UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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| From the Chairman, President and Chief Executive Officer
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March 30, 201826, 2021
Dear Shareholder:
We will hold our Annual Meeting of Shareholders at 8:30 AM, Eastern Daylight Time, on Wednesday,Tuesday, May 16, 2018,11, 2021. This year’s Annual Meeting of Shareholders will be held in a virtual only format through a live webcast. We will provide the webcast of the Annual Meeting at www.virtualshareholdermeeting.com/FNB21. The Virtual Annual Meeting presentation will be available online during the meeting and during the 30 days following the meeting, a replay of the meeting will be posted on F.N.B.’s website at https://www.fnb-online.com/about-us/investor-information/investor-relations/investor-analyst-presentations. For further information on how to participate in the Great Room at The Regional Learning Alliance located at 850 Cranberry Woods Drive, Cranberry Township, Pennsylvania 16066.meeting, please see About Our Annual Meeting on Page 92 in this Proxy Statement.
Agenda
At our Annual Meeting, our shareholders will act on the following matters: (i) election of thirteen (13) director nomineestwelve (12) director-nominees named in the accompanying proxy statementProxy Statement to our Board of Directors; (ii) adoption of an advisory(non-binding) resolution to approve the 20172020 compensation of our named executive officers; (iii) ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018;2021; and (iv) any other matter that is properly presented at our Annual Meeting in compliance with our bylaws.
Your Vote is Important
Your vote is important regardless of how many shares of F.N.B. Corporation stock you own. If you hold stock in more than one account or name, you will receive a proxy card for each.
Whether or not you plan to attendlog in to our Annual Meeting, please complete, sign, date and promptly return the enclosed proxy card in the postage-paid envelope we have provided to ensure that your shares are represented at our Annual MeetingMeeting.. Alternatively, you may vote by the Internet, by our QR Code feature or by telephone simply by following the instructions on your proxy card. By voting now, your vote will be counted even if you are unable to attend our Annual Meeting.Meeting virtually.
Please indicate on the card whether you plan to attendlogin to our Annual Meeting. If you attend and wish to vote in person,virtually during our Annual Meeting, you may withdraw your proxy at that time.
 |  | As always, our directors, management and
Vincent J. Delie, Jr. Chairman, President and Chief Executive Officer |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date:
Wednesday
May 16, 2018
Time:
8:30 AM
(Eastern Daylight Time)
Place:
Great Room at The Regional Learning Alliance
850 Cranberry Woods Drive
Cranberry Township, Pennsylvania 16066
Record Date:
March 7, 2018
Only shareholders of record as of the close of business on March 7, 2018, are entitled to notice of and to vote at our Annual Meeting. Please refer to responses to the frequently asked questions under the heading Voting in our 2018 proxy statement for additional information about how to vote your shares and attend our Annual Meeting.
Proposals:
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Record Date | March 5, 2021 — Only shareholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting. |
Proxy Voting | Make your vote count. Please vote your shares promptly to ensure the presence of a quorum during the Annual Meeting. Voting your shares now via the Internet, by telephone or by signing and returning the enclosed proxy card or voting instruction form will save the expense of additional solicitation. If you wish to vote by mail, we have enclosed an addressed envelope with postage prepaid if mailed in the U.S. Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option. |
Items of Business | We are requesting your vote: |
To elect the 12 nominees named in this proxy statement to serve on our Board of Directors until the 2022 Annual Meeting.
To provide an advisory vote for approval of the 2020 compensation of our named executives as disclosed in this proxy statement.
To ratify the appointment of Ernst & Young LLP as our independent auditor for 2021.
We will also act on any other timely business that is properly submitted.
Address of Corporate
Headquarters
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Meeting Details | See About Our Annual Meeting — Frequently Asked Questions on Page 92. |
BY ORDER OF THE BOARD OF DIRECTORS,
James G. Orie
Chief Legal Officer and Corporate Secretary
March 30, 2018
Pittsburgh, Pennsylvania26, 2021
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
OUR NOTICE OF ANNUAL MEETING, OF SHAREHOLDERS TO BE HELD ON MAY 16, 2018:
THE F.N.B. CORPORATION2021 PROXY STATEMENT, AND 20172020 ANNUAL REPORT, TO SHAREHOLDERS
2020 FORM 10K AND OUR 2021 CORPORATE RESPONSIBILITY REPORT ARE AVAILABLE AT http:https://www.proxyvote.com.www.proxyvote.com
Table of Contents
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2021 Proxy Statement i
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This proxy statement contains forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe” or other words of similar meaning. Forward-looking statements provide F.N.B. Corporation’s current expectations or forecasts of future events, circumstances, results or aspirations, and are subject to significant risks and uncertainties. These risks and uncertainties could
cause the F.N.B. Corporation’s actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties are described in F.N.B. Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020. F.N.B. Corporation does not undertake to update the forward-looking statements included in this proxy statement to reflect the impact of circumstances or events that may arise after the date the forward-looking statements were made.
ii F.N.B. Corporation
Proxy Statement |
One North Shore Center
12 Federal Street
Pittsburgh, PA 15212
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Our proxy statement2021 Proxy Statement (Proxy Statement) contains information relative to our Annual Meeting of Shareholders to be held on Wednesday,Tuesday, May 16, 2018,11, 2021, beginning at 8:30 AM, Eastern Daylight Time (EDT),(ET). This year’s Annual Meeting of Shareholders will be held in a virtual only format through a live webcast. We will provide the webcast of the Annual Meeting at www.virtualshareholdermeeting.com/FNB21. The Virtual Annual Meeting presentation will be available online during the meeting and, during the 30 days following the meeting, a replay of the meeting will be posted on F.N.B.’s website at https://www.fnb-online.com/about-us/investor-information/investor-relations/investor-analyst-presentations. For further information on how to participate in the Great Room at The Regional Learning Alliance located at 850 Cranberry Woods Drive, Cranberry Township, Pennsylvania 16066 (our “Annual Meeting”).meeting, please see About Our Annual Meeting — Frequently Asked Questions on Page 92 in this proxy statement. This proxy statement also relates to any adjournment of our Annual Meeting. This proxy statement was prepared under the direction of the F.N.B. Corporation Board of Directors to solicit your proxy for use at the Annual Meeting. On March 30, 2018,26, 2021, we commenced the distribution of our proxy statement and the accompanying proxy card to our shareholders of record as of March 7, 2018.5, 2021. We will bear all costs of preparing and distributing our proxy materials to our shareholders. We will, upon request,
reimburse brokers, nominees, fiduciaries, custodians and other record holders for their reasonable expenses in forwarding our proxy materials to beneficial owners.
Throughout this Proxy Statement, we summarize, describe or make references to various F.N.B. Corporation corporate governance documents, committee charters, ethical codes and policies. Should you desire to review these corporate governance documents and policies, you will find the corresponding weblink for each under the section of this Proxy Statement titled, Key Corporate Governance Documents (Pages 28-29) and Resources (Page 100).
We use the following terms in this proxy statement:
“We,” “us,” “our,” “F.N.B.,” “Company,” or “Corporation” meanmeans F.N.B. Corporation;Corporation and its subsidiaries and affiliates;
“Board” means the joint F.N.B. Corporation and First National Bank of Pennsylvania Boards of Directors;
“FNBPA” or “Bank” means First National Bank of Pennsylvania;
“F.N.B. Capital” means F.N.B. Capital Corporation, LLC; and
“CEO” means Chief Executive Officer.
What is a proxy?
Your proxy gives us authority to vote your shares and tells us how to vote your shares at the Annual Meeting or any adjournment. Three of our employees, who are called “proxy holders” (or “proxies” for short) and are named on the proxy card, will vote your shares at the Annual Meeting according to the instructions you give on the proxy card.
Why are you soliciting a proxy from me?
Our Board of Directors is soliciting your proxy to make sure that your vote is properly submitted and received on time, and to improve the efficiency of the Annual Meeting. We may ask for, or solicit, proxies using several methods.
We may solicit proxies by mail, personal interviews, telephone or fax. We may also use the Internet to solicit proxies. F.N.B. officers or employees may solicit proxies, but will not receive any special compensation for doing so. We have engaged the firm of Laurel Hill Advisory Group, LLC to assist us with soliciting proxies.
What will our shareholders vote on at our Annual Meeting?
Our shareholders will act upon the following proposals at our Annual Meeting:
Election of the thirteen (13) nominees for directors named in this proxy statement, each to serve for a term of one year and until the election of their successors (Proposal 1);
Adoption of an advisory(non-binding) resolution to approve the 2017 compensation of our named executive officers (Proposal 2);
Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018 (Proposal 3); and
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| 2021 Proxy Statement 1 |
Who is entitled to vote at our meeting?
Our Board has set March 7, 2018, as the record date for our Annual Meeting. Only holders of record of our common stock at the close of business on the record date are entitled to receive notice of and to vote at our Annual Meeting and any adjournment of our Annual Meeting. F.N.B. shareholders who plan to attend our Annual Meeting may obtain driving directions to the
meeting location by contacting our shareholder services representative at (888)981-6000 and asking to be connected to extension 4254.
What are the Board’s voting recommendations?
The Board recommends that you vote your shares:
“For” the election of each of the thirteen (13) nominees for election as directors named in this
2018 Proxy Statement 1
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“For” adoption of the advisory(non-binding) resolution to approve the 2017 compensation of our named executive officers (Proposal 2); and
“For” ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018 (Proposal 3).
What is a quorum?
On March 7, 2018, our record date, we had 323,627,694 shares of common stock outstanding. Under Pennsylvania law, we must have a quorum before we can consider proposals at our Annual Meeting. A quorum is the number of shares that must be present at the meeting. In determining if a quorum exists, we count the number of shares represented by shareholders in person as well as the number of shares represented by proxies. If you return a signed and dated proxy card, vote by Internet, vote by our QR Code feature, vote by telephone or vote in person at our Annual Meeting, you will be considered present for purposes of establishing a quorum.
To have a quorum, we need the presence of shareholders or their proxies who are entitled to castat least a majority of the votes that all shareholders are entitled to cast. If you return a proxy, whether you vote for or against a proposal, abstain from voting or only sign and date your proxy card, your holdings will be counted toward the quorum.
Although a quorum may be achieved, not all proposals will be subject to the same voting or approval requirement. Shareholders who hold their shares in an account at a bank or brokerage firm (street name) may need to take additional precautions to ensure that their vote counts. We discuss the vote required to approve each proposal under the question immediately below.
What vote is required to approve each matter?
In general, if you abstain from voting, it will not count as a vote “cast.” However, please see the summaries below for more specific information about how abstentions will be counted with respect to each proposal. With respect to Proposals 1, 2 and 3, if you desire to abstain, you must check the “Abstain” box on your proxy card, or select the appropriate option when voting by the Internet, by QR Code, or by telephone.
PROPOSAL 1. ELECTION OF DIRECTORS
Our bylaws provide that in the circumstance of an uncontested director election, which is the case for this year’s director election, our directors are elected by a
majority of the votes cast in person or by proxy at our Annual Meeting. Our Articles of Incorporation do not authorize cumulative voting for the election of directors. To receive a majority of votes cast means that the shares voted for a director’s election exceed the number of votes cast against that director’s election. Moreover, our bylaws provide that any incumbent director who does not receive a majority of votes cast will promptly tender his or her resignation to the Board. Upon recommendation of the Nominating and Corporate Governance Committee, the Board shall determine whether to accept the resignation. The director election is considered anon-routine item and, as such, there may be brokernon-votes. Any brokernon-votes or abstentions will not be included in the total votes cast and will not affect the director election results. If there is a contested election (which is not the case in 2018), directors are elected by a plurality of votes cast at the meeting.
PROPOSAL 2. “SAY ON PAY” ADVISORY VOTE ON EXECUTIVE COMPENSATION
A majority of the votes cast will be required to approve the advisory vote on executive compensation. Because your vote is advisory, it will not be binding on the Board or the Corporation. This matter is considered anon-routine matter and, as a result, there may be brokernon-votes. Any brokernon-votes or abstentions will not be included in the total votes cast and will not affect the results.
PROPOSAL 3. RATIFICATION OF AUDITOR
A majority of the votes cast will be required to approve the ratification of our Audit Committee’s selection of Ernst & Young LLP as our independent registered public accounting firm for 2018. This matter is considered a routine item, and brokers have the discretion to vote uninstructed shares on behalf of clients. As a routine item, there will be no brokernon-votes, although brokers may fail to submit a vote. Any failure by brokers to vote or any abstentions will not be included in the total votes cast and will not affect the results.
What are the voting rights of our shareholders?
The only class of our securities that is outstanding and entitled to vote at our Annual Meeting is our common stock. As of the March 7, 2018, record date, we had 322,774,059 shares of our common stock each entitled to one vote per share with respect to each matter to be voted on at our Annual Meeting.
How do I vote?
You can vote either in person at our Annual Meeting or by proxy whether or not you attend our Annual Meeting.
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When you or your authorizedattorney-in-fact grants us your proxy, you authorize us to vote your shares of our common stock in the manner you specify on your proxy card. Giving a proxy allows your shares to be voted at our Annual Meeting even if you do not attend the Annual Meeting in person. If your shares are held in street name, you will receive a separate card from your bank or brokerage firm with instructions about the manner in which you may vote your shares.
If you hold your shares directly, to vote by proxy you must do one of the following:
Vote by mail. Complete, sign, date and return the enclosed proxy card in the envelope provided (the envelope requires no postage if mailed in the United States) or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Vote in person at the Annual Meeting. If you are a registered shareholder and attend our Annual Meeting, you may deliver your completed proxy card in person or request a voting ballot to vote in person at the meeting. Even if you returned a proxy to us before our Annual Meeting, you may revoke it and vote in person.
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Vote by QR Code* by scanning the QR Code on your proxy card with your mobile device. If you vote by QR Code, you should not return your proxy card.
Vote by telephone* at1-800-690-6903. Instructions are provided on your proxy card. If you vote by telephone, you should not return your proxy card.
*Proxies voted by Internet, by telephone or by QR Code must be received by 11:59 PM, EDT on May 15, 2018, in order to be counted in the vote.
If you hold your F.N.B. shares in an account at a bank or brokerage firm, and you want to vote in person at our Annual Meeting, you will need to obtain a signed proxy card from the brokerage firm or the bank that holds your F.N.B. stock. If your F.N.B. stock is registered in the name of a bank or brokerage firm, you also may be eligible to vote your shares electronically by Internet, by the QR Code on your proxy card, or by telephone. Many banks and brokerage firms participate in programs such as the Broadridge Financial Solutions, Inc. online program. These programs provide eligible shareholders who receive a paper copy of this proxy statement the opportunity to vote by the Internet, by QR Code or by telephone. If your bank or brokerage firm is participating in one of these programs, your proxy card will contain instructions for voting by Internet, by QR
Code or by telephone. If your proxy card does not reference Internet, QR Code or telephone information, please complete and return the proxy card in the enclosed self-addressed, postage-paid envelope.
How will my shares be voted if I give my proxy but do not specify how my shares should be voted?
If you sign, date and return your proxy card, but do not provide voting instructions, or if you do not provide voting instructions when voting over the Internet, we will vote your shares represented by that proxy as recommended by our Board of Directors (seeWhat are the Board’s voting recommendations?), and this vote will count as a vote cast.
Who can attend our Annual Meeting?
All shareholders as of the close of business on March 7, 2018 (the record date), or their duly appointed proxies, may attend our Annual Meeting. Even if you currently plan to attend our Annual Meeting, we recommend that you vote by any of the applicable methods described above so that your vote will be counted at our Annual Meeting if you later decide not to attend.
If your shares are held in street name by your bank or brokerage firm, you will need to bring a valid form of identification along with a copy of a brokerage statement reflecting your ownership of F.N.B. stock as of the March 7, 2018, record date, and check in at the registration desk at our Annual Meeting.
What are the requirements for admittance to the Annual Meeting?
Only shareholders as of the record date have a right to attend the Annual Meeting. In order to be admitted to the Annual Meeting, you will need to present a government-issued photo identification (such as a driver’s license or passport) and, if you hold your shares in an account at a bank or brokerage firm, recent evidence of ownership of our common stock as of the record date (such as a brokerage account statement, a letter of proxy from your broker, or other intermediary). Entrance after the Annual Meeting has commenced will be prohibited. If you are representing an entity that is a shareholder, you must also present documentation showing your authority to attend and act on behalf of the entity (such as a power of attorney, written proxy to vote or letter of authorization on the entity’s letterhead). We reserve the right to limit the number of representatives for any entity that may be admitted to the meeting. No cameras, recording equipment, large bags or packages will be permitted in the Annual Meeting. The use of cell phones, smart phones, tablets and other personal communication devices during the Annual Meeting is also prohibited.
2018 Proxy Statement 3
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Can I change my vote after I have voted?
You may revoke your proxy and change your vote at any time before it is voted at our Annual Meeting. You may change your vote by delivering a written notice of revocation to our Corporate Secretary at F.N.B. Corporation, One North Shore Center, 12 Federal Street, Suite 503, Pittsburgh, PA 15212, by signing and returning a new proxy card with a later date, by voting by the Internet, by scanning the QR Code on your proxy card with your mobile device at a later date, by telephone, or by attending the Annual Meeting and voting in person. Only your latest instruction will be counted. However, your attendance at our Annual Meeting will not automatically revoke your proxy unless you vote again at our Annual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation prior to our Annual Meeting to our Corporate Secretary at F.N.B. Corporation, One North Shore Center, 12 Federal Street, Suite 503, Pittsburgh, Pennsylvania 15212.
How do I vote if my shares are held in street name?
If you hold your shares in street name in an account at a bank or brokerage firm, we generally cannot mail our proxy materials directly to you. Instead, your bank or brokerage firm will forward our proxy materials to you and tell you how to give them instructions for voting your F.N.B. shares.
Please ensure that you instruct your bank or brokerage firm how to vote your shares. Under New York Stock Exchange (NYSE) rules applicable to brokers, your broker has discretionary authority to vote your shares without receiving your instructions on “routine” matters. The only routine matter before our Annual Meeting will be the ratification of Ernst & Young LLP as the Corporation’s independent registered public accounting firm for 2018. All the other proposals that will be considered at our Annual Meeting are“non-routine” matters. Your bank or brokerage firm does not have discretionary authority to vote on anon-routine matter unless you provide them with your voting instructions. Therefore, please ensure that you instruct your bank or brokerage firm how to vote your shares with respect to election of our directors, the advisorynon-binding resolution to approve the 2017 compensation of our named executive officers, and the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018.
How do I vote my 401(k) Plan shares?
If you participate in the F.N.B. Corporation Progress Savings 401(k) Plan (401(k) Plan), you may vote the number of shares of common stock credited to your
account as of the record date. You may vote by instructing T. Rowe Price, the trustee of our 401(k) Plan, pursuant to the voting instruction card being mailed with this proxy statement to plan participants. The trustee will vote your shares in accordance with your duly executed voting instruction card, provided that the trustee receives it by 3:00 AM, EDT, on Friday, May 11, 2018.
In the case of the 401(k) Plan, if you do not return your voting instruction card, the shares credited to your plan account will be voted by the trustee in the same proportion that it votes the shares for which it timely received voting instruction cards.
You may also revoke a previously given proxy card until 3:00 AM, EDT, on Friday, May 11, 2018, by filing with the trustee either a written notice of revocation or a properly completed and signed voting instruction card or Internet vote or telephone vote having a later date.
How will we conduct the business of our Annual Meeting?
Our bylaws govern the organization and conduct of business at our shareholder meetings. Our bylaws specify that our Board Chairman shall preside at our shareholder meetings. Our Board Chairman, Vincent J. Delie, Jr., will serve as Chairman of our Annual Meeting and call the meeting to order. As Chairman of our Annual Meeting, Board Chairman Delie will determine, at his discretion, the order of the business to be conducted at our Annual Meeting and the procedure for our Annual Meeting. Board Chairman Delie will announce the opening and closing of the polls for each matter on which our shareholders will vote at our Annual Meeting.
Who can answer my questions?
Should you have questions concerning these proxy materials or our Annual Meeting or should you wish to request additional copies of this proxy statement or proxy card, you may contact Mr. James G. Orie, our Chief Legal Officer and Corporate Secretary, at (888)981-6000 and ask to be connected to extension 3435.
How can I avoid receiving more than one set of proxy materials in future years?
If two or more registered shareholders live in your household or if a registered shareholder maintains two or more shareholder accounts, you may have received more than one set of our proxy materials. At your request, we will “household” your proxy materials, i.e., only one annual report and one proxy statement will be delivered to your address; however, a separate proxy card will be delivered for each account. On the proxy
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card, there will be a householding election where you will indicate if you consent to receive your proxy materials in a single package per household. Please refer to the section titled,“Householding” of Proxy Materials at the end of this proxy statement.
Is my vote confidential?
We process proxy instructions, ballots and voting tabulations that identify individual shareholders in a manner that protects your voting privacy. We will not disclose your vote either within the Company or to third parties, except:
As necessary to meet applicable legal requirements;
To allow for the tabulation and certification of votes; and
To facilitate a successful proxy solicitation.
Occasionally, shareholders provide written comments on their proxy cards. At our discretion, we may forward your comments to our management or the Board.
Where can I find the voting results of the Annual Meeting?
We will announce the preliminary voting results at our Annual Meeting. The judges of election will tally the final voting results and we will include the final voting results in a Form8-K, which we will file with the Securities and Exchange Commission (SEC) by May 22, 2018.
Who is paying for the cost of this proxy solicitation?
The Company is paying the costs of the solicitation of proxies. The Company has retained Laurel Hill Advisory Group, LLC to assist in obtaining proxies by mail, facsimile or email from registered holders, brokerage firms, bank nominees and other institutions for the Annual Meeting. The estimated cost of such service is $12,250 includingout-of-pocket expenses. Laurel Hill Advisory Group, LLC may be contacted at888-742-1305.
