, Pennsylvania 17604
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELDTUESDAY,
MONDAY, MAY 25, 202120, 2024 AT 10:00 A.M. EASTERN TIME
TO THE SHAREHOLDERS OF FULTON FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of Directors, the 2024 Annual Meeting (the “Annual Meeting”) of the shareholders of FULTON FINANCIAL CORPORATIONFulton Financial Corporation (“Fulton”Fulton”) will be held virtually via live webcast on Tuesday,Monday, May 25, 2021,20, 2024, at 10:00 a.m., eastern time, at the Lancaster Marriott at Penn Square, 25 South Queen Street, Lancaster, Pennsylvania 17603, for the purpose of considering and voting upon the following matters:
· | ELECTION OF DIRECTORS. The election of |
· | ADVISORY VOTE ON EXECUTIVE |
· | RATIFICATION OF INDEPENDENT AUDITOR. The ratification of the appointment of KPMG LLP as Fulton’s independent auditor for the fiscal year ending December 31, | ||
OTHER BUSINESS. Such other business as may properly be brought before the Annual Meeting and any adjournments thereof.
Only those shareholders of record at the close of business on March 1, 2021, shall2024 will be entitled to be given notice of, to attend virtually and to vote at, the Annual Meeting. Please take a moment now to cast your vote over the Internetonline using your computer, by mobile device or by telephone in accordance with the instructions set forth on the enclosed proxy card or, alternatively, if you received paper copies of the this proxy statement (this “Proxy Statement”) and proxy card, tothen complete, sign and date the enclosed proxy card and return it in the postage-paid envelope provided. Shareholders attendingenvelope. If you attend the Annual Meeting, virtuallyyou may vote during the meeting in person or online by using the 16-digit control number that appears on the Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting,your proxy card and the instructions that accompanied the proxy materials, even if they haveyou previously votedvoted.
Your vote is important. Voting online using your computer, by proxy.
Voting via the Internetmobile device or by telephone prior to the meetingAnnual Meeting is fast and convenient, and your vote is immediately tabulatedconfirmed and confirmed.tabulated. Your proxy is revocable and may be withdrawn at any time before it is voted at the meeting.Annual Meeting. You are cordially invited to attend the virtual Annual Meeting on May 25, 202120, 2024 at 10:00 a.m. eastern time. If you plan on attending the Annual Meeting in person, then please see the instructions contained withinin this Proxy Statement.
A copy of Fulton’s 2023 Annual Report on Form 10-K (the “Annual Report”) accompanies this Proxy Statement.
| |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY STATEMENT
Dated and To Be Mailed on or about: April 1, 2021
P.O. Box 4887, One Penn SquareLancaster, Pennsylvania 17604(717) 291-2411
MATERIALS FOR THE 2024 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD VIRTUALLY ON MAY 25, 2021 STARTING AT 10:00 A.M.20, 2024. Our Proxy Statement and Annual Report are available online at www.proxyvote.com. We will mail to certain shareholders a Notice of Internet Availability of Proxy Materials which contains instructions on how to access these materials and vote online. We expect to mail this notice and to begin mailing our proxy materials on or about April 1, 2024.
Sincerely, | |
Natasha R. Luddington | |
April 1, 2024 | Senior Executive Vice President, Chief Legal Officer and Corporate Secretary |
[This Page Intentionally Left Blank]
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2024 ANNUAL MEETING SUMMARY |
This summary highlights information contained elsewhere in this proxy statement (this “Proxy Statement”) of Fulton Financial Corporation (“Fulton,” “we,” “our,” “us” or the “Company”). This summary provides an overview and is not intended to contain all the information that you should consider before voting. We encourage you to read this Proxy Statement for more detailed information prior to casting your vote.
When and Where | The 2024 Annual Meeting
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Matters to be Voted on and Vote Recommendations | Proposal | Board Recommendation | Page | ||||||
Proposal | Election of Directors.The election of | “FOR” each | 5 | ||||||
Proposal
| Advisory Vote on Executive Compensation. A non-binding | “FOR” approval | 28 | ||||||
Proposal | Ratification of Independent Auditor.The ratification of the appointment of KPMG LLP (“KPMG”) as Fulton’s independent auditor for the fiscal year ending December 31, | “FOR” ratification | 56 | ||||||
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How to Vote Your Shares | You can vote your shares by | Scan the following QR code with a mobile device. | You can vote your shares by calling | If you received a paper copy of | You can vote at the Annual | ||||
Electronic Delivery |
If you would like to save paper and reduce the costs incurred by Fulton in printing and mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and | ||||||||
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PROPOSAL 1 – ELECTION OF DIRECTORS |
The Nominating and Corporate Governance Committee (the “IntroductionNCG Committee
”) recommended, and the Fulton a Pennsylvania business corporation and registered financial holding company, was organized pursuantBoard of Directors (the “Board”) approved, 11 director nominees for election to a plan of reorganization adopted by Fulton Bank (“Fulton Bank”) and implemented on June 30, 1982. On that date, Fulton Bank became a wholly owned subsidiaryserve as directors of Fulton anduntil the shareholders of Fulton Bank became shareholders of Fulton. Since that time, Fulton has acquired other banks (all of which have since been merged into Fulton Bank), and Fulton Bank adopted a national charter (and adopted the name Fulton Bank, National Association).
In addition, Fulton has several other direct subsidiaries, including: Fulton Insurance Services Group, Inc. (which engages in the sale of various life insurance products); Fulton Financial Realty Company (which owns or leases certain properties on which branch and operational facilities are located); Central Pennsylvania Financial Corp. (which owns, directly or indirectly, certain limited partnership and limited liability company interests, principally in low- to moderate-income housing developments); and FFC Management, Inc. (which holds certain investment securities and other passive investments).
Date, Time and Place of Meeting
You are cordially invited to attend the Annual Meeting. The2025 Annual Meeting will be held Tuesday, May 25, 2021, at 10:00 a.m.of Shareholders (the “2025 Annual Meeting”) or until their successors are duly elected and conducted virtually via a webcast format only. There will be no in-person shareholder attendance atqualified.
The Board unanimously recommends that shareholders vote “FOR” the election of each of the 11 director nominees. |
The following table provides summary information regarding each director nominee as of the Annual Meeting. To vote at, or virtually attend,date of this Proxy Statement. Additional details about each of the Annual Meeting please go to the link thatdirector nominees can be found at www.proxyvote.com.beginning on page 9.
Director Nominee | Age | Fulton Director Since | Independent Director | Gender(1) | Demographic Background(2) | Committee Memberships |
Jennifer Craighead Carey | 55 | 2019 | - | F | AA | Risk Committee(*) |
Lisa Crutchfield | 61 | 2014 | 🗸 | F | AA | NCG Committee and Human Resources Committee(**) (the “HR Committee”) |
Denise L. Devine | 68 | 2012 | 🗸 | F | C | Executive Committee(**), Audit Committee(*) and Risk Committee |
Steven S. Etter | 70 | 2019 | 🗸 | M | C | NCG Committee and HR Committee |
George K. Martin | 70 | 2021 | 🗸 | M | AA | Risk Committee and NCG Committee(**) |
James R. Moxley III, Lead Director | 63 | 2015 | 🗸 | M | C | Executive Committee(*), Audit Committee and HR Committee |
Curtis J. Myers, Chairman of the Board (“Chairman”) and Chief Executive Officer (“CEO”) | 55 | 2019 | - | M | C | Executive Committee and Risk Committee(†) |
Antoinette M. Pergolin | 60 | 2022 | 🗸 | F | C | Audit Committee(**) and Risk Committee |
Scott A. Snyder | 58 | 2016 | 🗸 | M | C | Executive Committee, Risk Committee(**) and NCG Committee(*) |
Ronald H. Spair | 68 | 2015 | 🗸 | M | C | Executive Committee, Audit Committee and HR Committee(*) |
E. Philip Wenger | 66 | 2009 | - | M | C | Risk Committee |
(*) | Indicates committee chairperson |
(**) | Indicates committee vice chairperson |
(†) | Indicates ex-officio committee member |
(1) | Gender – Male (M) or Female (F) |
(2) | Demographic Background – African American (AA) or Caucasian (C) |
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Our Current Governance Best Practices
We are committed to maintaining strong corporate governance practices. The Annual Meeting can be viewed directly via the Internet at www.virtualshareholdermeeting.com/FULT2021. To participate in the Annual Meeting, you will need the 16-digit control number includedBoard regularly reviews our governance policies and procedures to ensure compliance with laws, rules and regulations. We are also committed to operating with corporate social responsibility as a central tenet and continue to focus attention on your proxy card or voting instruction form.
If you received an Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting, or if you requested proxy materialsenvironmental, social and governance (“ESG”) principles. Additional details about our corporate governance practices and our efforts to be provideda strong corporate citizen are set forth on page 16, and certain best practices are highlighted below.
Best Practices Include: | |||
Board Independence | Board Practices | Shareholders Rights | Shareholder Alignment |
ü Board-designated independent lead director (the “Lead Director”) ü Regular executive sessions chaired by the Lead Director ü Board and committee ability to hire outside advisors independent of management ü A majority of independent directors ü The Human Resources (“HR”), Audit and Nominating and Corporate Governance (“NCG”) Committees are composed entirely of independent directors ü The Audit, HR and NCG Committees are each chaired by an independent chairperson | ü Annual Board and committee self-evaluations ü Risk oversight and strategic planning by the full Board and committees ü Independent directors evaluate the CEO performance and approve CEO compensation ü Board has direct access to all of our senior executive officers ü Outside public board service limited to a total of four, including the Board | ü Annual election of all directors ü Resignation policy applicable in uncontested director elections ü Annual say-on-pay advisory vote | ü Officer and director stock ownership guidelines ü Anti-hedging and anti-pledging policies ü Rigorous compensation clawback policies that exceed Nasdaq requirements |
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PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION |
Our advisory vote on executive compensation (otherwise known as “say-on-pay”) is held annually. This proposal provides our shareholders with the opportunity to you by email, please govote to the link that can be found at www.proxyvote.com or directly at www.virtualshareholdermeeting.com/FULT2021. You will need to enter the 16-digit control number that appearsapprove, on the Important Notice regarding the Availability of Proxy Materials for the Shareholder Meeting or proxy materials sent to you.
Shareholders Entitled to Vote at and Attend Meeting
Attendance at the Annual Meeting will be limited to shareholders of record at the close of business on March 1, 2021 (the “Record Date”), their authorized representatives and guests of Fulton. Only those shareholders of record as of the Record Date shall be entitled to receive notice of, attend and vote at the Annual Meeting.
Fulton shareholders will be asked to consider and vote upon the following matters at the Annual Meeting: (i) the election of fourteen (14) director nominees to serve for one-year terms; (ii) a non-binding Say-on-Pay resolution to approveadvisory basis, the compensation of Fulton’s NEOs as discussed in this Proxy Statement, including the named executive officerscompensation, discussion and analysis and accompanying compensation tables and narrative discussion (the “CD&A”). The Board believes that the compensation of our NEOs is appropriate and should be approved on an advisory basis by our shareholders.
As an advisory vote, this proposal is not binding upon the Board, the HR Committee or Fulton. The HR Committee, however, values the opinions expressed by shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for 2020; (iii)our NEOs. The CD&A beginning on page 29 provides a more detailed description of Fulton’s compensation philosophy and practices, and certain items are highlighted below.
The Board unanimously recommends that shareholders vote “FOR” the approval of the compensation paid to Fulton’s NEOs as disclosed in this Proxy Statement, including the CD&A, compensation tables and narrative discussion. |
Our Compensation Philosophy | |
Alignment with Shareholder Interests | • Executive officers’ interests are closely aligned with the interests of our shareholders. • Executive officer stock ownership requirements. • Incentive compensation based on financial results, risk management and business objectives. |
Pay for Performance | • Executive officer compensation is linked to the achievement of our short-and long-term business goals as well as total shareholder return (“TSR”). • Majority of NEOs’ compensation is variable and performance-based. |
Attract and Retain Key Executives | • Annual peer group evaluation and benchmarking. |
PROPOSAL 3 – RATIFICATION OF INDEPENDENT AUDITOR |
As a matter of good corporate practice, we are seeking your ratification of the appointment of KPMG LLP as Fulton’sour independent auditor for the fiscal year ending December 31, 2021;2024. If our shareholders do not ratify the selection of KPMG, the Audit Committee may reconsider its selection.
For 2023, the total fees for services provided by KPMG, our current independent auditor, were $2,623,000, all of which represented audit fees, except for $63,000 in tax fees. Additional details about audit matters can be found beginning on page 56.
The Board unanimously recommends that shareholders vote “FOR” the ratification of the appointment of KPMG as Fulton’s independent auditor for the fiscal year ending December 31, 2024. |
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PROPOSAL 1 – ELECTION OF DIRECTORS |
Director Nominees
The Board nominates the following 11 director nominees for election to the Board for a one-year term:
• Jennifer Craighead Carey • Steven S. Etter • Curtis J. Myers • Ronald H. Spair | • Lisa Crutchfield • George K. Martin • Antoinette M. Pergolin • E. Philip Wenger | • Denise L. Devine • James R. Moxley III • Scott A. Snyder |
The NCG Committee recommended, and (iv) such other business as may be properly brought before the Board approved, the nomination of the above individuals. The Board is currently comprised of 11 directors, all of whom were previously elected at the 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”) and any adjournments thereof.
serve on the Fulton Bank, N.A. (“SolicitationFulton Bank”) board of Proxies
This Proxy Statement is furnished in connection with the solicitation of proxies, in the accompanying form, by the Board of Directors of directors (the “Fulton for useBank Board”). If elected at the Annual Meeting, to be held at 10:00 a.m. on Tuesday, May 25, 2021, and any adjournments or postponements thereof. Fulton is making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing the notices and these proxy materials and soliciting votes. In addition to the mailing of the notices and these proxy materials, the solicitation of proxies or votes may be made in person, by mail, telephone or by electronic communication by Fulton’s directors, officers and employees, who will not receive any additional compensation for such solicitation activities. Fulton has engaged Equiniti (US) Services LLC to aid in the solicitation of proxies in order to assure a sufficient return of votes on the proposals to be presented at the Annual Meeting. The fee for such services is estimated at $7,000, plus reimbursement for reasonable research, distribution and mailing costs.
Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and Fulton will reimburse them for reasonable out-of-pocket expenses incurred by them in connection with such activities.
Revocability and Voting of Proxies
The execution and return of the enclosed proxy card, or voting by another method, will not affect a shareholder’s right to attend the Annual Meeting and to vote at the Annual Meeting. A shareholder may revoke any proxy given pursuant to this solicitation by delivering written notice of revocation to the Corporate Secretary or Assistant Corporate Secretary of Fulton, sending a new proxy card at any time before the shares are voted by the proxy at the Annual Meeting, or by voting by another method at any time before the applicable deadline for voting set forth on the proxy card. Unless revoked, any proxy given pursuant to this solicitation will be voted at the Annual Meeting, including any adjournment or postponement thereof, in accordance with the written instructions of the shareholder giving the proxy. In the absence of specific voting instructions, all proxies will be voted FOR the election of each of the fourteen (14) director nominees identified in this Proxy Statement, FOR the approval of the non-binding Say-on-Pay resolution to approve the compensation of the named executive officers for 2020, and FOR the ratification of the appointment of KPMG LLP as Fulton’s independent auditor for the fiscal year ending December 31, 2021. Although the Board of Directors knows ofhas no other businessreason to be presented, in the eventbelieve that any other matters are properly brought before the Annual Meeting, any proxy given pursuant to this solicitation will be voted in the discretion of the proxyholders named on the proxy card, as permitted by Rule 14a-4(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If you are a registered shareholder of record who holds stock in certificates or in book entry with Fulton’s transfer agent and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.
Shares held for the account of shareholders who participate in the Dividend Reinvestment and Stock Purchase Plan and for the account of employees, and former employees, who participate in the Employee Stock Purchase Plan (the “ESPP”)director nominees will be voted in accordance with the instructions of each shareholder as set forth in hisunable to accept nomination or her proxy. If a shareholder who participates in these plans does not return a proxy, the shares held for the shareholder’s account will not be voted.
Shares held for the account of employees, and former employees, of Fulton and its subsidiaries who participate in the Fulton Financial Common Stock Fund of the Fulton Financial Corporation 401(k) Retirement Plan (the “401(k) Plan”), will be voted by Fulton Financial Advisors (“FFA”), a division of Fulton Bank, as plan trustee (“Plan Trustee”) in accordance with the instructions of each participant as set forth in the proxy card sent to the participant with respect to such shares. To allow sufficient time for the Plan Trustee to vote, participants’ voting instructions must be received by May 20, 2021.
Each participant in the 401(k) Plan (or the beneficiary of a deceased participant) is entitled to direct the Plan Trustee how to vote shares of common stock of Fulton which are allocated to his or her account under the 401(k) Plan on any matter on which other holders of Fulton’s common stock are entitled to vote. If no direction is given, then the 401(k) Plan shares will not be voted by the Plan Trustee. The Plan Trustee has established procedures that are designed to safeguard the confidentiality of information about each 401(k) Plan participant’s purchase, holding, sale and voting of the common stock. If a 401(k) Plan participant has questions about these procedures or concerns about the confidentiality of this information, please contact the Retirement Plan Administrative Committee and direct the inquiry to Fulton Financial Corporation, Attention: RPAC – Benefits, P.O. Box 4887, One Penn Square, Lancaster, PA 17604.
If you are a shareholder of record, there are several ways for you to vote your shares or submit your proxy:
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If you are a beneficial owner of shares common stock, you should receive Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting or voting instructions from the broker or other nominee holding your shares. You should follow the instructions in the Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting or the voting instructions provided by your broker or nominee in order to instruct your broker or nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker or nominee. Shares held beneficially may be voted at the Annual Meeting only if you have the right to vote the shares and the 16-digit control number.
If the Annual Meeting is adjourned or postponed, your proxy will still be effective and will be voted at the rescheduled or adjourned Annual Meeting. You will still be able to change or revoke your proxy until the rescheduled or adjourned Annual Meeting.
Voting Shares Held in Street Name
If you hold shares in “street name” or “nominee name” with a bank or broker, it is important that you instruct your bank or broker how to vote your shares if you want your shares to be voted on the election of directors (Proposal 1 of this Proxy Statement), and on the non-binding Say-on-Pay resolution to approve the compensation of the named executive officers for 2020 (Proposal 2 of this Proxy Statement). If you hold your shares in street name or nominee name and you do not instruct your bank or broker how to vote your shares in the election of directors or any non-routine matters, such as Proposal 2 of this Proxy Statement, no votes will be cast on your behalf for the election of directors or Proposal 2. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of Fulton’s independent auditor (Proposal 3 of this Proxy Statement) and other matters that your bank or broker considers routine.
Voting of Shares and Principal Holders Thereof
At the close of business on the Record Date, Fulton had 162,469,862 shares of common stock outstanding and entitled to vote. There is no other class of capital stock outstanding entitled to vote at the Annual Meeting. As of the Record Date, 3,712,402 shares of Fulton common stock were held by FFA, as the Plan Trustee, or in a fiduciary capacity for fiduciary accounts. The shares held in this manner, in the aggregate, represent approximately 2.28% of the total shares outstanding. Shares held by FFA, as Plan Trustee, are voted by the beneficiaries. Shares for which FFA servesserve as a co-fiduciary will be voted by the co-fiduciary, unless the co-fiduciary declines to accept voting responsibility, in which case, FFA will vote to abstain on all proposals. Sharesdirector.
The Board unanimously recommends that shareholders vote “FOR” the election of each of the 11 director nominees. |
Voting for which FFA serves as sole trustee of a revocable trust, shares for which FFA acts as agent for an investment management account, and shares for which FFA acts as custodian for a custodial account, are voted by the settlor of the revocable trust and the principal of the agency or custodial account unless the governing document provides for FFA to vote the shares, in which case FFA will vote to abstain on all proposals. Shares for which FFA is acting as sole trustee of an irrevocable trust or as guardian of the estate of a minor or an incompetent person are voted by FFA, and in such cases, FFA will vote to abstain on all proposals.Director Nominees
Vote Required
The holders of a majority of the shares of outstanding common stock present in person, virtually, or by proxy at the Annual Meeting constitute a quorum for the conduct of business. The judge of election will treat shares of Fulton common stock represented by a properly signed and returned proxy which casts a vote on any matter, other than a procedural matter, as present at the Annual Meeting for purposes of determining a quorum, without regard to whether the proxy is marked or designated as casting a vote or abstaining on a particular matter. Likewise, the judge of election will treat shares of common stock represented by broker non-votes as present for purposes of determining a quorum if such shares have been voted on any matter other than a procedural matter.1
1 Broker non-votes are shares of common stock held in record name by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote; and (ii) the broker or nominee does not have discretionary voting power to vote such shares on a particular proposal.
Each share is entitled to one vote on all matters submitted to a vote of the shareholders. A majority of the votes cast at a meeting at which a quorum is present is required in order to approve any matter submitted to a vote of the shareholders, except for the election of directors, or in cases where the vote of a greater number of shares is required by law or under Fulton’s Articles of Incorporation or Bylaws. In the case of the election of directors, the fourteen (14)11 candidates receiving the highest number of votes cast at the Annual Meeting shallwill be elected to the Board of Directors for terms of one (1) year. Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast is required for approval of the non-binding Say-on-Pay resolution to approve the compensation of the named executive officers for 2020 and the ratification of the appointment of Fulton’s independent auditor.
Board. Abstentions and broker non-votes (provided, in the case of broker non-votes, such non-votes represent shares that have been voted on any matter other than a procedural matter) will be counted as shares that are present at the Annual Meeting for determining the presence of a quorum,if such shares were voted on at least one non-procedural matter, but abstentions and broker non-votes will not be counted as votes cast onin the election of directors,directors.
Resignation Policy
In an uncontested election, any director nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election is required to promptly tender his or her resignation. The NCG Committee will consider the non-binding Say-on-Pay resolutiontendered resignation and recommend to approve the compensationBoard whether to accept it. The Board will act on the NCG Committee’s recommendation within 90 days following certification of the named executive officersshareholder vote. There is no cumulative voting for 2020, orour directors.
Director Qualifications
Diverse Mix of Skills, Qualifications and Attributes
The NCG Committee and the ratificationBoard believe that the 2024 director nominees provide Fulton with the right mix of skills and experience necessary for an effective Board. The NCG Committee reviews the composition of the appointmentBoard on an annual basis to ensure that the Board reflects the appropriate balance of Fulton’s independent auditor. Because abstentionsexperience, skills, expertise and broker non-votesdiversity. While the Board has not adopted a formal written policy regarding director diversity, the Board appreciates and embraces the value of Board diversity. The Board believes different points of view brought through diverse representation leads to better business performance, decision making and understanding of the needs of our diverse clients, employees, shareholders, business partners and other stakeholders.
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Based on our business, the primary areas of experience, qualification and skills typically sought by the NCG Committee in director candidates, include but are not counted as votes cast, theylimited to, the following:
· | Financial Expertise – Qualified to serve as an “Audit Committee financial expert” or experience in financial management, capital allocation, accounting, financial reporting or audit processes. As a bank holding company with multiple business lines, it is important to have directors who understand financial audits and can oversee financial reporting. |
· | Senior Leadership Experience – Experience holding significant leadership positions, particularly as a chief executive officer or head of a significant business line. It is important to have proven leaders on the Board who can oversee Fulton’s management and help us drive business strategy, growth and performance. |
· | Market Knowledge & Influence – Knowledge and influence in Fulton’s five-state footprint. |
· | Banking/Financial Experience – Experience with the banking or financial services industry. |
· | Risk Management – Knowledge of, or experience with, key risk oversight or risk management functions, including data privacy and cybersecurity. Risk management is critical to achieving long-term success in our industry. As such, we need directors with experience in overseeing and understanding the dynamic risks we face. |
· | Legal/Governance and Regulatory Compliance Experience – Knowledge of, or experience in, regulated industries or governmental organizations. These skills are important to the Board’s oversight of our highly regulated business. |
· | Mergers/Acquisition Experience – Experience with respect to mergers and acquisitions. |
· | Public Company Board Experience – Experience in public company governance, including corporate governance best practices and policies and managing relations with key stakeholders. |
· | HR/Compensation Experience – Knowledge of, or experience with, executive compensation and human capital resource management strategies and oversight. It is important to have individuals on the Board who can oversee our efforts to attract, motivate and retain key talent and provide valuable insight in determining the compensation of the CEO and other executive officers. |
· | Investment Experience – Experience with public company investment policies, practices and activities. |
· | IT Experience (General, FinTech, Cybersecurity, Digital) – Experience in the development and adoption of technology, information security and cybersecurity matters. |
· | Strategic Experience – Experience with the oversight of public company strategic planning. |
· | Marketing and Sales Experience – Experience in brand development, customer experience, marketing and sales. |
· | Public Company CEO Experience – Experience as a chief executive officer of a public company. |
Additionally, the NCG Committee may consider other areas relevant to our strategic growth and business needs and other important attributes, such as: (i) strong strategic, critical and innovative thinking, (ii) sound business judgment, (iii) high ethical standards, (iv) collegial spirit, (v) ability to debate and challenge constructively and (vi) availability and commitment to serve.
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Refreshment and Retention
The Board is committed to board refreshment. Pursuant to Fulton’s Bylaws, no person may be nominated for election if he or she will have no effectbe 72 years old on or before the election of directors, the non-binding Say-on-Pay resolution concerning executive compensation or the ratificationdate of the appointmentannual meeting of Fulton’s independent auditor.
To theshareholders at which he or she would stand for election. The NCG Committee believes there is a balance between seasoned directors with knowledge of Fulton and new directors who contribute fresh ideas, perspectives and viewpoints to the Board’s deliberations. The average tenure of our director nominees as of the date of this Proxy Statement is 7.5 years. Our director nomination process reflects our continued growth and our focus on having a Board composed of directors who contribute to the evolving needs of Fulton while maintaining the invaluable knowledge brought by more tenured directors.
Gender Diversity 36.4% | Racial Diversity 27.3% | Average Director Nominee Tenure 7.5 Years |
Selecting and Nominating Director Candidates
Fulton’s Corporate Governance Guidelines (the “Guidelines”) provide that the Board will be sufficient in size to achieve diversity in business experience, community service and other qualifications. The NCG Committee is responsible for carrying out the Board’s commitment to maintaining a balanced and diverse composition of well-qualified directors. The NCG Committee identifies director nominee candidates and recommends such candidate’s nomination to the Board based on his or her ability to diversify and complement the Board’s existing strengths. The NCG Committee also considers director nominees who are recommended by non-management directors, Fulton’s CEO, other senior officers and third parties. Information on the Record Date, no personexperience, qualifications and attributes of Fulton’s director nominees is detailed under “Director Nominees” on page 9.
Our shareholders may propose director candidates for consideration by the NCG Committee by submitting the individual’s name and qualifications to the Chairman or entity ownedCorporate Secretary at One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604 in accordance with, and with such other information as may be required by, our Bylaws and the Guidelines. Our NCG Committee will consider all director candidates properly submitted by our shareholders and will utilize the same criteria as director candidates not proposed by shareholders.
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Nasdaq Board Diversity Matrix
The Board Diversity Matrix below presents the Board’s diversity statistics.
Board Diversity Matrix (as of December 31, 2023) | ||
Total Number of Directors | 11 | |
Female | Male | |
Part I: Gender Identity | ||
Directors | 4 | 7 |
Part II: Demographic Background | ||
African American or Black | 2 | 1 |
White | 2 | 6 |
As of December 31, 2023, the gender identity and demographic background of the outstanding shares11 directors nominated to be elected at the Annual Meeting is reflected below.
Gender Diversity 36.4% | Racial Diversity 27.3% | ||
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Director Nominees
The biographies of each of our director nominees, as of the date of this Proxy Statement, are set forth below.
Director Since:2019 • Risk (Chair) | JENNIFER CRAIGHEAD CAREY – Director Managing partner of Barley Snyder LLP (“Barley Snyder”) since January 2024. Partner at Barley Snyder since 2001 and chaired Barley Snyder’s Employment Law group from 2005 to 2019. Other Directorships and Positions • Member, High Holdings Corporation Board of Directors (2021-present) • Member, High Industries Leadership Development & Compensation Committee (2023-present) • Member, Lancaster City Alliance (2019-present) • Member, Advisory Board for Millersville University’s College of Arts, Humanities and Social Sciences (2023-present) • Member, Fulton Bank Board (2012-present) Directorship Qualification Highlights Ms. Craighead Carey has extensive legal, risk management, and human capital experience. In addition, she is familiar with the markets in which Fulton operates. |
Director Since:2014 • HR (V-Chair) • NCG | LISA CRUTCHFIELD – Independent Director Managing principal of Hudson Strategic Advisers, LLC, an economic analysis and strategic advisory firm serving the energy industry. Ms. Crutchfield has served as a consultant to the energy industry since 2012. Other Directorships and Positions • Member, Fortis Inc. Board of Directors (TSX/NYSE: FTS) (2022-present) • Member, Vistra Energy Board of Directors (NYSE: VST) (2020-present) • Member, Buckeye Energy Holdings LLC Board of Directors (2020-present) • Member, Somos, Inc. Board of Directors (2023-present) • Member, Unitil Corporation Board of Directors (NYSE: UTL) (2012-2022) • Member, Fulton Bank Board (2014-present) • National Association of Corporate Directors (“NACD”) Board Leadership Fellow (2019-present) Directorship Qualification Highlights Ms. Crutchfield has substantial experience leading corporate teams and has extensive knowledge of the financial services industry. Ms. Crutchfield began her career as a commercial and investment banker. Ms. Crutchfield brings expertise in public board service, risk management, regulation and compliance. |
Director Since:2012 • Audit (Chair) • Executive (V-Chair) • Risk | DENISE L. DEVINE – Independent Director Founder and Chief Executive Officer of FNB Holdings, LLC, a company dedicated to initiatives in the health and wellness space since 2014. Other Directorships and Positions • Member, SelectQuote Board of Directors (NYSE: SLQT) (2020-present) • Member, AgroFresh Solutions, Inc. Board of Directors (Nasdaq: AGFS) (2018-2023) • Member, Cubic Corporation Board of Directors (NYSE: CUB) (2019-2021) • Member, Ben Franklin Technology Partners of Southeastern PA Board (2016-present) • Member, Ben Franklin Technology Development Authority Board (2018-present) • Member, Fulton Bank Board (2012-present) • NACD Board Leadership Fellow (2016-present) Directorship Qualification Highlights Ms. Devine is a certified public accountant. Ms. Devine has substantial management, business, public company and financial experience. |
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Director Since:2019 • NCG • HR | STEVEN S. ETTER – Independent Director Former President and Chief Executive Officer of the Harrisburg News Company, a regional magazine, book and newspaper wholesale distribution company since 1998. After being acquired by the Hudson News in 2014, Mr. Etter served as President of their Middle Atlantic Division until his retirement in 2020. Other Directorships and Positions • Member, University of Miami’s President’s Council (2014-present) • Member and Emeritus Director of the Whitaker Center for Science and the Arts (2001-present) • Member, Fulton Bank Board (2012-present) Directorship Qualification Highlights Mr. Etter has extensive business skills, financial expertise and regional market knowledge. |
Director Since:2021 • NCG (V-Chair) • Risk | GEORGE K. MARTIN – Independent Director Former senior partner of McGuireWoods LLP (“McGuireWoods”). From 2009 to 2021, Mr. Martin served as the managing partner of McGuireWoods’ largest office. Mr. Martin became a partner with McGuireWoods in 1990 and practices construction and commercial real estate law. Mr. Martin previously served in various firm management capacities, including service on the recruiting committee, advisory board, pension committees and McGuireWoods Consulting Oversight Committee. Other Directorships and Positions • Member, University of Virginia Investment Management Corporation Board (2023-present) • Member, Housing Development Law Institute Board (1991-present) • Member, University of Virginia School of Architecture Foundation Board (2011-present) • Member, Jefferson Scholars Foundation Board (2015-2022) • Member, Governing Council at the University of Virginia’s Miller Center (Vice Chair) (2019-present) • Adjunct professor at the University of Virginia School of Law (2020-present) • Member, Fulton Bank Board (2016-present) Directorship Qualification Highlights Mr. Martin has substantial senior leadership, legal, real estate and risk management experience. |
Director Since:2015 • Executive (Chair) • Audit • HR | JAMES R. MOXLEY III – Independent Director and Lead Director Principal of Security Development Corporation, a Washington-Baltimore real estate land development company engaged primarily in retail and multifamily projects since 1992. Other Directorships and Positions • Trustee, Johns Hopkins Medicine – Howard County Medical Center (2021-present) • Trustee, Howard Hospital Foundation (2014-2022) • Founding Director, Real Estate Charitable Foundation of Maryland (2015-present) • Chair, Duke University Library Advisory Board (2022-present); Member (2017-present) • Member, Board of Visitors of Duke Law School (2017-2023) • Trustee Emeritus, Glenelg Country School (1996-present) • Member, Fulton Bank Board (2019-present) • NACD Board Leadership Fellow (2017-present) Directorship Qualification Highlights Mr. Moxley has extensive business, tax and legal experience related to the acquisition, financing and development of commercial and residential real estate. |
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Director Since:2019 • Executive • Risk (ex-officio) | CURTIS J. MYERS – Chairman and Ceo Chairman and CEO of Fulton since January 1, 2023. President of Fulton from 2018 to 2023. President and Chief Operating Officer of Fulton Bank from 2009 to 2023. Mr. Myers became an executive officer of Fulton in 2013 and has held a number of executive and management level positions with Fulton Bank since 1990. Other Directorships and Positions • Member, Operation HOPE Global Board of Advisors (2023-present) • Member, Economic Development Company of Lancaster County Board (2021-present) • Member, ABA Stonier Graduate School of Banking Advisory Board (2020-present) • Member, IREX Corporation and North Lime Holdings Corporation Board (2021-present) • Member, Salvation Army, Lancaster, Pennsylvania (1995-present) • Member, Fulton Bank Board (2009-present) Directorship Qualification Highlights Mr. Myers has substantial banking experience, market knowledge, executive leadership and financial expertise. |
Director Since:2022 • Audit (V-Chair) • Risk | ANTOINETTE M. PERGOLIN – Independent Director President and Chief Executive Officer of Bancroft, a New Jersey non-profit for over 15 years that is a leading regional non-profit provider of programs and services for individuals with autism, intellectual and developmental disabilities and those in need of neurological rehabilitation. Other Directorships and Positions • Member and Chairwoman, Peirce College Board of Trustees (2016-present) • Member, Inspira Health Network, Inc. Board of Trustees (2021-present) • Member, Fulton Bank Board (2012-present) Directorship Qualification Highlights Ms. Pergolin has extensive experience in senior leadership, governance, investment, human resources, accounting and finance. |
Director Since:2016 • NCG (Chair) • Risk (V-Chair) • Executive | SCOTT A. SNYDER – Independent Director Chief Digital Officer at EVERSANA, a leading provider of global commercial services to the life sciences industry since 2021. Prior to that, Mr. Snyder was the Global Head of Digital and Innovation at Heidrick Consulting between 2018 and 2020 and Senior Vice President, Managing Director, and Chief Technology and Innovation Officer for Safeguard Scientifics, Inc. (NYSE: SFE) from 2016 to 2018. Other Directorships and Positions • Senior Fellow, Management Department at Wharton School (2003-present) • Adjunct faculty member, School of Engineering and Applied Science, University of Pennsylvania (1997-present) • Member, Wellhive Advisory Board (2020-present) • Member, Modus Create Advisory Board (2022-present) • Member, Fulton Bank Board (2019-present) Directorship Qualification Highlights Dr. Snyder has substantial experience in technology, the development of digital solutions, mobile business strategy and mobile security. |
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Director Since:2015 • HR (Chair) • Audit • Executive | RONALD H. SPAIR – Independent Director Retired Chief Financial Officer, Chief Operating Officer and a member of the Board of Directors of OraSure Technologies, Inc. (“OraSure”) (Nasdaq: OSUR), a diagnostic and medical device company headquartered in Bethlehem, Pennsylvania. Mr. Spair served on the Board of Directors of OraSure from 2006 to 2018 and as executive officer of OraSure from 2001 to 2018. Other Directorships and Positions • Member, Fulton Bank Board (2019-present) Directorship Qualification Highlights Mr. Spair is a certified public accountant. Mr. Spair has substantial public company, mergers and acquisitions, development and licensing transactions and corporate finance experience. |
Director Since:2009 • Risk | E. PHILIP WENGER – Director Chairman and CEO of Fulton since 2013 and retired effective December 31, 2022. Mr. Wenger served as President from 2008 to 2017 and Chief Operating Officer of Fulton from 2008 to 2012 in addition to other positions since 1979. Other Directorships and Positions • Member, Burnham Holdings, Inc. Board of Directors, (2019-present) • Member, Operation HOPE Global Board of Advisors (2017-2022) • Member, the Pennsylvania Chamber of Commerce Board of Directors (2013-present) • Member, Penn State Harrisburg Board of Advisers (2016-present) • Member, Attallo Board Chair (2023-present) • Member, Fulton Bank Board (2003-2009; 2019-present) Directorship Qualification Highlights Mr. Wenger has extensive knowledge of banking operations after more than 40 years in the financial services industry. |
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Executive Officers Who are Not Serving as Directors
The biographies of each of our executive officers who are not directors of Fulton, except those listed on Page 19 under “Security Ownershipas of Directors, Nominees, Management and Certain Beneficial Owners.”the date of this Proxy Statement, are set forth below.
