Corporate Governance
In addition to the formal list of duties performed by our Lead Director as set forth in our Corporate Governance Guidelines, he also meets with regulators, supports shareholder engagement and attends meetings with senior management. A more complete description of the role of our Lead Director is included in our Corporate Governance Guidelines and in the discussion above under “Standing Board Committee Membership and Lead Director Responsibilities.”
Board Size and Qualifications
Truist announced changes to the Board in October 2023, including the retirements of Kelly S. King, Nido R. Qubein, David M. Ratcliffe and Thomas N. Thompson, effective December 31, 2023, due to these directors reaching Truist’s mandatory retirement age, and the conclusions of service of Anna R. Cablik, Paul D. Donahue, Easter A. Maynard and Frank P. Scruggs, Jr., effective December 31, 2023. With these changes, the size of the Board was reduced to 13 directors entering 2024, 12 of whom are independent. In addition, Christine Sears has indicated a preference not to stand for reelection and will retire from the Board at the Annual Meeting. Our Board believes that the remaining directors continue to have an appropriate mix of skills and qualifications to lead Truist as it focuses on simplifying and streamlining its business. Of the remaining directors, several have broad experience in regulatory strategy and compliance, including directors who have served as (i) a former regional director with the Consumer Financial Protection Bureau and as Chief Compliance and Privacy Officer for two major financial institutions, (ii) CEO of a regional bank, and (iii) CEO of a major natural gas utility. Each of these directors has experience in leading businesses or operations in a regulated environment and interacting with regulatory agencies. Several directors also have direct experience managing capital and liquidity. In addition to the directors with CEO experience mentioned above, the Board also includes directors who serve or have served as (i) CFO of a major aerospace, defense, information security and technology corporation, (ii) CEO and CFO of a multinational manufacturer of paper and packaging products, and (iii) President and CFO of a large media, technology, and communications conglomerate. In these roles, the directors have overseen the capital structure of their companies and managed liquidity planning and analysis. In addition, our first time nominee identified in this proxy statement, Laurence Stein, will bring valuable experience to the Board in financial services and financial risk management as he recently retired after serving for many years in various senior executive roles with a large, complex financial institution. Our Board will continue to annually evaluate its size and composition.
Nominating and Governance Committee Director Nominations
The Nominating and Governance Committee is responsible for identifying and recommending to the Board nominees for election or reelection as directors. We seek as director candidates individuals who possess good judgment, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics in order to most effectively serve the long-term interests of Truist and its shareholders.
The Nominating and Governance Committee considers candidates submitted by directors and third-party search firms hired for identifying director candidates. The Nominating and Governance Committee also considers candidates recommended by shareholders.
Director candidates, including those recommended by shareholders, will be evaluated using the director membership criteria described below. The Board considers the Nominating and Governance Committee’s recommendations when appointing directors and selecting director nominees to be submitted to shareholders for election at the annual meeting of shareholders.
DIRECTOR MEMBERSHIP CRITERIA
A director candidate is nominated to stand for election based on his or her professional experience, strategic insights, recognized achievement in his or her respective field, an ability to contribute to our business, experience in risk management and the willingness to make the commitment of time and effort required of a Truist director over an extended period of time. A director must be “financially literate,” as defined by the Board, and should understand the intricacies of a public company. A director should possess good judgment, strength of character and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. Other factors are also considered in the context of assessing the overall composition of the Board.
An important goal of the Board, pursued through the Nominating and Governance Committee, is to include members with diverse backgrounds, expertise and characteristics (including diversity of race, ethnicity and gender) that, taken as a whole, will help ensure a strong and effective governing body. The Nominating and Governance Committee annually assesses these factors in the director selection and nomination process. The first time nominee included in this proxy statement, Laurence Stein, was identified by a search firm retained by the Nominating and Governance Committee and was considered by the Nominating and Governance Committee and the Board in accordance with these procedures prior to being nominated for election to the Board.
DIRECTOR CANDIDATES RECOMMENDED BY SHAREHOLDERS
The Board of Directors will consider qualified director nominees recommended by shareholders. Those recommendations should be sent in writing to the Corporate Secretary, Truist Financial Corporation, 214 N. Tryon Street, 43rd Floor, Mail Code 500-93-43-13, Charlotte, North Carolina 28202. The Nominating and Governance Committee will evaluate director candidates recommended by shareholders using the director membership criteria described above.
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Corporate Governance
Majority Voting and Director Resignation Policy
Our articles of incorporation require each director to be elected by the majority of the votes cast at a meeting of shareholders. Under our Director Resignation Policy, as described in our Corporate Governance Guidelines, any incumbent director nominee who receives a greater number of votes “against” than votes “for” such election shall tender his or her resignation to the Board. The Nominating and Governance Committee will then consider all of the relevant facts and circumstances and recommend to the Board whether to accept, reject or otherwise act with respect to such resignation. The Board will act on the Nominating and Governance Committee’s recommendation within 90 days following certification of the shareholder vote and will publicly disclose its decision within this 90-day timeframe. A director whose resignation is under consideration will abstain from participating in any recommendation or decision regarding that resignation. If a director’s resignation is not accepted, the director will continue to serve until the next annual meeting of shareholders and until the director’s successor is elected and qualified, or until the director’s earlier resignation or removal.
Currently, pursuant to North Carolina law and our bylaws, an incumbent director who is not re-elected remains in office until the director’s successor is elected and qualified or until his or her earlier resignation or removal. Our current Director Resignation Policy addresses this “holdover” issue by requiring any director who does not receive the requisite affirmative majority of the votes cast for his or her reelection to tender his or her resignation to the Board as described above.
Related Person Transactions
Pursuant to our Related Person Transactions Policy, we approve or ratify related person transactions only when the Board, acting through the Nominating and Governance Committee, determines that the related person transaction in question is in, or is not inconsistent with, the best interests of Truist and its shareholders.
The term “related person transaction,” under the Related Person Transactions Policy, generally means a transaction where the amount involved exceeds $120,000 in a single fiscal year and in which a related person has a direct or indirect material interest. A “related person” under the Related Person Transactions Policy generally means (a) a director, director nominee or executive officer of Truist; (b) a person who is known to be the beneficial owner of more than five percent of any class of our common stock; and (c) any immediate family member of any of the foregoing persons, which consists of any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the director, executive officer, nominee or more than five percent beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee or more than five percent beneficial owner.
To help the Board assess whether a material relationship exists for both independence and related person transactions purposes, our Board adopted guidance with regard to charitable contributions. Under this guidance, a related person who serves as an executive officer of a charitable or non-profit organization that receives a contribution from Truist will not be deemed to have a direct or indirect material interest in the transaction if:
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Within the past three years, the aggregate amount of all such contributions during any single fiscal year of the charitable or non-profit organization did not exceed the greater of $1 million or 2% of the charitable or non-profit organization’s consolidated gross revenues for that fiscal year; and |
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The charitable or non-profit organization is not a family foundation created by the related person or an immediate family member of the related person. |
In addition, to monitor charitable contributions provided by Truist, any charitable contribution in excess of $5 million made by Truist to any charitable or non-profit organization of which a director or executive officer of Truist serves as a director, trustee, executive officer, advisory board member or in any similar leadership capacity must be approved by the Nominating and Governance Committee, whether or not the director or executive officer has a direct or indirect material interest in the contribution. Further, charitable contributions of $500,000 or more to such organizations must be reported at the next Nominating and Governance Committee meeting.