The Company will also reimburse brokerage firms and other persons representing beneficial owners of shares held in street name for their reasonable costs associated with:
Forwarding the Notice of our Annual Meeting to beneficial owners;
Forwarding printed proxy materials by mail to beneficial owners who specifically request them; and
Obtaining beneficial owners’ voting instructions.
In addition to soliciting proxies by mail, certain of our directors, officers and regular employees, without additional compensation, may solicit proxies on our behalf personally or by telephone, facsimile or email.
2018 Proxy Statement 5
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PROPOSAL 1. ELECTION OF DIRECTORSSUMMARY
Pandemic Response | ||||
Critical Risk Management Imperatives — Focus on Employees, Customers, Communities and Shareholders, Operational Response and Preparedness, Risk Management, and Preservation of Shareholder Value
Our Board determinesThe once in a century global pandemic presented the number of directors to nominate for election each year. The F.N.B. bylaws provide thatfinancial services industry with unprecedented broad-scale, complex and continually evolving risk management and business continuity challenges. These challenges tested and ultimately demonstrated our Board shall consist of not fewer than five nor more than 25 persons,Chairman and CEO’s critical leadership and crisis management skills, as well as the exact number to be determined from time to time by the Board.
Acting on the recommendationefficacy of the NominatingBoard’s governance and Corporate Governance Committee,oversight processes, the tireless dedication of executive management and the resiliency of our risk management processes. From the outset and throughout the various critical phases of the pandemic crisis, our Board fixedChairman and CEO spearheaded the numberdevelopment and implementation of directors asF.N.B.’s COVID-19 response by establishing four foundational pillars:
| i. | Employee Protection and Assistance. To mitigate employee health risks and avoid business continuity issues, our CEO led efforts to develop and implement a comprehensive COVID-19 operating plan to provide full support for the health, safety and financial needs of our employees. |
| ii. | Operational Response and Preparedness. Rapid deployment of comprehensive continuity protocols, continuous monitoring of evolving COVID-19 circumstances and establishment of a critical response team comprised of senior leadership and key business and support areas. |
| iii. | Customer and Community Support. To protect and support our customers, we deployed rigorous health and safety precautions and provided appropriate relief through our substantial participation in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and through fee waivers, loan deferrals, a residential mortgage foreclosure moratorium and other accommodations. Our efforts also included the provision of critical financial donations to support COVID-19 related communityhealth, safety and relief efforts. |
| iv. | Risk Management Protocols and Shareholder Value Preservation. We remained focused on our rigorous risk management practices and our commitment to our shareholders’ interests by continuing to pursue our strategic long-term plan objectives, including expense reduction initiatives, operational efficiency tactics, protection of strong capital and liquidity positions, prudent credit management practices and multidimensional enhancements to our profitability strategies. |
The following are highlights of the Annual Meeting date at thirteen (13).actions we took as part of our four foundational COVID-19 response pillars which enabled F.N.B. to successfully navigate these unparalleled and difficult challenges and address the interests and needs of our important stakeholders:
1. Employee Protection and Assistance
Our CEO promptly implemented a comprehensive COVID-19 operating plan which prioritized employee health, safety and financial well-being, among other actions, and included the following:
| a. | Center for Disease Control and Prevention (CDC) compliant health, safety and sanitization protocols; |
| b. | An aggregate $7 million in special added support for our workforce for the purpose of protecting employees and maintaining our continued operations, including: |
| i. | Increasing wages by $2.25 per hour for frontline employees during the initial critical phase of the pandemic to cover their additional expenses related to COVID-19. |
| ii. | Providing five additional paid flex days to accommodate COVID-19 related illnesses impacting our employees and their family members. |
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| iii. | Furnishing financial relief and support payments to employees who facilitated customer access to critical financial services. |
| iv. | Offering no-cost employee access to telehealth medical services. |
| v. | Collaborating with state and local health agencies to offer COVID-19 testing on F.N.B. premises. |
| c. | Centralized prompt dissemination on the Company intranet of all important COVID-19 updates and alerts and informed employees of the following: |
| i. | Mandatory health, safety and sanitization protocols |
| ii. | Updates on COVID-19 case trends in our various geographic markets, as well as alerts regarding federal, state and local COVID-19 protocols |
| iii. | Location of COVID-19 testing sites |
| iv. | Process for scheduling COVID-19 vaccinations |
| v. | Updates regarding F.N.B.’s COVID-19 response, operating and safety plans |
| vi. | A forum for employees to ask questions and receive responses on COVID-19 related issues |
| d. | Distributed 24 messages to our Board and issued more than 133 articles in the COVID-19 Information Center on The Vault, our corporate intranet. In addition, during the critical phases of the pandemic, our CEO provided daily updates to our Board to keep them apprised of our strategies and risk management considerations regarding the pandemic. |
| e. | Instituted flexible work arrangements, including alternating A/B work schedules, remote work arrangements (more than 2,000 employees, or over 90 percent of our non-branch workforce, worked remotely or from home) and multiple operational centers to facilitate business and operational continuity. |
2. Operational Response and Preparedness
| a. | Advanced Preparedness. Prior to 2020, F.N.B. had in place a fully developed pandemic plan which it had successfully tested through a comprehensive pandemic exercise scenario in 2019 and which served |
as an instrumental playbook as the Company managed through the 2020 COVID-19 pandemic. |
| b. | Immediate and Continual Flow of Information Among Key Leadership. As soon as the COVID-19 crisis began to emerge, F.N.B.’s CEO, in collaboration with the F.N.B. Emergency Management Team, engaged the crisis management team comprised of key leadership members across our market footprint who met daily for the purpose of identifying critical issues, conducting a risk triage and prioritization process, monitoring and assessing the pandemic in our various markets and determining strategies and tactics to both promptly and prudently resolve the complex and evolving challenges presented by the pandemic. During critical phases of the pandemic crisis, our Board Chairman and CEO provided daily email communications to our Board regarding COVID-19 risk management issues and our Board conducted three special meetings dedicated exclusively to COVID-19 matters and financial planning and business continuity considerations. |
| c. | Regular Outreach to Regulatory and Industry Sources to Proactively Identify Emerging Pandemic Risks. F.N.B. senior leadership engaged in regular weekly meetings with the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) to assess our COVID-19 responses relative to other large banks, to identify emerging industry issues and to stay ahead of regulatory expectations. |
| d. | Comprehensive Effective Procurement Process. We promptly developed and implemented a comprehensive COVID-19 operating plan which included a logistically based supply sourcing process and a coordinated supply chain and procurement process. This approach enabled us to quickly acquire, from multiple sources, the appropriate health and safety supplies (e.g., personal protective equipment (PPE), sanitization supplies, etc.), as well as the necessary tools and equipment to enable our Company to effectively and safely operate during the pandemic crisis. |
| e. | Comprehensive Credit Risk Management Process. From the outset of the public health crisis, our credit team conducted a thorough |
| 2021 Proxy Statement 3 |
Summary |
and continuous due diligence evaluation of commercial credits related to the industries and businesses most economically impacted by COVID-19 (e.g., travel and leisure, restaurants, senior living, retail trade, retail IRE, arts and entertainment, etc.) and strategically reduced exposure to these COVID-19 sensitive industries to enhance the overall position of the F.N.B. loan portfolio and mitigate risk attendant to the economic uncertainty related to these types of loan exposures. Also, throughout the pandemic, we deployed enhanced credit portfolio analytics to continuously track and assess critical credit quality metrics, loan payment deferral levels and key risk identifiers related to geography, loan product type, collateral, industry and supply chain dependencies. Furthermore, we evaluated the adequacy of our loan loss reserve levels under several stressed scenarios, including the Federal Reserve Board’s most rigorous Dodd-Frank Act Stress Tests (DFAST) “severely adverse scenario”, and other uniquely stressed economic scenarios specific to the COVID-19 environment. |
3. Customer and Community Support
| • | Uninterrupted Access to Banking Services Throughout COVID-19 Crisis. We developed a systematic and sophisticated statistical analysis to evaluate the COVID-19 impacts and trends for each of our markets, while also continuously monitoring the CDC, state and local restrictions to determine branch and office openings and closings. Our investment in technology enabled customers to seamlessly schedule in-branch appointments, using a new feature on our website (nearly 10,000 appointments scheduled online during 2020). In addition, we saw a significant increase in digital traffic, with approximately 6.1 million combined monthly online and mobile banking logins and a nearly 21 percent increase in the number of mobile banking users in 2020 compared to the full-year average for 2019. |
| • | COVID-19 Relief Programs. F.N.B. was one of the first U.S. banks to announce its COVID-19 customer relief program which included payment deferrals on loans totaling more than $2.5 billion, fee waivers and a residential mortgage foreclosure moratorium. These measures enabled our business customers to sustain their operations and allowed our consumer customers to weather the impact of the pandemic crisis and ultimately regain their financial footing. |
| • | Funded $2.5 million to the F.N. B. Foundation. We funded the F.N.B. Foundation for the purpose of providing critical financial assistance to local communities for COVID-19 health and safety relief efforts, including supporting the critical needs of local food banks, local businesses and healthcare organizations. Our financial contributions were also augmented by the volunteerism of our dedicated employees. |
| • | Participation in the SBA PPP Loan Program. We deployed an extensive cross-section of our business and support functions (e.g., Executive Management, Legal, Compliance, Audit, Credit Underwriting, Risk Management, Finance, Information Technology, SBA and Commercial Lenders, Operations and Project Management) to quickly develop and implement an easily accessible online portal for our PPP applicants which streamlined and simplified the customer loan application process. We made over 20,000 PPP loans aggregating approximately $2.6 billion for small businesses throughout our market footprint which resulted in $1.3 billion in additional demand deposits. Notably, following our targeted outreach to more than 100 nonprofit and community organizations, nearly 24% of our PPP loans were made to businesses in predominantly minority rural and low- to moderate-income areas. |
4. Risk Management Protocols and Shareholder Value Preservation
We took significant steps to enhance future risk-adjusted returns through prudent balance sheet actions, notably the sale of a portion of our indirect automobile loan portfolio in November 2020, reduction of exposure to COVID-19 sensitive industries and prepayment of higher-cost liabilities. Despite the 2020 pandemic environment, the additional actions highlighted below reduced overall credit risk while enhancing overall profitability, bolstering capital levels and providing us with more liquidity moving forward:
| a. | Strengthened F.N.B.’s Funding Position. By continuing to grow non-interest-bearing deposits, F.N.B. surpassed a record of $9 billion in non-interest-bearing deposit balances as of December 31, 2020, driving total deposits to increase $4.3 billion and non-interest bearing deposits by $2.7 billion on a spot basis since year end 2019, thereby enabling F.N.B. to repay $715 million in higher cost Federal Home Loan Bank (FHLB) borrowings at a weighted average effective cost of 2.49 percent. |
| 4 F.N.B. Corporation |
Summary |
| b. | Operational Efficiency, Improved Liquidity and Expense Reductions. Contributions from low-cost customer deposits increased meaningfully, supported by growth in transaction deposits, reductions in the cost of interest-bearing deposits, strong growth in non-interest-bearing deposits and the termination of higher-rate FHLB borrowings, largely offsetting the impacts of a lower interest rate environment on asset yields. These efforts resulted in enhanced liquidity with a loan/deposit ratio of 87 percent at December 31, 2020. We also continued our branch optimization plan which entails consolidation of 16 retail locations in 2020 and 21 retail locations in 2021 as part of a $20 million cost-savings initiative. The plan is aimed at keeping expenses consistent with 2020 operating levels. Evolving changes in consumer preferences contributed to an acceleration of our branch optimization efforts. F.N.B. continues to leverage our significant investment in technology. |
| c. | Optimizing Capital and Shareholder Value. In 2019, our Board of Directors approved a $150 million share repurchase program, demonstrating their confidence in F.N.B.’s business model, as well as our increased capital generation capabilities. In addition to our strong dividend, repurchasing stock underscores our commitment to further optimizing capital and enhancing shareholder value. Internal capital generation was solid in 2020, despite the pandemic, and our tangible common equity (TCE) ratio, excluding PPP loans*, increased to 7.7 percent. Our Common Equity Tier 1 (CET1) ratio ended 2020 at 9.8 percent, the highest level in our history. In addition to the $157 million in |
common dividends returned to shareholders during 2020, we repurchased nearly 4 million shares and have $112 million remaining under our current $150 million authorized share repurchase program. Repurchase activity during the fourth quarter of 2020 included 25 percent of the repurchased shares being below tangible book value (TBV)* per share, resulting in these repurchases having shorter earn back periods and being accretive to TBV* per share. |
| d. | Maintained Prudent Credit Culture and Credit Management Processes. As of year-end 2020, the amount of loans remaining on COVID-19 deferral continued to improve to $397 million, or 1.7 percent of total loans and leases (excluding PPP loans), a significant reduction from the June 30, 2020, level of 10.2 percent during the height of the COVID-19 economic impact. |
| e. | Transparent COVID-19 Risk Disclosures. Our CEO and executive management communicated transparent disclosures regarding F.N.B.’s COVID-19 related risk management considerations and response plan to our investors through our SEC filings, earnings calls, meetings with analysts, shareholder engagement meetings and media communications. |
For more detailed information regarding our investments, donations and commitments related to COVID-19 health, safety, and customer relief, as well as our ongoing commitment to addressing social and economic inequity, please refer to our 2021 Corporate Responsibility Report under Resources.
| * | Non-GAAP measures are used by management to measure performance in operating the business that management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. In this Proxy Statement, the following are references to non-GAAP measures: Operating Net Income Available to Common Shareholders; Operating Earnings per Diluted Common Share (EPS); Tangible Book Value (TBV) per Common Share; Operating Return on Average Tangible Common Equity (ROATCE); reported ROATCE; Efficiency Ratio; Tangible Common Equity (TCE) to Tangible Assets; Internal Capital Generation (ICG) Growth; Pre Provision Net Revenue (PPNR) / Average TCE; Operating Return on Average Tangible Assets (ROATA) and reported ROATA. Please refer to Annex A(Non-GAAP to GAAP Reconciliations) to this Proxy Statement, where we include information to reconcile the non-GAAP measures to GAAP. The * is a non-GAAP designation used throughout this Proxy Statement to identify non-GAAP measures. |
| 2021 Proxy Statement 5 |
Summary |
Highlights of Superior Governance Practices | ||||
Our governance practices promote Board effectiveness and the interests of shareholders. These practices adhere to widely recognized public company best practices and are described in additional detail under the Corporate Governance Principles section of this Proxy Statement. The corporate governance policies, guidelines and other documents referenced in this section may be reviewed by clicking on the links contained in the section of this Proxy Statement titled, Key Corporate Governance Documents.
| 6 F.N.B. Corporation |
Summary |
Framework | ||||
TheOur corporate governance practices are designed, in part, to ensure the Board acting on the recommendationmaintains appropriate and prudent oversight consistent with its fiduciary responsibilities, of the NominatingCompany’s risk management, operations, business, legal and Corporate Governance Committee, has nominated for election as directorsregulatory obligations, strategic plan, employee welfare and financial performance. In addition to the nominees identified ingovernance practices highlighted above, our Board’s core oversight responsibilities include the table titledCurrent Directors and Nominees for Election at Our Annual Meeting. Each nominee is discussed in more detail in the section titledfollowing:
| 2021 Proxy Statement 7 |
Biographical Information Concerning Director Nominees of this proxy statement. If elected, the Company’s nominees will hold office for aone-year term until the next annual meeting of shareholders and the election and qualification of his or her successor. All of our nominees are currently directors.
Summary |
| ||||
Our Nominating and Corporate GovernanceWe are submitting an advisory resolution to approve the executive compensation of our Named Executive Officers (NEOs). In 2020, we received strong support of our Say-on-Pay proposal with 92% of our shareholders voting FOR Say-on-Pay proposal. The Compensation Committee identifies potential director nominees primarily through recommendations made by current or former Company Directors and contacts in business, civic, academic andnon-profit communities. Also,(Committee) maintained the following key features of our Company shareholders may propose persons to be nominated for electioncompensation program, which are important to our shareholders. The financial results in 2020, while being impacted by COVID-19, are a result of a multi-year business strategy that is supported by the Board, (see later discussions underShareholder Proposals and Nominations for the 2019 Annual Meeting).
At least annually, in consultation with the Nominatingapproved by it as part of its annual review and Corporate Governance Committee, our Board assesses the skills, qualifications and experienceapproval of our Board and decides whether to recommend an incumbent director for reelection or nominating new director candidates for election to the Board. In evaluating incumbent directors or new director candidates (including any candidates who may be recommended by a shareholder), our Nominating and Corporate Governance Committee and the Board consider each incumbent’s or new director candidate’s skills, background, experience and reputation,Operating Plan, as compared with the particular needs of the Board with respect to specific skill sets, background, experience and knowledge, and the other relevant criteria as moredemonstrated by:
fully described in our Corporate Governance Guidelines. Also, the Nominating and Corporate Governance Committee and the Board consider each incumbent director’s performance and contributions during the prior year (including the annual Board self-assessment results). Moreover, in evaluating the suitability of prospective Board candidates, our Nominating and Corporate Governance Committee and Board take into account multiple criteria, including those described in our Company bylaws and Corporate Governance Guidelines (e.g., each director candidate’s general understanding of banking, finance, regulatory compliance and other disciplines relevant to the success of a publicly traded financial services company in today’s business and financial services regulatory environment; compatibility with our culture; understanding of our business; educational and professional background; personal accomplishment; adherence to the standards set forth in our Code of Conduct; and geographic, gender, age, racial, ethnic and other diversity considerations). Please see the section titledBiographical Information Concerning Director Nomineesfor more information on each of our director nominees.
6 F.N.B. Corporation
| 8 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors
|
PROPOSAL 1. ELECTION OF OUR BOARD OF DIRECTORS
We are asking shareholders to elect the 2021 nominees named in this proxy statement and identified in the table belowto serve on the F.N.B. Board of Directors until the 2022 Annual Meeting of Shareholders or until each of their successors have been duly elected and qualified. In addition to all our outside directors being independent, our director-nominee candidates for election at our 2021 Annual Meeting are a highly-qualified group of individuals, who collectively possess diverse backgrounds and perspectives, skills and experience consistent with our Board Composition Criteria (described herein under the section titled, Criteria and Considerations for Recommending Director Nominees), and the requisite leadership qualities necessary to oversee F.N.B.’s management and business operations. We do not know of any reason why any nominee named in this proxy statement would be unable to serve as a director if elected. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as may be nominated in accordance with our bylaws. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. | ||||
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE NOMINEES
| ||||
| 2021 Proxy Statement 9 |
Proposal 1. Election of Our Board of Directors |
Election at Our | ||||
| Name | Age | Director Since | Independent | Other SEC- Reporting | Committee Memberships | Principal Background and Relevant Experience | ||||||
Pamela A. Bena | 56 | 2018 | Yes | 0 | Audit; Compensation | Finance Executive | ||||||
William B. Campbell (Independent Lead Director) | 82 | 1975 | Yes | 0 | Executive; Nominating and Corporate Governance | Former Business Owner | ||||||
James D. Chiafullo | 63 | 2012 | Yes | 0 | Credit Risk and CRA; Nominating and Corporate Governance (Chair) | Partner — Regional Law Firm | ||||||
Vincent J. Delie, Jr. (Chairman, President and CEO) | 56 | 2012(2) | No | 0 | Executive Credit Risk and CRA (Ex Officio); (Chair) | F.N.B. CEO | ||||||
Mary Jo Dively | 62 | 2018 | Yes | 0 | Audit; Credit Risk and CRA; Risk | General Counsel — Globally Top Tier Ranked University | ||||||
Robert A. Hormell | 74 | 2015 | Yes | 0 | Compensation; Nominating and Corporate Governance | Regional Economic Development Professional | ||||||
David J. Malone | 66 | 2005 | Yes | 0 | Audit; Compensation (Chair) | CEO — Investment and Insurance Advisory Firm | ||||||
Frank C. Mencini | 56 | 2016 | Yes | 0 | Audit (Chair); Executive; Nominating and Corporate Governance; Risk | Healthcare Consulting, Accounting | ||||||
David L. Motley | 62 | 2013 | Yes | 3 | Compensation; Credit Risk and CRA; Risk | Consultant — Strategic Planning and Executive Development | ||||||
Heidi A. Nicholas | 66 | 2015 | Yes | 0 | Audit; Executive; Risk (Chair) | Commercial Developer — Housing | ||||||
John S. Stanik | 67 | 2013 | Yes | 2* | Credit Risk and CRA; Risk | Former CEO/Director — Public Companies | ||||||
William J. Strimbu | 60 | 1995 | Yes | 0 | Compensation; Credit Risk and CRA (Chair); Executive; Nominating and Corporate Governance | CEO — Transportation Company | ||||||
| (1) | Includes current or prior service on public company board(s). |
| (2) | Chairman Delie was elected to the FNBPA Board on June 16, 2009. Chairman Delie was elected to the F.N.B. Board on January 18, 2012. |
Our Board and Nominating and Corporate Governance Committee regularly review our Board Succession Plan for the purpose of ensuring that the Board continually maintains a directorate who collectively possess an appropriate range of skills, backgrounds, and experience necessary for the Board to fulfill its oversight responsibilities for a public financial company operating in multi-state markets and subject to a comprehensive regulatory environment. Consistent with the Company’s Board succession process, Board leadership (consisting of the Chairman, CEO and Lead Director), along with our Nominating and Corporate Governance Committee, spearheaded the process of identifying qualified director candidates who would be considered appropriate replacements for Directors Martz and McCarthy, who are retiring May 16, 2018, in accordance with the F.N.B. Board retirement policy. In accordance with our proactive board succession plan, the Board established a year-long transition between the Board Chair and committee chairs facilitating a smooth transition and strengthening of our oversight. In view of Director Martz’s strong audit background and Director McCarthy’s lengthy risk management experience, the search process focused on identifying director candidates possessing considerable audit, accounting, financial, cybersecurity, and risk management skills and experience. Board leadership identified prospective director candidates through referrals from other F.N.B. directors, consultation with knowledgeable industry
insiders and others with particular knowledge of persons who possess the specific experience and background consistent with F.N.B.’s identified qualifications criteria. Following a review of potential candidates and preliminary interviews, Board leadership identified Ms. Pamela A. Bena and Ms. Mary Jo Dively as the most suitable director candidates to address the Board’s needs relative to risk management, cybersecurity, financial expertise and accounting and audit experience. The Board leadership interviewed both Ms. Bena and Ms. Dively and recommended each of them for consideration by the F.N.B. Nominating and Corporate Governance Committee. The F.N.B. Nominating and Corporate Governance Committee conductedin-person interviews with Ms. Bena and Ms. Dively, commissioned full background reviews of each candidate, and evaluated each candidate under the Board qualification and composition standards described above and more fully described in the F.N.B. Corporate Governance Guidelines. On December 19, 2017, the F.N.B. Nominating and Corporate Governance Committee unanimously voted to recommend to the Board the election of Ms. Bena and Ms. Dively to the Board. On December 20, 2017, the F.N.B. and FNBPA Boards reviewed the Nominating and Corporate Governance Committee’s recommendation and unanimously voted to elect Ms. Bena and Ms. Dively to the F.N.B. and FNBPA Boards, effective January 1, 2018.
