H. Lee Durham, Jr. Chairman and Audit Committee Financial Expert | ●Committee Meetings in 2023: 11 | | at its discretion and without the prior approval of management or the Boards, retain or obtain the advice of outside consultants or advisors (including legal counsel and other advisors), at our or FCB’s expense, in accordance with procedures established from time to time by the committee, and oversee and approve all terms of the engagement of any such consultants or advisors, including their fees or other compensation;
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| ● | | conduct investigations and request and consider information (from management or otherwise) as the committee considers necessary, relevant, or helpful in its deliberations and the formulation of its decisions or recommendations;
Other Committee Members (1): |
| ● | | seek any information from our or FCB’s associates (who are directed to cooperate with each committee’s requests), or from external parties, and consult to the extent it deems appropriate with the Chairman of the Boards, the Chief Executive Officer, the Lead Independent Director, other directors, and other officers and associates;
John M. Alexander, Jr., Michael A. Carpenter, David G. Leitch, and Robert T. Newcomb
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| ● | | delegate any of its responsibilities to subcommittees or to individual members to the extent not inconsistent with other sections of its charter (including applicable independence requirements) or applicable laws or regulations.
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Each committee(1) Floyd L. Keels served as a member may rely on the advice, expertise and integrity of persons (including our and FCB’s officers and associates) and organizations that provide information to the committee, and the accuracy and completeness of the financial and other information provided to the committee, absent actual knowledge that such reliance is not reasonable or warranted. In the performance of each committee’s responsibilities, each committee member (and the committeeCommittee until his death on October 30, 2023. Mr. Leitch was appointed as a whole) is undermember of the Committee upon his appointment as a continuing duty to exercise independent judgment on an informed basis, in good faith, and in a manner each considers to be in our and FCB’s best interests.
Audit Committee
| | | | | | | H. Lee Durham, Jr.
Chairman and
Audit Committee Financial Expert
Committee Meetings in 2021: 11
| | Other Committee Members:
John M. Alexander, Jr., Michael A. Carpenter (1), Daniel L. Heavner and
Floyd L. Keels
(1) Mr. Carpenter became a member of the Audit Committee on January 3, 2022.director effective January 1, 2024.
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| | | Our Audit Committee is a joint committee of our and FCB’s Boards of Directors.the Boards. In addition to being independent directors under the SEC’s rules and Nasdaq’s listing standards, under the Committee’s charter all members must be able to read and understand fundamental financial statements, and at least two members must have banking or related financial management expertise sufficient to comply with applicable regulations of the Federal Deposit Insurance Corporation.FDIC. At least one member must have past employment experience in finance or accounting, professional certification in accounting, or other comparable experience or background, which fulfillsthat will fulfill Nasdaq’s applicable financial sophistication requirements. In addition to its other dutiesresponsibilities, including those listed in the table, the Audit Committee annually reviews and responsibilities under its charter or as may be assigned from timeapproves our Regulation Fair Disclosure (FD) Policy, and it annually reviews and approves our accounting policies to time bydetermine that they are in accordance with accounting principles generally accepted in the Boards, the Committee is responsible for: | ● | | appointing, determining the compensation and terms of engagement of, and monitoring and overseeing the work, independence and performance of, our independent accountants and any other accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services;
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| ● | | approving all audit and permitted non-audit services proposed to be provided by our independent accountants in accordance with approval policies and procedures adopted by the Committee from time to time;
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| ● | | monitoring and overseeing the quality and integrity of our accounting and financial reporting process, and reviewing our annual audited and quarterly unaudited financial statements and quarterly earnings releases, and any significant accounting and financial reporting issues, with management and our independent accountants;
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| ● | | monitoring our systems of internal controls regarding finance, accounting and associated legal compliance, and reviewing and discussing any significant deficiencies or material weaknesses in the design or operation of internal controls that could adversely affect our ability to record, process, summarize and report financial data;
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| ● | | monitoring and overseeing the audit program of our Internal Audit Department;
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| ● | | annually reviewing our Associates Code of Ethics, Financial Officers Code of Ethics, and Contingent Workers Code of Ethics, recommending to the Boards any changes to the Codes that the Committee considers necessary or advisable, and overseeing management’s processes and procedures for enforcement of the Codes;
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| ● | | fostering free and open communication among our independent accountants, management, Internal Audit Department and the Boards; and
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| ● | | monitoring our and FCB’s compliance with laws, rules, regulations or other governmental or regulatory requirements as they affect accounting and financial processes and reporting, internal controls and auditing matters.
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United States of America. The Audit Committee also is responsible for establishing procedures for the receipt, retention, and treatment of complaints from associates, customers, suppliers, shareholdersstockholders, or others related to accounting and financial processes and reporting, internal controls, and auditing matters, including procedures for the confidential, anonymous submission by associates of concerns regarding those matters, and for evaluating any fraud, whether or not material, that involves management or other associates who have a significant role in our internal controls. The | | | | AUDIT COMMITTEE RESPONSIBILITIES | | In addition to its other duties and responsibilities under its charter or as may be assigned from time to time by the Boards, the Audit Committee reviews waivers approvedis responsible for: ● appointing, determining the compensation and terms of engagement of, and monitoring and overseeing the work, independence, and performance of, our independent accountants and any other accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services; ● pre-approving all audit and permitted non-audit services proposed to be provided by our independent accountants in accordance with approval policies and procedures adopted by the Committee from time to time; ● monitoring and overseeing the quality and integrity of our accounting and financial reporting process, and reviewing our annual audited and quarterly unaudited financial statements and quarterly earnings releases, and any significant accounting and financial reporting issues, with management and our independent accountants; ● monitoring our systems of internal controls regarding finance, accounting, and associated legal compliance, and reviewing and discussing any significant deficiencies or material weaknesses in the design or operation of internal controls that could adversely affect our ability to record, process, summarize, and report financial data; ● monitoring and overseeing the audit program, budget, and resources of our Internal Audit Department. and approving the hiring, annual performance, and compensation of our Chief Risk Officer related to associates under theInternal Audit Officer; ● annually reviewing our Associates Code of Ethics, and Contingent Workers Code of Ethics, but only the full Board may approve a waiver under the Financial Officers Code of Ethics, and Non-Employee Workers Code of Ethics, recommending to the Boards any changes to the Codes that the Committee considers necessary or related to an executive officer or memberadvisable, and overseeing management’s processes and procedures for enforcement of the Board. UnderCodes; ● fostering free and open communication among our independent accountants, management, Internal Audit Department, and the Boards’ written policies described below under the headingsBoards; and ● monitoring our and FCB’s compliance with laws, rules, regulations, or captions “TRANSACTIONSWITH RELATED PERSONS,”other governmental or regulatory requirements as they affect accounting and “BENEFICIAL OWNERSHIPOFOUR COMMON STOCK — Pledging Policy,” the Committee is responsible on an ongoing basis for reviewingfinancial processes and approving certain transactions, arrangements or relationships with us or FCB in which one of our related persons has a material interest,reporting, internal controls, and for reviewing and approving any requests by an executive officer or director for an exception to our pledging policy and monitoring any outstanding pledges of our stock by any of them. auditing matters. |
| | | | | | | 2024 Annual Proxy Statement  | | 31 |
Committees of Our Boards The Committee reviews waivers approved by our Chief Risk Officer related to associates under the Associates Code of Ethics and Non-Employee Workers Code of Ethics, but only the full Board may approve a waiver under the Financial Officers Code of Ethics or related to an executive officer or member of the Board. Under the Boards’ written policies described below under the heading “TRANSACTIONS WITH RELATED PERSONS,” the Committee is responsible on an ongoing basis for reviewing and approving certain transactions, arrangements, or relationships with us or FCB in which one of our related persons has a material interest. The Committee annually reviews and approves our Hedging and Pledging Policy described below under the captions “BENEFICIAL OWNERSHIP OF OUR COMMON STOCK – Hedging Policy” and “– Pledging Policy,” and it is responsible for reviewing any requests by an executive officer or director for an exception to our pledging policy and monitoring any outstanding pledges of our stock by any of them. The Committee selects and appoints, and reviews various reports from, our independent accountants (including their annual report on our audited consolidated financial statements), financial reports we file under the Exchange Act, and reports of examinations by our regulatory agencies. Our Chief Internal Audit Officer reports directly to our Audit Committee. At least quarterly, the Committee reviews reports on the work performed by FCB’s Corporate Finance Department. Our Chief Compliance Officer reports to the Committee regarding transactions with our related persons, as well as all reports of internal suspicious activity, and reports of external suspicious activity above certain amounts, filed by FCB. The Disclosure Committee and the Allowance Committee are management committees comprised of members selected from our management which report directly to the Audit Committee and assist it in the performance of its duties. Information regarding the process for and factors considered in the Audit Committee’s selection of our independent accountants is contained under the heading “PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS.” Audit Committee Financial Expert. H. Lee Durham, Jr., the Committee Chairman and one of our independent directors, is a retired partner in the accounting firm of PricewaterhouseCoopers LLP. Upon his retirement from public accounting, he had 32 years of public accounting and audit experience, much of which involved financial institutions and other public companies. Our Board of Directors has designated Mr. Durham as the Committee’s “Audit Committee Financial Expert,” as that term is defined by the rules of the SEC. Audit Committee Report This report is furnished by the Audit Committee, the members of which, on the date of the filing of our 2023 Annual Report, are named below. Our management is responsible for our financial reporting process, including our system of internal controls and disclosure controls and procedures, and for the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Our independent accountants are responsible for auditing those financial statements. The Audit Committee oversees and reviews those processes. In connection with the preparation and audit of our consolidated financial statements for 2023, the Committee has: | ● | | reviewed and discussed our audited consolidated financial statements for 2023 with our management; |
| ● | | discussed with our independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; |
| ● | | received the written disclosures and the letter from our independent accountants (including their annual report on our audited consolidated financial statements), financial reports we file underrequired by applicable requirements of the Securities Exchange Act of 1934,Public Company Accounting Oversight Board regarding the independent accountants’ communications with the Audit Committee concerning independence; and reports of examinations by our regulatory agencies. Our Chief Internal Audit Officer reports directly to our Audit Committee. At least quarterly, the Committee reviews reports on the work performed by FCB’s Corporate Finance Department. Our Chief Compliance Officer reports to the Committee regarding transactions |
| ● | | discussed with our related persons, as well as all reports of internal suspicious activity, and reports of external suspicious activity above certain amounts, filed by FCB. Information regardingindependent accountant the process for and factors considered in the Audit Committee’s selection of our independent accountants is contained under the heading “PROPOSAL 3: RATIFICATIONOF APPOINTMENTOF INDEPENDENT ACCOUNTANTS.”accountant’s independence.
Audit Committee Financial Expert.
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Based on the above reviews and discussions, the Audit Committee recommended to our Board that our audited consolidated financial statements be included in our 2023 Annual Report. The Audit Committee: | | | | | | | | | | H. Lee Durham, Jr. | | John M. Alexander, Jr. | | Michael A. Carpenter | | David G. Leitch | | Robert T. Newcomb |
| | | | | | 32 | | 2024 Annual Proxy Statement | | |
Committees of Our Boards Risk Committee | | | Robert R. Hoppe Chairman and Risk Management Expert Committee Meetings in 2023: 12 | | Other Committee Members (1): Ellen R. Alemany, Victor E. Bell III, Dr. Eugene Flood, Jr., and Robert E. Mason IV
(1) Vice Admiral John R. Ryan, USN (Ret.), served as a member of the Committee Chairman and one of our independent directors, is a retired partner induring 2023 until the accounting firm of PricewaterhouseCoopers LLP. He has 32years of public accounting and audit experience, much of which involved financial institutions and other public companies. Our Board of Directors has designated Mr. Durham as the Committee’s “Audit Committee Financial Expert,” as that term is defined by the rules of the SEC. Audit Committee Report
This report is furnished by the Audit Committee, the members of which, on the date of the filing of our2023 Annual Report on Form 10-K for the year ended December 31, 2021, are named below.
Our management is responsible for our financial reporting process, including our system of internal controls and disclosure controls and procedures, and for the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Our independent accountants are responsible for auditing those financial statements. The Audit Committee oversees and reviews those processes. In connection with the preparation and audit of our consolidated financial statements for 2021, the Committee has:
| ● | | reviewed and discussed our audited consolidated financial statements for 2021 with our management;
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| ● | | discussed with our independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC;
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| ● | | received the written disclosures and letter from our independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the accountants’ communications with the Committee concerning independence; and
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| ● | | discussed with our independent accountant the independent accountant’s independence.
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Based on the above reviews and discussions, the Committee recommended to our Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.
The Audit Committee:
| | | | | | | | | H. Lee Durham, Jr.
| | John M. Alexander, Jr. | | Michael A. Carpenter | | Daniel L. Heavner | | Floyd L. Keels |
Risk Committee
| | | | | | | Robert R. Hoppe
Chairman and
Risk Management Expert
Committee Meetings in 2021: 7
| | Other Committee Members:
Victor E. Bell III, Robert E. Mason IV and
Vice Admiral John R. Ryan, USN (Ret.) (1)
(1) Mr. Ryan became a member of the Risk Committee on January 3, 2022.Meeting.
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| | | Our Risk Committee is a joint committee of ourthe Boards. Under the Federal Reserve Board’s rules and FCB’s Boardsthe Risk Committee’s charter, the Committee must be chaired by an independent director and must include at least one member having experience in identifying, assessing, and managing risk exposures of Directors.large, complex financial firms. Our Board has designateddetermined that Robert R. Hoppe, the Committee’s Chairman, has that experience and has designated him as the Committee’s Risk Management Expert. Mr. Hoppe is a retired partner in the accounting firm of PricewaterhouseCoopers LLP with 34 years of public accounting and audit experience. In addition to Mr. Hoppe, the Board has determined that two other members of the Committee, Ellen R. Alemany and Dr. Eugene Flood, Jr., also have experience in identifying, assessing, and managing risk exposures of large, complex financial firms that satisfies the requirements of the Federal Reserve Board’s rule. The
In addition to its other responsibilities, including those listed in the table, the Risk Committee was established to review, effectivelyprovide effective challenge, and approve our enterprise-wide Risk Management Framework and Risk Appetite Framework and to assist the Boards in fulfilling their responsibility to oversee our risk management practices. Our Enterprise Risk Oversight Committee (“EROC”), whose voting members are selected from our management and which is chaired by our Chief Risk Officer, is a management committee that reports directly to the Risk Committee. EROC’s function is to oversee the operation of our Risk Management Framework | | | | RISK COMMITTEE RESPONSIBILITIES | | In addition to its other duties and responsibilities under its charter or as may be assigned from time to time by the Boards, the Risk Committee is directed to: | ● | | monitor and advise the Boards regarding our and FCB’s risk exposures, including capital adequacy, credit, market, liquidity, operational (Including human capital and information technology), compliance, legal, strategic, reputational and other
● monitor and advise the Boards regarding our and FCB’s risk exposures, including, without limitation, capital adequacy, credit, market, liquidity, operational (including human capital and information technology), compliance, legal, strategic, asset, and reputational risks and the control processes with respect to those risks; |
| ● | | ●evaluate, monitor, effectively challenge, and oversee the adequacy and effectiveness of our and FCB’s risk management program and supporting framework (within which our management is responsible for defining and executing enterprise-wide risk management programs) which are intended to ensure appropriate risk identification, assessment, monitoring, and reporting of significant risks; |
| ● | | ●review and assess our and FCB’s strategy to validate that it is aligned with our and FCB’s strategy to validate that it is aligned with FCB’s risk profile and financial objectives; |
| ● | | ●monitor the work of and receive and challenge reports from management and our Enterprise Risk Oversight Committee (described below) to determine whether risks are being identified (including top and emerging risks) and managed within approved risk tolerances; |
| ● | | review, approve, challenge, and monitor adherence to our and FCB’s risk appetite and supporting risk tolerance levels;
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| ● | | review reports of examination by and communications from regulatory agencies, and the results of internal and third-party testing, analyses and reviews, related to our and FCB’s risks, risk management, and any other matters within the scope of the Committee’s oversight responsibilities, and monitor and review management’s response to any noted issues; and
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| ● | | review and approve our Board level risk management policies on an annual basis to confirm consistency and compliance with risk appetite.
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Our Enterprise Risk Oversight Committee (“EROC”), whose voting membersto determine whether risks are selected from our managementbeing identified (including top and chaired by our Chief Risk Officer, reports directly to the Risk Committee. EROC’s function is to oversee the operation of our Risk Management Frameworkemerging risks) and Risk Appetite Frameworkmanaged within approved by the Risk Committee; work with our business units to implement processes to identify, assess, monitor and manage their risks;risk tolerances;
● review, approve, challenge, and monitor performance relativeadherence to our and FCB’s risk appetite and tolerances approved bysupporting risk tolerance levels; ● monitor the Risk Committee. Subcommitteeswork of EROC include the Asset/Liability Committee, Compliance Risk Committee,and receive and challenge reports from Credit Risk Committee, Operational Risk Committee, Capital PlanningReview to determine whether credit risks are being identified and Stress Testing Committee,managed within approved risk tolerances; ● review reports of examination by and Technology Investment Committee, eachcommunications from regulatory agencies, and the results of which has its own subcommittees or “councils” that focus on specific matters within their areas of responsibility. Our Chief Risk Officer reports directlyinternal and third-party testing, analyses, and reviews, related to the Risk Committee regarding capital risk, market risk, liquidity risk, credit risk, operational risk, compliance risk and strategic risk. Our Chief Credit Officer, Chief Compliance Officer, Treasurer, Enterprise and Operational Risk Executive, and officers within our Legal Department and other departments within our and FCB’s operations, also make quarterly reportsrisks, risk management, and any other matters within the scope of the Committee’s oversight responsibilities, and monitor and review management’s response to the Risk Committee.any noted issues; and ● review and approve our Board level risk management policies on an annual basis to confirm consistency and compliance with risk appetite. |
and Risk Appetite Framework approved by the Risk Committee; work to ensure adequate implementation of processes to identify, assess, monitor, and manage risks within business units; and monitor performance relative to our risk appetite and tolerances approved by the Boards. | | | | | | | 2024 Annual Proxy Statement | | 33 |
Committees of Our Boards Subcommittees of EROC are listed in the table, each of which may have its own “councils” that focus on specific matters within their areas of responsibility. The Risk Committee receives regular reports from business and independent risk functions regarding capital risk, market risk, asset risk, liquidity risk, credit risk, operational risk (including human capital and cyber risks), reputational risk, compliance risk, and strategic risk. | | | As discussed above under the caption “CORPORATE GOVERNANCE“CORPORATE GOVERNANCE —Human Capital Management,” the Risk Management Framework approved by the Risk Committee includes processes for the oversight and management of risks related to our human capital and the escalation of related risk issues to the Committee. TheOur Operational Risk Committee and Compliance Risk Committee, which are subcommittees of EROC, through the Human Resources Department, monitorsour human resources department, monitor various human capital metrics, including various associate voluntary and involuntary turnover, attrition, hiring, succession, associate demographics, and other metrics,metrics. Quarterly reports and reports results and trends are provided to EROC, which includesreports identified risk issues in its quarterly reports to the Risk Committee. The Risk Committee also periodically reviews information security policies and technology risk management programs and practices that are designed to protect FCB’s and its customers’ and associates’ data, records, and proprietary information, and it reviews reports on our business continuity and disaster recovery program that is designed to permit FCB to safeguard associates, customers, products | | | | SUBCOMMITTEES OF EROC | | Subcommittees of EROC include: ● the Financial Risk Committee, ● the Compliance Risk Committee, ● the Credit Risk Committee, ● the Operational Risk Committee, ● the Technology Security and services from disruptions such as cyber events, natural disasterRisk Committee, ● the Asset and man-madeLiability Committee, ● the Capital and Stress Testing Committee, and ● the Technology Investment Committee. |
to help FCB safeguard associates, customers, products, and services from disruptions from events such as cyberattacks, natural disasters, and man-made events. Certain matters within the scope of the Risk Committee’s oversight responsibilities also may fall within the scope of the oversight responsibilities of other committees of the Boards. To minimize the duplication of time and effort, the Risk Committee may defer to those other committees with respect to any such specific matters, but it may request reports or information from those other committees to determine whether those matters are being adequately addressed within our and FCB’s Risk Management Framework. Additional information regarding the Risk Committee’s processes is contained in the discussion under the caption “CORPORATE GOVERNANCE — Boards’ Role in Risk Management.” | | | | | | 34 | | 2024 Annual Proxy Statement | | |
Committees of Our Boards Trust Committee | | | John M. Alexander, Jr. Chairman Committee Meetings in 2023: 4 | | Other Committee Members (1): Hope H. Bryant and Dr. Eugene Flood, Jr.
(1) Floyd L. Keels served as a member of the Committee until his death on October 30, 2023. |
| | | In accordance with guidance from banking regulators that applies to banks with trust departments, FCB’s Board of Directors has a separate Trust Committee. The Committee must be comprised of not less than three members of FCB’s Board, including at least one independent director, who will be voting members and one of whom will be appointed as the Committee chairperson. The Committee may include no more than one director who also serves as an officer of FCB (who may not be an officer who participates significantly in the administration of FCB’s fiduciary responsibilities). In addition to its other responsibilities listed in the table, the Trust Committee’s primary purpose is to assist FCB’s Board in its oversight and supervision of FCB’s administration and exercise of fiduciary responsibilities and other trust activities and in its oversight of risks associated with those activities. Management subcommittees of the Trust Committee include the Trust Risk Management Committee, Trust Investment Committee, and the Trust Administrative Committee, the voting members of which are selected from our management and which report directly to the Committee and assist it in the performance of its duties. | | | | TRUST COMMITTEE RESPONSIBILITIES | | In addition to its other duties and responsibilities under its charter or as may be assigned from time to time by FCB’s Board, the Trust Committee is directed to: ● review and approve the Trust Department’s policies; ● review and decide whether to approve and/or ratify exceptions to Trust Committee-approved policies; ● review and assess the adequacy of the committee’s charter at least annually and recommend any proposed changes to FCB’s Board for consideration; ● review and approve any management committee charters at least annually and any recommended revisions; ● review and approve the regularly published fee schedules for Trust Department services; ● review and recommend for approval by FCB’s Board, in accordance with applicable state statutes, the quarterly purchases and sales for discretionary accounts administered by the Trust Department; ● review and receive the minutes of the management committees; ● provide an appropriate level of effective challenge to the first and the second lines within the scopeTrust Department; ● ensure the application of FCB’s conduct and ethical standards to, and the ethical environment within, the Trust Department; ● oversee the administration of client accounts by the Trust Department to ensure that it is in conformance with the FDIC’s Statement of Principles of Trust Department Management; ● oversee the organizational structure of the Risk Committee’s oversight responsibilities also may fallTrust Department, including establishment of divisions or groups within the responsibilitiesTrust Department, and the names used by the Trust Department and its divisions or groups offering fiduciary services; ● oversee the investment and disposition of anotherassets held by the Trust Department, and monitor financial performance of investments made and investment strategies and processes utilized; ● ensure records and recordkeeping practices of the Boards’ committees. To minimize duplication of timeTrust Department are in compliance with any applicable rules or regulations; and effort, the Risk Committee may defer to the other committees with respect to any such specific matters, but it may request reports or information from those other committees to determine whether those matters are being adequately addressed within our and FCB’s management of risk. Additional information regarding the Risk Committee’s processes is contained in the discussion under the caption “CORPORATE GOVERNANCE — Boards’ Role in Risk Management.” Compensation, Nominations and Governance Committee
| | | | ● oversee the use of vendors, services, and products by the Trust Department including, but not limited to, accounting and information systems and clearing arrangements. | | | |
Robert T. Newcomb
Chairman and
Lead Independent Director
| | | | | | | 2024 Annual Proxy Statement | | 35 |
Committees of Our Boards Committee Meetings in 2021: 6
| | Other Committee Members:
Victor E. Bell III, H. Lee Durham, Jr. and Robert E. Mason IV
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Our Compensation, Nominations and Governance Committee
| | | Robert T. Newcomb Chairman and Lead Independent Director Committee Meetings in 2023: 10 | | Other Committee Members (1): Victor E. Bell III, H. Lee Durham, Jr., David G. Leitch, and Robert E. Mason IV
(1) Mr. Leitch was appointed as a member of the Committee upon his appointment as a director effective January 1, 2024. |
| | | The CNG Committee is a joint committee of our and FCB’s Boards of Directors.the Boards. In addition to being independent directors under Nasdaq’s listing standards, under its charter members of the Committee must satisfy Nasdaq’s heightened independence requirements for members of compensation committees. The
As described in the following paragraphs, the Committee’s duties and responsibilities are divided into three areas as described in the following paragraphs.functions, including nominations, corporate governance, and compensation.
Nominations Function.In its role as the Boards’ nominations committee, the CNG Committee makes recommendations to the Boards regarding the selection of nominees for election as directors at our Annual Meetings, candidates for appointment to fill vacancies on the Boards, and candidates for appointment as the members and chairpersons of the various committees of the Boards. Each year the Committee also makes recommendations to the Boards regarding the selection of our and FCB’s Chairman, Chief Executive Officer, Vice ChairwomenChairwoman and President and a recommendation to our independent directors regarding their selection of a Lead Independent Director. In its Board succession planning, the Committee applies a process which includes: assessment of needs and vacancies; development of candidate criteria; assembly of a candidate pool; screening, recruiting, and interviewing candidates; selection and appointment or nomination of selected candidates; and orientation and integration of new directors. The Committee seeks to identify and recommend candidates who will best serve our and our stockholders’ interests. In identifying potential candidates and recommending nominees, the Committee considers incumbent directors as well as candidates who may be suggested by our management, other directors, or stockholders. The procedure for stockholders to recommend candidates to the Committee is contained below under the heading “RECOMMENDATIONS OF NOMINEES.” | | | | QUALIFICATIONS OF DIRECTOR CANDIDATES | | The CNG Committee seeks to recommend Board candidatescandidates: ● who have personal and professional integrity, sound judgment, and business acumen; ● who have the time, ability, and commitment to make a constructive and meaningful contribution to the Boards; and ● who, with other directors, will effectively serve the long-term interests of our shareholders. Candidates also muststockholders; and ● who satisfy applicable requirements of state and federal laws, rules, and regulations (including banking regulations) for service as our and FCB’s directors. Under our Bylaws, to be eligible for election and continued service as a director, a person must own at least 100 shares of our common stock, individually in his or her own name, jointly with his or her spouse, or in an account for his or her direct benefit. From time to time the Committee or our Board may develop other criteria or minimum qualifications for use in identifying and evaluating candidates to serve as directors. Our Board makes all final decisions regarding nominations. In identifying potential candidates, the Committee considers incumbent directors as well as candidates who may be suggested by our management, other directors or shareholders. A description of procedures to be followed by shareholders in submitting recommendations to the Committee is included in this proxy statement under the heading “RECOMMENDATION
| | | | | | EVALUATION OF NOMINEES.” DIRECTOR CANDIDATES | | The Committee has not used the services of a third-party search firm. In identifying and recommending candidates for election or appointment, the Committee will evaluate candidates recommended by shareholders in a manner similar to its evaluation of other candidates. TheCNG Committee considers the size and composition of the Boards in light of our current and future needs and recommends candidates based on its assessment of, among other things: (1)
● business, professional, personal, and educational background, skills, experience, and expertise; (2) ● community leadership; (3) ● independence; (4) ● potential contributions to the Boards that are unusual or unique; (5) ● knowledge of our organization and our and FCB’s respective operations; (6) ● personal financial interest in our and FCB’s long-term growth, stability, and success; (7) ● the performance and past and future contributions of our current directors, and the value of continuity and prior Board experience; (8) ● the existence of one or more vacancies on the Boards; (9) ● our need for directors possessing particular attributes, skills, experience, or expertise; (10) ● the role of directors in FCB’s business development activities; (11) diversity;activities, ● diversity of individuals who bring different attributes, experiences and (12)perspectives to deliberations; and ● other factors that it or our Boards consider relevant, including any specific qualifications that may be adopted from time to time. |
| | | | | | 36 | | 2024 Annual Proxy Statement | | |
Committees of Our Boards | | | While the Committee and our Boards recognize the benefits derived from boards of directors composed of individuals who bring different attributes, experiences, and perspectives to the Boards’ deliberations, and while diversity is a consideration in the selection of nominees, they have not adopted any written or mandatory diversity policy or criteria applicable to the director nominations process. Accordingly, in evaluating and selecting nominees, diversity is one of the multiple factors considered by the Committee and the Board.Boards. In recommending that our Board of Directors nominate our current 14 directors for re-election at the Annual Meeting, the Committee considered, among other things, the factors described above and the specific qualifications of each director described in his or her listing as a nominee under the caption “PROPOSAL 1: ELECTIONOF DIRECTORS — Nominees.” Additionally, with respect to directors who were members of our Board during 2021, the Committee considered each director’s preparedness for, engagement in and contributions to meetings and deliberations of the Board and committees on which they serve, and, in the case of the three former CIT directors who were appointed as our directors upon consummation of our merger with CIT, the Committee took into account our obligations under our merger agreement with CIT. After its consideration of these factors, the Committee recommended to our Board of Directors that our 14 current directors be nominated for re-election for new terms of office.
Governance Function. In its role as the Boards’ joint governance committee, and among its otherthe CNG Committee has a range of governance-related responsibilities under its charter or as may be assigned to it from time to time by the Boards, the Committee:responsibilities. | ● | | evaluates and makes recommendations to the Boards concerning our board and governance structure, the number, size, composition and responsibilities of committees of the Boards, and committee membership rotation practices;
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| ● | | annually reviews our Corporate Governance GuidelinesIn addition to its responsibilities listed in the table, and recommends for our Board’s approval any changes that it considers necessary or advisable;
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| ● | | establishes the knowledge, skills, experience, qualifications and performance criteria for directors and committees of the Boards in accordance with our strategic needs, our Corporate Governance Guidelines, applicable laws, regulations and standards, and other criteria or minimum qualifications as the Committee may recommend;
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| ● | | annually reviews our Directors Code of Ethics, reviews directors’ compliance with the Code, evaluates and makes recommendations to the Boards concerning any request for a waiver from the Code, and oversees our management’s processes and procedures for enforcement of the Code;
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| ● | | conducts periodic evaluations of our Chief Executive Officer’s performance, and coordinates and facilitates an annual self-evaluation by the Boards and their committees of their own performance, and reports the results of the evaluations to the Boards;
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| ● | | with the Chairman of the Boards and our Corporate Secretary, develops an orientation program for new directors and continuing education opportunities for incumbent directors;
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| ● | | oversees our communications with shareholders in connection with our Annual Meetings and “say-on-pay” resolutions; and
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| ● | | makes recommendations to the Boards as appropriate regarding succession planning for key Board positions, our Chief Executive Officer and President, and other key positions as the Boards may request.
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As provided in our Corporate Governance Guidelines and described above under the caption “CORPORATE GOVERNANCE“CORPORATE GOVERNANCE — Director Independence,” our Board also has directed the Committee to annually assess each outside director’s independence and report its findings in connection with the Board’s annual review of transactions, relationships and other arrangements involving our directors and determination of which of the directors the Board considers to be “independent.” Between those annual determinations, on an ongoing basis the Committee is directed to monitor the status of each director and inform the Board of changes or events that may affect a director’s ability to exercise independent judgment.
| | | | Compensation Function.
GOVERNANCE RELATED RESPONSIBILITIES | | In addition to its roleother duties and responsibilities under its charter or as may be assigned from time to time by the Boards, as the Boards’ joint compensationgovernance committee of the Boards, the Committee reviews and provides overall guidance to the Boards regarding our executive compensation and benefit programs. Under its charter, theCNG Committee is directed to establish our overall compensation philosophyto: ● evaluate and determine the overall risk profile of our compensation program and practices, and to at least annually review all of our and FCB’s compensation plans, including all incentive and variable pay plans within specific divisions of FCB, to (1) determine whether there are potential areas of risk that reasonably could be expected to have a material adverse effect on our business and financial results, and (2) ensure continuing oversight and mitigation of risk within our and FCB’s compensation practices. Among its other duties, the Committee administers and approves all grants and payments of awards under FCB’s Long-Term Incentive Plan (the “LTIP”), and it reviews and makesmake recommendations to the Boards regarding all other executive compensation matters, including:concerning our board and governance structure, the number, size, composition, and responsibilities of committees of the Boards, and committee membership rotation practices; | ● | | amounts of cash and other compensation paid or provided to, and the adoption of or revisions to compensation, incentive, retirement, or other benefit plans that affect, our and FCB’s Chief Executive Officer and other executive officers; and
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● annually review our Corporate Governance Guidelines and recommend for our Board’s approval any changes the Committee considers necessary or advisable; | ● | | at the request of the Boards, amounts of cash and other compensation paid or provided to, and the adoption of or revisions to compensation, incentive, retirement, or other benefit plans that affect, other individually named officers or associates.
● establish the knowledge, skills, experience, qualifications, and performance criteria for directors and committees of the Boards in accordance with our strategic needs, our Corporate Governance Guidelines, applicable laws, regulations and standards, and other criteria or minimum qualifications as the Committee may recommend; ● annually review our Directors Code of Ethics, review directors’ compliance with the Code, evaluate and make recommendations to the Boards concerning any request for a waiver from the Code, and oversee our management’s processes and procedures for enforcement of the Code; ● conduct annual evaluations of our Chief Executive Officer’s performance, and coordinate and facilitate an annual self-evaluation by the Boards and their committees of their own performance, and report the results of the evaluations to the Boards; ● with the Chairman of the Boards and our Corporate Secretary, develop an orientation program for new directors and continuing education opportunities for incumbent directors; ● oversee our communications with stockholders in connection with our Annual Meetings and otherwise; and ● make recommendations to the Boards as appropriate regarding succession planning for key Board positions, our Chief Executive Officer, and other key positions as the Boards may deem appropriate. |
Compensation Function. In its role as the joint compensation committee of the Boards, the CNG Committee reviews and provides overall guidance to the Boards regarding our executive compensation and benefit programs. After receiving the Committee’s recommendations, the Boards make all final decisions regarding executive compensation matters, with the exception of payments and awards under the LTIP and MPP which are the sole responsibility of the Committee. The Committee also reviews and makes recommendations to the Boards regarding amounts of compensation paid or provided to our directors. | | | | | | | 2024 Annual Proxy Statement | | 37 |
Committees of Our Boards | | | In its review and consideration of compensation matters, the Committee works closely with our Chief Human Resources Officer and his staff. In considering compensation to be paid to our directors and our executive officers named in the Summary Compensation Table below, the Committee considers information provided bythe results of its annual evaluation of our Chairman and Chief Executive Officer, including,Officer’s performance and, in the case of officers other than himself, information provided from time to time by our Chief Executive Officer about those officers’ individualtheir performance and his recommendations as to their compensation. The Committee may retain or obtain the services of outside consultants or other advisors at our or FCB’s expense, and under its charter the Committee is directly responsible for the appointment, compensation, terms of engagement, and oversight of the work of its consultants and advisors. Since 2013, the Committee has retained the services of Pay Governance LLC (“Pay Governance”), which is a national executive compensation consulting firm and which also served as compensation consultant to CIT’s Board of Directors’ independent Compensation Committee. Pay Governance’s engagement each year contemplates that it will prepare market | | | | COMPENSATION RELATED RESPONSIBILITIES | | In addition to its other duties and peer analyses comparing our executives’ and directors’responsibilities under its charter or as may be assigned from time to time by the Boards, as the Boards’ joint compensation rates tocommittee the market compensation paid by similar financial services organizations to their officers and directors in similar positions, advise the Committee regarding its responsibilities and developments in compensation rules and practices, consult with our management and the Committee regarding our annual and strategic plans and the formulation of their compensation recommendations, and assist the Committee in its consideration of new, and changes to existing, compensation plans and strategies. Pay Governance also assists in the review of the Committee’s discussion of our executive compensation program included under the heading “COMPENSATION DISCUSSIONAND ANALYSIS,” and additional information about Pay Governance’s work with theCNG Committee is contained under that heading. While Pay Governance’s advice is a resource considered by the Committee in its decision-making process, other than in a consulting and advisory capacity, Pay Governance has no role in the Committee’s compensation decisions or recommendations made to the Boards.directed to: During early January 2021, representatives of Pay Governance met with the Committee to present its market and peer analyses and to discuss
● establish our executive and director compensation, market conditions and recent trends in executive compensation practices, ouroverall compensation philosophy and various considerations that may affect the Committee’s executivepractices and director compensation decisions. Those representatives also met with our Chief Executive Officer to discuss the results of the market and peer analyses, our business strategies and management’s recommendations for 2021 base salary rates of executive officers and LTIP award grants. Pay Governance participated in a later meeting during early 2021 at which the Committee formulated and approved its recommendations to our Boards for 2021 executive base salary rates and 2021 director compensation, approved new LTIP award grants for the 2021-2023 performance period, and determined the amounts of payments to be made for LTIP awards previously granted for the just- ended 2018-2020 performance period. Pay Governance served as the Committee’s independent consultant and, during 2021, did not provide other services for us or FCB. In accordance with Nasdaq’s listing requirements, each year the Committee reviews various factors (including the factors described in rules of the SEC) that may pose a conflict of interest on the part of its consultants and advisors as well as their individual representatives who provide services to the Committee. No conflict of interest was identified in the most recentregularly review regarding Pay Governance.
The Compensation, Nominations and Governance Committee reviews its engagement of Pay Governance each year, and the Committee may engage different consultants at any time.
Effect of Risk Management on Compensation
The Compensation, Nominations and Governance Committee regularly reviews our compensation philosophy and practicesthem to determine the overall risk profile of our compensation program. As a part of that risk oversight process, onprogram;
● oversee an annual basis the Committee reviewsreview all of our and FCB’s compensation plans, including all incentive and variable pay plans within specific divisions of FCB, to identify anydetermine whether there are potential risksareas of risk that reasonably could be expected to have a material adverse effect on our business and financial results, and to ensure continuing oversight and mitigation of risk within our and FCB’s compensation practices. Atpractices; ● administer and approve all grants of award opportunities and payments of awards under FCB’s LTIP and MPP; ● review and make recommendations to the Boards regarding all other executive compensation matters, including: Ø amounts of cash and other compensation paid or provided to, and the adoption of or revisions to compensation, incentive, retirement, or other benefit plans that affect, our and FCB’s Chief Executive Officer and other executive officers; and Ø at the request of the RiskBoards, amounts of cash and other compensation paid or provided to, and the adoption of or revisions to compensation, incentive, retirement, or other benefit plans that affect, other individually named officers or associates. |
Committee prior to the CIT Merger. Pay Governance’s engagement each year contemplates that it will prepare market and peer analyses comparing our executives’ and directors’ compensation rates to the market compensation paid by similar financial services organizations to their officers and directors in similar positions, advise the Committee regarding its responsibilities and developments in compensation rules and practices, consult with our management and the Committee regarding our annual and strategic plans and the formulation of their compensation recommendations, and assist the Committee in its consideration of new, and changes to existing, compensation plans and strategies. Pay Governance also assists in the review of the discussion of our executive compensation program included under the heading “COMPENSATION DISCUSSION AND ANALYSIS.” Additional information about Pay Governance’s work with the Committee is contained under that heading. While Pay Governance’s advice is a resource considered by the Committee in its decision-making process, other than in a consulting and advisory capacity Pay Governance has no role in the Committee’s compensation decisions or recommendations made to the Boards. | | | | | | 38 | | 2024 Annual Proxy Statement | | |
Committees of Our Boards The following chart describes the process through which executive compensation decisions are made by the CNG Committee. | | | | | | | | | | | | | |
HOW WE PLAN COMPENSATION | | | | | | | | | Our Chief Executive Officer | | | | | | Independent Executive Compensation Consulting Firm | | | | | | CNG Committee | ● Chief Executive Officer provides information about individual officers’ performance and his recommendations for their compensation. ● Management consults with our executive compensation consulting firm regarding our annual and strategic plans and market conditions, our compensation philosophy, and the Compensation, Nominations and Governance Committee will make reports or provide information regarding matters relevantformulation of our consultant’s compensation recommendations. | | 
| | ● Reports to the Risk Committee’s oversightCNG Committee on trends in executive compensation practices, and prepares market and peer analyses comparing our executives’ and directors’ compensation to the market compensation paid by similar financial services organizations to their officers and directors in similar positions. ● Advises the CNG Committee regarding its responsibilities for our enterprise-wide Risk Management Framework. and developments in compensation rules and practices.Our executive officers participate● Assists the CNG Committee in FCB’sits decisions regarding new LTIP and certain business unitsMPP awards, the formulation of its executive compensation recommendations to the Boards, and divisions within FCB have incentive, commissionits consideration of new and variable paychanges to existing compensation plans that have unique structures, goals and reward levels in which other officers and associates participate. The Committee believes that, as currently administered, the LTIP is focused on performance goals that are aligned with our shareholders’ long-term interests, that none of those other plans provide for award levels that are over-weighted to a specific business unit or service, and that those other plans are structured in ways that the Committee believes protect our organization. Based on its most recent review, the Committee believes our and FCB’s current plans present no risk elements that reasonably could be expected to have a material adverse effect on our business and financial results.strategies.