A number of our directors, executive officers, and their affiliates utilize certain products and services offered by Truist, including personal and corporate banking, securities brokerage, investment advisory and wealth management services, in the ordinary course of our business. Our Related Person Transactions Policy provides that certain categories of transactions do not need review or approval of the Nominating and Governance Committee. These include all extensions of credit with related persons that 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 Truist, and that do not involve more than the normal risk of collectability or present other features unfavorable to Truist (although pursuant to Federal Reserve Board Regulation O, extensions of credit to directors, executive officers or their related interests that exceed $500,000 in the aggregate must be approved in advance by the full Board). These transactions also include any provision of financial services to a related person, other than extensions of credit, such as brokerage, banking, insurance, investment advisory, investment banking or asset management services, if the services are
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Corporate Governance
Communications with the Board of Directors
Any shareholder or other interested party may contact the Board of Directors or any individual director(s) by written communication mailed to:
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Board of Directors c/o Corporate Secretary Truist Financial Corporation 214 N. Tryon Street 43rd Floor, Mail Code 500-93-43-13 Charlotte, North Carolina 28202 |
Any proper communication so received will be processed by the Corporate Secretary on behalf of the Board or any individually named director. Unless, in the judgment of the Corporate Secretary, the matter is not intended or appropriate for the Board, the Corporate Secretary will prepare a summary of the communication for prompt delivery to the appropriate member(s) of the Board.
Corporate Responsibility and Sustainability
Truist’s Board of Directors and senior management are committed to an inclusive, balanced and sustainable approach to corporate responsibility and sustainability that delivers long-term value for investors, clients, communities, teammates and other stakeholders. Corporate responsibility and sustainability programs are important expressions of our corporate purpose. This includes investments in communities, innovative technologies and a commitment to responsible business practices and sound governance.
As a top 10 U.S. commercial bank, Truist partners with commercial clients of all sizes and across all industries as they set and achieve their sustainability goals. With a client-first mentality, we continue to build capacity, expand expertise and advisory capabilities and develop new or enhanced products and services that help clients achieve their own corporate responsibility and sustainability objectives.
Truist continues to focus on operational sustainability, including reducing our operational emissions. Across the enterprise, we seek opportunities to conserve or minimize consumption of energy and other resources. Truist is working enterprise-wide to address our Net Zero goal and sustainability issues in our governance, planning, risk management, strategy, facilities, operations and lines of business. Truist continues to make improvements in data gathering and analysis processes for enhanced transparency and disclosures regarding emissions and sustainability.
STAKEHOLDER ENGAGEMENT ON CORPORATE RESPONSIBILITY AND SUSTAINABILITY MATTERS
Truist regularly engages with clients, investors, suppliers, community leaders, teammates and other stakeholders to gain better insights into their views, preferences, aspirations and concerns about corporate responsibility and sustainability matters. This engagement informs our strategy and disclosure and influences goals and targets. Stakeholder engagement helps prioritize goals and actions that deliver long-term value for Truist as well as our various stakeholder groups. For a detailed review of our shareholder engagement efforts, please see the “Shareholder Engagement Program” section of this proxy statement.
GOVERNANCE, RISK MANAGEMENT AND OVERSIGHT
Truist’s Board oversees corporate responsibility and sustainability programs, enterprise risk, including climate-related risk, and corporate responsibility and sustainability disclosures, including ESG disclosures.
The Nominating and Governance Committee is the primary committee responsible for oversight of corporate responsibility and sustainability matters and ESG performance, including reporting and, along with the Audit Committee, reviews disclosure practices. As needed, other Board committees receive regular updates on corporate responsibility and sustainability matters that relate directly to their responsibilities. For example, (i) the Compensation and Human Capital Committee receives updates on diversity, equity and inclusion initiatives and human capital strategy, (ii) the Risk Committee reviews and oversees ESG risk and climate risk, including quarterly updates from the Climate Risk Management team, and (iii) the Audit Committee periodically reviews Truist’s procedures with respect to corporate responsibility and sustainability data. The full Board also receives updates on key accomplishments and upcoming initiatives.
Three management committees support the Board committees in their oversight of ESG-related matters. The Corporate Responsibility and Sustainability Committee, which reports to the Nominating and Governance Committee, is composed of internal leaders who guide corporate responsibility-related public affairs issues, disclosures and reporting, operational sustainability and Net Zero progress, and monitor sustainable finance activities for purposes of tracking and reporting. The Disclosure Committee reports to the Audit Committee and reviews our principal ESG disclosures prior to publication. The Contributions Committee reports to the Nominating and Governance Committee and reviews requests for corporate level funding from charitable organizations to support the philanthropic vision of Truist by delivering resources to our communities to drive economic growth and support meaningful change.
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Compensation of Executive Officers
(iii) failure to substantially perform his duties (other than such a failure due to his physical or mental illness or death), or (iv) material breach of any of his obligations under the Employment Agreement, under any other material written agreement or covenant Mr. Howard has entered into with TIH, or under any material written policy, program or code of TIH that is applicable to Mr. Howard and senior executives of TIH; provided, however, that if capable of cure, a termination for Cause under clauses (i)—(iv) will be effective only if Mr. Howard fails to cure the circumstances giving rise to termination for Cause within 30 days following delivery of a notice of termination by TIH.
The Employment agreement generally defines “good reason” to mean any termination of employment by Mr. Howard within three months following a reduction by TIH in Mr. Howard’s total salary or a reduction by TIH of Mr. Howard’s target bonus opportunity.
For purposes of the Employment Agreement, “Disability” means: (i) Mr. Howard incurs a separation from service for disability under a disability insurance program of TIH, or (ii) Mr. Howard incurs a “separation from service” for disability within the meaning of Internal Revenue Code Section 409A.
Profits Interests
With respect to Mr. Howard’s time-vesting profits interest in TIH, in the event of the termination of his employment by reason other than death, disability or reduction in force, all of his unvested time-vesting profits will be forfeited. In the event of the termination of his employment due to death, disability or reduction in force, the number of time-vesting profits interests that would have vested on the next vesting date will vest, and any other unvested time-vesting profits interests will be forfeited. All of Mr. Howard’s vested time-vesting profits interests will be subject to TIH’s repurchase rights upon termination of employment as described below.
