SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

 

Filedby the Registrant [X]

Filed by a Party other than the Registrant [   ]

Check the appropriate box:

[   ]X]Preliminary Proxy Statement                     [   ] Soliciting Material Under Rule 14a-12
[   ]Confidential, For Use of the
    Commission Only (as permitted by
    Rule 14a-6(e)(2))
[X]   ]Definitive Proxy Statement
[   ]Definitive Additional Materials

Capital One Financial Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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LOGO

NOTICE OF CAPITAL ONE FINANCIAL CORPORATION’S

2015 ANNUAL STOCKHOLDER MEETING

Important Notice Regarding the Availability of Proxy Materials for

The Stockholder Meeting To Be Held On April 30, 2015

The Proxy Statement and Annual Report to Stockholders are available atwww.proxyvote.com

The Annual Stockholder Meeting of Capital One Financial Corporation (“Capital One” or the “Company”) will be held at Capital One’s headquarters, 1680 Capital One Drive, McLean, Virginia 22102, on April 30, 2015, at 10:00 a.m.

 Items of Business

As a stockholder you will be asked to:

1.Elect ten nominated directors, who are listed in the proxy statement, as directors of Capital One;

2.Ratify the Audit Committee’s selection of Ernst & Young LLP as independent auditors of Capital One for 2015;

3.Approve, on a non-binding advisory basis, Capital One’s 2014 Named Executive Officer compensation;

4.Approve amendments to Capital One’s Restated Certificate of Incorporation to allow stockholders to request special meetings of the stockholders;

5.Consider a stockholder proposal regarding special meetings of the stockholders, if properly presented at the meeting; and

6.Transact such other business as may properly come before the meeting.

 Record Date

You may vote if you held shares of Capital One common stock as of the close of business on March 5, 2015.

 Proxy Voting

Your vote is important. You may vote your shares in person at the Annual Stockholder Meeting, via the Internet, by telephone or by mail. Please refer to the section “How do I vote?” for detailed voting instructions. If you choose to vote in person at the Annual Stockholder Meeting, via the Internet or by telephone, you do not need to mail in a proxy card.

 Annual Meeting Admission

Due to space limitations, attendance is limited to stockholders and one guest each. Admission to the meeting is on a first-come, first-served basis. Registration begins at 9:00 a.m. A valid government-issued picture identification and proof of stock ownership as of the record date must be presented in order to attend the meeting. If you hold Capital One stock through a broker, bank, trust or other nominee, you must bring a copy of a statement reflecting your stock ownership as of the record date. If you plan to attend as the proxy of a stockholder, you must present a legal proxy (described below). Cameras, recording devices and other electronic devices are not permitted.

We look forward to seeing you at the meeting.

On behalf of the Board of Directors,

LOGO

John G. Finneran, Jr.

Corporate Secretary

Capital One Financial Corporation

1680 Capital One Drive

McLean, VA 22102(Name of Registrant as Specified In Its Charter)

March 17, 2015

TABLE OF CONTENTS(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]No fee required.

 

[   ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 1)PageTitle of each class of securities to which transaction applies:

SECTION I – ABOUT THIS PROXY STATEMENT

     1

2)Aggregate number of securities to which transaction applies:

SECTION II – CORPORATE GOVERNANCE AT CAPITAL ONE

     6

3)Per unit price or other underlying value of transaction computed pursuant to Exchange ActRule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

SECTION III – SECURITY OWNERSHIP

     25

4)Proposed maximum aggregate value of transaction:

SECTION IV – DIRECTOR COMPENSATION

     28

5)Total fee paid:

SECTION V – COMPENSATION DISCUSSION AND ANALYSIS

     31

[   ]Fee paid previously with preliminary materials:

[   ]Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

1)Amount previously paid:

SECTION VI – NAMED EXECUTIVE OFFICER COMPENSATION

     52

2)Form, Schedule or Registration Statement No.:

SECTION VII – EQUITY COMPENSATION PLANS

     71

3)Filing Party:

SECTION VIII – COMPENSATION COMMITTEE REPORT

     73

4)Date Filed:

SECTION IX – AUDIT COMMITTEE REPORT

     74

SECTION X – ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)

75

SECTION XI – RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS (ITEM 2 ON PROXY CARD)

76

SECTION XII – ADVISORY APPROVAL OF CAPITAL ONE’S 2014 NAMED EXECUTIVE OFFICER COMPENSATION (ITEM 3 ON PROXY CARD)

78

SECTION XIII – APPROVAL OF AMENDMENT TO CAPITAL ONE’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF THE STOCKHOLDERS (ITEM 4 ON PROXY CARD)

79

SECTION XIV – STOCKHOLDER PROPOSAL REGARDING SPECIAL MEETINGS OF THE STOCKHOLDERS (ITEM 5 ON PROXY CARD)

83

SECTION XV – OTHER BUSINESS

85

APPENDIX A – PROPOSED AMENDMENTS TO CAPITAL ONE FINANCIAL CORPORATION’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF THE STOCKHOLDERS

A-1

APPENDIX B – PROPOSED AMENDMENTS TO CAPITAL ONE’S AMENDED AND RESTATED BYLAWS TO ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF STOCKHOLDERS

B-1

LOGO

SECTION I – ABOUT THIS PROXY STATEMENTLOGO

Notice of Capital One Financial Corporation’s

 Why did I receive a2018 Annual Stockholder Meeting

Important Notice Regarding the Internet Availability of Proxy Materials?

In accordance with rules of the Securities and Exchange Commission (“SEC”), instead of mailing printed copies of our proxy materials, we are furnishing the proxy materials to our stockholders via the Internet. This process will save the Company some of the cost of printing and mailing the proxy materials and will reduce the impact of our annual stockholder meetings on the environment. Accordingly, on or about March 17, 2015, we mailed to our stockholders a Notice Regarding the Internet Availability of Proxy Materials (the “Notice”). If you received a Notice, you will not receive a printed copy of the proxy materials unless you request one. for

The Notice provides instructions on howStockholder Meeting To Be Held On May 3, 2018

The Proxy Statement and Annual Report to access the proxy materials for Capital One’s 2015Stockholders are available atwww.proxyvote.com

The Annual Stockholder Meeting (the “Annual Meeting”) via the Internet, how to request a printed set of proxy materials and how to vote your shares.

 What is the purpose of the proxy materials?

The Board of Directors of Capital One is providing you these materials in connection with the solicitation byFinancial Corporation (“Capital One” or “Company”) will be held at Capital One’s Boardheadquarters at 1680 Capital One Drive, McLean, Virginia 22102, on May 3, 2018, at 10:00 a.m. local time.

Items of Directors of proxies toBusiness

As a stockholder, you will be voted atasked to:

➊

Elect eleven nominated directors, who are listed in the proxy statement, as directors of Capital One

➋

Ratify the Audit Committee’s selection of Ernst & Young LLP as independent auditor of Capital One for 2018

➌

Approve, on anon-binding advisory basis, Capital One’s 2017 Named Executive Officer compensation

➍

Ratify the 25% ownership threshold for stockholders to request a special meeting of stockholders

Stockholders also will transact other business that may properly come before the Annual Meeting. All stockholders who held shares as of the close of business on March 5, 2015 (the “record date”), are entitled to attend the Annual Meeting and to vote on the items of business outlined in this proxy statement. If you choose not to attend the Annual Meeting, youmeeting.

Record Date

You may vote your shares via the Internet, by telephone or by mail.

 How do I access the proxy materials?

The Notice provides instructions regarding how to view our proxy materials for the Annual Meeting online. As explained in greater detail in the Notice, to view the proxy materials and to vote, you will need to visitwww.proxyvote.com and have available your 16-digit control number(s) contained on your Notice.

 How do I request paper copies of the proxy materials?

You may request paper copies of the 2015 proxy materials by following the instructions listed atwww.proxyvote.com, by telephoning 1-800-579-1639 or by sending an e-mail tosendmaterial@proxyvote.com.

 What is the difference between a record holder and a holder of shares in street name?

You are a record holder if you hold shares of Capital One common stock directly in your name through Capital One’s transfer agent, Computershare Trust Company, N.A. (“Computershare”).

If you hold shares of Capital One common stock through a broker, bank, trust or other nominee, then you are a holder of shares in street name. As a result, you must instruct the broker, bank, trust or other nominee about how to vote your shares. Under the rules of the New York Stock Exchange (“NYSE”), if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares only with respect to “routine” matters, as described below.

 Can I attend the Annual Meeting?

If you held shares of Capital One common stock as of the close of business on March 5, 2015, you6, 2018 (“Record Date”).

Proxy Voting

Your vote is important. You may attendvote your shares via the Internet, by telephone, by mail or in person at the Annual Stockholder Meeting. Because seatingPlease refer to the section “How do I vote?” in the Proxy Statement for detailed voting instructions. If you vote via the Internet, by telephone or in person at the Annual Stockholder Meeting, you do not need to mail in a proxy card.

Annual Meeting Admission

Due to space limitations, attendance is limited only youto stockholders and aone guest may attend the meeting.each. Admission to the meeting is on a first-come, first-served basis. Registration begins at 9:00 a.m. You must present alocal time. A valid government-issued picture identification and proof of Capital One stock ownership as of the record date.Record Date must be presented to attend the meeting. If you hold Capital One stock in street name,through a broker, bank, trust or other nominee, you must also bring a copy of a brokerage statement reflecting your stock ownership as of the record date.Record Date. If you plan to attend as the proxy of a stockholder, you must present a legal proxy (described below).from your bank, broker, trust or other nominee vote. Cameras, recording devices and other electronic devices are not permitted.

If you require special assistance at the meeting because of a disability, please contact the Corporate Secretary at the address below.

 Am I entitledWe look forward to vote?

You are entitled to vote ifseeing you were the record holder of shares of Capital One common stock as of the close of business on March 5, 2015. All stockholders of record are entitled to one vote per share of common stock held for each matter submitted for a vote at the meeting.

If you hold your sharesOn behalf of the Board of Directors,

John G. Finneran, Jr.

Corporate Secretary

Capital One common stockFinancial Corporation

1680 Capital One Drive

McLean, VA 22102

March [    ], 2018

Proxy Summary

This summary highlights information contained elsewhere in street name,this proxy statement. This summary does not contain all the information you may instruct your broker regardingshould consider in voting your shares usingshares. Please read the same methods described below under “How do I vote?”

On March 5, 2015, there were 549,458,166 shares of Capital One’s common stock issuedcomplete proxy statement and outstanding.our annual report carefully before voting.

 

 Meeting Information

  Date:

Thursday, May 3, 2018

  Time:

10:00 a.m. local time

  Location:

1680 Capital One Drive, McLean, Virginia, 22102

  Record Date:

March 6, 2018

 How do I vote?

By Internet

 How to Vote

Your vote is important. You may vote your shares via the Internet, by going towww.proxyvote.com and following the instructions on the screen. Have your Notice, proxy card (for record holders) or voting instruction form (for holders of shares in street name) available when you access the web page.

By Telephone

You may vote by telephone, by calling the toll-free telephone number on the proxy card (1-800-690-6903), which is available 24 hours a day, and following the prerecorded instructions. Have your Noticemail or proxy card available when you call. If you hold your shares in street name, your broker, bank, trustee or other nominee may provide additional instructions to you regarding voting your shares by telephone.

By Mail

If you received your proxy materials by mail, you may vote by mail by completing the enclosed proxy card, dating and signing it and returning it in the postage-paid envelope provided or returning it to Broadridge Financial Solutions, Inc. (“Broadridge”), Vote Processing, 51 Mercedes Way, Edgewood, NY 11717.

Time for Voting Your Shares By Internet, By Telephone or By Mail

You may vote via the Internet or by telephone up until 11:59 PM Eastern Daylight Time on April 29, 2015. If you vote by mail, your proxy card must be received by April 29, 2015.

In Person

If you are a record holder of shares of Capital One common stock, you may vote in person at the Annual Meeting. A record holder must present a valid government-issued picture identification and, if the shares are held in the name of an entity, evidence of valid authorization from that entity in order to attend the meeting. Stockholders of record also may be represented by another person at the Annual Meeting by executing a legal proxy designating that person as the proxy holder. Each stockholder may appoint only one proxy holder or representative to attend the Annual Meeting on his or her behalf. See “Can I attend the Annual Meeting?” above for more information regarding attending the Annual Meeting.

If you hold your shares of Capital One common stock in street name, you must bring a valid government-issued picture identification and a copy of a statement reflecting your stock ownership as of the record date in order to attend the meeting. You must also obtain a legal proxy from your broker, bank, trust or other nominee and present itPlease refer to the inspector of elections with your ballot to be able to vote at the Annual Meeting. To request a legal proxy, please follow the instructions atwww.proxyvote.com.

 What if I hold my shares in street name and I do not provide my broker, bank, trustee or other nominee

 with instructions about how to vote my shares?

You may instruct your broker, bank, trustee or other nominee on how to vote your shares using the methods described above. If you do not vote via the Internet or by telephone and do not return your voting instructions to the firm that holds your shares prior to the Annual Meeting, the firm has discretion to vote your shares only with respect to Item 2 on the proxy card, which is considered a “routine” matter under NYSE rules. The election of

members of the Board of Directors and Items 3, 4 and 5 are not considered “routine” matters, and the firm that holds your shares will not have discretionary authority to vote your shares for these Items if you do not provide instructions using one of the methods described above. Therefore, you are encouraged to return your voting instructions so that your shares are voted for non-routine matters at the Annual Meeting. If you hold shares in several different accounts, you must provide voting instructions for each account in order to authorize all of your shares to be voted.

 Howsection “How do I vote my 401(k) shares?

vote?” on page 104 for detailed voting instructions. If you participate in the Capital One Associate Savings Plan, you may vote the number of shares equivalent to your interest in the Capital One Pooled Stock Fund as credited to your account on the record date. You will receive instructions on how to vote your shares via e-mail from Broadridge. The trustee of the Associate Savings Plan will vote your shares in accordance with your duly executed instructions if they are received by April 27, 2015. If you do not send instructions, the trustee will not vote the share equivalents credited to your account.

 Can I revoke my proxy or change my vote?

Yes, you may revoke any proxy that you previously granted or change your vote by:

submitting another timely vote via the Internet, by telephone or by mailing a new proxy card or voting instruction form;
attending the Annual Meeting and voting in person; or
if you are a record holder, giving written notice of revocation to the Corporate Secretary, Capital One Financial Corporation, 1680 Capital One Drive, McLean, VA 22102.

Your new vote or revocation must be submitted in accordance with the timeframes above under “Time for Voting Your Shares By Internet, By Telephone or By Mail.”

 What constitutes a quorum?

A quorum of stockholders is necessary to transact business at the Annual Meeting. A quorum exists if the holders of a majority of the voting power of Capital One’s outstanding shares entitled to vote generally in the election of directors are present in person or represented by proxy. Abstentions and broker non-votes will be counted in determining if there is a quorum, but neither will be counted as votes cast.

 What is a broker non-vote?

As described above, under NYSE rules, if you hold your shares in street name and you do not submit voting instructions to the firm that holds your shares, the firm has discretionary authority to vote your shares only with respect to “routine” matters. For non-routine matters, which include the election of directors and Items 3, 4 and 5, if you do not submit voting instructions, the firm that holds your shares will not have discretion to vote your shares. This is called a “broker non-vote.”

 Who will count the vote?

Votes will be tabulated by Broadridge. The Board of Directors has appointed a representative of American Elections Services, LLC to serve as the Inspector of Elections.

 Will a list of stockholders be made available?

Capital One will make a list of stockholders available at the Annual Meeting, and, for ten days prior to the meeting, at our offices located at 1680 Capital One Drive in McLean, Virginia. Please contact Capital One’s Corporate Secretary at (703) 720-1000 if you wish to inspect the list of stockholders prior to the Annual Meeting.

 How much did the solicitation cost?

Capital One will pay the costs of the solicitation. We have retained Georgeson Inc. to assist us in the solicitation of proxies for an aggregate fee of $12,500, plus reasonable out-of-pocket expenses. In addition to Capital One soliciting proxies via the Internet, by telephone and by mail, our directors, officers and employees may solicit proxies on our behalf, without additional compensation.

 What is “householding?”

Under SEC rules, a single package of Notices may be sent to any household at which two or more stockholders reside if they appear to be members of the same family unless contrary instructions have been received. Each stockholder continues to receive a separate Notice within the package. This procedure, referred to as householding, reduces the volume of duplicate materials stockholders receive and reduces mailing expenses. Stockholders may revoke their consent to future householding mailings or enroll in householding by contacting Broadridge toll free at 1-800-542-1061 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Capital One will deliver promptly, upon written or oral request, a separate copy of the proxy materials to any stockholder at a shared address to which a single copy was delivered. Stockholders who wish to receive a separate set of proxy materials now should contact Broadridge at the same phone number or mailing address.

 What vote is necessary to approve each item?

All stockholders of record are entitled to one vote per share of common stock held for each nominee for director and for each other matter presented for a vote at the meeting.

Item 1 requests your vote for the election of ten candidates for director. Richard D. Fairbank, Patrick W. Gross, Ann Fritz Hackett, Lewis Hay, III, Benjamin P. Jenkins, III, Pierre E. Leroy, Peter E. Raskind, Mayo A. Shattuck III, Bradford H. Warner and Catherine G. West will each be elected as a director of Capital One if a majority of the votes cast in his or her election is voted in favor of such election. Capital One also maintains a “majority voting” policy, which requires that any director who fails to receive a majority of votes cast in favor of his or her election tender a resignation for the Board’s consideration. Cumulative voting for the election of directors is not permitted. For more information regarding Capital One’s director nomination process see page 15.

Item 2, the ratification of the Audit Committee’s selection of Ernst & Young LLP as independent auditors of the Company for 2015, will be approved if a majority of the votes cast on the proposal are voted in favor of the proposal.

Item 3, the advisory approval of Capital One’s 2014 Named Executive Officer compensation, will be approved if a majority of the votes cast on the proposal are voted in favor of the proposal.

Item 4, amending Capital One’s Restated Certificate of Incorporation to allow stockholders to request special meetings of the stockholders, will be approved if a majority of the shares of common stock outstanding are voted in favor of the proposal;

Item 5, the stockholder proposal regarding special meetings of the stockholders, will be approved if a majority of votes cast on the proposal are voted in favor of the proposal.

As described under “How do I vote?” on page 2, under NYSE rules, if you hold your shares in street name and you do not submit voting instructionsneed to mail in a proxy card.

INTERNET

TELEPHONE

OR CELLPHONE

MAILIN PERSON
LOGOLOGOLOGOLOGO

Visit www.proxyvote.com

You will need the control number in your notice, proxy card or voting instruction form.

Dial toll-free(1-800-690-6903) or the telephone number on your voting instruction form. You will need the control number in your notice, proxy card or voting instruction form.If you received a paper copy of your proxy materials, send your completed and signed proxy card or voting instruction form using the enclosed postage-paid envelope.By following the instructions below under “Can I attend the Annual Meeting?” on page 103 and requesting a ballot when you arrive.

On March [    ], 2018, we began sending our stockholders a Notice Regarding the broker, bank, trust or other nominee that holds your shares, the firm will only have discretionary authorityInternet Availability of Proxy Materials.

 Voting Items

Item 1

Election of Directors

You are being asked to elect the following eleven candidates for director: Richard D. Fairbank, Aparna Chennapragada, Ann Fritz Hackett, Lewis Hay, III, Benjamin P. Jenkins, III, Peter Thomas Killalea, Pierre E. Leroy, Peter E. Raskind, Mayo A. Shattuck III, Bradford H. Warner and Catherine G. West. Each director nominee is standing for election to hold office until our next annual meeting or until his or her successor is duly elected and qualified. For additional information regarding our director nominees, see “Biographies of Director Nominees” beginning on page 16. For a description of our corporate governance practices, see “Corporate Governance at Capital One” beginning on page 10.

✓  Our Board of Directors unanimously recommends that you vote “FOR” each of these director nominees.



CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  1

Corporate Governance Highlights

Board of

Directors

∎    Ten of our eleven director nominees are independent

∎    Board consists of directors with a mix of tenures, including long-standing members who have actively overseen the Company’s strategic journey through various business cycles and have a deep knowledge of the Company, relatively new members who bring fresh ideas and perspectives, and others at different points along the tenure continuum

∎    Directors reflect a variety of experiences and skills that match the Company’s complexity and strategic direction and give the Board the collective capability necessary to oversee the Company’s activities

∎    All directors attended at least 75% of meetings of the Board and committees on which they served during 2017

Board

Leadership

Structure

∎    CEO and founder is the only member of management who serves as a director

∎    Active and empowered Lead Independent Director elected annually by independent directors

∎    Active and empowered committee chairs, all of whom are independent

Board

Governance

Best Practices

∎    Frequent executive sessions of independent directors

∎    Annual evaluations of the Board and each of its committees

∎    Annual assessments of independent directors

∎    Annual assessment and election by the independent directors of the Lead Independent Director

∎    Regular discussions regarding Board recruiting, succession and refreshment including desirable director skills
and qualifications for the Company’s long-term strategic objectives

∎    Active engagement in oversight of Company strategy

∎    Active risk oversight by the Board and committees

∎    Oversight of the Company’s political activities and contributions conducted by the Governance and
Nominating Committee

∎    Direct access by the Board to key members of management at the discretion of independent directors;
executive sessions regularly include separate meetings with our CFO, General Counsel, Chief Risk Officer,
Chief Auditor, Chief Credit Review Officer and Chief Compliance Officer

∎    Annual CEO evaluation process led by our Lead Independent Director

∎    Regular talent and succession planning discussions regarding the CEO and other key executives

∎    Regular meetings with federal regulators

Stockholder

Engagement and

Stockholder

Role in

Governance

∎    Regular outreach and engagement throughout the year with stockholders about Company strategy
and performance by our CEO, CFO and Investor Relations team

∎    Outreach and engagement with governance representatives of largest stockholders at least two times per year

∎    Feedback from investors regularly shared with our Board and its committees to ensure that our Board has
insight on investor views

∎    Board and Governance and Nominating Committee receive extensive briefings and benchmarking reports
on corporate governance practices and emerging corporate governance issues

∎    Annual elections of directors

∎    Majority voting for directors with resignation policy in uncontested elections

∎    Stockholders holding at least 25% of outstanding common stock may request a special meeting

∎    Proxy access for stockholders holding 3% of outstanding common stock for 3 years to nominate
director candidates

∎    No super majority vote provisions for future amendments to Bylaws and Certificate of Incorporation or
removing a director from office

∎    No stockholder rights plan (commonly referred to as a “poison pill”)



2  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

Item 2

Ratification of Appointment of Capital One’s Independent Auditor

You are being asked to ratify the Audit Committee’s appointment of Ernst & Young LLP as our
independent auditor for 2018. One or more representatives of Ernst & Young LLP will be present at
our Annual Meeting to respond to questions from stockholders. For additional information regarding the
Audit Committee’s appointment of and the fees paid to Ernst & Young LLP, see “Audit Committee Report”
on page 94 and “Ratification of Selection of Independent Auditor” on page 96 of this proxy statement.

✓Our Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of Ernst & Young LLP as the Company’s independent auditor.

Item 3

Advisory Approval of Capital One’s Named Executive Officer Compensation

You are being asked to approve on an advisory basis the compensation of Capital One’s named executive officers. For additional information regarding our executive compensation program and our named executive officer compensation, see “Compensation Discussion and Analysis” beginning on page 44 of this proxy statement.

✓  Our Board of Directors unanimously recommends that you vote “FOR” the advisory approval of our 2017 Named Executive Officer compensation as disclosed in this proxy statement.

Our executive compensation program is designed to vote your shares with respect to Item 2. If you do not submit voting instructions, the firm that holds your shares will not have discretion to vote your shares with respect to Items 1, 3, 4attract, retain and 5. Abstentions and broker non-votes are not considered “votes cast” and thus do not have an effect on the outcome of the vote as to Items 1, 2, 3 and 5. With respect to Item 4, abstentions and broker non-votes willmotivate leaders who have the same effect as a vote against the proposal.

ability to foster strong business results and promote our long-term success. We believe our executive compensation program strongly links rewards with both business and individual performance while appropriately balancing risk and ensuring that total compensation rewards performance over multiple time horizons, which aligns our executives’ interests with those of our stockholders.

2017 Company Performance

 What are the Board of Directors’ recommendations?

If you properly submit a proxy without giving specific voting instructions, the individuals named as proxy holders will vote in accordanceIn 2017, we advanced our quest to build an enduringly great franchise with the recommendationsscale, brand, capabilities and infrastructure to succeed as the digital revolution transforms our industry and our society. We made strategic moves to position our businesses for long-term success. We continued to grow and serve customers with ingenuity and humanity. Our digital and technology transformation is accelerating and we delivered solid near-term financial results for stockholders while investing in our future. The table below shows selected Company performance metrics that were considered by the Compensation Committee of the Board of Directors as follows:in making its decisions this year. See“Year-End Incentive Opportunity” beginning on page 52 for more information regarding the Company’s 2017 performance.



CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  3

Performance Factor

2017 Performance

LOGO

∎      Revenue

∎      Expense management

∎      Earnings and Earnings per share

∎      ROA and ROTCE

∎      Capital management

∎      Total shareholder return

∎      Revenue of $27.2 billion

∎       Pre-provision earnings of $13.0 billion

∎       Efficiency ratio of 52.1%, or 51.0% net of adjustments,(1) a significant improvement from 2016

∎      Net Income of $2.0 billion

∎       Adjusted earnings per share (“EPS”)(1) growth of 7.4% to $7.74 per common share, fully diluted

∎       Return on average assets (“ROA”) of 0.60%

∎       Return on average common equity of 4.07%

∎       Return on average tangible common equity (“ROTCE”) of 6.16%(2)

∎       Growth of tangible book value per common share was 4%

∎      Paid a quarterly common stock dividend of $.40 per share

∎       Strong revenue, new accounts, and purchase volume growth in the Credit Card business, with net income of $1.9 billion and average loan growth of 7%

∎       Strong financial and operating results in the Auto business, with new loan originations of $27.7 billion, and strong earnings growth of 18% in the Commercial Banking business

∎      One-, three- and five-year Total Shareholder Return of 16.3%, 28.2% and 88.4%, respectively

LOGO

∎      Credit performance and underwriting quality

∎      Risk management and compliance

∎      Balance sheet strength

∎      Board and executive governance

∎      Netcharge-off rate of 2.67%, 4.99% for Domestic Card

∎       Higher provision for loan losses, primarily driven by the front-loaded costs of strong loan growth, particularly in Domestic Card

∎       Continued progress enhancing the soundness and sustainability of the Company’s compliance and risk management programs, including well-managed market and liquidity risk programs

∎      Continued focus on horizontal and vertical profitability and resilience, and accelerated investments in and attention to credit monitoring and forecasting processes

∎      Common equity Tier 1 capital ratio of 10.3%, calculated under the Basel Pillar III Standardized Approach, as of December 31, 2017

∎      Open and active Board governance model, including access to management, embrace of effective challenge, and proactive stockholder outreach

LOGO

∎      Progress toward achievement of long-term strategy

∎      Execution against corporate imperatives

∎      Disciplined investments in infrastructure, technology and growth initiatives

∎      CEO leadership and performance of executive team

∎       Significant progress on building leading technology capabilities to drive our business

∎       Balanced investments in market opportunities and long-term capabilities, including talent, infrastructure, and process reinvention

∎       Accelerated focus on cloud capabilities, modern software engineering and delivery, and enhanced cybersecurity capabilities

∎       Continued building a national bank franchise through expansion of cafés driving efficiency and modernization of our retail branch network

∎       Expanded specialization capabilities in our Commercial Banking business and solidified our position as one of the leading auto lenders in the United States

∎       Successful acquisition of theco-branded credit card portfolio of Cabela’s, a strong retailer with an engaged and upmarket customer base

∎      Prudently increased investments to support customers’ financial needs while also making disciplined choices to reduce or eliminatenon-strategic or uncompetitive products and services



4  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

Performance Factor

2017 Performance

LOGO

∎       Recruitment and development of world class talent

∎      Associate engagement and retention

∎       Customer advocacy

∎      Brand

∎       Corporate reputation and community engagement

∎      Live our values and champion our culture

∎       Strong Net Promoter Scores across all of our consumer lending and retail banking businesses

∎       Our flagship Mobile Banking application earned J.D. Power award for Highest in Customer Satisfaction among mobile banking applications

∎       Continued focus on attracting top talent and welcomed over 10,000 new associates, while maintaining high bar for talent and diversity

∎       Recorded highest-ever associate engagement scores and low voluntary attrition rates

∎       Increased focus on enhancing and developing our executive leadership and governance

∎       Broadened and diversified the executive management team with the talents and experiences that support our growth, investments, risk profile, and culture

∎      Successfully exceeded our ten-year $180 billion Public Community Commitment in conjunction with the 2012 acquisition of ING Direct

∎      Expanded access to free digital tools that help customers save money, avoid unwanted merchant charges, improve their credit scores, and protect their personal information

(1)

Efficiency ratio is calculated based on totalnon-interest expense divided by total net revenue for the period and reflectsas-reported results in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The efficiency ratio net of adjustments and adjusted earnings per share arenon-GAAP measures that the Committee reviews as part of its assessment of the Company’s performance and reflects adjustments to exclude $1.8 billion impacts of the 2017 Tax Act (as defined below), $184 million of restructuring charges, $130 million from builds in the U.K. Payment Protection Insurance customer refund reserve, and $117 million of charges related to the Cabela’s acquisition. See Exhibit 99.2 to the Form8-K filed with the SEC on January 23, 2018 for supplemental financial data and corresponding reconciliation of this financial metric to U.S. GAAP. The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (“2017 Tax Act”) was enacted on December 22, 2017.

(2)

ROTCE is anon-GAAP financial measure calculated based on the sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; and (iii) less preferred stock dividends, for the period, divided by average tangible common equity. See “MD&A—TableF-Reconciliation ofNon-GAAP Measures and Calculation of Regulatory Capital Measures” on our Annual Report on Form10-K for the fiscal year ended December 31, 2017 for supplemental financial data and corresponding reconciliation of this financial metric to U.S. GAAP.

FOR the electionHighlights of Richard D. Fairbank, Patrick W. Gross, Ann Fritz Hackett, Lewis Hay, III, Benjamin P. Jenkins, III, Pierre E. Leroy, Peter E. Raskind, Mayo A. Shattuck III, Bradford H. Warner and Catherine G. West, as directors of Capital One (see page 75);Our 2017 Compensation Programs

FOR the ratificationThe Compensation Committee of the AuditBoard of Directors believes that our named executive officer compensation programs balance risk and financial results, reward named executive officers for their achievements, promote our overall compensation objectives and encourage appropriate, but not excessive, risk-taking. Our compensation programs are structured to encourage our executives to deliver strong results over the short term while making decisions that create sustained value for our stockholders over the long term. Key features of our 2017 compensation programs include:

∎

No CEO Cash Salary. Our CEO does not receive a cash salary and 100% of his compensation is at-risk based on his and the Company’s performance.

∎

Majority Equity-Based Compensation. 78% of our CEO’s total compensation and 80% of all other named executive officer compensation is equity-based.

∎

All CEO Compensation Deferred for 3 Years.All CEO compensation is deferred for at least three years.

∎

Awards Based on Company and Individual Performance. All named executive officers receive equity-based awards based on Company and individual performance.

∎

All Equity Awards Contain Performance and Recovery Provisions.All equity awards contain performance and recovery provisions that are designed to further enhance alignment between pay and performance and to balance risk by: (i) reducing performance share award values at vesting if the Company does not achieve positive Adjusted ROA (Adjusted ROTCE for performance shares granted in 2018); (ii) utilizing performance thresholds to determine the amount of equity delivered



CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  5

at the vesting of certain awards; and (iii) containing misconduct and financial statement clawbacks. See “Additional Performance Conditions and Recovery Provisions” beginning on page 64 for more information about these provisions.

Components of Our 2017 Compensation Programs

The CEO’s compensation for the 2017 performance year was composed of equity awards designed to provide the CEO with an incentive to focus on long-term performance and the opportunity for ayear-end incentive award based on the Compensation Committee’s selection of Ernst & Young LLP as independent auditorsevaluation of the Company’s performance and the CEO’s contributions to that performance. All of the CEO’s compensation is subject to a three-year deferred vesting or payout schedule. See “Chief Executive Officer Compensation” beginning on page 48 for a description of the compensation paid to our CEO.

NEO compensation for the 2017 performance year was composed of a mix of cash and equity-based compensation consisting of: cash salary and RSU salary, determined at the beginning of the performance year; and cash-settled RSUs and long-term incentive awards, determined following the end of the performance year based on the Compensation Committee’s evaluation of Company and individual performance during the past year. The long-term incentive awards granted for 2015 (seethe 2017 performance year are equity-based and consisted of performance shares (25% of target compensation) and stock-settled RSUs (25% of target compensation). See “NEO Compensation” beginning on page 76);58 for a description of compensation to the named executive officers other than the CEO.

FORThe charts below show the advisory approvalelements of compensation as an approximate percentage of the CEO’s and the NEOs’ total target compensation.

2017 CEO Target Compensation2017 NEO Target Compensation
LOGOLOGO

2017 CEO Compensation by Performance Year

Below is a table showing Mr. Fairbank’s compensation awards as they are attributable to the performance years indicated. For the years shown in the table, Mr. Fairbank’s total target compensation was $17.5 million. See “2017 CEO Compensation Program” beginning on page 49 for additional information regarding Mr. Fairbank’s 2017 performance year compensation.

Performance

Year

 

Cash

 Salary 

 

 

Year-End Incentive

 

 

 

 

Long-Term Incentives

 

 Total
  

Deferred Cash

Bonus

 

Cash-

Settled

RSUs

 

Stock-Settled

RSUs

 Performance
Shares		   Option Awards   
2017 $— $3,727,500 $2,485,006 $— $8,750,041 $1,750,018 $16,712,565
             
2016 $— $2,677,500 $1,785,080 $1,750,026 $8,750,002 $1,750,003 $16,712,611
              
2015 $— $2,677,500 $1,785,014 $1,750,016 $8,750,006 $1,750,000 $16,712,536
              


6  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

The table above is presented to show how the Compensation Committee views compensation actions and to which year the compensation awards relate. This table differs substantially from the Summary Compensation Table beginning on page 73 required for this proxy statement and is therefore not a substitute for the information required in that table.

Say on Pay and Response to Stockholder Feedback

The Compensation Committee and the Board of Directors value the input of our stockholders. At our 2017 Annual Meeting, more than 95% of our stockholders supported Capital One’s 2014 Named Executive Officer compensation (seenamed executive officer compensation. Additional information regarding our Say on Pay vote can be found under “Consideration of 2017 Say on Pay Vote” beginning on page 78);47.

FORIn response to feedback received from our stockholders, the approvalCompensation Committee and the independent members of the amendmentBoard adopted changes to Capital One’s Restated Certificateexecutive compensation program with the goal of Incorporation to allow stockholders to request special meetings of the stockholders (see page 79);simplifying its structure and further aligning our executive compensation practices with best practices and principles:

AGAINST the stockholder proposal regarding special meetings of the stockholders (see page 83).

∎

Introduced New Performance Share Award Metrics.Beginning in 2018, the performance shares awarded to the named executive officers will vest on the basis of two new metrics: Growth of Shareholder Value (measured by common dividends + growth of Tangible Book Value per Share) and Adjusted ROTCE, each as defined on page 56 under “Performance Share Award Metrics.”

∎

Increased CEO Performance Share Awards. Beginning in 2018, the Compensation Committee and the independent directors increased the alignment of CEO compensation and Company performance by increasing the percentage of the CEO’s target compensation that is comprised of performance shares from 50% to 60% of total target compensation. See “Performance Share Award” beginning on page 50 for more information.

∎

Simplified NEO Compensation Program.In 2018, the compensation program applicable to our NEOs other than our CEO was modified to reduce the number of compensation vehicles, eliminating stock options and cash-settled restricted stock units, and more closely aligning the program vehicles and structure to the programs used by the Company’s peers. See “2018 NEO Compensation Program” beginning on page 63 for more information.

Item 4

Ratification of 25% Ownership Threshold for Stockholders to Request a Special Meeting of Stockholders

You will have the opportunity to vote on a management proposal seeking stockholder ratification of the 25% ownership threshold for stockholders to request a special meeting of stockholders. For additional information regarding the proposal, see “Ratification of 25% Ownership Threshold for Stockholders to Request a Special Meeting of Stockholders” beginning on page 99.

✓  Our Board of Directors unanimously recommends a vote “FOR” the proposal.



CAPITAL ONE FINANCIAL CORPORATION  

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  7

Although the proposed amendment to Capital One’s Restated Certificate of Incorporation on page 79 and the stockholder proposal on page 83 concern the same subject matter, the terms and effects of each proposal differ. You should carefully read the descriptions of each proposal, and Capital One’s statement in opposition to the stockholder proposal. Stockholders may vote on both the proposed amendment to Capital One’s Restated Certificate of Incorporation and the stockholder proposal, and approval of the proposed amendment to Capital One’s Restated Certificate of Incorporation is not conditioned on approval or disapproval of the stockholder proposal.

The Board of Directors is not aware of any other matter that will be presented at the Annual Meeting. If any other matter is properly presented at the Annual Meeting, the persons named on the accompanying proxy card will, in the absence of stockholder instructions to the contrary, vote such proxy at their discretion.

SECTION II – CORPORATE GOVERNANCE AT CAPITAL ONETable of Contents

  Section I - Corporate Governance at Capital One

10

Overview of Corporate Governance at Capital One

10

Our Board of Directors

10

Biographies of Director Nominees

16

Board Leadership Structure

21

Key Board Governance Practices

23

Stockholder Engagement Program

27

Board Committees

29

Executive Officers

32

Related Person Transactions

35

Environmental, Social and Governance Practices

36

How to Contact Us

37

Section II - Security Ownership

38

Security Ownership of Certain Beneficial Owners

38

Security Ownership of Directors and Named Executive Officers

39

Section 16(a) Beneficial Ownership Reporting Compliance

40

Section III - Director Compensation

41

Director Compensation Objectives

41

Director Compensation Procedures

41

Director Compensation Structure

41

Compensation of Directors

42

Other Benefits

43

Stock Ownership Requirements

43

Section IV - Compensation Discussion and Analysis

44

Introduction

45

Our Compensation Objectives

45

Important Aspects of Our Executive Compensation Programs

46

Consideration of 2017 Say on Pay Vote

47

Chief Executive Officer Compensation

48

NEO Compensation

58

Additional Performance Conditions and Recovery Provisions

64

Process and Criteria for Compensation Decisions

66

Other Compensation Arrangements

69

Other Aspects of Executive Compensation

70

Section V - Named Executive Officer Compensation

73

2017 Summary Compensation Table

73

2017 Grants of Plan-Based Awards

75

2017 Grants of Plan-Based Awards Table

77

2017 Option Exercises and Stock Vested Table

78

2017 Outstanding Equity Awards at FiscalYear-End Table

79

Pension Benefits

81

2017 Pension Benefits Table

82

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TABLE OF CONTENTS

Capital One’s VoluntaryNon-Qualified Deferred Compensation Programs

82

2017Non-Qualified Deferred Compensation Table

83

Potential Payments Upon Termination or Change of Control

84

2017 Potential Payments and Benefits Upon Termination or Change of Control Table

88

Estimated Ratio of CEO Compensation to Median Employee Compensation

89

Section VI - Equity Compensation Plans

91

Equity Compensation Plan Information

91

1999 Directors Plan

91

Section VII - Compensation Committee Report

93

Section VIII - Audit Committee Report

94

Section IX - Election of Directors (Item 1 on Proxy Card)

95

Section X - Ratification of Selection of Independent Auditors (Item 2 on Proxy Card)

96

Section XI - Advisory Approval of Capital One’s 2017 Named Executive Officer Compensation (Item 3 on Proxy Card)

98

Section XII - Ratification of 25% Ownership Threshold for Stockholders to Request a Special Meeting of Stockholders (Item 4 on Proxy Card)

99

  Section XIII - Other Business

102

Other Business

102

Annual Report to Stockholders

102

Stockholder Proposals for 2019 Annual Stockholder Meeting

102

  Section XIV - Frequently Asked Questions

103

Appendix A - Special Meeting Excerpt from Capital One’s Certificate of Incorporation

107

 

CAPITAL ONE FINANCIAL CORPORATION  

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Section I - Corporate Governance Guidelines and Code of Business Conduct and Ethicsat Capital One

 Overview of Corporate Governance at Capital One

Capital One is dedicated to strong and effective corporate governance principles and practices. Thethat provides our Board of Directors (“Board”) with the appropriate framework to engage in ongoing oversight of the Company’s activities. Our Board believes that robust, dynamic corporate governance policies and practices are the foundation of an effective and well-functioning board, and are vital to preserving the trust of our stakeholders, including customers, stockholders, suppliers, associates and the general public.

Information About Our Corporate Governance Policies and Principles

The Board has adopted Corporate Governance Guidelines to formalize the Board’sits governance practices and to provide its view of effective governance. Our Corporate Governance Guidelines embody many of our long-standing practices, policies and procedures, which collectively form a corporate governance framework that promotes the long-term interests of our stockholders, ensurespromotes responsible decision-making and accountability and fosters a culture that allows our Board and management to pursue Capital One’s strategic objectives. TheTo maintain and enhance independent oversight, our Board reviewsregularly renews and periodically updates these principlesrefreshes its governance policies and practices as legal,changes in corporate strategy, the regulatory environment and best practice developments evolve.financial market conditions occur and in response to investor feedback and engagement.

The Board has also adopted Capital One’s Code of Business Conduct and Ethics (the “Code(“Code of Conduct”), which applies to Capital OneOne’s directors, executives and associates, including Capital One’s Chief Executive Officer (“CEO”), Chief Financial Officer,CEO, CFO, Principal Accounting Officer and other persons performing similar functions. The Code of Conduct reflects Capital One’s commitment to honesty, fair dealing and integrity and guides the ethical actions and working relationships of Capital One’s directors, officersexecutives and associates in their interactions with investors, current and potential customers, fellow associates, competitors, governmental entities, the media and other third parties with whom Capital One has contact.

We encourage you to visit the “Corporate Governance” section of our website at www.capitalone.com. Select “About Us,” then “Investors,” to open the section where you can find our:

∎

Corporate Governance Guidelines

∎

Code of Business Conduct and Ethics

∎

Committee Charters

∎

Certificate of Incorporation and Bylaws

 Our Board of Directors

Our Perspectives on Board Composition and Refreshment

In recent years, the investor community has become increasingly focused on the composition of corporate boards and policies and practices that encourage board refreshment. At Capital One, we appreciate that our investors share our passion for cultivating a board that encompasses the optimal mix of experiences, skills, expertise and qualifications to propel us to achieve our long-term strategic objectives.

The Governance and Nominating Committee, under the direction of its Chair, who also currently serves as the Company’s Lead Independent Director, assesses the composition of and criteria for membership on the Board and its committees on an ongoing basis. In fulfilling this responsibility, the Governance and Nominating Committee has taken a long-term view and continuously assesses the resiliency of the Board over the next ten to fifteen years in alignment with the Company’s strategic direction to determine what actions may be desirable to best position the Board for success. The Governance and Nominating Committee considers a variety of factors, including the Company’s long-term strategy, the skills and experiences that directors provide to the Board (including in the context of the Company’s strategy), the performance of the Board and the Company, the Board’s director retirement policy (as described in the Company’s Corporate Governance Guidelines), the Board’s view

10  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

that a resilient board should include members across a continuum of tenure, and evolving best practices in the areas of gender and racial diversity and director tenure. Over the last few years, the Governance and Nominating Committee held discussions regarding director recruiting plans on a quarterly basis, and has provided regular updates to the Board on those plans.

As a result of these long-term strategic resiliency assessments, the Governance and Nominating Committee has articulated a set of principles on board composition, which include:

 Board Size

∎     Consider the appropriate size of the Board in relation to creating active engagement, open discussion and effective challenge of management with the skills and experience for effective oversight of the Company’s strategy, performance and risk management

∎     Continuously assess the depth of successors available to assume leadership positions for expected and unexpected departures

 Tenure

∎     Believe that it is critical to have members across a continuum of director tenure in order to ensure the effective oversight of a large financial institution, which must simultaneously embrace innovation and changing market and customer expectations and prudently preserve the safety and soundness of the institution through long-term business and credit cycles

∎     Consider average tenure for the full Board, with a preference to have some long-standing members of the Board (who have actively overseen the Company’s strategic journey through various business cycles), some relatively new members who bring fresh ideas and perspectives, and the remaining members at different points along the tenure continuum

 Diversity

∎     Believe having a Board with members who demonstrate a diversity of thought, perspectives, skills, backgrounds and experiences is important to building an effective and resilent board, and as a result, have a goal of identifying candidates that can contribute to that diversity in a variety of ways, including racially and gender diverse candidates

 Board Skills

∎     Consider the collective set of skills that allows the Board to cover all vectors of effective challenge of management, especially in the areas of business strategy, financial performance, enterprise risk management, cyber risk, technology innovation, and executive talent and leadership

 Industry

 Experience

∎     Seek and retain Board members with industry experiences, both banking and technology, that align with our long-term strategy, understanding that such experience is critical to providing effective challenge

∎     Recognize that the financial services industry is complex and understand the importance of having directors who have witnessed the extended nature of banking business and credit cycles and can share the wisdom of those experiences

 Evergreen  Recruiting

∎     Engage in a continuous process of identifying and assessing potential director candidates in light of the Board’s collective set of skills and future needs

∎     Recognize that recruiting new directors is notone-dimensional and that effective Board members are those who have certain backgrounds and expertise combined with a broad business acumen; strategic leadership; a commitment to risk management; an understanding of the intricacies of a large, public company; and a dedication to the Company and its stockholders, the Board as a whole, and to the individual members that comprise the Board

 Staged  Refreshment

∎     View refreshment from a long-term perspective, working back from a destination which enables careful refreshment to meet strategic needs while avoiding disruption

∎     Take a planned approach to changes in board membership, considering the timing of new director onboarding relative to planned retirements and departures

∎     Recognize that new directors need time to become familiar with the Company’s business model and strategy and become deeply grounded in these matters to be well-positioned to challenge management effectively

∎     Acknowledge that relationships among Board members develop organically over time and recognize the importance of protecting and nurturing the open, values-based culture that the Board enjoys to appropriately oversee and challenge management

CAPITAL ONE FINANCIAL CORPORATION  

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

The Board leverages several long-standing practices and processes to support Board refreshment in keeping with the principles articulated above, including:

∎

Annual assessments of the Lead Independent Director. See “Annual Assessment of the Lead Independent Director” beginning on page 22.

∎

Annual evaluations of the Board and its committees. See “Annual Board and Committee Evaluations” beginning on page 24.

∎

Annual assessments of individual directors. See “Annual Assessment of Director Nominees” on page 25.

Our Director Nominees

  Name  Age  Occupation Director 
Since 		 Independent  

Other 

Public 

Boards 

 

Richard D. Fairbank

 

  

 

67

 

 

 

Chairman, CEO and President, Capital One Financial Corporation

 

 

 

1994

 

 

 

No

 

 

 

0

 

           

 

Aparna Chennapragada 

 

  

 

41

 

 

 

Vice President of Product Management,
AR & VR, Google

 

 

 

2018

 

 

 

✓

 

 

 

0

 

 

           

 

Ann Fritz Hackett

 

  

 

64

 

 

 

Partner andCo-Founder, Personal Pathways, LLC

 

 

 

2004

 

 

 

 

✓

 

 

 

1

 

           

 

Lewis Hay, III

 

  

 

62

 

 

 

Former Chairman, Chief Executive Officer and President, NextEra Energy, Inc.

 

 

 

2003

 

 

 

✓

 

 

 

2

 

           

 

Benjamin P. Jenkins, III

 

  

 

73

 

 

 

Former Senior Advisor, Managing Director and Vice Chairman for Retail Banking, Morgan Stanley & Co.

 

 

 

2013

 

 

 

✓

 

 

 

0

 

           

 

Peter Thomas Killalea

 

  

 

50

 

 

 

Owner and President, Aoinle, LLC

 

 

 

2016

 

 

 

✓

 

 

 

1

 

           

 

Pierre E. Leroy

 

  

 

69

 

 

 

Managing Partner, Aspiture, LLC

 

 

 

2005

 

 

 

✓

 

 

 

0

 

           

 

Peter E. Raskind

 

  

 

61

 

 

 

Former Owner, JMB Consulting, LLC

 

 

 

2012

 

 

 

✓

 

 

 

0

 

           

 

Mayo A. Shattuck III

 

  

 

63

 

 

 

Chairman, Exelon Corporation

 

 

 

2003

 

 

 

✓

 

 

 

3

 

           

 

Bradford H. Warner

 

  

 

66

 

 

 

Former President of Premier and Small Business Banking, Bank of America Corporation

 

 

 

 

2008

 

 

 

✓

 

 

 

0

 

           

 

Catherine G. West

 

  

 

58

 

 

 

Former Special Advisor, Promontory Financial Group

 

 

 

2013

 

 

 

✓

 

 

 

0

 

           

12  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

Our director nominees have specific experiences that, in the aggregate, meet an articulated set of Directors believes thatdirector skills established by the Governance and Nominating Committee and align with the Company’s long-term strategy and operational objectives, including:

Strategy

Experience setting a long-term corporate vision or direction, developing desirable products and customer segments, assessing geographies in which to operate, and evaluating competitive positioning

Digital/Technology

Leadership and understanding of technology, digital platforms and new media, cyber risk, and data analytics

Retail/Commercial Banking

Retail and/or commercial banking industry experience at an executive level

Risk Management/Compliance

Significant understanding with respect to the identification, assessment and oversight of risk management programs and practices

Public Company Senior Executive Management

Experience as a chief executive officer or other senior executive at a public company

Public Accounting/Financial Reporting

Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements

Financial Services

Leadership experience as an executive or board member in the financial services industry

Compensation/Human Resources

Understanding of the issues involved with executive compensation, succession planning, human resource management, and talent management and development

Public Company Board Service

Experience serving as a director on a large public company board

Nine of our director nominees have significant understanding of technology platforms and systems and their associated risks, two have experience with digital consumer product development, six have held senior executive responsibilities at large banks, seven could qualify as “audit committee financial experts” under the relevant New York Stock Exchange (“NYSE”) standards, and five serve or have served as chief executive officers. Our Board has significant experience in strategy development, risk management and the financial services industry through extensive careers in executive leadership positions and consulting engagements. In addition, a majority of our director nominees have public company board experience.

The Governance and Nominating Committee and the Board regularly review the Board’s membership in light of Capital One’s business model and strategic goals and objectives, the regulatory environment and financial market conditions, and consider whether the Board continues to possess the skills and experience to oversee the Company in achieving these policies, principlesgoals, and practices are vital tomay seek additional directors as a result of its considerations.

We believe our director nominees collectively possess the future successappropriate combination of skills and growthqualifications, independence, knowledge of Capital One and create a foundation forits industry and business acumen that enables the ethicalBoard to operate in an engaged and effective functioningmanner.

What We Look For in Director Nominees

The evaluation and selection of director nominees is a key aspect of the Governance and Nominating Committee’s regular evaluation of the composition of and criteria for membership on the Board. When considering director nominees, including incumbent directors eligible forre-election, nominees to fill vacancies on the Board and nominees recommended by stockholders, the Governance and Nominating Committee is focused on the objective of Directors, its committeesdeveloping a Board composed of directors that meet the criteria set forth below.

Experience

∎

The value derived from each nominee’s skills, qualifications, experience and ability to impact Capital One’s long-term strategic objectives

∎

Strong educational background

∎

Substantial tenure and breadth of experience in leadership capacities

CAPITAL ONE FINANCIAL CORPORATION  

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

∎

Business and financial acumen

∎

Understanding of the intricacies of a public company

∎

Experience in risk management

Personal Characteristics

∎

High personal and professional ethics, integrity and honesty, good character and judgment

∎

Independence and any actual or perceived conflicts of interest

∎

The ability to be an independent thinker and willingness to provide effective challenge to management

∎

Diversity along a variety of dimensions, including the candidate’s professional and personal experience, background, perspective and viewpoint, as well as the candidate’s gender, race and ethnicity

Commitment to the Company

∎

A willingness to commit the time and energy to satisfy the requirements of board and committee membership, including the ability to attend and participate in Board meetings and committee meetings in which they are a member and the annual meeting of stockholders and be available to management to provide advice and counsel

∎

A willingness to rigorously prepare prior to each meeting and actively participate in the meeting

∎

Possess, or be willing to develop, a broad knowledge of both critical issues affecting the Company and a director’s roles and responsibilities

∎

A willingness to comply with Capital One’s Director Stock Ownership Requirements, Corporate Governance Guidelines and Code of Conduct

Diversity along multiple dimensions is an important element of the Governance and Nominating Committee’s consideration of nominees. While diversity is evaluated in a broad sense based on experience, background and viewpoint, the Governance and Nominating Committee recognizes that Capital One as a whole. They are also critical to preservingserves diverse communities and customers, and believes that the trustcomposition of our stakeholders,Board should appropriately reflect this diversity. Accordingly, the Governance and Nominating Committee also considers other aspects of diversity, including stockholders, associates, customers, suppliers, governmental entitiesgender, race and ethnicity. The Governance and Nominating Committee is committed to seeking highly qualified women and individuals from minority groups to include in the general public. pool of nominees and has instructed management (and any third-party search firm used by management) to consider these elements accordingly. The Governance and Nominating Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.

For new nominees, the Governance and Nominating Committee may also consider the results of the nominee’s interviews with directors and/or other members of senior management and any background checks the Governance and Nominating Committee deems appropriate. In 2017, Capital One continued its engagement with Spencer Stuart, a third-party director search firm, to identify and evaluate potentialnon-incumbent director candidates based on the criteria and principles described above.

When evaluating incumbent directors, the Governance and Nominating Committee also considers the director’s performance throughout the year, including the director’s attendance, preparation for and participation in Board and committee meetings, the director’s annual evaluation, feedback received from fellow Board members, and whether the incumbent director is willing to serve for an additional term.

Capital One’s Corporate Governance Guidelines provide that anon-management director shall not be eligible for election to the Board upon reaching the age of 72. The Board may waive this requirement if it deems that it is in the best interests of the Company and its stockholders, and has done so for Mr. Jenkins, as discussed under “Election of Directors” on page 95.

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Process for Nominating Directors

Stockholders may propose nominees for consideration by the Governance and Nominating Committee by submitting the names and other relevant information as required by Capital One’s Amended and Restated Bylaws (“Bylaws”) and further described in Capital One’s Corporate Governance Guidelines, to the Corporate Secretary at Capital One’s address set forth in the Notice. Capital One’s Corporate Governance Guidelines require the Corporate Secretary to deliver a copy of the submitted information to the Chair of the Governance and Nominating Committee. The Governance and Nominating Committee will consider potential nominees proposed by stockholders on the same basis as it considers other potential nominees.

In addition, an eligible stockholder or group of stockholders may use Capital One’s “proxy access” bylaws to include stockholder-nominated director candidates in the Company’s proxy materials for annual meetings of stockholders. Our Bylaws permit up to 20 stockholders owning 3% or more of the Company’s outstanding common shares of voting stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to two (2) individuals or 20% of the Board (whichever is greater) provided that the stockholder(s) and the Codenominee(s) satisfy the requirements specified in the Bylaws.

Director Independence

Except for our CEO, who is the Company’s founder, the Board has affirmatively determined that the other members of Conduct, eachour Board are independent under Capital One’s Director Independence Standards, which have been adopted by the Board as amended from time to time, are available free of charge on the Corporate Governance pagepart of Capital One’s Internet site atwww.capitalone.comCorporate Governance Guidelines. The Board has concluded this based on a thorough assessment of whether each of itsnon-management members is “independent” under “About Us/Investors.”these standards. These standards reflect the director independence requirements set forth in the listing standards of the NYSE and other applicable legal and regulatory rules, and also describe certain categorical relationships that the Board has determined to be immaterial for purposes of determining director independence. The categorical relationships the Board has deemed immaterial for purposes of determining director independence are: (i) relationships between Capital One will discloseand an entity where the director serves solely asnon-management director; (ii) transactions between Capital One and a director or a director’s immediate family (or their primary business affiliations) that fall below the numerical thresholds in the NYSE listing standards (or do not otherwise preclude independence under those standards), and that are ordinary course, on its websitearm’s-length market terms, and, in the case of extensions of credit, followed usual underwriting procedures, contain no other unfavorable features and are in compliance with applicable legal and regulatory rules; and (iii) discretionary contributions tonot-for-profit organizations, foundations, or universities in which a director serves as an executive officer that in any amendmentof the last three fiscal years do not exceed the greater of $1 million or 2% of the organization’s consolidated gross revenues.

The Board has determined that each of Ms. Chennapragada, Ms. Hackett, Mr. Hay, Mr. Jenkins, Mr. Killalea, Mr. Leroy, Mr. Raskind, Mr. Shattuck, Mr. Warner and Ms. West is independent under these standards. The Board also determined that former director Patrick W. Gross, who retired from the Board on May 4, 2017, was independent under these standards during the period he served on the Board. In making these determinations, the Governance and Nominating Committee and the Board reviewed certain information obtained fromnon-management directors’ responses to a questionnaire asking about their relationships with Capital One, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain information obtained through internal diligence conducted on Capital One’s businesses related to transactions, relationships or arrangements between Capital One and anon-management director or their immediate family members, primary business or charitable affiliations. Following this review, the Board determined that the relationships or transactions complied with the Corporate Governance Guidelines orand the Code of Conduct, or any waiver under the Code of Conduct granted to any of its directors or executive officers.related NYSE standards.

 

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 Board Structure and Committee Composition

The Board of Directors oversees Capital One’s business and directs its management. The Board of Directors does not involve itself with the day-to-day operations and implementation of Capital One’s business. Instead, the Board of Directors meets periodically with management to review Capital One’s performance, risks and business strategy. Directors also regularly consult with management outside of formal meetings to keep themselves informed about Capital One’s progress.

The Board of Directors met thirteen times during 2014. Each incumbent director attended at least 75% of the aggregate of the meetings of the Board of Directors and the committees occurring during the year while they were members. In accordance with our Corporate Governance Guidelines and New York Stock Exchange Listing requirements, the Board has executive sessions of non-management directors without senior management on a regularly scheduled basis and no less than two times per year. In addition, at least one executive session of only independent directors without senior management is held annually. In 2014, the Board met these requirements and the number of times non-management directors held executive sessions without senior management present exceeded the standard set forth in the Corporate Governance Guidelines. During these executive sessions, the non-management directors or independent directors, as the case may be, have complete access to such members of the Company’s senior executive management as they may request, including the Chief Financial Officer, General Counsel, Chief Risk Officer, Chief Internal Auditor, Chief Credit Review Officer and Chief Compliance Officer.

Capital One expects all of its directors to attend the Annual Meeting. In 2014, all ten directors were present at the meeting.

 Biographies of Director Nominees

Leadership Structure of the Board of Directors

LOGO

Richard D. Fairbank        

 Chairman, Chief Executive

 Officer and President,

 Capital One Financial

 Corporation

 Director Since:  1994

 Age:  67

Capital One Committees:

∎ None

Capital One Companies:

∎ Capital One Bank (USA), National Association (Chair)

∎ Capital One, National Association (Chair)

Additional Public Directorships (current):

∎ None

Mr. Fairbank is founder, Chairman, and Chief Executive Officer of Capital One Financial Corporation. As an innovator and entrepreneurial leader, Mr. Fairbank has grown Capital One from a start-up to one of the ten largest banks in America and 100 largest companies in the country as ranked by Fortune Magazine. Mr. Fairbank has been the CEO since the Company’s Initial Public Offering in November 1994 and has served as the Chairman and CEO since February 1995. He has driven strong organic business growth and executed a series of strategic acquisitions across retail and direct banking, credit cards, auto lending, and technology. Prior to Capital One, Mr. Fairbank was Vice President and head of the banking practice at Strategic Planning Associates, Inc. (now Mercer, a global consulting subsidiary of Marsh & McLennan Companies). Mr. Fairbank served on MasterCard International’s Global Board of Directors from February 2004 until May 2006. Capital One is regularly cited by Fortune Magazine as a “Best Place to Work” (#17 in 2018) and in 2016 the Company was ranked #1 on InformationWeek’s “Elite 100.”

Skills and Qualifications:

Since the founding of the Company, Mr. Fairbank has been responsible for overseeing both the Company’s strategic direction as well as management of Capital One’s day-to-day operations. Mr. Fairbank has extensive experience in financial services and had led the development, growth, and transformation of the Company’s business capabilities, including technology, risk management, brand, customer experience, and talent development and diversity. Mr. Fairbank holds an MBA from the Stanford Graduate School of Business and a bachelor’s degree in economics from Stanford University. This combination of experiences and expertise provide Mr. Fairbank the ability to provide strong leadership and insight to the Board of Directors.

LOGO

 Aparna

Chennapragada               

 Vice President of Product
 Management, AR & VR,
 Google

 Director Since:  2018 (new
nominee)

 Age:  41

Capital One Committees:

∎ None

Capital One Companies:

∎ None

Additional Public Directorships (current):

∎ None

Ms. Chennapragada, a computer scientist and product executive trained at IIT and MIT, has more than 15 years of experience in leading teams, driving strategy, and developing successful flagship products. Ms. Chennapragada has been Vice President of Product Management at Google, a multinational technology company, since October 2017, where she currently oversees product management for new product areas in augmented reality and virtual reality. Prior to her current role, Ms. Chennapragada was a Senior Director and Technical Assistant to the CEO at Google from May 2016 to September 2017, where she helped drive various company-wide product efforts. She was a Director and Group Product Manager on Google Now from March 2013 to April 2016. From September 2010 to February 2013, Ms. Chennapragada was a Senior Product Manager on Google Search, and from July 2008 to September 2010, Ms. Chennapragada led the development of new algorithmic features for YouTube and Google. Prior to joining Google, Ms. Chennapragada served in various roles at Akamai Technologies, Inc. from September 1999 to June 2008.

Skills and Qualifications:

Ms. Chennapragada is an accomplished executive and has experience in technology innovation and development, leading change initiatives, product development, strategy, machine learning, and talent management. She brings significant insights on mobile, artificial intelligence, and technology’s transformational impact on business and consumers. This combination of skills provides the Board of Directors with valuable insight on these and other matters.

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LOGO

Ann Fritz Hackett             

 Partner andCo-Founder,

 Personal Pathways, LLC

 Lead Independent Director

 Director Since:  2004

 Age:  64

Capital One Committees:

∎ Compensation Committee

∎ Governance and Nominating Committee (Chair)

∎ Risk Committee

Capital One Companies:

∎ Capital One, National Association

Additional Public Directorships (current):

∎ Fortune Brands Home & Security, Inc.

Ms. Hackett is a partner andco-founder of Personal Pathways, LLC. The company’s flagship product is aweb-based enterprise collaboration insights platform. Prior to her role at Personal Pathways, she served as the President of Horizon Consulting Group, LLC since founding the company in 1996, providing strategic, organizational and human resources advice to clients worldwide. She has worked with boards of directors, chief executive officers and senior executives to identify strategic opportunities and execute solutions during periods of business and financial challenges and transformation. Prior to Horizon Consulting, Ms. Hackett was Vice President and Partner of a leading national strategy consulting firm where she served on the Management Committee and, among other strategy consulting assignments, led Human Resources and developed her expertise in managing cultural change, creating performance management processes and a performance-based culture, nurturing leadership talent and planning for executive succession. Ms. Hackett is also a member of the Tapestry Networks’ Lead Director Network, a select group of lead directors who collaborate on matters regarding board leadership. She also served as a director of Beam, Inc. (formerly Fortune Brands, Inc.) from December 2007 until April 2014.

Skills and Qualifications:

Ms. Hackett has experience in strategy, technology development, leading change initiatives, talent management and succession planning and in creating performance management processes and performance-based compensation programs. She also has experience in corporate governance and risk matters as a result of her participation with public company boards of directors and related governance committees,non-profit boards and consulting engagements. This combination of skills provides the Board of Directors with valuable insight on these and other matters.

LOGO

Lewis Hay, III                     

 Former Chairman, Chief

 Executive Officer and

 President, NextEra Energy,

 Inc.

 Director Since:  2003

 Age:  62

Capital One Committees:

∎ Compensation Committee

∎ Governance and Nominating Committee

Capital One Companies:

∎ Capital One, National Association

Additional Public Directorships (current):

∎ Harris Corporation

∎ Anthem, Inc. (formerly WellPoint, Inc.)

Mr. Hay served in a variety of executive positions at NextEra Energy, Inc. (“NextEra”) (formerly FPL Group, Inc.), including Chief Executive Officer (2001-2012), Chairman (2002-2012) and President (2001-2006). NextEra is one of the nation’s leading electricity-related services companies and the largest renewable energy generator in North America. Mr. Hay served as Executive Chairman of NextEra from July 2012 until he retired in December 2013 and as a director of NextEra from June 2001 through December 2013. While at NextEra, he also served as Chief Executive Officer of Florida Power & Light Company from January 2002 to July 2008. He joined NextEra Energy in 1999 as Vice President, Finance and Chief Financial Officer and served as President of NextEra Energy Resources, LLC (formerly FPL Energy, LLC) from March 2000 until December 2001. He currently serves as an Operating Advisor for Clayton, Dubilier & Rice, LLC, a private equity investment firm. Mr. Hay is a former chairman of both the Edison Electric Institute, the association of U.S. shareholder-owned electric companies, and the Institute of Nuclear Power Operations. Mr. Hay also served as Chair of the Electricity Subsector Coordinating Council, an organization that coordinated government and electricity industry cyber security initiatives, as well as on President Obama’s Council on Jobs and Competitiveness.

Skills and Qualifications:

Mr. Hay has extensive knowledge of the complex strategic, operational, management, regulatory, financial and governance issues faced by a large public company. His background in leading finance and accounting, treasury, credit, investor relations, mergers and acquisitions and information systems functions, as well as his understanding of enterprise risk management, executive compensation and public company governance, provides the Board of Directors with valuable insight on these and other matters.

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

LOGO

 Benjamin P.

Jenkins, III                         

 Former Senior Advisor,

 Managing Director and

 Vice Chairman for Retail

 Banking, Morgan Stanley &

 Co.

 Director Since:  2013

 Age:  73

Capital One Committees:

∎ Audit Committee

∎ Compensation Committee

∎ Risk Committee

Capital One Companies:

∎ Capital One, National Association

Additional Public Directorships (current):

∎ None

Mr. Jenkins served as Senior Advisor, Managing Director, and Vice Chairman for Retail Banking at Morgan Stanley & Co., a financial services firm, from January 2009 to January 2011. Prior to that, he had a38-year career with Wachovia Corporation (now Wells Fargo & Company), a financial services company, where he was Vice Chairman and President of the General Banking Group. He is credited with advancing the profitability of the General Bank through improvements in customer service and the reduction of customer attrition to industry-leading levels. He and his team were instrumental in the integration of the First Union/Wachovia and Wachovia/SouthTrust mergers, and Mr. Jenkins led the successful expansion of Wachovia’s banking network. He also previously served on the boards of Visa USA and Visa International.

Skills and Qualifications:

Mr. Jenkins’ experience in corporate banking, banking operations, investment banking, acquisition integration, and management of customer relationships brings valuable insight to the Board of Directors in overseeing, among other areas, matters critical to Capital One’s banking business.

LOGO

Peter Thomas Killalea      

 Owner and President,
 Aoinle, LLC

 Director Since:  2016

 Age:  50

Capital One Committees:

∎ Compensation Committee

∎ Risk Committee

Capital One Companies:

∎ Capital One, National Association

Additional Public Directorships (current):

∎ MongoDB, Inc.

Mr. Killalea has been an advisor to private technology-driven companies since November 2014 and is the Owner and President of Aoinle, LLC, a consulting firm. From May 1998 to November 2014, Mr. Killalea served in various leadership roles at Amazon.com, Inc., most recently as its Vice President of Technology for the Kindle Content Ecosystem from 2008 to November 2014. He served as its Vice President of Infrastructure and Distributed Systems from 2003 to 2008 and prior to that as Chief Information Security Officer and Vice President of Security. He led the infrastructure and distributed systems team, which later became a key part of the Amazon Web Services platform. He also led the product development and engineering teams for the Kindle Content Ecosystem. Mr. Killalea serves on the editorial board of ACM Queue (Association for Computing Machinery). He has served on the board of MongoDB, Inc. since December 2015. He served on the board of Xoom Corporation (acquired by PayPal Inc.) from March 2015 to November 2015.

Skills and Qualifications:

Mr. Killalea’s product, technology, and security experience in the technology industry, including his experience advising technology companies in various stages of growth and his various leadership roles, including as Chief Information Security Officer, at Amazon.com, Inc., bring valuable insight to the Board of Directors on these and other matters.

