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Proxy Statement and Notice of 20162023 Annual Meeting
and Proxy Statement
to be held May 19, 2016
NOTICE OF 2016 ANNUAL MEETING
OF STOCKHOLDERS
Time and Date: 11:00 a.m., Eastern Time, May 19, 2016
Virtual Meeting Website Address:www.virtualshareholdermeeting.com/SYF2016
Dear Stockholders:
You are invited to attend Synchrony Financial’s 2016 Annual Meeting of Stockholders to be held on May 19, 2016 at 11:00 a.m., Eastern Time, for the following purposes:
The meeting will again be held virtually to provide expanded access, improved communication and cost savings for our stockholders and Synchrony Financial. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location. The website address for the virtual meeting is: www.virtualshareholdermeeting.com/SYF2016.
To participate in the meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions that accompanied your proxy materials. The meeting will begin promptly at 11:00 a.m., Eastern Time. Online check-in will begin at 10:45 a.m., Eastern Time, and you should allow for time to complete the online check-in procedure. You are eligible to vote if you were a stockholder of record at the close of business on March 24, 2016. Whether or not you plan to attend the meeting, please submit your proxy by mail, internet or telephone to ensure that your shares are represented at the meeting.Be Held On May 18, 2023
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April 4, 2016
2023 ANNUAL MEETING AND PROXY STATEMENT / 1
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Board of Directors’ | ||||
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Management Development and Compensation Committee Interlocks and Insider Participation | ||||
Item 2—Advisory Vote to Approve Named Executive Officer Compensation | ||||
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2023 ANNUAL MEETING AND PROXY STATEMENT / 3
| PROXY SUMMARY | ||||||||
This summary highlights certain information in this proxy statement in connection with our 2023 Annual Meeting of Stockholders (the “Annual Meeting”). As it is only a summary and does not contain all of the information you should consider, please review the complete proxy statement before you vote. In this proxy statement, references to the “Company” and to “Synchrony” are to Synchrony Financial. For answers to frequently asked questions regarding the Annual Meeting, please refer to pages 73-75 of this proxy statement. Proxy materials are being mailed or made available to stockholders on or about April 4, 2023. | ||||||||
LOGISTICS | VOTING | |||||||
| DATE May 18, 2023 |
| BY MAIL You may date, sign and promptly return your proxy card by mail in a postage prepaid envelope (such proxy card must be received by May 17, 2023). | |||||
| TIME 11:00 a.m. Eastern Time |
| BY TELEPHONE | |||||
| VIRTUAL MEETING WEBSITE ADDRESS www.virtualshareholdermeeting.com/SYF2023 | You may use the toll-free telephone number shown on your Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy card up until 11:59 p.m., Eastern Time, on May 17, 2023. | ||||||
| RECORD DATE March 23, 2023 |  | BY THE INTERNET In Advance You may vote online by visiting the internet website address indicated on your Notice or proxy card or scan the QR code included on your Notice or proxy card with your mobile device, and follow the on-screen instructions until 11:59 p.m., Eastern Time, on May 17, 2023. At the Annual Meeting You may attend the virtual Annual Meeting by visiting this internet website address: www. virtualshareholdermeeting.com/SYF2023. | |||||
ELIGIBILITY TO VOTE | ||||||||
| You are eligible to vote if you were a stockholder of record at the close of business on March 23, 2023. | ||||||||
| AGENDA | ||||||||||||||||
| Election of 10 directors named in this proxy statement Voting standard: Majority of votes cast Page Reference — 19 BOARD RECOMMENDATION FOR |
| Advisory approval of our named executive officers’ compensation Voting standard: Majority of votes cast Page Reference — 33 BOARD RECOMMENDATION FOR |
| Ratify the selection of KPMG LLP as our independent registered public accounting firm for 2023 Voting standard: Majority of votes cast Page Reference — 69 BOARD RECOMMENDATION FOR | |||||||||||
4/ 2023 ANNUAL MEETING AND PROXY STATEMENT
EXECUTIVE SUMMARY
As the economy continued to recover from the pandemic, faced supply chain challenges, and experienced high levels of inflation, Synchrony performed well and drove significant growth through expansion of our product offerings and capabilities, broad distribution, improved efficiency and customer experiences, and balance sheet strength – all while maintaining a sound risk culture, continuing to focus on Equity, Diversity, Inclusion and Citizenship (“EDIC”) including supporting our employees and the communities in which we serve and live. Our 2022 performance outpaced expectations on nearly all fronts with record purchase volume of $180 billion, a 15% increase in loan receivables to $92.5 billion and our second highest diluted earnings per share since our initial public offering (the “IPO”) of $6.15. We delivered these financial results while improving our already strong culture as demonstrated in our rise in the Great Place to Work® ranking from #25 in 2022 to the Top 20 in 2023 in the United States, from #2 in 2022 to #1 in 2023 in the Philippines, and ranking #19 in India in 2022.
GROWTH
In 2022, Synchrony achieved double digit growth in loan receivables across four of our five sales platforms and high single digit in one platform. This was made possible through several initiatives, including new products and capabilities, expanded distribution channels and signing or renewing over 80 partnerships. Key metrics that demonstrated our growth in 2022 include:
| • | 30+ new partnerships |
| • | 50+ partnership renewals, including Lowe’s |
| • | ~24 million new accounts |
| • | 9% increase in purchase volume to $180 billion |
| • | 15% increase in loan receivables to $92.5 billion |
PRODUCTS AND CAPABILITIES
Synchrony Pay Later solutions (formerly SetPay) – this suite of installment loan products helps consumers and our partners by providing financing over time as an alternative to traditional credit card financing. Fixed payment schedules build trust with customers by demonstrating our commitment to helping consumers manage their finances. These fixed pay offerings represent another financial tool that we can offer to qualifying customers, while also driving incremental sales to our partners and providers.
Pre-Qualification– through a digital pre-qualification process that leverages Synchrony’s proprietary credit decisioning engine (PRISM), consumers have the
ability to avoid hard credit inquiries and shop with confidence. As this capability is introduced to more of our customers, allowing for seamless access to our credit products, we are seeing this contribute to both higher new accounts and sales at our partners.
DISTRIBUTION
Strategic Partnerships – we launched several strategic partnerships over the last year to scale our products more quickly by expanding our distribution channels and broadening customer access to our comprehensive product suite. We integrated with point-of-sale and business management platforms like Clover, and health and wellness practice management solutions like Sycle. Through these channels Synchrony has added hundreds of thousands of small business locations and several thousand provider locations through whom we can seamlessly and responsibly offer access to our flexible financing.
Synchrony Mastercard – by offering our direct-to-consumer credit card to more consumers, loan receivables associated with the Synchrony Mastercard were up 17% in 2022.
EFFICIENCY AND CUSTOMER EXPERIENCE
Customer Experience and Digital Strategy – through multiple improvements in Synchrony’s technological capabilities, 5 million calls moved to digital channels compared to prior year; in addition we also launched our new cardholder service platform across many of our largest portfolios which offers customers the ability to service their accounts in one dashboard and enable a broad suite of account notifications across every aspect of the credit lifecycle, continuing to enhance the customer’s experience within our partner’s brands. With the improved digital experience across accountholders, we experienced double-digit improvement in net promoter scores compared to our previous account management site.
Cost Efficiencies – during 2022 we maintained a disciplined focus on expenses, which included efficiencies such as our operations technologies which allowed for flat operational headcount while average active accounts grew 1.9%; an increase to 54% e-bill adoption by customers; and our physical site strategy actions resulting in go-forward additional cost savings of over $10 million annually. The combined impacts of our cost discipline, the inherent operating leverage in our highly scalable model, and strong revenue growth continued to drive improvement in Synchrony’s industry leading efficiency ratio of 37.2%.
2023 ANNUAL MEETING AND PROXY STATEMENT / 5
PROXY SUMMARY
BALANCE SHEET
Funding – deposit balances grew by over $9 billion in a competitive funding environment, launched new deposit products including affiliate savings product with PayPal, and two new CD product offerings.
Capital – the Company returned $3.8 billion to shareholders including a 5% increase in dividends and $3.3 billion of share repurchases – reducing common shares outstanding by 90.7 million shares, or 17%.
SOUND RISK CULTURE
At Synchrony, we promote and value a sound risk culture which results in (i) better risk management that allows us to identify, assess, and mitigate risks more efficiently; (ii) improved compliance that helps us to adhere to relevant laws, regulations and ethical standards; (iii) better decision-making by encouraging open and honest communication; (iv) a stronger reputation which helps retain customers, employees, and investors; and (v) increased employee engagement by valuing transparency, accountability, and collaboration helping to reduce turnover.
In addition to day-in-day-out risk oversight of the business, the Company continued to adhere to a rigorous annual process that reviews (i) the behaviors and risk-based outcomes of our leaders and (ii) incentive programs individuals or groups of individuals who could, together, put the Company at risk. Both of these processes and associated results are reviewed with the Board of Directors (the “Board”) and confirmed a strong risk culture at Synchrony, evidenced in part, by an independent third party risk assessment of our Company annual incentive plan that highlighted no concerns and an internal process that distills a company-wide set of risk events, to issues being investigated, to adverse risk outcomes that are discussed after root causes are identified and appropriate actions are taken.
EQUITY, DIVERSITY, INCLUSION, AND CITIZENSHIP
Pay Equity – since 2018, Synchrony has hired an independent third party to analyze pay equity for all employees. In 2022, Synchrony continued our annual practice of reviewing the Company’s pay equity for all employees globally, including base pay, cash incentive plans, and stock-based compensation. The third party analysis in 2022 stated “the base pay gap is at an all-time low and the U.S. gap is effectively eliminated.” The combined results of the pay equity analysis and our investment of more than $5 million over the past five years underpin our goal of 100% pay equity for employees
across genders globally and across racial/ ethnic groups in the United States as well as our commitment to improve Synchrony’s compensation processes to better support equity. Synchrony is committed to continuing our global pay equity analysis and disclosing the results each year.
New Way of Working – realizing that employees have diverse needs and to help all employees feel included in Synchrony’s culture, the Company continues to provide flexibility on where employees work. Feedback from our workforce and externally by potential employees wanting to work at an inclusive culture has been tremendous. Turnover remains reasonable, applicant pools have jumped by 30% compared to pre-pandemic levels and business results continue to improve in spite of difficult economic conditions.
Inclusive Culture – at Synchrony, we believe a strong employee culture that supports EDIC bolsters business results by:
| • | Attracting and retaining top talent: A positive employee culture attracts job seekers who are looking for a supportive and engaging workplace. This has helped mitigate turnover and improve employee retention. |
| • | Boosting employee morale and engagement: A supportive work environment can increase employee morale and engagement, leading to higher productivity and better job performance. |
| • | Improving teamwork and collaboration: A positive employee culture fosters collaboration and teamwork, which can lead to better problem-solving, more efficient decision-making, and improved results. |
| • | Building a positive company reputation: A strong employee culture can enhance a company’s reputation and help attract better talent, new customers, investors, and business partners. |
Since 2016, Synchrony has asked employees for anonymous feedback on our culture through an annual survey and open-ended questions performed by an independent third party – Great Place to Work®. In that time, we have steadily improved our ranking to the top 20 in 2023 in the United States and continue to strive to improve the culture at Synchrony by reviewing feedback, asking employees for detailed examples and addressing employee needs.
Diversity – additionally, our ability to cultivate and sustain a diverse workforce that reflects our customers and communities we serve continues to
6/ 2023 ANNUAL MEETING AND PROXY STATEMENT
PROXY SUMMARY
be a factor used by our Board in determining bonus funding for more than 4,500 leaders across the Company. This focus has resulted in year over year improvement in diverse demographics by increasing representation of Blacks and Hispanics across leadership in the United States and increasing the number of females in leadership roles globally. As of December 2022, our workforce in the United States comprised 47% non-white, including 20% Black, 16% Hispanic, 7% Asian and globally, 61% female.
Synchrony has made EDIC a continued priority and a strategic imperative for the Company by tying these values to our annual incentive plan and by creating a culture that enables every colleague to be their complete, authentic self – evidenced by our Great Place to Work® ranking, pay equity results, low turnover, and large candidate pools for open positions.
SUPPORTING OUR COMMUNITIES
Over the last four years, Synchrony’s community development lending and investment activities totaled more than $1.6 billion. In 2022, Synchrony continued to support our communities in a variety of ways including (i) supplier diversity; (ii) financial education; (iii) skills and career development; and (iv) investment in diverse startups. Synchrony was recognized for the fourth year in a row on JUST Capital’s Top 100 list of America’s Most Just Companies.
| • | Supplier Diversity – Our increased efforts to support diverse suppliers have increased diverse representation in companies included in our Request for Proposals (“RFPs”). In 2022, we achieved a 200% increase from prior year in the number of diverse suppliers included in RFPs. Of the diverse suppliers included in RFPs, nearly 80% were selected to do business with Synchrony. As a result, we ended 2022 with our diverse supplier spend increasing by 31% from 2021. |
| • | Financial Education and Inclusion – Synchrony participates in Project REACh – Roundtable for Economic Access and Change – as a member on the steering committee of the Alternative Credit Assessment Utility Workstream, one of four workstreams under Project REACh, working to improve credit availability and consumer financial literacy for underserved communities, individuals and small businesses. In 2022, Synchrony began utilizing bank and deposit account data made available through Project REACh to extend credit to the “credit invisible” population — consumers who have no record at the credit bureau or no trade lines at the credit bureau. |
| • | Skilling and Career Development – Synchrony supports multiple partnerships with nonprofit organizations already on the front lines of bringing education, skills training and career placement to the underserved in their communities including Latinx Executive Alliance, The Mom Project, AfroTech, and The Great Transformation organizations. In the past two years, we have invested $50 million in helping underrepresented groups acquire the skills, resources and training they need to advance their careers and livelihoods. Our new multi-million-dollar state-of-the-art Skills Academy holds a number of community programs focused on skilling and reskilling the local workforce. |
| • | Investment in Diverse Startups – Our Synchrony Ventures team has executed on opportunities to support our EDIC goals. In 2021, Synchrony Ventures committed $15 million in venture capital funds led by diverse partners with a track record of investing in minority-owned startups. Since our initial commitment, Synchrony has engaged with the partner funds to support their investment process and the growth of their portfolio companies. In 2022, Synchrony Ventures committed a further $5 million to support this strategy. In 2021, our Synchrony Ventures team committed up to $100 million towards opportunities spearheaded by Ariel Alternatives, a private equity subsidiary of Ariel Investments, LLC, whose mission is to scale sustainable minority-owned businesses and position these companies as leading suppliers to Fortune 500 companies. In 2023, Ariel Alternatives’ Project Black Fund, and Synchrony’s $100 million investment in this fund, was announced. Project Black invests in middle-market companies that are not currently minority owned, as well as existing Black- and Hispanic-owned businesses, providing capital, resources and minority executive talent. Under Project Black’s ownership, these companies are expected to be transformed into certified minority business enterprises of scale to fuel Fortune 500 vendor and supply chain diversity. Synchrony, along with other investors, plans to explore collaboration opportunities with portfolio company management teams to pursue growth strategies. We believe this strategic initiative will generate jobs, economic growth and equality within underrepresented populations from the entry level to the boardroom. This important initiative builds on Synchrony’s ongoing goal to treat equity, diversity and inclusion as a strategic business imperative and advance long-term progress across all areas of our business and communities. |
2023 ANNUAL MEETING AND PROXY STATEMENT / 7
PROXY SUMMARY
SUPPORTING OUR EMPLOYEES
Based on feedback from employees, in 2022, we continued to invest in our people through enhancementsin both mental and physical wellness, compensation, benefits, flexibility and career development. We maintained our support for employees to choose where and how they work best which allows our diverse workforce – with diverse needs – the ability to choose the option that works best for them and to reap the benefits of greater work/life balance.
We also continue to recognize the important role our associates play in driving our business forward. In 2022, Synchrony funded its performance plus bonus program for full-time, frontline hourly associates in our U.S. contact centers at $1,500, our highest ever payout, up from $1,200 in 2021 and $750 in 2020. In addition, in the first quarter of 2023, we paid a special one-time inflation bonus of $1,500 to our full-time non-exempt and other employees to help alleviate the impacts of inflation.
Some of the additional changes in 2022 to support employees include:
| • | Financial Wellness – We implemented two new financial wellness programs for employees: (i) an educational financial website to help Synchrony employees sharpen their personal money management skills and make smart decisions about spending their money, building credit, saving for retirement, reducing debt and investing wisely; and (ii) Money Talks — a series featuring Synchrony employees sharing candid experiences about managing their money and tips on doing it well, or at least doing it better. To encourage involvement, we offered to make a $100 donation to each participant’s favorite eligible charity. We also continue to make free, relatable personal finance resources available on synchrony.com and synchronybank.com through our Money 360 program. Synchrony is proud to be the founding sponsor of Millie, a magazine dedicated to helping women achieve their financial goals. This platform is devoted to women and money—earning it, saving it, investing it, spending it and talking about it. |
| • | Maternity/Parental Leave – we increased our combined maternity and parental leave to an industry-leading 22 weeks of 100% paid leave; simplified the process of taking the leave by moving maternity leave from short-term disability to a Synchrony benefit; removed the waiting period for new employees; and allow employees to take their leave when they need it – any time within 12 months before or after the date of birth/adoption. |
| • | Sabbaticals – In 2022, we launched the Synchrony Sabbatical and Employee Balance program to let employees reduce their schedules or take anywhere from one to 12 months leave while retaining benefits. It’s part of our broader commitment to flexibility and investments in our people’s well-being. Employees receive a portion of their base salary during the time of the sabbatical to help cover benefits. We also have the Employee Balance Program, a temporary reduced schedule program (20 hours a week). Here too, employees can return to their regular schedule after the program ends without sacrificing benefits. |
| • | Well-Being Coaches – During the pandemic we expanded our well-being support for employees by adding dedicated coaches with diverse backgrounds that match our workforce. In 2022, we increased the number of dedicated coaches to 15 which allows for speedy access and even more varied backgrounds for employees to choose. |
| • | Gender Affirming Benefits – In 2022, we expanded our Gender Affirming coverage to include the most common and safe surgeries available. This is a special and unique benefit that Synchrony offers above and beyond what others in the industry currently provide. |
| • | Fertility and Family Planning – We enhanced our fertility benefit from a dollar amount to a more comprehensive and easy-to use fertility program that covers multiple paths to parenthood, including couples struggling with fertility, LGBTQ+ families, single parents by choice and singles/couples who require donor tissue. The program includes three cycles of fertility treatment and covers cost from beginning to end. |
| • | Tuition Reimbursement – Synchrony has an industry leading tuition reimbursement program that provides up to $20,000 per year for full-time employees and $5,000 per year for part-time employees and up to $9,000 in reskilling education. It covers degrees relevant to their job as well as healthcare and education-related degree programs. In addition, Synchrony covers academic fees of up to $4,000 per year. In partnership with the Bright Horizons EdAssist program in 2022, Synchrony can now pay employees’ tuition directly through our Debt-Free Tuition option, offering no out-of-pocket cost. |
8/ 2023 ANNUAL MEETING AND PROXY STATEMENT
PROXY SUMMARY
BUSINESS AND FINANCIAL RESULTS
Our core strategy to drive sustainable growth at attractive risk-adjusted returns is founded on three primary objectives of (i) Grow our existing partners and win new partners; (ii) Diversify our programs, products and markets; and (iii) Deliver best-in-class customer experiences.
Focusing on these objectives, we delivered the following strategic commercial results in 2022:
| • | Expanded and retained partners with 30+ new partner deals and 50+ partner renewals, including Lowe’s |
| • | Diversified credit programs, partners, and markets through both organic and acquired capabilities including expansion of Health & Wellness, partnerships with third party digital platforms that expand our reach with Clover and Epic Systems, and through Synchrony’s Pay Later solutions, including pay in 4 and pay monthly options. |
| • | Grew our customer base and purchase volume with approximately 24 million new accounts and over $180 billion in purchase volume (a company record). |
We accomplished all these strategic commercial successes while maintaining strong financial performance. The Company continued to operate with a strong balance sheet through continued strength in our diversified funding strategy, including deposit balance growth of over $9 billion, and ending CET1 of 12.8%. With both commercial and financial success highlighted below, we believe the business has been performing well and has the foundation to sustain its performance into the future.
FISCAL YEAR 2022 FINANCIAL PERFORMANCE HIGHLIGHTS
| • | $3.0 billion in net earnings |
| • | 3.1% return on assets |
| • | $92.5 billion in loan receivables |
| • | $3.8 billion in capital returned to shareholders |
| • | $6.15 earnings per diluted common share |
| • | 37.2% Efficiency Ratio* |
* Efficiency Ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
OUR NAMED EXECUTIVE OFFICERS
The executive officers whose compensation we discuss in this Compensation Discussion and Analysis section (“CD&A”) – our named executive officers (“NEOs”) for 2022 – are Margaret M. Keane, Executive Chair and former CEO; Brian D. Doubles, President and CEO; Brian J. Wenzel, Sr., Executive Vice President, CFO; Thomas M. Quindlen, Executive Vice President and CEO—Diversified & Value and Lifestyle; Carol D. Juel, Executive Vice President and Chief Technology and Operating Officer.
In October 2022, the Board of the Company approved the following changes to roles and responsibilities of our NEOs effective January 1, 2023:
| • | Thomas Quindlen retired as Executive Vice President and CEO of the Diversified & Value and Lifestyle sales platforms and was replaced by Maran Nalluswami effective January 1, 2023. |
Mr. Quindlen agreed to continue in an advisory role until March 2023 as a part of the planned succession transition.
2023 ANNUAL MEETING AND PROXY STATEMENT / 9
PROXY SUMMARY
COMPENSATION PHILOSOPHY
TARGET COMPENSATION
A majority of our NEOs’ compensation is performance-based and therefore at risk. The only fixed compensation paid is base salary, which represents approximately 10% of the CEO’s total direct compensation and no more than 21% of the other NEOs’ total direct compensation as shown below in the 2022 mix of direct pay charts for our CEO and CFO:
Below we illustrate our CEO Target pay from 2018 to 2022 and alignment with market and our compensation philosophy. For each year we have shown market median as reported in proxy filings by peer companies that year. CEO Direct Pay below for years 2018 through 2020 reflects target pay for Margaret Keane while CEO. CEO Direct Pay for 2021 and 2022 reflect target pay for Brian Doubles as CEO.
SYNCHRONY CEO DIRECT PAY As part of our compensation philosophy, the Committee targets median pay while considering other factors including experience and performance. Mr. Doubles’ pay was initially set below median as part of the planned CEO succession with the intention of increasing pay on a multi-year glidepath toward market levels. As Mr. Doubles enters his third year as CEO and based on his proven performance, the Committee intends to continue to adjust his target pay to stay competitive with market which increased significantly in 2022. |  |
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PROXY SUMMARY
2022 SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION
At our 2022 annual meeting of stockholders, our investors supported the compensation for our named executive officers with more than 94% of the votes approving the advisory say-on-pay proposal. Our Management Development and Compensation Committee (“MDCC”) considers the results of our say-on-pay advisory vote as part of its review of our overall compensation programs and policies. In 2022, we continued our regular engagement with stakeholders regarding our compensation program. We also engaged with proxy advisory firms and sought regulatory perspectives.
BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES
The MDCC has implemented the following measures as part of our executive compensation programs:
WHAT WE DO
| Substantial portion of executive pay based on performance against goals set by the MDCC | |
| Risk governance framework underlies compensation decisions | |
| Stock ownership requirements for executive officers | |
| Minimum vesting of 12 months for any options or stock appreciation rights | |
| Minimum vesting of 12 months for any restricted stock units (“RSUs”) | |
| Greater percent of equity grants in Performance Share Units (“PSUs”) (55%) which are performance-based over RSUs (45%) | |
| Compensation subject to claw-back in the event of misconduct in addition to “no fault” in the case of financial restatements for all NEOs | |
| Limited perquisites | |
| Peer company benchmarking, targeting median among peers with additional consideration based on the size, scope and impact of role, market data, leadership skills, length of service and both company and individual performance and contributions | |
| Double-trigger vesting of equity and long-term incentive plan awards upon change in control | |
| Annual “Say-on-Pay” frequency | |
| Independent compensation consultant advises the MDCC | |
| Include relative performance metric via Total Shareholder Return modifier on long-term performance awards linked to stockholder returns relative to peers | |
WHAT WE DON’T DO
| No hedging or pledging of Company stock | |
| No employment agreements for executive officers | |
| No tax gross-ups for executive officers | |
| No discretion to accelerate the vesting of awards | |
| No cash buyouts of stock options or stock appreciation rights with exercise prices that are not in-the-money | |
| No payout of dividends on unvested equity prior to the vesting date | |
| No backdating or repricing of stock option awards | |
2023 ANNUAL MEETING AND PROXY STATEMENT / 11
CORPORATE GOVERNANCE | ||||||||
We believe that strong corporate governance is integral to building long-term value for our stockholders and enabling effective Board oversight. We are committed to | ||||||||
governance policies and practices that serve the interests of the Company and its stockholders. The Board monitors emerging issues in the governance community and regularly reviews our governance practices to incorporate evolving best practices and stockholder feedback. |
A FEW OF OUR CORPORATE GOVERNANCE BEST PRACTICES INCLUDE:
BOARD LEADERSHIP STRUCTURE
Our Board’s dedication to strong governance and regular evaluation of Board and executive leadership and succession supported our most recent Board leadership transition in April 2023. At that time, as part of a planned succession process, Margaret Keane retired as Executive Chair, and Jeffrey Naylor was appointed non-executive Chair of our Board. Mr. Naylor has served as an independent director on our Board since 2014, and served as Lead Independent Director of our Board since April 2021. During her time with Synchrony, Ms. Keane helped lead our journey to become an independent company and guided the Company through times of prosperity, challenge and growth. Her contributions helped establish Synchrony as a thriving and growing company living its values every day.
We believe that having an independent director serve as the non-executive Chair of the Board is in the best interests of our stockholders. The separation of roles allows our Chair to focus on the organization and effectiveness of the Board. At the same time, it allows our CEO to focus on executing our strategy and managing our operations, performance and risks.
BOARD’S ROLE IN STRATEGY
The Board actively oversees the Company’s strategic direction and the performance of our business and management. On an annual basis, the Board conducts an intensive, multi-day review of the Company’s short-, medium- and long-term strategic plan, taking into consideration economic, consumer, technology and other significant trends, as well as developments in the industry and regulatory initiatives. The Board’s input is then incorporated into the strategic plan and approved at the subsequent Board meeting. The output of these meetings provides the strategic context for the Board’s discussions at its meetings throughout the
next year, including regular updates and feedback from the Board on the Company’s progress on its strategic plan and deep dives on developments in important areas such as cyber security and healthcare. In addition, the Board regularly discusses and reviews feedback on strategy from our stockholders and other stakeholders, and often engages with internal and external experts and advisors to ensure our strategy reflects the latest competitive landscape.
Looking ahead, the Company remains focused on improving all aspects of the customer experience, starting with a quick, seamless account opening process all the way through account self-servicing features. We plan to continue to invest heavily in digital innovations to develop new products and services that drive deeper customer relationships.
BOARD COMMITMENT TO DIVERSITY
Since our IPO, the Board has consistently believed that sustainable, long-term stockholder value creation requires caring for our business, our customers, our partners, our employees, our communities, and the environment. We believe diversity makes our business stronger, more innovative and more successful. We have strong hiring practices for women, minorities, veterans, the LGBTQ community and people with disabilities. We promote this inclusive culture by sponsoring eight different employee Diversity Networks.
Five of our 10 directors are women and/or minorities; nine are independent; three are women and three are minorities. This diversity enables our Board to guide and oversee management more effectively, bringing strategically relevant, forward-looking and inclusive perspectives to our boardroom.
In 2022, our Board continued its elevated attention to, and further expanded its activities to support
12/ 2023 ANNUAL MEETING AND PROXY STATEMENT
social justice and racial equity within Synchrony and in our communities. Our Board received regular updates on progress in Synchrony’s EDIC efforts. Our directors hosted all-employee events on EDIC in the workplace, participated in our annual Global Diversity Experience, and shared their thought leadership on EDIC at conferences and in publications.
BOARD FOCUS ON OTHER ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
The pandemic and other recent social justice issues underscore the importance of Board engagement on diversity and other environmental, social and governance matters (ESG). To this end, our full Board actively engages on our most significant ESG topics throughout the year. Our Board delegates primary responsibility for oversight of our ESG strategy and performance to our Nominating and
Corporate Governance Committee. The Committee receives updates from management on ESG matters at least four times per year. All our Board committees oversee matters that impact our ESG strategy and performance. For example: our Audit and Risk Committees oversee compliance matters; our Risk Committee oversees cyber security risks associated with information security and data privacy; and our Management Development and Compensation Committee oversees human capital practices, including our EDIC efforts. Our Nominating and Corporate Governance Committee and our Management Development and Compensation Committee hold an annual joint meeting on ESG reflecting the significance of the human capital and community initiatives in our overall ESG strategy and performance. Our Nominating and Corporate Governance Committee regularly reports to the Board on the ESG-related activities of the Board committees.