Year of Hire:1994 | BETH ANN L. CHIVINSKI – Senior Executive Vice President and Senior Executive Vice President and Interim Chief Financial Officer since February 2024. Previously, Ms. Chivinski served as Senior Executive Vice President and Chief Risk Officer from 2016 to 2024. Ms. Chivinski also served as Chief Audit Executive from 2013 to 2016 and was promoted to Senior Executive Vice President of Fulton in 2014. Ms. Chivinski served as Controller and Chief Accounting Officer from 1994 to 2013, having been promoted to Executive Vice President in 2004. |
Year of Hire: 2018 ANDY B. FIOL – Senior Executive Vice President and Appointed Senior Executive Vice President and Head of Consumer Banking effective January 1, 2023. Mr. Fiol previously served as Senior Executive Vice President and Head of the Consumer & Small Business Bank since 2022. Mr. Fiol joined Fulton as Director of Consumer & Small Business Channel, Segment and Product in 2018. Prior to joining Fulton, he served as an executive in various roles at both Capital One Bank from 2011 to 2018 and prior to that at Bank of America. He has more than 20 years of experience in the financial services industry.Internet Availability of Proxy Materials
Age: 52
Head of Consumer Banking
Year of Hire:2021 | NATASHA R. LUDDINGTON – Senior Executive Vice President, Senior Executive Vice President, Chief Legal Officer and Corporate Secretary since 2021. Ms. Luddington became the Senior Executive Vice President, Chief Legal Officer and Corporate Secretary Designee in October 2021. Prior to joining Fulton, Ms. Luddington served in various positions, including Interim General Counsel and Senior Vice President, Associate General Counsel at Pacific Western Bank from 2014 to 2021. Ms. Luddington served in various roles in CapitalSource Bank’s legal department from 2007 to 2014. Ms. Luddington has more than 25 years of legal experience. |
Important Notice Regarding13
Year of Hire:2015 | ATUL MALHOTRA – Executive Vice President and Executive Vice President and Chief Risk Officer since February 2024. Mr. Malhotra served as Fulton’s Managing Director of Enterprise Risk Management from November 2015 to February 2024. Mr. Malhotra previously served as a regulatory and risk strategy consultant for various publicly traded companies, including large, global financial institutions. Mr. Malhotra has more than 20 years of enterprise risk experience in the financial services industry. |
Year of Hire:1996 | MEG R. MUELLER – Senior Executive Vice President and Senior Executive Vice President and Head of Commercial Banking since 2018. Ms. Mueller served as Chief Credit Officer from 2010 to 2017. Ms. Mueller was promoted to Senior Executive Vice President of Fulton in 2013 and has been employed by Fulton in a number of positions since 1996. |
Year of Hire: 1992 | ANGELA M. SARGENT – Senior Executive Vice President and Senior Executive Vice President and Chief Information Officer since 2013. Ms. Sargent served as Executive Vice President and Chief Information Officer from 2002 to 2013 and has been employed by Fulton in a number of positions since 1992. |
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Year of Hire: 2002 | ANGELA M. SNYDER – President President of Fulton since January 2024. Ms. Snyder served as Chief Banking Officer from January 2022 to December 2023. Ms. Snyder was Senior Executive Vice President and Head of Consumer Banking from 2018 to 2022. Ms. Snyder joined Fulton in 2002 as President of Woodstown National Bank. Ms. Snyder served as Chairwoman, President, and Chief Executive Officer of Fulton Bank of New Jersey until 2019. Ms. Snyder has more than 30 years of experience in the financial services industry. |
Year of Hire:2023 | KARTHIK K. SRIDHARAN – Senior Executive Vice President and Senior Executive Vice President and Chief Operations and Technology Officer since June 2023. Mr. Sridharan previously served as Executive Vice President and Chief Information Officer of OceanFirst Bank from 2019 to 2023. Mr. Sridharan was the Chief Technology Officer, Enterprise Operations and Technology at Citigroup from 2011 to 2019. Mr. Sridharan brings more than 20 years of experience with Fortune 500 companies including Microsoft, Bank of America, JP Morgan Chase, and Citigroup as Chief Information Officer, Chief Technology Officer, Director of Global Operations, and SVP, Global Technology. |
Year of Hire: 1994 | BERNADETTE M. TAYLOR – Senior Executive Vice President and Senior Executive Vice President and Chief Human Resources Officer since 2015. Dr. Taylor served as Executive Vice President of employee services, employment and director of human resources prior to her promotion in 2015 to Chief Human Resources Officer. Dr. Taylor joined Fulton in 1994 as the Corporate Training Director. |
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CORPORATE GOVERNANCE AND BOARD MATTERS |
Information about Director Nominees, Directors and Independence Standards
Independence Standards
The Board determined that eight of Fulton’s 11 director nominees are “independent” within the Availabilitymeaning of Proxy Materials
for the Shareholder Meeting to be Held on May 25, 2021
In accordance with the rulesdirector independence standards of the Nasdaq Stock Market LLC (“Nasdaq”) listing standards and Securities and Exchange Commission (the “SEC”(“SEC”), Fulton is advising its shareholders rules and regulations. Specifically, the Board determined that Fulton is furnishing proxy materials (i.e., this Proxy Statement, 2020 Annual Report on Form 10-Kdirector nominees Messes. Crutchfield, Devine and proxy card)Pergolin and Messrs. Etter, Martin, Moxley, Snyder and Spair met the Nasdaq listing standards and SEC rules and regulations with respect to some of Fulton’s shareholders on the Internet at www.proxyvote.com rather than mailing paper copiesindependent director requirements.
Each of the materials to those shareholders. As a result, some shareholders will receive Important Notice Regardingcurrent members of the Availability of Proxy MaterialsAudit, HR and NCG Committees meet the requirements for independence under the Shareholder MeetingNasdaq listing standards and SEC rules and regulations. In reviewing director independence, the Board considered the relationships and other shareholders will receive paper copiesarrangements, if any, of this Proxy Statement,each director nominee. The relationships and transactions reviewed and considered are more fully described in the 2020 Annual Report“Related Person Transactions” section on Form 10-Kpage 23.
Lead Director
The Guidelines provide that the Board must include a Lead Director, and proxy card. The Important Notice Regarding the Availability of Proxy MaterialsBoard determined a combined Chairman and CEO position is appropriate for Fulton. This structure permits the Shareholder Meeting contains instructions on howCEO to access this Proxy Statement, the 2020 Annual Report on Form 10-Kmanage Fulton’s daily operations and proxy card over the Internet, instructions on how to vote shares, as well as instructions on how to requestprovides a paper copy of the proxy materials, if shareholders so desire.single voice for Fulton. Fulton believes electronic delivery should expeditethat the receiptseparation of materials, significantly lower coststhese roles is not necessary because the Lead Director acts to counterbalance the combined Chairman and help to conserve natural resources.
Whether shareholders receive the Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting or paper copies of the proxy materials, the Proxy Statement, the 2020 Annual Report on Form 10-K, the proxy card and any amendments to the foregoing materials that are required to be furnished to shareholders, are available for review online on the Internet at www.proxyvote.com.
This Proxy Statement and Fulton’s 2020 Annual Report on Form 10-K also are available in the Investor Relations section of Fulton’s website at www.fult.com. Shareholders may access this material by choosing the “Investor Relations” tab at the top of the page, and then “SEC Filings” from the items listed in the Investor Relations section. The contents of Fulton’s website are not incorporated into this Proxy Statement by provision of this link, or other links in this Proxy Statement.
Recommendation of the Board of Directors
CEO position. The Board of Directors recommends that shareholders vote FOR the election of each of the fourteen (14) director nominees identified in this Proxy Statement, FOR the approval of the non-binding Say-on-Pay resolution to approve the compensation of the named executive officersdesignates for 2020, and FOR the ratificationa term of the appointment of KPMG LLP as Fulton’s independent auditor for the fiscal year ending December 31, 2021.
Under SEC rules, shareholder proposals intended to be considered for inclusion in Fulton’s Proxy Statement and form of proxy for the 2022 Annual Meeting must be received at the principal executive offices of Fulton at One Penn Square, Lancaster, Pennsylvania no later than December 2, 2021. In addition, any shareholder proposal
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not received at Fulton’s principal executive offices by February 15, 2022, which is forty-five (45) calendar days before the one (1) year anniversary of the date Fulton released the previous year’s annual meeting Proxy Statement to shareholders, will be considered untimely and, if presented at the 2022 Annual Meeting, the proxy holders will be able to exercise discretionary authority in voting on any such proposal to the extent authorized by Rule 14a-4(c) under the Exchange Act. All shareholder proposals must comply with Rule 14a-8 under the Exchange Act, as well as Fulton’s Bylaws.
Generally, under applicable SEC rules, a shareholder may not submit more than one proposal, and the proposal, including any accompanying supporting statement, may not exceed 500 words. In order to be eligible to submit a proposal, a shareholder must have continuously held at least $2,000 in market value of Fulton common stock for at least one year before the dateindependent, non-employee director who will lead the proposalnon-employee directors’ executive sessions and preside at all Board meetings at which the Chairman is submitted. Any shareholder submitting a shareholder proposalnot present. The Lead Director will, among other things:
● | serve as a liaison between the Chairman and the independent directors; |
● | approve information sent to the Board; |
● | approve meeting schedules to ensure that there is sufficient time for discussion of all agenda items; and |
● | have the authority to call meetings of the independent directors. |
Mr. Moxley has served as the Lead Director and independent Executive Committee Chair since June 2018.
Executive Sessions
In 2023, the Fulton independent directors met three times in executive session without management present. Fulton’s Lead Director presided over the executive sessions.
Board and Committee Evaluations
The Board and its committees, except the Executive Committee, conduct annual self-evaluations. The self-evaluations are designed to Fulton must also provide Fultonencourage open and candid feedback with a written statement verifying ownership of stock and confirmingrespect to the shareholder’s intention to continue to hold the stock through the dateeffectiveness of the 2022 Board and its committees and the effectiveness of each of its members. The NCG Committee creates the annual process to elicit feedback from the individual Board and committee members to enhance Board and committee effectiveness. The NCG Committee annually reports to the Board the results of these self-evaluations, and the Board and each committee discuss their respective self-evaluations.
Annual Meeting. The shareholder, or a qualified representative, must attendCEO Performance Evaluation
Each year, the 2022 Annual Meetingnon-employee directors and the HR Committee review the CEO’s performance over the past year in person to presentlight of Fulton’s performance and strategic goals and objectives.
CEO and Executive Succession Planning
Succession planning for the proposal. The shareholder must also continue to hold the applicable amount of Fulton common stock through the dateCEO and other key executive officers is one of the 2022 Annual Meeting.Board’s key responsibilities. At least annually, the Board reviews and approves the CEO and other key executive officer succession plans. The CEO succession plan is reviewed semi-annually with the HR Committee. The Chief Human Resources Officer reviews the succession planning process used by management to identify NEO successors.
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Outside Directorships
Fulton values the experience our directors bring from other boards on which they serve, but we encourage all directors to carefully consider the number of other company boards of directors on which they serve, taking into account the time required for board attendance, conflicts of interests, participation and effectiveness on these boards. Pursuant to the Guidelines, no director may serve on more than four total public company boards, including the Board.
Contacting the Board of Directors
AnyA Fulton shareholder of Fulton who desires tocan contact the Board of Directors may do so by writing to: Board of Directors, Fulton Financial Corporation, Attention: Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, PAPennsylvania 17604. These written communications will be provided to the Chair of the Executive Committee of the Board of Directors whoThe Chairman will determine further distribution of written communications based on the nature of the information in the communication. For example, communications concerning accounting, internal accounting controls or auditing matters will be shared with the Chair of the Audit Committee of the Board of Directors.
Code of ConductShareholder Engagement
Fulton’s Code of Conduct (the “Code of Conduct”) governs the conduct of its directors, officers and employees. Fulton provides the Code of Conduct to each director, officer and employee when starting their position, and they are required to annually acknowledge their review of the Code of Conduct. The last material update of Fulton’s Code of Conduct was in 2016 after a review by the Nominating and Corporate Governance Committee. Fulton’s employees and directors are expected to recognize and avoid conflicts of interest situations in which personal interest or relationships interfere with, might interfere with, or appear to interfere with, their responsibilities to Fulton. A current copy of the Code of Conduct can be obtained, without cost, by writing to the Corporate Secretary at: Fulton Financial Corporation, Attention: Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, PA 17604. The current Code of Conduct, future amendments and any waivers are also posted and available on Fulton’s website at www.fult.com.
Corporate Governance Guidelines
Fulton has adopted Corporate Governance Guidelines (the “Governance Guidelines”) that include guidelines and Fulton’s policy regarding the following topics: (1) the size of the Board of Directors; (2) director qualifications; (3) a majority vote standard; (4) service on other boards and director change in status; (5) meeting attendance and review of meeting materials; (6) director access to management and independent advisors; (7) designation of a Lead Director; (8) executive sessions; (9) Chief Executive Officer (“CEO”) evaluation and succession planning; (10) Board of Directors and committee evaluations; (11) stock ownership guidelines; (12) communications by interested parties; (13) Board of Directors and committee minutes; (14) Codes of Conduct; and (15) disclosure and update of the Governance Guidelines.
The Governance Guidelines were last updated effective October 1, 2019 to add a stock ownership guideline for directors of Fulton Bank who are not also directors of Fulton. The Governance Guidelines were amended, effective January 1, 2019, to increase the stock ownership guidelines for Fulton’s non-employee directors from $175,000 to $300,000. See Stock Ownership Guidelines on Page 48 for additional information regarding the changeBoard and Fulton’s stock ownership guidelines for non-employee directorsmanagement regularly engage with shareholders and officers. A copy of the current Governance Guidelines can be obtained, without cost, by writing to the Corporate Secretary at: Fulton Financial Corporation, Attention: Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, PA 17604. The Governance Guidelines are also posted and available on Fulton’s website at www.fult.com.
The Bylaws of Fulton providewill meet with shareholders that the Board of Directors shall consist of at least five (5) but not more than thirty-five (35) persons, and that the Board of Directors shall, from time to time, determine the number of directors. The Board of Directors has, by resolution, fixed the number of the Board of Directors at fourteen (14) as ofattend the Annual Meeting. Pursuant to Fulton’s Bylaws, as amended, all nominees elected to the Board of Directors are elected for one-year terms.In 2023, Fulton management engaged with institutional shareholders at various investor events.
A majority of the Board of Directors may increase or decrease the number of directors between meetings of the shareholders. Any vacancy occurring in the Board of Directors, whether due to an increase in the number of directors, resignation, retirement, death or any other reason, may be filled by appointment by the remaining directors. Any director who is appointed to fill a vacancy shall hold office until the next Annual Meeting of the shareholders and until a successor is elected and shall have qualified.
Fulton’s Bylaws limit the age of director nominees, and no person may be nominated for election as a director who will attain the age of seventy-two (72) years on or before the date of the Annual Meeting at which he or she is to be elected. In addition, Fulton has adopted a Voluntary Resignation Policy, last amended in January 2014, for directors that generally requires a director to tender his or her resignation when the director’s effectiveness as a member of the Board of Directors may be substantially impaired. Circumstances that require a resignation to be submitted include, but are not limited to: (i) a director failing to attend at least 62.5% of meetings of the Board of Directors or its committees without a valid excuse; (ii) unless such an event is promptly cured to the satisfaction of Fulton, any extension of credit by subsidiary bank of Fulton for which the director or a related interest of the director is an obligor or guarantor is: a) classified by Fulton as nonaccrual, sixty (60) or more days past due, or restructured; b) assigned a risk rating of “substandard” or less; or c) not in material compliance with Board of Governors of the Federal Reserve System’s Regulation O (12 C.F.R. Part 215) (“Regulation O”); or (iii) a nominee for director does not receive a majority of the votes cast in an uncontested election for the Board of Directors. While the policy sets forth events which might require a director to tender his or her resignation, it also directs Fulton’s Board of Directors to consider carefully, on a case-by-case basis, whether or not Fulton should accept such a resignation.
Majority Vote StandardRisk Oversight
In January 2014, Fulton’s Nominating and Corporate Governance Committee recommended, and the Board of Directors adopted, a majority vote standard for uncontested director elections by revising the Governance Guidelines and the Voluntary Resignation Policy for directors. In an uncontested election for the Board of Directors at a Fulton annual meeting of shareholders, any nominee for director who does not receive a majority of the votes cast is required to promptly tender his or her resignation following certification of the shareholder vote. As further described in the Governance Guidelines, the Nominating and Corporate Governance Committee shall consider the resignation tendered and recommend to the Board of Directors whether to accept it. Since Fulton’s adoption of a majority vote standard, all directors have been elected by a majority of the votes cast at each annual meeting.
Procedure for Shareholder Nominations
Section 3 of Article II of Fulton’s Bylaws requires shareholder nominations of director candidates to be made in writing and delivered or mailed to the Chairman of the Board or the Corporate Secretary not less than the earlier of (a) one hundred twenty (120) days prior to any meeting of shareholders called for the election of directors or (b) the deadline for submitting shareholder proposals for inclusion in a Proxy Statement and form of proxy as calculated under Rule 14a-8(e) promulgated by the SEC under the Exchange Act. For the 2022 Annual Meeting, this deadline date is December 2, 2021. Further, the notice to the Chairman of the Board or the Corporate Secretary of a shareholder nomination shall set forth: (i) the name and address of the shareholder who intends to make the nomination and a representation that the shareholder is a holder of record of stock of Fulton entitled to vote at such meeting and intends to be present in person or by proxy at such meeting to nominate the person or persons to be nominated; (ii) the name, age, business address and residence address of each nominee proposed in such notice; (iii) the principal occupation or employment of each such nominee; (iv) the number of shares of capital stock of
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Fulton that are beneficially owned by each such nominee; (v) a statement of qualifications of the proposed nominee and a letter from the nominee affirming that he or she will agree to serve as a director of Fulton, if elected by the shareholders; (vi) a description of all arrangements or understandings between the shareholder submitting the notice and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; and (vii) such other information regarding each nominee proposed by the shareholder as would have been required to be included in the Proxy Statement filed pursuant to the proxy rules of the SEC had each nominee been nominated by or at the direction of the Board of Directors. The chairman of the meeting shall determine whether nominations have been made in accordance with the requirements of the Bylaws and, if the chairman determines that a nomination is defective, the nomination and any votes cast for the nominee shall be disregarded. Shareholder nominees are subject to the same standard of review as nominees of Fulton’s Board of Directors or its Nominating and Corporate Governance Committee.
Director Qualifications and Board Diversity
In considering any individual nominated for membership on the Board of Directors, including those nominated by a shareholder, Fulton considers a variety of factors, including whether the candidate is recommended by executive management, the individual’s professional and personal qualifications, including business experience, education and community and charitable activities, the individual’s familiarity with one or more of the communities in which Fulton is located or is seeking to locate, and the diversity the individual may provide to the Board of Directors and its committees. Fulton does not have a separate written policy regarding how diversity is to be considered in the director nominating process. Generally, however, Fulton takes into account diversity in a variety of ways, including business experience, community service, skills, professional background and other qualifications, as well as diversity in race, national origin and gender, in considering individual candidates. Fulton’s Governance Guidelines provide that Fulton’s Board of Directors should be sufficient in size to achieve diversity in business experience, community service and other qualifications among non-employee directors while still facilitating substantive discussions in which each director can participate meaningfully. The Nominating and Corporate Governance Committee is responsible for the Governance Guidelines and for recommending director nominees to the Board of Directors. The Nominating and Corporate Governance Committee also considers nominees for director that are recommended by various persons or entities, including, but not limited to, non-management directors, Fulton’s Chief Executive Officer, other senior officers and third parties. Information on the experience, qualifications, attributes or skills of Fulton’s director nominees is described under “Director Nominee Biographical Information” below.
The Nominating and Corporate Governance Committee believes there is a balance between seasoned directors with knowledge of and insight into Fulton and Fulton Bank, and new directors who contribute fresh ideas, perspectives and viewpoints to the Board of Directors’ deliberations. While the Board of Directors has not established term limits for Fulton directors, Fulton has a mandatory retirement age of seventy-two (72) for directors. The Nominating and Corporate Governance Committee reviews each director’s age and continuation of service on the Board of Directors at the end of his or her term. The Nominating and Corporate Governance Committee members and the Board of Directors are focused on maintaining directors that provide increasing contributions to Fulton over time and have routinely considered candidates who first served on the board of directors of one of Fulton’s subsidiary banks. The Nominating and Corporate Governance Committee reviews the composition of the Board of Directors at least annually to ensure that the Board of Directors reflects the appropriate balance of knowledge, experience, skills, expertise and diversity.
Nominee Diversity and Board Tenure
The nominees for election to the Board of Directors have a gender diversity ratio of 21.4%, a racial diversity ratio of 35.7%, and an average tenure on the Board of Directors of 5.5 years, with seven nominees having served five or less years, six nominees having served from six to ten years and one nominee having served eleven or more years on the Board of Directors. The following is a summary of the gender diversity, racial diversity and average tenure of the nominees for election to the Board of Directors at the 2021 Annual Meeting.
Director Service on Fulton Bank Board of Directors
In September 2019, Fulton completed the consolidation of its banking subsidiaries into Fulton Bank. All Fulton directors that were not already directors of Fulton Bank were elected as directors of Fulton Bank. Effective with this consolidation, Fulton directors no longer receive any additional compensation for bank subsidiary board service.
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For the 2021 Annual Meeting, the Board of Directors has fixed the number of directors at fourteen (14). Pursuant to Fulton’s Bylaws, as amended, nominees to the Board of Directors are elected for one-year terms. The Board of Directors has nominated the following fourteen (14) persons for election to the Board of Directors for a term of one year:
Each of the above director nominees is presently a director of Fulton and also serves on the board of directors of Fulton Bank, with the exception of Mr. Martin, who currently only serves on the board of directors of Fulton Bank. Following the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors approved the nomination of the above individuals. However, in the event that any of the foregoing 2021 director nominees are unable to accept nomination or election, any proxy given pursuant to this solicitation will be voted in favor of such other persons as the Board of Directors may recommend. The Board of Directors has no reason to believe that any of its director nominees will be unable to accept nomination or to serve as a director, if elected at the Annual Meeting.
The fourteen (14) candidates receiving the highest number of votes cast at the Annual Meeting shall be elected to the Board of Directors. Abstentions and broker non-votes will be counted as shares that are present at the Annual Meeting, but will not be counted as votes cast in the election of directors. As described under Majority Vote Standard on Page 7, in an uncontested election of directors, the Governance Guidelines require any nominee for director who does not receive a majority of the votes cast to promptly tender his or her resignation following certification of the shareholder vote.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the election of each of the fourteen (14) director nominees identified in this Proxy Statement to serve for one-year terms.
Information about Nominees, Directors and Independence Standards
Information concerning the experience, qualifications, attributes and skills of the fourteen (14) persons nominated by Fulton for election to the Board of Directors at the 2021 Annual Meeting is set forth below, including whether they were determined by the Board of Directors to be independent for purposes of the Nasdaq listing standards.
Fulton is a Nasdaq listed company and follows the Nasdaq listing standards for Board of Directors and committee independence. The Board of Directors determined that eleven (11) of Fulton’s fourteen (14) director nominees are independent, as defined in the applicable Nasdaq listing standards. Specifically, the Board of Directors found that director nominees Crutchfield, Devine, Etter, Graupera, Hodges, Martin, Moxley, Snyder, Spair, Strauss and Waters met the definition of independent director in the Nasdaq listing standards and that each of these directors is free of relationships that would be deemed by the Nasdaq listing standards to interfere with his or her individual exercise of independent judgment.
In addition, the current members of the Audit Committee, the Human Resources Committee (the “HR Committee”) and the Nominating and Corporate Governance Committee of the Board of Directors meet the requirements for independence under the Nasdaq listing standards, and the rules and regulations of the SEC for service on the Audit Committee, the HR Committee or the Nominating and Corporate Governance Committee, as applicable. In reviewing director independence, the Board of Directors considered the relationships and other arrangements, if any, of each director. The other types of relationships and transactions that were reviewed and considered are more fully described in “Related Person Transactions” on Page 24.
Director Nominee Biographical Information
The following information regarding each director nominee’s background, experience, qualifications, attributes and skills represents the information that led Fulton to conclude that these persons should be nominated to serve as a director of Fulton.
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Director Retiring from Fulton Effective with the Annual Meeting
Director Freer will not stand for election at the Annual Meeting and will retire from both the Fulton and Fulton Bank Boards of Directors because he will have reached Fulton’s mandatory retirement age for directors upon the expiration of his current term in May 2021. He joined Fulton’s Board of Directors after the acquisition of Lebanon Valley Farmers Bank in 1996 and during his tenure with Fulton also served on the boards of several affiliate banks.
We thank Director Freer for his many years of dedicated service to the Board of Directors and Fulton.
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Security Ownership of Directors, Nominees, Management and Certain Beneficial Owners
The following table sets forth the number of shares of common stock beneficially owned 1 as of the Record Date, the latest practicable date, by each director, director nominee, and the named executive officers, Mr. Wenger, Mr. McCollom, Mr. Myers, Ms. Snyder and Ms. Chivinski, (collectively, the “Named Executive Officers” or the “Executives;” and individually, a “Named Executive Officer” or an “Executive”) and those persons known to be the beneficial owner of more than 5% of Fulton’s common stock. Except as to the beneficial owners and other principal holders listed below, to the knowledge of Fulton, no person or entity owned, of record or beneficially, on the Record Date more than 5% of the outstanding common stock of Fulton. Unless otherwise indicated in a footnote, shares shown as beneficially owned by each director, each director nominee and each Executive are held individually by the person. The directors, director nominees, the Executives and other executive officers of Fulton, as a group, owned of record and beneficially 1,643,071 shares of Fulton common stock, representing 1.01% of such shares then outstanding. Shares representing less than one percent of the outstanding shares are shown with a “*” below.
Director, Nominee and Management Beneficial Owners | Title | Total Shares Beneficially Owned | 1 2 3 4 | Total Shares and Director Stock Units | 5 | % of Class | ||||||||
Jennifer Craighead Carey | Director and Nominee | �� | 4,248 | 9,957 | * | |||||||||
Lisa Crutchfield | Director and Nominee | 11,938 | 21,751 | * | ||||||||||
Denise L. Devine | Director and Nominee | 20,562 | 6 | 30,375 | * | |||||||||
Steven S. Etter | Director and Nominee | 314,125 | 319,834 | * | ||||||||||
Patrick J. Freer | Director | 116,439 | 7 | 126,252 | * | |||||||||
Carlos E. Graupera | Director and Nominee | 15,909 | 21,617 | * | ||||||||||
George W. Hodges | Director and Nominee | 42,922 | 8 | 52,736 | * | |||||||||
George K. Martin | Nominee | 8,951 | 9 | 12,042 | * | |||||||||
James R. Moxley III | Director and Nominee | 149,484 | 10 | 155,193 | * | |||||||||
Scott A. Snyder | Director and Nominee | 6,540 | 16,353 | * | ||||||||||
Ronald H. Spair | Director and Nominee | 19,072 | 11 | 28,885 | * | |||||||||
Mark F. Strauss | Director and Nominee | 25,278 | 12 | 35,091 | * | |||||||||
Ernest J. Waters | Director and Nominee | 31,968 | 13 | 41,781 | * | |||||||||
E. Philip Wenger | Director, Nominee, Chairman of the Board and Chief Executive Officer | 402,413 | 14 | 402,413 | * | |||||||||
Mark R. McCollom | Senior Executive Vice President and Chief Financial Officer | 11,912 | 11,912 | * | ||||||||||
Curtis J. Myers | Director, Nominee, President and Chief Operating Officer | 151,835 | 15 | 151,835 | * | |||||||||
Angela M. Snyder | Senior Executive Vice President and Head of Consumer Banking | 20,967 | 20,967 | * | ||||||||||
Beth Ann L. Chivinski | Senior Executive Vice President and Chief Risk Officer | 74,897 | 16 | 74,897 | * | |||||||||
Total Ownership | Directors, Director Nominees, Named Executive Officers and executive officers as a Group (25 Persons) | 1,643,071 | 1,747,502 | 1.01 | % |
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Beneficial Owners Holding More than 5% | Title | Total Shares Beneficially Owned | % of Class | |||||||
BlackRock, Inc. 17 | ||||||||||
55 East 52nd Street | ||||||||||
New York, NY 10055 | N/A | 20,290,397 | 12.5 | % | ||||||
The Vanguard Group 18 | ||||||||||
100 Vanguard Blvd. | ||||||||||
Malvern, PA 19355 | N/A | 14,998,753 | 9.24 | % | ||||||
Dimensional Fund | ||||||||||
Advisors LP 19 | ||||||||||
Building One | ||||||||||
6300 Bee Cave Road | ||||||||||
Austin, TX 78746 | N/A | 11,293,742 | 7.0 | % |
1 Beneficial ownership is determined in accordance with SEC Rule 13d-3, which provides that a person is deemed to own any stock for which that person has or shares: (i) voting power, which includes the power to vote or to direct the voting of the stock; or (ii) investment power, which includes the power to dispose or direct the disposition of the stock; or (iii) the right to acquire beneficial ownership within 60 days after the Record Date.
2 Includes 91,123 shares issuable upon the exercise of vested stock options, which have been treated as outstanding shares for purposes of calculating the percentage of outstanding shares owned by each individual as a group.
3 As of the Record Date, none of the listed individuals had pledged Fulton stock and Fulton’s Insider Trading Policy currently prohibits the pledging of shares by Fulton directors and Executives.
4 Fulton has established stock ownership guidelines for Fulton directors and certain officers. All non-employee directors and the Executives were in compliance with Fulton’s stock ownership guidelines as of December 31, 2020. See a description of Fulton’s stock ownership guidelines on Page 48 for more information.
5 Includes a total of 104,431 unvested director stock units awarded in 2020 to the twelve non-employee directors that served from 2020 to 2021, including Director Freer. Mr. Martin received a director stock unit award for service on the board of directors Fulton Bank Board. The director stock units awarded to each of the directors will vest on June 1, 2020 unless the director has elected to defer vesting until retirement or departure from the Board of Directors.
6 Ms. Devine’s ownership includes 1,000 shares held jointly with her spouse.
7 Mr. Freer’s ownership includes 97,040 shares held jointly with his spouse.
8 Mr. Hodges’ ownership includes 21,430 shares held in a 401(k) plan, 300 shares held in Irrevocable Trust for his children and 21,192 shares held by The Hodges Family Foundation, Inc. Mr. Hodges has disclaimed beneficial ownership of the shares held by The Hodges Family Foundation, Inc.
9 Mr. Martin’s ownership includes 7,360 shares held in an IRA and 125 shares held jointly with his spouse.
10 Mr. Moxley’s ownership includes 39,115 shares held by The Moxley Family Trust, 1,207 shares held solely by his spouse, 18,086 shares held by Mr. Moxley as custodian for his children and 28,000 shares held in a 401(k) plan.
11 Mr. Spair’s ownership includes 10,000 shares held jointly with his spouse.
12 Mr. Strauss’ ownership includes 4,887 shares held jointly with his spouse and 6,426 shares held in an IRA.
13 Mr. Waters’ ownership includes 13,895 shares held in an IRA.
14 Mr. Wenger’s ownership includes 144,297 shares held jointly with his spouse and 89,370 shares held in the 401(k) Plan. Also includes 3,432 shares held in the 401(k) Plan by his spouse and 378 shares held by Mr. Wenger as custodian for his children.
15 Mr. Myers’ ownership includes 50,718 shares held in the 401(k) Plan, 34,515 shares which may be acquired pursuant to the exercise of vested stock options and 14,109 shares held jointly with his spouse.
16 Ms. Chivinski’s ownership includes 9,642 shares held in the 401(k) Plan.
17 This information is based solely on a Schedule 13G filed with the SEC January 27, 2021 by BlackRock, Inc., which reported sole voting power as to 19,722,654 shares and sole dispositive power as to 20,290,397 shares, as of December 31, 2020.
18 This information is based solely on a Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group, which reported sole voting power as to 0 shares and sole dispositive power as to 14,688,436 shares, shared voting power as to 161,830 shares and shared dispositive power as to 310,317 shares, as of December 31, 2020.
19 This information is based solely on a Schedule 13G filed with the SEC on February 12, 2021 by Dimensional Fund Advisors LP, which reported sole voting power as to 11,008,703 shares and sole dispositive power as to 11,293,742 shares, as of December 31, 2020.
Meetings and Committees of the Board of Directors
There were eight (8) regular and three (3) special meetings of the Board of Directors and a total of forty (40) meetings of the committees of the Board of Directors during 2020. No director attended fewer than 75% of (i) all meetings of the Board of Directors, (ii) all of the meetings of the committees of the Board of Directors on which a director served, or (iii) the aggregate number of meetings of the Board of Directors and of the committees of the Board of Directors on which he or she served in 2020.
The Board of Directors of Fulton has the following five regular standing committees: Audit, Executive, Human Resources, Nominating and Corporate Governance and Risk. The following table represents the membership on each Fulton committee as of the date of this Proxy Statement:
Human Resources Committee Interlocks and Insider Participation
HR Committee. Fulton maintains a Human Resources Committee (defined above as the “HR Committee”), and all members of the HR Committee meet the independence requirements of the Nasdaq listing standards for membership on compensation committees. More information regarding the HR Committee can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement beginning on Page 29. There are no interlocking relationships, as defined in applicable SEC regulations, involving members of the HR Committee. The HR Committee is responsible for approving or recommending to the Board of Directors compensation for the CEO and other Executives, oversight of Fulton’s cash and equity-based incentive compensation plans, the ESPP and the 401(k) Plan, approving employment agreements for the Executives and other officers of Fulton and Fulton Bank and fulfilling other broad-based compensation, benefits and human resources duties. The HR Committee met a total of nine (9) times in 2020. The HR Committee is governed by a formal charter, which was last amended in July 2020, and which is available on Fulton’s website at www.fult.com.
Audit Committee. All members of the Audit Committee meet the independence requirements of the Nasdaq listing standards, and the rules and regulations of the SEC for membership on audit committees. Each of the members of the Audit Committee has been determined to qualify, been designated by the Board of Directors, and agreed to serve, as an Audit Committee “financial expert” as defined by SEC regulations. The Audit Committee met twelve (12) times during 2020.
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The Audit Committee is governed by a formal charter, which was last amended in July 2020, and which is available on Fulton’s website at www.fult.com. The Audit Committee’s pre-approval policy and procedure for audit and non-audit services is set forth in its charter. The functions of the Audit Committee include: sole authority to appoint, evaluate, retain, or terminate the independent auditor; direct responsibility for the compensation and oversight of the work of the independent auditor; oversight of the overall relationship with the independent auditor; meeting with the independent auditor to review the scope of audit services; reviewing and discussing with management and the independent auditor annual and quarterly financial statements and related disclosures; overseeing the internal audit function, including hiring and replacing the chief audit executive; reviewing related person transactions; establishing procedures and handling complaints concerning accounting, internal accounting controls, or auditing matters; and those risk management matters outlined in the Audit Committee Charter. In addition, with respect to any bank subsidiary of Fulton that has not established its own independent audit committee, it is intended that Fulton’s Audit Committee, in carrying out its responsibilities, will also satisfy the obligations imposed on such bank subsidiary of Fulton relating to the establishment and duties of an independent audit committee as set forth in Section 36 of the Federal Deposit Insurance Act and its implementing regulations. Currently Fulton Bank is the only such subsidiary.
Based on its review and discussion of the audited 2020 financial statements of Fulton with management and KPMG LLP, the independent auditor of the Fulton’s financial statements, the Audit Committee recommended to the Board of Directors that the financial statements be included in the Annual Report on Form 10-K for filing with the SEC. A copy of the report of the Audit Committee of its findings that resulted from its financial reporting oversight responsibilities is attached as Exhibit A.
Nominating and Corporate Governance Committee. All members of the Nominating and Corporate Governance Committee meet the independence requirements of the Nasdaq listing standards. The Nominating and Corporate Governance Committee met eight (8) times during 2020.
The Nominating and Corporate Governance Committee is responsible for, among other things, recommending to the Board of Directors nominees for election to the Board of Directors and assisting the Board of Directors with corporate governance matters, including the review and approval of all changes to the Code of Conduct, Governance Guidelines and the responsibility for guidelines and procedures to be used by directors in completing Board of Directors evaluations used in monitoring and evaluating the performance of the Board of Directors and committees. The Nominating and Corporate Governance Committee is also responsible for determining whether Fulton’s directors and Executives are in compliance with Fulton’s stock ownership guidelines. The Nominating and Corporate Governance Committee is governed by a formal charter, which was last amended in July 2020, and is available on Fulton’s website at www.fult.com.
Executive Committee. The Executive Committee met two (2) times during 2020. Except for the powers expressly excluded in Section 5 of Article III of the Bylaws, the Executive Committee exercises the powers of the Board of Directors between board meetings.
Risk Committee. Fulton’s Risk Committee met nine (9) times during 2020. The Risk Committee is responsible for providing oversight of the risk management functions and practices of Fulton, including assisting the Board of Directors with its oversight of Fulton’s policies, procedures and practices relating to assessment and management of Fulton’s enterprise-wide risks, including those risks identified in Fulton’s Enterprise Risk Management Policy, which currently include strategic risk, credit risk, market risk, liquidity risk, operational risk, legal risk, compliance and regulatory risk and reputational risk. The Risk Committee Chair is an independent director and was found by Fulton’s Board of Directors to possess the requisite experience in identifying, assessing and managing risk exposures at large, complex firms. The Risk Committee is governed by a formal charter, which was last amended in July 2020, and is available on Fulton’s website at www.fult.com.