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CAPITAL ONE FINANCIAL CORPORATION  

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LOGO

Pierre E. Leroy                 

 Managing Partner, Aspiture,

 LLC

 Director Since:  2005

 Age:  69

Capital One Committees:

∎ Audit Committee

∎ Compensation Committee

Capital One Companies:

∎ Capital One Bank (USA), National Association

Additional Public Directorships (current):

∎ None

Mr. Leroy established an advisory and private equity firm in April 2015, Aspiture, LLC (“Aspiture”), which invests primarily in digital companies offering unique customer solutions. Mr. Leroy served as Executive Chairman from March 2012 and Chief Executive Officer from July 2012 until June 2013 of Vigilant Solutions, Inc. (formerly Vigilant Video, Inc.), an industry-leading pioneer of innovative intelligence solutions that help law enforcement protect officers, families and communities. Mr. Leroy retired in 2005 from Deere & Company as President of both the Worldwide Construction & Forestry Division and the Global Parts Division. Deere & Company is a world leader in providing advanced products and services for agriculture, forestry, construction, lawn and turf care, landscaping and irrigation, and also provides financial services worldwide and manufactures and markets engines used in heavy equipment. During his professional career with Deere & Company, Mr. Leroy served in a number of positions in Finance, including Treasurer, Vice-President and Treasurer, and Senior Vice-President and Chief Financial Officer. Mr. Leroy also served as a director of United Rentals, Inc. from April 2012 to May 2015, RSC Holdings Inc. and RSC Equipment Rental from May 2008 to April 2012 (when RSC was acquired by United Rentals), and Beam, Inc. (formerly Fortune Brands, Inc.) from September 2003 to February 2012.

Skills and Qualifications:

Mr. Leroy’s experience in capital markets and asset-liability management, and his experience as CEO and Executive Chairman of a digital analytic software company and managing partner of an advisory and consulting business, in addition to his experience in leading and managing large complex international marketing, engineering and manufacturing organizations and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters.

LOGO

Peter E. Raskind              

 Former Owner, JMB

 Consulting, LLC

 Director Since:  2012

 Age:  61

Capital One Committees:

∎ Governance and Nominating Committee

∎ Risk Committee (Chair)

Capital One Companies:

∎ Capital One Bank (USA), National Association

Additional Public Directorships (current):

∎ None

Until its merger with PNC Financial Services Group in December 2008, Mr. Raskind served as Chairman, President and Chief Executive Officer of National City Corporation, one of the largest banks in the United States. Through an extensive banking career, Mr. Raskind has served in a number of leadership roles and held positions of successively greater responsibility in a broad range of consumer and commercial banking disciplines, including cash management services, corporate finance, international banking, corporate trust, retail and small business banking, operations and strategic planning.

Mr. Raskind served as a director of United Community Banks, Inc. from May 2011 to January 2012 and Visa USA and Visa International. He also served on the board of directors of the Consumer Bankers Association, was a member of the Financial Services Roundtable, and served on the executive committee of the National Automated Clearing House Association.

In addition, until 2017, Mr. Raskind was the owner of JMB Consulting, LLC, which he established in February 2009 to provide consulting services to financial services firms and investors. In 2011, he served as Interim Chief Executive Officer of the Cleveland Metropolitan School District, and in 2010, he served as Interim Chief Executive Officer of the Cleveland-Cuyahoga County Port Authority.

Skills and Qualifications:

Mr. Raskind is experienced in corporate banking, retail banking, wealth management/trust, mortgage, operations, technology, strategy, product management, asset/liability management, risk management and acquisition integration from his extensive career in banking. He provides the Board of Directors with valuable insight on these and other matters.

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

LOGO

Mayo A. Shattuck III         

 Chairman,

 Exelon Corporation

 Director Since:  2003

 Age:  63

Capital One Committees:

∎ Compensation Committee (Chair)

∎ Governance and Nominating Committee

Capital One Companies:

∎ Capital One, National Association

Additional Public Directorships (current):

∎ Gap, Inc.

∎ Alarm.com

∎ Exelon Corporation

Mr. Shattuck is Chairman of the Board of Chicago-based Exelon Corporation (“Exelon”), the nation’s largest competitive energy provider and commercial nuclear plant operator. From March 2012 through February 2013, he served as Executive Chairman of the Board of Exelon. Prior to joining Exelon, he was Chairman, President and Chief Executive Officer of Constellation Energy Group, a leading supplier of electricity to large commercial and industrial customers, a position he held from 2001 to 2012. Mr. Shattuck was previously at Deutsche Bank, where he served as Chairman of the Board of Deutsche Banc Alex. Brown and, during his tenure, served as Global Head of Investment Banking and Global Head of Private Banking. From 1997 to 1999, Mr. Shattuck served as Vice Chairman of Bankers Trust Corporation, which merged with Deutsche Bank in 1999. From 1991 to 1997, Mr. Shattuck was President and Chief Operating Officer and a director of Alex. Brown & Sons, a major investment bank, which merged with Bankers Trust in 1997.

Mr. Shattuck is also Vice Chairman of Johns Hopkins Medicine, Trustee of Johns Hopkins University and former Chairman of the Institute of Nuclear Power Operators.

Skills and Qualifications:

Mr. Shattuck’s experience in global corporate finance and lending, corporate strategy, capital markets, risk management, executive compensation and private banking, as well as his experience in leading two large, publicly-held companies and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters.

LOGO

Bradford H. Warner          

 Former President of Premier

 and Small Business
 Banking, Bank of America
 Corporation

 Director Since:  2008

 Age:  66

Capital One Committees:

∎ Audit Committee (Chair)

∎ Risk Committee

Capital One Companies:

∎ Capital One Bank (USA), National Association

Additional Public Directorships (current):

∎ None

Mr. Warner served in a variety of executive positions at BankBoston, FleetBoston and Bank of America from 1975 until his retirement in 2004. These positions included President of Premier and Small Business Banking, Executive Vice President of Personal Financial Services, and Vice Chairman of Regional Bank.

Throughout his banking career, Mr. Warner served in leadership roles for many of the major business lines and functional disciplines that constitute commercial banking, including leadership of retail and branch banking, consumer lending (credit cards, mortgage and home equity), student lending and small business; various corporate banking functions, including community banking and capital markets businesses, such as underwriting, trading and sales of domestic and international fixed income securities, foreign exchange and derivatives; international banking businesses in Asia, northern Latin America and Mexico; and several investment-related businesses, including private banking, asset management and brokerage. He also served on the most senior management policy and governance committees at BankBoston, FleetBoston and Bank of America.

Skills and Qualifications:

Mr. Warner’s experience in a broad range of commercial, consumer, investment and international banking leadership roles, as well as his experience in corporate banking functions, customer relationships, corporate culture change management, enterprise risk management and technology, brings valuable insight to the Board of Directors in overseeing, among other matters, a broad range of matters critical to Capital One’s banking business.

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LOGO

Catherine G. West            

 Former Special Advisor,

 Promontory Financial Group

 Director Since:  2013

 Age:  58

Capital One Committees:

∎ Audit Committee

∎ Risk Committee

Capital One Companies:

∎ Capital One Bank (USA), National Association

Additional Public Directorships (current):

∎ None

Ms. West served as a Special Advisor to Promontory Financial Group, a financial services consulting firm, from May 2013 until her departure in October 2013, and as Managing Director from April 2012 until April 2013. From March 2011 to April 2012, Ms. West was the Associate Director and Chief Operating Officer of the Consumer Financial Protection Bureau (“CFPB”), a federal agency tasked with regulating U.S. consumer protection with regard to financial services and products, where she led thestart-up of the agency’s infrastructure. While at the CFPB, Ms. West also played an integral part in implementing a Consumer Response unit designed to solicit views from consumers regarding their experiences with financial institutions and leveraged those views to effect policy change. She was previously the Chief Operating Officer of J.C. Penney from August 2006 to December 2006. From March 2000 to July 2006, Ms. West was an executive officer at Capital One Financial Corporation where she served in roles that included President of the U.S. Card business and Executive Vice President of U.S. Consumer Operations.

Skills and Qualifications:

Ms. West has a multifaceted background in financial services with more than 25 years of experience in financial services operations, regulatory matters, technology platform conversions, process automation and innovation, and strategy development. She has experience in leveraged buyouts, initial public offerings, and mergers and acquisitions, and has a keen understanding of both business strategy and the regulatory perspective. Ms. West provides the Board with valuable insight on these and other matters.

 Board Leadership Structure

Our Board has carefully considered the critical issue of Board leadership and believes that the leadership structure must be considered in the context of Capital One’s specific circumstances, culture, strategic objectives and challenges. The diverse backgrounds and experiences of our directors provide the Board with broad perspectives from which to determine the leadership structure that is best suited for Capital One and the long-term interests of Capital One’s stockholders and other stakeholders. Our Corporate Governance Guidelines allow the roles of Chair and CEO to be filled by the same or different individuals, a policy which appropriately provides the Board with the flexibility to determine Capital One’s current leadership structure.

Mr. Fairbank founded Capital One and has served as CEO since shortly before Capital One’s initial public offering in late 1994 and Chair since early 1995. Given Mr. Fairbank’s role in the formation and growth of Capital One, the Board strongly believes that it is in the Company’s best interest to have him serve as the Chair and CEO, particularly given the Board’s recognition and implementation of strong independent leadership on the Board through an active and empowered Lead Independent Director and independent Board committee structure. Importantly, the Corporate Governance Guidelines provide for a Lead Independent Director who supports the Board in assuring effective governance in managing the affairs of the Board and Capital One. The Lead Independent Director is elected annually by the independent directors and is currently Ms. Hackett. The Lead Independent Director performs the following responsibilities:

With respect to executive sessions:

organizes and presides over executive sessions;
sets the agendas for and leads executive sessions; and
is responsible for soliciting feedback for and engaging the CEO on executive sessions;

With respect to Board meetings and agendas:

presides at all meetings of the Board at which the Chair of the Board is not present;
has the authority to call meetings of the independent directors;
approves meeting agendas for the Board;
approves information sent to the Board; and
approves meeting schedules and works with the Chair of the Board and committee chairpersons to assure that there is sufficient time for discussion of all agenda items;

With respect to other responsibilities related to the independent directors:

facilitates discussion among the independent directors on key issues and concerns outside of Board meetings;
serves as liaison between the Chair of the Board and the independent directors;
facilitates teamwork and communication among the independent directors; and
in a crisis, calls together the independent directors to establish appropriate Board leadership responsibility; and

With respect to performance assessments:

leads the performance assessment of the CEO;
facilitates the Board’s engagement with the CEO and CEO succession planning; and
leads the Board’s self-assessment and recommendations for improvement, if any.

In addition, if requested by major stockholders, the Lead Independent Director ensures that he or she is available for consultation and direct communication.

The Board of Directors has four standing committees: Audit, Risk, Compensation, and Governance and Nominating. Each of the Audit, Compensation, and Governance and Nominating Committees is composed solely of independent directors, and all four standing committees are led by a separate, independent chair. Detailed information on each committee is contained below under “Committees of the Board of Directors.”

We believe that our existing Board leadership structure, with Mr. Fairbank acting as CEO and Chairman of the Board, provides the most effective governance framework thatand allows our companyCompany to benefit from Mr. Fairbank’s talent, knowledge and leadership whileas the founder of Capital One and allows him to use thein-depth focus and perspective gained in running the Company to effectively and efficiently guide our Board. Capital One appropriately maintainingmaintains strong independent and effective oversight of our business and affairs as demonstrated bythrough our empowered Lead

Independent Director,Director;all-independent Board committees with independent key committeeschairs that oversee the Company’s operations, risks, performance and business strategy,strategy; experienced and committed directors,directors; and frequent executive sessions without management (including Mr. Fairbank) in attendance. This structure demonstrates

Lead Independent Director

Our Board believes that an active, empowered Lead Independent Director is key to providing strong, independent leadership for the Board. The Lead Independent Director position, elected annually by the independent directors upon the recommendation of the Governance and Nominating Committee, is a critical aspect of our associates, customers, stockholders, investors,corporate governance framework.

The Lead Independent Director’s responsibilities include:

Board Culture

∎

Serves as liaison between the Chairman of the Board and the independent directors

∎

Facilitates discussion among the independent directors on key issues and concerns outside of Board meetings

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

∎

Ensures Board discussions demonstrate effective challenge of management

∎

Facilitates teamwork and communication among the independent directors

∎

Fosters an environment that allows for engagement and commitment of Board members

Board Leadership

∎

Organizes and presides over executive sessions

∎

Sets the agendas for and leads executive sessions

∎

If a crisis occurs, calls together the independent directors to establish Board leadership responsibility

∎

Is responsible for soliciting feedback for and engaging the CEO on executive sessions

∎

Advises the Chairman of the Board on the retention of advisors and consultants who report directly to the Board

∎

Advises the Governance and Nominating Committee and the Chairman of the Board on the membership of Board committees and the selection of committee chairs

∎

Acts as a key advisor to the CEO on a wide variety of Company matters

Board Performance and Development

∎

Leads the annual performance assessment of the CEO

∎

Facilitates the Board’s engagement with the CEO and CEO succession planning

∎

Leads the Board’s annual evaluation and recommendations for improvement, if any

Board Meetings

∎

Has authority to call meetings of the independent directors

∎

Approves meeting agendas for the Board

∎

Approves information sent to the Board

∎

Approves meeting schedules and works with the Chairman of the Board and committee chairs to assure there is sufficient time for discussion of all agenda items

∎

Presides at all meetings of the Board at which the Chairman of the Board is not present

Stockholder Engagement

∎

If requested by larger stockholders, the Lead Independent Director ensures that he or she is available for consultation and direct communication

∎

Reviews stockholder communications addressed to the full Board, to the Lead Independent Director, or to the independent directors

In evaluating candidates for Lead Independent Director, the independent directors consider several factors, including each candidate’s corporate governance experience, board service and tenure, leadership roles, and ability to meet the necessary time commitment. For an incumbent Lead Independent Director, the independent directors also consider the results of the candidate’s annual Lead Independent Director assessment, as described in “Annual Assessment of the Lead Independent Director” below.

Annual Assessment of the Lead Independent Director

To support the independent directors in electing a Lead Independent Director, the Governance and Nominating Committee oversees an annual process to evaluate the effectiveness of the Lead Independent Director. Each

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year the Governance and Nominating Committee designates one independent director as the facilitator, who solicits input and feedback from all directors on the performance and effectiveness of the Lead Independent Director. The facilitator shares the results with the Governance and Nominating Committee and, as appropriate, the Board, without the Lead Independent Director present. The independent directors consider the results of this assessment in the annual election of the Lead Independent Director.

Our Lead Independent Director is currently Ms. Hackett. As Lead Independent Director, Ms. Hackett has a strong record of active engagement both inside and outside the board room, including regular meetings with both federal regulators and company executives in one-on-one and group settings. Ms. Hackett is also an active member of the Lead Director Network, a select group of lead independent directors from America’s most successful companies who share a commitment to improving corporate performance and earning stockholder trust through more effective board leadership. Leveraging her significant experience serving in leadership capacities in a variety of environments, Ms. Hackett has fostered a culture of collaboration, diligence, trust and mutual respect that allows the Board to work effectively to provide the oversight and effective challenge to management. Based on her performance, the independent directors unanimously supported Ms. Hackett’sre-election as Lead Independent Director for a one-year term beginning May 2017.

 Key Board Governance Practices

2017 Board Meetings and Attendance

∎

Each of our current directors attended at least 75% of the aggregate number of the meetings of the Board and the committees on which they served during the period the director was on the Board or committee

∎

The Board held 20 meetings

∎

The Board’s committees collectively held 31 meetings

∎

All directors then serving attended the Annual Meeting, and Capital One expects all of the director nominees to attend the 2018 Annual Meeting

Executive Sessions

Executive sessions of independent directors of the Board are led by the Lead Independent Director and are an important governance practice because they enable the Board to discuss matters, such as strategy, CEO and senior management performance and compensation, succession planning and board effectiveness without management present. Our independent directors meet in executive session without management at least once annually and, in 2017, the independent directors met three times in executive session. During these executive sessions, the independent directors have complete access to such members of the Company’s senior executive management as they may request, including the CEO, CFO, General Counsel, Chief Risk Officer, Chief Auditor, Chief Credit Review Officer and Chief Compliance Officer. The Lead Independent Director and/or any director may request additional executive sessions ofnon-management or independent directors.

Directors Are Actively Engaged Outside of Board Meetings

Engagement outside of Board meetings provides our directors with additional insight into our business and our industry and valuable perspective on the performance of our Company, the Board, our CEO and other stakeholdersmembers of senior management.

∎

Our committee chairs and Lead Independent Director meet and speak regularly with each other and with both the CEO and members of our management team, usually independently of the CEO.

∎

Our committee chairs and Lead Independent Director conductpre-meeting reviews of agendas and provide feedback directly to management. After Board meetings, the committee chairs and Lead Independent Director conduct post-meeting debriefs with management to discuss anyfollow-up items.

∎

Our individual directors have discussions with each other and with our CEO, members of our senior management team and other key associates and with our federal regulators.

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

Annual Board and Committee Evaluations

In order to monitor and improve their effectiveness, and to solicit and act upon feedback received, the Board and its committees engage in a formal self-evaluation process. The Board believes that in addition to serving as a tool to evaluate and improve performance, evaluations can serve several other purposes, including the promotion of good governance, integrity of financial reporting, reduction of risk, strengthening of the board-management partnership, and helping set and oversee board expectations of management. In assessing their performance, the Board and its committees take a multi-year perspective to identify and evaluate trends and assure themselves that areas identified for improvement are appropriately and timely addressed. As part of the Board’s evaluation process, directors consider various topics related to Board composition, structure, effectiveness and responsibilities and the overall mix of director skills, experience and backgrounds. While the Board and each of its committees conducts a formal evaluation annually, the Board considers its performance and that of its committees continuously throughout the year and shares feedback with management.

To ensure the process stays fresh and continues to generate rich insights, the Board follows a cyclical, programmatic approach to conducting Board and committee evaluations. This approach includes regular, holistic reviews of the evaluation framework, methodology and form. In 2017, the Board and its committees conducted their evaluations using the following process:

Initiation of

Process

LOGO

The Lead Independent Director developed and circulated a list of potential topics to directors for consideration in advance of the Board’s evaluation discussion. The Lead Independent Director solicited input from the Corporate Secretary, the Corporate Governance Office, and members of the Board in formulating the questions. Committee chairs followed a similar process for their respective committees.

Discussion

LOGO

The Lead Independent Director scheduled time with each individual director in advance of the Board evaluation discussion to gather input and feedback and leveraged those discussions to lead the evaluation discussion held during the executive session at the Board’s meeting held during the second quarter. Committee chairs led their respective committee discussions during executive session.

Follow-Up

LOGO

The Lead Independent Director shared a summary of the Board results with management to address any requests or enhancements in practices that may be warranted. Committee chairs reported on their respective evaluations to the full Board.

Topics considered during the 2017 annual evaluations process included:

∎

Setting corporate culture and “tone at the top”

∎

Lead Independent Director’s role

∎

Chairman of the Board’s role

∎

Assessment of the CEO’s performance

∎

CEO and executive management succession planning

∎

Executive compensation

∎

Company performance

∎

Corporate strategy (both short- and long-term strategic objectives)

∎

Executive talent development

∎

Access to Company executives and associates

∎

Board and committee composition including director skills, background, expertise, and diversity

∎

Oversight of enterprise risk, including the stature of the risk management function and appropriateness of the Company’s risk appetites and risk management in light of the scale and complexity of the Company’s business

∎

Overall Board governance including quality and quantity of materials and information, conduct of meetings and support for those activities from management

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In future years, the Board and its committees may conduct their annual evaluations in a different manner, such as through surveys, group discussions in executive session, individual director interviews and/or a third-party facilitator.

Annual Assessment of Director Nominees

Each year the Chair of the Governance and Nominating Committee conducts an individual director assessment process. This process includes candid,one-on-one discussions between the Governance and Nominating Committee’s Chair and each Board member regarding the individual performance and effectiveness of the directors nominated by the Board forre-election by Capital One’s Board of Directorsstockholders. The Lead Independent Director is committed to engaged,also assessed annually through a process facilitated by another independent leadership and performance of its responsibilities. The Board of Directors believes that combining the Chair and CEO positions takes advantagemember of the talentBoard. See “Annual Assessment of the Lead Independent Director” beginning on page 22 for a description of that process.

Solicitation

LOGO

The Governance and Nominating Committee Chair meets with Board members in separate,one-on-one sessions to solicit feedback on the other directors’ individual strengths and contributions in areas such as meeting preparation, knowledge of company business and strategy, personal knowledge and subject-matter expertise, corporate culture, ethics and candor.

Evaluation

LOGO

The Governance and Nominating Committee Chair synthesizes the feedback and reports the results to the Governance and Nominating Committee, the Chairman of the Board and the Board, as appropriate. Each director leaves the room during the discussion of his or her assessment and candidacy.

The Governance and Nominating Committee also reviews other considerations such as related person transactions, conflicts of interest and independence.

Nomination

LOGO

The Governance and Nominating Committee recommends director candidates for nomination to the Board, and the Board nominates one or more directors to stand forre-election by Capital One’s stockholders.

Follow-Up

LOGO

The Governance and Nominating Committee’s Chair shares input and feedback from the assessments with the individual directors.

Annual Performance Assessment of the CEO

Under the direction of our Lead Independent Director, the independent directors of the Board annually assess the performance of Mr. Fairbank as Capital One’s CEO. The Governance and Nominating Committee is responsible for developing and overseeing the founder of Capital One and effectively combinesprocess, facilitated by the responsibilities for strategy development and execution with management of day-to-day operations. It also reduces the potential for confusion or duplication of efforts and provides clear leadership for Capital One. The Board of Directors believes that the combination of the Chair and the CEO roles, together with its strong governance practices, including its supermajority of independent directors and its clearly defined Lead Independent Director responsibilities, providesand involving all directors, for conducting the CEO’s annual performance evaluation. This process includes an appropriate balance among strategy development, operational executionin-depth discussion of performance by the independent directors in executive session during which directors consider a variety of factors to evaluate Mr. Fairbank’s performance. Such factors include financial and independent oversightoperating performance, governance and risk management, strategic performance, setting the cultural “tone at the top,” and winning with our customers and associates as described in “Chief Executive Officer Compensation” beginning on page 48 and feedback raised through Board discussion and self-assessment materials provided by Mr. Fairbank to the Board regarding his and the Company’s performance and achievements for various subjective and objective metrics.

The annual CEO performance assessment is completed as part of Capital One.theend-of-year compensation process. The Compensation Committee managesend-of-year compensation decisions within the context of such assessment, and the Lead Independent Director and Chair of the Compensation Committee jointly share the input and feedback of the CEO performance assessment with Mr. Fairbank in a closed session.

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

The Board’s Role in Succession Planning

TheUnder the Corporate Governance Guidelines, the Board is responsible for ensuring thatmaintaining a succession plan for the CEO. The Board has in place an effective planning process to select successors to the CEO exists. Theand annually reviews the CEO succession plan is reviewed annually byplan. Our Board believes that the Board.directors and the CEO should work together on succession planning and that the entire Board should be involved. Each year, as part of its succession planning process, our CEO provides the Board with recommendations on, and evaluations of, potential CEO successors. The Board reviews the senior executive team’s experience, skills, competencies and potential to assess which executives possess or have the ability tocan develop the attributes that the Board believes are necessary to lead and achieve the Company’s goals. Among other steps taken to promote this process throughout the year, the two levels of executives below the CEO, which include all of the CEO’s direct reports, often attend Board meetings and present to the Board, providing the Board with numerous opportunities to interact with our senior management and assess their leadership capabilities.

Our Board also has established steps to address emergency CEO succession planning for an unplanned CEO succession event. Our emergency CEO succession planning is intended to enable our Company to respond to an unexpected CEO transition by continuing our Company’s safe and sound operation and minimizing potential disruption or loss of continuity to our Company’s operations and strategy. There is also available, on a continuing basis as a result of the process described above, the CEO’s recommendation as toon a successor should the CEO become unexpectedly unable to serve. The Board also reviews annually the CEO’s emergency successor recommendations on an annual basis.recommendations.

The Board’s Role in Risk Oversight

The Board of Directors believes that effective risk management and control processes are critical to Capital One’s safety and soundness, our ability to predict and manage the challenges that Capital One and the financial services industry face and, ultimately, Capital One’s long-term corporate success. Management is responsible for implementing Capital One’s risk assessment and management functions and for reporting to the Board of Directors with respect to the management of risk. The Board of Directors, in turn, both directly and through its committees, is responsible for overseeing management’s risk functions. The Board approves the Company’s strategic direction and overall risk appetite.

The enterprise-wide risk management framework defines the Board’s appetite for risk taking and enables senior management to understand, manage and report on risk. The risk management framework is implemented enterprise wideenterprise-wide and includes all eight risk categories: Strategic, Legal, Market, Liquidity, Operational, Reputation, Compliancecompliance, credit, legal, liquidity, market, operational, reputational and Credit.strategic. Management has worked to developdeveloped risk appetite statements with accompanying metrics which are meaningful to the organization and reflect the aggregate level and types of risk Capital One is willing to accept in order to achieve its business objectives, clarifying both risks the Company is actively taking and risks that are purposely avoided.

The Risk Committee oversees Capital One’s enterprise-wide risk management framework, including policies and practices established by management to identify, assess, measure and manage key risks facing Capital One across the eight risk categories identified above, as set forth in its charter. In addition, the Risk Committee oversees management’s specific responsibilities with respect to identification and management of, and planning for, Capital One’s market, liquidity, operational and credit risks. The Audit Committee is responsible for the oversight of enterprise risk oversight with respectmanagement for the Company, and is responsible for reviewing and recommending to compliance by Capital One with legalthe Board for approval certain risk tolerances taking into account the Company’s structure, risk profile, complexity, activities, size, and regulatory requirements. In addition, the Audit Committee reviews and discussesother appropriate risk-related factors. Within management, enterprise risk management is generally the policies and practices that govern the processes by which key risk exposures are identified, assessed, managed and controlled on an enterprise-wide basis and meets jointly with the Risk Committee to assess Capital One’s enterprise-wide risk management framework. The Risk Committee oversees thatresponsibility of the Chief Risk Officer, who has accountability for proposing risk tolerance and other members of management, as applicable, review with the Compensation Committee the risks that Capital One’s incentive compensation programs, such as its senior executive, corporate incentive and other material incentive compensation programs, may pose as more fully described below under “Risk Assessment of Compensation Policies and Practices.”

reporting levels related to all eight risk categories. The Chief Risk Officer is also responsible for ensuring that the Company has an overall enterprise risk framework and that it routinely assesses and reports on enterprise level risks. The Chief FinancialRisk Officer Chief Internal Auditor, Chief Credit Review Officerreports both to the CEO and General Counsel each meetto the Risk Committee. The Audit Committee also plays an important risk oversight function, and oversees elements of compliance and legal risk. Each committee of the Board oversees reputation risk matters within the scope of their respective responsibilities. Finally the Board as a whole oversees the entire enterprise risk framework for the Company, including the oversight of strategic risk.

The Board’s Role in Overseeing Cyber Risk

As a financial services company entrusted with or provide reportsthe safeguarding of sensitive information, our Board believes that a strong enterprise cyber strategy is vital to Capital One’seffective cyber risk management. Accordingly, our Board is actively engaged in the oversight of the Company’s cyber risk profile, enterprise cyber strategy implementation and key cyber initiatives. The Risk Committee receives regular updates from management on its cyber event preparedness efforts. The Risk Committee receives regular quarterly reports from the Chief Information Security Officer on the Company’s cyber risk profile and cybersecurity program initiatives and meets with the Chief Information Security Officer at least once per quarter as well as separately with the Risk Committee throughout the year on a periodic basis without other members of management present.twice annually. The Risk Committee also meets on a periodic basisperiodically with third-party experts, as appropriate, to evaluate the Company’s cybersecurity program. The Risk Committee annually reviews and recommends the Company’s information security policy and information security program to the Board for approval. The Risk Committee is also responsible for overseeing cybersecurity and information security risk as

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well as management’s actions to identify, assess, mitigate and remediate material issues. At least annually, the Board reviews and discusses the Company’s technology strategy with the Chief ComplianceInformation Officer without other members of management present. The Chief Risk Officer also meets at least annually with the full Board of Directors to reviewand approves the Company’s enterprise risk profile. In addition, the Audit Committee meets on a periodic basis with the Chief Compliance Officer and meets at least quarterly with the Chief Financial Officer to discuss Capital One’s financial results and financial forecasts. Throughout the year,technology strategic presentations and line of business updates to the Board of Directors or its committees typically include reports on risk management.plan.

Corporate Audit Services provides independent and objective assurance services and advice and guidance regarding risk management and control practices to provide that risk management, internal controls and governance systems are adequate and functioning on a consistent and reliable basis. The Chief Internal Auditor reports organizationally to the Audit Committee of the Board of Directors, which has the authority to hire and compensate the Chief Internal Auditor and to terminate his or her employment. The Chief Credit Review Officer reports organizationally to the Risk Committee of the Board of Directors, which has the authority to hire and compensate the Chief Credit Review Officer and to terminate his or her employment. The Chief Risk Officer reports directly to both the Risk Committee and the CEO.

Risk Assessment of Compensation Policies and Practices

The Compensation Committee actively oversees all of our compensation policies and practices, including our incentive compensation policies and practices, to monitorwith a view towards ensuring that such policies and practices encourage balanced risk-taking, are compatible with effective controls and risk management and align with our business strategy. In 2014, the Company continued to participate in the horizontal review of incentive compensation practices that the Federal Reserve Board began in late 2009 with respect to the incentive compensation practices at 25 large banking organizations. The purpose of the review has been to assess the incentive compensation practices at these organizations and their compliance with the interagency guidance on sound incentive compensation practices issued by the Federal Reserve Board and other bank regulators in June 2010. We believe that the Compensation Committee’s active oversight, together with the Company’s interactions and discussions with its regulators, has further enhanced the Company’s risk management and control processes with respect to incentive compensation at the Company. In January 2012,Annually, the Compensation Committee adopted anreviews and approves the Incentive Compensation Governance Policy applicablewhich applies to all Company employees thatassociates and governs incentive compensation decisions anddecisions. The Incentive Compensation Governance Policy provides the framework for oversight of the design of incentive compensation programs, which it reviews and re-approves annually.programs. In the context of setting executive compensation, the Compensation Committee assessedassesses each of the named executive officers against one or more performance objectives specifically designed to evaluate the degree to which the executive balanced risks inherent in his or her role and also implementedimplements additional risk-balancing features for certain equity awards, as described in more detail in the “Compensation Discussion and Analysis” beginning on page 31.44.

The Compensation Committee reviews the Company’s named executive officer and other senior executive compensation programs as well as any other material incentive compensation programs. During the course of these reviews, the Compensation Committee discusses the Company’s most significant risks, including the Company’s status with respect to managing those risks and the relationship of those risks to applicable compensation programs. The review includes discussion and analysis of risk-balancing features embedded in these incentive compensation programs and other actions taken by the Company designed to appropriately balance risk and achieve conformance with regulatory guidance and appropriately balance risk.guidance. The Compensation Committee also discusses these programs with the Company’s Chief Risk Officer, Chief Human Resources Officer and the Compensation Committee’s independent compensation consultant, as appropriate. Based on these discussions, the Compensation Committee believes that these compensation programs are consistent with safety and soundness and operate in a manner that appropriately balances risk.

 Director Independence

The Compensation Committee’s active oversight, together with the Company’s interactions and discussions with its regulators, has further enhanced the Company’s risk management and control processes with respect to incentive compensation at the Company and supported our continued compliance with the interagency guidance on sound incentive compensation practices.

 Stockholder Engagement Program

We value the input and insights of our stockholders and are committed to continued engagement with investors. As a result, we engage in continuous outreach to enable meaningful engagement and report feedback to our Board to help them drive results. In 2017, we engaged in direct outreach and discussions with stockholders representing approximately 60% of Directors has assessed whether eachour outstanding shares. Key topics of its non-management members is “independent” under Capital One’s Director Independence Standards. These standards, which have been adopted by the Board of Directors as part of Capital One’s Corporate Governance Guidelines, reflect, among other things, the director independence requirements set forth in the listing standards of the NYSEfocus included corporate governance matters, company strategy and other applicable legalresults, board composition, and regulatory rules, and describe certain relationships thatexecutive compensation performance metrics.

∎

Continuous Outreach.The CEO, the CFO, and our Investor Relations team meet frequently with stockholders and the investment community regarding our strategy and performance. In addition, members of management, including our Investor Relations, Corporate Governance, and Executive Compensation teams, and frequently our General Counsel, Corporate Secretary and CFO, meet with key governance contacts at our larger stockholders throughout the year.

∎

Meaningful Engagement.We engage on company performance and operations, strategic direction, corporate governance, executive compensation, risk and operational oversight and Board leadership, operation and composition, among other matters. Our goal is to engage in a manner characterized by both transparency and respect, fostering collaborative and mutually beneficial discussions. If questions arise that are best addressed through a conversation with our directors, management works with the stockholder to arrange for that conversation. Depending on the topics the investor wishes to discuss, our meetings with stockholders may include our Lead Independent Director, the Chair of the Compensation Committee or the Chair of the Governance and Nominating Committee.

CAPITAL ONE FINANCIAL CORPORATION  

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

∎

Regular Board Reporting.The Governance and Nominating Committee, Compensation Committee, and the Board request and receive reports from our Investor Relations team and members of management and discuss stockholders’ feedback and insights. Our Board and management review and evaluate stockholder input to identify issues and concerns that may require Board action or enhancements to our policies, practices or disclosure.

∎

Stockholder-Driven Results.In recent years, in response to stockholder feedback, we have made significant improvements to our corporate governance and executive compensation practices and disclosures:

∎

Introduced new metrics for our performance share program, more closely tying pay to performance, and increased the rigor of relative Company performance governing payouts applicable to performance share awards. See “Performance Share Award” beginning on page 50 for more information.

∎

Provided disclosure in our proxy statement regarding the three core elements of our approach to corporate social responsibility: People, Community, and Environment. See “Environmental, Social and Governance Practices” beginning on page 36 for more information.

∎

Increased alignment of CEO compensation and Company performance by increasing the percentage of the CEO’s total target compensation tied to ayear-end evaluation of CEO and Company performance from 30% to 40%, providing a more direct link between the CEO’s compensation and the Compensation Committee’s and independent directors’ assessment of such performance. See “Chief Executive Officer Compensation” beginning on page 48 for more information.

∎

Provided greater transparency regarding the Compensation Committee’s use of discretion, particularly regarding theyear-end incentive awards granted to the named executive officers. See “Use of Discretion” on page 47 for more information.

We Engage Across Many Channels

 Company-Led Engagement

 Stockholder-Led Engagement

∎Dedicated Investor Relations Department. Our Investor Relations professionals are dedicated full time to respond to questions from stockholders about the Company, its strategy and performance, and other issues of investor interest.

∎Formal Outreach Program. In addition to continuous outreach on a broad set of topics, our formal outreach program includes proactive outreach to our largest stockholders at least twice a year focused on governance, compensation, and related issues. Through our overall formal outreach program, our Board and management gain stockholder insights and provide an opportunity for management to assess stockholder sentiment.

∎Quarterly Earnings Conference Calls.In addition to prepared remarks, our management team participates in a question-and-answer session aimed at allowing stockholders to gain further insight into the Company’s financial condition and results of operations.

∎Regular Investor Conferences and Road-shows.Management and our Investor Relations team routinely engages with investors at conferences and other forums. During 2017, management attended 13 investor conferences.

∎SEC Filings and Proxy Statement. All our filings with the SEC are available on our Investor Relations website at www.capitalone.com (under “About Us,” then “Investors”).

∎Voting. Our stockholders have the opportunity to vote for the election of all of our directors on an annual basis using a majority voting standard, and, through our annual vote on executive compensation, to regularly express their opinion on our compensation programs.

∎Annual Stockholder Meeting. Our directors are expected to, and do, attend the annual meeting of stockholders, where all of our stockholders are invited to attend, ask questions and express their views.

∎Written Correspondence. Stockholders may write to the Board through the Corporate Secretary at the address provided below.

∎Special Meetings.A stockholder or group of stockholders that hold at least 25% of our outstanding common stock may request a special meeting of stockholders.

∎Proxy Access. A stockholder or group of up to 20 stockholders who have owned at least 3% of the Company’s outstanding common shares of voting stock continuously for at least 3 years may nominate and include in the Company’s proxy statement a number of director candidates equal to the greater of 2 or 20% of the total Board.

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SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

 Board Committees

Our Board has determined to be immaterial for purposes of determining director independence. As noted above, Capital One’s Corporate Governance Guidelines, including the Director Independence Standards, are available on the Corporate Governance page of Capital One’s Internet site atwww.capitalone.com under “About Us/Investors.” The Board of Directors has determined that each of Mr. Gross, Ms. Hackett, Mr. Hay, Mr. Jenkins, Mr. Raskind, Mr. Shattuck, Mr. Warner and Ms. West is independent under these standards.

 Related Person Transactions

Capital One’s policies and procedures for the review, approval or ratification of related person transactions are set forth in the charter of thefour standing committees: Audit, Risk, Governance and Nominating, and Compensation. Each of our committees:

∎

Is led by an active and empowered Committee Chair, each of whom is independent

∎

Is comprised of all independent members

∎

Operates in accordance with a written charter, which is reviewed annually

∎

Assesses its performance annually

∎

Has authority to retain outside advisors, as desired

Information About Our Current Board Committee Capital One’s Code of ConductMembership and internal written procedures. The charter of the Governance and Nominating2017 Committee requires the Committee to review on an annual basis any transactions involving Capital One and any of its directors, executive officers or their immediate family members and, as appropriate, to consider potential conflicts of interest or the appearance of potential conflicts of interest, as well as issues relating to director independence. The Governance and Nominating Committee performs this review each year based on the information provided by each director and executive officer on an annual questionnaire and through a review of Capital One’s internal systems for payments or other transactions that could indicate the presence of a related person transaction. In developing its assessment and recommendation regarding related person transactions to the Board of Directors, the Governance and Nominating Committee relies upon criteria set forth in the Code of Conduct to evaluate activities or relationships that may create a conflict of interest, including potential related person transactions. In addition to specific prohibitions, these criteria include the extent to which the proposed relationship would be authorized and permitted (or prohibited) by Capital One policies, as well as the potential perspective of third parties regarding such relationships.Meetings

Internal written procedures require that any potential conflict of interest, including related person transactions involving any of Capital One’s directors or executive officers, be reviewed by the General Counsel (in the case of a director) and by either the General Counsel or Chief Human Resources Officer (in the case of an executive officer). If the reviewer believes that such relationship could create a conflict of interest or require disclosure as a related person transaction, a second review is conducted by the disinterested members of the Governance and Nominating Committee (in the case of a director) or by the CEO (in the case of other executive officers).

 Director

 

  

Audit

 

  

Risk

 

  

Governance and

Nominating

 

  

Compensation

 

 

 Richard D. Fairbank

 

           
            

 

 Aparna Chennapragada(1)

 

           
            

 

 Ann Fritz Hackett

 

     

 

LOGO

 

  

 

LOGO

 

  

 

LOGO

 

            

 

 Lewis Hay, III

 

        

 

LOGO

 

  

 

LOGO

 

            

 

 Benjamin P. Jenkins, III

 

  

 

LOGO

 

  

 

LOGO

 

     

 

LOGO

 

            

 

 Peter Thomas Killalea

 

     

 

LOGO

 

     

 

LOGO

 

            

 

 Pierre E. Leroy

 

  

 

LOGO

 

        

 

LOGO

 

            

 

 Peter E. Raskind

 

     

 

LOGO

 

  

 

LOGO

 

  
            

 

 Mayo A. Shattuck III

 

        

 

LOGO

 

  

 

LOGO

 

            

 

 Bradford H. Warner

 

  

 

LOGO

 

  

 

LOGO

 

     
            

 

 Catherine G. West

 

  

 

LOGO

 

  

 

LOGO

 

     
            

 

 TOTAL MEETINGS HELD IN 2017

 

  

 

14

 

  

 

8

 

  

 

4

 

  

 

5

 

            

LOGO Chair    LOGO Member

From time to time in the ordinary course of its business, Capital One issues loans to directors, executive officers and/or nominees for director, or to a director’s, executive officer’s or director nominee’s immediate family member, including persons sharing the household of such director, executive officer or director nominee (other than a tenant or employee). Such loans are 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 Company and do not involve more than the normal risk of collectability or present other unfavorable features.

(1)

Ms. Chennapragada was appointed to the Board of Directors on March 1, 2018.

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Mr. Leroy is the former Executive Chairman and Chief Executive Officer of a company in which Mr. Leroy continues to hold a significant financial interest. Such company, through a majority owned subsidiary, receives payments from other companies that provide and are expected to continue to provide certain services to Capital One, which payments are based on the extent of Capital One’s dealings with such other companies. In 2014, the amount of payments received by such companies that were attributable to Capital One’s business was approximately $1.19 million. These dealings are continuing in 2015, although Capital One does not have information on the amounts to date that are attributable to its business.

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

Committees of the Board of Directors

In order to assist it in fulfilling its functions, the Board of Directors conducts business through four standing committees: the Audit Committee, the Risk Committee, the Compensation Committee and the Governance and Nominating Committee. Pursuant to Capital One’s Corporate Governance Guidelines and applicable law, the Audit, Compensation, and Governance and Nominating Committees are comprised solely of independent directors, the Audit and Compensation Committees are comprised solely of directors who satisfy the NYSE’s heightened independence requirements for audit and compensation committee members, respectively, and all four standing committees are led by a separate, independent chair. The Chair of each committee determines the frequency, length and agenda of meetings for his or her committee in accordance with such committee’s charter, in consultation with other members of the committee and with appropriate members of management, and establishes an annual calendar of topics for consideration by the committee. The Chair of each committee also seeks comments on key issues from other directors who are not part of the committee and reports committee activities to the full Board of Directors. In January 2015, each of the Audit, Risk, Compensation, and Governance and Nominating Committees and the Board of Directors approved the respective committee’s charter. Copies of the charter of each committee are available free of charge on the Corporate Governance page of Capital One’s Internet site atwww.capitalone.com under “About Us/Investors.” Below is a description of each committee.

Audit Committee

Description

The Audit Committee assists the Board of Directors with overseeing Capital One’s accounting, financial reporting and internal controls, including the responsibilities set forth below.

Key Responsibilities

 

Monitor the integrity of Capital One’s financial statements and internal controls;
Review both the acceptability and quality of major changes to the Company’s accounting principles and practices as suggested by the independent auditor, Chief Internal Auditor or management, and be responsible for the resolution of any disagreements between management and the independent auditor regarding financial reporting issues;
Monitor Capital One’s compliance with legal and regulatory requirements;
Review and discuss generally the policies and practices that govern the processes by which key risk exposures are identified, assessed, managed and controlled on an enterprise-wide basis;
Review and discuss with management their assessment of the effectiveness of the Company’s disclosure controls and procedures and whether any changes are necessary in light of such assessment;
Oversee the establishment of and monitor procedures for: (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting control or auditing matters; and (ii) the confidential, anonymous submission by the employees of the Company of concerns regarding accounting or auditing matters;
Recommend to the Board whether to include the audited financial statements in the Company’s Form 10-K;
Review and recommend to the Board the Company’s policy that addresses its approach for determining market risk disclosures and the associated internal controls and disclosure controls and procedures, and review market risk disclosures made pursuant to such policy, in accordance with applicable law and regulatory requirements implementing the Basel III capital accord.
Review the qualifications, independence and performance of Capital One’s independent auditor;
Appoint, compensate, retain and oversee Capital One’s independent auditor; and
Assess the performance of Capital One’s Chief Internal Auditor.

The Committee may delegate authority for certain responsibilities to subcommittees or members of management as the Committee deems appropriate and as permitted by law.

Financial Expert

Although other members of the Audit Committee may qualify as “audit committee financial experts” under the Sarbanes-Oxley Act of 2002 and the rules of the SEC and the NYSE promulgated thereunder, the Board of Directors has designated Mr. Raskind and Mr. Warner as its “audit committee financial experts.”

Service

No member of the Audit Committee simultaneously serves on the audit committees of more than three public companies, including that of Capital One.

2014 Meetings

During 2014, the Audit Committee met twelve times.

 Committee Members:

 Bradford H. Warner (Chair)

 Benjamin P. Jenkins, III

 Pierre E. Leroy

 Catherine G. West

 Meetings Held in 2017:14

Primary Responsibilities:

∎   Oversee the qualifications, independence and performance of the Company’s independent auditor

∎   Oversee the appointment, compensation, retention and work of the Company’s independent auditor

∎   Assist our Board with the oversight of the integrity of the Company’s financial statements, including matters related to internal controls

∎   Review and discuss with management their assessment of the effectiveness of the Company’s disclosure controls and procedures and whether any changes are necessary in light of such assessment

∎   Review and discuss generally the policies and practices that govern the processes by which key risk exposures are identified, assessed, managed and controlled on an enterprise-wide basis

∎   Oversee the Chief Auditor and the internal audit function

∎   Approve or replace the Chief Auditor, as appropriate, and annually review the performance, independence and compensation of the Chief Auditor

∎   Oversee the compliance by the Company with legal and regulatory requirements

∎   Perform the fiduciary audit committee function on behalf of our bank subsidiaries in accordance with federal banking regulations

∎   Review and recommend to the Board (or disinterested members of the Board, as appropriate) for approval (i) the Company’s Code of Business Conduct and Ethics, and any material changes thereto; and (ii) any waiver of the Code of Business Conduct and Ethics for directors and certain executive officers

Qualifications:

∎   Each member of the Audit Committee is “financially literate” within the listing standards of the NYSE

∎   No member of the Audit Committee simultaneously serves on the audit committees of more than three public companies, including that of Capital One

∎   The Board has identified Mr. Leroy and Mr. Warner as “audit committee financial experts” under the applicable SEC rules based on their experience and qualifications, with Mr. Leroy having been identified as such in February 2018

Risk Committee

Description

The Risk Committee assists the Board of Directors with overseeing Capital One’s risk assessment and management processes, including the responsibilities set forth below.

Key Responsibilities

 

Monitor the processes by which management assesses and manages risk;

 Committee Members:

 Peter E. Raskind (Chair)

 Ann Fritz Hackett

 Benjamin P. Jenkins, III

 Peter Thomas Killalea

 Bradford H. Warner

 Catherine G. West

Meetings Held in 2017:8

Primary Responsibilities:

∎   Assist our Board with oversight of the Company’s enterprise-wide risk management framework, including policies established by management to identify, assess, measure and manage key risks facing the Company across all of the Company’s eight risk categories: compliance, credit, legal, liquidity, market, operational, reputational and strategic risk

∎   Discuss with management the enterprise’s risk appetite and tolerance and, at least annually, recommend to the Board the statement of risk appetite and tolerance to be communicated throughout the Company

∎   Review and approve annually the credit review plans and policies, and any significant changes to such plans, as appropriate

∎   Review and recommend to the Board the Company’s liquidity risk tolerance at least annually, taking into account the Company’s capital structure, risk profile, complexity, activities and size, and review management reports regarding the Company’s liquidity risk profile and liquidity risk tolerance at least quarterly

∎   Oversee the Company’s cyber risk profile, enterprise cyber strategy implementation, and key cyber initiatives

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

Monitor Capital One’s enterprise-wide risk management framework, including policies established by management to identify, assess, measure and manage key risks facing Capital One across all of Capital One’s eight risk categories: strategic, compliance, operational, reputation, legal, credit, market, and liquidity risk;
Review Capital One’s capital adequacy, including compliance with legal, regulatory and supervisory requirements;
Discuss with management the enterprise’s risk appetite and tolerance and, and at least annually, recommend to the Board the statement of risk appetite and tolerance to be communicated throughout the Company;
Review and approve annually the credit review plans and policies, and any significant changes to such plans, as appropriate;
Review and recommend to the Board the Company’s liquidity risk tolerance at least annually, taking into account the Company’s capital structure, risk profile, complexity, activities and size, and review management reports regarding the Company’s liquidity risk profile and liquidity risk tolerance at least quarterly;
Review reports from Capital One’s Chief Risk Officer at least quarterly;
Assess the performance of Capital One’s Chief Credit Review Officer; and
Oversee management’s specific responsibilities with respect to identification and management of, and planning for, the Company’s market risk, liquidity risk, operational risk and credit risk.

The Committee may delegate authority for certain responsibilities to subcommittees or members of management as the Committee deems appropriate and as permitted by law. The Audit Committee is responsible for risk oversight with respect to compliance by Capital One with legal and regulatory requirements. In furtherance of its responsibility for oversight of Capital One’s enterprise-wide risk management framework, the Risk Committee coordinates with the Audit Committee to provide risk oversight with respect to compliance by Capital One with legal and regulatory requirements.

2014 Meetings

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

During 2014, the Risk Committee met eleven times.

Governance and Nominating Committee

Description

 Committee Members:

 Ann Fritz Hackett (Chair)

 Lewis Hay, III

 Peter E. Raskind

 Mayo A. Shattuck III

 Meetings Held in 2017:4

Primary Responsibilities:

∎   Director succession planning and recruitment of new director candidates

∎   Assist our Board by identifying and recommending nominees for election to our Board and review the qualifications of potential Board members

∎   Annually review and recommend committee membership

∎   Lead the Company’s corporate governance policies and practices, including recommending to the Board the Corporate Governance Guidelines

∎   Oversee the Board and CEO’s annual evaluation processes and periodically discuss the plan for the CEO’s succession

∎   Oversee management’s stockholder engagement program and practices

∎   Evaluate stockholder proposals and other correspondence

∎   Establish and oversee processes for individual director and Board assessments and oversee that committee chairs perform committee evaluations

∎   Keep informed regarding external governance trends, including reviewing benchmarking research conducted by management

Compensation Committee

 Committee Members:

 Mayo A. Shattuck III (Chair)

 Ann Fritz Hackett

 Lewis Hay, III

 Benjamin P. Jenkins, III

 Peter Thomas Killalea

 Pierre E. Leroy

 Meetings Held in 2017:5

Primary Responsibilities:

∎   Annually recommend to the Board officers for election orre-election or the manner in which such officers will be chosen

∎   Evaluate, approve and recommend to the independent directors the CEO’s compensation, including any salary, incentive awards, perquisites and termination arrangements, in light of the Committee’s assessment of his performance and anticipated contributions with respect to the Company’s strategy and objectives

∎   Review, approve and recommend the salary levels, incentive awards, perquisites and termination arrangements for executive officers, other than the CEO, to the independent directors and the hiring or promotion of such executive officers to the Board

∎   Review and approve the Company’s goals and objectives relevant to compensation, oversee the Company’s policies and programs relating to compensation and benefits available to executive officers with a goal of aligning the policies and programs with such goals and objectives, and review relevant market data relating to compensation and benefits

∎   Oversee incentive compensation programs for executive officers and others who can expose the Company to material risk with a goal that such programs be designed and operated in a manner that achieves balance and is consistent with safety and soundness

∎   Review data and analyses to allow an assessment of whether the design and operation of incentive compensation programs is consistent with the Company’s safety and soundness as provided under applicable regulatory guidance

∎   Administer Capital One’s 2004 Stock Incentive Plan, 2002 Associate Stock Purchase Plan and other associate benefit plans

∎   Periodically review and recommend director compensation to the Board

∎   Based on a review and discussion with management, recommend the inclusion of the Compensation Discussion and Analysis in our annual proxy statement

The independent directors of the Board may meet concurrently with the Compensation Committee, as appropriate, to review and approve compensation for the CEO and other executive officers.

The Charters of the Audit, Risk, Governance and Nominating, Committee assists the Board of Directors with respect to a variety of corporate governance matters and practices, including the responsibilities set forth below.

Key ResponsibilitiesCompensation Committees are available on our website at www.capitalone.com. Select “About Us,” then “Investors,” then “Corporate Governance.”

 

Advise the Board of Directors on its organization, membership and function;

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  31

Identify and recommend director nominees and the structure and membership of each Committee of the Board;
Advise and recommend action on corporate governance matters applicable to Capital One;
Develop and recommend to the Board a set of corporate governance guidelines applicable to the Company and periodically review and reassess the adequacy of such corporate governance guidelines and recommend any proposed changes to the Board for approval;
Review on an annual basis any transactions involving the Company and any director or executive officer or immediate family member thereof and, as appropriate, consider potential conflicts of interest or the appearance thereof and issues relating to director independence;
Advise the Board of Directors on the frequency of the Company’s advisory vote on executive compensation; and
Oversee the Board’s and the CEO’s annual evaluation processes and provide that the directors engage in periodic discussions to plan for the CEO’s succession, as described in more detail in Capital One’s Corporate Governance Guidelines.

The Committee may delegate authority for certain responsibilities to subcommittees or members of management as the Committee deems appropriate and as permitted by law.

2014 Meetings

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

During 2014, the Governance and Nominating Committee met five times.

Compensation Committee

Description

The Compensation Committee assists the Board of Directors with respect to the compensation programs and benefit plans for the directors, the Chief Executive Officer, the other executive officers and other employees; the annual Committee report and Capital One’s Compensation Discussion and Analysis; the election of officers and the hiring or promotion of senior executives; and such other responsibilities and activities as may be required by law or regulation, including the responsibilities set forth below.

Key Responsibilities

 

Recommend to the Board annually officers for election or re-election or the manner in which such officers will be chosen;
Evaluate, approve and recommend to the independent directors the Chief Executive Officer’s compensation, including any salary, incentive awards, perquisites and termination arrangements, in light of the Committee’s assessment of his performance and anticipated contributions with respect to the Company’s strategy and objectives;
Review, approve and recommend the salary levels, incentive awards, perquisites and termination arrangements for executive officers, other than the Chief Executive Officer, to the independent directors and the hiring or promotion of such executive officers to the Board;
Review and approve the Company’s goals and objectives relevant to compensation, oversee the Company’s policies and programs relating to compensation and benefits available to executive officers to ensure that they align with such goals and objectives, and review relevant market data in establishing compensation and benefits programs;

Oversee incentive compensation programs for executive officers and others who can expose the Company to material risk to ensure such programs are designed and operated in a manner that achieves balance and is consistent with safety and soundness;
Review data and analyses to allow an assessment of whether the design and operation of incentive compensation programs is consistent with the Company’s safety and soundness as provided under applicable regulatory guidance;
Administer Capital One’s 2004 Stock Incentive Plan, 2002 Associate Stock Purchase Plan and other employee benefit plans;
Review periodically and recommend director compensation to the Board; and
Recommend the inclusion of the Compensation Discussion and Analysis in our annual proxy statement or our Annual Report on Form 10-K.

The independent directors of the Board may meet concurrently with the Compensation Committee, as appropriate, to review and approve compensation for the Chief Executive Officer and other executive officers.

The Committee may also delegate authority for certain responsibilities to subcommittees or members of management as the Committee deems appropriate and as permitted by law and applicable plan documents.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are Ms. Hackett and Messrs. Shattuck, Gross, Hay and Jenkins. No interlocking relationship exists between any member ofDuring 2017, no Capital One’s Board of Directors or Compensation Committee and anyOne executive officer served as a member of the board of directors or the compensation committee of any other company,entity with one or more executive officers serving on our Board or Compensation Committee, nor has any such interlocking relationship existed in the past. No director who served on the Compensation Committee during 20142017 is or was formerly an officer or an employeeassociate of Capital One.

Compensation Committee Consultant

The Compensation Committee has the authority to retain and terminate legal counsel and other consultants and to approve such consultants’ fees and other retention terms. The Compensation Committee has retained the services of Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm (“F.W. Cook”). F.W.firm. FW Cook reports to the Chair of the Compensation Committee, and its engagement may be terminated by the Compensation Committee at any time.

The Compensation Committee determines the scope and nature of F.W.FW Cook’s assignments. In 2014, F.W. Cook:2017, FW Cook performed the following work for the Committee:

 

Provided to the Committee independent competitive market data and advice related to the compensation for the Chief Executive Officer, the other executive officers and the directors, including the development of a group of comparator companies for purposes of competitive analysis;
Reviewed for the Committee management-provided market data and recommendations on the design of compensation programs for senior executives other than the Chief Executive Officer;
Reviewed for the Committee Capital One’s executive compensation levels, performance and the design of incentive programs;
Reviewed the compensation program for Capital One’s directors and provided competitive compensation data and director compensation program recommendations to the Committee for review; and
Provided information to the Committee on executive and director compensation trends and analyses of the implications of such trends for Capital One.
∎

Provided independent competitive market data and advice related to the compensation for the CEO and the other executive officers, including the development of a group of comparator companies for competitive analysis

∎

Reviewed management-provided market data and recommendations on the design of compensation programs for senior executives other than the CEO

∎

Reviewed Capital One’s executive compensation levels, performance and the design of incentive programs

∎

Reviewed the compensation program for Capital One’s directors and provided competitive compensation data and director compensation program recommendations for review

∎

Provided information on executive and director compensation trends and analyses of the implications of such trends for Capital One

Consultants from F.W.FW Cook generallytypically attend Compensation Committee meetings and executive sessions upon the Chair of the Committee’sCompensation Committee upon request of the Compensation Committee Chair, including meetings held jointly with the independent directors to review or approve the compensation for the Chief Executive OfficerCEO and the other executive officers and to provide an independent perspective regarding such compensation practices.

The services provided by F.W.FW Cook are limited in scope as described above. F.W.FW Cook does not provide any services to the Company or its management other than the services provided to the Compensation Committee as described above.Committee. The Compensation Committee has considered factors relevant to F.W.FW Cook’s independence from management under SEC and NYSE rules and has determined that F.W.FW Cook is independent from management.

2014 Meetings

During 2014, the Compensation Committee met six times.

Committee Membership Determinations

The table below provides a summaryAnnually, the Governance and Nominating Committee assesses and considers membership for each of the Board’s currentstanding committees. This review takes into account, among other factors, committee structure,needs, director experience, committee succession planning and the desire to balance membership continuity with new insights.

The Chair of the Governance and Nominating Committee facilitates discussions with management, committee chairs, the Chairman of the Board, and individual directors, as needed and shares that feedback with the Governance and Nominating Committee. The Governance and Nominating Committee makes recommendations for committee membership and related information. As a management director, Richard D. Fairbank is not a member of any Board committee.Chairs to the full Board.

 Executive Officers

 

ChairLOGO MemberLOGOAudit Committee Financial Expert LOGO

Audit
CommitteeRobert M. Alexander

 

Compensation
Committee

Risk
Committee

Governance and
Nominating
Committee

Patrick W. Gross

LOGOLOGOLOGO

Ann Fritz Hackett

LOGOLOGOLOGO

Lewis Hay, III

LOGOLOGOLOGO

Benjamin P. Jenkins, III

LOGOLOGOLOGO

Pierre E. Leroy

LOGO

Peter E. Raskind

LOGOLOGOLOGO

Mayo A. Shattuck III

LOGOLOGOLOGO

Bradford H. Warner

LOGOLOGOLOGO

Catherine G. West

LOGOLOGO

 How to Contact the Board of Directors and the Lead Independent Director

Interested parties may make their concerns known to the Board of Directors or independent directors as a group by contacting the Lead Independent Director, Ms. Ann Fritz Hackett, care of the Corporate Secretary, at the address below:

Lead Independent Director

c/o Corporate Secretary’s Office

Capital One Financial Corporation

1680 Capital One Drive

McLean, Virginia 22102

Communications may also be sent to individual directors at the same address.

The Corporate Secretary reviews all communications sent to the Board of Directors, committees or individual directors and forwards all substantive communications to the appropriate parties. Communications to the Board of Directors, the independent directors or any individual director that relate to Capital One’s accounting, internal accounting controls or auditing matters are referred to the Chair of the Audit Committee and Capital One’s Chief Internal Auditor. Other communications are referred to the Lead Independent Director, the Chair of the appropriate committee and/or the specified director, as applicable.

 Director Nomination Process

The Governance and Nominating Committee considers and makes recommendations to the Board of Directors concerning nominees to create or fill open positions within the Board. Stockholders may propose nominees for consideration by the Governance and Nominating Committee by submitting the names and other relevant information as required by Capital One’s Amended and Restated Bylaws (the “Bylaws”) and further described in Capital One’s Corporate Governance Guidelines, to the Corporate Secretary at the address set forth on the Notice

of Annual Stockholder Meeting. Capital One’s Corporate Governance Guidelines also require that a copy of the information provided to the Corporate Secretary relating to the proposed nominee must be delivered to the Chair of the Governance and Nominating Committee.

Director candidates, other than current directors, may be interviewed by the Chair of the Governance and Nominating Committee, other directors, the CEO and/or other members of senior management. The Committee considers the criteria described below, as well as the results of interviews and any background checks the Committee deems appropriate, in making its recommendation to the Board of Directors. The Committee also considers current directors for re-nomination in light of the criteria described below and their past and potential contributions to the Board of Directors.

Consideration of Director Nominees

All director candidates, including incumbent directors and those recommended by stockholders, are evaluated using the same criteria. These criteria are as follows:

Candidates will represent diversity of experience and should possess a strong educational background, substantial tenure and breadth of experience in leadership capacities, and business and financial acumen;
Candidates may also be selected for their background relevant to Capital One’s business strategy, their understanding of the intricacies of a public company, their international business background and their experience in risk management; and
Other relevant criteria may include a reputation for high personal and professional ethics, integrity and honesty, good character and judgment, the ability to be an independent thinker and diversity along a variety of dimensions, including the candidate’s professional and personal experience, background, perspective and viewpoint.

The Governance and Nominating Committee and the Board of Directors believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences and other differentiating characteristics, is an important element of its nomination recommendations. The Board of Directors considers each nominee in the context of the Board as a whole, with the objective of assembling a Board that can best maintain the success of Capital One’s business. Although the Board of Directors does not have a formal diversity policy, the Governance and Nominating Committee and the Board periodically review the Board’s membership in light of Capital One’s business model and strategic objectives, consider whether the directors possess the requisite skills, experience and perspectives to oversee the Company in achieving those goals, and may seek additional directors from time to time as a result of its considerations.

Capital One’s Corporate Governance Guidelines provide that a director shall not be eligible for election to the Board upon reaching the age of 72. The Board may waive this requirement if it deems that it is in the best interests of the Company and its stockholders to issue a waiver.

In 2014, Capital One contracted with a third-party director search firm to identify, evaluate and verify references for potential director candidates and with a third-party to perform various background verification services for director candidates, including those related to federal and state criminal background checks, employment and education verification and credit reporting.

 Information about our Directors and Executive Officers

Each director who is nominated for election at the Annual Meeting and each of Capital One’s executive officers is listed below with a brief description of his or her business experience.

 Directors

Our Board of Directors, acting through the Governance and Nominating Committee, seeks a board that, as a whole, possesses the mix of experiences, skills, expertise and qualifications appropriate to support the success of the Company and that functions effectively in light of the Company’s current and evolving business circumstances. The Board believes that the collective combination of backgrounds, skills and experiences of its members has produced a Board that is well-equipped to exercise oversight responsibilities for Capital One’s

stockholders and other stakeholders. All of our directors have demonstrated business acumen, the ability to exercise sound judgment, a high degree of engagement, and a commitment of service to Capital One, the Board of Directors and the long-term interests of stockholders. The Board also believes that all of our directors have a reputation for integrity, honesty, professionalism, and adherence to high ethical standards. In addition, members of the Board have specific experiences that, in the aggregate, meet an articulated set of director skills established in 2014 by the Governance and Nominating Committee that align with the Company’s long-term strategy and operational objectives, including:

StrategyExperience setting a long-term corporate vision or direction, developing desirable products and customer segments, assessing geographies in which to operate, and competitive positioning
Digital/TechnologyLeadership and understanding of technology, digital platforms and new media, cybersecurity risk, and data analytics

Retail/Commercial

Banking

Retail and/or commercial banking industry experience at an executive level

Risk

Management/Compliance

Significant understanding with respect to the identification, assessment and oversight of risk management programs and practices

Senior Executive

Management

Experience as a chief executive officer or other senior executive at a public company

Public

Accounting/Financial

Reporting

Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements
Financial ServicesLeadership experience as an executive or board member in the financial services industry

Compensation/Human

Resources

Understanding of the issues involved with executive compensation, human resource management, and talent management and development

Public Company Board

Service

Experience serving as a director on a large public company board

All of our Board members have significant experience in strategy development, risk management and the financial services industry through executive leadership positions, consulting engagements, and/or extended service on the Board of Directors and its committees. Eight of our directors have significant understanding of technology platforms and systems and their associated risks, six of our directors have held senior executive responsibilities at large banks, and six of our directors serve or have served as chief executive officers. In addition, all of our directors have public company board experience and broad financial expertise, including experience with financial statements and the financial reporting required of large public companies.

In addition, the Board of Directors is composed of directors with a variety of tenures, ranging from one independent director who has served on the Board from the time Capital One became a public company to two independent directors added in 2013, reflecting a diversity of perspectives that creates an effective balance between directors who have direct experience with Capital One’s operations, history and business cycles and directors who bring fresh perspectives. Accordingly, we believe the Board possesses the appropriate combination of skills and qualifications, independence, knowledge of Capital One and its industry, and business acumen that enables it to operate as an engaged and effective Board.

Richard D. Fairbank, 64

Chair, Chief Executive Officer and President

Mr. Fairbank is founder, Chair, Chief Executive Officer and President of Capital One Financial Corporation. Mr. Fairbank also serves as Chair of Capital One Bank (USA), National Association and Capital One, National Association.

Mr. Fairbank has been Chair of Capital One since February 1995. Mr. Fairbank was appointed and served as the Fifth Federal Reserve District’s representative on the Federal Advisory Council from January 2010 until December 2012. As a member of the Council, he conferred periodically with the Board of Governors of the Federal Reserve System on business conditions and issues related to the banking industry. Mr. Fairbank also served on MasterCard International’s Global Board of Directors from February 2004 until May 2006 and, prior to that, as Chairman of MasterCard’s U.S. Region Board.

Mr. Fairbank’s experience in leading the business as founder and Chief Executive Officer of Capital One, his responsibilities for the strategic direction and management of Capital One’s day-to-day operations and his former roles with the Federal Advisory Council and MasterCard International bring broad industry and specific institutional knowledge and experience to the Board of Directors.

Patrick W. Gross, 70

Director

Mr. Gross is Chairman of The Lovell Group, a private business and technology advisory and investment firm he founded in 2002 to work with private venture-funded technology companies on a range of business, management and financial strategies. Prior to his role with Lovell, he was a founder, and served as a principal executive officer from 1970 to 2002, of American Management Systems, Inc. (“AMS”), an information technology, consulting, software development and systems integration firm. During his time at AMS, Mr. Gross built and supervised the AMS financial services business which provided IT-based applications to major banks in the U.S., Canada and Europe.

He has been a director of Capital One Financial Corporation since February 1995 and is also a director of Capital One Bank (USA), National Association. He served on the Audit and Risk Committee from March 1995 until the Committee’s restructuring in May 2013, the Risk Committee since May 2013, the Compensation Committee since April 2005 and the Governance and Nominating Committee since September 2002. He served as Chair of the Governance and Nominating Committee from September 2002 until April 2007, and as presiding director from September 2003 until April 2007.

Mr. Gross is currently a director of the following publicly-held companies: Career Education Corporation, Liquidity Services, Inc., Rosetta Stone, Inc., and Waste Management, Inc. Mr. Gross also served on the board of Taleo Corporation from 2006 to 2012.

Mr. Gross’s experience in applying information technology, advanced data analytics and risk management analytics within global financial services firms, as well as his roles in founding and leading AMS and with other public company boards, assists the Board of Directors in overseeing, among other matters, Capital One’s entrepreneurial innovations, digital initiatives, cyber security and information systems.

Ann Fritz Hackett, 61

Director

Ms. Hackett has been President of Horizon Consulting Group, LLC since she founded the company in 1996. Horizon Consulting Group provides strategic, organizational and human resources advice to clients worldwide. She has worked with boards of directors, chief executive officers and senior executives to identify strategic opportunities and execute solutions during periods of business and financial challenges and transformation. Prior to Horizon Consulting, Ms. Hackett was Vice President and Partner of a leading national strategy consulting firm where she served on the Management Committee and, among other strategy consulting assignments, led Human Resources and developed her expertise in managing cultural change, creating performance management processes and a performance-based culture, nurturing leadership talent and planning for executive succession.

Ms. Hackett has been a director of Capital One Financial Corporation since October 27, 2004, and is also a director of Capital One, National Association. She served on the Audit and Risk Committee from October 2004 until the Committee’s restructuring in May 2013, the Risk Committee since May 2013, the Governance and Nominating Committee since October 2004 and on the Compensation Committee since April 2005. Ms. Hackett became the Chair of the Governance and Nominating Committee and the Lead Independent Director in April 2007. She is also a director of Fortune Brands Home & Security, Inc. She served on the board of Beam, Inc. (formerly Fortune Brands, Inc.) from December 2007 until April 2014. In 2012, Ms. Hackett joined the Tapestry Networks’ Lead Director Network, a select group of lead directors who collaborate on matters regarding board leadership.