ESG OVERSIGHT BY OUR BOARD COMMITTEES
• Oversee ESG and corporate social responsibility • Oversee Synchrony’s corporate governance, including director qualifications, and board leadership and committee structure | • Oversee Synchrony’s compliance with legal, ethical and regulatory requirements and related processes and programs, including our compliance and Ombuds programs | • Oversee Synchrony’s human capital management, including policies and strategies for recruiting, retention, career development and progression, management succession for key executives, corporate culture, diversity, and employment practices | • Oversee Synchrony’s enterprise-wide risk management framework, including as it relates to operational risks, which encompass cyber security, compliance, and business resilience risks | • Review of Synchrony’s approach to technology-related innovation |
SYNCHRONY FINANCIAL
777 Long Ridge Road
Stamford, Connecticut 06902
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 2016
We are furnishing this proxy statement to stockholdersYou can read more about our ESG efforts in connection with Synchrony Financial’s solicitation of proxies on behalf of the Board of Directors (the “Board”) for the 2016 Annual Meeting of Stockholders (the “Annual Meeting”),our ESG report at www.synchrony.com. Our ESG report is not, and will not be deemed to be, held on May 19, 2016, at 11:00 a.m., Eastern Time, and any postponement or adjournment thereof. The meeting will be held virtually which allows participation from any location. The website address for the virtual meeting is: www.virtualshareholdermeeting.com/SYF2016. Distributiona part of this proxy statement or incorporated by reference into any of our other filings with the U.S. Securities and a proxy form to stockholdersExchange Commission (the “SEC”).
2023 ANNUAL MEETING AND PROXY STATEMENT / 13
CORPORATE GOVERNANCE
BOARD OVERSIGHT OF CYBER SECURITY AND TECHNOLOGY
The protection and security of financial and personal information of our consumers is scheduled to begin on or about April 4, 2016. This proxy statement describes the matters on which you are entitled to vote as a stockholderone of the Company’s highest priorities. To that end, we have an extensive cyber security oversight framework in place. The Board and its Risk Committee receive regular reports on cyber security and the Company ensures the Board includes members with cyber security experience. The information security program includes administrative, technical and is designedphysical safeguards and provides an appropriate level of protection to assist you in voting your shares. In this proxy statement, referencesmaintain the confidentiality, integrity, and availability of our Company’s and our customers’ information. This includes protecting against known and evolving threats to the “Company”security or integrity of customer records and information, and against unauthorized access to or use of customer records or information. Our information security program is continuously adapting to an evolving landscape of emerging threats and available technology. We have developed a security strategy and implemented layers of controls embedded throughout our technology environment that establish multiple control points between threats and our assets. We evaluate the effectiveness of the key security controls through ongoing assessment and measurement. When the Company’s employees shifted to working remotely due to the pandemic, this cyber security oversight framework set the foundation for the Risk Committee to engage seamlessly with management in monitoring the cyber risks of work from home. In 2022, we further adapted and enhanced our end-point controls and technologies to continue safely and securely working in the hybrid workplace.
A key part of our strategic focus is the continued development of innovative, efficient, and flexible technology to deliver products and services that meet the needs of our partners and customers and enables us to operate our business efficiently. The integration of our technology with our partners and customers is at the core of our value proposition, enabling us to anticipate and deliver the experiences and tools our partners and consumers want, while reducing fraud and enhancing customer service. Recognizing the importance of technology and innovation to our future success, and in order to better leverage the Board’s technology expertise, we have a committee of the Board devoted exclusively to technology and innovation. The Technology
Committee reviews and advises the Board on major strategies and other subjects relating to the Company’s approach to technology-related innovation, the technology development process and existing and emerging technologies. The Chair of the Technology Committee is Art Coviello, a leader in the technology industry and former Executive Vice President of EMC Corporation and Executive Chairman of RSA Security, Inc.
STOCKHOLDER ENGAGEMENT
We continue to value our stockholders’ perspectives on our strategy and governance practices. We believe that maintaining a dialogue with our stockholders allows us to better understand and respond to their perspectives on matters of importance to them. As part of our regular stockholder engagement in 2022, we engaged with representatives of a majority of our outstanding shares on a variety of topics, including our growth plans, business strategy, board composition, compensation practices and ESG issues. We also hosted our first Investor Day in 2021 to provide stockholders and other stakeholders a deeper dive into our business model, long-term growth strategy and financial operating framework.
BOARD REFRESHMENT
Under the leadership of our Nominating and Corporate Governance Committee, Synchrony’s Board of Directors and its committees routinely evaluate our Board and Board committee composition and leadership, as well as our latest updated skills matrix. This established process helps to ensure that the Board has the requisite expertise to oversee Synchrony’s business today and as it evolves under our strategy for the future. As a result, since 2019, we have added four new directors, adding expertise in healthcare, digital, technology, the consumer sector and risk management in the consumer banking sector. As a group, our Board possesses expertise in areas directly relevant to our business and strategy—including accounting, consumer banking, credit cards, cyber security, government affairs, healthcare, marketing, retail, risk management, digital and technology. We also recently rotated the chairs of our Audit Committee, Management Development and Compensation Committee, and Nominating and Corporate Governance Committee.
14/ 2023 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRACTICES
OUR GOVERNANCE HIGHLIGHTS INCLUDE:
 | Nine out of 10 directors are independent |
| Experienced Board members with a diversityof skills and backgrounds |
| Five out of 10 directors are women and/or minorities |
| Three out of five Board committee chairs are women and/or minorities |
| Each of the Audit Committee, MDCC, Nominating and Corporate Governance Committee, Risk Committee and Technology Committee is comprised exclusively of independent directors |
| Non-executive Chair of the Board |
| Regular meetings of independent directors in executive session without management |
| Annual election of all directors |
| Majority voting standard for directors in uncontested elections |
| Stockholder special meetings may be called upon the request of a majority of stockholders |
| Single-class voting structure (one share, one vote) |
| No stockholder rights plan |
| Stock ownership requirements for our executive officers and directors |
| Stockholder proxy access |
| Nominating and Corporate Governance Committee regularly reviews overall corporate governance framework and oversees the Company’s ESG efforts |
2023 ANNUAL MEETING AND PROXY STATEMENT /15
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
We believe that our directors possess the highest personal and professional ethics, deep industry knowledge and expertise, and are committed to representing the long-term interests of our stockholders. We deliberately and thoughtfully formed a Board with diverse perspectives and experiences, which we believe is critical to effective corporate governance and to “Synchrony” are to Synchrony Financial.
FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING (“FAQs”)
Who is entitled to vote at the Annual Meeting?
Holders ofachieving our common stock asstrategic goals. Nine of the close of business10 directors on the record date, which is March 24, 2016,our Board are entitled to notice of, and to vote at, the Annual Meeting. Asindependent, three of the record date, there were833,830,398 sharesdirectors are women and three of our common stock outstandingthe directors are minorities. The composition of the Board reflects distinct and entitled to vote at the Annual Meeting, with each share entitled to one vote.varied professional experience and cognitive diversity.
How do I vote at the Annual Meeting?
Stockholders of record can vote in one of four ways:DIVERSITY AND SKILLS MATRIX
FERNANDO AGUIRRE | PAGET ALVES | KAMILA CHYTIL | ARTHUR COVIELLO | BRIAN DOUBLES | ROY GUTHRIE | JEFFREY NAYLOR | BILL PARKER | LAUREL RICHIE | ELLEN ZANE | |||||||||||||
GENDER DIVERSITY | ||||||||||||||||||||||
MALE | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||
| FEMALE | ● | ● | ● | ||||||||||||||||||
ETHNIC DIVERSITY | ||||||||||||||||||||||
BLACK OR AFRICAN AMERICAN | ● | ● | ||||||||||||||||||||
HISPANIC | ● | |||||||||||||||||||||
WHITE/CAUCASIAN | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||
| FINANCIAL EXPERT | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||
RISK EXPERT | ● | ● | ● | ● | ● | ● | ||||||||||||||||
CREDIT CARDS | ● | ● | ● | ● | ● | |||||||||||||||||
CORE BANKING/ RETAIL LENDING | ● | ● | ● | ● | ||||||||||||||||||
DIRECT CONSUMER/ RETAILERS | ● | ● | ● | ● | ● | |||||||||||||||||
HEALTHCARE | ● | |||||||||||||||||||||
● | ||||||||||||||||||||||
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REGULATORY | ● |  | |||||||||||||||||||
| ● | ● | ● | ● | |||||||||||||||||||
TECH/DIGITAL/CYBER | ● | ● | ● | |||||||||||||||||||
16/ 2023 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
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Voting instructions (including instructions for both telephonic and internet voting) are provided on the Notice and the proxy card. The telephone and internet voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly. A control number, located on the Notice and the proxy card, will identify stockholders and allow them to submit their proxies and confirm that their voting instructions have been properly recorded.
If your shares are held through a bank, broker, fiduciary or custodian, please follow the voting instructions on the form you receive from such institution.
What if my shares of the Company’s common stock are held for me by a broker?
If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares in accordance with your instructions. If you do not give voting instructions to your broker, your broker may vote your shares for you on the ratification of the appointment of KPMG LLP (“KPMG”) but will not be permitted to vote your shares on any of the other matters. If you do not provide voting instructions on these matters, including the election of the director nominees named herein, the shares will be considered “broker non-votes” with respect to such matters.
What if I do not vote or do not indicate how my shares should be voted on my proxy card?
If a stockholder does not return a signed proxy card or submit a proxy by telephone or the internet, and does not attend the meeting and vote, his or her shares will not be voted. Shares of our common stock represented by properly executed proxies received by us and not subsequently revoked will be voted at the Annual Meeting in accordance with the instructions contained therein.
If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Board recommends on such proposal.In addition, if any other matter is properly presented at the Annual Meeting, the persons named in the accompanying proxy card will have discretion to vote in their best judgment on such matter.
How can I change my votes or revoke my proxy after I have voted?
Any proxy signed and returned by a stockholder or submitted by telephone or via the internet may be revoked or changed at any time before it is exercised by mailing a written notice of revocation or change to our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut, 06902 or by executing and delivering a later-dated proxy (either in writing, by telephone or via the internet).
Will my votes be publicly disclosed?
No. Stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed and are available only to the inspector of election and certain employees, who are obligated to keep such information confidential.
What if other matters come up during the Annual Meeting?
If any other matters properly come before the meeting, including a question of adjourning or postponing the meeting, the persons named in the proxies or their substitutes acting thereunder will have discretion to vote on such matters in accordance with their best judgment.
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What constitutes a quorum at the Annual Meeting?
The presence at the Annual Meeting, in person or represented by proxy, of the holders of a majority in voting power of the outstanding capital stock entitled to vote at the Annual Meeting is required to constitute a quorum to transact business at the Annual Meeting. Abstentions and broker non-votes will be counted toward the establishment of a quorum.
How many votes are required to approve each matter to be considered at the Annual Meeting?
Who will count the vote?
Votes will be tabulated by Broadridge. The Board has appointed a representative of Broadridge to serve as the Inspector of Elections.
Will a list of stockholders be made available?
We will make a list of stockholders available for ten days prior to the Annual Meeting at our offices located at 777 Long Ridge Road, Stamford, Connecticut, 06902. Please contact Synchrony Financial’s Corporate Secretary by telephone at (203) 585-2400 if you wish to inspect the list of stockholders prior to the Annual Meeting. This list will also be available during the Annual Meeting at www.virtualshareholdermeeting.com/SYF2016.
PROXY SOLICITATION AND DOCUMENT REQUEST INFORMATION
Why did I receive a Notice of Internet Availability of Proxy Materials instead of printed proxy materials?
The Securities and Exchange Commission (the “SEC”) permits companies to furnish proxy materials to stockholders by providing access to these documents over the internet instead of mailing printed copies, which can reduce costs of printing and impact on the environment. Accordingly, we have mailed a Notice to some of our stockholders. All stockholders can access our proxy materials on the internet website referred to in the Notice. If you received a Notice and would like to receive a printed copy of our proxy materials, you should follow the instructions for obtaining such materials included in the Notice.
Multiple individuals residing at my address are beneficial owners of the Company’s common stock, so why did we receive only one mailing?
The SEC permits companies to deliver a single Notice or set of Annual Meeting materials to an address shared by two or more stockholders. This delivery method is referred to as “householding.” We have delivered only one such Notice or set of Annual Meeting materials to some stockholders who share an address, unless we received contrary instructions from the affected stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of such Notice or Annual Meeting materials to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of such Notice or Annual Meeting materials, please contact our Corporate Secretary by telephone at (203) 585-2400 or in writing at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902.
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If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future Notices or Annual Meeting materials for your household, please contact the Company at the above phone number or address.
Who pays to prepare, mail and solicit the proxies?5 OF 10 ARE FEMALE AND/OR MINORITIES
We will bear the costs of solicitation of proxies for the Annual Meeting, including preparation, assembly, printing and mailing of the Notice, this proxy statement, the annual report, the proxy card and any additional information furnished to stockholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any solicitation materials to such beneficial owners. However, we do not reimburse or pay additional compensation to our own directors, officers or other employees for soliciting proxies. In addition, we have retained Georgeson, LLC to assist us in the solicitation of proxies for an aggregate fee of $15,000, plus reasonable out-of-pocket expenses.
INFORMATION ABOUT ATTENDING THE 2016 ANNUAL MEETING
How can I attend the Annual Meeting?
Stockholders as of the record date and/or their authorized representatives are permitted to attend our Annual Meeting. The Annual Meeting will be conducted entirely over an internet website, at the following address: www.virtualshareholdermeeting.com/SYF2016. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location. You may attend the Annual Meeting, vote and submit a question during the Annual Meeting by visiting www.virtualshareholdermeeting.com/SYF2016 and using your 16-digit control number, located on the Notice and the proxy card, to enter the meeting.
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9 OF 10 ARE INDEPENDENT
DIRECTOR AGE
2023 ANNUAL MEETING AND PROXY STATEMENT / 17
CORPORATE GOVERNANCE
BOARD QUALIFICATIONS
| NAME | AGE | DIRECTOR SINCE | INDEPENDENT | COMMITTEE MEMBERSHIP | ||||
Brian D. Doubles President and CEO of Synchrony Financial | 47 | 2021 | ||||||
Fernando Aguirre Former Chairman, President and CEO of Chiquita Brands International, Inc. | 65 | 2019 |  | Management Development and Compensation; Nominating and Corporate Governance (Chair) | ||||
Paget L. Alves Former Chief Sales Officer of Sprint Corporation | 68 | 2015 | | Audit (Chair); Nominating and Corporate Governance | ||||
Kamila Chytil Chief Operating Officer of DentaQuest LLC | 43 | 2022 | | Audit; Technology | ||||
Arthur W. Coviello, Jr. Former Executive Vice President of EMC Corporation; Former Executive Chairman of RSA Security, Inc. | 69 | 2015 | | Risk; Technology (Chair) | ||||
Roy A. Guthrie Former CEO of Renovate America, Inc.; Former Executive Vice President and Chief Financial Officer of Discover Financial Services, Inc. | 69 | 2014 | | Risk (Chair); Technology | ||||
Jeffrey G. Naylor (Non-Executive Chair of the Board) Former CFO and Chief Administrative Officer of the TJX Companies, Inc. | 64 | 2014 | | Audit; Management Development and Compensation | ||||
P.W. “Bill” Parker Former Vice Chairman and Chief Risk Officer of U.S. Bancorp | 66 | 2020 | | Nominating and Corporate Governance; Risk | ||||
Laurel J. Richie Former President of the Women’s National Basketball Association LLC | 64 | 2015 | | Management Development and Compensation (Chair); Nominating and Corporate Governance | ||||
Ellen M. Zane Former President and CEO of Tufts Medical Center and Tufts Children’s Hospital | 71 | 2019 | | Audit; Management Development and Compensation | ||||
18/ 2023 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
ITEM 1—ELECTION OF DIRECTORS
In November 2013, General Electric Company (“GE”) announced that it planned a staged exit from our business. The initial public offering of our common stock (the “IPO”) in July 2014 was the first step toward that exit. After the IPO, GE, through its subsidiaries, General Electric Capital Corporation (“GECC”) and GE Consumer Finance, Inc., beneficially owned 84.6% of our outstanding common stock. The second step toward GE’s exit from our business involved GE’s disposition of all of its remaining shares of our common stock through a split-off transaction.In October 2015, after we received approval from the Federal Reserve Board to become a stand-alone savings and loan holding company, GE commenced an offer to exchange all of its shares of our common stock for shares of GE common stock (the “exchange offer”). In November 2015, we announced the completion of the exchange offer and our separation from GE (the “Separation”).
Following the completion of the exchange offer, GE no longer owned any of our common stock, and we ceased to be a “controlled company” under the New York Stock Exchange (“NYSE”) corporate governance rules. In addition, all of GE’s rights that were contingent on GE owning 10% or more of our outstanding common stock, including the right to designate a certain number of persons for nomination for election as directors, were no longer applicable. Accordingly, effective on November 17, 2015, GE’s designees on the Board resigned from the Board and the Board committees on which they served, and the Board, based on the recommendations of its Nominating and Corporate Governance Committee, appointed Paget L. Alves, Arthur W. Coviello, Jr., William W. Graylin, Laurel J. Richie and Senator Olympia J. Snowe (together, the “New Directors”) as directors of the Company to fill the vacancies created by the resignations of the GE designees. Prior to their appointments, Senator Snowe had served as a non-voting observer to the Board since January 2015, and the other New Directors had served as non-voting observers to the Board since July 2015.
The Board currently consists of nine10 directors: our President and Chief Executive Officer (“CEO”), Margaret M. Keane;CEO, Brian D. Doubles, and eightnine directors who are “independent” under the listing standards of the NYSENew York Stock Exchange (“NYSE”) and our own independence standards set forth in our Governance Principles. Messrs. Hartnack,The independent directors are Fernando Aguirre, Paget L. Alves, Kamila Chytil, Arthur W. Coviello, Jr., Roy A. Guthrie, Jeffrey G. Naylor, Bill Parker, Laurel J. Richie and Naylor andEllen M. Zane (together, the New Directors were recommended by the Nominating and Corporate Governance Committee following an extensive search conducted with the assistance of a third party search firm and a review of these individuals’ experience, qualifications, attributes, skills and independence.
“Independent Directors”). Under our Amended and Restated Bylaws, (our “Bylaws”), our directors will be elected annually by a majority vote.of votes cast in uncontested elections. As discussed under “CommitteesCommittees of the Board of Directors”Directors below, our Nominating and Corporate Governance Committee is responsible for recommending to our Board, for theirits approval, the director nominees to be presented for stockholder approval at the Annual Meeting.each annual meeting.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
Nominees for Election to the Board of Directors
Each of the nine10 director nominees (the “Director Nominees”) listed belowon the following pages is currently a director of the Company.
The following biographies describe the business experience of each director nominee.Director Nominee. Following the biographical information for each director nominee,Director Nominee, we have listed specific qualifications that the Board considered in determining whether to recommend that the director be nominated for election at the Annual Meeting.
If elected, each of the director nomineesDirector Nominees is expected to serve for a term of one year or until their successors are duly elected and qualified. The Board expects that each of the nomineesDirector Nominees will be available for election as a director. However, if by reason of an unexpected occurrence one or more of the nomineesDirector Nominees is not available for election, the persons named in the form of proxy have advised that they will vote for such substitute nomineesDirector Nominees as the Board may nominate.
The Board recommends a voteFOR the following nominees for election as directors.
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THE BOARD RECOMMENDS
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2023 ANNUAL MEETING AND PROXY STATEMENT / 19
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CORPORATE GOVERNANCE
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Mr. Aguirre, 65, has been a director since July 2019. He served as President and CEO of Chiquita Brands International, Inc. from January 2004 to October 2012 and also served as Chairman from May 2004 to October 2012. Prior to that, Mr. Aguirre held various global marketing and management roles at Procter & Gamble from 1980 to 2004. Mr. Aguirre is currently on the boards of directors of CVS Health, a publicly-traded American healthcare company that owns CVS Pharmacy, CVS Caremark, and Aetna; and Barry Callebaut, a publicly-traded company which is one of the world’s largest cocoa processors and chocolate manufacturers. He previously served on other boards including Aetna, Inc., Coca-Cola Enterprises, and Levi Strauss & Co. Mr. Aguirre is currently the Owner & CEO of the Erie SeaWolves Minor League Baseball team, the double AA affiliate of the Detroit Tigers. He also owns a minority stake in the Myrtle Beach Pelicans, a low A affiliate of the Chicago Cubs. A native of Mexico, Mr. Aguirre is a prominent figure in the Hispanic community, recognized as one of the 100 Influentials by Hispanic Business Magazine and honored with the Hispanic Heritage Leadership Award by the NFL. Mr. Aguirre received a B.S. from Southern Illinois University Edwardsville.
We believe that Mr. Aguirre should serve as a member of the Board due to his significant knowledge and experience in the areas of leadership, strategy, digital marketing, branding, and communications, as well as his extensive experience as chair and CEO of a large publicly-traded company and as a director of other publicly-traded companies.
Mr. Alves, 68, has been a director since November 2015 and was a non-voting Board observer from July 2015 to November 2015. He has also been a member of the Board of Directors of the Bank since January 2017. He served as Chief Sales Officer of Sprint Corporation, a wireless and wireline communications services provider, from January 2012 to September 2013 after serving as President of that company’s Business Markets Group from 2009 to 2012. Prior thereto, Mr. Alves held various positions at Sprint Corporation, including President, Sales and Distribution, from 2008 to 2009; President, South Region, from 2006 to 2008; Senior Vice President, Enterprise Markets, from 2005 to 2006; and President, Strategic Markets, from 2003 to 2005. Between 2002 and 2003, he served as President and Chief Operating Officer of Centennial Communications Corporation and from 2000 to 2001 served as President and CEO of PointOne Telecommunications, Inc. Mr. Alves currently serves on the boards of directors of Assurant, Inc., a publicly-traded global provider of risk management products and services; and Yum! Brands, Inc., a publicly-traded company that develops, operates, franchises, and licenses a system of quick-service restaurants. Mr. Alves also serves on two private company boards: Sorenson Communications (Chairman) and Ariel Alternatives. Mr. Alves served on the board of International Game Technology PLC, a manufacturer and distributor of microprocessor-based gaming and video lottery products and software systems from 2015 to 2020. He previously served on the boards of directors of GTECH Holdings Corporation from 2005 to 2006, Herman Miller, Inc. from 2008 to 2010 and International Game Technology Inc. from 2010 to 2015. In 2017 and 2021, Savoy magazine recognized Mr. Alves among Savoy’s Most Influential Black Corporate Directors. Mr. Alves received a B.S. in Industrial and Labor Relations and a J.D. from Cornell University.
We believe that Mr. Alves should serve as a member of the Board due to his executive management and leadership experience, including leadership roles with technology companies, his extensive background in sales, his financial expertise and his experience with strategic and business development. He also has experience with strategic corporate transactions, including mergers and acquisitions. The Board has determined that Mr. Alves qualifies as an “audit committee financial expert” as defined in Item 407(d) (5) of Regulation S-K.
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2023 ANNUAL MEETING AND PROXY STATEMENT / 21
CORPORATE GOVERNANCE
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Qualifications
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Ms. Chytil, 43, has been a director since April 2022. Ms. Chytil has been the Chief Operating Officer of DirectorsDentaQuest LLC, a private equity backed oral health care company, since March 2021. From October 2019 to March 2021, she served as the Chief Operating Officer of MoneyGram International, a public crossborder P2P payments and money transfer company. From May 2016 to October 2019, she served as MoneyGram’s Chief Global Operations Officer, and from May 2015 to May 2016 as its Senior Vice President of Key Partnerships and Payments. From August 2004 to March 2015, Ms. Chytil held various positions of increasing responsibility at FIS, a Financial Technology (FinTech) corporation that offers a wide range of financial products and services. At FIS, she served in multiple risk management, analytics, and operational roles, including Senior Vice President and General Manager of Retail Payments, focusing on traditional financial services as well as retail and underbanked focused financial products. From January 2003 to August 2004, she served as a Business Analyst at Danka Office Imaging Company and from May 2000 to January 2003 she served as an Account Manager at Capital One Financial Corporation. Ms. Chytil served as a board member for MoneyGram Foundation from 2019 to 2021; MoneyGram Poland from 2016 to 2021; and MoneyGram Payment Systems, Inc. from 2017 to 2021. In 2020, Ms. Chytil contributed to multiple articles on digital transformation in Forbes FinTech. In 2016 she was voted Woman of the Year in Business, Poland; and in 2017, she was awarded the Dallas Business Journal 40 under 40 award and she was chosen by PaymentSource as 1 of 25 Most Influential Women in Payments. Ms. Chytil earned a B.S. in International Business and Finance from the University of Tampa and an M.B.A. from the University of Florida.
We believe that Ms. Chytil should serve as a member of the Board due to her executive management and leadership experience, and her extensive background in consumer finance, technology and operations. The Board has determined that Ms. Chytil qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.
Mr. Coviello, 69, has been a director since November 2015 and was a non-voting Board observer from July 2015 to November 2015. He has also been a member of the Board of Directors of the Bank since January 2017. Since 2015 he has been an independent cyber security consultant and since July has served as a Managing Partner of Syn Ventures, a venture capital firm specializing in investing in cyber security companies. He served as Executive Vice President of EMC Corporation, an IT infrastructure company, and Executive Chairman of RSA Security, Inc. (“RSA”), the Security Division of EMC Corporation and a provider of security, risk and compliance solutions, from 2011 to 2015, after serving as Executive Vice President and President of RSA from 2006 to 2011. Prior thereto, Mr. Coviello held various executive positions at RSA, including President and CEO from 2000 to 2006, and President from 1999 to 2000. Prior to RSA, he had extensive financial and operating management expertise in several technology companies. Mr. Coviello currently serves on the boards of directors of Tenable Holdings, Inc., a publicly-traded provider of Cyber Exposure solutions, which is a discipline for managing and measuring cyber security risk; and three private software companies, Oomnitza, Inc., Phosphorous Security Inc, and RegScale, Inc. Mr. Coviello previously served on the boards of directors of public companies: Epiphany Technology Acquisition Corp., EnerNOC, Inc., and Gigamon, Inc. He received a B.B.A. in Accounting from the University of Massachusetts, Amherst.
We believe that Mr. Coviello should serve as a member of the Board due to his leadership experience, including as CEO of a publicly-traded company, his extensive financial expertise and accounting background and his considerable experience in technology and cyber security.
22/ 2023 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Guthrie, 69, joined our Board and the Board of Directors of the Bank in connection with our IPO in July 2014. From October 2017 to September 2018, Mr. Guthrie served as CEO of Renovate America, Inc., a privately owned financial services company. From July 2005 to January 2012, Mr. Guthrie served as Executive Vice President, and from July 2005 to May 2011 as CFO of Discover Financial Services, Inc., a direct banking and payments company. From September 2000 to July 2004, he served as President and CEO of various businesses of Citigroup Inc., including CitiFinancial International from 2000 to 2004 and CitiCapital from 2000 to 2001. From April 1978 to September 2000, Mr. Guthrie served in various roles of increasing responsibility at Associates First Capital Corporation. Mr. Guthrie serves on the boards of directors of Mr. Cooper Group, Inc., a publicly-traded originator and servicer of real estate mortgage loans; and OneMain Holdings, Inc., a publicly-traded financial services company. He previously served on the boards of directors of Cascade Acquisition Corporation, LifeLock, Inc. and Garrison Capital Inc. During his tenure with Discover Financial Services, Inc., he also served on the board of directors of Discover Bank. Mr. Guthrie received a B.A. in Economics from Hanover College and an M.B.A. from Drake University.
We believe that Mr. Guthrie should serve as a member of the Board due to his leadership experience, including as CFO of two publicly-traded companies and as a director of other publicly-traded companies, financial expertise and accounting background, risk management experience and extensive experience in consumer finance (including the private-label credit card industry), including more than 30 years of experience in finance and/or operating roles.
Mr. Naylor, 64, was appointed non-executive Chair of the Board in April 2023. Mr. Naylor previously served as Lead Independent Director of the Board from April 2021 to April 2023. He joined our Board and the board of directors of the Bank in connection with the IPO in July 2014. From February 2013 to April 2014, Mr. Naylor served as Senior Corporate Advisor of the TJX Companies, Inc., a retail company of apparel and home fashions. From January 2012 to February 2013, Mr. Naylor served as Senior Executive Vice President and CAO of the TJX Companies, Inc.; from February 2009 to January 2012, he served as its Senior Executive Vice President, Chief Financial and Administrative Officer; from June 2007 to February 2009, he served as its Senior Executive Vice President, Chief Administrative and Business Development Officer; from September 2006 to June 2007, he served as its Senior Executive Vice President, Chief Financial and Administrative Officer; and from February 2004 to September 2006, he served as its CFO. From September 2001 to January 2004, Mr. Naylor served as Senior Vice President and CFO of Big Lots, Inc. From September 2000 to September 2001, Mr. Naylor served as Senior Vice President, Chief Financial and Administrative Officer of Dade Behring, Inc. From November 1998 to September 2000, he served as Vice President, Controller of The Limited, Inc. Mr. Naylor serves on the boards of directors of two public companies: Dollar Tree, Inc., an operator of discount variety stores; and Wayfair, Inc., an e-commerce retailer of home furnishings and decor. Mr. Naylor received a B.A. in Economics and Political Science from Northwestern University and an M.B.A. from the J.L. Kellogg Graduate School of Management.