Compensation Committee Report
This report has been furnished by the Compensation, Nominations and Governance Committee, the members of which are named below,● Assists in the Committee’s capacity asreview of the Boards’ joint compensation committee. The Committee has:
| ● | | reviewed and discussed with management the Compensation Discussion and Analysis that is included in this proxy statement; and
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| ● | | based on that review and discussion recommended to the full Board of Directors that the Compensation Discussion and Analysis be included in our proxy statement and Annual Report on Form 10-K for the year ended December 31, 2021.
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The Compensation, Nominations and Governance Committee:
| | | | | | | Robert T. Newcomb | | Victor E. Bell III | | H. Lee Durham, Jr. | | Robert E. Mason IV |
COMPENSATION DISCUSSION AND ANALYSIS
In this section, we describe the material components of our executive compensation program forincluded under the heading “COMPENSATION DISCUSSION AND ANALYSIS.”
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| | ● Makes the final decisions concerning payments and awards under the LTIP and MPP. ● In coordination with our “named executive officers” whose compensation is set forth inChief Human Resources Officer and his staff, reviews and makes recommendations to the 2021 Summary Compensation TableBoards regarding amounts of salaries and other compensation paid or provided to our executive officers. ● Considers the results of its annual evaluation of our Chief Executive Officer’s performance in setting his compensation, along with the voting results from the most recent “say-on-pay” resolutions submitted to our stockholders. ● Reviews and makes recommendations to the Boards regarding amounts of compensation paid or provided to our directors. |
During early January 2023, representatives of Pay Governance met with the Committee to present its market and peer analyses and to discuss our executive and director compensation, market conditions and recent trends in executive compensation practices, our compensation philosophy, and various considerations that may affect the Committee’s executive and director compensation decisions. Those representatives also met with our Chief Executive Officer to discuss the results of the market and peer analyses, our business strategies, and management’s recommendations for 2023 base salary rates of executive officers and LTIP and MPP award grants. Pay Governance participated in a later meeting during early 2023 at which the Committee formulated and approved its recommendations to our Boards for 2023 executive base salary rates and 2023 director compensation, approved new LTIP award grants for the 2023-2025 | | | | | | | 2024 Annual Proxy Statement | | 39 |
Committees of Our Boards Performance Period and MPP award opportunities related to the CIT Merger for 2023, and determined the amounts of payments to be made for LTIP awards previously granted for the just-ended 2020-2022 Performance Period and for MPP awards for 2022. During the remainder of 2023, Pay Governance met with the Committee during May to discuss executive compensation, including post-acquisition compensation design, and during July, following the SVB Acquisition, to discuss the July 2023 MPP awards and the compensation of our directors. Pay Governance served as the Committee’s independent consultant and, during 2023, did not provide other services for us or FCB. In accordance with Nasdaq’s listing requirements, each year the Committee reviews various factors (including the factors described in rules of the SEC) that may pose a conflict of interest on the part of its consultants and advisors as well as their individual representatives who provide services to the Committee. No conflict of interest was identified in the most recent review regarding Pay Governance. The CNG Committee reviews its engagement of Pay Governance each year, and the Committee may engage different consultants at any time. Effect of Risk Management on Compensation The CNG Committee is accountable for oversight of our compensation philosophy and practices to determine the overall risk profile of our compensation program. As a part of that risk oversight process, the Committee oversees an annual review of all of our and FCB’s compensation plans, including all incentive and variable pay plans within specific divisions of FCB, to identify any potential risks that reasonably could be expected to have a material adverse effect on our business and financial results, and to help ensure continuing oversight and mitigation of risk within our compensation practices. The Risk Committee may request reports or information from the CNG Committee regarding matters relevant to the Risk Committee’s oversight responsibilities for our enterprise-wide Risk Management Framework. During 2023, we began implementation of enhancements to the Incentive Compensation Risk Management Program, including new risk-balancing mechanisms. Those mechanisms include a compilation of results by control function for each business unit, with business units that experience an adverse risk outcome receiving an assessment of individuals responsible for the adverse outcome based on various matters, including compliance failures, sales practices, ethics policy violations, significant operational losses, or other significant risk events. The goal of the assessments is to help identify and mitigate imprudent risk taking within business units, including risk taking that may arise from incentive compensation arrangements. Our executive officers participate in FCB’s LTIP and MPP, and certain business units and divisions within FCB have incentive, commission, and variable pay plans that have unique structures, goals, and reward levels in which other officers and associates participate. The Committee believes that, as currently administered, the LTIP and MPP are focused on performance goals that are aligned with our stockholders’ long-term interests, that none of those other plans provide for award levels that are over-weighted to a specific business unit or service, and that those other plans are structured in ways that the Committee believes protect our organization. Compensation Committee Report This report has been furnished by the CNG Committee, the members of which are named below, in the Committee’s capacity as the Boards’ joint compensation committee. The Committee has: | ● | | reviewed and discussed with management the Compensation Discussion and Analysis that is included in this proxy statement; and |
| ● | | based on that review and discussion, recommended to the full Board of Directors that the Compensation Discussion and Analysis be included in our proxy statement and 2023 Annual Report. |
The Compensation, Nominations and Governance Committee: | | | | | | | | | | Robert T. Newcomb | | Victor E. Bell III | | H. Lee Durham, Jr. | | David G. Leitch | | Robert E. Mason IV |
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Compensation Discussion and Analysis COMPENSATION DISCUSSION AND ANALYSIS In this section, we describe the material components of our executive compensation program for the executive officers named in the 2023 Summary Compensation Table and other compensation tables under the heading “EXECUTIVE COMPENSATION,” who we refer to in this discussion as our “NEOs.” This discussion also provides an overview of our compensation philosophy and objectives, and how and why our CNG Committee implements compensation processes and arrives at specific compensation decisions and recommendations for our NEOs. Our 2023 NEOs are listed below, with their positions during 2023 (which they continue to hold), in the order in which they appear in the Summary Compensation Table. | | | | | | | | | 
Frank B. Holding, Jr. Chairman and Chief Executive Officer | | 
Craig L. Nix Chief Financial Officer | | 
Hope H. Bryant Vice Chairwoman | | 
Peter M. Bristow President | | 
Lorie K. Rupp Chief Risk Officer |
TABLEOF CONTENTS | | | | | | | 2024 Annual Proxy Statement | | 41 |
Compensation Discussion and Analysis EXECUTIVE SUMMARY Our Executive Compensation Philosophy and Objectives The CNG Committee endeavors to align executive officers’ compensation with our long-term business philosophy and achieve our objectives of: | ● | | rewarding sustained long-term performance, service, and loyalty; |
| ● | | balancing business risk with sound financial policy and stockholders’ interests, and aligning the interests of our executive officers with the long-term interests of our stockholders by encouraging growth in the value of our company and our stockholders’ investments; |
| ● | | enabling us to attract, motivate, and retain qualified executive officers; and |
| ● | | providing compensation to our executive officers that is competitive with comparable financial services companies. |
Because the performance-based compensation of our executive officers is paid in cash and does not include equity-based compensation, we do not have stock ownership requirements or guidelines for executive officers. However, as discussed elsewhere in this proxy statement, our Board has adopted a policy that prohibits our executive officers from hedging, or pledging as collateral for any loan, any shares of our common stock they own, subject to exceptions for certain “grandfathered” pledges and certain pledges approved by our Audit Committee following a review of relevant factors. For purposes of the policy, a “hedge” means any financial instrument, derivative transaction, or trading strategy designed to hedge or offset any decrease in the market value of our stock, such as a covered call, collar, prepaid variable forward sale contract, equity swap, exchange fund, or similar transaction. Executive Compensation Highlights Our executive compensation program is administered by the CNG Committee, which is focused on performance-based components of executive compensation in order to promote performance that will increase stockholder value and improve the overall effectiveness of our compensation program. During 2023, the Committee again engaged Pay Governance to evaluate our executive compensation and assist the Committee in maintaining a program that is both fair and effective. The following paragraphs summarize the Committee’s and our Boards’ actions and decisions with respect to the compensation of our NEOs for 2023 and 2024. 2023 Compensation Actions and Decisions | ● | | Base Salaries — In January 2023, the Committee recommended and the Boards approved no changes in the base salary rates of our NEOs for 2023. |
| ● | | Continued Use of Growth in Tangible Book Value as the LTIP Performance Metric — As noted below, the Committee continued to use growth in the tangible book value of our common stock as the primary component of the performance measure for the determination of LTIP awards. Tangible book value per share is defined as an amount equal to our total assets, minus our intangible assets, minus our liabilities, divided by the aggregate number of outstanding shares of both classes of our common stock. The central objective of our strategic plan is to build the long-term value of our company and our stockholders’ investments, and the Committee believes growth in tangible book value per share is a key driver of long-term value. As a result, the Committee believes the performance goals under our LTIP, from which our executives derive a substantial portion of their compensation, are consistent with our focus on long-term objectives and emphasis on financial stability and growth in stockholder value, which are factors that have contributed to our financial success over the years. |
| ● | | Long-Term Incentive Plan (“LTIP”) New Awards and Payments: |
| Ø | | In January 2023, the Committee approved the grant of cash-based LTIP performance awards to our NEOs for a three-year 2023-2025 Performance Period based on the same performance measure used in prior years — the growth rate of our tangible book value, plus dividends paid (the “TBV+D Growth Rate”), subject to certain adjustments. As with the grants made in 2022, the Committee set the Threshold, Target, and Stretch TBV+D Growth Rate goals of 12%, 30%, and 48%, respectively, with payment opportunities for performance at those levels to be based on 50%, 100%, and 150% of the Target Amounts of the awards. |
| Ø | | During January 2024, the Committee approved payment of the three-year cash performance awards previously granted under the heading “EXECUTIVE COMPENSATION.” This discussion also provides an overview of our compensation philosophy and objectives, and how and why our and FCB’s Boards��� joint Compensation, Nominations and Governance Committee implements compensation processes and arrives at specific compensation decisions and recommendations involvingLTIP for the named executive officers. Our 2021 named executive officers2021-2023 Performance Period, which are listed below in the order in which they appear in the Summary Compensation Table, and we refer to themreported in this discussionproxy statement as our “NEOs.” | ● | | Frank B. Holding, Jr. – Chairman and Chief Executive Officer
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| ● | | Craig L. Nix – Chief Financial Officer
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| ● | | Hope H. Bryant – Vice Chairwoman
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| ● | | Peter M. Bristow – President
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| ● | | Lorie K. Rupp – Chief Risk Officer
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Executive Summary
Executive Compensation Highlights
Our executive compensation program is administered by our Compensation, Nominationsfor 2023.
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| | | | | | 42 | | 2024 Annual Proxy Statement | | |
Compensation Discussion and Analysis | ● | | Merger Performance Plan (“MPP”) New Awards and Governance Committee, which is a joint committee of our and FCB’s Boards of Directors. The Committee has continued to focus on performance-based components of executive compensation in order to improve the overall effectiveness of our compensation program. During 2021,Payments: |
| Ø | | In February 2023, the Committee again engaged Pay Governance LLC to evaluate our executive compensation componentsapproved new MPP cash performance award opportunities for 2023, which could become payable at Target levels dependent on continued achievement of CIT Merger integration and assistconversion milestones, realization of remaining merger cost savings, and leveraging of merger synergies and benefits, as well as individual performance. |
| Ø | | In July 2023, following the SVB Acquisition, the Committee in maintaining a program that is both fairapproved performance award opportunities under the MPP for 2023, which could become payable at Threshold, Target, and effective. The following paragraphs summarizeMaximum levels dependent on achievement of integration and conversion milestones, the Committee’s actionsrealization of cost savings and decisionssynergies, and risk management objectives, as well as individual performance, related to the SVB Acquisition. |
| Ø | | In January 2024, the Committee assessed achievement of performance objectives with respect to the 2023 MPP awards and approved payment of the February MPP awards related to the CIT Merger and the July MPP awards related to the SVB Acquisition to each our NEOs at the maximum levels, all of which are reported in this proxy statement as compensation for 2023. |
| ● | | No Change in Control Arrangements or Stock-Based Compensation — We have no employment or change of control agreements with any of our current NEOs and we have not provided them with any equity or stock-based compensation. |
| ● | | Continued Focus on Performance-Based Compensation — By recommending no increases for 2023 in the base salaries of our NEOs, maintaining increased individual “Stretch” opportunity levels with respect to LTIP awards granted for 2021the 2023-2025 Performance Period at 150% of the Target Amounts (as compared to 125% for awards granted prior to 2022), and 2022. | | ●2021 Compensation Actions and Decisions
| | ●Base Salaries – In January 2021, the Committee recommended, and FCB’s Board approved, a 2.96% increase for 2021 in the base salary of Mr. Holding, our Chief Executive Officer, increases of 3.70% in Mrs. Bryant’s and Mr. Bristow’s base salaries, and increases of 6.30% and 10.00% respectively, in Mr. Nix’s and Mrs. Rupp’s base salaries.
| | ●LTIP Award Payments and Grants – In January 2021, the Committee approved payments for the three-year, cash-basedapproving award opportunities to NEOs under the MPP with performance objectives including integration and conversion milestones, cost savings and synergies, and risk management, as well as individual performance, awards previously granted under the LTIP for the 2018-2020 performance period, which were reported in our proxy statement for the 2021 Annual Meeting as compensation for 2020. The Committee also approved the grant of cash-based LTIP performance awards for a new three-year performance period (2021-2023) based on the same performance criteria as in prior years (the “TBV+D Growth Rate,” which is defined as the growth in the tangible book value per share of our common stock plus cumulative dividends paid per share on the stock) and with the same Threshold, Target and Stretch performance goals as in the previous year’s awards. Based on comparisons to market data, Target Amounts (as defined below) for the 2021-2023 LTIP awards were based on higher percentages of the NEOs’ base salary rates than in previous years. Finally, during January 2022, the Committee approved payments for the three-year awards previously granted under the LTIP for the 2019-2021 performance period, which are reported in this proxy statement as compensation for 2021.
| | ●Bonuses – During January 2022, the Committee recommended, and FCB’s Board approved, payment of special merger-related cash bonuses for 2021 to certain of our executive officers and associates. These “merger success” bonuses were intended to recognize the performance and contributions of and additional demands on our management team during late 2020 and through 2021 (including integration planning and addressing Federal and State regulatory issues) in connection with our merger with CIT. As a result of their efforts and achievements, our transformational merger with CIT received final regulatory approval on December 17, 2021, and was successfully completed on January 3, 2022. The merger has more than doubled our assets to over $100 billion and significantly increased the breadth and complexity of our business with the addition of multiple new business lines.
| | ●Non-Qualified Deferred Compensation Plan – During February 2021, the Committee recommended, and FCB’s Board approved, a non-qualified deferred compensation plan that became effective on March 1, 2021, and permits plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of up to 80% of their base salaries and certain eligible bonuses, including LTIP award payments. FCB credits
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| participants’ deferred amounts with deemed investment returns based on hypothetical investment options selected by the participants from a menu of investment options which are used only for purposes of measuring the amounts to be credited by FCB to participants’ accounts. The Plan does not provide for FCB to make any additional or discretionary contributions to the participants’ Plan accounts.
| | ●Performance-Based Compensation Relative to Total Compensation – By recommending relatively modest increases for 2021 in the base salaries of our NEOs and increasing the individual target opportunity levels with respect to new LTIP awards granted for the 2021-2023 performance period, the Committee continued to focus on performance-based compensation as a substantial component of our NEOs’ total compensation.
| | ●Continued Use of Tangible Book Value as LTIP Performance Metric – The Committee continued to use growth in the tangible book value of our common stock as the primary performance criteria for the determination of LTIP award payments. Tangible book value per share is defined as an amount equal to our total assets, minus our intangible assets, minus our liabilities, divided by the aggregate number of outstanding shares of both classes of our common stock. The central objective of our strategic plan is to build the long-term value of our company and our shareholders’ investments, and the Committee believes growth in tangible book value per share is a key driver of long-term value. As a result, the Committee believes the performance goals under our LTIP, from which our executives derive a substantial portion of their compensation, are consistent with our focus on long-term objectives and emphasis on financial stability and growth in shareholder value which are factors that have contributed to our financial success over the years.
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| ● | | | ●No Change in Control Arrangements or Stock-Based Compensation – We have no employment or change of control agreements with any of our named NEOs and we have not provided them with any equity or stock-based compensation.
| | ●January 2022 Compensation Actions and Decisions
| | ●Base Salaries – The Committee recommended no increases in the base salaries of our NEOs for 2022.
| | ●LTIP Award Payments and Grants – The Committee approved the grant of cash-based LTIP performance awards for a new, three-year 2022-2024 performance period based on the same TBV+D Growth Rate performance criteria as in prior years. However, to account for the future impact of the CIT merger on the attainability of performance goals, the Committee increased Target and Stretch TBV+D Growth Rate goals to 30% and 48%, respectively (as compared to 24% and 36% for the previous year’s awards) and set Target Amounts of the awards based on the same percentages of the NEOs’ base salary rates as in the previous year’s awards. The Committee increased the potential payment for performance at the higher Stretch level to 150% of the Target Amount of the awards as compared to prior Stretch level payouts of 125% of Target Amounts.
| | ●Amendment to LTIP – The Committee recommended, and FCB’s Board approved, an amendment to the LTIP that, for awards granted beginning in 2022, increased the maximum amount payable for any award from $7 million to $10 million. TheCommittee also modified its standard form of award agreement to impose non-solicitation and nondisclosure obligations on participants as conditions to awards beginning in 2022.
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Our ExecutiveIncentive Compensation Philosophy and Objectives
Risk Management Program.The Committee endeavorsand the Boards’ began implementation of enhancements to both align our executive officers’ compensation with our long-term business philosophy and achieve our objectives of: | ● | | rewarding sustained long-term performance and long-term service and loyalty;
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| ● | | balancing business risk with sound financial policy and shareholders’ interests, and aligning the interests of our executive officers with the long-term interests of our shareholders by encouraging growth in the value of our company and our shareholders’ investments;
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| ● | | enabling us to attract, motivate and retain qualified executive officers; and
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| ● | | providing compensation to our executive officers that is competitive with comparable financial services companies.
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Because our executive officers’ incentive compensation opportunities have not included equity-based compensation, we do not have stock ownership requirements or guidelines for executive officers. However, as discussed elsewhere in this proxy statement, upon the recommendation of our Audit Committee, our Board of Directors has adopted a policy that prohibits our executive officers from hedging, or pledging as collateral for any loan, any shares of our common stock they own, subject to exceptions for certain “grandfathered” pledges and certain pledges approved by our Audit Committee following a review of relevant factors. For purposes of
the policy, a “hedge” means any financial instrument, derivative transaction or trading strategy designed to hedge or offset any decrease in the market value of our stock, such as a covered call, collar, prepaid variable forward sale contract, equity swap, exchange fund or similar transaction.
Incentive Compensation Clawback Policy The Committee’s Incentive Compensation Policy (which appliesRisk Management Program to awards the Committee approves under the LTIP as well as other types ofinclude new risk-balancing mechanisms in incentive compensation arrangements in whichorder to help identify and mitigate risk taking that might arise from incentive compensation arrangements.
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2024 Compensation Actions and Decisions | ● | | Base Salaries — In January 2024, for the first time since 2021, the Committee recommended and the Boards approved the following merit-based increases in the base salaries of our associatesNEOs for 2024: 3.0% for Mr. Holding, 7.4% for Mr. Nix, 3.6% for both Mrs. Bryant and Mr. Bristow, and 4.5% for Mrs. Rupp. |
| ● | | LTIP Awards — In January 2024, the Committee approved the grant of LTIP cash performance awards for a new, three-year 2024-2026 Performance Period based on the same TBV+D Growth Rate performance measure used in various business units may participate) includes a “clawback” policy. Under that policy,prior years and with increased Target Amounts and payment opportunities as compared to the 2023-2025 awards. The Committee set the same Threshold, Target, and Stretch TBV+D Growth Rate goals of 12%, 30% and 48%, respectively, and with payments for performance at those levels based on the discretionsame 50%, 100%, and 150% of the Target Amounts. |
| ● | | MPP Awards — In January 2024, the Committee we may require a current or former associate, including an executive officer,approved new performance award opportunities under the MPP for 2024 for NEOs. For 2024 award opportunities, performance objectives with respect to forfeit future incentive payments, orthe CIT Merger include the optimization of merger cost savings and synergies, risk management, individual performance, our overall results, and other related specific goals, and with respect to repay to us all or any portion of any previously paid performance-based compensation, if:the SVB Acquisition, the performance objectives include timely integration achievement, risk management, individual performance, our overall results, and other related specific goals. |
Compensation Program Evolution Our executive compensation program is designed to align NEO compensation with our long-term business philosophy and achieve the objectives noted above, and it has continued to focus on performance-based components of executive compensation in order to promote performance that will increase stockholder value and improve the overall effectiveness of our compensation program. Beginning in 2021, the CNG Committee has taken steps toward future pay competitiveness of our NEO compensation against the comparably sized regional financial institutions with which we compete for business and talent following the CIT Merger and the SVB Acquisition through adjustments to base salaries in 2021 and 2024, and, beginning in 2022, expanded performance-based incentive opportunities under the LTIP for overlapping three-year performance periods, and annual awards under the MPP based upon performance objectives related to our mergers and acquisitions. As a result, performance-based compensation has continued to make up an increasingly substantial portion of our NEOs’ total compensation. | | | | | | | 2024 Annual Proxy Statement | | 43 |
Compensation Discussion and Analysis | ● | | an accounting restatement occurs due to material non-compliance with any financial reporting requirement under Federal securities laws, whether or not resulting from intentional misconduct;
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| ● | | we discover that a performance metric or calculation used in determining performance-based compensation was materially inaccurate; or
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| ● | | a significant violation of our Codes of Ethics, as determined by the Committee, results in a financial or reputational impact on FCB.
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The clawback policy applies to any plan or individual award under any plan that specifically references the policy, including our LTIP discussed below.
The Process of Evaluating Executive Officer Compensation Overview.Each January, the CNG Committee reviews total compensation paid or provided to our executive officers, considers changes in the executive officers’ base salaries, and makes recommendations to the Boards regarding the salaries of our executive officers for the coming year. Each year the Committee also approves payments under existing awards granted under the LTIP and MPP for which the periods covered by the awards have ended and approves new award opportunities under each plan. After receiving the Committee’s recommendations, the Boards approve all executive officer compensation, with the exception of payments and awards under the LTIP and the MPP which, under the terms of the plans, are the sole responsibility of the Committee. | | | The Committee evaluates the performance of our Chairman and Chief Executive Officer each year. Recent evaluations have included, in addition to our financial performance, an evaluation, through survey responses from our directors and Executive Leadership Team members, of his performance in various other areas, including leadership, talent and culture development, Board relations, and financial management, and the Board’s assessment of the extent of achievement of our company’s “Competitive Path” objectives set out for each year. The Committee and Boards consider the results of that performance evaluation in decisions each year regarding the amounts of our Chief Executive Officer’s salary, incentive award levels, and other compensation matters, and, because the individual performance of all of our executive officers considers changescontribute to our financial performance and the achievement of corporate objectives, the results of that evaluation also are considered by the Committee and Boards in the executive officers’ base salaries, and makes recommendations to the Boards of Directorsdecisions regarding the salariescompensation of our and FCB’s executive officers for the coming year. Under the LTIP, each year the Committee also approves payments under existing awards for which performance periods have ended and approves the grant of new awards. After receiving the Committee’s recommendations, the Boards approve all executive officer compensation, with the exception of payments and awards under the LTIP which, under the terms of the plan, are the sole responsibility of the Committee which consists solely of independent directors. In reviewing our NEOs’ compensation, the Committee considers:other NEOs.
| ● | | the scope of the officers’ responsibilities;
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| ● | | market analyses provided by the Committee’s independent consultant comparing our NEOs’ compensation to compensation paid to persons in each NEO’s position in similar financial services organizations, and executive compensation data compiled by the independent consultant for a group of industry peer companies;
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| ● | | our overall financial and operating performance;
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| ● | | internal equity of our NEOs’ current compensation and their levels of compensation in comparison to other NEOs; and
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| ● | | voting results on the most recent say-on-pay resolutions submitted to our shareholders, as well as any feedback received by the Committee from shareholders outside the voting process.
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Independent Compensation Consultant.In setting compensation paid to our NEOs for 2021,2023, the CNG Committee again retained Pay Governance as its independent compensation consultant. As part of their services, Pay Governance prepared | | | | CNG COMMITTEE COMPENSATION REVIEW | | In reviewing our NEOs’ compensation, the Committee considers: ● the scope of each officer’s responsibilities; ● market analyses forprovided by the CommitteeCommittee’s independent consultant comparing our executives’ then-currentNEOs’ compensation rates to the market median compensation paid byto persons in each NEO’s position in similar financial services organizations, to their officers in similar positions. The analyses focused on:and executive compensation data compiled by the independent consultant for a group of industry peer companies; | ● | | total cash compensation (which included base salaries and target annual incentive awards); and
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| ● | | total direct compensation (which included total cash compensation and the expected value of long-term incentives, including stock-based compensation provided by other companies).
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For purposes of the market analyses, Pay Governance used Willis Towers Watson’s Financial Services Executive Compensation Surveys, which included pay data for over 200 companies● our overall financial and operating performance, including our three-year TBV+D Growth Rate in the financial services industry. Our executive positions were compareddetermination of payments of LTIP awards and the achievement of integration goals in the determination of payments of MPP awards, and, in decisions regarding the compensation of our NEOs in general, our internal “Financial True North” metrics which include net income, loan growth, deposit growth, noninterest income and expense, and net loan charge-offs;
● achievement of internal company objectives set out in our “Competitive Path” which is formulated at the beginning of each year to similar positionsestablish goals for management for the year in similarly sized organizations. Statistical regression analyses were also performedvarious areas; ● individual performance of our NEOs; ● Board and Executive Leadership Team survey results regarding the Chief Executive Officer’s performance; ● internal equity of our NEOs’ current compensation and their levels of compensation in comparison to size-adjustother NEOs; and ● voting results on the most recent say-on-pay resolutions submitted to our stockholders, as well as any feedback received by the Committee from stockholders outside the voting process. |
Governance prepared market analyses for the Committee comparing our executives’ then-current compensation rates to the market median compensation paid by similar financial services organizations to their officers in similar positions. The analyses focused on: | ● | | total cash compensation (which included base salaries and target annual incentive awards); and |
| ● | | total direct compensation (which included total cash compensation and the expected value of long-term incentives). |
For purposes of the market analyses, Pay Governance used Willis Towers Watson’s Financial Services Executive Compensation Surveys, which included pay data for over 200 companies in the financial services industry. Our executive positions were compared to similar positions in similarly sized organizations. Statistical regression analyses were also performed to size-adjust the survey data to achieve a close correlation with our total asset scope, providing a more accurate view of the market data. | | | | | | 44 | | 2024 Annual Proxy Statement | | |
Compensation Discussion and Analysis | | | To further assist the Committee in understanding our compensation marketplace, each year Pay Governance reviews publicly available proxy-reported data for a group of industry peer companies consisting of publicly traded financial institutions that primarily concentrate on retail and business banking operations headquartered in the United States. Our peer companies used in informing pay decisions for 20202023 consisted, of 20 financial institutions that had assets between $20 billion and $70 billion.However, givenat the more than doublingtime, of our assets and the significantly increased breadth and complexity of our business with the addition of multiple new business lines that would result from our then-pending merger with CIT, the peer companies used in informing pay decisions for 2021 consisted of the following 14 publicly traded regional financial institutions that havehad assets between $50 billion and $220 billion:$225 billion. | | | | | Citizens Financial Group, Inc. | | Huntington Bancshares Incorporated | | Regions Financial Corporation | Comerica Incorporated | | KeyCorp | | Signature Bank | Fifth Third Bancorp | | M&T Bank Corporation | | SVB Financial Group | First Horizon National Corporation | | People’s United Financial, Inc. | | Synovus Financial Corp. | First Republic Bank | | | | Zions Bancorporation |
The Committee generally compares the compensation of each NEO in relation to the 50th percentile of the peer group for similar positions. In addition, the Committee takes into account various factors such as our performance within the peer group, the unique characteristics of each individual’s position, and any succession and retention considerations. Generally, differences or similarities in the levels of total direct compensation among the NEOs are driven primarily by the scope of their responsibilities, market data for similar positions, and considerations of internal equity within our executive leadership team.Executive Leadership Team. As discussed below under the caption “Cash Compensation,” the Committee took steps toward future pay competitiveness of our NEOs’ compensation against the larger regional financial institutions with which we would compete for business and talent following our then-pending merger with CIT through adjustments to base salaries and expanded performance-based incentive opportunities approved in January 2021 for the 2021-2023 performance period.
Consideration of Last Year’s “Say-on-Pay” Vote Vote.At each Annual Meeting, our shareholdersstockholders vote on a non-binding advisory resolution (a “say-on-pay” resolution) to approve the compensation paid to our NEOs as described in the proxy statement for that meeting. As in prior years, atAt our 20212023 Annual Meeting our shareholders overwhelminglystockholders approved the proposal with over 98%95% of the votes entitled to be cast on the proposal with respect to shares present in person or by proxy, and which were voted or abstained at the meeting, being cast for approval. In connection with its reviews and decision-making process and the setting of our NEOs’ compensation for 20212023 and 2022, the Committee considered the voting results on those proposals at our past recent Annual Meetings. The Committee believes the voting results on our say-on-pay resolutions indicate that our shareholders understand and support our executive compensation philosophy and objectives.The Committee will continue to consider each year’s say-on-pay voting results, as well as any feedback received from shareholders outside the voting process, in evaluating our executive compensation plans, policies and practices and its decisions regarding executive compensation. At our 2017 Annual Meeting, our shareholders also voted on a “say-on-frequency” proposal, expressing their preference whether future say-on-pay votes should be held annually, every two years, or every three years. Consistent with our Board’s recommendation, our shareholders approved the annual option. A say-on-pay resolution will be submitted for a vote of our shareholders at the 2022 Annual Meeting, and a say-on-frequency proposal will next be submitted for a vote of our shareholders at the 2023 Annual Meeting.
Tax and Accounting Considerations; Deductibility of Executive Compensation
In evaluating compensation program alternatives, the Committee has considered the potential impact on our company of Section 162(m) of the Internal Revenue Code. Section 162(m) generally disallows a tax deduction to public corporations for compensation over $1 million paid for any fiscal year to their chief executive officers and certain other named executive officers. The Committee believes it is important to maintain flexibility in designing compensation programs that it considers to be effective and in the best interests of our shareholders, even if that approach may result in payments that are not deductible under Section 162(m).
EXECUTIVE COMPENSATION COMPONENTS
The components of compensation paid to or received by our executive officers for 2021 are summarized in the following table.
| | | | | | | Compensation
Component
| | Component
Elements
| | Purpose
| | Component
Risk Profile | | | | | Base Salary
| | ● Cash compensation
| | Provides fixed annual compensation that is comparable with other similarly-sized financial institutions and helps attract and retain our executive officers and other associates. | | Low | | | | | Long-Term Incentive Plan
| | ● Awards of performance-based cash compensation measured by the extent to which goals are met during award performance periods
| | Ties substantial portion of NEO compensation to company performance and growth in the value of our shareholders’ investments, promotes a closer identification of the interests of plan participants with company interests and the long-term interests of shareholders, stimulates efforts to enhance efficiency, profitability, and growth in value of our company and shareholders’ investments, and enhances our ability to recruit and retain officers who are participants. | | Low | | | | | Merger Success Bonuses
| | ● Cash compensation
| | Special “merger success” bonuses paid for 2021 to certain of our and FCB’s executive officers and associates to recognize the performance and contributions of and additional demands on our management team during late 2020 and through 2021 in connection with our merger with CIT. | | Low | | | | | Retirement
Benefits
| | ● Defined benefit pension plans
● Matching contributions to legacy and enhanced Section 401(k) defined contribution plan accounts, and additional profit-sharing contributions to enhanced Section 401(k) plan accounts
| | Provide competitive levels of retirement income for our NEOs and other associates. | | Low | | | | | Non-qualified Deferred
Compensation Plan
| | ● Deferral of up to 80% of base salary and certain eligible bonuses, including LTIP award payments, under the plan
● Earnings on voluntary deferrals by plan participants based on deemed investments of participants’ accounts in outside investment funds selected by participants from a menu of investment options available under the plan
| | To provide an opportunity for plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of portions of their salaries and LTIP award payments. | | Low | | | | | Non-qualified Separation
from Service Agreements
| | ● Cash following separation from service at or after specified ages
● Death benefit
| | Retain and reward the long-term service and loyalty of certain key decision makers, and assure their continued loyalty following a separation from service. | | Low |
| | | | | | | Compensation
Component
| | Component
Elements
| | Purpose
| | Component
Risk Profile | | | | | Perquisites
| | ● Maintenance and monitoring of home security systems
● Limited staff services for personal activities
● Use of corporate apartments maintained by FCB primarily for executives traveling for business purposes
● Limited other personal benefits provided from time to time
| | Provide limited personal benefits to certain executive officers in furtherance of our risk management program, for the officers’ convenience, and from time-to-time for other specific purposes. | | Low |
Cash Compensation
Until the adoption of our LTIP during 2014, base salaries represented the primary component of our executive compensation program. Since that time, our company has grown but, with certain exceptions based on various considerations, including internal pay equity, increases in our NEOs’ base salaries have been limited, whilepayments for three-year, performance-based LTIP awards have become a substantial portion of our NEOs’ annual total compensation.
Base Salaries. In making its recommendations regarding 2021 and 2022 base salaries for our NEOs, the Committee considered various factors, including our 2020 and 2021 financial and operating performance and other factors described below.
Until 2019, the base salary of our Chief Executive Officer, Mr. Holding, had not been increased since our LTIP was adopted in 2014. Consideration of his 2021 and 2022 base salary rates took into account his 2020 and 2021 total compensation, the market and peer analyses (that included larger, regional financial institutions that would become our peers following our merger with CIT) as prepared by Pay Governance, the long-term incentive opportunities provided to him under the LTIP, and the total compensation of our other NEOs. Based on those factors and company and individual performance, the Committee recommended an increase of 2.96% in Mr. Holding’s base salary rate for 2021 but, consistent with its focus on performance-based compensation, no increase in his base salary for 2022.
In considering its recommendations for the 2021 and 2022 base salary rates of our other NEOs,2024, the Committee took into account their 2020the voting results
| | | | 2023 PEER COMPANIES | | Citizens Financial Group, Inc Comerica Incorporated Fifth Third Bancorp First Horizon Corporation First Republic Bank Huntington BancShares KeyCorp M&T Bank Corporation Regions Financial Corporation Signature Bank SVB Financial Group Synovus Financial Corp Webster Financial Corporation Zions Bancorporation, National Association |
on those proposals at our preceding years’ Annual Meetings. The Committee believes the voting results on our say-on-pay resolutions indicate that our stockholders understand and support our executive compensation philosophy and objectives. The Committee will continue to consider each year’s say-on-pay voting results, as well as any feedback received from stockholders outside the voting process, in evaluating our executive compensation plans, policies, and practices and its decisions regarding executive compensation. At our 2023 Annual Meeting, stockholders also voted on a “say-on-frequency” proposal, expressing their preference whether future say-on-pay votes should be held every year, every two years, or every three years. Consistent with our Board’s recommendation, stockholders approved the “every year” option. Accordingly, a say-on-pay resolution is being submitted for a vote of our stockholders at the Annual Meeting. Another say-on-frequency proposal is expected to be submitted for a vote of our stockholders at the 2029 Annual Meeting. Tax and Accounting Considerations; Deductibility of Executive Compensation. In evaluating compensation program alternatives, the CNG Committee has considered the potential impact on our company of Section 162(m) of the Internal Revenue Code of 1986. Section 162(m) generally disallows a tax deduction to public corporations for compensation over $1.0 million paid for any fiscal year to their chief executive officers and certain other named executive officers. The Committee believes it is important to maintain flexibility in designing compensation programs that it considers to be effective and in the best interests of our stockholders, even if that approach results in payments that are not deductible under Section 162(m). Incentive Compensation Risk Management. During 2023, we began implementation of enhancements to the Incentive Compensation Risk Management Program, including new risk-balancing mechanisms. Those methods include a compilation of results by control function for each business unit, with business units that experience an adverse risk outcome receiving an assessment of individuals responsible for the adverse outcome based on various matters, including compliance failures, sales practices, ethics policy violations, significant operational losses, or other significant risk events. The goal of the assessments is to help identify and mitigate imprudent risk taking within business units, including risk taking that may arise from incentive compensation arrangements. | | | | | | | 2024 Annual Proxy Statement | | 45 |
Compensation Discussion and Analysis Executive Compensation Components The components of compensation paid to or received by our executive officers for 2023 are summarized in the following table. | | | | | | | | | |
Compensation Component | | Component Elements | | Purpose | | Component Risk Profile | | | | | Base Salary | | ● Cash compensation | | Provides fixed annual compensation that is comparable with other similarly sized financial institutions and 2021 totalhelps attract and retain our executive officers and other associates | | Low | | | | | Long-Term Incentive Plan Awards | | ● Awards of performance-based cash compensation measured by the marketextent to which goals are met during award Performance Periods | | Ties a substantial portion of NEO compensation to company performance and peer analyses prepared by Pay Governance, their long-term incentive opportunities under the LTIP, and,growth in the case of each NEO, the total compensationvalue of our other NEOs and their total compensation as compared to larger, regional financial institutions following our merger with CIT. Based onthose factors and company and individual performance (including our Chief Executive Officer’s assessmentstockholders’ investments, promotes a closer identification of those officers’ individual performance and his recommendations as to their compensation), the Committee recommended increases of 3.70% in Mrs. Bryant’s and Mr. Bristow’s 2021 base salary rates, and increases of 6.30% and 10.00%, respectively, in Mr. Nix’s and Mrs. Rupp’s base salary rates. For 2022, and consistent with its focus on performance-based compensation, the Committee recommended no increases in any of their base salary rates. The following table shows the base salary rates of our Chief Executive Officer and our other four NEOs, and the percentage increases in their salaries, for 2019 through 2022 (with the exception of Mrs. Rupp who became an NEO for the first time for 2021). The base salary rates in the table for years prior to 2021 reflect the listed NEOs’ annual base salary rates approved by the Boards that became effective on April 1 of each of those years. Because those base salary rates were not in effect for the entire year, the salary rates listed for some NEOs in the table below for 2019 and 2020 may be higher than the amounts of base salaries those officers actually received during those years as listed in the Summary Compensation Table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019
Base Salary | | | 2020
Base Salary | | | 2021
Base Salary | | | 2022
Base Salary | | | | | %
Increase | | | Salary
Rate | | | %
Increase | | | Salary
Rate | | | %
Increase | | | Salary
Rate | | | %
Increase | | | Salary
Rate | | Frank B. Holding, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chairman and Chief Executive Officer | | | 1.27 | % | | $ | 967,100 | | | | 1.44 | % | | $ | 981,000 | | | | 2.96 | % | | $ | 1,010,000 | | | | 0.00 | % | | $ | 1,010,000 | | | | | | | | | | | Craig L. Nix | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chief Financial Officer | | | 2.00 | % | | | 612,000 | | | | 3.76 | % | | | 635,000 | | | | 6.30 | % | | | 675,000 | | | | 0.00 | % | | | 675,000 | | | | | | | | | | | Hope H. Bryant | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vice Chairwoman | | | 1.46 | % | | | 659,500 | | | | 2.35 | % | | | 675,000 | | | | 3.70 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | | | | | | | | Peter M. Bristow | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | President | | | 1.46 | % | | | 659,500 | | | | 2.35 | % | | | 675,000 | | | | 3.70 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | | | | | | | | Lorie K. Rupp (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chief Risk Officer | | | – | | | | – | | | | – | | | | 500,000 | | | | 10.00 | % | | | 550,000 | | | | 0.00 | % | | | 550,000 | |
(1) | Mrs. Rupp became an NEO for the first time for 2021.