With respect to Mr. Howard’s event-vesting profits interest in TIH, in the event of the termination of his employment for any reason prior to a Change in Control, Initial Public Offering or Spin-Off, all unvested event-vesting profits interests will be forfeited. In the event of the termination of his employment by reason other than death, disability or reduction in force during the post-event vesting period, all unvested event-vesting profits interests will be forfeited. If his employment is terminated due to death, disability or reduction in force during the post-event vesting period, the unvested event-vesting profits interests will vest on a pro rata basis depending on the length of time that has elapsed from the date of grant to the date of termination with 100% of such interests vesting if the termination of employment occurs four years or more after the grant date. Any vested event-vesting profits interests that are not cashed out in the applicable transaction giving rise to vesting will be subject to TIH’s repurchase rights upon termination of employment as described below.
If Mr. Howard’s employment is terminated for “cause” or if he breaches the restrictive covenants in the plan (as described below), all of his profits interests, whether vested or unvested, will be automatically forfeited. If his employment is terminated for any reason other than “cause,” and he has not breached the restrictive covenants in the plan, TIH may elect to repurchase all or a portion of his vested profits interests at fair market value as of the time that the repurchase election is made.
For purposes of the profits-interests plan, “Change in Control” means the first of the following events to occur after April 3, 2023: (i) any single transaction or series of related transactions, where any one person (other than the Investor Group) or more than one person acting in concert as a group, acquires more than fifty percent (50%) of TIH’s voting power; (ii) any single transaction or series of related transactions where Truist holds less than fifty percent (50%) of TIH’s voting power, (iii) a merger, consolidation, or similar transaction involving TIH or in which TIH’s securities are issued unless TIH’s pre-transaction equity holders continue to own at least 50% of the voting power of TIH, its successor or ultimate parent company; or (iv) the sale or other disposition of all or substantially all of the assets of TIH and its subsidiaries on a consolidated basis; provided that if any award constitutes “deferred compensation” (as defined in Section 409A of the Internal Revenue Code), no event shall constitute a change in control with respect to such award if it does not also constitute a change in the ownership or effective control of TIH, or in the ownership of a substantial portion of TIH’s assets (in either case, as defined in Section 409A). A Change in Control does not include an Initial Public Offering or a Spin-Off.
The profits-interest plan defines “Disability” to mean, (i) if Mr. Howard is a participant in a disability insurance program, that his employment is terminated for disability under that program, or (ii) if Mr. Howard is not a participant in a disability insurance program, that Mr. Howard suffers from any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes Mr. Howard to be unable to perform the duties of his employment or any substantially similar position of employment.
For purposes of the profits-interest plan, “Initial Public Offering” means (i) the initial underwritten public offering pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form, (ii) a direct listing of some or all of the applicable shares on any national market or exchange, or (iii) any transaction or series of related transactions in which the equity securities of a company are exchanged for or otherwise converted into securities that are publicly listed, through a merger, acquisition, business combination or similar transaction, in each case with a special purpose acquisition company, commonly known as a “de-SPAC transaction.”
“Reduction in Force” means the elimination of Mr. Howard’s job or position by TIH due solely to circumstances beyond the control of Mr. Howard, such as automation, technology, changing market conditions or the elimination, modification or centralization of all or a part of the operations of TIH, as determined by the plan administrator in its sole discretion.
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Proposal 4—Shareholder Proposal Regarding An Annual Report on Lobbying Activities
The following proposal was submitted by Kenneth Steiner of 14 Stoner Ave., 2M, Great Neck, NY 11021. Mr. Steiner owns at least 500 shares of our common stock. The Company is not responsible for the accuracy or content of the proposal and the supporting statement, which appear in the form received from the proponent. Our Board recommends that you vote AGAINST the proposal for the reasons set forth after the proponent’s supporting statement.
Proposal 4
Resolved, Shareholders request the preparation of a report, updated annually, disclosing:
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Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. |
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Payments by Truist used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. |
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Truist’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. |
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Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above. |
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Truist is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Nominating and Governance Committee and posted on Truist’s website.
Supporting Statement
Full disclosure of Truist’s lobbying activities and expenditures is needed to assess whether Truist’s lobbying is consistent with its expressed goals and shareholders’ interests. Truist spent $11 million from 2019 - 2022 on federal lobbying. This does not include state lobbying, where Truist also lobbies. Truist’s lobbying over the debt ceiling has attracted scrutiny.1
Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.2 Truist fails to disclose its payments to trade associations and social welfare groups (SWGs), or the amounts used for lobbying, to shareholders. Truist belongs to the American Bankers Association (ABA), Bank Policy Institute (BPI), Business Roundtable, Securities Industry and Financial Markets Association and US Chamber of Commerce, which together spent $119 million on federal lobbying for 2022.
Truist’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Truist publicly supports addressing climate change, yet the Business Roundtable opposed the Inflation Reduction Act,3 the Chamber reportedly has been a “central actor” in dissuading climate legislation over a two-decade period,4 and BPI lobbied the Securities and Exchange Commission to weaken proposed climate disclosure rules.5 A recent analysis looking at inconsistencies between banks’ public climate commitments and their direct and indirect climate lobbying practices noted Truist failed to publicly support the Inflation Reduction Act.6 And while Truist does not belong to or support the American Legislative Exchange Council, which is attacking “woke” investing,7 its trade associations do, as the Chamber sits on its Private Enterprise Advisory Council8 and ABA supported its 2022 annual meeting.9
Reputational damage stemming from these misalignments could harm shareholder value. Thus it will be a best practice for Truist to expand its lobbying disclosure.
1 https://www.politico.com/newsletters/politico-influence/2023/04/27/whos-lobbying-on-the-debit-ceiling-fight-00094301.
2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/. https://www.truist.com/content/dam/truist-bank/us/en/documents/disclosures/non-lob/truist-2022-tcfd.pdf
3 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable.
4 https://www.washingtonpost.com/politics/2023/08/02/climate-group-pushes-big-tech-exit-nations-largest-business-lobby/.
5 https://www.eenews.net/articles/banks-to-sec-climate-rule-poses-real-world-problems/.
6 https://www.ceres.org/news-center/press-reIeases/new-benchmark-analysis-us-banks-reveals-inconsistencies-between-cIimate.
7 https://www.wbur.org/hereandnow/2023/03/22/ESG-investing-fossil-fuels.
8 https://ohiocapitaljournal.com/2023/09/06/coming-soon-in-ohio-alec-releases-new-raft-of-model-legislation/.
9 https://documented.net/investigations/heres-who-bankrolling-alec-2022-annual-meeting.
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Proposal 5—Shareholder Proposal Regarding A Report on Board Oversight of Risks Related to Discrimination
The following proposal was submitted by David Bahnsen, trustee of the Bahnsen Family Trust dated July 14, 2023, of 409 39th Street, Newport Beach, CA 92663. The Bahnsen Family Trust owns approximately 629 shares of our common stock. The Company is not responsible for the accuracy or content of the proposal and the supporting statement, which appear in the form received from the proponent. Our Board recommends that you vote AGAINST the proposal for the reasons set forth after the proponent’s supporting statement.