We believe that Mr. Naylor should serve as a member of the Board due to his executive management and leadership experience, including as CFO of a publicly-traded company and as a director of other publicly-traded companies, his extensive financial expertise and accounting background, and his considerable experience accumulated over the course of 25 years in the retail and consumer goods industries. The Board has determined that Mr. Naylor qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.
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CORPORATE GOVERNANCE
24/ 2023 ANNUAL MEETING AND PROXY STATEMENT
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Parker, 66, has been a director since July 2020. Mr. Parker served as Vice Chairman and Chief Risk Officer of U.S. Bancorp from December 2013 to September 2018. From October 2007 until December 2013 he served as Executive Vice President and Chief Credit Officer of U.S. Bancorp. From March 2005 until October 2007, he served as Executive Vice President of Credit Portfolio Management of U.S. Bancorp, having served as Senior Vice President of Credit Portfolio Management of U.S. Bancorp since January 2002. Mr. Parker served on the board of directors of U.S. Bank National Association from January 2011 to October 2018. Mr. Parker received a B.A. from Amherst College and an M.B.A. from the Tuck School of Business at Dartmouth.
We believe that Mr. Parker should serve as a member of the Board due to his leadership experience, and his extensive background in risk management and deep expertise in credit.
Ms. Richie, 64, has been a director since November 2015 and was a non-voting Board observer from July 2015 to November 2015. Ms. Richie served as President of the Women’s National Basketball Association LLC, a professional sports league, from 2011 to 2015. From 2016 to 2018, Ms. Richie served as a brand consultant for Teach For America, and from 2008 to 2011, Ms. Richie served as Chief Marketing Officer of Girl Scouts of the United States of America. From 1984 to 2008, she held various positions at Ogilvy & Mather, including Senior Partner and Executive Group Director and member of the agency’s Operating and Diversity Advisory Boards. Ms. Richie is currently engaged by several Fortune 100 companies to advise c-suite executives on matters of personal leadership and corporate culture. Ms. Richie serves on the boards of directors of two public companies: Bright Horizons, a publicly-traded provider of high-quality childcare and early education; and Hasbro, a publicly-traded global play and entertainment company committed to Creating the World’s Best Play and Entertainment Experiences. She also serves as an independent director at SeatGeek, a closely held private corporation. Ms. Richie has been recognized as one of the 25 Most Influential Women in Business by The Network Journal, one of the Most Influential African Americans in Sports by Black Enterprise and one of the Most Influential Black Corporate Directors by Savoy magazine. She is the recipient of numerous awards including Sports Business Journal’s Game Changer Award and Ebony magazine’s Outstanding Women in Marketing and Communications Award. Ms. Richie received a B.A. in Policy Studies from Dartmouth College. Ms. Richie is a former Trustee of the Naismith Basketball Hall of Fame and her alma mater where she served as Chair of the Board from 2017 to 2021.
We believe that Ms. Richie should serve as a member of the Board due to her executive management and leadership experience and her considerable experience in communications and marketing.
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Ms. Zane, 71, has been a director since February 2019 and was a non-voting Board observer from October 2018 to February 2019. She currently serves as CEO Emeritus at Tufts Medical Center and Tufts Children’s Hospital, and from 2004 to 2011, she served as its President and CEO. From 1994 to 2004, Ms. Zane served as Network President for Mass General Brigham (formerly Partners Healthcare System), a physician/hospital network sponsored by the Harvard affiliated Massachusetts General Hospital and Brigham and Women’s Hospital. Prior to 2004, Ms. Zane served as the CEO of Quincy Hospital. Ms. Zane serves on the boards of directors of Boston Scientific Corporation, a publicly-traded manufacturer of medical devices; Azenta Life Sciences (formerly Brooks Automation), a publicly-traded provider of biostorage and life sciences company; and Haemonetics Corporation, a publicly-traded global medical device company and provider of blood and plasma supplies and services. Ms. Zane received a Bachelor of Arts from George Washington University and a Master of Arts from Catholic University of America. She has an Advanced Professional Director Certification from the American College of Corporate Directors and she holds the following honorary degrees: Doctorate of Humane Letters from University of Massachusetts—Dartmouth; Doctorate of Commercial Science from Bentley University; Doctorate of Business Administration from Stonehill College; and Doctorate of Humane Letters from Curry College.
We believe that Ms. Zane should serve as a member of the Board due to her executive experience in the healthcare industry, including as the CEO of a large medical center, in addition to her financial expertise and substantial experience as a director at other public companies. The Board has determined that Ms. Zane qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.
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CORPORATE GOVERNANCE
QUALIFICATIONS OF DIRECTORS
Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. The Company will endeavor to have a Board representing a range of experience at policy-making levels in areas that are relevant to the Company’s activities. Although the Board does not have a specific diversity policy, theThe Nominating and Corporate Governance Committee takes into account a candidate’s ability to contribute to the diversity on the Board. It considers theeach candidate’s and the existing Board members’ race, ethnicity, gender, age, cultural background and professional experience. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time. DirectorsOur Governance Principles maintain that directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Company’s Board, and other directors should not serve on more than fourthree boards of public companies in addition to the Company’s Board.
Pursuant to theour Company’s Governance Principles, when a director’s principal occupation or job responsibilities change significantly during his or her tenure as a director, that director shall tender his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will recommend to the Board the action, if any, to be taken with respect to the resignation. The Board does not believe that arbitrary term limits on directors’ service are appropriate, nor does it believe that directors should expect to be renominated annually until they reach the mandatory retirement age. The Board self-evaluation process described belowNominating and Corporate Governance Committee will be an important determinantevaluate each director in connection with his or her renomination for board tenure.election at each annual meeting of stockholders. Except in special circumstances, directors will not be nominated for election to the Board after their 75th 75th birthday.
PROCESS FOR REVIEWING, IDENTIFYING AND EVALUATING DIRECTOR NOMINEES
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Process for Reviewing, Identifying and Evaluating Director Nominees
The Nominating and Corporate Governance Committee is responsible for reviewing, identifying, evaluating and recommending director nominees to the Board after considering the qualifications described above and set forth in the Company’s Governance Principles. Upon recommendation of the Nominating and Corporate Governance Committee, the Board proposes a slate of nominees to the stockholders for election to the Board. Between annual stockholder meetings, the Board may fill vacancies and newly-creatednewly created directorships on the Board with directors who will serve until the next annual meeting.
Other stockholders may also propose nominees for consideration by the Nominating and Corporate Governance Committee by submitting the names and other supporting information required under our Bylaws to: Corporate Secretary, Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902. The Nominating and Corporate Governance Committee will apply the same standards in considering director candidates recommended by stockholders that it applies to other candidates. In addition to recommending director candidates to the Nominating and Corporate Governance Committee, stockholders may also, pursuant to procedures established in our Bylaws, directly nominate one or more director candidates to stand for election by the stockholders. For information on how to nominate a person for election as a director at the 2024 Annual Meeting of Stockholders, including through the proxy access right to include such nominees in the Company’s proxy materials, please see the discussion under the heading “Additional Information—Stockholder Proposals for the 2024 Annual Meeting.”
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CORPORATE GOVERNANCE
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COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board consist of anthe Audit Committee, athe Nominating and Corporate Governance Committee, a Management Developmentthe MDCC, the Risk Committee, and Compensation Committee (the “MDCC”), and a Riskthe Technology Committee. The duties and responsibilities of these standing committees are set forth below. The Board may also establish various other committees to assist it in its responsibilities. Our Board has adopted charters for each of its standing committees. Copies of the committees’ charters are available on our website at http://investors.synchronyfinancial.com under “Corporate Governance.” Each of the standing committees reports to the Board as they deemit deems appropriate and as the Board requests.
| # MEETINGS IN 2022 | ||||||||
Audit | Mr. Alves (Chair) |
| • Selecting, evaluating, compensating and overseeing the independent registered public accounting | 11 | ||||
Ms. Chytil
Mr. Naylor Ms. Zane | • • Reviewing the audit plan, changes in the audit plan, the nature, timing, scope and results of the audit, and any audit problems or difficulties and management’s | |||||||
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• Approving the appointment of, evaluating and, when appropriate, approving the replacement of the Chief Audit Executive | ||||||||
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• and related processes and programs | ||||||||
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2023 ANNUAL MEETING AND PROXY STATEMENT / 27
CORPORATE GOVERNANCE
| # MEETINGS IN 2022 | ||||||
Nominating and Corporate Governance |
(Chair) Mr. Alves Mr. Parker Ms. Richie | • Developing, and recommending to our Board for approval, qualifications for director candidates, taking into account applicable regulatory or legal requirements regarding experience, expertise or other qualifications for service on certain of our Board’s
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| COMMITTEES | MEMBERS | PRIMARY RESPONSIBILITIES | # OF IN 2022 | |||||
Management Development and Compensation |
| Ms. Richie (Chair) Mr. Aguirre Mr. Naylor | • Assisting our Board in developing and evaluating potential candidates for executive positions, including the CEO, and overseeing our management resources, structure, succession planning, development and selection
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| Ms. Zane | • | |||||||
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CORPORATE GOVERNANCE
| COMMITTEES | MEMBERS | PRIMARY RESPONSIBILITIES | # OF MEETINGS IN 2022 | |||
| Mr. Guthrie (Chair) Mr. Coviello Mr. Parker | • Assisting our Board in its oversight of our enterprise-wide risk management framework, including as it relates to credit, investment, market, liquidity, operational (including cyber security), compliance and strategic
•
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approving our strategy relating to managing key risks and other policies on the establishment of risk limits as well as the guidelines and policies for monitoring and mitigating such | 7 | |||||
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• Reviewing, at least quarterly, in coordination with the Bank’s Risk Committee, the Company’s allowance for | ||||||
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| PRIMARY RESPONSIBILITIES | # OF IN 2022 | ||||||
| Technology | Mr. Coviello (Chair) Ms. Chytil Mr. Guthrie | • Reviewing the Company’s approach to technology-related innovation, including the Company’s competitive position and relevant trends in technology and innovation • Reviewing the technology development process to assure ongoing business growth • Providing a forum for dialogue on existing and emerging technologies which present opportunities or threats to the Company’s strategic agenda | 6 | |||
2023 ANNUAL MEETING AND PROXY STATEMENT / 29
CORPORATE GOVERNANCE
Audit Committee
AUDIT COMMITTEE
The Board has determined that each of Mr. Alves, Ms. Chytil, Mr. Naylor and Ms. Zane qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K, and the Board is satisfied that all members of our Audit Committee have sufficient expertise and business and financial experience necessary to effectively perform their duties as members of the Audit Committee.
Management Development and Compensation CommitteeMANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
Each of Ms. Richie, Mr. Hartnack,Aguirre, Mr. Naylor and Ms. RichieZane qualifies as “outside directors” within the meaning of Section 162(m) (“Section 162(m)”) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and as “non-employee“non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)Act).
BOARD OF DIRECTORS’ LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT
TheOur Board’s dedication to strong governance and regular evaluation of Board is led byand executive leadership and succession supported our most recent Board leadership transition in April 2023. At that time, as part of a planned succession process, Margaret Keane retired as Executive Chair, and Jeffrey Naylor was appointed non-executive Chair of our Board. Mr. Hartnack. Naylor has served as an independent director on our Board since 2014, and served as Lead Independent Director of our Board since April 2021. During her time with Synchrony, Ms. Keane helped lead our journey to become an independent company and guided the Company through times of prosperity, challenge and growth. Her contributions helped establish Synchrony as a thriving and growing company living its values every day.
We believe that having an independent director serve as the non-executive Chair of the Board is in the best interests of our stockholders. The separation of roles allows our Chair to focus on the organization and effectiveness of the Board. At the same time, it allows our CEO to focus on executing our strategy and managing our operations, performance and risk following our transition to being a fully stand-alone public company.risks.
BOARD OF DIRECTORS’ ROLE
IN RISK OVERSIGHT
We manage our enterprise risk using an integrated framework that includes Board-level oversight, administration by a group of cross-functional management committees, and day-to-day implementation by a dedicated risk management team led by the CRO. The Board (with input from the Risk Committee) is responsible for approving the Company’s enterprise-wide risk appetite statement and framework, as well as certain other risk management policies, and oversees the Company’s strategic plan and enterprise-wide risk management program.
The Board regularly devotes time during its meetings to review and discuss the most significant risks facing the Company and management’s responses to those risks. During these discussions, the President and CEO, the CFO, the CRO, the General Counsel and other members of senior management present management’s assessment of risks, a description of the most significant risks facing the Company and any mitigating factors and plans or practices in place to address and monitor those risks. The Board has also delegated certain of its risk oversight responsibilities to its committees.
The Risk Committee of the Board has responsibility for the oversight of ourthe risk management program, and the three other board committees have other oversight roles with respect to risk management.management within their respective oversight areas. Several management committees and subcommittees have important roles and responsibilities in administering ourthe risk management program. This committee-focused governance structure provides a forum through which risk expertise is applied cross-functionally to all major decisions, including development of policies, processes policies and controls used by the CRO and risk management team to execute our risk management philosophy. OurThe CRO manages our risk management team and is responsible for establishing and implementing standards for the identification, management, measurement, monitoring and reporting of risk on an enterprise-wide basis. The CRO regularly reports to the Board of Directors and the Risk Committee on risk management matters. The enterprise risk management philosophy is to ensure that all relevant risks in our business activities are appropriately identified, measured, monitored and controlled. OurThe approach in executing this philosophy focuses on leveraging our strong credit risk cultureexpertise to drive enterprise risk management using a strong
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CORPORATE GOVERNANCE
governance framework structure, a comprehensive enterprise risk assessment program and an effective risk appetite framework.
Responsibility for risk management flows to individuals and entities throughout our Company, including ourthe Board, various boardBoard and management committees and senior management. We believe our creditThe corporate culture and values, in conjunction with the risk culturemanagement accountability incorporated into the integrated Enterprise Risk Government Framework, which includes a governance structure and three distinct “Lines of Defense” (as further described below), has facilitated, and will continue to facilitate, the evolution of an effective risk management presence across the Company.
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It is our policy that each director is expected to dedicate sufficient time to the performance of his or her duties as a director, including by attending meetings of the stockholders, and meetings of the Board and Board committees of which he or she is a member.
In 2015,2022, the Board held 14eight meetings, including regularly scheduled and special meetings. All incumbent directors attended at least 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she has been a director); and (ii) the total number of meetings
held by all committees on which he or she served (during the periods for which he or she has served). All then-serving directors attended the 20152022 Annual Meeting of Stockholders.
MEETINGSEXECUTIVE SESSIONS OF NON-MANAGEMENT AND INDEPENDENT DIRECTORS
In accordance with our Governance Principles, at the conclusion of every Board meeting, the Board hasindependent directors have an executive session without any management directors present. Periodically (and at least annually), the independent directors have executive sessions without any non-independent directors present. The Chair of the Board, Mr. Naylor, presides at executive sessions. During executive sessions, the independent directors have complete access to Company personnel as they may request.
COMMUNICATIONSWITHCOMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders and any interested parties who would like to communicate with the Board or its committees may do so by writing to them via the Company’s Corporate Secretary by email at corporate.secretary@synchronyfinancial.com or by mail at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 or by leaving a voicemail message at (800) 275-3301.
All communications directed to the Board, the Chair of the Board or any other members of the Board are initially reviewed by the Company’s Ombuds Leader. Any communications that allege or report fiscal improprieties or complaints about internal accounting controls or other accounting or auditing matters are immediately forwarded to the Chair of the Audit Committee, and the General Counsel and the Chief Audit Executive, and after consultation with the Chair of the Audit Committee, may be sent to the other members of the Audit Committee. Any communications that raise legal, ethical or compliance concerns about the Company’s policies or practices are immediately forwarded to the General Counsel and the Chief Compliance Officer. The Chair of the Board is advised promptly of any such communication that alleges misconduct on the part of the Company’s management or raises legal, ethical or compliance concerns about the Company’s policies or practices and that the General Counsel or the Chief Compliance Officer believes may be credible, and after consultation with the Chair of the Board, such communication may be reported to the other members of the Board or to a committee of the Board. On a quarterly basis, the Chair of the Board receives updates on other communications from stockholders that raise issues related to the affairs of the Company but do not fall into the two prior categories. The Chair of the Board determines which of these communications he would like to see.
2023 ANNUAL MEETING AND PROXY STATEMENT / 31
Typically, the Ombuds Leader will not forward to the Company’s directors communications from stockholders or other communications that are of a personal nature or not related to the duties and responsibilities of the Board, including: junk mail and mass mailings; routine customer service complaints; human resources matters; service suggestions; resumesresumés and other forms of job inquiries; opinion surveys and polls; business solicitations; or advertisements.
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We have adopted a Code of Conduct that applies to anyone who works for or represents Synchrony, including all directors, officers and employees. A copy of this code is available on our website at http://investors.synchronyfinancial.com under “Corporate Governance”.Governance.” If we make any substantive amendments to this code or grant any waiver from a provision to our CEO, principal financial officer or principal accounting officer, we will disclose the nature of such amendment or waiver on our website or in a Current Report on Form 8-K.
Our Governance Principles provide the framework for the governance of the Company. The Nominating and Corporate Governance Committee is responsible for developing and implementing our Governance Principles, and periodically reviewing such Governance Principles and recommending any proposed changes to the Board for approval. A copy of our Governance Principles is available on our website at http://investors.synchronyfinancial.com under “Corporate Governance.”
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of our records, we believe that all reports required to be filed by our directors, officers and holders of more than 10% of our common stock pursuant to Section 16(a) of the Exchange Act during 2015 were filed on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company’s MDCC are Ms. Richie, Mr. Hartnack,Aguirre, Mr. Naylor and Ms. Richie.Zane. None of Ms. Richie, Mr. Hartnack,Aguirre, Mr. Naylor and Ms. RichieZane was, during 20152022 or previously, an officer or employee of GE, the Company or any of their respective subsidiaries. William H. Cary, one of GE’s former designees on the Board, served as Chair of the MDCC in 2015, until November 17, 2015, when he resigned in connection with the Separation. Mr. Cary was not an officer or employee of the Company or any of its subsidiaries. During 2015,2022, there were no compensation committee interlocks required to be disclosed. In addition, no member of the MDCC had any relationship requiring disclosure under Item 404 of Regulation S-K under the Exchange Act.
32/ 2023 ANNUAL MEETING AND PROXY STATEMENT
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COMPENSATION MATTERS | ||||||
ITEM 2—ADVISORY VOTE TO APPROVE NAMED
EXECUTIVE OFFICER COMPENSATION
In accordance with Section 14A of the Exchange Act, we are asking stockholders to approve the compensation paid to our named executive officers, as disclosed in this proxy statement on pages 23 to 4433-67 (the “Say on Pay“Say-on-Pay Vote”). Although the voting results are not binding, we value continuing and constructive feedback from our stockholders on compensation and other important matters, and the Company’s MDCC will consider the voting results when evaluating our executive compensation program. Consistent with the direction of our stockholders, the Say on Pay Vote is held on an annual basis until the next non-binding stockholder vote on the frequency with which the Say on Pay Vote should be held.
We believe that our executive compensation program aligns the interests of the Company’s executives and other key employees with those of the Company and its stockholders. The program is intended to attract, retain and motivate high caliberhigh-caliber executive talent to enable the Company to maximize operational efficiency and long-term profitability. The program is also designed to differentiate compensation based upon individual contribution, performance and experience.
WE ASK FOR YOUR ADVISORY APPROVAL OF THE FOLLOWING RESOLUTION:
We ask for your advisory approval of the following resolution:
“RESOLVED, that the stockholders hereby approve, on an advisory basis, the compensation paid to Synchrony Financial’s named executive officers, as described in this proxy statement on pages 23 to 44.33-67.”
The Board recommends a voteFOR approval of the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement.
| THE BOARD RECOMMENDS A VOTE FOR approval of the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement. | ||||
2023 ANNUAL MEETING AND PROXY STATEMENT / 33
COMPENSATION MATTERS
MANAGEMENT
The following table sets forth certain information concerning our current and former (as applicable) executive officers (other than Ms. Keane).Mr. Doubles): Alberto Casellas, Curtis Howse, Carol Juel, David P. Melito, Jonathan S. Mothner, Maran Nalluswami, Thomas M. Quindlen, Bart Schaller, Brian J. Wenzel, Sr. and Paul Whynott. For information concerning Ms. Keane,Mr. Doubles, see “Corporate Governance—Election of Directors.”
PRESENT POSITION WITH THE COMPANY |
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Alberto Casellas Executive Vice President and CEO— Health & Wellness | Mr. Casellas, 56, has been the Executive Vice President and | |||
Margaret Keane Former Executive Chair | Ms. Keane, 63, served as Executive Chair of the Board from April 2021 to April 2023. Ms. Keane served as our CEO from February 2014 to March 2021 and | |||
Curtis Howse Executive Vice President and CEO—Home & Auto | Mr. Howse, 59, has been our Executive Vice President and CEO of our Home & Auto platform since June 2021. Mr. Howse served as the Executive Vice President and CEO of our Payment Solutions platform and our Chief Commercial Officer from January 2021 to May 2021. Prior to this role, Mr. Howse led Synchrony’s Direct to Consumer efforts from October 2018 to December 2020 and was Senior Vice President and General Manager of the Diversified Client Group at Synchrony from April 2011 to September 2018. Before Synchrony’s separation from GE in 2015, Mr. Howse held roles in operations, business development and client development at GE Consumer Finance, and led various business divisions in the U.S., Argentina, Brazil, Canada and Mexico. Mr. Howse received a bachelor’s degree in computer information systems from DeVry University. | |||
Carol Juel Executive Vice President, Chief Technology and Operating Officer | Ms. Juel, 50, has been our Executive Vice President, Chief Technology & Operating Officer of Synchrony since June 2021. She served as our Executive Vice President & Synchrony’s Chief Information | |||
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COMPENSATION MATTERS
| NAME AND PRESENT POSITION WITH THE COMPANY | AGE, PERIOD SERVED IN PRESENT POSITION AND OTHER BUSINESS EXPERIENCE | |
David P. Melito Senior Vice President, Chief Accounting Officer and Controller | Mr. Melito, 57, has been our Senior Vice President, Chief Accounting Officer and Controller since February 2014. Prior to this role, he served as Controller for GE’s North American retail finance | |
Jonathan S. Mothner Executive Vice President, General Counsel and Secretary | Mr. Mothner, | |
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Maran Nalluswami Executive Vice President and Value and Lifestyle | Mr. | |
Thomas M. Quindlen Former Executive Vice President and CEO— Diversified & Value and Lifestyle | Mr. Quindlen, 60, retired on December 31, 2022. Prior to that he had been our Executive Vice President and CEO of our Diversified & Value and Lifestyle platforms since June 2021. Prior to that he served as Executive Vice President and CEO of Synchrony’s Retail Card platform | |
Bart Schaller Executive Vice President | Mr. | |
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Brian J. Wenzel, Sr. Executive Vice President, Financial Officer | Mr. | |
Paul Whynott Executive Vice President, Chief Risk Officer | Mr. Whynott, 52, has been our Executive Vice President and | |
2023 ANNUAL MEETING AND PROXY STATEMENT / 35
COMPENSATION MATTERS
COMPENSATION
DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
As the economy continued to recover from the pandemic, faced supply chain challenges, and experienced high levels of inflation, Synchrony performed well and drove significant growth through expansion of our product offerings and capabilities, broad distribution, improved efficiency and customer experiences, and balance sheet strength – all while maintaining a sound risk culture, continuing to focus on EDIC including supporting our employees and the communities in which we serve and live. Our 2022 performance outpaced expectations on nearly all fronts with record purchase volume of $180 billion, a 15% increase in loan receivables to $92.5 billion and our second highest diluted earnings per share since our IPO of $6.15. We delivered these financial results while improving our already strong culture as demonstrated in our rise in the Great Place to Work® ranking from #25 in 2022 to the Top 20 in 2023 in the United States, from #2 in 2022 to #1 in 2023 in the Philippines, and ranking #19 in India in 2022.
GROWTH
In 2022, Synchrony achieved double digit growth in loan receivables across four of our five sales platforms and high single digit in one platform. This was made possible through several initiatives, including new products and capabilities, expanded distribution channels and signing or renewing over 80 partnerships. Key metrics that demonstrated our growth in 2022 include:
| • | 30+ new partnerships |
| • | ~24 million new accounts |
| • | 9% increase in purchase volume to $180 billion |
| 15% increase in loan receivables to $92.5 billion |
PRODUCTS AND CAPABILITIES
Synchrony Pay Later solutions (formerly SetPay) – this suite of installment loan products helps consumers and our partners by providing financing over time as an alternative to traditional credit card financing. Fixed payment schedules build trust with customers by demonstrating our commitment to helping consumers manage their finances. These fixed pay offerings represent another financial tool that we can offer to qualifying customers, while also driving incremental sales to our partners and providers.
Pre-Qualification – through a digital pre-qualification process that leverages Synchrony’s proprietary credit decisioning engine (PRISM), consumers have the ability to avoid hard credit inquiries and shop with confidence. As this capability is introduced to more of our customers, allowing for seamless access to our credit products, we are seeing this contribute to both higher new accounts and sales at our partners.
DISTRIBUTION
Strategic Partnerships – we launched several strategic partnerships over the last year to scale our products more quickly by expanding our distribution channels and broadening customer access to our comprehensive product suite. We integrated with point-of-sale and business management platforms like Clover, and health and wellness practice management solutions like Sycle. Through these channels Synchrony has added hundreds of thousands of small business locations and several thousand provider locations through whom we can seamlessly and responsibly offer access to our flexible financing.
Synchrony Mastercard – by offering our direct-to-consumer credit card to more consumers, loan receivables associated with the Synchrony Mastercard were up 17% in 2022.
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OMPENSATION MATTERS
EFFICIENCY AND CUSTOMER EXPERIENCE
Customer Experience and Digital Strategy – through multiple improvements in Synchrony’s technological capabilities, 5 million calls moved to digital channels compared to prior year; in addition we also launched our new cardholder service platform across many of our largest portfolios which offers customers the ability to service their accounts in one dashboard and enable a broad suite of account notifications across every aspect of the credit lifecycle, continuing to enhance the customer’s experience within our partner’s brands. With the improved digital experience across accountholders, we experienced double-digit improvement in net promoter scores compared to our previous account management site.
Cost Efficiencies – during 2022 we maintained a disciplined focus on expenses, which included efficiencies such as our operations technologies which allowed for flat operational headcount while average active accounts grew 1.9%; an increase to 54% e-bill adoption by customers; and our physical site strategy actions resulting in go-forward additional cost savings of over $10 million annually. The combined impacts of our cost discipline, the inherent operating leverage in our highly scalable model, and strong revenue growth continued to drive improvement in Synchrony’s industry leading efficiency ratio of 37.2%.
BALANCE SHEET
Funding – deposit balances grew by over $9 billion in a competitive funding environment, launched new deposit products including affiliate savings product with PayPal, and two new CD product offerings.
Capital – the Company returned $3.8 billion to shareholders including a 5% increase in dividends and $3.3 billion of share repurchases – reducing common shares outstanding by 90.7 million shares, or 17%.
SOUND RISK CULTURE
At Synchrony, we promote and value a sound risk culture which results in (i) better risk management that allows us to identify, assess, and mitigate risks more efficiently; (ii) improved compliance that helps us to adhere to relevant laws, regulations and ethical standards; (iii) better decision-making by encouraging open and honest communication; (iv) a stronger reputation which helps retain customers, employees, and investors; and (v) increased employee engagement by valuing transparency, accountability, and collaboration helping to reduce turnover.
In addition to day-in-day-out risk oversight of the business, the Company continued to adhere to a rigorous annual process that reviews (i) the behaviors and risk-based outcomes of our leaders and (ii) incentive programs individuals or groups of individuals who could, together, put the Company at risk. Both of these processes and associated results are reviewed with the Board and confirmed a strong risk culture at Synchrony, evidenced in part, by an independent third party risk assessment of our Company annual incentive plan that highlighted no concerns and an internal process that distills a company-wide set of risk events, to issues being investigated, to adverse risk outcomes that are discussed after root causes are identified and appropriate actions are taken.
EQUITY, DIVERSITY, INCLUSION, AND CITIZENSHIP
Pay Equity – since 2018, Synchrony has hired an independent third party to analyze pay equity for all employees. In 2022, Synchrony continued our annual practice of reviewing the Company’s pay equity for all employees globally, including base pay, cash incentive plans, and stock-based compensation. The third party analysis in 2022 stated “the base pay gap is at an all-time low and the U.S. gap is effectively eliminated.” The combined results of the pay equity analysis and our investment of more than $5 million over the past five years underpin our goal of 100% pay equity for employees across genders globally and across racial/ ethnic groups in the United States as well as our commitment to improve Synchrony’s compensation processes to better support equity. Synchrony is committed to continuing our global pay equity analysis and disclosing the results each year.