Ms. Hackett has experience in strategy, technology development, leading change initiatives, talent management and succession planning and in creating performance management processes and performance-based compensation. She also has experience in corporate governance and risk matters as a result of her participation with public company boards of directors and related governance committees, non-profit boards and consulting engagements. This combination of skills assists the Board of Directors in its discussions on these and other matters.

Lewis Hay, III, 59

Director

Mr. Hay currently acts as an Operating Advisor for Clayton, Dubilier & Rice, LLC, a private equity investment firm. Mr. Hay served as Executive Chairman of NextEra Energy, Inc. (formerly FPL Group, Inc.), one of the nation’s leading electricity-related services companies and the largest renewable energy generator in North America from July 2012 until he retired in December 2013. At NextEra Energy, he served as Chief Executive Officer from June 2001 to July 2012, Chairman from January 2002 to July 2012 and President from June 2001 to December 2006. He also served as Chief Executive Officer of Florida Power & Light Company from January 2002 to July 2008. He joined NextEra Energy in 1999 as Vice President, Finance and Chief Financial Officer and served as President of NextEra Energy Resources, LLC (formerly FPL Energy, LLC) from March 2000 until December 2001.

Mr. Hay has been a director of Capital One Financial Corporation since October 31, 2003, and is also a director of Capital One, National Association. He has served on the Compensation Committee since April 2004, the Risk Committee since May 2013, and the Governance and Nominating Committee since April 2007. He also served on the Finance and Trust Oversight Committee, of which he has served as Chair, from April 2005 until the Committee was disbanded in May 2013. He is also a director of Harris Corporation and of Anthem, Inc. (formerly WellPoint, Inc.). Mr. Hay serves on the Board of Business Advisors for the Tepper School of Business at Carnegie Mellon University, and on the Advisory Council of Carnegie Mellon University’s Scott Institute for Energy Innovation. He is a former chairman of both the Edison Electric Institute, the association of U.S. shareholder-owned electric companies, and the Institute of Nuclear Power Operations. Mr. Hay also served as Chair of the Electricity Subsector Coordinating Council, an organization that coordinated government and electricity industry cyber security initiatives, as well as on President Obama’s President’s Council on Jobs and Competitiveness.

Mr. Hay has extensive knowledge of complex strategic, operational, management, regulatory, financial and governance issues faced by a large public company. His background in leading finance and accounting, treasury, credit, investor relations, mergers and acquisitions and information systems functions, as well as his understanding of enterprise risk management, executive compensation and public company governance, provides the Board of Directors with valuable insight on these and other matters.

Benjamin P. Jenkins, III, 70

Director

Mr. Jenkins served as Senior Advisor, Managing Director, and Vice Chairman for Retail Banking at Morgan Stanley & Co., a financial services firm, from January 2009 to January 2011. Prior to that, he had a 38-year career with Wachovia Corporation (now Wells Fargo & Company), a financial services company, where he was Vice Chairman and President of the General Banking Group. He is credited with advancing the profitability of

the General Bank through improvements in customer service and the reduction of customer attrition to industry-leading levels. He and his team were instrumental in the integration of the First Union/Wachovia and Wachovia/SouthTrust mergers, and Mr. Jenkins led the successful expansion of Wachovia’s banking network. He also previously served on the boards of Visa USA and Visa International.

Mr. Jenkins has been a director of Capital One Financial Corporation since February 2013 and is also a director of Capital One, National Association. He has served on the Audit Committee since May 2013, the Compensation Committee since May 2013, and the Risk Committee since May 2014.

Mr. Jenkins’ experience in corporate banking, banking operations, investment banking, and management of customer relationships brings valuable insight to the Board of Directors in overseeing, among other areas, matters critical to Capital One’s banking business.

Pierre E. Leroy, 66

Director

Mr. Leroy served as Executive Chairman from March 2012 and Chief Executive Officer from July 2012 until June 2013 of Vigilant Solutions (formerly Vigilant Video, Inc.), a leading provider of video analytics software and systems. Mr. Leroy retired in 2005 from Deere & Company as President of both the Worldwide Construction & Forestry Division and the Global Parts Division. Deere & Company is a world leader in providing advanced products and services for agriculture, forestry, construction, lawn and turf care, landscaping and irrigation, and also provides financial services worldwide and manufactures and markets engines used in heavy equipment. During his professional career with Deere, Mr. Leroy served in a number of positions in Finance, including Treasurer, Vice-President and Treasurer, and Senior Vice-President and Chief Financial Officer.

Mr. Leroy has been a director of Capital One Financial Corporation since September 1, 2005, and is also a director of Capital One Bank (USA), National Association. Mr. Leroy has served on the Risk Committee since May 2013.

Mr. Leroy has been a director of United Rentals, Inc. since April 2012. He previously served on the boards of directors of RSC Holdings Inc. and RSC Equipment Rental from 2008 to April 2012 (when RSC was acquired by United Rentals), Beam, Inc. (formerly Fortune Brands, Inc.) from September 2003 to February 2012 and ACCO Brands from August 2005 to April 2009.

Mr. Leroy’s experience in capital markets and asset-liability management, as well as leading and managing large complex international marketing, engineering and manufacturing organizations and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters.

Peter E. Raskind, 58

Director

Mr. Raskind is the owner of JMB Consulting, LLC, which he established in February 2009 to provide consulting services to financial services firms and investors. In 2011, he served as Interim Chief Executive Officer of the Cleveland Metropolitan School District, and in 2010, he served as Interim Chief Executive Officer of the Cleveland-Cuyahoga County Port Authority. Until its merger with PNC Financial Services Group in December 2008, Mr. Raskind served as Chairman, President and Chief Executive Officer of National City Corporation, one of the largest banks in the United States. Through an extensive banking career, Mr. Raskind has served in a number of leadership roles and held positions of successively greater responsibility in a broad range of consumer and commercial banking disciplines, including cash management services, corporate finance, international banking, corporate trust, retail and small business banking, operations and strategic planning.

Mr. Raskind has been a director of Capital One Financial Corporation since January 31, 2012, and is also a director of Capital One Bank (USA), National Association. He served on the Audit and Risk Committee from January 2013 until the Committee’s restructuring in May 2013, and has served on the Audit Committee since May 2013 and as the Chair of the Risk Committee since May 2013. He qualifies as an “audit committee financial expert” under SEC guidelines and has been designated an “audit committee financial expert” for Capital One since 2014.

Mr. Raskind served as a director of United Community Banks, Inc. from May 2011 to January 2012. Mr. Raskind previously served as a director of Visa USA and Visa International, served on the board of directors of the Consumer Bankers Association, was a member of the Financial Services Roundtable, and served on the executive committee of the National Automated Clearing House Association.

Mr. Raskind is experienced in corporate banking, retail banking, wealth management/trust, mortgage, operations, technology, strategy, product management, asset/liability management, risk management and acquisition integration from his extensive career in banking. He provides the Board with valuable insight on these and other matters.

Mayo A. Shattuck III, 60

Director

Mr. Shattuck is Chairman of the Board of Chicago-based Exelon Corporation, the nation’s largest competitive energy provider and commercial nuclear plant operator. From March 2012 through February 2013, he served as Executive Chairman of the Board of Exelon. Prior to joining Exelon, he was Chairman, President and Chief Executive Officer of Constellation Energy, a leading supplier of electricity to large commercial and industrial customers, a position he held from 2001 to 2012. Mr. Shattuck was previously at Deutsche Bank, where he served as Chairman of the Board of Deutsche Banc Alex. Brown and, during his tenure, served as Global Head of Investment Banking and Global Head of Private Banking.

From 1997 to 1999, Mr. Shattuck served as Vice Chairman of Bankers Trust Corporation, which merged with Deutsche Bank in 1999. From 1991 to 1997, Mr. Shattuck was President and Chief Operating Officer and a director of Alex. Brown & Sons, a major investment bank, which merged with Bankers Trust in 1997.

Mr. Shattuck has been a director of Capital One Financial Corporation since October 31, 2003, and also serves as a director of Capital One, National Association. He has served on the Compensation Committee since April 2004 and became its Chairman in April 2005. He also served as Chairman of the Finance and Trust Oversight Committee from April 2004 to April 2005. Mr. Shattuck has served on the Governance and Nominating Committee since May 2013 and the Risk Committee since May 2014. Mr. Shattuck is also a director of Gap, Inc. and Chairman of its Audit and Finance Committee, Vice Chairman of Johns Hopkins Medicine, and former Chairman of the Institute of Nuclear Power Operators.

Mr. Shattuck’s experience in global corporate finance and lending, corporate strategy, capital markets, risk management and private banking, as well as his experience in leading two large, publicly-held companies and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters.

Bradford H. Warner, 63

Director

Mr. Warner served in a variety of executive positions at BankBoston, FleetBoston and Bank of America from 1975 until his retirement in 2004. These positions included President of Premier and Small Business Banking, Executive Vice President of Personal Financial Services, and Vice Chairman of Regional Bank.

Throughout his banking career, Mr. Warner served in leadership roles for many of the major business lines and functional disciplines that constitute commercial banking, including leadership of retail and branch banking, consumer lending (credit cards, mortgage and home equity), student lending and small business; various corporate banking functions, including community banking and capital markets businesses, such as underwriting, trading and sales of domestic and international fixed income securities, foreign exchange and derivatives; international banking businesses in Asia, northern Latin America and Mexico; and several investment related businesses, including private banking, asset management and brokerage. He also served on the senior most management policy and governance committees at BankBoston, FleetBoston and Bank of America.

Mr. Warner has been a director of Capital One Financial Corporation since April 24, 2008, and also serves as a director of Capital One Bank (USA), National Association. He was a member of the Audit and Risk and Finance and Trust Oversight Committees from April 2008 until the Committees were restructured in May 2013.

Mr. Warner has been a member of the Risk Committee since May 2013 and has served as Chair of the Audit Committee since May 2013. He qualifies as an “audit committee financial expert” under SEC guidelines and has been designated an “audit committee financial expert” for Capital One since 2012.

Mr. Warner’s experience in a broad range of commercial, consumer, investment and international banking leadership roles, as well as his experience in corporate banking functions, customer relationships, corporate culture change management, enterprise risk management and technology, brings valuable insight to the Board of Directors in overseeing, among other matters, a broad range of matters critical to Capital One’s banking business.

Catherine G. West, 55

Director

Ms. West joined Promontory Financial Group, a financial services consulting firm, in April 2012 as a Managing Director and then served as a Special Advisor from May 2013 to October 2013, where she focused on internal administrative activities. From March 2011 to April 2012, Ms. West was the Associate Director and Chief Operating Officer of the Consumer Financial Protection Bureau (the “CFPB”), a federal agency tasked with regulating U.S. consumer protection with regard to financial services and products, where she led the start-up of the agency’s infrastructure. While at the CFPB, Ms. West also played an integral part in implementing a Consumer Response unit designed to solicit views from consumers regarding their experiences with financial institutions and leverage those views to effect policy change. She was previously the Chief Operating Officer of J.C. Penney from August 2006 to December 2006. From March 2000 to July 2006, Ms. West was an executive officer at Capital One Financial Corporation where she served in roles that included President of the U.S. Card business and Executive Vice President of U.S. Consumer Operations.

Ms. West has been a director of Capital One Financial Corporation since February 2013 and is also a director of Capital One Bank (USA), National Association. She has served on the Audit Committee since May 2013 and the Risk Committee since May 2013.

Ms. West has a multifaceted background in financial services with more than 25 years of experience in financial services operations, regulatory matters, technology platform conversions, process automation and innovation, and strategy. She has experience in leveraged buyouts, initial public offerings, and mergers and acquisitions, and has a keen understanding of both business strategy and the regulatory perspective. Ms. West provides the Board with valuable insight on these and other matters.

 Executive Officers

Robert M. Alexander, 50

Chief Information Officer

Age: 53

Mr. Alexander joined Capital One in April 1998. From April 1998 to May 2007, Mr. Alexander had responsibility at various times for a number of Capital One’s lending businesses, including the U.S. consumer credit card and installment loan businesses. Mr. Alexander became Chief Information Officer in May 2007, and in this role he is responsible for overseeing all technology activities for Capital One.

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

Jory A. Berson 44

Chief Human Resources Officer

Age: 47

Mr. Berson joined Capital One in July 1992. From July 1992 to June 2009, Mr. Berson held a variety of roles at Capital One, including President, Financial Services and President, U.S. Card. In June 2009, Mr. Berson became Chief Human Resources Officer, and in this role Mr. Berson is responsible for overseeing Capital One’s Human Resources strategy, recruitment efforts and development programs.

R. Scott Blackley

Chief Financial Officer

Age: 49

Mr. Blackley joined Capital One in March 2011. Mr. Blackley became the Company’s CFO in May 2016 and served as the Company’s Principal Accounting Officer from July 2011 to May 2017 and Controller from March 2011 to March 2017. Prior to joining the Company, Mr. Blackley held various executive positions at Fannie Mae, most recently as Senior Vice President and Chief Financial Officer of the Capital Markets Group. Mr. Blackley’s early career included senior roles in consulting and public accounting, including an appointment to the US Securities and Exchange Commission as a Professional Accounting Fellow and as a Partner with KPMG, LLP.

Kevin S. Borgmann 43

Chief Risk OfficerSenior Advisor to the CEO

Age: 46

Mr. Borgmann joined Capital One in August 2001. Since that time he has served in a variety of roles in Capital One’s Corporate Strategy, Partnership Finance, Upmarket Acquisitions, Credit Card, Auto Finance and Risk departments, including serving as Senior Vice President with the Credit Card Division from March 2008 until

September 2010, President of Capital One Auto Finance from September 2010 until October 2012, and Deputy Chief Risk Officer from October 2012 untilto January 31, 2013. On2013, and Chief Risk Officer from January 31, 2013 through January 2018. In February 2018, Mr. Borgmann became Senior Advisor to the Chairman and CEO and executive team, with a focus on strategy, risk management, and executive recruiting matters.

Matthew W. Cooper

General Counsel

Age: 46

Mr. Cooper joined Capital One in January 2009. From January 2009 to January 2018, Mr. Cooper held a variety of roles within Capital One’s Legal Department, including Chief Counsel, Litigation from January 2009 to February 2014; Chief Counsel, Global Card from July 2012 to January 2017; and Chief Counsel, Legal from January 2016 to February 2018. In February 2018, Mr. Cooper became General Counsel, and in this role Mr. Cooper is responsible for overseeing Capital One’s Legal Department and he also manages Capital One’s internal audit department for administrative purposes. Prior to joining Capital One, Mr. Cooper served in various executive roles within the legal department of the General Electric Company and one of its successor companies, Genworth Financial.

John G. Finneran, Jr.

Chief Risk Officer and Corporate Secretary

Age: 68

Mr. Finneran joined Capital One in September 1994 as General Counsel and Corporate Secretary, responsible for managing Capital One’s legal, governmental affairs, corporate governance, regulatory relations and corporate affairs departments, and managed Capital One’s internal audit department for administrative purposes. In February 2018, Mr. Finneran became Chief Risk Officer and in this role he isCorporate Secretary, responsible for overseeing Capital One’s credit, compliance, operational, market and liquidity, and enterprise risk management functions.

Stephen S. Crawford, 50

Chief Financial Officer

Mr. Crawford joined Capital One in February 2013functions, as Chief Financial Officer Designate and servedwell as continuing to lead Capital One’s Chief Financial Officer beginning May 24, 2013. Prior to joining Capital One, Mr. Crawford co-founded Centerview Partners, an investment banking and advisory firm, in 2006. Prior to that, Mr. Crawford served in various leadership roles at Morgan Stanley & Co., a financial services firm, including as the Co-President of the firm during 2005, Executive Vice President and Chief Administrative Officer from 2004 to 2005, Executive Vice President and Chief Financial Officer from 2001 to 2004, and Executive Vice President and Chief Strategic Officer from 2000 to 2001.

John G. Finneran, Jr., 65

General Counsel and Corporate Secretary

Mr. Finneran joined Capital One in September 1994. Since that time, he has served as General Counsel and Corporate Secretary and is responsible for managing Capital One’s legal, governmental affairs, corporate governance regulatory relations and corporate affairs departments. He also manages Capital One’s internal audit department for administrative purposes.function.

Frank G. LaPrade, III 48

Chief Enterprise Services Officer

and Chief of Staff to the CEO

Age: 51

Mr. LaPrade joined Capital One in January 1996. Since that time he has served in various positions, including as Capital One’s Deputy General Counsel responsible for managing the company’s litigation, employment, intellectual property and transactional practice areas. In 2004, Mr. LaPrade became Chief of Staff to the Chief Executive Officer. In 2010, Mr. LaPrade added responsibilities as Chief Enterprise Services Officer. In that capacity, Mr. LaPrade manages InformationEnterprise Services for Capital One, including Technology, Digital, Design, Growth Ventures, Brand, Marketing,Enterprise Supplier Management, External Affairs, Workplace Solutions, and Corporate Development, Corporate Real Estate, Digital Banking and Procurement for the company.Security.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  33

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

Ryan M. Schneider, 45Christopher T. Newkirk

President, CardInternational and Small Business

Age: 47

Mr. SchneiderNewkirk joined Capital One in December 2001.September 2008, leading U.S. Card Partnership Analytics through January 2010. From December 2001February 2010 to December 2007,June 2013, Mr. Schneider held a variety of positions within Capital One includingNewkirk led U.S. Card Customer Management. From July 2013 to November 2016, Mr. Newkirk led the Company’s International Card business, most recently as Executive Vice President Auto Finance and Executive Vice President, US Card. Mr. Schneider became President,Head of International Card, in December 2007, and in this rolewhere he iswas responsible for all aspects of Capital One’s consumer and small business credit card lines of business, including thosebusinesses in the United States, the United Kingdom and Canada. In November 2016, Mr. Schneider also servesNewkirk became President, International and Small Business, where he is responsible for leading Capital One’s International credit card businesses and Capital One’s small business credit card business in the United States and, beginning in April 2017, small business banking.

Kleber Santos

President, Retail and Direct Banking

Age: 44

Mr. Santos joined Capital One in January 2006 as a director of Corporate Strategy. From July 2008 to February 2010, he served as head of marketing and analytics for Capital One’s Retail and Direct Bank. From August 2014 to March 2017, Mr. Santos served as Executive Vice President of the Consumer Bank. Mr. Santos became president of the Retail and Direct Bank in March 2017, providing strategic direction and leadership for the Retail and Direct Bank organization. Prior to joining Capital One, Bank (USA), National Association.Mr. Santos’ experience includes serving as an engagement manager and U.S. payments expert at McKinsey & Company, where he led a variety of projects for the leading credit card issuers and banks in the U.S. Mr. Santos is second lieutenant of infantry in the Brazilian Army Reserve Forces.

Michael C. Slocum 58

President, Commercial Banking

Age: 61

Mr. Slocum joined Capital One in August 2007. From August 2007 to September 2011, Mr. Slocum was Executive Vice President of Capital One’s Banking Business, leading the company’s Commercial Banking business including asset-based lending, leasingdeposit products and private banking.capital markets. Mr. Slocum became President, Commercial Banking in September 2011, and in this role he is responsible for leading multiple broad linesall aspects of business,Commercial Banking including Corporate and Commercial Real Estate Middle Market Banking, Commercial & Specialty FinanceCapital Markets, Treasury Services and Treasury Services.all related operations. Before joining Capital One, Mr. Slocum served in various leadership roles at Wachovia Bank (now Wells Fargo & Company), a provider of consumer and commercial financial services, including as the Regional Chief Executive Officer for Northeastern US.

Michael J. Wassmer

Jonathan W. Witter, 45

President, Retail and Direct BankingU.S. Card

Age: 48

Mr. WitterWassmer joined Capital One in December 2010July 1994. Since that time, Mr. Wassmer has served in roles of increasing responsibility across the Company, expanding his leadership scope and experience driving strategy and analysis, finance, operations and risk management. From 2013 to November 2016, Mr. Wassmer served as an Executive Vice President in Retail Banking. From September 2011 until February 2012, Mr. Witter served as President, Retailof the Company’s U.S. Branded Card business where he was responsible for leading credit, marketing and strategy for the domestic Branded Consumer and Small Business Banking.Card businesses. In February 2012, heNovember 2016, Mr. Wassmer became President, Retail and Direct Banking and in this role, he provides strategic direction and leadership for the Retail and Direct Banking organizationU.S. Card and is currently responsible for more than 14,000 associates, nearly 1,000 branchleading the Company’s consumer credit card business in the United States. In his over 20 years of leadership in the Company’s Card business, Mr. Wassmer has been responsible for driving significant transformation and office locations,growth, including the launch and 2,200 ATMs in California, Connecticut, Delaware, Louisiana, Maryland, Minnesota, New Jersey, New York, Texas, Virginia, Washingtonoversight of the Company’s flagship consumer and Washington, D.C. In February 2012, Mr. Witter also became a director of ING Bank, fsb. Prior to joining Capital One, Mr. Witter held various positions, including executive vice president and head of general Bank Distribution at Wachovia, managing director and president of Morgan Stanley Private Bank NA, a global financial services firm, and Chief Operating Officer of Morgan Stanley’s Retail Banking Group.small business products.

Sanjiv Yajnik 58

President, Financial Services

Age: 61

Mr. Yajnik joined Capital One in July 1998. From July 1998 to June 2009, Mr. Yajnik held a number of positionsled several businesses within Capital One’s European credit card business, Canadian credit card businessOne, including Capital One Europe, Capital One Canada, and small business services organization.Capital One Small Business Services. Mr. Yajnik became President, Financial Services in June 2009, and in2009. In this role he is responsible for overseeing Capital One’s auto financeAuto Finance and home loansHome Loans businesses. Mr. Yajnik also serves as a director of Capital One, National Association. Prior to joining Capital One, Mr. Yajnik held a broad range of positions, including General Manager at Circuit City Stores (USA), Market Manager at PepsiCo (Canada), and Chief Engineer at Mobil Oil (International).

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

SECTION III – SECURITY OWNERSHIP Related Person Transactions

Our Board has approved a written Related Person Transaction policy, which sets forth policies and procedures for reviewing, and approving or ratifying, transactions with directors, director nominees, executive officers, stockholders holding 5% or more of Capital One’s voting securities, or any of their immediate family members or affiliated entities (Related Persons). The policy covers transactions, arrangements and relationships where Capital One is a participant, the aggregate amount of the transaction exceeds $120,000, and a Related Person has a direct or indirect material interest (Related Person Transactions). Under the policy, Related Person Transactions must be approved or ratified by the Governance and Nominating Committee. The Governance and Nominating Committee will only approve or ratify a Related Person Transaction if, after reviewing all relevant facts and circumstances, it determines the Related Person Transaction is not inconsistent with the best interests of the Company and its stockholders.

In reviewing Related Person Transactions for approval or ratification, the Governance and Nominating Committee will consider all relevant facts and circumstances, which may include: the benefits to the Company resulting from the transaction; the nature and extent of the Related Person’s interest in the transaction; whether the transaction would impact a director’s independence; whether Capital One’s Code of Business Conduct and Ethics would be implicated (including whether the transaction would create a conflict of interest or appearance of a conflict of interest); whether the transaction raises any concerns with respect to reputational risk; the availability of other sources for comparable products or services; and the terms of the transaction and the terms available to unrelated third parties or to Capital One’s associates, generally.

The Governance and Nominating Committee haspre-approved the following types of Related Person Transactions as being not inconsistent with the best interests of Capital One and its stockholders. These include transactions involving: director and executive compensation otherwise disclosed in the Company’s proxy statement and/or approved by the Compensation Committee or the Board; amounts that are not material and where the relationship arises only from a Related Person being an employee (other than as an executive officer) or a director of, or having immaterial financial holdings in, another entity; and financial services, including loans, extensions of credit, or other financial services and products provided by Capital One to a Related Person that are in the ordinary course,non-preferential, do not involve features unfavorable to the Company, and comply with all applicable laws, rules, and regulations (including the Sarbanes-Oxley Act of 2002 and Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation Guidelines).

If a matter before the Governance and Nominating Committee involves a member of the Committee, the member must be recused and may not participate in deliberations or vote on the matter. If Capital One learns of a Related Person Transaction that was notpre-approved under the policy, the Committee will consider the options available, including ratification, revision or termination of the transaction.

From time to time in the ordinary course of its business, Capital One issues loans and provides other financial services and products to directors, executive officers and/or nominees for director, or to a director’s, executive officer’s or director nominee’s immediate family member, including persons sharing the household of such director, executive officer or director nominee (other than a tenant or employee). Such loans and other financial services and products are made in the ordinary course of business; are on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans and financial services and products with persons not related to the Company; and do not involve more than the normal risk of collectability or present other features unfavorable to the Company.

Matthew W. Cooper is Capital One’s General Counsel. Mr. Cooper’sbrother-in-law is a partner at the international law firm of McGuireWoods LLP (“McGuireWoods”). Capital One has engaged McGuireWoods from time to time in the ordinary course of business and on an arm’s length basis. The relationship between Capital One and McGuireWoods began before Mr. Cooper was employed by Capital One and alsopre-dates Mr. Cooper’sbrother-in-law’s association with McGuireWoods. Mr. Cooper’sbrother-in-law does not work on any Capital One matters and his ownership in the firm is less than 1%. In 2017, Capital One made aggregate payments to McGuireWoods of approximately $8.6 million for legal services. This relationship was ratified by the Governance and Nominating Committee.

 

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  35

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

 Environmental, Social and Governance Practices

At Capital One, we provide financial solutions to help people succeed and to make life better in the communities in which we operate. Our approach to corporate social responsibility continues to evolve each year, but we remain focused on three core elements: our people, our community, and our environmental footprint.

We are committed to helping our customers, associates, and communities succeed. For more information regarding our environmental, social and governance practices, see “Corporate Social Responsibility” located in Capital One’s Newsroom on our website at press.capitalone.com.

Our People

As part of our Mission, we aim to bring humanity to banking. It is fundamental to every aspect of our business operations and it underscores our commitment to putting people first.

∎

For our customers, our products are innovative, simple to use, and deliver value for individuals of all backgrounds

∎

For our associates, our culture is built on openness, collaboration, and diversity of backgrounds, perspectives, and experiences

∎

For our communities, we use our resources to provide people with opportunities to learn, work, and secure a stronger financial future

Trust is essential to our success, and we place a high bar on making thoughtful business decisions and being transparent in our communications with our customers and stakeholders. We facilitate ongoing dialogue with all of our stakeholders, incorporating their feedback as we evolve our products and services.

Our Community

For us, delivering real, lasting change is the result of longstanding commitments and strong community-based partnerships. The programs and partnerships we pursue integrate Capital One’s core strengths with the skills, expertise, and experiences of others to maximize our impact. As a financial services company, we will continue our focus on spurring economic growth and creating opportunities for many.

Our Environmental Footprint

Our environmental efforts are rooted in our sense of accountability for our actions – both to our stakeholders and society as a whole. We are committed to continuously improving the environmental sustainability of our business, to reducing the impact of our operations, and to using resources and materials thoughtfully. We continue to engage our associates, customers, suppliers, and other stakeholders in our environmental efforts.

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION I - CORPORATE GOVERNANCE AT CAPITAL ONE

 How to Contact Us

 Our Directors

Communicate with our directors, including our Lead Independent Director, Committee Chairs or Independent Directors as a Group

 Mail correspondence to:

 Board of Directors / Lead Independent Director

 c/o Corporate Secretary’s Office

 Capital One Financial Corporation

 1680 Capital One Drive

 McLean, Virginia 22102

Investor Relations

Reach out to our Investor Relations team at any time

Email:

Investor.relations@capitalone.com

The Corporate Secretary will review all communications sent to the Board, the Lead Independent Director, committee chairs, or individual directors and forwards all substantive communications to the appropriate parties. Communications to the Board, the independent directors or any individual director that relate to Capital One’s accounting, internal accounting controls or auditing matters are referred to the Chair of the Audit Committee and Capital One’s Chief Auditor. Other communications are referred to the Lead Independent Director. Please continue to share your thoughts or concerns with us. We value your input and your investment.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  37

Section II - Security Ownership

 Security Ownership of Certain Beneficial Owners

Based on Schedule 13D and 13G filings submitted to the SEC, Capital One is aware of the following beneficial owners of more than 5% of Capital One’s outstanding common stock. All percentage calculations are based on the number of shares of common stock issued and outstanding on December 31, 2017, which was 485,525,340.

    Name and Address

 

 

 Number of Shares of Common 

Stock Beneficially Owned

 

 

 

 Percent of 

Class

 

 

    Dodge & Cox(1)

    555 California Street, 40th Floor

    San Francisco, CA 94104

 

 43,826,372 9.03%
  

 

    Capital World Investors (2)

    333 South Hope Street

    Los Angeles, CA 90071

 

 38,537,005 7.94%
  

 

    The Vanguard Group(3)

    100 Vanguard Blvd.

    Malvern, PA 19355

 

 32,904,263 6.78%
  

 

    BlackRock, Inc.(4)

    55 East 52nd Street

    New York, NY 10055

 

 29,103,230 6.00%
  

(1)

Based on a Schedule 13D and 13G filings submitted to the SEC, Capital One is aware13G/A (Amendment No. 16) filed on February 13, 2018. As of the following beneficial owners of more than 5% of Capital One’s outstanding common stock. All percentage calculations are based on the number of shares of common stock issued and outstanding on December 31, 2014, which was 553,391,311.

Name and AddressAmount and Nature of Beneficial OwnershipPercent of
Class

Dodge & Cox(1)

555 California Street, 40th floor

San Francisco, CA 94104

46,449,3618.39%
  

BlackRock, Inc.(2)

55 East 52nd Street

New York, NY 10022

34,667,0406.26%
  

Capital World Investors(3)

333 South Hope Street

Los Angeles, CA 90071

31,440,0005.68%
  

The Vanguard Group(4)

100 Vanguard Blvd.

Malvern, PA 19355

28,857,6295.21%
  

FMR LLC(5)

245 Summer Street

Boston, MA 02210

28,417,6895.14%

(1)On a Schedule 13G (Amendment No. 11) filed on February 13, 2015, Dodge & Cox reported beneficial ownership of 46,449,361 shares of Capital One’s common stock as of December 31, 2014 with sole voting power with respect to 43,782,4642017, Dodge & Cox reported sole voting power with respect to 41,303,635 shares and sole dispositive power over all shares beneficially owned.

(2)

Based on a Schedule 13G/A (Amendment No. 3) filed on February 14, 2018. As of December 29, 2017, Capital World Investors reported sole voting power and sole dispositive power over all shares beneficially owned.

(3)

Based on a Schedule 13G/A (Amendment No. 3) filed on February 8, 2018. As of December 31, 2017, The Vanguard Group reported sole voting power with respect to 680,859 shares, shared voting power with respect to 112,920 shares, sole dispositive power over 32,128,394 shares and shared dispositive power over 775,869 shares.

(4)

Based on a Schedule 13G/A (Amendment No. 5) filed on January 29, 2018. As of December 31, 2017, BlackRock, Inc. reported sole voting power with respect to 25,109,445 shares and sole dispositive power over all shares beneficially owned.

38  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION II - SECURITY OWNERSHIP

 

(2)On a Schedule 13G (Amendment No. 2) filed on January 12, 2015, BlackRock, Inc. reported beneficial ownership of 34,667,040 shares of Capital One’s common stock as of December 31, 2014 with sole voting power with respect to 29,744,521 shares and sole dispositive power over all shares beneficially owned.

(3)On a Schedule 13G filed on February 13, 2015, Capital World Investors reported beneficial ownership of 31,440,000 shares of Capital One’s common stock as of December 31, 2014 with sole voting power and sole dispositive power over all shares beneficially owned.

(4)On a Schedule 13G filed on February 9, 2015, The Vanguard Group reported beneficial ownership of 28,857,629 shares of Capital One’s common stock as of December 31, 2014 with sole voting power with respect to 966,424 shares and sole dispositive power over 27,945,110 shares.

(5)On a Schedule 13G (Amendment No. 2) filed on February 13, 2015, FMR LLC reported beneficial ownership of 28,417,689 shares of Capital One’s common stock as of December 31, 2014 with sole voting power with respect to 3,595,430 shares and sole dispositive power over all shares beneficially owned.

 Security Ownership of Directors and Named Executive Officers

The following table lists the beneficial ownership of Capital One’s common stock as of January 31, 2015,

The following table lists the beneficial ownership of Capital One’s common stock as of February 23, 2018, by our directors, the named executive officers in this proxy statement and all directors and executive officers as a group. All percentage calculations are based on the number of shares of common stock issued and outstanding on February 23, 2018, which was 486,384,982.

Except as otherwise indicated below, each director or executive officer had sole voting and dispositive power for the shares of common stock in the table.

    Name Amount and Nature of Beneficial Ownership 

Stock

Settled

 RSUs (3) 

  Total (4) 
 

Common and

 Restricted Stock (1) 

 

Stock that

May Be

Acquired

Within

 60 days (2) 

 

Total

Beneficial

 Ownership 

 

 Percent of 

Class

  

 

Richard D. Fairbank

 

 

 

2,386,782

 

 

 

2,805,330

 

 5,192,112

 

 1.06%

 

 39,528

 

 5,231,640

 

 

R. Scott Blackley

 

 

 

4,167

 

 

 

0

 

 4,167

 

 *

 

 44,370

 

 48,537

 

 

Frank G. LaPrade, III

 

 

 

8,234

 

 

 

125,401

 

 133,635

 

 *

 

 38,646

 

 172,281

 

 

John G. Finneran, Jr.

 

 

 

63,530

 

 

 

166,809

 

 230,339

 

 *

 

 37,483

 

 267,822

 

 

Sanjiv Yajnik

 

 

 

25,009

 

 

 

84,191

 

 109,200

 

 *

 

 29,447

 

 138,647

 

 

Stephen S. Crawford

 

 

 

12,864

 

 

 

139,032

 

 151,896

 

 *

 

 50,565

 

 202,461

 

 

Aparna Chennapragada

 

 

 

0

 

 

 

0

 

 0

 

 *

 

 0

 

 0

 

 

Ann Fritz Hackett

 

 

 

20,656

 

 

 

42,361

 

 63,017

 

 *

 

 0

 

 63,017

 

 

Lewis Hay, III

 

 

 

2,728

 

 

 

83,107

 

 85,835

 

 *

 

 0

 

 85,835

 

 

Benjamin P. Jenkins, III

 

 

 

2,192

 

 

 

12,608

 

 14,800

 

 *

 

 0

 

 14,800

 

 

Peter Thomas Killalea

 

 

 

0

 

 

 

5,151

 

 5,151

 

 *

 

 0

 

 5,151

 

 

Pierre E. Leroy

 

 

 

0

 

 

 

41,361

 

 41,361

 

 *

 

 0

 

 41,361

 

 

Peter E. Raskind

 

 

 

2,000

 

 

 

22,116

 

 24,116

 

 *

 

 0

 

 24,116

 

 

Mayo A. Shattuck III

 

 

 

1,589

 

 

 

64,516

 

 66,105

 

 *

 

 0

 

 66,105

 

 

Bradford H. Warner

 

 

 

14,640

 

 

 

67,114

 

 81,754

 

 *

 

 0

 

 81,754

 

 

Catherine G. West

 

 

 

0

 

 

 

12,608

 

 12,608

 

 *

 

 0

 

 12,608

 

 

All directors and executive officers as a group (24 persons)

 

 

 

2,718,933

 

 

 

4,134,700

 

 6,853,633

 

 1.40%

 

 487,839

 

 7,341,472

 

*

Less than 1% of the outstanding shares of common stock.

(1)

Includes shares of unvested restricted stock that have voting rights but are not transferable until the end of the period of restriction.

(2)

This amount includes shares underlying stock options that are exercisable within 60 days after February 23, 2018, and restricted stock units for which delivery of the shares of common stock underlying the stock units is deferred until the director’s service with the Board, or, for Mr. Fairbank, his employment with the Company, ends.

(3)

Restricted stock units held by our officers and which are settled in an equivalent number of shares of our common stock issuedupon vesting. Represents unvested stock-settled RSUs as of February 23, 2018.

(4)

The amount includes the aggregate total of the “Total Beneficial Ownership” column and outstanding on January 31, 2015, which was 551,590,891.

Except as otherwise indicated below, each director or executive officer had sole voting and investment power for the applicable shares of common stock shown in the table.“Stock Settled RSUs” column.

   

 

Amount and Nature of Beneficial Ownership

 

      

Name

 

 

Common and
 Restricted Stock (1) 

 

 

 

Stock that
May Be
Acquired
Within

60 days (2)

 

Total
Beneficial
Ownership

 

 

Percent of  
Class

 

 

Stock
Settled
 RSUs (3) 

 

 

Total (4)

 

 Richard D. Fairbank

 1,946,154 5,569,422 7,515,576 1.35% 47,728 7,563,304

 Stephen S. Crawford

 158,056 15,681 173,737 * 51,477 225,214

 Ryan M. Schneider

 160,487 208,324 368,811 * 40,355 409,166

 John G. Finneran, Jr.

 146,236 492,113 638,349 * 32,811 671,160

 Sanjiv Yajnik

 108,143 141,891 250,034 * 30,767 280,801

 Patrick W. Gross

 7,539 85,217 92,756 * 0 92,756

 Ann Fritz Hackett

 20,656 67,173 87,829 * 0 87,829

 Lewis Hay, III

 2,728 92,418 95,146 * 0 95,146

 Benjamin P. Jenkins, III

 2,192 6,004 8,196 * 0 8,196

 Pierre E. Leroy

 4,900 63,944 68,844 * 0 68,844

 Peter E. Raskind

 2,000 20,013 22,013 * 0 22,013

 Mayo A. Shattuck

 1,589 89,094 90,683 * 0 90,683

 Bradford H. Warner

 14,640 70,510 85,150 * 0 85,150

 Catherine G. West

 0 6,004 6,004 * 0 6,004

 All directors and executive officers as a group (20 persons)

 2,843,026 7,794,668 10,637,694 1.90% 367,255 11,004,949

*Less than 1% of the outstanding shares of common stock.

 

(1)Includes shares of unvested restricted stock that have voting rights but are not transferable until the end of the period of restriction.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  39

SECTION II - SECURITY OWNERSHIP

 

(2)This amount includes shares underlying stock options that are exercisable within 60 days after January 31, 2015, and restricted stock units for which delivery of the shares of common stock underlying the stock units is deferred until the director’s service with the Board of Directors, or for Mr. Fairbank, his employment with the Company, ends.

 

(3)Restricted stock units held by our officers and which are settled in equivalent number of shares of our common stock.

Some of the shares shown in the preceding table are subject to restrictions or not held directly by the director or executive officer. Below is a table showing the number of shares subject to restrictions or not held directly by the director or executive officer.

 

(4)The amount includes the aggregate total of the “Total Beneficial Ownership” column and the “Stock Settled RSUs” column.

Some of the shares shown in the preceding table are either subject to restrictions or not held directly by the director or executive officer. Below is a table showing the number of shares subject to restrictions or not held directly by the director or executive officer.

    Name   

Restricted Stock

Units For Which Delivery

of Stock is Deferred

   

Stock Held by, or Tenant in

Common With, Family Member,

Trust or Partnership

 

Richard D. Fairbank

 

  241,680

 

  0

 

 

R. Scott Blackley

 

  0

 

  0

 

 

Frank G. LaPrade, III

 

  0

 

  0

 

 

John G. Finneran, Jr.

 

  0

 

  0

 

 

Sanjiv Yajnik

 

  0

 

  0

 

 

Stephen S. Crawford

 

  0

 

  0

 

 

Aparna Chennapragada

 

  0

 

  0

 

 

Ann Fritz Hackett

 

  42,361

 

  5,006

 

 

Lewis Hay, III

 

  42,361

 

  1,806

 

 

Benjamin P. Jenkins, III

 

  12,608

 

  0

 

 

Peter Thomas Killalea

 

  5,151

 

  0

 

 

Pierre E. Leroy

 

  41,361

 

  0

 

 

Peter E. Raskind

 

  16,192

 

  0

 

 

Mayo A. Shattuck III

 

  42,361

 

  0

 

 

Bradford H. Warner

 

  

35,585

 

  140

 

 

Catherine G. West

 

  12,608

 

  0

 

 

Name

Restricted Stock

Units For Which Delivery

of Stock is Deferred

Stock Held by, or Tenant in

Common With, Family Member,

Trust or Partnership

 Richard D. Fairbank

241,6800

 Stephen S. Crawford

00

 Ryan M. Schneider

00

 John G. Finneran, Jr.

064,904

 Sanjiv Yajnik

00

 Patrick W. Gross

35,7570

 Ann Fritz Hackett

35,7575,006

 Lewis Hay, III

35,7571,806

 Benjamin P. Jenkins, III

6,0040

 Pierre E. Leroy

34,7570

 Peter E. Raskind

9,5880

 Mayo A. Shattuck III

35,7570

 Bradford H. Warner

28,981140

 Catherine G. West

6,0040

 Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), requires that Capital One’s executive officers and directors, and persons that beneficially own more than 10% of Capital One’s common stock, file certain reports of beneficial ownership of the common stock and changes in such ownership with the SEC, and provide copies of these reports to Capital One. As a matter of practice, members of our staff assist our executive officers and directors in preparing initial ownership reports and reporting ownership changes and typically file these reports on their behalf. Based solely on our review of the copies of such forms in our possession and written representations furnished to us, we believe that in 2017 each of the reporting persons complied with these filing requirements.

40  

Section 16(a) of the Securities Exchange Act of 1934 requires that Capital One’s executive officers and directors, and persons that beneficially own more than 10% of Capital One’s common stock, file certain reports of beneficial ownership of the common stock and changes in such ownership with the SEC and provide copies of these reports to Capital One. As a matter of practice, members of our staff assist our executive officers and directors in preparing initial ownership reports and reporting ownership changes and typically file these reports on their behalf. Based solely on our review of the copies of such forms in our possession and written representations furnished to us, we believe that in 2014 each of the reporting persons complied with these filing requirements except the Company discovered that a timely report filed in 2008 for Robert M. Alexander, the Company’s Chief Information Officer, underreported one of his equity award holdings as a result of an administrative error by the Company, which was subsequently corrected on a Form 5 filed in 2015.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

Section III - Director Compensation

SECTION IV – DIRECTOR COMPENSATION

 Director Compensation Objectives

The Board of Directors approves the compensation for

The Board approves the compensation fornon-management directors based on recommendations made by the Compensation Committee. The Board of Directors has designed the director compensation program to achieve four primary objectives:

 

∎

Attract and retain talented directors with the skills and capabilities to perpetuate Capital One’s success;

success

∎

Fairly compensate directors for the work required in a company of Capital One’s size and scope;

scope

∎

Recognize the individual roles and responsibilities of the directors; and

directors

∎

Align directors’ interests with the long-term interests of Capital One stockholders.stockholders

Management directors do not receive compensation for their service on the Board. In 2017, Mr. Fairbank was Capital One’s only management director.

 Director Compensation Procedures

The Compensation Committee annually reviews the compensation program for Capital One’snon-management directors. FW Cook provides competitive compensation data and director compensation program recommendations to the Compensation Committee for review. See the discussion under “Compensation Committee Consultant” on page 32 for further information on the role and responsibilities of FW Cook. The competitive compensation data includes the compensation (cash, equity and other benefits) ofnon-management directors within Capital One’s peer comparator group. See the discussion under “Market Data” on page 68 for further information on the selection of the peer comparator group. The Compensation Committee considers this information, and FW Cook’s recommendations, and finalizes a proposed director compensation structure. The proposed structure is then reviewed and approved by the full Board, typically in the second quarter of each year.

Based on their review of competitive market data and guidance from FW Cook in the second quarter of 2017, the Compensation Committee determined that the Company’s director compensation program meets the objectives listed above.

 Director Compensation Structure

On May 4, 2017, the Board approved a compensation program for Capital One’snon-management directors for the period from May 4, 2017 through Capital One’s 2018 Annual Meeting that is similar to the program for the preceding year. The compensation program consists of an annual cash retainer of $90,000 for service on the Board. In addition, directors receive cash retainers for committee service and for service as committee chairs and Lead Independent Director. Based upon the analysis and data provided by FW Cook, the Board increased the committee chair retainers from $45,000 to $60,000 for the Risk Committee chair, from $30,000 to $45,000 for the Audit Committee chair, and from $30,000 to $35,000 for the Compensation Committee and Governance and Nominating Committee chairs, to reflect the scope of responsibilities of the committee chairs and to align with compensation levels within Capital One’s peer comparator group. See “Compensation of Directors” below for details regarding the retainers. In addition, eachnon-management director serving on May 3, 2017, other than Mr. Gross, received on such date an award of 2,061 restricted stock units of Capital One common stock (“RSUs”) with a grant date fair value of $170,012 valued at $82.49 per share. All RSUs were granted under the 2004 Stock Incentive Plan and were valued based on the fair market value of a share of Capital One common stock on the date of grant. The RSUs vest one year from the date of grant and delivery of the underlying shares is deferred until the director’s service with the Board ends. Mr. Gross retired from the Board effective May 4, 2017.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  41

SECTION III - DIRECTOR COMPENSATION

 Compensation of Directors

Directors of Capital One received the following compensation in 2017:

 

Director Name

 

Fees Earned or

Paid in Cash (3)

 

Stock

Awards (4)

 

Option
Awards

 

 

Change in Pension Value

and Nonqualified Deferred

Compensation Earnings

 

All Other

Compensation (5)

 

Total

 

 

Richard D. Fairbank (1)

 

—

 

—

 

—

 

—

 

—

 

—

 

Patrick W. Gross (2)

 

$75,000

 

$ —

 

—

 

—

 

$15,000

 

$90,000

 

Ann Fritz Hackett

 

$217,500

 

$170,012

 

—

 

—

 

$15,000

 

$402,512

 

Lewis Hay, III

 

$135,000

 

$170,012

 

—

 

—

 

$10,000

 

$315,012

 

Peter T. Killalea

 

$135,000

 

$170,012

 

—

 

—

 

$15,000

 

$320,012

 

Benjamin P. Jenkins, III

 

$150,000

 

$170,012

 

—

 

—

 

$15,000

 

$335,012

 

Pierre E. Leroy

 

$135,000

 

$170,012

 

—

 

—

 

$15,000

 

$320,012

 

Peter E. Raskind

 

$157,500

 

$170,012

 

—

 

—

 

$15,000

 

$342,512

 

Mayo A. Shattuck III

 

$157,500

 

$170,012

 

—

 

—

 

$15,000

 

$342,512

 

Bradford H. Warner

 

$157,500

 

$170,012

 

—

 

—

 

$15,000

 

$342,512

 

Catherine G. West

 

$135,000

 

$170,012

 

—

 

—

 

$15,000

 

$320,012

(1)

Management directors do not receive compensation for their service on the Board of Directors.Board. In 2014,2017, Mr. Fairbank was Capital One’s only management director.

 

(2)

 Director Compensation Procedures

The Compensation Committee reviewsMr. Gross retired from the Board effective May 4, 2017. Amounts shown represent cash payments made during 2017 for the compensation program for Capital One’s non-management directors on an annual basis. F.W. Cook provides competitive compensation data and program recommendations to the Compensation Committee for review. Please see the discussion under “Compensation Committee – Compensation Committee Consultant” in the “Corporate Governance at Capital One” section on page 14 for further information on the role and responsibilities of F.W. Cook. The competitive compensation data includes the compensation (cash, equity and other benefits) of non-management directors within Capital One’s peer comparator group. Please see the discussion under “Market Data” in the “Compensation Discussion and Analysis” section on page 46 for further information on the selection of the peer comparator group. The Compensation Committee considers this information, as well as F.W. Cook’s recommendations, and finalizes a proposed compensation structure. The proposed structure is then reviewed and approved by the full Board of Directors, typically in April or May of each year.

Based on their review of competitive market data and guidance from F.W. Cook in the second quarter of 2014, the Compensation Committee determined that the director compensation program described below meets the objectives listed above.

 Director Compensation Structure

On May 1, 2014, the Board of Directors approved a compensation program for Capital One’s non-management directorseffect for the period from May 1, 2014 until5, 2016 through Capital One’s 20152017 Annual Meeting that is similar toMeeting.

(3)

Represents cash payments made during 2017, which include half of the payments made under the compensation program for the preceding year. Theperiod from May 4, 2017 through Capital One’s 2018 Annual Meeting and half of the payments made under the compensation program consistsfor the period from May 5, 2016 through Capital One’s 2017 Annual Meeting.

(4)

Represents the grant date fair value of an annual cash retainer of $90,000 as well as cash retainers for committee service detailedRSUs granted during 2017, calculated in the notes to the table below. accordance with FASB ASC Topic 718.

(5)

Eachnon-management director serving on May 1, 2014 also received an annual award of restricted stock units of4, 2017 elected to direct contributions from Capital One common stock (“RSUs”) on such date, valued at $170,003. Lastly,in an aggregate amount of up to $15,000 to charitable organization(s) of his or her choice.

Under the most recently approved director compensation program, retainers are as follows:

∎

Lead Independent Director received a cash retainerRetainer: $50,000

∎

Chair of $25,000. Ms. Hackett was the Lead Independent Director in 2014.Risk Committee: $60,000

 

∎

 Other BenefitsChair of the Audit Committee: $45,000

∎

UnderChair of the Compensation Committee or Governance and Nominating Committee: $35,000

∎

Member of the Risk Committee (other than the chair): $30,000

∎

Member of the Audit Committee, Compensation Committee or Governance and Nominating Committee (other than the chair): $15,000

∎

Member of the Capital One, Financial Corporation Non-Employee Directors Deferred Compensation Plan, non-management directors may voluntarily defer all or a portion of their cash compensation and receive deferred income benefits. Participants in the plan have the opportunity to direct their individual deferrals among seventeen different investments available through the plan. Directors that elected a deferral will begin to receive their deferred income benefits in cash when they cease serving as directors, upon certain other distribution events specified in the plan, or at such earlier time as is authorized by the Compensation Committee. Upon a change of control, Capital One will pay to each director within thirty days of the change of control a lump sum cash payment equal to such director’s account balance as of the date of the change of control. In 2014, Messrs. Jenkins and Hay elected to defer their cash compensation under this plan. A list of the different investments available can be found under “Capital One’s Voluntary Non-Qualified Deferred Compensation Programs” on page 63.National Association Trust Committee: $10,000

Capital One offered non-management directors the opportunity to direct a contribution of up to $10,000 annually from Capital One to a charitable organization of their choice. Each non-management director serving on May 1, 2014 elected to make such a charitable contribution in 2014.

Directors also receive reimbursements for certain board-related expenses including, among other things, external educational seminars and travel-related costs incurred to attend Board meetings. Such reimbursements are not included as compensation for the directors in the table below.

In addition, prior to 2013, directors were offered the opportunity to elect to forego their cash retainers for a grant ofnon-qualified stock options under the 2004 Stock Incentive Plan. The outstanding options expire 10 years from the date of grant. In 2013, the Compensation Committee determined to no longer include stock options as part of the director compensation program. Upon termination from Board service (other than by removal for cause), a director will have the remainder of the full option term to exercise any vested stock options.

 

42  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION III - DIRECTOR COMPENSATION

The following table shows the number of RSUs outstanding, including accrued dividend equivalents, and the total number of stock options outstanding for eachnon-management director as of December 31, 2017:

  

Director Name

 

 

 Number of Outstanding 

RSUs

 

 

 Number of Outstanding 

Stock Options

 

  

 

Patrick W. Gross

 

 

 

—

 

 

 

—

 

  

 

Ann Fritz Hackett

 

 

 

42,361

 

 

 

6,361

 

  

 

Lewis Hay, III

 

 

 

42,361

 

 

 

40,746

 

  

 

Peter T. Killalea

 

 

 

5,151

 

 

 

—

 

  

 

Benjamin P. Jenkins, III

 

 

 

12,608

 

 

 

—

 

  

 

Pierre E. Leroy

 

 

 

41,361

 

 

 

—

 

  

 

Peter E. Raskind

 

 

 

16,192

 

 

 

10,425

 

  

 

Mayo A. Shattuck III

 

 

 

42,361

 

 

 

22,155

 

  

 

Bradford H. Warner

 

 

 

35,585

 

 

 

34,529

 

  

 

Catherine G. West

 

 

 

12,608

 

 

 

—

 

 Other Benefits

Under the Capital One Financial CorporationNon-Employee Directors Deferred Compensation Plan,non-management directors may voluntarily defer all or a portion of their cash compensation and receive deferred income benefits. Participants in the plan can direct their individual deferrals among seventeen investments available through the plan. Directors that elected a deferral receive their deferred income benefits in cash when they cease serving as directors, upon certain other distribution events specified in the plan, or at such earlier time as authorized by the Compensation Committee. Upon a change of control, Capital One will pay to each director within 30 days of the change of control a lump sum cash payment equal to such director’s account balance as of the date of the change of control.

Capital One offersnon-management directors the opportunity to direct a contribution of up to $10,000 annually from Capital One to charitable organization(s) of their choice. Eachnon-management director serving on May 4, 2017 elected to make such a charitable contribution in 2017. In addition, all directors serving on May 4, 2017 were eligible, and nine directors elected, to participate in a charitable contribution program available to Capital One associates under which Capital One made a contribution of $5,000 to a charitable organization of their choice.

Directors also receive reimbursements for certain board-related expenses including external educational seminars and travel-related costs incurred to attend Board meetings. Such reimbursements are not included as compensation for the directors in the table above.

 Stock Ownership Requirements

Capital One requires non-management directors to retain all shares underlying RSUs granted to them by Capital One until their service with the Board of Directors ends, pursuant to the terms of their respective grant agreements.

Capital One requiresnon-management directors to retain all shares underlying RSUs granted to them by Capital One until their service with the Board ends. The Board of Directors may grant an exception for any case where this requirement would impose a financial hardship on a director. No directors have been granted an exception to this requirement for any outstanding awards of RSUs.

 

 Compensation of Directors

Directors of Capital One received the following compensation in 2014:CAPITAL ONE FINANCIAL CORPORATION  

 

Name

Fees Earned or

Paid in Cash
(2)

Stock Awards
(3)

Option
Awards

(4)

Change in Pension Value
and Nonqualified Deferred
Compensation Earnings		All Other
Compensation
(5)		     Total     

 Richard D. Fairbank (1)

——————

 Patrick W. Gross

$150,000$170,003——$10,000$330,003

 Ann Fritz Hackett

$190,000$170,003——$10,000$370,003

 Lewis Hay, III

$150,000$170,003——$10,000$330,003

 Benjamin P. Jenkins, III

$135,000$170,003——$10,000$315,003

 Pierre E. Leroy

$120,000$170,003——$10,000$300,003

 Peter E. Raskind

$150,000$170,003——$10,000$330,003

 Mayo A. Shattuck III

$150,000$170,003——$10,000$330,003

 Bradford H. Warner

$150,000$170,003——$10,000$330,003

 Catherine G. West

$135,000$170,003——$10,000$315,003

  2018 PROXY STATEMENT  

 

  43

(1)In 2014, Mr. Fairbank was Capital One’s only management director.

 

(2)Figures above represent cash payments during 2014, which include half of the payments under the compensation program for the period from May 1, 2014, until Capital One’s 2015 Annual Meeting and half of the payments under the compensation program for the period from May 2, 2013, until Capital One’s 2014 Annual Meeting.

Compensation for committee service includes retainers for service as chairperson or as a member of a committee as described under the heading “Committee Membership” in the “Corporate Governance at Capital One” section of this proxy statement. Under the most recently approved compensation program, retainers are as follows:

Section IV - Compensation Discussion and Analysis

 

Key Topics Covered in our Compensation Discussion and Analysis:

 Introduction

45
¡Lead Independent Director Retainer: $25,000
¡Chair of the Risk Committee: $45,000
¡Chair of the Audit Committee, Compensation Committee or Governance and Nominating Committee: $30,000
¡Member of the Risk Committee (other than the chair): $30,000
¡Member of the Audit Committee, Compensation Committee or Governance and Nominating Committee (other than the chair): $15,000

(3)Each non-management director serving on May 1, 2014, received a grant of 2,281 RSUs with a grant date fair value of $170,003 valued at $74.53 per share. All RSUs were granted under the terms of the 2004 Stock Incentive Plan and were valued at the fair market value of a share of Capital One common stock on the date of grant. RSUs vest one year from the date of grant. Delivery of the underlying shares is deferred until the director’s service with the Board of Directors ends. The following table shows the number of RSUs outstanding for each director as of December 31, 2014:

 

 Our Compensation Objectives

Director NameNumber of Outstanding
Restricted Stock Units

 Patrick W. Gross

35,757

 Ann Fritz Hackett

35,757

 Lewis Hay, III

35,757

 Benjamin P. Jenkins, III

6,004

 Pierre E. Leroy

34,757

 Peter E. Raskind

9,588

 Mayo A. Shattuck III

35,757

 Bradford H. Warner

28,981

 Catherine G. West

6,004

(4)Prior to 2013, directors were offered the opportunity to elect to forego their cash retainers in exchange for a grant of non-qualified stock options under the 2004 Stock Incentive Plan. In 2013, the Compensation Committee determined not to include stock options as part of the director compensation program.

The following table sets forth the total number of stock options outstanding for each director as of December 31, 2014. The options expire ten years from the date of grant. Upon termination from Board service (other than by removal for cause), a director will have the remainder of the full option term to exercise the vested stock options.

 

Director Name

Number of Outstanding

Stock Options

45

 Important Aspects of Our Executive Compensation Programs

46

Highlights of our 2017 Compensation Programs

46

Use of Discretion

47

  Consideration of 2017 Say on Pay Vote

47

 Chief Executive Officer Compensation

48

Goals and Principles

48

CEO Compensation Components

48

2017 CEO Compensation Program

49

CEO Compensation by Performance Year

54

Additional Pay Elements

55

2018 CEO Compensation Program

55

  NEO Compensation

58

Goals and Principles

58

2017 NEO Compensation Components

58

2017 NEO Compensation Program

59

NEO Compensation by Performance Year

62

Additional Pay Elements

62

2018 NEO Compensation Program

63

  Additional Performance Conditions and Recovery Provisions

64

Performance-Based Vesting Provisions

64

Performance Share Reduction

65

Misconduct Clawback Provisions

66

Financial Restatement Clawbacks

66

  Process and Criteria for Compensation Decisions

66

Our Compensation Governance Cycle

67

Use of Outside Consultants for CEO Compensation

67

Use of Outside Consultants for NEO Compensation

67

Market Data

68

Tally Sheets

69

  Other Compensation Arrangements

69

Pension andNon-Qualified Deferred Compensation Plans

69

Employment Agreements

69

Change of Control Agreements

69

Post-Employment Compensation Practices

70

  Other Aspects of Executive Compensation

70

Stock Ownership and Retention Requirements

70

Prohibition of Hedging and Speculative Trading Activities

71

Equity Grant Practices

71

Tax Considerations

71

 Patrick W. Gross

49,460

 Ann Fritz Hackett

31,416

 Lewis Hay, III

56,661

 Benjamin P. Jenkins, III

0

 Pierre E. Leroy

29,187

 Peter E. Raskind

10,425

 Mayo A. Shattuck III

53,337

 Bradford H. Warner

41,529

 Catherine G. West

0
44  

 

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

(5)Each non-management director serving on May 1, 2014, elected to direct a contribution from Capital One of $10,000 to a charitable organization of his or her choice.

SECTION V –IV - COMPENSATION DISCUSSION AND ANALYSIS

 

 Introduction

Capital One’s executive compensation program is designed to attract, retain and motivate leaders who have the ability to foster strong business results and promote the long-term success of the Company. The Compensation Committee of the Board of Directors (the “Committee”) is responsible for, among other matters, developing, approving, monitoring and managing the compensation of all of our executive officers, including the named executive officers defined below. Final decisions regarding the compensation of our executive officers, including our Chief Executive Officer, are made by our independent directors. This Compensation Discussion and Analysis will review the compensation of the CEO, Richard D. Fairbank, and the following executive officers for 2014:

 

Stephen S. Crawford,
 Introduction

Capital One’s executive compensation program is designed to attract, retain and motivate leaders who have the ability to foster strong business results and promote the long-term success of the Company. The Compensation Committee of the Board of Directors (“Committee”) is responsible for, among other matters, developing, approving, monitoring and managing the compensation of all of our executive officers, including the named executive officers defined below. Final decisions regarding the compensation of our executive officers, including our CEO, are made by the Committee and the other independent directors. This Compensation Discussion and Analysis will review the compensation of the CEO, Richard D. Fairbank, and the following executive officers for 2017:

∎

R. Scott Blackley, Chief Financial Officer

Ryan M. Schneider, President, Card

∎

Frank G. LaPrade, III, Chief Enterprise Services Officer and Chief of Staff to the CEO

∎

John G. Finneran, Jr., GeneralChief Risk Officer and Corporate Secretary (General Counsel and Corporate Secretary

through February 1, 2018)

∎

Sanjiv Yajnik, President, Financial Services

∎

As used throughout this proxy statement,Stephen S. Crawford, Senior Advisor to the CEO (Head of Finance and Corporate Development through July 1, 2017)

Except as otherwise indicated, as used throughout this proxy statement, the “named executive officers” or “NEOs” means the five executive officers listed above and the CEO, collectively.

 Our Compensation Objectives

Capital One’s executive compensation program has four primary objectives.

Strongly link rewards with both business and individual performance while appropriately balancing risk

Capital One emphasizespay-for-performance at all organizational levels. Typically, as an executive’s level of responsibility increases, so does the proportion of the executive’s pay that is subject to performance criteria. Therefore, the named executive officers have the highest proportion of their pay directly linked to Company and individual performance, as compared to other associates. Awards made to the named executive officers in February 2018 for the 2017 performance year were based on Company and individual performance, and on demonstrating specific leadership competencies assessed through a comprehensive performance management process that included an individual assessment specifically designed to evaluate the degree to which the executive balanced risks inherent to his or her role. The Chief Risk Officer compiled these risk assessments and the Chief Human Resources Officer reviewed the assessments for the NEOs. Separately, the Chief Auditor compiled and reviewed the risk assessment for the Chief Risk Officer. The Committee considered the assessments in making its determinations regarding individual performance and compensation levels.

Ensure that total compensation rewards performance over multiple time horizons

Our compensation programs are structured to encourage our executives to deliver strong results over the short term while making decisions that create sustained value for our stockholders over the long term. For 2017, approximately 78% of the CEO’s total compensation was equity-based andat-risk to the performance of the Company’s stock price, and 100% of his compensation was deferred for a three-year period. In addition, approximately 80% of total compensation for NEOs other than the CEO was provided through equity-based vehicles which wereat-risk to the performance of the Company’s stock price and subject to vesting over multiple time horizons. The use of deferred, equity-based compensation vehicles with multi-year vesting terms advances our goal of aligning the ultimate value realized by the named executive officers with the performance of the Company’s stock over time because the value of these compensation vehicles increases and decreases based on the performance of the Company’s stock price in both current and future periods.

CAPITAL ONE FINANCIAL CORPORATION  

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Attract, retain and motivate top executive talent

To attract, retain and motivate exceptional leaders, we believe that compensation opportunities at Capital One must be competitive with the marketplace for talent. The Committee and the independent directors strive to preserve a competitive pay mix and total target compensation values in the executive compensation program, as well as provide competitive total rewards based on our selected peer group.

Align our executives’ interests with those of our stockholders

The Committee and the independent directors are committed to designing incentive compensation programs that reward individual and Company performance and that are aligned with the creation of stockholder value over the long term. Because named executive officer compensation is primarily delivered through deferred, equity-based vehicles that vest over multiple time horizons, the named executive officers have a significant stake in the success of the Company. In addition, we have established specific stock ownership policies that the named executive officers must meet and stock retention provisions applicable to certain equity awards.

 Important Aspects of Our Executive Compensation Programs

Highlights of Our 2017 Compensation Programs

The Committee believes that our named executive officer compensation programs balance risk and financial results, reward named executive officers for their achievements, promote our overall compensation objectives and encourage appropriate, but not excessive, risk-taking. The table below contains highlights of our 2017 compensation program:

 What We Do

What We Don’t Do

  ✓

We provide primarilylong-term, equity-based compensation to our NEOs

û

We do not provideexcise taxgross-up payments

  ✓

We provide our CEO with compensation consistingentirely ofequity awards anddeferred payouts

û

Wedo not reprice stock options

  ✓

We pay our NEOsequity-based awards based on Company and individual performance

û

Wedo not guarantee incentive awards

  ✓

We applyrisk balancing so as not to jeopardize the foursafety and soundness of Capital One

û

Wedo not provide compensation or awards to our NEOs on terms and conditions that aremore favorable than compensation and awards granted to other executive officers

  ✓

We applyperformance thresholds to NEO grants to determine the amount of equity delivered at vesting

û

We do not permit our NEOs to engage inshort sales, hedgingtransactions, orspeculative trading in derivatives of our securities

  ✓

We reduce performance share award values at vesting if the Company does not achievepositive Adjusted ROA (for awards granted in 2017)orpositive Adjusted ROTCE(for awards granted in 2018)

û

We do not permit our NEOs to place their Company securities in amargin account or topledge their Company securities as collateral for a loan

  ✓

We haveclawback provisions in our award agreements to ensure accountability

û

Generally, we do not utilizeemployment agreements, and none of our current NEOs have employment agreements

  ✓

We require both a change of control event and a termination before we accelerate the vesting of equity awards (double trigger)

û

We do not pay a cash salary to our CEO

  ✓

We have anindependent compensation consultant advising the Compensation Committee

  ✓

We use a mix ofrelative and absolute performance metrics in our incentive awards

46  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

In addition, the awards granted to our named executive officers in 2017 include the following performance and recovery provisions that are designed to further enhance alignment between pay and performance and to balance risks:

Performance-

            Based Vesting             

Provisions

We include performance-based vesting provisions as part of each stock option, if any, and stock-settled RSU award to named executive officers listed above,and each cash-settled RSU award to the CEO. These provisions will reduce the total value delivered to the executive at vesting if the Company does not meet certain performance thresholds during the three-year vesting period. The total value can be reduced to zero if the performance threshold is not met in any of the three years in the performance period.

Performance

Share Reduction

Each performance share award to the named executive officers provides that the total value delivered at vesting will be reduced if for any year in the three-year performance period the Company does not achieve positive Adjusted ROA (as defined on page 65 under “Performance Share Reduction”). The total value can be reduced to zero if positive Adjusted ROA is not achieved in all of the three years in the performance period. This reduction can occur regardless of where the Adjusted ROA ranks relative to a comparator group. Beginning with awards granted in 2018, the performance share reduction will be based on the achievement of positive Adjusted ROTCE (as defined on page 65 under “Performance Share Reduction”) instead of positive Adjusted ROA.

Misconduct

Clawback

Each incentive award to the named executive officers is subject to clawback provisions that allow the Committee to seek recovery of all unvested portions of the awards in the event there has been misconduct resulting in a violation of law or Company policy and the “namednamed executive officers” meansofficer committed the misconduct or failed in his or her responsibility to manage or monitor the applicable conduct or risks.

Financial

Restatement

Clawback

Each performance share award to the named executive officers includes clawback provisions that allow the Company to recover shares under the award following a financial restatement.

See “Additional Performance Conditions and Recovery Provisions” beginning on page 64 for more details.

All of the terms and features described above, including the performance-based vesting and clawback provisions, apply to awards granted to all executive officers and not just the named executive officers.

Use of Discretion

The Committee believes that exercising discretion is an important element in reaching balanced compensation decisions that are consistent with our strategy and reward both current year performance and sustained long-term value creation, and supplements other aspects of Capital One’spay-for-performance philosophy. By applying discretion, the Committee seeks to mitigate the risks associated with a rigid and strictly formulaic compensation program, which could unintentionally create incentives for our executives to focus only on certain performance metrics, encourage imprudent risk taking, and not provide the best results for stockholders. In addition, the use of discretion allows the Committee to respond to changes in economic conditions, our operating environment, and other significant factors that may affect the long-term performance of Capital One or our lines of business. The use of discretion also allows the Committee to adjust compensation based on factors that would not be appropriately reflected by a strictly formulaic approach, such as risk management, championing company values, and the discrepancies between absolute and relative performance levels or recognition of individual performance levels. There are certain performance conditions for which the Committee would not exercise discretion, for example where the minimum performance metric is not met in the award of performance shares or if the performance-based vesting requirements applicable to certain other stock-settled awards are not met.