2018 Proxy Statement 7
| 10 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors
|
| ||||
| Name | Age | Director Since | Independent | Committee Memberships | ||||||||
Pamela A. Bena*
|
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53
|
|
|
2018
|
|
Yes
| Audit; Risk
| ||||
William B. Campbell* (Lead Director)
|
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79 |
|
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1975 |
|
Yes |
Executive; Nominating and Corporate Governance
| ||||
James D. Chiafullo* | 60 | 2012 | Yes |
Credit Risk and CRA; Nominating and Corporate Governance(Chair)
| ||||||||
Vincent J. Delie, Jr.* (Chairman, President and CEO)
| 53 | 2012 | No |
Credit Risk and CRA (Ex Officio); Executive (Chair);
| ||||||||
Mary Jo Dively*
| 59 | 2018 | Yes | Credit Risk and CRA;Risk
| ||||||||
Stephen J. Gurgovits*
| 74 | 1981 | No | Credit Risk and CRA; Executive
| ||||||||
Robert A. Hormell* |
|
71 |
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2015 |
|
Yes | Compensation; Nominating and Corporate Governance
| ||||
David J. Malone*
|
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63
|
|
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2005
|
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Yes
|
Audit; Compensation (Chair)
| ||||
D. Stephen Martz(1)
|
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75
|
|
|
2008
|
|
Yes
|
Audit; Risk
| ||||
Robert J. McCarthy, Jr.(1)
|
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75
|
|
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2012
|
|
Yes
|
Risk
| ||||
Frank C. Mencini* |
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53 |
|
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2016 |
|
Yes |
Audit (Chair); Nominating and Corporate Governance; Risk
| ||||
David L. Motley*
|
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59
|
|
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2013
|
|
Yes
|
Audit; Compensation; Risk
| ||||
Heidi A. Nicholas*
|
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63
|
|
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2015
|
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Yes
|
Audit; Risk (Chair)
| ||||
John S. Stanik*
|
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64
|
|
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2013
|
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Yes
|
Compensation
| ||||
William J. Strimbu* | 57 | 1995 | Yes | Credit Risk and CRA (Chair); Nominating and Corporate Governance | ||||||||
|
|
|
Each of our director nominees has consented to being named in this proxy statement and to serve if elected.
Proxies submitted to us, unless indicated to the contrary, will be voted “For” the election of Directors Bena, Campbell, Chiafullo, Delie, Dively, Gurgovits,
Hormell, Malone, Mencini, Motley, Nicholas, Stanik and Strimbu with terms expiring at our 2019 Annual Meeting and upon election and qualification of their respective successors.
8 F.N.B. Corporation
|
Relevant biographical information concerning each of our director nomineesdirector-nominees for election at our Annual Meeting may be found below, including a brief discussion of the specific experience, qualifications, attributes or skills that led to our Board’s conclusion regarding each director nominee’sdirector-nominee’s qualifications to serve on our Board in light of our business and structure. As a result In considering whether to re-nominate each
of a corporate governancethe director-nominees, the Board, with the assistance of the Nominating and risk management initiative undertakenCorporate Governance Committee and in 2015, which includedcollaboration with our Independent Lead Director and Board Chairman, reviewed the creationqualifications of a combined board structure, or interlocking directorate,each director-nominee and engaged in the process described later in this Proxy Statement in the section titled, Criteria and Considerations for the Company and FNBPA, each of our director nominees also serves on the board of directors of our principal bank subsidiary, FNBPA.Recommending Director-Nominees.
PAMELA A. BENA
Committees: • Audit • | Director Since: 2018
| Age: 56
| ||||
Professional Experience Pittsburgh Zoo & PPG Aquarium • Director of Finance (2020-present) Heeter Printing, printing company • Vice President of Finance TMS International Corporation, industrial services company • Manager of Financial Reporting EHS Support LLC, environmental, health and safety company • Chief Financial Officer American Bridge Company, privately-held construction company • Senior Vice President of Finance |
Women for Economic Leadership Development (WELD), develops and advances women’s leadership to • Member • Programming Subcommittee Member | |||||
Director Qualifications Ms. Bena’s substantial and varied background, experience, and skills relative to audit, finance, accounting, regulatory compliance and risk management, including preparation of financial statements in accordance with GAAP, preparation of periodic SEC disclosure filings and the attendant quarterly review process, make her an ideal addition to the Board and its Audit and | ||||||
2018 Proxy Statement 9
|
WILLIAM B. CAMPBELL
Independent Lead Director
Committees: • Executive • Nominating and Corporate Governance | Director Since: 1975 (Founding Director)
| Age: 82 | ||||
Professional Experience Retired CEO Shenango Steel Erectors, Inc., commercial building construction company • Owner Charitable Work and National Association of Corporate Directors • F.N.B. Corporation Member/Sponsor • Three Rivers Chapter |
Shenango Valley Industrial Development Authority • Former Director Westminster College • Former Trustee | |||||
Director Qualifications As a founding director of the F.N.B. Corporation Board, Mr. Campbell’s background | ||||||
10 F.N.B. Corporation
| 2021 Proxy Statement 11 |
Proposal 1. Election of Our Board of Directors
|
JAMES D. CHIAFULLO
Committees: • Credit Risk and • Nominating and Corporate Governance (Chair) | Director Since: 2012
| Age: 63 | ||||
Professional Experience Dentons, Cohen & Grigsby, P.C., law firm |
• Board Member Emeritus (active) The Pittsburgh Foundation • Director, Verland Foundation • Counsel NACD — Three Rivers Chapter
| |||||
Director Qualifications The breadth and depth of Mr. Chiafullo’s corporate and transactional legal experience, along with his particular focus in the areas of corporate governance, fiduciary duties and responsibilities, regulatory compliance and finance, provide him the necessary background to assist the | ||||||
2018 Proxy Statement 11
|
VINCENT J. DELIE, JR.
Chairman
Committees: • Credit Risk and CRA (Ex Officio) • Executive (Chair) | Director Since: 2012
| Age: 56
| ||||
Professional Experience F.N.B. Corporation, financial services corporation • CEO, President and Board Member (2012-present) • Board Chairman (December 2017-present) First National Bank of Pennsylvania • President, Board Member (2009-present) • CEO (2011-present) Charitable Work and United Way of Allegheny County • Board Member Allegheny Conference on Community Development • Board Member Team Pennsylvania • Board Member Pittsburgh History and • Board of John V. Heher Humanitarian 2020 Awardee • For outstanding contributions to further the National Kidney Foundation mission and
| ||||||
Director Qualifications
|
Mr. Delie has more than
| |||||
| ||||||
12 F.N.B. Corporation
| 12 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors
|
MARY JO DIVELY
Committees: • Audit • Credit Risk and CRA • Risk | Director Since: 2018
| Age: 62
| ||||
Professional Experience Carnegie Mellon University, private, non-profit, research-based university • Vice President and General Counsel
Children’s Hospital of |
• Board Member
• Member Board of Visitors of • Member | |||||
Director Qualifications Ms. Dively’s | ||||||
2018 Proxy Statement 13
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| ||
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14 F.N.B. Corporation
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ROBERT A. HORMELL
Committees: • Compensation • Nominating and Corporate Governance | Director Since: 2015
| Age: 74 | ||||
Professional Experience Retired CEO/CFO SEDA Council of Governments, |
Presbyterian Senior Living • Chair Presbyterian Senior Living Investment Corporation • Board Member Faith Affordable Housing Corporation (Cape Coral, FL) • Board Member SEDA-COG Joint Rail Authority • Board Member Warrior Run Community Corporation, encourages communication and cooperation between six municipalities within the • Board Warrior Run Education Foundation, foundation supporting educational improvements in the Warrior Run School District • Special Advisor to • School Board | |||||
Director Qualifications Mr. Hormell offers the Corporation a unique background, which includes | ||||||
2018 Proxy Statement 15
| 2021 Proxy Statement 13 |
Proposal 1. Election of Our Board of Directors
|
DAVID J. MALONE
Committees: • Audit • Compensation (Chair) | Director Since: 2005
| Age: 66 | ||||
Professional Experience Gateway Financial Group, Inc. • Chairman and CEO (2005-present) Highmark, Inc., health insurer • Board Member and Compensation Committee Member Allegheny Health Network,non-profit, eight hospital academic medical system in Western Pennsylvania • Board Member Charitable Work and Community Involvement Allegheny Conference on Community Development • Board Member, Executive Committee Member, Personnel & Compensation Committee Member, and Workplace Committee Chair Robert Morris University Board of Trustees • Trustee, Executive, Finance and Governance Committee Member United Way, Board of Trustees • Trustee, Governance and Executive Committee Chair Strategic Investment Fund • Chair Pittsburgh Foundation • Investment Committee Member Pittsburgh Penguins Foundation • Board Member | ||||||
Director Qualifications Mr. Malone’s experience as CEO of a financial services firm, |
| |||||
a heavily regulated industry. Mr. Malone’s experience in the financial sector and his | ||||||
16 F.N.B. Corporation
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FRANK C. MENCINI
Committees: • Audit (Chair) • Executive • Nominating and Corporate Governance • Risk | Director Since: 2016
| Age: 56 | ||||
Professional Experience Inova Medical Group (Inova Health System), non-profit health organization in • Chief Financial Officer (2017-present) Mencini Healthcare Associates, • President and Arthur Andersen • Partner |
Inova Loudoun Hospital • Various fundraising and finance volunteer Loudon County Public • Volunteer classroom reader and Broadlands Community • Fundraising and Special Olympics • Volunteer and supporter — D.C. Metro Area | |||||
Director Qualifications As an experienced | ||||||
2018 Proxy Statement 17
| 14 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors
|
DAVID L. MOTLEY
Committees: •
• Credit Risk and CRA • Risk | Director Since: 2013
| Age: 62 | ||||
Professional Experience BlueTree Venture Fund,
• General Partner (2016-present)
• CEO, President (2017-present) Public Company Experience Koppers, global wood treatment solutions company • Board Member (2018-present) Deep Lake Capital Acquisition Corporation, a special purpose acquisition company • Board Member (2021-present) II-VI, • Board Member (2021-present) Private Company Experience Armada Supply Chain Management, creates innovative, fully integrated supply chain solutions • Board Member (2017-present) ALung, Inc., a leading developer of • Board Member (2016-present) Forest Devices, Inc, a |
Pittsburgh Gateways Corporation, community-based economic development • Board Member African American • Founder
• Advisory Board Member Inner City Junior Tennis Program • Executive Director | |||||
Director Qualifications With over three decades of working and consulting with corporate and business leaders regarding strategic development, implementation and | ||||||
18 F.N.B. Corporation
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HEIDI A. NICHOLAS
Committees: • Audit • Executive • Risk (Chair) | Director Since: 2015
| Age: 66 | ||||
Professional Experience Nicholas Enterprises, • Principal (2001-present) Charitable Work and Community Involvement Central Pennsylvania Festival of the Arts, a five-day visual and performing arts festival • Board Member Penn State University — Hospitality Real Estate Strategy Group, conducts teaching, research and outreach in real estate and strategy in the • Advisor Palmer Art Museum Advisory Board, art museum of • Board Member (2020-Present) | ||||||
| ||||||
Director Qualifications
| ||||||
2018 Proxy Statement 19
| 2021 Proxy Statement 15 |
Proposal 1. Election of Our Board of Directors
|
JOHN S. STANIK
Committees: • • Risk | Director Since: 2013
| Age: 67 | ||||
Professional Experience Retired CEO Ampco-Pittsburgh Corporation, • CEO and Calgon Carbon Corporation, • CEO, President and Director (2003-2012) • Chairman (2007-2012) Huber Engineered Chemicals, privately-held industrial chemicals manufacturing |
Greater Pittsburgh American Heart • Volunteer Fair Oaks Foundation, foundation supporting botanical gardens, zoos, food banks and • Board Member | |||||
Director Qualifications Mr. Stanik’s extensive CEO, | ||||||
20 F.N.B. Corporation
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WILLIAM J. STRIMBU
Committees: • Compensation • Credit Risk and CRA (Chair) • Executive • Nominating and Corporate Governance |
| Director Since: 1995 Age: 60 | ||||
Professional Experience Nick Strimbu, Inc., • President (1982-present) Charitable Work and Community Involvement Teamsters Local 261 and Employers Welfare Fund, health consortium in Western Pennsylvania and Eastern Ohio with |
Christian H. Buhl Legacy Trust • Board Member Community Foundation of Western Pennsylvania and • Vice President, Board Member of Shenango Valley Foundation • Board Member Strimbu • Board Member and | |||||
Director Qualifications Mr. Strimbu’s long-term executive and leadership experience in regional transportation, | ||||||
We believe that Mr. Strimbu’s executive, operational, economic development, philanthropic and financial experience qualifies him to serve as a member of our Board, as Chair of the | ||||||
2018 Proxy Statement 21
| 16 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors |
Director-Nominee Profile and Director Skill Matrix | ||||
As demonstrated by the Director-Nominee Profile highlights below (excluding our Independent Lead Director from the age and tenure figures and excluding our non-independent Chairman/CEO from the independence percentage), we have a well-balanced Board composition, which is a product of our careful Board succession planning and refreshment processes.
| 2021 Proxy Statement 17 |
Proposal 1. Election of Our Board of Directors |
Our Nominating and Corporate Governance Committee and our Board have identified the skills, experience and background criteria highlighted below as key necessary qualifications criteria and attributes that enable our Board to effectively discharge its oversight and fiduciary responsibilities. Moreover, in evaluating the background, skills and experience of our director-nominees, both our Nominating and Corporate Governance Committee and our Board understand that certain intangible qualities and attributes, such as each nominee’s commitment to shareholder interests, leadership skills, temperament and judgment, ability to challenge management, integrity and understanding of F.N.B.’s values and culture are critical to an effectively functioning Board. The F.N.B. Corporation Director Skill Matrix (Director Skill Matrix) below highlights that the collective expertise, experience and skills of our directors are aligned with F.N.B.’s strategy, risks and shareholder interests.
Director Skill Matrix
9 |
Accounting / Auditing. Understanding of financial institution audit processes, controls and financial statements.
9 |
Financial Services Experience. Possesses a fundamental understanding of financial institution business and operations, along with an understanding of the challenges that the industry faces.
9 |
Business. Has experience across various business lines and business developments that our Company maintains.
7 |
Legal / Regulatory / Government. Understanding of the heavily-regulated environment in which we operate, in addition to the role that the various regulatory agencies play in our industry.
6 |
Environmental, Social, Governance. Experience with the development and oversight of an effective corporate responsibility strategy.
6 |
Human Capital Management and Succession Planning. Can provide insight on how our Company can develop and retain talent, as well as oversee the succession planning of both our Board and management.
7 |
Public Company Board Service and Corporate Governance. Current or prior experience serving on a public company board or counseling such boards on governance and fiduciary matters.
10 |
Risk Management. Possesses the ability to understand, identify and oversee the various types of risk which challenge financial institutions.
4 |
Cybersecurity / Technology(3). Meaningful understanding of the critical aspects of financial institution technology and the challenges posed by the myriad of cybersecurity risks.
12 |
Strategic Planning. Possesses experience with oversight of our strategic plan development, implementation and execution.
| (3) | Two of our directors are currently in the process of obtaining a Certificate in Cybersecurity Oversight, issued by the CERT Division of the Software Engineering Institute at Carnegie Mellon University. |
| 18 F.N.B. Corporation |
Proposal 1. Election of Our Board of Directors
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Recommending Director-Nominees | ||||
The following table setsNominating and Corporate Governance Committee assists the Board with reviewing and evaluating individuals qualified to become F.N.B. Board members. The committee’s evaluative process entails consideration of our Board-approved director qualification criteria set forth certain information asin our F.N.B. Corporation Corporate Governance Guidelines (see Key Corporate Governance Documents), application of our Director Skill Matrix (see Current Directors and Nominees for Election at Our Annual Meeting) and the Board Composition Criteria described below for purposes of making its determinations relative to recommending nominees for directors at Annual Meetings and filling vacancies on the Board. Directors chosen to fill
vacancies will hold office for a term expiring at the end of the March 7, 2018, record date with respectnext Annual Meeting.
The Nominating and Corporate Governance Committee will evaluate all candidates suggested by the Board Chair, other directors or third-party search firms, which the Company may retain from time to beneficial ownershiptime to help identify potential new director candidates, or a person recommended by a shareholder for nomination as a director in the same manner. For information on recommending a candidate for nomination as a director, see Shareholder Proposals and Nominations for the 2021 Annual Meeting.
The Board and Nominating and Corporate Governance Committee have concluded that each of our common stock by: (i) each director and nominee; (ii) each currently employed Named Executive Officer (NEO) listed in the table entitled2018 Summary Compensation Table under the section of this proxy statement entitledExecutive Compensation and Other Proxy Disclosure; and (iii) allincumbent directors and executive officersshould be recommended for re-nomination as a group. Asdirector. Each of the record date, we had 323,627,694 shares of common stock issued and outstanding. Unless otherwise indicated, all persons namednominees for election as beneficial ownersa director was elected as a director at our 2020 Annual Meeting. Our Board believes that each of the Company’s common stock have sole voting powernominees continue to meet the criteria described above with high levels of professionalism, leadership, independence and sole investment power with respecta dedicated commitment to F.N.B. shareholder and other stakeholders’ interests. Moreover, our Board believes that, individually and collectively, the shares indicatednominees possess the necessary corporate values, commitment to ethical conduct, diversity, depth and breadth of experience that enable them to oversee management of the Company as beneficially owned.†an effective and engaged Board. No director or nominee has a family relationship to any other director-nominee for director or executive officer.
| Name of Beneficial Owner | Shares Beneficially Owned | Percentage Owned | ||||
Pamela A. Bena | 4,050 | * | ||||
William B. Campbell | 83,142 | (1) | * | |||
James D. Chiafullo | 47,237 | (2) | * | |||
Vincent J. Delie, Jr.# | 278,262 | * | ||||
Mary Jo Dively | 2,200 | * | ||||
Stephen J. Gurgovits | 305,468 | (3) | * | |||
Robert A. Hormell | 65,619 | * | ||||
David J. Malone | 79,746 | * | ||||
D. Stephen Martz | 140,902 | (4) | * | |||
Robert J. McCarthy, Jr. | 314,048 | (5) | * | |||
Frank C. Mencini | 24,611 | * | ||||
David L. Motley | 25,020 | * | ||||
Heidi A. Nicholas | 228,653 | (6) | * | |||
John S. Stanik | 33,930 | * | ||||
William J. Strimbu | 99,851 | (7) | * | |||
Vincent J. Calabrese, Jr.# | 132,237 | * | ||||
Gary L. Guerrieri# | 76,772 | (8) | * | |||
Robert M. Moorehead# | 32,206 | * | ||||
Barry C. Robinson# | 44,688 | * | ||||
All executive officers and directors as a group (21 persons) | 2,033,627 | (9) | 0.63% | |||
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22 F.N.B. Corporation
| Board Composition Criteria | ||
| Shareholders’ Interests Paramount | The individual’s strong commitment to the diligent pursuit of shareholders’ long-term best interests, as well as their understanding of their fiduciary obligations to our shareholders, including their adherence to the Investor Stewardship Group Principles (see Corporate Governance - Principles). | |
| Professional Background and Experience | The individual’s specific experience, background and education, as they pertain to the Director Skill Matrix under Current Directors and Nominees for Election at Our Annual Meeting. | |
| Leadership Roles | The individual’s sustained record of substantial accomplishments and leadership in executive, C-suite, senior-level management, entrepreneurship and/or policy-making positions in finance, law, business, government, education, technology or not-for-profit enterprises, as well as public company board experience and prior F.N.B. board experience. | |
| Judgment and Gravitas | The individual’s seriousness of purpose in evaluating complex business issues, willingness to confront challenging circumstances and ability to exhibit sound judgments including, when necessary, constructively challenging management’s recommendations and actions. | |
| Diversity | The individual’s contribution to the diversity of the Board including differences of viewpoints, professional experience, education, skills and demographics considerations, such as race, gender and ethnicity, as well as the variety of personal attributes and life experiences that contribute to the Board’s collective strength and perspective. | |
| Character and Integrity | The individual’s commitment to ethical conduct, with character and integrity, along with the requisite interpersonal skills to work with other directors on our Board and executive management in ways that are effective and beneficial to the interests of the Company and its shareholders, employees, customers and communities. | |
| Time | The individual’s willingness and ability to commit the necessary time and effort required for effective service on our Board and committees. | |
| Independence | The individual’s qualifications as “independent” under the NYSE and F.N.B.’s stringent categorical standards and their freedom from conflicts of interest that could interfere with their duties as a director, including outside board service and other affiliations for actual or perceived conflicts of interest. | |
| Understands F.N.B.’s Corporate Culture and
| The individual’s ability to effectively represent F.N.B. core values in the communities in which the Company operates, including adherence to Board and Company policies, including F.N.B.’s Code of Conduct and policies concerning F.N.B. stock ownership and continuing education requirements. | |
The table below lists the names of our current Executive Officers with their positions and ages. The table below does not include this information for CEO Vincent J. Delie, Jr. whose information is in the section of this proxy statement entitledBiographical Information Concerning Director Nominees.