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OMPENSATION MATTERS
New Way of Working – realizing that employees have diverse needs and to help all employees feel included in Synchrony’s culture, the Company continues to provide flexibility on where employees work. Feedback from our workforce and externally by potential employees wanting to work at an inclusive culture has been tremendous. Turnover remains reasonable, applicant pools have jumped by 30% compared to pre-pandemic levels and business results continue to improve in spite of difficult economic conditions.
Inclusive Culture – at Synchrony, we believe a strong employee culture that supports EDIC bolsters business results by:
| • | Attracting and retaining top talent: A positive employee culture attracts job seekers who are looking for a supportive and engaging workplace. This has helped mitigate turnover and improve employee retention. |
| • | Boosting employee morale and engagement: A supportive work environment can increase employee morale and engagement, leading to higher productivity and better job performance. |
| • | Improving teamwork and collaboration: A positive employee culture fosters collaboration and teamwork, which can lead to better problem-solving, more efficient decision-making, and improved results. |
| • | Building a positive company reputation: A strong employee culture can enhance a company’s reputation and help attract better talent, new customers, investors, and business partners. |
Since 2016, Synchrony has asked employees for anonymous feedback on our culture through an annual survey and open-ended questions performed by an independent third party – Great Place to Work.® In that time, we have steadily improved our ranking to the top 20 in 2023 in the United States and continue to strive to improve the culture at Synchrony by reviewing feedback, asking employees for detailed examples and addressing employee needs.
Diversity – additionally, our ability to cultivate and sustain a diverse workforce that reflects our customers and communities we serve continues to be a factor used by our Board in determining bonus funding for more than 4,500 leaders across the Company. This focus has resulted in year over year improvement in diverse demographics by
increasing representation of Blacks and Hispanics across leadership in the United States and increasing the number of females in leadership roles globally. As of December 2022, our workforce in the United States comprised 47% non-white, including 20% Black, 16% Hispanic, 7% Asian and globally, 61% female.
Synchrony has made EDIC a continued priority and a strategic imperative for the Company by tying these values to our annual incentive plan and by creating a culture that enables every colleague to be their complete, authentic self – evidenced by our Great Place to Work® ranking, pay equity results, low turnover, and large candidate pools for open positions.
SUPPORTING OUR COMMUNITIES
Over the last four years, Synchrony’s community development lending and investment activities totaled more than $1.6 billion. In 2022, Synchrony continued to support our communities in a variety of ways including (i) supplier diversity; (ii) financial education; (iii) skills and career development; and (iv) investment in diverse startups. Synchrony was recognized for the fourth year in a row on JUST Capital’s Top 100 list of America’s Most Just Companies.
| • | Supplier Diversity – Our increased efforts to support diverse suppliers have increased diverse representation in companies included in our RFPs. In 2022, we achieved a 200% increase from prior year in the number of diverse suppliers included in RFPs. Of the diverse suppliers included in RFPs, nearly 80% were selected to do business with Synchrony. As a result, we ended 2022 with our diverse supplier spend increasing by 31% from 2021. |
| • | Financial Education and Inclusion – Synchrony participates in Project REACh – Roundtable for Economic Access and Change – as a member on the steering committee of the Alternative Credit Assessment Utility Workstream, one of four workstreams under Project REACh, working to improve credit availability and consumer financial literacy for underserved communities, individuals and small businesses. In 2022, Synchrony began utilizing bank and deposit account data made available through Project REACh to extend credit to the “credit invisible” population — consumers who have no record at the credit bureau or no trade lines at the credit bureau. |
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COMPENSATION MATTERS
| • | Skilling and Career Development – Synchrony supports multiple partnerships with nonprofit organizations already on the front lines of bringing education, skills training and career placement to the underserved in their communities including Latinx Executive Alliance, The Mom Project, AfroTech, and The Great Transformation organizations. In the past two years, we have invested $50 million in helping underrepresented groups acquire the skills, resources and training they need to advance their careers and livelihoods. Our new multi-million-dollar state- of-the-art Skills Academy holds a number of community programs focused on skilling and reskilling the local workforce. |
| • | Investment in Diverse Startups – Our Synchrony Ventures team has executed on opportunities to support our EDIC goals. In 2021, Synchrony Ventures committed $15 million in venture capital funds led by diverse partners with a track record of investing in minority-owned startups. Since our initial commitment, Synchrony has engaged with the partner funds to support their investment process and the growth of their portfolio companies. In 2022, Synchrony Ventures committed a further $5 million to support this strategy. In 2021, our Synchrony Ventures team committed up to $100 million towards opportunities spearheaded by Ariel Alternatives, a private equity subsidiary of Ariel Investments, LLC, whose mission is to scale sustainable minority-owned businesses and position these companies as leading suppliers to Fortune 500 companies. In 2023, Ariel Alternatives’ Project Black Fund, and Synchrony’s $100 million investment in this fund, was announced. Project Black invests in middle-market companies that are not currently minority owned, as well as existing Black- and Hispanic-owned businesses, providing capital, resources and minority executive talent. Under Project Black’s ownership, these companies are expected to be transformed into certified minority business enterprises of scale to fuel Fortune 500 vendor and supply chain diversity. Synchrony, along with other investors, plans to explore collaboration opportunities with portfolio company management teams to pursue growth strategies. We believe this strategic initiative will generate jobs, economic growth and |
| equality within underrepresented populations from the entry level to the boardroom. This important initiative builds on Synchrony’s ongoing goal to treat equity, diversity and inclusion as a strategic business imperative and advance long-term progress across all areas of our business and communities. |
SUPPORTING OUR EMPLOYEES
Based on feedback from employees, in 2022, we continued to invest in our people through enhancements in both mental and physical wellness, compensation, benefits, flexibility and career development. We maintained our support for employees to choose where and how they work best which allows our diverse workforce – with diverse needs – the ability to choose the option that works best for them and to reap the benefits of greater work/life balance.
We also continue to recognize the important role our associates play in driving our business forward. In 2022, Synchrony funded its performance plus bonus program for full-time, frontline hourly associates in our U.S. contact centers at $1,500, our highest ever payout, up from $1,200 in 2021 and $750 in 2020. In addition, in the first quarter of 2023, we paid a special one-time inflation bonus of $1,500 to our full-time non-exempt and other employees to help alleviate the impacts of inflation.
Some of the additional changes in 2022 to support employees include:
| • | Financial Wellness – We implemented two new financial wellness programs for employees: (i) an educational financial website to help Synchrony employees sharpen their personal money management skills and make smart decisions about spending their money, building credit, saving for retirement, reducing debt and investing wisely; and (ii) Money Talks — a series featuring Synchrony employees sharing candid experiences about managing their money and tips on doing it well, or at least doing it better. To encourage involvement, we offered to make a $100 donation to each participant’s favorite eligible charity. We also continue to make free, relatable personal finance resources available on synchrony.com and synchronybank.com through our Money 360 |
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COMPENSATION MATTERS
| program. Synchrony is proud to be the founding sponsor of Millie, a magazine dedicated to helping women achieve their financial goals. This platform is devoted to women and money—earning it, saving it, investing it, spending it and talking about it. |
| • | Maternity/Parental Leave – we increased our combined maternity and parental leave to an industry-leading 22 weeks of 100% paid leave; simplified the process of taking the leave by moving maternity leave from short-term disability to a Synchrony benefit; removed the waiting period for new employees; and allow employees to take their leave when they need it – any time within 12 months before or after the date of birth/adoption. |
| • | Sabbaticals – In 2022, we launched the Synchrony Sabbatical and Employee Balance program to let employees reduce their schedules or take anywhere from one to 12 months leave while retaining benefits. It’s part of our broader commitment to flexibility and investments in our people’s well-being. Employees receive a portion of their base salary during the time of the sabbatical to help cover benefits. We also have the Employee Balance Program, a temporary reduced schedule program (20 hours a week). Here too, employees can return to their regular schedule after the program ends without sacrificing benefits. |
| • | Well-Being Coaches – During the pandemic we expanded our well-being support for employees by adding dedicated coaches with diverse backgrounds that match our workforce. In 2022, we increased the number of dedicated coaches to 15 which allows for speedy access and even more varied backgrounds for employees to choose. |
| • | Gender Affirming Benefits – In 2022, we expanded our Gender Affirming coverage to include the most common and safe surgeries available. This is a special and unique benefit that Synchrony offers above and beyond what others in the industry currently provide. |
| • | Fertility and Family Planning – We enhanced our fertility benefit from a dollar amount to a more comprehensive and easy-to use fertility program that covers multiple paths to parenthood, including couples struggling with fertility, LGBTQ+ families, single parents by choice and singles/ couples who require donor tissue. The program includes three cycles of fertility treatment and covers cost from beginning to end. |
| • | Tuition Reimbursement – Synchrony has an industry leading tuition reimbursement program that provides up to $20,000 per year for full-time employees and $5,000 per year for part-time employees and up to $9,000 in reskilling education. It covers degrees relevant to their job as well as healthcare and education-related degree programs. In addition, Synchrony covers academic fees of up to $4,000 per year. In partnership with the Bright Horizons EdAssist program in 2022, Synchrony can now pay employees’ tuition directly through our Debt-Free Tuition option, offering no out-of-pocket cost. |
BUSINESS AND ANALYSISFINANCIAL RESULTS
Executive SummaryOur core strategy to drive sustainable growth at attractive risk-adjusted returns is founded on three primary objectives of (i) Grow our existing partners and win new partners; (ii) Diversify our programs, products and markets; and (iii) Deliver best-in-class customer experiences.
Our Named Executive Officers – The executive officers whose compensationFocusing on these objectives, we discussdelivered the following strategic commercial results in this Compensation Discussion and Analysis and whom we refer to as our named executive officers (“NEOs”) are Margaret M. Keane, President and CEO; Brian D. Doubles, Executive Vice President, CFO; Glenn P. Marino, Executive Vice President, CEO – Payment Solutions; Jonathan S. Mothner, Executive Vice President, General Counsel and Secretary; and Thomas M. Quindlen, Executive Vice President and CEO – Retail Card.2022:
2015 Performance– Synchrony Financial performed very well in 2015 compared to goals established by the MDCC at the beginning of the year as well as to our direct peers (Discover Financial Services, Capital One, American Express).
| • | Expanded and retained partners with 30+ new partner deals and 50+ partner renewals, including Lowe’s |
| • | Diversified credit programs, partners, and markets through both organic and acquired capabilities including expansion of Health & Wellness, partnerships with third party digital platforms that expand our reach with Clover and Epic Systems, and through Synchrony’s Pay Later solutions, including pay in 4 and pay monthly options. |
| • | Grew our customer base and purchase volume with approximately 24 million new accounts and over $180 billion in purchase volume (a company record). |
We generatedaccomplished all these strategic commercial successes while maintaining strong financial performance, growing our core business through all three sales platforms. We grew loan receivables by 11% over 2014, increased net income by 5% over 2014 and achieved our target efficiency ratio of less than 34%. We successfully completed our Separation from GE, becoming a fully stand-alone company in November. We forged new relationships, renewals and programs with major partners like Amazon, Chevron, PayPal, Citgo,performance. The Container Store, Stash Hotel Rewards, Guitar Center and Mattress Firm. WeCompany continued to build for the future, successfully enabling the use of mobile payment technology, including Apple Pay and Samsung Pay, and enhancing our Customer Relationship Management analytics and loyalty capabilities. We maintainedoperate with a strong balance sheet with robust capital and liquidity levels andthrough continued strength in our diversified funding sources, growing direct deposits by 51%strategy, including deposit balance growth of over 2014.
The following charts show our$9 billion, and ending CET1 of 12.8%. With both commercial and financial success highlighted below, we believe the business has been performing well and has the foundation to sustain its performance in 2015 compared to 2014.into the future.
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The following charts show our performance in 2015 compared to direct peers.
FISCAL YEAR 2022 FINANCIAL PERFORMANCE HIGHLIGHTS • $3.0 billion in net earnings • 3.1% return on assets • $92.5 billion in loan receivables • $3.8 billion in capital returned to shareholders • $6.15 earnings per diluted common share • 37.2% Efficiency Ratio* OUR NAMED EXECUTIVE OFFICERS The executive officers whose compensation we discuss in this CD&A – our NEOs for 2022 – are Margaret M. Keane, Executive Chair and former CEO; Brian D. Doubles, President and CEO; Brian J. Wenzel, Sr., Executive Vice President, CFO; Thomas M. Quindlen, Executive Vice President and CEO—Diversified & Value and Lifestyle; Carol D. Juel, Executive Vice President and Chief Technology and Operating Officer. In October 2022, the Board of the Company approved the following changes to roles and responsibilities of our NEOs effective January 1, 2023: • Thomas Quindlen retired as Executive Vice President and CEO of the Diversified & Value and Lifestyle sales platforms and was replaced by Maran Nalluswami effective January 1, 2023. Mr. Quindlen agreed to continue in an advisory role until March 2023 as a part of the planned succession transition. *Efficiency Ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income. | STRONG NET EARNINGS $3.0B $6.15 DILUTED EARNINGS PER SHARE RETURNED CAPITAL TO STOCKHOLDERS $3.8B |
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COMPENSATION MATTERS
COMPENSATION PHILOSOPHY
TARGET COMPENSATION
A majority of our NEOs’ compensation is performance-based and therefore at risk. The only fixed compensation paid is base salary, which represents approximately 10% of the CEO’s total direct compensation and no more than 21% of the other NEOs’ total direct compensation as shown below in the 2022 mix of direct pay charts for our CEO and CFO:
Below we illustrate our CEO Target pay from 2018 to 2022 and alignment with market and our compensation philosophy. For each year we have shown market median as reported in proxy filings by peer companies that year. CEO Direct Pay below for years 2018 through 2020 reflects target pay for Margaret Keane while CEO. CEO Direct Pay for 2021 and 2022 reflect target pay for Brian Doubles as CEO.
SYNCHRONY CEO DIRECT PAY
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COMPENSATION MATTERS
Compensation Philosophy – One of the key principles guiding Synchrony’s executive compensation program is that compensation programs should measure business and individual performance against both qualitative and quantitative goals and objectives. SYNCHRONY PROGRAM PRINCIPLES
Synchrony’s executive compensation program is intended to discourage excessive or imprudent risk-taking while at the same time promoting and supporting our key compensation principles, which include our performance, our values, market competitiveness, internal equity, fair customer treatment and employees’ ability to raise concerns. The program is also designed to be consistent with our safety and soundness and to identify, measure, monitor and control incentive compensation arrangements.
Major Compensation Programs – In November 2015, we became a fully stand-alone company following the successful completion of GE’s offer to exchange all of the Synchrony shares it owned for shares of GE common stock. From a compensation standpoint, effective as of November 18, 2015, our U.S. employees stopped participating in any GE compensation and benefit plans and began participating in Synchrony compensation and benefit plans. Accordingly, the only components of our NEOs’ 2015 compensation that were based on GE/GECC plans are interest amounts accrued on GE deferred compensation amounts, the accrual of GE pension benefits and GE perquisites, all from January 1 to November 17, as well as the formulaic payout of GE’s Long-Term Performance Award (“LTPA”) for 2013-2015, which were granted to our NEOs in 2013 when we were a wholly-owned subsidiary of GECC. Since our IPO in July 2014, our employees have been granted equity awards based on our common stock pursuant to the Synchrony Financial 2014 Long-Term Incentive Plan. The chart below shows our NEOs’ participation in major compensation programs for 2015.
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Mix of Pay – The mix of target pay in 2015 for our CEO and CFO was as follows:
In 2016, the mix of pay will reflect an SYF long-term performance program that pays out based on performance versus pre-established financial goals over a three-year performance period. This plan will raise the incentive-based target pay for our NEOs.
Strong Governance– Our MDCC has implemented the following governance measures as part of our executive compensation programs:
Compensation Philosophy
Synchrony Program Principles
One of the key principles guiding Synchrony’s executive compensation program is that compensation programs should measure business and individual performance against both qualitative and quantitative goals and objectives. Synchrony’s executive compensation program is intended to discourage excessive or imprudent risk-takingrisk taking while at the same time promoting and supporting the key principles outlined below. The program is also designed to be consistent with our safety and soundness and to identify, measure, monitor and control incentive compensation arrangements.
The key principles guiding this program and underlying the oversight of thisour program by Synchrony’s MDCC are:
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| • | Values—compensation programs are also linked to how employees demonstrate the behaviors and values expected of our employees; |
| • | Stockholder Alignment—compensation programs should be designed to align management incentives with the creation of stockholder returns over the long-term; |
| • | Market Competitiveness—compensation programs should be competitive with the external labor markets; |
| • | Internal Equity—compensation programs should be internally equitable, subject to the employee’s experience, performance and other relevant factors; |
| • | Prudent Risk—compensation programs, particularly in the form of incentive compensation, must not encourage employees to expose the Company to inappropriate or excessive risks and should be based in part on the long-term performance outcomes of risks taken. Employees should take risks only within approved policy limits, in accordance with the MDCC charter and key practices and in consideration of Synchrony’s ability to effectively identify and manage such risks, including credit, operational and reputational risks; |
| • | Fair Customer Treatment—compensation programs should encourage employees to follow established Company procedures and to treat customers fairly; and |
| • | Reporting Concerns—compensation programs should be designed in such a way as to encourage employees to raise concerns without fear of retaliation. |
The consistent application of these design principles enables Synchrony to maintain compensation
programs that are reasonable and balanced, and that effectively attract, retain, motivate and engage employees who strive to achieve the mission, goals and objectives of Synchrony in a way that is compatiblealigned with effective risk management controls. A robust performance review process iscontrols and long-term stockholder value.
KEY CONSIDERATIONS IN SETTING COMPENSATION
During 2022, Synchrony’s compensation program – in conjunction with our culture, our flexibility in the way we work, and new or expanded benefit programs supporting employees – helped grow the Company. Synchrony grew loan receivables while maintaining turnover below industry norms which sustained a critical element in all reward decisions.positive customer and partner experience.
Key Considerations in Setting Compensation
For 2015, we usedThe MDCC continued to use the following considerations and philosophy outlined below in setting compensation for our NEOs:NEOs and did not change the overall philosophy for our pay programs in 2022. In light of the current labor market and to align NEO incentive pay in the context of 2022 performance the MDCC considered the substantial achievement of the Company’s improvement in cultural and strategic objectives as well as financial results when making decisions on pay for 2022. The details of the impact of these factors are provided in 2022 Compensation Elements section, below.
Consistent and sustainable performance.Sustainable Performance
Our executive compensation program provides the greatest pay opportunity forwhen executives who demonstrate superior performance for sustained periods of time. It also rewards executives for executing our Company’s strategy through business cycles, so that the achievement of long-term strategic objectives is not compromised by short-term considerations. The emphasis on consistent performance affects annual salary and equity incentive compensation. With the prior year’s salary and grant serving as an initial basis for consideration, such awardsthe final determinations for salary and grants are determined based on an assessment of an executive’s past performance and expected future contributions. Because current-year, past and sustainable performance are incorporated into compensation decisions, any percentage increase or decrease in the amount of total annual compensation tends to be more gradual than in a framework that is focused solely or largely on current-year performance.
Future pay opportunity versus current pay.
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COMPENSATION MATTERS
Balanced Compensation Mix
We strive to provide an appropriate mix of compensation elements to achieve a balance between currentshort versus long-term deferred compensation, cash versus equity incentive compensation and other features that cause the amounts ultimately received by the NEOs to appropriately reflect risk and risk outcomes. Cash payments primarily, but not exclusively, reward more recent performance, whereas equity awards encourage our NEOs to continue to deliver results over a longer period, align our executives’ interests with the interests of time,our stockholders and serve as a retention tool. We believe that the compensation paid or awarded to our NEOs should be more heavily weighted towardstoward rewards based on our Company’s sustained operating performance against both internal goals and relative to peers, as well as our stock price performance over the long-term.multiple years.
Qualitative and quantitative factors.Quantitative Factors
Quantitative formulas are not used exclusively in determining the amount of compensation. While quantitative calculations and formulas set the majority of funding and capmaximum award levels for our performance-based programs, the MDCC can use qualitative factors such as performance against approved cultural goals, improvement in the context ofcertain environmental, social and governance areas, the economic environment relative to other companies, a track recordrisk considerations, execution of integrity, good judgment,our strategic plan and leadership competencies/values. In 2021, the visionMDCC changed the annual incentive program to include 20% weighting on Strategy and ability to create further growth,Culture, the ability to lead others, and other considerations that cause the amounts ultimately received by the NEOs to appropriately reflect risk and risk outcomes.details of which are provided below.
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Consideration of risk.Our compensation program is balanced, focused on the long termlong-term and takes into consideration the full range and duration of risks associated with
an NEO’s activities. Under this structure, through clawback policies and other program features, the highest amount of compensation can be achieved through consistent superior performance but only within the limits of our stated risk appetite. In addition, significant portions of compensation are earned only over the longer term and may be adjusted during the vesting period for risk outcomes. This provides strong incentives for executives to manage our Company for the long termlong-term while avoiding excessive risk-taking in the short term.short-term. As discussed further below under “Compensation Governance – Compensation and Risk,” Synchrony’s MDCC reviews the relationship between our risk management policies and practices and the incentive compensation provided to our NEOs.
Peer Company Pay.Pay
We also considered compensation levels and pay practices at our direct peers and other peer companies when making Synchrony Financial equity grants in 2015. The list of peer companies used for understanding industry pay practices andsetting target pay levels for 2015 includes2022, targeting median pay among peers with additional consideration based on the size, scope and impact of the executive’s role, market data, leadership skills, experience and performance. The peer group was selected to provide a credible representation for assessing the competitiveness of executive compensation (both in amounts and structure) as well as for performance comparisons for annual and long-term incentives. Our peer group reflects publicly traded financial services companies headquartered in the United States considering assets, annual revenue and market capitalization equal to approximately one-half to two-times Synchrony’s size. At the time of the peer group selection for 2022 compensation decisions, Synchrony was at the peer 40th percentile in assets, 50th percentile in revenue and 42nd percentile in market capitalization.
For 2022, upon the recommendation of Meridian Compensation Partners, LLC (“Meridian”), the MDCC maintained the same peer group as 2021, listed below.
| CONSUMER FINANCE | DATA PROCESSING | COMMERCIAL BANKS | ||
Ally Financial Inc. | Fidelity National Information Services, Inc. | Citizens Financial Group, Inc. | ||
American Express Company | Fiserv, Inc. | Fifth Third Bancorp | ||
Bread Financial Holdings | Global Payments Inc. | Huntington Bancshares Incorporated | ||
Capital One Financial Corporation | Mastercard Incorporated | KeyCorp | ||
Discover Financial Services | PayPal Holdings, Inc. | M&T Bank Corporation | ||
Visa Inc. | Regions Financial Corporation | |||
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COMPENSATION MATTERS
COMPENSATION GOVERNANCE
2022 SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION
At our 2022 annual meeting of stockholders, our investors supported the compensation for our named executive officers with more than 94% of the votes approving the advisory say-on-pay item. Our MDCC considers the results of our say-on-pay advisory vote as part of its review of our overall compensation programs and policies. In 2022, we continued our regular engagement with stakeholders regarding our compensation program. We also engaged with proxy advisory firms and sought regulatory perspectives.
BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES
The MDCC has implemented the following financial services companies.measures as part of our executive compensation programs:
Consumer Finance
| WHAT WE DO | ||
| Substantial portion of executive pay based on performance against goals set by the MDCC | |
| Risk governance framework underlies compensation decisions | |
| Stock ownership requirements for executive officers | |
| Minimum vesting of 12 months for any options or stock appreciation rights | |
| Minimum vesting of 12 months for any RSUs | |
| Greater percent of equity grants in PSUs (55%) which are performance-based over RSUs (45%) | |
| Compensation subject to claw-back in the event of misconduct in addition to “no fault” in the case of financial restatements for all NEOs | |
| Limited perquisites | |
| Peer company benchmarking, targeting median among peers with additional consideration based on the size, scope and impact of role, market data, leadership skills, length of service and both company and individual performance and contributions | |
| Double-trigger vesting of equity and long-term incentive plan awards upon change in control | |
| Annual “Say-on-Pay” frequency | |
| Independent compensation consultant advises the MDCC | |
| Include relative performance metric via Total Shareholder Return modifier on long-term performance awards linked to stockholder returns relative to peers | |
| WHAT WE DON’T DO | ||
 | No hedging or pledging of Company stock | |
| No employment agreements for executive officers | |
| No tax gross-ups for executive officers | |
| No discretion to accelerate the vesting of awards | |
| No cash buyouts of stock options or stock appreciation rights with exercise prices that are not in-the-money | |
| No payout of dividends on unvested equity prior to the vesting date | |
| No backdating or repricing of stock option awards | |
Ally Financial Inc.
American Express Company2023 ANNUAL MEETING AND PROXY STATEMENT / 45
COMPENSATION MATTERS
Capital One Financial Corporation
2022 COMPENSATION ELEMENTS
CIT Group Inc.
Discover Financial Services
Navient Corporation
Data Processing
MasterCard Incorporated
Visa Inc.
Commercial Banks
BB&T Corporation
Comerica Incorporated
Fifth Third Bancorp
Huntington Bancshares Incorporated
KeyCorp
M&T Bank Corporation
The PNC Financial Services Group, Inc.
Regions Financial Corporation
SunTrust Banks, Inc.
U.S. Bancorp
2015 Compensation Elements
The following summarizes the compensation elements used in 2015for 2022 to reward and retain our NEOs.
Base SalaryBASE SALARY
Base salaries for our NEOs depend on a number ofseveral factors, including the size, scope and impact of their role, the market value associated with their role,data, leadership skills, and values, length of service and individual performance and contributions. Decisions regarding salary increases are affected
The MDCC regularly reviews base salaries and benchmark data provided by the NEOs’ currentMDCC’s independent compensation consultant. For 2022, the MDCC kept salaries for NEOs flat other than reflecting market movement and appropriate transition for the CEO, Brian Doubles, and Chief Technology and Operating Officer, Carol Juel. The MDCC increased Mr. Doubles’ salary from $1,000,000 to $1,100,000 and Ms. Juel’s salary from $650,000 to $700,000.
ANNUAL INCENTIVE
Annual incentive awards to our NEOs (and approximately 4,500 other employees) are made pursuant to Synchrony’s Annual Incentive Plan (“AIP”) with metric weightings and specific goals for threshold, target and maximum payout levels set in January or February each year. Target incentive opportunities are based on market practices for an officer’s role balanced against internal importance of the amounts paid to theirrole.