Board’s Role in Risk Oversight
While each of Fulton’s committees is responsible for overseeing the management of certain risks that are germane to their committee responsibilities outlined in their charters, Fulton’s Risk Committee is primarily responsible for overseeing the management of enterprise risk for Fulton, and the entire Board of Directors is regularly informed about such risks through committee reports and review of board committee meeting minutes. The Board of Directors and Risk Committee regularly review information regarding Fulton’s exposure to strategic risk, credit risk, market risk, liquidity risk, operational risk, compliance and regulatory risk, legal risk and reputational risk, as well as Fulton’s strategies to monitor, control and mitigate its exposure to these risks. In addition, the HR Committee is responsible for overseeing the management of risks relating to all of Fulton’s compensation plans. The Audit
Committee shares with the Risk Committee a general oversight role in Fulton’s risk management process in the context of the Audit Committee’s responsibility for financial reporting and its evaluation and assessment of the adequacy of Fulton’s internal control structure. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board of Directors, potential conflicts of interest and governance matters.
The Board of Directors also relies upon Fulton’s Chief Risk Officer and other members of Fulton’s Enterprise Risk Management Committee, which is Fulton’s officer-level risk management committee, to oversee existing and emerging risks and serve as a primary review forum prior to escalation to the Risk Committee and the Board of Directors. This officer-level risk management committee provides management-level oversight for Fulton’s risk management and compliance programs. In addition, annually, Fulton’s Board of Directors adopts a formal Risk Appetite Statement which sets forth both the qualitative and quantitative parameters within which Fulton executes its business strategies. This document also outlines the general framework within which Fulton manages risk in the context of Fulton’s core values and its management philosophy, which seeks to balance the risk it assumes in serving its customers and communities with the return it earns for its shareholders.
Fulton’s framework for enterprise risk management consists of three “lines of defense:” 1) lines of business, bank operations, shared services operations and certain corporate functions (collectively known as front line units) have primary responsibility for risk management and compliance, and they each drive process deployment, risk identification and management, policies and procedures, training and communication and reporting; 2) independent risk management units (consisting of risk management, compliance, loan review, vendor risk management, fraud risk management, Bank Secrecy Act compliance, corporate information security office and other risk management units) have oversight responsibility and define governance requirements for risk management and compliance, and these units educate, advise and monitor front line unit risk and compliance activities in discrete areas; and 3) Fulton’s Internal Audit function independently validates the effectiveness of internal controls and risk management activities within front line units and independent risk management units in those areas, and periodically reports results to management and the Board of Directors.
Fulton’s risk appetite is centeredfocused on Fulton’s objective to consistently increase and enhanceenhancing shareholder value while managing risk at an acceptable level. Fulton’sThe Board of Directors, and the committees that monitor risk assess and oversee therisk management, of risk, including the establishment, tracking and reporting of key risk indicators within the primary risk categories ofacross our strategic, reputation, credit, market, liquidity, operational, legal, compliance and regulatory risk pillars. The Board has primary responsibility for the oversight of capital adequacy and reputational risk. Finally,planning. Fulton also engages in ongoingcontinuing risk assessments, capital management and stress testing to ensure that Fulton has adequate capital to absorb potential losses under various stress scenarios. The Board specifically delegates certain risk oversight functions to the Risk, HR, Audit and NCG Committees as follows:
● | Risk Committee: Responsible for our enterprise risk oversight and regularly informing the Board about risks. The Board and the Risk Committee regularly review information regarding our exposure to strategic, reputation, credit, market, liquidity, operational, legal, compliance and regulatory risks as well as Fulton’s strategies to monitor, control and mitigate its exposure to these risks. The Risk Committee also oversees cybersecurity risks. |
● | HR Committee: Responsible for risk oversight with respect to our compensation plans and human capital management. |
● | Audit Committee: Responsible for risk management oversight with respect to financial reporting and the evaluation and assessment of the adequacy of our internal controls. |
● | NCG Committee: Responsible for risk oversight associated with governance matters, Board independence, potential conflicts of interest and ESG matters. |
Management’s Role in Risk Oversight
Fulton’s Chief Risk Officer and members of Fulton’s Enterprise Risk Management Committee (“ERMC”), a management-level risk committee, oversee organization-wide existing and emerging risks and serve as the primary review function prior to escalation to the Risk Committee and the Board. This management-level committee provides risk oversight, including oversight of Fulton’s risk management and compliance programs.
Risk Appetite Statement
On an annual basis, the Board adopts a formal Risk Appetite Statement (“RAS”) that details our risk management approach and the qualitative and quantitative parameters within which Fulton executes its business strategies. The RAS also outlines the general structure within which Fulton manages risk while balancing our customer and community needs and enhancing shareholder value.
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Risks and Controls
Fulton’s framework for enterprise risk management consists of three “lines of defense.” Our first line of defense, that includes our lines of business, bank operations, shared services operations and certain corporate functions, have primary responsibility for risk management and compliance, including process deployment, risk identification, training and reporting. Our second line of defense, that includes our independent risk management units, are responsible for: (i) overseeing risk, (ii) defining governance requirements for risk management and compliance and (iii) monitoring front line unit risk and compliance activities in discrete areas. Our risk management units include, but are not limited to, risk management, compliance, loan review, vendor risk management, fraud risk management, Bank Secrecy Act compliance and information security. Our third line of defense, that is our internal audit function, independently validates the effectiveness of internal controls and risk management activities within the front-line and independent risk management units and periodically reports its results to management and the Board.
Board’s Role in Cybersecurity Risk
Cybersecurity risk is a key consideration in theFulton’s operational risk management capabilities at Fulton.management. Under the direction of itsour Chief Information Security Officer, Fulton maintains a formal information security management program whichthat is subject to oversight by, and reportingreports to, the Risk Committee of the Board of Directors.Committee. Given the nature of Fulton’s operations and business, including Fulton’s reliance on relationships with various third-party providers in the delivery of financial services, cybersecurity risk may manifest itself through various business activities and channels, and itchannels. As such, cybersecurity risk is thus considered an enterprise-wide risk and subject to control and monitoring at various levels of management throughout the business. In accordance with its charter, the Risk Committee of the Board of Directors oversees and reviews reports on significant matters of actual, threatened or potential breaches of corporate security, including cybersecurity.
By the very nature of our business, handling sensitive data is a part of daily operations and is taken very seriously by all employees. The cybersecurity threat environment is volatile and dynamic requiring all levels of Fulton to be cognizant and aware of these threats at all times. As such, we maintain a comprehensive cybersecurity strategy that includes, but is not limited to, regular employee cybersecurity training and communications, regular monitoring, detection, alerting, and defense technologies, regular internal and third-party program oversight, policies and procedures regularly reviewed and designed with regulatory and industry guidance and regular reviews of vendors who maintain sensitive data on our behalf.
Fulton has implemented formal processes and a framework for determining cyber incident materiality, as well as formal processes and procedures for determining and, where necessary or appropriate, reporting incident materiality. Cyber incidents will be evaluated against this framework and these processes and procedures to ensure that any incidents meeting the defined materiality thresholds will be publicly disclosed. Please see Part I, Item 1C Cybersecurity in the Annual Report on Form 10-K for the year ended December 31, 2023 for more information regarding this framework and these processes and procedures.
Board’s Role in Consumer Financial Protection
Under the direction of Fulton’s Chief Compliance Officer, Fulton maintains a consumer compliance program that is subject to oversight of, and reporting to, the Risk Committee. The consumer compliance program includes regular risk assessments, policy updates, compliance monitoring, involvement in new product and significant project initiatives, regulatory change management, independent audit testing and a compliance training program administered by Fulton’s Learning and Development team. Compliance courses are mandatory and are assigned based upon an employee’s role. Fulton’s compliance management system also maintains specific cyber insurance through its corporate insurance program, the adequacy of whichincludes customer feedback and complaint monitoring. Our compliance management system is subject to review and oversightexamination by various regulatory agencies, including the Risk CommitteeOffice of the BoardComptroller of Directors.
Lead Director and Fulton’s Leadership Structure
Director Moxley has served as Fulton’s Lead Directorthe Currency and the independent ChairConsumer Financial Protection Bureau.
Meetings and Committees of the Executive Committee since June 2018. He is also a memberBoard
Meeting Attendance
During 2023, the Board met 12 times. In 2023, each director attended at least 75% of the Nominating and Corporate Governance Committee and Risk Committee. The Board of Directors has made a determination that a structure which includes a Lead Director and a combined Chairman/CEO is appropriate for Fulton. Pursuant to the Governance Guidelines, the Board of Directors designates for a term of at least one (1) year, and publicly discloses in Fulton’s Proxy Statement, the independent non-employee director who will lead the non-employee directors’ executive sessions and preside at all meetings of the Board of Directors at which the Chairman is not present. The Governance Guidelines also require that the Lead Director shall, as appropriate: serve as a liaison between the Chairman and the independent directors; approve information sent to the Board of Directors; approve meeting schedules to assure that therecommittees on which he or she served.
Unless their absence is sufficient time for discussion of all agenda items; and have the authority to call meetings of the independent directors.
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Similar to many public companies, the leadership structure of Fulton combines the positions of Chairman and CEO. This structure permits the CEO to manage Fulton’s daily operations and provides a single voice for Fulton when needed. Fulton believes that separation of these roles is not necessary because the Lead Director acts to counterbalance the combined Chairman and CEO positions. In addition, as of December 31, 2020, approximately 79% of Fulton’s directors (11 out of 14) were determined to be independent under applicable Nasdaq standards, which provides an appropriate level of independent oversight at Board of Directors meetings and executive sessions. Finally, Fulton’s HR Committee, Nominating and Corporate Governance Committee and Audit Committee are all currently, and will continue to be, comprised solely of independent directors.
The independent directors of the Fulton Board of Directors met three (3) times in executive session in 2020 at which only independent directors were present. Fulton’s Lead Director conducted these executive sessions of the independent directors.
Pursuant to Fulton’s Governance Guidelines,excused, Fulton expects directors to attend the Annual Meeting unless their absence is excused. AllMeeting. 10 members of the Board of Directors attended the 20202023 Annual MeetingMeeting.
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Other Board Committees
We believe the Board has created a sound committee structure designed to assist the Board in carrying out its responsibilities in an effective and efficient manner. While the Board may form, from time to time, ad hoc or other special purpose committees, the Board has five regular standing committees: Audit, Executive, HR, NCG and Risk.
Each of the Audit, HR, NCG and Risk Committees meets regularly and at least on a quarterly basis. The committees, typically through their committee chairpersons, routinely report their actions to, and discuss their recommendations with, the full Board.
The Board determined that was held virtually, excepteach member of the Audit, HR and NCG Committees is “independent” within the meaning of the Nasdaq listing standards and the SEC rules and regulations.
As of December 31, 2023, the names of the Board committee members and the key oversight responsibilities of the Board committees are set forth below.
Audit Committee |
Members: Denise L. Devine (Chair), Antoinette M. Pergolin (Vice Chair), Ronald H. Spair and James R. Moxley III Meetings in 2023: 12 Key Oversight Responsibilities: • pre-approval of audit and non-audit services; • the appointment, evaluation, retention or termination of the independent auditor; • compensation and general oversight of the independent auditor; • meeting with the independent auditor to review the scope of audit services; • reviewing and discussing with management and the independent auditor annual and quarterly financial statements and related disclosures; • overseeing the internal audit function; • reviewing related person transactions; and • establishing procedures for handling complaints concerning accounting, internal accounting controls or auditing matters. The Board has determined that each member of the Audit Committee satisfies the requirements established by the SEC for qualification as an “audit committee financial expert,” and each is independent under the Nasdaq listing standards and rules of the SEC. |
HR Committee |
Members: Ronald H. Spair (Chair), Lisa Crutchfield (Vice Chair), Steven S. Etter and James R. Moxley III Meetings in 2023: 9 Key Oversight Responsibilities: • approving or recommending to the Board compensation for the CEO and other NEOs; • administration of Fulton’s cash and equity-based incentive compensation plans, including the Employee Stock Purchase Plan (“ESPP”), the 2022 Amended and Restated Equity and Cash Incentive Compensation Plan (the “2022 Plan”) and the Amended and Restated 2023 Director Equity Plan (the “Director Equity Plan”); • overseeing employee benefit plans, including Fulton’s health and welfare plans; • approving employment agreements and change in control agreements for the NEOs and Fulton’s senior executive officers; • determining Fulton’s peer group; • reviewing Code of Conduct violations; and • fulfilling other broad-based compensation, benefits and human resources duties. |
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NCG Committee |
Members: Scott A. Snyder (Chair), George K. Martin (Vice Chair), Lisa Crutchfield and Steven S. Etter Meetings in 2023: 8 Key Oversight Responsibilities: • recommending to the Board nominees for election to the Board; • assisting the Board with corporate governance matters, including the review and approval of Fulton’s Code of Conduct (the “Code of Conduct”) and the Guidelines; • creating and administering the procedures used by directors in conducting Board evaluations; • determining whether Fulton’s directors and the NEOs are in compliance with Fulton’s stock ownership guidelines; and • providing oversight of Fulton’s ESG strategy as well as Fulton’s corporate social responsibility report. |
Risk Committee |
Members: Jennifer Craighead Carey (Chair), Scott A. Snyder (Vice Chair), Denise L. Devine, George K. Martin, Curtis J. Myers (ex-officio member), Antoinette M. Pergolin and E. Philip Wenger Meetings in 2023: 9 Key Oversight Responsibilities: • overseeing risk management functions and practices; • overseeing established practices, processes and controls employed to manage Fulton’s enterprise-wide risk; • upon recommendation of the ERMC, reviewing and recommending to the Board Fulton’s risk management framework and enterprise risk management policy; and • upon the recommendation of the ERMC, reviewing and recommending to the Board for its approval, Fulton’s RAS. The Chair of the Risk Committee is a director determined by Fulton’s Board to possess the requisite experience in identifying, assessing and managing risk exposures at large, complex financial institutions. |
Executive Committee |
Members: James R. Moxley III (Chair), Denise L. Devine (Vice Chair), Curtis J. Myers, Scott A. Snyder and Ronald H. Spair Meetings in 2023: 0 Key Oversight Responsibilities: subject to our Bylaws, authorized to exercise all the powers and authority of the Board between board meetings. |
Committee Governance
The Board adopted a written charter for Directoreach of the Audit, HR, NCG and Risk Committees that are available on Fulton’s website, www.fultonbank.com, under “Investor Relations – Overview – Governance Documents.” This Proxy Statement includes website addresses and references to additional materials found on those websites. These websites and materials are not incorporated by reference into this Proxy Statement or in any other SEC filing. The Board reviews the committees’ charters, and each committee reviews its own charter, on at least an annual basis.
The charters provide that the committees have adequate resources and authority to discharge their responsibilities, including appropriate funding for the retention of external consultants or advisors as the committees deem necessary and appropriate.
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HR Committee Interlocks and Insider Participation
Messes. Crutchfield and Devine, and Messrs. Etter, Moxley, Hodges, Spair and Strauss whose attendanceserved on the HR Committee in 2023, each of whom is an independent director. Messrs. Hodges and Strauss retired at the 20202023 Annual MeetingMeeting. None of Shareholders was excused.these individuals is, or has been, an officer or employee of Fulton during the last fiscal year or as of the date of this Proxy Statement, or is serving or has served as a member of the compensation committee (or other board committee performing equivalent functions) of another entity that has an executive officer serving on the compensation committee (or other board committee performing equivalent functions). No executive officer of Fulton served as a director of another entity that had an executive officer serving on the HR committee (or other board committee performing equivalent functions). Finally, no executive officer of Fulton served as a member of the compensation committee (or other board committee performing equivalent functions) of another entity that had an executive officer serving as a director of Fulton.
Director Education and Board of Directors DevelopmentCorporate Governance Guidelines
The Board has developed and adopted the Guidelines to promote the functioning of the Board and its committees and to establish a common set of expectations as to how the Board should perform its functions. The Guidelines address, among other matters: (i) the size of the Board, (ii) director qualifications, (iii) the majority vote standard with respect to the election of directors, (iv) service on other boards and director change in status, (v) meeting attendance and review of meeting materials, (vi) director access to management and independent advisors, (vii) the designation of a Lead Director, (viii) executive sessions, (ix) CEO evaluation and succession planning, (x) Board and committee evaluations, (xi) stock ownership guidelines, (xii) communications by interested parties, (xiii) Board and committee responsibilities and (xiv) the Code of Conduct.
Fulton encourages itsA current copy of the Guidelines can be obtained, without cost, by writing to the Corporate Secretary at One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604. The Guidelines are available on Fulton’s website at www.fultonbank.com under “Investor Relations – Overview – Governance Documents.”
Code of Conduct
The Board adopted a Code of Conduct that governs the conduct of our directors, officers and employees and affiliate entities. Our Code of Conduct sets forth specific standards of conduct that we expect all of our employees and directors to attend outside seminarsfollow so that Fulton conducts its business in accordance with the highest ethical standards of the financial industry and educational programscomplies with all laws regulating the conduct of Fulton and its employees. In addition, we maintain an ethics hotline for employees to use on an anonymous basis. A current copy of the Code of Conduct can be obtained, without cost, by writing to the Corporate Secretary at One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604. The current Code of Conduct is available on Fulton’s website at www.fultonbank.com under “Investor Relations – Overview – Governance Documents.”
ESG Overview
We are a community-focused, purpose-driven organization with a deep, long-standing commitment to promoting sound ESG practices. We recognize that good practices and effective oversight and management of such matters are essential in driving success for our shareholders, the communities in which we operate as well as other stakeholders, including customers, employees and third-party vendors. The Board and committees provide oversight of ESG matters as we continue to make progress in further enhancing our ESG approach, including promoting the success and well-being of our employees.
ESG Oversight
The Board designated the NCG Committee to be the Board-level committee responsible for oversight of our ESG strategy and corporate social responsibility reporting. We have a cross-functional management-level Corporate Social Responsibility Leadership Committee to coordinate Fulton’s ESG program that provides updates to the NCG Committee and the Board.
Employees
We recognize a crucial element of a successful organization is having a diverse, equitable and inclusive culture and workforce that encourages employees to share their opinions and different perspectives, and fosters a culture of respect. In recent years, we undertook many initiatives to increase our diversity, equity and inclusion practices, including, providing allyship training to leaders, conducting senior leader listening tours on diversity, equity and inclusion topics and supporting the launch of several employee resource groups.
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We continually invest in our employees. We provide relevant learning opportunities to help employees cultivate their strengths and enrich their careers. Our Employee Experience Council reviews data from employee engagement surveys that lead to action plans in response to survey feedback. We measure progress based on these employee engagement surveys, and success toward meeting established performance goals is reflected in the compensation of certain executives with an employee engagement scorecard metric.
Community and Customers
As an active, integral member of the local communities in which we operate, we recognize the importance of supporting our communities, including through charitable giving as well as providing employees with volunteering opportunities in their communities. A key part of our mission is to serve low- and moderate-income individuals, minorities and small businesses operating in underbanked and underserved areas.
We established and fund our Fulton Forward Foundation (“Fulton Forward”) to make direct impact grants to groups in a manner aligned with our four Fulton Forward® pillars detailed below. Our investment in opportunities for people in our communities to improve their lives includes focusing people and financial resources on philanthropic and volunteer activities to advance the Fulton Forward pillars that promote:
• | Affordable Housing and Home Ownership |
• | Job Training and Workforce Development |
• | Financial Education and Economic Empowerment |
• | Diversity, Equity and Inclusion |
To ensure fair and equitable customer treatment, we established a fair lending compliance program consisting of policies, procedures, training, monitoring and testing controls to ensure compliance with Fair Lending laws. The Fair and Responsible Banking Strategy Committee, assisted by the Fair and Responsible Banking Director, oversees the development and execution of fair and responsible banking strategic programs and initiatives.
Environment
As responsible environmental stewards, we strive to reduce the environmental impact of our activities. We are mindful of our operational footprint and deploy efficient land and building practices to minimize the resources used in the communities in which we operate.
A working group of senior officers from different departments across our organization is tasked with understanding the climate-related opportunities and risks in our business. The working group is supporting us by:
• | actively seeking ways to reduce our operational impact on the environment; |
• | incorporating climate-related risk management into our business practices; |
• | ensuring we have financial products and services that support our customers’ sustainability journeys; and |
• | engaging our vendors on sustainability. |
We created a centralized Strategic Sourcing and Procurement department that seeks to reduce the costs of goods and services we purchase. We implemented a new statement on supplier diversity as well as a formal Supplier Code of Conduct that can be found at www.fultonbank.com under the “About” tab. These initiatives were created to help reduce our overall environmental impact.
The Risk Committee has oversight responsibility for enterprise risks including climate risk factors. The Risk Committee evaluates Fulton’s established risk appetite and considers emerging risk factors such as ESG in its regular oversight and monitoring of management’s risk reporting and analysis. Climate risk factors in the credit and operational risk domains are considered in the risk appetite and monitoring processes. For more details on our Risk Committee’s activities, see “Board’s Role in Risk Oversight” on page 17.
ESG Reporting
We published our 2022 Corporate Social Responsibility Report (the “CSR”) that highlights our approach to changing the lives of our customers, employees, members of our communities and other stakeholders for the better. The CSR can be found on Fulton’s website at www.fultonbank.com under the “About” tab. The content of the CSR and our website is not incorporated by reference into this Proxy Statement or any other SEC filing.
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As part of our continued emphasis on engaging with stakeholders surrounding our ESG efforts, we plan to publish a 2023 CSR report that will include additional disclosures and ESG metrics, a few of which will be aligned with the Sustainability Accounting Standards Board.
Human Capital
Our workforce, excluding temporary employees and interns, on December 31, 2023 consisted of approximately 3,400 employees, compared to approximately 3,300 employees at December 31, 2022.
Employee Engagement and Retention. We place a premium on having a highly engaged workforce because engaged employees tend to perform at a higher level, support our success, and are more likely to remain with our organization. We conduct an annual survey of our workforce to measure employee engagement, assess employee morale, and help identify areas of the employee experience that could be improved. We then task our leaders with developing and implementing communication and action plans aimed at collaborating with their respective teams to gain a better understanding of the results of the assessment and to foster enhanced future engagement.
Our leaders are held accountable for the employee engagement of their teams as each leader’s engagement score is included in their annual performance review. Additionally, aggregated employee engagement assessment results are reported to our Board as a key indicator of the health and well-being of our workforce.
Culture, Diversity and Inclusion. We believe that building relationships matters. This belief includes relationships with customers and relationships among employees. We place significant emphasis on developing our corporate governanceculture, and general board education process. These educational opportunitieswe consider our culture to be one of the primary components of our continuing success. Our culture-shaping program, The Fulton Experience, is a highly engaging program that is intended to create new ways of thinking about employees’ individual roles, how employees collaborate, and how we and our employees grow together. We believe that we succeed as a company because we value our employees’ teamwork and foster a culture around that belief. We apply that same emphasis to the development of a diverse, equitable, and inclusive workforce. We recognize that having a diverse, equitable, and inclusive culture fosters a culture of respect and is a crucial element of a successful organization.
Compensation and Rewards. We invest in our workforce by offering a comprehensive Total Rewards program which includes competitive salaries, incentives, and benefits. In line with our pay for performance philosophy, our performance-based incentive programs are designed to drive results in the business units as well as at the enterprise level.
Workforce Recruitment and Development. We recruit our workforce, filling both vacant and new positions by posting these positions on our website and on social media platforms, through employee referrals and through talent recruiting efforts by internal and third-party recruiters. We provide for professional development of new and existing employees largely through the efforts of our Learning and Development area that develops and administers a wide variety of training programs for professional development. We also provide a number of third-party offerings in which employees can further enhance their skills, knowledge and leadership potential. One such example, afforded to employees with future leadership potential, is through our participation in the Stonier School of Banking sponsored by the American Bankers Association.
Safety, Health and Wellness. The safety, health and wellness of our employees remains a top priority. In addition to traditional healthcare, paid time off, paid parental leave and retirement benefits, we provide behavioral and mental health support and work-life services through our Employee Assistance Program. Following the education and development presentations that are provided during Fulton Board of Directors meetings and seminars. For example, third parties are periodically asked to provide the Board of Directors with presentations on governance, the economy, regulatory, compliance and a variety of other topics of interest. In addition, Directors Crutchfield, Devine, Hodges, Moxley and Waters have each completed the requirements for the NACD Board Leadership Fellow Program for 2020 and prior years. In order to become NACD Board Leadership Fellows, individuals must demonstrate their knowledgeend of the leading trends and practices that define exemplary corporate governance, and commit to developing professional insights through a sophisticated course of ongoing study. In 2017, Dr. Snyder and Mr. Waters also successfully completed the NACD Cyber-Risk Oversight Program and earned a CERT Certificate in Cybersecurity Oversight, issued by the Software Engineering Institute at Carnegie Mellon University. With the oversight of the Nominating and Corporate Governance Committee, Fulton willCOVID-19 pandemic, we continue to promote board developmentiterate our approach to remote and ensure directors are kept current in a selectionhybrid working arrangements to support new ways of topics via onsite programs sponsored by Fulton, and external and remote learning opportunities available for corporate directors.working while strengthening employee engagement.
There are no material legal proceedings to which any director, officer, nominee, affiliate or principal shareholder, or any associate thereof, is a party adverse to Fulton, or in which any such person has a material interest adverse to Fulton.
Financial Products and Services:Some of the currentIn 2023, certain Fulton directors and executive officers, of Fulton, including the Executives,certain NEOs, their family members and the companies with which they are associated, were customers of, and/or had banking transactions with, Fulton’s bank subsidiaries during 2020.Fulton Bank. These transactions included deposit accounts, trust relationships, loans and other financial products and services provided in the ordinary course of business by Fulton’s bank subsidiaries.Fulton Bank. All loans and commitments to lend made to suchthese persons and to the companies with which they are associated wereassociated: (i) are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender, and did not involve more than a normal risk of collectability or present other unfavorable features. It is anticipated that similar transactions will be entered into in the future. By using Fulton’s products and services, directors and executive officers have the opportunity to become familiar with the wide array of products and services offered by Fulton’s bank subsidiaries to customers.
Other Transactions:Applicable SEC regulations require Fulton to disclose transactions with certain related persons where the annual amount involved exceeds $120,000. However, a person who has a position or relationship with a firm, corporation, or other entity that engages in a transaction with Fulton is not deemed to have a material interest in a transaction where the interest arises only from such person’s position as a director of the firm, corporation or other entity and/or arises only from the ownership by such person in the firm, corporation or other entity if that ownership is under 10%, excluding partnerships. Amounts paid to entities in which a related person does not have a material interest or that were obtained by a low bid pursuant to a formal request for proposal to provide services(ii) are not required to be disclosed. Fulton may have engaged in various transactions on customary terms with companies where directors, nominees or officers and immediate family members may be directors, officers, partners, or employees, and it is possible that Fulton’s directors, nominees and executive officers may not have knowledge of those transactions.
During 2020, the only related person transactions Fulton had which were in excess of $120,000 and require specific disclosure were for the direct payment of fees to Barley Snyder LLP in the amount of $1.931 million, and donations and other payments to the Spanish American Civic Association for Equality, Inc., and related entities (“SACA”) in the amount of $208,500. Jennifer Craighead Carey is a director nominee for the Annual Meeting and was a partner with less than a 10% interest in the law firm of Barley Snyder LLP during 2020. The payment to Barley Snyder LLP represents the total direct amount paid for all invoices processed by Fulton and its subsidiaries during 2020. Ms. Craighead Carey was not directly engaged as counsel for any Fulton matter, nor did she bill any hours on Fulton engagements during 2020. Fulton anticipates engaging Barley Snyder LLP for legal services in the future. Carlos E. Graupera is a director nominee for the Annual Meeting, and he and his spouse were officers of SACA and its related entities during 2020. SACA is a Latino founded and managed community-based organization whose mission is to enable the community it serves to integrate itself into the social, economic, and political mainstream of life in Lancaster County, Pennsylvania. Amounts paid include contributions to SACA and its affiliates for the Neighborhood Assistance Project and other activities to advance their mission in the Lancaster, Pennsylvania community. Some of the contributions to SACA qualify as Pennsylvania tax credits for Fulton. The total payments and contributions to SACA by Fulton were less than 5% of total revenues reported by SACA in its 2020 Annual Report. Fulton anticipates providing future support for SACA and other community organizations in the future.
Fulton considered the transactions between Fulton and members of the Board of Directors and executive officers that do not require specific disclosure, when it made the determinations that eleven (11) of Fulton’s fourteen (14) director nominees, or approximately 79% of the director nominees who are standing for election at the Annual Meeting, are independent in accordance with the Nasdaq listing standards. See “Information about Nominees, Directors and Independence Standards” on Page 10 for more information.
Family Relationships:SEC regulations generally require disclosure of any employment relationship or transaction with a related person where the amount involved exceeds $120,000. In fiscal year 2020, there were no family relationships requiring disclosure among any of the members of the Board of Directors, board nominees and executive officers of Fulton. In addition, as of December 31, 2020, other family relationships existed among executive officers and some of the approximately 3,300 full-time equivalent employees of Fulton and its subsidiaries. These Fulton employees participate in compensation, benefit and incentive plans on the same basis as other similarly situated employees.
Related Person Transaction Policy and Procedures:Fulton does not have a separate policy specific to related person transactions. Under the Code of Conduct, however, employees and directors are expected to recognize and avoid those situations where personal interest or relationships might interfere, or appear to interfere, with their responsibilities to Fulton. The Code of Conduct also requires thoughtful attention to the problem of conflicts and the exercise of the highest degree of good judgment. Under the Code of Conduct, directors must provide prompt notice to Fulton of all new or changed business activities, related person relationships and board directorships as they arise.
In addition, Fulton and Fulton Bank are subject to Federal Reserve Regulation O, which governs loans by federally regulated banks to certain insiders, including an executive officer, director or 10% controlling shareholder of the applicable bank or bank holding company, or an entity controlled by such executive officer, director or controlling shareholder (an “Insider”). Fulton Bank is required to follow a Regulation O policy that prohibits Fulton Bank from making loans to an Insider unless the loan (i) is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender;Fulton Bank and
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(ii) does (iii) did not involve more than thea normal risk of repaymentcollectability or present other unfavorableunfavourable features. It is anticipated that similar transactions will be entered into in the future.
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In 2023, Fulton had one related person transaction in excess of $120,000 in connection with legal fees paid to Barley Snyder in the amount of $1,557,249. Ms. Craighead Carey, a director nominee, is the managing partner of Barley Snyder. Ms. Craighead Carey owns less than a 10% interest in Barley Snyder. In 2023, Ms. Craighead Carey was not directly engaged as counsel for any Fulton-related matter, and she did not bill any hours on Fulton engagements.
In 2023, there were no family relationships among Board members, director nominees and Fulton Bank are examined periodically by bank regulatorsexecutive officers requiring disclosure.
Fulton does not have a separate related person transactions policy. Under the Code of Conduct, directors must provide prompt notice to Fulton of all new or changed business activities, related person relationships and Fulton’s Internal Audit Department for compliance with Regulation O to ensure that internal controls exist within Fulton to monitor Fulton’s compliance with Regulation O.
In accordance with Fulton’s Audit Committee Charter and Nasdaq listing standards, theboard directorships. The Audit Committee is charged with the oversight of, and responsibility to conduct, at least annually,on an appropriateannual basis, a review and oversight of all transactions with related persons as defined in applicable SEC regulations. This responsibility in the Audit Committee Charter includes reviewing an annual report regarding the related person transactions, if any, with each member of Fulton’s Board of Directors, the Executives and other relevant related persons during the prior year.
In the event of a potentially significant related person transaction arises, Fulton’s Chief Legal Officer will review the facts and circumstances with the Committee at an interim date. At a meeting in February 2021,2024, the Audit Committee reviewed and approved a report of all potential2023 related person transactions identified during 2020.transactions.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires Fulton’s executive officers, including the Executives, its principal accounting officer, its directors, and any persons owning 10% or more of Fulton’s common stock, to file with the SEC, in their personal capacities, initial statements of beneficial ownership on Form 3, statements of changes in beneficial ownership on Form 4 and annual statements of beneficial ownership on Form 5. During 2020, persons filing such beneficial ownership statements were required by SEC regulation to furnish Fulton with copies of all such statements filed with the SEC. The rules of the SEC regarding the filing of such statements require that “late filings” of such statements be disclosed in Fulton’s Proxy Statement. Based solely on Fulton’s review ofof: (i) Forms 3 and 4 and amendments thereto furnished to Fultonfiled electronically with the SEC during the 20202023 fiscal year, includingyear; (ii) Forms 5 and amendments thereto furnishedfiled electronically with the SEC with respect to Fulton,the 2023 fiscal year and on(iii) written representations from Fulton’s directors, the ExecutivesNEOs and Fulton’s other executiveour officers, Fulton believeswe believe that all such statementsSection 16(a) reports were timely filed during the 2023 fiscal year, except for Mr. Wenger’s sale on March 16, 2023 of 0.5273 shares reported on a Form 4 filed on May 3, 2023, and Mr. Moxley’s sale on January 18, 2023 of 0.4599 shares reported on a Form 4 filed on April 27, 2023. Each of these transactions was a sale of non-transferable fractional shares in 2020.connection with the transfer of whole shares between accounts for the reporting person.
Board of Directors and Committee EvaluationsDirector Compensation
Pursuant to its charter, the Nominating and Corporate Governance Committee reviews and recommends to the Board of Directors guidelines and proceduresThe compensation for our non-employee directors is designed to be used by directorscompetitive with other financial institutions that are similar in monitoringsize, complexity and evaluatingbusiness model. The Board reviews Fulton’s non-employee director compensation on an annual basis with the performanceassistance of the BoardHR Committee.
Elements of Directors and its committees. The Board of Directors and its committees, except the Executive Committee, conduct an annual self-evaluation of the performance of the Board of Directors and committees. Anonymous board and committee evaluation questionnaires were last completed in the fourth quarter of 2020. The results were compiled by Fulton’s in-house corporate counsel and presented to the Nominating and Corporate Governance Committee in December 2020 and the members of each committee also received a summary report of the results of that committee’s questionnaire. The Nominating and Corporate Governance Committee reported the results to the Board of Directors at its December 2020 regular meeting, and the Board of Directors and each of the committees discussed the summary of its respective annual evaluations.
Director Compensation of Directors
Non-employee directors serving as a member of the Board of Directors currently receive a combination of a cash retainer and equity compensation paid by Fulton for service on the Board of Directors and its committees. FultonFulton-employed directors do not receive individual meeting fees nor do they receive compensation from any third party for theiror other director-related compensation. In 2023, Fulton board service. Equity compensation paid to non-employee directors is granted pursuant to the Amended and Restated Directors’ Equity Participation Plan (the “2019 Director Equity Plan”), which was approved by shareholders at the 2019 Annual Meeting. The equity compensation paid to Fulton non-employee directors during 2020 wasawards in the form of shares of Fulton restricted stock units that fullyto its non-employee directors pursuant to the Director Equity Plan. These restricted stock units vest one year after thetheir grant date. During 2020, the 2019 Director Equity Plan provided that the maximum number of shares, in the aggregate, under all types of awards granted to any one participant in any one calendar year, excluding elections to receive cash fees in the form of Fulton shares, shall not exceed the greater of 20,000 shares, or a number of shares with a fair market value on the date of the grant of $200,000.
Salaried officers of Fulton do not receive additional compensation for service on the Board of Directors. Thus, Mr. Wenger and Mr. Myers did not receive any director fees or additional compensation in 2020 for serving as members of the Board of Directors. The Board of Directors reviews Fulton’s non-employee director compensation annually with the assistance of the HR Committee and a report from the HR Committee’s independent compensation consultant.
Fulton reimburses directors for Board of Directors service-relatedBoard-related expenses incurred in serving as directors of Fulton and provides non-employee directors with a $50,000 term life insurance policy during their service as directors.policy. Certain directors have elected to participate in the FultonFulton’s Deferred Compensation Plan under which(the “DCP”) that allows a director mayto elect to defer a portion of his or her cash director’s fees as those feesdirector fees. Annual cash retainers are earned and to receive those fees, together with any returns earned on investments selected bypaid in quarterly installments.
Below is the participating director, in a lump sum or in installments over a period of up to twenty (20) years following retirement. The current non-employee directors of Fulton who have established accounts to defer a portion of the cash fees paid to them in 2020 are Directors Devine, Freer and Spair. The members of the Board of Directors of Fulton are also members of the Board of Directors of Fulton Bank. The non-employee directors of Fulton did not receive additional retainer, meeting fees or other compensation during 2020 for serving on the Board of Directors of Fulton Bank. The following is a summary of the structure and amountsamount of compensation paid to non-employee directors for service on the Board of Directors and its committees:
in 2023:
$ | |
$ | |
$ | |
Annual equity retainer |
_____________________________
1(1) An additional quarterlyA cash retainer is not paid to the chairchairperson of the Executive Committee.