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Long-Term Incentives. Since 2014, we have rewarded long-term performance through cash award opportunities that may be earned based on the extent of attainment of performance goals under our LTIP. The LTIP is intended to reinforce the link between the interests of our participating officersplan participants with company interests and the long-term interests of our companystockholders, stimulates efforts to enhance efficiency, profitability, and our shareholders, and to motivate and reward executive officers for their contributions toward achieving our strategic plan’s central objective of building the long-termgrowth in value of our company and stockholders’ investments, and enhances our shareholders’ investments. Cash incentive awards may be granted by the Committee under the LTIP in amounts (“Target Amounts”) whichability to recruit and retain officers who are expressed as percentagesparticipants
| | Low | | | | | Merger Performance Plan Awards | | ● Awards of officers’ base salaries. The awards represent opportunitiesannual performance-based cash compensation tied to receive cash payments based on the extentrealization of intended benefits to which performance goals set by the Committee at “Threshold” (i.e., minimum), “Target”our company and “Stretch” (i.e., maximum) levels are met or exceeded during stated periodsstockholders of time (“Performance Periods”). Since its inception, awards generally have been granted under the LTIP each year for overlapping three-year Performance Periodsour mergers and acquisitions, with performance objectives based on growth intied to one or more of the tangible book value per share (“TBV”)following: timely achievement of our common stock plus cumulative dividends per share (“D”) paid overstabilization, integration, or optimization milestones, realization of merger or acquisition cost savings and synergies, risk management, individual performance, or other related specific objectives as assigned.
| | Provides a cash incentive for the applicable Performance Periods (the “TBV+D Growth Rate”). Our tangible book value per share on each measurement date is the amount equalrealization of projected benefits to our total assets, minuscompany and our intangible assets, minus our liabilities, divided by the aggregate number of outstanding shares of both classes of our common stock. The Committee believes growth in tangible book value per share isstockholders from mergers and acquisitions, which promotes a key driver of long-term value. As a result, the Committee believes that using growth in tangible book value as the primary componentcloser identification of the performance goals for our LTIP is consistentinterests of plan participants with our focus oncompany interests and the long-term objectivesinterests of stockholders, and our emphasis on financial stabilitystimulates efforts to enhance efficiency, profitability, and growth in shareholder value. The Committee believes those objectives are factors that have contributedvalue of our company and stockholders’ investments | | Low | | | | | Retirement Benefits | | ● Defined benefit pension plans ● Matching contributions to our financial success overSection 401(k) defined contribution plan accounts, and additional profit-sharing contributions under one of the years.Section 401(k) plans | | During January 2021, new three-year awards were granted toProvides competitive levels of retirement income for our NEOs and other associates
| | Low | | | | | Nonqualified Deferred Compensation Plan | | ● Deferral of up to 80% of base salary and LTIP award payments under the plan ● Earnings (or losses) on voluntary deferrals by plan participants based on deemed investments of participants’ accounts in outside investment funds selected by participants from a menu of hypothetical investment options available under the plan | | Provides an opportunity for plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of portions of their salaries and LTIP award payments | | Low |
| | | | | | 46 | | 2024 Annual Proxy Statement | | |
Compensation Discussion and Analysis | | | | | | | | | |
Compensation Component | | Component Elements | | Purpose | | Component Risk Profile | | | | | Nonqualified Separation from Service Agreements | | ● Cash following separation from service at or after agreed-upon ages ● Death benefit | | Retain and reward the long-term service and loyalty of certain key decision makers, and assure their continued loyalty following a separation from service | | Low | | | | | Perquisites | | ● Maintenance and monitoring of home security systems ● Limited staff services for personal activities ● Limited other personal benefits provided from time to time | | Provide limited personal benefits to certain executive officers in furtherance of our risk management program, for the 2021-2023 Performance Period. As discussed above under the caption “The Process of Evaluating Executive Officer Compensation,” in anticipation of our then-pending merger with CIT, which would dramatically increase our asset sizeofficers’ convenience, and significantly increase the breadth and complexity of our business with the addition of multiple new business lines, and as a step toward future pay competitiveness of our NEOs’ compensation against the larger regional financial institutions with which we would competefrom time-to-time for business and talent following the CIT merger, the Committee approved increases in the percentages of our NEOs’ base salaries used for the determination of their Target Amounts under the 2021-2023 awards (as indicated in the table below). As with previous awards, under the new awards a percentage (the “Award Percentage,” which ranged from 0% to 125%) of the Target Amount of each award, may be earned based on the extent to which the stated TBV+D Growth Rate goals have been achieved at the end of the Performance Period.other specific purposes | | Low |
Cash Compensation Until the initial adoption of our LTIP during 2014, base salaries represented the primary component of our executive compensation program. Since that time, our company has grown significantly but, with certain exceptions based on various considerations, including internal pay equity, increases in our NEOs’ base salaries have been limited, while incentive compensation through performance-based awards under the LTIP and the MPP has become a substantial portion of our NEOs’ annual total compensation. Base Salaries. In making its recommendations regarding 2023 and 2024 base salaries for our NEOs, the Committee considered various factors, including our 2022 and 2023 financial and operating performance and the other factors described below. Consideration of the base salary rates of our Chief Executive Officer, Frank B. Holding, Jr., for 2023 and 2024 took into account the Committee’s evaluation of his performance during 2022 and 2023 (including consideration of our internal financial metrics and the extent of achievement of our corporate objectives), his 2022 and 2023 total compensation, the market and peer analyses (that included larger, regional financial institutions that became our peers following the CIT Merger and, for 2024, the SVB Acquisition) as prepared by Pay Governance, the incentive opportunities provided to him under the LTIP and MPP, and the total compensation of our other NEOs. For 2023, and consistent with its focus on performance-based compensation, the Committee recommended no increase in Mr. Holding’s base salary rate, and for 2024, the Committee recommended a 3.0% increase in his base salary rate. In considering its recommendations for the 2023 and 2024 base salary rates of our other NEOs, the Committee took into account our internal financial metrics and the extent of achievement of our corporate objectives during 2022 and 2023, their 2022 and 2023 total compensation, the market and peer analyses prepared by Pay Governance, their incentive opportunities under the LTIP and MPP, and, in the case of each NEO, the total compensation of our other NEOs and their total compensation as compared to similarly sized, regional financial institutions following the CIT Merger and, for 2024, the SVB Acquisition. Consistent with its focus on performance-based compensation, the Committee recommended no increase in base salary rates for Mr. Nix, Mrs. Bryant, Mr. Bristow, and Mrs. Rupp for 2023, and for 2024, the Committee recommended the following increases in base salary rates: 7.4% for Mr. Nix, 3.6% for Mrs. Bryant and Mr. Bristow, and 4.5% for Mrs. Rupp. The following table shows the base salary rates of our Chief Executive Officer and our other four NEOs, and the percentage increases in their salaries, from 2021 through 2024. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 Base Salary | | | 2022 Base Salary | | | 2023 Base Salary | | | 2024 Base Salary | | | | | % Increase | | | Salary Rate | | | % Increase | | | Salary Rate | | | % Increase | | | Salary Rate | | | % Increase | | | Salary Rate | | | | | | | | | | | | Frank B. Holding, Jr.
Chairman and Chief Executive Officer | | | 2.96 | % | | $ | 1,010,000 | | | | 0.00 | % | | $ | 1,010,000 | | | | 0.00 | % | | $ | 1,010,000 | | | | 3.0 | % | | $ | 1,040,000 | | | | | | | | | | | | Craig L. Nix Chief Financial Officer | | | 6.30 | % | | | 675,000 | | | | 0.00 | % | | | 675,000 | | | | 0.00 | % | | | 675,000 | | | | 7.4 | % | | $ | 725,000 | | | | | | | | | | | | Hope H. Bryant
Vice Chairwoman | | | 3.70 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | 3.6 | % | | $ | 725,000 | | | | | | | | | | | | Peter M. Bristow President | | | 3.70 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | 0.00 | % | | | 700,000 | | | | 3.6 | % | | $ | 725,000 | | | | | | | | | | | | Lorie K. Rupp Chief Risk Officer | | | 10.00 | % | | | 550,000 | | | | 0.00 | % | | | 550,000 | | | | 0.00 | % | | | 550,000 | | | | 4.5 | % | | $ | 575,000 | |
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Compensation Discussion and Analysis Long-Term Incentive Plan (“LTIP”). Since 2014, we have rewarded long-term performance through cash award opportunities that may be earned based on the extent of attainment of performance goals under our LTIP. The LTIP is intended to reinforce the link between the interests of our participating officers and the interests of our company and our stockholders, and to motivate and reward executive officers for their contributions toward achieving our strategic plan’s central objective of building the long-term value of our company and our stockholders’ investments. Cash incentive awards may be granted by the Committee under the LTIP in amounts (“Target Amounts”) which are expressed as percentages of officers’ base salaries. The awards represent opportunities to receive cash payments based on the extent to which performance goals set by the Committee at “Threshold” (i.e., minimum), “Target,” and “Stretch” (i.e., maximum) levels are met or exceeded during stated periods of time (“Performance Periods”). If performance over the Performance Period exceeds the Threshold level but not the Target level, or exceeds the Target level but not the Stretch level, the amount earned by each officer will be interpolated by the Committee. The maximum amount of awards that may be paid under the LTIP to any one participant in any one fiscal year is $10 million. Since its inception, awards generally have been granted under the LTIP each year for overlapping three-year Performance Periods and with performance objectives based on cumulative growth in the tangible book value per share (“TBV”) of our common stock plus cumulative dividends per share (“D”) paid over the applicable Performance Periods (the “TBV+D Growth Rate”). Our TBV on each measurement date is the amount equal to our total assets, minus our intangible assets, minus our liabilities, divided by the aggregate number of outstanding shares of both classes of our common stock. The Committee believes growth in TBV is a key driver of long-term value. As a result, the Committee believes that using growth in TBV as the primary component of the performance goals for our LTIP is consistent with our focus on long-term objectives and our emphasis on financial stability and growth in stockholder value. The Committee believes those objectives are factors that have contributed to our financial success over the years. The TBV+D Growth Rate is determined according to the following formula: | | | | | | | | | | The TBV+D Growth Rate is determined according to the following formula:
(Ending TBV minus Beginning TBV) plus D Beginning TBV | | |
“Beginning TBV” and “Ending TBV” are measured at the beginning and end of the relevant Performance Period and are subject to adjustments the Committee is authorized by the terms of the LTIP to make in order to eliminate, or to spread over several years, the effect of strategic decisions made by the Board during a Performance Period, such as bargain purchase gains and other merger or acquisition-related items, and share repurchases and other items that may have an immediate impact on TBV but which the Board believes will be beneficial to stockholders in future years. For example, the Committee excluded the significant net positive effects on tangible book value of the CIT Merger in 2022 and the SVB Acquisition in 2023 from the calculation of TBV in order to remove the impact of these strategic transactions from the determination of LTIP payments for the Performance Periods covering these years. Had the Committee not made these adjustments, those transactions alone may have maximized awards under the LTIP, and the intended incentive aspect of the LTIP awards for these Performance Periods may not have been realized. During January 2023, the Committee approved the grant to our NEOs and other selected officers of cash-based LTIP performance award opportunities for a new, three-year 2023-2025 Performance Period. Consistent with all previously granted awards, the awards may be earned based on our TBV+D Growth Rate during the Performance Period in comparison to goals established by the Committee. Percentages of our NEOs’ base salaries used for the determination of the Target Amounts of their awards, and the Threshold, Target, and Stretch TBV+D Growth Rate goals of 12%, 30%, and 48%, respectively, included the same increased Target and Stretch goals as were approved for awards granted during 2022. Those goals would result in participants earning 50%, 100%, and 150%, respectively, of the Target Amounts of their awards (the “Award Percentage”), which were the same as the Award Percentages for the awards granted in 2022. The awards granted in 2022 reflected an increase in the Award Percentage for performance at the Stretch level from 125% to 150%. As a result, under both the 2022-2024 and 2023-2025 awards, payment of awards at 100% of the Target Amount would require achievement of a higher TBV+D Growth Rate (30% versus 24%) than for awards prior to 2022, and attainment of the increased Stretch performance goal (48% versus 36%) would result in payment of a higher percentage of the Target Amount than for awards prior to 2022 (150% versus 125%). LTIP awards granted to our NEOs during 2023 are listed in the Grants of Plan-Based Awards table. In granting the 2023 awards, the Committee continued use of a standard form of award agreement first adopted during 2022 that imposes non-solicitation and nondisclosure obligations on participants as conditions to the awards. The non-solicitation obligations cover the term of each participant’s employment with FCB and a period of one year after termination of employment, while the nondisclosure obligations cover all times during and after each participant’s employment with FCB. During the non-solicitation period, other than on behalf of FCB, each participant is generally prohibited from employing or soliciting for employment any associate of FCB who was | | | | | | 48 | | 2024 Annual Proxy Statement | | |
Compensation Discussion and Analysis supervised by or was personally known to the participant, or soliciting the business of any customer or prospective customer with whom the participant had material contact. Subject to customary limitations, the nondisclosure provisions require the participant to maintain the confidentiality of all of FCB’s business information, trade secrets, and data and return all such materials in his or her possession to FCB upon termination of employment. During January 2024, the Committee approved payments for the three-year awards granted during January 2021 for the 2021-2023 Performance Period that ended on December 31, 2023. After making adjustments (which, in the aggregate, reduced the TBV+D Growth Rate) to, among other things, eliminate the significant net positive effects on tangible book value of the CIT Merger during 2022 and the SVB Acquisition during 2023 (which alone may have maximized awards under the LTIP), and to continue spreading over three years the impacts of share repurchases and of intangible assets related to other acquisitions in prior years, the Committee determined that our TBV+D Growth Rate, as so adjusted, for the 2021-2023 Performance Period exceeded the Stretch performance level of 36.0%, and it approved payments to LTIP participants, including our NEOs, at the maximum Award Percentage of 125% of the Target Amounts of the awards. Those payments made to our NEOs are included in the aggregate amounts on the 2023 line of the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and are separately listed in Footnote 4 to that table. A listing of the new awards granted to our NEOs during 2023, and additional information regarding the LTIP and the payments approved by the Committee for the 2021-2023 Performance Period, is provided in the discussion under the caption “EXECUTIVE COMPENSATION — Grants of Plan-Based Awards.” In setting the percentages of our NEOs’ base salary rates as the Target Amounts of awards, the Committee attempts to provide our NEOs with aggregate amounts of salary and incentive opportunities each year that it considers appropriate based on the market and peer analyses of total direct compensation for officers of other companies in similar positions as our NEOs. Since the LTIP was adopted, the percentages of our NEOs’ base salary rates that may be paid at Target levels of performance generally have increased, while, in general, there have been limited increases in our NEOs’ base salaries. As a result, payments of performance-based LTIP awards have become a substantial portion of our NEOs’ total compensation, which aligns with our philosophy of emphasizing and rewarding sustained long-term performance. The following table lists percentages of base salary rates and dollar amounts that could be paid in future years to our NEOs at each performance level under all outstanding LTIP awards they currently hold, including those granted to them in January 2024 for the 2024-2026 Performance Period. | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Performance
Period | | | Target
Level
Percentage
of
Base Pay | | | Potential Payment for Performance at: | | | | Threshold Level (1) | | | Target Level (1) | | | Stretch Level (1) | | | | | | | | | Frank B. Holding, Jr. | | | 2024-2026 | | | | 550 | % | | $ | 2,860,000 | | | $ | 5,720,000 | | | $ | 8,580,000 | | | | | 2023-2025 | | | | 475 | % | | | 2,398,750 | | | | 4,797,500 | | | | 7,196,250 | | | | | 2022-2024 | | | | 475 | % | | | 2,398,750 | | | | 4,797,500 | | | | 7,196,250 | | | | | | | | | Craig L. Nix | | | 2024-2026 | | | | 400 | % | | | 1,450,000 | | | | 2,900,000 | | | | 4,350,000 | | | | | 2023-2025 | | | | 325 | % | | | 1,096,875 | | | | 2,193,750 | | | | 3,290,625 | | | | | 2022-2024 | | | | 325 | % | | | 1,096,875 | | | | 2,193,750 | | | | 3,290,625 | | | | | | | | | Hope H. Bryant | | | 2024-2026 | | | | 460 | % | | | 1,667,500 | | | | 3,335,000 | | | | 5,002,500 | | | | | 2023-2025 | | | | 400 | % | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | 2022-2024 | | | | 400 | % | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | | | | | Peter M. Bristow | | | 2024-2026 | | | | 460 | % | | | 1,667,500 | | | | 3,335,000 | | | | 5,002,500 | | | | | 2023-2025 | | | | 400 | % | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | 2022-2024 | | | | 400 | % | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | | | | | Lorie K. Rupp | | | 2024-2026 | | | | 250 | % | | | 718,750 | | | | 1,437,500 | | | | 2,156,250 | | | | | 2023-2025 | | | | 250 | % | | | 687,500 | | | | 1,375,000 | | | | 2,062,500 | | | | | 2022-2024 | | | | 250 | % | | | 687,500 | | | | 1,375,000 | | | | 2,062,500 | |
| (1) | Performance goals were set for awards for the 2022-2024, 2023-2025, and “Ending TBV” are measured2024-2026 Performance Periods at the beginning and end of the relevant Performance Period and are subject to adjustments the Committee is authorized by the terms of the LTIP to make to eliminate, or to spread over several years, the effect of strategic decisions made by the Board during a Performance Period (such as acquisitions and share repurchases) that may have an immediate impact on TBV but which the Board believes will be beneficial to shareholders in future years. The Threshold, Target and Stretch performance goals set by the Committee for the awards granted to our NEOs during 2021 (TBV+D Growth Rates of 12%, 24% and 36%, respectively) were the same as the goals set for awards granted in 2019 and 2020 and would result in Award Percentages of 50%, 100% and 125%, respectively, of each NEO’s Target Amount. During January 2022, the Committee approved payments for the three-year awards previously granted during January 2019 for the 2019-2021 Performance Period that ended on December 31, 2021. After making adjustments that reduced the TBV+D Growth Rate for the impact of intangible assets related to acquisitions and share repurchases during 2018, 2019 and 2020, the Committee determined that our TBV+D Growth Rate, as so adjusted, for the 2019-2021 Performance Period exceeded the Stretch performance level of 36.0%, and it approved payments to LTIP participants, including our NEOs, at the maximum Award Percentage of 125% of the Target Amounts of the awards. Those payments made to our NEOs are listed on the 2021 line of the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
A listing of the new awards granted to our NEOs during 2021, and additional information regarding the LTIP and the payments approved by the Committee for the 2019-2021 performance period, is provided in the “GRANTS OF PLAN-BASED AWARDS” table and the narrative discussion that follows it under the caption “EXECUTIVE COMPENSATION — Long Term Incentive Plan.”
During January 2022, the Committee also approved the grant to our NEOs and other selected officers of cash-based LTIP performance award opportunities for a new, three-year 2022-2024 Performance Period. Consistent with all previously granted awards, the awards may be earned based on our TBV+D Growth Rate during the Performance Period in comparison to goals established by the Committee. Percentages of our NEOs base salaries used for the determination of the Target Amounts of their awards, and the Threshold TBV+D Growth Rate goallevels of 12%, were the same as for awards granted during 2021. However, to account for the future impact of the CIT merger on the attainability of performance goals, for the 2022-2024 awards the Committee increased30%, and 48%, respectively, which represented higher Target and Stretch TBV+D Growth Rate goals than in years prior to 30%2022.
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Compensation Discussion and Analysis All awards listed in the table are subject to the Clawback Policy described below under the caption “Incentive-Based Compensation Clawback Policy.” Merger Performance Plan (“MPP”). During 2022, the Committee approved the MPP under which eligible executives and other associates of FCB and its affiliates may be offered opportunities to earn awards, payable in cash, based upon attainment of performance objectives related to our mergers and acquisitions. The primary purpose of the MPP is to motivate and reward associates who have significant involvement in and responsibility for post-acquisition processes by offering cash incentives that are dependent on the realization of benefits of mergers and acquisitions to our company and stockholders. During February 2023, the Committee approved performance award opportunities for our NEOs for 2023 in specified “Target” amounts. The awards could be earned based on the attainment of performance objectives related to the CIT Merger, which included the timely achievement of remaining conversion and integration milestones with respect to the operations of CIT and its bank subsidiaries, CIT Bank, N.A., OneWest Bank and Mutual of Omaha Bank, and the continued realization of merger cost savings and synergies, as well as individual performance. The performance objectives were intended to be challenging, but achievable with superior effort at the “Target” level. During July 2023, the Committee approved additional performance award opportunities for our NEOs for 2023 in specified “Threshold,” “Target,” and “Maximum” amounts which could be earned based on the attainment during 2023 of performance objectives related to the SVB Acquisition, including the timely achievement of conversion and integration milestones with respect to the operations of SVB, the realization of cost savings and synergies resulting from that acquisition, and risk management objectives, as well as individual performance. The performance objectives were intended to be challenging, but achievable at the “Threshold” level, with increasing difficulty at the “Target” and “Maximum” levels. MPP awards granted for 2023 are listed in the Grants of Plan-Based Awards table. Under the MPP, the Committee can reduce or eliminate the amount of any award by applying negative discretion, including an award that would otherwise be earned and payable under the terms of the plan. On December 31, 2023, the period covered by the awards ended with respect to both the CIT MPP awards and the SVB MPP awards, and during January 2024, the Committee approved payments to participants based on its assessment of pre-determined performance objectives with respect to the 2023 MPP awards, including integration and conversion milestones, cost savings and synergies, and risk management, as well as individual performance. Each NEO received payment of the Target amount of his or her CIT award and the Maximum amount of his or her award opportunity for the SVB Acquisition. The amounts of those payments made to our NEOs are included in the aggregate amounts listed on the 2023 line of the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and are separately listed in Footnote 4 to that table. During January 2024, the Committee also approved new performance award opportunities under the MPP. For 2024 award opportunities, performance objectives with respect to the CIT Merger include the optimization of merger cost savings and synergies, risk management, individual performance, our overall results, and other related specific objectives; and, with respect to the SVB Acquisition the performance objectives include timely integration achievement, risk management, individual performance, our overall results, and other related specific goals. Additional information regarding the MPP and awards approved under it is contained in the narrative discussion under the caption “EXECUTIVE COMPENSATION — Grants of Plan-Based Awards.” The following table lists the dollar amounts of MPP award opportunities that could be paid to our NEOs for 2024 at each performance level under all outstanding MPP awards they currently hold, which include those granted to them in January 2024 related to the CIT Merger and the SVB Acquisition. | | | | | | | | | | | | | | | | | | | | Future MPP Award Opportunity Amounts | | | Name | | Identification Of Award | | Threshold | | | Target | | | Maximum | | Frank B. Holding, Jr. | | CIT Award for 2024 | | | — | | | $ | 1,010,000 | | | | — | | | | SVB Award for 2024 | | $ | 500,000 | | | | 1,000,000 | | | $ | 1,500,000 | | Craig L. Nix | | CIT Award for 2024 | | | — | | | | 472,500 | | | | — | | | | SVB Award for 2024 | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | Hope H. Bryant | | CIT Award for 2024 | | | — | | | | 490,000 | | | | — | | | | SVB Award for 2024 | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | Peter M. Bristow | | CIT Award for 2024 | | | — | | | | 490,000 | | | | — | | | | SVB Award for 2024 | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | Lorie K. Rupp | | CIT Award for 2024 | | | — | | | | 385,000 | | | | — | | | | SVB Award for 2024 | | | 250,000 | | | | 500,000 | | | | 750,000 | |
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Compensation Discussion and Analysis Bonuses. From time to time the Committee may consider and recommend, and the Boards may approve, payment of a discretionary cash bonus to one or more executive officers based on particular performance or achievement considerations or other factors related to the retention of motivated and talented executive officers. No discretionary bonuses were paid for 2023 to any of our NEOs. Nonqualified Deferred Compensation Plans During February 2021, the Committee recommended, and FCB’s Board approved, an unfunded, nonqualified deferred compensation plan (the “FCB 2021 Plan”) that permits plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of up to 80% of their base salaries and LTIP award payments. FCB credits participants’ deferred amounts with deemed investment gains, and deducts deemed investment losses, based on hypothetical investment options selected by the participants from a menu of investment options which are used only for purposes of measuring the amounts to be added to or deducted from participants’ accounts. Many of those hypothetical investment options are identical to the investment options offered to participants in FCB’s Section 401(k) plans. However, certain investment funds that are available to Section 401(k) plan participants are not options hypothetically available to FCB 2021 Plan participants because those investment funds are only available for the investment of assets held in employer-sponsored ERISA retirement plans, or because they are not available to plans that have smaller aggregate amounts of assets. In the case of those Section 401(k) plan investment options, a similar investment fund option is offered to participants in the FCB 2021 Plan that is equivalent to, but not more favorable than, the Section 401(k) plan option, with the exception of five investment funds available to Section 401(k) plan participants for which no comparable option is available to FCB 2021 Plan participants. The FCB 2021 Plan does not provide for FCB to make any additional or discretionary contributions to participants’ plan accounts. Mr. Nix, Mrs. Bryant, and Mr. Bristow were participants in and deferred compensation under the FCB 2021 Plan during 2023. Mr. Holding and Mrs. Rupp are eligible to participate in the FCB 2021 Plan but have not elected to defer any compensation and do not have account balances under the plan. Also, prior to our merger with FCB-SC during 2014, FCB-SC maintained two unfunded, nonqualified deferred compensation plans (the “FCB-SC Plans”) in which various officers of FCB-SC were participants. In connection with that merger, FCB agreed to assume, pay interest on (at the fixed interest rates provided for in the FCB-SC Plans), and distribute plan participants’ accounts in accordance with the terms of the plans as they existed when the merger was completed. Participants may not make any further deferrals under the FCB-SC Plans, and FCB does not make any additional or discretionary contributions to the accounts of participants in the FCB-SC Plans. Mr. Nix and Mr. Bristow each have accounts under both of the FCB-SC Plans, and a portion of the interest credited to each of their accounts for 2023 was considered to be “above market” under the SEC’s disclosure rules and is included in their amounts listed under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and described in Footnote 6 to that table. Additional information about the above three plans, including amounts deferred by Mr. Nix, Mrs. Bryant, and Mr. Bristow, deemed net investment gains credited to their accounts during 2023 under the FCB 2021 Plan, interest credited to Mr. Nix’s and Mr. Bristow’s FCB-SC Plan accounts for 2023, and their respective year-end account balances under all three plans, is contained in this proxy statement under the caption “EXECUTIVE COMPENSATION – Nonqualified Deferred Compensation.” Retirement Plans We currently maintain the following qualified plans under which retirement benefits are provided to our NEOs and other associates: | ● | | three defined benefit pension plans, including our plan and 48%, respectively, as compared to 24%separate plans previously maintained by FCB-SC and 36% for awards granted during previous years. Those goals would result in Award Percentages of 50%, 100% and 150%, respectively, of the Target Amounts of the awards. As a result, payment of awards at 100% of the Target Amount would require achievement of a higher TBV+D Growth Rate than for past awards, but attainment of the increased Stretch performance goal would result in payment of a higher percentage of the Target Amount than for past awards. In granting the new awards, the Committee modified its standard form of award agreement to impose non-solicitation and nondisclosure obligations on participants as conditions to the awards. The non-solicitation obligations cover the term of each participant’s employment withCIT that FCB and a period of one year after termination of employment, while the nondisclosure obligations cover all times during and after each participant’s employment with FCB. During the non-solicitation period, other than on behalf of FCB, each participant is generally prohibited from employing or soliciting for employment any associate of FCB who was supervised by or was personally known to the participant, or soliciting the business of any customer or prospective customer with whom the participant had material contact. Subject to customary limitations, the nondisclosure provisions require the participantcontinues to maintain the confidentiality of all of FCB’s business information, trade secrets, and data and return all such materials in his or her possession to FCB upon termination of employment. During January 2022, the Committee also recommended, and the Boards approved, an amendment to the LTIP which, for awards granted beginning in 2022, increased the maximum amount payable for any single award from $7 million to $10 million.
In setting the percentages of our NEOs’ base salary rates as the Target Amounts of awards, the Committee attemptsadminister to provide our NEOs with aggregate amounts of salarybenefits to FCB-SC’s and incentive opportunities each year that it considers appropriate based on the market and peer analyses of total direct compensation for officers of other companies in similar positions as our NEOs. Since the LTIP was adopted, the percentages of our NEOs’ base salary rates that may be paid at Target levels of performance generally have increased, while, in general, there have been limited increases in our NEOs’ base salaries. As a result, payments of performance-based LTIP awards have become a substantial portion of our NEOs’ total compensation, which aligns with our philosophy of emphasizing and rewarding sustained long-term performance.
The following table lists percentages of base salary rates and dollar amounts that could be paid in future years to our NEOs at each performance level under all outstanding LTIP awards they currently hold, including those granted to them in January 2022 for the 2022-2024 Performance Period.
| | | | | | | | | | | | | | | | | | | Name | | | | Performance
Period | | Target Level
Percentage of
Base Pay | | Potential Payment for Performance at: | | | | Threshold
Level (1) | | | Target
Level (1) | | | Stretch
Level (1) | | Frank B. Holding, Jr. | | | | 2020-2022 | | 260% | | $ | 1,275,300 | | | $ | 2,550,600 | | | $ | 3,188,250 | | | | 2021-2023 | | 475% | | | 2,398,750 | | | | 4,797,500 | | | | 5,996,875 | | | | 2022-2024 | | 475% | | | 2,398,750 | | | | 4,797,500 | | | | 7,196,250 | | | | | | | | | Craig L. Nix | | | | 2020-2022 | | 215% | | | 682,625 | | | | 1,365,250 | | | | 1,706,563 | | | | 2021-2023 | | 325% | | | 1,096,875 | | | | 2,193,750 | | | | 2,742,188 | | | | 2022-2024 | | 325% | | | 1,096,875 | | | | 2,193,750 | | | | 3,290,625 | | | | | | | | | Hope H. Bryant | | | | 2020-2022 | | 215% | | | 725,625 | | | | 1,451,250 | | | | 1,814,063 | | | | 2021-2023 | | 400% | | | 1,400,000 | | | | 2,800,000 | | | | 3,500,000 | | | | 2022-2024 | | 400% | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | | | | | Peter M. Bristow | | | | 2020-2022 | | 215% | | | 725,625 | | | | 1,451,250 | | | | 1,814,063 | | | | 2021-2023 | | 400% | | | 1,400,000 | | | | 2,800,000 | | | | 3,500,000 | | | | | | | 2022-2024 | | 400% | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | | | | | Lorie K. Rupp | | | | 2020-2022 | | 170% | | | 425,000 | | | | 850,000 | | | | 1,062,500 | | | | 2021-2023 | | 250% | | | 687,500 | | | | 1,375,000 | | | | 1,718,750 | | | | 2022-2024 | | 250% | | | 687,500 | | | | 1,375,000 | | | | 2,062,500 | |
(1) | Performance goals were set for awards for the 2020-2022 and 2021-2023 Performance Periods at Threshold, Target and Stretch TBV+D Growth Rate levels of 12%, 24% and 36%, respectively. Performance goals were set for awards for the 2022-2024 Performance Period at Threshold, Target and Stretch TBV+D Growth Rate levels of 12%, 30% and 48%, respectively.
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All awards listed in the table above are subject to the Committee’s clawback policy described above under the caption “Incentive Compensation Clawback Policy.”
Bonuses. From time to time the Committee may consider and recommend, and the Boards of Directors may approve, payment of a discretionary cash bonus to one or more executive officers based on particular performance or achievement considerations or other factors related to the retention of motivated and talented executive officers.
During January 2022, the Committee recommended, and the Boards approved, the payment of special, merger-related cash bonuses for 2021 to certain of our and the Bank’s executiveCIT’s former officers and associates who are participants in those plans; and
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| ● | | two Section 401(k) defined contribution plans, including each of our NEOs. These “merger success” bonuses were intended to recognize the performance and contributions of and additional demands on our management team during late 2020 and through 2021 in connection with our merger with CIT. The amounts of those bonuses were not based on any formula. Rather, they were recommended by the Committee based on its consideration of individual contributions in the successful completion of the merger and our financial performance. For Mr. Holding specifically, and our other NEOs who have leadership roles in the company, the Committee assessed 2021 performance at an “exceeds” level supporting the merger success bonuses, including their performance in: | ● | | developing integration and conversion plans for the merger for execution upon merger closing;
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| ● | | obtaining required Federal and State regulatory approvals for the merger;
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| ● | | maintaining strong financial performance and associate morale despite the unanticipated delay in receiving final regulatory approvals on December 17, 2021;
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| ● | | overseeing and supporting the successful accomplishment of our 2021 Competitive Path goals related to Customer Relationship, Talent/Culture and Operational Efficiency;
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| ● | | strengthening the leadership team and succession strategies; and
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| ● | | practicing and implementing strong risk management strategies.
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As a result of their efforts and achievements, our transformational merger with CIT was successfully completed on January 3, 2022 and has more than doubled our assets to over $100 billion and significantly increased the breadth and complexity of our business with the addition of multiple new business lines. The Committee believes the merger will contribute to the long-term value of our company and our shareholders’ investments and, as a result, that the payment of those bonuses is aligned with the central objectives of our strategiclegacy plan and our executive compensation philosophy. The amounts of those bonuses paid to our NEOs for 2021 are listed in the Summary Compensation Table in the column under the heading “Bonuses.”
Merger Integration Incentives. The Committee is considering providing future incentive opportunities intended to motivate and reward certain of our executive officers and associates for the achievement of specific merger integration and performance goals.
Non-Qualified Deferred Compensation Plans
During February 2021, the Committee recommended, and FCB’s Board approved, an unfunded, non-qualified deferred compensation planoriginally effective July 1, 1984 (the “FCB Legacy 401(k) Plan”) that permits plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of up to 80% of their base salaries and certain eligible bonuses, including LTIP award payments. FCB credits participants’ deferred amounts with deemed investment returns based on hypothetical investment options selected by the participants from a menu of investment options which are used only for purposes of measuring the amounts to be credited by FCB to participants’ accounts. With the exception of a money-market fund available to FCB Plan participants which, due to operational capabilities of our FCB Plan record keeper, is different from the substantially similar money market fund offered to participants in our Section 401(k) plans, each of the deemed investment options available to participants in the FCB Plan also is available to Section 401(k) plan participants for the investment of their accounts under those plans. The FCB Plan does not provide for FCB to make any additional or discretionary contributions to participants’ plan accounts. Mr. Nix, Mrs. Bryant and Mr. Bristow were participants in the FCB Plan during 2021, but Mr. Nix and Mrs. Bryant elected to defer only a portion of their LTIP award payment each year, and the FCB Plan did not become effective until March 1, 2021, after LTIP payments had been made in February 2021 for the 2018-2020 Performance Period. As a result, neither of them deferred any compensation during 2021. Mr. Bristow also elected to defer a portion of his 2021 salary and is the only NEO who deferred any compensation or had any deemed investment return credited to his account under the FCB Plan during 2021. Mr. Holding and Mrs. Rupp were eligible to participate in the FCB Plan during 2021 but did not elect to defer any compensation.
Also, prior to our merger with FCB-SC during 2014, FCB-SC maintained two unfunded, non-qualified deferred compensation plans (the “FCB-SC Plans”) in which various officers of FCB-SC were participants. In connection with that merger, FCB agreed to assume, accrue interest on (at the fixed interest rates provided for in the FCB-SC Plans), and distribute plan participants’ accounts in accordance with the terms of the plans as they existed when the merger was completed. Participants may not make any further deferrals under the FCB-SC Plans, and FCB does not make any additional or discretionary contributions to the accounts of participants in the FCB-SC Plans. Mr. Nix and Mr. Bristow each have accounts under both of the FCB-SC plans, and a portion of the interest credited to each of their accounts for 2021 was considered to be “above market” under the SEC’s disclosure rules and is included in their amounts listed under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table and described in footnotes to that table.
Additional information about the above three plans, including amounts deferred by Mr. Bristow during 2021 under the FCB Plan, earnings credited to Mr. Nix’s and Mr. Bristow’s accounts for 2021 under all plans, and their respective year-end account balances, is contained in this proxy statement under the caption “EXECUTIVE COMPENSATION – Non-Qualified Deferred Compensation.”
Retirement Plans
We maintain the following qualified plans under which retirement benefits are provided to our NEOs and other associates:
| ● | | two defined benefit pension plans, including our plan and a separate plan previously maintained by FCB-SC that FCB continues to maintain and administer to provide benefits to FCB-SC’s former officers and associates who were participants in that plan;
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| ● | | a legacy Section 401(k) defined contribution plan; and
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| ● | | an enhanced Section 401(k) defined contribution plan.
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During 2007, changes were made to our and FCB-SC’s retirement plan programs that were designed to reduce the volatility of our pension plan expense, while preserving the competitive retirement benefits we provide to our associates. The changes included
the retention of pension and Sectionoriginally effective January 1, 2008 (the “FCB 401(k) plans as they existed at the time the changes were made (now referred to as the “legacy plans”Plan”), and the addition of “enhanced” Section 401(k) plans. Associates of FCB and FCB-SC.
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During 2007, changes were made to our and FCB-SC’s retirement plan programs that were designed to reduce the volatility of our pension plan expense, while preserving the competitive retirement benefits we provide to our associates. The changes included the retention of pension and Section 401(k) plans as they existed at the time the changes were made (the “legacy plans”), and the addition of “enhanced” Section 401(k) plans. Associates of FCB and FCB-SC hired after the changes were made would participate only in the enhanced Section 401(k) plans and would not become participants in the pension plans. Eligible associates hired before the changes made one-time elections to: | ● | | continue to participate in the pension and legacy Section 401(k) plans; or |
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Compensation Discussion and Analysis | ● | | participate only in the enhanced Section 401(k) plans andrather than the legacy Section 401(k) plans, in which case they would not becomecontinue to be participants in the pension plans. Eligible associates hired before the changes made one-time elections to: | ● | | continue to participate in the pension and legacy Section 401(k) plans; or
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| ● | | participate only in the enhanced Section 401(k) plans rather than the legacy Section 401(k) plans, in which case they would continue to be participants in the pension plans, but their pension plan benefit service would be frozen and no further benefits would accrue.
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FCB’s and FCB-SC’s pension plans continue to exist as separate plans, but following the merger, FCB-SC’s legacytheir pension plan benefit service would be frozen and enhanced Section 401(k) plans were merged into tono further benefits would accrue (although under FCB’s corresponding plans. At the time of the change, Mr. Holding, Mr. Nix, Mrs. Bryant and Mr. Bristow were pension plan participants and each elected to remain in the legacy plans. Mrs. Rupp was first employed by FCB after FCB’s pension plan was frozen to new participants and, as a result, participates only in the enhanced Section 401(k) plan.
The following table contains a brief description of our qualified plans.
| | | Benefit
| | Description
| | | FCB and FCB-SC
Defined Benefit Pension Plans
| | Each plan provides a monthly retirement benefit based on a formula that takes into account a participant’s compensation covered by the plan and his or her years of service. | | | Legacy Section 401(k) Defined Contribution Plan
(receive credit for associates hired before the 2007 changes
who elected to continue participation in one of
the defined benefit pension plans)
| | Provides a matching employer contribution to each participant’s account of up to 4.5% of the participant’s eligible compensation (up to a maximum matching contribution of $13,050 for 2021). | | | Enhanced Section 401(k) Defined Contribution Plan
(for associates who are not participants in one of the defined
benefit pension plans or who are participants in but no longer
accrue benefit service under one of the pension plans)
| | Provides a matching employer contribution to each participant’s account of up to 6% of the participant’s eligible compensation (up to a maximum matching contribution of $17,400 for 2021). In addition, a profit sharing contribution is made to each participant’s account equal to 3% of the participant’s eligible compensation (up to a maximum profit sharing contribution of $8,700 for 2021). |
Further information about the terms of the defined benefit pension plans (including the calculation of benefits under the plans), as well as our legacy and enhanced Section 401(k) plans (including the calculation of matching contributions), is contained in this proxy statement under the caption “EXECUTIVE COMPENSATION – Retirement Benefits and Separation from Service Payments.”