In February 2022, the MDCC approved the metrics for Synchrony’s Annual Incentive Plan consistent with the prior year based on two weighted quantitative metrics and one qualitative metric with defined goals outlined below. We believe these metrics promote a balanced focus on profit, growth, risk, expenses, strategy and culture.
| • | PPNR (Pre-Provision Net Revenue less Net Charge-Offs – 50% weighting) – a quantitative metric that aligns the interests of executives with the interests of stockholders with a metric focused on pre-tax earnings that neutralizes the impact of change in reserves, but continues to capture credit quality through a reduction of actual charge offs. This metric also mitigates volatility in earnings and more closely aligns management decisions with goals and payouts. |
| • | Average Receivables Growth (30% weighting)—a quantitative metric that focuses executives on expanding the business to drive future earnings. |
| • | Strategy and Culture (20% weighting) — a qualitative metric that drives accountability to a framework focused on goals – approved by the Committee – related to Synchrony’s culture and strategic results. The framework for this metric includes multiple areas of focus including Strategic Impact, New Way of Working, Diversity, Equity, Inclusion and Citizenship, Employee Support and Engagement, and Social Responsibility which are closely aligned to company values. The goals for this metric are approved by the Committee and include targets for product distribution, capital, efficiency, representation, and culture improvement. |
The MDCC established minimum, target and maximum performance levels based on Synchrony’s business plan and financial and economic outlook for the industry. Additionally, goals considered (i) historical performance for Synchrony and our peers, within(ii) achieving our operating plan and/or (iii) beating prior year performance after reflecting accounting or other governance changes. The Annual Incentive Plan metrics, weights, and outside our Company.goals, approved at the February 2022 MDCC meeting and performance against those goals are shown below:
| GOALS | ASSOCIATED PAYOUT | CALCULATION | ||||||||||||||||||||||||||||||
| METRIC | WEIGHT | MIN | TARGET | MAX | MIN | TARGET | MAX | 2022 PERFORMANCE | 2022 WEIGHTED PAYOUT | |||||||||||||||||||||||
PPNR minus Charge-Offs | 50% | $3,000 | $4,000 | $5,000 | 50% | 100% | 200% | $4,808 | 90.4% | |||||||||||||||||||||||
Average Receivables Growth | 30% | 0% | 2.5% | 6.0% | 50% | 100% | 200% | 7.25% | 60.0% | |||||||||||||||||||||||
Strategy & Culture | 20% | Based on Framework | 50% | 100% | 200% | 150.00% | 30.0% | |||||||||||||||||||||||||
| Total Payout: | 180.4% | |||||||||||||||||||||||||||||||
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COMPENSATION MATTERS
The framework approved by the MDCC for Strategy & Culture Metric and associated performance resulting in 30% funding for that metric is shown below:
| COMMUNITY SUPPORT | GREAT PLACE TO WORK® |
| • Funding – through deposit balances which grew by over $9 billion • Capital – $3.8 billion returned to shareholders including a 5% increase in dividends and $3.3 billion share repurchases • Customer Experience and Digital Strategy – reduced call volume by 5 million calls and experienced double-digit improvement in net promotor score for account management tool compared to previous site • Cost Efficiencies – in operations technologies allowed for flat operational headcount while average active accounts grew 1.9%, maintaining Synchrony’s industry leading efficiency ratio of 37.2% | • New Products and Capabilities – developed across platforms including Synchrony Pay Later solutions allowing to pay over a set period of time and Pre-Qual allowing customers to shop with confidence • Renewals/New Program Launches – Lowe’s, Mattress Warehouse, Guitar Center, Cardi’s, Rooms-to-Go • Expanded Distribution through Clover and expanding Synchrony Mastercard prescreen process. | • Education – new “Skills Academy” at Synchrony headquarters, financial education support across our communities, and Education as an Equalizer to support under- represented communities • ESG – Environmental, Social and Governance continued investments and transparency resulting in low-risk rating and “top 10%” ratings by independent ratings firms • Supplier Diversity – focused efforts on using suppliers with diverse ownership resulting in a 200% increase in relationships with diverse suppliers | • Great Place to Work®Survey Results –U.S. #25, India #19, Philippines #2 in 2022 with consistency across diverse and non-diverse groups • Pay Equity – Annual independent pay equity analysis of both base salary and bonus, along with targeted investments resulting in pay equity for employees across genders globally and across racial/ethnic groups in the U.S. • VP and Executive Representation improvement in Black, Hispanic and Female groups through continued focus on leadership development, internal pipelines and external hiring | |||
| NAME | 2022 TARGET ANNUAL INCENTIVE | 2022 ANNUAL INCENTIVE PAYOUT | ||
Brian Doubles | $2,200,000 | $3,968,800 | ||
Brian Wenzel | $700,000 | $1,262,800 | ||
Margaret Keane | $1,762,500 | $3,179,550 | ||
Tom Quindlen | $850,000 | $1,533,400 | ||
Carol Juel | $700,000 | $1,262,800 | ||
Annual Non-Equity Incentive Plan Award2022 LONG-TERM INCENTIVE (LTI) AWARDS
Annual non-equity incentive planOur executives are eligible to receive long-term (equity) awards which are intended to provide compensation that supports multiple goals including to: 1) motivate and reward long-term performance, 2) reinforce an ownership mentality, 3) align our executives with shareholder interests, 4) support retention, and 5) mitigate risk through long-term ownership and stock holdings.
In 2022, NEOs are granted pursuantreceived 45% RSUs and 55% PSUs. Based on industry trends and stakeholder feedback, starting in 2020 the MDCC increased the mix of PSUs to Synchrony Financial’s Annual Incentive Plan and, for 2015, were based on three equally-weighted quantitative55% to further align the interest of management with metrics each as determined in accordance with GAAP. Minimum, target and maximum performance levels are established for each metric and result in funding levels that are applieddesigned to an executive’s target annual incentive. The MDCC may make negative adjustments toreflect long-term success of the weighted funding based on views of company and individual performance such as performance as compared to peers, risk outcomes and other considerations.Company beyond increasing stock price.
Metric weighting, funding goals, actual performance and the payout funding for 2015 are shown below:RESTRICTED STOCK UNITS (RSUs) – 45% OF LTI AWARD
| Metric | Weight | 100% Payout Target | Actual Performance | Calculated Payout* | ||||||||||||
Net Earnings | 1/3 | $ | 2.05B | $ | 2.21B | 150 | % | |||||||||
Loan Receivables Growth | 1/3 | 6 | % | 11 | % | 145 | % | |||||||||
Return on Assets | 1/3 | 2.5 | % | 2.9 | % | 137 | % | |||||||||
Annual RSU and Option Awards
In 2015, ourThe NEOs received annual grants of Synchrony Financial RSUs and stock options under the 2014 Synchrony Financial Long-Term Incentive Plan.in early 2022. The amount of RSUs and stock options awarded to each NEO is based on target incentive levels for each executive, based on the competitive market for their role and subject to adjustment by the MDCC. The 2015 awards were divided betweenIn 2022, the MDCC maintained the vesting period for RSUs (70%) and stock options (30%), with both awards vesting 20%at 1/3 per year over 5three years. Synchrony Financial uses grants of stock options to focus its executives on delivering long-term value to its stockholders because options have value only to the extent that the price of Synchrony stock on the date of exercise exceeds the stock price on the grant date, as well as to retain its executives. Synchrony Financial also grants RSUs to reward and retain executives by offering them the opportunity to receive shares of Synchrony Financial stock on the date the restrictions lapse as long as they continue to be employed by the Company.
2023 ANNUAL MEETING AND PROXY STATEMENT / 47
COMPENSATION MATTERS
PERFORMANCE SHARE UNITS (PSUs) – 55% OF LTI AWARD
Under the Synchrony Financial Transaction Award
In connection with our IPO, to provide an incentive2014 Long-Term Incentive Plan, we issued performance-based, long-term PSUs in 2022 that vest based on financial performance over the 2022-2024 (3-year) performance period. The PSUs will be paid in shares of common stock if we achieve pre-defined goals relating to our cumulative annual diluted earnings per common share (“EPS”) and average return on equity (ROE), each weighted 50%. The MDCC selected and approved the metrics and the goals for threshold, target and stretch with the ultimate award ranging from 0% (if threshold performance is not achieved) up to 150% for achieving stretch performance levels.
Target payout levels set for the 2022–2024 performance period require increased in both normalized EPS growth and Return on Equity over the 3-year PSU grant period compared to prior year grants. Performance below threshold results in forfeiture of the share units allocated to the corresponding performance measure. Dividend equivalents are accrued but not paid until the end of the performance period based on the actual number of shares earned. These performance metrics align the interests of our executives with the interests of stockholders by encouraging growth while ensuring that growth does not come at the cost of lower returns on assets. Grants of PSUs will vest at the end of the three-year period in the event performance conditions are met.
The 2022 PSU grants continue to include a Total Shareholder Return (“TSR”) modifier of +/-20% based on our TSR performance relative to peers. The peer group used to determine the modifier is the same peer group used to set executive pay levels. The details of how the modifier impacts the final payout calculations are shown below:
| PERFORMANCE | MODIFIER* | |||
| Bottom Quartile | 80% | |||
Median | No Impact | |||
Top Quartile | 120% | |||
* Any performance between bottom quartile and median or median and top quartile is linearly interpolated.
Below is a summary of the equity grants made to executives in 2022:
| NAME OF EXECUTIVE | RESTRICTED STOCK UNITS | PERFORMANCE SHARE UNITS | TOTAL | |||
Brian Doubles | $3,690,011 | $4,510,000 | $8,200,011 | |||
Brian Wenzel | $1,350,032 | $1,650,004 | $3,000,036 | |||
Margaret Keane | $2,700,024 | $3,300,008 | $6,000,032 | |||
Tom Quindlen | $1,125,013 | $1,375,016 | $2,500,029 | |||
Carol Juel | $1,170,009 | $1,430,038 | $2,600,047 | |||
48/ 2023 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2020-2022 LONG-TERM PERFORMANCE AWARDS (PSUs) PAYOUTS
In 2020, the MDCC granted performance-based, long-term PSUs that vested based on financial performance over the 2020–2022 performance period. The metrics used during the 3-year cycle were chosen to balance executives’ focus on profitability, returning capital to investors, and growing the Company. Target payouts set for the 2020–2022 performance period required a 10% annual growth in normalized EPS over the period. Target payouts also required a 17.5% return on equity which was top quartile of historical peer performance at that time. The chart below reflects (i) the performance over the last three years against goals approved at the beginning of the period and (ii) overall negative adjustments to GAAP that neutralized the impact of Walmart, Gap, and BP reserve releases and (iii) neutralizing the impact of new portfolios Verizon and Venmo and (iv) impact of other one-time items including restructuring savings and new deals.
| METRIC | WEIGHT | GOALS | ASSOCIATED PAYOUT | CALCULATION | ||||||||||||||||||||
| MIN | TARGET | MAX | MIN | TARGET | MAX | 2020-2022 PERFORMANCE | 2020-2022 PAYOUT | |||||||||||||||||
Cumulative EPS | 50% | $10 | $12 | $14 | 50% | 100% | 150% | $15.57 | 150.0% | |||||||||||||||
| Return on Equity | 50% | 15.0% | 17.5% | 20.0% | 50% | 100% | 150% | 21.2% | 150.0% | |||||||||||||||
| Weighted Average: | 150.0% | |||||||||||||||||||||||
| TSR Adjustment Factor: | 96.6% | |||||||||||||||||||||||
| Total Payout: | 145.0% | |||||||||||||||||||||||
TSR ADJUSTMENT FACTOR CALCULATION
For the 2020-2022 three-year performance period, the Company’s Total Shareholder Return was flat which was the 46th percentile of peers, resulting in an adjustment factor of 96.6% and overall downward adjustment of 5%.
OTHER COMPENSATION PROGRAMS AND PRACTICES
SYNCHRONY DEFERRED COMPENSATION PLAN
Our Deferred Compensation Plan does not pay an “above-market” rate of interest and is available to a select group of management teamand highly compensated employees of Synchrony and any of its participating affiliates. Under the plan, eligible employees may elect to remain dedicateddefer up to and to continue their employment with, our Company, we granted them transaction awards, pursuant to which each recipient, including our NEOs, received an amount equal to 100%80% of their base salary in effect asand bonus. The plan administrator will designate two or more investment benchmarks which participants can choose between to determine the rate of return or loss applicable to their deferred compensation amounts. Participants can also make elections regarding the datetime and form of payment of their award plus their 2012 bonus,deferral under the plan, in accordance with 50%Section 409A of the transaction award paid in August 2014 following the completion of the IPO and the remaining 50% paid shortly following the date GE ceased to own at least 50% of our outstanding common stock, which was November 17, 2015. The second half of these awards is reported in the Bonus column in the 2015 Summary Compensation Table.
Synchrony Financial Restoration Plan
The Restoration Plan mirrors the Company’s qualified 401(k) plan by providing a continuation of Company contributions that would have been made to our 401(k) plan, but for various limitations imposed by the Internal Revenue Code along(the “Code”). We have established notional unfunded accounts attributable to participants’ deferrals, which will be adjusted based on participants’ investment elections.
OTHER BENEFITS
In addition to standard health and welfare benefits available to other Synchrony employees, in 2022, Synchrony provided certain executive officers with additional Company contributions that cannot be made to the 401(k) plan. The Restoration Plan account is forfeited if an executive leaves voluntarily prior to age 60. For 2015, each of our NEOs received a credit in his (i) financial counseling and/or her Restoration Plan account,tax preparation services, (ii) supplementary life insurance, and (iii) annual physical examinations, which isare reported in the “All Other Compensation” column in the 20152022 Summary Compensation Table. The supplementary life insurance policies are intended to maintain benefits that existed for certain executives as GE employees prior to the completion of our split-off from GE and in lieu of life insurance benefits that are provided to other Synchrony employees. These policies were frozen in value and participation upon Synchrony’s IPO. While Synchrony could have “bought out” the value of these polices upon IPO, the Company chose to freeze the insurance amount and maintain the policies to help retain senior management through Synchrony’s transition away from GE. The policies require an executive to stay with Synchrony through age 60 to receive the full value of the benefit. The face value of the supplementary life insurance policies for all participants is less than the value of the standard life insurance program for Synchrony employees. Brian Doubles voluntarily forfeited the supplementary life insurance program and transitioned to the standard group term life plan offered to other employees when he became CEO.
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2023 ANNUAL MEETING AND PROXY STATEMENT / 49
COMPENSATION MATTERS
Other Compensation
OTHER COMPENSATION PRACTICES
For the period from January 1 to November 17, 2015, our NEOs received other benefits from GE, reflected in “– 2015 All Other Compensation Table,” consistent with those provided to certain GE executives, such as a leased car, financial counseling and tax preparation. In 2016, Synchrony Financial will provide its executive officers with financial counseling and tax preparation services, and annual physical examinations, but not leased cars.STOCK OWNERSHIP GUIDELINES
GE LTPAs
In 2013, as part of a broader 3-year GE performance program, GE granted contingent LTPAs to its executives across GE, including our NEOs, which were payable if GE achieved, on an overall basis for a three-year period (2013 through 2015), specified goals based on four equally weighted GE-specific performance metrics. These performance metrics were: (i) cumulative operating earnings per share, (ii) cumulative total cash generation, (iii) 2015 industrial earnings as a percentage of total GE earnings and (iv) 2015 return on total capital. The awards are based on achieving threshold, target or maximum levels for any of the performance metrics, with payments prorated for performance between the established levels. For each NEO, the award was based on a multiple of base salary and incentive compensation.
GE has reported that it achieved near-target performance levels for the 2013-2015 period. As a result, the LTPAs were paid out to our NEOs at 124% of the target payout, which corresponds to a .93X multiple (base salary + bonus, subject to a cap of 125% of an executive’s 2014 bonus) for Ms. Keane and a .62X multiple for our other NEOs. The LTPAs are reported in the Non-Equity Incentive Plan Awards column in the 2015 Summary Compensation Table.
In 2016, we adopted our own performance-based, long-term incentive program, ultimately payable in shares of our common stock, linked to financial performance over the 2016-2018 performance period.
GE Deferred Compensation
GE periodically offers both a deferred salary plan and a deferred bonus plan, with only the deferred salary plan providing for payment of an “above-market” rate of interest as defined by the SEC. These plans are available to eligible employees in GE’s executive band and above, including our NEOs. These plans are described in further detail in the narrative accompanying the “– 2015 Nonqualified Deferred Compensation Table.” Because of the Separation from GE, payouts for our NEOs will begin to occur in 2016 and in accordance with participants’ payout elections.
In 2015, effective for 2016, we adopted our own deferred compensation plan, which will not pay an “above-market” rate of interest.
GE Pension Plans
Through November 17, 2015, our NEOs were eligible to participate in the same GE Pension Plan, GE Supplementary Pension Plan and GE Excess Benefits Plan in which other eligible GE executives and employees participate. The GE Pension Plan is a broad-based tax-qualified plan under which eligible employees may retire at age 60 or later. Unlike the GE Pension Plan, the GE Supplementary Pension Plan and the GE Excess Benefits Plan are unfunded, unsecured obligations of GE and are not qualified for tax purposes. These plans are described in further detail in the narrative accompanying the “– 2015 GE Pension Benefits Table.” Our NEOs’ benefits under these plans continued to accrue until the Separation, at which time the benefits vested and stopped accruing any additional value. We will reimburse GE for the payment of pension benefits under the GE Supplementary Pension Plan and the GE Excess Benefits Plan when our NEOs are entitled to receive them.
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We do not have and do not intend to establish our own tax-qualified defined benefit pension plan for our employees, including our NEOs.
Performance Objectives and Evaluations for Our Named Executive Officers for 2015
At the beginning of 2015, Ms. Keane developed the objectives that she believed should be achieved for our Company to be successful. These objectives include both quantitative financial measurements and qualitative strategic, operational and risk management considerations and are focused on the factors that Ms. Keane believes create long-term shareowner value. Ms. Keane’s 2015 performance was evaluated and measured against these goals by Synchrony’s MDCC to develop a recommendation as to the appropriate incentive compensation awards for her. The amount of her incentive compensation was ultimately approved by Synchrony’s MDCC, based on their discretion and judgment. Ms. Keane did not participate in the determination of her compensation.
During 2015, our other NEOs reported directly to Ms. Keane, who developed their objectives based on our Company’s objectives. Each of our other NEOs’ objectives include both quantitative financial measurements and qualitative strategic, operational and risk management considerations affecting our Company and the sales platforms or functions that they lead. Each of our other NEOs’ 2015 performance was evaluated and measured against their respective goals by Synchrony’s MDCC, as well as by Ms. Keane. The amount of their incentive compensation was ultimately approved by Synchrony’s MDCC, based on their discretion and judgment. None of our other NEOs participated in the determination of their compensation.
2015 Performance Objectives and Achievements
Under Ms. Keane’s leadership, management delivered the following results on the qualitative and quantitative performance goals set for our Company by Ms. Keane with respect to 2015:
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2015 Compensation Decisions
Ms. Keane
Synchrony’s MDCC believes that Ms. Keane performed very well in 2015 in executing on the performance framework and 2015 financial objectives outlined above.
Mr. Doubles
In addition to Mr. Doubles’ contributions toward our Company’s objectives described above, Ms. Keane specifically recognized that Mr. Doubles provided strong leadership of our finance organization, including – leading key aspects of the Separation from GE, such as obtaining regulatory approvals for the Separation, marketing GE’s exchange offer and completing Separation projects across the finance organization; driving strong deposit growth and successful debt offerings to build a strong balance sheet with diversified funding sources; playing a key role in developing our first independent strategic plan focused on growth and capital allocation; establishing performance analytics tools to help drive insights and sustainable growth; continuing to build strong relationships with investors and analysts; adding significant expertise to key finance functions; and promoting diversity.
Mr. Marino
In addition to his contributions toward our Company’s objectives described above, Ms. Keane specifically recognized that Mr. Marino provided strong leadership of the Payment Solutions sales platform, including – expanding the platform’s presence in key industries by signing new deals with Guitar Center, Mattress Firm, Newegg and The Container Store; increasing repeat sales efforts; renewing key program agreements, including Discount Tire, Sleepy’s, P.C. Richard & Son, Conn’s, Polaris Industries, Mohawk Flooring, Art Van Furniture and MEGA Group USA; and driving deeper digital adoption; migrating off of all GE contracts and technology; increasing participation in SYF’s People with Disabilities Network; enhancing sales controls across all of our platforms; and expanding partner training across 100K+ client locations.
Mr. Mothner
In addition to his contributions toward our Company’s objectives described above, Ms. Keane specifically recognized that Mr. Mothner provided strong leadership of our legal organization, including – leading key aspects of the Separation from GE, including obtaining regulatory approvals for the Separation, preparing the SEC filings for GE’s exchange offer and implementing the legal separation of our operations from GE; driving governance and regulatory excellence, including the process for recruiting and onboarding our new independent directors and building out our public company corporate governance infrastructure; successfully managing litigations and investigations; providing legal support for our broad organic and inorganic growth; and building a strong corporate securities and capital markets legal team.
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Mr. Quindlen
In addition to his contributions toward our Company’s objectives described above, Ms. Keane specifically recognized that Mr. Quindlen provided strong leadership of the Retail Card sales platform – growing the platform within approved risk tolerances, including extending relationships with key partners representing 11% of Retail Card’s loan receivables, as well as winning two new partners; building for the future by entering into co-brand relationships in new industries; preparing for our Separation from GE by helping to support our compliance and risk culture and tone at the top; and promoting diverse leadership.
Other Compensation Practices
Stock Ownership Guidelines
We established stock ownership guidelines in 2014 to require the Company’s Executive Chair, President & CEO and Executive Vice Presidents to own significant amounts of our common stock, thereby aligning theirhelping to ensure alignment of executives’ interests with the interestthose of our stockholders. The stock ownership guideline for our President & CEO and our Executive Chair, is 5six times base salary, and thesalary. The stock ownership guideline for Executive Vice Presidents, including the other 4three NEOs, is 3three times base salary.
Equity Grant Practices
The exerciseguidelines are to be met within five years of being subject to the policy and/or promotion. For the purposes of our stock ownership guidelines, all shares of common stock, RSUs and phantom stock units held by our executives are credited toward ownership levels. All of our NEOs’ stock ownership exceeds the ownership guidelines. Based on our closing stock price on March 2, 2023 of each Synchrony Financial stock option granted to$35.74, our NEOs in 2015 washad the closing pricefollowing ownership base-salary multiples:
NAME OF EXECUTIVE | REQUIRED MULTIPLE | OWNERSHIP AS OF MARCH 2, 2023 | ||
Brian Doubles | 6X | 17.7X | ||
Brian Wenzel | 3X | 4.8X | ||
Margaret Keane | 6X | 26.1X | ||
Tom Quindlen | 3X | 7.2X | ||
Carol Juel | 3X | 5.7X | ||
ANTI-HEDGING AND ANTI-PLEDGING RESTRICTIONS
Our Code of Synchrony Financial’s stock on the date of grant,Conduct, which was April 1, 2015. Synchrony’s MDCC has delegated to the CEO the ability to grant equity-based awards to executives outside of the CEO’s staff to allow the Company to make timely decisions on hiring, performance and retention.
Hedging Restrictions
Our Compensation Key Practices, which applyapplies to all of our employees include(including officers) and directors, includes anti-hedging provisions that prohibit all employees and directors from engaging in transactions in derivatives of or short sellingshort-selling of Synchrony Financial securities, including buying and writing options. We also maintain an anti-pledging policy that prohibits employees and directors from pledging activity in Synchrony securities.
CLAWBACK POLICY
Clawback PolicySince 2018, the Company’s clawback policy has included “no fault” financial restatements for all of our named executive officers. Under the policy, in the event that the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will take action to recover from any current or former executive officer who received any annual or long-term incentive compensation paid, awarded, or granted during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous data, in excess of what would have been paid to the executive officer under the accounting restatement.
UnderAdditionally, under the Company’s policy, if it is determined that an employee at or above a designated executive grade under the Company’s compensation structure has engaged in conduct detrimental to the Company, the Bank or any of the Company’s other subsidiaries, Synchrony’sthe MDCC or, in the case of a Bank employee, the Bank’s Development and Compensation Committee, may take a range of actions to remedy the misconduct, prevent its recurrence, and impose such discipline as would be appropriate. Discipline may vary depending on the facts and circumstances, and may include, without limitation, (a) termination of employment, (b) initiating an action for breach of fiduciary duty, (c) reducing, cancelling or seeking reimbursement of any paid or awarded compensation, and (d) if the conduct resulted in a material inaccuracy in the Company’s financial statements or performance metrics that affects the executive’s compensation, seeking reimbursement of any portion of incentive compensation paid or awarded to the executive that is greater than what would have been paid or awarded if calculated based on the accurate financial statements or performance metrics. If it is determined that an executive engaged in fraudulent misconduct, Synchrony’sthe MDCC or, in the case of a Bank employee, the Bank’s Development and Compensation Committee, will seek such reimbursement. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.authorities, or as otherwise required by any agreement with a stock exchange on which the Company’s securities are listed.
Compensation50/ 2023 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
In light of recent SEC rulemaking regarding clawbacks, we are reviewing our policy and Riskwill make any necessary changes once the related NYSE listing standards have been finalized.
2015 Risk Review ProcessCOMPENSATION AND RISK
RISK REVIEW PROCESS
Synchrony’s risk management culture is strongly supported by a thorough risk review process that focuses on whether the risks we take are within our risk appetite framework. In 2015,Each year, working cross-functionally, our CEO and senior executives from our risk and human resourceresources teams identifiedidentify the individuals considered to be Material Risk
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Takers (“MRTs”) or Material Risk Controllers (“MRCs”). These individuals wereare required to have annual goals and objectives specifically tied to risk and compliance standards. DuringAs part of the fourth quarter,annual process, our Control Function Leaders, our CEO, our Audit Committee, MDCC and Risk Committee conductedconduct assessments on MRTs and MRCs, which tooktake into consideration MRT/MRC behavior in relation to their annual goals and objectives as well as any adverse risk outcomes during the year. These assessments wereare included in each MRT/MRC’s annual performance evaluation. By conducting these risk review processes as well as maintaining full transparency on all of our risk management policies and procedures, we believe that we have been able toeffectively discourage inappropriate risk taking.
Review of Compensation to NEOs Related to Risk ManagementREVIEW OF NEO INCENTIVE COMPENSATION RELATED TO RISK MANAGEMENT
In 2015, Synchrony’sEach year the MDCC reviewedreviews the relationship between our risk management policies and practices and the incentive compensation provided to our NEOs to confirm that their incentive compensation appropriately balances risk and reward and determined that our compensation policies and practices are not reasonably likely to have a material adverse effect on our Company. Synchrony’sThe MDCC metmeets with the CROChief Risk Officer to discuss the annual risk assessment conducted with respect to incentive compensation plans in which all employees (including the NEOs) participate, including whether these arrangements hadhave any features that might encourage excessive risk-takingrisk taking that could threaten the value of the Company. The CRO Chief Risk Officer
also discusseddiscusses the risk mitigation factors reviewed in the annual risk assessment, including the balance between financial and non-financial measures as well as the short-term and long-term oriented measures. Synchrony’sThe MDCC also continues to monitor a separate, ongoing risk assessment by senior management of our broader employee compensation practices consistent with the federal banking regulators’ guidance on sound incentive compensation policies.practices.
Risk Review of Incentive PlansRISK REVIEW OF INCENTIVE PLANS
Each year, we conduct a risk analysis on each of our incentive plans using aplans. In 2022, we hired an outside independent consultant to conduct this risk analysis tool. Thisassessment. The analysis covered 100% of our incentive eligible population and allowed us to gaugeunderstand the degree to which our plans contribute to excessive risk taking. The tool looks at six assessment categories (incentive design, strategic alignment/goal setting, pay opportunity, process, monitoring and administration) for each plan and assigns a rating score basedBased on results. All ofthis review, all our incentive plans were rated such that they conform to or exceed key standards for risk management. Additionally, all incentive plans including any changes are reviewed each year and approved by our Chief Risk and Chief Human ResourceResources Officers.
Tax ConsiderationsROLE OF INDEPENDENT COMPENSATION CONSULTANT
Section 162(m) ofUnder its charter, the Internal Revenue Code provides that no U.S. income tax deduction is allowableMDCC has the authority to a publicly held corporation for non-performance-basedretain such compensation consultants, outside counsel and other advisors as the MDCC may deem appropriate in excess of $1 million paidits sole discretion. In 2022, the MDCC engaged Meridian to a “covered employee” (generally, the NEOs (other than the CFO)). “Performance-based compensation,” which is exempt from the $1 million limitation, must be payable based upon meeting pre-establishedprovide advice regarding market pay levels, strong pay practices and objective performance goals established by our MDCC under a plan that has been approved by shareholders and meets other tax code requirements.
Our policy generally is to seek to qualify various elements of the compensation payable to executives as “performance-based compensation,” although we may pay non-deductible compensation in order to preserve the MDCC’s ability to structure our executive compensation programmatters. Meridian also provided advice to meet the objectives discussed above, includingNominating and Corporate Governance Committee regarding director compensation. Meridian does not provide any other services to reward individualthe MDCC or to Synchrony. The MDCC has determined that Meridian is independent and team performance.does not have any conflicts of interest.
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The Management Development and Compensation CommitteeMDCC of the Board of Directors of Synchrony Financial have reviewed and discussed the Compensation Discussion and Analysis with Synchrony Financial’sSynchrony’s management, and based on our review and discussions with management, we recommend to Synchrony Financial’sSynchrony’s Board of Directors that this Compensation Discussion and Analysis be included in this proxy statement.
Respectfully submitted by the Management Development and Compensation CommitteeMDCC of the Board.
Richard C. Hartnack,Laurel J. Richie, Chair
Fernando Aguirre
Jeffrey G. Naylor
Laurel J. RichieEllen M. Zane
| |
2023 ANNUAL MEETING AND PROXY STATEMENT / 51
COMPENSATION MATTERS
2022 EXECUTIVE COMPENSATION
The following table contains 20152022 compensation information for our NEOs.