2(2) Non-employee directors who are elected by Fulton shareholders at the Annual Meeting will receive a 2021 annual equity retainer in restricted stock units (“DSU Awards”). The DSU Awards are for Board of Directors service from May 2021 to May 2022. The number of restricted stock units comprising the DSUs Awards will beawarded was based on the June 1, 2023 grant date closing price per share of Fulton’s common stock on the grant date, or the prior trading day, if the grant date is not a trading day, rounded up to the next whole share. Until such time as the DSU Awards are fully vested, settled and paid in Fulton common stock, the equity award will accrue “Dividend Equivalents” that are reinvested in similarThe restricted stock units with the same vestingaccrue dividend equivalents and settlement terms applicable to the original DSU Awards. The DSU Awards fully vest after one year of service, or, if earlier, the date of the next annual meeting of shareholders. Directors who retire or leave the Board of Directors for other reasons prior to completing their full term may forfeit a prorated portion of their DSU Awards for not completing a full one-year term of service. The prorated portion of a DSU Award forfeited will be based on the remaining portion of the one-year term not served by the director, unless the HR Committee waives the proration due to a change in control, death, disability or other reason as determined by the HR Committee. The DSU Awards will settle in Fulton common stock and will vest and be paid on the first anniversary of the date of grant, unless a director irrevocably elected in writing to defer settlement and payment until after the end of his or her board service as described below.
3 A director may elect to defer settlement and payment of his or her DSU Award, but must make that election by December 31 of the year prior to the grant date. A non-employee director may elect to receive payment of a vested DSU Award either as a lump sum, or paid in equal annual installments over three years, commencing on January 15 of the year following the director’s departure from the Board of Directors. A deferred DSU Award will continue to accrue dividends as dividend equivalents, which will be paid in Fulton common stock once the DSU Award is settled and paid.
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2023 Director Compensation
The following table summarizes all ofdetails the compensation paid to each 2023 Fulton non-employee director of Fulton who served during 2020:
director:
2023 DIRECTOR COMPENSATION TABLE |
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) |
Jennifer Craighead Carey | 80,938 | 80,000 | 160,938 |
Lisa Crutchfield | 76,563 | 80,000 | 156,563 |
Denise L. Devine | 87,500 | 80,000 | 167,500 |
Steven S. Etter | 70,000 | 80,000 | 150,000 |
George W. Hodges(2) | 29,167 | - | 29,167 |
George K. Martin | 70,000 | 80,000 | 150,000 |
James R. Moxley III | 100,000 | 80,000 | 180,000 |
Antoinette M. Pergolin | 70,000 | 80,000 | 150,000 |
Scott A. Snyder | 87,500 | 80,000 | 167,500 |
Ronald H. Spair | 80,938 | 80,000 | 160,938 |
Mark F. Strauss(2) | 35,729 | - | 35,729 |
E. Philip Wenger | 70,000 | 80,000 | 150,000 |
Name 1 | Fees Earned or Paid in Cash | Stock Awards 2 | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation 3 | Total |
($) | ($) | ($) | ($) | ($) | ($) | ($) | |
Jennifer Craighead Carey | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
Lisa Crutchfield | 82,500 | 60,000 | 0 | 0 | 0 | 0 | 142,500 |
Denise L. Devine | 82,500 | 60,000 | 0 | 0 | 0 | 0 | 142,500 |
Steven S. Etter | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
Patrick J. Freer | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
Carlos E. Graupera | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
George W. Hodges | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
James R. Moxley III | 100,000 | 60,000 | 0 | 0 | 0 | 0 | 160,000 |
Scott A. Snyder | 82,500 | 60,000 | 0 | 0 | 0 | 0 | 142,500 |
Ronald H. Spair | 82,500 | 60,000 | 0 | 0 | 0 | 0 | 142,500 |
Mark F. Strauss | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
Ernest J. Waters | 70,000 | 60,000 | 0 | 0 | 0 | 0 | 130,000 |
1 Directors listed represent all the non-employee directors of Fulton serving during 2020. Director Freer will retire at the 2021 Annual Meeting and not stand for election after reaching Fulton’s mandatory retirement age of seventy-two (72)._____________________________
2(1) Fulton’s non-employee directors were granted Fulton common stock (rounded to next whole share) as part of their 2020 compensation pursuant to the 2020 Director Equity Plan. The amounts in this column consist of a $60,000$80,000 stock award granted on June 1, 20202023 under the Director Equity Plan consisting of 5,5006,909 restricted stock units having a grant date fair value of $10.91$11.58 per share, (thethe closing price of Fulton common stock on June 1, 2020).the grant date. These stock awards were granted as restricted stock units, to vest on June 1, 2021,2024.
(2) Messrs. Hodges and Strauss retired at the 2023 Annual Meeting.
Stock Ownership Guidelines
The Guidelines require that each director own at least $350,000 of Fulton common stock within five calendar years after becoming a director. As of December 31, 2023, Messes. Craighead Carey and Pergolin are on track to achieve the stock ownership guideline amount within five years of becoming subject to the Guidelines. The remaining directors have satisfied the stock ownership guideline requirements.
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Security Ownership of Directors, Nominees, Management and Certain Beneficial Owners
The following table sets forth the beneficial ownership of Fulton common stock at the close of business on March 1, 2024 (the “Record Date”) by: (i) each director, (ii) each director nominee, (iii) each NEO and (iv) Fulton’s directors and executive officers as a group. The following information is based on information furnished by the respective directors and officers.
Directors and Director Nominees who are not NEOs | Total Shares Beneficially Owned(1) | % of Class | |||
Jennifer Craighead Carey | 4,802 | * | |||
Lisa Crutchfield | 11,938 | * | |||
Denise L. Devine(2) | 23,199 | * | |||
Steven S. Etter | 296,232 | * | |||
George K. Martin(3) | 10,658 | * | |||
James R. Moxley III(4) | 173,933 | * | |||
Antoinette M. Pergolin | 3,163 | * | |||
Scott A. Snyder | 6,540 | * | |||
Ronald H. Spair(5) | 19,072 | * | |||
E. Philip Wenger(6) | 523,009 | * | |||
NEOs | |||||
Curtis J. Myers(7) | 213,562 | * | |||
Mark R. McCollom(8) | 73,805 | * | |||
Angela M. Snyder | 56,504 | * | |||
Meg R. Mueller(9) | 103,769 | * | |||
Beth Ann L. Chivinski(10) | 107,800 | * | |||
All Directors and Executive Officers as a group (20 persons) | 1,728,730 | 1.07% |
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(*) Represents less than 1.0% of the outstanding shares of Fulton’s common stock calculated in accordance with Rule 13d-3 of the Exchange Act.
(1) For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of the Record Date, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person.
(2) Ms. Devine’s ownership includes 1,000 shares held jointly with her spouse.
(3) Mr. Martin’s ownership includes 8,870 shares held in an individual retirement account and 125 shares held jointly with his spouse.
(4) Mr. Moxley’s ownership includes: (i) 39,115 shares held by The Moxley Family Trust, (ii) 1,341 shares held solely by his spouse, (iii) 20,112 shares held by Mr. Moxley as custodian for his children and (iv) 28,000 shares held in a 401(k) plan.
(5) Mr. Spair’s ownership includes 10,000 shares held jointly with his spouse.
(6) Mr. Wenger’s ownership includes: (i) 144,297 shares held jointly with his spouse, (ii) 96,626 shares held in an individual retirement account (“IRA”), (iii) 3,851 shares held in an IRA by his spouse and (iv) 424 shares held by Mr. Wenger as custodian for his children.
(7) Mr. Myers’ ownership includes: (i) 57,518 shares held in the Fulton Financial Corporation 401(k) Retirement Plan (the “401(k) Plan”) and (ii) 27,109 shares held jointly with his spouse.
(8) Mr. McCollom resigned as Senior Executive Vice President and Chief Financial Officer effective February 8, 2024.
(9) Ms. Mueller’s ownership includes 10 shares held jointly with her spouse.
(10) Ms. Chivinski’s ownership includes 10,934 shares held in the 401(k) Plan.
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Owners of More Than Five Percent
The following table sets forth information as to those persons or entities believed by the Company to be beneficial owners of more than 5% of Fulton’s outstanding shares of common stock on the Record Date or as represented by the owner or as disclosed in certain reports regarding such ownership filed by such persons with Fulton and with the SEC in accordance with Sections 13(d) and 13(g) of the Exchange Act. Other than those persons listed below, Fulton is not aware of any person, as such term is defined in the Exchange Act, that beneficially owns more than 5% of Fulton’s common stock as of the Record Date.
Name and Address of Beneficial Owner | Shares Owned | % of Class(1) | ||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 23,546,315 | 14.3% | ||
The Vanguard Group(3) 100 Vanguard Blvd. Malvern, PA 19355 | 19,444,753 | 11.84% | ||
Dimensional Fund Advisors LP(4) Building One 6300 Bee Cave Road Austin, TX 78746 | 11,918,842 | 7.3% | ||
State Street Corporation(5) 1 Congress Street, Suite 1 | 8,913,746 | 5.43% |
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(1) Based on 162,025,005 shares of Fulton common stock issued and outstanding as of the Record Date.
(2) Based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 23, 2024 that reported: (i) sole voting power as to 23,022,549 shares of Fulton common stock and (ii) sole dispositive power as to 23,546,315 shares of Fulton common stock.
(3) Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024 that reported: (i) sole voting power as to zero shares of Fulton common stock, (ii) sole dispositive power as to 19,123,055 shares of Fulton common stock, (iii) shared voting power as to 147,036 shares of Fulton common stock and (iv) shared dispositive power as to 321,698 shares of Fulton common stock.
(4) Based on a Schedule 13G/A filed by Dimensional Fund Advisors LP with the SEC on February 9, 2024 that reported: (i) sole voting power as to 11,737,936 shares of Fulton common stock and (ii) sole dispositive power as to 11,918,842 shares of Fulton common stock.
(5) Based on a Schedule 13G filed by State Street Corporation with the SEC on January 24, 2024 that reported: (i) shared voting power as to 1,016,254 shares of Fulton common stock and (ii) shared dispositive power as to 8,913,746 shares of Fulton common stock.
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PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION |
Proposal
We present our say-on-pay proposal annually. This proposal provides our shareholders with the opportunity to vote to approve, on a non-binding advisory basis, compensation of Fulton’s NEOs, as discussed in this Proxy Statement, including the CD&A. This proposal is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the amount shown does not reflect the value of any dividend equivalents accrued during 2020 on vested or unvested director awards.philosophy, policies and practices described in this Proxy Statement.
3 Unless otherwise noted, the amount excludes perquisites and other personal benefits with an aggregate value of less than $10,000. Fulton’s methodologyWe ask our shareholders to calculate the aggregate incremental cost of perquisites and other personal benefits was to use the amount disbursedindicate their support for the item. Where a benefit involved assets owned by Fulton, an estimate of the incremental cost was used.
Compensation Discussion and Analysis
This section of the Proxy Statement explains the design and operation of Fulton’sour executive compensation program with respect tofor our NEOs and vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to Fulton’s named executive officers (the “Named Executive Officers”) or (the “Executives”), as defined above, for 2020. Listed in the table below are Fulton’s Named Executive Officers, and the base salary, cash incentive and long-term incentive componentsas disclosed pursuant to Item 402 of their compensation for fiscal year 2020. You can find more complete information about all elements of compensation for the Named Executive Officers in the following discussion and in the Summary Compensation Table that appears on Page 51.
Named Executive Officers 1 | Year | Salary 2 | Annual Cash Incentive 3 | Long-Term Incentive 4 | Total Direct Compensation 5 | |
E. Philip Wenger Chairman and Chief Executive Officer | 2020 | $1,048,822 | $630,735 | $1,292,385 | $2,971,942 | |
2019 | $1,042,919 | $627,185 | $1,274,798 | $2,944,902 | ||
% Change | 0.57% | 0.57% | 1.38% | 0.92% | ||
$ Change | $5,903 | $3,550 | $17,587 | $27,040 | ||
Mark R. McCollom Senior Executive Vice President and Chief Financial Officer | 2020 | $435,625 | $215,743 | $431,603 | $1,082,971 | |
2019 | $433,173 | $214,529 | $423,585 | $1,071,287 | ||
% Change | 0.57% | 0.57% | 1.89% | 1.09% | ||
$ Change | $2,452 | $1,214 | $8,018 | $11,684 | ||
Curtis J. Myers President and Chief Operating Officer | 2020 | $561,000 | $277,835 | $555,828 | $1,394,663 | |
2019 | $549,231 | $272,006 | $508,305 | $1,329,542 | ||
% Change | 2.14% | 2.14% | 9.35% | 4.90% | ||
$ Change | $11,769 | $5,829 | $47,523 | $65,121 | ||
Angela M. Snyder Senior Executive Vice President and Head of Consumer Banking | 2020 | $394,625 | $139,599 | $295,703 | $829,927 | |
2019 | $392,404 | $138,813 | $287,788 | $819,005 | ||
% Change | 0.57% | 0.57% | 2.75% | 1.33% | ||
$ Change | $2,221 | $785 | $7,915 | $10,921 | ||
Beth Ann L. Chivinski Senior Executive Vice President and Chief Risk Officer | 2020 | $390,618 | $138,181 | $292,697 | $821,496 | |
2019 | $388,420 | $137,403 | $284,861 | $810,684 | ||
% Change | 0.57% | 0.57% | 2.75% | 1.33% | ||
$ Change | $2,198 | $778 | $7,836 | $10,812 |
(1) For a complete list of the members of Fulton’s senior management team, please see Page 19 of Fulton’s Annual Report on Form 10-K for the year ended December 31, 2020.
(2) Salary received in calendar year and reported in the Summary Compensation Table that appears on Page 51.
(3) Annual cash incentive paid for calendar year and reported in the Summary Compensation Table on Page 51 in the column “Non-Equity Incentive Plan Compensation” reflecting the HR Committee’s decision to keep Fulton’s bonus payout percentage of target unchanged year-over-year. See VCP Awards on Page 40 regarding the VCP Award reductions made for 2020.
(4) See the grant date value of the performance stock units in the Summary Compensation Table that appears on Page 51. This amount is not necessarily the value the Executive will realize upon vesting.
(5) The amounts in this column for 2020 and 2019, and the calculation of the percentage and dollar changes in 2020, compared to 2019, exclude the amounts appearing in the Summary Compensation Table on Page 51 in the column “All Other Compensation.”
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Table of Contents forRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Fulton’s HR CommitteeAs an advisory vote, this proposal is responsible for establishing and overseeing compensation programs for the Executives that comply with Fulton’s compensation philosophy. Fulton believes that the compensation of the Named Executive Officers should reflect Fulton’s overall performance as well as the contributions of the Executives to that performance. Annual cash incentive compensation awards (“VCP Awards”) and long-term equity awards in the form of performance shares (“Performance Shares”) earned by the Executives under Fulton’s Amended and Restated Equity and Cash Incentive Compensation Plan (the “2013 Plan”) are determined basednot binding on predetermined performance goals and the HR Committee’s assessment, in the exercise of its discretion, of Fulton’s and each Executive’s attainment of those goals in the preceding year.
The independent directors of the Board, of Directors review and approve compensation decisions for the CEO and other Executive Officers, after careful review and upon the recommendation of the independent members of the HR Committee. An independent compensation consultant provides advice, information and objective opinions to the HR Committee on Fulton’s executive compensation programs, policies and practices.or Fulton. The HR Committee, andhowever, values the Board of Directors also receive advice from members of Fulton’s Legal and Human Resources Departments.
A summary of some of Fulton’s executive compensation and related corporate governance practices is provided below. In light of the strong level of shareholder support for Fulton’s executive compensation proposal at Fulton’s 2020 Annual Meeting of Shareholders, the HR Committee believes these governance and compensation practices reflect appropriate governance and are closely aligned with shareholder interests.
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Fulton’s Management’s Discussion and Analysis of Financial Condition and Results of Operationsopinions expressed by our shareholders in Fulton’s Annual Report on Form 10-K for the year ended December 31, 2020, which is being made available to shareholders together with this Proxy Statement, contains an overview of Fulton’s 2020 performance. Some key accomplishments and financial highlights identified therein for the year ended December 31, 2020 were:
The HR Committee took a number of compensation actions for the Executives during 2020, as summarized in the table below:
Element | HR Committee Actions | |||||
Salaries | • | Mr. Wenger and the other Named Executive Officers did not receive an annual base salary increase for 2020. | ||||
VCP Awards | • | Set target VCP Award amounts as a percentage of salary for Mr. Wenger at 85%, for Mr. McCollom and Mr. Myers at 70%, and at 50% for each of the other Executives. | ||||
• | Approved updated scorecards with a series of performance criteria that would be used to determine the amount of the VCP Awards, if any, that would be paid to each of the Executives. The updates included increasing the threshold payout opportunity from 25% to 50% of target and the maximum payout opportunity from 150% to 200% of target to further align Fulton’s pay-for-performance calibration with peer and broader market practices. | |||||
• | Conditioned the payment of VCP Awards for 2020 performance on Fulton having a minimum return on average equity (“ROE”) of 5.66% and positive net income for 2020. | |||||
• | Evaluated Fulton’s and each Executive’s performance relative to the performance criteria and determined that the Executives should receive VCP Awards for 2020 performance, as a percentage of base salary in 2020, and a percentage of target, as follows: | |||||
Executive | Actual VCP Awards | Actual VCP Awards | ||||
as a % of base salary | as a % of target | |||||
Mr. Wenger | 60.14% | 70.75% | ||||
Other Executives | Ranged from 35.38% to 49.52% | 70.75% | ||||
Equity Awards | • | Approved the 2020 Performance Shares in the form of performance-based restricted stock units. | ||||
• | The number of Performance Shares awarded to each of the Executives was based on a target dollar amount equal to 125% of base salary for Mr. Wenger, 100% of base salary for Mr. McCollom and Mr. Myers, and 75% of base salary for the other Executives, as of January 1, 2020, which was then converted to a number of Performance Shares by dividing the target dollar amount by the closing price of Fulton’s common stock on the grant date. | |||||
• | The actual number of shares of Fulton common stock, if any, that the Executives may receive upon vesting on May 1, 2023, following the end of the performance period and determination of the achievement of the Performance Shares by the HR Committee, may be higher or lower than the target number granted. | |||||
• | The Performance Shares were allocated by the HR Committee among three components, each having different vesting terms, as summarized below: | |||||
Component A, representing 37.5% of the target dollar amount for the Executives: | ||||||
• | Component A Performance Shares will vest only if Fulton has net income during calendar year 2022 (the calendar year before potential vesting of the Performance Shares on May 1, 2023) at least equal to the dividends declared on Fulton common stock during the four calendar quarters immediately preceding the grant date (the “Profit Trigger”). | |||||
• | The number of shares that may be received upon vesting of Component A Performance Shares is determined based on Fulton’s 2020 return on average assets (“ROA”) measured against an absolute ROA goal equivalent to 100% of Fulton’s budgeted ROA for 2020, which was 0.708%. | |||||
• | Fulton’s actual ROA for 2020 of 0.732% resulted in an above-target payout of 108.45% for the number of shares of stock that may be received upon vesting at the end of the three-year service period on May 1, 2023. The vesting of the Component A Performance Shares remains subject to the Profit Trigger requirement. | |||||
Component B, representing 37.5% of the target dollar amount for the Executives: | ||||||
• | The number of shares that may be received upon vesting of Component B Performance Shares on May 1, 2023 is determined based on Fulton’s total shareholder return (“TSR”) during the period from May 1, 2020 through March 31, 2023 measured relative to Fulton’s 2020 peer group. | |||||
Component C, representing between 27% and 28.3% of the target dollar amount for the Executives: | ||||||
• | The HR Committee evaluated Fulton’s and each Executive’s performance and determined that the Executives should receive an above-target award of Component C Performance Shares at 27% (i.e. 102% of target) for Mr. Wenger and 27.5% to 28.3% (i.e. 102.5% to 103.3% of target) for the other Executives. | |||||
• | The number of shares that may be received upon vesting of Component C Performance Shares will not vary based on performance or other factors, but the potential vesting of Component C Performance Shares on May 1, 2023 is subject to the Profit Trigger requirement. |
Since 2011, Fulton has annually submitted a non-binding Say-on-Pay Proposal to its shareholders for approval. At the 2017 Annual Meeting, 73.72% of Fulton’s shareholders, excluding abstentions, voted in favor of a one-year frequency of conducting future non-binding Say-on-Pay votes for shareholders to approve the compensation of the Named Executive Officers. Pursuant to SEC Rules, Fulton is required to provide an opportunity for shareholders totheir vote on the frequency of the Say-on-Pay proposals, commonly known as a “Say-When-on-Pay”this proposal at least once every six (6) years, and the next Say-When-on-Pay proposal will be submitted to shareholders on or before Fulton’s 2023 annual meeting. Fulton’s 2020 annual non-binding Say-on-Pay Proposal is set forth on Page 63.
Fulton views the results of past Say-on-Pay Proposals as support for its previous compensation policies and decisions, and the Board of Directors and its HR Committee will consider the vote on the 2020 non-binding proposal as a barometer of shareholder support for the current compensation programs for the Executives. Fulton’s shareholders have consistently approved its Say-on-Pay Proposals with an average of approximately 97% of shares voted being cast “FOR” the Say-on-Pay Proposals over the last five (5) years. Following are the vote results over the past five years on Fulton’s prior Say-on-Pay Proposals:
Shares Voted FOR (excluding abstentions) as a Percentage of total vote FOR and AGAINST Fulton’s Say-on-Pay Proposal | |||||
Year | 2020 | 2019 | 2018 | 2017 | 2016 |
% Voted FOR | 97.45% | 97.57% | 97.73% | 97.63% | 96.56% |
The HR Committee, which is composed exclusively of independent directors, believes that the prior votes of Fulton’s shareholders confirm the philosophy and objective of linking Fulton’s executive compensation to its operating objectives and the enhancement of shareholder value. Fulton views this continued level of shareholder support as an affirmation of Fulton’s current pay practices and, as a result, no significant changes were made to Fulton’s executive compensation pay practices for 2020. The HR Committee will continue to consider the outcome of Fulton’s say-on-pay votesthe vote when making future compensation decisions for our NEOs. The Board believes that the Named Executive Officers.
compensation of our NEOs is appropriate and should be approved on an advisory basis by our shareholders.
Vote Required
The coreaffirmative vote of Fulton’sa majority of the shares for which votes are cast on the proposal at the Annual Meeting is needed to approve this proposal. Abstentions and broker non-votes will not be counted as votes cast and, therefore, will not affect this proposal. Further, the failure to vote, either by proxy or in person, will not have an effect on this proposal. Unless instructions to the contrary are specified in a proxy properly voted and returned through available channels, the proxies will be voted “FOR” this proposal.
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INFORMATION CONCERNING EXECUTIVE COMPENSATION |
Compensation Discussion and Analysis
In this CD&A we explain the design of our 2023 executive compensation philosophy is to link “pay to performance” on both a short-termprogram for our NEOs, which consist of the CEO, Chief Financial Officer (“CFO”) and long-term basis. Annual VCP Awards are “at-risk” and subject to financial performance thresholds to trigger plan funding. Once financial performance hurdles are attained, the VCP Award funding level is determined by scorecard performance factors, and funding can further be adjusted by the HR Committee in its discretion, if applicable, for corporate performance results using a corporate modifier. Additionally, theour three other highest paid executive officers (collectively, “NEOs”). The HR Committee has the discretion to adjust award payouts for individual Executives, or to not make any award payout. The 2020 Performance Share awards, like the prior year awards, are “at-risk” because, in addition to the amount of annual awards being linked to Fulton’s performance, these awards are subject to vesting and possible forfeiture dependent upon Fulton achieving specified levels of financial performance. In addition, the Performance Shares only increase in value if Fulton’s share price increases over the term of the award. The HR Committee believes that the VCP Awards and Performance Shares awarded under the 2013 Plan further Fulton’s business plan and further the HR Committee’s objective to ensure that thedesigned our NEO compensation program to: (i) align NEOs’ interests of the Executives, both short-term and long-term, are aligned with the interests of Fulton’s shareholders.our shareholders, (ii) pay for performance and (iii) attract, motivate and retain executive officers.
Executive Summary
Our 2023 NEOs are listed below:
Curtis J. Myers: | |
Mark R. McCollom: | Former Senior Executive Vice President and CFO(1) |
Angela M. Snyder: | Senior Executive Vice President and Chief Banking Officer(2) |
Meg R. Mueller: | Senior Executive Vice President and Head of Commercial Banking |
Beth Ann L. Chivinski: | Senior Executive Vice President and Chief Risk Officer(3) |
Table of Contents____________________________
(1) Mr. McCollom resigned as Senior Executive Vice President and CFO effective February 8, 2024.
(2) Ms. Snyder was appointed President effective January 1, 2024.
(3) Ms. Chivinski was appointed Senior Executive Vice President and Interim Chief Financial Officer effective February 8, 2024.
The following charts showtables highlight the key factors and outcomes with respect to our 2023 financial performance and executive compensation mix for Mr. Wenger and the other Executives, with 2020 VCP Awards, 2020 Performance Shares, 2020 Salary, and all other compensation received in 2020 based on amounts in the Summary Compensation Table that appears on Page 51.
For 2020, Mr. Wenger’s “performance pay” was 62% of total compensation, and the average “performance pay” for the other Executives was 54% of total compensation.
2020 Compensation Mix– Performance Based Pay
CEO and Average for Other Executives
program:
2023 Key Accomplishments and Financial Highlights |
Earnings Per Share: Diluted earnings per share (“EPS”) on a generally accepted accounting principles (“GAAP”) basis of $1.64 per share and an adjusted EPS(1)of $1.70 per share (“Adjusted EPS”). Return on Average Equity: Return on average equity (“ROE”) of 11.24%. Total Loans: Exceeded $21 billion in total loans. Dividends: Declared $0.64 per share in dividends. |
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(1) Non-GAAP financial measure. For more information regarding the calculation of non-GAAP financial measures included in this section, please refer to the section titled “Non-GAAP Reconciliations” included in Annex A to this Proxy Statement.
2023 Executive Compensation Highlights |
Performance-Based Compensation: 58% of CEO total target compensation was performance-based. Say-on-Pay Results: Approximate 96.41% approval of our executive compensation program. Annual Incentive Results: Paid out at 50% of target. Long-Term Incentives (“LTI”): Granted in the form of performance shares that vest based on relative total shareholder return (“TSR”) and pre-determined profit targets. 2020 Long-Term Performance-Based Awards Results: The equity awards granted in 2020 vested in 2023 based on the following performance goals: (i) the TSR award relative to peers was at the 42.86 percentile resulting in a 78.57% TSR payout and (ii) the return on average assets (“ROA”) (one year) goal was 0.732% resulting in a 108.45% ROA award payout as percentage of target. |
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Executive Compensation Philosophy
Objectives:Fulton’sOur executive compensation philosophy and programsprogram are intended to achieve the following three objectives:
Align NEOs interests | |
Link performance | |
Attract, motivate andretain |
To achieve these three objectives, Fulton provides the following elementsSummary of Executive compensation:Compensation Practices
Our HR Committee regularly reviews our compensation practices and policies to ensure that they further our executive compensation philosophy. Below is a summary of certain of our corporate governance and compensation practices. The HR Committee believes our corporate governance and compensation practices closely align with the interests of our shareholders.
ü HR Committee comprised exclusively of independent directors ü Align our executive compensation policy with business goals and shareholder interests ü Annual say-on-pay vote ü Independent executive compensation consultant ü Pay for performance – a substantial portion of executive compensation is variable or at risk ü LTI compensation aligned with shareholder interests and financial objectives ü NEO stock ownership requirements ü Rigorous compensation clawback policies that exceed Nasdaq requirements ü Evaluate and update the composition of our peer group annually ü Maintain effective balance of short- and long-term incentives ü Double-trigger change-in-control cash severance and equity provisions ü Annual incentive compensation risk assessment ü Cap on NEO incentive compensation payments | X Permit hedging and pledging by executives X Spring-loading with respect to equity awards X Provide excise tax gross-ups in any NEO employment or change-in-control agreements X Reward executives for taking excessive, inappropriate or unnecessary risks X Allow the repricing or backdating of equity awards X Provide multi-year guaranteed salary increases or non-performance bonus arrangements X Rely exclusively on one metric in our executive compensation program |
Pay for Performance
Our compensation philosophy is designed to align pay for performance on both a short- and long-term basis. We believe that the compensation of our NEOs should reflect Fulton’s overall performance as well as each individual NEO’s specific contributions to that performance.
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We believe that a significant portion of our NEOs’ total compensation should be “performance-based” and “at-risk,” meaning that its payment or vesting is based upon the achievement of predefined financial and performance metrics. We also believe that a significant portion should be “variable,” meaning that actual compensation paid to our NEOs will increase or decrease based on the achievement of pre-determined performance metrics.
A significant portion of pay “at-risk” motivates our executives to achieve performance goals and create value for our shareholders.
· | The annual incentive bonus awards are earned by our executives for the achievement of short-term performance goals and how well we perform relative to the industry and our peers. The amount paid is tied to the level of achieved performance, with higher payout levels reflecting superior performance. | |
· | Our long-term, performance-based equity awards reward our executives for achieving long-term performance goals while contributing to increased shareholder value. A portion of our long-term incentive awards are also tied to our performance relative to our peer group. |
As reflected in the charts below, 58% of our CEO’s target total 2023 compensation was “variable” or “at-risk,” and an average of 47% of our other NEOs’ target total 2023 compensation was “variable” or “at-risk.”
Executive Compensation Decision-Making Process |
HR Committee
The HR Committee is currently comprised of six (6)four independent directors all of whomwho are appointed to serve annually by the Board of Directors. Each member of the HR Committee qualifies as an independent director under the Nasdaq listing standards and meets the additional Nasdaq independence requirements specific to compensation committee members. No member of theannually.
The HR Committee is a party to a related person transaction as more fully described in “Related Person Transactions” on Page 24 of this Proxy Statement. There are no interlocking relationships, as defined in the regulations of the SEC, involving members of the HR Committee. For a further discussion on director independence, see the “Information about Nominees, Directorsresponsible for establishing and Independence Standards” section on Page 10 of this Proxy Statement.
Pursuant to its charter, which is available on Fulton’s website at www.fult.com, and consistent with Nasdaq rules, the role of the HR Committee is, among other things, to review and approve, or make recommendations to the Board of Directors with respect to, the base salaries and other compensation paid or granted to the Executives, to administer Fulton’s equity and other compensation plans and to take such other actions, within the scope of its charter, as the HR Committee deems necessary or appropriate. The HR Committee relies upon such performance data, statistical information and other data regardingoverseeing our executive compensation programs, including information provided byprogram in alignment with Fulton’s Human Resources Department, Fulton’s officers and outside advisors, as it deems appropriate. The HR Committee has unrestricted access to individual members of management and employees and may ask them to attend any HR Committee meeting or to meet with any member of the HR Committee. The HR Committee also has the power and discretion to retain, at Fulton’s expense, such independent counsel and other advisors or experts as it deems necessary or appropriate to carry out its duties.
Fulton’s executive compensation process consists of establishing targeted overall compensation for each Executive and then allocating that targeted total compensation among base salary, annual cash incentive compensation and long-term incentive equity awards. Fulton doesphilosophy. We do not have a policy or an exact formula or policy with regard to the allocation of compensation between cash and non-cash elements, except that the HR Committee has established a methodology and an award matrix for annual cash incentive compensation payments and long-term incentive equity awards under the 2013 Plan, as described in more detail below. Consistent with Fulton’s compensation philosophy, however, theelements. The HR Committee determines the amount of eachand type of our executive compensation for the Executives by: reviewingconsidering: (i) publicly available peer executive compensation information, of peer group companies (as defined and listed below); consulting with(ii) advice from outside advisors and experts; consideringexperts, (iii) the complexity, scope and responsibilities of the individual’s position; consulting withposition and (iv) the CEOCEO’s recommendations with respect to the other Executives; assessing possible demandNEOs. The CEO is not involved in discussions and determinations related to his own compensation.
The HR Committee reviews and makes recommendations to the Board with respect to the NEO base salaries and other compensation paid to the NEOs. The independent directors of the Board review and approve compensation decisions for the Executives by competitorsCEO and our other NEOs after review and upon recommendation of the HR Committee. The HR Committee also administers Fulton’s equity and other companies;compensation plans.
Management
Certain members of our executive management team attend regular HR Committee meetings at which Fulton’s performance and evaluating thecompetitive compensation appropriatelevels are discussed and evaluated. These executive management team members provide information and recommendations to attract executives to Fulton’s headquarters in Lancaster, Pennsylvania.
Management assists the HR Committee in recommending agenda items for its meetings and by gathering and producing information for these meetings. As requested bywith respect to our executive compensation design.
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The CEO, with the HR Committee the CEO,and without any other Executives and other officers, including members of Fulton’s in-house corporate counsel, participate in HR Committee meetings to provide background information, compensation recommendations for other officers, performance evaluations and other items requested by the HR Committee. As part of the performance evaluation process, all the Executives meet with the CEO to discuss their overall performance. The CEONEO present, reviews the performance of all NEOs other than the other Executives and shares his comments and recommendations with respect to the performance of the other Executives with the HR Committee.CEO. The HR Committee, without the CEO present, periodically reviews the CEO’s overall performance and routinely has executive sessions without management present. The Executives are not present forperformance.
In 2023, the HR Committee’s discussions, deliberations and decisions with respectCommittee recommended to their individual compensation. The HR Committee Charter, last amended in 2020, provides that the CEO may not be present during HR Committee voting or HR Committee deliberations regardingBoard the CEO’s compensation. Thecompensation of all NEOs. Based on these recommendations, the Board, of Directors, in executive session and with only the independent directors present, makes all final determinationsmade certain compensation decisions regarding the compensation ofNEOs.
Compensation Consultant
In 2023, the CEO, after considering recommendations made by the HR Committee.
The HR Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”Cook”) as its independent compensation consultant for 2020.consultant. FW Cook performed a variety of assignments during 2020 at the direction of the HR Committee, including2023, including: (i) conducting aan NEO compensation market analysis, related to Fulton’s Executives, scorecard review, an overall(ii) designing our executive compensation policy review, work related to the design of Fulton’sprogram including our annual cash incentive compensation plans, a comprehensive review of Fulton’sawards (“VCP”) and equity awards, (iii) reviewing our director compensation programsprogram and (iv) providing general compensation advice regarding Fulton’s Executives.our NEOs. As part of the 2020FW Cook’s 2023 engagement, FW Cook was instructed by the HR Committee also instructed FW Cook to compare Fulton’s current compensation practices and executive compensation programs with those of Fulton’sto our peers, evolving industry best practices and regulatory guidance. Based on that comparison,
In 2023, FW Cook was asked to recommend changes in Fulton’s executive compensation practices that were consistent with Fulton’s executive compensation philosophy and objectives as described above. The specific instructions given to the consultant and fees to be paid were generally outlined in engagement letters that described the scope and performance of duties under each project. Fulton does not have a policy that limits the other services that an executive compensation consultant may perform. FW Cook reported to the HR Committee that it and its affiliates did not provide additionalany services to Fulton or its affiliates in 2020.
At its January 2020 meeting, theother than FW Cook’s services as independent compensation consultant. The HR Committee considered the independence of FW Cook for the 20202023 engagement in light of the SEC rules and Nasdaq listing standards related to compensation committee consultants. The HR Committee requested and received a report from FW Cook addressing its independence as a compensation consultant to the HR Committee, including the following factors: (1) other services provided to Fulton by FW Cook; (2) fees paid by Fulton as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships between the individual consultants performing work for the HR Committee and a member of the HR Committee; (5) any Fulton stock owned by the individual consultants performing work for the HR Committee; (6) any business or personal relationships between Fulton’s executive officers, FW Cook and the individual consultants performing work for the HR Committee; and (7) other factors deemed relevant to FW Cook’s independence from management. The HR Committee discussed these considerations and concluded that the work performed by FW Cook and its consultants involved in the engagements did not raise any conflict of interest and it further concluded that FW Cook continues to satisfy the applicablesatisfied SEC rules and Nasdaq listing standards relatedwith respect to the independence of compensation committee consultants.
2023 Peer Group
In evaluating the market competitivenessAs part of theits annual review of our executive compensation paid to the Executives,program, the HR Committee, with theFW Cook’s assistance, of its compensation consultant, FW Cook, reviews the compensation paid to the Executives in comparison with compensation paid to executives with similar responsibilities withinestablished a defined peer group of similar financial institutions. FW Cook assists the HR Committee in reviewing the suitability of Fulton’s peer group annually, and such review took place in September 2019 for determining the 2020 peer group. The HR Committee, consistent with the recommendation of FW Cook, approved the peer group appearing in the table below as the peer group for 2020 (the “2020 Peer Group”). The aggregate analysis of the executive compensation practices of the companies in the 2020“2023 Peer Group and other relevant data from FW Cook, was used by the HR Committee in the review of overall compensation, in setting 2020 base salaries for the Executives and for other purposes. During 2020, the 2020 Peer Group was also used as the peer group for the Performance Shares, as discussed below.
Similar to the review and selection of prior peer groups, the 2020 Peer Group was evaluated and selected”), based on a rangenumber of factors, including asset size, revenue composition, number of employees, market capitalization, geographic focus,location, business model and ownership profile.composition of shareholder base. The HR Committee considered the 2023 Peer Group data, as well as other relevant data provided by FW Cook, preparedin establishing 2023 base salaries, 2023 annual cash incentive compensation awards (“VCP Awards”) and setting long-term equity award levels granted in the form of performance shares (“Performance Shares”).