Non-Qualified Separation from Service Agreements
FCB has non-qualified separation from service agreements with Mr. Holding, Mr. Nix, Mrs. Bryant and Mr. Bristow and certain of our other executive officers that were entered into before our LTIP was approved in 2014. The agreements provide for payments for a period of 10 years following a separation from service that occurs no earlier than an agreed-upon age. No new agreements have been entered into since our LTIP was approved and awards under it were first granted, and no new agreements currently are contemplated. Mrs. Rupp does not have a separation from service agreement. When originally approved, the agreements were intended to help us retain and reward the long-term service of key officers within our organization, and to assure their continued loyalty following a separation from service. Because payments will be made to the officers only if they continue in FCB’s employment until their specified ages, the Committee believed the agreements were consistent with our objective of encouraging and rewarding long-term service and loyalty. The Committee also believed the additional long-term benefit provided to our NEOs under the agreements enhanced our compensation program by mitigating to some degree its lack at that time of any incentive compensation plan or any equity-based compensation. In return for payments, each officer is obligated to provide limited consultation services to, and not to compete against, FCB during the payment period. Further information about the terms of the agreements is contained in this proxy statement below under the caption “EXECUTIVE COMPENSATION – Retirement Benefits and Separation from Service Payments.”
The amounts of payments provided for in the agreements with our NEOs are calculated as percentages, ranging from approximately 20% to approximately 45%, of the officers’ base salary rates at the time their agreements were approved. In the past, from time to time the agreements have been amended to change the amounts and/or percentages used to calculate payment amounts in order to reflect increases in compensation even if plan benefit service credit is frozen).
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FCB’s, FCB-SC’s and CIT’s pension plans continue to exist as separate plans. FCB-SC’s legacy and enhanced Section 401(k) plans were merged into FCB’s corresponding plans (the FCB Legacy 401(k) Plan and FCB 401(k) Plan, respectively) following that merger. CIT’s Section 401(k) plan remained in effect as a separate plan for CIT’s former employees during 2022, but it was merged into, and participants’ accounts were transferred to, the FCB 401(k) Plan effective January 1, 2023. At the time of the plan changes in 2007, Mr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow were pension plan participants and each elected to remain in the legacy plans. Mrs. Rupp was first employed by FCB after the above plan changes were implemented and does not participate in FCB’s pension plan, but is a participant in the FCB 401(k) Plan. Further information about the terms of the defined benefit pension plans in which NEOs participate (including the calculation of benefits under the plans), as well as our Section 401(k) plans (including the calculation of matching and profit-sharing contributions), is contained in this proxy statement under the caption “EXECUTIVE COMPENSATION – Retirement Benefits and Separation from Service Payments.” Nonqualified Separation from Service Agreements FCB has nonqualified separation from service agreements with Mr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow and certain of our other executive officers that were entered into before our LTIP was approved in 2014. The agreements provide for payments for a period of 10 years following a separation from service that occurs no earlier than an agreed-upon age. No new agreements have been entered into since our LTIP was approved and awards under it were first granted, and no new agreements currently are contemplated. Mrs. Rupp does not have a separation from service agreement. When originally approved, the agreements were intended to help us retain and reward the long-term service of key officers within our organization, and to assure their continued loyalty following a separation from service. Because payments will be made to the officers only if they continue in FCB’s employment until their agreed-upon ages, the Committee believed the agreements were consistent with our objective of encouraging and rewarding long-term service and loyalty. The Committee also believed the additional long-term benefit provided to our NEOs under the agreements enhanced our compensation program by mitigating to some degree its lack at that time of any incentive compensation plan or any equity-based compensation. In return for payments, each officer is obligated to provide consultation services to, and not to compete against, FCB during the payment period. Further information about the terms of the agreements is contained in this proxy statement below under the caption “EXECUTIVE COMPENSATION – Retirement Benefits and Separation from Service Payments.” The amounts of payments provided for in the agreements are calculated as percentages, ranging from approximately 20% to approximately 45%, of the officers’ base salary rates at the time their agreements were approved. In the past, from time to time the agreements have been amended to change the amounts and/or percentages used to calculate payment amounts in order to reflect increases in officers’ base salaries, but there have been no adjustments to agreements with any of our current NEOs since 2011, and no further adjustments to those agreements currently are contemplated. Personal Benefits We do not provide an extensive array of perquisites or personal benefits to our executive officers beyond those benefits (including individual and family group insurance coverages) that are available generally on the same terms to all our associates. However, for the convenience of our NEOs, or under our risk management program, or for other specific purposes, from time to time certain of our NEOs do receive, or are deemed to have received, other benefits that are not directly related to the performance of their duties as executive officers or that otherwise confer a benefit that has a personal aspect. As part of its review of our NEOs’ overall compensation each year, the Committee reviews all personal benefits being provided or proposed to be provided to executive officers, and it recommends to the Boards whether those benefits should be approved or continued. Benefits that certain of our NEOs received, or were deemed to have received, during 2023 included: | ● | | maintenance and monitoring of security systems in Mr. Holding’s, Mr. Nix’s, Mrs. Bryant’s, and Mr. Bristow’s residences under our risk management program, or for other specific purposes, from timeprogram; and |
| ● | | services of staff personnel that we attribute to timeMr. Holding’s personal activities. |
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Compensation Discussion and Analysis Since 2005, our Boards have maintained a policy under which FCB will, as deemed advisable, install, maintain, and monitor security systems in the homes of certain executive officers. The Boards believe the safety of our key executive officers is a business concern, and they approved the policy as part of our risk management program. Under the policy, each officer in whose home FCB installs a security system agrees to purchase that equipment from FCB, at its depreciated book value, following retirement or other termination of employment. FCB periodically replaces or upgrades the security systems in residences as technology improves or the systems age. FCB’s annual expenditures associated with equipment purchases and installation (including replacement), maintenance, and monitoring associated with each officer’s security system is treated as a personal benefit to that officer. We monitor our NEOs’ utilization of the services of administrative personnel. To the extent an associate may, from time to time, provide services that relate to an NEO’s personal activities, we estimate the staff time devoted to those services and treat a portion of our compensation and benefits expense related to the associate as a personal benefit to that NEO. FCB maintains three corporate apartments, including two apartments in a building owned by FCB in Columbia, South Carolina, and one apartment in New York, New York, that was leased during March 2021 in anticipation of the CIT Merger. All of the apartments are available for use by executives for business purposes, with the New York apartment being used during 2023 primarily by our President, Peter Bristow, whose duties overseeing various aspects of our commercial business lines resulting from the CIT Merger and the SVB Acquisition require frequent trips to the New York area to meet with staff. The apartments are provided as lodging for FCB executives during business trips, and we monitor their use. If an apartment is used by an executive for personal purposes, we allocate to the executive, as a personal benefit, our aggregate incremental cost associated with each day of that personal use. There was no personal use of any of the apartments during 2023. In the case of each of our NEOs, we believe our incremental costs associated with personal benefits we provided during 2023 did not exceed an aggregate of $10,000. As a result, the costs of the benefits they received are not included in their 2023 compensation listed in the Summary Compensation Table. Our executive officers also are covered by a directors and officers liability insurance policy paid for by FCB, and we also provide each executive officer with group life, health, medical and other insurance coverages for themselves and their spouses and families on the same terms, including cost, as those coverages are provided to all full-time associates. We do not consider those insurance coverages to be perquisites and the cost of that insurance is not included in the Summary Compensation Table or in our calculation of the incremental cost of benefits provided to our NEOs. Incentive-Based Compensation Clawback Policy During 2023, our Board adopted a “Policy for the Recovery of Erroneously Awarded Compensation” (the “Clawback Policy”) in accordance with the Nasdaq listing standards to supplement our existing clawback policy. The Clawback Policy applies to “Incentive-Based Compensation” provided directly or indirectly to executive officers (including awards the Committee approves under the LTIP and MPP). “Incentive-Based Compensation” is compensation granted, earned, or vested based wholly or in part on the attainment of a financial reporting measure that is determined and presented in accordance with, or derived wholly or in part from, accounting principles used in preparing our financial statements, or that is based on or derived wholly or in part from our stock price or total stockholder return. Under the Clawback Policy, which is administered by the CNG Committee, in the event of an accounting restatement that results from material noncompliance with any financial reporting requirement under the securities laws (including any restatement required to correct an error in previously issued financial statements that is material to those financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period), we will be required to recover “Erroneously Awarded Compensation” from each current or former executive officer in amounts determined as provided in the Policy. “Erroneously Awarded Compensation” means the amount of Incentive-Based Compensation received by an executive officer during the three completed fiscal years immediately preceding the date we are required to prepare an accounting restatement that exceeds the amount he or she otherwise would have received had it been determined based on the restated amounts in the accounting restatement (computed without regard to any taxes paid by the executive officer) or, in the case of Incentive-Based Compensation based on our stock price or total stockholder return where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the accounting restatement, an amount based on a reasonable estimate of the effect of the accounting restatement on our stock price or total stockholder return. Our obligation to recover Erroneously Awarded Compensation will not apply to the extent that the CNG Committee determines that recovery would be impracticable and (i) our direct expenses paid to third parties in enforcing the Clawback Policy would exceed the amount to be recovered (provided that we make a reasonable attempt to recover the Erroneously Awarded Compensation, document our attempt, and provide documentation to Nasdaq), (ii) recovery would violate applicable law adopted prior to November 8, 2022 (provided that we | | | | | | | 2024 Annual Proxy Statement | | 53 |
Compensation Discussion and Analysis obtain an opinion of counsel acceptable to Nasdaq), or (iii) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to our associates, to fail to meet requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code of 1986. The Clawback Policy provides that we will not indemnify any executive officer against the loss of any Erroneously Awarded Compensation. Each executive officer has executed an acknowledgement confirming that he or she is subject to the Clawback Policy during and after their employment by us and will abide by its terms, including the obligation to repay, return, and/or forfeit any Erroneously Awarded Compensation. | | | | | | 54 | | 2024 Annual Proxy Statement | | |
Executive Officers EXECUTIVE OFFICERS We consider our and FCB’s officers who are listed below to be our current executive officers. Each current executive officer serves at the pleasure of the Boards until his or her removal, resignation, retirement, death or disqualification, or until his or her successor is duly elected and qualified. | | | | | | | | Name and Age) | | Member of
Our Executive
Leadership
Team | | | Positions with FCB and Us | | | | Frank B. Holding, Jr. 62 | |
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| | FCB’s and our Chairman since February 2009, and FCB’s and our Chief Executive Officer since January 2008. Previously, Chief Executive Officer of our NEOs do receive, or are deemedformer subsidiary, IronStone Bank, from February 2009 to have received, other benefits that are not directly related to the performance of their duties as executive officers or that otherwise confer a benefit that has a personal aspect. As part of its review of our NEOs’ overall compensation each year, the Committee reviews all personal benefits being provided or proposed to be provided to executive officers,January 2011, and it recommends to the Boards of Directors whether those benefits should be approved or continued. Benefits that certain of our NEOs received, or were deemed to have received, during 2021 included: | ● | | maintenance and monitoring of security systems in Mr. Holding’s, Mr. Nix’s, Mrs. Bryant’s and Mr. Bristow’s residences under our risk management program;
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| ● | | services of staff personnel that we attribute to Mr. Holding’s personal activities; and
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| ● | | use of corporate apartments maintained by FCB primarily for executives traveling for business purposes.
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Since 2005, our Boards of Directors have maintained a policy under which FCB will, as deemed advisable, install, maintain and monitor security systems in the homes of certain executive officers. The Boards believe the safety of our key executive officers is a business concern, and they approved the policy as part of our risk management program. Under the policy, each officer in whose home FCB installs a security system agrees to purchase that equipment from FCB, at its depreciated book value, following retirement or other termination of employment. FCB periodically replaces or upgrades the security systems in NEOs’ residences as technology improves or the systems age. FCB’s annual expenditures associated with the installation (including replacement), maintenance and monitoring of each officer’s security system is treated as a personal benefit to that officer.
We monitor our NEOs’ utilization of the services of administrative personnel. To the extent an associate may, from time to time, provide services that relate to an NEO’s personal activities, we estimate the staff time devoted to those services and treat a portion of our compensation and benefits expense related to the associate as a personal benefit to that NEO, and those expenses are treated as taxable income to the NEO.
FCB maintains three corporate apartments, including two apartments in a building owned by FCB in Columbia, South Carolina, and one apartment in New York, New York, that was leased during March 2021 in anticipation of our merger with CIT. All of the apartments are available for use by executives for business purposes, with the New York apartment being used primarily by our President, Peter Bristow, whose duties planning for and overseeing the integration of various of CIT’s commercial business lines into FCB’s operations require frequent trips to the New York area to meet with staff. The Columbia apartments have not been regularly used by FCB’s executives and, because the closing of the merger with CIT was delayed, the New York apartment was seldom used during 2021. Although the apartments are intended as lodging for FCB executives during business trips, on occasion they have been used for personal purposes. For each day of such personal use, we have allocated to the executive, as a personal benefit, our aggregate incremental cost associated with that personal use.
In the case of each of our NEOs, we believe our incremental costs associated with personal benefits we provided during 2021 did not exceed an aggregate of $10,000. As a result, the costs of the benefits they received are not included in their 2021 compensation listed in the Summary Compensation Table. Our executive officers also are covered by a directors and officers liability insurance policy paid for by FCB, and we also provide each executive officer with group life, health, medical and other insurance coverages for themselves and their spouses and families on the same terms as those coverages are provided to all full-time associates. We do not consider those insurance coverages to be perquisites and the cost of that insurance is not included in the Summary Compensation Table or in our calculation of the incremental cost of benefits provided to our NEOs.
EXECUTIVE OFFICERS
We consider our and FCB’s officers who are listed belowPresident from 1994 to be our current executive officers. Mrs. Alemany and Ms. Harney were appointed to and serve in their executive positions pursuant to letter agreements between them and the Bank which were entered into in connection with our merger with CIT. AdditionalFebruary 2009. Employed by FCB since 1983. For additional information about those agreements is contained in this proxy statement under the caption “EXECUTIVE COMPENSATION–Employment and Compensation Arrangements with Former CIT Officers.Mr. Holding, see “PROPOSAL 1: ELECTION OF DIRECTORS.” Each other officer serves at the pleasure of the Boards until his or her removal, resignation, retirement, death or disqualification, or until his or her successor is duly elected and qualified.
| | | | | Name and Age
| | Member of Our
Executive
Leadership Team
| | Positions with FCB and Us
| | | | Frank B. Holding, Jr.
60
| |  | | FCB’s and our Chairman since February 2009, and FCB’s and our Chief Executive Officer since January 2008. Previously, Chief Executive Officer of our former subsidiary, IronStone Bank, from February 2009 to January 2011, and our and FCB’s President from 1994 to February 2009. Employed by FCB since 1983. | | | | Hope H. Bryant
59
| | | | FCB’s and our Vice Chairwoman since January 2011. Previously, President of our former subsidiary, IronStone Bank, from 2006 until January 2011, and FCB’s Executive Vice President from 2002 until January 2011. Employed by FCB since 1986. | | | | Ellen R. Alemany
66
| | | | FCB’s and our Vice Chairwoman since January 2022. Previously, Chairwoman and Chief Executive Officer of CIT and its subsidiary, CIT Bank, N.A. (2016-2022); Director of CIT (2014-2022); Head of RBS Americas (“RBS”) (management structure that oversees Royal Bank of Scotland’s Americas business, 2007-2013) and Chief Executive Officer of RBS Citizens Financial Group, Inc. (bank holding company subsidiary of RBS, 2008-2013); employed by Citigroup beginning in 1987 where she served as the Chief Executive Officer, Global Transaction Services (2006-2007), Commercial Business Group Executive Vice President (2003-2006), President and Chief Executive Officer of CitiCapital (2001- 2006), and in executive positions in Citigroup’s Global Corporate Bank. Employed by FCB since January 2022. | | | | Peter M. Bristow
56
| | | | FCB’s and our President since November 2014. Previously, Executive Vice President and Chief Operating Officer of First Citizens Bancorporation, Inc. and President and Chief Operating Officer of First Citizens Bank and Trust Company, Inc., Columbia, S.C., from 2001 to 2014. Employed by FCB since 2014. | | | | Craig L. Nix
50
| | | | FCB’s and our Chief Financial Officer since November 2014. Previously, Executive Vice President and Chief Financial Officer of First Citizens Bancorporation, Inc. and First Citizens Bank and Trust Company, Inc., Columbia, S.C., from 2001 to 2014. Employed by FCB since 2014. | | | | Lorie K. Rupp
57
| | | | FCB’s and our Chief Risk Officer since March 2017. Previously, FCB’s and our Chief Accounting Officer from 2013 to 2017; Consulting Director with KPMG, LLP from 2011 to 2013; Senior Vice President of Accounting and Finance of Regions Financial Corporation from 2008 to 2009; and Senior Vice President of Finance of Bank of America from 1990 to 2008. Employed by FCB since 2013. | | | | Jeffery L. Ward
61
| | | | FCB’s and our Chief Strategy Officer since October 2014. Previously, Regional Executive Vice President of FCB from 2004 to 2014. Employed by FCB since 1992. |
| | | | | Name and Age
| | Member of Our
Executive
Leadership Team
| | Positions with FCB and Us
| | | | Marisa J. Harney
64
| | | | FCB’s and our Chief Credit Officer since January 2022. Previously, Executive Vice President (2018-2022) and Chief Credit Officer (2016-2022) of CIT and CIT Bank, N.A.; Chief Risk Officer, GE Capital Americas (2013-2016); Head of Corporate Credit Risk of the Americas, Bank of America (2004-2013); Senior Credit Executive, Credit Suisse First Boston (1997-2004); team leader in Chemical Bank’s and CIBC World Markets’ Media & Telecom groups (1985-1997). Employed by FCB since January 2022. | | | | Matthew G. T. Martin
42
| | | | FCB’s and our Chief Counsel and Corporate Secretary since June 2021. Previously, United States Attorney, Middle District of North Carolina, from 2018 to 2021; Associate General Counsel, Duke Energy Corp (2013 to 2018); and Partner with the law firm of Smith Anderson in Raleigh, N.C. (until 2013). Employed by FCB since June 2021. | | | | West Ludwig
53
| | | Hope H. Bryant 61 | |
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| | FCB’s and our Vice Chairwoman since January 2011. Previously, President of our former subsidiary, IronStone Bank, from 2006 until January 2011, and FCB’s Executive Vice President from 2002 until January 2011. Employed by FCB since 1986. For additional information about Mrs. Bryant, see “PROPOSAL 1: ELECTION OF DIRECTORS.” | | | | Peter M. Bristow 58 | |
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| | FCB’s and our President since November 2014. Previously, Executive Vice President and Chief Operating Officer of First Citizens Bancorporation, Inc. and President and Chief Operating Officer of First Citizens Bank and Trust Company, Inc., Columbia, S.C., from 2001 to 2014. Employed by FCB since 2014. For additional information about Mr. Bristow, see “PROPOSAL 1: ELECTION OF DIRECTORS.” | | | | Craig L. Nix 52 | |
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| | FCB’s and our Chief Financial Officer since November 2014. Previously, Executive Vice President and Chief Financial Officer of First Citizens Bancorporation, Inc., and First Citizens Bank and Trust Company, Inc., Columbia, S.C., from 2001 to 2014. Employed by FCB since 2014. | | | | Gregory L. Smith 59 | |
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| | FCB’s and our Chief Information & Operating Officer since January 2024. Previously, Head of Transformation and Corporate Operations (2022 to 2023), Head of North American Customer Operations (2020-2022), Head of North American Contact Centers and ATM Channels (2019 to 2020), and Head of Shared Services (2014 to 2019), at TD Bank Financial Group, and served in various leadership positions at TD Bank, NA (2010 to 2019). Employed by FCB since January 2024. | | | | Lorie K. Rupp 59 | |
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| | FCB’s and our Chief Risk Officer since March 2017. Previously, FCB’s and our Chief Accounting Officer from 2013 to 2017; Consulting Director, KPMG, LLP, from 2011 to 2013; Senior Vice President of Accounting and Finance, Regions Financial Corporation, from 2008 to 2009; and Senior Vice President of Finance, Bank of America, from 1990 to 2008. Employed by FCB since 2013. | | | | Jeffery L. Ward 63 | |
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| | FCB’s and our Chief Strategy Officer since October 2014. Previously, Regional Executive Vice President of FCB from 2004 to 2014. Employed by FCB since 1992. | | | | Andrew Giangrave 54 | | | | | | FCB’s and our Chief Credit Officer – Commercial Bank, and Executive Vice President and Assistant Secretary of FCB, holding office as an officer since April 2022. Previously, CIT Bank, N.A.’s Senior Vice President from 2006 to 2022. Employed by FCB since January 2022 and, previously, by CIT since 2006. | | | | Randolph R. Martin 61 | | | | | | FCB’s and our Chief Credit Officer – General Bank, and Executive Vice President and Assistant Secretary of FCB, holding office as an officer since June 2022. Previously, FCB’s Executive Director of Consumer and Business Credit from 2018 to 2023 and Director of Private Banking from 2016 to 2017; Executive Director of Commercial Credit Services of Capital One from 2007 to 2016; Director of Private Banking of Chevy Chase Bank from 2001 to 2007; and employed by Wachovia Bank in various sales, credit and loan administration functions from 1986 to 2001. Employed by FCB since 2016. | | | | West Ludwig 55 | | | | | | FCB’s Executive Vice President, and Chief Human Resources Officer, and Assistant Secretary, holding office as an officer since 2018. Previously, Senior Vice President, Human Resources for MZ, Inc. (internet gaming technology) from 2016 to 2018 and Executive Vice President, Human Resources for Fidelity Investments, Inc. (financial services) from 2008 to 2016. Employed by FCB since 2018. |
| | | Matthew G. T. Martin EXECUTIVE COMPENSATION 44
Summary
The Summary Compensation Table below shows
| | | | | | FCB’s and our Chief Counsel and Corporate Secretary, and Senior Vice President of FCB, holding office as an officer since June 2021. Previously, United States Attorney, Middle District of North Carolina, from 2018 to 2021; Associate General Counsel, Duke Energy Corp from 2013 to 2018; and Partner with the cash and certain other compensation paid (or proposed to be paid) or providedlaw firm of Smith Anderson in Raleigh, N.C. until 2013. Employed by FCB to or deferred by our named executive officers listed in the table (our “NEOs”) for 2021, 2020, and 2019.since 2021. | |
| | | | | | | 2024 Annual Proxy Statement | | 55 |
Executive Compensation EXECUTIVE COMPENSATION Summary The Summary Compensation Table below shows the cash and certain other compensation paid or provided by FCB to or deferred by our named executive officers listed in the table (our “NEOs”) for 2023, 2022, and 2021. Our NEOs also serve as executive officers of FCB. They are compensated by FCB for their services as its officers, and they receive no separate salaries or other compensation from us. All of our NEOs below are employed on an “at will” basis and serve in their positions at the pleasure of our Board of Directors, and none of them has an employment agreement with us or FCB. SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and
Principal Position
During 2023 | | Year | | | Salary (2) | | | Bonus (3) | | | Stock Awards | | | Non-Equity Incentive Plan Compensation (2)(4) | | | Change in Pension Value and
Nonqualified
Deferred
Compensation Earnings (5)(6) | | | All Other Compensation (7) | | | Total | | | | | | | | | | | | Frank B. Holding, Jr. (1) Chairman and Chief Executive Officer | | | 2023 | | | $ | 1,010,000 | | | $ | -0- | | | $ | -0- | | | $ | 8,506,875 | | | $ | 429,578 | | | $ | 14,850 | | | $ | 9,961,303 | | | | | 2022 | | | | 1,010,000 | | | | -0- | | | | -0- | | | | 7,008,250 | | | | -0- | | | | 13,725 | | | | 8,031,975 | | | | | 2021 | | | | 1,010,000 | | | | 1,500,000 | | | | -0- | | | | 3,046,365 | | | | 60,063 | | | | 13,050 | | | | 5,629,478 | | | | | | | | | | | | Craig L. Nix Chief Financial Officer | | | 2023 | | | | 675,000 | | | | -0- | | | | -0- | | | | 4,214,688 | | | | 197,416 | | | | 14,850 | | | | 5,101,954 | | | | | 2022 | | | | 675,000 | | | | -0- | | | | -0- | | | | 3,216,563 | | | | 21,003 | | | | 13,725 | | | | 3,926,291 | | | | | 2021 | | | | 675,000 | | | | 575,000 | | | | -0- | | | | 1,606,500 | | | | 23,019 | | | | 13,050 | | | | 2,892,569 | | | | | | | | | | | | Hope H. Bryant (1) Vice Chairwoman | | | 2023 | | | | 700,000 | | | | -0- | | | | -0- | | | | 4,990,000 | | | | 337,788 | | | | 14,850 | | | | 6,042,638 | | | | | 2022 | | | | 700,000 | | | | -0- | | | | -0- | | | | 3,994,063 | | | | -0- | | | | 13,725 | | | | 4,707,788 | | | | | 2021 | | | | 700,000 | | | | 900,000 | | | | -0- | | | | 1,731,188 | | | | 54,538 | | | | 13,050 | | | | 3,398,776 | | | | | | | | | | | | Peter M. Bristow (1) President | | | 2023 | | | | 700,000 | | | | -0- | | | | -0- | | | | 5,190,000 | | | | 322,227 | | | | 14,850 | | | | 6,227,077 | | | | | 2022 | | | | 700,000 | | | | -0- | | | | -0- | | | | 3,994,063 | | | | 40,847 | | | | 13,725 | | | | 4,748,635 | | | | | 2021 | | | | 700,000 | | | | 900,000 | | | | -0- | | | | 1,731,188 | | | | 65,503 | | | | 13,050 | | | | 3,409,741 | | | | | | | | | | | | Lorie K. Rupp Chief Risk Officer | | | 2023 | | | | 550,000 | | | | -0- | | | | -0- | | | | 2,853,750 | | | | -0- | | | | 29,700 | | | | 3,433,450 | | | | | 2022 | | | | 550,000 | | | | -0- | | | | -0- | | | | 2,094,500 | | | | -0- | | | | 27,450 | | | | 2,671,950 | | | | | 2021 | | | | 550,000 | | | | 525,000 | | | | -0- | | | | 670,313 | | | | -0- | | | | 26,100 | | | | 2,466,660 | |
| (1) | Mr. Holding, Mrs. Bryant, and Mr. Bristow each served as a member of the Boards during each year, but they received no additional compensation for their services as its officers,directors. |
| (2) | Salary and they receive no separate salaries or other compensation from us. Each of our NEOs is employed on an “at will” basis and they serve in their positions atNon-Equity Incentive Plan Compensation amounts include the pleasure of our Board of Directors, and none of them has an employment agreement with us or FCB. No stock options or grants or other equity awards have been granted toportions, if any, of each officer’s base salary and non-equity incentive plan compensation paid by FCB that were deferred at each officer’s election under our NEOs, nor are there any arrangementsSection 401(k) plans and, in the case of Mr. Nix, Mrs. Bryant, and Mr. Bristow, under which payments would be madethe FCB 2021 Plan. |
| (3) | Bonus amounts shown for 2021 reflect discretionary “merger success” bonuses paid to our NEOs, orthem in connection with the vesting of any of our NEOs’ benefits would be accelerated, upon a change in control of our company or FCB.CIT Merger. SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position During 2021 | | | | Year | | Salary (3) | | Bonus (4) | | Non-Equity
Incentive Plan
Compensation (5) | | Change in
Pension Value
and
Non-qualified
Deferred
Compensation
Earnings (6) | | All Other
Compensation (7) | | Total | | | | | | | | | | Frank B. Holding, Jr. (1) | | | | | | 2021 | | | | $ | 1,010,000 | | | | $ | 1,500,000 | | | | $ | 3,046,365 | | | | $ | 60,063 | | | | $ | 13,050 | | | | $ | 5,629,478 | | | | | | | | | | | Chairman and | | | | | | 2020 | | | | | 977,525 | | | | | -0- | | | | | 2,865,000 | | | | | 581,100 | | | | | 12,825 | | | | | 4,436,450 | | | | | | | | | | | Chief Executive Officer | | | | | | 2019 | | | | | 964,075 | | | | | -0- | | | | | 2,327,813 | | | | | 719,854 | | | | | 12,600 | | | | | 4,024,342 | | | | | | | | | | | | | | | | | 2021 | | | | $ | 675,000 | | | | $ | 575,000 | | | | $ | 1,606,500 | | | | $ | 23,019 | | | | $ | 13,050 | | | | $ | 2,892,569 | | | | | | | | | | | Craig L. Nix | | | | | | 2020 | | | | | 629,250 | | | | | -0- | | | | | 1,500,000 | | | | | 312,185 | | | | | 12,825 | | | | | 2,454,260 | | | | | | | | | | | Chief Financial Officer | | | | | | 2019 | | | | | 609,000 | | | | | -0- | | | | | 1,125,000 | | | | | 342,375 | | | | | 12,600 | | | | | 2,088,975 | | | | | | | | | | | | | | | | | 2021 | | | | $ | 700,000 | | | | $ | 900,000 | | | | $ | 1,731,188 | | | | $ | 54,538 | | | | $ | 13,050 | | | | $ | 3,398,776 | | | | | | | | | | | Hope H. Bryant (1) | | | | | | 2020 | | | | | 671,125 | | | | | -0- | | | | | 1,625,000 | | | | | 426,481 | | | | | 12,825 | | | | | 2,735,431 | | | | | | | | | | | Vice Chairwoman | | | | | | 2019 | | | | | 657,125 | | | | | -0- | | | | | 1,300,000 | | | | | 513,445 | | | | | 12,600 | | | | | 2,483,170 | | | | | | | | | | | | | | | | | 2021 | | | | $ | 700,000 | | | | $ | 900,000 | | | | $ | 1,731,188 | | | | $ | 65,503 | | | | $ | 13,050 | | | | $ | 3,409,741 | | | | | | | | | | | Peter M. Bristow (1) | | | | | | 2020 | | | | | 671,125 | | | | | -0- | | | | | 1,625,000 | | | | | 424,684 | | | | | 12,825 | | | | | 2,733,634 | | | | | | | | | | | President | | | | | | 2019 | | | | | 657,125 | | | | | -0- | | | | | 1,300,000 | | | | | 496,935 | | | | | 12,600 | | | | | 2,466,660 | | | | | | | | | | | Lorie K. Rupp (2) Chief Risk Officer | | | | | | 2021 | | | | $ | 550,000 | | | | $ | 525,000 | | | | $ | 670,313 | | | | $ | -0- | | | | $ | 26,100 | | | | $ | 1,771,413 | |
(1) | Mr. Holding, Mrs. Bryant and Mr. Bristow each served as a member of our and FCB’s Boards of Directors during each year, but they received no additional compensation for their services as directors.
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(2) | Mrs. Rupp became an NEO for the first time for 2021.
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(3) | Salary amounts include the portion of each officer’s base salary paid by FCB that was deferred at the officer’s election under our Section 401(k) plans and, in the case of Mr. Bristow for 2021, under FCB’s non-qualified deferred compensation plan.
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(4) | Reflects discretionary “merger success” bonuses paid for 2021 to the NEOs during February 2022 in connection with our transformational merger with CIT which has more than doubled our assets to over $100 billion. Additional information about the merger success bonuses is contained in the discussion under the heading “COMPENSATION DISCUSSIONAND ANALYSIS.”
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| (4) | Reflects the aggregate of amounts paid to NEOs (i) for each year with respect to awards under FCB’s LTIP, as described in the narrative discussion under the caption “Long-Term Incentive Plan.” |
(6) | Amounts in this column consist of two components, including:
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| ● | | “Change in Pension Value,” which represents the net aggregate amount of the increase, if any, for each year in (i) the actuarial present value of, for officers who are pension plan participants, those officers’ accumulated benefits under defined benefit pension plans, and (ii) for officers who are parties to separation from service agreements with FCB, the present value of monthly payments that would be made under those agreements to the officers in the future for a period of 10 years following their separation from service at agreed-upon ages; and
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| ● | | in the case of Mr. Nix and Mr. Bristow only, “Non-qualified Deferred Compensation Earnings,” which represent amounts of interest paid on non-qualified deferred compensation that is considered to be “above market” under the SEC’s disclosure rules.
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“Change in Pension Value” amounts do not represent payments actually received by officers. As further described in the narrative discussion under the caption “Retirement Benefits“Long-Term Incentive Plan (‘LTIP’)” and Separation from Service Payments,(ii) for 2023 and 2022 only, with respect to award opportunities under FCB’s MPP as described in the narrative discussion under the caption “Merger Performance Plan (‘MPP’).” The following table reflects amounts paid to each NEO, under each plan for 2023.
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| | | | | | | | | | |
Plan | | Frank B. Holding, Jr. | | Craig L. Nix | | Hope H. Bryant | | Peter M. Bristow | | Lorie K. Rupp | LTIP | | $ 5,996,875 | | $ 2,742,188 | | $ 3,500,000 | | $ 3,500,000 | | $ 1,718,750 | MPP (CIT awards) (a) | | 1,010,000 | | 472,500 | | 490,000 | | 690,000 | | 385,000 | MPP (SVB awards) (b) | | 1,500,000 | | 1,000,000 | | 1,000,000 | | 1,000,000 | | 750,000 |
| (a) | Reflects payments made with respect to the MPP awards for 2023 described in the Grants of Plan Based Awards table below related to the CIT Merger. |
| (b) | Reflects payments made with respect to the MPP awards for 2023 described in the Grants of Plan Based Awards table below related to the SVB Acquisition. |
| (5) | Amounts in this column consist of two components, including: |
| ● | | “Change in Pension Value,” which represents the net aggregate amount of the increase, if any, for each year we determinein (i) for officers who are pension plan participants, the actuarial present valuesvalue of those officers’ accumulated benefits and future payments under thedefined benefit pension plans, and (ii) for officers who are parties to separation from service agreements aswith FCB, the present value of December 31 in order to reflect the amounts of our future obligationsmonthly payments that would be made under those agreements to the named officers underin the plansfuture for a period of 10 years following their separation from service at agreed-upon ages; and those agreements in our consolidated financial statements. Future payments are projected based on a number of assumptions, including assumptions regarding future |
| ● | | events (including, in the case of the pension plans, mortality assumptions),Mr. Nix and we discount the projected future payments to present values using a rateMr. Bristow only, “Nonqualified Deferred Compensation Earnings,” which, as described in Footnote 6 below, represent amounts of interest calculated by a third party basedpaid on a theoretical portfolio of high quality corporate bondsnonqualified deferred compensation that wouldis considered to be sufficient to provide for projected payments“above market” under the SEC’s disclosure rules.
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“Change in Pension Value” amounts do not represent payments actually received by NEOs. As further described in the narrative discussion under the caption “Retirement Benefits and Separation from Service Payments,” each year we determine present values of benefits and future payments under the pension plans and agreements. Under financial and pension accounting principles, those assumptions and the discount rates change from time to time. In general, the present value of an officer’s future payments increases as the officer grows older and the time before the commencement of those payments decreases. The present values also increase if the discount rate used in the calculation decreases from one year to the next, and they decrease if the discount rate increases. Changes in the other assumptions we use also can result in increases or decreases in present values. The discount rates used for calculating the present values for each year covered in the table below were 3.04% for 2021, 2.76% for 2020, and 3.46% for 2019. For 2021, present values increased by a lesser amount than in prior years, or, in the case of separation from service agreements, decreased, resulting primarily from an increase in the discount rate used in determining present values (as compared to the rate used for the prior year), offset somewhat by a one-year decrease in the time before commencement of payments. For each of 2020 and 2019, aggregate present values at December 31 increased as compared to the amounts at December 31 of the preceding year, resulting primarily from a decrease in the discount rates used in determining present values (as compared to the rates used for 2019 and 2018), combined with a one-year decrease in the time before commencement of payments. Present value amounts could increase or decrease in future years if discount rates decrease or increase or there are changes in other assumptions. The separate increases or decreases for each officer under the pension plans and the separation from service agreements for 2021, 2020, and 2019 are listed in the following table. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | F. B.
Holding, Jr. | | C. L.
Nix | | H. H.
Bryant | | P. M.
Bristow | | L. K.
Rupp (a) | 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of
accumulated benefits under pension plan | | | $ | 63,624 | | | | $ | 21,434 | | | | $ | 60,926 | | | | $ | 42,371 | | | | | (b) | | Increase (decrease) in present value of
future monthly payments under separation from service agreements | | | | (3,561 | ) | | | | (17,770 | ) | | | | (6,388 | ) | | | | (14,510 | ) | | | | (b) | | Aggregate increase (decrease) | | | $ | 60,063 | | | | $ | 3,664 | | | | $ | 54,538 | | | | $ | 27,861 | | | | | (b) | | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of
accumulated benefits under pension plan | | | $ | 270,262 | | | | $ | 191,328 | | | | $ | 299,648 | | | | $ | 249,288 | | | | | — | | Increase (decrease) in present value of
future monthly payments under separation from service agreements | | | | 310,838 | | | | | 103,021 | | | | | 126,833 | | | | | 140,708 | | | | | — | | Aggregate increase (decrease) | | | $ | 581,100 | | | | $ | 294,349 | | | | $ | 426,481 | | | | $ | 389,996 | | | | | — | | 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of
accumulated benefits under pension plan | | | $ | 346,491 | | | | $ | 213,719 | | | | $ | 363,768 | | | | $ | 303,653 | | | | | — | | Increase (decrease) in present value of
future monthly payments under separation from service agreements | | | | 373,363 | | | | | 112,225 | | | | | 149,677 | | | | | 161,326 | | | | | — | | Aggregate increase (decrease) | | | $ | 719,854 | | | | $ | 325,944 | | | | $ | 513,445 | | | | $ | 464,979 | | | | | — | | (a) Mrs. Rupp became an NEO for the first time for 2021. (b) Mrs. Rupp is not a participant in a pension plan and is not a party to a separation from service agreement. | |
| | | | | | 56 | | 2024 Annual Proxy Statement | | |
Executive Compensation service agreements as of December 31 in order to reflect the amounts of our future obligations to the NEOs under the plans and those agreements in our consolidated financial statements. Future payments are projected based on a number of assumptions, including assumptions regarding future events (including, in the case of the pension plans, mortality assumptions), and we discount the projected future payments to present values using a rate of interest calculated by a third party based on a theoretical portfolio of high quality corporate bonds that would be sufficient to provide for projected payments under the pension plans and agreements. Under financial and pension accounting principles, those assumptions and the discount rates change from time to time. In general, the present value of an officer’s future payments increases as the officer grows older and the time before the commencement of those payments decreases. The present values also increase if the discount rate used in the calculation decreases from one year to the next, and they decrease if the discount rate increases. Changes in the other assumptions we use also can result in increases or decreases in present values. The discount rates used for calculating the present values for each year covered in the table below were: for 2023, 5.16% for the pension plans and 4.60% for the separation from service agreements; for 2022, 5.57% for the pension plans and 4.73% for the separation from service agreements; and 3.04% for both plans for 2021. For 2023, aggregate present values at December 31 increased as compared to the amounts at December 31 of the prior year resulting primarily from the decrease in the discount rates used in determining present values (as compared to the rates used for 2022), as well as from the one-year decrease in the time remaining before the commencement of payments. For 2022, the aggregate present values at December 31 decreased as compared to the amounts at December 31 of the prior year resulting primarily from an increase in the discount rates used in determining present values (as compared to the rates used for 2021), offset somewhat by the one-year decrease in the time remaining before the commencement of payments. As provided in the SEC’s disclosure rules, the net decrease in aggregate present values for each NEO for 2022 is reflected as $-0-in the Summary Compensation Table. For 2021, aggregate present values at December 31 increased by lesser amounts than in prior years, or, in the case of separation from service agreements, decreased, resulting primarily from an increase in the discount rates used in determining present values (as compared to the rate used for 2020), offset somewhat by a one-year decrease in the time before commencement of payments. Present value amounts could increase or decrease in future years if discount rates decrease or increase or there are changes in other assumptions. The separate increases or decreases for 2023, 2022, and 2021 for each NEO who participates in a pension plan and the separation from service agreements are listed in the following table. Mrs. Rupp is not a participant in a pension plan and does not have a separation from service agreement. | | | | | | | | | | | | | | | | | | | | Frank B. Holding, Jr. | | | Craig L. Nix | | | Hope H. Bryant | | | Peter M. Bristow | | 2023 | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of accumulated benefits under pension plan | | $ | 277,630 | | | $ | 142,071 | | | $ | 281,013 | | | $ | 222,847 | | Increase (decrease) in present value of future monthly payments under separation from service agreements | | | 151,948 | | | | 32,553 | | | | 56,775 | | | | 55,054 | | Aggregate increase (decrease) | | | 429,578 | | | | 174,624 | | | | 337,788 | | | | 277,901 | | 2022 | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of accumulated benefits under pension plan | | $ | (433,317 | ) | | $ | (355,382 | ) | | $ | (489,873 | ) | | $ | (441,347 | ) | Increase (decrease) in present value of future monthly payments under separation from service agreements | | | (340,295 | ) | | | (152,171 | ) | | | (152,438 | ) | | | (187,793 | ) | Aggregate increase (decrease) | | $ | (773,612 | ) | | $ | (507,553 | ) | | $ | (642,311 | ) | | $ | (629,140 | ) | 2021 | | | | | | | | | | | | | | | | | Increase (decrease) in actuarial present value of accumulated benefits under pension plan | | $ | 63,624 | | | $ | 21,434 | | | $ | 60,926 | | | $ | 42,371 | | Increase (decrease) in present value of future monthly payments under separation from service agreements | | | (3,561 | ) | | | (17,770 | ) | | | (6,388 | ) | | | (14,510 | ) | Aggregate increase (decrease) | | $ | 60,063 | | | $ | 3,664 | | | $ | 54,538 | | | $ | 27,861 | |
| (6) | In addition to their “Changes“Change in Pension Values,Value,” the amounts listed in this column of the Summary Compensation Table for 2021, 2020,2023, 2022, and 20192021 for Mr. Nix and Mr. Bristow include “Non-qualified“Nonqualified Deferred Compensation Earnings” which represent portions of the interest accrued by FCB onto their accounts each year under non-qualifiednonqualified deferred compensation plans it assumed from FCB-SC in 2014 that is considered to be “above market” (for 2021, $19,3552023, $22,792 for Mr. Nix, and $37,642$44,326 for Mr. Bristow). Those “above market” amounts equal the portions of total interest FCB credited to each officer’s accounts each year at the fixed interest rate provided for in the plans that exceed the amounts that would have been accrued at rates equal to 120% of the Internal Revenue Service’s “applicable federal rates” for the months during which the actual fixed accrual rate was set. Interest credited to their accounts that is not considered to be “above market” is not included in the table. None of our other NEOs had any “Non-qualified“Nonqualified Deferred Compensation Earnings” for 2021,any year in the table, and none are included in their amounts listed for any year in this column. Additional information regarding our NEOs’ participation in non-qualifiednonqualified deferred compensation plans during 20212023 is contained in the narrative discussion under the caption “Non-Qualified“Nonqualified Deferred Compensation.” |
| (7) | The following table describes each officer’s “Other Compensation” for 2023. |
(7) | | | | | | | | | | | | | | | | | | | | | | Description | | Frank B. Holding, Jr. | | | Craig L. Nix | | | Hope H. Bryant | | | Peter M. Bristow | | | Lorie K. Rupp | | FCB’s matching contributions under Section 401(k) plans (a) | | $ | 14,850 | | | $ | 14,850 | | | $ | 14,850 | | | $ | 14,850 | | | $ | 19,800 | | FCB’s additional profit-sharing contributions under FCB 401(k) Plan (a) | | | — | | | | — | | | | — | | | | — | | | | 9,900 | | Estimates of FCB’s aggregate incremental costs related to personal benefits (b) | | | — | | | | — | | | | — | | | | — | | | | — | | Total Other Compensation | | $ | 14,850 | | | $ | 14,850 | | | $ | 14,850 | | | $ | 14,850 | | | $ | 29,700 | |
| (a) | The following table describes each officer’s “Other Compensation” for 2021.