Proposal 5
Financial institutions are essential pillars of the marketplace. Because of their pivotal role in America’s economy, many federal and state laws already prohibit them from discriminating against customers. The UN Declaration of Human Rights recognizes that “everyone has the right to freedom of thought, conscience, and religion.”1 These guarantees are an important part of protecting every American’s right to free speech and free exercise of religion.
As shareholders of Truist, we believe it is essential for the company to provide financial services on an equal basis without regard to race, color, religion, sex, national origin, or social, political, or religious views.
We are concerned with recent evidence of religious and political discrimination against customers by financial services companies, as seen in recent examples2 and the 2022 Statement on Debanking and Free Speech.3
Truist’s charitable giving policy4 excludes faith-based organizations, from churches to other religious organizations. As noted in the 2023 Viewpoint Diversity Score Business lndex,5 “charitable giving policies [ought not] bar nonprofits from receiving support simply because of their religious status.”
Furthermore, as per the 1792 Exchange’s report6 on Truist (listing the bank as ‘High Risk’), Truist “does not provide its employees with protections against viewpoint discrimination.” This lack of protection raises serious concerns as to the possibility of politicized debanking, concerns which Truist’s shareholders have a right to have assuaged.
As per the Index, almost two-thirds of major financial institutions feature overly vague language regarding what can trigger debanking of a client. As matters currently stand, with nonspecific language of risk (JP Morgan Chase), hate (Visa), and bigotry (Truist), the majority of prominent financial institutions have no avenue to rectify any serious concerns about bias.
And concerns are growing. In early 2023, shareholders called for Chase, Mastercard, PayPal, Capital One, and Charles Schwab to assess whether they have adequate safeguards to prevent politicized de-banking.7 Nineteen state attorneys general and fourteen state financial officers specifically called out Chase for their de-banking of a non-profit committed to advancing religious freedom and demanded action from the company to show good faith in addressing these widespread concerns.8 In absence of clearer protocols, Truist could be next.
Increased transparency in debanking is a critical element of Truist’s business purpose–the responsibility to provide value for shareholders must take priority over the kind of activist demands that ultimately jeopardize a business’ profit models and erode shareholder trust.
Resolved: Shareholders request that Truist’s Board of Directors conduct an evaluation and issue a report within the next year, at reasonable cost and excluding proprietary information and disclosure of anything that would constitute an admission of pending litigation, evaluating how it oversees risks related to discrimination against individuals based on their race, color, religion (including religious views), sex, national origin, or political views, and whether such discrimination may impact individuals’ exercise of their constitutionally protected civil rights.
1 https://www.un.org/en/about-us/universal-declaration-of-human-rights.
2 https://adflegal.org/press-release/bank-america-boots-charity-serving-impoverished-ugandans-under-vague-risk-tolerance. https://www.newsweek.com/stop-troubling-trend-politically-motivated-debanking-opinion-1787639. https://www.dailymail.eo.uk/news/article-12314423/The-Coutts-Faragedossier-bank-admitted-ex-Ukip-leader-DID-meet-commercial-criteria-used-tweet-Ricky-Gervaistrans-joke-Novak-
Djokovic-ties-decide-odds-position-inclusive-organisation.html; https://familycouncil.org/?p=25159
3 https://storage.googleapis.com/vds_storage/document/Statement%20on%20Debanking%20and%20Free%20Speech.pdf.
4 https://www.truist.com/purpose/truist-foundation/grant-application
5 https://www.viewpointdiversityscore.org/news/how-they-scored-truist
6 https://1792exchange.com/company/truist-financial/
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Proposal 5—Shareholder Proposal Regarding A Report on Board Oversight of Risks Related to Discrimination
STATEMENT OF THE TRUIST BOARD OF DIRECTORS IN OPPOSITION TO THE SHAREHOLDER PROPOSAL
Truist is proud of the rich diversity that exists in the backgrounds, experiences, perspectives, and views of its clients and teammates, and we already evaluate and provide public disclosure of the oversight of risks related to discrimination against individuals. As a result, the adoption of the proposal is unnecessary and not in the best interests of Truist or its shareholders.
We already have and regularly evaluate policies and processes for overseeing risks related to discrimination against individuals.
Truist is committed to meeting the banking needs of the communities we serve, and it is our policy not to discriminate against any potential client or credit applicant on a prohibited basis, including race, color, ethnicity, religion, national origin, sex/gender, sexual orientation, gender identity, military status, disability, marital or familial status, or age consistent with applicable law. It is also our policy not to discriminate on the basis of the current or prospective location of a customer’s residence or business location. The equal and fair treatment of all credit applicants and existing and former clients in all aspects of a credit transaction, without regard to any of the prohibited characteristics referenced above, is an integral part of Truist’s fundamental mission to help our clients achieve economic success and financial security. In addition, we will not deny services to current or prospective clients on the basis of the client’s political opinions, speech or affiliations, or the client’s religious beliefs, religious exercise or religious affiliations. Denying or limiting equal access to basic economic opportunities, such as home ownership or credit, to any segment of our communities is contrary to Truist’s core values.
As part of our commitment to treating clients in a non-discriminatory manner, we deploy fair-lending training to our branch, lending, and other teammates on an annual basis. Complaints of discrimination from clients—including any based on religion—are escalated to Truist’s Fair and Responsible Banking Compliance Group for review. In addition, Truist has a Bias Complaint Review Team that includes members of legal, ethics, fair banking, branch operations, human resources, client advocacy, corporate investigations, corporate security, and financial crimes. The Bias Complaint Review Team reviews complaint reporting and trends and also attends escalation meetings to provide guidance, action plans, and feedback for complaints.
As described in the Truist Code of Ethics (available on our investor-relations website at https://ir.truist.com), Truist is also committed to treating teammates in a fair, non-discriminatory, and inclusive manner. As an equal-opportunity employer, Truist’s employment decisions must be based upon individual qualifications and conduct without regard to any protected classifications. Truist is committed to recruiting, hiring, compensating, training, disciplining, promoting, terminating, and administering all personnel actions and terms and privileges of employment in a non-discriminatory and non-retaliatory manner. To create a workplace environment that fosters inclusivity and respect, Truist does not tolerate bullying, harassment, abuse, or discrimination. Harassment and discrimination of any kind, whether intentional or not, have no place in Truist’s work environment.
We already publicly report on the status and outcomes of anti-discrimination efforts.
The anti-discrimination efforts associated with our diversity, equity, and inclusion program are already disclosed in existing publicly available reports, such as our Corporate Responsibility Reports. These public reports set forth our commitment to responsible sales and lending practices and the equal and fair treatment of credit applicants and existing borrowers. They also provide an overview of our programs and policies aimed at reinforcing an inclusive culture and building a diverse workforce.
Our Board and its committees oversee risks related to discrimination against individuals.
Fair treatment of clients and teammates is part of the “tone at the top” set by our Board. This principle is also embedded in a comprehensive governance and risk-management framework for Truist that is overseen by the Board and its committees. As part of this framework, the Nominating and Governance Committee has general oversight of our corporate-responsibility strategies and programs and periodically reviews, recommends changes, considers exceptions, and monitors compliance with Truist’s Code of Ethics, and the Compensation and Human Capital Committee oversees our initiatives on teammate well-being and diversity, equity, and inclusion.