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Vincent J. Calabrese, Jr.has served as our Chief Financial Officer since 2009. Mr. Calabrese joined the Company in 2007, serving as our Corporate Controller from 2007 to 2009. Prior to joining the Company, Mr. Calabrese was Senior Vice President, Controller and Chief Accounting Officer of People’s Bank, Connecticut, from 2003 to 2007. During his19-year tenure at People’s Bank, Mr. Calabrese’s principal responsibilities included financial planning and reporting, accounting policies, general accounting operations and investor relations.
James L. Duteyhas served as our Corporate Controller and Principal Accounting Officer since March 2017. Mr. Dutey has more than 20 years of accounting experience in the banking and financial services sectors. During the past 12 years, Mr. Dutey has served in various senior management roles at Huntington Bancshares, Inc., including most recently as Assistant Corporate Controller, with a primary focus on SEC and bank regulatory financial reporting requirements. Prior to joining Huntington Bancshares, Inc., Mr. Dutey was employed at KPMG LLP, ending his tenure there as senior manager for the assurance practice, primarily serving the banking industry. Mr. Dutey is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania.
Gary L. Guerrieribecame our Chief Credit Officer in April of 2011. Prior to his promotion, Mr. Guerrieri had been an Executive Vice President and the Chief Credit Officer of FNBPA since 2005. In his role as Chief Credit Officer of the Company, Mr. Guerrieri is responsible for managing the entire credit function for the Company, including commercial and retail underwriting, credit administration, credit policy and credit risk management. He also has oversight of FNBPA’s special assets, loan servicing and indirect lending functions. Prior to joining FNBPA in 2002, Mr. Guerrieri was an Executive Vice President of commercial banking
with Promistar Financial Corporation, a bank holding company that had been acquired by F.N.B. in 2002.
Robert M. Moorehead became our Chief Wholesale Banking Officer in September 2015. From 2011 through 2015, Mr. Moorehead served as President of FNBPA’s Pittsburgh Region. In his role as Chief Wholesale Banking Officer of the Company, Mr. Moorehead is responsible for managing Commercial Banking, Treasury Management, Investment Real Estate, Wealth Management, Private Banking, Insurance and International and Capital Markets. Prior to joining FNBPA, Mr. Moorehead was Senior Vice President and Regional Chief Credit Officer for First Niagara Bank from 2009 through 2011. Mr. Moorehead began his43-year career at Equibank and, subsequently, joined National City Bank, where he served as Executive Vice President and Group Manager of Corporate Banking.
James G. Orie has been our Chief Legal Officer since 2004 and became Corporate Secretary in January 2015. Mr. Orie is principally responsible for the Corporation’s legal, regulatory, transactional and governance matters. Prior to joining F.N.B. as Corporate Counsel in 1996, Mr. Orie began his33-year career as a financial services counsel with the Office of the Comptroller of the Currency, the Federal Home Loan Bank of Pittsburgh, Office of Thrift Supervision and, prior to joining F.N.B., as business leader of the Financial Services Practice Group of a Pittsburgh-based law firm.
Barry C. Robinson has served as our Chief Consumer Banking Officer since August 2015. As Chief Consumer Banking Officer, Mr. Robinson is responsible for leading the team which provides our full range of consumer financial products and services to our customers. Mr. Robinson joined our Company in July 2010 as Executive Vice President of our Consumer Banking operations, for which he had principal responsibility for
2018 Proxy Statement 23
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strategic planning and oversight of the Company’s consumer retail operations, including leading the development of our digital banking platform. Prior to joining the Company, Mr. Robinson held several key leadership and executive positions with large regional
banks, including regional leader in Cleveland, Ohio, of wealth management and private banking for PNC Bank and National City Bank, and head of corporate banking in Kentucky and Tennessee for National City Bank.
OUR BOARD OF DIRECTORS AND ITS COMMITTEESCORPORATE GOVERNANCE
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The foundation of our corporate governance principles is our commitment to our shareholders, customers, employees, communities and other stakeholders based on the fundamental principles of fairness, transparency, integrity, diversity and accountability. Our corporate governance standards are highlighted in our Corporate Governance Guidelines (see Key Corporate Governance Documents), which are reviewed and, if required, updated annually by our Board. These guidelines are designed to adhere to regulatory requirements, including the NYSE corporate governance listing standards, SEC governance standards, other widely accepted “best” practices promoted by proxy advisory firms, institutional investors and national organizations dedicated to promoting sound governance practices, and, most notably, are modeled after the globally recognized “best practice” corporate governance framework established by the Investor Stewardship Group (ISG) for U.S. listed companies. The information below highlights the complete alignment of our corporate governance practices with the ISG standards (Note: references below to F.N.B. governance policies, guidelines and charters may be accessed by clicking on the weblinks found in the section of this Proxy Statement titled Key Corporate Governance Documents):
| ISG Principle 1: Boards are accountable to Shareholders. | ||
Maintain a Declassified Board | • The full Board of Directors is elected annually. | |
Directors Committed to their Board Responsibilities and to Shareholders | • Directors will attend all shareholder and Board meetings and those committee meetings of which they are a member, and at a minimum, at least 75 percent of Board and committee meetings in the aggregate. • As a collective group our director-nominees attended 99 percent of all our Board and committee meetings in the aggregate in 2020 and all our directors attended our 2020 Annual Meeting. | |
Shareholder Right to Call Special Meeting and to Act by Written Consent | • A special meeting of shareholders may be called by the consent of shareholders holding at least 25 percent of the outstanding shares of our common stock. | |
Shareholder Access to Board | • Shareholders may communicate directly with our Board or any Board Committee or any individual director (see section of this Proxy Statement titled Communications with Our Board). | |
Anti-Hedging Policy | • Directors, executive officers and other employees of F.N.B. are prohibited from engaging in pledging and hedging strategies involving F.N.B. stock and other derivative securities transactions based on the value of F.N.B. common stock. | |
| ISG Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interests. | ||
One Share, One Vote Policy | • Each shareholder of the Company entitled to vote on any matter at any meeting of shareholders is entitled to one vote for every share outstanding in such shareholder’s name on the record date for the meeting. | |
| ISG Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives. | ||
Active Shareholder Engagement Program | • We met with more than 100 of our institutional shareholders for the purpose of discussing our financial performance, strategic and business plans, compensation practices, environmental, social and governance (ESG) topics and other topics of importance to them and reported these meetings to our Board. • For additional information regarding our 2020 shareholder engagement efforts, please see Active Engagement with Shareholders, Governance Enhancements Informed by Shareholders and Say-on-Pay and Investor Engagement in the Compensation Discussion and Analysis (CD&A) in this Proxy Statement. | |
| 20 F.N.B. Corporation |
Our commitment to “best in class” corporate governance is integral to our business. Our key governance practices are described below.
Corporate Governance |
| ISG Principle 4: Board should have a strong, independent leadership structure. | ||
Independent Lead Director | • Our Board has determined that our unified board structure is effectively counterbalanced by the fact that 100 percent of our directors, excluding our CEO, are independent under SEC and NYSE independence standards, as well as our strict adherence to a robust governance structure and our effective empowerment of our Independent Lead Director. • For a full description of our Independent Lead Director’s responsibility and authority, please see our Corporate Governance Guidelines. | |
Overwhelmingly Independent Board and Board Committees Composed of Independent Directors | • Excluding our CEO, 100 percent of our Board is independent. • Each of our Standing Committees and the FNBPA Credit Risk and CRA Committee conduct regular meetings during the year and are composed entirely of independent directors. | |
| ISG Principle 5: Boards should adopt structures and practices that enhance their effectiveness. | ||
Detailed Board Composition Criteria, Including the Director Skill Matrix | • Our Director Skill Matrix is used by the Nominating and Corporate Governance Committee to assess each of our director nominees in connection with the nomination of prospective director candidates for election at our 2021 Annual Meeting. | |
Strive for Board Diversity and Broad Range of Perspectives and Backgrounds | • Diverse Board.Presently, 33 percent of our Board and 25 percent of the F.N.B Standing Committee Chair positions are composed of minority and/or women directors. • Practices Designed to Promote a Diverse Board. Our Corporate Governance Guidelines and our Nominating and Corporate Governance Committee’s practices provide that we shall consider diversity, among other important factors, in connection with identifying and recruiting prospective director candidates and in connection with Board composition determinations and Board succession planning. • Values the Benefits of a Diverse Board. In addition to skills and experience, we believe that a Board composed of a mix of diverse backgrounds, including gender, age, race and ethnicity, creates a diversity of perspectives among the Board and thereby supports a more nuanced and broader scope consideration of Company strategies and opportunities, and, ultimately, results in a more productive Board. In 2017 and 2018, F.N.B. was the lead sponsor of the African American Directors Forum which drew participation from public company board leaders across the U.S. for the purpose of measurably improving diverse, and particularly African American representations on public company boards of directors. F.N.B. continues to financially support the efforts of the African American Directors Forum as well as other initiatives designed to support and promote diversity within U.S. companies, and as is more fully described in our 2021 Corporate Responsibility Report, is committed to furthering economic opportunity for our historically underserved communities. | |
Proactive Board Oversight of Board, CEO and Executive Management Succession Planning Process | • Succession planning is a priority for the Board and our senior management, with the goal of ensuring a strong pipeline of leaders for the future, and the Board annually reviews the Board and management succession plans. • For additional, detailed information, please see the section of this Proxy Statement titled Succession Planning — Board, CEO and Management. | |
| 2021 Proxy Statement 21 |
Corporate Governance |
Combined Chair/CEO Structure | • The advantage of the combined Chair/CEO position is a better Board-level understanding of the daily and long-term inherent critical regulatory risk, business and financial risks associated with the operation of our business, and eliminating confusion by ensuring that the Company has a clear single public “face” for our shareholders, customers, employees, regulators, analysts and other key stakeholders. • Our Independent Lead Director possesses the necessary authority to facilitate independent board oversight of management and serves as an effective counterbalance under a unified board structure. • Many other financial institutions recognize the value of, and effectively utilize, a similar board structure with a combined Chair/CEO, coupled with an Independent Lead Director. | |
Board Retirement Policy | • Our directors are required to retire at age 75(4). | |
Limit Service on Other Public Company Boards and Audit Committees | • No Board member may serve on more than three other public company boards. • Our Board policy provides that Audit Committee members cannot serve on the audit committees of more than two public companies at the same time. | |
Conduct Annual Board Self-Assessment Evaluations. | • The Board and its committees conduct rigorous annual self-evaluations. The results are reported to the Board and committees and are a consideration in the director re-nomination process. | |
Conduct Executive Sessions of Directors | • Our Board conducted four executive sessions in 2020 (two attended only by independent directors), all presided over by our Independent Lead Director. | |
Comprehensive Board Orientation and Continuing Director Education Program | • The F.N.B. Director orientation and education program includes an annual extensive internal training curriculum designed to provide education about insider trading, fiduciary standards, our Code of Conduct requirements, other critical regulatory compliance matters, a stipend to incentivize participation in local, regional and national director educational conferences, director onboarding and mentoring programs and periodic management presentations to the Board on business, regulatory, cybersecurity and other topics related to current industry issues. | |
Board Oversight of Corporate Responsibility and ESG Matters | • Our commitment to identifying corporate responsibility best practices is an essential part of our culture and corporate values. Our commitment to ESG begins with our Board Chairman and CEO and our Nominating and Corporate Governance Committee has oversight of the Company’s corporate ESG strategies. • F.N.B. publishes an annual Corporate Responsibility Report which provides, among other highlights, an overview of our commitment to the environment, overall community well-being, diversity, equity and inclusion initiatives, and socially responsible Company endeavors (please see our 2021 Corporate Responsibility Report under Resources). • To view F.N.B.’s 2020 public announcements, including those concerning our COVID-19 response and social equality, as well as other significant initiatives and contributions benefiting our customers, employees and communities, please visit the Press Releases section of our Newsroom at fnbcorporation.com. | |
| (4) | Our board has “grandfathered” our Independent Lead Director, William B. Campbell, who has served on our Board since 1975 (shortly after F.N.B. was organized in 1974). In its decision to grandfather Director Campbell, the Board took into account the considerable benefits that Director Campbell’s Board tenure offers to us, including his indispensable historical perspective, experience and institutional knowledge as a Board member regarding significant prior U.S. economic and banking crises and the recurring challenges that confront financial institution boards. Moreover, Director Campbell’s dedicated commitment and proactive engagement has enabled him to exercise his unique and effective leadership skills, which provide him the respect of his Board colleagues, and executive management, and the necessary gravitas to serve effectively as our Independent Lead Director. However, the Board’s succession planning process includes consideration for when Director Campbell retires. |
| 22 F.N.B. Corporation |
Corporate Governance |
Board Access to Management and External Auditors or Counsel | • Our Board and committees have access to the Company officers, external auditors and legal counsel in order to discharge their fiduciary and legal duties and responsibilities. | |
Board Approves and Oversees the Company’s Long-Term Strategic Plan | • Our Board engages with management and oversees significant business plans and risk management strategies. In 2020, the Board reviewed and approved F.N.B.’s 2020-2023 Strategic Plan. | |
| ISG Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company. | ||
Maintain Stock Ownership Requirement | • Our Board has implemented stock ownership policies for our Board, Section 16 officers, NEOs and other members of senior management which are designed to ensure that their interests are meaningfully aligned with shareholders’ interests, as is more fully detailed in our Corporate Governance Guidelines. | |
Annual Say-on-Pay Advisory Vote | • Per our Board recommendation, our shareholders approved continuing to hold our advisory Say-on-Pay vote on an annual basis. In 2020, 92 percent of our shareholders voted in favor of our compensation practices. As a result, the Compensation Committee and the Board are again submitting for the vote of shareholders an advisory resolution to annually approve the compensation of our NEOs. | |
Properly Align Executive Compensation and Use of an Independent Compensation Consultant | • As discussed more fully in the CD&A of this proxy statement, our Compensation Committee consults with an independent compensation consulting firm, whose independence is annually reviewed and evaluated to assess whether it possesses the necessary experience of consulting with other public companies, particularly those in the financial services industry, for the purpose of developing appropriate policies and practices to align executive compensation with shareholder interests and to avoid inappropriate risk. • We annually engage with our shareholders regarding our executive compensation practices. • A majority of the incentive compensation opportunities available to key executives are not guaranteed, since they are tied to Company performance and aligned with shareholder interests. • For additional information regarding how our incentive structures are aligned with our long-term strategy and our shareholders’ interests, see Compensation Governance and Risk Management in our CD&A. | |
Incentive Plans that Do Not Encourage Excessive Risk-Taking | • We annually conduct risk assessments of each of our compensation plans, which the Compensation Committee reviews with our Chief Risk Officer to ensure our various compensation programs do not encourage excessive risk-taking or otherwise pose material harm to our customers or our financial condition. | |
| 2021 Proxy Statement 23 |
Corporate Governance |
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In performing its role, our Board of Directors is guided by our Corporate Governance Guidelines, which establish a framework for the governance of the Board and the management of our Company. The Corporate Governance Guidelines are annually reviewed, updated as appropriate, and approved by the Board. Our Corporate Governance Guidelines reflect broadly recognized and evolving “best practice” governance standards and regulatory requirements, including the New York Stock Exchange (NYSE) corporate
governance listing standards, SEC governance standards, and other widely accepted practices promoted by proxy advisory firms and institutional investors. The full text of the Corporate Governance Guidelines is posted on our website at www.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading.
We believe the diverse and strong mix of skill sets, background, and experience provides the Board a well-rounded and depth of knowledge capacity to prudently oversee F.N.B.’s business and operations.
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24 F.N.B. Corporation
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The Board is responsible for the oversight of management on behalf of the Company’s shareholders. The Board and its committees meet regularly throughout the year to: (i) review and, where appropriate, approve long- and short-term strategies, business and financial planning and performance, risk management, regulatory compliance, internal control and financial reporting and audit matters, compensation, Board and management succession, corporate culture, and public, social and environmental responsibility matters; and (ii) provide oversight and guidance to, and regularly assess the performance of, the Chief Executive Officer (CEO) and other senior executives.
The Board believes that its longstanding approach to our leadership structure has proven to be effective in promoting Company performance and the interest of F.N.B. shareholders since it is designed to optimize the directors’ exercise of their fiduciary oversight as well as properly allocate authority and responsibility between the Board and management. The Board considers its leadership structure frequently as part of its assessment regarding the most effective governance practices for the Company, as well as a succession planning process for the Board. The Board and its Nominating and Corporate Governance Committee formally review the leadership structure not less than annually as part of this self-assessment process, taking into consideration the following:
The potential impact of particular leadership structures on the Company’s performance;
The Company’s circumstances including financial and business performance, economic and regulatory environment, and governmental policies;
The Company’s ability to attract and retain qualified individuals for Company and Board leadership positions;
Legislative and regulatory developments and prevailing industry practices regarding board leadership structures;
The views of our shareholders;
Trends in corporate governance, including practices at other public companies, proxy advisory firms, and influential academic studies on board leadership structures and the impact of leadership structures on shareholder value;
The respective responsibilities for the positions of Board Chairman, CEO, Independent Lead Director and the Board committee chairs; and
Regular executive session meetings of the independent directors to engage in open discussions regarding CEO and Company performance, strategic considerations and other matters considered important and in the best interest of the Company and its shareholders.
The Board believes it is important to retain flexibility to determine its leadership structure based on the particular composition of the Board (specifically, the fact that a majority of the Board is independent), the individuals serving in leadership roles and the needs and opportunities of the Company.
During 2017, our Board reviewed its leadership structure, taking into consideration the factors outlined above, and determined to maintain its well-established approach to board leadership structure since this structure, coupled with a strong and experienced independent Lead Director and an overwhelmingly independent and experienced Board, will continue to provide appropriate leadership for and oversight of the Company and promote effective, fully engaged and efficient functioning of both the Board and management, which ultimately serves the best interests of our shareholders. A unified board leadership structure has presented critical advantages for the Board, including promoting a more transparent understanding ofday-to-day management matters, deeper consideration of key issues affecting the Company’s operations, initiatives and business priorities, greater engagement with respect to the long-term strategy of the Company, and better overall consistency in internal and external communication of the Company’s strategic and business priorities. This structure provides free and open input from our experienced independent Lead Director, as well as active engagement by a Board composed almost entirely of independent directors. Moreover, the Board’s extensive and significant leadership skills (over 61% of our Board members possess CEO or principal business experience along with other high caliber professionals) creates an environment for an active and engaged Board. The Board regularly evaluates our leadership structure with the focus on promoting the shareholders’ best interests and believes this dynamic approach offers the most flexibility with respect to making certain the Board adopts the leadership structure which best serves the interests of F.N.B. shareholders.
Notwithstanding the strong oversight roles of the Independent Lead Director and committee chairs described below, all directors share equally in their responsibilities as members of the Board.
2018 Proxy Statement 25
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Independent Oversight. All of our directors are independent, with the exception of our Board Chairman and CEO, Vincent J. Delie, Jr., and our former CEO, Stephen Gurgovits, who retired more than six years ago. The independent directors meet at regular intervals in executive session with no management present, where they discuss any matter they deem appropriate, including CEO and Company performance and Board meeting agendas and materials.
Board Chairman. Our Board Chairman is appointed annually by all the directors. The Chairman’s responsibilities include:
calling Board and shareholder meetings;
presiding at Board and shareholder meetings; and
preparing meeting schedules, agendas and materials, in consultation with the Independent Lead Director and input from other Board members.
Independent Lead Director. The Independent Lead Director is appointed annually by the independent directors. In considering the appointment of the Independent Lead Director, the Board not only takes into account such person’s qualifications under applicable NYSE, F.N.B. categorical and SEC independence standards, but also examines such person’s personal attributes such as strength of character, unyielding integrity and commitment to facilitate open and meaningful communication between the Chairman, CEO, the Board and Board committees. The duties and responsibilities of the Independent Lead Director are more fully described in our Corporate Governance Guidelines and include, but are not limited to, the following:
Preside over Board meetings when the Chairman is absent or his participation raises a possible conflict and may call Board meetings or convene executive sessions of the independent directors;
Collaborates with the Board Chairman and other Board members to establish Board meeting agendas and add agenda items;
Preside over executive sessions of independent directors;
Meet regularlyone-on-one with the CEO;
Coordinate the annual performance evaluation of the CEO by the Board and discuss the results with the CEO;
Collaborate with the Nominating and Corporate Governance Committee on the annual self-assessment of the full Board;
Facilitate communications between management and the independent directors;
When necessary, act as a liaison to and facilitate communications among the Corporation’sChairman-CEO, management and directors for the purpose of coordinating information flow among the parties with the goal of optimizing the effectiveness of the Corporation’s Board and Board Committee meetings;
Serve as a conduit of information and feedback among the Corporation’sChairman-CEO and directors between Board meetings; and
Coordinate the review and resolution of conflict of interest issues with respect to members of the Corporation’s Board as they may arise.
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Calling meetings of their committees;
Presiding at meetings of their committees;
Approving agendas, adding agenda items, and reviewing materials for their committee meetings;
Serving as a liaison between committee members and the Board, and between committee members and senior management, including the CEO; and
Working directly with the members of senior management responsible for the matters reviewed by the committees.