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| | | | | | | | | | | | | | | | | | | | | | | | | | Description | | F. B.
Holding, Jr. | | C. L.
Nix | | H. H
Bryant | | P. M.
Bristow | | L. K.
Rupp | FCB’s matching contributions under our legacy and enhanced Section 401(k) plans (a) | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 17,400 | | FCB’s additional profit sharing contributions under our enhanced Section 401(k) plan (a) | | | | — | | | | | — | | | | | — | | | | | — | | | | | 8,700 | | Estimates of FCB’s incremental costs related to personal benefits (b) | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | Total Other Compensation | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 13,050 | | | | $ | 26,100 | |
| (a) | Mr. Holding, Mr. Nix, Mrs. Bryant and Mr. Bristow participate in our legacy Section 401(k) plan and, as a result, received FCB’s matching contributions to their accounts during 2021 but did not receive additional profit sharing contributions. Mrs. Rupp participates in our enhanced Section 401(k) plan and received a profit sharing contribution to her account for 2021 in addition to FCB’s matching contributions under that plan. The legacy and enhanced plansMr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow participate in the FCB Legacy 401(k) Plan and, as a result, received FCB’s matching contributions to their accounts during 2023 but did not receive additional profit-sharing contributions. Mrs. Rupp participates in the FCB 401(k) Plan and received a profit-sharing contribution to her account for 2023 in addition to FCB’s matching contributions. The FCB Legacy 401(k) Plan and FCB 401(k) Plan are described below under the caption “Section 401(k) Plans.”
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| (b) | From time to time our executive officers, including our NEOs in the table above, receive or may be deemed to have received various personal benefits from FCB. We believe FCB’s aggregate incremental cost associated with personal benefits provided during 2021 to each of our NEOs did not exceed $10,000 and, for that reason, no amount for personal benefits is included for any of them in the table above or in the “All Other Compensation” column in the Summary Compensation Table. FCB also provides each of our executive officers with group life, health, medical and other insurance coverages for themselves and their
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Executive Compensation | | (b) | From time to time our executive officers, including our NEOs, receive or may be deemed to have received various personal benefits from FCB. We believe FCB’s aggregate incremental cost associated with personal benefits provided during 2023 to each of our NEOs listed in the table did not exceed $10,000 and, for that reason, no amount for personal benefits is included for any of them in the table above or in the “All Other Compensation” column in the Summary Compensation Table. FCB also provides each of our executive officers with group life, health, medical, and other insurance coverages for themselves and their spouses and families on the same terms as those coverages are provided to all full-time employees. The cost of that insurance is not included in the table. Additional information regarding personal benefits is contained in the discussion under the heading “COMPENSATION DISCUSSIONAND ANALYSIS.” |
Long-Term Incentive Plan (“LTIP”)
Under FCB’s LTIP, eligible associates of FCB and its affiliates may be offered opportunities to earn awards stated as percentages of their base salary rates, and payable in cash, based upon attainment of objective performance goals. The LTIP is intended to promote a closer alignment of the participants’ interests with our corporate interests and the long-term interests of our shareholders, and to encourage participants’ efforts to enhance our efficiency, profitability, growth and value. Each year our Compensation, Nominations and Governance Committee considers the grant of new awards under the LTIP. Awards granted each year have provided for payments based on performance goals measured over stated periods of time (“Performance Periods”) which generally have been specified as three calendar years. As reflected in the table below, during January 2021, the Committee approved the grant of awards to each of our NEOs under the LTIP for a new, three-year 2021-2023 Performance Period.
GRANTS OF PLAN-BASED AWARDS
| | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Grant
Date | | Performance
Period | | Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards (1) | | | Threshold | | Target | | Stretch | Frank B. Holding, Jr. | | | | 01/26/2021 | | | | | 2021-2023 | | | | $ | 2,398,750 | | | | $ | 4,797,500 | | | | $ | 5,996,875 | | | | | | | | Craig L. Nix | | | | 01/26/2021 | | | | | 2021-2023 | | | | | 1,096,875 | | | | | 2,193,750 | | | | | 2,742,188 | | Hope H. Bryant | | | | 01/26/2021 | | | | | 2021-2023 | | | | | 1,400,000 | | | | | 2,800,000 | | | | | 3,500,000 | | | | | | | | Peter M. Bristow | | | | 01/26/2021 | | | | | 2021-2023 | | | | | 1,400,000 | | | | | 2,800,000 | | | | | 3,500,000 | | Lorie K. Rupp | | | | 01/26/2021 | | | | | 2021-2023 | | | | | 687,500 | | | | | 1,375,000 | | | | | 1,718,750 | |
(1) | “Threshold,” “Target” and “Stretch” amounts reflect the amounts of awards that may be paid to each NEO at “Threshold” (i.e., minimum), “Target” and “Stretch” (i.e., maximum) levels of performance during the 2021-2023 Performance Period in relation to goals set by the Committee for the awards. Each NEO’s award specified an amount payable at the Target level of performance (“Target Amount”) which was determined based on a percentage of the officer’s 2021 base salary rate as follows: Mr. Holding – 475%; Mr. Nix – 325%; Mrs. Bryant – 400%; Mr. Bristow – 400%; and Mrs. Rupp – 250%. At the end of the Performance Period, payments may be made to the officers equal to 50%, 100% and 125% of their Target Amounts for performance at the Threshold, Target and Stretch levels, respectively. If performance over the Performance Period exceeds the Threshold level but not the Target level, or exceeds the Target level but not the Stretch level, the amount earned by each NEO will be interpolated by the Committee. Stretch amounts are the maximum amounts that may be paid for the 2021-2023 Performance Period.
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The LTIP is administered by our Compensation, Nominations and Governance Committee, which selects associates to whom awards will be granted. All salaried associates who are considered to be in the “Executive Career Level,” as defined by FCB’s Career Framework, are eligible to participate in the LTIP.
In general, when the Committee grants awards under the LTIP, it establishes the Performance Period during which performance will be measured, establishes one or more specific written performance objectives and specific goals for each participant and/or for each group of participants for that Performance Period, and assigns to each participant a target award (a “Target Amount”) for the Performance Period. Performance Periods are coincident with one or more of our fiscal years, or any portions thereof, and to date they have been overlapping. Each participant may earn a percentage set by the Committee at the time of grant (the “Award Percentage,” which may exceed or be less than 100%) of his or her Target Amount based on the extent of attainment of the performance goals established by the Committee for the relevant Performance Period. However, for awards granted prior to 2022, the maximum amount that may be paid to any one participant in any one year under the LTIP is $7 million. During January 2022, the Committee recommended, and the Boards approved, an amendment to the LTIP to increase the maximum payment amount to $10 million for awards granted beginning in 2022. The Committee also modified its standard form of award agreement to impose non-solicitation and nondisclosure obligations on participants as conditions to awards beginning in 2022. The non-solicitation obligations cover the term of each participant’s employment with FCB and a period of one year after termination of employment, while the nondisclosure obligations cover all times during and after each participant’s employment with FCB. During the non-solicitation period, other than on behalf of FCB, each participant will generally be prohibited from employing or soliciting for employment any associate of FCB who was supervised by or was personally known to the participant, or soliciting the business of any customer or prospective customer with whom the participant had material contact. Subject to customary limitations, the nondisclosure provisions will require the participant to maintain the confidentiality of all of FCB’s business information, trade secrets, and data and return all such materials in his or her possession to FCB upon termination of employment.
Performance objectives under the LTIP may be based on individual, business unit/function, and/or corporate performance, or any combination thereof. If a participant’s performance goals are based on a combination of performance criteria, the Committee may weight the importance of each type of performance that applies to the participant by assigning a percentage to it. The Committee also may apply other or non-objective performance criteria for participants to the extent permitted, or not prohibited, by applicable law and regulations. The targeted levels of performance with respect to performance objectives may be established at such levels and on such terms as the Committee in its discretion may determine, including but not limited to on an absolute basis, in relation to performance in a prior Performance Period, and/or relative to one or more peer group companies or indices, or any combination thereof, and performance objectives may be calculated without regard to extraordinary items. The Committee may adjust awards as appropriate for partial achievement of goals or other factors, and may interpret and make necessary and appropriate adjustments to performance goals and the manner in which goals are evaluated.
Performance objectives are required to be established by the Committee no more than 90 days after the commencement of the Performance Period to which the objectives relate and before 25% of the relevant Performance Period has elapsed. As soon as practicable after the end of a Performance Period, the Committee will determine whether performance goals for the period were met and, if so, at what level of achievement, under specific formulae established for the period. If performance goals are met, the Committee will determine the amount of each participant’s Target Amount that has been earned and will be paid. The Committee has unilateral discretion to reduce or eliminate the amount of an award, including an award otherwise earned and payable under the LTIP.
The Committee has discretion to determine whether awards will be paid or forfeited in the event of a participant’s termination of employment before the end of a Performance Period or prior to payment of such awards. If a participant dies, retires, becomes disabled, is assigned to a different position, is granted a leave of absence, or another similar event occurs, or if the participant’s employment is otherwise terminated (except for cause) by us during a Performance Period, a pro rata share of the participant’s award based on the period of actual participation may be paid to the participant, at the Committee’s discretion, after the end of the Performance Period if and to the extent that it would have become earned and payable had the participant’s employment status not changed.
Our Board of Directors may amend, discontinue or terminate the LTIP in whole or in part at any time, subject to shareholder approval of any amendments if required by applicable laws, rules or regulations and to participant consent if any such action may adversely affect any award earned and payable under the LTIP at that time. However, the Committee has unilateral authority to amend the LTIP and any award (without participant consent) to the extent necessary to comply with applicable laws, rules or regulations or changes to applicable laws, rules and regulations, as well as to reduce or eliminate an award. The Committee also may adjust or modify the terms of awards, performance objectives or performance calculations (i) in the event of a large, special and non-recurring dividend or distribution, or a recapitalization, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, forward or reverse split, stock dividend, liquidation, dissolution or other similar corporate or strategic transactions, or in recognition of any other unusual or nonrecurring event or extraordinary item affecting us or our financial statements, or (ii) in response to changes in applicable laws and regulations, accounting principles and tax rates, or changes in business conditions or the Committee’s assessment of our business strategy. In addition, the Committee’s authority to grant awards and authorize payments under the LTIP does not restrict its authority, and the Board reserves the right, to grant compensation under other compensation plans or programs, grant discretionary bonuses, or otherwise pay compensation, to any officers and associates.
As described under the caption “COMPENSATION DISCUSSIONAND ANALYSIS — Incentive Compensation Clawback Policy,” payments of awards under the plan are subject to the Committee’s Incentive Compensation Policy under which the Committee may, at its discretion, and under specified circumstances, require any current or former associate, including an executive officer, to forfeit future incentive payments, or to repay all or any portion of any previously paid performance-based compensation, including payments for LTIP awards.
Under the awards granted during January 2021 that are listed in the table above, a percentage of the Target Amount of each award could be earned at the end of its Performance Period based on the extent to which we have attained performance goals set for the awards. As has been the case with all previous awards, the performance goals for the awards were based on growth in the tangible book value per share (“TBV”) of our common stock, plus cumulative dividends per share (“D”) paid, over the 2021-2023 Performance Period that applies to the awards (the “TBV+D Growth Rate”) and were set at “Threshold” (i.e., minimum), “Target” and “Stretch” (i.e., maximum) TBV+D Growth Rate levels of 12.0%, 24.0% and 36.0%, respectively. Our tangible book value per share on each measurement date is the amount equal to our total assets, minus our intangible assets, minus our liabilities, divided by the total outstanding shares of both classes of our common stock. The TBV+D Growth Rate is determined according to the following formula: TBV at the end of the Performance Period, minus TBV at the beginning of the Performance Period, plus cumulative dividends paid on the stock during the Performance Period, divided by TBV at the beginning of the Performance Period, subject to adjustments the
Committee is authorized by the terms of the LTIP to make to eliminate, or to spread over several years, the effect of strategic decisions made by the Board during a Performance Period (such as acquisitions and share repurchases) that may have an immediate impact on TBV but which the Board believes will be beneficial to shareholders in future years. The Threshold, Target and Stretch performance levels set by the Committee for the awards would result in Award Percentages of 50%, 100% and 125%, respectively, of the Target Amounts. In the table, the dollar amounts reflect the amounts that could be earned and paid at each performance level set by the Committee.
On December 31, 2021, the 2019-2021 Performance Period ended for awards granted during 2019, and during February 2022 payments were made to participants in the LTIP with respect to those three-year awards. The Threshold, Target and Stretch performance levels set by the Committee for those awards were TBV+D Growth Rates of 12.0%, 24.0% and 36.0%. After making adjustments that reduced the TBV+D Growth Rate for the impact of intangible assets related to acquisitions and share repurchases during 2018, 2019 and 2020, the Committee determined that our TBV+D Growth Rate for the Performance Period, as so adjusted, exceeded the Stretch performance level of 36.0%, and payments were made to LTIP participants at the maximum Award Percentage of 125% of Target Amounts. The amounts of those payments made to our NEOs are listed on the 2021 line of the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
Information regarding all outstanding awards under the plan currently held by our NEOs is contained in the discussion under the caption “COMPENSATION DISCUSSIONheading “COMPENSATION DISCUSSION AND ANALYSIS — Long-Term Incentives. ANALYSIS.”
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Grants of Plan-Based Awards During 2023, various plan-based award opportunities were approved for the NEOs listed in the Summary Compensation Table. Those awards are listed in the table below and are further described in the paragraphs following the table. GRANTS OF PLAN-BASED AWARDS | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Name | | Grant Date | | | Threshold | | | Target | | | Stretch (4) | | | | | | | | Frank B. Holding, Jr. | | | 01/23/2023 | (1) | | $ | 2,398,750 | | | $ | 4,797,500 | | | $ | 7,196,250 | | | | | 02/22/2023 | (2) | | | — | | | | 1,010,000 | | | | — | | | | | 07/24/2023 | (3) | | | 500,000 | | | | 1,000,000 | | | | 1,500,000 | | | | | | | | Craig L. Nix | | | 01/23/2023 | (1) | | | 1,096,875 | | | | 2,193,750 | | | | 3,290,625 | | | | | 02/22/2023 | (2) | | | — | | | | 472,500 | | | | — | | | | | 07/24/2023 | (3) | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | | | | | | | Hope H. Bryant | | | 01/23/2023 | (1) | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | 02/22/2023 | (2) | | | — | | | | 490,000 | | | | — | | | | | 07/24/2023 | (3) | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | | | | | | | Peter M. Bristow | | | 01/23/2023 | (1) | | | 1,400,000 | | | | 2,800,000 | | | | 4,200,000 | | | | | 02/22/2023 | (2) | | | — | | | | 690,000 | | | | — | | | | | 07/24/2023 | (3) | | | 333,333 | | | | 666,667 | | | | 1,000,000 | | | | | | | | Lorie K. Rupp | | | 01/23/2023 | (1) | | | 687,500 | | | | 1,375,000 | | | | 2,062,500 | | | | | 02/22/2023 | (2) | | | — | | | | 385,000 | | | | — | | | | | 07/24/2023 | (3) | | | 250,000 | | | | 500,000 | | | | 750,000 | |
| (1) | Retirement BenefitsAwards were granted on January 23, 2023, under FCB’s LTIP for the 2023-2025 Performance Period. See “Long-Term Incentive Plan (‘LTIP’)” below. “Threshold,” “Target,” and Separation from Service Payments
We have two separate defined benefit pension plans (including our original plan“Stretch” amounts reflect the amounts of the LTIP awards that may be paid to each NEO at “Threshold” (i.e., minimum), “Target,” and a separate plan previously maintained“Stretch” (i.e., maximum) levels of performance during the Performance Period in relation to goals set by FCB-SC covering its formerthe Committee for the awards. The amounts payable at the Target level of performance (“Target Amount”) were based on percentages of the officers’ 2023 base salary rates as follows: Mr. Holding – 475%; Mr. Nix – 325%; Mrs. Bryant – 400%; Mr. Bristow – 400%; and Mrs. Rupp – 250%. At the end of the Performance Period, payments may be made to the officers equal to 50%, 100%, and associates) under which benefits are provided to plan participants following their retirement, and two separate Section 401(k) defined contribution plans under which plan participants may defer a pre-tax portion150% of their compensationTarget Amounts for retirementperformance at the Threshold, Target, and receive employer matching contributionsStretch levels, respectively. If performance over the Performance Period exceeds the Threshold level but not the Target level, or exceeds the Target level but not the Stretch level, the amount earned by each NEO will be interpolated by the Committee. Stretch amounts are the maximum amounts that may be paid for the 2023-2025 Performance Period.
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| (2) | Award opportunities were approved on February 22, 2023, for 2023 based on continued attainment of performance objectives related to their accounts equalthe CIT Merger, including timely achievement of conversion and integration milestones with respect to a portionthe operations of their voluntary deferralsCIT and under oneits subsidiaries, and the continued realization of merger cost savings and synergies, as well as individual performance. See “Merger Performance Plan (‘MPP’)” below. The “Target” amounts of the plans, additional profit sharingNEOs’ awards reflect the amounts that could be paid to them if performance objectives for the awards for 2023 were determined to have been satisfied at the end of the year. The awards for 2023 were paid at the Target level during February 2024 and are included in the aggregate amount listed for each NEO for 2023 in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. Those payments are separately listed in Footnote 4 to that table. |
| (3) | Award opportunities were approved on July 24, 2023, for 2023 based on attainment of performance objectives related to the SVB Acquisition during 2023, including timely achievement of conversion and integration milestones with respect to the operations of SVB and its subsidiaries, the realization of acquisition cost savings and synergies, and risk management objectives, as well as individual performance. See “Merger Performance Plan (‘MPP’)” below. The “Threshold,” “Target,” and “Stretch” (“Maximum”) amounts of the NEOs’ awards reflect the amounts that could be paid to them for 2023 based on the degree to which performance objectives for the awards were determined to have been satisfied at the end of the year. The awards for 2023 were paid at the Maximum level during February 2024 and are included in the aggregate amount listed for each NEO for 2023 in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. Those payments are separately listed in Footnote 4 to that table. |
| (4) | In the case of the MPP awards, the “Stretch” amount reflects the “Maximum” amount that may be paid for the year. |
Long-Term Incentive Plan (“LTIP”). Under FCB’s LTIP, eligible associates of FCB and its affiliates may be offered opportunities to earn awards stated as percentages of their base salary rates, and payable in cash, based upon attainment of objective performance goals. The LTIP is intended to promote a closer alignment of the participants’ interests with our corporate interests and the long-term interests of our stockholders, and to encourage participants’ efforts to enhance our efficiency, profitability, growth, and value. Each year our CNG Committee considers the grant of new awards under the LTIP. Awards granted each year have provided for payments based on | | | | | | 58 | | 2024 Annual Proxy Statement | | |
Executive Compensation performance goals measured over stated periods of time (“Performance Periods”) which generally have been specified as three calendar years. As reflected in the table above, during January 2023, the Committee approved the grant of awards to our NEOs listed in the table for a new, three-year 2023-2025 Performance Period. The LTIP is administered by the CNG Committee, which selects associates to whom awards will be granted. All salaried associates who are considered to be in the “Executive Career Level,” as defined by FCB’s Career Framework, are eligible to participate in the LTIP. In general, when the Committee grants awards under the LTIP, it establishes the Performance Period during which performance will be measured, establishes one or more specific written performance objectives and specific goals for each participant and/or for each group of participants for that Performance Period, and assigns to each participant a target award (a “Target Amount”) for the Performance Period. Performance Periods may be coincident with one or more of our fiscal years, or any portions thereof, and to date they have been overlapping. Each participant may earn a percentage set by the Committee at the time of grant (the “Award Percentage,” which may exceed or be less than 100%) of his or her Target Amount based on the extent of attainment of the performance goals established by the Committee for the relevant Performance Period. The maximum amount of awards that may be paid to any one participant in any one fiscal year under the LTIP is $10 million. As conditions to their awards, participants must agree to non-solicitation and nondisclosure obligations. The non-solicitation obligations cover the term of each participant’s employment and a period of one year after termination of employment, while the nondisclosure obligations cover all times during and after each participant’s employment with FCB. During the non-solicitation period, other than on behalf of FCB, each participant will generally be prohibited from employing or soliciting for employment any associate of FCB who was supervised by or was personally known to the participant, or soliciting the business of any customer or prospective customer with whom the participant had material contact. Subject to customary limitations, the nondisclosure provisions will require the participant to maintain the confidentiality of all of FCB’s business information, trade secrets, and data and return all such materials in his or her possession to FCB upon termination of employment. Performance objectives under the LTIP may be based on individual, business unit/function, and/or corporate performance, or any combination thereof. If a participant’s performance goals are based on a combination of performance criteria, the Committee may weight the importance of each type of performance that applies to the participant by assigning a percentage to it. The Committee also may apply other or non-objective performance criteria for participants to the extent permitted, or not prohibited, by applicable law and regulations. The targeted levels of performance with respect to performance objectives may be established at such levels and on such terms as the Committee in its discretion may determine, including but not limited to on an absolute basis, in relation to performance in a prior Performance Period, and/or relative to one or more peer group companies or indices, or any combination thereof, and performance objectives and results may be determined without regard to extraordinary items. The Committee may adjust awards as appropriate for partial achievement of goals or other factors, and may interpret and make necessary and appropriate adjustments to performance goals and the manner in which goals are evaluated. Performance objectives are required to be established by the Committee no more than 90 days after the commencement of the Performance Period to which the objectives relate and before 25% of the relevant Performance Period has elapsed. As soon as practicable after the end of a Performance Period, the Committee will determine whether performance goals for the period were met and, if so, at what level of achievement, under specific formulae established for the period. If performance goals are met, the Committee will determine the amount of each participant’s Target Amount that has been earned and will be paid. The Committee has unilateral discretion to reduce or eliminate the amount of an award, including an award otherwise earned and payable under the LTIP. The Committee has discretion to determine whether awards will be paid or forfeited in the event of a participant’s termination of employment before the end of a Performance Period or prior to payment of the awards. If a participant dies, retires, becomes disabled, is assigned to a different position, is granted a leave of absence, or another similar event occurs, or if the participant’s employment is otherwise terminated (except for cause) by us during a Performance Period, a pro rata share of the participant’s award based on the period of actual participation may be paid to the participant, at the Committee’s discretion, after the end of the Performance Period if and to the extent that it would have become earned and payable had the participant’s employment status not changed. FCB’s Board may amend, discontinue, or terminate the LTIP in whole or in part at any time, subject to stockholder approval of any amendments if required by applicable laws, rules, or regulations and to participant consent if any such action may adversely affect any award earned and payable under the LTIP at that time. However, the Committee has unilateral authority to amend the LTIP and any award (without participant consent) to the extent necessary to comply with applicable laws, rules, or regulations, or changes to applicable laws, rules, or regulations, as well as to reduce or eliminate an award. The Committee also may adjust or modify the terms of awards, performance objectives, or performance calculations (i) in the event of a large, special, and non-recurring dividend or distribution, or a recapitalization, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, forward or reverse split, stock dividend, liquidation, dissolution, or other similar corporate or strategic transactions, or in recognition of any other unusual or nonrecurring | | | | | | | 2024 Annual Proxy Statement | | 59 |
Executive Compensation event or extraordinary item affecting us or our financial statements, or (ii) in response to changes in applicable laws and regulations, accounting principles, and tax rates, or changes in business conditions, or the Committee’s assessment of our business strategy. In addition, the Committee’s authority to grant awards and authorize payments under the LTIP does not restrict its authority, and the Board reserves the right, to grant compensation under other compensation plans or programs, grant discretionary bonuses, or otherwise pay compensation, to any officers and associates. As described under the caption “COMPENSATION DISCUSSION AND ANALYSIS — Incentive-Based Compensation Clawback Policy,” payments of awards under the LTIP are subject to the Clawback Policy. Under the awards granted during January 2023 that are listed in the table above, a percentage of the Target Amount of each award could be earned at the end of its Performance Period based on the extent to which we have attained performance goals set for the awards. As has been the case with all previous awards, the performance goals for the awards were based on growth in the tangible book value per share (“TBV”) of our common stock, plus cumulative dividends per share (“D”) paid, over the 2023-2025 Performance Period that applies to the awards (the “TBV+D Growth Rate”). The Committee set the same Threshold, Target, and Stretch TBV+D Growth Rate goals of 12%, 30% and 48%, respectively, as had been set for awards beginning in 2022. Our tangible book value per share on each measurement date is the amount equal to our total assets, minus our intangible assets, minus our liabilities, divided by the total outstanding shares of both classes of our common stock. The TBV+D Growth Rate is determined according to the following formula: TBV at the end of the Performance Period, minus TBV at the beginning of the Performance Period, plus cumulative dividends paid on the stock during the Performance Period, divided by TBV at the beginning of the Performance Period, subject to adjustments the Committee is authorized by the terms of the LTIP to make in order to eliminate, or to spread over several years, the effect of strategic decisions made by the Board during a Performance Period, such as bargain purchase gains and other merger or acquisition related items, and share repurchases and other items that may have an immediate impact on TBV but which the Board believes will be beneficial to stockholders in future years. The Threshold, Target, and Stretch performance levels set by the Committee for the awards granted in 2023 would result in the same Award Percentages of 50%, 100%, and 150%, respectively, as had been set for awards beginning in 2022. In the Grants of Plan-Based Awards table above, the dollar amounts reflect the amounts that could be earned and paid at each performance level set by the Committee. On December 31, 2023, the 2021-2023 Performance Period ended for awards granted during 2021, and during February 2024 payments were made to participants in the LTIP with respect to those three-year awards. The Threshold, Target, and Stretch performance levels set by the Committee during 2021 for those awards were TBV+D Growth Rates of 12.0%, 24.0%, and 36.0%, respectively. After making adjustments to, among other things, eliminate the significant net positive effects on tangible book value of the CIT Merger during 2022 and the SVB Acquisition during 2023 (which alone may have maximized awards under the LTIP), and to continue spreading over three years the impacts of share repurchases and of intangible assets related to other acquisitions in prior years, which adjustments, in the aggregate, reduced the TBV+D Growth Rate, the Committee determined that our TBV+D Growth Rate, as so adjusted, for the 2021-2023 Performance Period exceeded the Stretch performance level of 36%, and payments were made to LTIP participants at the maximum Award Percentage of 125% of Target Amounts. The amounts of those payments made to our NEOs for 2023 are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and are separately listed in Footnote 4 to that table. Information regarding all outstanding awards under the plan currently held by our NEOs is contained in the discussion under the caption “COMPENSATION DISCUSSION AND ANALYSIS — Long-Term Incentives.” Merger Performance Plan (“MPP”). The MPP was adopted by our joint CNG Committee (under authority delegated by the Boards) during May 2022 following consummation of the CIT Merger. Under the plan, eligible executives and other associates of FCB and its affiliates may be offered opportunities to earn awards payable in cash based upon attainment of performance objectives related to our mergers and acquisitions. The primary purpose of the MPP is to motivate and reward associates who have significant involvement in and responsibility for post-acquisition processes by offering cash incentives that are dependent on the realization of the benefits of mergers and acquisitions to our company and stockholders since, as noted above, the significant net positive effect on tangible book value of the CIT Merger, as well as the SVB Acquisition, were eliminated from consideration in determining the realization of performance levels under the LTIP. The MPP is administered by the CNG Committee. The plan authorizes the Committee to select associates as participants for whom awards will be approved, set the amounts of the awards, performance objectives, and other terms and conditions of each award, and specify the period during which achievement of performance objectives will be measured. Executive career level and other associates who play a key role in merger and acquisition planning and integration processes are eligible to participate in the MPP. The CNG Committee, in its discretion, may delegate all or part of its authorities under the plan to one or more directors and/or officers; provided, however, that it may not delegate its responsibility to make awards to executive officers. The Committee is authorized to establish, suspend, or waive any rules for the administration, interpretation, and application of the MPP and make any determination, and take any other action, that it considers necessary or desirable for the administration of the plan. | | | | | | 60 | | 2024 Annual Proxy Statement | | |
Executive Compensation Performance objectives under the MPP may be tied to one or more of the following: timely achievement of stabilization, integration, or optimization milestones, realization of merger or acquisition cost savings and synergies, risk management, individual performance, or other related specific objectives as assigned, which may include company performance. Where performance objectives are based on company and individual performance, the Committee may weight the importance of each type of performance that applies to the participant by assigning a percentage to it. Following the end of the period covered by each award, the Committee will determine the extent to which performance objectives for that period have been achieved and the amount, if any, of the participants’ awards that will be paid. Amounts of awards, which may be set as single “Target” amounts, or tiered as “Threshold,” “Target,” and “Maximum” amounts, reflect the amounts that may be paid to participants based on the extent to which performance objectives set by the Committee are determined to have been satisfied at the end of the period covered by the awards. At its discretion, the Committee may reduce or eliminate the amount of an award by applying negative discretion, including to an award that would otherwise be earned and payable under the terms of the plan. Award payments are made in cash in a lump sum, less required withholdings, and payment to a participant will be conditioned on his or her continued active employment on the payment date, subject to certain exceptions specified in the plan. The maximum amount that may be paid under the MPP to any one participant in any fiscal year may not exceed $5,000,000. As described under the caption “COMPENSATION DISCUSSION AND ANALYSIS — Incentive-Based Compensation Clawback Policy,” payments of awards under the MPP are subject to the Clawback Policy. During 2023, the Committee approved MPP award opportunities for 2023, including the two awards to each of our NEOs listed in the Grants of Plan-Based Awards table above. Those awards could be earned based on the attainment of performance objectives related to the CIT Merger and the SVB Acquisition, respectively, including timely achievement of conversion and integration milestones, cost savings and synergies, and risk management objectives, as well as individual performance. The performance objectives for the CIT awards were intended to be challenging, but achievable with superior effort at the “Target” level. The performance objectives for the SVB awards were intended to be challenging, but achievable at the “Threshold” level, with increasing difficulty at the “Target” and “Maximum” levels. The table lists the amounts that could be earned and paid under each award based on attainment of performance objectives. On December 31, 2023, the period covered by the 2023 awards ended, and during January 2024 the Committee approved payments to participants with respect to those awards. Based on the Committee’s assessment of pre-determined performance objectives with respect to the 2023 MPP awards, payments were made to MPP participants of the Target amounts of the CIT awards and the Maximum amounts of the SVB awards. The amounts of those payments made to our NEOs for 2023 are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and are separately listed in Footnote 4 to that table. Restricted Stock Units (“RSUs”). Prior to consummation of the CIT Merger, certain officers of CIT who became our officers held stock awards covering shares of CIT’s common stock granted to them by CIT during 2019, 2020, and 2021 pursuant to CIT’s 2016 Omnibus Incentive Plan. As provided in our merger agreement with CIT, upon consummation of the merger on January 3, 2022, those awards were converted (based on the merger share exchange ratio) into RSUs covering shares of our Class A Common. None of our current NEOs hold any RSUs or other equity awards. Retirement Benefits and Separation from Service Payments We currently have three separate qualified defined benefit pension plans (including our original plan and two separate plans previously maintained by FCB-SC and CIT covering their former officers and associates) under which benefits are provided to plan participants following their retirement, and two separate Section 401(k) defined contribution plans (the FCB Legacy 401(k) Plan and the FCB 401(k) Plan) under which plan participants may defer a pre-tax and/or post-tax portion of their compensation for retirement and receive employer matching contributions to their accounts equal to a portion of their voluntary deferrals and, in the case of participants in the FCB 401(k) Plan, additional profit-sharing contributions to their accounts. CIT’s Section 401(k) plan remained in effect during 2022 following the merger but was merged into the FCB 401(k) Plan effective January 1, 2023. In addition, FCB has separation from service agreements with certain executive officers which provide for payments to the officers or their beneficiaries for a period of 10 years following their separation from service at agreed-upon ages or their deaths. | | | | | | | 2024 Annual Proxy Statement | | 61 |
Executive Compensation The following table provides information about benefits under the pension plans and the separation from service agreements for each of our NEOs who participates in those plans. Mrs. Rupp does not participate in a pension plan and does not have a separation from service agreement. PENSION BENEFITS AND SEPARATION FROM SERVICE AGREEMENTS | | | | | | | | | | | | | | Name | | Plan Name (1) | | Number of Years
Credited Service (2) | | Present Value of
Accumulated Benefit (3)(4) | | | Payments During
Last Fiscal Year | | | | | | | | Frank B. Holding, Jr. | | Pension plan | | 40 | | $ | 1,808,831 | | | $ | -0- | | | | Separation from service agreement | | N/A | | | 2,701,720 | | | | -0- | | | | | | | | Craig L. Nix | | Pension plan | | 24 | | | 720,034 | | | | -0- | | | | Separation from service agreement | | N/A | | | 475,076 | | | | -0- | | | | | | | | Hope H. Bryant | | Pension plan | | 37 | | | 1,758,641 | | | | -0- | | | | Separation from service agreement | | N/A | | | 973,690 | | | | -0- | | | | | | | | Peter M. Bristow | | Pension plan | | 32 | | | 1,304,231 | | | | -0- | | | | Separation from service agreement | | N/A | | | 890,017 | | | | -0- | |
| (1) | Mr. Holding and Mrs. Bryant are participants in and entitled to benefits under FCB’s pension plan, and they are parties to separation from service agreements with certain executive officers which provide for paymentsFCB. Mr. Nix and Mr. Bristow are participants in and entitled to the officers or their beneficiaries for a period of 10 years following their separation from service at specified ages or their deaths. The following table provides information about benefits under the pension plans and the separation from service agreements for each of our NEOs.
PENSION BENEFITS
AND SEPARATION FROM SERVICE AGREEMENTS
| | | | | | | | | | | | | | | | | Name | | | | Plan Name (2) | | Number of
Years Credited
Service (3) | | Present Value of
Accumulated
Benefit (4)(5) | | Payments
During Last
Fiscal Year | Frank B. Holding, Jr. | | | | Pension plan | | 38 | | | | $ 1,964,518 | | | $ -0- | | | | Separation from service agreement | | N/A | | | | 2,890,066 | | | -0- | | Craig L. Nix | | | | Pension plan | | 22 | | | | 933,345 | | | -0- | | | | Separation from service agreement | | N/A | | | | 594,694 | | | -0- | | Hope H. Bryant | | | | Pension plan | | 35 | | | | 1,967,501 | | | -0- | | | | Separation from service agreement | | N/A | | | | 1,069,352 | | | -0- | | Peter M. Bristow | | | | Pension plan | | 30 | | | | 1,522,731 | | | -0- | | | | Separation from service agreement | | N/A | | | | 1,022,756 | | | -0- | | Lorie K. Rupp (1) | | | | Pension plan | | — | | | | — | | | — | | | | Separation from service agreement | | — | | | | — | | | — | |
(1) | Mrs. Rupp is not a participant in either of our pension plans and is not a party to a separation from service agreement.
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(2) | Mr. Holding and Mrs. Bryant are participants in and entitled to benefits under FCB’s pension plan, and they are parties to separation of service agreements with FCB. Mr. Nix and Mr. Bristow are participants in and entitled to benefits under the pension plan previously provided by FCB-SC which FCB continues to maintain and administer to provide benefits to the former officers and associates of FCB-SC who are participants in that plan, and they are parties to separation from service agreements that were assumed by FCB from FCB-SC.
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(3) | Years of credited service under the pension plans are as of December 31, 2021. Payments under the separation from service agreements are not determined on the basis of years of credited service.
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(4) | The amounts shown for the pension plans reflect the actuarial present value of each officer’s accumulated benefit as of December 31, 2021. Those amounts were determined using the same interest rate and mortality rate assumptions as were used for purposes of calculating our liability for future benefits in our consolidated financial statements. We used a discount rate of 3.04%,and we assumed that each officer will remain an active associate until, and will retire at, normal retirement age under the plans (65), and that each officer will elect to receive benefits based on a single life annuity. No pre-retirement decrements were applied.
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(5) | The amounts shown for the separation from service agreements reflect the present values, as of December 31, 2021, of future payments to be made to the officers under their respective agreements. Those amounts were determined using the same assumptions as were used for purposes of calculating our liability for future payments under the agreements in our consolidated financial statements. We used a discount rate of 3.04%, and the monthly payment amounts called for by each officer’s agreement (as in effect on December 31, 2021) that would be made to him or her (or his or her beneficiary) in the future over the ten-year payment term that begins six months and one week following separation from service at the officer’s agreed-upon age or his or her death. In calculating those amounts, we assumed that each officer will remain an active associate until, and the officer’s payments will begin after, the age specified in his or her agreement. As described in the discussion of these agreements under the heading “COMPENSATION DISCUSSIONAND ANALYSIS,” amounts of payments generally were calculated as a percentage of the officers’ base salaries at the time their agreements were approved. The monthly payment amounts provided for under the named officers’ agreements as of December 31, 2021 were as follows: Mr. Holding – $33,056; Mr. Nix – $9,240; Mrs. Bryant – $12,875; and Mr. Bristow – $13,451.
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The pension plans, Section 401(k) plans and separation from service agreements are described below, and further information about them is provided in the discussion under the heading “COMPENSATION DISCUSSIONAND ANALYSIS.”
Pension Plans. FCB’s two defined benefit pension plans include its original plan and the plan previously provided by FCB-SC for its associates which FCB continues to maintain and administer to provide pension benefits for FCB-SC’sto the former officers and associates of FCB-SC who are participants in that plan. The termsplan, and they are parties to separation from service agreements that were assumed by FCB from FCB-SC.