 Consideration of 2017 Say on Pay Vote

The Committee and the Board value the input of our stockholders and strive to foster a constructive dialogue with stockholders on matters of executive compensation and corporate governance. At our 2017 Annual Meeting, our stockholders supported our executive compensation program with more than 95% of the votes cast in favor of ournon-binding advisory vote on executive compensation (“2017 Say on Pay Vote”). Though the Committee recognized the 2017 Say on Pay Vote reflected strong support for the Company’s executive compensation programs, the Committee remains committed to stockholder engagement. In 2017, we continued to strengthen

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  47

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

our outreach to stockholders to ensure that we maintain strong lines of communication with our stockholders and that the perspectives of our stockholders are shared with the Committee and the Board. From this outreach, the Committee and the Board gained valuable insight into our investors’ views about the Company, including our executive compensation programs. As a result of the feedback received from investors during 2017, the Committee made the following enhancements to our executive compensation programs and disclosure:

∎

Introduced New Performance Share Award Metrics.Beginning in 2018, the performance shares awarded to the named executive officers will vest on the basis of two new metrics: Growth of Shareholder Value and Adjusted ROTCE, each as defined on page 56 under “Performance Share Award Metrics.” The Committee and the independent directors believe that these two performance metrics, in combination, provide a balanced and rigorous measurement of Company performance by balancing the creation of long-term stockholder value and the returns generated on stockholders’ investment in the Company.

∎

Increased CEO Performance Shares. Beginning in 2018, the Committee and the independent directors increased the alignment of CEO compensation and Company performance by increasing the percentage of the CEO’s target compensation that is composed of performance shares from 50% to 60% of total target compensation and eliminating the 10% that was previously granted in the form of stock options. See “2018 CEO Compensation Program” beginning on page 55 for more information.

∎

Simplified NEO Compensation Program.In 2018, the Committee and the independent directors modified the compensation program applicable to our NEOs, other than our CEO, to reduce the number of compensation vehicles, eliminating stock options and cash-settled restricted stock units (“RSUs”), and more closely aligning the program vehicles and structure to the programs used by the Company’s peers. See “2018 NEO Compensation Program” beginning on page 63 for more information.

The Committee continues to actively monitor our stockholder engagement with respect to executive compensation matters and has considered stockholder feedback in approvingyear-end incentive awards for 2017 and structuring and approving the 2018 compensation programs for the named executive officers.

 Chief Executive Officer Compensation

Goals and Principles

The Committee’s top priority is to implement a compensation program that aligns the interests of the CEO with the interests of our stockholders by directly linking his compensation with the Company’s performance and his contributions to that performance over appropriate time horizons. The Committee believes that all of the CEO’s compensation should beat-risk based on his and the Company’s performance. Each year the Committee approves the form, timing and amount of CEO compensation and makes recommendations to the independent directors for final approval. The Committee considers the CEO’s historical performance and seeks to effectively align the CEO’s interests with the interests of our stockholders over time, support safety and soundness and appropriately balance risk. The Committee and the independent directors have the flexibility to adjust compensation decisions from year to year to take into account the Company’s performance and evolving market practices. For example, over the past five years, the CEO’s total performance year compensation has ranged from $16.7 to $19.7 million.

CEO Compensation Components

The CEO’s compensation for the performance year 2017 was composed of equity awards designed to provide the CEO with an incentive to focus on long-term performance and the opportunity for ayear-end incentive award based on the Committee’s evaluation of the Company’s performance and the CEO’s contributions to that performance. The equity awards granted to the CEO in February 2017 consisted of stock options and performance shares. Theyear-end incentive award granted to the CEO in February 2018 consisted of deferred cash and cash-settled RSUs. All of the CEO’s compensation is subject to a three-year deferred vesting or payout schedule. Beginning in performance year 2018, the Committee and the independent directors eliminated stock options from the CEO compensation program such that the equity awards granted to the CEO consisted of only performance shares.

48  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The chart below shows these elements of CEO compensation as an approximate percentage of the CEO’s total target compensation. In 2017, CEO total target compensation was composed of long-term incentives (60%) and ayear-end incentive opportunity (40%).

2017 CEO Target Compensation

LOGO

2017 CEO Compensation Program

The Committee annually reviews and approves the compensation structure of the CEO and makes recommendations to the independent directors for final approval. In February 2017, the Committee and the independent directors reviewed the CEO’s compensation structure and determined that for 2017 the compensation program would continue to consist of equity awards granted at the beginning of the year plus an opportunity for ayear-end incentive award based on the Company’s performance for 2017. In this manner, the CEO’s compensation continues to be completelyat-risk, aligned with the Company’s performance over the appropriate time horizons, and supports the Company’s executive compensation goals and principles.

The table below summarizes the CEO compensation program that the Committee and the independent directors approved for the 2017 performance year.

Compensation

Element

Timing of Award

Determination

Basis for Award

Vesting

Schedule

Performance and Recovery

Provisions

Base SalaryNot applicableNot applicableNot applicableNot applicable
Stock OptionsFebruary 2017Incentive for future Company performance3-year cliff vesting; expires in 10 years

∎  Performance-based vesting provisions

∎  Misconduct clawback

Performance SharesFebruary 2017

Incentive for future

Company performance

Vest at the end of the3-year performance period; the number of shares vesting depends on achievement of performance factors

∎  Performance share reduction

∎  Misconduct clawback

∎  Financial restatement clawbacks

Year-End Incentive

Opportunity

February 2018Reward for 2017 CEO and the NEOs, collectively.Company performanceDelivered as combination of cash-settled RSUs and deferred cash bonus; payout after 3 years

∎  Performance-based vesting provisions (RSUs only)

∎  Misconduct clawback

See “Additional Performance Conditions and Recovery Provisions” beginning on page 64 for more details regarding the performance and recovery provisions applicable to each of the elements of compensation that the Committee approved for the 2017 performance year for the named executive officers.

 

CAPITAL ONE FINANCIAL CORPORATION  

 2014 Company Performance

In 2014, Capital One delivered strong financial  2018 PROXY STATEMENT  

  49

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

After considering various factors as described below, without giving particular weight to any specific factor, the Committee and the independent directors determined that a total target compensation amount of $17.5 million was appropriate for Mr. Fairbank’s 2017 compensation program. When determining the structure and total target compensation opportunity for Mr. Fairbank’s 2017 compensation program, as well as the value for each component of the award, the Committee and the independent directors considered the Company’s performance during 2016 and Mr. Fairbank’s contribution to that performance relative to the following factors: financial and operating performance, governance and risk management, strategic performance and winning with our customers and associates. In addition, the Committee and the independent directors considered the Company’s performance in 2016 relative to the peer comparator companies’ performance in 2016, the structure and amount of compensation awarded to the chief executive officers of the peer comparator companies and the structure and amount of Mr. Fairbank’s compensation awards in prior years. The Committee and the independent directors also considered the Company’s risk profile and the time horizon over which the deferred, equity-based vehicles will vest, as well as the fact that the ultimate value of Mr. Fairbank’s deferred, equity-based awards will depend on the Company and Mr. Fairbank’s performance over time.

The chart below shows the pay mix of the CEO’s actual compensation for the 2017 performance year, including theyear-end incentive opportunity which consisted of 60% deferred cash and 40% cash-settled RSUs.

2017 CEO Pay Mix

LOGO

Stock Option Award

In February 2017, Mr. Fairbank received a grant of 81,486non-statutory stock options at an exercise price of $86.34 per share (which was the fair market value of the Company’s common stock on the date of grant). Any benefits to Mr. Fairbank of the stock options are deferred, as the options cannot be exercised until February 15, 2020 and will expire 10 years after the date of grant. The option grant had a grant date value of $1,750,018; however, the ultimate value Mr. Fairbank realizes, if any, depends solely on the long-term appreciation in the Company’s stock price. Mr. Fairbank can only realize value from the stock options if and to the extent the Company’s stock price increases after the date of grant and the market value of the stock exceeds the exercise price at some point after the three-year vesting period when the options are exercised. The stock option award is also subject to performance-based vesting conditions and clawback provisions, each as described in more detail under “Additional Performance Conditions and Recovery Provisions” beginning on page 64. Beginning with performance year 2018, the Committee and the independent directors have determined to replace the portion of Mr. Fairbank’s compensation previously granted as stock options with performance shares.

Performance Share Award

In February 2017, based on the above determination by the Committee and the independent directors, Mr. Fairbank was granted an award of performance shares under which he may receive from 0% to 150% of a target number of 101,344 shares of the Company’s common stock based on the Company’s performance over the three-year period from January 1, 2017 through December 31, 2019. The performance shares had a grant date fair value of $8,750,041.

50  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The Company’s performance will be assessed on the basis of Adjusted ROA relative to a comparator group consisting of companies in the KBW Bank Index, excluding threenon-traditional banks that do not focus on lending to consumers and businesses (the “KBW Index”). The Committee believes that the KBW Index is an appropriate index against which to assess the Company’s performance because it reflects institutions of a comparable size and business mix to the Company. In addition, the Committee selected relative Adjusted ROA as the metric to underlie 2017 performance share awards in order to achieve a balance of incentivizing and rewarding management to pursue business strategies that reward stockholders over the long term, while discouraging excessive risk-taking or balance sheet leverage in pursuit of those goals. In response to stockholder feedback, during 2017 and early 2018, the Committee evaluated the use of Adjusted ROA and selected two new performance metrics that will apply to performance share awards granted beginning in 2018: Adjusted ROTCE and Growth of Shareholder Value. See “Performance Share Award Metrics” beginning on page 56 for more information regarding these new metrics.

In 2017, the Committee and the independent directors revised the performance metrics applicable to performance shares granted beginning in 2017, in part in response to stockholder feedback, to require a more rigorous set of relative Company performance hurdles related to the potential payouts made in connection with the awards. Under the revised performance hurdles, the Company’s positive Adjusted ROA must be at least at the 25th percentile of peers for any performance shares to vest, target payout will be achieved at the 55th percentile of peers, and the maximum payout can only be achieved if the Company performs at the 80th percentile of peers. If the Company’s positive Adjusted ROA is under the 25th percentile, none of the shares will vest and no payout will be made with respect to the award. The graph below represents these new, more rigorous performance hurdles. After the end of the three-year performance period, the Committee will certify the Company’s performance and issue the corresponding number of shares of the Company’s common stock, if any, in accordance with the graph below. Payouts will range between the values shown below for performance that falls between the points labeled in the graph.

LOGO

Under the performance share reduction feature applicable to the 2017 performance share awards, the number of shares issued at settlement will be reduced if the Company’s Adjusted ROA for one or more fiscal years completed during the three-year performance period is not positive, no matter how well the Company performs compared to the peer group. In any year that the Company does not achieve positive Adjusted ROA, the executive will forfeit 50% of that years’ worth of performance shares. If the Company’s Adjusted ROA is not positive in each of the three fiscal years in the performance period, the executive will forfeit the entire award of performance shares. The table below shows potential performance share reduction amounts based on the Company’s Adjusted ROA performance.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  51

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Number of Years During

Performance Period That Adjusted
ROA is Not Positive

Reduction in Number of Units Vesting
and distributed significant capital to our shareholders. We returnedShares Awarded

Zero

No reduction

One

One-sixth reduction

Two

One-third reduction

Three

Entire award forfeited

Year-End Incentive Opportunity

A portion of Mr. Fairbank’s 2017 compensation consisted of an opportunity for ayear-end incentive award based on the Company’s performance in 2017. The award had a target value of $7,000,000, but the ultimate value of the award was determined based on the Committee’s evaluation of the Company’s performance during 2017 and Mr. Fairbank’s contributions to that performance relative to the factors shown below related to: financial and operating performance, governance and risk management, strategic performance and winning with our customers and associates. These factors were evaluated on a qualitative and quantitative basis without any specificpre-established targets or weights. The Committee believes that these factors appropriately reflect and balance near term performance and long-term success for the Company’s customers, associates and stockholders.

In 2017, Capital One delivered solid financial performance while continuing to make decisions and investments that support the company’s long-term strategic agenda. We grew earnings per share, carefully managed expenses, and significantly improved operating efficiency while delivering resilient growth. We had disciplined loan and volume growth in our Credit Card and Auto businesses, and increased earnings in our Commercial Banking business. The Company continued to make transformational investments in talent, capabilities, and technology to create value today and over the long term. In addition, management continued to build risk identification and management capabilities, especially in the areas of cybersecurity, credit monitoring, and capital planning, and is committed to effective, proactive, and sustainable operation of these capabilities. The Committee believes that the actions taken by Mr. Fairbank and the other named executive officers throughout the year contributed greatly to the Company’s 2017 results and have advanced the Company toward creating enduring value, sustainable financial performance and the achievement of the Company’s strategic goals over the long term. In February 2018, the Committee considered the Company’s performance on both a quantitative and qualitative basis. In particular, the Committee considered:

Performance Factor

2017 Performance

LOGO

∎     Revenue

∎     Expense management

∎     Earnings and Earnings per share

∎     ROA and ROTCE

∎     Capital management

∎     Total shareholder return

∎     Revenue of $27.2 billion

∎Pre-provision earnings of $13.0 billion

∎     Efficiency ratio of 52.1%, or 51.0% net of adjustments,(1) a significant improvement from 2016

∎     Net Income of $2.0 billion

∎     Adjusted earnings per share (“EPS”)(1) growth of 7.4% to $7.74 per common share, fully diluted

∎     Return on average assets (“ROA”) of 0.60%

∎     Return on average common equity of 4.07%

∎     Return on average tangible common equity (“ROTCE”) of 6.16%(2)

∎     Growth of tangible book value per common share was 4%

∎     Paid a quarterly common stock dividend of $.40 per share

∎     Strong revenue, new accounts, and purchase volume growth in the Credit Card business, and continued to prudently grow our Auto and Commercial Banking businesses. We improved the quality of our franchise and laid a solid foundation to position Capital One as a digital leader. We continued to generate capital on a strong trajectory, maintaining our common stock dividend in 2014 and positioning ourselves to complete our announced $2.5 billion share repurchase program by the end of the first quarter 2015. Key financial results for 2014 included:

$4.4 billion in net income, or $7.59 per common share (fully diluted), with return on tangible common equity ranking fourth among our peer comparator group;
Pre-provision earnings of $10.1 billion;
Common equity Tier 1 capital ratio as calculated under the Basel III Standardized Approach of 12.46% as of December 31, 2014;
Strong credit risk performance, with a net charge-off rate of 1.72% for 2014;
Credit Card net income of $2.5 billion; Domestic Card$1.9 billion and average loan growth of 6.1% from the end of 2013;
Solid7%

∎     Strong financial and operating results in the Auto business, with new loan originations of $20.9 billion;$27.7 billion, and strong earnings growth of 18% in the Commercial Banking business

∎     One-, three- and five-year Total Shareholder Return of 16.3%, 28.2% and 88.4%, respectively

52  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

Solid
SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Performance Factor

2017 Performance

LOGO

∎       Credit performance and underwriting quality

∎      Risk management and compliance

∎       Balance sheet strength

∎      Board and executive governance

∎       Netcharge-off rate of 2.67%, 4.99% for Domestic Card

∎       Higher provision for loan losses, primarily driven by the front-loaded costs of strong loan growth, particularly in Domestic Card

∎       Continued progress enhancing the soundness and sustainability of 13.1%the Company’s compliance and risk management programs, including well-managed market and liquidity risk programs

∎      Continued focus on horizontal and vertical profitability and resilience, and accelerated investments in and attention to credit monitoring and forecasting processes

∎       Common equity Tier 1 capital ratio of 10.3%, calculated under the Basel Pillar III Standardized Approach, as of December 31, 2017

∎       Open and active Board governance model, including access to management, embrace of effective challenge, and proactive stockholder outreach

LOGO

∎       Progress toward achievement of long-term strategy

∎      Execution against corporate imperatives

∎       Disciplined investments in infrastructure, technology and growth initiatives

∎      CEO leadership and performance of executive team

∎       Significant progress on building leading technology capabilities to drive our business

∎       Balanced investments in market opportunities and long-term capabilities, including talent, infrastructure, and process reinvention

∎       Accelerated focus on cloud capabilities, modern software engineering and delivery, and enhanced cybersecurity capabilities

∎       Continued building a national bank franchise through expansion of cafés driving efficiency and modernization of our retail branch network

∎       Expanded specialization capabilities in our Commercial Banking business fromand solidified our position as one of the endleading auto lenders in the United States

∎      Successful acquisition of 2013.theco-branded credit card portfolio of Cabela’s, a strong retailer with an engaged and upmarket customer base

∎       Prudently increased investments to support customers’ financial needs while also making disciplined choices to reduce or eliminatenon-strategic or uncompetitive products and services

LOGO

∎       Recruitment and development of world class talent

∎      Associate engagement and retention

∎       Customer advocacy

∎      Brand

∎       Corporate reputation and community engagement

∎      Live our values and champion our culture

∎       Strong Net Promoter Scores across all of our consumer lending and retail banking businesses

∎       Our flagship Mobile Banking application earned J.D. Power award for Highest in Customer Satisfaction among mobile banking applications

∎       Continued focus on attracting top talent and welcomed over 10,000 new associates, while maintaining high bar for talent and diversity

∎       Recorded highest-ever associate engagement scores and low voluntary attrition rates

∎       Increased focus on enhancing and developing our executive leadership and governance

∎       Broadened and diversified the executive management team with the talents and experiences that support our growth, investments, risk profile, and culture

∎      Successfully exceeded our ten-year $180 billion Public Community Commitment in conjunction with the 2012 acquisition of ING Direct

∎      Expanded access to free digital tools that help customers save money, avoid unwanted merchant charges, improve their credit scores, and protect their personal information

(1)

Efficiency ratio is calculated based on totalnon-interest expense divided by total net revenue for the period and reflectsas-reported results in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The Committee believesefficiency ratio net of adjustments and adjusted earnings per share arenon-GAAP measures that the actions taken by the named executive officers throughout 2014 contributed greatly to the Company’s results and have positioned the Company well to deliver strong, sustainable financial performance over the long-term.

 Important AspectsCommittee reviews as part of Our Executive Compensation Programs

The Committee believes that our named executive officer compensation programs balance risk and financial results, reward named executive officers for their achievements, promote our overall compensation objectives and encourage appropriate, but not excessive, risk-taking. The following are some of the highlights of our compensation program:

Capital One’s executive compensation programs consist primarily of a variety of long-term, equity-based compensation vehicles. See “Compensation Components” on page 34 for more details on the specific components of the CEO and NEO compensation programs.
Since 1997, the CEO’s compensation program has consisted entirely of equity awards and other incentive awards with payouts deferred for three years in lieu of any salary, retirement plan contributions or other traditional forms of compensation.

We do not pay cash bonuses to the NEOs. Instead, we grant equity-based awards following the end of the year based on Company and individual performance during the year.
Beginning in January 2015, vesting for all equity awards granted to named executive officers will not automatically accelerate upon a change of control but instead will require a so-called “double trigger” for accelerated vesting. The vesting of such awards will accelerate only in the event of a qualifying termination of the named executive officer within the two years following a change of control. See “Potential Payments Upon Termination or Change of Control – Change of Control” on page 67 for more information.
We have eliminated excise tax gross-up provisions from our executive officer change of control agreements. All executive officer change of control agreements containing an excise tax gross-up that previously were entered into have expired as of the date of this proxy statement and have been replaced with new agreements that do not provide for an excise tax gross-up. See “Change of Control Agreements” on page 48 for more information.
We have designed our incentive compensation programs such that they continue to appropriately balance risk and do not jeopardize the safety and soundness of Capital One. See “Risk Assessment of Compensation Policies and Practices” in the “Corporate Governance at Capital One” section on page 9 for more information.

The awards granted to our named executive officers include the following provisions that are designed to further enhance alignment between pay and performance and balance risks:

Performance-

Based Vesting

Provisions

Since January 2012, we have included performance-based vesting provisions as part of each stock option, restricted stock and stock-settled RSU award to the named executive officers and each cash-settled RSU award to the CEO. These provisions will reduce the total value delivered to the executive at vesting if the Company does not meet certain performance thresholds during the three-year vesting period. The total value can be reduced to zero if the performance metric is not met for all three years in the performance period.

Performance

   Share Reduction   

Each performance share award to the named executive officers since January 2012 provides that the total value delivered at vesting will be reduced if for any year in the three-year performance period the Company does not achieve positive Adjusted ROA. The total value can be reduced to zero if the metric is not met for all three years in the performance period. These terms are in addition to the performance metric relative to a comparator group.

Clawback

Provisions

Each incentive award to the named executive officers since January 2013 is subject to clawback provisions that allow the Committee to seek recovery of all unvested portions of the awards in the event there has been misconduct resulting in a violation of law or Company policy and the named executive officer committed the misconduct or failed in his or her responsibility to manage or monitor the applicable conduct or risks.

Financial

Restatement

Clawback

Since January 2011, each performance share award to the named executive officers has included clawback provisions that allow the Company to recover shares under the award following a financial restatement.

See “Additional Performance Conditions and Recovery Provisions” on page 44 for more details.

Capital One does not distinguish the terms and conditions of compensation and awards between the NEOs and all other executive officers. All of the terms and features described above, including the clawback and performance-based vesting provisions, apply to awards granted to all executive officers and not just the named executive officers.

 Our Compensation Objectives

Capital One’s executive compensation program has four primary objectives.

Strongly link rewards with both business and individual performance while appropriately balancing risk

Capital One emphasizes pay-for-performance at all organizational levels. Typically, as an executive’s level of responsibility increases, so does the proportion of the executive’s pay that is subject to performance criteria. Therefore, the named executive officers have the highest relative portion of their pay directly linked to Company and individual performance, as compared to other associates. Awards made in January 2015 for the 2014 performance year were based on Company and individual performance, as well as on the demonstration of specific leadership competencies assessed through a comprehensive performance management process that included an individualits assessment against one or more performance objectives specifically designed to evaluate the degree to which the executive balanced risks inherent in his or her role. The Chief Human Resources Officer and the Chief Risk Officer reviewed these assessments, with the Chief Auditor also reviewing the risk assessment for the Chief Risk Officer, and the Committee considered the assessments in making its determinations regarding individual performance and compensation levels.

Ensure that total compensation rewards performance over multiple time horizons

Our compensation programs are structured to encourage our executives to deliver strong results over the short-term while making decisions that create sustained value for our stockholders over the long-term. For 2014, approximately 78% of the CEO’s total compensation is equity-based and at-risk to the performance of the Company’s stock price, and 100% of his compensation is deferred for a three-year period. For the NEOs in 2014, approximately 80% of total target compensation was provided through equity-based vehicles which were all at-risk to the performance of the Company’s stock price and subject to vesting over multiple time horizons. The use of deferred, equity-based compensation vehicles with multi-year vesting terms advances our goal of aligning the ultimate value realized by the named executive officers with the performance of the Company’s stock over time because the value of these compensation vehicles increases and decreases based on the performance of the Company’s stock price.

Attract, retain and motivate top executive talent

To attract, retain and motivate exceptional leaders, we believe that compensation opportunities at Capital One must be competitive with the marketplace for talent. The Committee and the independent directors strive to preserve a competitive pay mix and total target compensation values in the executive compensation program, as well as provide competitive total rewards based on our selected peer group.

Align our executives’ interests with those of our stockholders

The Committee and the independent directors remain committed to designing incentive compensation programs that reward individual and corporate performance and that are aligned with the creation of stockholder value over the long-term. Because the majority of named executive officer compensation is delivered through deferred, equity-based vehicles that vest over multiple time horizons, the named executive officers have a significant stake in the success of the Company. In addition, we established specific stock ownership policies that the named executive officers must meet on an annual basis and stock retention provisions applicable to certain equity awards.

 Consideration of 2014 Say on Pay Vote and Stockholder Engagement

The Committee and the Board of Directors value the input of our stockholders and strive to foster a constructive dialogue with stockholders on matters of executive compensation and corporate governance. At our 2014 Annual Meeting of Stockholders, our stockholders supported our executive compensation program by approving our non-binding advisory vote on executive compensation (“2014 Say on Pay”) with a higher percentage of votes cast than at any prior meeting. Though the Committee recognized the 2014 Say on Pay vote reflected strong support for the Company’s executive compensation programs, the Committee remains committed to stockholder engagement. In 2014, we continued to strengthen our outreach to stockholders to ensure that we maintain strong lines of communication with our stockholders and that the perspectives of our stockholders are shared with the Committee and the Board of Directors. To that end, since the 2014 Annual Meeting of Stockholders, we continued direct engagement and discussions with stockholders representing approximately 50% of our

outstanding shares. The Committee continues to actively oversee our stockholder engagement with respect to executive compensation matters and has considered stockholder feedback in approving year-end incentive awards for 2014 and structuring and approving the 2015 compensation programs for the named executive officers.

 Compensation Components

CEO Compensation

In 2014, as in past years, the Committee granted equity awards to the CEO at the beginning of the year that are designed to provide an incentive to focus on longer term performance. The Committee also established the opportunity for the CEO to receive an additional year-end incentive award based on the Committee’s evaluation of the Company’s performance and the CEO’s contributions over the year. Allreflects adjustments to exclude $1.8 billion impacts of the CEO’s awards are subject to a three-year deferred vesting or payout.

The table below summarizes2017 Tax Act (as defined below), $184 million of restructuring charges, $130 million from builds in the elementsU.K. Payment Protection Insurance customer refund reserve, and $117 million of compensation that the Committee approved for the 2014 performance year for the CEO.

Compensation
Element

Timing of Award 

Determination 

Basis for Award

Approximate % of 

CEO Total Target 

Compensation 

                  Vesting Schedule                     

Base Salary

Not applicable

Not applicable

0%

Not applicable

Stock Options

January 2014

Incentive for Future

Company Performance

10%3-year cliff vesting; expires in 10 years
Performance SharesJanuary 2014

Incentive for Future

Company Performance

50%

Vest at the end of the 3-year performance period; the number of shares vesting depends on achievement of performance factors

Stock-Settled RSUs

January 2014

Incentive for Future Company Performance

10%

3-year cliff vesting; settles in Company stock

Year-End Incentive

Opportunity

January 2015Reward for 2014 Company Performance30%

Delivered as combination of cash-settled RSUs and deferred cash bonus; payout after 3 years

NEO Compensation

The NEOs traditionally receive a mix of cash and equity-based compensation. As noted above, we do not pay cash bonusescharges related to the NEOsCabela’s acquisition. See Exhibit 99.2 to the Form8-K filed with the SEC on January 23, 2018 for annual performance. Instead, following the endsupplemental financial data and corresponding reconciliation of this financial metric to U.S. GAAP. The Act to provide for reconciliation pursuant to titles II and V of the year the Committee may grant a variety of equity-based awards basedconcurrent resolution on the Committee’s evaluation of Company and individual performance during the past year. All of these equity-based awards are subject to deferred vesting over a three-year period.

The table below summarizes the elements of compensation that the Committee approvedbudget for the 2014 performancefiscal year for the NEOs.

Compensation

Element

Timing of Award
Determination

Basis for Award

Approximate % of
NEO Total Target
Compensation		                  Vesting Schedule                     

Base Salary -

Cash

January 2014

Overall experience, skills, performance, and knowledge

20%Paid in cash throughout the performance year

Base Salary -

RSUs

January 2014

Portion of base salary Delivered in RSUs

15%

Awarded as RSUs which settle in cash on February 15 following the performance year

Cash Bonus

Not applicable

Not applicable

0%Not applicable

Cash-Settled RSUs

January 2015

Reward for 2014

Company Performance

15%3-year ratable vesting

Stock Options

January 2015

Reward for 2014 Individual

Performance and
Incentive for Long-Term Performance

50%3-year ratable vesting; expires in 10 years

Performance Shares

Vest at the end of the 3-year performance period; the number of shares vesting depends on achivement of performance factors

Stock-Settled RSUs

3-year ratable vesting

Performance and Recovery Provisions

The table below summarizes the performance and recovery provisions applicable to the elements of compensation that the Committee approved for the 2014 performance year for the named executive officers. See “Additional Performance Conditions and Recovery Provisions”2018 (“2017 Tax Act”) was enacted on page 44 for more details.

            Compensation Element                   Performance and Recovery Provisions        

Cash-Settled RSUs

•  Clawback provisions

Stock Options

•  Performance-based vesting provisions

•  Clawback provisions

Performance Shares

•  Performance share reduction

•  Clawback provisions

•  Financial restatement clawbacks

Stock-Settled RSUs

•  Performance-based vesting provisions

•  Clawback provisions

CEO Year-End

Incentive Opportunity

•  Performance-based vesting provisions (RSUs)

•  Clawback provisions

December 22, 2017.

 

CAPITAL ONE FINANCIAL CORPORATION  

 Chief Executive Officer Compensation

Goals and Principles  2018 PROXY STATEMENT  

The Committee’s top priority

  53

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

(2)

ROTCE is to align the interests of the CEO with the interests of our stockholders by directly linking his awards with the Company’s performance and his contributions to that performance over appropriate

time horizons. The Committee believes that the CEO’s compensation should be at-risk based on his and the Company’s performance. Each year the Committee approves the form, timing and amount of CEO compensation and makes recommendations to the independent directors for final approval. The Committee takes into account the CEO’s historical performance and how to most effectively align the CEO’s interests with the interests of our stockholders over the appropriate time horizons, support safety and soundness and appropriately balance risk. The Committee and the independent directors have the flexibility to adjust compensation decisions from year to year to take into account the Company’s performance and evolving market practices.

2014 CEO Compensation Decisions

In January 2014, the Committee and the independent directors reviewed the compensation structure utilized since 2009 for Mr. Fairbank and determined that for 2014 the compensation program would continue to consist of equity awards granted at the beginning of the year plus an opportunity for an additional year-end incentive awardanon-GAAP financial measure calculated based on the Company’s actual performance for 2014. In this manner, the CEO’s compensation continuessum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to be completely at-risk based on the Company’sparticipating securities; and Mr. Fairbank’s performance. The Committee and independent directors determined that the compensation program structured in this manner remained appropriate for Mr. Fairbank in 2014 given that the compensation program aligns Mr. Fairbank’s compensation with the Company’s performance over the appropriate time horizons and supports the Company’s executive compensation goals and principles. The Committee and the independent directors determined, however, to change the mix of the vehicles(iii) less preferred stock dividends, for the 2014 CEO compensation program, reducingperiod, divided by average tangible common equity. See “MD&A—TableF-Reconciliation ofNon-GAAP Measures and Calculation of Regulatory Capital Measures” on our Annual Report on Form10-K for the proportion of total target compensation represented by stock options, increasing the year-end incentive opportunity to 30% of the CEO’s total target compensation program and introducing a stock-settled RSU award. In addition, the Committee and the independent directors determined to reduce the maximum value of Mr. Fairbank’s year-end incentive opportunity to one and a half times the target value from two times the target value for prior year-end incentive opportunities. The Committee and the independent directors made these decisions after taking into account the perspectives of stockholders, proxy advisory firms, the Federal Reserve and other federal banking regulators. After considering various factors as described below, without giving particular weight to any specific factor, the Committee and the independent directors determined that a total target compensation amount of $17.5 million was appropriate for Mr. Fairbank’s 2014 compensation program.

When determining the structure and total target compensation amount for Mr. Fairbank’s 2014 compensation program, as well as the value for each component of the award, the Committee considered Mr. Fairbank’s and the Company’s performance during 2013 relative to the financial, operating, safety and soundness and strategic performance factors described below under “Year-End Incentive Opportunity.” In addition, the Committee and the independent directors considered the Company’s performance in 2013 relative to the peer comparator companies’ performance in 2013, the structure and amount of compensation awarded to the chief executive officers of the peer comparator companies and the structure and amount of Mr. Fairbank’s compensation awards in prior years. The Committee and the independent directors also considered the Company’s risk profile and the time horizon over which the deferred, equity-based vehicles will vest, as well as the fact that the ultimate value of Mr. Fairbank’s deferred, equity-based awards will depend on the Company and Mr. Fairbank’s performance over time.

Performance Share Award

In January 2014, based on the above determination by the Committee and the independent directors, Mr. Fairbank was granted an award of performance shares under which he may receive from 0% to 150% of a target number of 123,309 shares of the Company’s common stock based on the Company’s performance over the three-year period from January 1, 2014 throughfiscal year ended December 31, 2016. The Company’s performance will be assessed on the basis of Adjusted ROA relative to a comparator group consisting of companies in the KBW Bank Index, excluding custody banks (the “KBW Index”). The Committee believes that the KBW Index is an appropriate index against which to assess the Company’s performance because its members are principally lending businesses similar to the Company. Moreover, under the performance share reduction feature2017 for supplemental financial data and corresponding reconciliation of this award, the number of shares issued at settlement will be reduced if the Company’s Adjusted ROA for one or more fiscal years completed during the performance period is not positive, no matter how well it comparesfinancial metric to the peer group. If the Company’s Adjusted ROA is not positive for all three fiscal years in the performance period,U.S. GAAP.

The Committee also took into account peer comparator group CEO compensation levels and structure, including that Mr. Fairbank does not receive a cash salary and 100% of his compensation is deferred for at least 3 years; the tenures of each of the peer companies’ CEOs; the varying degrees of success those CEOs have had in leading their respective companies; and Mr. Fairbank’s strategic role as the founder of Capital One.

After considering all of the above factors, in February 2018 the Committee and the independent directors approvedyear-end incentive awards for Mr. Fairbank totaling $6,212,506. In determining the 2017year-end incentive awards, the Committee rewarded Mr. Fairbank’s leadership in delivering solid financial performance and driving strategies that advanced the Company’s ability to deliver enduring growth and value to stockholders over the long term. In addition, the Committee also recognized that the Company and management responded quickly and appropriately to market and regulatory challenges during 2017, and remain focused on continued enhancement of its risk management capabilities and on their effective, proactive, and sustainable operation. The Committee also considered the management challenge in balancing near-term financial results and the investments in growth and technology that will position the Company for long-term success. While growth and investments may dampen short-term returns to stockholders, the Committee and the independent directors believe that the Company continues to strike the right balance between investing for the future and delivering attractive returns over the short, medium and long term.

The Committee and the independent directors determined to award Mr. Fairbank’syear-end incentive award using two vehicles: (i) an award of 23,730 RSUs, which had a total grant date value of approximately $2,485,000, and (ii) a deferred cash bonus in the amount of approximately $3,727,500. Including theyear-end incentive opportunity, Mr. Fairbank’s total compensation for the 2017 performance year consisted of 78% equity-based awards and 22% deferred cash. The award of RSUs will vest in full on February 15, 2021, will settle in cash based on the Company’s average stock price over the 15 trading days preceding the vesting date, and is subject to performance-based vesting provisions. The cash bonus is mandatorily deferred for three years into the Company’s VoluntaryNon-Qualified Deferred Compensation Plan and will pay out in the first calendar quarter of 2021. Both the award of RSUs and the deferred cash bonus are subject to clawback provisions. The performance-based vesting provisions applicable to the RSUs and the clawback provisions applicable to both awards are described in more detail under “Additional Performance Conditions and Recovery Provisions” beginning on page 64.

CEO Compensation by Performance Year

Below is a table showing Mr. Fairbank’s compensation awards as they are attributable to the performance years indicated. For the years shown in the table, Mr. Fairbank’s total target compensation was $17.5 million. Mr. Fairbank’s total compensation for performance year 2017 was $16,712,565, which is substantially similar to his total compensation for performance years 2016 and 2015. See“Year-End Incentive Opportunity” beginning on page 52 for additional information regarding theyear-end incentive granted to Mr. Fairbank for performance year 2017.

Performance

Year

 

Cash

 Salary 

 

 

Year-End Incentive

 

 

Long-Term Incentives

 

 Total
  

Deferred Cash

Bonus

 

Cash-
Settled

RSUs

 

Stock-Settled

RSUs

 Performance
Shares		 Option Awards 
       

2017

 $— $3,727,500 $2,485,006 $— $8,750,041 $1,750,018 $16,712,565
              
��      

2016

 $— $2,677,500 $1,785,080 $1,750,026 $8,750,002 $1,750,003 $16,712,611
              
       

2015

 $— $2,677,500 $1,785,014 $1,750,016 $8,750,006 $1,750,000 $16,712,536
              

54  

Mr. Fairbank will forfeit the entire award of performance shares. Thus, although the award had a grant date value of $8,750,007, the number of shares that Mr. Fairbank ultimately receives, if any, will be solely dependent on the Company’s performance over the performance period. The performance share award also is subject to certain clawback provisions. See “Performance Share Reduction” and “Financial Restatement Clawbacks” on page 45 for more information.

After the end of the three-year performance period, the Committee will certify the Company’s performance and issue the corresponding number of shares of the Company’s common stock, if any, in accordance with the table below.CAPITAL ONE FINANCIAL CORPORATION  

 

 Relative Metric: Adjusted ROA
  

³ 75th

Percentile

50th

Percentile

< 20th

Percentile

Number of years with
positive Adjusted

ROA:

    Three    150%100%0%
Two125%83%0%
One100%67%0%
None0%0%0%

The table above shows potential payouts based on specific Company performance results. Payouts will range between the values shown above for performance that falls between the performance results shown in the table.

Stock Option Award

In January 2014, Mr. Fairbank also received a grant of 108,944 non-statutory stock options at an exercise price of $70.96 per share (which was the fair market value of the Company’s common stock on the date of grant). The benefits to Mr. Fairbank of the stock options are deferred, as the options cannot be exercised until February 15, 2017 and will expire ten years after the date of grant. The option grant had a fixed grant date value of $1,750,000; however, the ultimate value Mr. Fairbank realizes, if any, is solely dependent on the long-term appreciation in the Company’s stock price. Mr. Fairbank can only realize value from the stock options if and to the extent the Company’s stock price increases after the date of grant and the market value of the stock exceeds the exercise price at some point after the three-year vesting period when the options are exercised. The stock option award is also subject to performance-based vesting conditions and clawback provisions, each as described in more detail under “Additional Performance Conditions and Recovery Provisions” beginning on page 44.

Stock-Settled RSU Award

In January 2014, Mr. Fairbank also received a grant of 24,662 stock-settled RSUs. The stock-settled RSU grant had a fixed grant date value of $1,750,016. The stock-settled RSU award vests in full on February 15, 2017 and is subject to performance-based vesting conditions and clawback provisions, each as described in more detail under “Additional Performance Conditions and Recovery Provisions” beginning on page 44.

Year-End Incentive Opportunity

A portion of Mr. Fairbank’s 2014 compensation award consisted of an opportunity for a year-end incentive award based on the Company’s actual performance in 2014. The award had a target value of $5,250,000, but the ultimate value of the award was determined based on the Committee’s evaluation of the Company’s performance during 2014 and Mr. Fairbank’s contributions to that performance relative to the financial, operating, safety and soundness and strategic factors shown below (which were evaluated on a qualitative basis without any specific pre-established targets).  2018 PROXY STATEMENT

 

 Financial Performance

Operating Performance

Safety and Soundness

Strategic Performance

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

•  Operating earnings

•  Revenue generation

•  Capital adequacy

•  CEO leadership and performance

•  Earnings per share

•  Expense management

•  Risk management and

of executive team

•  Return on tangible capital

•  Operating effectiveness

compliance

•  Capital management

•  Customer satisfaction

•  Credit loss management

•  Progress toward achievement

•  Underwriting quality

of long-term strategy

•  Balance sheet management

•  Execution against corporate

imperatives

•  Recruitment and development of world class talent

•  Disciplined investment

The table above is presented to show how the Committee views compensation actions and to which year the compensation awards relate. This table differs substantially from the Summary Compensation Table beginning on page 73 required to be included in infrastructure

•  Corporate reputation and community engagement

•  Preservation of corporate culture and values

In January 2015, the Committee considered the Company’s performance on both a quantitative and qualitative basis, including the results described under “2014 Company Performance” on page 31. In particular, the Committee considered:

Capital One’s strong financial results in 2014, particularly the solid growth in earnings per share and the Company’s return on tangible common equity relative to the peer comparator group;

Management’s success in delivering $10.1 billion in pre-provision earnings, tightly managing costs while investing in growth and positioning the Company for future earnings growth potential;

The return to growth in Domestic Card and continued prudent growth in the Auto and Commercial Banking businesses, all while maintaining focus on resiliency and managing credit losses across the Company;

The Company’s return of substantial capital to stockholders in 2014, maintaining the common stock dividend from the end of 2013 and significantly increasing share repurchases coming out of the 2014 Comprehensive Capital Analysis and Review (CCAR) cycle;

Ending 2014 with a Common Equity Tier 1 Capital ratio of 12.46%, even with increased capital distribution and growth in Card and other loan portfolios;

The Company’s total shareholder return (“TSR”) of 9.5% in 2014, outperforming the KBW Bank Index;

The Company’s continued progress enhancing its compliance and risk management programs across the enterprise, reflecting investments in talent and infrastructure;

The significant progress on positioning Capital One as a digital leader, including recruiting great digital talent, building foundational infrastructure, simplifying our core systems and applications, introducing new products and features, enhancing design and data capabilities, and re-inventing processes, operations and governance designed to ensure the Company has the agility to get to market quickly and securely; and

The CEO’s leadership in building Capital One’s powerful national brand, with a strategic focus on products and services designed to build an enduring customer franchise.

The Committee considered these factors in light of the challenges still facing management to position Capital One to deliver superior and sustainable returns, including the Company’s ongoing work to meet rising regulatory expectations across the financial services industry. The Committee also considered the Company’s one-year TSR of 9.5% and noted that it ranked at the median for the peer comparator group in 2014. The Committee also considered the Company’s three- and five-year TSR of 102.0% and 124.9%, respectively.

The Committee also took into account peer comparator group CEO compensation levels, the different tenures of each of the peer companies’ CEOs as compared to Mr. Fairbank’s tenure as the CEO of Capital One, and the varying degrees of success those CEOs have had in leading their respective companies.

After considering all of the above factors together, in January 2015 the Committee and the independent directors approved awards for Mr. Fairbank totaling $7,350,006. The Committee and the independent directors determined to award that amount using two vehicles: (i) an award of 39,221 restricted stock units (“RSUs”), which had a total grant date value of $2,940,006, and (ii) a deferred cash bonus in the amount of $4,410,000. The award of RSUs will vest in full on February 15, 2018, will settle in cash based on the Company’s average stock price over the fifteen trading days preceding the vesting date, and is subject to performance-based vesting provisions. The cash bonus is mandatorily deferred for three years into the Company’s Voluntary Non-Qualified Deferred Compensation Plan and will pay out in the first calendar quarter of 2018. Both the award of RSUs and the deferred cash bonus are subject to clawback provisions. The performance-based vesting provisions applicable to the RSUs and the clawback provisions applicable to both awards are described in more detail under “Additional Performance Conditions and Recovery Provisions” beginning on page 44.

CEO Compensation by Performance Year

Below is a table showing Mr. Fairbank’s compensation awards as they are attributable to the performance years indicated.

Performance

Year

Cash
Salary		Deferred Cash
Bonus		Cash-Settled
RSUs		Stock-Settled
Awards		Option AwardsTotal

2014

$0$4,410,000$2,940,006$10,500,022$1,750,000$19,600,028

2013

$0$2,843,750$2,843,793$8,750,044$4,375,012$18,812,599

2012

$0$2,187,500$2,187,525$8,750,008$4,375,009$17,500,042

The table above is presented to show how the Committee views compensation actions and to which year the compensation awards relate. This table differs substantially from the Summary Compensation Table on page 53 required for purposes of this proxy statement and is therefore not a substitute for the information required in that table. There are two principal differences between the Summary Compensation Table and the table above:

 

∎

The table above reports equity-based awards as compensation for the performance year for which they were awarded, even if the award was granted in one year based on performance for the prior year. As a result, the cash-settled RSU award granted to the CEOMr. Fairbank in January 2015February 2018 for the 20142017 performance year, for example, is shown in the table above as 20142017 compensation. The Summary Compensation Table reports equity-based awards only in the year in which they were granted.

∎

The Summary Compensation Table reports the change in pension value andnon-qualified deferred compensation earnings and all other compensation. These amounts generally are not a result of current year compensation determinations and are not shown above.

Additional Pay Elements

As part of the CEO compensation program, the Committee and the independent directors also approved certain other programs intended to support Mr. Fairbank’s productivity and well-being. These include:

 

∎

Executive term life insurance with a benefit level of $5 million;

million

∎

The ability to participate in a comprehensive voluntary annual health screening;

Office supplies and other maintenancescreening

∎

Maintenance for Mr. Fairbank’s home office;

The use of a driver whooffice

∎

Personal security detail that also provides transportation service for Mr. Fairbank’s personal security; and

Fairbank

∎

The monitoring and maintenance of an electronic home security system.system

Additional details on these programs can be found in the “Named Executive Officer Compensation” section beginning on page 52.

2015 CEO Compensation Decisions

In January 2015, the Committee and the independent directors reviewed the compensation structure utilized in 2014 for Mr. Fairbank and determined that the structure for the 2015 CEO compensation program would be the same, consisting

Additional details on these programs can be found in the “Named Executive Officer Compensation” section beginning on page 73.

2018 CEO Compensation Program

Each year, the Committee and the independent directors review the CEO compensation program in light of Company performance data, peer comparator group performance data, historical pay information, data on specific market practices and trends, stockholder feedback, and other relevant points of information. The Committee and the independent directors continue to believe that the CEO compensation program aligns Mr. Fairbank’s compensation with the Company’s performance over the appropriate time horizons and supports the Company’s executive compensation goals and principles. In February 2018, the Committee and the independent directors reviewed the compensation structure utilized in 2017 for Mr. Fairbank and determined that, for 2018, the CEO compensation program would continue to consist of equity awards granted at the beginning of the year plus an opportunity for an additionalyear-end incentive award based on CEO and Company performance for 2018. In this manner, the CEO’s compensation will continue to be completelyat-risk based on the Company’s and Mr. Fairbank’s performance, and all CEO compensation continues to be subject to a three-year deferred vesting or payout. The Committee and the independent directors also determined that for Mr. Fairbank’s 2018 compensation program, a total target compensation amount of $17.5 million, the same total target compensation for 2017, was appropriate.

In connection with the review of the CEO compensation program and in response to feedback received from stockholders, the Committee and the independent directors modified the structure of the CEO compensation program to increase the percentage of the CEO’s total target compensation granted as performance shares from 50% to 60%, increasing the alignment of CEO compensation and Company performance by directly linking a greater portion of the CEO’s compensation to the Company’s performance over a three-year period of time. In connection with this change, the Committee and the independent directors eliminated the 10% of the CEO’s total target compensation that was previously granted as stock options at the beginning of the performance year.

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The chart below shows the elements of the CEO’s 2018 compensation as an approximate percentage of his total target compensation. For 2018, total target compensation comprised long-term incentives (60%) and ayear-end incentive opportunity (40%).

2018 CEO Target Compensation

LOGO

In addition, based on market practices and peer comparator information, and in response to stockholder feedback, the Committee and the independent directors changed the performance metrics underlying the performance share element of the compensation program for the CEO and other named executive officers. See “Performance Share Award Metrics” below for information regarding the new metrics. The terms of all other compensation granted to Mr. Fairbank in February 2018 are substantially similar to the terms described earlier under “2017 CEO Compensation Program,” including the application of performance-based vesting and clawback provisions.

Performance Share Award Metrics

The Committee and the independent directors believe that named executive officer compensation should be linked to the performance of the Company and balanced to promote financial returns and value creation. Each year, the Committee and the independent directors evaluate the structure and amount of the equity awards provided to our named executive officers, including the Company performance metrics applicable to such awards. In connection with the annual review of the equity awards and in response to stockholder feedback, the Committee and the independent directors determined that performance share awards granted beginning in 2018 will be based on the following two metrics:

Common Dividends +

Growth of Tangible Book

Value per Share

(“Growth of Shareholder

Value”)

∎      Growth of Shareholder Value rewards strong operational results, balanced stewardship of capital, and long-term stockholder value creation by measuring the value distributed to stockholders (common dividends per share) and the growth of company value created for common stockholders (tangible book value per share).

∎      Growth of Shareholder Value is calculated as the three-year average of the ratios, expressed as a percentage, of (a) the Company’s tangible book value per share at the end of each year within the performance period, plus total common dividends per share paid during such year, to (b) the Company’s tangible book value per share at the beginning of each corresponding year within the year plus an opportunity for an additional year-end incentive award basedperformance period.

Adjusted Return on

Tangible Common Equity

(“Adjusted ROTCE”)

∎      Adjusted ROTCE rewards balanced capital management and stewardship while capturing current and historical business performance and profitability as compared to the size of our stockholders’ investment in the Company. ROTCE is broadly used in banking as a key performance indicator and component in peer executive compensation programs.

∎      Adjusted ROTCE is calculated as the ratio, expressed as a percentage, of (a) the Company’s actual performance for 2015. In this manner,net income available to common stockholders, excluding, on a tax-adjusted basis, the CEO’s compensation will continueimpact of impairment, amortization andre-measurement of intangible assets, to be completely at-risk based on(b) the Company’s average tangible common equity.

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The Committee and the independent directors believe that these two performance metrics, in combination, provide a balanced and rigorous measurement of Company performance by balancing the creation of long-term stockholder value and the returns generated on stockholders’ investment in the Company. Beginning with performance year 2018, the performance share awards represent 60% of CEO total target compensation and an anticipated range of between 30% and 55% of total target compensation of the other NEOs.

To appropriately incentivize long-term value creation in line with the Company’s strategic goals,two-thirds of each performance share award will vest based on Growth of Shareholder Value, andone-third of each performance share award will vest based on Adjusted ROTCE. The Company’s performance on each metric will be assessed relative to the KBW Index over the three-year period. After the end of the three-year performance period, the Committee will certify the Company’s performance and issue the corresponding number of shares of the Company’s common stock, if any, in accordance with the relative performance hurdles illustrated in the graph on page 51 under “Performance Share Award.” The metrics will be calculated as indicated above, with the Committee excluding from such calculations the initial effects of changes in tax laws, accounting principles or regulations, or other laws or provisions affecting the reported results if the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the 2004 Stock Incentive Plan or necessary or appropriate to comply with applicable laws, rules or regulations.

All performance share awards will continue to be subject to a performance share reduction. For performance shares granted beginning 2018, the performance share reduction will be based on the Company’s Adjusted ROTCE, replacing Adjusted ROA, on an absolute basis. Specifically, the number of shares issued at settlement will be reduced if the Company’s Adjusted ROTCE for one or more fiscal years completed during the performance period is not positive, no matter how well the Company performs compared to the peer group. In each year that the Company does not achieve positive Adjusted ROTCE, the executive will forfeit 50% of that years’ worth of performance shares. If the Company’s Adjusted ROTCE is not positive in each of the three fiscal years in the performance period, the executive will forfeit the entire award of performance shares. See “Performance Share Reduction” on page 65 and “Financial Restatement Clawbacks” on page 66 for more information. The table below shows potential performance share reduction amounts based on the Company’s Adjusted ROTCE performance.

Number of Years During

Performance Period Adjusted

ROTCE is Not Positive

Reduction in Number of Units Vesting
and Mr. Fairbank’s performance. The Committee and the independent directors continue to believe that the compensation program aligns Mr. Fairbank’s compensation with the Company’s performance over the appropriate time horizons and supports the Company’s executive compensation goals and principles. The Committee and the independent directors determined that for Mr. Fairbank’s 2015 compensation program a total target compensation amount of $17.5 million, the same total target compensation for 2014, was appropriate.Shares Awarded

Based on this framework, in January 2015 the Committee and the independent directors granted to Mr. Fairbank a performance shareZero

No reduction

One

One-sixth reduction

Two

One-third reduction

Three

Entire award under which he may receive from 0% to 150% of a target number of 116,729 shares of the Company’s common stock based on the Company’s performance over the three-year period from January 1, 2015, through December 31, 2017. Mr. Fairbank also received a grant of 115,812 non-statutory stock options at an exercise price of $74.96 per share (which was the fair market value of the Company’s common stock on the grant date) and a grant of 23,346 stock-settled RSUs. The Committee also determined that Mr. Fairbank will have an opportunity to receive an award in late 2015 or early 2016. Any such award will consist of deferred cash, an equity-based award or both and will pay out or vest after a three-year deferral period. The Committee and the independent directors will have absolute discretion to determine whether to make the award, the form of the award and the value of the award relative to the target amount of $5,250,000, and will base these determinations on the Committee’s evaluation of the Company’s performance in 2015 relative to the same financial, operating, safety and soundness and strategic factors described earlier under “2014 CEO Compensation Decisions – Year-End Incentive Opportunity.” The maximum value of the award, if granted, will not exceed one and a halfforfeited

2018 CEO Compensation Decisions

Based on the revised CEO compensation program, in February 2018 the Committee and the independent directors granted to Mr. Fairbank a performance share award under which he may receive from 0% to 150% of a target number of 100,268 shares of the Company’s common stock based on the Company’s performance over the three-year period from January 1, 2018 through December 31, 2020.

The Committee also determined that Mr. Fairbank will have an opportunity to receive an incentive award in late 2018 or early 2019. Any such award will consist of deferred cash, an equity-based award or both and will pay out or vest after a three-year deferral period. The Committee and the independent directors will have absolute discretion to determine whether to make the award, the form of the award and the value of the award relative to the target amount of $7 million, and will base these determinations on the Committee’s evaluation of the Company’s performance in 2018 relative to the same factors described earlier under“Year-End Incentive Opportunity” related to financial and operating performance, governance and risk management, strategic performance and winning with our customers and associates. The maximum value of the award, if granted, will not exceed one-and-a-half times the target value. The Company expects that any such award will be subject to performance-based vesting and clawback provisions similar to provisions applicable to the 2014 year-end incentive opportunity.

The terms of the performance share, stock option and stock-settled RSU awards granted to Mr. Fairbank in January 2015 are substantially similar to the terms described earlier under “2014 CEO Compensation Decisions,” including the application of performance-based vesting and clawback provisions. See “Additional Performance Conditions and Recovery Provisions” on page 44 for more details.

 

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

performance-based vesting and clawback provisions similar to the provisions applicable to the 2017year-end incentive opportunity.

 NEO Compensation

Goals and Principles

As with the CEO, the Committee seeks to align the interests of the other named executive officers with the interests of our stockholders by linking compensation to Company performance and the NEOs’ contribution to that performance over the appropriate time horizons, while supporting safety and soundness and appropriately balancing risk. Each year the Committee approves the form, timing and amount of NEO compensation and makes recommendations to the independent directors for final approval. The Committee takes into account each NEO’s historical performance, individual roles and responsibilities and contributions expected from each NEO in the future as well as the recommendations of the CEO, including his assessment of each NEO’s performance. In determining 2017 NEO compensation, the Committee also considered the specific factors discussed below under “Equity Incentive Awards” beginning on page 60.

In this section, “NEO Compensation,” the term “NEO” refers to the named executive officers other than the CEO.

2017 NEO Compensation Components

For the 2017 performance year, the NEOs received a mix of approximately 20% cash and 80% equity-based compensation, consisting of: cash salary, RSU salary, and cash-settled RSUs, determined at the beginning of the performance year; and long-term incentive awards, determined following the end of the performance year based on the Committee’s evaluation of Company and individual performance during the past year. The long-term incentive awards granted for the 2017 performance year are equity-based and consisted of performance shares (25% of target compensation) and stock-settled RSUs (25% of target compensation). All of these equity-based awards vest over a three-year period. Due to his transition to anon-executive role in July 2017, Mr. Crawford became ineligible to receive performance share awards, stock-settled RSUs, and certain cash-settled RSUs for the second half of the 2017 performance year, but continued to receive a cash base salary and an RSU salary.

The chart below shows the 2017 elements of NEO compensation as an approximate percentage of NEO total target compensation:

2017 NEO Target Compensation

LOGO

See “Additional Performance Conditions and Recovery Provisions” beginning on page 64 for more details regarding the performance and recovery provisions applicable to each element of compensation that the Committee approved for the 2016 performance year for the named executive officers.

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

2017 NEO Compensation Program

The Committee annually reviews and approves the compensation structure for all of our executive officers, including those who are ultimately reported as NEOs, and makes recommendations to the independent directors for final approval. In February 2017, the Committee and the independent directors approved the 2017 compensation program, which is designed to be consistent with the Company’spay-for-performance philosophy and is generally consistent with the 2016 compensation program. The Committee believes that this pay mix balances stockholder interests while effectively rewarding and motivating key talent; however, based on market practices and trends, a review of peer comparator information, and in response to stockholder feedback, the Committee determined to further refine the NEO compensation program in 2018, as described below under “2018 NEO Compensation Program.”

The table below summarizes the NEO compensation program that the Committee and the independent directors approved for the 2017 performance year.

Compensation

Element(1)

Timing of

Award

Determination

Basis for Award

Vesting

Schedule

Performance and

Recovery Provisions

Base Salary - Cash

February 2017

Overall experience,

skills, performance,

and knowledge

Paid in cash

throughout the

performance year

Not applicable

Base Salary - RSUs

February 2017

Portion of base salary

delivered in RSUs

Awarded as RSUs

which settle in cash on

February 15 following

the performance year

Not applicable

Cash-Settled RSUs

February 2018

Reward for 2017

Company

performance

3-year ratable vesting

Misconduct

clawback

Performance Shares

February 2018

Reward for 2017

individual

performance and

incentive for long-

term performance

Vest at the end of the NEOs with

3-year performance

period; the interestsnumber of our stockholders by directly linking compensation to

shares vesting

depends on

achievement of

performance over the appropriate time horizons while supporting safety and soundness and appropriately balancing risk. The Committee annually reviews and approves the compensation structure for all of our executive officers, including those who are ultimately reported as NEOs, and makes recommendations to the independent directors for final approval. The Committee takes into account each NEO’s historical performance, individual roles and responsibilities and contributions expected from each NEO in the future as well as the recommendations of the CEO, including his assessment of each NEO’s performance. In determining 2014 NEO compensation, the Committee also considered the specific factors discussed below. Final decisions regarding NEO compensation are made by the independent directors.

2014 NEO Compensation Decisions

The 2014 NEO compensation program approved by the Committee and the independent directors was designed to be consistent with the Company’s pay-for-performance philosophy and is generally consistent with the 2013

∎   Performance share
 reduction

compensation program. Base salary remains a smaller portion of total target compensation than equity based vehicles, and cash bonuses are not included in the 2014 NEO compensation program. The Committee believes that this pay mix serves to balance stockholder interests while effectively rewarding and motivating key talent.

Based on the above framework, the Committee and the independent directors then determined the 2014∎   Misconduct
clawback

∎   Financial
restatement
 clawbacks

Stock-Settled RSUs

3-year ratable vesting

∎   Performance-based
 vesting provisions

∎   Misconduct
clawback

Based on the above framework, the Committee and the independent directors determined the 2017 total target compensation for each NEO by considering the following factors:

 

∎

Each NEO’s performance relative to the Company’s strategic objectives;

objectives

∎

Capital One’s historical performance;

performance

∎

The role and qualifications of each NEO (for example, the NEO’s scope of responsibility, experience and tenure and the demonstration of competencies consistent with the Company’s values and the ability to deliver strong, sustainable business results);

∎

Appropriate internal pay differentials and the desire to foster teamwork and collaboration;

collaboration

∎

Historical pay levels;

levels

∎

Available role-specific market compensation data from peer comparator companies;

companies

∎

Available information on the structure of compensation packages for senior executives at peer comparator companies;companies

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

∎

Market trends in executive compensation (for example, current rates of pay and the prevalence and types of incentive vehicles); and

∎

The overall structure of the compensation program.

Base Salariesprogram

For the 2014 performance year, the Committee chose to defer a significant portion of each NEO’s base salary until the end of the year. Rather than award each NEO a base salary entirely in cash, the 2014 base salary for NEOs was delivered in a mix of cash (approximately 20% of total target compensation) and RSUs that settled in cash on February 15, 2015 (approximately 15% of total target compensation). In this way, the 2014

Base Salaries

For the 2017 performance year, the Committee chose to defer a significant portion of each NEO’s base salary until the end of the year. Rather than award each NEO a base salary entirely in cash, the 2017 base salary for NEOs was delivered in a mix of cash (approximately 20% of total target compensation) and RSUs that settled in cash on February 15, 2018 (approximately 15% of total target compensation). In this way, the 2017 compensation program further deferred cash compensation for each NEO and placed it at risk to the performance of the Company’s stock price for the entire performance year.

In January 2014, the Committee and the independent directors approved 2014 base salaries for the NEOs, including the portion of base salary delivered as RSUs, ranging from $1,588,056 to $2,655,071. Individual details for each NEO are provided in the table below showing compensation by performance year.

Year-End Incentive Awards

In addition to base salary, in January 2015 the Committee determined to award each NEO various equity-based incentive awards as a reward for Company and individual performance in 2014.

Cash-Settled RSU Awards

In January 2015, the Committee and the independent directors approved awards of cash-settled RSUs for the NEOs ranging from $942,247 to $1,575,060, representing a payout at 140% of the target award values established by the Committee in January 2014. Individual details for each NEO are provided in the table below showing compensation by performance year. The Committee and the independent directors determined that these awards were appropriate in light of the Company’s performance as described under “Year-End Incentive Opportunity” on page 38 in connection with the determinations by the Committee and the independent directors relating to the CEO’s year-end incentive awards.

Equity Incentive Awards

In January 2015, the Committee and the independent directors awarded various equity incentive awards to the NEOs for the 2014 performance year.

In February 2017, the Committee and the independent directors approved 2017 base salaries for the NEOs, ranging from $1,586,784 to $2,835,007, which consisted of a cash portion ranging from $900,000 to $1,600,000 and a cash-settled RSU portion ranging from $686,784 to $1,235,007. Individual details for each NEO are provided in the table below showing compensation by performance year.

Year-End Incentive Awards

A portion of the NEO’s 2017 compensation consisted of an opportunity for ayear-end incentive award based on individual NEO and Company performance in 2017. This award, if granted, may consist of stock options, performance shares, and/or RSUs. In February 2018 the Committee and the independent directors determined to award each NEO various equity-based incentive awards as recognition of Company and individual performance in 2017.

Cash-Settled RSU Awards

In February 2018, the Committee and the independent directors approved awards of cash-settled RSUs for the NEOs ranging from $612,507 to $788,018, representing a payout at 100% of the target award values established by the Committee in February 2017 based on actual Company performance in 2017. Individual details for each NEO are provided in the table below showing compensation by performance year. The assessment of Company performance for the NEOs is consistent with the assessment performed in connection with the CEOyear-end incentive award. The Committee and the independent directors determined that these awards were appropriate in light of the Company’s performance as described under“Year-End Incentive Opportunity” beginning on page 52 in connection with the determinations by the Committee and the independent directors relating to the CEO’syear-end incentive awards.

Equity Incentive Awards

In February 2018, the Committee and the independent directors granted equity incentive awards, consisting of stock-settled RSUs and performance share awards, to the NEOs for the 2017 performance year as recognition for individual NEO performance in 2017 and to drive further performance over the long term. At Capital One, equity incentive awards are linked to performance in two ways:

 

∎

The size of the award is based on each NEO’s individual performance assessment for the year just completed; and

completed

∎

The ultimate value of the award is dependent on Capital One’s performance over time.time

Equity incentive awards are designed to emphasize elements that are of particular importance to Capital One given the Company’s unique goals and continually evolving business strategies and objectives. In determining the actual amounts to be awarded to each NEO, the Committee considered each NEO’s contribution to the Company’s performance for 2014

Equity incentive awards are designed to emphasize elements that are of particular importance to Capital One given the Company’s unique goals and continually evolving business strategies and objectives. In determining the actual amounts to be awarded to each NEO, the Committee considered each NEO’s contribution to the Company’s performance for 2017, as well as the individual performance of each NEO. The Committee also received input from the CEO on his assessment of each NEO’s individual performance and his recommendations for compensation of the NEOs. The CEO also assessed each NEO’s performance against one or more specific objectives designed to evaluate the degree to which the NEO balanced risks inherent in the NEO’s role. These assessments included the use of both quantitative and qualitative risk measures and were reviewed by the Chief Human Resources Officer and the Chief Risk Officer before being presented to the Committee and the independent directors for their consideration.

The equity incentive awards consisted of stock-settled RSUs, performance share awards and stock options. The terms of the performance share awards are substantially similar to the terms of the performance share awards granted to our CEO, as described earlier under “2015 CEO Compensation Decisions.” The NEO stock options and stock-settled RSUs vest ratably in one-third increments starting on the first anniversary of the grant date and are subject to performance-based vesting and clawback provisions as discussed below under “Additional Performance Conditions and Recovery Provisions” on page 44. The stock options have an exercise price of $74.96 per share, which was the fair market value of the Company’s common stock on the date of grant.

Mr. Crawford, the Company’s Chief Financial Officer, was awarded 60,664 non-statutory stock options, 27,515 stock-settled RSUs and a target amount of 16,509 performance shares with a total grant date value for all three awards of $4,216,715. The Committee and the independent directors determined to grant these awards based upon Mr. Crawford’s leadership in managing the Company’s balance sheet in 2014, particularly the Company’s capital generation and distribution. The Committee and the independent directors also considered Mr. Crawford’s continued leadership in driving well-managed processes within the Company’s finance operations and across the enterprise and his positioning of Capital One for Basel-related and other regulatory initiatives, as well as his contributions providing strategic market advice and enhancing transparency and communication to investors.

Mr. Schneider, President, Card, was awarded 46,374 non-statutory stock options, 21,034 stock-settled RSUs and a target amount of 12,620 performance shares with a total grant date value for all three awards of $3,223,447. The Committee and the independent directors determined to grant these awards based upon the strong performance of the Credit Card business in 2014, particularly the year-over-year growth driving increased net income for Domestic Card with strong return on assets while maintaining focus on resiliency, as well as his leadership positioning the Domestic Card business for future strong performance and managing the partnership business. The Committee and the independent directors also considered Mr. Schneider’s leadership implementing the Company’s digital agenda while continuing to enhance the compliance and risk management programs within the business.

Mr. Finneran, General Counsel and Corporate Secretary, was awarded 31,660 non-statutory stock options, 15,956 stock-settled RSUs and a target amount of 9,574 performance shares with a total grant date value for all three awards of $2,392,134. The Committee and the independent directors determined to grant these awards based upon Mr. Finneran’s management of the Company’s engagement with a broad range of regulators and other stakeholders in an environment of heightened regulatory scrutiny and examination. In addition, the Committee and the independent directors considered his leadership enhancing the Corporation’s governance framework in 2014, his success in managing the Company’s litigation portfolio and his implementation of well-managed processes across his organization.

Mr. Yajnik, the Company’s President, Financial Services, was awarded 29,688 non-statutory stock options, 14,962 stock-settled RSUs and a target amount of 8,977 performance shares with a total grant date value for all three awards of $2,243,074. The Committee and the independent directors determined to grant these awards based upon the strong performance of the Auto business in 2014, including growth in originations, as well as his leadership managing credit risk in Auto and Home Loans. The Committee and the independent directors also considered Mr. Yajnik’s success implementing a comprehensive process improvement program and enhanced technological solutions across both businesses.

NEO Compensation by Performance Year

The table below shows actual NEO compensation as it is attributable to the performance year indicated.

 

Name Performance
Year		 Cash Salary Cash
Bonus		 Cash-Settled
RSUs (1)		 Stock-Settled
Awards (2)		  Option
Awards		  Total

Stephen S. Crawford

 2014 $1,530,000 $0 $2,700,130 $3,300,039  $916,676  $8,446,845
 2013 $1,326,923 $0 $2,550,531 $2,720,606  $755,714  $7,353,774
       
  2014 $1,119,000 $0 $1,975,275 $2,522,704  $700,744  $6,317,723

Ryan M. Schneider

 2013 $1,097,000 $0 $2,057,566 $2,193,657  $609,345  $5,957,568
  2012 $1,065,000 $0 $1,677,443 $1,704,018  $473,342  $4,919,803
       
  2014 $977,000 $0 $1,723,258 $1,913,729  $478,405  $5,092,392

John G. Finneran, Jr.

 2013 $957,000 $0 $1,795,055 $1,913,649  $478,413  $5,144,117
  2012 $929,000 $0 $1,463,232 $1,858,053  $464,511  $4,714,796
       

Sanjiv Yajnik

 2014 $915,000 $0 $1,615,303 $1,794,467  $448,606  $4,773,376
60  

 

(1)For 2014, includes cash-settled restricted stock units (restricted stock unit portion of base salary granted in January 2014 and restricted stock units granted in January 2015).

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

 

(2)For 2014, includes stock-settled restricted stock units and performance share award

the NEO’s role. These assessments included the use of both quantitative and qualitative risk measures and were compiled by the Chief Risk Officer and reviewed by the Chief Human Resources Officer, and separately the Chief Auditor compiled and reviewed the assessment for the Chief Risk Officer, before being presented to the Committee and the independent directors for their consideration.