2015 Summary Compensation Table2022 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Option Awards(2)/(3) | Non-Equity Incentive Plan Awards(4) | Change in Pension and Nonqualified Deferred Comp. | All Other Comp.(6) | SEC Total | SEC Total Without Change in Pension Value | ||||||||||||||||||||||||||||||
Margaret Keane | ||||||||||||||||||||||||||||||||||||||||
President and | 2015 | $ | 933,893 | $ | 912,500 | $ | 1,400,016 | $ | 599,742 | $ | 5,318,600 | $ | 3,077,387 | $ | 108,812 | $ | 12,350,949 | $ | 9,282,693 | |||||||||||||||||||||
Chief Executive Officer | 2014 | $ | 881,250 | $ | 2,287,500 | $ | 6,156,088 | $ | 2,636,436 | $ | 0 | $ | 2,708,286 | $ | 114,101 | $ | 14,783,661 | $ | 12,083,638 | |||||||||||||||||||||
| 2013 | $ | 825,000 | $ | 1,150,000 | $ | 0 | $ | 1,130,000 | $ | 0 | $ | 563,573 | $ | 95,255 | $ | 3,763,828 | $ | 3,207,733 | ||||||||||||||||||||||
Brian Doubles | ||||||||||||||||||||||||||||||||||||||||
Executive Vice President | 2015 | $ | 631,394 | $ | 427,500 | $ | 456,758 | $ | 195,672 | $ | 1,561,500 | $ | 376,728 | $ | 38,631 | $ | 3,688,184 | $ | 3,312,266 | |||||||||||||||||||||
and Chief Financial Officer | 2014 | $ | 555,000 | $ | 877,500 | $ | 3,256,773 | $ | 1,394,589 | $ | 0 | $ | 694,487 | $ | 28,292 | $ | 6,806,641 | $ | 6,112,900 | |||||||||||||||||||||
| 2013 | $ | 527,500 | $ | 330,000 | $ | 0 | $ | 339,000 | $ | 0 | $ | 57,570 | $ | 29,657 | $ | 1,283,727 | $ | 1,226,845 | ||||||||||||||||||||||
Glenn Marino | ||||||||||||||||||||||||||||||||||||||||
Executive Vice President, | 2015 | $ | 712,077 | $ | 577,500 | $ | 394,813 | $ | 169,127 | $ | 1,723,000 | $ | 943,196 | $ | 113,799 | $ | 4,633,512 | $ | 3,715,171 | |||||||||||||||||||||
Chief Executive Officer – | 2014 | $ | 682,500 | 1,152,500 | $ | 2,451,326 | $ | 1,049,687 | $ | 0 | $ | 1,558,558 | $ | 98,126 | $ | 6,992,697 | $ | 5,456,653 | ||||||||||||||||||||||
Payment Solutions and | 2013 | $ | 665,000 | $ | 530,000 | $ | 0 | $ | 339,000 | $ | 0 | $ | 277,460 | $ | 120,309 | $ | 1,931,769 | $ | 1,674,705 | |||||||||||||||||||||
Chief Commercial Leader | ||||||||||||||||||||||||||||||||||||||||
Jonathan Mothner | ||||||||||||||||||||||||||||||||||||||||
Executive Vice President, | 2015 | $ | 660,447 | $ | 425,000 | $ | 364,008 | $ | 155,939 | $ | 1,431,900 | $ | 623,537 | $ | 43,447 | $ | 3,704,279 | $ | 3,080,742 | |||||||||||||||||||||
Secretary and | 2014 | $ | 600,000 | $ | 825,000 | $ | 1,932,702 | $ | 827,541 | $ | 0 | $ | 839,288 | $ | 33,785 | $ | 5,058,316 | $ | 4,219,028 | |||||||||||||||||||||
General Counsel | 2013 | $ | 562,500 | $ | 375,000 | $ | 0 | $ | 158,200 | $ | 0 | $ | 51,290 | $ | 29,868 | $ | 1,176,858 | $ | 1,125,568 | |||||||||||||||||||||
Tom Quindlen | ||||||||||||||||||||||||||||||||||||||||
Executive Vice President | 2015 | $ | 782,825 | $ | 730,000 | $ | 502,434 | $ | 215,232 | $ | 2,313,400 | $ | 1,226,711 | $ | 108,802 | $ | 5,879,404 | $ | 4,690,928 | |||||||||||||||||||||
and Chief Executive | 2014 | $ | 750,000 | $ | 1,545,000 | $ | 3,144,956 | $ | 1,346,753 | $ | 0 | $ | 2,568,861 | $ | 73,951 | $ | 9,429,521 | $ | 6,895,429 | |||||||||||||||||||||
Officer – Retail Card | 2013 | $ | 670,000 | $ | 760,000 | $ | 0 | $ | 497,200 | $ | 0 | $ | 31,623 | $ | 67,155 | $ | 2,025,978 | $ | 2,025,978 | |||||||||||||||||||||
| NAME | YEAR | SALARY | BONUS(1) | STOCK AWARDS(2) | NON-EQUITY INCENTIVE PLAN COMP. (3) | ALL OTHER COMP. (4) | TOTAL | |||||||||||||||||||
Brian Doubles | 2022 | $1,082,692 | $0 | $8,200,011 | $3,968,800 | $450,438 | $13,701,941 | |||||||||||||||||||
| 2021 | $950,685 | $0 | $5,250,015 | $2,450,000 | $229,647 | $8,880,347 | ||||||||||||||||||||
| 2020 | $800,000 | $1,140,000 | $3,000,035 | $0 | $241,676 | $5,181,711 | ||||||||||||||||||||
Brian Wenzel | 2022 | $700,000 | $0 | $3,000,036 | $1,262,800 | $197,891 | $5,160,727 | |||||||||||||||||||
| 2021 | $700,000 | $0 | $2,600,000 | $980,000 | $150,151 | $4,430,151 | ||||||||||||||||||||
| 2020 | $653,005 | $665,000 | $1,800,039 | $0 | $146,334 | $3,264,378 | ||||||||||||||||||||
Margaret Keane | 2022 | $1,175,000 | $0 | $6,000,032 | $3,179,550 | $596,774 | $10,951,356 | |||||||||||||||||||
| 2021 | $1,175,000 | $0 | $9,000,000 | $2,800,000 | $525,981 | $13,500,981 | ||||||||||||||||||||
| 2020 | $1,175,000 | $2,232,500 | $9,000,048 | $0 | $532,965 | $12,940,513 | ||||||||||||||||||||
Tom Quindlen | 2022 | $850,000 | $0 | $2,500,029 | $1,533,400 | $322,949 | $5,206,378 | |||||||||||||||||||
| 2021 | $850,000 | $0 | $2,300,000 | $1,190,000 | $269,666 | $4,609,666 | ||||||||||||||||||||
| 2020 | $850,000 | $807,500 | $2,300,035 | $0 | $286,984 | $4,244,519 | ||||||||||||||||||||
Carol Juel | 2022 | $691,346 | $0 | $2,600,047 | $1,262,800 | $192,154 | $4,746,347 | |||||||||||||||||||
| 2021 | $639,658 | $0 | $2,000,108 | $910,000 | $160,589 | $3,710,355 | ||||||||||||||||||||
| (1) | Amounts shown under “bonus” for 2020 reflect incentive paid under refocused discretionary incentive framework in 2020; amounts shown in 2021 and |
| (2) | For |
| Name of Executive | SYF Annual Non-Equity Incentive Plan Awards | 2013-2015 GE Long-Term Performance Awards | Total | |||||||||
Margaret Keane | $ | 2,903,000 | $ | 2,415,600 | $ | 5,318,600 | ||||||
Brian Doubles | $ | 894,000 | $ | 667,500 | $ | 1,561,500 | ||||||
Glenn Marino | $ | 842,000 | $ | 881,000 | $ | 1,723,000 | ||||||
Jonathan Mothner | $ | 759,000 | $ | 672,900 | $ | 1,431,900 | ||||||
Tom Quindlen | $ | 1,188,000 | $ | 1,125,400 | $ | 2,313,400 | ||||||
| |
This column represents amounts paid under Synchrony’s Annual Incentive Plan. The MDCC awarded a final payout of 180.4% for the |
See the |
2015 All Other Compensation
52/ 2023 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2022 ALL OTHER COMPENSATION
In 2015,2022, our NEOs received additional benefits, reflected in the table below, which Synchrony GE and GECC, as applicable, believed to be reasonable, competitive and consistent with theirits overall executive compensation programs.program. The costs of these benefits are shown below after giving effect to any reimbursements by the NEOs.
2015 All Other Compensation Table2022 ALL OTHER COMPENSATION TABLE
| Name of Executive | Perquisites & Other Personal Benefits(1) | Value of Supplementary Life Insurance Premium(2) | Payments Relating to Employer Savings Plan(3) | Amounts Credited to Restoration Plan Account(4) | Total | |||||||||||||||||||||||||
NAME OF EXECUTIVE | PERQUISITES & OTHER PERSONAL BENEFITS (1) | VALUE OF SUPPLEMENTARY LIFE INSURANCE PREMIUMS (2) | PAYMENTS RELATING TO EMPLOYEE SAVINGS PLAN (3) | AMOUNTS CREDITED TO RESTORATION PLAN ACCOUNT (4) | TOTAL | |||||||||||||||||||||||||
Brian Doubles | $61,842 | $0 | $33,550 | $355,046 | $450,438 | |||||||||||||||||||||||||
Brian Wenzel | $13,090 | $0 | $33,550 | $151,251 | $197,891 | |||||||||||||||||||||||||
Margaret Keane | $ | 22,903 | $ | 62,627 | $ | 12,300 | $ | 10,982 | $ | 108,812 | $0 | $159,524 | $33,550 | $403,700 | $596,774 | |||||||||||||||
Brian Doubles | $ | 17,981 | $ | 2,740 | $ | 12,332 | $ | 5,578 | $ | 38,631 | ||||||||||||||||||||
Glenn Marino | $ | 39,105 | $ | 55,454 | $ | 12,321 | $ | 6,919 | $ | 113,799 | ||||||||||||||||||||
Jonathan Mothner | $ | 15,054 | $ | 9,959 | $ | 12,325 | $ | 6,109 | $ | 43,447 | ||||||||||||||||||||
Tom Quindlen | $ | 49,683 | $ | 38,565 | $ | 12,309 | $ | 8,245 | $ | 108,802 | $0 | $98,549 | $33,550 | $190,850 | $322,949 | |||||||||||||||
Carol Juel | $13,460 | $2,545 | $33,550 | $142,599 | $192,154 | |||||||||||||||||||||||||
| (1) | Amounts in this column include financial counseling, spousal airfare and |
| (2) | This column reports taxable payments made to the NEOs to cover premiums for universal life insurance policies owned by the |
| (3) | This column reports |
| (4) | This column reports |
2015 Grants of Synchrony Financial Plan-Based Awards
2023 ANNUAL MEETING AND PROXY STATEMENT / 53
COMPENSATION MATTERS
2022 GRANTS OF PLAN-BASED AWARDS
The following table provides information about Synchrony Financial equityplan-based awards granted to the NEOs in 2015:2022, including the annual non-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan and the equity awards granted under the Synchrony Financial 2014 Long-Term Incentive Plan. In regard to the annual non-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan, the table below provides the threshold, target and maximum cash awards linked to Synchrony’s performance over the 2022 performance period based on the following metrics: earnings (50%), receivables growth (30%), and strategy and culture (20%). In regard to the equity incentive plan awards granted pursuant to the Synchrony Financial 2014 Long-Term Incentive Plan, the table below provides: (i) the grant date, (ii) the number of shares or stock units underlying stock awards, granted to the NEOs under the Synchrony Financial 2014 Long-Term Incentive Plan, (iii) the number of other securities underlying option awards granted, to the NEOs under the Synchrony Financial 2014 Long-Term Incentive Plan, (iv) the exercise or base price of the stock option grants, which reflects the closing price of Synchrony Financial common stock on the date of grant, and (v) the grant date fair value of each option grant computed in accordance with applicable SEC rules. Our NEOs did not receive any GE stock-based awards in 2015.
2022 GRANTS OF SYNCHRONY PLAN-BASED AWARDS TABLE
ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS |
ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS | |||||||||||||||||
NAME OF
EXECUTIVE | GRANT
DATE | ANNUAL
INCENTIVE
THRESHOLD $ | ANNUAL
INCENTIVE
TARGET $ | ANNUAL
INCENTIVE
MAXIMUM $ | PSU AWARDS
THRESHOLD #(1) | PSU AWARDS
TARGET #(1) | PSU AWARDS
MAXIMUM #(1) | ALL OTHER STOCK
AWARDS: NUMBER
OF SHARES - RSU
AWARDS(2) | VALUE OF STOCK
AWARDS; NUMBER OF
SHARES OF STOCK OR
UNITS(3) | |||||||||
Doubles | 3/1/22 | 1,100,000 | 2,200,000 | 4,400,000 | 57,132 | 114,264 | 171,396 | 93,489 | $8,200,011 | |||||||||
Wenzel | 3/1/22 | 350,000 | 700,000 | 1,400,000 | 20,902 | 41,804 | 62,706 | 34,204 | $3,000,036 | |||||||||
Keane | 3/1/22 | 881,250 | 1,762,500 | 3,525,000 | 41,804 | 83,608 | 125,412 | 68,407 | $6,000,032 | |||||||||
Quindlen | 3/1/22 | 425,000 | 850,000 | 1,700,000 | 17,419 | 34,837 | 52,256 | 28,503 | $2,500,029 | |||||||||
Juel | 3/1/22 | 350,000 | 700,000 | 1,400,000 | 18,116 | 36,231 | 54,347 | 29,643 | $2,600,047 | |||||||||
| (1) | ||
| | These columns show the number of PSUs granted as long-term performance awards that are linked to Synchrony’s performance over the 2022-2024 performance period. The PSUs will be payable in shares of common stock based on our cumulative annual diluted earnings per share and average return on equity over the performance period provided performance and vesting conditions are met. Final payout will be subject to a TSR modifier of +/-20% of the amounts reflected above based on our TSR performance relative to peers used to set executive pay levels. |
2015 Grants of SYF Plan-Based Awards Table
| Name of Executive | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units(1) | All Other Option Awards: Number of Securities Underlying Options(2) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards(3) | |||||||||||||||
Margaret Keane | 4/1/15 | 46,038 | 63,532 | $ | 30.41 | $ | 1,999,758 | |||||||||||||
Brian Doubles | 4/1/15 | 15,020 | 20,728 | $ | 30.41 | $ | 652,431 | |||||||||||||
Glenn Marino | 4/1/15 | 12,983 | 17,916 | $ | 30.41 | $ | 563,940 | |||||||||||||
Jonathan Mothner | 4/1/15 | 11,970 | 16,519 | $ | 30.41 | $ | 519,947 | |||||||||||||
Tom Quindlen | 4/1/15 | 16,522 | 22,800 | $ | 30.41 | $ | 717,666 | |||||||||||||
This column shows the number of RSUs granted as part of the annual equity incentive grant in |
This column shows the aggregate grant date fair value of |
2015 Outstanding Synchrony Financial Equity Awards at Fiscal Year-End
54/ 2023 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2022 OUTSTANDING SYNCHRONY EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information on the current holdings of SYF common stock and SYFSynchrony equity awards by the NEOs.NEOs as of the 2022 fiscal year-end. This table includes unexercised (both vested and unvested) option grants and unvested RSUs and PSUs with vesting conditions that were not yet satisfied as of December 31, 2015.2022. Each equity grant is shown separately for each NEO.separately. The vesting schedule for each outstanding award is shown following this table.
2015 Outstanding Synchrony Financial Equity Awards at Fiscal Year-End Table2022 OUTSTANDING SYNCHRONY EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name of Executive | Option Grant Date | Number of Securities Underlying Unexercised Options (Exercisable) | Number of Securities Underlying Unexercised Options (Unexercisable) | Option Exercise Price | Option Expiration | Stock Award Grant Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(1) | ||||||||||||||||||||||||
Margaret Keane | 7/31/14 | 0 | 323,218 | $ | 23.00 | 7/31/24 | 7/31/14 | 213,044 | $ | 4,900,012 | ||||||||||||||||||||||
| 9/17/14 | 15,963 | 63,852 | $ | 24.55 | 9/17/24 | 9/17/14 | 40,932 | $ | 1,004,881 | |||||||||||||||||||||||
| 4/1/15 | 0 | 63,532 | $ | 30.41 | 4/1/25 | 4/1/15 | 46,038 | $ | 1,400,016 | |||||||||||||||||||||||
Brian Doubles | 7/31/14 | 0 | 184,696 | $ | 23.00 | 7/31/24 | 7/31/14 | 121,740 | $ | 2,800,020 | ||||||||||||||||||||||
| 9/17/14 | 5,804 | 23,220 | $ | 24.55 | 9/17/24 | 9/17/14 | 14,884 | $ | 365,402 | |||||||||||||||||||||||
| 4/1/15 | 0 | 20,728 | $ | 30.41 | 4/1/25 | 4/1/15 | 15,020 | $ | 456,758 | |||||||||||||||||||||||
Glenn Marino | 7/31/14 | 0 | 139,099 | $ | 23.00 | 7/31/24 | 7/31/14 | 91,685 | $ | 2,108,755 | ||||||||||||||||||||||
| 9/17/14 | 4,353 | 17,415 | $ | 24.55 | 9/17/24 | 9/17/14 | 11,164 | $ | 274,076 | |||||||||||||||||||||||
| 4/1/15 | 0 | 17,916 | $ | 30.41 | 4/1/25 | 4/1/15 | 12,983 | $ | 394,813 | |||||||||||||||||||||||
Jonathan Mothner | 7/31/14 | 0 | 115,435 | $ | 23.00 | 7/31/24 | 7/31/14 | 76,087 | $ | 1,750,001 | ||||||||||||||||||||||
| 9/17/14 | 2,322 | 9,288 | $ | 24.55 | 9/17/24 | 9/17/14 | 5,954 | $ | 146,171 | |||||||||||||||||||||||
| 4/1/15 | 0 | 16,519 | $ | 30.41 | 4/1/25 | 4/1/15 | 11,970 | $ | 364,008 | |||||||||||||||||||||||
Tom Quindlen | 7/31/14 | 0 | 174,307 | $ | 23.00 | 7/31/24 | 7/31/14 | 114,892 | $ | 2,642,516 | ||||||||||||||||||||||
| 9/17/14 | 6,385 | 25,541 | $ | 24.55 | 9/17/24 | 9/17/14 | 16,373 | $ | 401,957 | |||||||||||||||||||||||
| 4/1/15 | 0 | 22,800 | $ | 30.41 | 4/1/25 | 4/1/15 | 16,522 | $ | 502,434 | |||||||||||||||||||||||
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE | OPTION EXERCISE PRICE | OPTION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED(1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(2) | |||||||||||||||||||||||
Doubles | 7/31/2014 | 84,696 | 0 | $23.00 | 7/31/2024 | |||||||||||||||||||||||||||
| 9/17/2014 | 11,610 | 0 | $24.55 | 9/17/2024 | ||||||||||||||||||||||||||||
| 4/1/2015 | 20,728 | 0 | $30.41 | 4/1/2025 | ||||||||||||||||||||||||||||
| 4/1/2016 | 28,019 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||
| 4/1/2017 | 28,449 | 0 | $34.30 | 4/1/2027 | ||||||||||||||||||||||||||||
| 4/1/2018 | 31,284 | 7,821 | $33.53 | 4/1/2028 | 4,724 | $155,235 | ||||||||||||||||||||||||||
| 3/1/2020 | 16,625 | $546,302 | ||||||||||||||||||||||||||||||
| 3/1/2021 | 23,358 | $767,533 | 42,822 | $1,407,145 | ||||||||||||||||||||||||||||
| 4/1/2021 | 16,821 | $552,726 | 30,837 | $1,013,315 | ||||||||||||||||||||||||||||
| 3/1/2022 | 95,274 | $3,130,690 | 116,445 | $3,826,387 | ||||||||||||||||||||||||||||
Wenzel | 4/1/2015 | 6,281 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||
| 4/1/2016 | 8,490 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||
| 4/1/2017 | 8,514 | 0 | $34.30 | 4/1/2027 | ||||||||||||||||||||||||||||
| 4/1/2018 | 7,039 | 1,760 | $33.53 | 4/1/2028 | 1,063 | $34,942 | ||||||||||||||||||||||||||
| 3/1/2020 | 9,976 | $327,802 | ||||||||||||||||||||||||||||||
| 3/1/2021 | 20,243 | $665,196 | 37,113 | $1,219,525 | ||||||||||||||||||||||||||||
| 3/1/2022 | 34,857 | $1,145,398 | 42,602 | $1,399,901 | ||||||||||||||||||||||||||||
Keane | 4/1/2015 | 63,532 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||
| 4/1/2017 | 166,123 | 0 | $34.30 | 4/1/2027 | ||||||||||||||||||||||||||||
| 4/1/2018 | 125,136 | 31,284 | $33.53 | 4/1/2028 | 12,146 | $399,121 | ||||||||||||||||||||||||||
| 3/1/2020 | 49,875 | $1,638,906 | ||||||||||||||||||||||||||||||
| 3/1/2021 | 70,073 | $2,302,600 | 128,467 | $4,221,433 | ||||||||||||||||||||||||||||
| 3/1/2022 | 69,713 | $2,290,763 | 85,204 | $2,799,802 | ||||||||||||||||||||||||||||
Quindlen | 4/1/2015 | 18,240 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||
| 4/1/2016 | 24,659 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||
| 4/1/2017 | 29,811 | 0 | $34.30 | 4/1/2027 | ||||||||||||||||||||||||||||
| 4/1/2018 | 22,456 | 5,614 | $33.53 | 4/1/2028 | 3,392 | $111,445 | ||||||||||||||||||||||||||
| 3/1/2020 | 12,746 | $418,841 | ||||||||||||||||||||||||||||||
| 3/1/2021 | 17,908 | $588,442 | 32,831 | $1,078,811 | ||||||||||||||||||||||||||||
| 3/1/2022 | 29,047 | $954,487 | 35,502 | $1,166,595 | ||||||||||||||||||||||||||||
Juel | 4/1/2015 | 11,436 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||
| 4/1/2016 | 17,177 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||
| 4/1/2017 | 16,613 | 0 | $34.30 | 4/1/2027 | ||||||||||||||||||||||||||||
| 4/1/2018 | 14,516 | 3,629 | $33.53 | 4/1/2028 | 2,192 | $72,041 | ||||||||||||||||||||||||||
| 3/1/2020 | 8,313 | $273,151 | ||||||||||||||||||||||||||||||
| 3/1/2021 | 13,626 | $447,762 | 24,980 | $820,851 | ||||||||||||||||||||||||||||
| 7/1/2021 | 1,587 | $52,143 | 2,907 | $95,529 | ||||||||||||||||||||||||||||
| 3/1/2022 | 30,209 | $992,663 | 36,923 | $1,213,277 | ||||||||||||||||||||||||||||
| (1) | The market value of the stock awards represents the product of the closing price of |
| (2) | ||||
PSUs granted in 2022 and 2021 vest, to the extent earned, on December 31, 2024 and December 31, 2023, respectively. The market value of PSUs that have not vested as of December 31, 2022 was calculated using the closing price of Synchrony |
| |
2023 ANNUAL MEETING AND PROXY STATEMENT / 55
COMPENSATION MATTERS
2015 Outstanding SYF Equity Awards Vesting Schedule
2022 OUTSTANDING SYNCHRONY EQUITY AWARDS VESTING SCHEDULE
NAME OF EXECUTIVE | OPTION AWARDS VESTING SCHEDULE (1) | GRANT DATE | STOCK AWARDS VESTING SCHEDULE (2) | EQUITY INCENTIVE PLAN VESTING SCHEDULE (3) | |||||||||||
All Executives | 4/1/18 | 20% vests 2023 | 4/1/18 | 20% vests 2023 | |||||||||||
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| 3/1/ | 33.3% vests 2023 | ||||||||||||||
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| 100% vests | ||||||||||||||
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Doubles | |||||||||||||||
| 100% vests | ||||||||||||||
Juel | |||||||||||||||
| 100% vests | ||||||||||||||
All Executives | |||||||||||||||
| (1) | This column shows the vesting schedule of unexercisable or unearned options reported in the “Number of Securities Underlying Unexercised Options (Unexercisable)” column of the |
| (2) | This column shows the vesting schedule of unvested |
2015 GE Pension Benefits
In 2015, the NEOs continued to accrue GE pension benefits up to November 17, 2015, the date of the Separation. Post-Separation, they will no longer accrue any GE pension benefits, and Synchrony does not and will not provide its employees with a defined benefit plan. The table below sets forth information on the pension benefits for the NEOs under each of the following pension plans:
GE Pension Plan
The GE Pension Plan is a funded and tax-qualified retirement program that covers eligible employees. As applicable to the NEOs, the plan provides benefits based primarily on a formula that takes into account the NEO’s earnings for each fiscal year. Since 1989, the formula has provided an annual benefit accrual equal to 1.45% of the NEO’s earnings for the year up to “covered compensation” and 1.9% of his or her earnings for the year in excess of “covered compensation.” “Covered compensation” was $45,000 for 2015 and has varied over the years based in part on changes in the average of the Social Security taxable wage bases. The NEO’s annual earnings taken into account under this formula include base salary and up to one-half of his bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($265,000 for 2015). As a result, for service in 2015, the
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maximum incremental annual benefit an NEO could have earned toward his or her total pension payments under this formula was $4,832.50 ($402.71 per month), payable after retirement, as described below.
The accumulated benefit an employee earns over his or her career with GE is payable starting after retirement on a monthly basis for life with a guaranteed minimum term of five years. The normal retirement age as defined in this plan is 65. For employees who commenced service prior to 2005, including the NEOs, retirement may occur at age 60 without any reduction in benefits. Employees vest in the GE Pension Plan after five years of qualifying service. In addition, the plan provides for Social Security supplements and spousal joint and survivor annuity options, and requires employee contributions.
Section 415 of the Internal Revenue Code limits the benefits payable under the GE Pension Plan. For 2015, the maximum single life annuity an NEO could have received under these limits was $210,000 per year. This ceiling is actuarially adjusted in accordance with IRS rules to reflect employee contributions, actual forms of distribution and actual retirement dates.
Our NEOs’ benefits under the GE Pension Plan continued to accrue until the Separation, at which time the benefits vested and stopped accruing any additional value. We have no obligation to reimburse GE for the payment of benefits under the GE Pension Plan.
GE Supplementary Pension Plan
The GE Supplementary Pension Plan is an unfunded and non-tax-qualified retirement program that is offered to eligible employees in the executive band and above at GE, including our NEOs, to provide for retirement benefits above amounts available under GE’s tax-qualified and other pension programs. An NEO’s annual supplementary pension, when combined with certain amounts payable under the GE’s tax-qualified and other pension programs and Social Security, will equal 1.75% of his “earnings credited for retirement benefits” multiplied by the number of his years of credited service, up to a maximum of 60% of such earnings credited for retirement benefits. The “earnings credited for retirement benefits” are the NEO’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to Separation. The normal retirement age as defined in this plan is 65.
Our NEOs’ benefits under the GE Supplementary Pension Plan continued to accrue until the Separation, at which time the benefits vested and stopped accruing any additional value. We will reimburse GE for the payment of benefits under the GE Supplementary Pension Plan.
GE Excess Benefits Plan
The GE Excess Benefits Plan is an unfunded and non-tax-qualified retirement program that is offered to employees whose benefits under the GE Pension Plan are limited by certain tax code provisions. Benefits payable under this program are equal to the excess of (1) the amount that would be payable in accordance with the terms of the GE Pension Plan disregarding the limitations imposed by certain tax code provisions over (2) the pension actually payable under the GE Pension Plan taking such limitations into account. Benefits under the GE Excess Benefits Plan for the NEOs are generally payable at the same time and in the same manner as the GE Pension Plan benefits.
Our NEOs’ benefits under the GE Excess Benefits Plan continued to accrue until the Separation, at which time the benefits vested and stopped accruing any additional value. We will reimburse GE for the payment of benefits under the GE Excess Benefits Plan.
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The amounts reported in the table below equal the present value of the accumulated benefit at December 31, 2015 for the NEOs under each plan based upon the assumptions described in note 1 to that table.
2015 GE Pension Benefits Table
| Name of Executive | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) | Payments During Last Fiscal Year | ||||||||||
Margaret Keane | GE Pension Plan | 19.630 | $ | 1,135,934 | N/A | |||||||||
| GE Supplementary Pension Plan | 19.630 | $ | 10,465,005 | N/A | ||||||||||
| GE Excess Benefits Plan | 19.630 | 713 | N/A | |||||||||||
Brian Doubles | GE Pension Plan | 15.734 | $ | 414,380 | N/A | |||||||||
| GE Supplementary Pension Plan | 15.734 | $ | 1,548,071 | N/A | ||||||||||
| GE Excess Benefits Plan | 15.734 | — | N/A | |||||||||||
Glenn Marino | GE Pension Plan | 19.726 | $ | 1,256,466 | N/A | |||||||||
| GE Supplementary Pension Plan | 19.726 | $ | 5,387,016 | N/A | ||||||||||
| GE Excess Benefits Plan | 19.726 | — | N/A | |||||||||||
Jonathan Mothner | GE Pension Plan | 15.548 | $ | 776,859 | N/A | |||||||||
| GE Supplementary Pension Plan | 15.548 | $ | 2,280,479 | N/A | ||||||||||
| GE Excess Benefits Plan | 15.548 | — | N/A | |||||||||||
Tom Quindlen | GE Pension Plan | 30.829 | $ | 1,164,697 | N/A | |||||||||
| GE Supplementary Pension Plan | 30.829 | $ | 8,729,177 | N/A | ||||||||||
| GE Excess Benefits Plan | 30.829 | — | N/A | |||||||||||
| (3) | This column shows the vesting schedule of |
2015 GE Nonqualified Deferred Compensation
The NEOs are entitled to certain deferred compensation payments associated with benefits received while employed prior to the Separation. 56/ 2023 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2022 SYNCHRONY NONQUALIFIED DEFERRED COMPENSATION
The table below provides information on the nonqualified deferred compensation of the NEOs in 2015, including:
Bonus deferrals
GE’s executive-band and above employees,2022, including our NEOs priorDeferred Compensation and Restoration Plans.