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| (2) | Years of the two plans are very similar. Each plan is a non-contributory final average pay plan. Monthly retirement benefitscredited service under the pension plans are computed as straight life annuities beginning at age 65 andof December 31, 2023. Payments under the separation from service agreements are not subject to deductionsdetermined on the basis of years of credited service. |
| (3) | The amounts shown for Social Securitythe pension plans reflect the actuarial present value of each officer’s accumulated benefit as of December 31, 2023. Those amounts were determined using the same interest rate and mortality rate assumptions as were used for purposes of calculating our liability for future benefits or any other offset amounts. Normalin our consolidated financial statements. We used a discount rate of 5.16%, and we assumed that each officer will remain an active associate until, and will retire at, normal retirement age under the plans (65), and that each officer will elect to receive benefits based on a single life annuity. No pre-retirement decrements were applied. |
| (4) | The amounts shown for the separation from service agreements reflect the present values, as of December 31, 2023, of future payments to be made to the officers under their respective agreements. Those amounts were determined using the same assumptions as were used for purposes of calculating our liability for future payments under the agreements in our consolidated financial statements. We used a discount rate of 4.60% and the monthly payment amounts called for by each officer’s agreement (as in effect on December 31, 2023) that would be made to him or her (or his or her beneficiary) in the future over the ten-year payment term that begins six months and one week following separation from service at the officer’s agreed-upon age or his or her death. In calculating those amounts, we assumed that each officer will remain an active associate until, and the officer’s payments will begin after, the age specified in his or her agreement. As described in the discussion of these agreements under the heading “COMPENSATION DISCUSSION AND ANALYSIS,” amounts of payments generally were calculated as a percentage of the officers’ base salaries at the time their agreements were approved. The monthly payment amounts provided for under the NEOs’ agreements are as follows: Mr. Holding - $33,056; Mr. Nix - $9,240; Mrs. Bryant - $12,875; and Mr. Bristow - $13,451. |
The pension plans, Section 401(k) plans and separation from service agreements are described below, and further information about them is provided in the discussion under the heading “COMPENSATION DISCUSSION AND ANALYSIS.” Pension Plans. FCB’s qualified defined benefit pension plans include its original plan and the plan previously provided by FCB-SC for its associates which FCB continues to maintain and administer to provide pension benefits for FCB-SC’s former officers and associates who are participants in that plan. FCB’s plans also include the qualified pension plan previously provided by CIT which FCB continues to maintain to provide pension benefits to CIT’s former officers and associates who are participants in that plan. None of our NEOs participate in the CIT pension plan, and Mrs. Rupp is not a participant in any of the pension plans. The terms of FCB’s and FCB-SC’s plans are very similar. Each plan is a non-contributory final average pay plan. Monthly retirement benefits under the pension plans are computed as straight life annuities beginning at age 65 and are not subject to deductions for Social Security benefits or any other offset amounts. Normal retirement age under the plans is the later of age 65 or completion of five years of service. Under FCB’s plan, early retirement is permitted for participants who have reached age 50 with at least 20 years of service, or age 55 with at least 15 years of service, while under FCB-SC’s plan participants qualify for early retirement when they reach age 50 with at least 15 years of service, or age 55 with at least 10 years of service. As described under the heading “COMPENSATION DISCUSSION AND ANALYSIS,” participants in FCB’s and FCB-SC’s pension plans include only those eligible associates who were hired on or before specified dates during 2007 when FCB and FCB-SC restructured their respective pension plans and Section 401(k) plans. Participants in each of the pension plans on those dates could choose to continue to participate in their respective pension plan and “legacy” Section 401(k) plan, or they could choose to participate in an “enhanced” | | | | | | 62 | | 2024 Annual Proxy Statement | | |
Executive Compensation Section 401(k) plan. If they chose the enhanced Section 401(k) plan, they would continue to be participants in their pension plan, but their accrued pension plan benefit service was frozen and no further benefits would accrue (although under FCB’s pension plan participants receive credit for increases in compensation even if plan benefit service credit is frozen). Under both pension plans, a participant’s benefit is based on his or her: | ● | | “average monthly compensation,” which is the participant’s highest average monthly pensionable compensation for any five consecutive plan years of service or age 55 with at least 15within the last 10 completed years of service while under FCB-SC’s plan participants qualify for early retirement when they reach age 50 with at least 15 years of service, or age 55 with at least 10 years of service. As described under the heading “COMPENSATION DISCUSSIONAND ANALYSIS,” participants in FCB’s and FCB-SC’s pension plans include only those eligible associates who were hired on or before specified dates during 2007 when FCB and FCB-SC restructured their respective pension plans and Section 401(k) plans. Participants in each of the pension plans on those dates could chooseprior to continue to participate in their respective pension plan and “legacy” Section 401(k) plan, or they could choose to participate in an “enhanced” Section 401(k) plan. If they chose the enhanced Section 401(k) plan, they would continue to be participants in the pension plan, but their accrued pension plan benefit service was frozen and no further benefits would accrue.retirement;
Under both pension plans, a participant’s benefit is based on his or her:
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| ● | | “average monthly compensation,” which is the participant’s highest average monthly covered compensation for any five consecutive plan years of service within the last 10 completed years of service prior to retirement;
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| | ● | | in the case of participants who chose to continue in the pension plans and legacy Section 401(k) plans, years of “creditable service,” which is the number of calendar years in which the participant completes 1,000 or more hours of service (and which, in the case of participants who elected to participate in the enhanced Section 401(k) plans, was frozen at the time of their election); and |
| ● | | “covered compensation,” which is the average of the participant’s Social Security taxable wage base for each year during the 35-year period ending with the year in which the associate attains Social Security retirement age.
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We do not grant extra years of service to participants under either pension plan for purposes of calculating benefits.
A participant’s annual compensation covered by the plans includes base salary, overtime, and any regular bonuses, including LTIP award payments. However, under the Internal Revenue Service’s regulations, during 2021 the maximum amount of covered compensation that could be considered in determining a retiring participant’s benefit was $290,000.
A participant’s normal monthly benefit amount following retirement will be equal to:
| ● | | 1.2% of average monthly compensation multiplied by total plan years of service, not to exceed 35 years if hired on or after January 1, 2005, or 40 years if hired before that date; plus
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| ● | | 0.65% of average monthly compensation in excess of one-twelfth of covered compensation multiplied by total plan years of service, not to exceed 35 years.
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The maximum annual benefit that could be paid to a participant retiring under either plan during 2021 was $230,000. Participants may elect to receive retirement benefits in a joint and survivor annuity rather than a single life annuity. In those cases, the amount of the annual retirement benefit will be actuarially reduced. In cases of early retirement, a participant’s annual retirement benefit is actuarially reduced by 5.0% for each year of the first 12 years, and 3.0% for each of the next three years, by which the starting date of the early retirement benefit precedes the participant’s normal retirement date, unless the participant elects to defer receipt of benefits until he or she reaches age 65. In the case of participants whose employment continues after age 65, the annual retirement benefit calculated at normal retirement date, as well as the maximum permitted benefit amount, is actuarially increasedto reflect the continuing accrual of benefits during their extended employment and the projected reduction in the number of their benefit payments.
On December 31, 2021, Mr. Holding, Mr. Nix, Mrs. Bryant and Mr. Bristow were eligible for early retirement under the pension plans.
Non-Qualified Separation from Service Agreements. Under the separation from service agreements between FCB and certain executive officers, including Mr. Holding and Mrs. Bryant, payments will be made to each officer for a period of 10 years following a separation from service that occurs no earlier than a specified age. Mr. Nix and Mr. Bristow are parties to substantially similar agreements which were originally entered into between them and FCB-SC and were assumed by FCB. The benefits provided under the agreement with Mr. Holding and Mrs. Bryant vest at age 65 (or an earlier agreed-upon age). Under the agreements with Mr. Nix and Mr. Bristow, payments will be made following a termination of employment no later than the month in which they reach age 65 or following such other termination as shall be agreed upon. However, no payments are made under any of the agreements until there is a separation from service. In return for payments under the agreements, each officer is obligated to provide limited consultation services to, and not to compete against, FCB during the payment period.
Payments under each agreement begin six months and one week following separation from service. If an officer dies prior to separation from service, or during the payment period following separation from service, the payments under his or her agreement will be made to the officer’s designated beneficiary or estate. Except in the case of death, there are no automatic early vesting rights, and FCB may terminate an officer’s agreement at any time prior to the separation from service. If an officer’s agreement is terminated, or the officer’s employment terminates before the age provided in his or her agreement, or another date agreed to by FCB, for any reason other than death, all rights under his or her agreement will be forfeited. However, based on facts and circumstances, the Compensation, Nominations and Governance Committee may recommend, and our Board of Directors may approve, an immediate vesting of an officer’s rights under his or her agreement. The agreements do not include any change in control or “golden parachute” provisions or provide for any non-cash benefits.
No new agreements have been entered into since 2014 when our LTIP was approved and awards under it were first granted, and no new agreements currently are contemplated. Amounts of payments provided for in the current agreements with our NEOs are described in the footnotes to the “PENSION BENEFITSAND SEPARATIONFROM SERVICE AGREEMENTS” table above.
Section 401(k) Plans. As described in the discussion under the heading “COMPENSATION DISCUSSIONAND ANALYSIS,” our legacy and enhanced Section 401(k) plans both are qualified defined contribution plans that provide vehicles for associates to voluntarily defer a pre-tax portion of their compensation for retirement and receive an employer matching contribution on a portion of the maximum voluntary deferral. Our associates are participants in one of the two Section 401(k) plans, depending on when they were first employed and, if they were first employed before we restructured our pension plans and Section 401(k) plans during 2007, depending on elections they made at that time. In the case of associates who elected to participate in the enhanced Section 401(k) plan, account balances underplans, was frozen at the legacy plan were transferred to the associates’ accounts under our enhanced plan. Associates who were hired after the plans were restructured may participate only in the enhanced plan. Currently, newly-hired associates become eligible to participate for purposestime of their own voluntary contributions after one full month of employment,election); and they become eligible to receive employer matching contributions following one full year of employment.
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| ● | | The maximum 2021 voluntary deferral under either plan was $19,500 for a participant under“covered compensation,” which is the age of 50, and $26,000 for a participant age 50 or older. Under the legacy Section 401(k) plan, FCB makes a matching contribution to each participant’s account equal to 100% of the first 3%, and 50% of the next 3%,average of the participant’s compensation that he or she defers, up to and including a maximum matching contribution of 4.5% ofSocial Security taxable wage base for each year during the participant’s eligible compensation, but not more than $13,050 for 2021. Under35-year period ending with the enhanced plan, FCB makes a matching contribution to each participant’s account equal to 100% of up to 6% of the participant’s compensation that he or she defers. In addition, following the close of each plan year FCB makes a profit-sharing contribution under the enhanced plan to each eligible participant’s account equal to 3% of the participant’s eligible compensation, without regard to the amount of the participant’s voluntary deferrals. During 2021 the maximum matching contribution under the enhanced Section 401(k) plan was $17,400, and the maximum profit-sharing contribution was $8,700.
Each associate’s voluntary deferrals, together with all employer contributions to his or her account, are invested in one or more investment vehicles selected bywhich the associate from a menuattains Social Security retirement age.
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We do not grant extra years of service to participants under either pension plan for purposes of calculating benefits. A participant’s annual compensation covered by the plans includes base salary, overtime, any regular bonuses, and LTIP and MPP award payments. However, under the Internal Revenue Service’s regulations, during 2023 the maximum amount of covered compensation that could be considered in determining a retiring participant’s benefit was $330,000. A participant’s normal monthly benefit amount following retirement will be equal to: | ● | | 1.2% of publicly-traded mutual fundsaverage monthly compensation multiplied by total plan years of creditable service, not to exceed 35 years if hired on or other investment vehicles determined from time to time by FCB. Eligibility requirements for participation and matching contributions, as well as investment opportunities, are the same in both the legacy and enhanced Section 401(k) plans.after January 1, 2005, or 40 years if hired before that date; plus |
| ● | | FCB’s Section 401(k) contributions during 2021 for the accounts0.65% of our NEOs are included in the “All Other Compensation” column of the Summary Compensation Table and are listed for each officer in a footnote to that table. Mr. Holding, Mr. Nix, Mrs. Bryant and Mr. Bristow are participants in FCB’s legacy 401(k) plan, so they did not receive the profit sharing contributions that were made for 2021 to the accounts of participants in the enhanced 401(k) plan. Mrs. Rupp participates in the enhanced Section 401(k) and did receive a profit sharing contribution to her account for 2021.
Non-Qualified Deferred Compensation
During February 2021, following the recommendation of our Compensation, Nominations and Governance Committee, FCB’s Board of Directors adopted a new non-qualified deferredaverage monthly compensation plan (the “FCB Plan”) which became effective on March 1, 2021. The purpose of the FCB Plan is to permit management (including our NEOs) and other highly compensated associates of FCB and its participating affiliates to save for retirement and other long-term financial goals on a tax-deferred basis by electing annually to defer receipt of portions of their base salaries and certain eligible bonuses, including LTIP award payments, in excess of amounts they could defer through their voluntary contributionsone-twelfth of covered compensation multiplied by total plan years of creditable service, not to our 401(k) plans. The FCB Plan does not provide for FCB to make any additional or discretionary contributions to the Plan. Mr. Nix, Mrs. Bryant and Mr. Bristow were participants in the FCB Plan during 2021, although only Mr. Bristow had compensation that was deferred during 2021. Mr. Holding and Mrs. Rupp were eligible to participate in the FCB Plan during 2021 but did not elect to defer any compensation.exceed 35 years.
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The maximum annual benefit that could be paid to a participant retiring under either plan during 2023 was $265,000. Participants may elect to receive retirement benefits in a joint and survivor annuity rather than a single life annuity. In those cases, the amount of the annual retirement benefit will be actuarially reduced. In cases of early retirement, a participant’s annual retirement benefit is actuarially reduced by 5.0% for each year of the first 12 years, and 3.0% for each of the next three years, by which the starting date of the early retirement benefit precedes the participant’s normal retirement date, unless the participant elects to defer receipt of benefits until he or she reaches age 65. In the case of participants whose employment continues after age 65, the annual retirement benefit calculated at normal retirement date, as well as the maximum permitted benefit amount, is actuarially increased to reflect the continuing accrual of benefits during their extended employment and the projected reduction in the number of their benefit payments. On December 31, 2023, Mr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow were eligible for early retirement under the pension plans. Nonqualified Separation from Service Agreements. Under the separation from service agreements between FCB and certain executive officers, including Mr. Holding and Mrs. Bryant, payments will be made to each officer for a period of 10 years following a separation from service that occurs no earlier than an agreed-upon age. Mr. Nix and Mr. Bristow are parties to substantially similar agreements which were originally entered into between them and FCB-SC and were assumed by FCB. Mrs. Rupp is not a party to a separation from service agreement. The benefits provided under the agreements with Mr. Holding and Mrs. Bryant vest at age 65 (or an earlier agreed-upon age). Under the agreements with Mr. Nix and Mr. Bristow, payments will be made following a termination of employment no later than the month in which they reach age 65 or following such other termination as shall be agreed upon. However, no payments are made under any of the agreements until there is a separation from service. In return for payments under the agreements, each officer is obligated to provide consultation services to, and not to compete against, FCB during the payment period. Payments under each agreement begin six months and one week following separation from service. If an officer dies prior to separation from service, or during the payment period following separation from service, the payments under his or her agreement will be made to the officer’s designated beneficiary or estate. Except in the case of death, there are no automatic early vesting rights, and FCB may terminate an officer’s agreement at any time prior to his or her separation from service. If an officer’s agreement is terminated, or the officer’s employment terminates before the age provided in his or her agreement, or another date agreed to by FCB, for any reason other than death, all rights under his or her agreement will be forfeited. However, based on facts and circumstances, our CNG Committee may recommend, and FCB’s Board may approve, an immediate vesting of an officer’s rights under his or her agreement. The agreements do not include any change in control or “golden parachute” provisions or provide for any non-cash benefits. | | | | | | | Also, prior to our merger with FCB-SC during 2014, FCB-SC maintained two unfunded, non-qualified deferred compensation plans in which various officers of FCB-SC were participants (the “FCB-SC Plans”). In connection with that merger, FCB agreed to assume, accrue interest on and distribute the accounts of participants in the FCB-SC Plans in accordance with the terms of the plans as they existed when the merger was completed. Participants may not make any further deferrals under the FCB-SC Plans. FCB is responsible for interest accrued on the balances in plan accounts, but FCB does not make any contributions to the plans. Mr. Nix and Mr. Bristow have accounts under both FCB-SC2024 Annual Proxy Statement
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Executive Compensation No new agreements have been entered into since 2014 when our LTIP was approved and awards under it were first granted, and no new agreements currently are contemplated. Amounts of payments provided for in the current agreements with Mr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow are described in the footnotes to the Pension Benefits and Separation from Service Agreements table above. Section 401(k) Plans. As described in the discussion under the heading “COMPENSATION DISCUSSION AND ANALYSIS,” both of our Section 401(k) plans are qualified defined contribution plans that provide vehicles for associates to voluntarily defer a pre-tax and/or post-tax portion of their compensation for retirement and receive an employer matching contribution on a portion of their voluntary deferrals and, under one of the plans, additional profit-sharing contributions to their accounts. Our associates are participants in one of the two Section 401(k) plans, depending on when they were first employed and, if they were first employed before we restructured our pension plans and Section 401(k) plans during 2007, depending on elections they made at that time. Associates first hired prior to the plan restructuring (and not rehired on or after January 1, 2015) who chose to continue to participate in their respective pension plan and “legacy” Section 401(k) plan are eligible to make deferrals and receive employer matching contributions under the FCB Legacy 401(k) Plan. Associates first hired prior to the plan restructuring who elected to participate in an “enhanced” Section 401(k) plan, and associates first hired after the plan restructuring or rehired on or after January 1, 2015 (including former CIT and SVB associates), may only participate in the FCB 401(k) Plan. The maximum 2023 voluntary deferral under either plan was $22,500 for a participant under the age of 50, and $30,000 for a participant age 50 or older. Under the FCB Legacy 401(k) Plan, FCB matches participants’ deferrals in an amount equal to 100% of the first 3%, and 50% of the next 3%, of the participant’s compensation that he or she defers, up to and including a maximum matching contribution of 4.5% of the participant’s eligible compensation, but not more than $14,850 for 2023. Under the FCB 401(k) Plan, FCB matches participants’ deferrals in an amount equal to 100% of to the first 6% of the participant’s eligible compensation that he or she defers. In addition, following the close of each plan year, FCB may make a discretionary profit-sharing contribution under the FCB 401(k) Plan to each eligible participant’s account, without regard to the amount of the participant’s deferrals. FCB made a profit-sharing contribution for 2023 equal to 3% of each participant’s eligible compensation. During 2023 the maximum matching contribution under the FCB 401(k) Plan was $19,800, and the maximum profit-sharing contribution was $9,900. Each associate’s voluntary deferrals, together with all employer contributions to his or her account, are invested in one or more investment vehicles selected by the associate from a menu of publicly-traded mutual funds and other investment options made available to participants by FCB. FCB’s Section 401(k) plan contributions during 2023 for the accounts of our NEOs are included in the “All Other Compensation” column of the Summary Compensation Table and are listed for each officer in Footnote 7 to that table. Mr. Holding, Mr. Nix, Mrs. Bryant, and Mr. Bristow are participants in the FCB Legacy 401(k) Plan, so they did not receive the profit-sharing contributions that were made for 2023 to the accounts of participants in the FCB 401(k) Plan. Mrs. Rupp participates in the FCB 401(k) Plan and for 2023 received matching and profit-sharing contributions to her account. Nonqualified Deferred Compensation During 2021 FCB’s Board of Directors adopted the FCB 2021 Plan. The purpose of the FCB 2021 Plan is to permit management and other highly compensated associates of FCB and its participating affiliates to save for retirement and other long-term financial goals on a tax-deferred basis by electing annually to defer receipt of portions of their base salaries and LTIP award payments in excess of amounts they could defer through their voluntary contributions to our Section 401(k) plans. The FCB 2021 Plan does not provide for FCB to make any additional or discretionary contributions to participants’ plan accounts. Mr. Nix, Mrs. Bryant, and Mr. Bristow were participants in the FCB 2021 Plan during 2023. Mr. Holding and Mrs. Rupp are eligible to participate in the plan but have not elected to defer any compensation. Also, prior to our merger with FCB-SC during 2014, FCB-SC maintained two unfunded, nonqualified deferred compensation plans in which various officers of FCB-SC were participants (the “FCB-SC Plans”). In connection with that merger, FCB agreed to assume, accrue interest on, and distribute the accounts of participants in the FCB-SC Plans in accordance with the terms of the plans as they existed when the merger was completed. Participants may not make any further deferrals under the FCB-SC Plans. FCB is responsible for interest accrued on the balances in participants’ plan accounts, but FCB does not make any contributions to the plans. Mr. Nix and Mr. Bristow have accounts under both FCB-SC Plans. | | | | | | 64 | | 2024 Annual Proxy Statement | | |
Executive Compensation The following table provides information regarding accounts under the FCB 2021 Plan and the two FCB-SC Plans of our NEOs who were participants in those plans during 2023. NONQUALIFIED DEFERRED COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | Name | | Plan Name | | Executive
Contributions in Last Fiscal Year (2) | | | Our Contributions in Last Fiscal Year (3) | | | Aggregate
Earnings/
(Loss) in Last Fiscal Year | | | Aggregate Withdrawals/ Distributions | | | Aggregate
Balance at Last Fiscal Year End (6) | | | | | | | | | | Craig L. Nix | | FCB 2021 Nonqualified Deferred Compensation Plan | | $ | 170,656 | | | $ | -0- | | | $ | 73,499 | (4) | | $ | -0- | | | $ | 646,059 | | | | FCB-SC Deferred Compensation Plan (1) | | | -0- | | | | -0- | | | | 10,855 | (5) | | | -0- | | | | 138,328 | | | | FCB-SC 409A Deferred Compensation Plan (1) | | | -0- | | | | -0- | | | | 59,131 | (5) | | | -0- | | | | 753,539 | | Hope H. Bryant | | FCB 2021 Nonqualified Deferred Compensation Plan | | | 502,813 | | | | -0- | | | | 86,305 | (4) | | | -0- | | | | 736,527 | | | | | | | | | | Peter M. Bristow | | FCB 2021 Nonqualified Deferred Compensation Plan | | | 362,813 | | | | -0- | | | | 91,678 | (4) | | | -0- | | | | 863,969 | | | | FCB-SC Deferred Compensation Plan (1) | | | -0- | | | | -0- | | | | 45,008 | (5) | | | -0- | | | | 573,565 | | | | FCB-SC 409A Deferred Compensation Plan (1) | | | -0- | | | | -0- | | | | 109,641 | (5) | | | -0- | | | | 1,397,217 | |
| (1) | The FCB-SC Deferred Compensation Plan was replaced by the FCB-SC 409A Deferred Compensation Plan in 2004. |
| (2) | No additional deferrals may be made by Mr. Nix or Mr. Bristow under either FCB-SC Plan. |
| (3) | No contributions are made by FCB to officers’ accounts under the FCB Plan and 2021 Plan. Although each of the FCB-SC Plans of our NEOs who had account balances under those plans at December 31, 2021. NON-QUALIFIED DEFERRED COMPENSATION
| | | | | | | | | | | | | | | Name (1) | | | | Plan Name | | Executive
Contributions
in Last
Fiscal Year (3) | | Our
Contributions
in Last
Fiscal Year (4) | | Aggregate
Earnings
in Last
Fiscal Year (5)(6) | | Aggregate
Withdrawals/
Distributions | | Aggregate
Balance at Last
Fiscal Year End (7) | | | | | | | | | Craig L. Nix | | | | FCB-SC Deferred
Compensation Plan (2) | | $ -0- | | $ -0- | | $ 9,218 | | $ -0- | | $ 117,471 | | | FCB-SC 409A Deferred Compensation Plan (2) | | -0- | | -0- | | 50,215 | | -0- | | 639,917 | | | | | | | | | Peter M. Bristow | | | | FCB 2021 Non-qualified Deferred Compensation Plan | | 52,500 | | -0- | | 2,382 | | -0- | | 54,882 | | | | | | FCB-SC Deferred Compensation Plan (2) | | -0- | | -0- | | 38,222 | | -0- | | 487,080 | | | FCB-SC 409A Deferred Compensation Plan (2) | | -0- | | -0- | | 93,109 | | -0- | | 1,186,538 |
(1) | Mr. Nix, Mrs. Bryant and Mr. Bristow were participants in the FCB Plan during 2021. However, Mr. Nix and Mrs. Bryant elected to defer a portion of their future LTIP award payments only and, because the LTIP award payments made during 2021 for the 2018-2020 Performance Period were paid before the March 1, 2021 effective date of the FCB Plan, they had no deferrals during 2021 and no account balances at December 31, 2021. Mr. Bristow elected to defer a portion of his salary and future LTIP award payments and, as a result, he had deferrals of salary during 2021 and an account balance at December 31, 2021.
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(2) | The FCB-SC Deferred Compensation Plan was replaced by the FCB-SC 409A Deferred Compensation Plan in 2004.
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(3) | Mr. Bristow’s listed deferrals under the FCB Plan are included in the amount listed for him in the “Salary” column of the Summary Compensation Table as compensation received by him for 2021. No additional deferrals may be made by Mr. Nix or Mr. Bristow under either FCB-SC Plan.
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(4) | No contributions are made by FCB to officers’ accounts under the FCB Plan. Although each of the FCB-SC Plans permitted employer contributions, FCB-SCpermitted employer contributions, FCB-SC did not make contributions to Mr. Nix’s and Mr. Bristow’s plan accounts, and FCB has not made, and in the future will not make, any contributions to their accounts.
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| (4) | The listed amounts of aggregate earnings under the FCB 2021 Plan reflect net amounts accrued by FCB to the named NEOs’ respective accounts for 2023, as measured by the deemed net investment income that would have accrued to their accounts if their account balances had actually been invested during 2023 in the publicly traded mutual funds or other deemed investment options elected by the officers from among those available to participants under the plan. Many of those deemed investment options are identical to the investment options offered to participants in the Section 401(k) plans. However, certain investment funds that are available to Section 401(k) plan participants are not options available to FCB 2021 Plan participants because those investment funds are only available for the investment of assets held in employer sponsored ERISA retirement plans, or because they are not available to plans that have smaller aggregate amounts of assets. In the case of those Section 401(k) plan investment options, a similar investment fund option is offered to participants in the FCB 2021 Plan that is equivalent to, but not more favorable than, the Section 401(k) plan option, with the exception of five investment funds available to Section 401(k) plan participants for which no comparable option is available to FCB 2021 Plan participants. Because the investment options available to FCB 2021 Plan participants are not more favorable than the options available to Section 401(k) plan participants, no deemed investment earnings credited by FCB to our NEOs’ accounts for 2023 under the FCB 2021 Plan are considered to be “above market” or are included in the Summary Compensation Table as compensation received by them for that year. (5) | The listed amount of aggregate earnings for Mr. Bristow’s account under the FCB Plan reflects amounts accrued by FCB for 2021 to his account, as measured by the deemed investment earnings that would have been credited to his account if it had actually been invested in the publicly traded mutual funds or other deemed investment options elected by Mr. Bristow from among those available under the plan. With the exception of a money-market fund available to FCB Plan participants which, due to operational capabilities of our FCB Plan record keeper, is different from the substantially similar money market fund offered to participants in our Section 401(k) plans, all of the 29 deemed investment options available to officers under the FCB Plan also are available to all of FCB’s associates for the investment of funds in their accounts under FCB’s 401(k) plans, and, under the SEC’s disclosure rules, none of the deemed investment earnings credited by FCB to Mr. Bristow’s account under the FCB Plan are considered to be “above market” or are included in the Summary Compensation Table as compensation received by Mr. Bristow for 2021.
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| (5) | The listed amounts of aggregate earnings for Mr. Nix’s and Mr. Bristow’s accounts under the FCB-SC Plans reflect interest accrued by FCB for 2021 to their respective separate accounts under those plans. Of those amounts, an aggregate of $19,355 for Mr. Nix and $37,642 for Mr. Bristow is considered to be “above market” and is included in their respective amounts listed in the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table as compensation received by them for 2021. Those “above-market” amounts reflect the portions of total interest FCB accrued to their accounts during 2021 that exceed the amounts that would have been accrued at a rate equal to 120% of the “applicable federal rates,” as set by the Internal Revenue Service, in effect at the time the fixed rate at which interest actually is accrued on each account was set. |
(7) | The listed amounts reflect the aggregate balances credited to the officers’ accounts under each of the plans at December 31, 2021. Of the amounts of executive contributions and aggregate earnings credited to Mr. Bristow’s account under the FCB Plan during 2021, the full amount of Mr. Bristow’s contribution ($52,500) is reported in the Summary Compensation Table (under the “Salary” column) as compensation received by him for 2021. The FCB Plan was first established during 2021 and, as a result, none of Mr. Bristow’s year-end account balance under that plan has been reported as compensation in the Summary Compensation Tables contained in our proxy statements for years prior to 2021. In the case of the FCB-SC Plans, aggregates of $103,963 and $193,567, respectively, were reported as compensation received by Mr. Nix and Mr. Bristow for years prior to 2021 in the Summary Compensation Tables contained in our proxy statements for those years, including aggregates of $91,463 and $177,942, respectively, representing “above market” amounts of interest accrued to their accounts under the FCB-SC Plans during those prior years.
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FCB 2021 Nonqualified Deferred Compensation Plan. Amounts deferred by each participant under the FCB Plan are credited to a book-entry account and represent an unfunded, unsecured obligation of FCB to the participant. Each participant’s account is increased or decreased by FCB to reflect gains or losses the participant’s account would have realized or incurred if it had been invested in one or more deemed investment options selected by the participant from a menu of 29 publicly-traded mutual funds or other investment vehicles determined from time to time by FCB. Each of those deemed investment options also is available to all associates for the investment of their accounts under FCB’s 401(k) plans,with the exception of a money-market fund available to FCB Plan participants which, due to operational capabilities of our FCB Plan record keeper, is different from the substantially similar money market fund offered to participants in our Section 401(k) plans. Participants may change their investment option elections at any time. The deemed investment options are used for measurement purposes only and amounts deferred by participants do not represent any actual investments made on their behalves. FCB’s payment obligation to each participant at any time is equal to the amount of the participant’s own elective deferrals to the FCB Plan, as adjusted for the hypothetical gains or losses on the participant’s account based on the participant’s deemed investment option elections.
Each participant is fully vested at all times in all amounts credited to his or her account under the FCB Plan. Distributions of a participant’s FCB Plan account will be made following a “triggering event,” which will be the participant’s separation of service, death, disability, or certain limited unforeseeable emergencies. Distributions will generally be paid in a single lump sum unless the participant elects, upon commencing his or her participation in the FCB Plan, to receive distributions in annual installments over five, 10 or 15 years. Payments to participants under the FCB Plan will be made, or will commence, within 90 days following January 31 of the calendar year immediately following the year in which their triggering events occur.
The FCB Plan is designed to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and all distributions will be made in accordance with Section 409A. FCB may generally amend or terminate the FCB Plan at any time, provided that any such action complies with the requirements of Section 409A and will not reduce a participant’s FCB Plan account balance.
A Rabbi Trust has been established by FCB in connection with the FCB Plan for purposes of holding assets necessary to fund distributions payable under the plan. However, FCB Plan participants (and their beneficiaries) at all times have the same status as general, unsecured creditors of FCB.
FCB-SC Deferred Compensation Plans. The two FCB-SC Plans include FCB-SC’s original Deferred Compensation Plan, which was frozen effective December 31, 2004, and a new 409A Deferred Compensation Plan that replaced the frozen plan. The terms of the FCB-SC Plans continue to govern the accounts of participants as they existed when FCB assumed the plans. Each of the FCB-SC Plans permitted participants to defer up to 10% of their “compensation” (as defined in the plans) each year. Deferred amounts were credited to unfunded accounts on FCB-SC’s books, and interest was accrued on the accounts at a fixed or floating rate, as elected by the participants when they first became participants. Mr. Nix’s and Mr. Bristow’s accounts under both plans accruethe FCB-SC Plans reflect interest accrued by FCB for 2023 to their respective separate accounts under those plans. Of those amounts, an aggregate of $22,792 for Mr. Nix and $44,326 for Mr. Bristow is considered to be “above market” and is included in their respective amounts listed in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table as compensation received by them for 2023. Those “above-market” amounts reflect the portions of total interest FCB accrued to their accounts during 2023 that exceed the amounts that would have been accrued at a rate equal to 120% of the “applicable federal rates,” as set by the Internal Revenue Service, in effect at the 8.20%time the fixed contract rate thatat which interest actually is accrued on each account was provided for byset.
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| (6) | The listed amounts reflect the aggregate balances credited to the officers’ accounts under each plan at December 31, 2023. |
| (a) | Of the time they became participants.amount of executive contributions and aggregate earnings (or loss) credited to each officer’s account under each plan in which he or she was a participant, the following amounts are reported in the Summary Compensation Table as compensation received by the officer for 2023: FCB 2021 Plan: Mr. Nix -$-0-, Mrs. Bryant - $140,000, and Mr. Bristow -$-0-;FCB-SC Deferred Compensation Plan: Mr. Nix - $3,342, and Mr. Bristow - $8,262; and FCB-SC 409A Deferred Compensation Plan: Mr. Nix - $19,450 and Mr. Bristow - $36,064. |
| (b) | Of the amounts of each officer’s year-end account balance under each plan, the following amounts have been reported as compensation received by the officer in the Summary Compensation Tables contained in our proxy statements for years prior to 2023: FCB 2021 Plan: Mr. Nix - $620,476, Mrs. Bryant - $535,932, and Mr. Bristow - $828,859; FCB-SC Deferred Compensation Plan: Mr. Nix - $19,337, and Mr. Bristow - $47,845; and FCB-SC 409A Deferred Compensation Plan: Mr. Nix - $124,983, and Mr. Bristow - $224,212. |
FCB 2021 Nonqualified Deferred Compensation Plan. Amounts deferred by each participant under the FCB 2021 Plan are credited to a book-entry account and represent an unfunded, unsecured obligation of FCB to the participant. Each participant’s account is increased or decreased by FCB to reflect gains or losses the participant’s account would have realized or incurred if it had been invested in one or more deemed investment options selected by the participant from a menu of publicly-traded mutual funds or other investment vehicles determined from time to time by FCB. Participants may change their investment option elections at any time. The deemed investment options are used for measurement purposes only and amounts deferred by participants do not represent any actual investments made on | | | | | | | Participants’ FCB-SC2024 Annual Proxy Statement
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Executive Compensation their behalf. FCB’s payment obligation to each participant at any time is equal to the amount of the participant’s own elective deferrals to the FCB 2021 Plan, as adjusted for the hypothetical gains or losses on the participant’s account based on the participant’s deemed investment option elections. Each participant is fully vested at all times in all amounts credited to his or her account under the FCB 2021 Plan. Distributions of a participant’s FCB 2021 Plan account will be made following a “triggering event,” which will be the participant’s separation of service, death, disability, or certain limited unforeseeable emergencies. Distributions will generally be paid in a single lump sum unless the participant elects, upon commencing his or her participation in the plan, to receive distributions in annual installments over five, 10, or 15 years. Payments to participants under the FCB 2021 Plan will be made, or will commence, within 90 days following January 31 of the calendar year immediately following the year in which their triggering events occur. The FCB 2021 Plan is designed to comply with Section 409A of the Internal Revenue Code of 1986 (“Section 409A”) and all distributions will be made in accordance with Section 409A. FCB may generally amend or terminate the FCB 2021 Plan at any time, provided that any such action complies with the requirements of Section 409A and will not reduce a participant’s plan account balance. A Rabbi Trust has been established by FCB for purposes of holding assets necessary to fund distributions payable under the FCB 2021 Plan. However, FCB 2021 Plan participants (and their beneficiaries) at all times have the same status as general, unsecured creditors of FCB. FCB-SC Deferred Compensation Plans. The two FCB-SC Plans include FCB-SC’s original Deferred Compensation Plan, which was frozen effective December 31, 2004, and a new 409A Deferred Compensation Plan that replaced the frozen plan. The terms of the FCB-SC Plans continue to govern the accounts of participants as they existed when FCB assumed the plans. Each of the FCB-SC Plans permitted participants to defer up to 10% of their “compensation” (as defined in the plans) each year. Deferred amounts were credited to unfunded accounts on FCB-SC’s books, and interest was accrued on the accounts at a fixed or floating rate, as elected by the participants when they first became participants. Mr. Nix’s and Mr. Bristow’s accounts under both plans accrue interest at the 8.20% fixed contract rate that was provided for by each plan at the time they became participants. Participants’ FCB-SC Plan accounts will be paid out upon their retirement, and participants could elect to be paid in a lump sum or in an annuity of five, 10, 15, or 20 years. If a participant dies before or after payments commence, payments will be made to the participant’s designated beneficiary in the manner elected by the participant, or if no election was made, in a lump-sum payment. If a participant terminates employment for reasons other than retirement, the participant’s plan accounts will be paid in a lump sum. In the event of an unforeseen emergency, at a participant’s request a distribution of all or part of the participant’s accounts may be made at the discretion of the plan administrator, subject to applicable law. FCB-SC Plan participants (and their beneficiaries) at all times have the same status as general, unsecured creditors of FCB. Potential Payments upon Termination of Employment The only contracts, agreements, plans, or arrangements under which payments or other benefits will be made or provided to any of our NEOs in connection with a termination of their employment or a change in their responsibilities are: | ● | | FCB’s qualified pension plans and Section 401(k) plans; |
| ● | | the FCB 2021 Plan and the two FCB-SC Plans; |
| ● | | the separation from service agreements under which payments will be made to the participant’s designated beneficiary in the manner elected by the participant, or if no election was made, in a lump-sum payment. If a participant terminates employment for reasons other than retirement, the participant’s plan accounts will be paid in a lump sum. In the event of an unforeseen emergency, at a participant’s request a distribution of all or part of the participant’s accounts may be made at the discretion of the plan administrator, subject to applicable law. FCB-SC Plan participants (and their beneficiaries) at all times have the same status as general, unsecured creditors of FCB. Potential Payments upon Termination of Employment
The only contracts, agreements, plans or arrangements under which payments or other benefits will be made or provided to any of our NEOs in connection with a termination of their employment or a change in their responsibilities are:
| ● | | FCB’s pension plans and Section 401(k) plans;
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| ● | | FCB’s 2021 Non-Qualified Deferred Compensation Plan and FCB-SC’s two non-qualified deferred compensation plans;
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| ● | | the separation from service agreements under which payments will be made following an officer’s separation from service after a specified age or his or her earlier death while still employed;
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| ● | | provisions of FCB’s LTIP under which, if a participant dies, retires, becomes disabled, or if the participant’s employment is terminated by FCB other than for cause, before a previously granted award becomes payable, a pro rata share of the award may be paid, at the Committee’s discretion, after the end of the Performance Period if and to the extent that the award would have become earned and payable had the participant’s employment status not changed; and
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| ● | | FCB’s group insurance plans under which disability and death benefits are provided to all of our and FCB’s eligible officers and associates.
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There are no other agreements with any of our NEOs under which change-in-control payments would be made as a result of a change in control of our company or FCB or severance payments would be made upon a termination of their employment.
Payments and benefits under the pension plans, Section 401(k) plans, separation from service agreements,after a specified age or his or her earlier death while still employed;
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| ● | | provisions of FCB’s LTIP and non-qualified deferred compensation plans, are described inMPP under which, if a participant dies, retires, becomes disabled, or if the discussions above. An associate’s death benefit under participant’s employment is terminated by FCB other than for cause, before a previously granted award becomes payable, a pro rata share of the award may be paid, at the Committee’s discretion, after the end of the period covered by the award if and to the extent that the award would have become earned and payable had the participant’s employment status not changed; and |
| ● | | FCB’s group life insurance plans equals the associate’s annual base salary rate, with a maximum benefitunder which disability and death benefits are provided to all of $600,000. Pay Ratio
As required by the Dodd-Frank Wall Street Reformour and Consumer Protection Act,FCB’s eligible officers and Item 402(u) of the SEC’s Regulation S-K,associates.