The Board oversees the Company’s CEO and other senior management in the competent and ethicalday-to-day operation of the Company and ensures that our officers are serving the long-term interests of the shareholders. We expect each director to take a proactive and focused approach to his or her position, and to assist in setting standards to ensure that the Company is committed to business success through the maintenance of high standards of responsibility, fiduciary conduct and ethics, as embodied in our Statement of Directors’ Duties and Responsibilities, Code of Ethics, Code of Conduct and Corporate Governance Guidelines. Our Statement of Directors’
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Duties and Responsibilities describes the legal, regulatory and fiduciary duties which our directors must adhere to in the conduct of their Board responsibilities. Each of our Directors is required to participate in an annual Code of Conduct training program and affirm that they understand their obligations under the Code of Conduct. Our Code of Conduct applies to all of the Company’s employees and directors and our Code of Ethics applies to senior officers and employees. Our Corporate Governance Guidelines outline the key practices and procedures that our Board follows. These codes and standards may be found on our website atwww.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading.
Our Board met eight times in 2017. Each director attended 100% of the meetings of the Board and the respective committees on which such director served, with the exception of Directors Martz, Motley and Stanik. Director Martz and Director Stanik each missed one Board meeting due to illness. Director Martz attended at least 97.06% and Director Stanik attended at least 95% of the aggregate of all meetings of the Board and of each committee on which they served. Director Motley missed two committee meetings and attended 94.74% of the aggregate of all meetings of the Board and his committee meetings. We expect the members of our Board to attend our Annual Meeting as a matter of policy, and all of our current Board members attended our 2017 Annual Meeting with the exception of Directors Bena and Dively, who were not directors in 2017.
Our principal Board committees serve as joint committees for both the Corporation and FNBPA and consist of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee (Nominating Committee), and Risk Committee (collectively, the Standing Committees). The Board has determined that all directors who served as members of the Standing Committees (including their Chairs) during 20172020 are independent under the applicable NYSE standards and SEC rules and otherwise meet the specific eligibility requirements for these committees. The Corporation also has an Executive Committee. Each member of the Executive Committee has been determined by our Board to be independent except for Mr. Gurgovits (former CEO) and Mr. Delie (current CEO). FNBPA has a Credit Risk and CRA Committee. Each member of FNBPA’s Credit Risk and CRA Committee has been determined by our Board to be independent except for Mr. Gurgovits (former CEO).independent. The composition of the Credit Risk and CRA Committee is consistent with federal bank regulatory standards. Board Chairman Delie is an ex officio member of the Credit Risk and CRA Committee. We identify the current members and chairs of our Board and FNBPA committees in the table titled Current Directors and Nominees for Election at Our Annual Meeting in this proxy statement.
Executive Committee.
The Executive Committee, consistent with Pennsylvania law, our bylaws and the committee charter, assists the Board by offering an efficient means of considering matters and issues during intervals between regular meetings of our Board. The Executive Committee met two times in 2017.
Audit Committee
In accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, the Audit Committee is responsible primarily for selecting and overseeing the services performed by our independent registered public accounting firm and internal audit department, evaluating our accounting policies and system of internal controls and reviewing significant financial transactions and compliance matters. In addition, the Audit Committee approves all audit services and permittednon-audit services, as well as all engagement fees and terms related thereto. The Audit Committee met 11 times during 2017. The Board has determined that each member of the Audit Committee, Directors Bena, Malone, Martz, Mencini, Motley and Nicholas, qualify as being “financially literate,” and each of these Audit Committee members also qualifies as an “audit committee financial expert” as defined by the SEC. The determination that each of the Audit Committee members qualifies as an “audit committee financial expert” included an evaluation of each person’s qualifications and other relevant experience under applicable SEC rules and definitions, including consideration of each person’s work, financial, business and professional experience. (For more detail regarding the work, financial, business and professional experience of Directors Bena, Malone, Martz, Mencini, Motley and Nicholas considered by the Board in determining financial literacy and expertise, see the section titledBiographical Information Concerning Director Nominees.) Each Audit Committee member also meets the additional criteria for independence of audit committee members set forth under the SEC rules, NYSE listing standards, F.N.B. categorical independence standards, and the applicable federal bank regulatory requirements. We refer you to the Report of the Audit Committee in this proxy statement.
Audit Committee (met 10 times in 2020) | • Responsible primarily for selecting and overseeing the services performed by our independent registered public accounting firm and Internal Audit Department (Internal Audit), evaluating our accounting policies and system of internal controls and reviewing significant financial transactions and compliance matters. | |
• Approve all audit services and permitted non-audit services, as well as all engagement fees and terms related thereto. | ||
• The Board has determined that each member of the Audit Committee qualifies as “financially literate,” and each of these Audit Committee members also qualifies as an “audit committee financial expert” as defined by the SEC. The determination that each of the Audit Committee members qualifies as an “audit committee financial expert” included an evaluation of each person’s qualifications and other relevant experience under applicable SEC rules and definitions, including consideration of each person’s work, financial, business and professional experience and educational background. Each Audit Committee member also meets the additional criteria for independence of audit committee members set forth under the SEC rules, NYSE listing standards, F.N.B. categorical independence standards and the applicable federal bank regulatory requirements. | ||
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Compensation Committee (met 7 times in 2020) | • Responsible primarily for structuring, reviewing and monitoring the compensation arrangements for our executive officers, including the CEO, administering our equity compensation plans and reviewing and approving the compensation of the Board. • Provide a compensation structure that is aligned with strong financial performance and shareholder interests. Works directly with our independent consultant to achieve the Committee’s objectives. | |
• For a description of the Compensation Committee’s processes and procedures, including the roles of our executive officers and our independent compensation consultant in the Compensation Committee’s decision-making process, we refer you to Executive Compensation and Other Proxy Disclosure. | ||
• The Board has affirmatively determined that each member of the Compensation Committee qualifies under the NYSE, F.N.B. categorical and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) compensation committee “independence” rules. | ||
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Compensation Committee
The Compensation Committee (also referred to as the “Committee” in theExecutive Compensation and Other Proxy Disclosure discussion of this proxy statement) is responsible primarily for reviewing the compensation arrangements for our executive officers, including the CEO, administering our equity compensation plans, and reviewing the compensation of the Board. For a description of the Compensation Committee’s processes and procedures, including the roles of our executive officers and independent compensation consultants in the Compensation Committee’s decision-making process, we refer you toExecutiveCompensation and Other Proxy Disclosureelsewhere in this proxy statement. The Compensation Committee met nine times in 2017. The F.N.B. Board has affirmatively determined that each member of the Compensation Committee, Directors Hormell, Malone, Motley and Stanik, qualifies under the NYSE, F.N.B. categorical, and Dodd-Frank compensation committee “independence” rules and as an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986 (Code).
Nominating and Corporate Governance Committee
The Nominating Committee assists in the development of standards concerning the qualifications and composition of our Board and conducts succession planning for our Board. In addition, the Nominating Committee recommends director candidates to stand for election to our Board and seeks to promote the best interests of the Company and its shareholders through implementation of prudent and sound corporate governance principles and practices. We refer you to the discussions underIdentification and Evaluation of Director Candidates located elsewhere in this proxy statement. The Nominating Committee met six times in 2017. Each member of the Nominating Committee, Directors Campbell, Chiafullo, Hormell, Mencini and Strimbu, meets the criteria for independence under the NYSE rules and F.N.B. categorical standards.
Risk Committee
The Risk Committee’s principal responsibility is to assist the Board with the review and oversight of the Company’s management of its enterprise-wide risk
program (see discussion underRisk Oversight later in this proxy statement), including establishing, in consultation with senior management, acceptable risk tolerance levels for the Company and reporting this information to the Board. Each member of the Risk Committee, Directors Bena, Dively, Martz, McCarthy, Mencini, Motley and Nicholas, meet the independence criteria under the NYSE rules and F.N.B. categorical standards. The Risk Committee met seven times in 2017.
Credit Risk and CRA Committee
The purpose of the Committee is to oversee the credit and lending strategies and objectives of FNBPA, including: (i) oversight of credit risk management and strategies, including approval of internal credit policies and establishment of loan portfolio concentration limits; (ii) review of the quality and performance of the Bank’s loan portfolio; (iii) approval of intercompany loans subject to Regulation W and loans to Bank “insiders” (as defined under Regulation O) in accordance with applicable regulatory requirements; and (iv) oversight of the Bank’s Community Reinvestment Act (CRA) responsibilities, including the monitoring of the Bank’s community lending and investment activities relative to CRA laws, regulations and requiring guidance, including the CRA Policy, fair lending, affirmative credit programs, and the Bank’s community development activities, and collaborations with national, regional and local community development organizations. The Credit Risk and CRA Committee met nine times in 2017.
The Audit Committee, Compensation Committee, Executive Committee, Nominating Committee, Risk Committee and Credit Risk and CRA Committee each operate under written charters adopted by the Board. You may review these charters on our website at www.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading. The principal responsibilities of the Standing Committees described above are qualified by reference to the charters of these committees and relevant sections of our bylaws.
Credit Risk and CRA Committee (met 7 times in 2020) | • Oversee the credit and lending strategies and objectives of FNBPA, including: | |
• Credit risk management and strategies, including approval of internal credit policies and establishment of loan portfolio concentration limits; | ||
• Review of the quality and performance of the Bank’s loan portfolio; | ||
• Approval of intercompany loans subject to Regulation W and loans to Bank “insiders” (as defined under Regulation O) in accordance with applicable regulatory requirements; and | ||
• Oversight of the Bank’s Community Reinvestment Act (CRA) responsibilities, including the monitoring of FNBPA’s community lending and investment activities relative to CRA and federal fair lending laws and regulations, our CRA Policy, and our community development activities and collaborations with national, regional and local community development organizations. | ||
• Oversee of our affirmative credit programs and fair lending matters. | ||
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Nominating and Corporate Governance Committee (met 6 times in 2020) | • Review and recommends to the Board governance policies, practices and processes. • Lead our process to develop standards concerning the qualifications and composition of our Board and conducts succession planning for our Board. | |
• Recommend director candidates to stand for election to our Board and seeks to promote the best interests of the Company and its shareholders through implementation of prudent and sound corporate governance principles and practices, including oversight of the Company’s corporate responsibility strategies. • Conduct annual Board self-assessment process, evaluates results and reports results to the Board. • Oversee the Company’s ESG strategies and reporting. | ||
Risk Committee (met 4 times in 2020) | • Assist the Board with review and oversight attendant to Company management of its enterprise-wide risk program (see discussion under Oversight of Risk), including establishing, in consultation with the Chief Risk Officer and senior management, an appropriate risk management framework and acceptable risk tolerance levels for the Company and reporting this information to the Board. | |
Executive Committee (did not meet in 2020) | • Assist the Board by offering an efficient means of considering matters and issues requiring immediate attention during intervals between regular meetings of our Board or considering specific responsibilities which may be delegated to it from time to time by the Board. | |
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Succession Planning Board, CEO and Management | ||||
Board Succession and Refreshment
Our Nominating and Corporate Governance Committee is responsible for leading, in collaboration with our Independent Lead Director and Board Chair, our Board succession and refreshment processes. Our Board’s succession plan and refreshment practices are the culmination of a thoughtful and methodical process that is carried on throughout the year. The chart below describes in detail our Board succession planning process objectives and the ways in which those objectives are met throughout the year.
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Corporate Governance |
Management and Employee Succession and Refreshment
The CEO, in collaboration with his executive management team, regularly reviews the management and employee succession plan for our Chairman/CEO,
key executives, senior management and other employee positions and periodically consults with the Board, which includes formal presentations to both groups regarding the management succession plan.
Succession planning is a priority for the Board and our senior management, with the goal of ensuring a strong pipeline of leaders for the future. The chart below describes in detail our management and employee succession planning process objectives and the ways in which those objectives are met throughout the year:
For additional, detailed information about our succession planning processes, as well as our human capital management program, please see our 2020 Form 10-K and our 2021 Corporate Responsibility Report(see Resources).
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Corporate Governance |
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The CompanyOur Board has a Code of Conduct that applies to each ofadopted the Company’s Directors and employees, including its principal executive officer, principal financial officer and principal accounting officer, and a Code of Ethics that applies to the Company’s senior officers and employees. The Company annually requires all directors and employees to certify that they understand their responsibilities under the Code of Conduct. Also, the Company’s directors and employees are required to participate in annual training relative to the standards set forth in the Code of Conduct and Code of Ethics.following key corporate governance documents. You may view copies of our Code of Conduct and Code of Ethics on our websitethese, along with other important governance documents, at
www.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading. In addition, thelinks set forth below. The Company will provide copies of its Code of Conduct and Code of Ethics,these documents, without charge, to any person upon written request sent to our Corporate Secretary at F.N.B. Corporation, One North Shore Center, 12 Federal Street, Pittsburgh, Pennsylvania 15212. The Company will disclose any changes in or waivers from its Code of Conduct or Code of Ethics by posting the revised Code(s) or other related information on its website or by filing a Form8-K.
F.N.B. - FNBPA Audit Committee Charter | • The charter governs the operations of the joint F.N.B. - FNBPA Audit Committee and is reviewed on an annual basis, with any changes being recommended and approved by the Board of Directors. • You may view the Audit Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/audit-committee-charter-final-101718.pdf |
F.N.B. - FNBPA Compensation Committee Charter | • The charter governs the operations of the joint F.N.B. - FNBPA Compensation Committee and is reviewed on an annual basis, with any changes being recommended and approved by the Board of Directors. • You may view the Compensation Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/compensation-committee-charter-121620.pdf |
FNBPA Credit Risk and CRA Committee Charter | • The charter governs the operations of the FNBPA Credit Risk and CRA Committee and is reviewed on an annual basis, with any changes being recommended and approved by the FNBPA Board of Directors. • You may view the Credit Risk & CRA Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/credit-risk-and-cra-committee-charter-121620.pdf |
F.N.B. - FNBPA Executive Committee Charter | • The charter governs the operations of the joint F.N.B. - FNBPA Executive Committee and is reviewed on an annual basis, with any changes being recommended and approved by the Board of Directors. • You may view the Executive Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/executive-committee-charter-171019.pdf |
F.N.B. - FNBPA | • The charter governs the operations of the joint F.N.B. - FNBPA Nominating and Corporate Governance Committee and is reviewed on an annual basis, with any changes being recommended and approved by the Board of Directors. • You may view the Nominating and Corporate Governance Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/nominating-and-corporate-governance-charter-101619.pdf |
F.N.B. - FNBPA Risk Committee Charter | • The charter governs the operations of the joint F.N.B. - FNBPA Risk Committee and is reviewed on an annual basis, with any changes being recommended and approved by the Board of Directors. • You may view the Risk Committee Charter on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/risk-committee-charter-121819.pdf |
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Corporate Governance |
F.N.B. Code of Conduct | • The Code of Conduct applies to all Company directors and employees, including its principal executive officer, principal financial officer and principal accounting officer. • The Code of Conduct reflects F.N.B.’s policy of responsible and ethical business practices and states that the Company’s reputation for integrity depends on the conduct of its representatives. • The Company annually requires all directors and employees to certify that they understand their responsibilities under the Code of Conduct. • The Company’s directors and employees are required to participate in annual training relative to the standards set forth in the Code of Conduct. • The Company will disclose any changes in or waivers from its Code of Conduct by posting the revised Code or other related information on its website. • You may view the Code of Conduct on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/code-of-conduct-180919.pdf |
F.N.B. Code of Ethics for | • The Code of Ethics applies to the Company’s senior officers and employees. • The Code of Ethics advocates for, among other things, honest behavior and integrity, compliance with statutes, rules and regulations of any federal, state and local government that are applicable to the Company’s operations and acting in order to maintain the Company’s reputation. • The Company’s directors and employees are required to participate in annual training relative to the standards set forth in the Code of Ethics. • The Company will disclose any changes in or waivers from its Code of Ethics by posting the revised Code or other related information on its website. • You may view the Code of Ethics on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/code-ethics.pdf |
F.N.B. Corporation Policy | • This policy sets forth the procedures with respect to the review and approval of all transactions involving the Company and a related person. • You may view the Related Persons Transactions Policy on our website at: https://www.fnb-online.com/-/media/fnbonline/files/feature/pagecontent/au/corporate-governance/policy-respect-180118.pdf |
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Corporate Governance |
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TheOur Board recognizes that as a financial institution, theeffective management of our Company takes on a certain amount ofrequires identifying, understanding, and prudently and proactively managing risk in every business decision, transactionattendant to our businesses and activity. The Company’soperations. Our Board and management manage our risk appetite to optimize long-term shareholder value while supporting our employees, customers and communities. We approve our Enterprise Risk Appetite and critical risk policies at the Board level. We discuss ouroversees risk management approach in the Risk Management sectionthrough multiple layers of Item 7 of this year’s Annual Report on Form10-K. The Company’s Boarddefense and management have identified the following major categories of risk: credit risk, market risk, liquidity risk, strategic alignment and reputation, operational risks (legal, fiduciary, compliance, regulatory, technology), economic risk, succession planning and compensation practices, and capital adequacy. In its oversight role of the Company’s risk management function, the Board is mindful that risk management is not about eliminating risk, but rather is about identifying, accepting and managing risks so as to optimize total shareholder value, while balancing prudent business considerations, maintaining safety and soundness and mitigating potential customer impact.
receives reports regarding F.N.B.’s corporate culture emphasizes a strong compliance culture, and places critical value on risk management at all levels, from the Board level to each of our employees. The importance of effectively managing risks in the execution of our strategic objectives is reinforced throughout our workforce through incentive compensation and training programs, with particular emphasis on ensuring that such strategic execution is consistent with our risk appetite.
The Company supports its risk management process through a governance structure involving its Board and senior management. The Board Risk Committee
establishes risk tolerance limits for monitoring significant business regulatory matters, and oversees senior management in monitoring business and strategic decisions with respect to the Company’s risk profile. The Risk Committee oversees senior management in the following activities: (i) identification, measurement, assessment, monitoring and controlling of enterprise-wide risk across the Company and its subsidiaries; (ii) development of appropriate and meaningful risk metrics to use in connection with the oversight of the Company’s businesses and strategies; (iii) review and assessment of Company policies and practices to manage the Company’s credit, market, liquidity, operating and regulatory risk (including technology, operational, compliance and fiduciary risks); and (iv) identification and implementation of risk management best practices. The Board Risk Committee serves as the primary point of contact between our Board and the FNBPA Risk Management Committee, which is the senior management-level committee responsible for FNBPA’s risk management. The combined board structure, which includes an interlocking directorate for the F.N.B. and FNBPA Boards and a joint meeting schedule, was implemented in 2015 as part of an initiative to streamline and further strengthen the governance, oversight and risk management processes, challenges and issues from
our Audit, Risk and Credit Risk and CRA Committees (each of which is composed entirely of independent directors who qualify under the requirements of the Company’sSEC and FNBPA’s Boards of Directors.
Generally, we use a variety of key risk metrics at the businessNYSE), executive management, internal information security and operational unit level, as well as by risk category, to develop a quarterlycompliance departments, and our Chief Risk Appetite Dashboard to enable the Board Risk Committee and the Board, as well as our various management level risk committees, to oversee, manage and monitor our adherence to our risk appetite. As noted above, the Company’s principal subsidiary, FNBPA, has a Risk Management Committee composed of seniorOfficer.
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management. The purposeWe have established a complaint process with regard to the following matters:
COMPLAINT PROCEDURES
We also encourage active engagement among the different areas within the Company responsible for our risk management oversight. Since certain risk management issues and processes are considered by both our Audit and Risk Committees, our governance structure ensures that appropriate information and knowledge is disseminated between these two committees by having certain interlocking members of this committeeboth committees, and providing these committees authority to conduct joint sessions to hear reports and discuss key risk management and audit matters affecting our Company.
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Corporate Governance |
Each of our business areas is required to provide regular oversight of specific areas of risk with respectensure that decisions relative to new business initiatives, products and services or material changes to our business model or operations conform to the Company’s Statement of Risk Appetite approved by our Board’s Risk Committee. Moreover, each of our various lines of business and operations and support areas include appropriate governance processes in considering the limits incorporated into our Risk Appetite Statement, including, but not limited to, policy, risk tolerance limits, key risk indicators, risk and control self-assessments, model validation, capital planning and stress testing and strategic planning.
We believe our comprehensive internal risk framework facilitates an appropriate level of risk oversight by our Risk Committee, including such critical features as:
Providing that risks are identified, monitored and reported properly;
Defining and measuring the type and amount of risk the Company is willing to take;
Communicating the type and amount of risk taken to the appropriate management level;
Promoting a strong risk management structure. The FNBPA Risk Management Committee reportsculture that encourages a focus on a regular basis to the Company’s Board Risk Committee regarding the enterprise-wide risk profile of the Company, trackingrisk-adjusted performance; and monitoring of risk-related matters and other significant risk management issues. F.N.B.’s Chief Risk Officer is principally responsible for the design and implementation of the Company’s enterprise-wide risk management strategy and framework, consistent with tolerance limits established by the Board Risk Committee, and ensures the coordinated and consistent implementation of risk management initiatives and strategies on aday-to-day basis. Our Compliance Department, which reports to the Chief Risk Officer, is responsible for developing policies and procedures and monitoring the Bank’s compliance with applicable laws and regulations. Further, the Company’s audit function performs an independent assessment of the Company’s internal controls environment and plays an integral role in testing the operation of our internal controls systems and reporting findings to management and the Company’s Audit Committee. Both the Company’s Board Risk Committee and Audit Committee regularly report on risk-related matters to the Company’s Board. Significant risk-related matters, including regulatory, financial, economic, industry, transactional, business, cybersecurity, technology, litigation, compliance and other matters are regularly monitored, evaluated and reported to, and discussed by the various management-level risk committees along with the Board and Risk Committee.