As noted above, the equity incentive awards consisted of stock-settled RSUs and performance share awards. The terms of the performance share awards are substantially similar to the terms of the performance share awards granted to our CEO in 2018, as described earlier under “Performance Share Award Metrics” beginning on page 56. The NEO stock-settled RSUs vest ratably inone-third increments starting on the first anniversary of the grant date and are subject to performance-based vesting and clawback provisions as discussed below under “Additional Performance Conditions and Recovery Provisions” beginning on page 64.

Mr. Blackley, the Company’s Chief Financial Officer, was awarded 11,167 stock-settled RSUs and a target amount of 11,167 performance shares with a total grant date value for both awards of $2,338,816. The Committee and the independent directors determined to grant these awards based upon Mr. Blackley’s leadership of the Company’s financial reporting, disclosure and related controls and his successful assumption of an expanded role leading the Company’s Global Finance organization and Corporate Development. The Committee and the directors also considered Mr. Blackley’s collaborative partnership, breadth of knowledge, and exceptional results in improving the Company’s financial discipline.

Mr. LaPrade, the Company’s Chief Enterprise Services Officer and Chief of Staff to the CEO, was awarded 12,071 stock-settled RSUs and a target amount of 12,071 performance shares with a total grant date value for both awards of $2,528,150. The Committee and the independent directors determined to grant these awards based upon the continued strong performance of the Company’s information technology, brand marketing, and digital banking functions in 2017, as well as Mr. LaPrade’s multi-dimensional perspective, motivational leadership, and excellence in strategic problem solving.

Mr. Finneran, the Company’s Chief Risk Officer and Corporate Secretary (General Counsel and Corporate Secretary during 2017), was awarded 12,534 stock-settled RSUs and a target amount of 12,534 performance shares with a total grant date value for both of $2,625,120. The Committee and the independent directors determined to grant these awards based upon Mr. Finneran’s valuable guidance and oversight on legal, risk, and regulatory issues, as well as Mr. Finneran’s sound judgment, strategic leadership, and thoughtful, rigorous, and balanced management of risk.

Mr. Yajnik, the Company’s President, Financial Services, was awarded 13,047 stock-settled RSUs and a target amount of 13,047 performance shares with a total grant date value for both awards of $2,732,564. The Committee and the independent directors determined to grant these awards based upon the strong performance of the Auto business in 2017, including disciplined loan and volume growth, as well as Mr. Yajnik’s continued leadership in driving technological innovation and transformational change in financial services.

Mr. Crawford, the Company’s Head of Finance and Corporate Development until June 30, 2017 and Senior Advisor (anon-executive advisory role) thereafter, was awarded 9,739 stock-settled RSUs and a target amount of 9,739 performance shares with a total grant date value for both awards of $2,039,736. The Committee and the independent directors determined to grant these awards based upon Mr. Crawford’s effective leadership as Head of Finance and Corporate Development through the first half of 2017. The Committee and the independent directors also recognized Mr. Crawford’s thoughtful and integrative advice to senior management to advance the Company’s financial and strategic agenda.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  61

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

NEO Compensation by Performance Year

The table below shows actual NEO compensation as it is attributable to the performance year indicated.

                                                                                                                                                                                                                                
      

Base Salary

 

 

 

Year-End
Incentive

 

Long-Term Incentives

 

Name 

Performance 

Year

 Cash
Salary		 

RSU

Salary(1)

 

 

Cash-
Settled

RSUs

 

Stock-
Settled

RSUs

 

Performance 

Shares

 

Option

Awards

       Total      
        

R. Scott Blackley

 2017

 

 $900,000

 

 $686,784

 

 $637,850

 

 $1,169,408

 

 $1,169,408

 

 $—

 

 $4,563,450

 

        
  2016

 

 $630,000

 

 $410,039

 

 $574,075

 

 $1,462,513

 

 $487,562

 

 $—

 

 $3,564,189

 

                
        

Frank G. LaPrade, III

 2017

 

 $1,013,000

 

 $760,051

 

 $760,058

 

 $1,264,075

 

 $1,264,075

 

 $—

 

 $5,061,259

 

        
  2016

 

 $983,000

 

 $737,037

 

 $737,085

 

 $1,350,876

 

 $810,560

 

 $600,370

 

 $5,218,928

 

                
        

John G. Finneran, Jr.

 2017

 

 $1,051,000

 

 $788,025

 

 $788,018

 

 $1,312,560

 

 $1,312,560

 

 $—

 

 $5,252,163

 

        
  2016

 

 $1,020,000

 

 $765,015

 

 $765,059

 

 $1,274,551

 

 $764,713

 

 $509,804

 

 $5,099,142

 

        
  2015

 

 $990,000

 

 $743,004

 

 $743,028

 

 $1,237,063

 

 $742,263

 

 $494,803

 

 $4,950,161

 

                
        

Sanjiv Yajnik

 2017

 

 $995,000

 

 $746,064

 

 $746,025

 

 $1,366,282

 

 $1,366,282

 

 $—

 

 $5,219,653

 

        
  2016

 

 $966,000

 

 $724,037

 

 $724,047

 

 $1,206,083

 

 $723,616

 

 $482,401

 

 $4,826,184

 

        
  2015

 

 $937,000

 

 $703,050

 

 $703,006

 

 $1,171,039

 

 $702,623

 

 $468,416

 

 $4,685,134

 

                
        

Stephen S. Crawford

 2017

 

 $1,600,000

 

 $1,235,007

 

 $612,507

 

 $1,019,868

 

 $1,019,868

 

 $—

 

 $5,487,250

 

        
  2016

 

 $1,598,000

 

 $1,199,016

 

 $1,199,004

 

 $1,996,526

 

 $1,197,968

 

 $887,336

 

 $8,077,850

 

        
  2015

 

 $1,552,000

 

 $1,164,054

 

 $1,164,028

 

 $1,938,029

 

 $1,162,818

 

 $861,334

 

 $7,842,263

 

                

(1)

For 2017, includes cash-settled restricted stock units granted in February 2017.

This table is presented to show how the Committee views compensation actions and to which year the compensation awards relate, but it differs substantially from the Summary Compensation Table beginning on page 73 required to be included in January 2015.

This table is presented to show how the Committee views compensation actions and to which year the compensation awards relate, but it differs substantially from the Summary Compensation Table on page 53 required for purposes of this proxy statement and is therefore not a substitute for the information required in that table. There are two principal differences between the Summary Compensation Table and the above table:

 

∎

The table above reports equity-based awards as compensation for the performance year for which they were awarded, even if the award was granted in one year based on performance for the prior year. As a result, the cash-settled RSU, stock option, stock-settled RSU and performance share awards granted in January 2015February 2018 for the 20142017 performance year, for example, are shown in the above table as 20142017 compensation. The Summary Compensation Table reports equity-based awards only in the year in which they were granted.

∎

The Summary Compensation Table reports the change in pension value andnon-qualified deferred compensation earnings and all other compensation. These amounts generally are not a result of current year compensation determinations and are not shown above.

Additional Pay Elements

Additional Pay Elements

The Committee provides certain other programs intended to support the NEOs’ productivity, well-being and security. These programs provide some level of personal benefit and are not generally available to all associates. For 2017, these programs intended to support the NEOs’ productivity, well-being and security. These programs provide some level of personal benefit and are not generally available to all associates. For 2014, these included the following:

 

The ability to participate in a comprehensive voluntary annual health screening;
∎

Executive term life insurance with a benefit level of approximately $5 million;

million

∎

The ability to participate in a comprehensive voluntary annual health screening

∎

An automobile lease; and

lease or the use of transportation services

∎

The monitoring and maintenance of an electronic home security system.system

The Committee has determined that the nature and value of these programs are comparable to those offered to similarly situated executives at our peers. Additional details on these programs can be found in the “Named Executive Officer Compensation” section beginning on page 73.

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

2018 NEO Compensation Program

Each year, the Committee reviews the NEO compensation program in light of Company performance data, peer comparator group performance data, historical pay information, data on specific market practices and trends, stockholder feedback, and other relevant points of information. The program consists of multiple compensation vehicles that directly link the NEOs’ compensation with the Company’s performance over multiple time horizons, align the NEOs’ interests with the interests of the Company’s stockholders, support safety and soundness and encourage appropriate risk-taking. Based on market practices and trends, peer comparator group information and stockholder feedback, the Committee determined to eliminate three of the six compensation vehicles previously used by the Company to compensate NEOs: stock options, cash-settled RSU awards, and cash-settled RSU salary. This change simplifies the NEO compensation program and greater aligns the program vehicles and structure with the programs used by the Company’s peers. Beginning with the 2018 performance year, NEO total target compensation will be composed of 20% base salary, 25% annualyear-end incentive opportunity, and 55% long-term incentive opportunity, which will consist of performance shares and stock-settled RSUs as determined by the Committee. The terms of the performance share awards are substantially similar to the terms of the performance share awards granted to our CEO in 2018, as described earlier under “Performance Share Award Metrics” beginning on page 56.

The table below summarizes the NEO compensation program that the Committee and the independent directors approved for the 2018 performance year.

Compensation

Element

Timing of
Award

  Determination  

Basis for Award

Vesting

Schedule

Performance and

Recovery
Provisions

Base Salary

February 2018

Overall experience,

skills, performance,

and knowledge

Paid in cash

throughout the

performance year

Not applicable

Year-End Incentive

Opportunity

February 2019

Reward for 2018

Company

performance

Paid in cash in

February 2019

Not applicable

Performance Shares

February 2019

Reward for 2018

Individual

Performance and

Incentive for Long-

Term Performance

Vest at the nature and valueend of these programs are comparable to those offered to similarly situated executives at our peers. Additional detailsthe

3-year performance

period; the number of

shares vesting

depends on these programs can be found in the “Named Executive Officer Compensation” section beginning on page 52.

2015 NEO Compensation Decisionsachievement of

For 2015, the Committee and the independent directors approved an NEO compensation program that is substantially similar to the 2015 program. The plan consists of multiple compensation vehicles that directly link the NEOs’ compensation with the Company’s performance over multiple time horizons, align the NEOs’ interests with the interests of the Company’s stockholders, support safety and soundness and encourage appropriate risk-taking.

factors

∎     Performance
share reduction

∎     Misconduct
clawback

∎     Financial
restatement
clawbacks

Stock-Settled RSUs

3-year ratable vesting

∎     Performance-
based vesting
provisions

∎    Misconduct
clawback

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  63

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The chart below shows the 2018 elements of NEO compensation as an approximate percentage of NEO total target compensation:

2018 NEO Target Compensation

LOGO

 Additional Performance Conditions and Recovery Provisions

The awards granted to our named executive officers include the following provisions that are designed to further enhance alignment between pay and performance and balance the risks that our incentive compensation programs might otherwise encourage:

 

∎

Performance-based vesting provisions;

provisions

∎

Performance share reduction;

Clawback provisions; and
reduction

∎

Misconduct clawback provisions

∎

Financial restatement clawbacks.clawbacks

These terms and conditions apply to incentive awards granted to every executive officer and not just to the named executive officers.

Performance-Based Vesting Provisions

The ultimate value that our named executive officers receive from equity-based incentive awards is tied to our stock price performance over the vesting period. The Committee nevertheless determined that these awards should be subject to additional performance conditions so that the value received by the executives is also conditioned upon the Company continuing to meet certain operating performance thresholds for each and every fiscal year ending in the three-year vesting period. Any forfeitures will be cumulative over the three-year vesting period. In this manner, regardless of our executives’ past performance and of our stock price performance, the awards subject to performance-based vesting remain at risk of complete forfeiture over the three-year vesting period.

Performance-based vesting provisions apply to incentive awards granted to every executive officer and not just to the named executive officers.

Performance-Based Vesting Provisions

The ultimate value that our named executive officers receive from equity-based incentive awards is tied to our stock price performance over the vesting period. The Committee nevertheless determined that these awards should be subject to additional performance conditions so that the value received by the executives is also conditioned upon the Company continuing to meet certain operating performance thresholds. The vesting of awards subject to performance-based vesting provisions is conditioned upon the Company meeting specific performance thresholds for each and every fiscal year ending in the three-year vesting period. Any forfeitures will be cumulative over the three-year vesting period. In this manner, regardless of our executives’ past performance and of our stock price performance, the awards subject to performance-based vesting remain at risk of complete forfeiture over the three-year vesting period.

Since January 2012, performance-based vesting provisions have applied to the following awards:

 

∎

All named executive officer stock option awards;

awards

∎

All named executive officer restricted stock and stock-settled RSUs; and

RSUs

∎

All CEO cash-settled RSUs.

In setting the threshold operating performance conditions, the Company took into account discussions with federal bank regulators. These performance conditions do not present any upside potential for the named executive officers’ compensation but instead create an additional RSUs

These performance conditions do not present any upside potential for the named executive officers’ compensation but instead create an additionalat-risk element to the compensation that has been awarded to them. Imposing these additional performance conditions is designed to further reflect our approach of balancing risk and performance over the long term.

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CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

For awards granted since January 2014, vesting is conditioned on the Company achieving positive Core Earnings (as defined below). If Core Earnings are not positive for any fiscal year in the vesting period, the named executive officer will automatically forfeit 50% ofone-year’s worth of vesting (i.e.,one-sixth of the total award). In addition, the Committee will determine the extent to which any named executive officer was accountable for the outcome and, based on such determination, the Committee will decide whether any or all of the remaining 50% ofone-year’s worth of vesting will also be forfeited. The Committee may also decide to delay the vesting of the applicable portion of the award not so forfeited. For the NEOs, these determinations will be made each year prior to the scheduled vesting date, based on the Core Earnings for the fiscal year ended prior to such vesting date. For the CEO, these determinations will be made prior to the scheduled vesting date at the end of the three-year vesting period, taking into account Core Earnings for each fiscal year within the period.

Core Earnings focuses on whether profits are being generated by our basic business, as opposed to other factors that may not reflect business fundamentals. The terms of the applicable award agreements define “Core Earnings” to mean the Company’s net income available to common stockholders, excluding, on atax-adjusted basis, the impact of (i) impairment or amortization of intangible assets, (ii) the build or release of the allowance for loan and lease losses, calculated as the difference between the provision for loan and lease losses and charge-offs, net of recoveries, and (iii) the change in the combined uncollectible finance charge and fee reserve. The Committee believes that Core Earnings is an appropriate performance metric to employ for these performance-based vesting provisions because the metric captures major operational costs and risks to the Company’s business, including charge-offs, operating expenses, market and competitive risks and costs to maintain adequate levels of capital and liquidity. Because the metric is based on net income available to common stockholders, it also includes the impact of discontinued operations.

Performance Share Reduction

The performance share awards granted to the named executive officers in 2017 employed Adjusted ROA as the performance metric, with the Company’s performance assessed on the basis of Adjusted ROA relative to a comparator group consisting of companies in the KBW Index, excluding custody banks. Each of the performance share awards granted in 2017 is subject to reduction in the event that the Company’s Adjusted ROA for any fiscal year in the three-year performance period is not positive. These reductions will occur regardless of how well the Company’s Adjusted ROA compares to its peers in the KBW Index. If the Company does not achieve positive Adjusted ROA for one year in the performance period, the total number of shares issued on the vesting date will be reduced byone-sixth. If the Company does not achieve positive Adjusted ROA for two years in the performance period, the total number of shares issued on the vesting date will be reduced byone-third. If the Company does not achieve positive Adjusted ROA for any of the three years in the performance period, the named executive officers will forfeit the entire award. In this manner, even if we outperform compared to the comparator group, the performance share awards are at risk of complete forfeiture if we do not achieve a threshold level of performance on an absolute basis.

“Adjusted ROA” means the ratio, expressed as a percentage, of (a) the Company’s net income available to common stockholders, excluding, on atax-adjusted basis, the impact of impairment or amortization of intangible assets to (b) the Company’s average tangible assets for the period. This metric is intended to reflect our earnings capacity by focusing on a component of our net income relative to our tangible assets.

Beginning in 2018, the performance share awards granted to the named executive officers employ Adjusted ROTCE as the absolute performance metric, with the Company’s performance assessed on the basis of Adjusted ROTCE relative to a comparator group consisting of companies in the KBW Index, excluding custody banks. All of the other features of the performance share reduction remains the same, with Adjusted ROTCE being used in the place of Adjusted ROA. “Adjusted ROTCE” means the ratio, expressed a percentage, of (a) the Company’s net income available to common stockholders, excluding, on a tax adjusted basis, the impact of impairment, amortization andre-measurement of intangible assets, to (b) the Company’s average tangible common equity, and shall exclude the initial effects of changes in tax laws, accounting principles or regulations, or other laws or provisions affecting the reported results if the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the 2004 Stock Incentive Plan or necessary or appropriate to comply with applicable laws, rules or regulations.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  65

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Misconduct Clawback Provisions

Beginning with awards granted in January 2013, every incentive award granted to our executive officers includes a clawback provision designed to provide the Committee the authority to recover previously awarded compensation in the event that the Committee determines (i) there has been misconduct resulting in either a violation of law or of Company policy that has caused significant financial or reputational harm to the Company and (ii) either the executive committed the misconduct or failed in his or her responsibility to manage or monitor the applicable conduct or risks.

These clawback provisions have been designed to apply broadly, to a range of potential manifestations of misconduct at any level of the executive’s organization. The unvested portions of all applicable incentive awards are subject to recovery and at risk of complete forfeiture. In each case, the Committee will determine the amount of compensation to recover, allowing the Committee to calibrate each recovery to the facts and circumstances giving rise to the need for such recovery.

In the event the Committee exercises these clawback provisions, the Company intends to disclose the aggregate amount that the Committee has determined to recover, so long as the underlying event has already been publicly disclosed in the Company’s filings with the SEC.

Financial Restatement Clawbacks

All performance share awards to our executive officers include a clawback that is triggered in the event that the Company issues a restatement of its financial statements, or announces within three years after the vesting of an award that it expects to issue a restatement. If an executive would have been entitled to fewer shares on the vesting date under the restated financial statements, the executive may be required to return to the Company the excess shares awarded to him or her or, in the event he or she has sold or otherwise transferred the shares, he or she may be required to return the net proceeds from the sale or transfer.

 Process and performance over the long-term.

For awards granted in January 2014 and 2015, vesting is conditioned on the Company achieving positive Core Earnings. If Core Earnings are not positive for any fiscal year in the vesting period, the named executive officer will automatically forfeit 50% of one-years’ worth of vesting (i.e., one-sixth of the total award). In addition, the Committee will determine the extent to which any named executive officer was accountable for the outcome and, based on such determination, the Committee will decide whether any or all of the remaining 50% of one-years’ worth of vesting will also be forfeited. The Committee may also decide to delay the vesting of the applicable portion of the award not so forfeited. For the NEOs, these determinations will be made each year prior to the scheduled vesting date, based on the Core Earnings for the fiscal year ended prior to such vesting date. For the CEO, these determinations will be made prior to the scheduled vesting date at the end of the three-year vesting period, taking into account Core Earnings for each fiscal year within the period.

Core Earnings focuses on whether profits are being generated by our basic business, as opposed to other factors that may not reflect business fundamentals. The terms of the applicable award agreements define “Core Earnings” to mean the Company’s net income available to common stockholders, excluding, on a tax-adjusted basis, the impact of (i) impairment or amortization of intangible assets, (ii) the build or release of the allowance for loan and lease losses, calculated as the difference between the provision for loan and lease losses and charge-offs, net of recoveries, and (iii) the change in the combined uncollectible finance charge and fee reserve. The Committee believes that Core Earnings is an appropriate performance metric to employ for these performance-based vesting provisions because the metric captures major operational costs and risks to the Company’s

business, including charge-offs, operating expenses, market and competitive risks and costs to maintain adequate levels of capital and liquidity. Because the metric is based on net income available to common stockholders, it also includes the impact of discontinued operations.

Performance Share Reduction

As described above, the performance share awards granted to the named executive officers since January 2012 employ Adjusted ROA as the performance metric, with the Company’s performance assessed on the basis of Adjusted ROA relative to a comparator group consisting of companies in the KBW Index. Each of these performance share awards is subject to reduction in the event that the Company’s Adjusted ROA for any fiscal year in the three-year performance period is not positive. These reductions will occur regardless of how well the Company’s Adjusted ROA compares to its peers in the KBW Index. If the Company does not achieve positive Adjusted ROA for one year in the performance period, the total number of shares issued on the vesting date will be reduced by one-sixth. If the Company does not achieve positive Adjusted ROA for two years in the performance period, the total number of shares issued on the vesting date will be reduced by one-third. If the Company does not achieve positive Adjusted ROA for any of the three years in the performance period, the named executive officers will forfeit the entire award. In this manner, even if we outperform compared to the comparator group, the performance share awards are at risk of complete forfeiture if we do not achieve a threshold level of performance on an absolute basis.

“Adjusted ROA” means the ratio, expressed as a percentage, of (a) the Company’s net income available to common stockholders, excluding, on a tax-adjusted basis, the impact of impairment or amortization of intangible assets to (b) the Company’s average tangible assets for the period. This metric is intended to reflect our earnings capacity by focusing on a component of our net income relative to our tangible assets. For the January 2014 awards, the credit portion of other than temporary impairment of the securities portfolio is also excluded, on a tax-adjusted basis, from the Company’s net income available to common stockholders for purposes of determining Adjusted ROA.

Clawback Provisions

Capital One has included clawback provisions in certain equity awards since 2011. Beginning with awards granted in January 2013, every incentive award granted to our executive officers, including our named executive officers, includes a clawback provision designed to provide the Committee the opportunity to recover compensation previously awarded in the event the clawback is triggered. Under these clawback provisions, the Committee will determine the amount of compensation to recover in the event that the Committee determines (i) there has been misconduct resulting in either a violation of law or of Company policy that in either case causes significant financial or reputational harm to the Company and (ii) either the executive committed the misconduct or failed in his or her responsibility to manage or monitor the applicable conduct or risks. The portions of all applicable incentive awards that are unvested at the time the Committee makes a determination to exercise the clawback provisions will be subject to recovery and at risk of complete forfeiture.

In the event the Committee exercises the clawback provisions in the future, the Company intends to disclose the aggregate amount that the Committee has determined to recover, so long as the underlying event has already been publicly disclosed in the Company’s filings with the SEC. This disclosure would appear in the proxy following any such determination by the Committee and would provide the aggregate amount of recovery for each event if there is more than one applicable event.

Financial Restatement Clawbacks

All performance share awards to our executive officers beginning in January 2011 include a clawback that is triggered in the event of a financial restatement by the Company within three years of the vesting of the award if the executive would have been entitled to fewer shares on the vesting date as a result of the restatement. This restatement clawback is designed to recoup the shares awarded to the executive or, in the event the executive has sold or otherwise transferred the shares, the net proceeds from that sale or transfer.

Criteria and Process for Compensation Decisions

The Committee is actively engaged throughout the year and considers a number of factors in making compensation decisions with respect to the named executive officers. The Committee relies on a range of objective data including Company performance data, peer comparator group performance data, historical pay information, data on specific market practices and trends, stockholder feedback, and other relevant points of information to inform its business judgment.

66  

CAPITAL ONE FINANCIAL CORPORATION  

Use of Outside Consultants for CEO Compensation

  2018 PROXY STATEMENT

The Committee engages F.W. Cook to assist in the design of the CEO compensation program. F.W. Cook assists the Committee in a number of ways, including proposing and evaluating a peer comparator group, gathering relevant compensation data from the peer comparator companies, discussing relevant market trends and context and developing recommendations on possible plan designs. Please see the discussion under “Compensation Committee – Compensation Committee Consultant” in the “Corporate Governance at Capital One” section beginning on page 14 for additional information about F.W.

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Governance Cycle

The Committee met five times in 2017, with each meeting concluding with an executive session without management present. While specific topics may vary from meeting to meeting, the following graph describes the typical annual cycle of the Committee’s compensation-related activities.

LOGO

Use of Outside Consultants for CEO Compensation

The Committee engages FW Cook to assist in the design of the CEO compensation program. FW Cook assists the Committee in a number of ways, including proposing and evaluating a peer comparator group, gathering relevant compensation data from the peer comparator companies, discussing relevant market trends and context and developing recommendations on possible plan designs. See the discussion under “Compensation Committee Consultant” in the “Corporate Governance at Capital One” section on page 32 for additional information about FW Cook.

Use of Outside Consultants for NEO Compensation

The Chief Human Resources Officer and other members of the Company’s Human Resources department assist the CEO in developing compensation recommendations to the Committee for the NEOs. The Human Resources department typically uses multiple surveys as sources of market compensation data. FW Cook also provides additional market reference points that the Committee and the independent directors use when evaluating NEO compensation. Other outside consultants provide information to the Human Resources department regarding market practices and trends and research reports and provide subject matter expertise on specific concepts and

CAPITAL ONE FINANCIAL CORPORATION  

Use of Outside Consultants for NEO Compensation

  2018 PROXY STATEMENT  

The Chief Human Resources Officer and other members of the Company’s Human Resources department assist the CEO in developing compensation recommendations to the Committee for the NEOs. The Human Resources department typically uses multiple surveys as sources of market compensation data. F.W. Cook also provides additional market reference points that the Committee and the independent directors use when evaluating NEO compensation. Other outside consultants provide information to the Human Resources department regarding market practices and trends and research reports and provide subject matter expertise on specific concepts and technical issues related to executive compensation. However, these outside consultants do not recommend either the form or amount of compensation that is to be paid to the NEOs. The Human Resources department is responsible for analyzing the information obtained from the outside consultants and presenting it to the CEO. The CEO then considers all of the information provided by the Human Resources department and the Chief Human Resources Officer and makes his compensation recommendations for the NEOs to the Committee and the independent directors.

  67

Management does not have a contractual arrangement with any compensation consultant to determine or recommend compensation programs for the NEOs. A consultant from F.W. Cook is present at Committee meetings during which CEO and NEO compensation is discussed and provides market data as well as an outsider’s perspective regarding CEO and NEO compensation practices. F.W. Cook has no other engagement with, and performs no other services for, Capital One besides the services described above.

Market Data

The Committee reviews pertinent data from a group of peer comparator companies within the financial services industry. These organizations are intended to represent the marketplace of companies with whom Capital One competes for business and for executive talent.

F.W. Cook plays a lead role in evaluating the peer comparator group on an annual basis. Each year, a consultant from F.W.

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

technical issues related to executive compensation. However, these outside consultants do not recommend either the form or amount of compensation that is to be paid to the NEOs. The Human Resources department is responsible for analyzing the information obtained from the outside consultants and presenting it to the CEO. The CEO then considers all of the information provided by the Human Resources department and the Chief Human Resources Officer and makes his compensation recommendations for the NEOs to the Committee and the independent directors.

Management does not have a contractual arrangement with any compensation consultant to determine or recommend compensation programs for the NEOs. A consultant from FW Cook is present at Committee meetings during which CEO and NEO compensation is discussed and provides market data as, well as an independent perspective regarding CEO and NEO compensation practices. FW Cook has no other engagement with, and performs no other services for, Capital One other than the services described above.

Market Data

The Committee reviews data from a group of peer comparator companies within the financial services industry. These organizations are intended to represent the marketplace of companies with whom Capital One competes for business and for executive talent.

FW Cook plays a lead role in evaluating the peer comparator group on an annual basis. Each year, a consultant from FW Cook presents a comprehensive report to the Committee that highlights size, scope and performance information from the peer comparator companies across a variety of metrics. The Committee specifically considers the Company’s percentile rank versus peer comparator companies across the following financial metrics:

 

Revenue;
Assets;

∎ Revenue

∎ Assets

∎Market value;

value

∎Net income available to common stockholders;

stockholders

∎U.S. deposits;

deposits

∎Loans held for investment;

investment

∎Diluted earnings per share growth;

growth

∎Return on average tangible common equity;equity

∎Adjusted ROA;

ROA

∎Tier 1 common capital ratio;

ratio

∎Charge-off rate;

rate

∎Ratio of stock price to tangible book value;

value

∎Ratio of stock price to earnings; and

earnings

∎Total stockholder return.

After reviewing this information, the Committee recommends a final peer comparator group to the independent directors for approval. The peer comparator group is adjusted each year, as appropriate, so that the size, scope, performance and business focus of the peer comparator companies reflect Capital One’s competitive environment. After the peer comparator group was significantly adjusted in 2009 due to considerable consolidation within the peer comparator group caused by the turmoil in the financial sector, the same peer group has been used for competitive analysis when the Committee approved the 2010 through 2014 compensation programs and target award values.return

After reviewing this information, the Committee recommends a final peer comparator group to the independent directors for approval. The peer comparator group is reviewed each year and adjusted, as appropriate, so that the size, scope, performance and business focus of the peer comparator companies reflect Capital One’s competitive environment. For 2017, the peer comparator group was the same group for 2016 and included the following companies:

 

American Express

Fifth Third BancorpRegions Financial

Bank of America Corporation

J.P. Morgan ChaseSunTrust Banks

BB&T Corporation

KeyCorpU.S. Bancorp

Citigroup

PNC Financial ServicesWells Fargo & Company

Typically, compensation data from the peer comparator group is used to inform the Committee’s determination of the total compensation target values for the named executive officers. As of December 31, 2014, Capital One was positioned at or near the median of the peer comparator group in terms of total assets, revenues, net income, market value and ratio of price to tangible book value.∎ American Express

For purposes of designing the 2015 compensation programs, however, the Committee determined to adjust the peer comparator group by removing KeyCorp and including∎ Discover  Financial Services. The Committee believes that the revised peer comparator group better reflects the competitive environment for theServices

∎ Regions Financial

∎ Bank  of America Corporation

∎ Fifth Third Bancorp

∎ SunTrust Banks

∎ BB&T Corporation

∎ J.P. Morgan Chase

∎ U.S. Bancorp

∎ Citigroup

∎ PNC  Financial Services

∎ Wells  Fargo & Company particularly the performance and business focus of the companies in the peer comparator group and the competition for talent, and made this determination after considering, among other things, stockholder feedback as described earlier under “Consideration of 2014 Say on Pay Vote.”

The Committee believes that the peer comparator group reflects the competitive environment for the Company, particularly the performance and business focus of the companies in the peer comparator group and the competition for talent. The Committee determined to maintain the same peer comparator group for purposes of designing the 2018 compensation programs, and approved the comparator group in July 2017.

Typically, compensation data from the peer comparator group is used to inform the Committee’s determination of the total compensation target values for the named executive officers. As of December 31, 2017, Capital One was positioned at or near the median of the peer comparator group in terms of total assets, loans, deposits, revenues, net income, and market value.

68  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Tally Sheets

In addition to considering market data from our peer comparator group (when available), the Committee also considers information contained on total compensation tally sheets for the CEO and each NEO. The tally sheets summarize multiple components of current and historical compensation, as well as the potential value of post-termination arrangements. The tally sheets are just one point of information used by the Committee in the process of determining CEO and NEO compensation. They help the Committee understand the historical context that is relevant to current compensation decisions, such as the CEO and each NEO’s accumulated equity value. The tally sheets also help the Committee assess the potential downstream consequences of its decisions, such as the potential value to be received by the CEO and each NEO upon separation due to a change of control, retirement or other termination scenarios.

 

 Other Compensation Arrangements

Pension and Non-Qualified Deferred Compensation Plans

Pension andNon-Qualified Deferred Compensation Plans

Capital One does not currently have any active pension plans for the NEOs. We offer a voluntary,non-qualified deferred compensation plan that restores participating NEOs, excluding the CEO, to the level of savings they would have achieved if they had not been impacted by IRS limits governing our qualified 401(k) plan. It also allows the NEOs, excluding the CEO, to defer additionalpre-tax compensation in order to save for retirement. Capital One annually reviews programs and practices at our peer comparator companies and across the financial services industry. We also review changes in the legal and regulatory environment pertaining to retirement programs.

Each of our named executive officers participated in Capital One’s VoluntaryNon-Qualified Deferred Compensation Plan (“VNQDCP”) in 2017. The CEO participates in the VNQDCP on anon-voluntary basis, as his cash bonus is mandatorily deferred in the VNQDCP for three years. Details of the VNQDCP can be found under “Capital One’s VoluntaryNon-Qualified Deferred Compensation Programs” beginning on page 82.

Employment Agreements

Capital One typically does not enter into defined term employment agreements with the named executive officers in order to maintain maximum flexibility in establishing separation terms at the appropriate time and considering their current circumstances. The Committee retains full discretion to approve employment agreements on an exception basis and has done so for exceptional circumstances in the past. None of the current NEOs have an employment agreement.

Change of Control Agreements

Each named executive officer is a party to an agreement providing certain benefits if the executive’s employment terminates in connection with a change of control, as well as compensation and benefits protections during thetwo-year period following the change of control. The Committee determined that such agreements were appropriate based on their prevalence within the banking and financial services industry and given the dynamic nature of merger and acquisition activity among these institutions.

The change of control agreements define compensation and benefits payable to named executive officers in certain merger and acquisition scenarios, giving them some degree of certainty regarding their individual outcomes in these circumstances. The Committee believes these agreements allow the named executive officers to remain neutral and consider a full range of decisions that are focused on maximizing stockholder value. The change of control agreements are also intended to allow Capital One’s businesses to operate with minimal disruption in the event of a change of control by providing each named executive officer with an incentive to remain in his or her leadership role up to and beyond the transaction date. In addition to compensation and benefits protections during atwo-year protection period after a change of control, the CEO or the NEOs. We offer a voluntary, non-qualified deferred compensation plan that restores participating NEOs to the level of savings they would have achieved if they had not been impacted by IRS limits governing our qualified 401(k) plan. It also allows the NEOs to defer additional pre-tax compensation in order to save for retirement.

Capital One annually reviews programs and practices at our peer comparator companies and across the financial services industry. We also review changes in the legal and regulatory environment pertaining to retirement

programs. Each of our named executive officers participated in Capital One’s Voluntary Non-Qualified Deferred Compensation Plan (the “Plan”) in 2014. Details of the Plan can be found under “Capital One’s Voluntary Non-Qualified Deferred Compensation Programs” on page 63.

Employment Agreements

Capital One typically does not enter into defined term employment agreements with the named executive officers in order to maintain maximum flexibility in establishing separation terms at the appropriate time and considering then current circumstances. The Committee retains full discretion to approve employment agreements on an exception basis and has done so for exceptional circumstances in the past.

Change of Control Agreements

Each named executive officer is a party to an agreement providing certain benefits if their employment terminates in connection with a change of control. The Committee determined that such agreements were appropriate based on their prevalence within the banking and financial services industry and given the dynamic nature of merger and acquisition activity among these institutions.

The change of control agreements define compensation and benefits payable to named executive officers in certain merger and acquisition scenarios, giving them some degree of certainty regarding their individual outcomes in these circumstances. The Committee believes these agreements allow the named executive officers to remain neutral and consider a full range of decisions that are focused on maximizing stockholder value. The change of control agreements are also intended to allow Capital One’s businesses to operate with minimal disruption in the event of a change of control by providing each named executive officer with an incentive to remain in his leadership roles up to and beyond the transaction date. The named executive officers are only entitled to severance-type benefits under the agreements if their employment is actually terminated as a result of (or in anticipation of) certain merger and acquisition scenarios.

Both eligibility for participation and the structure of payments under these agreements are designed to be aligned with market practice in the banking and financial services industry. This is designed so that our stockholders are not faced with disproportionate severance costs that may impair potential merger opportunities. It also supports our ability to attract and retain talented executives by providing them with a competitive level of benefit.

Projections of potential payouts to the named executive officers under these agreements are included in the total compensation tally sheets reviewed by the Committee on an annual basis. Although the potential change of control payouts do not necessarily impact annual decisions on CEO and NEO pay, reviewing this information allows the Committee to fully understand the downstream implications of its decisions and the resulting impact to the Company and its stockholders.

Our change of control agreements for executive officers no longer provide for excise tax “gross-up” payments. On March 1, 2011, Capital One delivered notice to all executive officers that their change of control agreements, which included excise tax gross-up provisions, would not be renewed. The Committee and the independent directors also approved a new form of change of control agreement to be used after March 1, 2011 for new hires, promotions and renewals which does not provide for an excise tax gross-up. Accordingly, all executive officer change of control agreements providing for a potential excise tax gross-up after a change of control have expired and been replaced with the new form of agreement that does not provide for an excise tax gross-up.

Post-Employment Compensation Practices

The CEO has no employment or severance arrangement with the Company other than the change of control agreement as described above. If an NEO separates from Capital One, he or she is entitled to receive the amounts set forth in the Company’s Executive Severance Plan, which provides for a payment of up to 30% of the NEO’s current target total compensation plus partially subsidized health, dental and vision benefits through COBRA and outplacement services. The Committee may exercise its business judgment in approving additional amounts in light of all relevant circumstances, including the NEO’s term of employment, past accomplishments, reasons for separation from the Company, potential risks and the NEO’s willingness to restrict his or her future action(s),

such as through an agreement not to compete or solicit the Company’s customers or employees. Capital One has asked certain NEOs to enter into various agreements that contain restrictive covenants related to confidentiality, non-competition, non-solicitation and ownership of work product. For additional information, please see “Restrictive Covenants” in the “Named Executive Officer Compensation” section beginning on page 65. Each of the NEOs also has a change of control agreement as described above. Upon retiring from the Company, employees are generally entitled to receive certain retiree medical benefits.

 

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

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SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

Both eligibility for participation and the structure of payments under these agreements are designed to be aligned with market practice in the banking and financial services industry. Our program is designed so that our stockholders are not faced with disproportionate severance costs that may impair potential merger opportunities. In addition, our change of control agreements for executive officers do not provide for excise tax“gross-up” payments. The program also supports our ability to attract and retain talented executives by providing them with a competitive level of benefits.

Projections of potential payouts to the named executive officers under these agreements are included in the total compensation tally sheets reviewed by the Committee on an annual basis. Although the potential change of control payouts do not necessarily impact annual decisions on NEO pay, reviewing this information allows the Committee to fully understand the downstream implications of its decisions and the resulting impact to the Company and its stockholders.

Post-Employment Compensation Practices

The CEO has no employment or severance arrangement with the Company other than the change of control agreement as described above. If an NEO, excluding the CEO, separates from Capital One, he or she is entitled to receive the amounts set forth in the Company’s Executive Severance Plan, which provides for a payment of up to 30% of the NEO’s current target total compensation plus partially subsidized health, dental and vision benefits through COBRA, term life continuation and outplacement services. The Committee may exercise its business judgment in approving additional amounts in light of all relevant circumstances, including the NEO’s term of employment, past accomplishments, reasons for separation from the Company, potential risks and the NEO’s willingness to restrict his or her future action(s), such as through an agreement not to compete or solicit the Company’s customers or associates. In addition, following a separation from Capital One, certain equity-based awards will continue to vest according to their original terms, as described under “Payments Under Certain Termination Scenarios” beginning on page 85.

Capital One has asked certain NEOs to enter into various agreements that contain restrictive covenants related to confidentiality,non-competition,non-solicitation and ownership of work product. For additional information, see “Restrictive Covenants” in the “Named Executive Officer Compensation” section beginning on page 84.

Upon retiring from the Company, associates are generally entitled to receive certain retiree medical benefits, including subsidized medical benefits for qualified individuals. In addition, certain equity-based awards will continue to vest according to their original terms, as described under “Payments Upon Retirement” on page 86.

 Other Aspects of Executive Compensation

Stock Ownership and Retention Requirements

Consistent with their responsibilities to our stockholders, the executive officers are required to maintain a significant financial stake in the Company. To this end, the CEO and the NEOs must own shares of Capital One stock with a fair market value of at least the following annual cash salary multiples:

 Role    Salary Multiple    

 CEO

5X

 Other NEOs and Executive Officers

 

3X

Role Salary Multiple

 CEO

5X

 Other NEOs and

 Executive Officers

3X

Given that the CEO’s compensation program does not include a base salary, his ownership requirement is based on a notional salary established by the Committee and the independent directors, which is currently $1,000,000.

Ownership requirements may be fulfilled using the following shares:

 

∎

Shares owned without restriction;

restriction

∎

Unvested restricted stock;

stock

∎

Unvested stock-settled RSUs;

RSUs

∎

Shares acquired through the 2002 Associate Stock Purchase Plan; and

Plan

∎

Shares owned through Capital One’s 401(k) Plan.plan

70  

The Committee annually reviews the guidelines and monitors the named executive officers’ compliance with them. New executive officers are given two years from the date of promotion to or appointment as an executive officer to comply with these requirements. In the event that an executive officer is not in compliance with these requirements, the Committee has the right to take action, including reducing the executive officer’s compensation. The named executive officers are currently in compliance with this requirement.

CAPITAL ONE FINANCIAL CORPORATION  

In addition, beginning in January 2011, the Company implemented stock retention requirements for certain equity awards made to the named executive officers. For equity awards granted in January 2015, throughout each executive’s term of employment with Capital One, and for all shares that are acquired during the one-year period following termination of employment, each executive must hold 50% of the after-tax net shares acquired under performance share and stock-settled RSU awards for one year. These stock ownership and retention requirements apply to all of our executive officers.

  2018 PROXY STATEMENT

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

The Committee reviews the guidelines and monitors the named executive officers’ compliance with them. New executive officers are given two years from the date of promotion to or appointment as an executive officer to comply with these requirements. In the event that an executive officer is not in compliance with these requirements, the Committee has the right to take action, including reducing the executive officer’s compensation. The named executive officers are currently in compliance with this requirement.

In addition, the Company has stock retention requirements for certain equity awards made to the named executive officers. With respect to awards of performance shares and stock-settled RSUs that vest (i) during an executive’s term of employment with Capital One or, (ii) as applicable, prior to the first anniversary of such executive’s separation from Capital One, each executive must hold 50% of theafter-tax net shares acquired for a period of one year after the acquisition date of the shares. These stock ownership and retention requirements apply to all of our executive officers.

Prohibition of Hedging and Speculative Trading Activities

All of Capital One’s executive officers and directors are prohibited from engaging in short sales, hedging transactions or speculative trading in derivative securities of Capital One stock and from using their Capital One stock in a margin account or pledging Capital One stock as collateral for a loan.

Equity Grant Practices

Capital One strives to maintain equity grant practices that demonstrate high standards of corporate governance. Annual incentive awards generally are approved by the Committee and the independent directors (or by delegated authority to the Chief Human Resources Officer for certain associates who are not executive officers) at regularly scheduled meetings in the first quarter of each year. The date of grant is the actual date on which the Committee approves the awards. The Committee may grant awards of restricted stock, restricted stock units, stock options or other equity awards outside of the annual incentive cycle. The Committee has delegated authority to the CEO to award restricted stock and to the Chief Human Resources Officer to award stock-settled and cash-settled RSUs (but not options or other equity awards) to associates who are not executive officers, subject to a maximum amount of $2 million for any associate in any one year. These awards are designed to be used for new hires and for special programs designed by management to incentivize and reward current associates of the Company. The Committee reviews all grants made by delegation at least once per year.

With respect to awards of stock options, the exercise price is always the Fair Market Value of the Company’s stock on the date of grant. Under the terms of our 2004 Stock Incentive Plan, “Fair Market Value” is equal to the closing price of the Company’s common stock on the date of grant.

The Company does not seek to time equity grants to take advantage of materialnon-public information and in no event is the grant date set to a date that is prior to the date of approval.

Tax Considerations

The Committee carefully considers the tax impacts of its compensation programs on the Company, as well as on its executives. To maintain flexibility in compensating executive officers, the Committee does not require all compensation to be paid or awarded in atax-deductible manner. However, it is the Committee’s intent to maximize tax deductibility to the extent reasonable, provided the Company’s programs remain consistent with the Company’s overall executive compensation objectives.

Historically, with respect to the named executive officers (other than the Chief Financial Officer), Section 162(m) of the Internal Revenue Code limited the federal tax deduction for compensation paid to the executive to $1 million. Amounts in excess of $1 million were also eligible for the deduction if the compensation qualified as “performance-based.” For this purpose, the Company’s 2004 Stock Incentive Plan provides for the establishment of specific performance thresholds to be tied to equity-based awards that would allow awards to qualify as “performance-based” for the purposes of Section 162(m).

In accordance with the requirements of Section 162(m) and the Company’s 2004 Stock Incentive Plan, the Committee established performance thresholds in (i) February 2016 for awards to be granted in early 2017, and

CAPITAL ONE FINANCIAL CORPORATION  

All of Capital One’s executive officers are prohibited from engaging in short sales, hedging transactions or speculative trading in derivative securities of Capital One stock and from using their Capital One stock in a margin account or pledging Capital One stock as collateral for a loan.

  2018 PROXY STATEMENT  

Equity Grant Practices  71

SECTION IV - COMPENSATION DISCUSSION AND ANALYSIS

(ii) February 2017 for awards to be granted in early 2018, that would have to be reached in order for awards to be granted for the 2016 performance year and the 2017 performance year, respectively. These awards included performance share awards, RSUs (other than the RSUs representing a portion of base salary) and a deferred cash bonus to the CEO. In each case, it was determined that the named executive officers would receive the awards only if the Company achieved positive Core Earnings ROA from Continuing Operations for the applicable fiscal year. For purposes of this performance metric, “Core Earnings ROA from Continuing Operations” means the ratio, expressed as a percentage, of (A) the Company’s Core Earnings from Continuing Operations for the applicable fiscal year to (B) the Company’s average total assets for the period. Core Earnings from Continuing Operations means the Company’s net income from continuing operations, excluding, on atax-adjusted basis, the impact of (i) impairment or amortization of intangible assets, (ii) the build or release of the allowance for loan and lease losses, calculated as the difference between the provision for loan and lease losses and charge-offs, net of recoveries, and (iii) the change in the combined uncollectible finance charge and fee reserve.

The Company’s Core Earnings ROA from Continuing Operations for fiscal year 2016 was positive, as was the Company’s Core Earnings ROA from Continuing Operations for fiscal year 2017. As a result, the Committee determined that the performance threshold was met for each performance year and the following awards were granted to executive officers of the Company, including the named executive officers, in February 2017 for the 2016 performance year and in February 2018 for the 2017 performance year: performance share awards, RSUs (other than the RSUs representing a portion of base salary) and the deferred cash bonus to the CEO.

On December 22, 2017, the 2017 Tax Act was enacted. This legislation repealed the exclusion for performance-based compensation under Section 162(m), effective for taxable years beginning after December 31, 2017, such that compensation paid to covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Because of ambiguities and uncertainties as to scope of the transition relief available under the 2017 Tax Act, no assurance can be given that the compensation described above, which was intended to satisfy the requirements for exemption from Section 162(m), will continue to be exempt. Further, no assurance can be given that all stock options awarded to the named executive officers in 2017, or for the 2017 performance year to the CEO, will satisfy the requirements for exemption from Section 162(m). The Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with Capital One’s business needs.

72  

CAPITAL ONE FINANCIAL CORPORATION  

Capital One strives to maintain equity grant practices that demonstrate high standards of corporate governance. Annual incentive awards are approved by the Committee and the independent directors (or by delegated authority to the Chief Human Resources Officer for certain employees who are not executive officers) at regularly scheduled meetings in the first quarter of each year. The date of grant is the actual date on which the Committee approves the awards. The Committee may grant awards of restricted stock, restricted stock units, stock options or other equity awards outside of the annual incentive cycle. The Committee has delegated

  2018 PROXY STATEMENT

authority to the CEO to award restricted stock and to the Chief Human Resources Officer to award stock-settled and cash-settled RSUs (but not options or other equity awards) to employees who are not executive officers, subject to a maximum amount of $2 million for any employee in any one year. These awards are designed to be used for new hires and for special programs designed by management to incentivize and reward current employees of the Company. The Committee reviews all grants made by delegation at least once per year.

With respect to awards of stock options, the exercise price is always the Fair Market Value of the Company’s stock on the date of grant. Under the terms of our 2004 Stock Incentive Plan, “Fair Market Value” is equal to the closing price of the Company’s common stock on the date of grant.

Section V - Named Executive Officer Compensation

The Company does not seek to time equity grants to take advantage of material non-public information and in no event is the grant date set to a date that is prior to the date of approval.

Tax Considerations

The Committee carefully considers the tax impacts of its compensation programs on the Company, as well as on its executives. To maintain flexibility in compensating executive officers, the Committee does not require all compensation to be paid or awarded in a tax-deductible manner. However, it is the Committee’s intent to maximize tax deductibility to the extent reasonable, provided the Company’s programs remain consistent with the Company’s overall executive compensation objectives.

With respect to the named executive officers (other than the Chief Financial Officer), Section 162(m) of the Internal Revenue Code limits the federal tax deduction for compensation paid to the executive to $1 million. Amounts in excess of $1 million are also eligible for the deduction if the compensation qualifies as “performance-based.” The Company’s 2004 Stock Incentive Plan provides for the establishment of specific performance thresholds to be tied to equity-based awards that may allow these awards to qualify as “performance-based” for the purposes of 162(m).

The Company expects that the award of stock options and performance shares to the CEO and NEOs in 2014 will be deductible as “performance-based” compensation. The vesting of restricted stock units granted to the CEO and stock-settled RSUs granted to the NEOs in January 2014 is contingent upon the achievement of performance-based vesting conditions. Specifically, the CEO and NEOs would receive these awards as long as the Company achieves a Core Earnings ROA of better than or equal to negative two percent (-2%) for the applicable fiscal year. As further described in “Additional Performance Conditions and Recovery Provisions – Performance-Based Vesting Provisions” beginning on page 44, additional vesting conditions also apply that could further limit the vesting of these awards.

For purposes of the above performance metric, Core Earnings ROA means the ratio, expressed as a percentage, of (A) the Company’s Core Earnings for the 2014 fiscal year to (B) the Company’s average total assets for the period. Core Earnings has the same meaning as described earlier under “Additional Performance Conditions and Recovery Provisions – Performance-Based Vesting Provisions” beginning on page 44.

In February 2014, the Committee and the independent directors established a performance threshold that the Company had to meet in order for the following awards to executive officers of the Company, including the named executive officers, for the 2014 performance year to be granted: performance share awards, RSUs (other than the RSUs representing a portion of base salary) and the deferred cash bonus to the CEO. Under the threshold, the CEO and NEOs would receive these awards only if the Company achieved positive Core Earnings ROA from Continuing Operations for the 2014 fiscal year. For purposes of this performance metric, Core Earnings ROA from Continuing Operations means the ratio, expressed as a percentage, of (A) the Company’s Core Earnings from Continuing Operations for the 2014 fiscal year to (B) the Company’s average total assets for the period. Core Earnings from Continuing Operations means the Company’s net income from continuing operations, excluding, on a tax-adjusted basis, the impact of (i) impairment or amortization of intangible assets, (ii) the build or release of the allowance for loan and lease losses, calculated as the difference between the provision for loan and lease losses and charge-offs, net of recoveries, and (iii) the change in the combined uncollectible finance charge and fee reserve.

The Company’s Core Earnings ROA from Continuing Operations for fiscal year 2014 was positive. Therefore, the Company expects the awards made in January 2015 to be tax-deductible as “performance-based” compensation.

SECTION VI – NAMED EXECUTIVE OFFICER COMPENSATION

The 2017 Summary Compensation Table below provides information concerning compensation for the fiscal years ended December 31, 2014, 2013 and 2012

The Summary Compensation Table below provides information about compensation for the fiscal years ended December 31, 2017, 2016 and 2015 for the named executive officers. As discussed in the “Compensation Discussion and Analysis” section beginning on page 44, our executive compensation program is heavily weighted towards equity-based andat-risk elements of compensation. Under SEC rules, equity-based compensation is reported below in the year in which it is awarded, which may not correlate to the year for which it is paid.

With respect to the compensation reported below for our CEO:

∎

As discussed under “Chief Executive Officer Compensation” in the “Compensation Discussion and Analysis” section beginning on page 35, 78%77% of the CEO’s total compensation (78% of 2017 performance year compensation) is equity-based andat-risk to the performance of the Company’s stock price, with 100% of his compensation deferred for a three-year period. at least three years.

∎

Amounts shown in the table below for the CEO for 20142017 represent stock options and performance shares and stock-settled RSUs granted in January 2014February 2017 and a deferred cash bonus awarded in January 2015February 2018 for 20142017 performance. The CEO also was granted cash-settled RSUsrestricted stock units (”RSUs”) in January 2015February 2018 for the 20142017 performance year, which are not shown in the table below.

∎

Amounts shown in the “Stock Awards” column for 20142017 also include cash-settled RSUs granted to the CEO in January 2014February 2017 for the 20132016 performance year.

With respect to the compensation reported below for the NEOs other than the CEO:

∎

As discussed under “NEO Compensation” beginning on page 40, under the NEOs’ 2014 compensation program, baseBase salary comprised approximately 35% of NEO total target compensation.

∎

Each NEO other than the CEO received a portion of his or her 20142017 base salary in the form of cash that was paid throughout the year and a portion in the form of cash-settled RSUs that were granted in January 2014February 2017 and settled in cash in February 2015.2018. These cash-settled RSUs are included in the table below in the “Stock Awards” column for 2014. For the NEOs, amounts2017.

∎

Amounts shown for 20142017 in the table below also include stock options, performance shares, stock-settled RSUs, and cash-settled RSUs granted in January 2014February 2017 for the 20132016 performance year. The NEOs other than the CEO also were granted equity awards in January 2015February 2018 for the 20142017 performance year, which are not shown in the table below. The NEOs were not eligible for cash bonuses for 2014.2017.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

Amounts paid to the CEO and the other NEOs in 2017 for other compensation and benefit programs are listed under the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” and “All Other Compensation” columns. The details of these program amounts are provided in the footnotes to the table:

                                                                                                                                                                                                                                        

  Name and Principal

  Position

    Year       Salary (5)       Bonus (6)     

Stock

   Awards (7)   

 

Option

   Awards  (8)   

 

Change in

Pension Value

and Non-

Qualified

Deferred

   Compensation   

Earnings (9)

 

All Other

 Compensation  (10)   

         Total       

Richard D. Fairbank

Chairman, CEO and

President(1)

 2017 $0 $3,727,500 $10,535,121 $1,750,018 $4,161 $158,970 $16,175,770
 2016 $0 $2,677,500 $12,285,042 $1,750,003 $3,407 $205,185 $16,921,137
 2015 $0 $2,677,500 $13,440,028 $1,750,000 $3,357 $144,289 $18,015,174
            

R. Scott Blackley

Chief Financial

Officer (2)(3)

 2017 $826,538 $0 $3,210,934 $0 — $225,176 $4,262,648
 2016 $617,769 $0 $2,597,024 $0 — $132,046 $3,346,839
            
            

Frank G. LaPrade, III

Chief Enterprise

Services Officer (2)

 2017 $1,009,538 $0 $3,658,572 $600,370 — $198,420 $5,466,900
 2016 $974,577 $0 $3,329,446 $530,369 — $193,202 $5,027,594
            
            

John G. Finneran, Jr.

Chief Risk Officer and
Corporate Secretary (2)

 2017 $1,047,423 $0 $3,592,348 $509,804 $978 $218,997 $5,369,550
 2016 $1,016,538 $0 $3,487,369 $494,803 $778 $219,255 $5,218,743
 2015 $988,500 $0 $3,661,947 $478,405 $785 $199,231 $5,328,868
            

Sanjiv Yajnik

President, Financial
Services (2)

 2017 $991,654 $0 $3,399,810 $482,401 — $259,729 $5,133,594
 2016 $962,654 $0 $3,300,705 $468,416 — $203,132 $4,934,907
 2015 $934,462 $0 $3,439,765 $448,606 — $219,681 $5,042,514
            

Stephen S. Crawford

Senior Advisor to the
CEO (2)(4)

 2017 $1,619,231 $0 $5,628,505 $887,336 — $181,516 $8,316,588
 2016 $1,592,692 $0 $5,463,891 $861,334 — $280,676 $8,198,593
 2015 $1,549,462 $0 $6,039,153 $916,676 — $272,031 $8,777,322
            

(1)

Mr. Fairbank’s compensation for 2017 consisted of stock options, performance shares, and ayear-end incentive opportunity (payable in deferred cash bonus and cash-settled RSUs), in addition to certain perquisites. Mr. Fairbank received a portion of his total compensation for 2017 in February 2017 (stock options and performance shares), which is reflected in the table above for 2017. Mr. Fairbank received the remainder of his compensation for 2017 in February 2018 (theyear-end incentive opportunity delivered partially in cash-settled RSUs and the NEOsremainder in 2014 for other compensation and benefit programs are listed underdeferred cash bonus). The portion of the “Changeyear-end incentive opportunity delivered as deferred cash bonus to Mr. Fairbank in Pension Value and Non-Qualified Deferred Compensation Earnings” and “All Other Compensation” columns. The details of these program amounts are providedFebruary 2018 is included in the footnotes.

Please seetable above, while the footnotes toportion delivered as cash-settled RSUs is not. His compensation for 2016 included cash-settled RSUs granted in February 2017 (a portion of his 2016year-end incentive opportunity), which are included in the table belowabove for an additional explanation regarding compensation attributable to each performance year. Further information on the timing of awards under the 2014 compensation programs for the CEO and the NEOs can be found under “Compensation Components”2017. See “CEO Compensation by Performance Year” in the “Compensation Discussion and Analysis” section beginning on page 34.

 2014 Summary54 for more information on how the Compensation TableCommittee views compensation actions and to which year the compensation awards relate.

 

Name and Principal
Position		 Year Salary (3)Bonus (4)Stock
Awards (5)		Option
Awards (6)

Change in
Pension Value and

Non-Qualified

Deferred

Compensation

Earnings (7)

All Other

Compensation (8)

Total
Richard D. Fairbank(1)
Chairman, CEO and
President		2014$0$4,410,000$13,343,815$1,750,000$3,195$99,464$19,606,474
2013$0$2,843,750$10,937,569$4,375,012$2,177$136,017$18,294,525
2012$0$2,187,500$15,950,051$4,375,009$3,550$89,264$22,605,374
Stephen S. Crawford(2)
Chief Financial Officer		2014$1,526,538$0$5,376,001$755,714–$277,002$7,935,255
2013$1,326,923$0$10,832,068$0–$223,225$12,382,216
Ryan M. Schneider(2)
President, Card		2014$1,116,462$0$4,251,285$609,345–$207,210$6,184,302
2013$1,093,308$0$3,405,670$473,342–$204,084$5,176,404
2012$1,032,394$0$4,235,215$591,559–$204,151$6,063,319
John G. Finneran, Jr.(2)
General Counsel and
Corporate Secretary		2014$974,692$0$3,708,724$478,413$842$195,481$5,358,152
2013$953,769$0$3,342,536$464,511$293$203,963$4,965,072
2012$907,760$0$3,989,126$518,657$1,113$198,199$5,614,855
Sanjiv Yajnik(2)
President, Financial
Services		2014$912,923$0$3,477,040$448,616–$186,306$5,024,885
(2)

(1)Mr. Fairbank’s compensation for 2014 consisted of stock options, performance shares, stock-settled RSUs, and a year-end incentive opportunity (payable in deferred cash bonus and cash-settled RSUs), in addition to certain perquisites. Mr. Fairbank received a portion of his total compensation for 2014 in January 2014 (stock options, performance shares, and stock-settled RSUs), which is reflected in the table above for 2014. Mr. Fairbank received the rest of his compensation for 2014 in January 2015 (the year-end incentive opportunity delivered partially in cash-settled RSUs and the remainder in deferred cash bonus). The portion of the year-end incentive opportunity delivered as deferred cash bonus to Mr. Fairbank in January 2015 is included in the table above, while the portion delivered as cash-settled RSUs is not. His compensation for 2013 included cash-settled RSUs granted in January 2014 (a portion of his 2013 year-end incentive opportunity), which are included in the table above for 2014. See “CEO Compensation by Performance Year” in the “Compensation Discussion and Analysis” section on page 39 for more information on how the Compensation Committee views compensation actions and to which year the compensation awards relate.

(2)NEO compensation for 2014 consisted of cash base salary, stock options, performance shares and three grants of RSUs (one representing a portion of base salary which settles in cash), in addition to certain perquisites. The cash-settled RSUs attributable to base salary are included in the table above for 2014, however the other equity-based awards for 2014 performance were granted in January 2015 and are not included in the table above. The stock options, performance shares, stock-settled RSUs and cash-settled RSUs granted in January 2014 for 2013 performance are included in the table above for 2014.For NEOs other than the CEO, compensation for 2017 consisted of cash base salary, stock options (other than Mr. Blackley as discussed in footnote 3 below), performance shares and three grants of RSUs (one representing a portion of base salary which settles in cash), in addition to certain perquisites. The cash-settled RSUs representing base salary are included in the table above for 2017, however the other equity-based awards for 2017 performance were granted in February 2018 and are not included in the table above. The stock options, performance shares, stock-settled RSUs and cash-settled RSUs granted in February 2017 for 2016 performance are included in the table above for 2017. See “NEO Compensation by Performance Year” in the “Compensation Discussion and Analysis” section on page 43 for more information on how the Compensation Committee views compensation actions and to which year the compensation awards relate.

(3)The amounts shown in this column represent the cash portion of base salary for NEOs. The remaining portion of base salary for 2014 was delivered in cash-settled RSUs, as described under “Base Salaries” in the “Compensation Discussion and Analysis” section on page 41, and is included in the “Stock Awards” column in the table above.

(4)The amount shown in this column reflects Mr. Fairbank’s deferred cash bonus for 2014 performance awarded in January 2015 as described under “Year-End Incentive Opportunity” in the “Compensation Discussion and Analysis” section on page 38.

(5)

The amounts shown in this column for 2014 represent the grant date fair value of performance shares, stock-settled RSUs and cash-settled RSUs granted to the named executive officers in 2014, calculated in

accordance with FASB ASC Topic 718. The grant date fair value of performance shares included in this column assumes a payout at the target performance level. For additional information, including performance share awards at target and maximum performance on a per executive basis, refer to footnote 3 to the Grants of Plan-Based Awards Table below.

(6)The amounts shown in this column for 2014 represent the grant date fair value of stock options granted to the named executive officers in 2014, calculated in accordance with FASB ASC Topic 718. For information on the valuation assumptions of these awards, refer to footnote 3 to the Grants of Plan-Based Awards Table below.

(7)The amounts shown in this column represent the change in the actuarial present value of the accumulated pension benefits for Messrs. Fairbank and Finneran under the Cash Balance Pension Plan and the Excess Cash Balance Plan. The interest crediting rate for the Cash Balance Pension Plan changes annually based on the average yield of 5-year Treasury Securities for the preceding 12 months. For the Excess Cash Balance Plan, the interest crediting rate changes monthly based on the Wall Street Journal Prime Rate.

(8)All other compensation consists of the following on a per executive basis:

Named Executive
Officer		Auto
(a)		Travel
and
Aircraft

Health

Screening

Driver and
Security		Company
Contributions to
Defined Contribution
Plans (b)		Insurance
(c)		    Other    
(d)

Richard D. Fairbank

$645$0$1,655$79,596 (e)$0$16,740$828
        

Stephen S. Crawford

$31,124$0$0$0$237,600$7,450$828
        

Ryan M. Schneider

$18,745$0$3,636$3,314 (f)$176,750$4,650$115
        

John G. Finneran, Jr.

$16,210$0$1,900$4,589 (f)$155,850$16,740$192
        

Sanjiv Yajnik

$16,999$0$3,211$5,204 (f)$146,820$12,480$1,592

(a)Represents the value attributable to personal use of Company-provided automobile benefits. The cost of automobile benefits is determined on an annual basis and includes, as applicable, annual car lease, automobile service fees, and other related miscellaneous expenses (such as fuel and maintenance).

(b)Represents Company contributions under qualified and non-qualified deferred compensation programs and other supplemental executive retirement benefits.

(c)Represents life insurance premiums paid on behalf of the executives.

(d)Represents incidental expenses incurred in connection with corporate events.

(e)Includes cost attributable to personal use of a driver who also provides for Mr. Fairbank’s personal security ($70,752) and aggregate cost to the Company for home security services ($8,844) for Mr. Fairbank. The percent of personal use of the automobile is tracked throughout the calendar year and then applied to the full expense amount for personal security.

(f)Includes aggregate cost to the Company for home security services.

 2014 Grants of Plan-Based Awards Table

The Grants of Plan-Based Awards table provides details on equity incentive plan awards granted in 2014 including stock options, performance shares, cash-settled RSUs and stock-settled RSUs.

The columns reporting “Estimated Future Payouts Under Equity Incentive Plan Awards,” “All Other Stock Awards” and “All Other Option Awards” relate to Capital One’s equity-based incentive awards to the named executive officers.

For the CEO in 2014, the awards are comprised of stock options, performance shares, and stock-settled RSUs granted in January 2014 as part of the CEO’s 2014 compensation program and cash-settled RSUs granted in January 2014 for 2013 performance.

The stock options become exercisable on February 15, 2017 and expire in ten years.
The performance shares will be issued based on the Company’s Adjusted ROA over the three-year period from January 1, 2014 through December 31, 2016, relative to the KBW Bank Sector index, excluding custody banks. The total value delivered at vesting will be reduced if for any of the years in the three-year performance period the Company does not achieve positive Adjusted ROA, regardless of how well the Company compares to its peers in the KBW Bank Sector index over the performance period. See “2014 CEO Compensation Decisions” in the “Compensation Discussion and Analysis” section beginning on page 3662 for more detailsinformation on how the Compensation Committee views compensation actions and to which year the compensation awards relate.

(3)

Mr. Blackley was appointed Chief Financial Officer in May 2016. His 2017 stock awards granted for performance share awards. Dividend equivalents are accrued onyear 2016 reflect the performance sharesposition he held at the same timebeginning of 2016, which did not include a grant of stock options. Beginning with performance year 2017, Mr. Blackley’s compensation program is consistent with the othernon-CEO named executive officers.

(4)

Mr. Crawford served as dividends are paid outthe Head of Finance and Corporate Development from May 2016 to July 2017. In July 2017, he ceased to be an executive officer of the Company. Mr. Crawford currently serves as a Senior Advisor to the Company’s other stockholders and are paid out as additional shares only onCEO.

(5)

The amounts shown in this column represent the performance shares that actually vest based oncash portion of base salary for the results certified by the Compensation Committee.

NEOs. The remaining portion of base salary for each year was delivered in cash-settled RSUs, and stock-settled RSUs vest in full on February 15, 2017. The cash-settled RSUs settle in cash based on the average closing price of the Company’s common stock for the 15 trading days preceding the vesting date. Dividend equivalents are accrued on the cash-settled and stock-settled RSUs at the same time as dividends are paid to the Company’s other stockholders and are paid at the time of vesting, adjusted for performance-based vesting results.

For the NEOs in 2014, the awards are comprised of stock options, performance shares, cash-settled RSUs, and stock-settled RSUs granted in January 2014 for the 2013 performance year and cash-settled RSUs granted in January 2014 as a portion of 2014 base salary (as described under “Base Salaries” in the “Compensation Discussion and Analysis” section on page 41).60, and is included in the “Stock Awards” column in the table above.

 

(6)

The stock options become exercisableamount shown in three equal annual installments, beginning onthis column for 2017 reflects Mr. Fairbank’s deferred cash bonus for 2017 performance awarded in February 15 of the year after the date of grant, and expire in ten years.

The terms of the performance shares for the NEOs are substantially the same2018 as the terms of the CEO’s performance shares described above. Dividend equivalents are accrued on the performance shares at the same time as dividends are paid to the Company’s other stockholders and are paid out as additional shares only on the performance shares that actually vest based on the results certified by the Compensation Committee.
The stock-settled RSUs vest in three equal annual installments beginning on February 15 of the year after the date of grant. Dividend equivalents are accrued on the stock-settled RSUs at the same time as dividends are paid to the Company’s other stockholders and are paid at the time of vesting, adjusted for performance-based vesting results.
The cash-settled RSUs representing a portion of base salary vested in full on January 1, 2015 and settled in cash on February 15, 2015 (the “Payment Date”) based on the average closing price of the Company’s common stock for the 15 trading days preceding the payment date. The other cash-settled RSUs vest in three equal annual installments beginning on February 15 of the year after the date of grant and settle in cash based on the average closing price of the Company’s common stock for the 15 trading days preceding the vesting date. Dividend equivalents are paid on the cash-settled RSUs at the same rate and at approximately the same time as dividends are paid to the Company’s other stockholders.

Each award of stock-settled RSUs (as well as cash-settled RSUs for the CEO) and stock options reported below is also subject to performance-based vesting provisions tied to core earnings that will reduce the total number of shares delivered at vesting if the Company does not achieve certain performance thresholds during the three-year vesting period. See “Additional Performance Conditions and Recovery Provisions”under“Year-End Incentive Opportunity” in the “Compensation Discussion and Analysis” section beginning on page 44 for more details52.

74  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

(7)

The amounts shown in this column represent the grant date fair value of performance shares, stock-settled RSUs and cash-settled RSUs granted to the named executive officers, calculated in accordance with FASB ASC Topic 718. The grant date fair value of performance shares included in this column assumes a payout at the target performance level. For additional information, including performance share awards at maximum performance on a per executive basis, refer to footnote 1 to the performance-based vesting provisions.