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Payments and benefits for our NEOs under the pension plans, Section 401(k) plans, separation from service agreements, LTIP and MPP, and nonqualified deferred compensation plans, are described in the discussions above. An associate’s death benefit under FCB’s group life insurance plan equals one times the associate’s base annual earnings, up to a maximum benefit of $600,000. There are no agreements with any of our NEOs under which payments would be made as a result of a change in control of our company or FCB or any other severance arrangements under which payments would be made to them upon a termination of their employment. | | | | | | 66 | | 2024 Annual Proxy Statement | | |
Executive Compensation Pay Ratio In accordance with the requirements of Schedule 14A of the Exchange Act, and Item 402(u) of the SEC’s Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our associates (i.e., our employees) to the annual total compensation of our Chairman and Chief Executive Officer, Frank B. Holding, Jr. (our “CEO”). For 2023: | ● | | the annual total compensation of our associates (i.e., “median associate” was $103,692, and |
| ● | | our employees) and theCEO’s annual total compensation, as reported in the “Total” column of our Chairman and Chief Executive Officer, Frank B. Holding, Jr. (our “CEO”). For 2021:
| ● | | the annual total compensation of our “median associate” was $76,985, and
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| ● | | our CEO’s annual total compensation, as reported in the “Total” column of the Summary Compensation Table included in this proxy statement, was $5,629,478.
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Based on this information, for 2021proxy statement, was $9,961,303.
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Based on this information, for 2023 the ratio of the annual total compensation of our CEO to the annual total compensation of our median associate was 96.1:1. This “pay ratio” is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2023, we reviewed our associate population and compensation arrangements for our associates and, because of the significant increase in our associate population resulting from employees of SVB becoming our associates in connection with the SVB Acquisition in March 2023, we believed there had been changes that would significantly affect our pay ratio disclosure. As a result, for purposes of the calculation of our pay ratio for 2023, we selected a new median associate on November 24, 2023. On that date, our associate population consisted of a total of 16,010 U.S. and non-U.S. associates, including permanent full-time and part-time associates and temporary and seasonal associates, but excluding our CEO and our contract workers. Of that total number, we had a total of 13 non-U.S. associates, including 11 located in Canada and two located in Mexico, all of whom we excluded for purposes of our analysis. From our remaining population of 15,997 associates, we identified our median associate using a consistently applied compensation measure described below, which is the same measure we used to identify our previous median associate. | ● | | We compared the aggregate amounts of associates’ 2023 compensation through November 24, 2023 (including salary, wages, overtime pay, commissions, bonuses, incentives, and certain other compensation), and our matching contributions to Section 401(k) plan accounts, together with the amounts of our most recent annual profit-sharing contributions (made in 2023 for 2022) to FCB 401(k) Plan accounts of associates, all as reflected in our payroll records. For associates included in the associate population who were hired or became our associates after January 1, 2023 (including former SVB employees), we considered them as having been employed at their salary or wage rates for the entire year prior to November 24, 2023. We did not make any cost-of-living adjustment in any associate’s compensation. From the totals above we identified 13 associates whose 2023 totals were at or near the median total but who were participants in different plans under our retirement programs, and, for those who were pension plan participants, we obtained estimates of their respective changes in pension values (if any) based on the status of their participation in those plans. |
| ● | | We then compiled the aggregate amounts of those 13 associates’ 2023 compensation and, for each associate in the group who was a participant in one of our pension plans, we added, based on the pension plan in which he or she participated and his or her participation status under the plan, the average of the estimated changes (if positive) in the actuarial present values of accumulated pension plan benefits for 2023 for the associates in the group who participated in that plan to determine an estimate of his or her 2023 total compensation. |
| ● | | We then compared those associates’ 2023 compensation compiled as described above, and identified the initial median associate for 2023. |
| ● | | Because the amounts of changes in the actuarial present values of accrued pension benefits can increase and decrease each year, thereby affecting the total compensation of our median associate, it was 73.1:1. This “pay ratio” isdetermined that, if the initial median associate identified as described above was a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-Kpension plan participant, we would review the associates above and is higher than in prior years, primarilybelow that associate and select one whose total compensation was substantially the same as a resultthat of the special “merger success” bonus for 2021 approved byinitial median associate, but who was not a pension plan participant. However, the Board of Directors for certain of our executive officersinitial median associate identified as described above was not a pension plan participant and, associates, including our CEO, in connection with our merger with CIT which was successfully completed on January 3, 2022. We initially selectedtherefore, is our median associate on December 31, 2020. On that date, our associate population consisted of a total of 6,721 permanent full-time and part-time associates and temporary and seasonal associates, excluding our CEO.From that population, we identified our median associate using a consistently applied compensation measure described below, which is the same measure we used to identify our previous median associate.for 2023.
| ● | | We compared the aggregate amounts of associates’ 2020 compensation through November 30, 2020 (including salary, wages, overtime pay, commissions, bonuses, incentives and certain other compensation),and our matching contributions
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| to 401(k) plan accounts, together with the amounts of our most recent annual profit-sharing contributions (made in 2020 for 2019) to the accounts of those associates who were participants in our enhanced 401(k) plan, all as reflected in our payroll records. Forassociates included in the associate population who were hired or became our associates after January 1, 2020, we considered them as having been employed at their salary or wage rates for the entire 12-month period. We did not make any cost-of-living adjustment in any associate’s compensation. From the totals above we identified 10 associates whose 2020 totals were at or near the median total, including five associates who were participants in our legacy Section 401(k) plan and one of our defined benefit pension plans, and five who were participants in our enhanced Section 401(k) plan and one of our pension plans but whose pension plan accounts were frozen and no longer accrued additional service credit, and we obtained estimates of their respective changes in pension values based on the status of their participation in the pension plans.
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| ● | | We then compiled the aggregate amounts of those 10 associates’ 2020 compensation through December 31, 2020, and, for associates who were pension plan participants, we added to each associates’ compensation, based on his or her participation status under the pension plans, the average of the estimated changes in the actuarial present values of accumulated pension plan benefits for 2020 to determine estimates of their 2020 total compensation.
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| ● | | We then compared our associates’ 2020 compensation compiled through December 31, 2020, as described above and identified the median associate for 2020.
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| ● | | For 2021, we reviewed our associate population and compensation arrangements for our associates and believe there have been no changes that would significantly affect our pay ratio disclosure. However, the original median associate selected as of December 31, 2020 as described above is no longer employed with us. As a result, for purposes of the calculation of our pay ratio for 2021, we selected a substitute median associate whose 2020 compensation was substantially similar to that of the original median associate based on the compensation measures described above.
|
After we selected our substitute median associate, we determined the amount of that associate’s actual 2021
|
After we selected our median associate, we determined the amount of that associate’s actual 2023 annual total compensation listed above in the same manner as we determined our CEO’s annual total compensation disclosed in the “Total” column of our Summary Compensation Table included in this proxy statement, and we compared our CEO’s annual total compensation to that of the median associate to determine our 2023 pay ratio. | | | | | | | 2024 Annual Proxy Statement | | 67 |
Executive Compensation Compensation Committee Interlocks and Insider Participation Calvin B. Koonce, Jr., who is a relative of our director and CNG Committee member Victor E. Bell III, is employed by FCB in a non-executive officer position. Mr. Koonce’s aggregate compensation for services during 2023 amounted to $163,362 (including FCB’s contributions to his FCB 401(k) Plan account, but excluding other normal benefits provided to all associates). We believe the terms of Mr. Koonce’s employment, including compensation, are commensurate with his experience, responsibilities, and performance in his position, his incentive opportunities are the same as those provided to other associates in similar positions, and his employee benefits are the same as are provided on the same terms to all other associates. Mr. Koonce’s compensation is set each year through FCB’s normal evaluation and merit increase process. Our Audit Committee reviewed and approved the terms of his employment relationship for 2023 and will continue to do so annually. | | | | | | 68 | | 2024 Annual Proxy Statement | | |
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of the SEC’s RegulationS-K, we are providing the following information about the relationship between our NEOs’ compensation and certain measures of our financial performance. Further information about ourphilosophy and how we align executive compensation with our performance is contained in the discussion under the heading “COMPENSATION DISCUSSION AND ANALYSIS.” | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average Summary Compensation Table Total for Non-PEO Named Executive | | | Average
Compensation
Actually
Paid to | | | | | | | | | | | | | Peer Group
Total
Shareholder | | | 2023 | | $ | 9,961,303 | | | $ | 9,565,064 | | | $ | 5,201,280 | | | $ | 5,033,984 | | | $ | 268 | | | $ | 97 | | | $ | 11,466 | | | 2022 | | | 8,031,975 | | | | 8,086,666 | | | | 6,460,948 | | | | 5,993,031 | | | | 144 | | | | 98 | | | | 1,098 | | | 2021 | | | 5,629,478 | | | | 5,623,548 | | | | 2,868,125 | | | | 2,889,582 | | | | 157 | | | | 124 | | | | 547 | | | 2020 | | | 4,436,450 | | | | 3,904,039 | | | | 2,397,694 | | | | 2,110,228 | | | | 109 | | | | 90 | | | | 492 | |
| (1) | For each year, reflects the total compensation amount reported for our Chief Executive Officer (our “PEO”), Frank B. Holding, Jr., in the “Total” column of our Summary Compensation Table includedthat appears under the heading “EXECUTIVE COMPENSATION” in thisour proxy statement for that year. |
| (2) | For each year, reflects the amount of “Compensation Actually Paid” to our Chief Executive Officer, Frank B. Holding, Jr., as computed in accordance with Item 402(v) of RegulationS-K. “Compensation Actually Paid” is calculated solely for purposes of required disclosures under Item 402(v) and we compared our CEO’s annualdoes not reflect the actual amount of compensation earned by or paid to Mr. Holding for each year. In accordance with Item 402(v), the following adjustments were made to Mr. Holding’s total compensation as presented in the Summary Compensation Table for each year to thatcalculate “Compensation Actually Paid.” No equity awards have been granted to Mr. Holding and, as a result, the table below reflects no equity award adjustments. |
| | | | | | | | | | | | | | | | | | | Reported Summary
Compensation Table | | | Reported Change in
Actuarial | | | | | | | | | 2023 | | $ | 9,961,303 | | | $ | (429,578 | ) | | $ | 33,339 | | | $ | 9,565,064 | | | 2022 | | | 8,031,975 | | | | -0- | | | | 54,691 | | | | 8,086,666 | | | 2021 | | | 5,629,478 | | | | (60,063 | ) | | | 54,133 | | | | 5,623,548 | | | 2020 | | | 4,436,450 | | | | (581,100 | ) | | | 48,690 | | | | 3,904,039 | |
| (a) | Reflects subtraction of the substitute median associatenet aggregate change in the actuarial present value of Mr. Holding’s accumulated benefits under all defined benefit and actuarial pension plans as reported for him in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table for each year. For 2022, the amount of the net change was a negative amount and, in accordance with the SEC’s disclosure rules, is shown as |
| (b) | Reflects addition of annual “service cost,” which is the actuarially determined present value of Mr. Holding’s benefit under FCB’s defined benefit pension plan attributable to determineservices he rendered during each year. There were no amendments to defined benefit or actuarial plans during 2023, 2022, 2021, or 2020 that resulted in service costs for prior years. |
| (3) | For each year, reflects the average of the total compensation amounts reported for our other NEOs as a group (excluding Mr. Holding) in the “Total” column of the Summary Compensation Table in our proxy statement for that year. Our other NEOs included for purposes of calculating the average amount for each of 2023, 2022, 2021, pay ratio.Compensation Committee Interlocks and Insider Participation
Calvin B. Koonce, Jr., who is a relative2020 are: Craig L. Nix, Hope H. Bryant, and Peter M. Bristow. In addition, our other NEOs included Ellen R. Alemany for 2022, Lorie K. Rupp for 2023 and 2021, and Jeffery L. Ward for 2020. The average total compensation of our directorother NEOs for 2022 was higher than in 2023, 2021, and Compensation, Nominations and Governance Committee member Victor E. Bell III, is employed by FCB in2020 primarily as a non-executive officer position. During 2021, Mr. Koonce’s aggregateresult of the compensation amountedpaid to $149,271 (including FCB’s contributions to our Section 401(k) planMrs. Alemany for his account, but excluding other normal benefits provided to all associates). Our Audit Committee reviewed and approved2022, following the CIT Merger, under the terms of hisher employment relationshipagreement, and the RSUs deemed to have been granted to her during 2022 upon the conversion into RSUs covering our Class A Common of equity awards previously granted to her by CIT.
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| (4) | For each year, reflects the average of the amounts of “Compensation Actually Paid” to the other NEOs as a group (excluding Mr. Holding), as computed in accordance with Item 402(v) of RegulationS-K. The names of each of the other NEOs included for purposes of calculating the average amount for each of 2023, 2022, 2021, and will continue to do so annually.Employment2020 are: Craig L. Nix, Hope H. Bryant, and Compensation Arrangements with Former CIT Officers
Our current executive officers include CIT’s and CIT Bank, N.A.’s former Chairwoman and Chief Executive Officer,Peter M. Bristow. In addition, our other NEOs included Ellen R. Alemany for 2022, Lorie K. Rupp for 2023 and their former Chief Credit Officer, Marisa J. Harney. Concurrent2021, and Jeffery L. Ward for 2020. “Compensation Actually Paid” is calculated using the same methodology described in Footnote 2. The average “Compensation Actually Paid” to our other NEOs for 2022 was higher than in 2023, 2021 and 2020, primarily as a result of the compensation paid to Mrs. Alemany for 2022 as described in Footnote 3 above. In accordance with the executionrequirements of Item 402(v), the following adjustments were made to average total compensation of the other NEOs as a group for each year to determine the “Compensation Actually Paid.”
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| | | | | | | 2024 Annual Proxy Statement | | 69 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Average
Reported
Summary
Compensation
Table Total for | | | | | | Average
Equity Award
Adjustments (b) | | | Average
Reported
Change in
Actuarial Present Value
of Pension
Benefits (c) | | | | | | | | | 2023 | | $ | 5,201,280 | | | $ | | | | $ | | | | $ | (197,578 | ) | | $ | 30,283 | | | $ | 5,033,984 | | | 2022 | | | 6,460,948 | | | | (659,436 | ) | | | 148,923 | | | | -0- | | | | 42,596 | | | | 5,993,031 | | | 2021 | | | 2,868,125 | | | | -0- | | | | -0- | | | | ( 21,516 | ) | | | 42,973 | | | | 2,889,582 | | | 2020 | | | 2,397,694 | | | | -0- | | | | -0- | | | | (323,938 | ) | | | 36,472 | | | | 2,110,228 | |
| (a) | For 2022, reflects subtraction of the average for our other NEOs as a group (excluding Mr. Holding) of the fair value, computed in accordance with FASB ASC Topic 718, of equity awards granted during that year. The RSUs deemed to have been granted to Mrs. Alemany during 2022 upon conversion of an equity award previously granted to her by CIT is the only equity award that is deemed to have been granted to any of our merger agreement withNEOs during 2023, 2022, 2021, or 2020. |
| (b) | Reflects the addition of a net average amount of equity award adjustments for 2022, which was the only year in which equity awards were outstanding. The amounts added or subtracted in calculating the total average equity award adjustments for 2022 are listed in the following table. As described in footnotes to the table, Mrs. Alemany is the only NEO who held any equity awards during any year shown in the table. Amounts listed are averages for our four NEOs as a group, excluding Mr. Holding, based on equity awards held only by Mrs. Alemany. |
| | | | | | | | | | | | | | | | | | | | | | | Fair Value as
of Vesting Date
of Equity Awards | | | Average Change
in Fair Value as
of Vesting Date
of Equity Awards
Granted | | | Average Change in
Fair Value as
of End of the Year in
Outstanding
Equity Awards
Granted | | | of Dividends or
other Earnings Paid
on Stock or Option
Awards not
Otherwise Reflected
in Fair Value or | | | | | | 2022 | | $ | 581,662 | | | $ | (84,710 | ) | | $ | (348,030 | ) | | $ | -0- | | | $ | 148,923 | |
| (A) | Reflects the average for our NEO’s as a group (excluding Mr. Holding) based on the fair value as of its vesting date of one equity award previously granted by CIT on October 15, 2020, FCB agreed to employ, and enteredMrs. Alemany which was modified when it was converted into an employment letter agreement with, eachRSUs covering shares of them, effectiveour Class A Common upon consummation of the merger,CIT Merger. As a result of the modification, that award is deemed to have been granted by us during 2022. |
| (B) | Reflects subtraction of an average for our NEOs as described below.Ellen R. Alemany. The agreement witha group (excluding Mr. Holding) based on the change (which was a decrease) in the fair value between consummation of the CIT Merger on January 3, 2022, and the partial vesting dates during 2022 of three equity awards previously granted by CIT to Mrs. Alemany provideswhich were converted into RSUs covering shares of our Class A Common upon consummation of the CIT Merger. The converted CIT equity awards were granted by CIT in prior years, and the RSUs into which they were converted are not considered to have been granted by us during 2022 because the terms of the awards were not modified.
|
| (C) | Reflects subtraction of an average for our NEOs as a two-yeargroup (excluding Mr. Holding) based on the change (which was a decrease) in the fair value between consummation of the CIT Merger on January 3, 2022, and December 31, 2022, of the unvested portion of four equity awards previously granted by CIT to Mrs. Alemany which were converted into RSUs covering shares of our Class A Common upon consummation of the merger. The converted CIT equity awards were granted by CIT in prior years and the RSUs into which they were converted are not considered to have been granted by us during 2022 because the terms of the awards were not modified. |
| (D) | All dividends accrued on unvested shares covered by Mrs. Alemany’s RSUs during 2022 were included in total compensation in the 2022 Summary Compensation Table. As a result, no separate adjustment for them is made in the determination of average “Compensation Actually Paid” to the other NEOs. |
| (c) | Reflects subtraction of the average net aggregate change in the actuarial present value of the accumulated benefits of the other NEOs as a group (excluding Mr. Holding) under all defined benefit and actuarial pension plans as reported for them in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table for each applicable year. For 2022, the average net amount of the change was a negative amount and, in accordance with the SEC’s disclosure rules, is shown as |
| (d) | Reflects addition of the average annual “service cost,” which is the average of the actuarially determined present values of the benefits of the other NEOs as a group (excluding Mr. Holding) under defined benefit plans attributable to services they rendered during each applicable year. There were no amendments to defined benefit or actuarial plans during 2023, 2022, 2021, of 2020 that resulted in service costs for prior years. |
| (5) | “Total Shareholder Return” (“Company TSR”) represents our cumulative total stockholder return during each measurement period and is calculated by dividing the sum of (i) the difference between the share price of our Class A Common at the end and the beginning of the measurement period, plus (ii) the cumulative amount of dividends paid on our Class A Common for the measurement period, assuming dividend reinvestment, by the share price of our Class A Common at the beginning of the measurement period. Each amount assumes that $100 was invested in our Class A Common on December 31, 2019, and dividends were reinvested for additional shares. |
| (6) | “Peer Group Total Shareholder Return” (“Peer Group TSR”) represents the cumulative total stockholder return during each measurement period for the KBW Nasdaq Bank Total Return Index, which is an industry index composed of the largest banking companies, including all regional and money center banks. Each amount assumes that $100 was invested on December 31, 2019, and dividends were reinvested for additional shares. |
| (7) | Reflects the dollar amount of net income reported in our audited consolidated financial statements for the applicable year. |
| | | | | | 70 | | 2024 Annual Proxy Statement | | |
Financial Performance Measures. one-year or other short-term financial measures to link “Compensation Actually Paid” to our NEOs for 2023 to company performance, we have not included a “Company-Selected Measure” in the Pay Versus Performance table above, nor have we included TBV+D Growth Rate or any other financial performance measure in a list of measures used to link 2023 compensation to company performance.The central objective of our strategic plan is to build the long-term value of our company and our stockholders’ investments. Our CNG Committee believes growth in tangible book value per share is a key driver of long-term value, and the performance objectives the Committee sets for awards granted each year under our LTIP, from which our NEOs derive a substantial portion of their annual compensation, are based on our TBV+D Growth Rate. Our TBV+D Growth Rate measures growth in the tangible book value, plus cumulative dividends paid, on our common stock over the preceding three years, and our TBV+D Growth Rate for 2021 through 2023 determined the payments for LTIP awards for the 2021-2023 plan Performance Period disclosed in the Summary Compensation Table above, which were a significant portion of NEO compensation for 2023. As a result, a substantial portion of compensation paid to our NEOs for 2023 was based on our TBV+D Growth Rate for 2021 through 2023 and, therefore, was linked to sustained company performance. The way we use and calculate the TBV+D Growth Rate (including adjustments made in the calculation) is described in more detail under the heading “COMPENSATION DISCUSSION AND ANALYSIS.” Our “Financial True North” measures include our net income, loan and deposit growth, noninterest income and expense, and net originated loan charge-offs for each year. They areone-year measures and are considered by the CNG Committee generally, and collectively rather than as individual measures of company performance, in its annual performance evaluation of our Chief Executive Officer and in its consideration of our executive officers’ compensation for the following year. However, those measures were not used to link “Compensation Actually Paid” for 2023 or any other year to company performance. Analysis of the Information Presented in the Pay Versus Performance Table. S-K) for a particular year. In accordance with Item 402(v) of RegulationS-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. | | | | | | | 2024 Annual Proxy Statement | | 71 |
The following graph compares, for each of 2023, 2022, 2021, and 2020, the “Compensation Actually Paid” to our Chief Executive Officer, and the average “Compensation Actually Paid” to our other NEOs, for each of those years to the Company TSR and Peer Group TSR over those years. As illustrated by the graph, the amount of “Compensation Actually Paid” to Mr. Holding and the average amount of “Compensation Actually Paid” to our other NEOs as a group (excluding Mr. Holding) for each year are generally aligned with our Company TSR over the four years presented in the graph, and our Company TSR compares favorably to the Peer Group TSR over that period. However, both our Company TSR and the Peer Group TSR for 2022 were negatively affected by the general market decline in stock prices during 2022. COMPENSATION ACTUALLY PAID (CAP) VS. COMPANY TSR AND PEER GROUP TSR  The following graph compares, for each of 2023, 2022, 2021, and 2020, the “Compensation Actually Paid” to our Chief Executive Officer, and the average “Compensation Actually Paid” to our other NEOs, for each of those years to our net income as reported in our audited financial statements for each year. While net income is one of the measures included in our “Financial True North” metrics, we do not use it alone as a performance measure in the overall executive compensation program. However, net income is a substantial component of annual increases in tangible book value and, accordingly, it is a factor in our TBV+D Growth Rate. Net income has increased each year during the four years covered by the graph, and it increased significantly for 2023 due, in large part, to the impact of the SVB Acquisition effective on March 27, 2023. As illustrated by the graph, the amount of “Compensation Actually Paid” to Mr. Holding and the average amount of “Compensation Actually Paid” to our other NEOs as a group (excluding Mr. Holding) for each year are generally aligned with increases in our net income over the four years presented in the graph. COMPENSATION ACTUALLY PAID (CAP) VS. NET INCOME | | | | | | 72 | | 2024 Annual Proxy Statement | | |
Director Compensation DIRECTOR COMPENSATION 2023 Compensation. The following table lists compensation paid to our non-associate directors during 2023 as compensation for their services as members of the Boards and committees of the Boards for their one-year terms of office following our 2023 Annual Meeting. Directors who also served as our or FCB’s officers or associates during 2023 did not receive any compensation for their services as directors. 2023 DIRECTOR COMPENSATION | | | | | | | | | | | | | | Name (1) | | Fees Earned or Paid in
Cash (3) | | | All Other Compensation (2)(4) | | | Total | | Ellen R. Alemany (2) | | $ | -0- | | | $ | 7,925,978 | | | $ | 7,925,978 | | John M. Alexander, Jr. | | | 272,500 | | | | -0- | | | | 272,500 | | Victor E. Bell III | | | 265,000 | | | | -0- | | | | 265,000 | | Michael A. Carpenter | | | 265,000 | | | | -0- | | | | 265,000 | | H. Lee Durham, Jr. | | | 322,500 | | | | -0- | | | | 322,500 | | Dr. Eugene Flood, Jr. | | | 320,000 | | | | -0- | | | | 320,000 | | Robert R. Hoppe | | | 295,000 | | | | -0- | | | | 295,000 | | Floyd L. Keels | | | 265,000 | | | | -0- | | | | 265,000 | | Robert E. Mason IV | | | 265,000 | | | | -0- | | | | 265,000 | | Robert T. Newcomb | | | 340,000 | | | | -0- | | | | 340,000 | |
| (1) | Mr. Holding, Mrs. Bryant, and Mr. Bristow are not listed in the table. Each of them served as a director for 2023, but, as reflected in the Summary Compensation Table, each was compensated as an associate of FCB and received no additional compensation for services as a director. David G. Leitch was appointed as a director during 2024 and did not serve or receive compensation as a director during 2023. Compensation will be paid for his services as a director during 2024 on the same basis as other outside directors, including a pro rata amount for his service between his appointment as a director and the date of the Annual Meeting. Vice Admiral John R. Ryan, USN (Ret.) was re-elected as a director at our 2022 Annual Meeting and served until the end of his term at our 2023 Annual Meeting. Compensation for his service during his one-year term of office following the 2022 Annual Meeting was paid in full during 2022, and no payment was made to him during 2023. |
| (2) | Mrs. Alemany was an employee of FCB during 2023 and received no retainer or fees for her service as a director. Her compensation as an employee is listed in the “All Other Compensation” column and is described in the narrative discussion below. Her employment ended on January 4, 2024, and during 2024 she will receive compensation for her services as a director on the same basis as other outside directors, including payment of a pro rata portion of annual fees for her service during the remainder of her current term of office ending at the Annual Meeting. |
| (3) | Amounts include the aggregate amounts of compensation paid (all of which was paid during 2023) to outside directors for services as directors, committee chairs, and in other Board positions for their one-year terms of office following our 2023 Annual Meeting. Dr. Flood’s total fees include, in addition to fees for his one-year term of office following the 2023 Annual Meeting, a prorated amount for his service during the time between his appointment as a director effective January 1, 2023, and the date of the 2023 Annual Meeting. |
| (4) | From time to time our directors may receive or be deemed to have received personal benefits from FCB. We believe FCB’s aggregate incremental cost associated with anpersonal benefits received during 2023 by each of our directors listed in the table did not exceed $10,000 and, for that reason, no amount for personal benefits is included for any of them in the “All Other Compensation” column in the table above. Our non-associate directors are covered under a directors and officers liability insurance policy provided by FCB, and by a travel and accident insurance policy provided by FCB that covers all of our and FCB’s officers, associates, and directors, and they are reimbursed for their expenses in attending Board and committee meetings and in attending industry and professional development events related to their duties. |
| | | | | | | 2024 Annual Proxy Statement | | 73 |
Director Compensation Schedules of Directors’ Fees. The following table describes our standard schedule of fees under which compensation was paid to non-associate directors for their services during their one-year terms of office following our 2023 Annual Meeting, and the revised schedule of fees approved by the Board of Directors under which directors will be paid during their one-year terms of office following the Annual Meeting. | | | | | | | | | Description (1) | | Amount | | | | 2023 | | | 2024 | | Annual retainer paid to each director | | $ | 245,000 | | | $ | 270,000 | | Annual retainer paid to the chairperson of our Compensation, Nominations and Governance Committee | | | 30,000 | | | | 40,000 | | Annual retainer paid to the chairperson of our Risk Committee | | | 30,000 | | | | 40,000 | | Annual retainer paid to the chairperson of our Audit Committee | | | 30,000 | | | | 40,000 | | Annual retainer paid to the chairperson of FCB’s Trust Committee | | | 7,500 | | | | 7,500 | | Annual retainer paid to our Audit Committee Financial Expert | | | 27,500 | | | | 27,500 | | Annual retainer paid to our Lead Independent Director | | | 45,000 | | | | 45,000 | | Retainer paid to participants in director working groups | | | — | | | | (2 | ) |
| (1) | Neither fee schedule contemplates the payment of fees for attendance at meetings of the Boards or committees of the Boards. However, the Boards’ approval of each fee schedule provided that, in the event of a substantial increase in the frequency of meetings, including the calling of special meetings, or the appointment of a special committee, the CNG Committee could recommend, for approval by the Boards, the payment of additional compensation in consideration for the additional time demands placed on directors. For 2023, as a result of the increase in meetings of directors related to the SVB Acquisition, the Committee recommended, and the Boards approved, payment of $20,000 in additional compensation to each outside director. Those payments are included in each director’s “Fees Earned or Paid in Cash” in the 2023 Director Compensation table above. |
| (2) | The Boards may, from time to time, appoint working groups of directors to focus on special projects or significant initiatives, including integration and optimization, transition to large bank risk management, technology and operations, or other oversight matters. It is expected that directors appointed to such a working group will be paid a monthly retainer which currently is not expected to exceed $3,000 for service as a working group chairperson, $2,500 for service as a vice-chairperson (if any), and $2,000 for other working group members. |
The separate annual retainers paid to chairpersons of the various committees, to the Audit Committee Financial Expert, and to the Lead Independent Director are in recognition of the additional time, duties, and responsibilities required by those positions. In increasing retainer amounts in the 2024 fee schedule, the CNG Committee’s recommendation to the Boards, and the Boards’ approval, took into account our compensation philosophy, the Board composition and fees paid to directors of comparable financial institutions, advice from Pay Governance on boardroom pay practices, and the increased time commitment and scope of duties and responsibilities of our directors in light of our continued growth. Compensation paid to our directors is in the form of cash, and we have no plans under which stock options or grants or other equity awards are made to directors. Ellen R. Alemany “Other Compensation.” Concurrent with the execution of our merger agreement with CIT on October 15, 2020, we agreed to employ CIT’s then current Chairwoman and Chief Executive Officer, Ellen R. Alemany, and we entered into a two-year employment agreement with her, effective upon consummation of the CIT Merger. Mrs. Alemany’s agreement and the term of her employment began when the merger became effective on January 3, 2022. The employment agreement, the term of which ended on January 4, 2024, provided for annual base salary of $1,000,000 and, in lieu of participation in our LTIP, a guaranteed annual bonus of $6,850,000 at the conclusion of each 12-month period during the term. Additionally, by virtue of having worked through the second anniversary of consummation of the merger, Mrs. Alemany will receive a retention bonus of $13 million which is expected to be paid in a lump sum during July 2024, conditioned upon her execution of a release of all claims. The retention bonus is in lieu of any amounts she would have been entitled to receive upon any qualifying termination of employment under the CIT Employee Severance Plan or any other severance arrangements with CIT or FCB. During 2022 following the merger, Mrs. Alemany served as our and FCB’s Vice Chairwoman, reporting to our Chairman and Chief Executive Officer, and served on the Boards, with duties related to the transition and integration of CIT’s and FCB’s businesses. Effective December 31, 2022, Mrs. Alemany ceased to serve as Vice Chairwoman and as an executive officer. During 2023, in addition to her role as a director, she was an employee of FCB and Special Advisor to our Chairman and Chief Executive Officer. Following the end of her employment on January 4, 2024, she continues to serve as a director and has been nominated for reelection at the Annual Meeting. | | | | | | 74 | | 2024 Annual Proxy Statement | | |
Director Compensation During 2023, Mrs. Alemany was eligible for benefits from FCB on the same basis as other former employees of CIT, and vacation, holiday, and personal leave in accordance with FCB’s plans and policies that apply to all of its associates. Additionally, in 2023, consistent with the employment agreement, FCB provided Mrs. Alemany with first-class business air travel arrangements for her business-related travel. Upon consummation of the CIT Merger, Mrs. Alemany held unvested stock awards previously granted by CIT covering an aggregate of 323,827 shares of CIT’s common stock which, in the same manner as all other CIT stock awards held by CIT’s other officers, were converted into RSUs covering an aggregate of 20,080 shares of our Class A Common and having the same terms as the converted CIT awards, with the exception of performance-based conditions that applied to one CIT stock award which, pursuant to the terms of the merger agreement, were considered to have been satisfied at the time of the merger. All RSUs would vest over time in accordance with the terms of the converted CIT awards. With the conclusion of her employment, the last of her unvested RSUs became vested and are expected to be settled during July 2024. The following table describes Mrs. Alemany’s compensation received as an employee of FCB for 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary | | Bonus (1) | | Non-Equity Incentive Plan Compensation | | Change in Pension Value and Nonqualified
Deferred
Compensation Earnings | | All Other Compensation (2) | | Total | $ 1,000,000 | | $ 6,850,000 | | $ -0- | | $ 0 | | $ 75,978 | | $ 7,925,978 |
| (1) | Includes a cash bonus paid by FCB during January 2024, pursuant to the terms of Mrs. Alemany’s employment agreement, as described in the narrative above the table, in lieu of Mrs. Alemany’s participation in our LTIP, guaranteed annual bonuses of $6,850,000 at the conclusion of each 12-month period during the term. Additionally, subject to her continued employment, she will receive aLTIP. Mrs. Alemany’s $13,000,000 retention bonus of $13 million payabledescribed in a lump sum following the second anniversary of consummation of the merger,narrative above is expected to be paid during July 2024, conditioned uponon her execution of a release of all claims, which will beclaims. |
| (2) | Includes $19,800 in lieu of any amounts that she would have been entitledmatching contributions, and a $9,900 profit sharing contribution, made by FCB to receive upon any qualifying termination of employment under the CIT Employee Severance Plan or any other severance arrangements with CIT or FCB. Under certain conditions, such as Mrs. Alemany’s termination by FCB without “cause” (as defined401(k) Plan account, and $46,278 in the agreement), her disability or death, or her decision to terminate her own employment for “good reason” (as defined in the agreement), the retention bonus will become immediately payable. Under the agreement, Mrs. Alemany initially will serve as Vice Chairwoman, reporting to our Chairman and Chief Executive Officer, and servedividends accrued during 2023 on our and FCB’s Boards, with duties related to the transition and integration of CIT’s and FCB’s businesses.
However, after the initial six months of the term, FCB may remove Mrs. Alemany from the Vice Chairwoman position, assuming that she and our Chairman and Chief Executive Officer mutually agree that successful integration of CIT is sufficiently assured such that her service in that position is no longer necessary, after which her employment will continue for the remainder of the two-year term as a special advisor to our Chairman and Chief Executive Officer. If Mrs. Alemany is removed from the Vice Chairwoman position, she is obligated to resign from our and FCB’s Boards.
Upon consummation of the merger, Mrs. Alemany held restricted stock units (“RSUs”) previously granted by CIT and covering an aggregate of 323,827 shares of CIT’s common stock which, in the same manner as all other CIT RSUs held by CIT’s other officers, were converted into RSUs covering 20,080 shares of our Class A Common and having the same terms as the converted CITunvested RSUs. Those RSUs will vest over time in accordance with the terms of the converted CIT RSUs and will vest in full upon an eligible termination of her employment. Also, following the merger, retention and short-term incentive bonuses totaling $4,315,000 approved by CIT’s Board of Directors, or related to CIT’s incentive plans, were paid to Mrs. Alemany.
In addition to the letter agreement, Mrs. Alemany executed and delivered a non-competition, non-solicitation, and confidentiality agreement that will generally prohibit her from competing with FCB during and for the two year period following termination of her employment.
Marisa J. Harney. The agreement with Ms. Harney provides that she will serve as FCB’s Chief Credit Officer and receive annual base salary at a rate no less than her rate in effect immediately prior to the merger closing ($500,000). In addition, she will be entitled to receive (i) incentive compensation opportunities commensurate with those provided to other senior executives of FCB, (ii) a special bonus of $500,000, which will, subject to continued employment, be paid 50% on the first anniversary of consummation of the merger and 50% percent on the second anniversary, and (iii) a retention bonus in the amount of $2,336,500 that will vest in full and become non-forfeitable upon the second anniversary of consummation of the merger and be paid in a lump sum upon separation from service, conditioned upon the execution of a release of all claims. Under certain conditions, such as Ms. Harney’s termination by FCB without “cause” (as defined in the agreement), her disability or death, or her decision to terminate her own employment for “good reason” (as defined in the agreement), the unpaid portion of the special bonus and the retention bonus will become immediately payable. Ms. Harney remains subject to the terms of a non-competition, non-solicitation and confidentiality agreement she previously entered into with CIT.
Upon consummation of the merger, Ms. Harney held RSUs previously granted by CIT and covering an aggregate of 21,586 shares of CIT common stock which, in the same manner as all other CIT RSUs held by CIT’s other officers, were converted into RSUs covering 1,341 shares of our Class A Common and having the same terms as the converted CIT RSUs. Those RSUs will vest over time in accordance with the terms of the converted CIT RSUs and will vest in full upon an eligible termination of her employment. Also, following the merger, retention and short-term incentive bonuses totaling $795,000 approved by CIT’s Board of Directors, or related to CIT’s incentive plans, were paid to Ms. Harney.
DIRECTOR COMPENSATION
The following table lists compensation paid to our non-associate directors for their services during 2021 as members of our and FCB’s Boards of Directors. Directors who also serve as our or FCB’s officers or associates do not receive any compensation for their services as directors.
2021 DIRECTOR COMPENSATION
| | | | | | | | | | | | | | | | Name (1) | | Fees Earned or
Paid in Cash (3) | | All Other
Compensation (4) | | Total | | | | | John M. Alexander, Jr. | | | $ | 200,000 | | | | | $-0- | | | | $ | 200,000 | | | | | | Victor E. Bell III | | | | 200,000 | | | | | -0- | | | | | 200,000 | | | | | | Michael A. Carpenter (2) | | | | -0- | | | | | -0- | | | | | -0- | | | | | | H. Lee Durham, Jr. | | | | 257,500 | | | | | -0- | | | | | 257,500 | | | | | | Daniel L. Heavner | | | | 200,000 | | | | | -0- | | | | | 200,000 | | | | | | Robert R. Hoppe | | | | 230,000 | | | | | -0- | | | | | 230,000 | | | | | | Floyd L. Keels | | | | 200,000 | | | | | -0- | | | | | 200,000 | | | | | | Robert E. Mason IV | | | | 200,000 | | | | | -0- | | | | | 200,000 | | | | | | Robert T. Newcomb | | | | 265,000 | | | | | -0- | | | | | 265,000 | | | | | | Vice Admiral John R. Ryan, USN (Ret.) (2) | | | | -0- | | | | | -0- | | | | | -0- | |
(1) | Mrs. Alemany, Mr. Holding, Mrs. Bryant and Mr. Bristow are not listed in the table. Mrs. Alemany was first appointed as a director and executive officer during January 2022 and did not serve or receive compensation as a director during 2021. During 2022 she is being compensated as an executive officer of FCB and will not receive any additional compensation for her services as a director. Mr. Holding, Mrs. Bryant and Mr. Bristow each served as a director for 2021, but each was compensated as an executive officer of FCB and received no additional compensation for services as a director.
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(2) | Mr. Carpenter and Mr. Ryan were appointed as directors during January 2022 and they did not serve or receive compensation as directors during 2021. Compensation will be paid for their future services as directors on the same basis as other outside directors.
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(3) | Amounts include aggregate retainers paid during 2021 to outside directors for services as directors, committee chairs and in other Board positions.
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(4) | From time to time our directors may receive or be deemed to have received personal benefits from FCB. FCB’s aggregate incremental cost associated with personal benefits received during 2021 by each of our directors listed in the table did not exceed $10,000 and, for that reason, no amount for personal benefits is included for any of them in the “All Other Compensation” column in the table. Our non-associate directors are covered under a directors and officers liability insurance policy provided by FCB, and by a travel and accident insurance policy provided by FCB that covers all of our and FCB’s officers, associates and directors, and they are reimbursed for their expenses in attending Board and committee meetings and in attending industry and professional development events related to their duties.
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Compensation paid to our directors is in the form of cash, and we have no plans under which stock options or grants or other equity awards have been made to directors. The following table describes our standard schedule of fees under which compensation is being paid to non-associate directors during their one-year terms of office following our 2021 Annual Meeting and the revised schedule of fees approved by the Board of Directors under which directors will be paid during their one-year terms of office following our 2022 Annual Meeting. In increasing retainer amounts in the 2022 fee schedule, the Compensation, Nominations and Governance Committee’s recommendation to the Boards, and the Boards’ approval, took into account fees paid to directors of comparable larger financial institutions, and the more than doubling of our assets and significantly increased breadth and complexity of our business with the addition of multiple new business lines that has resulted from our transformational merger with CIT which became effective January 3, 2022. Those factors have increased the scope of the duties and responsibilities of, and commitment of time required from, our directors going forward.
| | | | | | | | | Description | | Amount (1) | | | | 2021 | | | 2022 | | | | | Annual retainer paid to each director | | $ | 200,000 | | | $ | 220,000 | | | | | Annual retainer paid to the Chairman of our Compensation, Nominations and Governance Committee | | | 30,000 | | | | 30,000 | | | | | Annual retainer paid to the Chairman of our Risk Committee | | | 30,000 | | | | 30,000 | | | | | Annual retainer paid to the Chairman of our Audit Committee | | | 30,000 | | | | 30,000 | | | | | Annual retainer paid to our Audit Committee Financial Expert | | | 27,500 | | | | 27,500 | | | | | Annual retainer paid to our Lead Independent Director | | | 35,000 | | | | 45,000 | |
(1) | Under the 2021 fee schedule, directors did not receive separate fees for attendance at meetings of the Board of Directors or committees of the Board held during the 12 months following our 2021 Annual Meeting, and directors will not receive meeting fees under the 2022 fee schedule. However, the Compensation, Nominations
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| and Governance Committee is authorized to recommend implementation of meeting fees in the event circumstances result in a substantial increase in the frequency of meetings or the appointment of a special committee. |
The separate annual retainers paid to Chairmen of the various committees, to the Audit Committee Financial Expert, and to the Lead Independent Director are in recognition of the additional time, duties and responsibilities required by those positions.