Our compensation philosophy supports and reflects F.N.B.’s risk appetite and risk management culture. Our Compensation Committee, in consultation with an experienced and independent executive compensation advisor, monitors and evaluates our compensation practices from
Maintaining a risk management perspective to ensureorganization that such compensationis independent of risk-taking activities. We incorporate both front-line risk-monitoring at the business level, and incentive practices do not encourage unduea second-line of defense consisting of monitoring oversight by our risk and compliance functions (which are consistent withindependent of our business operations). In addition, we have an independent check of both of our first- and second-line risk management processes through our internal and external audit function.
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Our primary risk exposures, as well as our risk management framework and methodologies, are discussed more fully under Item 1A — Risk Factors (pages 22-35) and the Risk Management discussion (pages 77-78) in the Company’s risk appetite. Our risk policies2020 Form 10-K. Also see Compensation Governance and procedures guide our management’s decisions, including how we pay employees. By setting and communicating our risk appetite in advance, we seek to manage and controlRisk Management within the risks that employees can take or effectively influence, consistent with their roles and responsibilities to serve our clients.
All employees have performance objectives tied to business and individual performance, but each employee also has customer and compliance focus and risk management responsibilities. We evaluate employee performance against these objectives, in addition to considering risk outcomes from actions taken in prior years. We incorporate our comprehensive evaluation of employee risk management into our performance and incentive compensation decisions. In addition, all employees are encouraged to collaborate across groups to identify and mitigate risks and elevate and address identified risk-related issues or concerns.
Our compensation program is designed to encourage managementCompensation Committee Report for a discussion of risk within our appetite and discourage inappropriate risk-taking and conduct relativeassessment as it relates to our customers, by offering incentive compensation awards to our executives and employees designed, in part, to reward appropriate conduct relative to our customers. Specifically, we balance our incentive awards between fixed and variable compensation; cash and equity-based compensation; and annual and long-term compensation. We base awards to Section 16 officers on the Compensation Committee’s assessment of a variety of quantitative and qualitative performance measurements, both on an absolute and a relative basis. Likewise, the CEO, in consultation with senior management, performs a similar assessment fornon-Sectionprogram. 16 employees. Compensation decisions also rely on discretion to consider other factors, such as effective risk management, commitment to delivering a superior customer experience, compliance with controls and ethical duties, competition for top talent, market-based pay levels and the need to attract and engage our leaders.
The Board believes that the Company’s enterprise-wide risk management process is effective since it includes the following material components: (i) enables the Board, Risk and Audit Committees, Chief Risk Officer and senior management to properly assess the quality of the information it receives;receives and the adequacy of strategies deployed to manage various risk matters; (ii) enables the Board, the Audit and Risk Committees and senior management to monitor the risk management considerations concerning the Company’s businesses, investments and financial, accounting, regulatory and legal compliance, investments, financial performance, technology and operations, cybersecurity effectiveness, audit and accounting methods and practices, and strategic considerations of F.N.B. and its subsidiaries, and the risks that they face;plan; (iii) enables the Board and the Audit, Credit Risk and CRA, and Risk Committees to oversee and assess how senior management evaluates risk; and (iv) provides the Board and its Audit, Credit Risk and CRA, and Risk Committees appropriate oversight perspective to assess the quality of the Company’s enterprise-wide risk management process.
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Our Company has an effective, robust engagement program with shareholders and other stakeholders on a wide range of topics throughout the year. Engagement and transparency with our shareholders help the Company gain useful feedback on these topics. Shareholder feedback also helps us to better tailor the public information we provide to our shareholders and other interested parties. Our engagement efforts in 2020 included:
In connection with its engagement with shareholders and other interested parties, management and the Board limit the discussions in accordance with the requirements of Federal Regulation FD.
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We have developed and operate under corporate governance principles and practices which are designed
As part of our commitment to optimize long-term shareholder value, align the interests ofeffective engagement with investors, our Board and management with those ofteam evaluate and respond to the views communicated by our shareholders and promote the highest ethical conduct amongproxy advisory firms, including vote results at our directors, managementAnnual Meeting. After considering input from shareholders, a recognized proxy advisory firm and employees.
Highlights of portions ofother stakeholders, our Corporate Governance Guidelines, as well as some ofCompany has made enhancements to our corporate governance policies, practices, procedures and related matters are as follows:2021 Proxy Statement, including:
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Continued to add metric-related data to our 2021 Corporate Responsibility Report.
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We encourage you to visitDisclosed our corporate website at www.fnbcorporation.com undercompensation considerations in view of the “About Us” tab, selectingCOVID-19 pandemic impact.
Also, see Say-on-Pay Support and Investor Engagement in our CD&A for our 2020 Say-on-Pay vote, which describes our compensation-related shareholder engagement discussions and the “Investor Relations and Shareholder Services” option and scrollingresulting disclosure enhancements we made in response to the “Corporate Governance” heading for additional information about our Board, its committees, our Corporate Governance
Guidelines, our Code of Ethics, our Code of Conduct and our Audit, Nominating and Corporate Governance, Risk, Executive, Credit Risk and CRA, and Compensation Committee Charters. We also include additional information on these topics in other sections of this proxy statement.shareholder discussions.
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Effective and meaningful strategies relative to ESG matters and employee engagement, welfare and inclusion are critical components of our efforts to manage our company for the long term and remain a trusted and respected company by our four key constituencies: shareholders, customers, communities, and employees. F.N.B. communicates information about its ESG and employee engagement, welfare and inclusion initiatives through a variety of means, including reports and presentations, regulatory filings,
press releases and direct engagement with our shareholders, customers, employees and communities, in our efforts to remain responsive to the concerns of our key constituencies. The following discussion highlights important 2017 ESG and employee engagement, welfare and inclusion initiatives, commitments and achievements which reflect on how we build and maintain trust and credibility as a company that people want to work for, invest in, do business with, and be proud to have as a part of their community.
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Our Environmental Leadership
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Our Social Leadership
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Our Employee Engagement, Welfare and Inclusion Commitment
As we strive to make our Company a fulfilling place to work, we listen to our employees to build upon our programs and resources to enhance their experience,
help them deepen their skill sets and further develop their careers with us. We focus our human capital management efforts on key areas, including:
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2018 Proxy Statement 39
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40 F.N.B. Corporation
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Background.Applicable Standards for Determining Director Independence.
As a company that has securities listed on theThe NYSE listing standards require a majority of the membersour directors and each member of our Board mustAudit, Compensation, and Nominating and Corporate Governance Committees to be independent (which can be found in the NYSE: Corporate Governance Guide at https://www.nyse.com/publicdocs/nyse/listing/NYSE_Corporate_Governance_Guide.pdf). In addition, our Corporate Governance Guidelines require a substantial majority of our directors to be independent. UnderOur Board has adopted Director Independence Categorical Standards (Categorical Standards) which are contained in our Corporate Governance Guidelines (see Key Corporate Governance Documents), to assist it in determining each director’s independence. The Categorical Standards allow for the NYSE’s corporate governance standards, no director qualifies asassessment of independence based upon the specified categories and types of transactions which conform to, or, in part, are more rigorous than, the independence requirements of the NYSE.
F.N.B. Director Independence Determinations.
In early 2021, the independent unlessdirectors on our Board, affirmatively determines thatin coordination with our Nominating and Corporate Governance Committee, evaluated the director has no “material relationship” with F.N.B. The fact that a directorrelevant relationships between each director/director-nominee (and his or member of a director’sher immediate family may have a material relationship withmembers and affiliates) and F.N.B. directly, or as a partner, owner, shareholder, or officer of an organization that has a relationship with F.N.B., will not necessarily preclude such director from being nominated for election to our Board. In assessing director independence, the Board must consider all relevant facts and circumstances in determining whether a material relationship exists. This portion of the proxy statement describes the NYSE independence standards for directors and the categorical independence standards that our Board adopted to guide it in evaluating director independence. The types of material relationships that the Board may considerits subsidiaries under the NYSE and F.N.B. categorical independence standards include commercial, legal, industrial, banking, business, consulting, accounting, charitable (collectively, F.N.B. Independence Standards) described more fully in our Corporate Governance Guidelines (see Key Corporate Governance Documents) and family relationships.affirmatively determined that all our directors/director-nominees are independent, except for Mr. Delie, due to his position as CEO of our Company. Specifically, the following 11 of our 12 directors/director-nominees are independent under the F.N.B. Independence Standards: Ms. Bena, Mr. Campbell, Mr. Chiafullo, Ms. Dively, Mr. Hormell, Mr. Malone, Mr. Mencini, Mr. Motley, Ms. Nicholas, Mr. Stanik and Mr. Strimbu.
The NYSE’s bright-line independence tests. The NYSE established director independence requirements in order to increase the quality of Board oversight at listed companies and to lessen the possibility that damaging conflicts of interests will influence Board decisions.
Some of the relationships that are deemed to automatically impair a director’s independence under NYSE’s “bright-line” tests include the following:
a director employed by F.N.B.;
a director’s immediate family member is an F.N.B. executive officer;
a director’s (or immediate family member’s) receipt of more than $120,000 per year in direct compensation from F.N.B.;
a director (or immediate family member) who has been an executive officer of a company where an F.N.B. executive officer serves on that company’s compensation committee;
a director’s (or immediate family member’s) relationship involving companies that make business-related payments to, or receive business-related payments from, F.N.B. in excess of certain amounts;
any of the above relationships that existed within the prior three years; or
a director is currently a partner or employee of a firm that is F.N.B.’s internal or external auditor, or has an immediate family member who is a current partner of such firm or who is a current employee of such firm and personally works on F.N.B.’s audit; or the director or an immediate family member was an employee or partner of such firm within the last three years and personally worked on F.N.B.’s audit during such time.
2018 Proxy Statement 41
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More detail regardingIn making their independence determination, the NYSE’s bright-line director independence tests, including the explanatory commentary, may be found at the NYSE’s website atwww.nyse.com. The NYSE’s corporate governance standards do not define every relationship that may be considered byindependent directors of our Board to be material for purposes of determining a director’s independence.
F.N.B. Corporation categorical standards of director independence. In addition to the NYSE bright-line independence standards, F.N.B. has adopted categorical independence standards. F.N.B. categorical independence standards are described in its Corporate Governance Guidelines which may be found on our website atwww.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading. The categorical independence standards define certain ordinary course of business transactions and other relationships that F.N.B.’s Board has concluded would not cause a director to cease to be independent. F.N.B.’s categorical standards include the following:
Financial relationship whereby a service or product provider that is an affiliated entity of a director or immediate family member has made payments to, or received payments from us or our affiliates in an amount that, in any of the last five fiscal years, does not exceed the greater of $1,000,000 or 2% of such provider’s consolidated gross revenue;
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A director or immediate family member is associated as a partner or associate of, or of counsel to, a law firm that provides services to F.N.B. or its affiliates and the payments relating to such services do not exceed $1,000,000 or 2%, whichever is greater, of the law firm’s revenues in each of the past five years. Moreover,considered the F.N.B. Board adopted guidelines which provide that directors associated with law firms that provide servicesIndependence Standards relative to F.N.B. adopt appropriate measures which are designed to preclude directors from participating in, or otherwise receiving, pecuniary or other benefits in connection with law firm services provided to F.N.B.; and
A director or an immediate family member is an officer, director or trustee of a charitable ornot-for-profit entity that F.N.B., its subsidiaries or any foundation sponsored by or associated with F.N.B. or its subsidiaries, supports through grants or other support and the contributions by F.N.B. do not exceed the greater of $250,000 or 2% of the charitable organization’s ornot-for-profit entity’s annual receipts.
In applying the NYSE and F.N.B. categorical independence standards, an “immediate family member” includes a director’s spouse, parents, children, siblings, mothers- andfathers-in-law, sons- anddaughters-in-law, brothers- andsisters-in-law and anyone who resides in such director’s home.
All relevant facts and circumstances. Our Corporate Governance Guidelines require that our Board “broadly consider all relevant facts and circumstances” especially in particular situations not covered by the NYSE bright-line independence standards or our categorical independence standards.
As required by the NYSE’s corporate governance rules, we will disclose any relationship that a director has with us that is not consistent with either the NYSE bright-line independence standards or our categorical independence standards in this proxy statement.
On February 21, 2018, our Board, with the assistance of the Nominating Committee, conducted an evaluation of F.N.B. director independence based on the director independence standards set forth in the F.N.B. Corporate Governance Guidelines, the NYSE corporate governance standards, and applicable SEC rules and regulations. As a result of this evaluation, our Board
affirmatively determined that each of Directors Bena, Campbell, Chiafullo, Dively, Hormell, Malone, Martz, McCarthy, Mencini, Motley, Nicholas, Stanik and Strimbu is an independent director. Additionally, our Board affirmatively determined that former director Ms. Laura Ellsworth, who resigned from our Board on September 30, 2017, also was an independent director.
42 F.N.B. Corporation
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In making these determinations, the Board considered various categories of transactions, relationships and arrangements that existed between each independent director and the Company or its subsidiaries, including, but not limited to, business, legal, family and charitable. The following chart reflects relationships between F.N.B and each independent director, such director’s spouse and immediate family members (Personal or Family Relationships), and related interests, including a
company or charitable organization of which such director or the director’s spouse is, or was, during 2017, a partner, officer, director, employee, or in which the director or the director’s spouse holds a significant ownership position (Affiliated Entity Relationships). All of these transactions meet our Board guidance on independence (i.e., made in the ordinary course, of business, not preferential and fair market value, and involving normal risk of collectability).
Personal, Family and Affiliated Entity Relationships of F.N.B. Director Nomineesnon-preferential
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Customer Relationships. We provide financial services to most of our directors. We also provide financial services to some of their immediate family members and affiliated entities. We offer these services in relationships that existed during the ordinary course of our business. We provide the services on substantially the same terms and conditions,preceding three years, including price, as we provide to other similarly situated customers.
Credit Relationships. We also extend credit to some of our directors and their immediate family members and affiliated entities. Federal Banking law (Regulation O) governs these extensions of credit. We have incorporated the Regulation O requirements as part of the F.N.B. categorical independence standards.
Business/Law Firm Relationships. We may also have other business relationships or professional services
arrangements with entities affiliated with our directors or their immediate family members. These relationships are in the ordinary course of business. During 2017, the law firms with which Director Chiafullo and former Director Ellsworth are associated provided legal services to F.N.B. or FNBPA and received aggregate legal fees of $330 and $63,100, respectively. Director Chiafullo and former Director Ellsworth were not personally involved in providing such legal services, and former Director Ellsworth was reassigned from the Compensation Committee shortly after her law firm was engaged. Additionally, Director Chiafullo’s law firm frequently represents borrowers in lendingthose transactions and, from time to time, represents borrowers in transactions where FNBPA is a lender. Director Chiafullo is not personally involved in providing legal services to these clients and any associated legal fees are paid out of the borrower’s loan proceeds, as is
2018 Proxy Statement 43
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customary practice. Under his law firm’s procedures, Mr. Chiafullo is restricted from access to information regarding the borrower’s transaction with FNBPA and he does not receive any compensation related to such transactions. Under his law firm’s procedures, Mr. Chiafullo is restricted from access to information regarding the borrower’s transaction with FNBPA and he does not receive any compensation related to such transactions. The Board determined that such relationships are not material.
Also during 2017, Heeter, a commercial printing company where Director Bena serves as Vice President of Finance, provided printing services to subsidiaries of F.N.B. and received fees of approximately $500,000, or less than 2% of Heeter’s gross revenues for 2017. Heeter is one of five printing vendors employed by F.N.B.’s subsidiaries across their markets and has served as a printing vendor since 2010,pre-dating Director Bena’s assumption of her position at Heeter in April 2017. Director Bena does not receive special compensation from Heeter related to the business relationship between F.N.B. and Heeter and was not identified as a potential director nominee through such business relationship.
Certain Charitable Contributions. We make contributions to charitable organizations where our directors serve as directors or trustees or have other affiliations with the charity. Such contributions, donations and grants are in accordance with our applicable policies and practices.
As part of FNBPA’s community reinvestment outreach initiative, during 2017, FNBPA donated $100,000 to Imani Christian Academy, a Pittsburgh-based nonprofit organization that offers an alternative to the public education system, particularly for minority children from under-performing school districts. This donation is eligible for a 90% Pennsylvania tax credit which will reduce overall Company expense. Former Director Ellsworth is Chair of the Academy’s Board of Directors.
Additional transactions, relationships and arrangements that were considered by the Board are disclosedreported underRelated Person Transactions.
Our Board affirmatively, and determined that Mr. Gurgovits (former CEO), Board Chairman Delie (current CEO), former Director Gary Nalbandian (former Chairnone of the relationships constituted a material relationship between the director/director-nominee and CEO of Metro Bancorp, Inc., (Metro) who retired from our Board on February 28, 2017) and former Director Scott M. Custer (former Chair and CEO of Yadkin Financial Corporation (Yadkin) who retired from our Board on March 24, 2017) are not independent under the NYSE corporate governance standards and F.N.B.’s categorical director independence standards by virtue of their former (Mr. Gurgovits) or current employment (CEO Delie) with the Corporation or the change in control compensation they received in connection with their former leadership roles with companies acquired by F.N.B. (see discussion underRelated Persons Transactions).Company:
| Relationship | Director Relationship in 2020 | |
Material-Related Party Transactions with Directors. | • None | |
Family Relationships Among Directors and Executive Officers. | • None | |
Customer Relationships. Transactions with the Company and its affiliates are in the ordinary course and not preferential. | • None | |
Credit Relationships. Loans are not preferential and comply with the Federal Reserve’s Regulation O governing insider loan transactions. | • All credit transactions comply with the requirements of the Federal Reserve Board’s Regulation O. | |
Business/Law Firm Relationships. Exceeds the greater of $1,000,000 or 2 percent of annual revenue. | • None | |
Certain Charitable Contributions. Exceeds the greater of $250,000 or 2 percent of charitable organization’s total annual receipts. | • None | |
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We have adopted a written policy formalizing the manner in which we review a proposed transaction involving the Company and any of our directors, any director-nominees, any executive officers, any 5 percent or greater shareholder or any immediate family member of the foregoing (related persons) because of the possibility of a conflict of interest. A related persons transaction is generally defined as a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which the Company or any of its subsidiaries was, is or will be a participant, and the amount involved exceeds $120,000, and a related person had, has or will have a direct or indirect material interest. A copy of the Related Persons Transactions Policy is posted on our website (see Key Corporate Governance Documents). Under our policy, all proposed related person transactions, except for (i) transactions generally available to all employees or shareholders of the Company, and (ii) compensatory transactions consistent with the plans, policies and decisions approved by the Company’s Board of Directors or Compensation Committee, must receive the prior approval of the Nominating and Corporate Governance Committee of our Board before we can
take part in the transaction, and if such transaction continues for more than one year, the Nominating and Corporate Governance Committee and Board must annually approve the transaction.
In 2020, no Company directors, director nominees, executive officers, nor immediate family members of the foregoing persons nor any entity owned or controlled by the foregoing persons conducted any related persons transactions with the Company. BlackRock, Inc. (BlackRock), the Vanguard Group (Vanguard), Fuller & Thaler Asset Management, Inc., and Dimensional Fund Advisors LP indicated that they beneficially owned more than 5 percent of our outstanding shares of common stock (including through certain of their subsidiaries) as of December 31, 2020 (see Security Ownership of Certain Beneficial Owners). We may in the ordinary course of business engage in transactions with BlackRock and Vanguard mutual funds, including selling BlackRock and Vanguard investment products to our customers, placing our customer funds in BlackRock and/or Vanguard mutual and exchange traded funds, and using Vanguard funds as an investment vehicle for the F.N.B. 401(k) accounts.
| 36 F.N.B. Corporation |
There are no family relationships among the executive officers and directors of the Company.
Corporate Governance |
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Our Board conducted six executive sessions in 2017, of which two were attended by all directors and the CEO, two were attended exclusively by independent directors
and two were attended exclusively bynon-management directors. William B. Campbell, our Lead Director, presided at all executive sessions.
Our Board believes that each director’s equity ownership in the Corporation should be aligned with the Corporation’s shareholders. Accordingly, our Corporate Governance Guidelines require each of our directors to have beneficial ownership of the lesser of 40,000 shares of Corporation common stock (or common stock
equivalent) or $400,000 in value of the Corporation’s common stock (or common stock equivalent). The Corporation’s director stock ownership requirement is progressively phased in over asix-year period. As of March 30, 2018, each F.N.B. director is in compliance with the stock ownership requirement.