 2014 Grants of Plan-Based Awards Table below.

 

Name and Principal
Position		 Award Type Date of
Grant (1)		 

Estimated Future
Payouts Under
Equity Incentive
Plan Awards

 All Other
Stock
Awards:
Number of
Shares of
Stock or
Units		 All Other
Option
Awards:
Number of
Securities
Underlying
Options		 Exercise or
Base Price
of Option
Awards (2)
($/Sh)		 Grant Date Fair
Value of Stock
and Option
Awards (3)
   

 

Target

 

 

Maximum

    

Richard D. Fairbank

Chairman, CEO and President

 

Performance Shares (3)

 1/30/2014 123,309 184,964 – – – $8,750,007
 Stock Options 1/30/2014 – – – 108,944 $70.96 $1,750,000
 Cash-Settled RSUs (4) 1/30/2014 – – 40,076 – – $2,843,793
 Stock-Settled RSUs (5) 1/30/2014 – – 24,662 – – $1,750,016
                 

Stephen S. Crawford

Chief Financial Officer

 

Performance Shares(3)

 1/30/2014 14,378 21,567 – – – $1,020,263
 

Stock Options

 1/30/2014 – – – 47,046 $70.96 $755,714
 

Cash-Settled RSUs

 1/30/2014 – – 21,566 – – $1,530,323
 Cash-Settled RSUs (6) 1/30/2014 – – 15,855 – – $1,125,071
 

Stock-Settled RSUs

 1/30/2014 – – 23,962 – – $1,700,344
                 
Ryan M. Schneider
President, Card		 

Performance Shares(3)

 1/30/2014 11,593 17,390 – – – $822,639
 

Stock Options

 1/30/2014 – – – 37,934 $70.96 $609,345
 Cash-Settled RSUs 1/30/2014 – – 17,398 – – $1,234,562
 

Cash-Settled RSUs(6)

 1/30/2014 – – 11,599 – – $823,065
 

Stock-Settled RSUs

 1/30/2014 – – 19,321 – – $1,371,018
                 

John G. Finneran, Jr.

General Counsel and

Corporate Secretary

 

Performance Shares(3)

 1/30/2014 10,113 15,170 – – – $717,618
 Stock Options 1/30/2014 – – – 29,783 $70.96 $478,413
 Cash-Settled RSUs 1/30/2014 – – 15,178 – – $1,077,031
 Cash-Settled RSUs(6) 1/30/2014 – – 10,119 – – $718,044
 

Stock-Settled RSUs

 1/30/2014 – – 16,855 – – $1,196,031
                 

Sanjiv Yajnik

President, Financial

Services

 

Performance Shares(3)

 1/30/2014 9,483 14,225 – – – $672,914
 Stock Options 1/30/2014 – – – 27,928 $70.96 $448,616
 Cash-Settled RSUs 1/30/2014 – – 14,227 – – $1,009,548
 Cash-Settled RSUs(6) 1/30/2014 – – 9,485 – – $673,056
 

Stock-Settled RSUs

 1/30/2014 – – 15,805 – – $1,121,523
(8)

The amounts shown in this column represent the grant date fair value of stock options granted to the named executive officers in 2017, calculated in accordance with FASB ASC Topic 718. See footnote 4 to the Grants of Plan-Based Awards table below for information on the valuation assumptions related to these awards.

(1)Date on which awards were approved by the Compensation Committee and independent directors and granted to the individuals.

(9)

The amounts shown in this column represent the change in the actuarial present value of the accumulated pension benefits for Messrs. Fairbank and Finneran under the Cash Balance Pension Plan and the Excess Cash Balance Plan.

(10)

All other compensation for the named executive officers consists of the following:

 

(2)Equal to the fair market value of a share of Capital One’s common stock on the date of grant determined on the basis of the closing price as reported by the NYSE Composite Transaction Tape.
                                                                                                                                                                                                    

  Named Executive

  Officer

 Auto (a)   

Travel  

and

Aircraft  

 

Health 

Screening (b) 

 Security   

Company

Contributions to

Defined Contribution  

Plans(c)

 Insurance (d)   Other (e)  
    

  Richard D. Fairbank

 $ — $ — $2,633 $105,354(f) $ — $19,800 $31,183
          
    

  R. Scott Blackley

 $33,232 $ — $3,575 $34,341(g) $139,650 $5,100 $9,278
          
    

  Frank G. LaPrade, III

 $19,689 $ — $1,900 $2,370(g) $163,980 $7,260 $3,221
          
    

  John G. Finneran, Jr.

 $19,621 $ — $1,900 $2,673(g) $169,710 $19,800 $5,293
          
    

  Sanjiv Yajnik

 $29,932 $ — $4,578 $40,543(g) $161,280 $13,860 $9,536
          
    

  Stephen S. Crawford

 $6,415 $ — $ — $ — $166,728 $7,260 $1,113
          

(a)

The cost of these benefits is determined on an annual basis and includes, as applicable, annual car lease or car service, automobile service fees, and other related miscellaneous expenses (such as fuel and maintenance). Mr. Fairbank does not participate in the Company-provided automotive benefit.

(b)

Represents cost attributable to the annual physical program where executives have the opportunity to receive a comprehensive health screening once a year.

(c)

Represents Company contributions under qualified andnon-qualified deferred compensation programs and other supplemental executive retirement benefits.

(d)

Represents life insurance premiums paid on behalf of the executives.

(e)

Represents contributions made by Capital One to charitable organizations chosen by CEO (up to $30,000) and the other NEOs (up to $5,000), as well as incidental expenses incurred in connection with corporate events. Additionally, for Mr. Blackley, the total value includes payments he received in consideration for the execution of aNon-Competition Agreement with the Company in March 2017 and an amendment to that agreement in July 2017, as well as a gift card in recognition of his 2016 promotion. For additional details regarding Mr. Blackley’sNon-Competition Agreement, see“Non-Competition Agreements” beginning on page 84.

(f)

Represents costs attributable to a security guard who provides for Mr. Fairbank’s personal security and operates Mr. Fairbank’s personal vehicle ($79,782). Amount shown also includes aggregate cost to the Company for home security services ($25,572) for Mr. Fairbank. The percent of personal use of the security guard’s services is tracked throughout the calendar year and then applied to the full expense amount for personal security.

(g)

Represents aggregate cost to the Company for home security services provided to executives.

  2017 Grants of Plan-Based Awards

The Grants of Plan-Based Awards table provides details on equity incentive plan awards granted in 2017, including stock options, performance shares, cash-settled RSUs and stock-settled RSUs. The columns reporting “Estimated Future Payouts Under Equity Incentive Plan Awards,” “All Other Stock Awards” and “All Other Option Awards” relate to Capital One’s equity-based incentive awards to the named executive officers.

2017 Grants to CEO

For 2017, awards granted to the CEO are comprised of stock options and performance shares granted in February 2017 as part of the CEO’s 2017 compensation program and cash-settled RSUs granted in February 2017 for 2016 performance.

Stock Options. The stock options become exercisable on February 15, 2020 and expire ten years from the grant date.

Performance Shares.The performance shares will be issued based on the Company’s Adjusted ROA (as defined on page 65 under “Performance Share Reduction”) over the three-year period from January 1, 2017

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  75

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 

(3)The grant date fair value for each option awarded on January 30, 2014, was calculated using the Black-Scholes method and was based on the following assumptions:

through December 31, 2019, relative to the KBW Index (as defined on page 51). The total value delivered at vesting will be reduced if the Company’s Adjusted ROA for one or more fiscal years completed during the performance period is not positive, no matter how well the Company performs relative to the peer group. See “2017 CEO Compensation Program” in the “Compensation Discussion and Analysis” section beginning on page 49 for more details on the 2017 performance share awards. Dividend equivalents are accrued on the performance shares at the same time as dividends are paid out to the Company’s other stockholders and are paid out as additional shares only on the performance shares that actually vest based on the results certified by the Committee.

Cash-Settled Restricted Stock Units.The cash-settled RSUs vest in full on February 15, 2020 and settle in cash based on the average closing price of the Company’s common stock for the 15 trading days preceding the vesting date. Dividend equivalents are accrued on the cash-settled RSUs at the same time as dividends are paid to the Company’s other stockholders and are paid at the time of vesting, adjusted for performance-based vesting results.

2017 Grants to NEOs (other than the CEO)

For 2017, the awards granted to NEOs other than the CEO are comprised of stock options, performance shares, cash-settled RSUs, and stock-settled RSUs granted in February 2017 for the 2016 performance year and cash-settled RSUs granted in February 2017 as a portion of 2017 base salary (as described under “Base Salaries” in the “Compensation Discussion and Analysis” section on page 60). Mr. Blackley did not receive stock options in 2017 for the 2016 performance year. His 2017 stock awards granted for the 2016 performance year reflect the position he held at the beginning of 2016.

Stock Options. The stock options become exercisable in three equal annual installments, beginning on February 15 of the year after the date of grant, and expire ten years from the grant date.

Performance Shares.The terms of the performance shares for the other NEOs are substantially the same as the terms of the CEO’s performance shares described above. Dividend equivalents are accrued on the performance shares at the same time as dividends are paid to the Company’s other stockholders and are paid out as additional shares only on the performance shares that actually vest based on the results certified by the Committee.

Stock-Settled Restricted Stock Units.The stock-settled RSUs vest in three equal annual installments beginning on February 15 of the year after the date of grant. Dividend equivalents are accrued on the stock-settled RSUs at the same time as dividends are paid to the Company’s other stockholders and are paid at the time of vesting.

Cash-Settled Restricted Stock Units.The cash-settled RSUs representing a portion of base salary vested in full on January 1, 2018 and settled in cash on February 15, 2018 based on the average closing price of the Company’s common stock for the 15 trading days preceding the payment date. The other cash-settled RSUs vest in three equal annual installments beginning on February 15 of the year after the date of grant and settle in cash based on the average closing price of the Company’s common stock for the 15 trading days preceding the vesting date. Dividend equivalents are paid on the cash-settled RSUs at approximately the same time as dividends are paid to the Company’s other stockholders.

The annual awards of stock-settled RSUs (as well as cash-settled RSUs for the CEO) and stock options reported below are also subject to performance-based vesting provisions that are associated with Core Earnings. As a result, the total number of shares delivered at vesting will be reduced if the Company does not achieve certain performance thresholds during the three-year vesting period. See “Additional Performance Conditions and Recovery Provisions” in the “Compensation Discussion and Analysis” section beginning on page 64 for more details on the performance-based vesting provisions.

 

   
Volatility  Risk-Free Interest Rate  Dividend Yield  Expected Life

25.53%

  1.92%  1.74%  6.1 Years
76  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 2017 Grants of Plan-Based Awards Table

 Name and

 Principal

 Position

 

 

 

Award Type

 

 

 

Date of

Grant(6)

 

 

  

 

 

 

Estimated Future

Payouts Under

Equity Incentive

Plan Awards

 

 

All Other 

Stock 

Awards: 

Number of 

Shares of 

Stock or 

Units 

 

 

 

All Other 

Option 

Awards: 

Number of 

Securities 

Underlying 

Options 

 

 

 

Exercise or 

Base Price 

of Option 

Awards (7) 

($/Sh) 

 

 

 

 Grant Date 

 Fair Value 

 of Stock 

 and 

 Option 

 Awards 

 

 

   

Target

 

 

Maximum 

 

    

Richard D.

Fairbank

Chairman, CEO

and President

 Performance Shares (1)  2/2/2017  $101,344 $152,016 — — — $8,750,041
 Stock Options(2)  2/2/2017  — — — 81,486 $86.34 $1,750,018
 Cash-Settled RSUs (3)  2/2/2017  — — 20,675 — — $1,785,080
        

R. Scott

Blackley

Chief Financial 

Officer

 Performance Shares (1)  2/2/2017  $5,647 $8,471 — — — $487,562
 Cash-Settled RSUs  2/2/2017  — — 6,649 — — $574,075
 Cash-Settled RSUs (4)  2/2/2017  — — 7,516 — — $648,931
 Stock-Settled RSUs  2/2/2017  — — 16,939 — — $1,462,513
 Cash-Settled RSUs (5)  7/3/2017  — — 453 — — $37,853
        

Frank G.

LaPrade, III

Chief

Enterprise

Services

Officer

 Performance Shares (1)  2/2/2017  $9,388 $14,082 — — — $810,560
 Stock Options (2)  2/2/2017  — — — 27,955 $86.34 $600,370
 Cash-Settled RSUs  2/2/2017  — — 8,537 — — $737,085
 Cash-Settled RSUs (4)  2/2/2017  — — 8,803 — — $760,051
 Stock-Settled RSUs  2/2/2017  — — 15,646 — — $1,350,876
        

John G.

Finneran, Jr.

Chief Risk

Officer and

Corporate

Secretary

 Performance Shares (1)  2/2/2017  $8,857 $13,286 — — — $764,713
 Stock Options(2)  2/2/2017  — — — 23,738 $86.34 $509,804
 Cash-Settled RSUs  2/2/2017  — — 8,861 — — $765,059
 Cash-Settled RSUs (4)  2/2/2017  — — 9,127 — — $788,025
 Stock-Settled RSUs  2/2/2017  — — 14,762 — — $1,274,551
        

Sanjiv Yajnik

President,

Financial

Services

 Performance Shares (1)  2/2/2017  $8,381 $12,572 — — — $723,616
 Stock Options(2)  2/2/2017  — — — 22,462 $86.34 $482,401
 Cash-Settled RSUs  2/2/2017  — — 8,386 — — $724,047
 Cash-Settled RSUs (4)  2/2/2017  — — 8,641 — — $746,064
 Stock-Settled RSUs  2/2/2017  — — 13,969 — — $1,206,083
        

Stephen S.

Crawford

Senior Advisor

to the CEO

 Performance Shares (1)  2/2/2017  $13,875 $20,813 — — — $1,197,968
 Stock Options(2)  2/2/2017  — — — 41,317 $86.34 $887,336
 Cash-Settled RSUs  2/2/2017  — — 13,887 — — $1,199,004
 Cash-Settled RSUs (4)  2/2/2017  — — 14,304 — — $1,235,007
 Stock-Settled RSUs  2/2/2017  — — 23,124 — — $1,996,526
        

(1)

The grant date fair values for the performance shares if the maximum level of performance is achieved are as follows: $13,125,010$13,125,061 for Mr. Fairbank, $1,530,394$731,386 for Mr. Crawford, $1,233,959Blackley, $1,215,840 for Mr. Schneider, $1,076,428LaPrade, $1,147,113 for Mr. Finneran, and $1,009,371$1,085,466 for Mr. Yajnik.Yajnik, and $1,796,944 for Mr. Crawford.

(2)

The grant date fair value for each option awarded on February 2, 2017, was calculated using the Black-Scholes method and was based on the following assumptions: (i) volatility of 26.87%; (ii) risk-free interest rate of 2.3%; (iii) dividend yield of 1.85% and (iv) expected life of 6.6 years.

(4)Grant of cash-settled RSUs representing a portion of Mr. Fairbank’s 2013

(3)

Grant of cash-settled RSUs representing a portion of Mr. Fairbank’s 2016year-end incentive opportunity.

(4)

Grant of cash-settled RSUs representing a portion of base salary for 2017.

(5)

One-time grant of cash-settled RSUs representing an increase in Mr. Blackley’s base salary for 2017 in connection with Mr. Blackley taking on an expanded role in July 2017.

(6)

Date on which awards were approved by the Committee and independent directors and granted to the executives.

(7)

Equal to the fair market value of a share of Capital One’s common stock on the date of grant determined on the basis of the closing price as reported by the NYSE Composite Transaction Tape.

 

(5)Grant of stock-settled RSUs representing 10% of the CEO’s 2014 total target compensation, introduced in 2014 to account for the reduction of the stock option component of the CEO’s total target compensation.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  77

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 

(6)Grant of cash-settled RSUs representing a portion of base salary for 2014.

 2014 2017 Option Exercises and Stock Vested Table

 

  Option AwardsStock Awards

Name & Principal Position

 

Number of Shares
   Acquired on Exercise    

Value Realized

   on Exercise (1)    

Number of Shares
   Acquired on Vesting    		Value Realized on
Vesting (2)

Richard D. Fairbank

Chairman, CEO and President

566,000$163,785303,979$22,912,886

Stephen S. Crawford

Chief Financial Officer

0$035,571$2,446,166

Ryan M. Schneider

President, Card

72,683$2,596,74165,192$4,757,336

John G. Finneran, Jr.

General Counsel and Corporate Secretary

0$057,136$4,176,124

Sanjiv Yajnik

President, Financial Services

7,630$28,69651,805$3,782,929

(1)The value realized is the pre-tax value of the shares (market price less the exercise price) received.

 

                                                                                                                                                                                                                        
  Option Awards Stock Awards
    Name & Principal Position 

 Number of Shares 

 Acquired on Exercise 

 

 Value Realized on 

 Exercise(1) 

 

 Number of Shares 

 Acquired on Vesting 

 

 Value Realized on 

 Vesting (2) 

    

Richard D. Fairbank

Chairman, CEO and President

 1,113,393 $41,547,468 259,062 $23,732,337
    

 

R. Scott Blackley

Chief Financial Officer

 — $— 21,871 $1,932,089
    
    

Frank G. LaPrade, III
Chief Enterprise Services Officer

 141,761 $7,107,643 53,724 $4,844,919
    
    

John G. Finneran, Jr.

Chief Risk Officer and Corporate Secretary

 — $— 58,590 $5,284,245
    
    

Sanjiv Yajnik

President, Financial Services

 108,169 $5,198,257 55,155 $4,974,238
    

 

Stephen S. Crawford

Senior Advisor to the CEO

 17,550 $508,161 104,021 $9,063,725
    

(1)

The value realized is thepre-tax value of the shares (market price less the exercise price) received.

(2)

The value realized for awards other than certain cash-settled RSUs and performance shares is the number of shares multiplied by the closing price of the Company’s common stock on the vesting date, as reported by the NYSE Composite Transaction Tape. For performance shares, the value also reflects the accrued dividends paid out as additional shares on the date the performance share award results were certified by the Committee. Except for cash-settled RSUs that were vested and released in connection with tax withholding on February 2, 2017, the value realized for all other cash-settled RSUs and amount paid is the number of shares multiplied by the closing price of the Company’s common stock for the 15 trading days preceding the vesting date, in accordance with the terms of the applicable awards. The value included in the table above that was realized from cash-settled RSUs was as follows: $3,521,617 for Mr. Fairbank, $848,305 for Mr. Blackley, $2,042,792 for Mr. LaPrade, $2,228,662 for Mr. Finneran, $2,103,794 for Mr. Yajnik, and $3,425,841 for Mr. Crawford.

(2)The value realized for awards other than certain cash-settled RSUs and performance shares is the number of shares multiplied by the closing price of the Company’s common stock on the vesting date, as reported by the NYSE Composite Transaction Tape. For performance shares, the value also reflects the accrued dividends paid out as additional shares on the date the performance share award results are certified by the Compensation Committee. Except for cash-settled RSUs that were vested and released in connection with tax withholding on January 30, 2014, the value realized for all other cash-settled RSUs and amount paid is the number of shares multiplied by the closing price of the Company’s common stock for the 15 trading days preceding the vesting date, in accordance with the terms of the applicable awards. The value included in the table above that was realized from cash-settled RSUs was as follows: $10,186,459 for Mr. Fairbank, $54,710 for Mr. Crawford, $1,710,848 for Mr. Schneider, $1,607,667 for Mr. Finneran, and $1,424,777 for Mr. Yajnik.
78  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

 2014

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 2017 Outstanding Equity Awards at FiscalYear-End Table

 

 Option Awards (1), (2)Stock Awards (2)

 

Name and Principal

Position

Number of
Securities
Underlying
Unexercised
Options
Exercisable		Number of
Securities
Underlying
Unexercised
Options
Unexercisable

 

Option
Exercise
Price (3)

 

Option
Expiration
Date

Number of
Shares or
Units of
Stock that
Have Not
Vested		Market Value
of Shares or
Units of
Stock that
Have Not
Vested (4)		Equity Incentive
Plan Awards:
Number of Unearned
Shares, Units, or
Other Rights that
Have Not Vested		Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units, or Other
Rights that Have Not
Vested (4)

Richard D. Fairbank

Chairman, CEO and President

260,957 (6)$21,542,000813,219 (7)$67,131,228
573,000 (5)0$87.2812/19/2015
594,851 (5)0$76.4512/10/2016
1,661,780 (5)0$50.9912/09/2017
970,403 (5)0$18.281/28/2019
559,333 (5)0$36.551/26/2020
608,366 (5)0$48.281/25/2021
0360,009 (5)$45.751/30/2022
0325,985 (5)$56.321/30/2023
0108,944 (5)$70.961/29/2024
         

Stephen S. Crawford

Chief Financial Officer

199,812 (9)$16,494,48121,567 (7)$1,780,356
047,046 (8)$70.961/29/2024
         

Ryan M. Schneider

President, Card

89,924 (10)$7,423,22670,480 (7)$5,818,083
15,650 (8)0$78.713/14/2015
17,890 (8)0$88.813/2/2016
26,250 (8)0$76.793/1/2017
63,700 (8)0$48.952/20/2018
32,451 (8)16,227 (8)$45.751/30/2022
11,756 (8)23,513 (8)$56.321/30/2023
037,934 (8)$70.961/29/2024
         

John G. Finneran, Jr.

General Counsel and Corporate Secretary

82,749 (10)$6,830,93068,867 (7)$5,684,930
57,760 (8)0$78.713/14/2015
63,650 (8)0$88.813/2/2016
88,510 (8)0$76.793/1/2017
149,890 (8)0$48.952/20/2018
56,624 (8)0$48.281/25/2021
28,452 (8)14,227 (8)$45.751/30/2022
11,536 (8)23,075 (8)$56.321/30/2023
029,783 (8)$70.961/29/2024
         

Sanjiv Yajnik

President, Financial Services

76,997 (10)$6,356,10263,334 (7)$5,228,222
11,670 (8)0$88.813/2/2016
23,560 (8)0$76.793/1/2017
37,204 (8)0$48.281/25/2021
25,676 (8)12,839 (8)$45.751/30/2022
10,816 (8)21,634 (8)$56.321/30/2023
027,928 (8)$70.961/29/2024

 

  Option Awards(1) Stock Awards  

  Name and

  Principal

  Position

 

 Grant 

 Date 

 

 Number of 

 Securities 

 Underlying 

 Unexercised 

 Options 

 Exercisable 

 

 Number of 

 Securities 

 Underlying 

 Unexercised 

 Options 

 Unexercisable 

 

 Option 

 Exercise 

 Price(2) 

 

 Option 

 Expiration 

 Date

 

 Number of 

 Shares
or 

 Units of 

 Stock that 

 Have
Not 

 Vested 

 

 Market 

 Value of 

 Shares or 

 Units of 

 Stock that 

 Have Not 

 Vested(3) 

 

 Equity 

 Incentive 

 Plan 

 Awards: 

 Number of 

 Unearned 

 Shares, 

 Units, or 

 Other 

 Rights that 

 Have Not 

 Vested 

 

 Equity 

 Incentive 

 Plan 
 Awards: 
 Market or 
 Payout 
 Value of 

 Unearned 

 Shares, 

 Units, or 

 Other 

 Rights that 

 Have Not 

 Vested (3) 

Richard D. Fairbank Chairman,

CEO and President

 1/29/2009 970,403(4) 0 $18.28 1/28/2019    
 1/27/2010 559,333(4) 0 $36.55 1/26/2020    
 1/26/2011 608,366(4) 0 $48.28 1/25/2021    
 1/31/2012 360,009(4) 0 $45.75 1/30/2022    
 1/31/2013 325,985(4) 0 $56.32 1/30/2023    
 1/30/2014 108,944(4) 0 $70.96 1/29/2024    
 1/29/2015 0 115,812(5) $74.96 1/28/2025    
 1/29/2015     38,214(6) $3,805,350  
 1/29/2015     22,746(6) $2,265,047  
 1/29/2015       175,094(7) $17,435,861
 2/4/2016 0 106,973(5) $63.73 2/3/2026    
 2/4/2016     27,607(6) $2,749,105  
 2/4/2016     27,066(6) $2,695,232  
 2/4/2016       205,947(8) $20,508,202
 2/2/2017 0 81,486(5) $86.34 2/2/2027    
 2/2/2017     20,675(6) $2,058,817  
 2/2/2017       152,016(8) $15,137,753
         

R. Scott Blackley

Chief Financial Officer

 1/29/2015     2,531(9) $252,037  
 1/29/2015     1,345(10) $133,935  
 1/29/2015       3,798(7) $378,205
 2/4/2016     6,846(9) $681,725  
 2/4/2016     3,142(10) $312,880  
 2/4/2016       5,135(8) $511,343
 5/9/2016     10,776(11) $1,073,074  
 2/2/2017     16,939(9) $1,686,786  
 2/2/2017     6,386(10) $635,918  
 2/2/2017     7,516(12) $748,443  
 2/2/2017       8,471(8) $843,542
 7/3/2017     453(12) $45,110  
         

Frank G.
LaPrade, III Chief Enterprise Services Officer

 1/31/2013 32,603(4) 0 $56.32 1/30/2023    
 1/30/2014 29,964(4) 0 $70.96 1/29/2024    
 1/29/2015 21,268(13) 10,635(13) $74.96 1/28/2025    
 1/29/2015     4,823(9) $480,274  
 1/29/2015     3,721(10) $370,537  
 1/29/2015       13,023(7) $1,296,830
 2/4/2016 10,806(13) 21,614(13) $63.73 2/3/2026    
 2/4/2016     12,484(9) $1,243,157  
 2/4/2016     6,894(10) $686,505  
 2/4/2016       16,853(8) $1,678,222
 2/2/2017 0 27,955(13) $86.34 2/2/2027    
 2/2/2017     15,646(9) $1,558,029  
 2/2/2017     8,151(10) $811,677  
 2/2/2017     8,803(12) $876,603  
 2/2/2017       14,082(8) $1,402,286
         

(1)Stock options granted generally have time-based vesting schedules, are exercisable upon vesting and vest earlier upon the optionee’s termination of employment for death, disability, or upon a change of control of Capital One. Certain stock options, as noted in the footnotes below, are also subject to performance-based vesting requirements. They are transferable only to or for the benefit of immediate family members. For the treatment of stock options after the optionee’s retirement, see “Payments upon Retirement” in the “Potential Payments Upon Termination or Change of Control” section on page 67 for details.

CAPITAL ONE FINANCIAL CORPORATION  

(2)The following table details vesting dates for all outstanding equity awards; the date listed as the vesting date for performance shares is the date by which the Compensation Committee must certify the performance of the Company over the applicable performance period.

  2018 PROXY STATEMENT  

  79

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

  Option Awards(1) Stock Awards  

  Name and

  Principal

  Position

 

 Grant 

Date 

 

 Number of 

 Securities 

 Underlying 

 Unexercised 

 Options 

 Exercisable 

 

 Number of 

 Securities 

 Underlying 

 Unexercised 

 Options 

 Unexercisable 

 

 Option 

 Exercise 

 Price(2) 

 

 Option 

 Expiration 

 Date

 

 Number of 

 Shares
or 

 Units of 

 Stock that 

 Have
Not 

 Vested 

 

 Market 

 Value of 

 Shares or 

 Units of 

 Stock that 

 Have Not 

 Vested(3) 

 

 Equity 

 Incentive 

 Plan 

 Awards: 

 Number of 

 Unearned 

 Shares, 

 Units, or 

 Other 

 Rights that 

 Have Not 

 Vested 

 

 Equity 

 Incentive 

 Plan 
 Awards: 
 Market or 
 Payout 
 Value of 

 Unearned 

 Shares, 

 Units, or 

 Other 

 Rights that 

 Have Not 

 Vested (3) 

John G.

Finneran, Jr.

Chief Risk Officer

and Corporate

Secretary

 1/26/2011 56,624(4) 0 $48.28 1/25/2021    
 1/31/2012 42,679(4) 0 $45.75 1/30/2022    
 1/31/2013 34,611(4) 0 $56.32 1/30/2023    
 1/30/2014 29,783(4) 0 $70.96 1/29/2024    
 1/29/2015 21,106(13) 10,554(13) $74.96 1/28/2025    
 1/29/2015     5,318(9) $529,566  
 1/29/2015     4,302(10) $428,393  
 1/29/2015       14,361(7) $1,430,068
 2/4/2016 10,082(13) 20,164(13) $63.73 2/3/2026    
 2/4/2016     12,941(9) $1,288,665  
 2/4/2016     7,507(10) $747,547  
 2/4/2016       17,471(8) $1,739,762
 2/2/2017 0 23,738(13) $86.34 2/2/2027    
 2/2/2017     14,762(9) $1,470,000  
 2/2/2017     8,555(10) $851,907  
 2/2/2017     9,127(12) $908,867  
 2/2/2017       13,286(8) $1,323,020
         

Sanjiv Yajnik

President,

Financial

Services

 1/30/2014 27,928(4) 0 $70.96 1/29/2024    
 1/29/2015 19,791(13) 9,897(13) $74.96 1/28/2025    
 1/29/2015     4,987(9) $496,605  
 1/29/2015     4,048(10) $403,100  
 1/29/2015       13,466(7) $1,340,944
 2/4/2016 9,544(13) 19,089(13) $63.73 2/3/2026    
 2/4/2016     12,250(9) $1,219,855  
 2/4/2016     7,131(10) $710,105  
 2/4/2016       16,538(8) $1,646,854
 2/2/2017 0 22,462(13) $86.34 2/2/2027    
 2/2/2017     13,969(9) $1,391,033  
 2/2/2017     8,125(10) $809,088  
 2/2/2017     8,641(12) $860,471  
 2/2/2017       12,572(8) $1,251,920
         

Stephen S.

Crawford

Senior Advisor to

the CEO

 2/4/2013     15,262 (14) $1,519,790  
 1/30/2014 47,046 (4) 0 $70.96 1/29/2024    
 1/29/2015 40,442 (13) 20,222 (13) $74.96 1/28/2025    
 1/29/2015     9,171(9) $913,248  
 1/29/2015     6,756 (10) $672,762  
 1/29/2015       24,764(7) $2,465,999
 2/4/2016 0 35,101 (13) $63.73 2/3/2026    
 2/4/2016     20,274 (9) $2,018,885  
 2/4/2016     11,613 (10) $1,156,423  
 2/4/2016       27,369(8) $2,725,405
 2/2/2017 0 41,317 (13) $86.34 2/2/2027    
 2/2/2017     23,124 (9) $2,302,688  
 2/2/2017     13,390 (10) $1,333,376  
 2/2/2017     14,304 (12) $1,424,392  
 2/2/2017       20,813(8) $2,072,559
         

(1)

Stock options granted generally have time-based vesting schedules, are exercisable upon vesting and vest earlier upon the optionee’s termination of employment for death, disability, or, beginning with awards granted in 2015, termination by Capital One without cause or by the individual for “good reason” within two years following (or in anticipation of) a change of control of Capital One. Certain stock options, as noted in the footnotes below, are also subject to performance-based vesting requirements. These options are transferable only to or for the benefit of immediate family members. For the treatment of stock options after the optionee’s retirement, see “Payments upon Retirement” in the “Potential Payments Upon Termination or Change of Control” section on page 86 for details.

 

      First VestingSecond VestingThird VestingFourth VestingFifth Vesting

 

Name

 

Grant
Date

 

Grant Type

 

 Vesting Date 

 

 # of Shares 

Vesting
Date		# of
 Shares 		Vesting
Date		# of
 Shares 		Vesting
Date		# of
 Shares 		Vesting
Date		# of
 Shares 

Richard D.

Fairbank

12/20/2005Option Award12/20/2010573,000
12/11/2006Option Award12/11/2011594,851
12/10/2007Option Award12/10/20101,661,780
1/29/2009Option Award1/29/2012970,403
1/27/2010Option Award1/27/2013559,333
1/26/2011Option Award1/26/2014608,366
1/31/2012Perf Share Award3/15/2015191,257
1/31/2012Restricted Stock Unit Award2/10/2015157,378
1/31/2012Option Award2/10/2015360,009
1/31/2013Perf Share Award3/15/2016155,363
1/31/2013Restricted Stock Unit Award2/10/201638,841
1/31/2013Option Award2/10/2016325,985
1/30/2014Perf Share Award3/15/2017123,309
1/30/2014Restricted Stock Unit Award2/15/201740,076
1/30/2014Restricted Stock Unit Award2/15/201724,662
1/30/2014Option Award2/15/2017108,944

Stephen S.

Crawford

2/4/2013Restricted Stock Award2/4/201434,8002/4/201534,8002/4/201634,8002/4/201734,8002/4/201834,800
1/30/2014Perf Share Award3/15/201714,378
1/30/2014Restricted Stock Unit Award2/15/20157,9882/15/20167,9872/15/20177,987
1/30/2014Restricted Stock Unit Award1/30/20147712/15/20156,9322/15/20166,9322/15/20176,931
1/30/2014Restricted Stock Unit Award1/1/201515,855
1/30/2014Option Award2/15/201515,6812/15/201615,6822/15/201715,683

Ryan M.

Schneider

3/15/2005Option Award3/15/20065,2163/15/20075,2173/15/20085,217
3/3/2006Option Award3/3/20075,9573/3/20085,9573/3/20095,976
3/2/2007Option Award3/2/20088,7493/2/20098,7503/2/20108,751
2/21/2008Option Award2/21/200921,2332/21/201021,2332/21/201121,234
1/31/2012Perf Share Award3/15/201517,456
1/31/2012Restricted Stock Award2/10/20139,6982/10/20149,6982/10/20159,697
1/31/2012Restricted Stock Unit Award2/10/20139,5212/10/20149,5212/10/20159,522
1/31/2012Option Award2/10/201316,2252/10/201416,2262/10/201516,227
1/31/2013Perf Share Award3/15/201611,346
1/31/2013Restricted Stock Award2/10/20146,3042/10/20156,3032/10/20166,303
1/31/2013Restricted Stock Unit Award2/10/20145,2002/10/20155,2002/10/20165,201
1/31/2013Option Award2/10/201411,7562/10/201511,7562/10/201611,757
1/30/2014Perf Share Award3/15/201711,593
1/30/2014Restricted Stock Unit Award2/15/20156,4412/15/20166,4402/15/20176,440
1/30/2014Restricted Stock Unit Award1/30/20146202/15/20155,5932/15/20165,5932/15/20175,592
1/30/2014Restricted Stock Unit Award1/1/201511,599
1/30/2014Option Award2/15/201512,6442/15/201612,6452/15/201712,645

John G.

Finneran, Jr.

3/15/2005Option Award3/15/200619,2533/15/200719,2533/15/200819,254
3/3/2006Option Award3/3/200721,1953/3/200821,1953/3/200921,260
3/2/2007Option Award3/2/200829,5033/2/200929,5033/2/201029,504
2/21/2008Option Award2/21/200949,9622/21/201049,9632/21/201149,965
1/26/2011Option Award1/26/201218,8741/26/201318,8741/26/201418,876
1/31/2012Perf Share Award3/15/201517,005
1/31/2012Restricted Stock Award2/10/20139,4482/10/20149,4482/10/20159,446
1/31/2012Restricted Stock Unit Award2/10/20138,8722/10/20148,8722/10/20158,873
1/31/2012Option Award2/10/201314,2262/10/201414,2262/10/201514,227
1/31/2013Perf Share Award3/15/201612,372
1/31/2013Restricted Stock Award2/10/20146,8732/10/20156,8722/10/20166,874
1/31/2013Restricted Stock Unit Award2/10/20144,5362/10/20154,5362/10/20164,537
1/31/2013Option Award2/10/201411,5362/10/201511,5372/10/201611,538
1/30/2014Perf Share Award3/15/201710,113
1/30/2014Restricted Stock Unit Award2/15/20155,6192/15/20165,6182/15/20175,618
1/30/2014Restricted Stock Unit Award1/30/20145412/15/20154,8792/15/20164,8792/15/20174,879
1/30/2014Restricted Stock Unit Award1/1/201510,119
1/30/2014Option Award2/15/20159,9272/15/20169,9282/15/20179,928

Sanjiv Yajnik

3/3/2006Option Award3/3/20073,8863/3/20083,8863/3/20093,898
3/2/2007Option Award3/2/20087,8533/2/20097,8533/2/20107,854
1/26/2011Option Award1/26/201218,6011/26/201318,6011/26/201418,603
1/31/2012Perf Share Award3/15/201515,346
1/31/2012Restricted Stock Award2/10/20138,5262/10/20148,5262/10/20158,525
1/31/2012Restricted Stock Unit Award2/10/20138,0062/10/20148,0072/10/20158,007
1/31/2012Option Award2/10/201312,8382/10/201412,8382/10/201512,839
1/31/2013Perf Share Award3/15/201611,599
1/31/2013Restricted Stock Award2/10/20146,4442/10/20156,4432/10/20166,445
1/31/2013Restricted Stock Unit Award2/10/20144,2522/10/20154,2532/10/20164,254
1/31/2013Option Award2/10/201410,8162/10/201510,8172/10/201610,817
1/30/2014Perf Share Award3/15/20179,483
1/30/2014Restricted Stock Unit Award2/15/20155,2692/15/20165,2682/15/20175,268
1/30/2014Restricted Stock Unit Award1/30/20144472/15/20154,5942/15/20164,5932/15/20174,593
1/30/2014Restricted Stock Unit Award1/1/20159,485
1/30/2014Option Award2/15/20159,3092/15/20169,3092/15/20179,310

(3)
(2)

For stock options granted before April 23, 2009, the exercise price is equal to the fair market value of common stock on the date of grant determined on the basis of the average high and low sales prices as reported by the NYSE Composite Transaction Tape. For stock options granted on or after April 23, 2009, the exercise price is equal to the closing price of common stock on the date of grant as reported by the NYSE Composite Transaction Tape.

(4)Market value based on the closing price of a share of Capital One’s common stock on the last trading day of 2014 as reported by the NYSE Composite Transaction Tape. For stock

80  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 

(5)

Stock options granted to the CEO prior to 2012 are fully vested. Stock options granted to the CEO in 2012-2013 vest in full on February 10 after the third anniversary of the date of grant (subject to performance-based vesting provisions), and the grant made in 2014 vests in full on February 15 after the third anniversary of the date of grant (subject to performance-based vesting provisions). See “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section on page 44 for details.

options granted on or after April 23, 2009, the exercise price is equal to the closing price of common stock on the date of grant as reported by the NYSE Composite Transaction Tape.

(6)For grants awarded prior to 2014, vest in full on February 10 after the third anniversary of the date of grant. For grants awarded after January 1, 2014, vest in full on February 15 after the third anniversary of the date of grant. All shares are subject to performance-based vesting provisions (see “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section on page 44 for details).

(3)

Market value based on the closing price of a share of Capital One’s common stock on the last trading day of 2017 as reported by the NYSE Composite Transaction Tape.

(7)Represents the maximum number of shares the executive may receive under

(4)

Stock options granted to NEOs prior to 2015 are fully vested.

(5)

Stock options granted to the CEO in 2015, 2016 and 2017 vest in full on February 15 after the third anniversary of the date of grant (subject to performance-based vesting provisions. See “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section beginning on page 64 for details.

(6)

A portion of the award is subject to vest following the first and second anniversary of the grant date in connection with requiredtax-related withholdings made by the Company on behalf of the executive; the remaining shares vest in full on February 15 after the third anniversary of the date of grant. The awards are subject to performance-based vesting provisions (see “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section beginning on page 64 for details).

(7)

Represents the number of shares expected to be issued for the January 29, 2015 performance share awards granted on January 31, 2013 and January 30, 2014, and the actual shares awarded (including accrued dividends paid out as additional shares) for the January 31, 2012 performance share awards, which were issued on March 10, 2015 with the following issuance date values: $30,715,799 for Mr. Fairbank; $2,803,438 for Mr. Schneider; $2,731,003 for Mr. Finneran; and $2,464,579 for Mr. Yajnik. The actual number of shares an executive receives under a performance share award is dependent on the Company’s performance over the applicable three-year performance period. For the grants made in 2013 and 2014, the actual number of performance shares awarded may range from 0% to 150% of target and the value reported excludes dividend equivalents accrued with respect to performance shares which are paid in shares at the time the underlying performance shares are issued, and only with respect to the number of performance shares that actually vest.

(8)Stock options granted to the NEOs prior to 2011 are fully vested. Stock options granted to the NEOs in 2012-2013 vest 33% annually beginning on February 10 after the first anniversary of the date of grant (subject to performance-based vesting provisions), and grants in 2014 vest 33% annually beginning on February 15 after the first anniversary of the date of grant (subject to performance-based vesting provisions). See “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section on page 44 for details.

(9)For the award granted prior to 2014, vests 20% annually beginning on the first anniversary of the date of grant. For the awards granted after January 1, 2014, vest 33% annually beginning on February 15 after the first anniversary of the date of grant, except for the cash-settled RSUs representing a portion of 2014 base salary which vested in full on January 1, 2015, and were paid February 15, 2015. For the cash-settled RSUs granted on January 30, 2014 that vest 33% annually, a portion of the award vested on the grant date in connection with withholdings made by the Company on behalf of the individuals. The stock-settled RSU award is subject to performance-based vesting provisions (see “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section on page 44 for details).

(10)For awards granted prior to 2014, vest 33% annually beginning on February 10 after the first anniversary of the date of grant. For awards granted after January 1, 2014, vest 33% annually beginning on February 15 after the first anniversary of the date of grant, except for the cash-settled RSUs representing a portion of 2014 base salary which vested in full on January 1, 2015, and were paid February 15, 2015. For the cash-settled RSUs granted on January 30, 2014 that vest 33% annually, a portion of the award vested on the grant date in connection with withholdings made by the Company on behalf of the individuals. Restricted stock grants and stock-settled RSU awards are subject to performance-based vesting provisions (see “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section on page 44 for details).

 Pension Benefits

Capital One Programs

Prior to November 1995, Capital One offered a Cash Balance Pension Plan (“CBPP”) and an Excess Cash Balance Plan (“Excess CBPP”) to all full-time salaried associates and certain executive officers. Both of these programs were frozen in December 1995; however, interest credits continue to accrue on plan balances on a quarterly basis for the CBPP and on a monthly basis for the Excess CBPP. The CBPP crediting rate changes annually based on the average annual yield of 5-year Treasury Securities for the preceding 12 months ending October of the prior year (1.04% annual average for 2014). The Excess CBPP interest crediting rate changes monthly based on the Wall Street Journal Prime Rate (3.3% annual average for 2014).

Messrs. Fairbank and Finneran participated in these programs. The estimated annual payouts upon retirement in the CBPP and the Excess CBPP as of December 31, 2014, are $1,950 and $5,996, respectively, for Mr. Fairbank, and $1,371 and $945, respectively, for Mr. Finneran. These projected benefits assume interest credits2017. The number of shares an executive receives under a performance share award is dependent on the Company’s performance over the applicable three-year performance period.

(8)

Represents the maximum number of shares the executive may receive under the CBPPperformance share awards granted. The actual number of shares an executive receives under a performance share award is dependent on the Company’s performance over the applicable three-year performance period. The actual number of performance shares awarded may range from 0% to be 2.65% credited quarterly150% of target and under the Excess CBPPvalue reported excludes dividend equivalents accrued with respect to be 3.85% credited monthly. Accountsperformance shares which are paid in either planshares at the time the underlying performance shares are distributedissued, and only with respect to the number of shares that actually vest. The Committee will certify the performance of the Company over the applicable performance period by March 15th after separation from service. the third anniversary of the grant.

(9)

Awards vestone-third annually beginning on February 15 after the first anniversary of the date of grant. Awards are subject to performance-based vesting provisions (see “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section beginning on page 64 for details).

(10)

Awards vestone-third annually beginning on February 15 after the first anniversary of the date of grant. For awards granted on February 2, 2017, a portion of the award vested on the grant date in connection with requiredtax-related withholdings made by the Company on behalf of the individuals.

(11)

Vestsone-fourth annually beginning on the first anniversary of the date of grant.

(12)

Cash-settled RSUs representing a portion of 2017 base salary which vested in full on January 1, 2018, and settled in cash on February 15, 2018.

(13)

Stock options vestone-third annually beginning on February 15 after the first anniversary of the date of grant (subject to performance-based vesting provisions). See “Performance-Based Vesting Provisions” in the “Compensation Discussion and Analysis” section beginning on page 64 for details.

(14)

Award vests 20% annually beginning on the first anniversary of the date of grant.

  Pension Benefits

Capital One Pension Benefit Programs

Prior to November 1995, Capital One offered a Cash Balance Pension Plan (“CBPP”) and an Excess Cash Balance Plan (“Excess CBPP”) to all full-time salaried associates and certain executive officers. Both of these programs were frozen in December 1995; however, interest continues to accrue on plan balances on a quarterly basis for the CBPP and on a monthly basis for the Excess CBPP. The CBPP interest rate changes annually. For plan years prior to 2017, the CBPP interest rate reflected the average annual yield of five-year U.S. Treasury Securities for the preceding 12 months ending October of the prior year. For plan years after 2017, the interest rate will be based on the average yield of five-year U.S. Treasury Securities for the month of October of the prior plan year. For the 2017 plan year, the greater of the two rates applied (2.02% annual average for 2017). The Excess CBPP interest rate changes monthly based on the Wall Street Journal Prime Rate (4.14% annual average for 2017).

Messrs. Fairbank and Finneran participated in these programs. The estimated annual payouts upon retirement in the CBPP and the Excess CBPP as of December 31, 2017, are $2,151 and $6,935, respectively, for Mr. Fairbank, and $1,574 and $1,146, respectively, for Mr. Finneran. As of December 31, 2017, the “Value of Accumulated Benefit” for both plans is equal to the account balance for each participant because both Messrs. Fairbank and Finneran have attained their normal retirement age of 65 and so are assumed to retire immediately under the actuarial valuation assumptions. Since both participants are assumed to retire as of the measurement date, the future interest rate does not apply. Accounts in both plans are distributed after separation from service.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  81

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

Distribution options from the CBPP plan are lump sum (eligible for rollover to another qualified plan or personal IRA) or an annuity option. The Excess CBPP will be distributed in the same form as the CBPP, as a lump sum (not eligible for rollover) or as an annuity. Since the CBPP and Excess CBPP are account-based defined benefit plans, years of service are not tracked.

 

 2014
 2017 Pension Benefits Table

 

Name and Principal Position

 

Plan Name (1)

 

Present Value of
Accumulated Benefit (2,3,4)

 

  Payments During Last  
Fiscal Year

 

   

Richard D. Fairbank

Chairman, CEO and President

Cash Balance Pension Plan

 

$26,485$0
Excess Cash Balance Plan$81,418$0
       
   

Stephen S. Crawford

Chief Financial Officer

---
       
   

Ryan M. Schneider

President, Card

---
       
   

John G. Finneran, Jr.

General Counsel and Corporate Secretary

Cash Balance Pension Plan

 

$19,036$0
Excess Cash Balance Plan$13,127$0
       
   

Sanjiv Yajnik

President, Financial Services

---
 Name and Principal PositionPlan Name  (1)

  Present Value of    

  Accumulated    

  Benefit  (2)(3)

Payments During

  Last Fiscal Year  

 Richard D. Fairbank

(1)In November 1995, Capital One amended the CBPP and the Excess CBPP to eliminate further pay-based credits to participants as of December 31, 1995, and to provide that there would be no new participants in such plans on or after January 1, 1996. Interest continues to be credited on plan balances on a quarterly (CBPP) or monthly (Excess CBPP) basis.

 Chairman, CEO and President

Cash Balance Pension Plan$28,128$—
Excess Cash Balance Plan$90,700$—

 R. Scott Blackley

(2)For the CBPP, the interest crediting rate changes annually based on the average annual yield of 5-year Treasury Securities for the preceding 12 months ending October of the prior year. The average annual interest rate for 2014 was 1.04%. For the Excess Cash Balance Plan, the interest crediting rate changes monthly based on the Wall Street Journal Prime Rate. The average annual interest rate for 2014 was 3.3%.

 Chief Financial Officer

—$0—

 Frank G. LaPrade, III

(3)The amounts shown are the present value of the accrued benefit under the same actuarial assumptions and measurement date used for financial accounting purposes.

 Chief Enterprise Services Officer

—$0—

 John G. Finneran, Jr.

(4)Consistent with the measurement date used for financial disclosure for the pension plans, the amounts for each year are determined as of a December 31, 2014 measurement date.

 Chief Risk Officer and Corporate Secretary

Cash Balance Pension Plan$19,684$—
Excess Cash Balance Plan$14,042—

 Sanjiv Yajnik

 President, Financial Services

—$0—

 Stephen S. Crawford

 Senior Advisor to the CEO

—$0—

(1)

In November 1995, Capital One amended the CBPP and the Excess CBPP to eliminate furtherpay-based credits to participants as of December 31, 1995 and to provide that there would be no new participants in such plans on or after January 1, 1996. Interest continues to be credited on plan balances on a quarterly (CBPP) or monthly (Excess CBPP) basis.

(2)

The amounts shown are the present value of the accrued benefit under the same actuarial assumptions and measurement date used for financial accounting purposes.

(3)

Consistent with the measurement date used for financial disclosure for the pension plans, the amounts for each year are determined as of a December 31, 2017 measurement date.

 Capital One’s VoluntaryNon-Qualified Deferred Compensation Programs

Capital One offers its Voluntary Non-Qualified Deferred Compensation Plan (“VNQDCP”) to eligible associates.

In 2014, our NEOs could elect to contribute up to 50% of the cash portion of their respective base salaries and up to 100% of the restricted stock unit portion of their respective base salaries on a tax-deferred basis. Messrs. Crawford, Schneider, Finneran, and Yajnik participated in the program in 2014.

In 2014,

Capital One offers a VoluntaryNon-Qualified Deferred Compensation Plan (“VNQDCP”) to eligible associates. In 2017, our NEOs excluding our CEO, could elect to contribute up to 50% of the cash portion of their respective base salaries and up to 90% of the restricted stock unit portion of their respective base salaries on atax-deferred basis to the VNQDCP. Messrs. Blackley, LaPrade, Finneran, Yajnik and Crawford participated in the program in 2017. In 2017, 100% of the CEO’s deferred cash bonus was mandatorily deferred for three years under the VNQDCP and will be paid in lump sum in the first quarter of 2020. In addition to participant deferrals, Capital One makes contributions under the VNQDCP. Company contributions vest immediately when posted to the VNQDCP.

Participants in the VNQDCP have the option to direct their individual deferrals among seventeen different investment offerings made available by the plan: Fidelity Investments Money Market Government Portfolio - Institutional Class, iShares U.S. Aggregate Bond Index Fund Class K, Prudential Total Return Bond Fund Class Q, Dodge and Cox Balanced Fund, Dodge and Cox Stock Fund, T. Rowe Price Institutional Large Cap Value Fund, Northern Small Cap Value Fund, Fidelity 500 Index Fund - Institutional Premium Class, iShares Russell 2000Small-Cap Index Fund Class K, Fidelity Capital Appreciation Fund - Class K, T. Rowe Price Institutional Large Cap Growth Fund, The Hartford MidCap Fund Class Y, The Hartford Small Company Fund Class Y, Dodge and Cox International Stock Fund, iShares MSCI Total International Index Fund Class K, Vanguard Total World Stock Index Fund International Shares, and Lazard Emerging Markets Market Equity Portfolio Institutional Shares.

Individual investment returns experienced in 2017 were as follows: Mr. Fairbank 15.8% or $1,685,081.99, Mr. Blackley 16.4% or $109,014.38, Mr. LaPrade 24.6% or $511,282.04, Mr. Finneran 9.6% or $312,220.08, Mr. Yajnik 19.1% or $246,625.87, and Mr. Crawford 15.7% or $164,781.59.

82  

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

Distributions under the VNQDCP may be made to participants according to the schedule for distribution that they elect in accordance with plan terms. Distributions can occur based upon the following events: termination of employment (including for retirement), death, disability,in-service distribution election or change of control. The distribution schedules available under the plan include lump sum and, in the case of retirement, 5-, 10- or 15-year annual installments.

Prior to December 31, 2005, Capital One offered its executives an Excess Savings Plan (“ESP”). The plan was frozen as of December 31, 2005; no additional participants have been permitted to enter the plan, and no compensation has since been taken into account after this date. Messrs. Fairbank, LaPrade, Finneran, and Yajnik participated in the ESP and, returns on these investments are reported for 2017. Effective January 1, 2008, the ESP was merged into the VNQDCP, and participants in the ESP have the option to direct their individual investments among the same offerings as the VNQDCP. Individual investment returns associated with the ESP experienced in 2017 were as follows: Mr. Fairbank 21.8% or $ 106,890.54, Mr. LaPrade 21.8% or $81,529.69, Mr. Finneran 21.8% or $ 325,684.41, Mr. Yajnik 6.7% or $20,619.75.

 2017Non-Qualified Deferred Compensation Table

                                                                                                                                                                                                                                                                  
  Name and Principal
  Position		 Plan Name 

Executive  

  Contributions    

in Last FY (2)  

 

Registrant

  Contributions   

in Last FY (3)

 

   Aggregate   

Earnings

in Last FY (4) 

 

Aggregate  

   Withdrawals/     

Distributions  

 

Aggregate

  Balance at  

Last FYE  (5)

      

Richard D. Fairbank

Chairman, CEO and

President

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $2,677,500 $0 $1,685,082 $3,451,246 $11,865,477
 Excess Savings Plan $0 $0 $106,891 $0 $596,979
      
 2003 Performance Share Award (1) $0 $0 $2,982,331 $0 $24,066,494
      
      

R. Scott Blackley

Chief Financial Officer

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $98,145 $119,400 $109,014 $0 $883,836
 Excess Savings Plan — — — — —
      
      

Frank G. LaPrade, III

Chief Enterprise Services Officer

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $10,096 $143,730 $511,282 $0 $2,674,521
 Excess Savings Plan $0 $0 $81,530 $0 $455,340
      
      

John G. Finneran, Jr.

Chief Risk Officer and

Corporate Secretary

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $104,742 $149,460 $312,220 $0 $3,693,764
 Excess Savings Plan $0 $0 $325,684 $0 $1,818,932
      
      

Sanjiv Yajnik

President, Financial

Services

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $9,916 $141,030 $246,626 $0 $1,623,769
 Excess Savings Plan $0 $0 $20,620 $0 $328,014
      
      

Stephen S. Crawford

Senior Advisor to the CEO

 

VoluntaryNon-Qualified

Deferred Compensation Plan

 $16,192 $146,478 $164,782 $0 $1,271,616
 Excess Savings Plan — — — — —
      

(1)

Includes the value of performance shares that were granted to Mr. Fairbank in December 2003, subject to Capital One’s earnings per share performance relative to its comparator group over a three-year performance period from January 1, 2004 through December 31, 2006. On March 2, 2007, the Committee and the independent directors of the Board certified, following the end of the performance period, the achievement of the performance target. Because the Company ranked in the 76th percentile for the performance period relative to the comparator group, Mr. Fairbank acquired the right to receive 241,680 shares of Capital One’s common stock on March 31, 2007. Delivery of these shares is deferred until the end of Mr. Fairbank’s employment with the Company. Mr. Fairbank neither acquired these shares nor realized any value from these shares in 2017.

(2)

Reflects executive contributions made for 2017. Mr. Fairbank’s executive contribution under the VNQDCP was a mandatory deferral of the deferred cash bonus awarded in February 2017 for 2016 performance, which was reported in the 2016 Summary Compensation Table. For Messrs. Blackley, LaPrade, Finneran, Yajnik and Crawford, all executive contributions under the VNQDCP were made in the form of base salary deferrals, and are reported in the 2017 Summary Compensation Table.

(3)

Company contributions are also included in the 2017 Summary Compensation Table (see “Company Contributions to Defined Contribution Plans” in footnote 10 to that table).

(4)

Includes earnings on total assets in the VNQDCP and the ESP. Earnings under the VNQDCP and will pay out in lump sumESP were not above-market and therefore are not reported in the first quarter of 2016. The CEO does not receive company contributions under the VNQDCP.

In addition to participant deferrals, Capital One makes contributions under the VNQDCP. Company contributions vest immediately when posted to the VNQDCP. Participants in the VNQDCP have the option to direct their individual deferrals among seventeen different investment offerings made available by the plan: Fidelity Retirement Money Market Portfolio, Blackrock Bond Index Fund, PIMCO Total Return Fund Institutional, Dodge & Cox Balanced Fund, Dodge & Cox Stock Fund, T. Rowe Price Institutional Large Cap Value Fund, Northern Small Cap Value Fund, Fidelity Spartan S&P 500 Index Fund, Blackrock Small Cap Index Fund, Fidelity Capital Appreciation Fund, T. Rowe Price Institutional Large Cap Growth Fund, The Hartford Mid Cap Fund, The Hartford Small Company Fund, Blackrock ACWI ex-US Index Fund, Dodge & Cox International Stock Fund, Vanguard Total World Stock Index, and Lazard Emerging Markets Equity.

Individual investment returns experienced in 2014 were as follows: Mr. Fairbank 4.95% or $182,199, Mr. Crawford 1.71% % or $5,743, Mr. Schneider 0.01% or $22, Mr. Finneran 4.85% or $120,768 and Mr. Yajnik 7.22% or $64,323. Distributions under the VNQDCP may be made to participants according to their respective elected schedule for distribution in accordance with plan terms. The distribution schedules available under the plan include lump sum and 5, 10 or 15 year annual installments. Distributions occur based upon the following events: termination of employment, death, disability, in-service distribution election or change of control.

Prior to December 31, 2005, Capital One offered its executives an Excess Savings Plan (“ESP”). The plan was frozen as of December 31, 2005; no additional participants are permitted to enter the plan, and no compensation is taken into account after this date. Messrs. Fairbank, Schneider, Finneran, and Yajnik participated in the ESP and, as such, returns on these investments are reported for 2014. Effective January 1, 2008, the ESP was merged into the VNQDCP, and participants in the ESP have the option to direct their individual investments among the same offerings as the VNQDCP. Individual investment returns experienced in 2014 were as follows: Mr. Fairbank 13.66% or $51,878, Mr. Schneider 0.01% or $13, Mr. Finneran 13.66% or $158,066, and Mr. Yajnik 4.69% or $13,088.

 2014 Non-Qualified Deferred Compensation Table

Name and Principal
Position		Plan NameExecutive
Contributions
in Last FY (1)		Registrant
Contributions
in Last FY (2)		Aggregate
Earnings in
Last FY (3)		Aggregate
Withdrawals/
Distributions		Aggregate
Balance at
Last FYE (4)		 
Richard D. Fairbank Chairman, CEO and PresidentVoluntary Non-Qualified Deferred Compensation Plan$2,843,750$0$182,199$0 $5,284,955  
Excess Saving Plan$0$0$51,878$0 $431,724  
2003 Performance Share Award (5)$0$0$1,435,579$0 $19,950,684  
              
Stephen S. Crawford Chief Financial OfficerVoluntary Non-Qualified Deferred Compensation Plan$15,265$218,100$5,743$0 $457,076  
Excess Saving Plan---- -  
              
Ryan M. Schneider President, CardVoluntary Non-Qualified Deferred Compensation Plan$11,165$157,410$22$162,286 $336,843  
Excess Saving Plan$0$0$13$0 $129,346  
              
John G. Finneran, Jr. General Counsel and Corporate SecretaryVoluntary Non-Qualified Deferred Compensation Plan$9,747$136,350$120,768$0 $2,682,913  
Excess Saving Plan$0$0$158,066$0 $1,315,417  
              

Sanjiv Yajnik

President, Financial Services

Voluntary Non-Qualified Deferred Compensation Plan$9,129$127,320$64,323$0 $1,023,100  
Excess Saving Plan$0$0$13,088$0 $292,188  

(1)Reflects executive contributions made for 2014. Mr. Fairbank’s executive contribution under the VNQDCP was a mandatory deferral of the deferred cash bonus awarded in January 2014 for 2013 performance, which was reported in the 2013 Summary Compensation Table. For Messrs. Crawford, Schneider, Finneran, and Yajnik, all executive contributions under the VNQDCP were made in the form of base salary deferrals, and are reported in the 2014 Summary Compensation Table.

 

(2)Registrant contributions are also included in the amounts reported as “Company Contributions to Defined Contribution Plans” in footnote 8 to the Summary Compensation Table.

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 

(3)Includes earnings on total assets in the VNQDCP and the ESP.

 

(5)

All the amounts shown in this column, other than earnings on deferred compensation, were included in compensation amounts reported in the current or prior years for those executives that were NEOs in the applicable year and in the amounts required to be reported pursuant to the then applicable rules. Of these balances, the following amounts were reported in the Summary Compensation Tables in prior year proxy statements (to the extent that the named executive officer was a named executive officer in the applicable year): Mr. Fairbank $12,118,750; Mr. Blackley $153,467; Mr. LaPrade $149,186, Mr. Finneran $2,094,180; Mr. Yajnik $424,851; and Mr. Crawford $931,375.

(4)All the amounts shown in this column, other than earnings on deferred compensation, were included in compensation amounts reported in prior years for those executives that were NEOs in such prior years and in the amounts required to be reported pursuant to the then applicable rules. Of these balances, the following amounts were included in compensation amounts reported in the Summary Compensation Tables in prior year proxy statements beginning with the 2007 proxy statement: Mr. Fairbank $2,187,500; Mr. Crawford $210,138; Mr. Schneider $617,715; and Mr. Finneran $1,642,463.

(5)Includes the value of restricted stock units that were granted to Mr. Fairbank in December 2003, subject to Capital One’s earnings per share performance relative to its comparator group over a three-year period from January 1, 2004 through December 31, 2006 (the “Performance Period”). On March 2, 2007, the independent directors of the Board certified, following the end of the Performance Period, the achievement of the performance target. Because the Company ranked in the 76th percentile for the Performance Period relative to the comparator group, Mr. Fairbank acquired the right to receive 241,680 shares of Capital One’s common stock on March 31, 2007. Delivery of these shares is deferred until the end of Mr. Fairbank’s employment with the Company. Similar to other deferred compensation, Mr. Fairbank neither acquired these shares nor realized any value from these shares in 2014.

 Potential Payments Upon Termination or Change of Control

Overview

The disclosure in the table below illustrates payouts that the named executive officers could receive under certain hypothetical termination scenarios. Actual circumstances resulting in the departure of a named executive officer cannot be predicted and may differ from the assumptions used in the information outlined below. The Company has adopted plans providing certain standards governing named executive officer separation payments (reflected in the table below) in order to protect the Company’s interests in the event of an acquisition as well as to provide competitive benefits to senior executives.

The Compensation Committee reviews each executive officer’s separation on a case by case

Overview

The disclosure in the table below illustrates payouts that the named executive officers could receive under certain hypothetical termination scenarios. Actual circumstances resulting in the departure of a named executive officer cannot be predicted and may differ from the assumptions used in the information outlined below. The Company has adopted plans providing certain standards governing named executive officer separation payments (reflected in the table below) in order to protect the Company’s interests in the event of an acquisition, as well as to provide competitive benefits to senior executives.

The Committee reviews each executive officer’s separation on acase-by-case basis and exercises its business judgment, with the approval of the independent directors, to customize the terms of such separations in consideration of the relevant circumstances, including:

 

∎

The reasons for the separation;

separation

∎

Market competitive practices for comparable separation scenarios;

scenarios

∎

Potential benefits to the Company, such as retaining its competitive advantage, maintaining a positive reputation internally and externally, and preserving its ability to recruit highly talented executives;

executives

∎

The executive’s tenure and contributions to the Company’s success;

success

∎

The executive’s willingness to provide legal waivers and/or enter into agreements not to compete with the Company or to solicit the Company’s employeesassociates or customers; and

customers

∎

The resulting impact of the separation terms on the Company and its stockholders.stockholders

Restrictive Covenants

Capital One maintains a competitive advantage in part through the intellectual property developed and utilized by our senior executives. Capital One has asked certain NEOs to enter into various agreements that contain restrictive covenants related to confidentiality,non-competition,non-solicitation and ownership of work product, as described below.

Non-Competition Agreements

Certain NEOs have entered intonon-competition agreements with the Company pursuant to which they may be restricted as to what competitive services they may provide to an entity following separation from Capital One. Messrs. Blackley and Yajnik have entered intonon-competition agreements with the Company which provide for the following in exchange for the NEO complying withnon-competition restrictions for up to two years following an involuntary termination, other than for cause, death or disability: payment equal to 15% of the NEO’s target total compensation for each year of enforcement and up to eighteen months of subsidized health insurance premiums under COBRA if the NEO is eligible and elects such coverage, subject to certain terms and conditions. The payments are made in two lump sums, the first following termination and the second upon successful completion of the enforcement period. In the event of a voluntary termination, the previously described payments are typically made for the second year of enforcement only for agreements with a two-year enforcement period.

In May 2016, Mr. Crawford entered into an Amended and RestatedNon-Competition Agreement with the Company in connection with his appointment to Head of Finance and Corporate Development which provides for the following in exchange for Mr. Crawford complying withnon-competition restrictions for up to three years

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

following an involuntary termination without cause: 15% of total target compensation for each year of enforcement, and certain continued benefits during each year of thenon-competition restriction, subject to certain terms and conditions. The payments are made in two lump sums, the first following termination and the second upon successful completion of the enforcement period. In addition, pursuant to thenon-competition agreement and the terms of his equity awards, Mr. Crawford’s unvested equity awards, other than the RSUs granted as part of his base salary (which will vest in accordance with the terms of their respective agreements), will continue to vest in full through the original vesting schedule upon a voluntary or involuntary termination for any reason other than cause. All vested unexercised options will remain exercisable through their original expiration date.

For allnon-competition agreements entered into between the Company and the NEOs, there are no payments under the agreement if benefits are payable under a change of control agreement. See “Change of Control” below for information regarding Change of Control Agreements applicable to the NEOs. In addition, payments related to thenon-competition agreement are separate from any severance payments that may be made upon the NEO’s departure. However, severance payments are typically offset in part by payments related to thenon-competition agreement so that total payment amounts are consistent with the severance program’s intent.

Confidentiality, Work Product andNon-Solicitation of Employee Agreement

Messrs. Blackley, Crawford, and Yajnik are parties to confidentiality, work product andnon-solicitation of employee agreements. The confidentiality provisions of these agreements generally provide that at all times during and following employment with the Company, the NEO may not use for personal benefit or the benefit of others, or divulge to others, any of Capital One’s confidential information, except as expressly authorized by Capital One or required by legal process. These agreements also provide that for a period of two years following separation from Capital One, the NEO shall not directly or indirectly solicit or induce any associate of Capital One to become employed by any person or entity engaged in competition with Capital One, hire or engage any associate of Capital One to provide services to a competitor or director or indirectly solicit or induce any associate of Capital One to end his or her employment based on confidential information the NEO learned about the associate while they were employed by Capital One.

Payments Under Certain Termination Scenarios

Upon separation from the Company, the named executive officers, regardless of the reason for termination, receive certain earned, but previously unpaid, payments, such as accrued but unused vacation pay and amounts earned and vested under the Company’s qualified andnon-qualified retirement programs. In addition, cash-settled RSUs granted to NEOs, other than the CEO, after the end of a performance year continue to vest according to the original provisions of such grants upon separation for any reason other than cause or as soon as practicable following a “double trigger” change of control (as discussed below).

Voluntary Termination

An NEO, other than the CEO, who voluntarily terminates employment with Capital One may receive payments related tonon-competition covenants (described above, if applicable) and any contractual payments to which the NEO may otherwise be entitled. Cash-settled RSUs granted to NEOs at the beginning of a performance year representing a portion of base salary arepro-rated and continue to vest according to their original terms following voluntary termination. In addition, an NEO has the ability following separation to exercise vested but unexercised options for three months following voluntary termination.

Involuntary Termination Without Cause

An NEO, other than the CEO, whose employment with Capital One is terminated involuntarily, for performance or job elimination, is entitled to receive the amounts set forth in the Company’s Executive Severance Plan in exchange for executing a release of claims against the Company. For 2017, potential payments under the Executive Severance Plan were 30% of total target compensation. Additional benefits include healthcare continuation subsidy under COBRA, continued coverage through broad-based and executive life insurance

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

programs, outplacement services and any contractual payments to which the NEO may otherwise have been entitled. If an NEO’sNon-Competition Agreement is enforced, cash payments under the Executive Severance Plan will be offset by any cash amounts paid under theNon-Competition Agreement and the NEO will be eligible for an additional payment of up to 90% of the severance payments in exchange for executing a release of claims against the Company. Cash-settled RSUs granted to NEOs at the beginning of the performance year representing a portion of base salary arepro-rated and continue to vest according to their original terms following an involuntary termination. Generally, performance shares granted to NEOs prior to 2018 will vest on apro-rata basis based on actual Company performance during the performance period if an involuntary termination without cause occurs during the performance period, while performance shares granted to NEOs in 2018 will vest in full, based on actual Company performance, subject to the NEO’s execution of a release of claims against the Company. Stock-settled RSUs granted to NEOs in 2016 and 2017 will continue to vest if an involuntary termination without cause occurs, subject to the NEO’s execution of a release of claims against the Company. In addition, named executive officers have the ability following separation to exercise vested but unexercised options for two years. If a named executive officer’s employment with Capital One is terminated as a result of death or disability, the named executive officer’s unvested stock options, restricted stock, RSUs and performance shares granted in 2016 and beyond, based on target Company performance, will vest in full, and performance shares granted prior to 2016 will vest on apro-rata basis based on target Company performance.