* * *
For these reasons, our Board believes that the proposal is not in the best interests of the Company and its shareholders.
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| 86 |
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| 2024 Proxy Statement |
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Voting and Other Information
How to Attend the Annual Meeting
If you are a registered shareholder or beneficial owner of common stock holding shares at the close of business on the record date, you may attend the annual meeting by visiting www.virtualshareholdermeeting.com/TFC2024 and logging in by entering your name, a valid email address and the 16-digit control number found on your proxy card, Notice of Internet Availability, or voting instruction form, as applicable. If you lost your 16-digit control number or are not a shareholder, you will be able to attend the meeting by visiting www.virtualshareholdermeeting.com/TFC2024 and registering as a guest. If you enter the meeting as a guest, you will not be able to vote your shares, examine our list of shareholders or submit questions during the meeting. To submit questions in advance of the Annual Meeting, visit www.proxyvote.com before 11:59 p.m. ET on April 22, 2024, and enter your name, email address and 16-digit control number.
We have structured our virtual Annual Meeting to provide shareholders the same rights as if they were present in person, including the ability to vote shares electronically during the meeting and submit questions in accordance with the rules of conduct for the meeting. Shareholders may submit questions through the web portal prior to and during the Annual Meeting. We may exercise our discretion in selecting questions submitted through the web portal to be answered during the Annual Meeting. We may not be able to address all such questions asked during the time allotted for questions during the Annual Meeting and will focus on those issues that appear to be of the greatest interest to shareholders.
You may log into and attend the virtual Annual Meeting beginning at 10:45 a.m. ET on April 23, 2024. The Annual Meeting will begin promptly at 11:00 a.m. ET. If you experience any technical difficulties during the meeting, please call 844-976-0738 (U.S.) or 303-562-9301 (International) for assistance.
Even if you plan to attend the Annual Meeting, we encourage you to vote your shares in advance online, or if you received or requested printed copies of the proxy materials, by phone or by mail, to ensure that your shares will be represented at the Annual Meeting. Shareholders who participate in the Annual Meeting virtually by way of the link provided above will be deemed to be present in person, including for purposes of determining a quorum.
Please note that participation in the virtual Annual Meeting is subject to capacity limits of the virtual meeting platform provider and access to the meeting will be granted on a first-come, first-served basis. Additional information regarding the rules and procedures for participating in our Annual Meeting will be provided in our meeting rules of conduct, which shareholders can view during the meeting on the meeting website.
Votes Required, Non-Votes, Abstentions and Revocations
For the election of directors, each director nominee must receive the affirmative vote of a majority of votes cast in order to be elected. Proposals 2 through 5 require the affirmative vote of a majority of votes cast on each proposal. An affirmative majority of the votes cast means the number of votes cast “for” the applicable director or proposal exceeds the number of votes cast “against” the applicable director or proposal.
A broker or other nominee may generally vote your shares without instruction on routine matters but not on non-routine matters. A broker “non-vote” occurs when your broker submits a proxy for your shares but does not indicate a vote for a particular “non-routine” proposal because your broker does not have authority to vote on that proposal and has not received specific voting instructions from you. Brokers and other nominees who are New York Stock Exchange members are expected to have discretionary voting power only for Proposal 2, the ratification of PricewaterhouseCoopers LLP as our independent auditor, but not for any other proposals. As a result, if you do not provide specific voting instructions to your record holder, New York Stock Exchange rules will allow the record holder to vote only on Proposal 2, and not on Proposals 1 or 3-5. Broker non-votes, as well as abstentions, will be counted in the number of shares represented for purposes of determining whether a quorum is present, but they will not be counted as votes cast for or against any of the proposals, and therefore will not affect the outcome of the vote. Holders of our common stock do not have cumulative voting rights in the election of directors.
A proxy may be revoked by a shareholder at any time before it is exercised by submitting to the Corporate Secretary of Truist an instrument revoking it, submitting a duly executed proxy bearing a later date (including a proxy given over the internet or by telephone), or by attending the virtual Annual Meeting and electing to vote using the virtual platform. Even if you plan to attend the virtual Annual Meeting, you are encouraged to vote your shares by proxy.
Delivering Proxy Materials
We deliver proxy materials primarily through the internet in accordance with SEC rules. In addition to reducing the amount of paper used in producing the materials, this method lowers the costs associated with mailing the proxy materials to shareholders. Shareholders who own Truist common shares directly and not through a bank, broker or nominee (“record holders”) will have proxy materials or the Notice of Internet Availability delivered directly to their mailing address or electronically if they have previously consented to delivery by email. Shareholders whose shares are held for them by banks, brokers or other nominees (“beneficial holders”) will have the proxy materials or the Notice of Internet Availability forwarded to them by the intermediary that holds the shares.
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| 90 |
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| 2024 Proxy Statement |
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Voting and Other Information
If you received only a Notice of Internet Availability by mail, you will not receive a printed copy of the proxy materials unless you request a copy by following the instructions on the notice. The Notice of Internet Availability also contains instructions for accessing and reviewing the proxy materials over the internet and provides directions for submitting your vote over the internet.
In accordance with SEC rules, we sent proxy materials or a Notice of Internet Availability on or about March 11, 2024 to our shareholders of record as of the close of business on February 15, 2024. To reduce the expenses of delivering duplicate proxy materials to shareholders, we rely on SEC rules that permit us to deliver only one set of applicable proxy materials to multiple shareholders who share an address, unless we receive contrary instructions from any shareholder at that address. All shareholders sharing an address will continue to receive separate proxy cards based on their registered ownership of Truist common stock. Any shareholder sharing an address who does not receive an individual proxy statement, our 2023 Annual Report and our Annual Report on Form 10-K may write or call Broadridge Investor Communication Solutions, Inc., as specified below, and we will promptly deliver the materials at no cost. For future meetings, a registered shareholder may request separate copies of our proxy materials or request that we only send one set of these materials if the shareholder is receiving multiple copies by telephoning our transfer agent at 1-800-213-4314, or writing the transfer agent at: Computershare Trust Company N.A., P.O. Box 43078, Providence, RI 02940-3078. If your shares are held in “street name,” you may contact Broadridge Investor Communication Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, NY 11717 or by calling 1-866-540-7095.
How to Request and Receive a Paper or Email Copy
A shareholder may obtain a copy of this proxy statement, our 2023 Annual Report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (including the financial statements and financial statement footnotes), without charge, by contacting Broadridge Investor Communication Solutions, Inc. or their bank, broker or other nominee.