44 F.N.B. Corporation
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Shareholders or other interested parties may send communications to our Board, the independent directors as a group, the Board Chairman, any committee chair, and/or any individual director, including our Independent Lead Director, by addressing such communications to the Board, c/o Corporate Secretary, F.N.B. Corporation, One North Shore Center, 12 Federal Street, Pittsburgh, Pennsylvania 15212. The
Corporate Secretary, or his designee, will promptly forward all such communications submitted and addressed in this manner to the members of our Board or any designated individual director or directors, as the case may be. Our Corporate Secretary will forward all shareholder communications withis
authorized to open and review any mail that is addressed to the Board or individual directors without prior screening bydirector(s) unless the envelope is marked “Confidential” or “Personal.” If so marked, it will be delivered, unopened, to the Chairman of the Board (addressed to the Board) or to the individual director addressee. If the Corporate Secretary opens an unmarked envelope which contains a magazine, solicitation or any other employee.advertisement, the contents may be discarded.
| 2021 Proxy Statement 37 |
Stock Ownership |
Security Ownership of Directors and Executive Officers
The following table sets forth certain information as of the Securities Exchange Act of 1934 (Exchange Act) requires our executive officers and directors, as well as certain persons who beneficially own 10% or moreMarch 5, 2021, record date with respect to beneficial ownershipa of our common stock to file reportsby: (i) each director and nominee; (ii) each currently employed NEO listed in the table entitled, 2021 Summary Compensation Table under the section of their ownership of our securities, as well as statements of changes in such ownership, with the SEC. To our knowledge, based solely on written representations received from ourthis proxy statement entitled Executive Compensation and Other Proxy Disclosure; and (iii) all directors and executive officers
and directors and copies as a group. As of the statementsMarch 5, 2021, record date, we had 320,533,058 shares of ownership changes furnished to us by our executive officers and directors during 2017, we believe that all such filings required during 2017 were made on a timely basis. We do not have any shareholders who own 10% or more of our common stock who are required to file reports under Section 16(a)issued and outstanding. All persons named as beneficial owners of the Exchange Act.Company’s common stock have sole voting power and sole investment power with respect to the shares indicated as beneficially owned, otherwise we include a notation where the director or executive officer has shared voting or investment power with other persons.b
| Name of Beneficial Owner | Shares Beneficially Owned | Percentage Owned | ||||
Pamela A. Bena | 43,466 | * | ||||
William B. Campbell | 103,403 | (1) | * | |||
James D. Chiafullo | 94,317 | (2) | * | |||
Vincent J. Delie, Jr.#+ | 695,971 | * | ||||
Mary Jo Dively | 48,156 | * | ||||
Robert A. Hormell | 89,517 | * | ||||
David J. Malone | 107,792 | * | ||||
Frank C. Mencini | 62,785 | * | ||||
David L. Motley | 48,188 | * | ||||
Heidi A. Nicholas | 249,454 | (3) | * | |||
John S. Stanik | 62,500 | * | ||||
William J. Strimbu | 122,849 | (4) | * | |||
Vincent J. Calabrese, Jr.#+ | 315,377 | * | ||||
Gary L. Guerrieri#+ | 129,515 | (5) | * | |||
Robert M. Moorehead#+ | 62,992 | * | ||||
Barry C. Robinson#+ | 78,425 | * | ||||
All executive officers and directors as a group (18 persons)+ | 2,404,933 | (6) | 0.75% | |||
| a | The term “beneficial ownership” means any person who, directly or indirectly, through any contract, agreement, arrangement, understanding, relationship or otherwise, has or shares voting or investment power with respect to F.N.B. common stock. |
| b | Includes shares held or obtainable by the person within 60 days of March 5, 2021. This figure does not include time-based and performance-based restricted stock units (RSUs) granted to NEOs that do not vest within such sixty (60) day period (see footnote + below). |
| # | Denotes a person who served as an executive officer of the Corporation during 2020. |
| * | Unless otherwise indicated, represents less than 1% of all issued and outstanding common stock. |
| + | The table does not include time-based or performance based RSUs granted to NEOs, except to the extent that any of the same will vest within 60 days of March 5, 2021. Upon vesting, shares of common stock are issued on a one-for-one basis for such units. The amount of RSUs presently held by each NEO (with the performance-based RSUs being presented at target level) is as follows: Mr. Delie, 414,722 units; Mr. Calabrese, 125,466 units; Mr. Guerrieri, 60,934 units; Mr. Moorehead, 52,366 units; Mr. Robinson, 49,769 units; and all executive officers and directors as a group, 759,755 units. The number of shares actually issued upon the vesting of the units may be different based upon the Company’s performance. |
| (1) | Includes 2,072 shares owned by Mr. Campbell’s wife and 3,000 shares held in an IRA for Mr. Campbell. |
| (2) | Includes 600 shares held in a custodial account for Mr. Chiafullo’s grandson. |
| (3) | Includes 121,936 shares owned by the Fred Nicholas Marital Trust (Ms. Nicholas is Co-Trustee) and 90,990 shares owned by Nicholas Family Limited Partnership. |
| (4) | Includes 1,900 shares owned by Mr. Strimbu’s children. |
| (5) | Includes 748 shares held in a custodial account for Mr. Guerrieri’s daughter. |
| (6) | Includes the amount of shares beneficially owned by Corporate Controller and Principal Accounting Officer, James L. Dutey, and Chief Legal Officer and Corporate Secretary, James G. Orie. |
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Stock Ownership |
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The table below lists the names of our current Executive Officers with their positions and ages. The table below does not include this information for CEO Vincent J. Delie, Jr. whose information is in the section of this proxy statement entitled Biographical Information Concerning Director-Nominees.
| Name | Position with Company | Age as of Annual Meeting | ||
Vincent J. Calabrese, Jr. | Chief Financial Officer | 58 | ||
James L. Dutey | Corporate Controller and Principal Accounting Officer | 47 | ||
Gary L. Guerrieri | Chief Credit Officer | 61 | ||
David B. Mitchell, II | Chief Wholesale Banking Officer | 63 | ||
Robert M. Moorehead* | Chief Wholesale Banking Officer | 66 | ||
James G. Orie | Chief Legal Officer and Corporate Secretary | 62 | ||
Barry C. Robinson | Chief Consumer Banking Officer | 58 | ||
| * | Mr. Moorehead retired from his position, effective January 1, 2021. |
Vincent J. Calabrese, Jr. has served as our Chief Financial Officer since 2009. Mr. Calabrese joined the Company in 2007, serving as our Corporate Controller from 2007 to 2009. Prior to joining the Company, Mr. Calabrese was Senior Vice President, Controller and Chief Accounting Officer of People’s Bank, Connecticut, from 2003 to 2007. During his 19-year tenure at People’s Bank, Mr. Calabrese’s principal responsibilities included financial planning and reporting, accounting policies, general accounting operations and investor relations.
James L. Dutey joined our Company in January 2017 and has served as our Corporate Controller and Principal Accounting Officer since March 2017. Mr. Dutey has more than 25 years of accounting experience in the banking and financial services sectors. During his 12 years at Huntington Bancshares, Inc., Mr. Dutey served in various senior management roles, including Assistant Corporate Controller, with a primary focus on SEC and bank regulatory financial reporting requirements. Prior to joining Huntington Bancshares, Inc., Mr. Dutey was employed at KPMG LLP, ending his tenure there as senior manager for the assurance practice, primarily serving the banking industry. Mr. Dutey is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania.
Gary L. Guerrieri became Chief Credit Officer of F.N.B. in April of 2011 and has been an Executive Vice President and Chief Credit Officer of FNBPA since 2005. In his role as Chief Credit Officer, Mr. Guerrieri is responsible for managing the entire credit function for the Company, including commercial and retail underwriting, credit administration, credit policy and credit risk management. He also has oversight of FNBPA’s special assets, loan servicing
and indirect lending functions. Prior to joining FNBPA in 2002, Mr. Guerrieri was an Executive Vice President of commercial banking with Promistar Financial Corporation, a bank holding Company acquired by F.N.B. in 2002.
David B. Mitchell II became our Chief Wholesale Banking Officer in January 2021. As Chief Wholesale Banking Officer, Mr. Mitchell oversees commercial lines of business and functional areas across FNBPA’s market footprint including Commercial Banking, Capital Markets and the Wealth Management group. Prior to his position as Chief Wholesale Banking Officer, Mr. Mitchell served as Executive Vice President of FNBPA’s Capital Markets and Specialty Finance businesses. Mr. Mitchell joined FNBPA in January 2018 after more than 36 years with The PNC Financial Services Group, Inc (“PNC”). During his tenure with PNC, Mr. Mitchell served in various bank officer positions and most recently in the following leadership roles: Executive Vice President with responsibility over the company’s National Large Corporate, Energy, Metals and Mining businesses and Executive Vice President, Public Finance, where he led the company’s banking and capital markets activities in the government, higher education and non-profit spaces.
Robert M. Moorehead became our Chief Wholesale Banking Officer in September 2015. From 2011 through 2015, Mr. Moorehead served as President of FNBPA’s Pittsburgh Region. In his role as Chief Wholesale Banking Officer of the Company, Mr. Moorehead was responsible for managing Commercial Banking, Treasury Management, Investment Real Estate, Wealth Management, Private Banking, Insurance, International Banking and Capital Markets. Prior to joining FNBPA, Mr. Moorehead was
| 2021 Proxy Statement 39 |
Stock Ownership |
Senior Vice President and Regional Chief Credit Officer for First Niagara Bank from 2009 through 2011. Mr. Moorehead began his 46-year career at Equibank and, subsequently, joined National City Bank, where he served as Executive Vice President and Group Manager of Corporate Banking. Mr. Moorehead retired from his position as Chief Wholesale Banking Officer of F.N.B., effective January 1, 2021.
James G. Orie has been our Chief Legal Officer since 2004 and became Corporate Secretary in January 2015. Mr. Orie is principally responsible for advising the Corporation, its Board and executive management team on all legal and regulatory affairs impacting the Corporation, as well as advising on corporate governance, legal risk mitigation, litigation management, merger and acquisition and other critical transaction matters, and compliance guidance on business and corporate strategies and activities. Prior to joining F.N.B. as Corporate Counsel in 1996, Mr. Orie began his 36-year career in financial services with the Office of the Comptroller of the Currency. Later, he served as counsel with the Federal Home
Loan Bank of Pittsburgh and Office of Thrift Supervision during the “thrift crisis” and led the Financial Services Practice Group of a regional Pittsburgh-based law firm.
Barry C. Robinson has served as our Chief Consumer Banking Officer since August 2015. As Chief Consumer Banking Officer, Mr. Robinson is responsible for leading the team that provides our full range of consumer financial products and services to our customers. Mr. Robinson joined our Company in July 2010 as Executive Vice President of our Consumer Banking operations, for which he had principal responsibility for strategic planning and oversight of the Company’s consumer retail operations, including leading the development of our digital banking platform. Prior to joining the Company, Mr. Robinson held several key leadership and executive positions with large regional banks, including as regional leader of wealth management and private banking in Cleveland, Ohio, for PNC and National City Bank, and as head of corporate banking in Kentucky and Tennessee for National City Bank.
| 40 F.N.B. Corporation |
Stock Ownership |
We are not aware of any shareholder who was the beneficial owner of more than 5%5 percent of our outstanding common stock as of December 31, 2017,2020, except for the entities identified in the table below:
Name and Address | Amount and Nature of Beneficial Ownership(1) | Percent of Outstanding Common Stock | ||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | ||||||||||
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | ||||||||||
Fuller & Thaler Asset Management, Inc 411 Borel Avenue, Suite 300 San Mateo, CA 94402 | 23,177,168(5) | 7.2% | ||||||||
Dimensional Fund Advisors LP 6300 Bee Cave Road Building One Austin, TX 78746 | 16,369,883(6) | 5.1% | ||||||||
| (1) | Under the regulations of the SEC, a person who has or shares voting or investment power with respect to a security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of or direct the disposition of shares. |
| (2) | Based on |
| (3) | According to Schedule 13G filed under the Exchange Act on January |
| (4) | According to Schedule 13G filed under the Exchange Act on February |
| (5) | According to Schedule 13G filed under the Exchange Act on February 11, 2021, by Fuller & Thaler Asset Management, Inc. The Schedule 13G states that Fuller & Thaler Asset Management, Inc has sole voting power over 22,641,085 shares and sole dispositive power over 23,177,168 shares. Fuller & Thaler Asset Management, Inc. states in its Schedule 13G that it is deemed to be the beneficial owner of certain of the securities reflected in the Schedule 13G pursuant to separate arrangements whereby it acts as investment adviser to certain persons. Each person for whom Fuller & Thaler Asset Management, Inc. acts as investment adviser has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock. |
| (6) | According to Schedule 13G filed under the Exchange Act on February 12, 2021, by Dimensional Fund Advisors LP. The Schedule 13G states that Dimensional Fund Advisors LP has sole voting power over 15,929,725 shares and sole dispositive power over 16,369,883 shares. Dimensional Fund Advisors LP states in its Schedule 13G that it is an investment adviser, furnishes investment advice to four investment companies, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of the issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the issuer held by the Funds. However, all securities reported in the Schedule 13G are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. |
2018 Proxy Statement 45
We have adopted a written policy formalizing the manner in which we review a proposed transaction involving the Company and any of our directors, any director nominees, any executive officers, any 5% or greater shareholder or any immediate family member of the foregoing (related persons) because of the possibility of a conflict of interest. A copy of this “Policy with Respect to Related Person Transactions” is posted on our website atwww.fnbcorporation.com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading. Under our policy, all proposed related person transactions except for (i) transactions generally available to all employees or shareholders of the Company, and (ii) compensatory transactions consistent with the plans, policies and decisions approved by the Company’s Board of Directors or Compensation Committee, must receive the prior approval of the Nominating Committee of our Board before we can take part in the transaction, and if such transaction continues for more than one year, the Nominating Committee and Board must annually approve the transaction. For purposes of this policy, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which the Company or any of its subsidiaries was, is or will be a participant, and the amount involved exceeds $120,000, and a related person had, has or will have a direct or indirect material interest. The category of related persons generally consists of the Company’s Directors, director nominees and executive officers, holders of 5% or more of the Company’s common stock, immediate family members of the foregoing persons and any entity owned or controlled by the foregoing persons.
Mr. Gurgovits’ son is the former employee and managing director of F.N.B. Capital Corporation, LLC, a merchant banking subsidiary of the Corporation. Due to the uncertainty as to whether the F.N.B. Capital investment activities would continue to be permissible under the final Dodd-Frank Volcker rules, Mr. Gurgovits’ son, along with the other F.N.B. Capital principals, resigned from F.N.B. Capital effective July 31, 2013. Mr. Gurgovits’ son and his fellow principals established a new company called Tecum Capital Partners, as a Small Business Investment Company licensed by the U.S. Small Business Administration (SBIC Fund) in 2013. Mr. Gurgovits’ son and the other principals are the sole owners of Tecum Capital Management (Tecum), the general partner of the SBIC Fund. In view of the detailed knowledge and experience that the Tecum principals had with respect to the F.N.B. Capital
investment portfolio, F.N.B. Capital entered into an asset management agreement whereby Tecum manages the F.N.B. Capital investment portfolio for a quarterly fee based on the amount of assets under management. The economics and terms of the asset management arrangement were agreed to pursuant to an arms-length negotiation between F.N.B. Capital and Tecum. In 2017, F.N.B. Capital made total payments to Tecum of approximately $52,813 in fees pursuant to terms of the asset management advisory arrangement.
In addition, as of December 31, 2017, as anchor investor, F.N.B. committed to invest an aggregate amount of $14,700,000 (representing a 21.94% equity interest) in the SBIC Fund, subject to the same material terms and conditions as those of otherco-investors in the SBIC Fund. The SBIC Fund has 61co-investors, including sixnon-affiliated bank investors. The total commitment of all investors in the SBIC Fund is $66,900,000. Mr. Gurgovits has a 0.75% equity investment in the SBIC Fund. Mr. Gurgovits is on the SBIC Fund Board of Advisors and the fund’s Investment Committee. F.N.B. had a net book value of funded commitments at December 31, 2017, of $14,032,029 after investing $12,191,054 into the SBIC Fund (leaving a remaining unfunded commitment of $2,508,946).
Mr. Gurgovits and members of his immediate family also haveco-invested an aggregate of $140,000 in a portfolio company of F.N.B. Capital on the same terms negotiated by F.N.B. Capital.
Also during 2017, Heeter, the commercial printing company where Director Bena serves as Vice President of Finance, provided printing services to subsidiaries of F.N.B. and received fees of approximately $500,000.00, or less than 2% of Heeter’s gross revenues for 2017. Heeter is one of five printing vendors employed by F.N.B.’s subsidiaries across their markets and has served as a printing vendor since 2010,pre-dating Director Bena’s assumption of her position at Heeter in April 2017. F.N.B. uses a competitive bidding and evaluation process in selecting printing firms for large-scale projects. Director Bena does not receive special compensation from Heeter related to the business relationship between F.N.B. and Heeter, and was not identified as a potential director nominee through such business relationship. Also, Heeter Printing has aggregate outstanding loans in the amount of approximately $5.7 million with FNBPA which are performing in accordance with their terms. The Board determined that such relationship is not material.
46 F.N.B. Corporation
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Gary Nalbandian, the former Chairman, President and CEO of Metro Bancorp, Inc., was elected to the F.N.B. Board of Directors, effective February 12, 2016, upon consummation of the merger by which F.N.B. acquired Metro. In connection with the completion of the merger and related transactions, Mr. Nalbandian received approximately $2.4 million in 2016 as a change in control payment, as well as immediate vesting of all unvested incentive compensation awards, including equity awards, and is entitled to (i) continuation of disability and life insurance benefits until three years after completion of the merger; (ii) medical insurance coverage for Mr. Nalbandian and his dependents during his lifetime; (iii) directors’ and officers’ liability and fiduciary liability insurance coverage until six years after completion of the merger; and (iv) customary rights to indemnification and advancement of expenses with respect to actual or threatened third party claims. Additionally, FNBPA leases 4,744 square feet in a local business center from NN&S Associates, of which Mr. Nalbandian is a partner. FNBPA utilizes this leased space as a storage facility. The lease was originally entered into by NN&S Associates and FNBPA’s predecessor by merger, Metro Bank, on November 1, 2006, and was renewed by FNBPA, as successor to Metro Bank, in 2016 (the monthly lease amount at the time the lease expired was $5,161.05) for another five-year term that will expire on October 31, 2021. Under the terms of the lease arrangement, Mr. Nalbandian and his family members received approximately $44,164 in lease payments in 2017.
Scott Custer, the former Chairman, President and CEO of Yadkin, was elected to the F.N.B. Board of Directors, effective March 11, 2017, upon consummation of the merger by which F.N.B. acquired Yadkin. In connection with the completion of the merger and related transactions, Mr. Custer received approximately $2.0 million, which included change in control,pro-rated bonus (including vesting of prior equity awards),
healthcare benefits and life/disability benefits, and a distribution of shares of F.N.B. common stock then valued at $3,751,578.34 from a rabbi trust previously established by Yadkin. F.N.B. also must provide Mr. Custer with directors’ and officers’ liability and fiduciary liability insurance coverage for a period of six years after completion of the merger and customary rights to indemnification and advancement of expenses with respect to actual or threatened third party claims. Mr. Custer entered into aone-year term Consulting Agreement which commenced on March 11, 2017 (effective date of the F.N.B.-Yadkin merger), which provided for Mr. Custer to furnish services to assist F.N.B. with the retention of employees and customers and to meet with customers for purposes of obtaining business. In exchange for his services under the consulting arrangement, F.N.B. was to compensate Mr. Custer in the annual amount of $600,000 netted against his F.N.B. director compensation. Mr. Custer resigned from the F.N.B. Board, effective March 24, 2017. Mr. Custer terminated the Consulting Agreement effective as of his March 24, 2017, resignation from the F.N.B. Board. Mr. Custer was paid $12,676.61 under the Consulting Agreement for his consulting services between March 11, 2017, and March 24, 2017.
In the ordinary courseof our business, we have engaged and expect to continue engaging in ordinary banking transactions with our directors, executive officers, their immediate family members and entities in which they hold a position or ownership interest, including loans to such persons. Any loan to those persons or entities was made on substantially the same terms, including interest rates and collateral, as those prevailing at the time such loan was made as loans made to persons who were not related to us. These loans do not involve more than the normal credit collection risk and do not present any other unfavorable features.
2018 Proxy Statement 47
Executive Compensation and Other Proxy Disclosure
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EXECUTIVE COMPENSATION AND OTHER PROXY DISCLOSURE
Compensation Committee Interlocks and Insider Participation | ||||
The members of the Compensation Committee (“Committee”) during 2017 were(Committee) are Committee Chair Malone and Directors Ellsworth,Bena, Hormell, Malone, Motley and Stanik. Mr. Hormell joined the Committee in October, at which time Ms. Ellsworth left the Committee.Strimbu. Neither we nor FNBPA hashave ever employed any member of the Committee. No such member has, during our last fiscal year, any relationship with us requiring disclosure under Item 404 of RegulationS-K or under the Compensation Committee Interlocks disclosure requirements of Item 407(e)(4) of RegulationS-K. We have determined that the Committee members are independent under both the NYSE corporate governance standards and Section 952 of the Dodd-Frank Act and arenon-employees under the meaning of Rule16b-3 under the Exchange Act. Our Board has delegated to the Committee the responsibility of setting the compensation of our directors and all Section 16 officers, including our CEO and Chief Financial Officer (“CFO”) and Section 16 officers.(CFO). The Committee met 9seven times in 2017.2020.
Authority and Responsibilities
The Committee administers our executive compensation programs, including the oversight of executive compensation policies and decisions, administration of our equity incentive plan and the annual cash incentive award plan applicable to Section 16 officers. TheAdditionally, the Committee administersoversees and interprets our qualified andnon-qualified benefit plans, establishes guidelines, approves participants in thenon-qualified plans, approves grants and awards and exercises other power and authority required and permitted under the plans and its Charter. The Committee also reviews and approves executive officer, including CEO, compensation, including, as applicable, salary, short-term incentive and long-term incentive compensation levels, perquisites and equity compensation.ownership. The Committee Charter reflects its responsibilities and the Committee reviews the Charter annually and recommends any proposed changes to the Board. A copy of the Compensation Committee Charter is available aton our website atwww.fnbcorporation com under the “About Us” tab, selecting the “Investor Relations and Shareholder Services” option and scrolling to the “Corporate Governance” heading.(see Key Corporate Governance Documents).
Delegation
From time to time, and subject to statutory and regulatory limitations, the Committee may delegate authority to fulfill various administrative and ministerial functions of administeringattendant to the
Company’s plans to our employees. Currently, it delegates administration of
our qualified plans to the Pension Committee, a committee comprised of our senior officers who have the appropriate expertise, experience and background in handling defined benefit and defined contribution plans.