The HR Committee removes peer group companies upon the announcement that a detailed analysis of current peerspeer group company is being acquired or is involved in a significant merger and potential peersacquisition (“M&A”) transaction. The 2023 Peer Group is set forth below:
2023 Peer Group |
Atlantic Union Bankshares Corporation | Old National Bancorp | Umpqua Holdings Corporation(1) |
Cadence Bank | Prosperity Bancshares, Inc. | United Bankshares, Inc. |
Commerce Bancshares, Inc. | Provident Financial Services, Inc. | United Community Banks, Inc. |
F.N.B. Corporation | Simmons First National Corporation | Valley National Bancorp |
Hancock Whitney Corporation | Trustmark Corporation | Wintrust Financial Corporation |
Independent Bank Corp. | UMB Financial Corporation | WSFS Financial Corporation |
Northwest Bancshares, Inc. |
(1) Ceased to be consideredused as a 2023 Peer Group member when it was acquired by the HR Committee. In evaluatingColumbia Banking System, Inc. in 2023.
Shareholder Say-on-Pay Proposal Historical Results
The Board and selecting the peer group, the HR Committee seeksconsider the non-binding advisory say-on-pay vote as a barometer of shareholder support for our executive compensation program. Below are our say-on-pay votes for the past five years:
Year | 2023 | 2022 | 2021 | 2020 | 2019 |
% Voted “FOR” | 96.41% | 96.95% | 97.17% | 97.45% | 97.57% |
These prior say-on-pay votes confirm shareholder support of our compensation philosophy and objective of linking executive compensation to create a peer group that would have a median asset size near Fulton’s asset size.shareholder value creation.
Compensation Plan Risk Review
At its January 2024 meeting, the HR Committee conducted its annual incentive compensation plan risk assessment review. The following table provides the nineteen (19) members of the 2020 Peer Group, their stock trading symbolsHR Committee received an incentive compensation plan risk assessment report from management and the locationHR Committee determined that our incentive compensation design and plans do not promote undue risk taking.
Elements of their principal executive offices as of December 31, 2020:Our Executive Compensation Program
Fulton’sOur executive compensation program currently provides for a mix of base salary, cash incentiveVCP Awards and long-term equity-based incentives, as well as retirement benefits, health plansincentive awards (“LTI Awards”). The HR Committee reviews these components and other benefitsthe effectiveness of our compensation program annually. The HR Committee generally targets a range around the median of our peer group for positioning target total direct NEO compensation. The purpose and key characteristics of each element of our executive compensation program are as follows:
2023 CEO Compensation | Average Other NEOs Actual Direct Compensation | Purpose and Key Features |
Base Salary | |
Purpose: Attract, motivate and retain NEOs. Key Feature: Base salary based on NEO’s position, experience, responsibilities and performance. | |
Annual Cash Incentive Awards – VCP Awards | |
Purpose: Reward NEOs for the achievement of certain short-term financial, risk management and business goals. Key Feature: Reward NEOs for performance relative to the goals contained in our VCP scorecard. | |
Equity Awards – LTI Awards | |
Purpose: Focus NEOs’ attention on delivering long-term performance results that increase shareholder value. Key Feature: Reward NEOs for our relative TSR performance while maintaining baseline profitability. | |
All Other Compensation | |
Purpose: Attract and retain NEOs. |
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Base Salary
Base Salary:Consistent with its compensation philosophy, Fulton generally seeks to setThe HR Committee is responsible for setting senior executive officer base salaries. The HR Committee considers base salary forlevels as part of its process of ensuring that each senior executive officer’s overall compensation package is competitive, including annual and long-term incentives, the Executives in line withtarget amounts of which are generally based on a percentage of base salary.
Our NEO base salaries are set within a competitive range around Fulton’s peer median based upon the market median. Fulton sets salaries on an individual basis and seeks to provide base salary appropriate for the person’sNEOs’ position, experience, responsibilities and performance.
In making recommendations to the Board of Directors regarding the appropriate base salaries for 2020,2023, the HR Committee considered Peer Group pay practices, as well asexamined the compensation levels of our NEOs based on the market analysis performed by FW Cook in order to appropriately compare the compensation of our NEOs to the compensation paid by other sources of market pay informationcompanies with which we compete for the financial services industry.talent. The HR Committee also consulted with FW Cook when formulating recommendations to the Board of Directors. Generally, when granted in the past base salary increases were effective for the pay period that included the first day of April, and included a review of the Executives’ competitive positioning to market using relevant peer data andincreased the base salary increases paid to other Fulton officers.of Mr. Myers based on the CEO market analysis performed by FW Cook providesto provide closer alignment of Mr. Myers with the peer CEO median. In addition, the HR Committee with a reportincreased Mr. McCollom and recommendations. Fulton’s CEO also provides his recommendations to the HR Committee for the other Executives.
Based on the recommendations of Fulton’s CEO to the HR Committee, no base salary increases were approved during 2020, and as a result, Executives’Ms. Snyder’s base salaries remained unchanged compared to 2019. The 2019more closely align each of them with their respective peer median positions.
Below are the 2022 and 20202023 base salaries for each of the Executives were:
Executive | 2019 Base Salary | 2020 Base Salary | 2020 Base Salary Increase | ||||
E. Philip Wenger | $ | 1,048,822 | $ | 1,048,822 | 0% | ||
Mark R. McCollom | $ | 435,625 | $ | 435,625 | 0% | ||
Curtis J. Myers | $ | 561,000 | $ | 561,000 | 0% | ||
Angela M. Snyder | $ | 394,625 | $ | 394,625 | 0% | ||
Beth Ann L. Chivinski | $ | 390,618 | $ | 390,618 | 0% |
TableNEOs effective April of Contentseach year.
NEO | 2022 Base Salary | 2023 Base Salary | % Change |
Curtis J. Myers | $661,279 | $850,000 | 28.5% |
Mark R. McCollom | $459,911 | $500,000 | 8.7% |
Angela M. Snyder | $463,500 | $500,000 | 7.9% |
Meg R. Mueller | $416,625 | $433,290 | 4.0% |
Beth Ann L. Chivinski | $412,395 | $428,891 | 4.0% |
Annual Cash Incentives – VCP Awards
VCP Awards:OverviewFulton’s VCP Awards are designed to reward Executives for achieving fiscal year financial, risk management, and business goals. No VCP Award is paid unless Fulton achieves a predetermined ROE performance threshold and a net income goal. Both the ROE performance threshold and the net income goal are designed to ensure that the VCP Awards are funded only if Fulton is profitable. Once those thresholds are achieved, the financial, risk management and business metrics are evaluated against goals that were established at the start of the fiscal year in a balanced scorecard. These scorecard performance results determine overall VCP Award payouts, with potential adjustment for positive or negative performance based on factors not reflected in the scorecards.
The HR Committee setuses a scorecard approach to determine the 2020 ROE threshold equivalentVCP Award funding level, which we also refer to 80%as the VCP payout. The HR Committee retains discretion to increase or decrease any VCP Award subject to a cap on individual awards of Fulton’s 2020 budgeted ROE, which was viewed as an attainable goal, but not a level that would ensure payment200% of VCP Award.the target award.
2023 Scorecard Performance Metrics
In February 2020,March 2023, the HR Committee approved the scorecard performance metrics for the 20202023 VCP Awards plan year.(the “2023 Scorecard”) which calculates each metric as a score ranging from 0 to 5. The 2020 scorecard consisted2023 Scorecard included key objectives in the following three categories: “Financial Results,” “Risk Management” and “Business Objectives.” The HR Committee believes each of seven subcategories, which were allocated amongthese objectives is a key driver of Fulton’s performance and aligns Fulton and its NEOs’ focus on continued long-term value creation.
In establishing the 2023 Scorecard, the HR Committee set the performance goals and metrics prior to the impact of the rising interest rate and inflationary environment together with the increased pressure on funding costs, particularly deposit pricing that the industry began to experience in late 2022 and early 2023. The 2023 Scorecard was approved before the extraordinary industry events in the Spring of 2023 that resulted in the failures of Silvergate Bank, Silicon Valley Bank, First Republic Bank and Signature Bank. Following the extraordinary events of the Spring of 2023, the HR Committee considered the potential of setting aside the formula-based VCP Award framework due to the significant uncertainty that the convergence of these events caused across the industry with respect to 2023 financial planning. The HR Committee continued to discuss proceeding in a manner consistent with past practices with respect to the formula-based program and relative weightings of the various performance metrics focused on Financial Results, Risk Management and Business Objectives, categories with weightings of 60%, 25% and 15% respectively. Scorecard results establish the sizeuse of the overall pool based on formulaic scorecard outcomes, withBoard-approved financial plan as the basis for performance targets. With the assistance of FW Cook, the HR Committee retaining discretionactively monitored the broader environment with respect to adjust any VCP Award, up or down, up to 35%, asexecutive compensation and the treatment of 2023 annual cash incentive awards by peers and the market generally. The HR Committee may deemreserved the ability to exercise discretion with respect to the ultimate VCP Awards to reflect appropriate by applying a corporate modifier. The Named Executive Officers, including the CEO,outcomes for Fulton, our NEOs and our shareholders.
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Our 2023 performance goals and relative weightings, as reflected in our 2023 Scorecard, were assigned the same 2020 scorecard, containing identical Financial Results and Risk Management performance categories and metrics. The 2020 Business Objectives were also the same for the Named Executive Officers, including the CEO, and consisted of Fulton’s “Employee Engagement Index,” which is measured based on 2020 employee survey results.as follows:
2023 Scorecard Matrix | ||||||||||
Performance Categories | Performance Sub-categories(1) | |||||||||
Financial Results | Score Rating | 0 | 1 | (Threshold) 2 | (Target) 3 | 4 | (Max) 5 | Weight | ||
Adjusted EPS | < = $1.700 | $1.800 | $1.900 | $2.000 | $2.100 | = > $2.200 | 30% | |||
Adjusted ROE | < = 11.246% | 11.907% | 12.569% | 13.230% | 13.892% | = > 14.553% | 20% | |||
Adjusted Operating Expense/ Average Assets | = > 2.580% | 2.520% | 2.460% | 2.400% | 2.340% | < = 2.280% | 15% | |||
Risk Management | Weight | ||||
Capital, Liquidity, Management, Market Risk and Consumer Compliance | 10% | ||||
Asset Quality: Non-performing Assets to Total Assets | 10% | ||||
Business Objectives | Weight | ||||
2023 Company-wide Employee Engagement Index (All Employees) | 7.5% | ||||
2023 Company-wide Employee Engagement Index (Employees of Color) | 7.5% | ||||
The CEO has a higher payout opportunity than the other Executives, who are each placed in bands (see chart below) to determine their VCP Award opportunity. The 2020 scorecard was assessed with possible scores ranging from 0 to 5 for each factor. Where scorecard results fall in between the scores for threshold, target and maximum award levels, the VCP Award is interpolated(1) Interpolated on a straight-line basis. At the start of the 2020 plan year,
Target VCP Opportunities
In February 2023, the HR Committee approved the target VCP opportunities for each NEO with a payout opportunityrange of 50% of target at threshold performance, and a maximum payout of0% to 200% of target if maximum scorecard results were attained. This change represents an increase over the 2019 threshold and maximum payout levels of 25% and 150% of target, and was made to bring Fulton’s pay-for-performance calibration into better alignment with peer and broader market practices. This 2020 VCP Award structure was also based on performance achievement against pre-established goals. In addition to this payout range, the recommendation from FW Cook and is believedHR Committee has the ability to be in alignment with peer and industry practice.
At the start of 2020, the VCP Awards were expected to be calculated and paidmodify individual payouts based on scorecard results, with payouts made in accordance with theits holistic evaluation of Company and individual performance. The application of any modifier for an NEO would be informed by tailored individual goals without any specific weighting. The following 2020table shows each NEO’s VCP Award Matrix:opportunity range:
2023 VCP Award Matrix | |||
NEO | Payment as a % of 2023 Eligible Earnings(1) | ||
VCP Threshold (50% of Target) Scorecard Result | VCP Target (100% of Target) Scorecard Result | VCP Maximum (200% of Target) Scorecard Result | |
Curtis J. Myers | 45% | 90% | 180% |
Mark R. McCollom | 35% | 70% | 140% |
Angela M. Snyder | 35% | 70% | 140% |
Meg R. Mueller | 25% | 50% | 100% |
Beth Ann L. Chivinski | 25% | 50% | 100% |
2020 VCP Award Matrix | ||||
Payment as a % of Eligible 2020 Base Salary 1 | ||||
Executive | VCP Threshold (50% of Target) Scorecard Result 2 | VCP Target Scorecard Result 3 | VCP Maximum (200% of Target) Scorecard Result 5 or better | VCP Band |
E. Philip Wenger | 42.5% | 85% | 170% | A |
Mark R. McCollom and Curtis J. Myers | 35.0% | 70% | 140% | B |
Angela M. Snyder and Beth Ann L. Chivinski | 25.0% | 50% | 100% | C |
1(1) For purposes of determining VCP Awards, the eligible earnings utilized isare the actual 2023 base salary earnings paid to each Executive during 2020.the NEOs.
VCP Payout Potential
However, in April 2020, following recognition ofIn determining the severe effect the COVID-19 pandemic was expected to have on the world economy, and the unprecedented low interest rates andVCP payout potential for wide-spread business shut-downs,each NEO, the HR Committee after consulting with FW Cook, deemed it appropriateapproved the following 2023 Scorecard composite (“2023 Scorecard Composite”) score performance metrics:
VCP Scorecard Composite Score | VCP Payout Potential(1) |
Threshold – Composite Score of 2 | 50% |
Target – Composite Score of 3 | 100% |
Maximum – Composite Score of 5 | 200% |
_____________________ | |
(1) Payouts are interpolated on a straight-line basis. |
Minimum Adjusted ROE and Net Income Requirement
Annual VCP Awards are subject to lowerfinancial performance thresholds. Regardless of the achievement of the performance goals, no VCP Award Financial Results goals for the year. The revised financial goals were consistent with Fulton’s revised expectations for growth, revenues, expensesis paid unless Fulton achieves both a pre-determined Adjusted ROE (as defined below) performance threshold and other parameters, and were deemed appropriate and advisable to continue to incentivize Fulton’s Executives and other employees in what was expected to be, and was, an exceptionally challenging business, work and personal environment in 2020. The revised Financial Results goals approved by the HR Committee were consistent with the budget forecast as of April 2020.
At its February 2021 meeting,a pre-determined net income goal. For 2023, the HR Committee determined that the revised thresholdFulton must achieve an Adjusted ROE of at least 10.58% and positive net income as a condition to any VCP Award performancebeing paid. In February 2024, the HR Committee evaluated the two criteria was attained:
and determined:
• | 2023 Adjusted ROE(1) performance of 11.612% was above the 2023 Adjusted ROE threshold; and | ||
• | |||
________________________ | |||
2023 Scorecard Results
The following table shows Fulton’s actual 2023 results with respect to the 2023 Scorecard:
Final 2023 Scorecard Matrix | |||||||||||||
Performance Categories | Performance Sub-categories(1) | ||||||||||||
Financial | Score Rating | 0 | 1 | (Threshold) 2 | (Target) 3 | 4 | (Max) 5 | Weight | Actual Performance | Weighted Score | |||
Adjusted EPS(2) | < = $1.700 | $1.800 | $1.900 | $2.000 | $2.100 | = > $2.200 | 30% | $1.698 | 0.00 | ||||
Adjusted ROE(2) | < = 11.246% | 11.907% | 12.569% | 13.230% | 13.892% | = >14.553% | 20% | 11.612% | 0.11 | ||||
Adjusted Operating Expense/ Average Assets(2) | = > 2.580% | 2.520% | 2.460% | 2.400% | 2.340% | < = 2.280% | 15% | 2.459% | 0.30 | ||||
Risk | Weight | Weighted Score | |||||||||||
Capital, Liquidity, Management, Market Risk and Consumer Compliance | 10% | 0.40 | |||||||||||
Asset Quality: Non-performing Assets to Total Assets | 10% | 0.46 | |||||||||||
Business Objectives | Weight | Weighted Score | |||||||||||
2023 Company-wide Employee Engagement Index (All Employees) | 7.5% | 0.24 | |||||||||||
2023 Company-wide Employee Engagement Index (Employees of Color) | 7.5% | 0.24 | |||||||||||
Total Score | 1.75 | ||||||||||||
(1) Interpolated on a straight-line basis.
(2) Non-GAAP financial measure. For more information regarding the calculation of non-GAAP financial measures included in this section, please refer to the section titled “Non-GAAP Reconciliations” included in Annex A to this Proxy Statement.
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2023 VCP Award Compensation Payouts
Looking holistically at the Company’s successes and challenges during 2023, the HR Committee concluded that the calculated zero funding for the VCP Award for the NEOs that resulted from the application of the pre-approved 2023 Scorecard would not appropriately link total compensation to performance or our compensation philosophy. The HR Committee recognized that the 2023 Scorecard failed to recognize our management team’s actions that protected and enhanced long-term shareholder value in the face of disruption in the industry, which was unprecedented in terms of velocity. Specifically, the 2023 Scorecard Adjusted ROE and Adjusted EPS performance metrics, which were directly and negatively affected by the unanticipated increase in deposit costs resulting from the rapidly rising interest rate environment and significantly enhanced by depositor behaviors and preferences following the bank failures in the Spring of 2023, drove a below-threshold 2023 Scorecard Composite score that would have resulted in no 2023 VCP Award payouts.
The HR Committee, reviewedwhen examining the Executives’ overall 2020 performanceCompany’s achievements and scorecard results, andchallenges during 2023, determined that the NEOs each ofcontributed to the Executives achieved a level ofCompany’s financial performance in 2020 that qualified for a VCP Award.
The following is a summary of the final 2020 Executive scorecard and results.
Final 2020 Executive Scorecard | |||||||||||
Performance Categories | Performance Sub-categories | ||||||||||
Financial Results | Score Rating | 0 | 1 | 2 Threshold | 3 Target | 4 | 5 Max | Weight | Weighted Score | ||
• EPS | < = $0.85 | $0.90 | $0.95 | $1.00 | $1.05 | = > $1.10 | 30% | 1.37 | |||
• ROE | < = 6.019% | 6.373% | 6.727% | 7.081% | 7.435% | = > 7.789% | 20% | 0.81 | |||
• Operating Expense/Average Assets | = > 2.610% | 2.549% | 2.489% | 2.428% | 2.367% | < = 2.307% | 10% | 0.44 | |||
Risk Management | Weight | Weighted Score | |||||||||
• Capital Ratings. Liquidity and Market Risk | 8% | 0.40 | |||||||||
• Asset Quality: Non-performing Assets to Total Assets | 9% | 0.45 | |||||||||
• Corporate Rollup-Regulatory Exams (Compliance) | 8% | 0.32 | |||||||||
Business Objectives | Weight | Weighted Score | |||||||||
• Employee Engagement Index | 15% | 0.45 | |||||||||
Total Score | 4.24 |
The final 2020 scorecard result for all the Executives was 4.24 yielding a potential 162% VCP Award payout. However, the HR Committee withviewed as successful when considered within the concurrencecontext of the CEOextraordinary and other membersunpredictable events of senior management, reduced the 2020 VCP Award payout by capping it at the 2019 amount equal to 70.75% of target. While the final scorecard result of 4.24 was above target performance, Fulton’s 2020 EPS was 20% less compared to 2019 and Fulton’s 2020 ROE was 24% less compared to 2019. Furthermore, if the initial Financial Results had not been adjusted in April, the ROE funding hurdle would not have been attained, and there would have been no 2020 VCP Award funding. With these factors in mind,2023. Notably, the HR Committee reducedtook into consideration the Company’s many quantitative and qualitative achievements in 2023, as highlighted below:
• | Our loan-to-deposit ratio remained within our target range, ending the year at 99%; | |
• | We expanded our net interest margin 15 basis points in 2023; | |
• | Delinquency and non-performing asset ratios improved year over year; | |
• | Launched our Diverse Business Banking program to support diverse business owners; | |
• | Increased the number of households to 534,000; | |
• | Increased our digital transactions to more than 6 million digital transactions per month; and | |
• | Grew loans by $1 billion, exceeding $21 billion at year end. |
The HR Committee determined that providing no 2023 VCP Award funding frompayouts would not adequately recognize the final scorecardsignificant achievements of our NEOs in a very challenging economic and operating environment.
As a result, of 162% of target by over half of the calculatedHR Committee, in consultation with FW Cook, and considering both the Company’s performance with respect to the pre-approved performance metrics as well as the quantitative and qualitative factors described above, recommended that the Board exercise its discretion to modify the 2023 Scorecard VCP Award resultingoutcomes. The HR Committee determined that the unanticipated events of 2023 had a disproportionately negative effect on the 2023 Scorecard Composite score due to the Adjusted EPS and Adjusted ROE weightings. The HR Committee balanced the inherent difficulty in a 70.75% of target funding, which was intentionally consistentisolating and quantifying the precise impact these unanticipated events had on Adjusted EPS and Adjusted ROE, on the one hand, with the 2019 annual cash incentive amount. There was no other corporate modifier applieddiscipline and integrity the scorecard framework provides to the 70.75% VCP Award funding. A comparisonprocess and the desire to not disregard the 2023 Scorecard Composite score in its entirety, on the other hand. Consequently, the HR Committee exercised its discretion to provide a VCP Award to each NEO in the amount of initial Financial Results to50% of target.
Below are the recalibrated goals and corresponding scores are outlined below:
Initial vs Final 2020 Executive Scorecard Financial Results Comparison | ||||||||
Financial Results | Score Rating | 2020 Result | Initial Target | Final Target | Initial Weighted Score | Final Weighted Score | ||
• EPS | $1.079 | $1.397 | $1.00 | 0.00 | 1.37 | |||
• ROE | 7.444% | 9.650% | 7.081% | 0.00 | 0.81 | |||
• Operating Expense/Average Assets | 2.342% | 2.53% | 2.428% | 0.50 | 0.44 | |||
The following is a tabular summary of the 2020NEOs’ 2023 VCP Award target final scorecard payout calculation, the actualand 2023 VCP Award paid for 2020, and the VCP Award as a percentage of eligible base salary for each Executive.paid:
NEO | 2023 VCP Award Target | 2023 VCP Award Paid | ||
Curtis J. Myers | $765,000 | $382,500 | ||
Mark R. McCollom(1) | $350,000 | - | ||
Angela M. Snyder | $350,000 | $175,000 | ||
Meg R. Mueller | $214,402 | $107,201 | ||
Beth Ann L. Chivinski | $212,225 | $106,112 |
Executive | VCP Award Target for 2020 | Scorecard Payout Calculation 1 | Amount of VCP Reduction 2 | VCP Award Paid for 2020 3 | VCP Award as a % of eligible salary |
E. Philip Wenger | $891,499 | $1,444,228 | $813,493 | $630,735 | 60.14% |
Mark R. McCollom | $304,938 | $494,000 | $278,257 | $215,743 | 49.52% |
Curtis J. Myers | $392,700 | $636,174 | $358,339 | $277,835 | 49.52% |
Angela M. Snyder | $197,313 | $319,647 | $180,048 | $139,599 | 35.38% |
Beth Ann L. Chivinski | $195,309 | $316,401 | $178,220 | $138,181 | 35.38% |
(1) Mr. McCollom did not receive a VCP Award because he resigned prior to the VCP Award payment date.
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Equity Awards – LTI Awards
Equity Awards:Overview For 2020,
In 2023, LTI awards were granted to our NEOs in the form of performance shares (the “Performance Shares”). Under the 2022 Plan, long-term equity awards in the form of performance shares are calculated based on pre-determined performance goals and the HR Committee’s assessment, in its discretion, of our NEOs’ attainment of our 2023 goals. LTI awards are awarded to focus each of our NEO’s attention on delivering long-term performance results that increase shareholder value.
Performance Shares that vest, together with accrued dividend equivalents, are settled in shares of Fulton common stock on a one-for-one basis. Dividend equivalents will not be paid unless the Performance Shares vest.
The Performance Shares granted in 2023 vest based on two separate performance components that are summarized below:
2023 Equity Award Structure |
TSR Component | |
Allocation: 65% Grant Date: May 1, 2023 Performance Period: May 1, 2023 – March 31, 2026 Vesting: Relative TSR to 2023 Peer Group determines the number of Performance Shares earned for the performance period | |
Profit Trigger Component | |
Allocation: 35% Grant Date: May 1, 2023 Performance Period: January 1, 2025 – December 31, 2025 Vesting: 3-year, time-based cliff vesting conditioned on achievement of the Profit Trigger (defined below) for the performance period |
Award Opportunities
The number of Performance Shares grantedawarded to each of the Executives generally representsNEOs is based on a target dollaropportunity amount that may be adjusted from 0% to 125% of Performance Shares established bytarget. For 2023, the HR Committee, based on recommendations from FW Cook, equal totarget award opportunities (as a percentage of each NEO’s base salary) were as follows:
NEO | 2023 LTI Target Opportunity(1) | ||
LTI Minimum (0% of Target) | LTI Target | LTI Maximum (125% of Target) | |
Curtis J. Myers | 0% | 120% | 150.00% |
Mark R. McCollom(2) | 0% | 100% | 125.00% |
Angela M. Snyder | 0% | 100% | 125.00% |
Meg R. Mueller | 0% | 75% | 93.75% |
Beth Ann L. Chivinski | 0% | 75% | 93.75% |
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(1) 2023 LTI target opportunity is a percentage of the NEOs’ base salary as of January 1, 2020,2023.
(2) As a result of 125% for the CEO, 100% forMr. McCollom’s resignation in February 2024, Mr. McCollom and Mr. Myers, and 75% forforfeited his 2023 LTI awards.
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The actual payout of the other Executives, and assuming a value for each Performance Share equal toTSR portion of the closing price of Fulton’s common stock on the grant date. In 2020, the HR Committee awarded a small number of Performance Shares above the target dollar amount to the Executives.
The Performance Shares were granted to the Executivesis based on 2023 Peer Group performance from May 1, 2020. 2023 through March 31, 2026 using the following pay line:
TSR Performance Pay Line | LTI TSR Payout Potential |
TSR Threshold – 25th percentile | 50% |
TSR Target – 50th percentile | 100% |
TSR Maximum – 75th percentile | 150% |
The actual number of shares of Fulton common stock, if any, that the Executives may receive upon vesting of the Performance Shares on the third anniversary of the date of grant may be higher or lower than the number of Performance Shares granted to the Executives. NEOs based on the attainment of the performance goals underlying the Performance Shares.
The aggregate number ofProfit Trigger performance measure is Fulton’s net income from January 1, 2025 to December 31, 2025. In order to achieve this performance measure, net income must be greater than all dividends declared by Fulton for the immediately preceding four full calendar quarters prior to the May 1, 2023 Performance Shares granted to each of the Executives was allocated by the HR Committee among three components, as summarized below:
grant date. The performance goals and potential payouts for ROA and TSR Components A and B for 2020 were:
Category | Component A Absolute ROA Performance Criteria | Component A Payout Potential (% of target) | Component B TSR Performance Relative to Peers | Component B Payout Potential (% of target) |
Threshold | 80% of Budget | 25% | 25th Percentile TSR | 25% |
Target | 100% of Budget | 100% | 50th Percentile TSR | 100% |
Maximum | 120 % of Budget | 150% | 80th Percentile TSR | 150% |
The following provides more detail related to the 2020 Performance Share Components:
Performance Shares that actually vest, together with dividend equivalents accrued during the performance period on those Performance Shares, are settled in shares of Fulton common stock on a 1-for-1 basis after the expiration of the three-year performance period and satisfaction of vesting criteria under the 2013 Plan. Further, Components A and B are adjusted after their respective one- and three-year performance periods, but are forfeited if the corresponding threshold performance level for ROA or TSR is not achieved. In addition, Components A and C are designed to be forfeited if the Profit Trigger is not achieved. Finally, unless waived by the HR Committee upon an eligible retirement, if the Executive does not satisfy the continuous service requirement in the 2013 Plan beforecomponent of the Performance Shares vest in 2023, all Performance Shares awarded are forfeited.
Tablerepresents a fixed number of Contents
shares that can either be earned or not.
The following table depicts the2023 grant date fair value of the Performance Shares, the total number of Performance Shares at target performance,awarded, and the allocation of the Performance Shares among Components A, B and C granted to each ofare set forth below:
NEO | 2023 Grant Date Fair | Performance Shares Awarded | Shares Subject to TSR Component | Shares Subject to Profit Trigger Component |
Curtis J. Myers | $954,757 | 86,513 | 56,234 | 30,279 |
Mark R. McCollom(2) | $468,014 | 42,408 | 27,566 | 14,842 |
Angela M. Snyder | $468,014 | 42,408 | 27,566 | 14,842 |
Meg R. Mueller | $292,475 | 26,502 | 17,227 | 9,275 |
Beth Ann L. Chivinski | $289,507 | 26,233 | 17,052 | 9,181 |
(1) Based on the Executives on May 1, 2020.
Executive | 2020 Grant Date Fair Value of Performance Shares 1 | 2020 Total Performance Shares Awarded 2 | Component A (ROA Goal) Shares Awarded 3 | Component B (TSR Goal) Shares Awarded | Component C (Profit Trigger) Shares Awarded |
E. Philip Wenger | $1,292,385 | 119,610 | 43,975 | 43,975 | 31,660 |
Mark R. McCollom | $431,603 | 39,938 | 14,612 | 14,612 | 10,714 |
Curtis J. Myers | $555,828 | 51,433 | 18,817 | 18,817 | 13,799 |
Angela M. Snyder | $295,703 | 27,355 | 9,927 | 9,927 | 7,501 |
Beth Ann L. Chivinski | $292,697 | 27,077 | 9,827 | 9,827 | 7,423 |
1 See footnote 4 to the Summary Compensation Table on Page 51 for additional information regarding the2023 grant date fair value of the Performance Shares.
2(2) Shares listed do not include accrued dividend equivalents.As a result of his resignation in February 2024, Mr. McCollom forfeited his 2023 LTI Performance Shares.
3 BasedPayout of 2020 Performance-Based Equity Awards
Fulton granted to the NEOs on Fulton’s ROA for the year ended December 31,May 1, 2020 the number of Component Aperformance share awards (the “2020 Performance SharesShare Award”) that may vest, subject tovested on May 1, 2023 based on the achievement of the Profit Trigger, has been increased to 108.45%performance goals. The performance metric targets and results are as follows:
2020 Performance Share Award Metrics | Weighting | Performance Period Targets | Actual Results | % of Payment |
3-year TSR | 37.5% | TSR Relative to 2019 Peer Group from May 1, 2020 to March 31, 2023 | 42.86 Percentile | 78.57% |
1-year ROA | 37.5% | ROA Goal of 0.708% | 0.732% | 108.45% |
Profit Trigger | 25.0% | Subject to profit requirement | 100.00% | 100.00% |
Total Payout as a % of Target | 95.13% |
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The amounts below include accrued dividend equivalent units. In connection with the original award amount. Such shares may be further reduced to zero if2020 Performance Share Award, the Profit Trigger is not mettotal number of Performance Shares awarded, the grant date fair value of Performance Shares awarded, the total number of Performance Shares issued upon vesting and the total value of Performance Shares issued upon vesting are as follows:
NEO | Total Number of Performance Shares Awarded | Grant Date Fair Value of Performance Shares Awarded | Total Number | Total Value of |
Curtis J. Myers | 51,433 | $555,828 | 55,638 | $655,977 |
Mark R. McCollom | 39,938 | $431,603 | 43,203 | $509,359 |
Angela M. Snyder | 27,355 | $295,703 | 29,602 | $349,011 |
Meg R. Mueller | 27,355 | $295,703 | 29,602 | $349,011 |
Beth Ann L. Chivinski | 27,077 | $292,697 | 29,302 | $345,467 |
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(1) Shares valued at $11.79 per share on the end of the performance period.May 1, 2023 vesting date.
Other Compensation Elements
Employee Stock Purchase Plan:The Employee Stock Purchase Plan (“ESPP”) was. The ESPP is designed to advance the interests of Fulton and its shareholders by encouraging Fulton’s employees and the employees of its subsidiary banks and other subsidiaries to acquire a stake in theour future of Fulton by purchasing shares of theFulton common stock of Fulton. Fulton limitsstock. We limit payroll deduction and annual employee participation in the ESPP to $15,000 annually, with no limitation based on a participant’s pay.$15,000. The Executives participating in the ESPPNEOs are eligible to purchase shares through the ESPP at a discount, currently 15%, on the same basis as other Fulton employees participating in the ESPP.
Defined Contribution Plan – 401(k) Plan:Plan. Fulton provides a qualified defined contribution plan, in the form of a 401(k) Plan to the ExecutivesNEOs and other employees that allows employees to defer a portion of their compensation and provides for employer matching contributions that satisfy a non-discrimination “safe-harbor” available to 401(k) retirement plans. This safe-harbor employer matching contribution is equal to 100% of each dollar a participant elects to contribute such amount to the 401(k) Plan but the amounton a pre-tax basis. For 2023, Fulton matched 100% of employee contributions, that are matched by Fulton is limitedup to 5% of eligible compensation. The Executives participating incompensation, subject to contribution limits imposed by the 401(k) Plan are eligible to receive the same employer matching contributionInternal Revenue Code of 1986, as other Fulton employees participating in the 401(k) Plan.amended (the “Tax Code”).
Deferred Compensation Plan:Plan. Fulton’s nonqualified deferred compensation planDCP permits non-employee directors and non-employee advisory board members to elect to defer receipt of cash director fees and certain eligible senior officers can elect to defer receipt of cash compensation. Itfees. The DCP also enables Fultonus to credit certain senior officers, including the Executives,NEOs, with full employerfull-employer matching contributions each year equal to the contributions they would have otherwise been eligible to receive under the 401(k) Plan if not fornotwithstanding the contribution limits imposed by the Internal Revenue Code, as amended (the “Tax Code”) onTax Code.
Death Benefits. In the amount of compensation that can be taken into account under a tax-qualified retirement plan. Fulton’s deferred compensation contributions for the Executives in 2020 are stated in footnote 8 of the “Summary Compensation Table” on Page 51. The deferred compensation plan accounts of each participant are held and invested under theevent certain NEOs die while actively employed by Fulton, Nonqualified Deferred Compensation Benefits Trust, with FFA, serving as trustee. The participants are permitted to individually direct the investment of the deferred amounts into various investment options under the Nonqualified Deferred Compensation Benefits Trust.
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Death Benefits:The estates of each of the Executives areNEOs is eligible for a payment from Fulton equal to two (2) times base salary (plus an amount equal to applicable individual income taxes due on such amounts) from Fulton pursuant to individual Death Benefit Agreementsdeath benefit agreements between Fulton and each Executive, should the Executive die while actively employed by Fulton. Upon the Executive’s retirement, thethat NEO. The post-retirement benefit payable upon the individual’s death is reduced to $5,000 for Mr. Wenger,each of Mr. Myers Ms. Snyder and Ms.Messes. Chivinski in their Death Benefit Agreements, while the Death Benefit Agreement for, Mr. McCollom doesand Snyder. The other NEOs are not provideeligible for any post-retirement death benefit payment. Fulton does not provide retiree death benefits for its full-time employees unless specifically provided for in an employee’s Death Benefit Agreement.benefit.
Health, Dental and Vision Benefits: Fulton offers. We offer a comprehensive benefits package for health, dental and vision insurance coverage tofor all full-time employees, including the Executives,NEOs and their eligible spouses and children. Fulton paysdependents. We pay a portion of the premiumspremium for the coverage selected, and the amount paid varies with each health, dental and vision plan. All of the Executives have elected one of the standard employee coverage plans available.
Other Executive Benefits:NEO BenefitsFulton provides the Executives. We provide our NEOs with a variety of other perquisites and other personal benefits that the HR Committee believes are necessary to facilitate the conduct of Fulton’s business by the Executivesoperations, including a company-owned automobile or a car allowance, club memberships and are reasonable and consistent with the overall compensation program for the CEO and the other Executives. In addition, theseexecutive benefits. These benefits enable Fultonus to attract and retain talented senior officers for key positions, as well as provide the Executives and other senior officers with opportunities to be involved in their communities and directly interact with current and prospective customers of Fulton.positions. The 20202023 amounts are included in the “All Other Income”Compensation” column of the “Summary Compensation Table” on Page 51 of this Proxy Statement. The Executives are provided with company-owned automobiles or a car allowance, club memberships and other executive benefits consistent with their positions. Fulton does not have a direct or indirect interest in any corporate aircraft. Generally, the Executives travel on commercial aircraft, by train or in vehicles provided by Fulton. In addition, if spouses accompany an Executive when traveling on business or attending a corporate event, Fulton pays the travel and other expenses associated with certain spousal travel for the Executive. Fulton also includes spousal travel and personal vehicle use as part of the Executive’s reported W-2 income.Table.”
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Fulton believes that a company should provide reasonable severance benefits to employees. For most employees, Fulton has a policy that, in general, provides for severance benefits to be paid upon a reduction in force or position elimination. These severance arrangements are intended to provide the employees with a sense of security in making the commitment to dedicate their professional careers to the success of Fulton. With respect to the Executives and certain other employees, the severance benefits provided reflect the fact that it may be difficult for them to find comparable employment within a reasonable period of time. The levels of these benefits for the Executives in the event of a change in control of Fulton are discussed in footnote 6 in the “Potential Payments Upon Termination and Golden Parachute Compensation Table” on Page 58 under “Termination Without Cause or for Good Reason – Upon or After a Change in Control”.