When requesting a copy from Broadridge Investor Communication Solutions, you will need to provide your 16-digit control number found on your proxy card, voting instruction form or Notice of Internet Availability when making your request. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:
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| • By Internet: www.proxyvote.com |
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• By Telephone: 1-800-579-1639 |
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• By Email: sendmaterial@proxyvote.com |
Proxy Costs
All expenses incurred in the solicitation of proxies for the annual meeting will be paid by Truist. In addition to soliciting proxies by mail, over the internet and by telephone, our directors, officers and teammates may solicit proxies on behalf of Truist without additional compensation. We have engaged Georgeson LLC to act as our proxy solicitor and have agreed to pay such firm $22,000 plus (i) itemized charges based on the number of calls made and votes received by Georgeson, and (ii) reasonable expenses for such services. Banks, brokerage houses and other institutions, nominees and fiduciaries are requested to forward the proxy materials to beneficial holders and to obtain voting instructions from them. Upon request, we will reimburse these parties for their reasonable expenses in forwarding proxy materials to beneficial holders.
Proposals for the 2025 Annual Meeting of Shareholders
Shareholder proposals for inclusion in our proxy statement. Under SEC Rule 14a-8, a shareholder desiring to make a proposal to be included in the proxy statement for the 2025 annual meeting of shareholders must present such proposal to the following address: Corporate Secretary, Truist Financial Corporation, 214 N. Tryon Street, 43rd Floor, Mail Code 500-93-43-13, Charlotte, North Carolina 28202. Proposals must be received no later than the close of business on November 11, 2024 and must comply with SEC Rule 14a-8 in order for the proposal to be considered for inclusion in the Company’s proxy statement.
Director nominations under Proxy Access. As set forth in our bylaws, a shareholder or group of up to 20 shareholders that has held at least 3% of Truist’s stock for at least three years is able to submit director nominees for up to 25% of the Board (or at least two directors) for inclusion in our proxy statement if the shareholder(s) and nominee(s) satisfy the requirements specified in our bylaws and notice is received at least 120 days, but not earlier than 150 days, before the anniversary of the date the proxy statement for the prior year’s annual meeting was released to shareholders. In order for a nominee to be considered for inclusion in our proxy statement for the 2025 annual meeting of shareholders, a shareholder must deliver timely notice in writing to the Corporate Secretary (at the address above) no earlier than October 12, 2024, and no later than November 11, 2024. The notice must contain the specific information required by Article II, Section 14 of our bylaws.
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2024 Proxy Statement | |
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91 |
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Pay vs Performance Disclosure - USD ($)
|
4 Months Ended |
8 Months Ended |
12 Months Ended |
Dec. 31, 2021 |
Sep. 11, 2021 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
| Pay vs Performance Disclosure |
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| Pay vs Performance Disclosure, Table |
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As required by SEC rules, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s philosophy and how the Company aligns executive compensation with the Company’s performance, please refer to the “Compensation Discussion and Analysis” (the “CD&A”).
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Value of Initial Fixed $100 |
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(a) |
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(b) |
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(b) |
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(c) |
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(c) |
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(d) |
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(e) |
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(f) |
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|
(g) |
|
|
(h) |
|
|
|
(i) |
|
2023 |
|
|
— |
|
|
$ |
12,037,646 |
|
|
|
— |
|
|
|
$4,119,266 |
|
|
$ |
9,199,771 |
|
|
$ |
3,870,419 |
|
|
$ |
78.39 |
|
|
$ 96.66 |
|
$ |
(1,047 |
) |
|
$ |
4.76 |
|
2022 |
|
|
— |
|
|
$ |
13,237,842 |
|
|
|
— |
|
|
$ |
11,774,153 |
|
|
$ |
6,193,618 |
|
|
$ |
6,642,889 |
|
|
$ |
85.70 |
|
|
$ 97.53 |
|
$ |
6,267 |
|
|
$ |
4.59 |
|
2021 |
|
$ |
15,288,905 |
|
|
$ |
10,395,426 |
|
|
$ |
23,785,332 |
|
|
$ |
24,811,139 |
|
|
$ |
9,296,667 |
|
|
$ |
9,957,776 |
|
|
$ |
112.04 |
|
|
$124.08 |
|
$ |
6,437 |
|
|
$ |
4.25 |
|
2020 |
|
$ |
14,823,906 |
|
|
|
— |
|
|
$ |
11,068,514 |
|
|
|
— |
|
|
$ |
7,678,184 |
|
|
$ |
5,076,214 |
|
|
$ |
88.87 |
|
|
$ 89.69 |
|
$ |
4,492 |
|
|
$ |
3.80 |
|
| 1. |
The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. William H. Rogers, Jr. (our Chief Executive Officer) and Mr. Kelly S. King (our former Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Compensation of Executive Officers – Summary Compensation Table.” Mr. King served as our Chief Executive Officer during 2020 and 2021. Effective September 12, 2021, Mr. Rogers succeeded Mr. King as Chief Executive Officer. Mr. Rogers continued to serve as our Chief Executive Officer during 2022 and 2023. |
| 2. |
The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to the PEOs, Mr. Rogers and Mr. King, as computed in accordance with Item 402(v) of Regulation S-K. These dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Rogers or Mr. King, as applicable, during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Rogers’ total compensation for 2023 to determine the compensation actually paid: |
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2023 |
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|
$ |
12,037,646 |
|
|
|
$ |
(6,843,578 |
) |
|
|
$ |
4,774 |
|
|
|
$ |
(1,107,866 |
) |
|
|
$ |
28,290 |
|
|
|
$ |
4,119,266 |
|
| (a) |
Represents the deduction from the “Reported Summary Compensation Table Total for PEO” column for the total grant date fair value of equity awards reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for 2023. |
| (b) |
The equity award adjustments for 2023 include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in 2023 that were outstanding and unvested as of the end of 2023; (ii) the amount of change as of the end of 2023 (from the end of the prior fiscal year) in fair value of any awards granted in prior years that were outstanding and unvested as of the end of 2023; (iii) for awards that were granted and vested in 2023, the fair value as of the vesting date; (iv) for awards granted in prior years that vested in 2023, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during 2023, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in 2023 prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for 2023. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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|
2023 |
|
|
$ |
2,505,037 |
|
|
|
$ |
(1,697,970 |
) |
|
|
|
— |
|
|
|
$ |
(802,293 |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
$ |
4,774 |
|
| (c) |
Represents the deduction for the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table for 2023. |
| (d) |
The total pension benefit adjustments for 2023 include the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Rogers during 2023 (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during 2023 that were attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: |
| 3. |
The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. King and/or Mr. Rogers, applicable) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Rogers) included for purposes of calculating the average amounts in 2023 are Michael B. Maguire, Hugh S. Cummins III, Clarke R. Starnes III, Dontá L. Wilson and John M. Howard. |
| 4. |
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. King and/or Mr. Rogers, as applicable), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Rogers) during 2023. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for the NEOs as a group (excluding Mr. Rogers) for 2023 to determine the compensation actually paid, using the same methodology described above in Note 2: |
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Compensation Table Total for Non-PEO |
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|
|
|
|
2023 |
|
$ |
9,199,771 |
|
|
$ |
(6,031,278 |
) |
|
$ |
1,432,720 |
|
|
$ |
(1,076,723 |
) |
|
$ |
345,928 |
|
|
$ |
3,870,419 |
|
| (a) |
|
The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
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Average
Year End Fair Value |
|
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|
|
|
|
|
|
|
|
|
2023 |
|
|
$ |
2,934,301 |
|
|
|
$ |
(615,412 |
) |
|
|
|
— |
|
|
|
$ |
(258,644 |
) |
|
|
|
(627,525 |
) |
|
|
|
— |
|
|
|
$ |
1,432,720 |
|
| (b) |
|
The amounts deducted or added in calculating the total pension benefit adjustments are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Prior Service Cost |
|
|
2023 |
|
|
$ |
345,928 |
|
|
|
|
— |
|
|
|
$ |
345,928 |
|
| 5. |
Cumulative TSR is calculated by dividing (i) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the measurement period, by (ii) the Company’s share price at the beginning of the measurement period. |
| 6. |
Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the KBW Nasdaq Bank Index. |
| 7. |
The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
| 8. |
For purposes of our incentive compensation plans, absolute earnings per share is calculated by dividing the Company’s net income available to common shareholders for the applicable year, adjusted for certain unexpected or non-core performance items as determined by the Compensation and Human Capital Committee, by the average number of fully diluted common shares outstanding during the year. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that EPS is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table above) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. EPS for purposes of our incentive compensation plans is a non-GAAP financial measure. See Annex A for a reconciliation of GAAP earnings per share to EPS for purposes of our incentive compensation plans for 2023. |
|
|
|
|
| Company Selected Measure Name |
|
|
absolute earnings per share
|
|
|
|
| Named Executive Officers, Footnote |
|
|
The names of each of the NEOs (excluding Mr. Rogers) included for purposes of calculating the average amounts in 2023 are Michael B. Maguire, Hugh S. Cummins III, Clarke R. Starnes III, Dontá L. Wilson and John M. Howard.