SYNCHRONY-DEFERRED COMPENSATION
Our Deferred Compensation Plan does not pay an “above-market” rate of interest and is available to Separation, are ablea select group of management and highly compensated employees of Synchrony and any of its participating affiliates. Under the plan, eligible employees may, to the extent permitted by the administrator of the plan, elect to defer up to 80% (or such lower percentage, as determined by the plan administrator) of their base salary and bonus, and all or a portion of theirany other type of compensation, as determined by the plan administrator.
SYNCHRONY FINANCIAL RESTORATION PLAN
The Restoration Plan mirrors the Company’s qualified 401(k) plan. The plan provides a continuation of Company contributions on salary and bonus payments in either:that would have been made to our 401(k) plan but for various limitations imposed by the Code, along with additional Company contributions that cannot be made to the 401(k) plan. The plans include Company contributions of (i) a 3% core contribution, (ii) a 4% match, and (iii) 4% additional contribution for former participants of GE stock; (ii)pension plans. The Restoration Plan account is forfeited if an index based on the S&P 500;executive leaves voluntarily prior to age 60. For 2022, each of our NEOs received contributions to his or (iii) cash units. Deferred cash units earn interest income on the daily outstanding balanceher Restoration Plan account, which are reported in the account based on“All Other Compensation” column in the prior calendar month’s average yield for U.S. Treasury Notes and Bonds issued with maturities of 10 years and 20 years. The interest income does not constitute an “above-market interest rate” as defined by the SEC and is credited to the participant’s account monthly.2022 Summary Compensation Table.
2022 SYNCHRONY NONQUALIFIED DEFERRED COMPENSATION
NAME OF EXECUTIVE | TYPE OF PLAN | EXECUTIVE CONTRIBUTIONS IN LAST FISCAL YEAR | REGISTRANT CONTRIBUTIONS IN LAST FISCAL YEAR | AGGREGATE EARNINGS IN LAST FISCAL YEAR (1) | AGGREGATE BALANCE AT LAST FISCAL YEAR-END | |||||||||||||
Doubles | Restoration Plan | $0 | $355,046 | ($459,426 | ) | $1,868,967 | ||||||||||||
| Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||
Wenzel | Restoration Plan | $0 | $151,251 | ($220,106 | ) | $812,585 | ||||||||||||
| Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||
Keane | Restoration Plan | $0 | $403,700 | ($825,351 | ) | $3,587,701 | ||||||||||||
| Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||
Quindlen | Restoration Plan | $0 | $190,850 | ($601,785 | ) | $1,880,067 | ||||||||||||
| Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||
Juel | Restoration Plan | $0 | $142,599 | ($326,577 | ) | $941,745 | ||||||||||||
| Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||
| (1) | ||
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Salary deferrals
GE’s executive-band and above employees, including our NEOs prior to Separation, are able to defer their salary payments under executive deferred salary plans offered to them by GE from time to time. The deferred salary plans pay accrued interest to our NEOs, including an above-market interest rate as defined by the SEC, ranging from 8.5% to 12%, compounded annually.
Effective as of the Separation, our NEOs no longer participate in GE’s deferred compensation plans. Payouts to our NEOs and other participating employees will begin in 2016 in accordance with participants’ payout elections.
2015 GE Nonqualified Deferred Compensation Table
| Name of Executive | Type of Deferred Compensation Plan | Executive Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year(1) | Aggregate Balance at Last Fiscal Year-End | ||||||||||
Margaret Keane | Deferred bonus plans | $ | 0 | $ | 13,997 | $ | 114,415 | |||||||
| Deferred salary plans | $ | 0 | $ | 28,585 | $ | 303,010 | ||||||||
Brian Doubles | Deferred bonus plans | $ | 0 | $ | 0 | $ | 0 | |||||||
| Deferred salary plans | $ | 0 | $ | 2,242 | $ | 28,622 | ||||||||
Glenn Marino | Deferred bonus plans | $ | 0 | $ | 44,020 | $ | 1,906,206 | |||||||
| Deferred salary plans | $ | 0 | $ | 77,449 | $ | 825,481 | ||||||||
Jonathan Mothner | Deferred bonus plans | $ | 0 | $ | 2,404 | $ | 37,196 | |||||||
| Deferred salary plans | $ | 0 | $ | 0 | $ | 0 | ||||||||
Tom Quindlen | Deferred bonus plans | $ | 0 | $ | 28,392 | $ | 281,380 | |||||||
| Deferred salary plans | $ | 0 | $ | 107,283 | $ | 1,206,271 | ||||||||
The earnings on |
2023 ANNUAL MEETING AND PROXY STATEMENT / 57
A | B | C | D | E | F | VALUE OF INITIAL $100 INVESTMENT 12/31/2019: | ||||||||||||||||||||||||||||||||||
YEAR | SUMMARY COMP TABLE TOTAL FOR CEO (DOUBLES) 1 | COMPENSATION ACTUALLY PAID TO CEO (DOUBLES) 2 | SUMMARY COMP TABLE TOTAL FOR FORMER CEO / EXEC CHAIR (KEANE) 1 | COMPENSATION ACTUALLY PAID TO FORMER CEO / EXEC CHAIR (KEANE) 2 | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-CEO NEOS 3 | AVERAGE COMPENSATION ACTUALLY PAID TO NON-CEO NEOS 4 | SYF 5 | PEERS 6 | NET INCOME (MILLIONS) 7 | RECEIVABLES (BILLIONS) 8 | ||||||||||||||||||||||||||||||
2022 | $13,701,941 | $8,599,737 | $6,516,202 | $1,775,284 | $99 | $101 | $3,016 | $92.5 | ||||||||||||||||||||||||||||||||
2021 | $8,880,347 | $20,462,092 | $13,500,981 | $46,015,762 | $4,124,797 | $10,116,008 | $136 | $122 | $4,221 | $80.7 | ||||||||||||||||||||||||||||||
2020 | $12,940,513 | ($28,817) | $4,131,919 | $1,300,820 | $100 | $121 | $1,385 | $81.9 | ||||||||||||||||||||||||||||||||
| (1) | The dollar amounts reported in columns (A) and (C) are |
| (2) | The dollar amounts reported in columns (B) and (D) represent the amount of “compensation actually paid” to Mr. Doubles and Ms. Keane in the years in which they served as CEO, computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Doubles or Ms. Keane during the applicable years. Ms. Keane’s CAP in 2021 reflects significant increase in value due to increase in stock price and projected performance for outstanding PSUs. SeeCompensation Actually Paid below for the adjustments that were made to Mr. Doubles’ and Ms. Keane’s total compensation for each year to determine the compensation actually paid. |
| (3) | The dollar amounts reported in column (E) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Doubles for 2021 and 2022, and excluding Ms. Keane for 2020 and 2021, in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Margaret Keane, Brian J. Wenzel, Sr., Thomas M. Quindlen, and Carol D. Juel; (ii) for 2021, Brian J. Wenzel, Sr., Thomas M. Quindlen, Alberto B. Casellas, and Carol D. Juel; and (iii) for 2020, Brian Doubles, Brian J. Wenzel, Sr., Neeraj Mehta, and Thomas M. Quindlen. |
| (4) | The dollar amounts reported in column (F) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Doubles for 2022 and 2021 and Ms. Keane in 2021 and 2020), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable year. SeeDetermination of Compensation Actually Paid below for the adjustments that were made to Mr. Doubles’ and Ms. Keane’s total compensation for each year to determine the compensation actually paid. |
| (5) | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period beginning at market close on 12/31/2019, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the |
| (6) | Represents the weighted peer group TSR, weighted according to the respective companies’ stock Compensation Discussion and Analysis section, which is used for setting pay and determining relative TSR with respect to performance share units. |
| (7) | The dollar amounts reported represent the amount of |
2015 Potential Payments Upon Termination or Change-in-Control At Fiscal Year-End
| (8) | Receivables, our “Company selected measure”, reflect year-end loan receivables as reported under GAAP. |
MOST IMPORTANT FINANCIAL PERFORMANCE MEASURES | ||
Receivables | ||
PPNR minus Charge-Offs | ||
Return on Equity | ||
Earnings Per Share | ||
Relative Total Shareholder Return | ||
CEO | (A) | (X) | (B) | |||||
YEAR | SUMMARY COMPENSATION TABLE TOTAL (SCT) | DEDUCTIONS OF EQUITY AWARDS* | ADDITIONS/ ADJUSTMENTS TO SCT TOTAL** | COMPENSATION ACTUALLY PAID (CAP) | ||||
2022 | $13,701,941 | ($8,200,011) | $3,097,807 | $8,599,737 | ||||
2021 | $8,880,347 | ($5,250,015) | $16,831,760 | $20,462,092 | ||||
Former CEO/ | ||||||||
Executive Chair | (C) | (Y) | (D) | |||||
YEAR | SUMMARY COMPENSATION TABLE TOTAL (SCT) | DEDUCTIONS OF EQUITY AWARDS* | ADDITIONS/ ADJUSTMENTS TO SCT TOTAL** | COMPENSATION ACTUALLY PAID (CAP) | ||||
2021 | $13,500,981 | ($9,000,000) | $41,514,781 | $46,015,762*** | ||||
2020 | $12,940,513 | ($9,000,048) | ($3,969,282) | ($28,817) | ||||
Non-CEO NEOs | (E) | (Z) | (F) | |||||
YEAR | SUMMARY COMPENSATION TABLE TOTAL (SCT) | DEDUCTIONS OF EQUITY AWARDS* | ADDITIONS/ ADJUSTMENTS TO SCT TOTAL** | COMPENSATION ACTUALLY PAID (CAP) | ||||
2022 | $6,516,202 | ($3,525,036) | ($1,215,882) | $1,775,284 | ||||
2021 | $4,124,797 | ($2,250,027) | $8,241,238 | $10,116,008 | ||||
2020 | $4,131,919 | ($2,325,032) | ($506,067) | $1,300,820 | ||||
CEO Equity | (X) | |||||||||||||||||
TYPE | FAIR VALUE AT YE OF OUTSTANDING UNVESTED AWARDS GRANTED DURING APPLICABLE YEAR | YEAR OVER YEAR CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT VESTED DURING APPLICABLE YEAR | CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT REMAIN UNVESTED | VALUE INCLUDED IN “COMP ACTUALLY PAID” | ||||||||||||||
2022 | RSUs | $3,130,690 | ($427,575) | ($751,974) | $1,951,141 | |||||||||||||
| PSUs | $4,760,026 | ($1,347,449) | ($2,105,254) | $1,307,323 | ||||||||||||||
| SOs | $0 | ($92,301) | ($68,356) | ($160,657) | ||||||||||||||
Total | $7,890,716 | ($1,867,325) | ($2,925,584) | $3,097,807 | ||||||||||||||
2021 | RSUs | $2,729,662 | $262,895 | $740,783 | $3,733,340 | |||||||||||||
| PSUs | $5,738,365 | $2,862,634 | $4,251,987 | $12,852,986 | ||||||||||||||
| SOs | $0 | $84,150 | $161,284 | $245,434 | ||||||||||||||
Total | $8,468,027 | $3,209,679 | $5,154,054 | $16,831,760 | ||||||||||||||
Former CEO /Executive | ||||||||||||||||||
Chair Equity | (Y) | |||||||||||||||||
TYPE | FAIR VALUE AT YE OF OUTSTANDING UNVESTED AWARDS GRANTED DURING APPLICABLE YEAR | YEAR OVER YEAR CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT VESTED DURING APPLICABLE YEAR | CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT REMAIN UNVESTED | VALUE INCLUDED IN “COMP ACTUALLY PAID” | ||||||||||||||
2021 | RSUs | $4,760,710 | $909,590 | $2,351,775 | $8,022,075 | |||||||||||||
| PSUs | $10,008,070 | $9,621,154 | $12,755,810 | $32,385,034 | ||||||||||||||
| SOs | $0 | $385,401 | $722,271 | $1,107,672 | ||||||||||||||
Total | $14,768,780 | $10,916,145 | $15,829,856 | $41,514,781 | ||||||||||||||
2020 | RSUs | $4,973,949 | ($2,073,572) | ($6,367) | $2,894,010 | |||||||||||||
| PSUs | $0 | ($1,037,713) | ($5,535,051) | ($6,572,764) | ||||||||||||||
| SOs | $0 | ($634,845) | $344,317 | ($290,528) | ||||||||||||||
Total | $4,973,949 | ($3,746,130) | ($5,197,101) | ($3,969,282) | ||||||||||||||
Non-CEO NEOs Equity | (Z) | |||||||||||||||||
TYPE | FAIR VALUE AT YE OF OUTSTANDING UNVESTED AWARDS GRANTED DURING APPLICABLE YEAR | YEAR OVER YEAR CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT VESTED DURING APPLICABLE YEAR | CHANGE IN FAIR VALUE OF AWARDS GRANTED IN PRIOR YEARS THAT REMAIN UNVESTED | VALUE INCLUDED IN “COMP ACTUALLY PAID” | ||||||||||||||
2022 | RSUs | $1,345,828 | ($433,174) | ($678,372) | $234,282 | |||||||||||||
| PSUs | $2,046,248 | ($1,639,378) | ($1,616,945) | ($1,210,075) | ||||||||||||||
| SOs | $0 | ($147,692) | ($92,397) | ($240,089) | ||||||||||||||
Total | $3,392,076 | ($2,220,244) | ($2,387,714) | ($1,215,882) | ||||||||||||||
2021 | RSUs | $1,184,064 | $141,365 | $406,948 | $1,732,377 | |||||||||||||
| PSUs | $2,489,146 | $1,279,182 | $2,622,041 | $6,390,369 | ||||||||||||||
| SOs | $0 | $43,662 | $74,830 | $118,492 | ||||||||||||||
Total | $3,673,210 | $1,464,209 | $3,103,819 | $8,241,238 | ||||||||||||||
2020 | RSUs | $1,284,953 | ($493,973) | ($1,334) | $789,646 | |||||||||||||
| PSUs | $0 | ($159,877) | ($1,065,505) | ($1,225,382) | ||||||||||||||
| SOs | $0 | ($132,185) | $61,854 | ($70,331) | ||||||||||||||
Total | $1,284,953 | ($786,035) | ($1,004,985) | ($506,067) | ||||||||||||||
Executive Severance Plan
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SEVERANCE PLAN Severance Restricted Stock Units Stock Options Annual Cash Incentive Medical Benefits Outplacement Restoration Plan Total Severance Restricted Stock Units Stock Options Annual Cash Incentive Medical Benefits Outplacement Restoration Plan Total Severance Restricted Stock Units Stock Options Annual Cash Incentive Medical Benefits Outplacement Restoration Plan TotalSeverance Planthese executives in the event of any occurrence of, threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a change in control of the Company. The CIC Severance Plan provides for the following severance benefits upon a “double-trigger” qualifying termination of employment within 30 months following a change in control:– lump sumand Executive Chair — Cash payment equal to the sum of (1) the CEO’sexecutive’s prorated bonus for the year of termination, (2) a severance benefit equal to the product of two and one halfthree multiplied by the sum of the CEO’sexecutive’s annual base salary and average target bonus for the three prior years, and (3) an amount equal to 36 months of the employer portion of the monthly premium or cost of coverage for the health benefits elected by the executive, based on the rates for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“Healthcare Premiums”). In addition, for 36 months following the executive’s termination of employment, the executive will be entitled to reasonable executive outplacement services.CEO,NEO, based on the rates for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“Healthcare Premiums”). In addition, for 30 months following the CEO’s termination of employment, the CEO will be entitled to reasonable executive outplacement services.Other NEOs – lump sum payment equal to the sum of (1) the NEO’s prorated bonus for the year of termination, (2) the product of two multiplied by the sum of the NEO’s annual base salary and target bonus, and (3) an amount equal to 24 months of Healthcare Premiums. In addition, for 2430 months following the NEO’s termination of employment, the NEO will be entitled to reasonable executive outplacement services.SYF Equity Awardsdieretire (voluntarily terminating after reaching age 60 with three years of service) or become disabled, any un-exercisable stock options become exercisable and remain exercisable until their expiration date. In the eventinvoluntarily terminate with over 20 years of disability, this provision applies only to options that have beenservice, all awards held for at least one year.year will continue to vest according to the original vesting schedule. For involuntary termination with less than 20 years of service, all awards held for at least one year continue to vest on ahistheir job. Remaining restrictions on RSUs that were awarded prior to death or disability lapse immediately. In addition, any unvested options or RSUs held for at least one year become fully vested upon becoming retirement-eligible (reaching age 60 with 3 years of service), depending on the terms of the particular award. For involuntary termination, awards are either pro-rated (if under age 60 and less than 20 years of service) or fully vest if over 20 years of service.Pension BenefitsIn “—2015 GE Pension Benefits,” we describe the general terms of each pension plan in which the NEOs participate, the years of credited service and the present value of each NEO’s accumulated pension benefit, assuming payment begins at age 60. The table below provides the pension benefits that would have become payable by Synchrony (in the form of reimbursement to GE) if the NEOs had died, become disabled or voluntarily terminated at December 31, 2015. We are responsible for reimbursing GE for amounts paid out pursuant to the GE Supplementary Pension Plan and the GE Excess Benefits Plan. GE is responsible for amounts paid out pursuant to the GE Pension Plan.Payment Upon Termination as of Year-End Tables2015.2022. Termination upon a change in control reflects amounts assuming each NEO’s employment was terminated by the Company without “cause” or by the executive for “good reason” within 30 months of the specified time period prior to or following the change in control. None of ourOf the NEOs, only Ms. Keane and Mr. Quindlen were eligible to retire as of December 31, 2015;2022; therefore, none of themother than Ms. Keane and Mr. Quindlen, the NEOs do not have any values in the voluntary or retirement termination columns below. The tables below assume a stock price of $30.41,$32.86, the closing price of a share of our common stock on December 31, 2015.30, 2022.
CAUSE
TERMINATION
DISABILITY
CONTROL $0 $0 $1,624,039 $0 $0 $8,089,677 $0 $0 $2,021,797 $0 $5,152,486 $5,152,486 $0 $0 $0 $0 $0 $0 $0 $0 $2,420,459 $0 $6,246,847 $6,246,847 $0 $0 $3,968,800 $0 $3,968,800 $3,968,800 $0 $0 $0 $0 $0 $58,801 $0 $0 $1,868,967 $0 $1,868,967 $1,868,967 $0 $0 $0 $0 $0 $0
CAUSE
TERMINATION
DISABILITY
CONTROL $0 $0 $700,000 $0 $0 $3,685,834 $0 $0 $1,027,940 $0 $2,173,338 $2,173,338 $0 $0 $0 $0 $0 $0 $0 $0 $1,219,525 $0 $2,619,426 $2,619,426 $0 $0 $1,262,800 $0 $1,262,800 $1,262,800 $0 $0 $0 $0 $0 $49,591 $0 $0 $812,585 $0 $812,585 $812,585 $0 $0 $0 $0 $0 $0
CAUSE
TERMINATION
DISABILITY
CONTROL $0 $0 $1,762,500 $0 $0 $11,008,500 $0 $4,340,627 $4,340,627 $4,340,627 $6,631,389 $6,631,389 $0 $0 $0 $0 $0 $0 $0 $4,221,433 $4,221,433 $4,221,433 $7,021,236 $7,021,236 $0 $3,179,550 $3,179,550 $3,179,550 $3,179,550 $3,179,550 $0 $0 $0 $0 $0 $35,326 $0 $3,587,701 $3,587,701 $3,587,701 $3,587,701 $3,587,701 $0 $0 $0 $0 $0 $0
CAUSE
TERMINATION
DISABILITY
CONTROL $0 $0 $850,000 $0 $0 $4,528,417 $0 $1,118,728 $1,118,728 $1,118,728 $2,073,215 $2,073,215 $0 $0 $0 $0 $0 $0 $0 $1,078,811 $1,078,811 $1,078,811 $2,245,406 $2,245,406 $0 $1,533,400 $1,533,400 $1,533,400 $1,533,400 $1,533,400 $0 $0 $0 $0 $0 $48,656 $0 $1,880,067 $1,880,067 $1,880,067 $1,880,067 $1,880,067 $0 $0 $0 $0 $0 $0
CAUSE
TERMINATION
DISABILITY
CONTROL $0 $0 $691,346 $0 $0 $3,503,032 $0 $0 $422,549 $0 $1,837,760 $1,837,760 $0 $0 $0 $0 $0 $0 $0 $0 $458,190 $0 $2,129,657 $2,129,657 $0 $0 $1,262,800 $0 $1,262,800 $1,262,800 $0 $0 $0 $0 $0 $49,246 $0 $0 $941,745 $0 $941,745 $941,745 $0 $0 $0 $0 $0 $0 (1) 42 Synchrony Financial2016 Proxy Statement(2) Compensation Matters Margaret KeaneElement of Pay For
Cause Voluntary
Termination Involuntary
Termination Retirement Death or
Disability Change-in-
Control $ 0 $ 0 $ 1,512,000 — $ 0 $ 9,777,500 $ 0 $ 0 $ 2,916,899 — $ 9,123,426 $ 9,123,426 $ 0 $ 0 $ 1,035,332 — $ 2,769,218 $ 2,769,218 $ 0 $ 0 $ 2,903,000 — $ 2,903,000 $ 2,903,000 $ 0 $ 0 $ 0 — $ 0 $ 45,886 $ 0 $ 0 $ 0 — $ 0 $ 14,750 $ 0 $ 0 $ 10,981 — $ 10,981 $ 10,981 $ 0 $ 0 $ 8,378,212 — $ 14,806,625 $ 24,644,761 Brian DoublesElement of Pay For
Cause Voluntary
Termination Involuntary
Termination Retirement Death or
Disability Change-in-
Control $ 0 $ 0 $ 621,000 — $ 0 $ 3,030,000 $ 0 $ 0 $ 1,537,476 — $ 4,611,494 $ 4,611,494 $ 0 $ 0 $ 552,746 — $ 1,504,667 $ 1,504,667 $ 0 $ 0 $ 894,000 — $ 894,000 $ 894,000 $ 0 $ 0 $ 0 — $ 0 $ 36,708 $ 0 $ 0 $ 0 — $ 0 $ 11,800 $ 0 $ 0 $ 5,578 — $ 5,578 $ 5,578 $ 0 $ 0 $ 3,610,800 — $ 7,015,739 $ 10,094,248 Glenn MarinoElement of Pay For
Cause Voluntary
Termination Involuntary
Termination Retirement Death or
Disability Change-in-
Control $ 0 $ 0 $ 717,000 — $ 0 $ 3,118,000 $ 0 $ 0 $ 1,326,964 — $ 3,522,451 $ 3,522,451 $ 0 $ 0 $ 467,100 — $ 1,132,775 $ 1,132,775 $ 0 $ 0 $ 842,000 — $ 842,000 $ 842,000 $ 0 $ 0 $ 0 — $ 0 $ 36,708 $ 0 $ 0 $ 0 — $ 0 $ 11,800 $ 0 $ 0 $ 6,919 — $ 6,919 $ 6,919 $ 0 $ 0 $ 3,359,983 — $ 5,504,145 $ 8,670,653 Synchrony Financial 2016 Proxy Statement 43
| |
Jonathan Mothner
| Element of Pay | For Cause | Voluntary Termination | Involuntary Termination | Retirement | Death or Disability | Change-in- Control | ||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 659,000 | — | $ | 0 | $ | 2,836,000 | |||||||||||||
Restricted Stock Units | $ | 0 | $ | 0 | $ | 910,003 | — | $ | 2,858,875 | $ | 2,858,875 | |||||||||||||
Stock Options | $ | 0 | $ | 0 | $ | 330,159 | — | $ | 909,801 | $ | 909,801 | |||||||||||||
Annual Cash Incentive | $ | 0 | $ | 0 | $ | 759,000 | — | $ | 759,000 | $ | 759,000 | |||||||||||||
Medical Benefits | $ | 0 | $ | 0 | $ | 0 | — | $ | 0 | $ | 36,708 | |||||||||||||
Outplacement | $ | 0 | $ | 0 | $ | 0 | — | $ | 0 | $ | 11,800 | |||||||||||||
Restoration Plan | $ | 0 | $ | 0 | $ | 6,109 | — | $ | 6,109 | $ | 6,109 | |||||||||||||
Total | $ | 0 | $ | 0 | $ | 2,664,271 | — | $ | 4,533,785 | $ | 7,418,293 | |||||||||||||
Tom Quindlen
| Element of Pay | For Cause | Voluntary Termination | Involuntary Termination | Retirement | Death or Disability | Change-in- Control | ||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 812,000 | — | $ | 0 | $ | 4,000,000 | |||||||||||||
Restricted Stock Units | $ | 0 | $ | 0 | $ | 1,735,314 | — | $ | 4,494,203 | $ | 4,494,203 | |||||||||||||
Stock Options | $ | 0 | $ | 0 | $ | 607,117 | — | $ | 1,441,285 | $ | 1,441,285 | |||||||||||||
Annual Cash Incentive | $ | 0 | $ | 0 | $ | 1,188,000 | — | $ | 1,188,000 | $ | 1,188,000 | |||||||||||||
Medical Benefits | $ | 0 | $ | 0 | $ | 0 | — | $ | 0 | $ | 36,708 | |||||||||||||
Outplacement | $ | 0 | $ | 0 | $ | 0 | — | $ | 0 | $ | 11,800 | |||||||||||||
Restoration Plan | $ | 0 | $ | 0 | $ | 8,245 | — | $ | 8,245 | $ | 8,245 | |||||||||||||
Total | $ | 0 | $ | 0 | $ | 4,350,676 | — | $ | 7,131,733 | $ | 11,180,242 | |||||||||||||
| |
In connection with these reviews, the Nominating and Corporate Governance Committee receives advice regarding director compensation, including peer company benchmarking. Board. Paget L. Alves Arthur W. Coviello, Jr. William W. Graylin Roy A. Guthrie Richard C. Hartnack Jeffrey G. Naylor Laurel J. Richie Olympia J. Snowe Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total$160,000,$265,000, of which $50,000$100,000 is paid in cash and $110,000$165,000 is paid in Synchrony Financial RSUs. (When they were non-voting observers to the Board, the New Directors received annual compensation of $160,000 in cash only.) The RSUs are subject to a three-year Chair of our Board receivesAudit and Risk Committees will receive an additional $90,000$20,000 in annual cash compensation and each member of the Nominating and Corporate Governance Committee, the MDCC and the Technology Committee will receive an additional $15,000 in annual cash compensation;$35,000$40,000 in annual cash compensation and the Chairs of the Nominating and Corporate Governance Committee, the MDCC and the Company’s MDCCTechnology Committee each receive an additional $20,000$25,000 in annual compensation. Separately, for each board committee meeting attended,cash compensation; andindependent director receives $2,000 in cash. If an independent directoradditional $235,000, of which $110,000 is also a director of the Bank and attends a meeting of a Bank committee that takes place on a day when the analogous board committee is not meeting, the independent director receives $2,000paid in cash for such meeting. and $125,000 is paid in RSUs.board.$250,000$375,000 in our common stock, RSUs or deferred stock units while a member of our Board. Each independent director has four years to satisfy this requirement. Individual and joint holdings of our common stock with immediate family members, including unvested time-based restricted stock, RSUs and deferred stock units count toward this requirement.2015 Independent Directors’ Compensation TableName of Director Fees Earned or Paid
in Cash(1) Stock Awards(2) All Other
Compensation(3) Total $ 10,114 $ 13,472 $ 60,435 $ 84,021 $ 8,114 $ 13,472 $ 60,435 $ 82,021 $ 8,114 $ 13,472 $ 60,435 $ 82,021 $ 133,000 $ 110,091 — $ 243,091 $ 208,000 $ 110,091 — $ 318,091 $ 143,000 $ 110,091 — $ 253,091 $ 10,114 $ 13,472 $ 60,435 $ 84,021 $ 12,560 $ 13,472 $ 140,435 $ 166,467 $145,385 $165,091 $310,476 $135,000 $165,091 $ 300,091 $95,385 $123,807 $219,191 $160,000 $165,091 $325,091 $90,978 $111,246 $ 202,225 $160,000 $165,091 $325,091 $250,000 $165,091 $415,091 $135,000 $165,091 $ 300,091 $155,000 $165,091 $320,091 $61,538 $63,519 $125,057 $135,000 $165,091 $ 300,091 (1) 20152022 for Board and committee service.(2) Synchrony Financial RSUs granted in 2015 in accordance with SEC rules.2022. Grant date fair value is calculated by multiplying the number of RSUs granted by the closing price of SYFSynchrony common stock on the grant date, which was $30.35$34.81 for March 31, 20152022 grants, $32.93$27.62 for June 30, 20152022 grants, $31.30$28.19 for September 31, 201530, 2022 grants and $30.41$32.86 for December 31, 20152022 grants.(3) Amount of cash compensation received in 2015 for service as a non-voting observer toBoard.Board on September 2, 2022.(4) Synchrony Financial 2016 Proxy Statement 45(5) Compensation Matters20152022 regarding the number of shares of our common stock that may be issued under our equity compensation plans.Plan Category Number of
securities
to be issued
upon
exercise of
outstanding
options,
warrants and
rights(1) Weighted-average
exercise price of
outstanding
options,
warrants and
rights Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in
column (a)) (a) (b) (c) 10,842,236 $ 24.29 5,669,056 — — — 10,842,236 $ 24.29 5,669,056 10,204,127 $32.80 37,849,360 — — 10,204,127 $32.80 37,849,360 (1) 6,476,6364,690,120 shares underlying stock options, and 4,365,6003,175,450 shares underlying RSUs and 2,338,557 shares underlying PSUs, in each case, awarded under the LTIP. 46,839,931 45,115,124 43,581,766 41,798,948 39,895,916 1,069,882 1,802,996 1,713,183 1,259,255 1,860,004 616,673 606,006 923,997 728,696 1,306,086 1,782,601 0 0 847,500 205,000 3,469,156 2,409,002 2,637,180 2,835,451 3,371,090 1,499,331 440,084 554,713 602,180 815,393 62,704 271,478 245,407 265,550 473,693 182,313 164,082 54,242 64,690 35,448 1,744,349 875,644 854,362 932,420 1,324,534 45,115,124 43,581,766 41,798,948 39,895,916 37,849,360 (1) (2)
| ||||||
AUDIT MATTERS | ||||||
The Audit Committee retained KPMG LLP (“KPMG”) to audit our consolidated and combined financial statements for 2015.2022. In addition, the Audit Committee retained KPMG to provide other auditing and advisory services in 2015.2022. In selecting KPMG as the independent auditor for 2023, the Audit Committee considered, among other factors, KPMG’s performance during 2022, including that of the lead audit partner, its independence and its attention to quality control matters. We understand the need for KPMG to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of KPMG, our Audit Committee has restricted the non-audit services that KPMG may provide to us primarily to tax services and merger and acquisition due diligence and integration services. The Audit Committee also requires key KPMG partners assigned to our audit to be rotated at least every five years.