Fulton has entered into employment agreements with certain of its key employees, including each of the Executives. Fulton’s employment agreement with Mr. Wenger was entered into on June 1, 2006, and amended on November 12, 2008. Fulton entered into separate employment agreements and change in control agreements with the other Executives, all effective as of January 1, 2018. The employment agreements and change in control agreements with the Executives (individually, an “Employment Agreement,” and collectively, the “Employment Agreements”), continue until terminated, and each provides that the Executive is to receive a base salary, which is set annually, is entitled to participate in Fulton’s incentive bonus programs as in effect from time to time, and will participate in Fulton’s retirement plans, welfare benefit plans and other benefit programs.
The Employment Agreements with the Executives contain restrictions on the sharing of confidential information, as well as non-competition and non-solicitation covenants that continue for one year following termination of employment. The non-competition and non-solicitation covenants will not apply if the Executive terminates employment for good reason or if the Executive’s employment is terminated without cause, as defined in the Employment Agreements. These provisions of the Employment Agreements are further outlined in the “Potential Payments Upon Termination and Golden Parachute Compensation Table” section on Page 58. The Employment Agreements Fulton executed with the Executives do not contain an excise tax gross-up for taxes applicable to termination payments as a result of the Executive’s termination, except that the Employment Agreement executed with Mr. Wenger, the only legacy agreement, provides for an excise tax gross up. The Employment Agreements
with the other Executives provide that, in the event a payment to be made in connection with their termination of employment would result in the imposition of an excise tax under Section 4999 of the Tax Code, such payment would be retroactively reduced, if necessary, to the extent required to avoid such excise tax imposition and, if any portion of the amount payable the Executive is determined to be non-deductible pursuant to the regulations promulgated under Section 280G of the Tax Code, Fulton would be required to pay to the Executive only the amount determined to be deductible under Section 280G.
At its January 2021 meeting, the HR Committee conducted its annual risk review of all compensation plans in effect as of December 31, 2020. At this meeting, Beth Ann L. Chivinski, Fulton’s Chief Risk Officer (“CRO”), discussed her review of Fulton’s compensation plans. The CRO informed the HR Committee that based on her review, the design of Fulton’s compensation plans do not appear to promote undue risk-taking. FW Cook supported the CRO’s conclusion that Fulton’s compensation plans do not appear to promote undue risk-taking. The HR Committee considered various factors that have the effect of mitigating risk and, with the assistance of Fulton’s CRO, Legal and Human Resources staff members, reviewed Fulton’s compensation policies to determine whether any portion of such compensation encourages excessive risk-taking. The HR Committee has reviewed and considered all of such plans and practices and does not believe that Fulton’s compensation policies and practices create risks that are reasonably likely to have a material adverse effect on Fulton.
Discussion of Equity Award Process:Fulton does not have a formal written policy as to when equity awards are granted during the year. In April 2020, Fulton awarded Performance Shares and time-based restricted stock units to eligible participants under the 2013 Plan with a grant date of May 1, 2020, so that the equity awards could be considered by the HR Committee at the same time as the cash incentive awards under the 2013 Plan. Fulton does not backdate options or grant options retroactively, and does not coordinate option grants with the release of positive or negative corporate news. The 2013 Plan, which amended and restated the 2004 Stock Option and Compensation Plan, does not permit the award of discounted options, the reload of stock options, or the re-pricing of stock options. Pursuant to the terms of the 2013 Plan, option prices are determined based on the closing price on the grant date. Under the 2013 Plan, an option exercise price may not be less than 100% of the fair market value of Fulton’s stock on the date of grant. The 2013 Plan defines fair market value to be the closing price on the date of grant, or if no sales of shares were reported on any stock exchange or quoted on any interdealer quotation system on that day, the price on the next preceding trading day on which such price was quoted.
Stock Hedging and Pledging Policy and Stock Trading Procedures:Fulton has adoptedProcedures
We have an Insider Trading Policy to facilitate securities law compliance in a number of areas. Pursuant to this policy, which was last updated in 2018, Fulton(“ITP”) that requires that all directors, officers, and employees of Fulton and its affiliatesto adhere to certain proceduresrules when trading in Fulton common stock or any other security issued by Fulton or its subsidiaries.our securities. Among other requirements, directors, officers and employees of Fulton and its subsidiaries that know of material, non-public information aboutregarding Fulton may notnot: (i) buy or sell Fulton stocksecurities while the information remains non-public or (ii) disclose the information to relatives, friends or any other person. In addition, the Executives and directors of Fulton and Fulton’s banking subsidiaries and certain other officers are prohibited fromwe prohibit engaging in hedging and other speculative transactions involving Fulton’s securities. This prohibition encompassesour securities, including “short sales” andsales,” “puts,” along withand pledging our securities. Fulton’s NEOs are also prohibited from holding Fulton securities in a margin account or otherwise pledging Fulton securities as collateral for a loan and must provide advance notice of any sale, purchase, stock option exercise, gift or other trading that anticipates a decline in price. These instruments can involve “a bet againsttransfer of Fulton” raise issues about the insider knowledge securities, including by members of the NEOs’ immediate family sharing the same household, or any corporation, partnership or trust in which any such person involvedhas an economic interest or create a conflict of interest and are therefore prohibited by Fulton’s policy. Since 2014, Fulton’s Insider Trading Policy has prohibited the pledging of shares, and none of Fulton’s current directors or the Named Executive Officers have pledged any shares of Fulton common stock.investment control.
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Stock Ownership Guidelines:Fulton believes that broad-basedGuidelines
Pursuant to the Guidelines, stock ownership by non-employee directors,for Fulton’s executive officers and employees is an effective method to align the interests of its directors, officers and employees with the interests of its shareholders. In 2009, Fulton first adopted Governance Guidelines that included formal Fulton common stock ownership guidelines for non-employee directors and the Executives. The director ownership guideline was updated by the Nominating and Corporate Governance Committee in December 2018, to be effective January 1, 2019, to require that each director own at least $300,000 of eligible Fulton common stock within the later of five (5) full calendar years of first becoming a director, or five (5) full calendar years after the guideline was changed. Current Fulton directors have until December 31, 2023 to achieve this new and enhanced equity ownership guideline. Similar stock ownership guidelines exist for the Executives. The guidelines for the Executives were last updated and approved in 2017, with the recommended ownership guidelinesare calculated as a multiple of each of the Executive’sNEO’s annual base salary depending upon the position of the Executive as follows:
Executive Position | CEO | President | CFO | Other Executives |
Fulton Common Stock Ownership Guideline as a Multiple of Annual Base Salary | 3.0 | 1.5 | 1.5 | 1.0 |
NEO Position | Minimum Ownership of Fulton Common Stock (Multiple of Base Salary) |
CEO | 6.0 |
President | 3.0 |
CFO | 3.0 |
Other NEOs | 2.0 |
Compliance with theour stock ownership guidelines is determined annually based on an annual basis. The Guidelines require that each executive officer comply with our stock ownership andrequirements within five years after the closing price of Fulton’s common stock as of December 31 oflater of: (i) first being appointed to his or her position, (ii) being hired by Fulton or (iii) a change in the prior year. Ownershipminimum ownership requirement. Stock ownership excludes stock options and other unvested restricted stock or Performance Share Awards,awards, but includes all other shares beneficially owned and reported on an individual’s Form 3, Form 4 or Form 5 filed with the SEC, including shares owned individually, deferred vested stock unit awards, shares held in retirement accounts, indirect ownership and jointly held shares of Fulton common stock. Once an Executive or director has achieved the ownership guideline, he or she remains in compliance with the ownership guideline regardlessAs of changes in base salary or the price of Fulton’s common stock, as long as he or she retains the same number of shares or a higher amount. However, if an Executive is promoted to CEO, President or CFO with a base salary increase, he or she would be permitted to satisfy the new stock ownership requirement for the new position and base salary over a period of five (5) full calendar years. Except forDecember 31, 2023, Mr. McCollomMyers and Ms. Snyder all of the Executives currently employed by Fulton have satisfied the stock ownership guidelines as ofuntil December 31, 2020. Mr. McCollom2028 and Ms. Snyder are required to achieve their targeted stock ownership by December 31, 20222029, respectively, to satisfy the stock ownership guideline forrequirements, and all other NEOs satisfied their current positions. As of December 31, 2020, all of Fulton’s non-employee directors have satisfied the new $300,000 ownership guideline, except Directors Craighead Carey, Crutchfield, Graupera and Snyder. Under the Governance Guidelines, these directors are required to achieve the enhanced targetedrespective stock ownership level by December 31, 2023.requirements. Mr. McCollom resigned as Senior Executive Vice President and CFO effective February 8, 2024.
Clawback Policies
Management Succession:The topicFulton maintains two distinct clawback policies – its Amended and Restated Compensatory Recovery “Clawback” Policy (the “Clawback Policy”) and its Mandatory Recovery of management succession is discussed and reviewed at least annually at Fulton. At the December 2020 meeting of the Board of Directors, during an executive session of the Board of Directors, senior officers in Fulton’s Human Resources Department discussed and reviewed the succession planning processes used by management to identify successors for each Executive at Fulton.Compensation Policy (the “Mandatory Clawback Policy”).
Clawback Policies:In 2016, the HR Committee amended Fulton’s Compensation RecoveryOur Clawback Policy (“Clawback Policy”) to implementcontains clawback provisions for all participants, including the Executives,NEOs, with respect to theirincentive compensation, including VCP Awards and Performance Shares and, subject to limited exceptions, other incentive compensation plans.Shares. The Clawback Policy identifies the events that may give rise to a clawback, such as: 1)including: (i) any accounting restatement due to Fulton’s material noncompliance with any financial reporting requirement under applicable securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a restatementmaterial misstatement if the error were corrected in the current period or left uncorrected in the current period, (ii) there is a material inaccuracy in the calculation of Fulton’s performance metrics used to determine incentive compensation or any affiliate’s, financial statements (other than(iii) there is a restatement caused by a change in applicable accounting rules or interpretations), the result of which is that any performance-based compensation paid would have been lower, had it been calculated based on such restated results; 2) the discovery that a performance metric or calculation used in determining performance-based compensation was materially inaccurate; 3) amaterial violation of Fulton’sour Code of Conduct resulting in a negative financial impact to Fulton.
Our Board also adopted a separate and distinct Mandatory Clawback Policy that applies to any incentive compensation paid to executive officers. Except as provided in the Mandatory Clawback Policy, if Fulton is required to prepare any accounting restatement due to Fulton’s material noncompliance with any financial reporting requirement under applicable securities laws, including any required accounting restatement to correct an error in
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previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, then the Board will recover any recoverable amount of which creates a significant financial or reputational impact for Fulton; and 4) violationany incentive compensation received by a departingcurrent or departed employeeformer executive officer. The recoverable amount will be repaid to Fulton within a reasonable time after the current or former executive officer is notified of the non-solicitation restrictions set forthrecoverable amount. Recovery under the Mandatory Clawback Policy will apply regardless of any misconduct, fault, or illegal activity of Fulton, the executive officer, or the Board.
Tax Deductibility of Compensation Expense
Section 162(m) of the Tax Code generally places a $1 million limit on the amount of compensation a company can deduct in Fulton’s employment policies or such employee’s employment agreement.
In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that the SEC adopt rules that require publicly traded companies to adopt a formal clawback policy. Pending final clawback rules from the SEC,any one year for certain executive officers. While the HR Committee will continue to monitor and considerconsiders the usedeductibility of clawbacks and update the Clawback Policy for any new or amendedawards as one factor in determining executive compensation, agreements and plans with the Executives and other employees. During 2020, the HR Committee wasalso looks at other factors in making its decisions, as detailed in the CD&A, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not asked to consider any instance or situation where a clawback may have been required or attempteddeductible by us for a Named Executive Officer or other senior officertax purposes.
CEO Pay Ratio Disclosure
We are providing the following information about the annual total compensation of Fulton.
our estimated median employee (“Median Employee”) and the annual total compensation of our CEO:
• | The 2023 annual total compensation of our Median Employee (other than our CEO) was $63,537. |
• | The 2023 annual total compensation of our CEO, as reported in the Summary Compensation Table, was $2,309,440. |
• | For 2023, the ratio of the annual total compensation of our CEO to our Median Employee was 36.35 to 1. |
Our pay ratio estimate was calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below.
We retained the same Median Employee identified in 2022 and used for 2023. The Median Employee is currently employed by Fulton in the same position and no material change occurred during 2023 that would significantly affect the pay ratio using the same individual for 2023. As of December 31, 2022, we identified the Median Employee by comparing the total compensation in Box 5 on the 2022 W-2 tax statements for our employee population. We identified our Median Employee using this consistently applied compensation measure (excluding our CEO, temporary employees and employees that departed our workforce during the period). In making this determination, we annualized the compensation of permanent full-time employees who were hired in 2022 and did not work for us for our entire fiscal year but were still employed as of December 31, 2022.
For the 2023 pay ratio, we combined all of the elements of such employee’s compensation for 2023 consistent with the requirements of Item 402(c)(2)(x) of Regulation S-K. For our CEO, the same process and amount reported in the “Total” column of our 2023 Summary Compensation Table (“SCT”) was used.
HR COMMITTEE REPORT |
Human Resources Committee Report
The HR Committee reviewed and discussed with management the foregoing Compensation Discussion and Analysis with management and, based on the review and discussions, the HR Committee recommended to the Board of Directors that the Compensation Discussion and Analysis above be incorporated in Fulton’s Annual Report on Form 10-K for the year ended December 31, 2020, and the 2021this Proxy Statement, as applicable.Statement.
As described above in the Compensation Discussion and Analysis section, in performing its compensation risk evaluation, the HR Committee met with the CRO regarding the material risks facing Fulton, and consulted with Legal and Human Resources personnel about Fulton’s various compensation plans. Based on the foregoing review, the HR Committee concluded that Fulton’s compensation policies and practices in 2020 did not create risks that are reasonably likely to have a material adverse effect on Fulton.
Human Resources Committee
Denise L. Devine, Chair
Mark F. Strauss, Vice Chair
Steven S. Etter
Patrick J. Freer
George W. Hodges
Ronald H. Spair,
49 Chair
Lisa Crutchfield, Vice Chair
Steven S. Etter
James R. Moxley III
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SUMMARY COMPENSATION TABLE |
Name and Principal Position(1) | Year | Salary ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4)(5) ($) | Total ($) |
Curtis J. Myers Chairman of the Board, CEO and President | 2023 | 850,000 | 954,757 | 382,500 | 122,183 | 2,309,440 |
2022 | 638,057 | 626,009 | 767,423 | 107,556 | 2,139,045 | |
2021 | 571,788 | 558,644 | 806,793 | 67,705 | 2,004,930 | |
Mark R. McCollom Former Senior Executive Vice President and CFO | 2023 | 500,000 | 468,014 | - | 86,465 | 1,054,479 |
2022 | 456,305 | 441,922 | 451,970 | 81,600 | 1,431,797 | |
2021 | 444,002 | 433,784 | 515,931 | 66,112 | 1,459,829 | |
Angela M. Snyder Senior Executive Vice | 2023 | 500,000 | 468,014 | 175,000 | 65,881 | 1,208,895 |
2022 | 459,865 | 378,563 | 390,426 | 55,414 | 1,284,268 | |
2021 | 402,214 | 294,713 | 333,838 | 33,940 | 1,064,705 | |
Meg R. Mueller Senior Executive Vice | 2023 | 428,803 | 292,475 | 107,201 | 48,819 | 877,298 |
2022 | 413,358 | 300,235 | 292,451 | 50,505 | 1,056,549 | |
2021 | 402,214 | 294,713 | 333,838 | 21,589 | 1,052,354 | |
Beth Ann L. Chivinski Senior Executive Vice | 2023 | 424,450 | 289,507 | 106,112 | 38,527 | 858,596 |
2022 | 409,161 | 297,187 | 289,481 | 41,813 | 1,037,642 | |
2021 | 398,130 | 291,725 | 330,448 | 31,024 | 1,051,327 |
Name and Principal Position 1 | Year | Salary 2 ($) | Bonus 3 ($) | Stock Awards 4 ($) | Option Awards 5 ($) | Non-Equity Incentive Plan Compensation 6 ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings 7 ($) | All Other Compensation 8 ($) | Total ($) |
E. Philip Wenger Chairman and | 2020 | 1,048,822 | 0 | 1,292,385 | 0 | 630,735 | 0 | 112,553 | 3,084,495 |
2019 | 1,042,919 | 0 | 1,274,798 | 0 | 627,185 | 0 | 98,654 | 3,043,556 | |
2018 | 1,017,482 | 0 | 1,134,491 | 0 | 566,051 | 0 | 118,936 | 2,836,960 | |
Mark R. McCollom Senior Executive Vice | 2020 | 435,625 | 0 | 431,603 | 0 | 215,743 | 0 | 65,419 | 1,148,390 |
2019 | 433,173 | 0 | 423,585 | 0 | 214,529 | 0 | 39,710 | 1,110,997 | |
2018 | 425,000 | 0 | 386,381 | 0 | 194,714 | 0 | 29,229 | 1,035,324 | |
Curtis J. Myers President and | 2020 | 561,000 | 0 | 555,828 | 0 | 277,835 | 0 | 68,725 | 1,463,388 |
2019 | 549,231 | 0 | 508,305 | 0 | 272,006 | 0 | 61,013 | 1,390,555 | |
2018 | 510,000 | 0 | 463,673 | 0 | 233,657 | 0 | 65,477 | 1,272,807 | |
Angela M. Snyder Senior Executive Vice | 2020 | 394,625 | 0 | 295,703 | 0 | 139,599 | 0 | 35,183 | 865,110 |
2019 | 392,404 | 0 | 287,788 | 0 | 138,813 | 0 | 44,495 | 863,500 | |
2018 | 385,000 | 0 | 262,512 | 0 | 125,991 | 0 | 42,861 | 816,364 | |
Beth Ann L. Chivinski Senior Executive Vice | 2020 | 390,618 | 0 | 292,697 | 0 | 138,181 | 0 | 30,512 | 852,008 |
2019 | 388,420 | 0 | 284,861 | 0 | 137,403 | 0 | 27,627 | 838,311 | |
2018 | 374,956 | 0 | 241,708 | 0 | 122,704 | 0 | 34,006 | 773,374 |
1(1) Titles and positions listed are as of Fulton’s fiscal year-end of December 31, 2020.
2 This column represents the base salary amounts paid to and earned by each of the Executives named in this table for the years indicated. On February 9, 2021, the HR Committee set the 2021 annual base salaries, effective for the April 1, 2021 pay period for Mr. Wenger,2023. Mr. McCollom Mr. Myers, Ms. Snyderresigned from his position on February 8, 2024, and Ms. Chivinski at $1,048,822, $446,516, $575,025, $404,491, and $400,384, respectively.
concurrently was named Interim Chief Financial Officer.
3(2) The HR Committee did not award any bonus payments in 2020, 2019 or 2018 to the Executives.
51
4Amounts represent the grant date fair values of Performance Shares. There were no forfeitures of Performance Shares during 2020, 2019 and 2018 by any of the Executives.
The following is a summary of the grant date fair valuesvalue of the Performance Shares grantedin 2023, 2022 and 2021 was determined in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are discussed in Note 16 to our Consolidated Audited Financial Statements for the Executivesfiscal year ended December 31, 2023, included in 2020, 2019 and 2018.
Name | Grant Date | Performance Share Grant Date Fair Value Assuming Highest Performance Level Achieved ($) | Number of Performance Shares Granted to Executive (#) | Per Share Grant Date Fair Value With Non-Market Conditions ($) | Per Share Grant Date Fair Value With Market Conditions ($) | Weighted Average Per Share Grant Date Fair Value ($) |
5/1/2020 | 1,761,599 | 119,610 | 11.18 | 10.16 | 10.81 | |
E. Philip Wenger | 5/1/2019 | 1,758,687 | 75,327 | 16.98 | 16.83 | 16.92 |
5/1/2018 | 1,545,754 | 73,187 | 17.05 | 12.92 | 15.36 | |
5/1/2020 | 587,513 | 39,938 | 11.18 | 10.16 | 10.81 | |
Mark R. McCollom | 5/1/2019 | 584,367 | 25,029 | 16.98 | 16.83 | 16.92 |
5/1/2018 | 526,461 | 24,926 | 17.05 | 12.92 | 15.36 | |
5/1/2020 | 756,605 | 51,433 | 11.18 | 10.16 | 10.81 | |
Curtis J. Myers | 5/1/2019 | 701,240 | 30,035 | 16.98 | 16.83 | 16.92 |
5/1/2018 | 631,760 | 29,912 | 17.05 | 12.92 | 15.36 | |
5/1/2020 | 401,624 | 27,355 | 11.18 | 10.16 | 10.81 | |
Angela M. Snyder | 5/1/2019 | 397,026 | 17,005 | 16.98 | 16.83 | 16.92 |
5/1/2018 | 357,682 | 16,935 | 17.05 | 12.92 | 15.36 | |
5/1/2020 | 397,551 | 27,077 | 11.18 | 10.16 | 10.81 | |
Beth Ann L. Chivinski | 5/1/2019 | 392,985 | 16,833 | 16.98 | 16.83 | 16.92 |
5/1/2018 | 329,341 | 15,593 | 17.05 | 12.92 | 15.36 |
In the table above, the per share grant date fair value for Performance Shares with non-market-based performance conditions was equal to the closing price of Fulton common stock on the date the shares were granted. The per-share grant date fair value for Performance Shares granted with market-based performance conditions is estimated based on the use of a Monte Carlo valuation methodology. For additional information concerning the valuation of Performance Shares with market-based performance conditions granted in 2020, 2019 and 2018, including the assumptions made in determining those valuations, see Fulton’sour Annual Report on Form 10-K for the yearsfiscal year ended December 31, 2020, December 31, 20192023. Fair value is based on a Monte Carlo simulation used to account for market conditions. The number of awards granted in 2023 is reflected in the “Grants of Plan-Based Awards” table below. The fair value of awards granted in 2023, 2022 and December 31, 2018, respectively, under Item 8 – Financial Statements and Supplementary Data, “Note 15 – Stock-Based Compensation Plans.”
5 Fulton did not grant options2021 are shown in 2020, 2019 or 2018 tothis table assuming the Executives, and there were no forfeiturestarget level of options during those periods by anyawards will be earned. The fair value of the Executives.
awards granted in 2023, if earned at the maximum performance level, would equal $1,253,641 for Mr. Myers; $614,527 for Mr. McCollom; $614,527 for Ms. Snyder; $384,037 for Ms. Mueller; and $380,138 for Ms. Chivinski. As a result of his resignation on February 8, 2024, Mr. McCollom forfeited his Performance Shares.
6(3) The amounts reported in this column are VCP Awards that are substantially based on performance goal achievement and on individual scorecard results as described furtherdetailed under “VCP“Annual Cash Incentives – VCP Awards” beginning on Page 40.
page 34.
7(4) All other compensation includes: (i) Fulton has determined thatcontributions to the Executives did not receive above-market earnings on their nonqualified deferred compensation plan accounts, and therefore, such earnings are not required401(k) Plan, (ii) Fulton contributions to be reported in this column for 2020, 2019 or 2018. All participants in the nonqualified deferred compensation plan, including senior officers other than the Executives, are permitted to select various investment options listed in footnote 2 of the “Nonqualified Deferred Compensation Table” on Page 57. The rate of return for an individual participant’s account is based on the performance of the various investment options selected by each participant.
8 All Other Compensation includes Fulton’s payments for qualified employer matching contributions, nonqualified employer matching contributions,DCP, (iii) Fulton-paid club membership fees,memberships, (iv) automobile perquisites plusand (v) other personal benefits received by each of the Executives. The methodology used to calculate the aggregate incremental cost of perquisites and other personal benefits was the amount disbursed for the items. Where a benefit involved assets owned by Fulton, an estimate of the incremental cost was used. The automobile perquisite amounts include the financial benefit that the Executive received, such as the personal use value of a company-owned automobile or the taxable automobile allowance, as reported on the Executive’s W-2. The “Other Perquisites” column in the table below includes personal travel, and other small benefits that individually are less than the greater of $25,000 or ten percent10% of all perquisites received by the Executive.
Name | Year | Qualified Retirement Plan Company Contribution ($) | Nonqualified Deferred Compensation Plan Company Contribution ($) | Club Memberships ($) | Automobile Perquisites ($) | Other Compensation and Perquisites ($) | Total All Other Compensation ($) |
2020 | 14,250 | 69,550 | 18,907 | 7,716 | 2,130 | 112,553 | |
E. Philip Wenger | 2019 | 14,000 | 66,448 | 12,070 | 3,546 | 2,590 | 98,654 |
2018 | 13,750 | 81,745 | 16,988 | 3,426 | 3,027 | 118,936 | |
2020 | 14,250 | 18,258 | 14,011 | 18,000 | 900 | 65,419 | |
Mark R. McCollom | 2019 | 14,000 | 0 | 6,810 | 18,000 | 900 | 39,710 |
2018 | 0 | 0 | 12,200 | 15,000 | 2,029 | 29,229 | |
2020 | 14,250 | 27,400 | 18,859 | 7,316 | 900 | 68,725 | |
Curtis J. Myers | 2019 | 14,000 | 25,451 | 11,071 | 3,313 | 7,178 | 61,013 |
2018 | 13,750 | 23,368 | 16,753 | 2,919 | 8,687 | 65,477 | |
2020 | 14,250 | 12,422 | 4,917 | 2,694 | 900 | 35,183 | |
Angela M. Snyder | 2019 | 13,982 | 12,226 | 8,589 | 1,965 | 7,733 | 44,495 |
2018 | 13,315 | 11,951 | 8,589 | 1,569 | 7,437 | 42,861 | |
2020 | 14,250 | 12,176 | 0 | 2,686 | 1,400 | 30,512 | |
Beth Ann L. Chivinski | 2019 | 14,000 | 11,556 | 0 | 1,171 | 900 | 27,627 |
2018 | 13,750 | 14,889 | 0 | 4,467 | 900 | 34,006 |
53perquisites.
43
(5) Breakdown of “Total All Other Compensation” below. The amount of “Other Compensation and Perquisites” includes personal travel, taxable housing expense, reimbursements for mobile device expenses and other small items. For Mr. Myers, Ms. Mueller and Ms. Snyder personal travel included a tax gross up.
Name | Year | Qualified Retirement Plan Company Contribution ($) | Nonqualified Deferred Compensation Plan Company Contribution ($) | Club Memberships ($) | Automobile Perquisites ($) | Other Compensation and Perquisites ($) | Total All Other Compensation ($) |
Curtis J. Myers | 2023 | 16,500 | 64,839 | 24,705 | 4,386 | 11,753 | 122,183 |
2022 | 15,250 | 57,441 | 19,661 | 3,640 | 11,564 | 107,556 | |
2021 | 14,500 | 27,981 | 18,370 | 4,990 | 1,864 | 67,705 | |
Mark R. McCollom | 2023 | 16,500 | 31,099 | 18,337 | 19,000 | 1,529 | 86,465 |
2022 | 15,250 | 33,362 | 14,088 | 18,000 | 900 | 81,600 | |
2021 | 14,500 | 18,487 | 13,600 | 18,000 | 1,525 | 66,112 | |
Angela M. Snyder | 2023 | 16,500 | 28,370 | 864 | 2,095 | 18,052 | 65,881 |
2022 | 15,250 | 24,827 | 2,935 | 2,019 | 10,383 | 55,414 | |
2021 | 14,500 | 12,590 | 3,859 | 2,091 | 900 | 33,940 | |
Meg R. Mueller | 2023 | 16,500 | - | 16,178 | 11,150 | 4,991 | 48,819 |
2022 | 15,250 | - | 15,800 | 11,215 | 8,240 | 50,505 | |
2021 | 3,889 | - | 6,512 | 11,188 | - | 21,589 | |
Beth Ann L. Chivinski | 2023 | 16,500 | 19,212 | - | 1,615 | 1,200 | 38,527 |
2022 | 15,250 | 21,746 | - | 2,988 | 1,829 | 41,813 | |
2021 | 14,500 | 12,341 | - | 2,783 | 1,400 | 31,024 |
44
GRANTS OF PLAN-BASED AWARDS |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock and Option Awards(3) | ||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ($) |
Curtis J. Myers | 5/1/2023 | - | - | - | - | 30,279 | 30,279 | 356,989 |
5/1/2023 | - | - | - | 28,117 | 56,234 | 84,351 | 597,767 | |
- | 382,500 | 765,000 | 1,530,000 | - | - | - | - | |
Mark R. McCollom(4) | 5/1/2023 | - | - | - | - | 14,842 | 14,842 | 174,987 |
5/1/2023 | - | - | - | 13,783 | 27,566 | 41,349 | 293,027 | |
- | 175,000 | 350,000 | 700,000 | - | - | - | - | |
Angela M. Snyder | 5/1/2023 | - | - | - | - | 14,842 | 14,842 | 174,987 |
5/1/2023 | - | - | - | 13,783 | 27,566 | 41,349 | 293,027 | |
- | 175,000 | 350,000 | 700,000 | - | - | - | - | |
Meg R. Mueller | 5/1/2023 | - | - | - | - | 9,275 | 9,275 | 109,352 |
5/1/2023 | - | - | - | 8,614 | 17,227 | 25,841 | 183,123 | |
- | 107,201 | 214,402 | 428,803 | - | - | - | - | |
Beth Ann L. Chivinski | 5/1/2023 | - | - | - | - | 9,181 | 9,181 | 108,244 |
5/1/2023 | - | - | - | 8,526 | 17,052 | 25,578 | 181,263 | |
- | 106,113 | 212,225 | 424,450 | - | - | - | - |
All | |||||||||||||
Other | |||||||||||||
Stock | All Other | Grant | |||||||||||
Awards: | Option | Date Fair | |||||||||||
Estimated Future or Possible | Number | Awards: | Exercise | Value of | |||||||||
Estimated Future or Possible | Payouts Under Equity | of | Number of | or Base | Closing | Stock | |||||||
Payouts Under Non-Equity | Incentive | Shares | Securities | Price of | Price on | and | |||||||
Incentive Plan Awards 2 | Plan Awards 3 | of Stock | Underlying | Option | Grant | Option | |||||||
Grant | Approval | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Date | Awards 4 | |
Name | Date | Date 1 | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($/Sh) | ($) |
E. Philip Wenger | 5/1/2020 | 4/21/2020 | - | - | - | 53,648 | 119,610 | 163,585 | - | - | - | 11.18 | 1,292,385 |
E. Philip Wenger | - | 4/21/2020 | 445,750 | 891,499 | 1,782,998 | - | - | - | - | - | - | - | - |
Mark R. McCollom | 5/1/2020 | 4/21/2020 | - | - | - | 18,020 | 39,938 | 54,550 | - | - | - | 11.18 | 431,603 |
Mark R. McCollom | - | 4/21/2020 | 152,469 | 304,938 | 609,876 | - | - | - | - | - | - | - | - |
Curtis J. Myers | 5/1/2020 | 4/21/2020 | - | - | - | 23,208 | 51,433 | 70,250 | - | - | - | 11.18 | 555,828 |
Curtis J. Myers | - | 4/21/2020 | 196,350 | 392,700 | 785,400 | - | - | - | - | - | - | - | - |
Angela M. Snyder | 5/1/2020 | 4/21/2020 | - | - | - | 12,465 | 27,355 | 37,282 | - | - | - | 11.18 | 295,703 |
Angela M. Snyder | - | 4/21/2020 | 98,657 | 197,313 | 394,626 | - | - | - | - | - | - | - | - |
Beth Ann L. Chivinski | 5/1/2020 | 4/21/2020 | - | - | - | 12,337 | 27,077 | 36,904 | - | - | - | 11.18 | 292,697 |
Beth Ann L. Chivinski | - | 4/21/2020 | 97,655 | 195,309 | 390,618 | - | - | - | - | - | - | - | - |
1 The grants of Performance Shares were approved at the April 2020 HR Committee and Board of Directors meetings, pursuant to the 2013 Plan, with a grant date of May 1, 2020. Based on the recommendation of the HR Committee, the independent directors of the Board of Directors also approved the non-equity incentive plan awards under the 2013 Plan at the March and April 2020 meetings.
2 The Executives were eligible to receive VCP Awards for 2020 pursuant to the 2013 Plan that is discussed under “VCP Awards” beginning on Page 40. Amounts are calculated based on 2020 base salary paid while employed as an Executive.
3(1) The amounts reflect incentive cash bonuses with respect to the VCP. The actual amount paid for 2023 with respect to the VCP is set forth in thisthe “Non-Equity Incentive Plan Compensation” column representof the SCT.
(2) Represents the number of Performance Shares granted to the Executives on May 1, 2020 based on the closing price of $11.18 for Fulton’s common stock on that date. TheNEOs. Performance Shares were allocated among three components, Component A, Component B and Component C, for each of the Executives, as set forth in the table on Page 43. Performance Shares may become earned and vested based on the actual performance level achieved, over various performance periods, with respect to the following performance measures: (i) Component A Performance Shares may be earned and vested based on the actual performance level achieved with respect to an absolute ROA target for 2020 and subject to satisfaction of the Profit Trigger; (ii) Component B Performance Shares may be becomeare earned and vested based on the actual performance level achieved with respect to the relativefollowing performance measures: (i) TSR for the period of May 1, 2020 through March 31, 2023;component and (iii) Component C Performance Shares may be earned and vested if the(ii) Profit Trigger is achieved. With respect to Component A Performance Shares and Component B Performance Shares, thecomponent. The actual number of 2023 Performance Shares earned and vested will be based onwith respect to the actual performance level and will beTSR component is interpolated on a straight-line basis for pro-rata achievement of the performance goals, if applicable, rounded down to the nearest whole number. Performance Shares also accrue dividend equivalents, which will be added to the award upon vesting on May 1, 2023.
basis.
4(3) See footnote 42 to the Summary Compensation TableSCT on Page 51page 43 for additional information regarding the grant date fair value of the Performance Shares. The grant date fair value of each equity award is computed in accordance with FASB ASC Topic 718. The closing price of Fulton common stock on the May 1, 2023 grant date was $11.79.
(4) Mr. McCollom’s VCP Awards and LTI Awards were forfeited in connection with his February 8, 2024 resignation.
45
2023 OUTSTANDING EQUITY AWARDS AT |
Option Awards | Stock Awards | ||||||||
Equity | |||||||||
Incentive | Equity | ||||||||
Plan | Incentive | ||||||||
Equity | Awards: | Plan Awards: | |||||||
Incentive | Number of | Market or | |||||||
Plan Awards: | Market | Unearned | Payout Value | ||||||
Number of | Number of | Number of | Number of | Value of | Shares, | of Unearned | |||
Securities | Securities | Securities | Shares or | Shares or | Units or | Shares, Units | |||
Underlying | Underlying | Underlying | Units of | Units of | Other | or Other | |||
Unexercised | Unexercised | Unexercised | Option | Stock That | Stock That | Rights That | Rights That | ||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | Have Not | Have Not | |
(#) | (#) | Options | Price | Expiration | Vested | Vested | Vested | Vested | |
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) 1 |
E. Philip Wenger 2 | - | - | - | - | - | - | - | 75,178 | 956,270 |
E. Philip Wenger 3 | - | - | - | - | - | - | - | 67,857 | 863,147 |
E. Philip Wenger 4 | - | - | - | - | - | - | - | 126,895 | 1,614,099 |
Mark R. McCollom 2 | - | - | - | - | - | - | - | 25,603 | 325,675 |
Mark R. McCollom 3 | - | - | - | - | - | - | - | 22,547 | 286,791 |
Mark R. McCollom 4 | - | - | - | - | - | - | - | 42,364 | 538,868 |
Curtis J. Myers | 12,375 | 0 | 0 | 10.880 | 6/30/2021 | - | - | - | - |
Curtis J. Myers | 11,263 | 0 | 0 | 10.475 | 3/31/2022 | - | - | - | - |
Curtis J. Myers | 10,877 | 0 | 0 | 11.580 | 3/31/2023 | - | - | - | - |
Curtis J. Myers 2 | - | - | - | - | - | - | - | 30,726 | 390,832 |
Curtis J. Myers 3 | - | - | - | - | - | - | - | 27,057 | 344,166 |
Curtis J. Myers 4 | - | - | - | - | - | - | - | 54,557 | 693,969 |
Angela M. Snyder 2 | - | - | - | - | - | - | - | 17,395 | 221,263 |
Angela M. Snyder 3 | - | - | - | - | - | - | - | 15,319 | 194,855 |
Angela M. Snyder 4 | - | - | - | - | - | - | - | 29,009 | 368,996 |
Beth Ann L. Chivinski 2 | - | - | - | - | - | - | - | 16,017 | 203,731 |
Beth Ann L. Chivinski 3 | - | - | - | - | - | - | - | 15,163 | 192,874 |
Beth Ann L. Chivinski 4 | - | - | - | - | - | - | - | 28,714 | 365,244 |
Stock Awards | ||
Name | Number of Shares That Have Not Vested | Market Value of Shares That Have Not Vested |
Curtis J. Myers | 48,569(3) | 799,450 |
59,192(4) | 974,293 | |
117,660(5) | 1,936,690 | |
Mark R. McCollom(6) | 37,714(3) | 620,769 |
41,785(4) | 687,786 | |
57,676(5) | 949,355 | |
Angela M. Snyder | 25,623(3) | 421,753 |
35,794(4) | 589,177 | |
57,676(5) | 949,355 | |
Meg R. Mueller | 25,623(3) | 421,753 |
28,389(4) | 467,280 | |
36,044(5) | 593,281 | |
Beth Ann L. Chivinski | 25,363(3) | 417,480 |
28,101(4) | 462,536 | |
35,678(5) | 587,258 |
1(1) Represents the number of Performance Shares and accrued dividend equivalents on December 31, 2023 based on maximum vesting.