Payments Upon Retirement

As with all executives who are eligible for retirement, named executive officers who retire from Capital One may receive the following amounts: payments related tonon-competition covenants as if they had terminated voluntarily (described above); partially subsidized participation in retiree medical coverage (including dependents as applicable), for Messrs. Fairbank, Finneran, and Yajnik, who became eligible to retire on or before December 31, 2012; coverage through the executive life insurance program (at a reduced benefit); and any contractual payments to which he or she may otherwise be entitled.

Upon retirement, all RSUs (other than cash-settled RSUs representing a portion of base-salary, which vestpro-rata) and stock options continue to vest according to their original terms, which, for stock-settled RSUs and stock options granted during or after 2012, also includes performance-based vesting provisions, which vest based on actual performance. In addition, performance shares granted to named executive officers will continue to vest after retirement, except the 2017 performance share grant to the CEO which would have been forfeited if he had retired on or before December 31, 2017. For stock options granted prior to January 1, 2010, the executive has the earlier of five years from the date of retirement or the expiration of the option term to exercise vested but unexercised options. For stock options granted during or after 2010 the executive has until the expiration of the option term to exercise vested but unexercised options.

Termination for Cause

Generally, an NEO whose employment with Capital One is terminated for cause receives no additional benefits but is required to comply with any applicable restrictive covenants related to confidentiality,non-competition,non-solicitation of associates or customers, and ownership of work product, as described above. Cash-settled RSUs granted to NEOs at the beginning of the performance year representing a portion of base salary arepro-rated and continue to vest according to their original terms upon a termination for cause because these are deferred awards representing base salary that would otherwise already have been paid to an executive. In addition, if terminated for cause, named executive officers have the ability following separation to exercise vested but unexercised options for three months.

Change of Control

Each named executive officer is a party to an agreement (a “Change of Control Agreement”) that provides for certain payments in the event his or her employment is terminated within two years following (or in anticipation of) a change of control, either involuntarily without cause or voluntarily for good reason. Amounts payable in each of these scenarios are outlined below.

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

Pursuant to the agreements, a “change of control” occurs if one or more of the following events take place: (i) an acquisition of 20% or more of Capital One’s common stock or the combined voting power of the voting securities of Capital One by a person or group, (ii) certain changes in the majority of the Board, (iii) consummation of a reorganization, merger, share exchange or consolidation or similar transaction, sale of all assets or the acquisition of another company, except where all or substantially all of Capital One’s stockholders receive 50% or more of the stock of the resulting company, at least a majority of the board of directors of the resulting company were incumbent Board members, and no person owns 20% or more of the resulting company who did not own such stock immediately before the business combination or (iv) approval by stockholders of a complete liquidation or dissolution of Capital One. In the event of a change of control, we do not provide for excise tax gross up payments. In addition, all equity awards granted to the named executive officers after 2014 require aso-called “double trigger” for accelerated vesting in connection with a change of control. Upon a change of control, all equity awards continue to vest according to their original schedule. The vesting of such awards only accelerates if a named executive officer is involuntarily terminated without cause or voluntarily terminates for good reason within the two years following a change of control. All outstanding equity grants awarded prior to 2015 vest in full immediately upon a change of control.

Involuntary Termination for Cause

Named executive officers terminated involuntarily for cause following a change of control receive no additional benefits except in regards to options, which allow named executive officers to exercise vested but unexercised options for three months following a termination for cause.

Voluntary Termination with Good Reason or Involuntary Termination Without Cause

In the event of a voluntary termination with good reason or an involuntary termination without cause, the potential payments that the named executive officers could receive under certain termination scenarios are based on a percentage of target total compensation. For the CEO, the potential payments are based on a multiple of his notional salary and cash bonus. If a change of control of Capital One had occurred as of December 31, 2017, then following a voluntary termination with good reason or involuntary termination without cause, a named executive officer would have received certain benefits as outlined below:

The CEO would be entitled to receive:

∎

Alump-sum payment of 2.5 times the sum of his current notional salary and the “Highest Annual Bonus,” which is the highest of (i) the target annual bonus for the year in which the change of control occurs (or themid-point if no target is established), (ii) the target annual bonus for the year immediately before the year the change of control occurs (or midpoint if no target is established), or (iii) the annual bonus paid or payable for the most recently completed fiscal year

∎

The cash value, prorated through the intellectual property developed and utilized by our senior executives. Capital One has asked certain NEOs to enter into various agreements that contain restrictive covenants related to confidentiality, non-competition, non-solicitation and ownershipdate of work product, as described below.

Standard Non-Competition Agreement

Under Capital One’s standard non-competition agreement program, NEOs may be restricted as to what competitive services they may provide to an entity following separation from Capital One, typically for a period of up to two years. In recognition of these restrictions, the agreement calls for payments to be made to the NEO during periods of enforcementtermination, of the non-competition restrictions, subject to certain circumstances and conditions. Messrs. Crawford, Schneider, and Yajnik are parties to standard non-competition agreements.Highest Annual Bonus

An NEO would be entitled to receive:

∎

For 2014, potential payments following termination under112.5% of the standard non-competition agreement are 15%highest of (i) the NEO’s current target total compensation, (ii) the NEO’s target total compensation for eachthe prior year, of enforcement and up to eighteen months of subsidized health insurance premiums and administrative fees under COBRA ifor (iii) the NEO elects such coverage, subject to certain terms and conditions. For voluntary terminations, the previously described payments are only madeNEO’s actual total compensation for the secondprior year

∎

The cash value, prorated through the date of enforcement. In the casetermination, of the NEO’s involuntary termination for any reason other than death, disabilitycurrent year’s target annual incentive award, whether in the form of cash or cause, the payments are made in two lump sums, the first following termination and the second upon completion of the enforcement period. However, there are no payments under the non-competition agreement if benefits are payable under a change of control agreement. Payments relatedequity-based compensation

The CEO and each NEO would also be entitled to receive:

∎

An amount equal to the non-competition agreement are separate from any severance payments that may be made upon the NEO’s departure. However, severance payments are typically offset in part by payments related to the non-competition agreement so that total payment amounts are consistent with the program’s intent.

Confidentiality, Work Product and Non-Solicitation of Employee Agreement

Messrs. Crawford, Schneider, and Yajnik are parties to confidentiality, work product and non-solicitation of employee agreements. The confidentiality provisions of these agreements generally provide that at all times during and following employment with the Company, the NEO may not use for personal benefit or the benefit of others, or divulge to others, any of Capital One’s confidential information, except as expressly authorized by Capital One or required by legal process.

Further, the NEO, upon separation from Capital One, shall return any and all of Capital One’s confidential information to Capital One.

Generally, under the non-solicitation of employee provisions of these agreements, for a period of two years following separation from Capital One, the NEO shall not directly or indirectly solicit or induce any associate of Capital One to become employed by any person or entity engaged in competition with Capital One, hire or engage any associate of Capital One to provide services to a competitor, or directly or indirectly solicit or induce any associate of Capital One to end his or her employment based on confidential information the NEO learned about the employee while they were employed by Capital One.

Payments under Certain Termination Scenarios

Upon separation from the Company, the named executive officers, regardless of the reason for termination, receive certain earned, but previously unpaid, payments, such as accrued but unused vacation pay and amounts earned and vestedemployer contributions under the Company’s qualified andnon-qualified retirement, programs. In addition, cash-settled RSUs grantedhealthcare and life insurance programs for 2.5 years, as well as access to NEOs aftersuch healthcare and life insurance plans for the endnamed executive officer (and dependents as applicable)

∎

Service credit from 2.5 years for purposes of a performance year continuedetermining vesting under any supplemental or excess defined contribution plan and eligibility under any applicable retiree medical plan

∎

Outplacement services of up to vest according to the original provisions upon separation for any reason other than cause because these are deferred awards attributable to prior performance and are intended to replace cash bonuses, which would otherwise already have been paid to an executive.$30,000

∎

Voluntary Termination

An NEO who voluntarily terminates employment with Capital One may receive payments related to non-competition covenants (described above, if applicable) and anyAny contractual payments to which the NEO may otherwise be entitled. Cash-settled RSUs granted to NEOs at the beginning of a performance year representing a portion of base salary are pro-rated and continue to vest according to their original terms upon voluntary termination. In addition, an NEO has the ability following separation to exercise vested but unexercised options for 3 months following voluntary termination.

Involuntary Termination Without Cause

An NEO whose employment with Capital One is terminated involuntarily, for performance or job elimination, is entitled to receive the amounts set forth in the Company’s Executive Severance Plan. For 2014, potential payments under the Executive Severance Plan were 30% of total target compensation. If an NEO’s Non-Competition Agreement is enforced, payments under the Executive Severance Plan will be offset by any amounts paid under the Non-Competition Agreement and the NEO will be eligible for (i) an additional payment of up to 90% of the severance payments in exchange for executing a release of claims against the Company, as well as (ii) continued coverage through broad-based andnamed executive life insurance programs, outplacement services and any contractual payments to which the NEOofficer may otherwise have been entitled. Cash-settled RSUs granted to NEOs at the beginning of the performance year representing a portion of base salary are pro-ratedentitled

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SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 2017 Potential Payments and continue to vest according to their original terms upon an involuntary termination. Performance shares granted to NEOs will vest on a pro-rata basis if an involuntary termination without cause occurs during the performance period. In addition, named executive officers have the ability following separation to exercise vested but unexercised options for two years. If a named executive officer’s employment with Capital One is terminated as a result of deathBenefits Upon Termination or disability, his unvested stock options, restricted stock and restricted stock units will vest in full and his performance shares will vest on a pro-rata basis based on actual Company performance during the performance period.

Termination for Cause

Generally, an NEO whose employment with Capital One is terminated for cause receives no additional benefits but is required to comply with any applicable restrictive covenants related to confidentiality, non-competition, non-solicitation of employees or customers, and ownership of work product, as described above. Cash-settled RSUs granted to NEOs at the beginning of the performance year representing a portion of base-salary are pro-rated and continue to vest according to their original terms upon a termination for cause because these are deferred awards representing base salary that would otherwise already have been paid to an executive. In addition, if terminated for cause, named executive officers have the ability following separation to exercise vested but unexercised options for 3 months.

Payments upon Retirement

As with all executives who are eligible for retirement, named executive officers who retire from Capital One may receive the following amounts: payments related to non-competition covenants as if they had terminated voluntarily (described above); partially subsidized participation in retiree medical coverage (including dependents as applicable), provided that the executive became eligible to retire on or before December 31, 2012; coverage through the executive life insurance program (at a reduced benefit); and any contractual payments to which he or she may otherwise be entitled.

Upon retirement, shares of restricted stock, all restricted stock units (other than cash-settled RSUs representing a portion of base-salary, which vest pro-rata) and stock options continue to vest according to their original terms, which, for shares of restricted stock, stock-settled restricted stock units (all restricted stock units for the CEO) and stock options granted on or after 2012, also includes performance-based vesting provisions. In addition, performance shares granted to named executive officers will continue to vest after retirement, except the 2014 performance share grant to the CEO which would be forfeited if he retired on or before December 31, 2014. For stock options granted on or before December 1, 2005, the executive has one year from the date of retirement to exercise vested but unexercised options. For stock options granted after December 1, 2005 and prior to January 1, 2010 the executive has the earlier of five years from the date of retirement or the expiration of the option term to exercise vested but unexercised options. For stock options granted on or after January 1, 2010 the executive has until the expiration of the option term to exercise vested but unexercised options.

Change of Control

Each named executive officer is a party to an agreement (a “Change of Control Agreement”) that provides for certain payments in the event his or her employment is terminated within two years following (or in anticipation of) a change of control, either involuntarily without cause or voluntarily for good reason. Amounts payable in each of these scenarios are outlined below.

In the agreements, a change of control occurs if one or more of the following events take place: (i) an acquisition of 20% or more of Capital One’s common stock or the combined voting power of the voting securities by a person or group, (ii) certain changes in the majority of the Board of Directors, (iii) consummation of a reorganization, merger, share exchange or consolidation or similar transaction, sale of all assets or the acquisition of another company, except where all or substantially all of Capital One’s stockholders receive 50% or more of the stock of the resulting company, at least a majority of the board of directors of the resulting company were incumbent board members, and no person owns 20% or more of the resulting company who did not own such stock immediately before the business combination or (iv) approval by stockholders of a complete liquidation or dissolution of Capital One.

All named executive officer Change of Control Agreements providing for a potential excise tax gross-up after a change of control have expired and have been replaced with new Change of Control Agreements that do not provide for an excise tax gross-up.

Involuntary Termination For Cause

Named executive officers terminated involuntarily for cause following a change of control receive no additional benefits.

Voluntary Termination With Good Reason or Involuntary Termination Without Cause

For 2014, the potential payments that the named executive officers could receive under certain termination scenarios are based on a percentage of target total compensation. For the CEO, the potential payments are based on a multiple of his notional salary and cash bonus (as described below). As of December 31, 2014, if a change of control of Capital One occurs, then following a voluntary termination with good reason or involuntary termination without cause, a named executive officer may receive certain benefits as outlined below:Table

 

The CEO will be entitled to receive:

¡

A lump-sum payment of 2.5 times the sum of his current notional salary and the “Highest Annual Bonus,” which is the highest of (i) the target annual bonus for the year in which the change of

control occurs (or the mid-point if no target is established), (ii) the target annual bonus for the year immediately before the year the change of control occurs (or midpoint if no target is established), or (iii) the annual bonus paid or payable for the most recently completed fiscal year; and

 

                                                                                                                                                                                                                                       
 Name and
 Principal Position		 Situation Cash
  Severance (3) 		 Retirement Plan
 Contributions (4) 		 

 

Acceleration
and
Continuation
of Equity
Awards(5)

 Continuation
of Medical/
Welfare
Benefits (7)		 Excise
Tax
Gross
Up(8)		 Total

 

 Richard D. Fairbank

 Chairman, CEO and

 President (1)

 

 

Voluntary Termination

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

Involuntary Termination

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

Retirement

 

 

 

$—  

 

 

 

$—  

 

 

 

$46,634,707

 

 

 

$578,000

 

 

 

—  

 

 

 

$47,212,707

 

 

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$—  

 

 

 

$—  

 

 

 

—  

 

 

 

$—  

 

  

 

Change of Control (2)

 

 

 

$16,286,248

 

 

 

$—  

 

 

 

$56,726,543(6)

 

 

 

$241,482

 

 

 

—  

 

 

 

$73,254,273

 

 

 R. Scott Blackley

 Chief Financial Officer

 

 

Voluntary Termination

 

 

 

$675,000

 

 

 

$—  

 

 

 

$1,876,286

 

 

 

$—  

 

 

 

—  

 

 

 

$2,551,286

 

 

 

Involuntary Termination

 

 

 

$2,565,000

 

 

 

$—  

 

 

 

$6,236,350

 

 

 

$15,075

 

 

 

—  

 

 

 

$8,816,425

 

 

 

Retirement

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

  

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$793,553

 

 

 

$—  

 

 

 

—  

 

 

 

$793,553

 

  

 

Change of Control (2)

 

 

 

$5,780,442

 

 

 

$351,766

 

 

 

$6,725,235(6)

 

 

 

$139,550

 

 

 

—  

 

 

 

$12,996,993

 

 

 Frank G. LaPrade, III

 Chief Enterprise

 Services Officer

 

 

Voluntary Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$2,745,321

 

 

 

$—  

 

 

 

—  

 

 

 

$2,745,321

 

 

 

Involuntary Termination

 

 

 

$1,518,300

 

 

 

$—  

 

 

 

$7,947,843

 

 

 

$17,225

 

 

 

—  

 

 

 

$9,483,368

 

 

 

Retirement

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

  

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$876,603

 

 

 

$—  

 

 

 

—  

 

 

 

$876,603

 

  

 

Change of Control (2)

 

 

 

$5,719,547

 

 

 

$413,051

 

 

 

$10,351,792(6)

 

 

 

$144,388

 

 

 

—  

 

 

 

$16,628,778

 

 

 John G. Finneran, Jr.

 Chief Risk Officer and

 Corporate Secretary

 

 

Voluntary Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$10,517,122

 

 

 

$—  

 

 

 

—  

 

 

 

$10,517,122

 

 

 

Involuntary Termination

 

 

 

$1,575,600

 

 

 

$—  

 

 

 

$10,517,122

 

 

 

$10,000

 

 

 

—  

 

 

 

$12,102,722

 

 

 

Retirement

 

 

 

$—  

 

 

 

$—  

 

 

 

$10,517,122

 

 

 

$483,000

 

 

 

—  

 

 

 

$11,000,122

 

  

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$908,867

 

 

 

$—  

 

 

 

—  

 

 

 

$908,867

 

  

 

Change of Control (2)

 

 

 

$6,746,619

 

 

 

$427,485

 

 

 

$10,517,122(6)

 

 

 

$173,614

 

 

 

—  

 

 

 

$17,864,840

 

 

 Sanjiv Yajnik

 President,

 Financial Services

 

 

Voluntary Termination

 

 

 

$745,650

 

 

 

$—  

 

 

 

$9,942,037

 

 

 

$—  

 

 

 

—  

 

 

 

$10,687,687

 

 

 

Involuntary Termination

 

 

 

$2,833,470

 

 

 

$—  

 

 

 

$9,942,037

 

 

 

$10,000

 

 

 

—  

 

 

 

$12,785,507

 

 

 

Retirement

 

 

 

$745,650

 

 

 

$—  

 

 

 

$9,942,037

 

 

 

$389,000

 

 

 

—  

 

 

 

$11,076,687

 

  

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$860,471

 

 

 

$—  

 

 

 

—  

 

 

 

$860,471

 

  

 

Change of Control (2)

 

 

 

$6,385,813

 

 

 

$406,250

 

 

 

$9,942,037(6)

 

 

 

$175,436

 

 

 

—  

 

 

 

$16,909,536

 

 

 Stephen S. Crawford

 Senior Advisor to the  CEO

 

 

Voluntary Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$18,487,413

 

 

 

$—  

 

 

 

—  

 

 

 

$18,487,413

 

 

 

Involuntary Termination

 

 

 

$5,842,590

 

 

 

$—  

 

 

 

$18,487,413

 

 

 

$17,225

 

 

 

—  

 

 

 

$24,347,228

 

 

 

Retirement

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

—  

 

  

 

For Cause Termination

 

 

 

$—  

 

 

 

$—  

 

 

 

$1,424,392

 

 

 

$—  

 

 

 

—  

 

 

 

$1,424,392

 

  

 

Change of Control (2)

 

 

 

 

$6,967,525

 

 

 

 

$419,973

 

 

 

 

$18,487,413(6)

 

 

 

 

$184,253

 

 

 

 

—  

 

 

 

 

$26,059,164

 

 

(1) ¡The cash value, prorated through the date of termination, of the Highest Annual Bonus.

An NEO will be entitled to receive:

¡The cash value, prorated through the date of termination, of the current year’s target annual incentive award, whether in the form of cash or equity-based compensation; and

¡112.5% of the highest of (i) the NEO’s current target total compensation, (ii) the NEO’s target total compensation for the prior year, or (iii) the NEO’s actual total compensation for the prior year.

The CEO or an NEO will also be entitled to receive:

¡An amount equal to the employer contributions under the Company’s qualified and non-qualified retirement, healthcare and life insurance programs for 2.5 years as well as access to such healthcare and life insurance plans for the named executive officer (and dependents as applicable);

¡Service credit of 2.5 years for purposes of determining vesting under any supplemental or excess defined contribution plan and eligibility under any applicable retiree medical plan;

¡Outplacement services of up to $30,000 for one full year (the named executive officer must begin to take advantage of the services within one year of the date of termination); and

¡Any contractual payments to which the named executive officer may otherwise have been entitled.

Beginning in January 2015, all equity awards granted to named executive officers will require a so-called “double trigger” for accelerated vesting in connection with a change of control. Upon a change of control, all equity awards continue to vest according to their original schedule. The vesting of such awards will only accelerate if a named executive officer is involuntarily terminated without cause or voluntarily terminates for good reason within the two years following a change of control. All outstanding equity grants awarded prior to January 2015 vest in full immediately upon a change of control.

Richard D. Fairbank

Mr. Fairbank receives no regular base salary. In light of this, for 2014,For 2017, Mr. Fairbank’s payment in the event of a termination following a change of control was based on a notional salary of $1 million and his Highest Annual Bonus.Bonus (as defined above). The Committee reviews and establishes the notional salary amount on an annual basis, based on market trends related to CEO compensation and recommendations provided by F.W.FW Cook. Mr. Fairbank is a party to a Change of Control Agreement.

(2)

Stephen S.Represents potential payments and benefits upon change of control for involuntary termination without cause or voluntary termination for good reason. “Acceleration and Continuation of Equity Awards” represents the value of equity where vesting is accelerated upon change of control, assuming, where applicable, that all performance metrics have been achieved at their target level.

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  2018 PROXY STATEMENT

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

(3)

Represents cash amounts paid for severance or in relation to enforcement ofnon-competition covenants as described under “Restrictive Covenants” beginning on page 84. In cases where the NEO is eligible for both types of payments,non-competition amounts typically offset severance amounts in whole or in part. Cash-settled restricted stock unit awards granted after the end of a performance year are included in the “Acceleration and Continuation of Equity Awards” column. Messrs. LaPrade and Crawford Ryan M. Schneider, John G. Finneran, Jr., and Sanjiv Yajnikwould receive a reduction in change of control severance payments in order to meet safe harbor limitations, which is reflected in the cash severance amounts reported above.

(4)

Represents the value of projected contributions to retirement plans during the severance period.

(5)

Represents the value of equity where vesting is accelerated or continued by the triggering event. For stock options, this represents thein-the-money value on December 31, 2017. For stock awards, this represents the fair market value of the shares on December 31, 2017. Most currently unvested equity awards held by our retirement eligible executives will continue to vest according to their original terms following retirement, which includes a voluntary or involuntary termination not for cause after a named executive officer becomes eligible for retirement. Messrs. Crawford, Schneider,Fairbank, Finneran, and Yajnik are generally eligible forwere the same payments upon termination, and are all party to a Change of Control Agreement. For 2014, these payments were calculated based on their 2014 target total compensation values. Messrs. Crawford, Schneider and Yajnik are party to a standard Non-Competition Agreement and a Confidentiality, Work Product and Non-Solicitation of Employee Agreement.

2014 Potential Payments and Benefits Upon Termination or Change of Control Tables by Named Executive Officer

Name and
Principal Position		SituationCash
Severance (1)		Retirement Plan
Contributions
(2)

Acceleration and
Continuation of
Equity

Awards (3)

Continuation of
Medical/Welfare
Benefits (4)

Excise Tax

    Gross

    Up (5)

 Total

Richard D. Fairbank

Chairman, CEO and

President

Voluntary TerminationNANANANANANA
Involuntary TerminationNANANANANANA
Retirement$0$0$73,217,060$462,000NA$73,679,060
For Cause Termination$0$0$0$0NA$0
CIC*$12,253,417$0$83,396,218 (6)$242,267NA$95,891,902
        

Stephen S. Crawford

Chief Financial

Officer

Voluntary Termination$1,129,500$0$3,025,458$0NA$4,154,958
Involuntary Termination$4,292,100$0$14,911,691$17,433NA$19,221,224
RetirementNANANANANANA
For Cause Termination$0$0$1,308,830$0NA$1,308,830
CIC*$9,611,826$595,012$18,226,648 (6)$180,685NA$28,614,171
        

Ryan M. Schneider

President, Card

Voluntary Termination$826,050$0$3,987,165$0NA$4,813,215
Involuntary Termination$3,138,990$0$6,371,276$14,640NA$9,524,906
RetirementNANANANANANA
For Cause Termination$0$0$957,497$0NA$957,497
CIC*$7,350,212$442,628$12,411,388 (6)$84,984NA$20,289,212
        

John G. Finneran, Jr.

General Counsel and

Corporate Secretary

Voluntary Termination$0$0$11,564,825$0NA$11,564,825
Involuntary Termination$1,441,500$0$11,564,825$10,000NA$13,016,325
Retirement$0$0$11,564,825$450,000NA$12,014,825
For Cause Termination$0$0$835,323$0NA$835,323
CIC*$6,515,721$390,289$11,564,825 (6)$196,372NA$18,667,207
        

Sanjiv Yajnik

President, Financial

Services

Voluntary Termination$675,600$0$10,726,854$0NA$11,402,454
Involuntary Termination$2,567,280$0$10,726,854$10,000NA$13,304,134
Retirement$675,600$0$10,726,854$313,000NA$11,715,454
For Cause Termination$0$0$782,987$0NA$782,987
CIC*$4,033,306$367,675$10,726,854 (6)$154,392NA$15,282,227

*Represents potential payments and benefits upon change of control for involuntary termination without cause or voluntary for good reason. “Acceleration and Continuation of Equity Awards” represents the value of equity where vesting is accelerated upon change of control, assuming, where applicable, that all performance metrics have been achieved at their target level.

The table above is intended to reflect potential payments toonly named executive officers acrosseligible for retirement as of December 31, 2017.

(6)

Most unvested equity awards will be treated in a rangesimilar manner to a termination of a named executive officer’s employment following a termination of employment due to death or disability.

(7)

Represents the value of potential separation scenarios, assumingpayments made on the changeexecutive’s behalf for continuation of controlmedical and welfare benefits during thenon-competition or separation occurred on December 31, 2014.

The amounts shown inseverance period, as applicable. Includes programs such as medical, dental, insurance, outplacement services and related benefits. Only includes programs that are specific to the table above donamed executive officers; does not include payments and benefits that are provided on a non-discriminatory basisthe value of programs generally available to salaried employees generallyall associates upon termination of employment. The namedseparation from the Company.

(8)

Named executive officers also are eligible to receive certain pension benefits and certain qualified and non-qualified deferred compensation amounts upon termination. These amounts are outlined in the 2014 Pension Benefits Table on page 62 and the 2014 Non-Qualified Deferred Compensation Table on page 64, respectively, and are not included in the table above.eligible for excise taxgross-ups.

Other amounts not included in the table above are the following:

The table above is intended to reflect potential payments to named executive officers across a range of potential separation scenarios, assuming the change of control or separation occurred on December 31, 2017. The amounts shown in the table do not include payments and benefits that are provided on anon-discriminatory basis to salaried associates generally upon termination of employment. The NEOs also are eligible to receive certain pension benefits and certain qualified andnon-qualified deferred compensation amounts upon termination. These amounts are outlined in the 2017 Pension Benefits Table on page 82 and the 2017Non-Qualified Deferred Compensation Table on page 83, respectively, and are not included in the table above.

Other amounts not included in the table above include:

 

∎Accrued salary, bonus and vacation pay as of the date of termination; and
termination

∎Welfare benefits generally available to all retirees, including retiree medical programs.programs

 Estimated Ratio of CEO Compensation to Median Employee Compensation

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K (the “Annual Total Compensation”) of our median employee and the Annual Total Compensation of our CEO, Richard Fairbank.

For 2017, our last completed fiscal year:

∎The Annual Total Compensation of the median compensated of all employees of our company (other than our CEO), was $62,037

∎The Annual Total Compensation of Mr. Fairbank was $16,175,770

Accordingly, the ratio of Mr. Fairbank’s Annual Total Compensation to the median employee’s Annual Total Compensation was 261 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.

The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s Annual Total Compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

 

(1)Represents cash amounts paid for severance or in relation to enforcement of non-competition covenants as described under “Restrictive Covenants” beginning on page 65. In cases where the executive is eligible for both types of payments, non-competition amounts typically offset severance amounts in whole or in part. Cash-settled restricted stock unit awards granted after the end of a performance year are included in the “Acceleration and Continuation of Equity Awards” column. Messrs. Schneider and Yajnik would receive a reduction in CIC severance payments in order to meet safe harbor limitations, which is reflected in the cash severance amounts reported above.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

  89

SECTION V - NAMED EXECUTIVE OFFICER COMPENSATION

 

To identify the median employee, as well as determine the Annual Total Compensation of the median employee, we used the following methodology and consistently applied material assumptions, adjustments and estimates:

∎

We identified the median compensated employee based on payroll data for our global employee population of 50,429 as of October 1, 2017 (the “Determination Date”).

∎

We compared the payroll data of our global employee population using a consistently applied compensation measure consisting of the salary, wages (including overtime), bonuses and commissions paid to our employees over the twelve-month period preceding the Determination Date, as reflected in our payroll records (the “Estimated Compensation”).

∎

Based on the Estimated Compensation of each employee, we identified a cohort of 101 employees, consisting of the median employee and 50 employees above and 50 employees below the median Estimated Compensation value (the “Median Cohort”). After evaluating the shared characteristics of the Median Cohort, we noted that 27 employees appeared to bear anomalous characteristics (such as participation innon-US compensation programs, a hire date during the fiscal year, or separation prior to the end of the fiscal year) that could significantly distort the pay ratio calculation (“Anomalous Employees”).

∎

We then calculated the Annual Total Compensation of each member of the Median Cohort, excluding Anomalous Employees. We identified the employee with the median Annual Total Compensation of the Median Cohort.

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(2)Represents the value of projected contributions to retirement plans during the severance period.

(3)Represents the value of equity where vesting is accelerated or continued by the triggering event. For stock options, this represents the in-the-money value. For stock awards, this represents the fair market value of the shares on December 31, 2014. Most currently unvested equity awards held by our retirement eligible executives will continue to vest according to their original terms following retirement, which includes a voluntary or involuntary termination not for cause after a named executive officer becomes eligible for retirement. Messrs. Fairbank, Finneran, and Yajnik were the only named executive officers eligible for retirement as of December 31, 2014.

 

(4)Represents the value of potential payments made on the executive’s behalf for continuation of medical and welfare benefits during the severance period. Includes programs such as medical, dental, insurance, outplacement services and related benefits. Only includes programs that are specific to the named executive officers; does not include the value of programs generally available to all employees upon separation from the Company.

 

(5)Named executive officers are not eligible for excise tax gross-ups.

Section VI - Equity Compensation Plans

 

(6)Most currently unvested equity awards will be treated in a similar manner following a named executive officer’s termination of employment for death or disability. Due to differences in the vesting provisions of performance shares, the value of the acceleration and continuation of unvested equity awards for each named executive officer following the termination of his employment for death or disability on December 31, 2014 would have been: $72,331,945 for Mr. Fairbank, $17,435,017 for Mr. Crawford, $11,460,892 for Mr. Schneider, $10,667,583 for Mr. Finneran, and $9,885,569 for Mr. Yajnik.

SECTION VII – EQUITY COMPENSATION PLANS

 Equity Compensation Plan Information

The following table provides information as of December 31, 2017, with respect to shares of Capital One common stock that may be issued under our existing compensation plans.

 Plan Category

 

  

Number of securities      

to be issued upon      

exercise      

of outstanding options,      

warrants and rights      

  

Weighted-average       

exercise price of       

outstanding options       

warrants and rights (5)       

  

 

Number of securities 

remaining available 

for future issuance 

under equity 

compensation 

plans (excluding securities 

reflected in column (a)) 

  

 

(a)      

 

  

 

(b)       

 

  

 

(c)

 

 

 Equity compensation plans approved by security holders(1)

  10,399,125(3)  $48.50      32,760,917(6)
      

 

 Equity compensation plans not approved by security holders (2)

  44,084(4)  $0.00      0(7)
      

 

 Total

  10,443,209  $48.50      32,760,917
      

(1)

The following table provides information as of December 31, 2014, with respect to shares ofplans have been approved by Capital One common stock that may be issued under our existing compensation plans.stockholders and are currently in effect: the 2004 Stock Incentive Plan and the 2002 Associate Stock Purchase Plan.

Plan Category Number of Securities to be
issued upon exercise of
outstanding options,
warrants and rights		 Weighted-average
exercise price of
outstanding options,
warrants  and rights (3)		 Number of securities remaining available
for future issuance under equity
compensation plans (excluding securities
reflected in column (a))
   (a) (b) (c)
Equity compensation plans approved by security holders (1) 14,011,073 (4) $55.75 29,787,036 (6)
Equity compensation plans not approved by security holders (2) 201,568 (5) $64.41 0 (7)

Total

 14,212,641 $55.87 29,787,036

(1)The following plans have been approved by Capital One stockholders and are currently in effect: the 2004 Stock Incentive Plan and the 2002 Associate Stock Purchase Plan.

(2)The 1999 Directors Plan, which is described below, was terminated in April 2009 and has not been approved by Capital One stockholders. In conjunction with the acquisition of Hibernia National Bank (“Hibernia”) in November 2005, Capital One assumed three existing Hibernia stock incentive plans. In conjunction with the acquisition of North Fork Bancorporation (“North Fork”) in December 2006, Capital One assumed fifteen existing North Fork stock incentive plans. Options outstanding under these plans were converted to Capital One options outstanding and are included in the amounts reported in this row. As of December 31, 2014, one Hibernia plan had options outstanding and two North Fork plans had options outstanding. All remaining Hibernia and North Fork options will expire by December 2015. There are no shares available for future issuance under the Hibernia or North Fork plans.

(3)Does not reflect restricted stock units and performance shares because they have no exercise price.

(4)Excludes purchase rights accruing under the 2002 Associate Stock Purchase Plan and 1,382,229 issued and unvested outstanding shares of restricted stock under the 2004 Stock Incentive Plan. Includes 2,189,443 shares, representing the maximum number of shares issuable pursuant to outstanding performance share awards under the 2004 Stock Incentive Plan and 1,431,066 shares subject to outstanding restricted stock units under the 2004 Stock Incentive Plan. Excludes shares of restricted stock, to be settled in cash, under the 2004 Stock Incentive Plan. Also excludes dividend equivalents accrued with respect to performance shares which are paid in shares at the time the underlying performance shares are issued and only with respect to the number of performance shares that actually vest.

(5)Includes 54,456 outstanding restricted stock units under the 1999 Directors Plan.

(6)Represents 21,529,289 shares available for future issuance under the 2004 Stock Incentive Plan; and 8,257,747 shares available for future issuance under the 2002 Associate Stock Purchase Plan as shares purchased voluntarily by Capital One associates through regular payroll deductions and a company match.

(7)There are no shares available for future issuance under the equity compensation plans not approved by security holders.

 

 Description of Non-Security Holder Approved Equity Compensation Plans

Set forth below is a brief description of the material features of each Capital One equity compensation plan that was adopted without the approval of Capital One’s security holders and that had grants outstanding or shares available for issuance as of December 31, 2014.

 1999 Directors Plan

(2)

The 1999 Directors Plan, which is described below, was adopted by the Board onterminated in April 29, 1999,2009 and terminated on April 28, 2009. The plan authorized a maximum of 825,000 shares of Capital One’s common stock for the grant of non-qualified stock options, restricted stock and restricted stock units to members of the Board who werewas not otherwise employedapproved by Capital One or any subsidiarystockholders.

(3)

Excludes purchase rights accruing under the 2002 Associate Stock Purchase Plan and 15,262 issued and unvested outstanding shares of Capital Onerestricted stock under the 2004 Stock Incentive Plan. Includes 1,143,914 shares, representing the maximum number of shares issuable pursuant to outstanding performance share awards under the 2004 Stock Incentive Plan and 4,489,138 shares subject to outstanding RSUs, including outstanding RSUs subject to performance-based vesting provisions, under the 2004 Stock Incentive Plan. Excludes shares of RSUs, to be settled in cash, under the 2004 Stock Incentive Plan. Also excludes dividend equivalents accrued with respect to performance shares which are paid in shares at the time an award was granted. Thethe underlying performance shares are issued, and only with respect to the number of performance shares available for issuancethat actually vest.

(4)

Represents 44,084 outstanding RSUs under the plan included shares granted under the plan subject to options that expired or otherwise terminated unexercised and shares forfeited pursuant to restrictions on restricted stock or deferred stock. The plan is administered by the Board.

The exercise price of stock options granted under the plan could not be less than the fair market value, as defined in the 1999 Directors Plan, of Capital One common stock on the date of grant. The maximum term of each stock option was ten years, and vesting schedules were determined at the time of grant. The Board could, in its discretion, grant options that by their terms became fully exercisable upon a change of control, as defined in the 1999 Directors Plan.

(5)

The Board could award restricted stock to eligible directors. During the restricted period, a director cannot dispose of any restrictedDoes not reflect RSUs and performance shares and must forfeit any restrictedbecause they have no exercise price.

(6)

Represents 14,716,819 shares granted to such director if he or she ceases to be a member of the Board. The Board had the authority to establish the terms and conditions upon which these restrictions will lapse. The Board could also, at any time, accelerate the time at which any or all restrictions would lapse or remove any and all such restrictions. Subject to any applicable restrictions, a participant who received an award of restricted stock would have all of the rights of a stockholder with respect to the shares subject to the award, including but not limited to the right to vote the shares and the right to receive all dividends and other distributions paid with respect to the shares.

The Board could award restricted stock units to eligible directorsavailable for future issuance under the plan. The Board has the authority to establish, in its discretion, the length of the vesting period; any restrictions with respect to an award of restricted stock units2004 Stock Incentive Plan; and the terms and conditions upon which restrictions, if any, shall lapse.

The Board has retained the right to cancel any awards outstanding18,044,098 shares available for future issuance under the plan in exchange for2002 Associate Stock Purchase Plan as shares purchased voluntarily by Capital One associates through regular payroll deductions and a cash payment equal to any such award’s value as of the date of cancellation.Company match.

(7)

Currently,There are no shares are available for future issuance under this plan other than shares subject to outstandingthe equity awards under the plan.compensation plans not approved by security holders.

SECTION VIII – COMPENSATION COMMITTEE REPORT

All members of the Compensation Committee participated in the review and discussion of the Compensation Discussion and Analysis (“CD&A”) with management. Based on that review and discussion, the Compensation Committee recommended to the Board of 1999 Directors that the CD&A be included in this proxy statement.Plan

The 1999 Directors Plan was adopted by the Board on April 29, 1999, and terminated on April 28, 2009. The plan authorized a maximum of 825,000 shares of Capital One’s common stock for the grant ofnon-qualified stock options, restricted stock and RSUs to members of the Board who were not otherwise employed by Capital One or any subsidiary of Capital One at the time an award was granted. The number of shares available for issuance under the plan included shares granted under the plan subject to options that expired or otherwise terminated unexercised and shares forfeited pursuant to restrictions on restricted stock or deferred stock. The plan is administered by the Board.

The exercise price of stock options granted under the plan could not be less than the fair market value, as defined in the 1999 Directors Plan, of Capital One common stock on the date of grant. The maximum term of each stock option was ten years, and vesting schedules were determined at the time of grant. The Board could, in its discretion, grant options that by their terms became fully exercisable upon a change of control, as defined in the 1999 Directors Plan.

The Board could award restricted stock to eligible directors. During the restricted period, a director cannot dispose of any restricted shares and must forfeit any restricted shares granted to such director if he or she ceases to be a member of the Board. The Board had the authority to establish the terms and conditions upon which these restrictions will lapse. The Board could also, at any time, accelerate the time at which any or all restrictions would lapse or remove any and all such restrictions. Subject to any applicable restrictions, a participant who received an award of restricted stock would have all of the rights of a stockholder with respect to the shares subject to the award, including, but not limited to, the right to vote the shares and the right to receive all dividends and other distributions paid with respect to the shares.

 

The Compensation Committee

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SECTION VI - EQUITY COMPENSATION PLANS

The Board could award RSUs to eligible directors under the plan. The Board has the authority to establish, in its discretion, the length of the vesting period, any restrictions with respect to an award of RSUs and the terms and conditions upon which restrictions, if any, shall lapse.

The Board has retained the right to cancel any awards outstanding under the plan in exchange for a cash payment equal to any such award’s value as of the date of cancellation. Currently, no shares are available for issuance under this plan other than shares subject to outstanding equity awards under the plan.

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Section VII - Compensation Committee Report

All members of the Compensation Committee participated in the review and discussion of the Compensation Discussion and Analysis (“CD&A”) with management. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this proxy statement.

The Compensation Committee:

Mayo A. Shattuck III (Chair)

Patrick W. Gross

Ann Fritz Hackett

Lewis Hay, III

Benjamin P. Jenkins, III

The foregoing Report of the Compensation Committee on Executive Compensation shall not be deemed to be soliciting material or filed with the SEC and is not incorporated by reference into any of Capital One’s previous or future filings with the SEC, except as otherwise explicitly specified by Capital One in any such filing.

Peter Thomas Killalea

Pierre E. Leroy

The foregoing Report of the Compensation Committee shall not be deemed to be soliciting material or filed with the SEC and is not incorporated by reference into any of Capital One’s previous or future filings with the SEC, except as otherwise explicitly specified by Capital One in any such filing.

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SECTION IX – AUDIT COMMITTEE REPORT  93

The charter of the Audit Committee was most recently approved by the Committee and the full Board of Directors on January 28, 2015.

Section VIII - Audit Committee Report

The charter of the Audit Committee was most recently approved by the Committee on January 31, 2018, and the full Board of Directors on February 1, 2018.

In accordance with its charter, the Audit Committee assists the Board of Directors in the oversight of:

 

∎

The qualifications, independence and performance of Capital One’s independent auditor

∎

The integrity of Capital One’s financial statements and internal controls;

The qualifications, independence and performance of Capital One’s independent auditor;
controls

∎

The performance of Capital One’s internal auditor; and

auditor

∎

Capital One’s compliance with legal and regulatory requirements.requirements

The Audit Committee has implemented procedures to enable it to devote the attention it deems appropriate to each of the matters assigned to it under its charter. In carrying out its responsibilities, the Audit Committee met a total of fourteen times during 2017. Pursuant to Capital One’s Corporate Governance Guidelines and applicable law, the Audit Committee is comprised solely of independent directors.

In discharging its oversight responsibility, the Audit Committee has reviewed and discussed Capital One’s audited financial statements for the fiscal year ended December 31, 2017, and the assessment of the effectiveness of Capital One’s internal control over financial reporting, with management and Ernst & Young LLP (“Ernst & Young”), Capital One’s independent auditor. The Audit Committee has also discussed with Ernst & Young the matters required to be discussed under the applicable standards of the Public Company Accounting Oversight Board. In addition, the Audit Committee has received the written disclosures and the letter from Ernst & Young required by the applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young their independence from Capital One. Based on its review and discussions with management and Ernst & Young, and pursuant to a delegation of authority from the Board of Directors, the Audit Committee has approved the inclusion of the audited financial statements in Capital One’s Annual Report on Form10-K for the fiscal year ended December 31, 2017, for filing with the SEC.

The Audit Committee has implemented procedures to enable it to devote the attention it deems appropriate to each of the matters assigned to it under its charter. In carrying out its responsibilities, theCommittee:

Bradford H. Warner (Chair and Audit Committee met a total of twelve times during 2014. Pursuant to Capital One’s Corporate Governance Principles and applicable law, the Audit Committee is comprised solely of independent directors.Financial Expert)

In discharging its oversight responsibility, the Audit Committee has reviewed and discussed Capital One’s audited financial statements for the fiscal year ended December 31, 2014, and the assessment of the effectiveness of Capital One’s internal control over financial reporting, with management and Ernst & Young LLP (“Ernst & Young”), Capital One’s independent auditors. The Audit Committee has also discussed with Ernst & Young the matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board. In addition, the Audit Committee has received the written disclosures and the letter from Ernst & Young required by the applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young their independence from Capital One. Based on its review and discussions with management and Ernst & Young, and pursuant to a delegation of authority from the Board of Directors, the Audit Committee has approved the inclusion of the audited financial statements in Capital One’s Annual Report on Form 10-K for the fiscal year ending December 31, 2014, for filing with the SEC.

The Audit Committee:

Bradford H. Warner (Chair and “Audit Committee Financial Expert”)
Benjamin P. Jenkins, III
Peter E. Raskind (“Audit Committee Financial Expert”)

Benjamin P. Jenkins, III

Pierre E. Leroy (Audit Committee Financial Expert)

Catherine G. West

The foregoing Report of the Audit Committee shall not be deemed to be soliciting material or filed with the SEC and is not incorporated by reference into any of Capital One’s previous or future filings with the SEC, except as otherwise explicitly specified by Capital One in any such filing.

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Section IX - Election of Directors

(Item 1 on Proxy Card)

All of Capital One’s directors are elected at each annual meeting of stockholders and hold such office until the next annual meeting of stockholders, and until their successors are duly elected and qualified. Each nominee is a current Board member who was elected by stockholders at the 2017 Annual Meeting, other than Ms. Chennapragada, who was appointed to the Board in March 2018 and was recommended to the Governance and Nominating Committee by Spencer Stuart, a third-party director search firm. Each nominee has consented to serve aone-year term. Information about the proposed nominees for election as directors is set forth under “Biographies of Director Nominees” in the “Corporate Governance at Capital One” section beginning on page 16 of this proxy statement.

In the event a nominee ceases to be available for election, the Board of Directors may designate a substitute as a nominee or reduce the size of the Board. If the Board designates a substitute nominee, proxies will be voted for the election of such substitute. As of the date of this proxy statement, the Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve as a director.

Capital One’s Corporate Governance Guidelines provide that anon-management director shall not be eligible for election to the Board upon reaching the age of 72. The Board may waive this prohibition of eligibility if it determines that, in light of all the circumstances, doing so is in the best interests of Capital One and its stockholders. The Board has waived this requirement with respect to Mr. Jenkins after considering: his contribution to the diversity of skills needed on the Board as a whole, particularly in light of the Company’s business model and strategic objectives; his experience and performance during his tenure as a member of the Board; the fresh perspective he continues to bring to the Board given his relatively short tenure with Capital One; the quantity and quality of his experience in corporate banking, banking operations, investment banking, and management of customer relationships spanning over 38 years, during which time he saw the industry undergo significant and rapid change; and his continuing value to the Company and its stockholders as the Company continues to evolve to match the pace of change in the banking industry.

The nominees for election this year are:

Richard D. FairbankPierre E. Leroy
Aparna ChennapragadaPeter E. Raskind
Ann Fritz HackettMayo A. Shattuck III
Lewis Hay, IIIBradford H. Warner
Benjamin P. Jenkins, IIICatherine G. West
Peter Thomas Killalea

***

The Board of Directors unanimously recommends that you vote “FOR” each of these director nominees.

The foregoing Report of the Audit Committee shall not be deemed to be soliciting material or filed with the SEC and is not incorporated by reference into any of Capital One’s previous or future filings with the SEC, except as otherwise explicitly specified by Capital One in any such filing.

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Section X - Ratification of Selection of Independent Auditors

(Item 2 on Proxy Card)

The Audit Committee, pursuant to authority granted to it by the Board of Directors, is directly responsible for the appointment, compensation, retention and oversight of Capital One’s independent auditor. The Audit Committee evaluates the independent auditor’s qualifications, performance and independence at least annually and periodically considers whether to continue to retain our current independent auditor or engage another firm. In connection with applicable partner rotation requirements, the Audit Committee and its Chair are involved in considering the selection of the independent auditor’s new lead engagement partner. Additionally, Capital One has established policies to provide for adherence to Sarbanes-Oxley Act requirements relating to the rotation of partners engaged in Capital One’s audit by the independent auditor.

For 2018, the Audit Committee has appointed the firm of Ernst & Young LLP as Capital One’s independent auditor. Ernst & Young has served in this role since 1994. The members of the Audit Committee and the Board believe that the continued retention of Ernst & Young as Capital One’s independent auditor is in the best interests of Capital One and its stockholders.

The Board of Directors is submitting this proposal to the vote of the stockholders as a matter of good corporate governance. If stockholders do not ratify the selection of Ernst & Young, the Audit Committee will reconsider their appointment as our independent auditor. Even if the selection is ratified, the Audit Committee may, in its discretion, appoint a different independent auditor at any time during the year if the Audit Committee determines that such a change would be in our stockholders’ best interests.

The fees billed for professional services provided by Ernst & Young for fiscal years 2017 and 2016 are shown in the following table:

Fees (dollars in millions)

  2017  2016
  

Audit Fees

  $12.35    $11.38
    
  

Audit-Related Fees

  $1.39    $1.23
    
  

Tax Fees

  $0.01    $0.00
    
  

All Other Fees

  $0.00    $0.00
    

“Audit Fees” include fees for the audit of our annual financial statements, the review of unaudited interim financial information included in our quarterly reports on Form10-Q, and services that normally would be provided by the auditor in connection with statutory and regulatory filings or engagements and that generally only the independent auditor can provide. In addition to fees for an audit or review in accordance with generally accepted auditing standards, this category contains fees for comfort letters, statutory and subsidiary audits, consents and assistance with and review of documents filed with the SEC. “Audit-Related Fees” are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and traditionally are performed by the independent auditor, such as: compliance testing and reporting; internal control reviews; attestation services that are not required by statute or regulation; and agreed upon procedure reports. “Tax Fees” include corporate and subsidiary tax compliance services. “All Other Fees” include fees for services that are not defined as Audit, Audit-related or Tax and are not specifically prohibited by the SEC.

The Audit Committee is responsible for approving all fees and terms of engagement for audit, audit-related and permissiblenon-audit services provided by Ernst & Young. The Audit Committee has reviewed the fees paid to Ernst & Young and has considered whether the fees paid fornon-Audit services are compatible with maintaining Ernst & Young’s independence. The Audit Committee also adopted policies and procedures to approve services provided by Ernst & Young in accordance with the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) and rules of the SEC promulgated thereunder. These policies and procedures involve annualpre-approval by the Audit Committee of the types of services to be provided by Capital One’s independent auditor and fee limits for each type of service on both a per engagement and aggregate level. Any service engagements that exceed these

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SECTION X – ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)

All of Capital One’s directors are elected at each annual meeting of stockholders and hold such office until the next annual meeting of stockholders, and until their successors are duly elected and qualified. Each nominee has consented to serve a one-year term. Information about the proposed nominees for election as directors is set forth under “Information about our Directors and Executive Officers” in the “Corporate Governance at Capital One” section beginning on page 16 of this proxy statement.

In the event a nominee ceases to be available for election, the Board of Directors may designate a substitute as a nominee or reduce the size of the Board. If the Board designates a substitute nominee, proxies will be voted for the election of such substitute. As of the date of this proxy statement, the Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve as a director.

The nominees for election this year are:

Richard D. FairbankPierre E. Leroy
Patrick W. GrossPeter E. Raskind
Ann Fritz HackettMayo A. Shattuck III
Lewis Hay, IIIBradford H. Warner
Benjamin P. Jenkins, IIICatherine G. West

***

The Board of Directors unanimously recommends that you vote “FOR” each of these director nominees.

SECTION XI –- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

(ITEMAUDITOR (ITEM 2 ON PROXY CARD)

pre-approved limits must be submitted to the Audit Committee for specificpre-approval. Under the policy adopted by the Audit Committee, Tax Fees are limited to 25% of combined Audit and Audit-Related Fees, and services that would fall under the category “All Other Fees” are prohibited. In 2017, all of the Audit and Audit-Related Fees and related services werepre-approved by the Audit Committee pursuant to the policies and procedures described above.

Representatives of Ernst & Young are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

***

The Board of Directors unanimously recommends that you vote “FOR” the ratification of Ernst & Young LLP as Capital One’s independent auditor for 2018.

The Audit Committee, pursuant to authority granted to it by the Board of Directors, is directly responsible for the appointment, compensation, retention and oversight of Capital One’s independent auditors. The Audit Committee evaluates the independent auditors’ qualifications, performance and independence at least annually and periodically considers whether to continue to retain our current independent auditor or engage another firm. In connection with applicable partner rotation requirements, the Audit Committee and its Chair are involved in considering the selection of Ernst & Young’s new lead engagement partner.

For 2015, the Audit Committee has appointed the firm of Ernst & Young as independent auditors. Ernst & Young has served as Capital One’s independent auditors since 1994. The members of the Audit Committee and the Board believe that the continued retention of Ernst & Young as Capital One’s independent auditors is in the best interests of Capital One and its stockholders.

The Board of Directors is submitting this proposal to the vote of the stockholders as a matter of good corporate governance. If stockholders do not ratify the selection of Ernst & Young, the Audit Committee will reconsider their appointment as our independent auditors.

The fees billed for professional services provided by Ernst & Young for fiscal years 2014 and 2013 are shown in the following table:CAPITAL ONE FINANCIAL CORPORATION  

 

  Fees (dollars in millions)20142013

  Audit Fees

$10.14$10.22

  Audit-Related Fees

$1.22$1.49

  Tax Fees

$0.26$0.32

  All Other Fees

$0.00$0.00

Audit fees include fees for the audit of our annual financial statements, the review of financial statements included in our quarterly reports on Form 10-Q and services that normally would be provided by the auditor in connection with statutory and regulatory filings or engagements and that generally only the independent auditor can provide. In addition to fees for an audit or review in accordance with generally accepted auditing standards, this category contains fees for comfort letters, statutory audits, consents and assistance with and review of documents filed with the SEC. Audit-related fees are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and traditionally are performed by the independent auditor, such as: employee benefit plan audits; due diligence related to mergers and acquisitions; internal control reviews; attestation services that are not required by statute or regulation; and consultation concerning financial accounting and reporting standards. Tax fees include corporate and subsidiary compliance, consulting, international and employee benefit services. All other fees would include fees for services that are not defined as Audit, Audit-related or Tax and are not specifically prohibited by the SEC.  2018 PROXY STATEMENT  

The Audit Committee is responsible for overseeing the amount of Audit fees paid to Ernst & Young. The Audit Committee has reviewed the fees paid to Ernst & Young and has considered whether the fees paid for non-Audit services are compatible with maintaining Ernst & Young’s independence. The Audit Committee also adopted policies and procedures to approve services provided by Ernst & Young in accordance with the Sarbanes-Oxley Act of 2002 and rules of the SEC promulgated thereunder. These policies and procedures involve annual pre-approval by the Audit Committee of the types of services to be provided by Capital One’s independent auditor and fee limits for each type of service on both a per engagement and aggregate level. Additional service engagements that exceed these pre-approved limits must be submitted to the Audit Committee for further pre-approval. Under the policy adopted by the Audit Committee, Tax fees are limited to 25% of combined Audit and Audit-related fees, and services that would fall under the category “All Other Fees” are prohibited. Capital One’s policy, for administrative ease, allows for a $25,000de minimis exception to the pre-approval procedures; however, any services provided pursuant to this exception must be approved at the next meeting of the Audit

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Committee. Additionally, Capital One has established policies to provide for adherence to Sarbanes-Oxley Act requirements relating to the rotation of partners engaged in Capital One’s audit by the independent auditors.

Representatives of Ernst & Young are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

***

The Board of Directors unanimously recommends that you vote“FOR” the ratification of Ernst & Young LLP as Capital One’s independent auditors for 2015.

Section XI - Advisory Approval of Capital One’s 2017 Named Executive Officer Compensation

(Item 3 on Proxy Card)

We are offering to our stockholders anon-binding advisory vote to approve our 2017 named executive officer compensation, pursuant to Section 14A of the Exchange Act. While the vote isnon-binding, the Board of Directors values the opinions that stockholders express through their votes and in any additional dialogue. The Board of Directors will consider the outcome of the vote when making future compensation decisions.

As discussed in the “Compensation Discussion and Analysis” section beginning on page 44, our Board of Directors generally has provided compensation programs for the CEO and the other NEOs that are competitive with the market, performance-based and transparent and that align with our stockholders’ interests over multiple time horizons. Our CEO’s and other NEOs’ compensation programs generally have consisted primarily of performance-based incentive opportunities, including multiple types of equity instruments with multi-year vesting schedules. The ultimate value of the equity-based awards made to our named executive officers is subject to Capital One’s sustained performance over time, both on an absolute basis and relative to our peers.

For 2017, approximately 78% of the CEO’s total compensation is equity-based andat-risk to the performance of the Company’s stock price, and 100% of his compensation is deferred for a three-year period. As discussed under “NEO Compensation” beginning on page 58, under the 2017 NEO compensation program applicable to our other NEOs, approximately 80% of total target compensation was provided through equity-based vehicles which were allat-risk based on the performance of the Company’s stock price and subject to vesting over multiple time horizons.

Additional information relevant to your vote can be found under “Compensation Discussion and Analysis” on pages 44 to 72 and “Named Executive Officer Compensation” section on pages 73 to 90.

We ask for your advisory vote to approve the following resolution:

“Resolved, that Capital One’s stockholders hereby provide their advisory approval of the 2017 Named Executive Officer compensation as disclosed pursuant to the rules of the SEC in the Compensation Discussion and Analysis, the Summary Compensation Table, the other compensation tables and the related notes and narratives in this proxy statement.”

The Board of Directors has resolved to hold annual advisory votes to approve executive compensation. Accordingly, the next advisory vote to approve executive compensation will occur at the 2019 Annual Meeting, unless the Board of Directors modifies its policy on the frequency of holding such advisory votes.

***

The Board of Directors unanimously recommends that you vote “FOR” advisory approval of our 2017 Named Executive Officer compensation as disclosed in this proxy statement.

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Section XII- Ratification of 25% Ownership Threshold for Stockholders to Request a Special Meeting of Stockholders

(Item 4 on Proxy Card)

Overview

Capital One’s Restated Certificate of Incorporation (the “Certificate”) currently allows one or more stockholders who own at least 25% of the Company’s Voting Stock (as defined below) to request that Capital One call a special meeting of stockholders (the “Special Meeting Right”) provided that they satisfy certain procedures outlined in Capital One’s Amended and Restated Bylaws (the “Bylaws”). This proposal, which the Board of Directors recommends that stockholders support, asks Capital One’s stockholders to ratify the existing 25% ownership threshold set forth in the Special Meeting Right.

Background

After engaging with stockholders about their views on stockholder-requested special meetings, in 2015, the Board proposed, and stockholders approved, an amendment to the Certificate to enhance stockholder rights by permitting stockholders that own at least 25% of the Company’s Voting Stock to call a special meeting. For purposes of the Special Meeting Right, under the Certificate a stockholder is deemed to “own” only those shares of outstanding “Voting Stock” (which currently consists of Capital One’s common stock) as to which the stockholder possesses both (1) full voting and investment rights and (2) the full economic interest, including the opportunity for profit and risk of loss. At that time, the Board (including all members of the Governance and Nominating Committee) carefully considered various implications of implementing a stockholder right to call special meetings, including a stockholder proposal requesting adoption of a special meeting right with a 20% ownership threshold as well as feedback received from other Capital One stockholders, and determined that the Board’s proposed Special Meeting Right, including the 25% threshold, was an appropriate enhancement to stockholder rights. Although Capital One’s stockholders expressed a variety of views regarding the appropriate threshold level, the strongest consensus was at 25%. This consensus was borne out at the 2015 Annual Stockholder Meeting, at which Capital One’s stockholders overwhelmingly approved the Special Meeting Right with a 25% threshold as proposed by the Board, and rejected the stockholder proposal requesting a 20% ownership threshold.

This proxy season, the Company received a stockholder proposal for consideration at the 2018 Annual Meeting of Stockholders requesting that the Company initiate steps to lower the threshold to 10%, which the staff of the Securities and Exchange Commission agreed Capital One could exclude from these Proxy Materials in compliance with SEC rules. The Board and the Governance and Nominating Committee carefully considered the stockholder proposal, and determined that the existing 25% threshold continues to be appropriate for Capital One and that it is advisable not to propose an amendment to the 25% ownership threshold at this time. In making this determination, the Board and the Governance and Nominating Committee considered, among other factors, that stockholders overwhelmingly approved the Special Meeting Right (including the 25% ownership threshold) over a stockholder proposal requesting a 20% threshold only three years ago, that stockholder engagement at that time showed the strongest consensus among stockholders for the 25% threshold level, and that since that time, the Special Meeting Right and ownership threshold has not been a significant topic raised by our stockholders in the course of our ongoing engagement with them.

However, given that a stockholder raised this matter in a proposal, the Governance and Nominating Committee and the Board determined to submit this ratification proposal to a vote at the 2018 Annual Meeting in order to provide all of our stockholders with a means of communicating their views on the existing 25% ownership threshold. Providing our stockholders with the ability to communicate their views on important governance topics, both through our continuous year-round stockholder engagement program discussed on pages 27 and 28 and through stockholder votes, is important to Capital One’s Board, which values the voice and perspectives of the

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SECTION XII – ADVISORY APPROVAL- RATIFICATION OF CAPITAL ONE’S 2014 NAMED EXECUTIVE OFFICER COMPENSATION

(ITEM 3 ON PROXY CARD)

We are offering to our stockholders a non-binding advisory vote on our 2014 Named Executive Officer compensation, including the compensation of our Chief Executive Officer, pursuant to Section 14A of the Securities and Exchange Act of 1934. While the vote is non-binding, the Board of Directors values the opinions that stockholders express through their votes and in any additional dialogue. The Board of Directors will consider the outcome of the vote when making future compensation decisions.

As discussed in the “Compensation Discussion and Analysis” section beginning on page 31, our Board of Directors generally has provided compensation programs for the CEO and the NEOs that are competitive with the market, performance-based and transparent and that align with our stockholders’ interests over multiple time horizons. Our CEO and NEO compensation programs generally have consisted primarily of performance-based incentive opportunities, including multiple types of equity instruments with multi-year vesting schedules. The ultimate value of the equity-based awards made to our CEO and the NEOs is subject to Capital One’s sustained performance over time, both on an absolute basis and relative to our peers.

For 2014, approximately 78% of the CEO’s total compensation is equity-based and at-risk to the performance of the Company’s stock price, and 100% of his compensation is deferred for a three-year period. As discussed under “NEO Compensation” on page 34, under the 2014 NEO compensation program approximately 80% of total target compensation was provided through equity-based vehicles which were all at-risk based on the performance of the Company’s stock price and subject to vesting over multiple time horizons.

Additional information relevant to your vote can be found in the “Compensation Discussion and Analysis” section of this proxy statement on pages 31 to 51 and in the “Named Executive Officer Compensation” section on pages 52 to 70.

We ask for your advisory vote on the following resolution:

“Resolved, that Capital One’s stockholders hereby provide their advisory approval of the 2014 Named Executive Officer compensation as disclosed pursuant to the rules of the SEC in the Compensation Discussion and Analysis, the Summary Compensation Table, the other compensation tables and the related notes and narratives in this proxy statement.”

***

The Board of Directors unanimously recommends that you vote“FOR” advisory approval of our 2014 Named Executive Officer compensation as disclosed in this proxy statement.

The Board of Directors has resolved to hold annual advisory votes on executive compensation. Accordingly, the next advisory vote on executive compensation will occur at the 2016 Annual Meeting, unless the Board of Directors modifies its policy on the frequency of holding such advisory votes.

SECTION XIII – APPROVAL OF AMENDMENT TO CAPITAL ONE’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW25% OWNERSHIP THRESHOLD FOR STOCKHOLDERS TO REQUEST A SPECIAL MEETINGSMEETING OF THE STOCKHOLDERS

(ITEM (ITEM 4 ON PROXY CARD)

Overview

The Board of Directors recommends that Capital One’s stockholders approve an amendment to Capital One’s Restated Certificate of Incorporation (the “Certificate”) to allow one or more stockholders who own at least 25% of the Company’s common stock and who satisfy certain procedures to require that the Company call a special meeting of the stockholders (the “Proposed Certificate Amendment”). Stockholders do not presently have the ability to require that the Company call a special meeting of the stockholders.

The Proposed Certificate Amendment

If the Proposed Certificate Amendment is approved by stockholders, the Certificate will provide that the Company is required to call a special meeting of the stockholders upon the written request of one or more stockholders who:

 

•own shares representing 25% or more of the voting power of the then outstanding Voting Stock1 entitled to vote on the matter or matters to be brought before the proposed special meeting,

stockholders the Board represents. The Board determined that proposing ratification of the 25% threshold provides a more effective method to commence further engagement on the topic of special meetings, rather than a vote on the stockholder proposal, given the Company’s past communications on the issue. The Company believes a vote in favor of this ratification proposal is tantamount to a vote against a proposal to lower the threshold for calling a special meeting and therefore provides stockholders a means of clearly communicating their views. In contrast, a stockholder’s vote in favor of the stockholder proposal would not have clearly communicated whether the stockholder preferred a 10% threshold over another ownership standard below the current 25% threshold. In addition, a stockholder’s vote against the stockholder proposal would not have clearly indicated that the stockholder supports the current 25% threshold. Accordingly, the Board determined that the most effective means to commence engagement with its stockholders on this matter is to first assess whether a majority of stockholders continue to support the current 25% ownership threshold over another alternative, as a significant majority did in 2015.

The 25% Ownership Threshold Remains Appropriate for Capital One

The Board believes the existing Special Meeting Right, including the 25% ownership threshold previously approved by stockholders, continues to provide a meaningful right for stockholders who represent a significant financial stake in our company to call a special meeting. The Board of Directors notes that the 25% ownership threshold provides stockholders with a right that is the same as, or more favorable than, the special meeting rights in place at all but three of Capital One’s 12 peer companies, as of February 2018. According to data provided by FactSet, as of February 2018, a 25% threshold is also the same as, or more favorable to stockholders than, the special meeting rights at approximately 79% of the 469 S&P 500 companies surveyed.

An ownership threshold that is inappropriately low can allow a small minority of stockholders to utilize the mechanism of a special meeting for their own special interests, which may not be shared more broadly by other stockholders. Special meetings of stockholders can be costly and potentially disruptive to a company’s business operations and to long-term stockholder interests. The Board believes that the existing 25% ownership threshold strikes an appropriate balance by allowing stockholders to request a vote on important matters that arise between annual meetings while also ensuring that stockholders with a sufficient stake in the Company determine that any issue to be considered at a special meeting is an appropriate use of company resources and management time.

Capital One is dedicated to strong and effective corporate governance principles that promote the long-term interests of our stockholders, allow for responsible decision-making and accountability, and foster a culture that reflects the Company’s high standards of independence, transparency and stockholder rights. Our existing Special Meeting Right is just one facet of a number of strong, stockholder-friendly governance practices and structures we have put in place to empower our stockholders and provide them an opportunity to express their views. These features include a proxy access right with standard terms; an annually elected Board; a majority voting standard for uncontested elections of directors; independent Board leadership through a strong and active Lead Independent Director; and independent committee chairs for all of the Board’s committees.

The Board also believes that the existing 25% ownership threshold is appropriate in light of Capital One’s ongoing year-round dialogue with stockholders, of which we view this ratification proposal as a part, to provide input that informs our strategy and decision-making. For example, in addition to proposing the Special Meeting right following stockholder engagement in 2015, in that same year, based on its ongoing review of the Company’s governance practices and following engagement with stockholders, the Board also determined that the Company should proactively adopt proxy access bylaws that permit a stockholder or group of up to 20 stockholders who have owned at least 3% of the Company’s common stock continuously for at least three years to nominate and include in the Company’s proxy materials a number of director candidates equal to the greater of two or 20% of the total Board. Our stockholder engagement program is described more fully under “Stockholder Engagement Program” beginning on page 27 of this proxy.

In sum, in light of the existing right of Capital One stockholders to call a special meeting, coupled with Capital One’s strong corporate governance policies and ongoing dialogue with stockholders, the Board of Directors unanimously recommends that stockholders vote to ratify the existing 25% ownership threshold.

 

continue to satisfy that level of stock ownership for such period as set forth in the Amended and Restated Bylaws (the “Bylaws”), as amended from time to time, and
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provide the information regarding the stockholder(s) requesting the special meeting and the proposed special meeting, and satisfy such additional procedures, as provided for in the Bylaws from time to time.

As discussed further below, the Proposed Certificate Amendment utilizes a “net long” definition of stock ownership for purposes of determining whether stockholders requesting a special meeting satisfy the 25% ownership threshold. Under the “net long” definition, a person will be deemed to “own” only those shares of outstanding Voting Stock as to which the person possesses both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares, which terms may be further defined in the Bylaws from time to time.

The Board of Directors unanimously recommends that you vote “FOR” the Proposed Certificate Amendment.

Purpose and Effect of the Proposed Certificate Amendment

The Proposed Certificate Amendment is a result of the Board of Directors’ ongoing review of our corporate governance principles and consideration of the stockholder proposal discussed below. In developing the Proposed Certificate Amendment, the Board of Directors (including all members of the Governance and Nominating Committee) carefully considered the implications of amending our Certificate to allow stockholders to request that the Company call a special meeting.