|
|
|
|
| Peer Group Issuers, Footnote |
|
|
Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the KBW Nasdaq Bank Index.
|
|
|
|
| Adjustment To PEO Compensation, Footnote |
|
|
| 2. |
The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to the PEOs, Mr. Rogers and Mr. King, as computed in accordance with Item 402(v) of Regulation S-K. These dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Rogers or Mr. King, as applicable, during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Rogers’ total compensation for 2023 to determine the compensation actually paid: |
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|
|
2023 |
|
|
$ |
12,037,646 |
|
|
|
$ |
(6,843,578 |
) |
|
|
$ |
4,774 |
|
|
|
$ |
(1,107,866 |
) |
|
|
$ |
28,290 |
|
|
|
$ |
4,119,266 |
|
| (a) |
Represents the deduction from the “Reported Summary Compensation Table Total for PEO” column for the total grant date fair value of equity awards reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for 2023. |
| (b) |
The equity award adjustments for 2023 include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in 2023 that were outstanding and unvested as of the end of 2023; (ii) the amount of change as of the end of 2023 (from the end of the prior fiscal year) in fair value of any awards granted in prior years that were outstanding and unvested as of the end of 2023; (iii) for awards that were granted and vested in 2023, the fair value as of the vesting date; (iv) for awards granted in prior years that vested in 2023, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during 2023, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in 2023 prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for 2023. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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|
2023 |
|
|
$ |
2,505,037 |
|
|
|
$ |
(1,697,970 |
) |
|
|
|
— |
|
|
|
$ |
(802,293 |
) |
|
|
|
— |
|
|
|
|
— |
|
|
|
$ |
4,774 |
|
| (c) |
Represents the deduction for the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table for 2023. |
| (d) |
The total pension benefit adjustments for 2023 include the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Rogers during 2023 (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during 2023 that were attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: |
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
|
|
$ 9,199,771
|
$ 6,193,618
|
$ 9,296,667
|
$ 7,678,184
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
|
|
$ 3,870,419
|
6,642,889
|
9,957,776
|
5,076,214
|
| Adjustment to Non-PEO NEO Compensation Footnote |
|
|
| 4. |
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. King and/or Mr. Rogers, as applicable), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Rogers) during 2023. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for the NEOs as a group (excluding Mr. Rogers) for 2023 to determine the compensation actually paid, using the same methodology described above in Note 2: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation Table Total for Non-PEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
9,199,771 |
|
|
$ |
(6,031,278 |
) |
|
$ |
1,432,720 |
|
|
$ |
(1,076,723 |
) |
|
$ |
345,928 |
|
|
$ |
3,870,419 |
|
| (a) |
|
The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Year End Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
$ |
2,934,301 |
|
|
|
$ |
(615,412 |
) |
|
|
|
— |
|
|
|
$ |
(258,644 |
) |
|
|
|
(627,525 |
) |
|
|
|
— |
|
|
|
$ |
1,432,720 |
|
| (b) |
|
The amounts deducted or added in calculating the total pension benefit adjustments are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Prior Service Cost |
|
|
2023 |
|
|
$ |
345,928 |
|
|
|
|
— |
|
|
|
$ |
345,928 |
|
|
|
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
|
|
Compensation Actually Paid and Cumulative TSR The amount of compensation actually paid to the PEOs, Messrs. King and Rogers (as applicable), and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. King and/or Rogers, as applicable) is generally aligned with the Company’s cumulative TSR over the four years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is primarily because a significant portion of the compensation actually paid to the NEOs is comprised of equity awards. As described in more detail in the CD&A, as of December 31, 2023, approximately 51% of the value of total target compensation awarded to the CEO and 44% of the value of total target compensation awarded to the other NEOs consists of equity awards, including RSU and PSU awards.