(2) Market value of Performance Shares shown is based on the Fulton closing price of Fulton common stock of $12.72$16.46 on December 31, 2020, the last trading day of 2020.29, 2023. The number of Performance Shares includes dividend equivalents for all dividends that have been paid by Fulton from the Performance Share grant dateaccrued through December 31, 2020.
The Performance Shares are allocated among three components, Component A, Component B and Component C, for each of the Executives. Performance Shares allocated to Component A are presented based on actual ROA performance during the first year of the performance period; Performance Shares allocated to Component B are presented assuming the target level of performance for 2018, 2019 and 2020, based on relative TSR performance through December 31, 2020; and Performance Shares allocated to Component C are presented using the actual number of shares granted, since the number of shares that may vest upon completion of the performance period will not change.
2023.
As of December 31, 2020,2023, the relative TSR performance that determinesdetermined the number of Performance Shares allocated to Component Bthe TSR component of the 2018, 20192021, 2022 and 2020 awards that would be earned and vested was below the target levels.
All such2023 Performance Shares awards were at target or above performance levels, and, as such, amounts are subject to the achievement of the applicable performance criteria for the designated performance period, and continued service with Fulton on the vesting date. The actual earning and vesting of these Performance Shares could vary materially from the amounts in the table at the end of the performance period. Dividend equivalents accrued during the performance period, which may be earned and vest on the Performance Shares, are included in the number of Performance Shares.
shown based upon maximum vesting.
2(3) Performance Shares granted on May 1, 2018.2021. If the performance criteria areis achieved and other requirements under the 2013 Plan are satisfied,based on maximum vesting, then these Performance Shares will vest on May 1, 2021.
2024.
3(4) Performance Shares granted on May 1, 2019.2022. If the performance criteria areis achieved and other requirements under the 2013 Plan are satisfied,based on maximum vesting, then these Performance Shares will vest on May 1, 2022.
2025.
4(5) Performance Shares granted on May 1, 2020.2023. If the performance criteria areis achieved and other requirements under the 2013 Plan are satisfied,based on maximum vesting, then these Performance Shares will vest on May 1, 2023.2026.
(6) Mr. McCollom forfeited his unvested LTI Awards upon his February 8, 2024 resignation.
46
2023 OPTION EXERCISE AND STOCK VESTED |
Option Awards | Stock Awards | |||||||
Number of | Number of | |||||||
Shares | Shares | |||||||
Acquired | Value Realized | Acquired | Value Realized | Option Awards | Stock Awards | |||
Name | on Exercise 1 | on Exercise | on Vesting | on Vesting 2 | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(3) ($) |
(#) | ($) | (#) | ($) | |||||
E. Philip Wenger | 0 | 0 | 60,610 | 677,615 | ||||
Curtis J. Myers(1) | 10,877 | 23,059 | 55,638 | $655,977 | ||||
Mark R. McCollom | 0 | 0 | 15,507 | 201,277 | - | 43,203 | $509,359 | |
Curtis J. Myers | 7,500 | 8,963 | 14,651 | 163,800 | ||||
Angela M. Snyder | 0 | 0 | 4,297 | 48,040 | - | 29,602 | $349,011 | |
Meg R. Mueller(2) | 11,554 | 47,697 | 29,602 | $349,011 | ||||
Beth Ann L. Chivinski | 0 | 0 | 14,386 | 160,834 | - | 29,302 | $345,467 |
1(1) On March 23, 2023 Mr. Myers exercised options granted in 20102013 by paying cash for the full amount of the exercise price.
(2) On March 14, 2023 Ms. Mueller exercised options granted in 2013 by cashless exercise.
2(3) Except for Mr. McCollom, all of the Executives hadVesting Performance Shares that vested during 2020. Shares that vestedvalued at $11.79 per share on the May 1, 2020 for Mr. Wenger, Mr. Myers, Ms. Snyder2023 vesting date and Ms. Chivinski were valued at $11.18 per share, the closing price of Fulton’s common stock on May 1, 2020. For Mr. McCollom the three-year, time-based restricted stock unit award granted in 2017 in conjunction with the commencement of his employment with Fulton, which vested on November 27, 2020, was valued at $12.98 per share, the closing price of Fulton’s common stock on November 27, 2020.
include accrued dividend equivalent units.
Name | NEO Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-end(3) ($) |
Curtis J. Myers | 151,281 | 64,839 | 164,137 | 1,327,675 |
Mark R. McCollom | 40,868 | 31,098 | 33,153 | 244,331 |
Angela M. Snyder | 130,389 | 28,370 | 191,042 | 1,275,449 |
Meg R. Mueller | - | - | 138 | 2,896 |
Beth Ann L. Chivinski | 30,145 | 19,212 | 26,430 | 326,197 |
3 During 2020, none of the Executives participated in or had an account balance in any qualified or nonqualified defined benefit plans sponsored by Fulton or any Fulton subsidiary bank.
Name | Executive | Registrant | Aggregate | Aggregate | |
Contributions in | Contributions in | Earnings in | Withdrawals/ | Aggregate Balance | |
Last FY | Last FY 1 | Last FY 2 | Distributions | at Last FYE 3 | |
($) | ($) | ($) | ($) | ($) | |
E. Philip Wenger | 143,397 | 69,550 | 723,438 | 0 | 3,221,489 |
Mark R. McCollom | 16,755 | 18,258 | 1,586 | 0 | 36,598 |
Curtis J. Myers | 70,354 | 27,400 | 68,470 | 0 | 702,054 |
Angela M. Snyder | 75,991 | 12,422 | 144,850 | 0 | 779,965 |
Beth Ann L. Chivinski | 19,046 | 12,176 | 10,470 | 0 | 178,668 |
1(1) Fulton’s contributions toward nonqualified deferred compensation for each of the ExecutivesAmounts listed as NEO Contributions in Last Fiscal Year are listed in this column. The Executives’ contributions are matched at the same 100% of the first 5% of compensation deferred as providedincluded in the 401(k) Plan. However, while the Executives were permitted to contribute up to 100% of their eligible salary and cash bonus during 2020, these matching contributions are made based on an Executive’s eligible salary and bonus that exceeds the federal limit of $285,000SCT for 2020. See the table contained in footnote 8 of the “Summary Compensation Table” on Page 51.2023 as Base Salary and/or Non-Equity Incentive Plan Compensation.
(2) Amounts listed as Registrant Contributions in this Nonqualified Deferred Compensation Tableto the DCP are also included as part of the Executives’NEOs’ “Total All Other Compensation” in the Summary Compensation Table. 2020 contributions were credited to each of the Executive’s accounts in early 2021.
SCT.
2(3) The Executives direct the investmentaggregate balances as of their Nonqualified Deferred Compensation contributions into various standard investment options offered from a set menu of investment funds. In 2020, the available investment funds included Federated Total Return Bond Fund (FTRBX), Morgan Stanley International Opportunity Portfolio (MNOPX), FMI International Institutional (FMIYX), Goldman Sachs Core Fixed Income Fund (GSFIX), Goldman Sachs Financial Square Government Fund (FGTXX), Janus Henderson Enterprise I (JMGRX), MFS Value Fund I (MEIIX), T. Rowe Price Growth Stock Fund (PRGFX), T. Rowe Price Retirement 2010 (TRPAX), T. Rowe Price Retirement 2020 (TRBRX), T. Rowe Price Retirement 2030 (TRPCX), T. Rowe Price Retirement 2040 (TRPDX), T. Rowe Price Retirement 2050 (TRPMX), T. Rowe Price Retirement 2060 (TRPLX), T. Rowe Price Small-Cap Value Fund I (PRVIX), Vanguard 500 Index Fund Admiral (VFIAX), Vanguard Inflation-Protected Securities Fund Admiral (VAIPX), Vanguard Mid-Cap Value Index Fund Admiral (VMVAX), Vanguard Mid-Cap Index Fund Admiral (VIMAX), Vanguard Short-Term Bond Index Fund Admiral (VBIRX), Vanguard Small Cap Growth Index Fund Admiral (VSGAX), Vanguard Small-Cap Index Fund Admiral (VSMAX), Vanguard Small-Cap Value Index Fund Admiral (VSIAX), Vanguard STAR Fund (VGSTX) and Vanguard Windsor II Fund Admiral (VWNAX).
The Executives may change their individual elections by completing a new election form. Accumulated balances in the Deferred Compensation Plan become payable upon the later of a participant attaining age 62, or the participant’s separation of service from Fulton. Participants in the Deferred Compensation Plan, including the Executives, may elect to receive benefits either in a single, lump sum payment, or in equal monthly or annual installments over a period of not more than twenty (20) years. Participants are permitted to request withdrawals from contributions credited prior to January 1, 2005 and earnings thereon, to defray certain medical expenses or prevent eviction or foreclosure from the participant’s principal residence, and from contributions credited on or after January 1, 2005 and earnings thereon, to alleviate a severe financial hardship due to injury or illness of the participant or the participant’s spouse or dependents, a casualty loss to the participant’s property, imminent foreclosure or eviction from the participant’s primary residence or unpaid funeral expenses for the participant’s spouse or dependents. A discussion of the Deferred Compensation Plan is included on Page 45.
3 Balances include the 2020 contributions made by Fulton and credited to the Executives’ accounts in early 2021. The Aggregate Balances at Last FYEDecember 31, 2023 include the following amounts that previously were reported in the Summary Compensation TableSCT for prior fiscal years:years for Mr. Wenger, a totalMessrs. Myers and McCollom, and Messes. Snyder, Mueller and Chivinski of $704,486; for Mr. McCollom, none;$201,138, $70,107, $74,016, $0, and $35,485, respectively.
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EMPLOYMENT AGREEMENTS, SEVERANCE AND CHANGE IN CONTROL PAYMENTS |
We entered into employment agreements with certain of our employees, including each of our NEOs. Fulton entered into separate employment agreements and change in control agreements with the other NEOs, all effective as of January 1, 2018, except for Mr. Myers, whose agreements were effective January 1, 2023. The employment agreements (individually, an “Employment Agreement,” and collectively, the “Employment Agreements”) and key employee change in control agreements (individually, a total“CIC Agreement,” and collectively, the “CIC Agreements”) with the other NEOs continue until terminated. The Employment Agreements and the CIC Agreements provide for: (i) the receipt of $88,316;base salary, (ii) the participation in Fulton’s incentive bonus programs and (iii) the participation in Fulton’s retirement plans, welfare benefit plans and other benefit programs.
In the event of a reduction in force or position elimination, our NEOs are eligible for Ms. Snyder,severance benefits. These benefits are discussed in the “2023 NEO Change in Control and Termination Table” on page 51 under “Termination Without Cause or for Good Reason – Upon or After a totalChange in Control.”
The Employment Agreements contain confidentiality restrictions and include non-competition and non-solicitation covenants that continue for one year following termination of $24,177;employment. The non-competition and non-solicitation covenants in the Employment Agreements will not apply if the NEO terminates employment for Ms. Chivinski,good reason or if the NEO’s employment is terminated Without Cause (defined below), but a total of $23,309.
separate one year non-solicitation covenant in the CIC Agreement will apply if the termination occurs 90 days prior to or two years following a change in control. The Employment Agreements and the CIC Agreements do not include excise tax gross-up provisions.
POTENTIAL PAYMENTS |
Executive | Voluntary | Termination | Termination | Termination | Termination | Termination |
Termination 2 | Without Cause | Without Cause or | Due to | Due to | Due to | |
or Termination | or for Good | for Good Reason | Retirement 9 | Disability 10 11 | Death 12 13 | |
for Cause 3 | Reason – Before | – Upon or After | ||||
a Change in | a Change in | |||||
Control 4 5 | Control 6 7 8 | |||||
E. Philip Wenger | ||||||
Cash ($) | 0 | 1,048,822 | 3,359,114 | 0 | 1,153,704 | 2,097,644 |
Equity ($) | 0 | 0 | 3,433,515 | 0 | 3,433,515 | 3,433,515 |
Pension/NQDC($) | 0 | 0 | 167,956 | 0 | 0 | 0 |
Perquisites and Benefits($) | 0 | 12,000 | 74,000 | 0 | 18,000 | 0 |
Tax Reimbursement($) | 0 | 0 | 0 | 0 | 0 | 1,342,798 |
TOTAL ($) | 0 | 1,060,822 | 7,034,585 | 0 | 4,605,220 | 6,873,957 |
Mark R. McCollom | ||||||
Cash ($) | 0 | 651,368 | 1,302,736 | 0 | 479,188 | 871,250 |
Equity ($) | 0 | 0 | 1,151,334 | 1,151,334 | 1,151,334 | 1,151,334 |
Pension/NQDC($) | 0 | 0 | 65,137 | 0 | 0 | 0 |
Perquisites and Benefits($) | 0 | 12,000 | 34,000 | 0 | 18,000 | 0 |
Tax Reimbursement($) | 0 | 0 | 0 | 0 | 0 | 557,727 |
TOTAL ($) | 0 | 663,368 | 2,553,207 | 1,151,334 | 1,648,521 | 2,580,311 |
Curtis J. Myers | ||||||
Cash ($) | 0 | 838,835 | 1,677,670 | 0 | 617,100 | 1,122,000 |
Equity ($) | 60,455 | 60,455 | 1,489,422 | 60,455 | 1,489,422 | 1,489,422 |
Pension/NQDC($) | 0 | 0 | 83,884 | 0 | 0 | 0 |
Perquisites and Benefits($) | 0 | 12,000 | 34,000 | 0 | 18,000 | 0 |
Tax Reimbursement($) | 0 | 0 | 0 | 0 | 0 | 718,243 |
TOTAL ($) | 60,455 | 911,290 | 3,284,975 | 60,455 | 2,124,522 | 3,329,665 |
Angela M. Snyder | ||||||
Cash ($) | 0 | 534,223 | 1,068,446 | 0 | 434,088 | 789,250 |
Equity ($) | 0 | 0 | 785,114 | 0 | 785,114 | 785,114 |
Pension/NQDC($) | 0 | 0 | 53,422 | 0 | 0 | 0 |
Perquisites and Benefits($) | 0 | 12,000 | 34,000 | 0 | 18,000 | 0 |
Tax Reimbursement($) | 0 | 0 | 0 | 0 | 0 | 505,235 |
TOTAL ($) | 0 | 546,223 | 1,940,982 | 0 | 1,237,201 | 2,079,599 |
Beth Ann L. Chivinski | ||||||
Cash ($) | 0 | 528,799 | 1,057,598 | 0 | 429,680 | 781,236 |
Equity ($) | 0 | 0 | 761,850 | 0 | 761,850 | 761,850 |
Pension/NQDC($) | 0 | 0 | 52,880 | 0 | 0 | 0 |
Perquisites and Benefits($) | 0 | 12,000 | 34,000 | 0 | 18,000 | 0 |
Tax Reimbursement($) | 0 | 0 | 0 | 0 | 0 | 500,105 |
TOTAL ($) | 0 | 540,799 | 1,906,328 | 0 | 1,209,529 | 2,043,191 |
1 All amounts listed under Equity in this table are the valueSet forth below is a summary of the Executive’s Performance Shares or time-based restricted stock units and vested and “inmaterial terms regarding the money” stock options valued based on the closing pricepotential compensation of Fulton’s common stockNEOs in connection with a termination event or change in control of $12.72 on December 31, 2020, the last trading day of 2020.Fulton.
2Voluntary Termination: Termination. In the event an Executive’sNEO’s employment is voluntarily terminated by the ExecutiveNEO other than for “GoodGood Reason” which is defined in the Employment Agreement and described in footnote 4 below, (defined below), Fulton’s obligations are limited to the payment of the Executive’sNEO’s base salary, through the effective date of the Executive’s termination, together with any applicable expense reimbursements and all accrued and unpaid benefits and vested benefits in accordance with the applicable
employee benefit plans.benefits. No other payments are required, and under the 2013 Plan, unexercisedany unvested time-based restricted stock optionsunits and Performance Shares are forfeited by the Executive asNEO unless the voluntary termination is also a result of voluntary termination. The amount listed under Equity is the value of the Executive’s vested and “in the money” stock options.Retirement.
3Voluntary Termination for Cause: If an Executive’s employment is terminated for “Cause,” Fulton is not obligated to make any further payments to the Executive under the Employment Agreement, other than amounts (including salary, expense reimbursement, etc.) accrued under the Employment Agreements as of the date of such termination. Under the 2013 Plan, unexercised stock options and Performance Shares are forfeited by an Executive terminated for Cause, which is generally defined in the Employment Agreement to include the commission of certain felonies or misdemeanors, use of alcohol or other drugs which interferes with the performance by the Executive of the Executive’s duties, intentional refusal or failure by the Executive to perform duties, or conduct that brings public discredit on, or injures the reputation of, Fulton. The value listed under Equity is the value of the Executive’s vested and “in the money” stock options.
4Termination Without Cause or for Good Reason – Before a Change in Control: or Without Cause. If an ExecutiveNEO terminates the Executive’shis or her employment for “Good Reason”Good Reason or the Executive’sNEO’s employment is terminated by Fulton “WithoutWithout Cause” (defined below), other than in connection with a Change in Control (defined below), the Executive isNEOs are entitled to receive the Executive’sNEO’s base salary for a period of one year, plus any vested and unpaid cash bonus for the prior fiscal year plus a cash bonus for the fiscal year in which the termination date occurs at the target payout level, pro-rated to the date of termination, except that Mr. Myers is entitled to receive his base salary for Mr. Wenger, both the paymenttwo years. The NEO and the amount of the cash bonus shall be at the discretion of the HR Committeehis or her spouse and as approved by Fulton’s Board of Directors. The Executive also would continueeligible dependents are permitted to participate in employee health and other benefit plans for which the ExecutiveNEO is eligible during thethis one-year period. If the ExecutiveFulton is not eligibleunable to continue to participatethe NEO’s participation in any employee benefit plan, the ExecutiveNEO will be compensated on an annual basis, in advance, for such plan in an amount equal to the cost Fulton would have incurred had the ExecutiveNEO been eligible to participate in suchthe plan plus any permitted gross-uptax gross-up. Unvested time-based restricted stock units and Performance Shares are forfeited.
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Termination for Cause. If an NEO’s employment is terminated for Cause, Fulton is not obligated to make any taxes applicable thereto. Under the 2013 Plan, unexercised stock options are forfeited by an Executive terminated Without Cause or for Good Reason. Good Reason is defined in the Employment Agreement to include a breach by Fulton of its material obligations without remedy, a significant change in the Executive’s authority, duties, compensation or benefits, or a relocation of the Executive outside a specified distance from where the Executive previously was based. Without Cause is defined in the Employment Agreement to include any reason other than for Cause.
5 Cash amount listed for each Executive includes a severance payment based on the Executive’s 2020 base salary. The amounts listed under Cash assume no discretionary bonus was paid to Mr. Wenger, but thefurther payments to the NEO, other Executives inthan accrued amounts. Unvested time-based restricted stock units and Performance Shares are forfeited unless the table assume the payment of their VCP Awards for the prior year. Equity amounts listed are the value of unexercised stock options. Perquisites/ Benefits includevoluntary termination is also a monthly estimate of $1,000 for the value of health and other benefit expenses paid by Fulton for the one-year severance period attributed to each Executive.Retirement.
6Termination Without CauseRetirement or for Good Reason – Upon or After a Change in Control: The Executives and other employees have contributed to the building of Fulton into the successful enterprise it is today, and Fulton believes that it is important to protect them inDisability. In the event of a “Change in Control.” Further,an NEO terminates his or her employment due to retirement, Fulton believes thatis obligated to pay the interests of shareholders will be best served ifNEO’s base salary through the interestseffective date of the Executives are alignedNEO’s retirement, together with them,any applicable expense reimbursements and providing Changeall accrued and unpaid benefits and vested benefits. Unvested time-based restricted stock units and Performance Shares vest upon retirement.
Following an NEO’s Disability (defined below), the NEO’s employment would terminate automatically, in Control benefits should eliminate or mitigatewhich event Fulton is not thereafter obligated to make any reluctancefurther payments other than: (i) amounts accrued as of the Executives to pursue potential Change in Control transactions that may be in the best interests of shareholders. The HR Committee has determined that the potential Change in Control benefits it offers the Executives are typical for the financial services industry and reasonable relative to the overall value of Fulton.
A Change in Control with respect to Mr. Wenger is defined in his Employment Agreement to include: the acquisition of the beneficial ownership of more than 50% of the total fair market value or voting power of the stock of Fulton by any one person or group of persons acting in concert; a change in the composition of the Board of Directors of Fulton during any period of 12 consecutive months such that a majority of the Board of Directors is replaced by directors whose appointment or election was not endorsed by a majority of the Board of Directors before such appointment or election; or the acquisition by any person or group of persons acting in concert during any 12 month period of 30% or more of the total voting power of the stock of Fulton, or of 40% or more of the total assets (on a gross fair market value basis) of Fulton.
With respect to the other Executives in the table, a Change in Control is defined in the Employment Agreements to occur when: during any period of not more than 36 months, the individuals that constituted Fulton’s Board of Directors at the beginningdate of such period, with certain exceptions, ceasetermination plus (ii) an amount equal to constitute at least a majority of Fulton’s Board of Directors; beneficial ownership of more than 30% of the outstanding voting power of the stock of Fulton is acquired by any person, with certain exceptions; a merger or consolidation involving Fulton is consummated, unless at least 50% of the voting power of the resulting entity is represented by Fulton voting securities outstanding prior to such merger or consolidation, no person beneficially has the power to vote 30% or more of the voting power of the resulting entity, and at least a majority of the members of the board of directors of the resulting entity were members of Fulton’s Board of Directorssix months’ base salary as in effect immediately prior to the executiondate of the agreement which effectuated such merger or consolidation;Disability. After this six-month salary continuation period, for as long as the sale of all or substantially allNEO continues to be disabled, the NEO will continue to receive at least 60% of the assetsNEO’s base salary until the earlier of the NEO’s death or December 31 of the calendar year in which the NEO is 65. The NEO will also receive those benefits customarily provided by Fulton is consummated; or Fulton’s shareholders approveto disabled former employees, including, but not limited to, life, medical, health, accident insurance and a plan of liquidation or dissolution.survivor’s income benefit. Unvested time-based restricted stock units and Performance Shares vest upon a Disability.
Change in Control. If, during the period beginning 90 days before a Change in Control and ending two years after such Change in Control, an ExecutiveNEO is terminated by Fulton Without Cause or an ExecutiveNEO resigns for Good Reason, Fulton would beis required to pay the ExecutiveNEO two times the sum of the Executive’s:NEO’s: (i) annual base salary immediately before the Change in Control;Control and (ii) the highest annual cash bonus or other incentive compensation awarded to the ExecutiveNEO over the prior three years. The ExecutiveNEO is also would be entitled to receive: (i) an amount equal to that portion of Fulton’s retirement plan,the 401(k) planPlan or deferred compensation planDCP contributions for the ExecutiveNEO which weredid not vested,vest, plus the amount of any federal, state or local income taxes due on such amount;amount, (ii) an amount equivalentequal to two years of Fulton retirement plan contributions to each tax qualified or nonqualified retirement plan in which the ExecutiveNEO was a participant immediately prior to the Executive’sNEO’s termination or resignation;resignation, (iii) payment of up to $10,000 for outplacement services;services and (iv) continuation of other employee welfare benefits for a period of two years.
With respect to Mr. Wenger,Myers, if during the period beginning 90 days before a Change in Control and ending two years after such Change in Control, Mr. Myers is terminated by Fulton Without Cause or he would not be eligibleresigns for Good Reason, Fulton is required to continuepay Mr. Myers three times the sum of Mr. Myers’: (i) annual base salary immediately before the Change in Control and (ii) the average annual cash bonus or other cash incentive compensation awarded to participate in any employee welfare benefit plan, he would be compensated on an annual basis, in advance, for such plan in an amount equal toMr. Myers over the cost Fulton would have incurred, had he been eligible to participate in such plan, plus any permitted gross-up for any taxes applicable thereto. In addition,past three years. Mr. Wenger would beMyers is also entitled to receive continuation ofadditional NEO Change in Control benefits similar to the other executive perquisites, such as club memberships and an employer-provided automobile, for a period of two years. NEOs described above.
The other ExecutivesNEOs are not entitled to receive continuation of other executive perquisites, such as club memberships and employer-provided automobiles, however,but, the other ExecutivesNEOs have the ability to purchase, at book value, any employer-provided automobile used by the ExecutiveNEO at the time of the theirhis or her termination.
Mr. Wenger’s EmploymentDefinitions. The relevant definitions under the CIC Agreement provides that, in the event any payment or distribution by Fulton to or for the benefitare summarized as follows:
· | “Cause” means (i) the NEO’s commitment and act of dishonesty that constitutes a felony and results or intends to result in gain or personal enrichment at the expense of Fulton, (ii) the NEO’s use of alcohol or other drugs which interferes with their performance, (iii) the NEO’s continuing deliberate and intentional refusal or failure to perform the NEO’s duties to Fulton, (iv) the NEO’s participation in conduct that brings public discredit on or injures the reputation of Fulton or (v) the NEO’s legal preclusion of employment. |
· | “Change in Control” means (i) during any period of not more than 36 months, the individuals that constituted the Board at the beginning of such period, with certain exceptions, cease to constitute at least a majority of Fulton’s Board, (ii) beneficial ownership of more than 30% of the outstanding voting power of Fulton common stock is acquired by any person, with certain exceptions, (iii) a merger or consolidation involving Fulton is consummated, unless at least 50% of the voting power of the resulting entity is represented by Fulton voting securities outstanding prior to such merger or consolidation, no person beneficially has the power to vote 30% or more of the voting power of the resulting entity, and at least a majority of the members of the board of directors of the resulting entity |
49
were members of the Board prior to the execution of the agreement which effectuated such merger or consolidation, (iv) the sale of all or substantially all of the assets of Fulton is consummated, or (v) Fulton’s shareholders approve a plan of liquidation or dissolution. |
· | “Disability” means a medically determinable physical or medical impairment that is expected to result in death or to last for at least 12 months and that either renders the NEO unable to engage in any substantial gainful activity or qualifies the NEO for benefits under a Fulton disability plan. |
· | “Good Reason” means (i) a breach by Fulton of its material obligations without remedy, (ii) a significant change in the NEO’s authority, duties, compensation or benefits or (iii) a relocation of the NEO outside a specified distance from where the NEO previously was based. |
· | “Without Cause” means any reason other than for Cause. |
In keeping with Fulton’s objective to offer a competitive contract when they were offered, this provision was included in the Employment Agreements in 2006, but more recent agreements, such as the agreements with the other Executives do not contain a “gross-up provision.” Further, pursuant to the terms of the Employment Agreements for the other Executives, their total payments are reduced to the extent required to avoid a federal excise tax imposed under Section 280G of the Tax Code.
Generally, the 2013 Plan provides for vesting of unvested stock options and time-based restricted stock units upon termination of employment during the 12-month period following a Change in Control. However, with respect to Performance Shares, in the event of a Change in Control, all incomplete performance periods with respect of such Performance Shares in effect on the date the Change in Control occurs shall end on the date of such change, and the HR Committee shallwill: (i) determine the extent to which performance goals with respect to each such performance period for any Performance Shares have been met based upon such audited or unaudited financial information then available as it deems relevant and (ii) cause such portion or all of the Performance Shares to vest with respect to performance goals for each such performance period based upon the HR Committee’s determination of the degree of attainment of performance goals or, if not determinable, the values assume the applicable “target”target levels of performance have been attained.
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2023 NEO CHANGE IN CONTROL AND TERMINATION TABLE |
Potential Payments as of December 31, 2023 | ||||||
NEO | Voluntary Termination or Termination for Cause | Termination Without Cause or for Good Reason – Before a Change in Control(4) | Termination Without Cause or for Good Reason – Upon or After a Change in Control(5) | Termination Due to Retirement(6) | Termination Due to Disability(7) | Termination Due to Death(8) |
Curtis J. Myers | ||||||
Cash ($) | - | 1,232,500 | 3,853,822 | - | 935,000 | 1,700,000 |
Equity ($)(1) | - | - | 2,800,321 | - | 2,800,321 | 2,800,321 |
Pension/NQDC ($)(2) | - | - | 192,691 | - | - | - |
Perquisites and Benefits ($)(3) | - | 12,000 | 34,000 | - | 18,000 | - |
Tax Reimbursement ($) | - | - | - | - | - | 1,088,248 |
TOTAL ($) | - | 1,244,500 | 6,880,834 | - | 3,753,321 | 5,588,569 |
Mark R. McCollom | ||||||
Cash ($) | - | 675,000 | 1,862,619 | - | 550,000 | 1,000,000 |
Equity ($)(1) | - | - | 1,704,078 | - | 1,704,078 | 1,704,078 |
Pension/NQDC ($)(2) | - | - | 93,131 | - | - | - |
Perquisites and Benefits ($)(3) | - | 12,000 | 34,000 | - | 18,000 | - |
Tax Reimbursement ($) | - | - | - | - | - | 640,146 |
TOTAL ($) | - | 687,000 | 3,693,828 | - | 2,272,078 | 3,344,224 |
Angela M. Snyder | ||||||
Cash ($) | - | 675,000 | 1,283,983 | - | 550,000 | 1,000,000 |
Equity ($)(1) | - | - | 1,479,454 | - | 1,479,454 | 1,479,454 |
Pension/NQDC ($)(2) | - | - | 64,199 | - | - | - |
Perquisites and Benefits ($)(3) | - | 12,000 | 34,000 | - | 18,000 | - |
Tax Reimbursement ($) | - | - | - | - | - | 640,164 |
TOTAL ($) | - | 687,000 | 2,861,636 | - | 2,047,454 | 3,119,600 |
Meg R. Mueller | ||||||
Cash ($) | - | 540,491 | 1,534,256 | - | 476,619 | 866,580 |
Equity ($)(1) | - | - | 1,118,715 | - | 1,118,715 | 1,118,715 |
Pension/NQDC ($)(2) | - | - | 76,713 | - | - | - |
Perquisites and Benefits ($)(3) | - | 12,000 | 34,000 | - | 18,000 | - |
Tax Reimbursement ($) | - | - | - | - | - | 554,737 |
TOTAL ($) | - | 552,491 | 2,763,684 | - | 1,613,334 | 2,540,032 |
Beth Ann L. Chivinski | ||||||
Cash ($) | - | 535,003 | 1,518,678 | - | 471,780 | 857,782 |
Equity ($)(1) | - | - | 1,107,363 | - | 1,107,363 | 1,107,363 |
Pension/NQDC ($)(2) | - | - | 75,934 | - | - | - |
Perquisites and Benefits ($)(3) | - | 12,000 | 34,000 | - | 18,000 | - |
Tax Reimbursement ($) | - | - | - | - | - | 549,105 |
TOTAL ($) | - | 547,003 | 2,735,975 | - | 1,597,143 | 2,514,250 |
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7(1) CashAll amounts listed are two times 2020 base salaryunder Equity in this table include: (i) Performance Shares and (ii) unvested time-based restricted stock units valued based on the closing price of Fulton’s common stock on December 29, 2023, accelerated for certain events as appropriate.
(2) The amounts listed under Pension/NQDC represent the aggregate dollar value of year-end and the highest VCP Awards paid for the last three years for each Executive. No cash payments have been reduced to limit a payment pursuantFulton’s contributions to the terms of401(k) Plan, the Executive’s Employment Agreement, which represents the reduction required to avoid a federal excise tax imposition pursuant to the regulations promulgated under Section 280G of the Tax Code.DCP and other retirement benefits.
Equity amount is the value of all “in the money” stock options, unvested time-based stock unit awards and unvested Performance Shares, which would vest as described in the last paragraph of footnote 6 above, as of December 31, 2020.(3) Perquisites and Benefits include, as applicable: (i) $10,000 for outplacement services and (ii) $1,000 per month during the severance period for the estimated value of health and other benefit expensesexpenses.
(4) The cash amount listed for each NEO includes a severance payment based on the NEO’s 2023 base salary. The amounts listed under Cash assume no discretionary bonus paid by Fulton attributed to each Executive,the NEOs and with respect to Mr. Wenger, an additional $20,000 per yearassume the payment of their VCP awards for club memberships, vehiclethe prior year. Perquisites/Benefits include a monthly estimate of $1,000 for the value of health and other benefit expenses paid by Fulton for histhe one-year severance period.
(5) The cash amounts listed are a multiple of 2023 base salary as of December 31, 2023 and the highest VCP Awards paid for the past three years, except for Mr. Myers it is the average annual VCP Award paid for the past three years. The cash payment amounts to Messrs. Myers and McCollom, and Messes. Snyder, Mueller and Chivinski have been reduced in the table by $652,895, $169,243, $496,869, $0 and $0, respectively, to limit a payment required to avoid a federal excise tax imposition under Section 280G of the Tax Code.
8(6) Amount listed under Pension/NQDC represents the aggregate dollar value of Fulton’s contributions to the 401(k) Plan, Nonqualified Deferred Compensation Plan and other retirement benefits as a result of this termination event.
9Termination Due to Retirement: In the event an Executive terminates his employment due to retirement, Fulton is obligated to pay the Executive’s base salary through the effective date of the Executive’s retirement, together with any applicable expense reimbursements and all accrued and unpaid benefits and vested benefits in accordance with the applicable employee benefit plans. In addition, pursuant to the 2013 Plan, in the event an Executive terminates employment due to retirement at the earlier of (i) achieving age 60 with at least 10 years of service to Fulton or any affiliate or (ii) achieving age 62 with at least five years of service to Fulton or any affiliate, unvested stock options and time-based restricted stock units awarded under Fulton’s plans would automatically vest. Pursuant to the 2013 Plan, the Performance Shares do not automatically vest uponawarded in 2021, 2022 and 2023 provide that the continuous service requirement is waived if an NEO is retirement but, subject to revieweligible, and approval by the HR Committee, performance continues to be measured and the shares may vest based on the original vesting schedule according to the performance level actually achieved. AssumingAmounts provided assume that all the ExecutivesNEOs achieved the earlier ofof: (i) age 60 with at least 10 years of service to Fulton or any affiliate or (ii) age 62 with at least five years of service to Fulton or any affiliate and retired as of December 31, 2020.2023.
(7) The Executives would generally have one or two years from the date of retirement, but not beyond the original option expiration date, to exercise their stock options.
10Termination Due to Disability: Following an Executive’s “Disability”, defined in the Employment Agreements to be a medically determinable physical or medical impairment that is expected to result in death or to last for at least 12 months, and that either renders the Executive unable to engage in any substantial gainful activity or qualifies the Executive for benefits under a Fulton disability plan, the employment of the Executive would terminate automatically, in which event Fulton is not thereafter obligated to make any further payments under the Employment Agreement, other than amounts (including salary, expense reimbursement, etc.) accrued as of the date of such termination, plus ancash amount equal to at least six months’ base salary as in effect immediately prior to the date of the Disability. After this six month salary continuation period, for as long as the Executive continues to be disabled, the Executive will continue to receive at least 60% of the Executive’s base salary until the earlier of the Executive’s death or December 31 of the calendar year in which the Executive attains age 65. To the extent it does not duplicate benefits already being provided, an Executive will also receive those benefits customarily provided by Fulton to disabled former employees, which benefits shall include, but are not limited to, life, medical, health, accident insurance and a survivor’s income benefit.
11 Cash amount for all the Executives isrepresents six months at fullbase salary thenfollowed by 12 months at 60% of salary forbase salary. In the event an assumed period of 12 months. PerquisitesNEO terminates employment due to Disability, Performance Shares and Benefits include a monthly estimate of $1,000 for the value of health and other benefit expenses paid by Fulton for an assumed period of 18 months. Equity amount is the value of all “in the money” options,unvested time-based restricted stock units and Performance Shares, which would vest as described in the last paragraph of footnote 6 above. In the event an Executive terminates employment due to disability, unvested options, Performance Shares and time-based restricted stock units awarded under Fulton’s option plans would automatically vest. The Executives would have one year from the date of disability, but not beyond the original option expiration date, to exercise stock options.
12(8) Termination Due to Death: In the event of a termination of employment as a result of an Executive’sNEO’s death, the Executive’sNEO’s dependents, beneficiaries or estate, as the case may be, would receive such survivor’s income and other benefits as they may be entitled to under the terms of Fulton’s benefit programs, which includesincluding the Life Insurancelife insurance benefit of twicetwo times base salary amount plus a tax reimbursement due as a result of the payment under the Death Benefits“Death Benefits” described on Page 46.
13page 40. In the event an Executive terminates employment due to death,addition, unvested options, Performance Shares and time-based restricted stock units awarded under Fulton’s option plans would automatically vest, withand Performance Shares vesting as described in the last paragraph of footnote 6 above. The estate of the Executive would have one year from the date of death to, but not beyond the original option expiration date, to exercise stock options.automatically vest.
As required byPay Versus Performance Disclosure
Pursuant to Section 953(b)953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u)402(v) of Regulation S-K, Fulton is providing the following information about the ratiorelationship between executive compensation actually paid (“CAP”) to Fulton’s principal executive officer (“PEO”) and non-PEO named executive officers (the “Non-PEO NEOs”) and certain aspects of the annualfinancial performance of Fulton. The HR Committee does not utilize CAP as the basis for making compensation decisions. Please see the CD&A with respect to our compensation philosophy and how we align executive compensation with our performance.