The Board of Directors recognizes that providing stockholders the ability to require that the Company call special meetings is viewed by some stockholders as an important corporate governance practice. However, special meetings of the stockholders can cause the Company to incur substantial expenses and can be potentially disruptive to its business operations and to long-term stockholder interests. Accordingly, the Board of Directors believes that special meetings of the stockholders should be extraordinary events that should not be held in close proximity to an annual meeting or when the matters to be addressed have been recently considered or are planned to be considered at another meeting. The Board of Directors would continue to have the ability to call special meetings of the stockholders in other instances when, in the exercise of their fiduciary obligations, they determine appropriate.

In light of these considerations, the Board of Directors believes that it strikes an appropriate balance between enhancing stockholder rights and adequately protecting stockholder interests to provide that stockholders whoCAPITAL ONE FINANCIAL CORPORATION  

 

  2018 PROXY STATEMENT

1References in this discussion to votes of the outstanding shares and to the “Voting Stock” mean the outstanding shares of capital stock of the Company entitled to vote generally in the election of directors. Currently, Capital One common stock is the only class or series of Voting Stock outstanding.

satisfy a

SECTION XII- RATIFICATION OF 25% “net long” ownership threshold and comply with certain additional procedures and limitations have the abilityOWNERSHIP THRESHOLD FOR STOCKHOLDERS TO REQUEST A SPECIAL MEETING OF STOCKHOLDERS (ITEM 4 ON PROXY CARD)

Additional Information

Capital One values the input and insights of our stockholders and is committed to continued engagement with our investors and carefully considered corporate governance standards that operate for the benefit of all stockholders. As noted above, this proposal is being voluntarily submitted for stockholder approval by the Board of Directors. The Board cannot unilaterally amend the Certificate to lower the existing 25% ownership threshold – the Board would need to take further action, which Capital One’s stockholders would need to approve, to amend the Certificate to do so. Therefore, regardless of whether this proposal is approved or not approved, the 25% threshold in the Certificate and the Bylaws will continue to apply after the stockholder vote on this proposal. If this proposal is approved, the Board will retain the existing 25% ownership threshold in the Special Meeting Right. If this proposal is not approved, as discussed above, we will engage with stockholders and the Board of Directors will take additional responsive action, as appropriate, depending on investor feedback received through engagement.

The general description of the Special Meeting Right set forth above is qualified in its entirety by reference to the text of the Special Meeting Right in the Certificate, which is attached as Appendix A to these proxy materials.

***

The Board of Directors unanimously recommends that you vote “FOR” this proposal to ratify the 25% stock ownership threshold for Capital One’s stockholders to request that the Company call a special meeting.

In determining to utilize a 25% ownership threshold, the Board of Directors noted that the 25% ownership standard is the most prevalent standard among its peer companies that allow stockholders to call special meetings and that a number of the Company’s institutional stockholders have in the past expressed support for a 25% ownership standard for stockholders to be able to request a special meeting of the stockholders. The Board of Directors determined to adopt a “net long” definition of ownership because it believes that only stockholders with full and continuing economic interest and voting rights in our Voting Stock should be entitled to request that the Company call a special meeting.

As a result, the Board of Directors has considered the matter, and upon recommendation of the Governance and Nominating Committee, adopted resolutions setting forth the Proposed Certificate Amendment, declared such amendment advisable and unanimously resolved to submit such amendment to our stockholders for consideration and to recommend that stockholders vote“FOR” the Proposed Certificate Amendment.

Related Changes to the Bylaws

The Proposed Certificate Amendment authorizes the Bylaws (1) to specify the information required to be provided in connection with a stockholder’s request to call a special meeting, (2) to set forth continuing ownership requirements and additional procedures and conditions applicable to stockholders’ ability to request that the Company call a special meeting, and (3) to define ownership for purposes of the “net long” ownership standard under the Proposed Certificate Amendment. Accordingly, the Board of Directors has amended Article II of our Bylaws, contingent upon stockholder approval and implementation of the Proposed Certificate Amendment, to address these provisions.

Information Provisions.

The Bylaw amendment requires any special meeting request to set forth the same information regarding the business to be conducted at the meeting and regarding any director candidate to be nominated at the meeting that is required to be provided by a stockholder who proposes to introduce such business or to make director nominations at an annual meeting of stockholders. Any stockholder or beneficial owner who is seeking to call the special meeting or who solicits other stockholders to support calling the special meeting also must provide the same information as to its ownership of the Company’s stock and its interest in the matters proposed to be voted on at the special meeting that is required of a stockholder who proposes to introduce such business or to make director nominations at an annual meeting of stockholders. Each stockholder supporting the special meeting request must provide information as to the number of shares of the Company’s stock that it owns.

Ownership Provisions.

The Bylaw amendment elaborates on the “net long” ownership definition included in the Proposed Certificate Amendment by providing that borrowed or hedged shares do not count toward the 25% ownership threshold. However, holding shares through a nominee and the practice of share lending will not be deemed to interrupt ownership of shares that otherwise are deemed to be “owned” under this standard. Stockholders requesting a special meeting must hold the requisite number of shares through the date of the special meeting and provide updated ownership information at the record date and shortly before the date of the special meeting of stockholders.

Additional Provisions.

The Bylaw amendment sets forth certain procedural requirements that the Board believes are appropriate to avoid duplicative or unnecessary special meetings. Under these provisions, a special meeting request is not valid if:

 

the proposed meeting relates to an item of business that is not a matter on which stockholders are authorized to act under, or that involves a violation of, applicable law;
the proposed meeting relates to an item of business that is the same or substantially similar to any item of business that was voted on at a meeting of stockholders occurring within 90 days preceding the earliest dated request for a special meeting; or

an otherwise valid special meeting request is submitted within the 90 days preceding the anniversary of the prior year’s annual meeting.

Under the Bylaw amendment, if stockholders who requested a special meeting revoke the request or cease to own 25% of the Voting Stock, the Company is not required to hold the special meeting of the stockholders.

The Stockholder Proposal

As described below in Section XIV, Capital One has been notified that a stockholder intends to present a proposal for consideration at the Annual Meeting (the “Stockholder Proposal”) that also addresses stockholders’ ability to call special meetings of the stockholders. Although the Proposed Certificate Amendment and the Stockholder Proposal concern the same subject matter, the terms and effects of each proposal differ. Stockholders may vote on both the Proposed Certificate Amendment and the Stockholder Proposal, and approval of the Proposed Certificate Amendment is not conditioned on approval or disapproval of the Stockholder Proposal. Among the differences between the Proposed Certificate Amendment and the Stockholder Proposal are the following:CAPITAL ONE FINANCIAL CORPORATION  

 

The Proposed Certificate Amendment is binding. If the Proposed Certificate Amendment is approved, our Certificate and Bylaws will be amended, thereby providing stockholders the ability to have the Company call a special meeting of the stockholders. In contrast, the Stockholder Proposal is not binding; approval of the Stockholder Proposal requests that the Board consider the matter but does not amend either the Certificate or the Bylaws.
For the reasons discussed above, the Board provided in the Proposed Certificate Amendment that one or more stockholders who hold in the aggregate at least 25% of the Company’s Voting Stock can request that the Company call a special meeting of the stockholders. The Stockholder Proposal requests that holders in the aggregate of 20% of our outstanding common stock be given the power to call a special meeting of the stockholders, but does not specifically address why it believes that a 20% threshold is appropriate.
The Proposed Certificate Amendment sets forth procedures for stockholders to request a special meeting of the stockholders which, as explained above, the Board has determined are in the interests of our stockholders. The Stockholder Proposal does not address such terms.

Neither the Proposed Certificate Amendment nor the Stockholder Proposal affect the Board of Directors’ existing authority to call special meetings of stockholders.

You should carefully read the descriptions of each proposal, and Capital One’s statement in opposition to the Stockholder Proposal, in considering the Proposed Certificate Amendment and the Stockholder Proposal.

Additional Information

The general description of the Proposed Certificate Amendment set forth above is qualified in its entirety by reference to the text of the Proposed Certificate Amendment, which is attached as Appendix A to these proxy materials. In addition, the text of the Bylaw amendment, which can be amended from time to time, is attached as Appendix B to these proxy materials. Additions to the Certificate and the Bylaws are indicated by double underlining and deletions to the Certificate and the Bylaws are indicated by strike outs. Complete copies of the current Certificate and Bylaws are available on the Corporate Governance page of Capital One’s Internet site at www.capitalone.com under “About Us/Investors.”

The Proposed Certificate Amendment is binding. If the Proposed Certificate Amendment is approved, the Company intends to file the Certificate of Amendment to Capital One’s Certificate with the Secretary of State of the State of Delaware, and the Proposed Certificate Amendment will become effective at the time of that filing. If the Proposed Certificate Amendment is not approved by the requisite vote, then the Proposed Certificate Amendment will not be filed with the Secretary of State of the State of Delaware, the Bylaw amendment will not become effective and our stockholders will not have the ability to request that the Company call a special meeting of stockholders. Approval of the Proposed Certificate Amendment is not conditioned on approval or disapproval of the Stockholder Proposal, which means that the foregoing effects of approval or disapproval of the Proposed Certificate Amendment are not affected by approval or disapproval of the Stockholder Proposal.

***

The Board of Directors unanimously recommends that you vote “FOR” the Proposed Certificate Amendment in order to amend our Restated Certificate of Incorporation to allow one or more stockholders who own at least 25% of the Company’s Voting Stock and who satisfy certain procedures to require that the Company call a special meeting of the stockholders

SECTION XIV – STOCKHOLDER PROPOSAL REGARDING SPECIAL MEETINGS OF THE STOCKHOLDERS

(ITEM 5 ON  2018 PROXY CARD)

Capital One has been notified that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, intends to present a proposal for consideration at the Annual Meeting (the “Stockholder Proposal”) that addresses stockholders’ ability to call special meetings of the stockholders. Mr. Chevedden has submitted documentation indicating that he is the beneficial owner of no fewer than 100 shares of Capital One common stock. The Stockholder Proposal will be voted on at the Annual Meeting only if properly presented by or on behalf of Mr. Chevedden.

In a different proposal that is described above in Section XIII, the Board of Directors is recommending that Capital One’s stockholders approve an amendment to Capital One’s Certificate to allow one or more stockholders owning at least 25% of the Company’s Voting Stock to require that the Company call a special meeting of the stockholders, which we refer to as the Proposed Certificate Amendment.Although the Proposed Certificate Amendment and the Stockholder Proposal concern the same subject matter, the terms and effects of each proposal differ.STATEMENT  

 

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You should carefully read the descriptions of each proposal, and Capital One’s statement in opposition to the Stockholder Proposal, in considering the Proposed Certificate Amendment and the Stockholder Proposal.
Stockholders may vote on both the Proposed Certificate Amendment and the Stockholder Proposal, and approval of the Proposed Certificate Amendment is not conditioned on approval or disapproval of the Stockholder Proposal.
Although the Stockholder Proposal is not binding, as a matter of good corporate governance, if the Stockholder Proposal is approved, the Board expects to consider and to direct the Company to engage with stockholders regarding the Stockholder Proposal, regardless of whether the Proposed Certificate Amendment is approved by the stockholders.
•The Board of Directors is recommending a vote FOR the Proposed Certificate Amendment (Item 4) and AGAINST the Stockholder Proposal described below (Item 5).

Mr. Chevedden has submitted the following resolution:

Special Shareowner Meetings

Resolved, Shareowners ask our board to take the steps necessary (unilaterally if possible) to amend our bylaws and each appropriate governing document to give holders in the aggregate of 20% of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting.

Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. Shareowner input on the timing of shareowner meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This proposal topic won more than 70% support at Edwards Lifesciences and SunEdison in 2013. Vanguard sent letters to 350 of its portfolio companies asking them to consider providing the right for shareholders to call a special meeting.

A shareholder right to call a special meeting and to act by written consent are 2 complimentary ways to bring an important matter to the attention of management and shareholders outside the annual meeting cycle. This is important because there could be 15 months between annual meetings. A shareholder right to call a special meeting is one method to equalize the absence of a shareholder right to act by written consent at Capital One.

An added incentive to vote for this proposal is our clearly improvable corporate governance and performance as summarized in 2014:

GMI Ratings, an independent investment research firm, said Richard Fairbank received $26 million in 2013 Total Realized Pay. GM said Capital One had not disclosed specific, quantifiable performance target objectives for Mr. Fairbank. Capital One paid long-term incentives to executives without requiring the company to perform above the median of its peer group. GMI rated Capital One D for accounting. GMI said multiple related party transactions and other potential conflicts of interest involving our company’s board or senior managers should be reviewed in greater depth, as such practices raise concerns regarding potential self-dealing or abuse.

Director Patrick Gross received our highest negative votes again. Mr. Gross had 19-years long tenure which can result in low independence and served on 5 public boards which can be a sign of over-extension. Nonetheless Mr. Gross was on our executive pay and nomination committees. In August 2014, Capital One said it received subpoenas from the New York District Attorney’s Office as part of a money-laundering probe.

Returning to the core topic of this proposal from the context of our clearly improvable corporate governance, please vote to protect shareholder value:

Special Shareowner Meetings – Proposal 5

Statement in Opposition to the Stockholder Proposal

The Board of Directors recommends that stockholders vote“AGAINST” the Stockholder Proposal in light of the Proposed Certificate Amendment set forth in Section XIII. The Board of Directors recognizes that providing stockholders the ability to request that the Company call special meetings is viewed by some stockholders as an important corporate governance practice. However, special meetings of the stockholders can cause the Company to incur substantial expenses and can be potentially disruptive to the Company’s business operations and to long-term stockholder interests. Accordingly, the Board of Directors believes that special meetings of the stockholders should be extraordinary events. In addition, the Board of Directors believes that a small minority of stockholders should not be entitled to utilize the mechanism of special meetings for their own interests, which may not be shared more broadly by stockholders of the Company. Likewise, the Board of Directors believes that only stockholders with full and continuing economic interest in our Voting Stock and full voting rights should be entitled to request that the Company call a special meeting.

Capital One is dedicated to strong and effective corporate governance principles that promote the long-term interests of our stockholders, allow for responsible decision-making and accountability, and foster a culture that reflects the Company’s high standards of independence, transparency and stockholder rights. In recommending votes against the Stockholder Proposal, the Board believes that it is important to consider not only the Proposed Certificate Amendment but also the Company’s current governance practices, including that:

Section XIII - Other Business

 

A majority voting standard applies for the election of directors in uncontested elections;
All directors stand for election annually;
The Board of Directors has empowered and elected a strong and active Lead Independent Director; and
Key governance committees of the Board of Directors are chaired by and comprised solely of independent directors.

In addition, in 2014, our stockholders approved amendments to Capital One’s Certificate that had been recommended by the Board of Directors to adopt a majority voting standard in place of the supermajority voting standards applicable to certain stockholder actions. These practices reflect the Board of Directors’ commitment to carefully considered corporate governance standards that operate for the benefit of all stockholders.

In the Proposed Certificate Amendment, the Board of Directors is recommending that Capital One’s stockholders approve an amendment to Capital One’s Certificate to allow one or more stockholders owning at least 25% of the Company’s Voting Stock to require that the Company call a special meeting of the stockholders. In determining to utilize a 25% ownership threshold in the Proposed Certificate Amendment, the Board noted that the 25% ownership standard is the most prevalent standard among its peer companies, and that a number of the Company’s institutional stockholders have in the past expressed support for a 25% ownership standard for stockholders to be able to request a special meeting of the stockholders. In light of these considerations, the Board of Directors believes that it strikes an appropriate balance between enhancing stockholder rights and adequately protecting stockholder interests to provide that stockholders who satisfy a 25% “net long” ownership standard and comply with certain additional procedures and limitations have the ability to request that the Company call a special meeting.

***

The Board of Directors unanimously recommends that you vote “AGAINST” the Stockholder Proposal Regarding Special Meetings of the Stockholders

SECTION XV – OTHER BUSINESS

Other Business

As of the date of this proxy statement, we know of no business that will be presented for consideration at the Annual Meeting other than the items referred to above. If other matters are properly brought before the meeting, the persons named in the accompanying proxy card will vote such proxy at their discretion.

 

Annual Report to Stockholders

Capital One’s Annual Report to Stockholders for the fiscal year ended December 31, 2014, including consolidated financial statements, is being furnished along with this proxy statement to Capital One’s stockholders of record. The Annual Report to Stockholders does not constitute a part of the proxy soliciting material. A copy of the Annual Report as well as Capital One’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014,

Capital One’s Annual Report to Stockholders for the fiscal year ended December 31, 2017, including consolidated financial statements, is being furnished along with this proxy statement to Capital One’s stockholders of record. The Annual Report to Stockholders does not constitute a part of the proxy soliciting material. A copy of the Annual Report, as well as Capital One’s Annual Report on Form10-K for the fiscal year ended December 31, 2017 (“Form10-K”) may be obtained at the Annual Meeting, at our website atwww.capitalone.com under “About Us,” then “Investors,” or by contacting our Investor Relations department at Capital One’s address set forth on the Notice. The Form10-K, which is filed with the SEC, may also be obtained at the SEC’s website atwww.sec.gov.

  Stockholder Proposals for 2019 Annual Stockholder Meeting

To be considered for inclusion in the proxy materials for Capital One’s 2019 Annual Stockholder Meeting (“Capital One’s 2019 Annual Meeting”), stockholder proposals submitted pursuant to Rule14a-8 under the Exchange Act and stockholder director nominations submitted pursuant to the proxy access provisions of our Bylaws must be received by Capital One’s Corporate Secretary at the address on the Notice of Annual Stockholder Meeting no later than November 20, 2018 (and in the case of proxy access director candidates no earlier than October 21, 2018). Stockholders submitting proposals pursuant to Rule14a-8 or submitting proxy access director candidates must also satisfy other procedural and qualification requirements set forth in Rule14a-8 and our Bylaws, respectively. The submission of a stockholder proposal or proxy access nomination does not guarantee that it will be included in our proxy statement.

Under our Bylaws, if you wish to present a stockholder proposal other than pursuant to Rule14a-8 or nominate a director candidate other than pursuant to our proxy access Bylaw provisions, then to be timely for consideration at Capital One’s 2019 Annual Meeting, you must give proper written notice of such proposal and of such nomination to the Corporate Secretary no earlier than January 3, 2019, and no later than February 2, 2019. If Capital One’s 2019 Annual Meeting is held on a date that is not within thirty days before or sixty days after May 3, 2019, the anniversary date of this year’s Annual Meeting, notice must be delivered no earlier than the one hundred twentieth day prior to such annual meeting and no later than the later of the ninetieth day prior to such meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. Your notice must include the information specified in our Bylaws concerning the proposal or nominee. Our Bylaws set forth the information that must be furnished to the Corporate Secretary in order for any such notice to be proper. A copy of our Bylaws may be obtained from the Corporate Secretary at Capital One’s address on the Notice of Annual Stockholder Meeting.

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Section XIV - Frequently Asked Questions

Why did I receive a Notice Regarding the Internet Availability of Proxy Materials?

Pursuant to rules of the Securities and Exchange Commission (“SEC”), we are furnishing the proxy materials to our stockholders via the Internet instead of mailing printed copies. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of printing and mailing the proxy materials and reduce the environmental impact of Capital One’s 2018 Annual Stockholder Meeting (“Annual Meeting”). Accordingly, on March [    ], 2018, we began sending our stockholders a Notice Regarding the Internet Availability of Proxy Materials (“Notice”). If you received a Notice, you will not receive a printed copy of the proxy materials unless you request one. The Notice provides instructions on how to access the proxy materials for the Annual Meeting via the Internet, how to request a printed set of proxy materials and how to vote your shares.

What is the purpose of the proxy materials?

The Board of Directors of Capital One (“Board of Directors” or “Board”) is providing you these materials in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting. All stockholders who held shares of Capital One common stock as of the close of business on March 6, 2018 (“Record Date”) are entitled to attend the Annual Meeting and to vote on the items of business outlined in this proxy statement. If you choose not to attend the Annual Meeting in person, you may vote your shares via the Internet, by telephone or by mail.

How do I access the proxy materials?

The Notice provides instructions regarding how to view our proxy materials for the Annual Meeting online. As explained in greater detail in the Notice, to view the proxy materials and to vote, you will need to visitwww.proxyvote.com and have available your16-digit control number(s) contained in your Notice.

How do I request paper copies of the proxy materials?

You may request paper copies of the 2018 proxy materials by following the instructions atwww.proxyvote.com, by calling1-800-579-1639 or by sending ane-mail tosendmaterial@proxyvote.com.

What is the difference between a record holder and a holder of shares in street name?

You are a record holder if you hold shares of Capital One common stock directly in your name through Capital One’s transfer agent, Computershare Trust Company, N.A. (“Computershare”).

If you hold shares of Capital One common stock through a broker, bank, trust or other nominee, then you are a holder of shares in street name. As a result, you must instruct the broker, bank, trust or other nominee about how to vote your shares. Under the rules of the New York Stock Exchange (“NYSE”), if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares only with respect to “routine” matters, as described below.

Can I attend the Annual Meeting?

If you held shares of Capital One common stock as of the Record Date, you may attend the Annual Meeting. Because seating is limited, only you and one guest may attend the meeting. Admission to the meeting is on a first-come, first-served basis. Registration begins at 9:00 a.m. You must present a valid government-issued picture identification and proof of Capital One stock ownership as of the Record Date. If you hold Capital One stock in street name, you must also bring a copy of a brokerage statement reflecting your stock ownership as of the Record Date. Stockholders of record also may be represented by another person at the Annual Meeting by executing a legal proxy designating that person as the proxy holder. Each stockholder may appoint only one proxy holder or representative to attend the Annual Meeting on his or her behalf. Cameras, recording devices and other electronic devices are not permitted. If you require special assistance at the meeting because of a disability, please contact the Corporate Secretary at Capital One’s address in the Notice.

Am I entitled to vote?

You are entitled to vote if you were the record holder of shares of Capital One common stock as of the Record Date. All stockholders of record are entitled to one vote per share of common stock held for each matter submitted for a vote at the meeting.

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  2018 PROXY STATEMENT  

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SECTION XIV - FREQUENTLY ASKED QUESTIONS

If you hold your shares of Capital One common stock in street name, you may instruct your broker regarding voting your shares using the same methods described below under “How do I vote?”

How many votes can be cast by all stockholders?

A total of [    ] votes, consisting of one vote for each share of Capital One common stock issued and outstanding on the Record Date.

How do I vote?

In Person

In addition to complying with the requirements described under “Can I attend the Annual Meeting?” above, if you are a record holder, you just need to fill out a ballot at the meeting, and if you are a street name holder, you must obtain a legal proxy from your broker, bank, trust or other nominee and present it to the inspector of elections with your ballot to be able to vote at the Annual Meeting. To request a legal proxy, please follow the instructions atwww.proxyvote.com.

By Internet

You may vote via the Internet by going towww.proxyvote.com and following the instructions on the screen. Have your Notice, proxy card (for record holders) or voting instruction form (for holders of shares in street name) available when you access the web page.

By Telephone

You may vote by telephone by calling the toll-free telephone number on the proxy card(1-800-690-6903), which is available 24 hours a day, and following the prerecorded instructions. Have your proxy card available when you call. If you hold your shares in street name, follow the voting instructions you receive from your broker, bank, trustee or other nominee.

By Mail

If you received your proxy materials by mail, you may vote by mail by completing the enclosed proxy card, dating and signing it and returning it in the postage-paid envelope provided or returning it to Broadridge Financial Solutions, Inc. (“Broadridge”), Vote Processing, 51 Mercedes Way, Edgewood, NY

11717. If you hold your shares in street name, follow the voting instructions you receive from your broker, bank, trustee or other nominee.

Time for Voting Your Shares By Internet, By Telephone or By Mail

You may vote via the Internet or by telephone until 11:59 p.m. Eastern Daylight Time on May 2, 2018. If you vote by mail, your proxy card or voting instruction form, as applicable, must be received by May 2, 2018. If you participate in the Capital One Associate Savings Plan or Hibernia Corporation Supplemental Stock Plan, see “How do I vote my 401(k) shares?” below for more information.

What if I hold my shares in street name and I do not provide my broker, bank, trustee or other nominee with instructions about how to vote my shares?

You may instruct your broker, bank, trustee or other nominee on how to vote your shares using the methods described above. If you do not vote via the Internet or by telephone and do not return your voting instructions to the firm that holds your shares prior to the Annual Meeting, the firm has discretion to vote your shares only with respect to Item 2 (ratification of selection of independent auditors), which is considered a “routine” matter under NYSE rules. Items 1 (election of members of the Board of Directors), 3 (advisory approval of 2017 Named Executive Officer compensation), and 4 (ratification of 25% ownership threshold for stockholders to request a special meeting of stockholders) are not considered “routine” matters, and the firm that holds your shares will not have discretionary authority to vote your shares for these Items if you do not provide instructions using one of the methods described above. Therefore, you are encouraged to return your voting instructions so that your shares are voted fornon-routine matters at the Annual Meeting. If you hold shares in several accounts, you must provide voting instructions for each account to authorize all of your shares to be voted.

How do I vote my 401(k) shares?

If you participate in the Capital One Associate Savings Plan or Hibernia Corporation Supplemental Stock Plan, you may vote the number of shares equivalent to your interest in the Capital One Stock

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SECTION XIV - FREQUENTLY ASKED QUESTIONS

Fund as credited to your account on the Record Date. You will receive instructions on how to vote your shares viae-mail from Broadridge. The trustee of the Capital One Associate Savings Plan and the Hibernia Corporation Supplemental Stock Plan will vote your shares in accordance with your duly executed instructions if they are received by 11:59 p.m. Eastern Daylight Time on April 30, 2018. If you do not send instructions, the trustee will not vote the share equivalents credited to your account.

Can I revoke my proxy or change my vote?

Yes, you may revoke any proxy that you previously granted or change your vote by:

∎

submitting another timely vote via the Internet, by telephone or by mailing a new proxy card or voting instruction form;

∎

attending the Annual Meeting at our website atwww.capitalone.comand voting in person, as indicated above under “About Us/Investors”“How do I vote?”; or by contacting our Investor Relations department at Capital One’s address set forth on the Notice of Annual Stockholder Meeting. The Form 10-K, which is filed with the SEC, may also be obtained at the SEC’s website atwww.sec.gov.

∎

Stockholder Proposals for 2016 Annual Stockholder Meeting

Stockholders interested in submitting a proposal for inclusion in the proxy materials at Capital One’s 2016 Annual Stockholder Meeting (“Capital One’s 2016 Annual Meeting”) may do so by following the rules prescribed in Rule 14a-8 under the Securities Exchange Act of 1934. To be eligible for inclusion, stockholder proposals must be received by Capital One’s Corporate Secretary at the address on the Notice of Annual Stockholder Meeting no later than the close of business on November 18, 2015.

Under our Bylaws, if you wish to present other business before the stockholders at Capital One’s 2016 Annual Meeting or nominateare a director candidate, you must give properrecord holder, giving written notice of any such businessrevocation to the Corporate Secretary, not before January 1, 2016,Capital One Financial Corporation, 1680 Capital One Drive, McLean, VA 22102.

Your new vote or revocation must be submitted in accordance with the timeframes above under “Time for Voting Your Shares By Internet, By Telephone or By Mail.”

What constitutes a quorum?

A quorum of stockholders is necessary to transact business at the Annual Meeting. A quorum exists if the holders of a majority of the voting power of Capital One’s outstanding shares entitled to vote generally in the election of directors are present in person or represented by proxy. Abstentions and brokernon-votes will be counted in determining if there is a quorum, but neither will be counted as votes cast.

What is a brokernon-vote?

Under NYSE rules, if you hold your shares in street name and you do not submit voting instructions to the firm that holds your shares, the firm has discretionary authority to vote your shares only with respect to “routine” matters. Fornon-routine matters, which include the election of directors and Items 3 and 4, if you do not submit voting instructions, the firm that holds your shares will not have discretion to vote your shares. This is called a “brokernon-vote.”

Who will count the vote?

Votes will be tabulated by Broadridge. The Board of Directors has appointed a representative of American Election Services, LLC to serve as the Inspector of Elections.

Will a list of stockholders be made available?

Capital One will make a list of stockholders available at the Annual Meeting and, for ten days prior to the meeting, at our offices at 1680 Capital One Drive in McLean, Virginia. Please contact Capital One’s Corporate Secretary at(703) 720-1000 if you wish to inspect the list of stockholders prior to the Annual Meeting.

How much did the solicitation cost?

Capital One will pay the costs of the solicitation. We have retained Morrow Sodali to assist us in the solicitation of proxies for an aggregate fee of $12,500, plus reasonableout-of-pocket expenses. In addition to Capital One soliciting proxies via the Internet, by telephone and by mail, our directors, officers and associates may solicit proxies on our behalf, without additional compensation.

What is “householding?”

Under SEC rules, a single package of Notices may be sent to any household at which two or more stockholders reside if they appear to be members of the same family unless contrary instructions have been received. Each stockholder continues to receive a separate Notice within the package. This procedure, referred to as “householding,” reduces the volume of duplicate materials stockholders receive and reduces mailing expenses. Stockholders may revoke their consent to future householding mailings or enroll in householding by contacting Broadridge toll free at1-866-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Capital One will deliver promptly, upon written or oral request, a separate copy of the proxy materials to any stockholder at a shared address to which a single copy was delivered. Stockholders who wish to receive a separate set of proxy materials now should contact Broadridge at the same phone number or mailing address.

CAPITAL ONE FINANCIAL CORPORATION  

  2018 PROXY STATEMENT  

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SECTION XIV - FREQUENTLY ASKED QUESTIONS

What vote is necessary to approve each item and what are the Board’s recommendations?

All stockholders of record are entitled to one vote per share of common stock held for each nominee for

director and for each other matter presented for a vote at the meeting. The following table sets forth the voting requirements for each proposal being voted at the meeting and the Board’s recommendations.

  Item  

Matter to be Voted On

  Board  

  Recommendation  

Voting Requirement





1.

Election of eleven candidates for director:

Richard D. Fairbank, Aparna Chennapragada, Ann Fritz Hackett, Lewis Hay, III, Benjamin P. Jenkins, III, Peter Thomas Killalea, Pierre E. Leroy, Peter E. Raskind, Mayo A. Shattuck III, Bradford H. Warner and not after January 31, 2016. IfCatherine G. West

FOR

Each candidate will be elected as a director of Capital One’s 2016 Annual Meeting is not within thirty days before or sixty days after April 30, 2016, the anniversary date of this year’s Annual Meeting, notice must be delivered no earlier than the one hundred twentieth day prior to such annual meeting and no later than the close of business on the laterOne if a majority of the ninetieth day prior to such meetingvotes cast in his or the tenth day following the day on which public announcement of the dateher election is voted in favor of such meeting is first made. Your notice must include the information specifiedelection. Capital One also maintains a “resignation” policy, which requires that any director who fails to receive a majority of votes cast in our Bylaws concerning the businessfavor of his or nominee. Our Bylaws set forth the information that must be furnished to the Corporate Secretary in orderher election tender a resignation for any such notice to be proper. A copy of our Bylaws may be obtained from the Corporate Secretary at Capital One’s address on the Notice of Annual Stockholder Meeting.

On behalf of the Board of Directors,

LOGO

John G. Finneran, Jr.

Corporate Secretary

March 17, 2015

APPENDIX A – PROPOSED AMENDMENTS TO CAPITAL ONE’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF STOCKHOLDERS

Set forth below is the text of the Company’s Restated Certificate of Incorporation proposed to be amended by Item 4. Proposed additions are indicated by double underlining, and proposed deletions are indicated by strike-outs.

Proposed Amendments to Article IV:

(A)        Authorized Stock. The Corporation shall be authorized to issue 1,050,000,000 shares of capital stock, of which 1,000,000,000 shares shall be shares of Common Stock, $.01 par value (“Common Stock”), and 50,000,000 shares shall be shares of Preferred Stock, $.01 par value (“Preferred Stock”).

(B)        Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to create and provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.

The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i)        The designation of the series, which may be by distinguishing number, letter or title.

(ii)        The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding).

(iii)        Whether dividends, if any, shall be cumulative or noncumulative and the dividend rate of the series.

(iv)        Dates at which dividends, if any, shall be payable.

(v)        The redemption rights and price or prices, if any, for shares of the series.

(vi)        The terms and amount of any sinking fund provided for the purchase or redemption of shares of the series.

(vii)        The amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(viii)        Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible and all other terms and conditions upon which such conversion may be made.

(ix)        Restrictions on the issuance of shares of the same series or of any other class or series.

(x)        TheDirectors’ consideration. Cumulative voting rights, if any, of the holders of shares of the series.

(xi)        Such other powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof as the Board of Directors shall determine.

Pursuant to the authority conferred by this Article IV, Paragraph (B),athe followingseries of Preferred Stock has been designated as Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B, and is attached as Exhibit 1 hereto and incorporated herein by reference.series of Preferred Stock are hereby

provided for, with the number of shares to be included in each such series, and the designation, powers, preference and rights, and qualifications, limitations or restrictions thereof fixed as stated and expressed with respect to each such series in the respective exhibits specified below, which exhibits are attached hereto and incorporated herein by reference:

Exhibit 1 Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B

Exhibit 2 Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series C

Exhibit 3 Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series D

(C)        The Common Stock. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Each share of Common Stock shall have the right to cast one vote for each share for the election of Directors and on all other matters upon which stockholders are entitled to vote.

(D)        Vote. Except as otherwise provided in this Certificate of Incorporation or in a Preferred Stock Designation, or as may be required by applicable law, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes and holders of shares of Preferred Stock shallis not be entitled to receive notice of any meeting of shareholders at which they are not entitled to vote. Each share of Common Stock shall have one vote, and the Common Stock shall vote together as a single class.permitted. For more information regarding Capital One’s director nomination process see page 15.

2.

(E)        Record Holders. The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.

Proposed Amendments to Article VI:

Section 2.2. Special Meeting.

(A)        In furtherance and not in limitationRatification of the powers conferred by law, the BoardAudit Committee’s selection of Directors is expressly authorized and empowered:Ernst & Young LLP as independent auditors for 2018

FOR

(i)        to adopt, amend or repeal the Bylaws of the Corporation,provided,however, that the Bylaws adopted by the Board of Directors under the powers hereby conferred mayThis item will be altered, amended or repealed by the Board of Directors or by the stockholders having voting power with respect thereto,provided further than in the case of amendments by stockholders, the affirmative vote of the holders of at leastapproved if a majority of the voting powervotes cast on the proposal are voted in favor of the then outstanding Voting Stock, voting together asproposal.

3.

Advisory approval of Capital One’s 2017 Named Executive Officer compensation

FOR

This item will be approved if a single class, shall be required to alter, amend or repeal, the Bylaws; and

(ii)        from time to time to determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and booksmajority of the Corporation, or any of them, shall be open to inspection of stockholders; and, except as so determined, or as expressly providedvotes cast on the proposal are voted in this Certificate of Incorporation or in any Preferred Stock Designation, no stockholder shall have any right to inspect any account, book or documentfavor of the Corporation other than such rights as mayproposal.

4.

Ratification of 25% ownership threshold for stockholders to request a special meeting of stockholders

FOR

This item will be conferred by law.approved if a majority of the votes cast on the proposal are voted in favor of the proposal.

Abstentions and brokernon-votes are not considered “votes cast” and thus do not have an effect on the outcome of the vote as to Items 1, 2, 3 and 4.

106  

CAPITAL ONE FINANCIAL CORPORATION  

(B)        The Corporation may in its Bylaws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by law.

  2018 PROXY STATEMENT

Appendix A – Special Meeting Excerpt from Capital One’s Certificate of Incorporation

Article VI

…

(C)

A special meeting of the stockholders of the Corporation: (a) may be called at any time by the Chair of the Board of Directors or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies; and (b) shall be called by the Chair of the Board of Directors or the Secretary of the Corporation upon the written request of one or more stockholders of record that (i) Own, or who are acting on behalf of persons who Own, shares representing 25% or more of the voting power of the then outstanding Voting

Stock entitled to vote on the matter or matters to be brought before the proposed special meeting, (ii) provide the information regarding such stockholder(s) (and the persons for whom the stockholders are acting, as applicable) and the proposed special meeting and comply with such procedures as shall be set forth in the Bylaws of the Corporation from time to time, (iii) continue to Own, or are acting on behalf of persons who continue to Own, shares representing 25% or more of the voting power of the then outstanding Voting Stock entitled to vote on the matter or matters to be brought before the proposed special meeting for such period as shall be set forth in the Bylaws, as amended from time to time, and (iv) satisfy such additional terms, conditions and limitations as may be set forth in the Bylaws of the Corporation from time to time. Except as provided for in the preceding sentence of this Article VI(C) or in the terms of any series of Preferred Stock, special meetings of the stockholders of the Corporation may not be called by any other person or persons. For purposes of this Article VI(C), a person shall be deemed to “Own” only those shares of outstanding Voting Stock as to which the person possesses both (i) full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares, which terms may be further defined in the Bylaws of the Corporation adopted from time to time. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting (or, in the case of nominations for directors to be elected at a special meeting, if such nominations are brought in accordance with the procedures set forth in the Bylaws from time to time).

(D)

(C)(D)For purposes of this Certificate of Incorporation, “Voting Stock” shall mean the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of Directors.

APPENDIX B – PROPOSED AMENDMENTS TO CAPITAL ONE’S AMENDED AND RESTATED BYLAWS TO ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF STOCKHOLDERS

Set forth below is the text of the Company’s Amended and Restated Bylaws proposed to be amended by Item 4. Proposed additions are indicated by double underlining, and proposed deletions are indicated by strike-outs.

Proposed Amendments to Article II:

Section 2.1. Annual Meeting. The annual meetings of stockholders of the Corporation shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors, by resolution, shall determine and set forth in the notice of the meeting. If the Board of Directors fails so to determine the time, date and place of meeting, the annual meeting of stockholders shall be held at the Corporation’s principal executive offices on the first Tuesday in May. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day.

Section 2.2. Special Meeting.

(A)Subject to the rights of the holders of any series of preferred stock, par value $.01 per share, of the Corporation (the “Preferred Stock”) to elect additional directors under specified circumstances,aspecial meetings of the stockholdersof the Corporation: (i) may be called only by the Chair of the Board or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies (the “Whole Board”) and shall be held at such place, on such date, and at such time as the Chair of the Board or Board of Directors pursuant to a resolution adopted by a majority of the Whole Board, as the case may be, shall fix.; and (ii) shall be called by the Chair of the Board of Directors or the Secretary of the Corporation upon the written request of one or more stockholders of record that at the time a request is delivered, Own, or who are acting on behalf of persons who Own, shares representing 25% (the “Requisite Percent”) or more of the voting power of the then outstanding Voting Stock entitled to vote on the matter or matters to be brought before the proposed special meeting, provided that a special meeting called at the request of one or more stockholders (a “Stockholder Requested Special Meeting”) shall be called by the Chair of the Board or the Secretary of the Corporation only if the stockholder(s) requesting such meeting provide the information regarding such stockholder(s) (and regarding the persons for whom such stockholders are acting, as applicable) and the proposed special meeting and comply with such procedures set forth in Section 2.2(B) of these Bylaws. For the purposes of this Section 2.2 of these Bylaw, a person shall be deemed to “Own” only those shares of outstanding Voting Stock as to which the person possesses both (a) full voting and investment rights pertaining to the shares and (b) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (a) and (b) shall not include any shares (x) sold by such person or any of its affiliates in any transaction that has not been settled or closed, (y) borrowed by such person or any of its affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of shares of outstanding Voting Stock of the Corporation, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (1) reducing in any manner, to any extent or at any time in the future, such person’s or affiliates’ full right to vote or direct the voting of any such shares, and/or (2) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such person or affiliate. A person shall “own” shares held in the name of a nominee or other intermediary so long as the person retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A person’s ownership of shares shall be deemed to continue during any period in which the person has loaned such shares provided that the person has the power to recall such loaned shares on less than three (3) business days’ notice and during any period in which the person has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the person. The determination of the extent to which a person “Owns” any shares of Voting Stock for these purposes shall be made in good faith by the Board of Directors, which determination shall be conclusive and binding on the Corporation and the stockholders.

(B) In order for a Stockholder Requested Special Meeting to be called by the Chair of the Board or the Secretary of the Corporation, one or more written requests for a special meeting (individually or collectively, a “Special Meeting Request”) signed and dated by the stockholders of record that Own, or who are acting on behalf of persons who Own, the Requisite Percent of Voting Stock of the Corporation (or their duly authorized agents), must be delivered to the Secretary at the principal executive offices of the Corporation and must be accompanied by:

(1) in the case of any Stockholder Requested Special Meeting at which director nominations are proposed to be presented, the information required by Section 2.7(A)(4) and (5), including as to the person(s) seeking to propose such nominations at such meeting, the information required under Section 2.7(A)(4)(b), which notice shall be further updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct, as provided in the last sentence of Section 2.7(A)(2); and/or

(2) in the case of any Stockholder Requested Special Meeting at which any business other than nominations of persons for election to the Corporation’s Board of Directors is proposed to be presented, the information required by Section 2.7(B)(3) (which shall be in addition to the information required by Section 2.2(B)(1) if director nominations also are proposed to be considered), including as to the person(s) seeking to propose such business at such meeting, the information required under Section 2.7(B)(3)(d), which notice shall be further updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct, as provided in the last sentence of Section 2.7(B)(2); and

(3) as to each stockholder of the Corporation signing such request, or if such stockholder is a nominee or custodian, the beneficial owner(s) on whose behalf such request is signed, (i) an affidavit by each such person stating the number of shares of Voting Stock of the Corporation that it Owns (as defined in Section 2.2(A)) as of the date such request was signed and agreeing to continue to Own such number of shares of Voting Stock through the date of the Stockholder Requested Special Meeting and an agreement by such person to update and supplement such affidavit, if necessary, so that the information provided in such affidavit regarding the number of shares of Voting Stock of the Corporation that such person Owns shall be true and correct as of the record date for the Stockholder Requested Special Meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof; provided that in the event of any decrease in the number of shares of Voting Stock of the Corporation Owned by such person at any time before the Stockholder Requested Special Meeting, such person’s Special Meeting Request shall be deemed to have been revoked with respect to such shares of Voting Stock of the Corporation comprising such reduction and shall not be counted towards the calculation of the Requisite Percent, and (ii) as to the stockholder seeking to call the special meeting (or the person on whose behalf the stockholder is acting, as applicable) or any stockholder or beneficial owner who has solicited other stockholders to request the special meeting, the information as to such stockholder or beneficial owner required under Section 2.7(A)(4)(b).

One or more written requests for a special meeting delivered to the Secretary shall constitute a valid Special Meeting Request only if each such written request satisfies the requirements set forth above and has been dated and delivered to the Secretary within sixty (60) days of the earliest dated of such requests. If the record holder is not the signatory to the Special Meeting Request, such Special Meeting Request will not be valid unless documentary evidence from the record holder is supplied to the Secretary at the time of delivery of such Special Meeting Request (or within ten (10) business days thereafter) of such signatory’s authority to execute the Special Meeting Request on behalf of the record holder. The determination of the validity of a Special Meeting Request

shall be made in good faith by the Board of Directors, which determination shall be conclusive and binding on the Corporation, and the stockholders and the date of such determination is referred to herein as the “Request Receipt Date.” A Special Meeting Request shall not be valid if: (i) such Special Meeting Request relates to an item of business that is not a matter on which stockholders are authorized to act under, or that involves a violation of, applicable law, or (ii) such Special Meeting Request relates to an item of business that is the same or substantially similar to any item of business that was voted on at a meeting of stockholders occurring within ninety (90) days preceding the earliest dated request for a special meeting, or (iii) the Request Receipt Date occurs during the period commencing ninety (90) days prior to the first anniversary of the date of the most recent annual meeting of stockholders and ending on the date of the next annual meeting of stockholders.

(C) Any special meeting of stockholders shall be held at such date and time as may be fixed by the Board of Directors in accordance with these Bylaws; provided, however, that a Stockholder Requested Special Meeting shall be called for a date not later than the date that is (i) ninety (90) days after the Request Receipt Date (or, in the case of any litigation related to the validity of the requests for a Stockholder Requested Special Meeting, ninety (90) days after the resolution of such litigation), or (ii) fifty (50) days after the date the Corporation files definitive soliciting materials with respect to such meeting pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whichever is latest.

(D) Business transacted at a Stockholder Requested Special Meeting shall be limited to (i) the business stated in the valid Special Meeting Request(s) received from the Requisite Percent of stockholders, (ii) any additional business that the Board of Directors determines to include in the Corporation’s notice of meeting. and (iii) in the case of nominees for director nominated by a stockholder who has not delivered, and has not directed the delivery of, a Special Meeting Request with respect to the Stockholder Requested Special Meeting, in accordance with Section 2.7(C). If none of the stockholders who submitted the Special Meeting Request(s) (or their qualified representatives, as defined in Section 2.7(D)(1)) appears at the Stockholder Requested Special Meeting to present the matter or matters to be brought before the special meeting that were specified in the Special Meeting Request(s), the Corporation need not present the matter or matters for a vote at the meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

(E) The stockholder seeking to call the special meeting may revoke a Special Meeting Request by written revocation delivered to, or mailed and received by, the Secretary at any time prior to the special meeting and any stockholder signing a Special Meeting Request may revoke such request as to the shares that such person Owns (or Owned by the person on whose behalf the stockholder is acting, as applicable) and shall be deemed to revoke a Special Meeting Request as and to the extent provided in Section 2.2(B)(3); provided that if as a result of such revocation(s), there no longer are valid unrevoked Special Meeting Request(s) from stockholders who Own the Requisite Percent of the voting power of the then outstanding Voting Stock entitled to vote on the matter or matters to be brought before the proposed special meeting, there shall be no requirement to call a special meeting or to hold a special meeting regardless of whether notice of such special meeting has been sent and/or proxies solicited for such special meeting. Further, in the event that the stockholder requesting the Stockholder Requested Special Meeting withdraws such Special Meeting Request, there shall be no requirement to call or hold such special meeting.

Section 2.3. Place of Meeting. The Board of Directors or the Chair of the Board, as the case may be, may designate the place of meeting for any meeting of the stockholders. If no designation is so made, the place of meeting shall be the Corporation’s principal executive offices.

Section 2.4. Notice of Meeting. Written or printed notice, stating the place, day and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be prepared and delivered by the Corporation not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally, or by mail, or otherwise sent electronically as permitted by law, including via electronic mail or the Internet to each stockholder of record entitled to vote at such meeting.In the case of a special meeting, the purpose or purposes for which the meeting is called also shall be set forth in the notice.If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at such stockholder’s address as it appears

on the stock transfer books of the Corporation. If sent electronically, such notice shall be deemed to be delivered at the times provided in the General Corporation Law of the State of Delaware. Such further notice shall be given as may be required by law. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors or by the Chair of the Board (in the case of a special meeting called by the Chair), in each case upon public notice given prior to the time previously scheduled for such meeting of stockholders.

Section 2.5. Quorum and Adjournment. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the voting power of the outstanding shares of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series voting as a class, the holders of a majority of the voting power of the shares of such class or series shall constitute a quorum for the transaction of such business. The chair of the meeting or a majority of the shares of Voting Stock so represented may adjourn the meeting from time to time, whether or not there is such a quorum (or, in the case of specified business to be voted on by a class or series, the chair or a majority of the shares of such class or series so represented may adjourn the meeting with respect to such specified business). No notice of the time and place of adjourned meetings need be given except as required by law. The Voting Stock (or, in the case of specified business to be voted on by a class or series, the shares of such class or series) present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.6. Proxies. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or as may be permitted by law, or by his or her duly authorized attorney-in-fact. Such proxy must be filed with the Secretary of the Corporation or his or her representative at or before the time of the meeting.

Section 2.7. Notice of Stockholder Business and Nominations.

(A)Notice of Director Nominations atAnnualMeetings of Stockholders.

(1) At any annual meeting or Stockholder Requested Special Meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be made as shall have been properly brought before the meeting. For nominations to be properly made at an annual meeting, nominations must be (a) specified in the Corporation’s notice of meeting given by or at the direction of the Board of Directors delivered pursuant to Section 2.4 of these Bylaws, (b) otherwiseproperlymade at the annual meeting by or at the direction of the Chair of the Board or the Board of Directors or (c) otherwise properly requested to be brought before the annual meeting by any stockholder of the Corporation in accordance with this Section 2.7(A) of these Bylaws.For nominations to be properly made at a Stockholder Requested Special Meeting, nominations must be (a) specified in the Corporation’s notice of meeting given by or at the direction of the Board of Directors delivered pursuant to Section 2.4 of these Bylaws, (b) otherwise made at the special meeting by or at the direction of the Chair of the Board or the Board of Directors or (c) otherwise have been properly requested to be brought before the special meeting by the stockholder in accordance with this Section 2.2(B)(1) of these Bylaws or Section 2.7(C) of these Bylaws.For nominations of persons for election to the Board of Directors to be properly requested by a stockholder to be made at an annual meeting of stockholders, a stockholder must (i) be entitled to vote at the meeting, (ii) comply with the notice and other procedures set forth in this Bylaw as to such nomination and (iii) be a stockholder of record at the time such stockholder’s notice pursuant to this Bylaw is delivered to the Secretary of the Corporation and at the time of the annual meeting. The immediately preceding sentence shall be the exclusive means for a stockholder to make nominations before an annual meeting of stockholders.

(2) For nominations of persons for election to the Board of Directors of the Corporation to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation (including the completed and signed questionnaire, representation and agreement required

by paragraph (A)(5) of this Bylaw), and timely updates and supplements thereof as required by this Bylaw, in writing to the Secretary. To be timely, a stockholder’s notice (including the questionnaire, representation and agreement) shall be delivered to the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting;provided, however, that in the event that the date of an annual meeting is more than thirty(30) days before or more than sixty (60) days after such first anniversary date of the previous year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the one hundred twentieth (120th) day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to the date of such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. In addition, to be considered timely, a stockholder’s notice (including the questionnaire, representation and agreement) shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice (including the questionnaire, representation and agreement) shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased by the Board of Directors and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(4) To be in proper form, a stockholder’s notice to the Secretary with respect to the nomination of directors (whether given pursuant to paragraph (A)(1) of this Bylaw with respect to an annual meeting, or Section 2.2(B)(1) of these Bylaws or paragraph (C) of this Bylaw with respect to a special meeting) shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election, in each case pursuant to Regulation 14A under theSecuritiesExchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected, (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner on whose behalf the nomination is made, if any, and their respective affiliates or associates or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K of the Exchange Act if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; (b) as to

the stockholder giving the notice and any beneficial owner of the Corporation’scommon stockVoting Stock on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, and of any such beneficial owner, as they appear on the Corporation’s books and of their respective affiliates or associates or others acting in concert therewith, (ii) the class and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, any such beneficial owner and any of their respective affiliates or associates or others acting in concert therewith, (iii) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class of shares of the Corporation or with a value derived in whole or in part from the value of any class of shares of the Corporation and any other derivative positions or synthetic arrangements (including any position resulting from hedging, swap, securities lending or other similar transaction relating to the Corporation’s capital stock), whether or not such instrument or right shall be subject to settlement in the underlying class of capital stock of the Corporation or otherwise, (any of the foregoing, a “Derivative Position”) held or beneficially held by the stockholder, any such beneficial owner or any of their respective affiliates or associates or others acting in concert therewith, including a description of the substantive terms thereof including the amount, value and/or number so held and the extent to which any such Derivative Position is intended to or has the effect of increasing or decreasing the actual or apparent voting power of such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith with respect to the Corporation’s securities, (iv) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith has the sole or shared right to vote any class of shares of the Corporation, (v) any short interest in any security of the Corporation (for purposes of this Bylaw, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from, or avoid, mitigate or offset in whole or in part any loss related to, any decrease in the value of the subject security), (a “Short Interest”) held by such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith, (vi) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of the Corporation, (vii) any proportionate interest in securities of the Corporation or Derivative Positions held, directly or indirectly, by a general or limited partnership in which such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith is a general partner, or directly or indirectly, beneficially owns an interest in a general partner, (viii) any performance-related fees (other than an asset-based fee) that such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith is entitled to based on any increase or decrease in the value of securities of the Corporation or Derivative Positions, if any, including without limitation any such interests held by members of such person’s immediate family sharing the same household, and (ix) any other information relating to such stockholder, beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any, that would be required to be disclosed in a proxy statement and form or proxy or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Regulation 14(A) of the Exchange Act.

(5) A stockholder’s notice to the Secretary with respect to the nomination of directors (whether given pursuant to paragraph (A)(1) of this Bylaw with respect to an annual meeting, or Section 2.2(B)(1) of these Bylaws or paragraph (C) of this Bylaw with respect to a special meeting) must also include a completed and signed written response to a questionnaire with respect to the background and qualification of the nominee for director and the background of any other person or entity on whose behalf the nomination is being made or who is reasonably expected to participate in the solicitation of proxies with respect to the election of such person (which questionnaire shall be provided by the Secretary of the Corporation upon written request) and a signed written representation and agreement

(in the form provided by the Secretary of the Corporation upon written request) that such nominee for director (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosedtherein,to the Corporation,and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(6) For nominations of persons for election to the Board of Directors of the Corporation pursuant to Section 2.7(A)(1)(a) or (b) of this Bylaw or paragraph (C) of this Bylaw with respect to a special meeting, the nominee must also provide a completed and signed questionnaire, representation and agreement with the same information, and delivered in accordance with the same time period that applies to nominations to be brought by a stockholder of the Corporation, required by Section 2.7(A)(5) of this Bylaw.

(B)Notice of Other Business atAnnual Meetings of Stockholders.

(1) At any annual meeting or Stockholder Requested Special Meeting of the stockholders, only such business to be considered by the stockholders, other than nominations of persons for election to the Corporation’s Board of Directors which is addressed by paragraph (A) of this Bylaw, (“Other Business”) shall be made at such annual meeting of stockholders as shall have been properly brought before the meeting. For proposals of Other Business to be properly brought before an annual meeting, proposals of Other Business must be: (a) specified in the Corporation’s notice of meeting given by or at the direction of the Board of Directors delivered pursuant to Section 2.4 of these Bylaws, (b) otherwise properly made at the annual meeting, by or at the direction of the Chair of the Board or the Board of Directors or (c) otherwise properly requested to be brought before the annual meeting by any stockholder of the Corporation in accordance with Section 2.7(B) of these Bylaws.For proposals of Other Business to be properly brought before a Stockholder Requested Special Meeting, proposals of Other Business must be: (a) specified in the Corporation’s notice of meeting given by or at the direction of the Board of Directors delivered pursuant to Section 2.4 of these Bylaws, (b) otherwise properly made at the Stockholder Requested Special Meeting, by or at the direction of the Chair of the Board or the Board of Directors or (c) otherwise have been properly requested to be brought before the Stockholder Requested Special Meeting by the stockholder in accordance with this Section 2.2(B)(2) of these Bylaws.For proposals of Other Business to be properly requested by a stockholder to be made at an annual meeting of stockholders, a stockholder must (i) be entitled to vote at the meeting, (ii) comply with the notice procedures and other procedures set forth in this Bylaw as to such proposal and (iii) be a stockholder of record at the time such stockholder’s notice pursuant to this Bylaw is delivered to the Secretary of the Corporation and at the time of the annual meeting. The immediately preceding sentence shall be the exclusive means for a stockholder to submit proposals for Other Business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Corporation’s notice of meeting) to be considered at an annual meeting of stockholders.

(2) For a proposal of Other Business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (B)(1) of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such Other Business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting;provided, however, that in the event that the date of an annual meeting is more than thirty(30) days before or more than sixty (60) days after such first anniversary date of the previous year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the one hundred twentieth (120th) day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to the date of such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. In addition, to be considered timely, a stockholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.

(3)Such stockholder’s noticeTo be in proper form, a stockholder’s notice to the Secretary with respect to the Other Business (whether given pursuant to paragraph (B)(1) of this Bylaw with respect to an annual meeting, or Section 2.2(B)(2) of these Bylaws with respect to a special meeting) shall set forth (a) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and any beneficial owner on whose behalf the proposal is made; (b) the text of the proposal of business (including the text of any resolutions proposed for consideration and, in the event that such proposal or business includes a proposal to amend the Bylaws, the text of the proposed amendment), (c) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any of their respective affiliates or associates or others acting in concert therewith and (d) as to the stockholder giving the notice and any beneficial owner of the Corporation’scapital stockVoting Stock on whose behalf the proposal is made (i) the name and address of such stockholder, and of such beneficial owner, as they appear on the Corporation’s books and of any of their respective affiliates or associates or others acting in concert therewith, (ii) the class and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, any such beneficial owner and any of their respective affiliates or associates or others acting in concert therewith, (iii) any Derivative Position held or beneficially held by the stockholder, any such beneficial owner or any of their respective affiliates or associates or others acting in concert therewith, including a description of the substantive terms thereof including the amount, value and/or number so held and the extent to which any such Derivative Position is intended to or has the effect of increasing or decreasing the actual or apparent voting power of such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith with respect to the Corporation’s securities, (iv) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith has the sole or shared right to vote any class of shares of the Corporation, (v) any Short Interest held by such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith, (vi) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder, beneficial owner or any of their respective

affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of the Corporation, (vii) any proportionate interest in securities of the Corporation or Derivative Positions held, directly or indirectly, by a general or limited partnership in which such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith is a general partner, or directly or indirectly, beneficially owns an interest in a general partner, (viii) any performance-related fees (other than an asset-based fee) that such stockholder, beneficial owner or any of their respective affiliates or associates or others acting in concert therewith is entitled to based on any increase or decrease in the value of securities of the Corporation or Derivative Positions, if any, including without limitation any such interests held by members of such stockholder’s immediate family sharing the same household, and (ix) any other information relating to such stockholder, beneficial owner and any of their respective affiliates or associates or others acting in concert therewith, if any, that would be required to be disclosed in a proxy statement and form or proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal pursuant to Regulation 14(A) of the Exchange Act.

(C)Special Meetings of Stockholders. At any special meeting of the stockholders, only such business shall be conducted or considered as shall have been properly brought before the meetingby the Board of Directorspursuant to the Corporation’s notice of meeting pursuant to Section 2.4 of these Bylaws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at whichthe Board of Directors has determined thatdirectors are to be elected, as reflected in the Corporation’s notice of meeting pursuant to Section 2.4 of these Bylaws, (a) by or at the direction of the Board of Directors or (b) in the case of a special meeting other than a Stockholder Requested Special Meeting, or in the case of a special meeting that is a Stockholder Requested Special Meeting and the person wishing to make such nominations did not deliver, and did not otherwise direct the delivery of, a Special Meeting Request with request to such meeting,by any stockholder of the Corporation who (i) is entitled to vote at the meeting, (ii) complies with the notice and other procedures set forth in this Bylaw as to such nomination and (iii) is a stockholder of record at the time such stockholder’s notice is delivered pursuant to this Bylaw to the Secretary of the Corporation and at the time of the special meeting. The immediately preceding sentence shall be or (c) in theexclusive means forcase ofaStockholder Requested Special Meeting, by anystockholderof the Corporation pursuanttomake nominations before a special meeting of stockholdersSection 2.2.

(1)For any nominations of persons for election to the Board of Directors ofIn the event the Corporationto be properly brought beforecalls a special meetingbyof stockholders for the purpose of electing one or more directors to the Board of Directors, any stockholder entitled to vote in such election of directors (other thana stockholderpursuantwho has delivered, or who is acting on behalf of a person who directed the delivery of, a written request with respect toparagraph (C) of this Bylaw,such special meeting, in the case of a Stockholder Requested Special Meeting (an “Excluded Stockholder”)) may nominate a person or persons, as the case may be, for election to the Board of Directors of the Corporation as specified in the Corporation’s notice of meeting, by delivering the stockholder’s notice in the form required by paragraphs (A)(4) and (A)(5) of this Bylaw (including the completed and signed questionnaire, representation and agreement required by paragraph (A)(56) of this Bylaw), and timely updates and supplements thereof as required by this Bylaw,shall be deliveredto the Secretary at the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. In addition, to be considered timely, a stockholder’s notice (including the questionnaire, representation and agreement) shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice (including the questionnaire, representation and agreement) shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof,

and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting, or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.Notwithstanding any other provision of these Bylaws, in the case of a Stockholder Requested Special Meeting, no Excluded Stockholder may nominate a person for election to the Board of Directors at the meeting, except pursuant to the written request(s) delivered for such special meeting pursuant to Section 2.2(A). Notwithstanding any other provision of these Bylaws, in the case of a Stockholder Requested Special Meeting, no stockholder may propose any other business to be considered at the meeting, except pursuant to the written request(s) delivered for such special meeting pursuant to Section 2.2(A).

(D)General.

(1)OnlyExcept as otherwise required by law, only such persons who are nominated in accordance with the procedures set forth in this Bylaw and Section 2.2 (as applicable) shall be eligible to serve as director and only such Other Business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylawand Section 2.2 (as applicable). Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chair of the meeting shall have the power and duty to determine whether a nomination or any Other Business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or Other Business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded.Notwithstanding the foregoing provisions of this Section 2.7, unless otherwise required by law, if the stockholder does not provide the information required under Section 2.2(B) and/or this Section 2.7 to the Corporation within the time frames specified herein, or if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or Other Business, such nomination shall be disregarded and such Other Business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of Section 2.2(B) and this Section 2.7, to be considered a qualified representative of a stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or electronic transmission of the writing) delivered to the Corporation prior to the making of such nomination or proposal at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.

(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw;provided,however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the separate and additional requirements set forth in these Bylaws with respect to nominations or proposals as to any Other Business to be considered pursuant to this Bylaw.

(4) Nothing in this Bylaw shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws. Subject to Rule 14a-8 under the Exchange Act, nothing in these Bylaws shall be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Corporation’s proxy statement any nomination of director or directors or any Other Business proposal.

Section 2.8. Procedures; Required Vote.

(A)Procedures and Required Vote for Election of Directors. Election of directors at all meetings of stockholders at which directors are to be elected shall be by written ballot, and, except as otherwise set forth in the Certificate of Incorporation with respect to the right of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, each director shall be elected by a majority of the votes cast at any meeting for the election of directors at which a quorum is present with respect to such director’s election in elections of directors in which the number of nominees is equal to the number of positions available;provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for the election of directors at which a quorum is present for which (i) the Secretary of the Corporation receives a notice that a stockholder has or expects to nominate a person for election to the Board of Directors in compliance with the requirements set forth in Section 2.7 of these Bylaws, and (ii) such nomination has not been withdrawn by such stockholder on or prior to the business day next preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality vote, stockholders shall be provided with the option to withhold votes with respect to a nominee in lieu of the option to cast a vote against such nominee. The Board of Directors shall establish such procedures as it deems appropriate and advisable for the submission and consideration of resignations from the Board by incumbent directors who do not receive a majority of the votes cast for such director at any meeting of stockholders at which directors are to be elected and the number of nominees is equal to the number of positions available.

(B)Required Vote for Other Business. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, all matters submitted to the stockholders at any meeting other than election of directors (which is addressed in paragraph (A) of this Bylaw) shall be decided by a majority of the votes cast with respect thereto.

Section 2.9. Inspectors of Elections; Opening and Closing the Polls; Rules of Conduct.

(A) The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act, or if all inspectors or alternates who have been appointed are unable to act at a meeting of stockholders, the chair of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by the General Corporation Law of the State of Delaware.

(B) The chair of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting.

(C) The Board of Directors and the chair of the meeting each shall have the authority to adopt and enforce such rules or regulations for the conduct of meetings of stockholders as they shall deem necessary or appropriate.

Section 2.10. No Stockholder Action by Written Consent. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specific circumstances, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be affected by any consent in writing by such stockholders.

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CAPITAL ONE FINANCIAL CORPORATION  1680 CAPITAL ONE DR.

MCLEAN, VA 22102-3491
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1. Election of Directors
Nominees: For Against Abstain
The Board of Directors recommends you vote FOR
1a. Richard D. Fairbank proposals 2, 3 and 4. For Against Abstain
1b. Patrick W. Gross 2. Ratification of selection of Ernst & Young LLP as
independent auditors of Capital One for 2015.
3. Advisory approval of Capital One’s 2014 Named Executive
1c. Ann Fritz Hackett Of?cer compensation.
4. Approval of amendments to Capital One’s Restated
1d. Lewis Hay, III Certi?cate of Incorporation to allow stockholders to
request special meetings of the stockholders.
1e. Benjamin P. Jenkins III The Board of Directors recommends you vote AGAINST For Against Abstain
proposal 5.
1f. Pierre E. Leroy 5. Stockholder proposal regarding special meetings of the
stockholders, if presented at the meeting.
1g. Peter E. Raskind NOTE: Such other business as may properly come before the
meeting or any adjournment thereof.
1h. Mayo A. Shattuck III
1i. Bradford H. Warner ! ! !
1j. Catherine G. West
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other ?duciary, please give full title as such. Joint
owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized of?cer.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateSTATEMENT  

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on April 30, 2015:
The Notice & Proxy Statement and Annual Report/10-K are available at www.proxyvote.com.
M83953-P60101-Z64838
cAPITAl ONE FINANcIAl cORPORATION
Annual Stockholder Meeting
Thursday, April 30, 2015 10:00 a.m.
capital One’s Headquarters
1680 capital One Drive
Mclean, Virginia 22102
THIS PROXY IS SOlIcITED ON BEHAlF OF THE BOARD OF DIREcTORS
The undersigned hereby appoints Richard D. Fairbank and John G. Finneran, Jr., and either of them, proxies of the
undersigned, with full power of substitution, to vote all the shares of Common Stock of Capital One Financial Corporation,
a Delaware corporation, held of record by the undersigned on March 5, 2015, at the Annual Stockholder Meeting to be
held on April 30, 2015 and at any postponement or adjournment thereof.
THIS PROXY, WHEN PROPERlY EXEcuTED, WIll BE VOTED AS SPEcIFIED BY THE uNDERSIGNED STOcKHOlDER.
IF NO cHOIcE IS SPEcIFIED BY THE STOcKHOlDER, THIS PROXY WIll BE VOTED “FOR” All PORTIONS OF
ITEMS (1), (2), (3) AND (4), “AGAINST” ITEM (5), AND IN THE PROXIES’ DIScRETION ON ANY OTHER MATTERS
cOMING BEFORE THE MEETING.
continued
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CAPITAL ONE FINANCIAL CORPORATION 1680 CAPITAL ONE DR. MCLEAN, VA 22102-3491    VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/02/2018 for shares held directly and by 11:59 P.M. ET on 04/30/2018 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Capital One in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 05/02/2018 for shares held directly and by 11:59 P.M. ET on 04/30/2018 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. If you vote your proxy by Internet or by telephone, you do not need to mail back your proxy card. 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:    KEEP THIS PORTION FOR YOUR RECORDS    DETACH AND RETURN THIS PORTION ONLY    THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.    The Board of Directors recommends you vote FOR the following:    1. Election of Directors    Nominees For Against Abstain 1A Richard D. Fairbank    1B Aparna Chennapragada 1C Ann Fritz Hackett 1D Lewis Hay, III 1E Benjamin P. Jenkins,III 1F Peter Thomas Killalea 1G Pierre E. Leroy 1H Peter E. Raskind 1I Mayo A. Shattuck III 1J Bradford H. Warner 1K Catherine G. West    The Board of Directors recommends you vote FOR    management proposals 2, 3 and 4. For Against Abstain 2. Ratification of selection of Ernst & Young LLP as independent auditors of Capital One for 2018.    3. Advisory approval of Capital One’s 2017 Named Executive Officer compensation.    4. Ratification of 25% ownership threshold for stockholders to request a special meeting of stockholders. NOTE: To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.    Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.    Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date    0000359426_1    R1.0.1.17

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy Statement, Annual Report toStockholders/10-K is/are available at www.proxyvote.com .    CAPITAL ONE FINANCIAL CORPORATION Annual Stockholder Meeting Thursday, May 3, 2018 10:00 a.m. local time Capital One’s Headquarters 1680 Capital One Drive McLean, Virginia 22102 THIS PROXY IS SOLICTED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Richard D. Fairbank and John G. Finneran, Jr., and either of them, proxies of the undersigned, with full power of substitution, to vote all the shares of Common Stock of Capital One Financial Corporation, a Delaware corporation, held of record by the undersigned on March 6, 2018, at the Annual Stockholder Meeting to be held on May 3, 2018 and at any postponement or adjournment thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting by a reasonable time before the proxy solicitation was made or for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unavailable to serve). THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED STOCKHOLDER. IF NO CHOICE IS SPECIFIED BY THE STOCKHOLDER, THIS PROXY WILL BE VOTED “FOR” ALL PORTIONS OF ITEMS (1), (2), (3) AND (4), AND, IN THE PROXIES’ DISCRETION, ON ANY OTHER MATTERS COMING BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. Continued and to be signed on reverse side    0000359426_2    R1.0.1.17