Pre-Approval ProcessesPRE-APPROVAL PROCESSES
The Audit Committee approves all audit engagement fees and terms. It is the Audit Committee’s policy to review and pre-approve all audit and non-audit services provided to the Company by KPMG on an engagement-by-engagement basis. To minimize relationships that could appear to impair KPMG’s objectivity, it is the Audit Committee’s practice to restrict the non-audit services that may be provided to the Company by KPMG primarily to tax services and merger and acquisition due diligence and integration services. The Chair of the Audit Committee is authorized to pre-approve any audit or non-audit service on behalf of the Audit Committee, provided such decisions are presented to the full committee at its next regularly scheduled meeting.
ACCOUNTING FEES
Accounting Fees and ServicesAND SERVICES
The following table presents fees paid for the audit of our annual consolidated and combined financial statements and all other professional services rendered by KPMG for the years ended December 31, 20152022 and 2014.2021.
FOR THE YEARS ENDED DECEMBER 31, | ||||||||||||||||
| For the Years Ended December 31, | 2022 | 2021 | ||||||||||||||
| 2015 | 2014 | |||||||||||||||
Audit fees | $ | 4,290,536 | $ | 3,142,834 | $ | 5,282,629 | $ | 4,610,321 | ||||||||
Audit-related fees | 435,928 | 783,587 | 508,177 | 528,627 | ||||||||||||
Tax fees | — | — | — | — | ||||||||||||
All other fees | 2,830 | — | — | — | ||||||||||||
Total fees | $ | 4,729,294 | $ | 3,926,421 | $ | 5,790,806 | $ | 5,138,948 | ||||||||
In the above table, in accordance with SEC rules, “Audit” fees are fees that we paid to KPMG for (i) the audit of the Company’s annual financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 20152022, and review of financial statements included in the Quarterly Reports on Form 10-Q for the first, second and third quarters of 2015,2022, and (ii) services that are normally provided by the auditorKPMG in connection with statutory and regulatory filings or engagements, including comfort letter procedures and consent relatedconsent-related procedures. “Audit-related” fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including agreed uponagreed-upon procedures. “Tax” fees are fees for tax compliance, tax advice and tax planning, and “All other” fees are fees for any services not included in the first three categories.
Hiring Restrictions68/ 2023 ANNUAL MEETING AND PROXY STATEMENT
HIRING RESTRICTIONS
The Audit Committee has adopted restrictions on our hiring of any KPMG partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having responsibility for providing audit assurance on any aspect of KPMG’s certification of the Company’s financial statements. These restrictions are contained in our Audit Committee Key Practices, which are published on the Company’s website at http://investors.synchronyfinancial.cominvestors.synchrony. com under “Corporate Governance.”
| |
ITEM 3—RATIFICATION OF SELECTION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 20162023
We are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2016.2023. The Audit Committee has approved the selection of KPMG as our independent registered public accounting firm for 2016; and2023. KPMG is currently our independent registered public accounting firm.
THE AUDIT COMMITTEE AND THE BOARD RECOMMEND |
A VOTE FOR |
ratification of the selection of KPMG as our independent registered public accounting firm for 2023. |
Although the Company is not required to seek stockholder approval of this appointment, the Board believes that doing so is consistent with good corporate governance practices. If the selection is not ratified, the Audit Committee will explore the reasons for stockholder rejection and whether it is appropriate to select another independent auditor.
We have been advised that representatives of KPMG will attend the Annual Meeting. They will have an opportunity to make a statement if they wish to do so and will be available to respond to appropriate questions.
The Audit Committee and the Board recommend a voteFOR ratification of the selection of KPMG as our independent registered public accounting firm for 2016.
The Audit Committee reviews and oversees the Company’s financial reporting process on behalf of the Board, including the selection, evaluation, compensation and oversight of our independent auditor. Management has the primary responsibility for the Company’s financial statements and overall financial reporting process, including the Company’s internal control over financial reporting. KPMG, our independent auditor for 2015,2022, has the responsibility to conduct an independent audit in accordance with generally accepted auditing standards and to issue an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles.
In this context, the Audit Committee:
| • | Has reviewed and discussed with management the Company’s audited consolidated financial statements for the year ended December 31, 2022; |
| • | Has discussed with KPMG the matters required to be discussed by Auditing Standard No. 1301: Communications with Audit Committees; |
| • | Has discussed with KPMG its assessment of the effectiveness of the Company’s internal control over financial reporting; |
| • | Has received from KPMG the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence; and |
| • | Has discussed with KPMG its independence, taking into consideration the amount and nature of the fees paid to the firm for audit and non-audit services. |
Based on the review and discussions described above, the Audit Committee has recommended to the Board that the audited consolidated and combined financial statements for the year ended December 31, 20152022 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20152022 for filing with the SEC.
Respectfully submitted by the Audit Committee of the Board.
Jeffrey G. Naylor, Chair
Paget L. Alves
Olympia J. SnoweKamila Chytil
Ellen M. Zane
2023 ANNUAL MEETING AND PROXY STATEMENT / 69
| ||||||
BENEFICIAL OWNERSHIP | ||||||
At March 24, 2016,16, 2023, we had833,830,398had 428,447,357 shares of common stock issued and outstanding.
The following table shows information regarding the beneficial ownership of our common stock by:
| • | All persons known by us to own beneficially more than 5% of our common stock; • |
| • | Our CEO and each of our named executive officers; |
| • | Each of our directors; and |
| • | All directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Synchrony Financial common stock subject to options or RSUs held by that person that are currently exercisable or exercisable (or in the case of RSUs, vested or vest) within 60 days of the date of this proxy statement are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of each other stockholder. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them.
Except as noted by footnote, all stockholdings are as of March 24, 201616, 2023, and the percentage of beneficial ownership is based on833,830,398on 428,447,357 shares of common stock outstanding as of March 24, 2016.16, 2023.
| NAME OF BENEFICIAL OWNER | NUMBER OF SHARES | PERCENT OF TOTAL | ||
The Vanguard Group—100 Vanguard Blvd., Malvern, PA 19355 (1) | 58,021,118 | 12.88% | ||
Capital World Investors—333 South Hope Street, 55th Fl, Los Angeles, CA 90071 (2) | 45,088,025 | 10.0% | ||
BlackRock, Inc.—55 East 52nd Street, New York, NY 10055 (3) | 40,751,703 | 9.0% | ||
FMR LLC—245 Summer Street, Boston, MA 02210 (4) | 18,346,980 | 4.07% | ||
Margaret M. Keane (5) | 1,161,978 | * | ||
Brian D. Doubles (6) | 528,206 | * | ||
Carol Juel (7) | 74,693 | * | ||
Tom M. Quindlen (8) | 243,758 | * | ||
Brian J. Wenzel, Sr. (9) | 53,735 | * | ||
Fernando Aguirre (10) | 19,001 | * | ||
Paget L. Alves (10) | 13,126 | * | ||
Kamila Chytil | 0 | * | ||
Arthur W. Coviello, Jr. (10) | 34,627 | * | ||
Roy A. Guthrie (10) | 12,079 | * | ||
Jeffrey G. Naylor (10) | 44,320 | * | ||
P.W. “Bill” Parker (10) | 16,558 | * | ||
Laurel J. Richie (10) | 15,631 | * | ||
Ellen M. Zane (10) | 1,216 | * | ||
All directors and executive officers as a group (21 persons) | 2,767,843 | * | ||
| * | ||||
| |
| Name of Beneficial Owner | Number of Shares | Percent of Total | ||||||
BlackRock, Inc. | 49,614,142 | 6.0 | % | |||||
The Vanguard Group | 46,901,514 | 5.6 | % | |||||
Margaret M. Keane(3) | 43,130 | * | ||||||
Brian D. Doubles(4) | 15,406 | * | ||||||
Jonathan S. Mothner(5) | 9,000 | * | ||||||
Glenn P. Marino(6) | 12,461 | * | ||||||
Thomas M. Quindlen(7) | 17,350 | * | ||||||
Paget L. Alves | 0 | 0 | % | |||||
Arthur W. Coviello, Jr. | 6,186 | * | ||||||
William W. Graylin | 32,000 | * | ||||||
Roy A. Guthrie(8) | 10,000 | * | ||||||
Richard C. Hartnack | 2,000 | * | ||||||
Jeffrey G. Naylor | 20,000 | * | ||||||
Laurel J. Richie | 0 | 0 | % | |||||
Olympia J. Snowe | 0 | 0 | % | |||||
All directors and executive officers as a group (16 persons) | 193,214 | * | ||||||
Denotes less than 1.0% |
70/ 2023 ANNUAL MEETING AND PROXY STATEMENT
| (1) | Based on a Schedule |
Based on a Schedule 13G/A filed on February 13, 2023 by Capital World Investors regarding its holdings of our common stock as of December 31, 2022. The Schedule 13G/A discloses that the reporting entity had sole voting power as to 45,088,025 of the shares, shared voting power as to none of the shares, sole dispositive power as to 45,088,025 of the shares and shared dispositive power as to none of the shares. |
| (3) | Based on a Schedule 13G/A filed on January 30, 2023 by BlackRock, Inc. regarding its holdings, together with its subsidiaries, of our common stock as of December 31, 2022. The Schedule 13G/A discloses that the reporting entity had sole voting power as to 36,097,026 of the shares, shared voting power as to none of the shares, sole dispositive power as to 40,751,703 of the shares and shared dispositive power as to none of the shares. |
| (4) | Based on a Schedule 13G/A filed on February 9, 2023 by FMR LLC regarding its holdings, together with certain of its subsidiaries and affiliates, of our common stock as of December 31, 2022. The Schedule 13G/A discloses that the reporting entity had sole voting power as to 17,687,085 of the shares, shared voting power as to none of the shares, sole dispositive power as to 18,346,980 of the shares and shared dispositive power as to none of the shares. |
| (5) | Includes |
Includes |
Includes |
Includes |
Includes |
Includes 1,216 restricted stock |
units that vested on March 31, 2023.
| |
2023 ANNUAL MEETING AND PROXY STATEMENT / 71
BENEFICIAL OWNERSHIP
RELATED PERSON TRANSACTIONS
Relationship with GE and GECC
Prior to the completion of the exchange offer and Separation from GE in November 2015, GE provided a variety of services to Synchrony, and Synchrony provided a variety of services to GE. These arrangements are described in the “Agreements Between GE and Synchrony and Other Related Party Transactions” section in our Amendment No. 1 to Form S-4 (Reg. No. 333-207479), filed on November 3, 2015 (the “S-4”), and such description is incorporated herein by reference. The majority of the arrangements with GE and GECC have been replaced, and the limited remaining arrangements consist primarily of information technology services, which will cease or be replaced by mid-2016.
Other than as previously disclosed in the S-4, thereThere were no othertransactions or proposed transactions between the Company and any officer, director or nominee for director, any stockholder beneficially owning more than 5% of any class of our voting stock or any affiliateimmediate family member of or person related to any of them, since January 1, 2015,2022, of the type or amount required to be disclosed under the applicable SEC rules.
Following the Separation, GE no longer owns any of our outstanding common stock and is no longer a related party to us, and we no longer consider our transactions with GE as related party transactions.RELATED PERSON
Related Person Transactions PolicyTRANSACTIONS POLICY
Our Board has adopted a written policy for the review, approval or ratification of transactions (known as “related person transactions”) between us or any of our subsidiaries and any related person, in which the amount involved since the beginning of our last completed fiscal year will or may be expected to exceed $120,000 and in which one of our executive officers, directors or nominees for director, or stockholders beneficially owning more than 5% of any class of our voting stock (or theiran immediate family members)member of any of the foregoing has a direct or indirect material interest. Other than as previously disclosed in the S-4, sinceinterest). Since January 1, 2015,2022, no other transaction has been identified as a related person transaction.
The policy calls for related person transactions to be reported to, reviewed and, if deemed appropriate, approved or ratified by, the Nominating and Corporate Governance Committee. In determining whether or not to approve or ratify a related person transaction, the Nominating and Corporate Governance Committee will take into account, among other factors it deems important, whether the related person transaction is in our best interests and whether the transaction is on terms no less favorable than terms generally available to us from an unaffiliated third party under the same or similar circumstances. In the event a member of the Nominating and Corporate Governance Committee is not disinterested with respect to the related person transaction under review, that member may not participate in the review, approval or ratification of that related person transaction.
Certain decisions and transactions are not subject to the related person transaction approval policy, including: (i) decisions on compensation or benefits relating to our directors or executive officers or the hiring or retention of our executive officers, (ii) decisions relating to pro rata distributions to all our stockholders, (iii) indebtedness transactions with the Bank made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to the lender and not presenting more than the normal risk of collectability or other unfavorable features, and (iv) deposit transactions with the Bank made in the ordinary course of business and not paying a greater rate of interest on the deposits of a related person than the rate paid to other depositors on similar deposits with the Bank.
Certain of our directors and executive officers and certain members of their immediate families have received extensions of credit from us in connection with credit card transactions. The extensions of credit were made in the ordinary course of business on substantially the same terms, including interest rates, as those prevailing at the time for comparable transactions with other persons not related to us and did not involve more than the normal risk of collectability or present other unfavorable terms.
Future extensions of credit of this nature are not subject to the related person transaction approval policy.
72/ 2023 ANNUAL MEETING AND PROXY STATEMENT
FREQUENTLY ASKED QUESTIONS | ||||
| ABOUT THE ANNUAL MEETING (“FAQS”) | ||||
VOTING INFORMATION WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? Holders of our common stock as of the close of business on the record date, which is March 23, 2023, are entitled to notice of, and to vote at, the Annual Meeting. As of March 16, 2023, there were 428,447,357 shares of our common stock outstanding and entitled to vote at the Annual Meeting, with each share entitled to one vote. HOW DO I VOTE AT THE ANNUAL MEETING? Stockholders of record can vote in one of four ways: | Voting instructions (including instructions for both telephonic and internet voting) are provided on the Notice and the proxy card. The telephone and internet voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly. A control number, located on the Notice and the proxy card, will identify stockholders and allow them to submit their proxies and confirm that their voting instructions have been properly recorded. If your shares are held through a bank, broker, fiduciary or custodian (which we refer to in this proxy statement as a “broker”), please follow the voting instructions on the form you receive from such institution. WHAT IF MY SHARES OF THE COMPANY’S COMMON STOCK ARE HELD FOR ME BY A BROKER? If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares in accordance with your instructions. If you do not provide your broker with instructions as to how to vote such shares, your broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by NYSE rules. The proposal to ratify the appointment of KPMG is the only proposal considered a routine matter to be presented at the Annual Meeting. Brokers will not be permitted to vote your shares on any of the other matters presented at the Annual Meeting. If you do not provide voting instructions on these matters, including the election of the Director Nominees named herein, the shares will be considered “broker non-votes” with respect to such matters. | |||||||
| BY MAIL You may date, sign and promptly return your proxy card by mail in a postage prepaid envelope (such proxy card must be received by May 17, 2023). | |||||||
| BY TELEPHONE You may use the toll-free telephone number shown on your Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy card up until 11:59 p.m., Eastern Time, on May 17, 2023. | |||||||
| BY THE INTERNET In Advance You may vote online by visiting the internet website address indicated on your Notice or proxy card or scan the QR code indicated on your Notice or proxy card with your mobile device, and follow the on-screen instructions until 11:59 p.m., Eastern Time, on May 17, 2023. | |||||||
At the Annual Meeting You may attend the virtual Annual Meeting by visiting this internet website address: www. virtualshareholdermeeting.com/SYF2023. | ||||||||
2023 ANNUAL MEETING AND PROXY STATEMENT / 73
FREQUENTLY ASKED QUESTIONS (“FAQS”)
WHAT IF I DO NOT VOTE OR DO NOT INDICATE HOW MY SHARES SHOULD BE VOTED ON MY PROXY CARD?
If a stockholder does not return a signed proxy card or submit a proxy by telephone or the internet, and does not attend the meeting and vote, his or her shares will not be voted or counted as present for purposes of establishing a quorum at the Annual Meeting. Shares of our common stock represented by properly executed proxies received by us and not subsequently revoked will be voted at the Annual Meeting in accordance with the instructions contained therein.
If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Board recommends on such proposal. In addition, if any other matter is properly presented at the Annual Meeting, the persons named in the accompanying proxy card will have discretion to vote your shares in their best judgment on such matter.
HOW CAN I CHANGE MY VOTES OR REVOKE MY PROXY AFTER I HAVE VOTED?
Any proxy signed and returned by a stockholder or submitted by telephone or via the internet may be revoked or changed at any time before it is exercised by mailing a written notice of revocation or change to our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 or by executing and delivering a later-dated proxy (either in writing, by telephone or via the internet).
WILL MY VOTES BE PUBLICLY DISCLOSED?
No. Stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed and are available only to the inspector of election and certain employees, who are obligated to keep such information confidential.
WHAT IF OTHER MATTERS COME UP DURING THE ANNUAL MEETING?
If any other matters properly come before the meeting, including a question of adjourning or postponing the meeting, the persons named in the proxies or their substitutes acting thereunder will have discretion to vote your shares on such matters in accordance with their best judgment.
WHAT CONSTITUTES A QUORUM AT THE ANNUAL MEETING?
The presence at the Annual Meeting, present in person, present by means of remote communication, or represented by proxy, of the holders of a majority in voting power of the outstanding capital stock issued and entitled to vote at the Annual Meeting is required to constitute a quorum to transact business at the Annual Meeting. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under “What if my shares of the Company’s common stock are held for me by a broker?,” if brokers exercise their discretionary voting authority on the ratification of the appointment of KPMG, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting.
| | HOW MANY VOTES ARE REQUIRED TO APPROVE EACH MATTER TO BE CONSIDERED AT THE ANNUAL MEETING? | |||||||||
TREATMENT OF ABSTENTIONS
AND BROKER NON-VOTES
BOARD
RECOMMENDATION
Not counted as votes cast and
therefore will have no effect
Not counted as votes cast and
therefore will have no effect
74/ 2023 ANNUAL MEETING AND PROXY STATEMENT
FREQUENTLY ASKED QUESTIONS (“FAQS”)
ADDITIONAL INFORMATIONWHO WILL COUNT THE VOTE?
Votes will be tabulated by Broadridge. The Board has appointed a representative of Broadridge to serve as the Inspector of Elections.
WILL A LIST OF STOCKHOLDERS BE MADE AVAILABLE?
We will make a list of stockholders available for 10 days prior to the Annual Meeting at our offices located at 777 Long Ridge Road, Stamford, Connecticut 06902. Please contact Synchrony’s Corporate Secretary by telephone at (203) 585- 2400 if you wish to inspect the list of stockholders prior to the Annual Meeting. This list will also be available during the Annual Meeting at www. virtualshareholdermeeting.com/SYF2023.
PROXY SOLICITATION AND DOCUMENT REQUEST INFORMATION
WHY DID I RECEIVE A NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF PRINTED PROXY MATERIALS?
The SEC permits companies to furnish proxy materials to stockholders by providing access to these documents over the internet instead of mailing printed copies, which can reduce costs of printing and impact on the environment. Accordingly, we have mailed a Notice to some of our stockholders. All stockholders can access our proxy materials on the internet website referred to in the Notice. If you received a Notice and would like to receive a printed copy of our proxy materials, you should follow the instructions for obtaining such materials included in the Notice.
MULTIPLE INDIVIDUALS RESIDING AT MY ADDRESS ARE BENEFICIAL OWNERS OF THE COMPANY’S COMMON STOCK, SO WHY DID WE RECEIVE ONLY ONE MAILING?
The SEC permits companies to deliver a single Notice or set of Annual Meeting materials to an address shared by two or more stockholders. This delivery method is referred to as “householding.” We have delivered only one such Notice or set of Annual Meeting materials to some stockholders who share an address unless we received contrary instructions from the affected stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of such Notice or Annual Meeting materials to any stockholder at the shared address to which a single copy of
those documents was delivered. If you prefer to receive separate copies of such Notice or Annual Meeting materials, please contact our Corporate Secretary by telephone at (203) 585-2400 or in writing at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902.
If you are currently a stockholder sharing an address with another stockholder receiving multiple copies of Notices or Annual Meeting materials and wish to receive only one copy for your household, please contact the Company at the above phone number or address.
WHO IS SOLICITING MY PROXY AND WHO PAYS TO PREPARE, MAIL AND SOLICIT THE PROXIES?
The Board is soliciting proxies from the Company’s stockholders for the Annual Meeting. We will bear the costs of solicitation of proxies for the Annual Meeting, including preparation, assembly, printing and mailing of the Notice, this proxy statement, the annual report, the proxy card and any additional information furnished to stockholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any solicitation materials to such beneficial owners.
However, we do not reimburse or pay additional compensation to our own directors, officers or other employees for soliciting proxies. In addition, we have retained Innisfree M&A Incorporated to assist us in the solicitation of proxies for an aggregate fee of $20,000, plus reasonable out-of-pocket expenses.
INFORMATION ABOUT ATTENDING THE 2023 ANNUAL MEETING
HOW CAN I ATTEND THE ANNUAL MEETING?
Stockholders as of the record date and/or their authorized representatives are permitted to attend our Annual Meeting. The Annual Meeting will be conducted entirely over an internet website, at the following address: www.virtualshareholdermeeting. com/ SYF2023. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location. You may attend the Annual Meeting, vote and submit a question during the Annual Meeting by visiting www. virtualshareholdermeeting.com/ SYF2023 and using your 16-digit control number, located on the Notice and the proxy card, to enter the meeting.
2023 ANNUAL MEETING AND PROXY STATEMENT / 75
| ADDITIONAL INFORMATION |
OTHER BUSINESS
The Board has no knowledge of any other matter to be submitted at the Annual Meeting. If any other matter shall properly come before the Annual Meeting, including a question of adjourning or postponing the meeting, the persons named in this proxy statement will have discretionary authority to vote the shares thereby represented in accordance with their best judgment.
ANNUAL REPORT AND COMPANY INFORMATION
A copy of our 20152022 Annual Report is being furnished to stockholders concurrently herewith. Our Annual Report and other reports we file with the SEC are available free of charge on our website as soon as reasonably practicable after they are electronically filed or furnished to the SEC at http://investors.synchronyfinancial.cominvestors.synchrony.com under “SEC Filings.”
Under the heading “Related Person Transactions” in this proxy statement, we have incorporated by reference the information described in the “Agreements Between GE and Synchrony and Other Related Party Transactions” section in our Form S-4. Upon your oral or written request, we will provide you with a copy of the S-4 (excluding exhibits) at no cost. Requests should be directed to:
Synchrony Financial Investor Relations
777 Long Ridge Road
Stamford, Connecticut 06902
(855) 818-3056
STOCKHOLDER PROPOSALS FOR THE 20172024 ANNUAL MEETING
Proposals that stockholders wish to submit for inclusion in our proxy statement for our 20172024 Annual Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be received by our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 no later than December 5, 2016.2023. Any stockholder proposal submitted for inclusion must be eligible for inclusion in our proxy statement in accordance with the rules and regulations promulgated by the SEC.
With respect to proposals submitted by a stockholder for consideration at our 2017 Annual Meeting2024 annual meeting but not for inclusion in our proxy statement for such Annual Meeting,annual meeting, timely notice of any stockholder proposal must be received by us in accordance with our Bylaws no earlier than January 19, 20172024, nor later than February 18, 2017.2024. Such notice must contain the information required by our Bylaws.laws.
Stockholders who intend to submit director nominees for inclusion in our proxy statement for the 2024 annual meeting must comply with the requirements of proxy access as set forth in our Bylaws. The stockholder or group of stockholders who wish to submit director nominees pursuant to proxy access must deliver the required materials to the Company not earlier than November 5, 2023, nor later than December 5, 2023. Stockholders who wish to propose director nominees at the 2024 annual meeting but not include such nominees in our proxy statement must deliver notice to the Company at its principal executive offices no earlier than January 19, 2024, nor later than February 18, 2024, and such notice must otherwise comply with our Bylaws. In addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 19, 2024.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE 20162023 ANNUAL MEETING TO BE HELD ON MAY 19, 201618, 2023
Our proxy materials relating to our 2016 Annual Meeting (notice,(Notice, proxy statement and annual report) are available at www.proxyvote.com.
76/ 2023 ANNUAL MEETING AND PROXY STATEMENT
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Synchrony
SYNCHRONY FINANCIAL 777 LONG RIDGE ROAD STAMFORD, CT 06902
SCAN TO
VIEW MATERIALS & VOTE
VOTE BY INTERNET
Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before meeting date. 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.
During The Meeting—Go to www.virtualshareholdermeeting.com/SYF2023
You may attend the Meeting via the internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE—1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
If you vote your proxy by internet or telephone, you do NOT need to mail back your proxy card. To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E06744-P76545
V04234-P82839
KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
SYNCHRONY FINANCIAL
The Board of Directors recommends a vote FOR all nominees and FOR Items 2 and 3.
1. Election of Directors
Nominees: For Against Abstain
1a. Brian D. Doubles
1b. Fernando Aguirre
1c. Paget L. Alves
1d. Kamila Chytil
1e. Arthur W. Coviello, Jr.
1f. Roy A. Guthrie
1g. Jeffrey G. Naylor
1h. Bill Parker
1i. Laurel J. Richie
1j. Ellen M. Zane
For Against Abstain
2. Advisory Vote to Approve Named Executive Officer Compensation
3. Ratification of Selection of KPMG LLP as Independent Registered Public Accounting Firm of the Company for 2023
NOTE: Any other matters that may
properly come before the meeting or any adjournments or postponements of the meeting.
All shares will be voted as instructed above. In the absence of instructions, all shares will be voted with respect to registered stockholders that return a signed proxy card, FOR all nominees listed in Item 1, FOR Item 2, and FOR Item 3.
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
2016SYNCHRONY FINANCIAL
2023 ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 2016
18, 2023 11:00 A.M., EASTERN TIME
www.virtualshareholdermeeting.com/SYF2016
SYF2023
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting is available through 11:59 PMP.M., Eastern Time on May 18, 2016.
17, 2023.
Your internet or telephone vote authorizes the named proxies to vote the shares in the
same manner as if you marked, signed and returned your proxy card.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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E06745-P76545
V04235-P82839
PROXY
FOR ANNUAL MEETING OF STOCKHOLDERS
SYNCHRONY FINANCIAL
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Margaret M. Keane, Brian D. Doubles, and Jonathan S. Mothner, and Brian J. Wenzel, Sr., and each of them, as proxies, each with full power of substitution, and authorizes them to represent and to vote, as designated on the reverse side of this form, all shares of common stock of Synchrony Financial held of record by the undersigned as of March 24, 2016,23, 2023, at the 20162023 Annual Meeting of Stockholders to be held on May 19, 2016,18, 2023, beginning at 11:00 a.m., Eastern Time, at www.virtualshareholdermeeting.com/SYF2016,SYF2023, and in their discretion, upon any matter that may properly come before the meeting or any adjournment of the meeting, in accordance with their best judgment.
If no other indication is made on the reverse side of this form, the proxies shall vote FOR all nominees listed in Item 1, FOR Item 2, and FOR Item 3.
This proxy may be revoked at any time prior to the time voting is declared closed by giving the Corporate Secretary of Synchrony Financial written notice of revocation or a subsequently dated proxy, or by casting a ballot at the meeting.
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side