Pay Versus Performance Table | ||||||||
Year(1) | Summary Compensation Table Total for PEO(2) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(3) | Value of Initial Fixed $100 Investment Based on:(4) | Net Income (GAAP)(6) | Company Selected Metric: Adjusted EPS(7) | |
TSR | Peer Group TSR(5) | |||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
2023 | $2,309,440 | $2,862,798 | $999,817 | $1,196,969 | $111.02 | $95.12 | $284 | $1.70 |
2022 | $4,923,557 | $5,537,243 | $1,541,616 | $1,675,245 | $108.96 | $101.92 | $287 | $1.76 |
2021 | $4,207,894 | $5,365,077 | $1,395,455 | $1,745,204 | $106.37 | $124.84 | $275 | $1.62 |
2020 | $3,084,495 | $2,225,418 | $1,082,224 | $821,870 | $76.52 | $89.37 | $178 | $1.08 |
_________________________
(1)Mr. Myers served as the PEO for the entirety of 2023. Mr. Wenger served as the PEO for the entirety of 2022, 2021 and 2020 and our Non-PEO NEOs for the applicable years were as follows:
• | 2023: Mark R. McCollom, Angela M. Snyder, Meg R. Mueller and Beth Ann L. Chivinski; |
• | 2022: Curtis J. Myers, Mark R. McCollom, Angela M. Snyder and Natasha R. Luddington; |
• | 2021: Curtis J. Myers, Mark R. McCollom, Angela M. Snyder and Meg R. Mueller; and |
• | 2020: Curtis J. Myers, Mark R. McCollom, Angela M. Snyder and Beth Ann L. Chivinski. |
(2) Amounts reported in these columns represent: (i) the total compensation paid to our “median employee,”reported in the SCT for the applicable year for the PEO and (ii) the annualaverage of the total compensation of Mr. Wenger (our “CEO”),reported in the SCT for the applicable year endedfor our Non-PEO NEOs.
(3) Amounts reported in these columns represent CAP. Adjustments were made to the amounts reported in the SCT for the applicable year. A reconciliation of the adjustments for the applicable PEO and for the average of the Non-PEO NEOs is set forth in the following table.
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2023 | 2022 | 2021 | 2020 | |||||
PEO Myers | Average Non-PEO NEOs | PEO Wenger | Average Non-PEO NEOs | PEO Wenger | Average Non-PEO NEOs | PEO Wenger | Average Non-PEO NEOs | |
Summary Compensation Table Total | $2,309,440 | $999,817 | $4,923,557 | $1,541,616 | $4,207,894 | $1,395,455 | $3,084,495 | $1,082,224 |
Less Stock Award Value & Option Award Value Reported in SCT for the Covered Year | $954,757 | $379,503 | $2,076,061 | $462,213 | $1,305,528 | $395,464 | $1,292,385 | $393,958 |
Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Covered Year | $1,616,090 | $642,375 | $2,517,933 | $552,934 | $1,335,263 | $404,470 | $1,423,841 | $434,250 |
Plus Year over Year Change in Fair Value as of the Last Day of the Covered Year of Outstanding and Unvested Equity Awards Granted in Prior Years | $191,243 | $111,252 | $233,715 | $57,715 | $944,182 | $285,212 | ($901,359) | ($267,705) |
Plus Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | - | - | - | - | - | - | - | - |
Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested During the Covered Year | ($299,218) | ($176,972) | ($61,901) | ($14,807) | $183,267 | $55,530 | ($89,174) | ($32,941) |
Minus Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year | - | - | - | - | - | - | - | - |
Plus Value of Dividends or other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation for the Covered Year | - | - | - | - | - | - | - | - |
Compensation Actually Paid | $2,862,798 | $1,196,969 | $5,537,243 | $1,675,245 | $5,365,077 | $1,745,204 | $2,225,418 | $821,870 |
In the table above, the unvested equity values are computed in accordance with ASC Topic 718. For unvested awards subject to performance-based vesting conditions, the equity value is determined based on the probable outcome of such performance-based vesting conditions as of the last day of the covered year.
(4) TSR is cumulative for the measurement periods beginning on December 31, 2020.2019 and ending on December 31 of each of 2023, 2022, 2021 and 2020, respectively, calculated in accordance with Item 201(e) of Regulation S-K.
For 2020,(5) Peer Group total shareholder return (“Peer Group TSR”) represents the median employee that wasNasdaq Bank Index, which is used by Fulton for purposes of calculating the 2020 ratiocompliance with Item 201(e) of the annual total compensation of our CEO to the median of the annual total compensation of all employeesRegulation S-K.
(6) Amounts in millions.
(7)Adjusted EPS is a new employee that was identifiedFulton selected measure. Values shown reflect EPS as calculated for purposes of our 2020 pay ratio disclosure. Asexecutive compensation program for the applicable reporting year as set forth in detail under “Non-GAAP Reconciliations” in Annex A to this Proxy Statement. No adjustments to EPS were made for 2021 and 2020.
Performance Measures Used to Link Company Performance and CAP
The following is a list of December 31, 2020,performance measures that represent the most important performance measures used by Fulton to identifylink 2023 CAP to the 2020 median employee from our employee population at that time, we comparedNEOs:
• | Adjusted EPS; |
• | Adjusted ROE; and |
• | Adjusted Operating Expenses/Average Assets. |
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PAY VERSUS PERFORMANCE CHARTS |
Relationship between CAP and Net Income. The graph below illustrates the relationship between Net Income and CAP for the PEO and average Non-PEO NEOs.
Relationship between CAP and Adjusted EPS. The graph below illustrates the relationship between Fulton’s Adjusted EPS and CAP for the PEO and average Non-PEO NEOs.
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PROPOSAL 3 – RATIFICATION OF INDEPENDENT AUDITOR |
Proposal
Fulton’s Audit Committee selected KPMG to continue as Fulton’s independent auditor for the fiscal year but were still employed as ofending December 31, 2020.
For the 2020 pay ratio, once we identified our median employee as described above, we combined all2024. Although shareholder approval of the elementsselection of such employee’s compensation for 2020KPMG is not required by our organizational documents, the Board believes that it is advisable to allow our shareholders an opportunity to ratify this selection as it is consistent with sound corporate governance practices.
If Fulton’s shareholders do not approve this proposal at the requirementsAnnual Meeting, then the Audit Committee may consider the appointment of Item 402(c)(2)(x)another independent auditor, but it is not required to do so.
Representatives of Regulation S-K. With respect toKPMG will be present at the annual total compensation of our CEO, the same processAnnual Meeting and amount reported in the “Total” column of our 2020 Summary Compensation Table included in this Proxy Statement on Page 51 was used.
The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies maywill have different employment and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the “Dodd-Frank Act,” Fulton is providing its shareholders with the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.
The Board unanimously recommends that shareholders vote “FOR” the ratification of the appointment of KPMG as Fulton’s independent auditor for the fiscal year ending December 31, 2024. |
Vote Required
The affirmative vote of a majority of the shares for which votes are cast on an advisory (non-binding) resolutionthe proposal at the 2021 Annual Meeting is needed to approve the compensation of Fulton’s named executive officers for 2020 as described in the Compensation Discussion and Analysis, and the tabular disclosures of the Named Executive Officers’ compensation (“Compensation Tables”) in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” Proposal, gives shareholders the opportunity to endorse or not endorse Fulton’s Executive pay program. At Fulton’s 2020 Annual Meeting, Fulton presented a similar proposal to its shareholders, and approximately 97.45% of the shareholders who cast a vote on this proposal voted in favor of, and approved, Fulton’s Say-on-Pay proposal. The HR Committee considered the number of votes cast in favor of Fulton’s prior Say-on-Pay proposal to be a positive endorsement of Fulton’s current pay programs and practices. Fulton will continue to monitor the level of support for each Say-on-Pay proposal. However, because the shareholder vote is not binding, the outcome of this year’s vote, or any future vote, may not be construed as overruling any decision by Fulton’s Board of Directors or HR Committee regarding executive compensation. Fulton is providing shareholders with this opportunity pursuant to section 14A of the Securities Exchange Act (15 U.S.C. 78n-1).
At Fulton’s Annual Meeting in 2017, Fulton submitted to shareholders a non-binding proposal, asking shareholders whether Fulton should submit its Say-on-Pay proposal to shareholders every one (1), two (2) or three (3) years. This type of proposal is commonly known as a “Say-When-on-Pay” proposal, and under current SEC rules, is required to be presented to shareholders no less frequently than once every six (6) years. The shareholders approved Fulton’s recommendation that the Say-on-Pay proposal should be submitted to shareholders on an annual basis. Although Fulton believes that having an annual Say-on-Pay vote is appropriate, Fulton’s HR Committee and Board of Directors will continue to evaluate the frequency of the non-binding Say-on-Pay proposal and might recommend that shareholders approve a different frequency in the future. Fulton intends to submit a new Say-When-on-Pay proposal to shareholders on or before the Fulton Annual Meeting in 2023.
As further described in the “Compensation Discussion and Analysis” section of this Proxy Statement, starting on Page 29, Fulton’s executive compensation philosophy and program are intended to achieve three (3) objectives: (i) align interests of the Executives with shareholder interests; (ii) link the Executives’ pay to performance; and (iii) attract, motivate and retain executive talent. Fulton’s Executive compensation program currently includes a mix of base salary, incentive bonus, equity-based plans, retirement plans, health plans and other benefits. Fulton believes that its compensation program, policies and procedures are reasonable and appropriate and compare favorably with the compensation programs, policies and procedures of its peers.
The Board of Directors recommends that shareholders, in a non-binding proposal, vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to Fulton’s Named Executive Officers for 2020, as disclosed in this Proxy Statement pursuant to Item 402 of SEC Regulation S-K, including the Compensation Discussion and Analysis and the Compensation Tables contained in this Proxy Statement, is hereby APPROVED.”
Approval of the non-binding resolution regarding the compensation of the Named Executive Officers would require that the number of votes cast in favor of the proposal exceed the number of votes cast against it. Abstentions and broker non-votes will not be counted as votes cast and, therefore, will not affect this proposal. Further, the determination asfailure to whether the proposal is approved.
Because your vote, is advisory, iteither by proxy or in person, will not have an effect on this proposal. Unless instructions to the contrary are specified in a proxy properly voted and returned through available channels, the proxies will be binding upon Fulton. However, Fulton’s HR Committee and Board of Directors will take into account the outcome of the vote when considering future Executive compensation arrangements, but no determination has been made as to what action, if any, the HR Committee or Board of Directors might take if shareholders do not approvevoted “FOR” this advisory proposal.
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Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR the non-binding resolution to approve the compensation of the Named Executive Officers for 2020.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS |
Independent Auditor
On February 20, 2024, Fulton’s Audit Committee approved the appointment of KPMG for the fiscal year ended December 31, 2024. The Audit Committee carefully considered KPMG’s qualifications and the services requiring independence. The Audit Committee determined that such services did not impair the independence of KPMG.
Fees
For the years ended December 31, 20202023 and December 31, 2019,2022, Fulton engaged KPMG, LLP (“KPMG”), independent registered public accountants, to audit Fulton’s financial statements. KPMG has served as Fulton’s independent auditor since 2002. The fees incurred for services rendered by KPMG for the years ended December 31, 20202023 and 20192022 are summarized in the following table:
Services and Fees | 2023 | 2022 |
Audit Fees – Annual Audit and Quarterly Reviews(1) | $2,275,000 | $2,570,000 |
Audit Fees – Issuance of Consents | 70,000 | 25,000 |
Audit Fees – Statutory Audit | 61,000 | 58,000 |
Audit Fees Subtotal | 2,406,000 | 2,653,000 |
Audit-Related Fees – Attestation | 154,000 | - |
Tax Fees | 63,000 | 60,000 |
All Other Fees | - | - |
TOTAL | $2,623,000 | $2,713,000 |
Services and Fees | 2020 | 2019 |
Audit Fees – Annual Audit and Quarterly Reviews 1 | $1,725,000 | $2,357,500 |
Audit Fees – Issuance of Comfort Letters and Consents | 300,000 | 440,000 |
Audit Fees – Statutory Audit | 52,000 | 52,000 |
Audit Fees Subtotal | 2,077,000 | 2,849,500 |
Audit Related Fees 2 | – | – |
Tax Fees 3 | 63,225 | 65,894 |
All Other Fees | – | – |
TOTAL | $2,140,225 | $2,915,394 |
1(1) Amounts presented for 2020 are based upon the audit engagement letter and additional fees paid. FinalWe do not anticipate final billings for 2020 may differ.to differ significantly from the amounts presented above.
2Audit Fees paid for a required agreed-upon procedures report. Fees related to student lending and auditsthe integrated audit of Fulton’s annual financial statements for the years ended December 31, 2023 and 2022, and for the reviews of certain employee benefits plans.the financial statements included in Fulton’s quarterly reports on Form 10-Q and 10-K for 2023 and 2022.
Audit-Related Fees. Audit related fees for 2023 relate to attestation engagements. There were no audit-related fees for 2022.
3Tax Fees. Tax fees were paid for tax services relating to federal and state tax matters.
All Other Fees. There were no other fees for 2023 or 2022.
The appointment of KPMG for the fiscal year ended December 31, 2021 was approved by the Audit Committee of the Board of Directors of Fulton at a meeting on February 23, 2021. Representatives of KPMG are expected to be present at the 2021 Annual Meeting with the opportunity to make a statementPre-Approval Policies and will be available to respond to appropriate questions.
Procedures
The Audit Committee has carefully considered whether the provision of the non-audit services described above, which were performed by KPMG in 2020 and 2019, would be incompatible with maintaining the independence of KPMG in performing its audit services and has determined that, in its judgment, the independence of KPMG has not been compromised.
Allpre-approved all fees paid to KPMG in 20202023 and 2019 were pre-approved by the Audit Committee.2022. The Audit Committee pre-approves all auditing and permitted non-auditing services, including the fees and terms thereof, to be performed by its independent auditor,KPMG, subject to the de minimusminimis exceptions for non-auditing services permitted by the Exchange Act. However, these types of services are approved prior to completion of the services. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members, when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services. Any decisions of such subcommittees to grant pre-approvals are presented to the full Audit Committee for ratification at its next scheduled meeting.
Based on its review and discussion of the audited 2020 financial statements of Fulton with management and KPMG, the Audit Committee recommended to the Board of Directors that the financial statements be included in the Annual Report on Form 10-K for filingthe year ended December 31, 2023.
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AUDIT COMMITTEE REPORT |
The Audit Committee reviewed and discussed with management Fulton’s audited financial statements as of, and for the SEC. A copyyear ended, December 31, 2023.
The Audit Committee discussed with representatives of KPMG, Fulton’s independent auditor, the matters required to be discussed by the applicable requirements of the report ofPublic Company Accounting Oversight Board (“PCAOB”) and the SEC.
The Audit Committee received, reviewed and discussed with KPMG the written disclosures and the letter from the independent auditor required by applicable PCAOB requirements regarding the independent auditor’s communications.
Based on the reviews and discussions referred to above, the Audit Committee of its findings that resulted from its financial reporting oversight responsibilities is attached as Exhibit A.
Fulton’s Audit Committee has selected the firm of KPMGrecommended to continue as Fulton’s independent auditor for the fiscal year ending December 31, 2021. Although shareholder approval of the selection of KPMG is not required by law, the Board of Directors believes that it is advisable to give shareholders an opportunity to ratify this selection as it is a common practice among other publicly traded companies and consistent with sound corporate governance practices. Assuming the presence of a quorum at the Annual Meeting, the affirmative vote of the majority of the votes cast is required to ratify the appointment of KPMG as Fulton’s independent auditor for the fiscal year ending December 31, 2021.
If Fulton’s shareholders do not approve this proposal at the 2021 Annual Meeting, the Audit Committee will consider the results of the shareholder vote on this proposal when selecting an independent auditor for 2022. However, no determination has been made as to what other specific action, if any, the Audit Committee would take if shareholders do not ratify the appointment of KPMG at the 2021 Annual Meeting.
KPMG has conducted the audit of theaudited consolidated financial statements of Fulton and its subsidiaries for the years ended December 31, 2002 through December 31, 2020. Representatives of KPMG are expected to2023 be present at the meeting, will be given an opportunity to make a statement if they desire to do so, and will be available to answer appropriate questions from shareholders.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR ratification of the appointment of KPMG LLP as Fulton’s independent auditor for the fiscal year ending December 31, 2021.
A copy ofincluded in Fulton’s Annual Report on Form 10-K for the year-endedyear ended December 31, 2020, as filed2023.
Denise L. Devine, Chair
Antoinette M. Pergolin, Vice Chair
James R. Moxley III
Ronald H. Spair
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MEETING AND OTHER INFORMATION |
Date, Time and Place of the Annual Meeting
The Annual Meeting will be held Monday, May 20, 2024, at 10:00 a.m. eastern time at the Lancaster Marriott at Penn Square, 25 South Queen Street, Lancaster, Pennsylvania 17603. To vote at the Annual Meeting, please go to www.proxyvote.com.
Registered and beneficial shareholders may choose to attend the Annual Meeting in person. Each person attending the Annual Meeting must bring his or her proof of ownership and a valid photo identification.
Notice of Internet Availability of Proxy Materials
In accordance with rules adopted by the SEC, except for shareholders who have requested otherwise, we have generally mailed to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”). The Notice of Internet Availability provides instructions either for accessing our proxy materials, including financial statements, is available without chargethe Notice of Annual Meeting of Shareholders (the “Notice”) and Proxy Statement, the 2023 Annual Report to shareholders upon written request addressed to the Corporate Secretary: Fulton Financial Corporation, Attention Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, Pennsylvania 17604.
The FultonShareholders, which includes our Annual Report on Form 10-K for year-endedthe year ended December 31, 2020 and this 2023 (collectively, the “Proxy Statement are posted and available on Fulton’sMaterials”), at the website at www.fult.com. Copiesaddress referred to in the Notice of Internet Availability or for requesting printed copies of the current governance documentsProxy Materials by mail or electronically. If you would like to receive a paper or electronic copy of our Proxy Materials for this Annual Meeting or for future meetings, you should follow the instructions for requesting such materials included in the Notice.
The Board provided the Notice and future updates, including but not limitedis making the Proxy Materials available to you in connection with the Fulton CodeAnnual Meeting. As a shareholder of Conduct, Audit Committee Charter, HR Committee Charter, Nominatingrecord on the Record Date, you are invited to attend the Annual Meeting and Corporate Governance Committee Charter, Risk Committee Charterare entitled to, and Fulton’s Governance Guidelines, are also posted and availablerequested to, vote on Fulton’s website at www.fult.com. The contents of Fulton’s website are not incorporated into this Proxy Statement by provision of this link, or other linksthe proposals described in this Proxy Statement.
Information Contained in Proxy Statement
The information relates to the proposals to be voted on at the Annual Meeting, the voting process, compensation of our directors and most highly paid executives, and certain other required information.
Shareholders Eligible to Vote and Attend the Annual Meeting
Only those shareholders of record at the close of business on the Record Date will be entitled to receive notice of, attend and vote at the Annual Meeting.
Attendance at the Annual Meeting will be limited to shareholders of record at the close of business on the Record Date.
Shares Eligible to be Voted
At the close of business on the Record Date, Fulton had 162,025,005 shares of common stock outstanding and entitled to vote.
Vote Required
The vote required for each proposal presented at the Annual Meeting and the effect of uninstructed shares and abstentions on each proposal is as follows:
Proposal | Vote Requirement | Effect of Abstentions | Effect of Broker Non-Votes | You May Vote | |
1. | Election of Directors | Highest number of votes cast | No effect | No effect | For or Withhold |
2. | Advisory vote on executive compensation | Majority of the votes cast | No effect | No effect | For, Against or Abstain |
3. | Ratification of independent auditor | Majority of the votes cast | No effect | No effect | For, Against or Abstain |
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HouseholdingQuorum Requirement
The holders of a majority of Fulton’s outstanding shares of common stock must be present in person or by proxy at the Annual Meeting to constitute a quorum. Abstentions and broker non-votes (i.e., proxies from banks, brokers or other nominees) will be counted as being present for purposes of determining a quorum. Proxies returned without voting instructions will not be counted for purposes of determining a quorum.
A majority of the votes cast at a meeting at which a quorum is present is required in order to approve any matter submitted to a vote of the shareholders except for: (i) the election of directors, in which the director nominees receiving the highest number of votes “for” will be elected, or (ii) in cases where the vote of a greater number of shares is required by law or under Fulton’s Articles of Incorporation or Bylaws, each share is entitled to one vote on all matters submitted to a vote of the shareholders.
Broker Non-Votes
If a broker indicates on the proxy card that it does not have authority to vote certain shares held in “street name,” the shares not voted are referred to as “broker non-votes.” Broker non-votes occur when brokers do not have discretionary voting authority to vote certain shares held in “street name” on particular proposals, and the “beneficial owner” of those shares has not instructed the broker how to vote on those proposals. If you are a beneficial owner and you do not provide instructions to your broker, bank or other nominee, your broker, bank or other nominee is permitted to vote your shares for or against “routine” matters such as Proposal 3. All of the matters on which shareholders will be asked to vote on at the Annual Meeting, with the exception of Proposal 3, are “non-routine” matters. Broker non-votes will not be counted as votes cast and will have no effect on the voting of non-routine matters.
How to Vote
There are several ways to vote your shares:
• | By mail. If you received printed Proxy Materials, you may submit your proxy card by completing, signing and dating each proxy card received and returning it in the prepaid envelope. Proxy cards submitted by mail must be received no later than 11:59 p.m. eastern time on May 19, 2024 to be voted at the Annual Meeting; |
• | By mobile device. Scan the QR code; |
• | By telephone. Instructions are shown on your proxy card or Notice; |
• | Via the Internet. Instructions are shown on your proxy card or Notice; and |
• | At the Annual Meeting. You may vote your shares at the Annual Meeting by casting a ballot or voting online by following the instructions on the Proxy Materials sent to you. |
If you are a beneficial owner of Fulton common stock, you should receive the Notice or voting instructions from your broker or other nominee holding your shares. In accordance with the rules of the SEC, unless a shareholder elected to receive a paper copy of Fulton’s Proxy Materials, Fulton is furnishing Proxy Materials to Fulton’s shareholders via the Internet at www.proxyvote.com. Electronic delivery expedites the receipt of proxy materials, significantly lowers costs, and helps us conserve natural resources. If you hold shares in “street name” or “nominee name” with a bank or broker, then you should instruct your bank or broker how to vote your shares and follow the voting procedures required by your bank or broker to vote your shares.
If you submit a proxy card properly voted and returned through available channels without giving specific voting instructions, the proxies will vote the shares as recommended by the Board.
Revoking or Changing Your Vote
The execution and return of the enclosed proxy card, or voting by another method, will not affect a shareholder’s right to attend, and vote at, the Annual Meeting. A shareholder may revoke his or her proxy before it is counted at the Annual Meeting by: (i) delivering written notice to the Corporate Secretary, (ii) sending a new proxy card before his or her shares are voted at the Annual Meeting or (iii) voting by another method before the deadline set forth on the proxy card. Unless revoked, any proxy given pursuant to this solicitation will be voted at the Annual Meeting in accordance with the shareholder’s written instructions.
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Only one (1)The Cost of the Proxy Solicitation
This Proxy Statement is being delivered to multiple security holders sharing an address unlessfurnished in connection with the solicitation of proxies. Fulton is making this solicitation and will pay the cost of preparing, assembling, printing, mailing and distributing Proxy Materials and soliciting votes for the Annual Meeting. The solicitation of proxies or votes may be made in person, by mail, mobile device, telephone or by electronic communication by Fulton’s directors, officers and employees who will not receive any compensation for such solicitation activities. Fulton will reimburse brokers and other nominees for costs incurred by them in mailing Proxy Materials in accordance with applicable laws. Fulton has received contrary instructions from one or moreengaged Alliance Advisors to assist in the solicitation of the security holders. Fulton will promptly deliver, upon written or oral request, a separate copy of this Proxy Statement to a security holderproxies at a shared addresscost of approximately $8,000, plus reimbursement for reasonable out-of-pocket expenses.
How to which a single copyObtain Fulton’s Corporate Governance Information
Our corporate governance information is available on our website at www.fultonbank.com under the “Investor Relations” section. Our shareholders may also obtain written copies of the document was delivered. Such a request should be made to the Corporate Secretary: Fulton Financial Corporation, Attention Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, Pennsylvania 17604, (717) 291-2411. Requests to receive a separate mailing for future Proxy Statements or to limit multiple copies to the same address should be made orally or inour materials at no cost by writing to the Corporate Secretary at the foregoing address or phone number.One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604.
Sign Up for Electronic Delivery
If you would like to save paper and reduce the costs incurred by Fultonwe incur in printing and mailing proxy materials,Proxy Materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please go to www.proxyvote.com and have yourfollow the instructions.
COMPANY DOCUMENTS AND OTHER MATTERS |
Shareholder Proposals
Shareholder proposals intended to be considered for inclusion in Fulton’s proxy statement for the 2025 Annual Meeting must be received by Fulton’s Corporate Secretary at One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604 no later than December 2, 2024, 120 calendar days prior to the anniversary date that this Proxy Statement is released to shareholders in connection with the Annual Meeting, and must satisfy the other requirements of Rule 14a-8 under the Exchange Act regarding the inclusion of shareholder proposals in company-sponsored proxy materials.
Shareholder proposals to be considered at the 2025 Annual Meeting but not included in our Proxy Materials must be received by our Corporate Secretary no later than February 20, 2025 to be considered timely.
Procedure for Shareholder Nominations
Our Bylaws permit shareholders to nominate directors for consideration at an annual meeting. To nominate a director for consideration at an annual meeting (but not for inclusion in our proxy statement), a nominating shareholder must provide the information required by our Bylaws and give timely notice of the nomination to Fulton’s Corporate Secretary in accordance with our Bylaws, and each nominee must meet the qualifications required by our Bylaws. To nominate a director for consideration at the 2025 Annual Meeting, the notice must be received by Fulton’s Corporate Secretary no later than December 2, 2024, 120 days prior to the date that this Proxy Statement is released to shareholders in connection with the Annual Meeting, unless the date of the 2025 Annual Meeting is changed by more than 30 days from May 20, 2025, the one-year anniversary of Fulton’s Annual Meeting, in which case the proposal must be received a reasonable time before Fulton begins to print and send our Proxy Materials.
In addition, SEC Rule 14a-19 requires inclusion on our proxy card of all nominees for director for whom we have received notice under the rule, which must be received no later than 60 calendar days prior to the first anniversary of the preceding year’s annual meeting. For the proxy card relating to the 2025 Annual Meeting, notice must be received by Fulton’s Corporate Secretary of a shareholder’s intent to solicit proxies and control numberthe names of their nominees no later than March 21, 2025 for the 2025 Annual Meeting. Such notice must comply with the requirements set forth in hand when you accessour Bylaws and the additional requirements of Rule 14a-19(b).
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Annual Report
A copy of our Annual Report, including the financial statements and schedules, is available without charge to shareholders on our website at www.fultonbank.com in the “Investor Relations” section, from the website then followwww.proxyvote.com, from the SEC at its website at www.sec.gov and upon written request addressed to the Corporate Secretary: Fulton Financial Corporation, Attention Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, Pennsylvania 17604.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery requirements for annual reports, proxy statements, and Notices of Internet Availability with respect to two or more shareholders sharing the same address by delivering a single annual report, proxy statement, and Notice of Internet Availability addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. Only one Proxy Statement is being delivered to multiple shareholders sharing an address unless we receive contrary instructions at www.proxyvote.com to obtain your recordsfrom one or more of the shareholders. If you are eligible for householding and to create an electronic voting instruction form. Follow the instructions for voting by Internet and, when prompted, indicate that you agreewish to receive one copy for all eligible shareholders in your household, or access shareholder communications electronically in future years.if you are receiving multiple copies of this Proxy Statement and wish to receive only one, then you may make a written request to the Corporate Secretary: Fulton Financial Corporation, Attention Corporate Secretary, P.O. Box 4887, One Penn Square, Lancaster, Pennsylvania 17604.
Table of ContentsOther Matters
The Board of Directors of Fulton knows of no matters other than those discussed in this Proxy Statement, whichbusiness that will be presented for consideration at the Annual Meeting. However, if anyMeeting other than as stated in the Notice. If, however, other matters are properly brought before the meeting, anyAnnual Meeting, it is the intention of the persons named in the accompanying proxy given pursuant to this solicitation will be votedvote the shares represented thereby on such matters in accordance with the recommendations of the Board of Directors of Fulton.his or her best judgment.
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BY ORDER OF THE BOARD OF DIRECTORS
Lancaster, PennsylvaniaApril 1, 2021
Annex A
Fulton uses certain financial measures in this Proxy Statement that have been derived from methods other than GAAP to provide meaningful supplemental information regarding its operational performance and to enhance the overall understanding of such financial performance. The non-GAAP measures used herein include Adjusted EPS, Adjusted ROE and Adjusted Operating Expense/Average Assets.
February 23, 2021
ToFulton has presented these non-GAAP financial measures because Fulton’s management believes that these measures provide useful and comparative information to assess trends in Fulton’s results of operations. Presentation of these non-GAAP financial measures is consistent with how Fulton evaluates its performance internally, and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the Boardevaluation of Directorscompanies in our industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate Fulton’s results. Shareholders should recognize that Fulton’s presentation of Fulton Financial Corporation:
We have reviewedthese non-GAAP financial measures might not be comparable to similarly-titled measures of other companies, and discussed with management Fulton Financial Corporation’s auditedthat these non-GAAP financial statementsmeasures should not be considered a substitute for GAAP-basis measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure are set forth below:
2023 | 2022 | ||
Adjusted net income available to common shareholders | |||
Net income available to common shareholders | 274,032,000 | 276,733,000 | |
Plus: Merger-related expenses | - | 10,328,000 | |
Plus: Current Expected Credit Losses (“CECL”) day 1 provision expense(1) | - | 7,954,000 | |
Plus: Interest rate derivative transition valuation(2) | 1,855,000 | - | |
Plus: Federal Deposit Insurance Corporation (“FDIC”) special assessment | 6,494,000 | - | |
Plus: FultonFirst Initiative | 3,197,000 | - | |
Less: Tax impact of adjustments | (2,424,660) | (3,839,220) | |
Adjusted net income available to common shareholders (numerator) | 283,153,340 | 291,175,780 | |
Weighted average shares (diluted) (denominator) | 166,769,000 | 165,472,000 | |
Adjusted net income available to common shareholders, per share (diluted) | $1.698 | $1.760 | |
2023 | 2022 | ||
Adjusted return on common shareholders’ equity | |||
Net income available to common shareholders | 274,032,000 | 276,733,000 | |
Plus: Merger-related expenses | - | 10,328,000 | |
Plus: CECL day 1 provision expense(1) | - | 7,954,000 | |
Plus: Interest rate derivative transition valuation(2) | 1,855,000 | - | |
Plus: FDIC Special Assessment | 6,494,000 | - | |
Plus: FultonFirst Initiative | 3,197,000 | - | |
Less: Tax impact of adjustments | (2,424,660) | (3,839,220) | |
Adjusted net income available to common shareholders (numerator) | 283,153,340 | 291,175,780 | |
Average shareholders’ equity | 2,631,249,000 | 2,560,323,000 | |
Less: Average preferred stock | (192,878,000) | (192,878,000) | |
2,438,371,000 | 2,367,445,000 | ||
Adjusted return on common shareholders’ equity | 11.612% | 12.299% |
(1) Initial provision for credit losses required on non-purchased credit deteriorated loans acquired in the acquisition by the Company of Prudential Bancorp effective as of and for the year ended, December 31, 2020.July 1, 2022.
We have discussed with representatives of KPMG LLP, Fulton Financial Corporation’s independent auditor, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission.
We have received and reviewed the written disclosures and the letter(2) Resulting from the independent auditor required byreference rate transition from the PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, as amended, by the PCAOB, and have discussed with the auditor the auditor’s independence.
Based on the reviews and discussions referred to above, we recommendLondon Inter-Bank Offered Rate to the Board of Directors thatSecured Overnight Financing Rate in the financial statements referred to above be included in Fulton Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020.Company’s commercial customer interest rate swap program.
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Ronald H. Spair, ChairDenise L. Devine, Vice ChairSteven S. EtterGeorge W. HodgesErnest J. Waters
2023 | 2022 | ||
Adjusted operating expense/average assets | |||
Noninterest expenses | 679,207,000 | 633,728,000 | |
Less: Merger-related expenses | - | (10,328,000) | |
Less: CECL day 1 provision expense(1) | - | (7,954,000) | |
Less: FDIC special assessment | (6,494,000) | - | |
Less: FultonFirst initiative expenses | (3,197,000) | - | |
Adjusted non-interest expenses | 669,516,000 | 615,446,000 | |
Average assets | $27,229,704,000 | 25,971,484,000 | |
Adjusted operating expense/average assets | 2.459% | 2.370% |
_________________________
(1) Initial provision for credit losses required on non-purchased credit deteriorated loans acquired in the acquisition by the Company of Prudential Bancorp effective as of July 1, 2022.
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ATTN: SHAREHOLDER SERVICES
STOCK TRANSFER DEPARTMENT
P.O. BOX 4887
ONE PENN SQUARE
LANCASTER, PA 17604
VOTE BY INTERNET
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date for Registered Shareholders oron May 20, 2021 for Plan Participants.19, 2024. Have your proxy card in hand when you access the web sitewebsite and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/FULT2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date for Registered Shareholders oron May 20, 2021 for Plan Participants.19, 2024. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |||
V28007-P03770 | KEEP THIS PORTION FOR YOUR RECORDS | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
FULTON FINANCIAL CORPORATION
The Board of Directors recommends you vote FOR the
following proposals:
1. | ||||||||||||
Election of Directors | ||||||||||||
Nominees: | For | Withhold | ||||||||||
1a. | ||||||||||||
Jennifer Craighead Carey | ☐ | ☐ | ||||||||||
1b. | Lisa Crutchfield | ☐ | ☐ | |||||||||
1c. | ||||||||||||
Denise L. Devine | ☐ | ☐ | ||||||||||
1d. | ||||||||||||
Steven S. Etter | ☐ | ☐ | ||||||||||
1e. | ||||||||||||
George K. Martin | ☐ | ☐ | ||||||||||
1f. | ||||||||||||
James R. Moxley III | ☐ | ☐ | ||||||||||
1g. | ||||||||||||
Curtis J. Myers | ☐ | ☐ | ||||||||||
1h. | Antoinette M. Pergolin | ☐ | ☐ | |||||||||
1i. | Scott A. Snyder | ☐ | ☐ | |||||||||
1j. | ||||||||||||
Ronald H. Spair | ☐ | ☐ | ||||||||||
1k. | E. Philip Wenger | ☐ | ☐ |
For | Against | Abstain | ||||||||
2. | A non-binding advisory proposal to approve the compensation of Fulton Financial Corporation's ("Fulton") named executive officers. | ☐ | ☐ | ☐ | ||||||
3. | The ratification of the appointment of KPMG LLP as Fulton’s independent auditor for the fiscal year ending December 31, 2024. | ☐ | ☐ | ☐ | ||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as an attorney, executor, administrator, or other fiduciary, please give your full title as such.title. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer.
Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |
Meeting Time, Date and Location
The meeting will be held at 10:00 a.m. Eastern Time on Tuesday,Monday, May 20, 2024 at the Lancaster Marriott at Penn Square, 25 2021 via a virtual live webcast format.South Queen Street, Lancaster, Pennsylvania 17603.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting:
The Notice and Combined Document Proxy(Proxy Statement and Annual Report on Form 10-Kare10-K)
is available at www.proxyvote.com.
|
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FULTON FINANCIAL CORPORATION
This proxy appoints Steven R. Horst, Kenneth E. Shenenberger,Matthew Jozwiak and John R. Merva, or any one of them acting in the absence of the other proxies, with full power of substitution, to represent and vote, as designated on the reverse side, all of the Fulton Financial Corporation Common Stock:common stock: (i) held of record by the signer on March 1, 20212024 and (ii) which the signer is otherwise entitled to vote, and, in their discretion, to vote upon such other business as may be properly brought before the Annual Meeting of Shareholders to be held on Tuesday,Monday, May 25, 2021,20, 2024, at 10:00 a.m., via a virtual live webcast format, Eastern Time (the “Annual Meeting”) or any adjournment thereof.
This proxy, when properly delivered, will be voted in the manner directed by the shareholder(s). If no direction is made, this proxy will be voted FOR the Electionelection of Directors,each of the director nominees, FOR the "Say-on-Pay"executive compensation proposal and FOR the ratification of the appointment of KPMG LLP.
If shares of Fulton Financial Corporation Common Stock are issued to or held for the account of the person(s) signing on the reverse side ("Plan Participant") under employee plans and voting rights are attached to such shares (any such plans, an "Employee Plan"), the Plan Participant hereby directs the respective fiduciary ("Plan Trustee") of each applicable Employee Plan to vote all shares of Fulton Financial Corporation Common Stock in the Plan Participant's name and/or account under such Employee Plan as of March 1, 2021 in accordance with the instructions given herein, and, in its discretion, to vote upon such other business as may be properly brought before the Annual Meeting, to be held on Tuesday, May 25, 2021, at 10:00 a.m., via a virtual webcast format, or any adjournments or postponements thereof.
Employee Plan shares, when this proxy is properly delivered, will be voted by the Plan Trustee in the manner directed by the Plan Participant and, in the absence of direction by the Plan Participant, the Plan Trustee will abstain from voting such shares.
Please use the Internet or touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 24, 2021, which is the deadline to vote the shares through the use of the Internet or telephone. Voting instructions for Employee Plan shares made through the Internet or telephone must be received by 11:59 p.m. Eastern Time on May 20, 2021.19, 2024.