Independent Compensation Consultant
The Committee engaged an independent compensation consultant, McLagan, an AONAon company, (Consultant), to assist with evaluating our compensation practices and to provide ongoing advice and recommendations regarding CEO, NEO, Section 16 officer and director compensation that are consistent with our business goals and pay philosophy. The Consultant is not affiliated with us. The Committee selected the Consultantconsultant for, among other reasons, its reputation for providing comprehensive solutions to complex compensation challenges facing companies and specific expertise in the financial services industry. In addition to services provided to the Committee, with the permission of the Committee, the Consultant provided advice and analysis to us regarding compensation practices of our mortgage department. In addition to McLagan, an AON affiliate,another Aon company, Radford, provided accounting services to us related to our long-term incentive plan and the valuation of the Yadkin stock options.program (LTIP). The Committee has reviewed all services provided by the ConsultantsMcLagan in 2017,2020 and has determined that they are independent with respect to NYSE and SEC standards.
The ConsultantIn performing its duties, McLagan reported directly to the Chairman of the Committee. In performance of its duties, the ConsultantCommittee, and interacted with our CEO, CFO, Executive Vice President of Human Resources and Corporate Services, Chief Legal Officer and other employees. The CEO had various discussions with the Consultant related to our compensation programs, philosophy and Peer Group. Additionally, the CEO regularly attended Compensation Committee meetings and discussed with the ConsultantMcLagan and the Committee members, both during meetings and outside meetings, the appropriate base salary and short-term and long-term compensation offor the other Section 16 officers. The CFO regularly attended meetings of the Committee to discuss Company performance relative to the short-term and long-term plans versus peers. In addition, the ConsultantMcLagan communicated with, took direction from and regularly interacted with the Chairman of the Committee and other members of the Committee in addition to attending Committee meetings on anas-needed basis. Executive officers are not involved with setting the amount or form of their own compensation. The Committee considers our CEO’s insight and recommendations before approving compensation for our executive officers.
48 F.N.B. Corporation
| 42 F.N.B. Corporation |
Compensation Discussion and Analysis
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COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis (CD&A) describes the philosophy, objective and structure of our fiscal year 2020 (the year ending December 31, 2020) executive compensation program. This CD&A is intended to be read in conjunction with the tables following this section which provide further historical compensation information for our NEOs as identified below.
| Name | Position | |
Vincent J. Delie, Jr. | Chairman, President and CEO | |
Vincent J. Calabrese, Jr. | Chief Financial Officer | |
Gary L. Guerrieri | Chief Credit Officer | |
Robert M. Moorehead | Chief Wholesale Banking Officer* | |
Barry C. Robinson | Chief Consumer Banking Officer | |
| * | Mr. Moorehead retired effective January 1, 2021. |
43 | ||||
50 | ||||
52 | ||||
54 | ||||
64 |
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The Board of Directors supports management’s vision and strategic plan that have allowed us to grow into a multi-state regional financial services company with plans to continue to successfully and profitably grow organically and strategically. The Board approved the F.N.B. 2020-2023 Strategic Plan in September 2020 and approves the Company’s annual Operating Plan and regularly receives reports from executive management regarding execution of the objectives of the Operating Plan. Management continues to focus on profitability and shareholder value while our strategic investments in technology and our rigorous risk management and business continuity processes enabled us to continue uninterrupted operations, prioritize employee and customer health and safety and successfully manage through a myriad of challenges we faced during the COVID-19 pandemic (see Overview2020 COVID-19 Pandemic Response
in the Summary of this Proxy Statement). The Board believes that management should be compensated appropriately for the Company’s 2020 performance and for positioning F.N.B. for longer-term future success (for additional details, please see Compensation Philosophy and Objectives). We have designed our compensation programs to align strongour corporate performance and strategic goals with our executives’ total compensation. We review our philosophy and our compensation programs annuallyopportunities. In doing so, we seek to ensure that we are being competitive in attracting and retaining the appropriate executive
talent while maintaining goodsound corporate governance practices.practices and aligning management interests with those of our shareholders.
After receiving shareholder feedback, in 2019 we modified our incentive compensation programs as specifically detailed in our 2019 Proxy Statement. Overall, the goal was to provide management with appropriate short- and long-term compensation that properly rewarded strong financial performance by F.N.B., consistent with our shareholders’ interests. In determining executive compensation for 2017,the second quarter of 2020, the Committee consideredrecognized that the overwhelming supportunusual circumstances unfolding due to the COVID-19 pandemic required it to review the compensation programs to ensure that, despite the“Say-On-Pay” proposal received at uncertain health and economic challenges, F.N.B.’s compensation program properly rewarded executives during this pandemic crisis for taking critical steps to protect shareholder value and position F.N.B. for the changed environment. In reviewing our May 2017 Annual Meeting of Shareholders (2017 Annual Meeting) pertaining to 2016 compensation andplans under the relatedCompensation Discussion and Analysis disclosure of 2016 compensation and certain 2017 items. Over 96%specter of the shareholders who voted on our proposal supported our compensation program. As a result, the Committee continued to applyCOVID-19 potential impact, we were mindful that most companies were doing the same effective principlestype of review. Upon completion of our review, we determined that both our short-term and philosophy it has used in previous years in determining executivelong-term incentive compensation and will continueplans did not need to consider shareholder input and future advisory votes. We have provided an advisory vote to shareholders on an annual basis consistent with the frequency vote first supported by the shareholders at our 2011 Annual Meeting of Shareholders and again at our 2017 Annual Meeting. In addition to ongoing shareholder engagement discussions in 2017, following the 2017 Annual Meeting we conducted an outreach program directed to our largest shareholders to seek input regarding our executive compensation and governance practices. Furthermore, our CEO and CFO will continue to frequently meet with shareholders and prospective investors, while our Investor Relations Department will remain continually available to shareholdersbe modified in order to ensure adequate methods to receiveour plans properly balance our shareholders’ interests and appropriately rewarding management for enhancing and protecting shareholder sentiment. In addition to peer-based performance comparisons, shareholder and investor relations are regularly discussed at our scheduled Board meetings.value. To accomplish this objective, both
Board Engagement
The Board plays a key role in the oversight of the Company’s strategy and commitment to engaging in a proactive outreach with our investors. The Board, as a group or as a subset of one or more directors, meets throughout the year with the Company’s senior executives, shareholders, regulators and organizations interested in our strategy, performance, corporate governance, or business practices. The board receives periodic updates from senior executive management regarding investor relations and shareholder
engagement at each Board meeting and offers advice and counsel regarding such engagements.
Engagement and transparency with our shareholders helps the Company to gain useful feedback on a wide variety of topics. This information is shared regularly with the Company’s management and the Board and is considered in the processes that set the governance practices and strategic direction for the Company. Shareholder feedback also helps us to better tailor the public information we provide to our shareholders and other interested parties.
The Company routinely interacts and communicates with shareholders in a number of forums, including quarterly earnings presentations, SEC filings, the Annual Report and proxy statement, the annual meeting, industry conferences and other investor communications. Discussions preceding our annual meeting are usually focused on specific issues related to the proxy statement while discussions at other times of the year cover a broader range of topics, including our strategy and financial results and corporate governance matters.
In 2017, shareholder outreach activities included participation in more than 100 shareholder engagement discussions, covering shareholders representing in the aggregate more than 35% of our outstanding common stock, similar to our 2016 outreach program; presentations by senior management multiple investor conferences; and numerousin-person meetings in cities across the U.S. between members of senior management and existing and prospective domestic and international investors and other interested parties. Engagement topics included:
Company strategy, performance and operations;
Management and Board compensation;
Board structure and composition;
Corporate Governance Guidelines and Bylaws, including proxy access;
Succession planning;
Environmental and social issues, including diversity; and
Disclosures, including the format and content of our proxy.
2018 Proxy Statement 49
| 2021 Proxy Statement 43 |
Compensation Discussion and Analysis |
In addition, following our 2017 Annual Meeting, we reached out to our largest shareholders and two proxy advisory firms, ISS and Glass Lewis, specifically to review our executive compensation program and discuss any concerns they may have regarding it or our governance practices. As a result, we conducted a series of calls andin-person meetings during which we received valuable investor input regarding the design and disclosure of our executive compensation program, which was instrumental in the Compensation Committee’s decision to modify the Company’s long-term incentive plan to incorporate two performance metrics, as discussed in more detail in the Compensation Discussion and Analysis. This round of dialogue with our investors also provided beneficial insights on a number of the other topics listed above.
Shareholders and interested parties who wish to contact our Board of Directors, any Board member, including the Lead Independent Director, any committee chair, or
the independent directors as a group, may mail their correspondence to: F.N.B. Corporation, Attention (name of Board member(s)), c/o Corporate Secretary’s Office, One North Shore Center, 12 Federal Street, Suite 503, Pittsburgh, PA 15212, ore-mail the Office of the Secretary atFNBCorporateSecretaryOffice@fnb-corp.com.
Corporate Performance
In 2017, we reported net income available to common stockholders of $191.2 million, an increase of 17% from 2016. On an operating basis, our 2017 net income available to common stockholders was $282.2 million, or 50% higher than 2016. Our 2017 operating earnings per diluted common share increased 3.3% to $0.93. As the charts below demonstrate, we have grown rapidly while simultaneously remaining profitable and efficient. This combination positions us to meet our long-term growth objectives in order to create shareholder value.
The following accomplishments during 2017 were key to our success and should serve us well moving forward:
Successful completion of the largest acquisition in F.N.B. history and expansion into the attractive Carolina markets through the acquisition of Yadkin.
Total revenue exceeded $1 billion for the first time in our history.
Continued investments in our infrastructure, while maintaining a peer-leading efficiency ratio.
Strong credit quality throughout 2017.
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Exceed federal bank regulatory agency “well-capitalized” thresholds.
50 F.N.B. Corporation
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We believeour short- and long - term plans contain the following key design features: (i) utilize financial performance metrics; (ii) are specifically tailored to drive shareholder value; and (iii) rely on a significant use of peer metrics, rather than absolute measures being used by many of our peers. Therefore, we are well-positioneddetermined during 2020 to deliver greater shareholder value through a sustained earnings growth trajectory.
maintain the plan structure and metrics for 2020 incentive compensation. We have concentratedalso recognized over the last few years that, due to the narrow structure of our former LTIP awards that were based solely on moving F.N.B. into markets with more opportunities. Duringtotal shareholder return (TSR), management’s actual realized compensation has been below the previous 5 years, under our Chairman’s leadership, we have grown organically and by acquisition, with our acquisition strategy focused on attractive metropolitan markets. Specifically, we acquired financial services franchisestarget amount utilized in the contiguous markets of Baltimore, Maryland, and Cleveland, Ohio, through whole bank acquisitions,Summary Compensation Table, while expanding our presence in both Harrisburg and Pittsburgh, Pennsylvania, through both whole bank and branch acquisitions. Most recently in March 2017, wethe Company’s financial performance for those periods was better than peer
expanded intomedians and top quartile for several key measures that are important to shareholders. While executives at many peer institutions utilized absolute performance metrics and their CEOs and executives received full payouts under their incentive plans during the highly attractive market2016 through 2020 period, the Committee made no adjustments to our Short-Term Incentive Plan (STIP) nor LTIP and LTIP awards failed to vest three times and vested at 50% of North Carolina, including Charlotte, Raleigh,target the first and last year of this period, despite the Piedmont Triad (Winston-Salem, Greensboro and High Point) throughfact that F.N.B.’s financial performance in several important areas exceeded these peers during the completionrelevant period. Accordingly, the total amount of vested awards was significantly below the largest transactionamounts shown for the corresponding years in the history of F.N.B. We have a proven track record for gaining market share and significantly increasing scale as a result of our acquisition strategy. Through our acquisitions, we continue to produce strong financial returns by focusing on expanding our core competencies in the new and expanded markets. Our acquisition activity has resulted in significant growth in profits and changes in our overall financial results in a short period of time, including the impact of merger-related items on our financial results.respective Summary Compensation Table.
F.N.B. 2017 Performance - GAAP vs. Operating
Earnings |
| Return on | ||
Growth (PPNR* and Operating EPS*) | Common Equity Tier 1 Ratio (CET1) (+) | ROATA* | ||
Efficiency (Efficiency Ratio*, Loan / Deposit Ratio (#), Net Interest Margin (*) | Dividend Payout Ratio (#) | PPNR/Average TCE* | ||
Asset Quality (Net Charge Offs /Average Loans (#), Allowance for Credit Losses/Period End Loans (#) | ICG Growth* TBV */ Share Growth | ROATCE* | ||
| (*) |
|
| (#) |
|
| (+) |
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|
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For additional information regarding these metrics, please see Vesting of Performance Awards.
Say-on-Pay Support and Investor Engagement
Since we last modified our incentive compensation programs in 2019, we believe that our shareholders recognized our strong financial performance and its direct link to our incentive compensation, as evidenced by the 92% of shareholders that voted FOR the Say-on-Pay proposal. Our acquisition strategy generally resultsCompany has been, and continues to be, committed to ongoing shareholder engagement discussions and outreach, and we value the shareholder input from these discussions since they have been helpful in accompanying merger-related itemsdesigning our compensation program and corresponding disclosures. In 2020, despite the challenges of COVID-19, we continued seeking shareholder feedback from 25 of our top investors, which represented approximately 56% of
our shares owned at that are commensurate with the sizetime, as well as a leading proxy advisory firm, to discuss, among other topics, executive compensation. Notably, of the transactiontop 25 investors from who we received feedback in connection with our shareholder engagement meetings, each was supportive and size of the acquired entity. Nonetheless, we attempt to minimize these items when possible such that we are able to reduce the financial impact of those merger-related items below those modeled. Therefore, in evaluationdid not express any issues or negative view of our NEOs’ compensation in comparisonprogram.
In addition to peers,our 2020 ESG and compensation-related shareholder engagements, we believe it is appropriatealso continued to exclude merger-related items associatedcollaboratively engage with our growthinstitutional investors throughout the year (over 100 meetings) to discuss our financial performance, strategies, plans and to make comparisons relative to peer performance on an operating basis. In addition, during the fourth quarter of 2017, we incurred a $54.0 million expense associated with the valuation of our net deferred tax assets dueCOVID-19 response. These shareholder engagements are reported to the enactment ofCommittee and the Tax Cuts and Jobs Act. Accordingly, the financial impact of that item is excluded fromBoard. For detailed information regarding our operating results.
Furthermore, in order to ensure our compensation levels remain appropriate and we properly compensate our NEOs for successful completion of strategically important and profitable growth, we rely on our operating results as a measure of success. We routinely evaluate our Peer Group on a pro forma basis due to our rapid and significant growth. The Peer Group we used for 2017 compensation contemplated our Yadkin acquisition and excluded companies with assets below $10 billion. We review our performance versus peers and our executive compensation analysis with such matters in mind in an effort to properly assess our relative performance. We expect to continue to review our NEOs in light of their ability to continue to create shareholder value through organic growth and acquisition-related growth and other strategic initiatives.outreach efforts, please see Shareholder Engagement under Corporate Governance.
2018 Proxy Statement 51
| 44 F.N.B. Corporation |
Compensation Discussion and Analysis |
Based on feedback that we received in recent years in connection with these shareholder engagement meetings and consistent with our efforts to optimize the alignment of shareholder interests with our pay-for-performance compensation philosophy, we modified our compensation programs and made changes to the manner in which we disclose information and the presentation format of various matters in our CD&A. During our shareholder engagement in 2020, we found investors particularly interested in our COVID-19 response (more fully discussed in the Summary section of this Proxy Statement, under 2020 COVID-19 Pandemic Response) and whether we planned to modify our executive incentive compensation plan metrics and design due to the pandemic impact. Described below, under Summary of 2020 Executive Compensation Actions, are our considerations and rationale for not making any changes to our executive compensation plan metrics and design.
For topics related to corporate governance, please see Enhancements Resulting from Shareholder Engagement under Corporate Governance and for additional information regarding compensation matters relative to COVID-19, please see 2020 COVID-19 Pandemic Response in the Summary of our Proxy Statement.
Summary of 2020 Executive Compensation Actions
Base and Incentive Compensation Structure
Consistent with our philosophy of tying pay to performance, we highlight key compensation actions and summarize our 2020 executive compensation structure, incentive compensation performance metrics and corresponding weightings of these measures and
considerations relevant to the Committee’s decision-making process regarding the optimization of incentive plan designs.
| (i) | Base Salaries: Given the current environment, we are not increasing our Section 16 officers’ base salaries in 2021. At the commencement of 2020, we increased the base salary of our CEO and each of our named executive officers 2.5% to position salaries to the approximate median of our peer group. |
| (ii) | STIP |
| a. | Target Incentive Opportunity: For each NEO, target short-term incentive opportunity for 2020 remained the same as 2019. |
| b. | Performance Metrics: We maintained the same performance metrics in 2020 that were used in 2019. In 2019, we modified one of three metrics used for payouts under our annual incentive plan. As a result, in 2020, as in 2019, our annual incentive plan had the following components and corresponding weightings Operating EPS* versus Operating Plan, and two peer-based measures, PPNR divided by Average TCE* and Efficiency Ratio*, with the weightings as detailed below: |
| c. | Payout: We made a discretionary STI payment to the CEO and NEOs as more particularly detailed later under 2020 Performance and Annual Incentive Awards. |
| 2021 Proxy Statement 45 |
Compensation Discussion and Analysis |
| (iii) | LTIP |
| a. | Target Incentive Opportunity: In 2020, we maintained the long-term opportunity for our NEOs at their current levels detailed in the CD&A. |
| b. | Plan Structure: We granted our executives equity-based awards using a pre-defined matrix which assigns grant values as a percentage of salary. We delivered time-based RSUs equal to 40% of the value. We delivered the 60% remaining target LTI value in performance-based RSUs and, for Mr. Delie, a combination of performance-based RSUs and cash-based Performance Units (PeUs) to incentivize performance compensation opportunities on the same metrics and across levels for all executives, consistent with the limitations and types of performance awards available under the F.N.B. Corporation Incentive Compensation Plan (F.N.B. Incentive Plan). The significant weighting of performance-based awards underscores our pay-for-performance alignment. |
| c. | Performance Metrics: In 2020, we maintained the LTIP structure established in 2019 as more specifically detailed in the 2020 Proxy Statement and in the Elements of Compensation section below. Despite the challenges presented due to the global pandemic, the Committee reviewed the LTIP structure and determined that no changes were necessary to either LTIP design or metrics due to the peer nature of the LTIP |
structure. Shareholders responded positively during our 2020 shareholder outreach program that our LTIP was flexible to account for the unusual circumstances. |
| d. | Payout: We anticipate our performance awards for 2018 will vest at approximately at 143% of target on the scheduled vesting date, April 1, 2021. |
| (iv) | Peer Group Selection |
We annually review our peers to determine whether any changes to the group are necessary to ensure that the peer group is diverse and provides the necessary depth to be meaningful from which to benchmark our compensation. With the assistance of McLagan, we identified 20 comparable U.S. commercial banks with assets ranging from approximately $19 billion to $140 billion (as of the time of peer group selection in mid-2019 for 2020 compensation decision making). We compete for talent with the institutions in our peer group, as well as large financial institutions in our metropolitan markets. We believe the peer group below is diverse and provides the necessary depth to be meaningful in setting salary and incentive goals and is an appropriate group from which to benchmark our compensation. We used the peer financial institutions listed below for the following purposes: 2020 base salary, STIP, LTIP and target incentive compensation levels: |
| 46 F.N.B. Corporation |
Compensation Discussion and Analysis
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Benchmarks
We desire our compensation programs to be competitive in the marketplace. Thus, for purposes of 2017 compensation, we compared ourself against commercial banks with assets in the $21 billion to $73 billion range as of December 31, 2016, located in the Continental United States (Peer Group) that includes the following financial institutions:Peer Group
Associated Banc-Corp.
Comerica, Inc.
Commerce Bancshares, Inc.
Cullen/Frost Bankers, Inc.
East West Bancorp, Inc.
First Horizon National Corp.
First Republic Bank
Hancock Holding Co.
Investors Bancorp, Inc.
New York Community Bancorp
People’s United Financial, Inc.
Prosperity Bancshares, Inc.
Synovus Financial Corp.
TCF Financial Corporation
Umpqua Holdings Corp.
Peer | Ticker | 2020 Total Assets | ||||
KeyCorp | KEY | $ | 170,336,000 | |||
Huntington Bancshares Inc. | HBAN | $ | 123,038,000 | |||
First Horizon National Corporation(1) | FHN | $ | 84,209,000 | |||
Zions Bancorporation | ZION | $ | 81,479,000 | |||
People’s United Financial, Inc.(2) | PBCT | $ | 63,091,800 | |||
New York Community Bancorp, Inc. | NYCB | $ | 56,306,120 | |||
Synovus Financial Corp. | SNV | $ | 54,394,159 | |||
TCF Financial Corporation (2) | TCF | $ | 47,802,487 | |||
Wintrust Financial Corporation | WTFC | $ | 45,080,768 | |||
Cullen/Frost Bankers, Inc. | CFR | $ | 42,391,317 | |||
Valley National Bancorp | VLY | $ | 40,686,076 | |||
Pinnacle Financial Partners, Inc. | PNFP | $ | 34,932,860 | |||
Hancock Whitney Corporation | HWC | $ | 33,638,602 | |||
Associated Banc-Corp | ASB | $ | 33,419,783 | |||
Commerce Bancshares, Inc. | CBSH | $ | 32,922,974 | |||
Webster Financial Corporation | WBS | $ | 32,590,690 | |||
| UMPQ | $ | 29,235,175 | |||
United Bankshares, Inc. | UBSI | $ | 26,184,247 | |||
Fulton Financial Corporation | FULT | $ | 25,906,733 | |||
|
| $ | 33,171,379 | |||
| $ | 42,391,317 | ||||
75th Percentile of | $ | 59,698,960 | ||||
F.N.B. Corporation | FNB | $ | 37,354,351 | |||
Percent Rank | 42% | |||||