|
|
|
|
| Compensation Actually Paid vs. Net Income |
|
|
Compensation Actually Paid and Net Income The amount of compensation actually paid to the PEOs, Messrs. King and Rogers (as applicable), and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. King and/or Rogers, as applicable) is generally aligned with the Company’s net income over the four years presented in the PvP table. While the Company does not use net income as a performance measure in the overall executive compensation program, the measure of net income is correlated with the performance measures which the Company uses when setting goals in the Company’s short-term and long-term incentive compensation plans, such as EPS, PPNR and ROACE. Each of these measures is calculated using net income as a component. As described in more detail in the CD&A, as of December 31, 2023, approximately 68% of the value of total target compensation awarded to the CEO and 67% of the value of total target compensation awarded to the other NEOs is performance-based pay largely dependent on financial measures that are calculated using net income as a key element. |
|
|
|
| Compensation Actually Paid vs. Company Selected Measure |
|
|
Compensation Actually Paid and EPS The amount of compensation actually paid to the PEOs, Messrs. King and Rogers (as applicable), and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. King and/or Rogers, as applicable) is generally aligned with the Company’s EPS over the four years presented in the PvP table, although EPS increased slightly in 2023 while compensation actually paid decreased as discussed below. For purposes of our incentive compensation plans, EPS is defined as the Company’s net income available to common shareholders for the applicable year, adjusted for certain unexpected or non-core performance items as determined by the Compensation and Human Capital Committee, divided by the average number of fully diluted common shares outstanding during the year. EPS for purposes of our incentive compensation plans is a non-GAAP financial measure. See Annex A for a reconciliation of GAAP earnings per share to EPS as used in our incentive compensation plans for 2023. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that EPS is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the PvP table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. The Company utilizes EPS when setting goals in the Company’s AIP awards program with EPS weighted at 50% in determining the payouts to the NEOs prior to 2023 and at 40% starting in 2023. As described in more detail in the CD&A, as of December 31, 2023, approximately 24% of the value of total target compensation awarded to the CEO and 28% of the value of total target compensation awarded to the other NEOs consists of amounts determined under the Company’s AIP awards. Although EPS as adjusted for incentive compensation purposes increased slightly in 2023, compensation actually paid decreased for the year due to a number of factors, including adjusting the weighting of EPS in the Company’s AIP awards program from 50% to 40%, failing to achieve threshold performance for PPNR (a new performance metric in the AIP awards program for 2023), and the decrease in the Company’s stock price during 2023 causing a large decline in the value of the significant portion of NEO pay comprised of equity awards. |
|
|
|
| Total Shareholder Return Vs Peer Group |
|
|
Cumulative TSR of the Company and Cumulative TSR of the Peer Group The Company’s cumulative TSR over the four-year period presented in the PvP table was -21.6%, while the cumulative TSR of the peer group presented for this purpose, the KBW Nasdaq Bank Index, was -3.3% over the four years presented in the PvP table. The Company’s cumulative TSR underperformed the peer group over this period primarily due to elevated merger-related costs, lower asset sensitivity, higher unrealized losses in the securities portfolio and slower growth relative to the peer group. For more information regarding the Company’s performance and the companies that the Compensation and Human Capital Committee considers when determining compensation, refer to the CD&A. |
|
|
|
| Tabular List, Table |
|
|
Financial Performance Measures As described in greater detail in the CD&A, the Company’s executive compensation program reflects a culture at Truist that is rooted in our values. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
| |
• |
Absolute Earnings Per Share (“EPS”); |
|
| |
• |
Absolute Pre-provision Net Revenue (“PPNR); and |
|
| |
• |
Relative Return on Average Common Equity (“ROACE”). |
|
|
|
|
|
| Total Shareholder Return Amount |
|
|
$ 78.39
|
85.7
|
112.04
|
88.87
|
| Peer Group Total Shareholder Return Amount |
|
|
96.66
|
97.53
|
124.08
|
89.69
|
| Net Income (Loss) |
|
|
$ (1,047,000,000)
|
$ 6,267,000,000
|
$ 6,437,000,000
|
$ 4,492,000,000
|
| Company Selected Measure Amount |
|
|
4.76
|
4.59
|
4.25
|
3.8
|
| Measure:: 1 |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Name |
|
|
Absolute Earnings Per Share (“EPS”);
|
|
|
|
| Non-GAAP Measure Description |
|
|
| 8. |
For purposes of our incentive compensation plans, absolute earnings per share is calculated by dividing the Company’s net income available to common shareholders for the applicable year, adjusted for certain unexpected or non-core performance items as determined by the Compensation and Human Capital Committee, by the average number of fully diluted common shares outstanding during the year. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that EPS is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table above) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. EPS for purposes of our incentive compensation plans is a non-GAAP financial measure. See Annex A for a reconciliation of GAAP earnings per share to EPS for purposes of our incentive compensation plans for 2023. |
|
|
|
|
| Measure:: 2 |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Name |
|
|
Absolute Pre-provision Net Revenue (“PPNR);
|
|
|
|
| Measure:: 3 |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Name |
|
|
Relative Return on Average Common Equity (“ROACE”).
|
|
|
|
| Mr. KellyS. King [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| PEO Total Compensation Amount |
|
|
$ 0
|
$ 0
|
$ 15,288,905
|
$ 14,823,906
|
| PEO Actually Paid Compensation Amount |
|
|
0
|
0
|
23,785,332
|
$ 11,068,514
|
| PEO Name |
|
Mr. Kelly S. King
|
|
|
|
Mr. Kelly S. King
|
| Mr. William H. Rogers, Jr. [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| PEO Total Compensation Amount |
|
|
12,037,646
|
13,237,842
|
10,395,426
|
$ 0
|
| PEO Actually Paid Compensation Amount |
|
|
$ 4,119,266
|
$ 11,774,153
|
$ 24,811,139
|
$ 0
|
| PEO Name |
Mr. William H. Rogers, Jr.
|
|
Mr. William H. Rogers, Jr.
|
Mr. William H. Rogers, Jr.
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Reported Value Of Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
$ (6,843,578)
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Equity Award Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
4,774
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Reported Change In The Actuarial Present Value Of Pension Benefits [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(1,107,866)
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Pension Benefit Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
28,290
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Year End Fair Value Of Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
2,505,037
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Year Over Year Change In Fair Value Of Outstanding And Unvested Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(1,697,970)
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Fair Value As Of Vesting Date Of Equity Awards Granted And Vested In The Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(802,293)
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Fair Value At The End Of The Prior Year Of Equity Awards That Failed To Meet Vesting Conditions In The Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Value Of Dividends Or Other Earnings Paid On Stock Or Option Awards Not Otherwise Reflected In Fair Value Or Total Compensation [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Total Equity Award Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
4,774
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Service cost [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
28,290
|
|
|
|
| PEO | Mr. William H. Rogers, Jr. [Member] | Prior service cost [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| Non-PEO NEO | Reported Value Of Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(6,031,278)
|
|
|
|
| Non-PEO NEO | Equity Award Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
1,432,720
|
|
|
|
| Non-PEO NEO | Reported Change In The Actuarial Present Value Of Pension Benefits [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(1,076,723)
|
|
|
|
| Non-PEO NEO | Pension Benefit Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
345,928
|
|
|
|
| Non-PEO NEO | Year End Fair Value Of Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
2,934,301
|
|
|
|
| Non-PEO NEO | Year Over Year Change In Fair Value Of Outstanding And Unvested Equity Awards [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(615,412)
|
|
|
|
| Non-PEO NEO | Fair Value As Of Vesting Date Of Equity Awards Granted And Vested In The Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| Non-PEO NEO | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(258,644)
|
|
|
|
| Non-PEO NEO | Fair Value At The End Of The Prior Year Of Equity Awards That Failed To Meet Vesting Conditions In The Year [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
(627,525)
|
|
|
|
| Non-PEO NEO | Value Of Dividends Or Other Earnings Paid On Stock Or Option Awards Not Otherwise Reflected In Fair Value Or Total Compensation [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
0
|
|
|
|
| Non-PEO NEO | Total Equity Award Adjustments [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
1,432,720
|
|
|
|
| Non-PEO NEO | Service cost [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
345,928
|
|
|
|
| Non-PEO NEO | Prior service cost [Member] |
|
|
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
|
|
| Adjustment to Compensation, Amount |
|
|
$ 0
|
|
|
|