Transactions with Related Persons TRANSACTIONS WITH RELATED PERSONS TRANSACTIONS WITH RELATED PERSONS
Our Policy The Boards have adopted a written Corporate Compliance Policy Our Board of Directors has adopted a written policy under which our Audit Committee, on an ongoing basis, in accordance with standards that support the policy, reviews and approves certain transactions, arrangements, or relationships in which we or FCB, or any of our or FCB’s subsidiaries, are a participant and in which any of our “related persons” has a material interest. Our related persons include our directors, nominees for election as directors, executive officers, beneficial owners of more than 5% of a class of our voting stock, and members of the immediate family of one of those persons.
Except as described below, the policy covers: | ● | | transactions, arrangements, or relationships, or series of transactions, arrangements, or relationships, in which we or FCB, or any of our or FCB’s subsidiaries, are or will be a participant and in which any of our “related persons” has a material interest. Our related persons include our directors, nominees for election as directors, executive officers, beneficial owners of more than 5% of a class of our voting stock, and members of the immediate family of one of those persons. Except as described below, the policy covers:
| ● | | transactions, arrangements or relationships, or series of transactions, arrangements or relationships, in which we or FCB, or any of our or FCB’s subsidiaries, are or will be a participant and in which the dollar amount involved exceeds or will exceed an aggregate of $120,000 (including all periodic installments in the case of any agreement which provides for periodic payments) and in which one of our related persons has or will have a direct or indirect material interest (in general, transactions that are required to be disclosed in our proxy statements under rules of the SEC); and
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| ● | | charitable contributions or gifts, or series of charitable contributions or gifts (whether in cash or in-kind in the form of property or services), by us or FCB, or any of our or FCB’s subsidiaries, to any charitable or other nonprofit organization in which a related person is a director or executive officer (other than a non-management director or advisory director) or is known to have some other material relationship and in which the aggregate dollar amount involved exceeds or will exceed (including periodic installments, and all other such contributions made during the same year) the greater of $200,000 or 5% of that organization’s gross revenues for the current year.
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The transactions covered by the policy generally include loans, but the policy does not cover loans made by FCB in the ordinary course of its business and, if subject to banking regulations relating to “insider loans,” in conformity with those regulations, and that are made on substantially the same terms as those prevailing at the time for comparable loans with unrelated persons, do not involve more than a normal risk of collectability or present other unfavorable features, and are not disclosed as nonaccrual, past due, restructured or potential problem loans. The policy also does not cover compensation paid to our executive officers or directors that has been reviewed and approved, or recommended to our Board of Directors for approval, by our Compensation, Nominations and Governance Committee. Transactions and relationships in the ordinary course of FCB’s business involving its provision of services as a depositary of funds, or other banking or financial services or customer relationships, are not required to be approved by the Audit Committee. However, it has directed FCB’s Chief Compliance Officer to review and monitor those transactions and relationships with our related persons on an ongoing basis and make periodic reports to the Committee.
Individual transactions under ongoing relationships in which we or FCB regularly obtain products or services from, or provide services to, related persons in connection with our business operations are not required to be separately approved. Rather, the Committee approves the entry into any new relationships and then monitors those relationships on an ongoing basis. Similarly, in the case of any agreement which provides for periodic payments) and in which one of our related persons has or will have a direct or indirect material interest (in general, transactions that are required to be disclosed in our proxy statements under rules of the ongoing relationships described below underSEC); and
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| ● | | charitable contributions or gifts, or series of charitable contributions or gifts (whether in cash or in-kind in the caption “Related Person Transactions During 2021” underform of property or services), by us or FCB, or any of our or FCB’s subsidiaries, to any charitable or other nonprofit organization in which FCB has provided various business servicesa related person is a director or executive officer (other than a non-management director or advisory director) or is known to have some other material relationship and in which the named banks, the Committee approves the entry into any new service agreement,aggregate dollar amount involved exceeds or the renewal of any existing agreement. However,will exceed (including periodic installments, and all other such contributions made during the termssame year) the greater of $200,000 or 5% of that organization’s gross revenues for the current year. |
The transactions covered by the policy generally include loans, but the policy does not cover loans made by FCB in the ordinary course of its business (and, if subject to banking regulations relating to “insider loans,” in conformity with those regulations) on substantially the same terms as those prevailing at the time for comparable loans with unrelated persons, that do not involve more than a normal risk of collectability or present other unfavorable features, and that are not disclosed as nonaccrual, past due, restructured, or potential problem loans. The policy also does not cover compensation paid to our executive officers or directors that has been reviewed and approved, or recommended to our Board of Directors for approval, by our CNG Committee. Transactions and relationships in the ordinary course of FCB’s business involving its provision of services as a depositary of funds, or other banking or financial services or customer relationships, are not required to be approved by the Audit Committee. However, it has directed FCB’s Chief Compliance Officer to review and monitor those transactions and relationships with our related persons on an ongoing basis and make periodic reports to the Committee. Individual transactions under ongoing relationships in which we or FCB regularly obtain products or services from, or provide services to, related persons in connection with our business operations are not required to be separately approved. Rather, the Committee approves the entry into any new relationships and then monitors those relationships on an ongoing basis. Similarly, in the case of the ongoing relationships described below under the caption “Related Person Transactions Since January 1, 2023” under which FCB provides services to the named banks, the Committee approves the entry into any new service agreement, or the renewal of any existing agreement. However, during the terms of the agreements, the Committee is not required to pre-approve the periodic addition, deletion, or modification of services, or pricing or other changes, under the agreements. FCB’s Chief Compliance Officer reviews and evaluates all such proposed individual changes and reports those actions to the Committee, and the Committee then may approve, modify, or rescind any such change. In its review of related person transactions or charitable gifts, the policy provides that the Committee should exercise independent judgment and should not approve any proposed transaction or charitable gift unless and until it has concluded to its satisfaction that the transaction or gift: | ● | | has been or will be agreed to pre-approve the periodic addition, deletion or modification of services, or pricing or other changes, under the agreements. FCB’s Chief Compliance Officer reviews and evaluates all such proposed individual changes and reports those actions to the Committee, and the Committee then may approve, modify or rescind any such change.engaged in on an arm’s-length basis; In its review of related person transactions or charitable gifts, the policy provides that the Committee should exercise independent judgment and should not approve any proposed transaction or charitable gift unless and until it has concluded to its satisfaction that the transaction or gift:
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| ● | | has been or will be agreed to or engaged in on an arm’s-length basis;
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| | ● | | is or will be on terms that are fair and reasonable to us or FCB; and |
| ● | | is in our or FCB’s best interests.
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Related Person Transactions During 2021
FCB has had, and expects to have in the future, banking transactions in the ordinary course of its business with certain of its and our current directors, nominees for director, executive officers, principal shareholders, and other related persons. All loans included in those transactions during 2021 were made in the ordinary course of FCB’s business on substantially the same terms, including interest rates, repayment terms and collateral, as those prevailing at the time the loans were made for comparable transactions with persons not related to us or FCB,FCB; and those loans did not involve more than the normal risk of collectability
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| ● | | is in our or present other unfavorable features. On December 31, 2021, the aggregate outstanding balance of loans and leases to our and FCB’s directors and officers and business and other entities they control was approximately $122,000 and FCB had an aggregate of approximately $2.7 million in unfunded loan commitments to those persons (in each case exclusive of outstanding and available balances on credit card lines of $15,000 or less, overdraft checking lines of $5,000 or less and intercompany extensions of credit between FCB and our company).best interests. |
Related Person Transactions Since January 1, 2023 FCB has had, and expects to have in the future, banking transactions in the ordinary course of its business with certain of its and our current directors, nominees for director, executive officers, principal stockholders, their affiliates, and our other related persons. Except as | | | | | | 76 | | FCB serves as trustee of the pension and Section 401(k) plans of The Fidelity Bank (“Fidelity”) and Southern Bank and Trust Company (“Southern”), issues credit cards to Southern’s customers under which extensions of credit are made to customers by and repaid directly to FCB, provides Southern with a $300,000 line of credit to give Southern limited discretionary credit override authority on credit card lines, and issues business credit cards to Southern’s employees under an aggregate credit line of $2 million that may be used only for employee business-related expenses and on which payments of outstanding balances are due monthly. Amounts billed to Fidelity and Southern for all services provided to them during 2021 totaled approximately $263,000 and $597,000, respectively. Hope H. Bryant, our Vice Chairwoman, currently serves as a director of both Fidelity and Southern and their respective parent companies, and she and members of her family, including our Chief Executive Officer, Frank B. Holding, Jr., and the spouse of our President, Peter M. Bristow, are principal shareholders of the parent companies of those banks. As a result, we historically have considered transactions with Fidelity and Southern to be covered by the Board’s transaction approval policy, and our Audit Committee reviews and approves FCB’s new service agreements, and monitors FCB’s ongoing relationships, with each of Fidelity and Southern. Under our policy, individual transactions under, or changes (such as changes in services or pricing) in, those service agreements are reviewed and evaluated by FCB’s Chief Compliance Officer and reported to the Committee. The Committee’s normal review and approval process will continue to apply to any relationships or transactions with Fidelity or Southern. 2024 Annual Proxy Statement
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Transactions with Related Persons described below, all loans included in those transactions since January 1, 2023 were made in the ordinary course of FCB’s business on substantially the same terms, including interest rates, repayment terms, and collateral, as those prevailing at the time the loans were made for comparable transactions with persons not related to us or FCB, and those loans did not involve more than the normal risk of collectability or present other unfavorable features. FCB serves as trustee of the pension and Section 401(k) plans of The Fidelity Bank (“Fidelity”) and Southern Bank and Trust Company (“Southern”) under a service agreement with each bank. Amounts billed under those agreements to Fidelity and Southern for trust administrative services provided to them during 2023 totaled approximately $193,978 and $457,167, respectively. Under our policy, individual transactions under, or changes (such as changes in services or pricing) in, those service agreements are reviewed and evaluated by FCB’s Chief Compliance Officer and reported to the Committee. FCB issues credit cards to Southern’s customers under which extensions of credit are made to customers by and repaid directly to FCB, and it provides Southern with a line of credit giving Southern limited discretionary credit override authority on credit card lines to its customers. During 2023, the $300,000 credit override line of credit was inadvertently exceeded by $13,000. The Audit Committee has reviewed and approved that exception and has approved an increase in the override line of credit to $600,000. FCB also issues business credit cards to Southern’s employees with credit limits aggregating $2 million that may be used only for employee business-related expenses and on which the employees are responsible for payments of outstanding account balances in full monthly, no late charges or interest is imposed, and, as guarantor, Southern is responsible for any payments not made by employees. The Audit Committee has approved a restructuring of the business credit card arrangement under which the aggregate of the credit limits of the employee cards will be reduced to $1 million and late payment charges will be imposed on the employees’ accounts. During 2023, the highest aggregate month-end balance owed by Southern’s employees on their business credit card accounts was $160,795, and the aggregate outstanding balance of those accounts on February 15, 2024, was $106,542. Also, during 2023 FCB sold to Fidelity, in a negotiated off-market transaction, a former branch facility located in Spartanburg, South Carolina, that was closed by FCB during 2017 and held as surplus property, but which it continued to use until 2023 as an ATM location. The agreed upon cash purchase price, based on an independent broker’s assessment of the highest and best use value of the property, was $1,380,000. We believe the terms of the sale, including the sales price, were no less favorable to FCB than could have been obtained in a sale to an unrelated purchaser. Hope H. Bryant, our Vice Chairwoman, and Olivia B. Holding, one of our principal stockholders, currently serve as directors of both Fidelity and Southern and their respective parent companies, and they and members of the Holding family, including our Chief Executive Officer, Frank B. Holding, Jr., and the spouse of our President, Peter M. Bristow, are principal stockholders of the parent companies of those banks. As a result, we historically have considered transactions with Fidelity and Southern to be covered by the our Corporate Compliance Policy and related standards, and our Audit Committee reviews and approves FCB’s new service agreements, transactions, and relationships with each of Fidelity and Southern. During 2023, FCB listed and sold through an unrelated broker a former branch facility located in Danville, Virginia, that had been closed by FCB during 2020 and was held as surplus property and listed for sale during 2021. The facility was sold to Movement Bank for cash at a purchase price of $750,000, which exceeded the broker’s assessment of the highest and best use value of the property. At the time of the sale, the Chief Executive Officer of Movement Bank was the spouse of Lorie K. Rupp, FCB’s Chief Risk Officer. We believe the terms of the sale, including the sales price, were no less favorable to FCB than could have been obtained in a sale to an unrelated purchaser. FCB leases excess space in one of its branch offices to Twin States Farming, Inc. on a month-to-month basis. Our Vice Chairwoman, Hope H. Bryant, and Olivia B. Holding, one of our principal stockholders and the sister of Mrs. Bryant and our Chief Executive Officer, Frank B. Holding, Jr., are officers and directors of the lessee, and substantially all of the lessee’s capital stock is owned by members of the Holding family. Rental payments to FCB under the lease agreement for 2023 totaled $21,316, and the monthly rental rate increases annually by 2.5%. Either FCB or the lessee may terminate the lease at any time upon advance written notice. When the lease was last renewed in 2019, a real estate brokerage firm was engaged to assess the fair market rental rate for the space. If the lease continues in effect after five years, the rental rate will be adjusted based on a new independent assessment of its market rental value and thereafter will continue to increase annually as provided above. In disposing of surplus and foreclosed properties it holds in its various banking markets across the country, FCB regularly lists properties for sale with a number of real estate brokerage firms. During 2023, FCB listed four properties located in North Carolina through Lee & Associates, a national brokerage firm with an office in Raleigh, N.C., for prices ranging from $400,000 to $2,250,000. Also, during May 2023 FCB sold one property located in Cary, N.C., through Lee & Associates for a price of $2,625,000 (that had been listed in a prior year at an asking price of $2,000,000) and for which FCB paid sales commissions of $157,500. The listing broker at Lee & Associates was James Bailey, who is the son-in-law of our Chief Executive Officer, Frank B. Holding, Jr. We believe the terms of FCB’s listing agreements with Lee & Associates, including the sales commission of 6%, are no less favorable to FCB than the terms of its agreements for the listing and sale of properties through, or that would have been available to FCB with, other unrelated brokers. | | | | | | | In upfitting new office spaces and refurbishing existing spaces in the ordinary course of FCB’s business, among other interior decorating firms, FCB uses the services of Claire Bristow Interiors, which is owned and operated by Claire H. Bristow, one of our principal shareholders who is the spouse of our President, Peter M. Bristow, and the sister of our Chief Executive Officer, Frank B. Holding, Jr., and our Vice Chairwoman, Hope H. Bryant. Mrs. Bristow’s firm provides services to FCB at a below-market rate and acquires furnishings and fixtures for FCB at wholesale or discounted prices. During 2021, FCB paid an aggregate of $29,048 for the firm’s services (including fees, expenses and sales taxes) and an aggregate of $157,110 for furnishings and fixtures (including shipping costs) purchased through the firm. The Audit Committee reviews and approves FCB’s relationship with Mrs. Bristow’s firm annually.2024 Annual Proxy Statement
FCB leases excess space in one of its branch offices to Twin States Farming, Inc. on a month-to-month basis. Our Vice Chairwoman, Hope H. Bryant, and Olivia B. Holding, one of our principal shareholders and the sister of Mrs. Bryant and our Chief Executive Officer, Frank B. Holding, Jr., are officers and directors of the lessee, and substantially all of the lessee’s capital stock is owned by members of the Holding family. Monthly rent under the lease agreement currently is $1,719 and increases annually by 2.5%. When the lease was last renewed in 2019, a real estate brokerage firm was engaged to assess the fair market rental rate for the space. If the lease continues in effect after five years, the rental rate will be adjusted based on a new assessment of fair market rental and thereafter will continue to increase annually as provided above. Either FCB or the lessee may terminate the lease at any time upon advance written notice.
In disposing of surplus and foreclosed properties it holds in its various banking markets across the country, FCB regularly lists properties for sale with a number of real estate brokerage firms. During 2021, FCB listed one property located in North Carolina with Lee & Associates, a national brokerage firm, which was sold at a price of $655,500. Two other properties located in North Carolina previously listed with that firm during 2020 were sold during 2021 and January 2022 at prices of $750,000 and $1,425,000, respectively. The listing broker at that firm was James Bailey who is the son-in-law of our Chief Executive Officer, Frank B. Holding, Jr. We believe the terms of the listing agreements with Lee & Associates, including the sales commission of 6%, were no less favorable to FCB than the terms of FCB’s listing agreements with other brokers.
Perry H. Bailey, who is the daughter of Frank B. Holding, Jr. and niece
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Transactions with Related Persons During 2023, Ellen R. Alemany, who serves as a member of our and FCB’s Boards and who is a nominee for reelection at the Annual Meeting, was employed by FCB in a non-executive officer position. Her 2023 compensation as an associate of FCB is described under the heading “DIRECTOR COMPENSATION.” Certain family members of our and FCB’s directors and executive officers also are employed by FCB in non-executive officer positions. Information regarding the current employment of five family members whose total compensation for services during 2023 exceeded, or whose compensation for services during 2024 may exceed, $120,000 is contained in the following table. Information regarding the current employment of an additional family member is contained under the caption “EXECUTIVE COMPENSATION — Compensation Committee Interlocks and Insider Participation.” In addition, Lewis R. Holding II, one of our principal stockholders and the son of Frank B. Holding, Jr., and nephew of Hope H. Bryant and Peter M. Bristow, is expected to become an associate of FCB during 2024. His 2024 total compensation (including prorated salary and potential incentive award) is expected to amount to approximately $180,580, exclusive of FCB’s contributions to his FCB 401(k) Plan account. | | | | | | | | | Name | | Relationship | | 2023 Compensation (2) | Perry H. Bailey | | Daughter of Frank B. Holding, Jr., and niece of Hope H. Bryant and Peter M. Bristow | | | $ | 250,840 | | John Patrick Connell | | Son of Hope H. Bryant and nephew of Frank B. Holding, Jr. and Peter M. Bristow | | | | 166,556 | | H. Collier Connell (1) | | Son of Hope H. Bryant and nephew of Frank B. Holding, Jr. and Peter M. Bristow | | | | 97,412 | | Joseph L. Ward | | Brother of our executive officer, Jeffery L. Ward | | | | 252,850 | | Caroline E. Ward | | Daughter of our executive officer, Jeffery L. Ward | | | | 127,835 | |
| (1) | Mr. Connell was employed by FCB in a non-executive officer position. During 2021, her aggregatefull time position for only a portion of 2023. His total compensation amountedfor 2024 (including salary and potential incentive award) is expected to $128,989 (includingamount to approximately $171,250, exclusive of FCB’s contributions to our Sectionhis FCB 401(k) planPlan account. |
| (2) | Amounts reflect aggregate compensation paid to each individual for her account, but excluding other normal benefits provided to all associates.) Our Audit Committee reviewed and approved the terms of her employment relationship for 2021services during 2023. |
We believe the terms of the family members’ employment, including compensation, are commensurate with their experience, responsibilities, and performance in their positions, that their incentive opportunities are the same as those provided to other associates in similar positions, and that their employee benefits are the same as are provided on the same terms to all other associates. Each family member’s compensation is set each year through FCB’s normal evaluation and merit increase process. Our Audit Committee reviewed and approved the terms of FCB’s employment relationship (including his or her compensation) with each individual named or referenced above and will continue to do so annually. | | | | | | 78 | | 2024 Annual Proxy Statement | | |
Beneficial Ownership of Our Equity Securities BENEFICIAL OWNERSHIP OF OUR EQUITY SECURITIES Additional information regarding related person transactions is contained under the captions “EXECUTIVE COMPENSATION– Compensation Committee Interlocks and Insider Participation” and “– Employment and Compensation Arrangements with Former CIT Officers.”
BENEFICIAL OWNERSHIP OF OUR EQUITY SECURITIES
Directors and Executive Officers The following table describes the beneficial ownership of shares of our voting Class A Common and Class B Common, our nonvoting Depositary Shares (each representing a 1/40th interest in a share of our 5.375% Non-Cumulative Perpetual Preferred Stock, Series A) and our nonvoting 5.625% Non-Cumulative Perpetual Preferred Stock, Series C (“Series C Preferred”), on the Record Date for the Annual Meeting, by our current directors, nominees for election as directors, and our NEOs whose compensation is disclosed in the Summary Compensation Table above, individually, and by all of our current directors and executive officers as a group. We are not aware that any of our directors or executive officers beneficially own any shares of our nonvoting Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B. For purposes of the table, we consider a director or executive officer to “beneficially own” shares held in his or her name, or in the name of any other person or entity, if the director or officer either directly, or indirectly through some agreement, arrangement, understanding or relationship, has or shares the right to vote or dispose of the shares, or to direct the voting or disposition of the shares. As a result, the same shares may be “beneficially owned” by more than one person. As described in footnotes to the table, portions of the shares listed as beneficially owned by certain of the directors and executive officers in the table also are listed as beneficially owned by others named in the table. However, those shares are only counted once in the total numbers of shares beneficially owned by all directors and executive officers as a group. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beneficial Ownership | | | | | | Class A Common | | Class B Common | | Depositary Shares | | Series C Preferred | | | Name of Beneficial Owner (1) | | Number of Shares (2) | | Percentage of Class (3) | | Number of Shares (2) | | Percentage of Class (3) | | Number of Shares (2) | | Percentage of Class (3) | | Number of Shares (2) | | Percentage Of Class (3) | | Percentage of Total Votes (3) | DIRECTORS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ellen R. Alemany | | | | 20,714 | (4) | | | | 0.15 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 30,000 | | | | | 0.38 | % | | | | 0.07 | % | John M. Alexander, Jr. | | | | 1,227 | (5) | | | | 0.01 | % | | | | 68 | | | | | 0.01 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 0.01 | % | Victor E. Bell III | | | | 6,900 | (6) | | | | 0.05 | % | | | | 1,643 | (6) | | | | 0.16 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 0.11 | % | Peter M. Bristow | | | | 513,508 | (7) | | | | 3.80 | % | | | | 111,484 | (7) | | | | 11.09 | % | | | | 41,285 | (7) | | | | 0.30 | % | | | | -0- | | | | | — | | | | | 7.76 | % | Hope H. Bryant | | | | 451,084 | (8) | | | | 3.34 | % | | | | 65,821 | (8) | | | | 6.55 | % | | | | 47,500 | (8) | | | | 0.34 | % | | | | -0- | | | | | — | | | | | 5.08 | % | Michael A. Carpenter | | | | 2,215 | | | | | 0.02 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 0.01 | % | H. Lee Durham, Jr. | | | | 700 | | | | | 0.01 | % | | | | 100 | | | | | 0.01 | % | | | | 3,000 | | | | | 0.02 | % | | | | 3,000 | (9) | | | | 0.04 | % | | | | 0.01 | % | Dr. Eugene Flood, Jr. | | | | 20 | | | | | * | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | * | | Frank B. Holding, Jr. | | | | 605,892 | (10) | | | | 4.48 | % | | | | 160,114 | (10) | | | | 15.93 | % | | | | 35,500 | (10) | | | | 0.26 | % | | | | -0- | | | | | — | | | | | 10.70 | % | Robert R. Hoppe | | | | 314 | | | | | * | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | * | | David G. Leitch | | | | 100 | | | | | * | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | * | | Robert E. Mason IV | | | | 350 | | | | | * | | | | | 200 | | | | | 0.02 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 0.01 | % | Robert T. Newcomb | | | | 1,000 | | | | | 0.01 | % | | | | -0- | | | | | — | | | | | 6,000 | | | | | 0.04 | % | | | | -0- | | | | | — | | | | | * | | OTHER NAMED EXECUTIVE OFFICERS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Craig L. Nix | | | | 1,124 | (11) | | | | 0.01 | % | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | 9,265 | | | | | 0.12 | % | | | | * | | Lorie K. Rupp | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | -0- | | | | | — | | | | | — | | ALL CURRENT DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (21 PERSONS) | | | | 1,563,954 | (12) | | | | 11.56 | % | | | | 302,705 | (12) | | | | 30.11 | % | | | | 103,385 | (12) | | | | 0.75 | % | | | | 42,265 | (12) | | | | 0.53 | % | | | | 21.64 | % |
| (1) | Each individual’s business address is 4300 Six Forks Road, Raleigh, NC 27609. |
| (2) | Except as otherwise noted in the footnotes below, and to the best of our knowledge, individuals named and included in the group exercise sole voting (in the case of voting stock) and investment power with respect to all listed shares. |
| (3) | “Percentage of Class” reflects each individual’s and the group’s listed shares as a percentage of the total number of outstanding shares of that class of stock on March 4, 2024. “Percentage of Total Votes” reflects the aggregate votes represented by each individual’s and the group’s listed shares of Class A Common and Class B Common stock, our nonvoting Depositary Shares (each representingas a 1/40th Interest in a sharepercentage of our 5.375% Non-Cumulative Perpetual Preferred Stock, Series A) and our nonvoting 5.625% Non-Cumulative Perpetual Preferred Stock, Series C (“Series C Preferred”), on February 28, 2022, by our current directors, nominees for election as directors, and our NEOs whose compensation is disclosed in the Summary Compensation Table above, individually, andaggregate votes represented by all of our current directors and executive officers as a group. We are not aware that any of our directors or executive officers beneficially own anyoutstanding shares of our nonvoting Fixed-to-Floating Rate Non-Cumulative Perpetualvoting securities on that date. Depositary Shares and Series C Preferred Stock Series B. For purposesdo not have voting rights and do not affect the percentages of the table, we consider a director or executive officertotal votes. An asterisk indicates less than .01%. |
| (4) | Includes an aggregate of 10,294 shares of Class A Common as to “beneficially own”which Mrs. Alemany may be considered to exercise shared voting and investment power. The number of listed shares held in his ordoes not include an aggregate of 4,764 additional shares of Class A Common that may be issued to her name, or in the namefuture upon the settlement of any other person or entity, if the director or officer either directly, or indirectly through some agreement, arrangement, understanding or relationship, has or shares the right to vote or dispose of the shares, or to direct the voting or disposition of the shares. As a result, the same shares may be “beneficially owned” by more than one person. As described in footnotes to the table, portions of the shares listed as beneficially owned by certain of the directors and executive officers in the table also are listed as beneficially owned by others named in the table. However, those shares are only counted once in the total numbers of shares beneficially owned by all directors and executive officers as a group.RSUs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beneficial Ownership | | | | | | | | Class A Common | | | Class B Common | | | Depositary Shares | | | Series C Preferred | | | | | Name of Beneficial Owner (1) | | Number
of Shares (2) | | | Percentage
of Class (3) | | | Number
of Shares (2) | | | Percentage
of Class (3) | | | Number
of Shares (2) | | | Percentage
of Class (3) | | | Number
of Shares (2) | | | Percentage
of Class (3) | | | Percentage of
Total Votes (3) | | | | | | | | | | | | DIRECTORS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ellen R. Alemany | | | 22,090 | (4) | | | 0.15% | | | | -0- | | | | — | | | | -0- | | | | — | | | | 30,000 | | | | 0.38% | | | | 0.07% | | | | | | | | | | | | John M. Alexander, Jr. | | | 1,227 | (5) | | | 0.01% | | | | 68 | | | | 0.01% | | | | -0- | | | | — | | | | -0- | | | | — | | | | 0.01% | | | | | | | | | | | | | Victor E. Bell III | | | 6,900 | (6) | | | 0.05% | | | | 1,643 | (6) | | | 0.16% | | | | -0- | | | | — | | | | -0- | | | | — | | | | 0.11% | | | | | | | | | | | | Peter M. Bristow | | | 528,846 | (7) | | | 3.53% | | | | 113,826 | (7) | | | 11.32% | | | | 41,285 | (7) | | | 0.30% | | | | -0- | | | | — | | | | 7.57% | | | | | | | | | | | | | Hope H. Bryant | | | 597,908 | (8) | | | 3.99% | | | | 149,544 | (8) | | | 14.88% | | | | 47,500 | (8) | | | 0.34% | | | | -0- | | | | — | | | | 9.63% | | | | | | | | | | | | Michael A. Carpenter | | | 2,215 | | | | 0.01% | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | 0.01% | | | | | | | | | | | | | H. Lee Durham, Jr. | | | 700 | | | | * | | | | 100 | | | | 0.01% | | | | 3,000 | | | | 0.02% | | | | 2,000 | (9) | | | 0.03% | | | | 0.01% | | | | | | | | | | | | Daniel L. Heavner | | | 640 | | | | * | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | * | | | | | | | | | | | | | Frank B. Holding, Jr. | | | 629,736 | (10) | | | 4.21% | | | | 164,135 | (10) | | | 16.33% | | | | 35,500 | (10) | | | 0.26% | | | | -0- | | | | — | | | | 10.48% | | | | | | | | | | | | | Robert R. Hoppe | | | 300 | | | | * | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | * | | | | | | | | | | | | | Floyd L. Keels | | | 112 | | | | * | | | | -0- | | | | — | | | | 600 | | | | * | | | | -0- | | | | — | | | | * | | | | | | | | | | | | | Robert E. Mason IV | | | 350 | | | | * | | | | 200 | | | | 0.02% | | | | -0- | | | | — | | | | -0- | | | | — | | | | 0.01% | | | | | | | | | | | | | Robert T. Newcomb | | | 250 | | | | * | | | | -0- | | | | — | | | | 6,000 | | | | 0.04% | | | | -0- | | | | — | | | | * | | | | | | | | | | | | | Vice Admiral
John R. Ryan, USN (Ret.) | | | 1,871 | | | | 0.01% | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | 0.01% | | | | | | | | | | | | OTHER NAMED EXECUTIVE OFFICERS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Craig L. Nix | | | 505 | (11) | | | * | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | * | | | | | | | | | | | | | Lorie K. Rupp | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | -0- | | | | — | | | | — | | | | | | | | | | | | ALL CURRENT DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (20 PERSONS) | | | 1,747,929 | (12) | | | 11.67% | | | | 392,791 | (12) | | | 39.08% | | | | 102,385 | (12) | | | 0.74% | | | | 32,000 | (12) | | | 0.40% | | | | 25.86% | |
(1) | Each individual’s business address is 4300 Six Forks Road, Raleigh, NC 27609.
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(2) | Except as otherwise noted in the footnotes below, and to the best of our knowledge, individuals named and included in the group exercise sole voting (in the case of voting stock) and investment power with respect to all listed shares.
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(3) | “Percentage of Class” reflects each individual’s and the group’s listed shares as a percentage of the total number of outstanding shares of that class of stock on February 28, 2022. “Percentage of Total Votes” reflects the aggregate votes represented by each individual’s and the group’s listed shares of Class A Common and Class B Common as a percentage of the aggregate votes represented by all outstanding shares of our voting securities on that date. Depositary Shares and Series C Preferred Stock do not have voting rights and do not affect the percentages of total votes. An asterisk indicates less than .01%.
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(4) | Includes an aggregate of 16,454 shares of Class A Common as to which Mrs. Alemany may be considered to exercise shared voting and investment power, and 3,283 shares of Class A Common that Mrs. Alemany has a right to acquire within 60 days following February 28, 2022, upon the vesting of restricted stock units (“RSUs”). The number of listed shares does not include an aggregate of 16,797 additional shares of Class A Common that may be issued to her in the future upon the vesting of other unvested RSUs.
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| (5) | Includes 200 shares of Class A Common as to which Mr. Alexander may be considered to exercise shared voting and investment power. |
(6) | Includes an aggregate of 6,473 shares of Class A Common and 1,643 shares of Class B Common held by various entities and as to which shares Mr. Bell may be considered to exercise shared voting and investment power.
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(7) | Mr. Bristow’s beneficial ownership is described in the table and footnotes below under the caption “Principal Shareholders.
Beneficial Ownership of Our Equity Securities | (6) | Includes an aggregate of 6,473 shares of Class A Common and 1,643 shares of Class B Common held by various entities and as to which shares Mr. Bell may be considered to exercise shared voting and investment power. |
| (7) | Mr. Bristow’s beneficial ownership is described in the table and footnotes below under the caption “Principal Stockholders.” Information regarding pledges of shares beneficially owned by Mr. Bristow is contained below under the caption “Pledging Policy.” |
| (8) | (8) | Mrs. Bryant’s beneficial ownership is described in the table and footnotes below under the caption “Principal Shareholders.Mrs. Bryant’s beneficial ownership is described in the table and footnotes below under the caption “Principal Stockholders.” Information regarding pledges of shares beneficially owned by Mrs. Bryant is contained below under the caption “Pledging Policy.”
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| (9) | Mr. Durham may be considered to exercise shared voting and investment power as to all listed shares of Series C Preferred. |
| (10) | Mr. Holding’s beneficial ownership is described in the table and footnotes below under the caption “Principal Stockholders.” Information regarding pledges of shares beneficially owned by Mr. Holding is contained below under the caption “Pledging Policy.” |
| (11) | Includes 1,124 shares of Class A Common and 9,265 shares of Series C Preferred as to which Mr. Nix may be considered to exercise shared voting and investment power. |
| (12) | In the aggregate, individuals included in the group may be considered to exercise shared voting and investment power as to 457,514 shares of Class A Common, 86,722 shares of Class B Common, and 12,265 shares of Series C Preferred, and shared investment power only as to 82,385 Depositary Shares. As described in the table and footnotes below under the caption “Principal Stockholders,” certain shares are included in the numbers of shares listed in the table above for each of Mrs. Bryant and Mr. Holding, but they are included only once in the total shares listed for the group. The number of shares of Class A Common listed for the group does not include an aggregate of 4,764 additional shares that may be issued to them in the future upon the vesting of other unvested RSUs. |
(9) | Mr. Durham may be considered to exercise shared voting and investment power as to all listed shares of Series C Preferred.
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(10) | Mr. Holding’s beneficial ownership is described in the table and footnotes below under the caption “Principal Shareholders.” Information regarding pledges of shares beneficially owned by Mr. Holding is contained below under the caption “Pledging Policy.”
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(11) | Includes 505 shares of Class A Common as to which Mr. Nix may be considered to exercise shared voting and investment power.
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(12) | In the aggregate, individuals included in the group may be considered to exercise shared voting and investment power as to 555,446 shares of Class A Common, 137,242 shares of Class B Common, and 2,000 shares of Series C Preferred,; and shared investment power only as to 80,785 Depositary Shares. As described in the table and footnotes below under the caption “Principal Shareholders,” certain shares are included in the numbers of shares listed in the table above for each of Mrs. Bryant and Mr. Holding, but they are included only once in the total shares listed for the group. The number of shares of Class A Common listed for the group Includes an aggregate of 3,613 shares that individuals included in the group (Ellen R. Alemany and Marisa J. Harney) have a right to acquire within 60 days following February 28, 2022, upon the vesting of RSUs, but does not include an aggregate of 17,808 additional shares that may be issued to them in the future upon the vesting of other unvested RSUs.
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Hedging Policy
Our hedging policy
Hedging Policy Our Hedging and Pledging Policy adopted by our Board in 2014 prohibits our directors and executive officers from hedging any shares of our common stock. For purposes of the prohibition, a “hedge” means any financial instrument, derivative transaction or trading strategy designed to hedge or offset any decrease in the market value of our stock, such as a covered call, collar, prepaid variable forward sale contract, equity swap, exchange fund, or similar transaction. Pledging Policy General Prohibition on Pledging by Directors and Officers. Our Hedging and Pledging Policy generally prohibits any director or executive officer from pledging any shares of our common stock that he or she owns and controls. However, pledges that existed on the date the policy was originally adopted were “grandfathered” and those shares may continue to be pledged until they are finally released pursuant to those pledge arrangements (as those arrangements may be amended, extended or modified). However, the pledging policy provides that those grandfathered pledges be reviewed at least annually by our Audit Committee. Criteria and Process For Granting Exceptions. The policy permits our Audit Committee to grant an exception to the pledging policy to a director or executive officer who desires to pledge shares of our common stock if the Committee determines to its satisfaction that the proposed pledge arrangement is not reasonably likely to pose a material risk to our company and the market for our common stock. In making its determination on a request for an exception, the policy provides that the Committee shall consider factors that it considers relevant, which may include: | ● | | historical information regarding existing and prior pledging arrangements; |
| ● | | the number of pledged shares, including in relation to: |
| Ø | | the total number of outstanding shares of our common stock. For purposes of the prohibition, a “hedge” means any financial instrument, derivative transaction or trading strategy designed to hedge or offset any decrease in the market value of our stock, such as a covered call, collar, prepaid variable forward sale contract, equity swap, exchange fund or similar transaction.stock; |
Pledging Policy
General Prohibition on Pledging by Directors and Officers. Our pledging policy adopted by our Board in 2014 generally prohibits any director or executive officer from pledging any shares of our common stock that he or she owns and controls. However, pledges that existed on the date the policy was originally adopted are “grandfathered” and those shares may continue to be pledged until they are finally released pursuant to those pledge arrangements (as those arrangements may be amended, extended or modified). However, the pledging policy provides that those grandfathered pledges be reviewed at least annually by our Boards’ Audit Committee.
Criteria and Process For Granting Exceptions. The policy permits our Audit Committee to grant an exception to the pledging policy to a director or executive officer who desires to pledge shares of our common stock if the Committee determines to its satisfaction that the proposed pledge arrangement is not reasonably likely to pose a material risk to our company and the market for our common stock.
In making its determination on a request for an exception, the policy provides that the Committee shall consider factors that it considers relevant, which may include:
| ● | Ø | | historical information regarding existing and prior pledge arrangements;
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| ● | | the number of pledged shares, including in relation to:
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| ● | | the total number of outstanding shares of our common stock;
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| ● | | the total number of shares held by the director or executive officer; and |
| ● | | the director’s or executive officer’s total assets;
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| ● | | the market value, volatility and trading volume of our common stock;
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| ● | | the financial capacity of the director or executive officer to repay the loan without resort to the pledged stock;
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| ● | | the loan-to-value ratio in the proposed pledge arrangement;
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| ● | | the nature of any other collateral in the proposed pledge arrangement;
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| ● | | the material terms of the proposed pledge arrangement; and
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| ● | | the procedural safeguards to foreclosure, such as notice periods and the ability to substitute collateral.
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The policy requires a director or executive officer requesting an exception to submit the request in writing, with information addressing the factors listed above, and to supply any supporting documentation the Audit Committee requests. A request for an exception must be submitted with sufficient advance notice to enable the Committee to fully consider the request. No exceptions have been approved by the Committee since the policy was first adopted.
No Pledging of Equity Compensation Shares. Our pledging policy prohibits the Audit Committee from approving an exception for a pledge of shares granted to a director or executive officer as compensation. While we currently have no equity-based
compensation plans under which directors or executive officers receive compensation in the form of shares of our common stock, the prohibition would apply to any future grants. The policy also will apply to shares of our stock that may be issued in the future to Ellen R. Alemany and Marisa J. Harney, former officers of CIT who became our executive officers in connection with our merger with CIT, upon the vesting of restricted stock units (“RSUs”) originally granted to them by CIT which we assumed and converted into RSUs covering shares of our Class A Common in connection with the merger.
Monitoring of Pledging Arrangements. The policy provides that the Audit Committee will review all outstanding pledging arrangements annually (or more frequently where circumstances warrant). As of the date of this proxy statement, the only outstanding pledging arrangements are the grandfathered pledges listed in the table below.
If the Audit Committee determines, based on any new facts or changed circumstances, that the continuation of any pledge arrangement established through an exception (which does not include the grandfathered pledges) is reasonably likely to pose a material risk to us and the market for our common stock, then the Committee or its designee and the director or executive officer will work cooperatively (i) to modify officer; and
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| Ø | | the arrangementdirector’s or take other action to mitigate or eliminate executive officer’s total assets; |
| ● | | the risk, or (ii) where mitigation is not reasonably possible, to terminate market value, volatility, and trading volume of our common stock; |
| ● | | the arrangement as soon as reasonably practicable. Grandfathered PledgesPose No Material Risk. The Audit Committee has reviewed all grandfathered pledge arrangements that existed as of December 31, 2021.Based on its review and analysis, the Committee concluded that the pre-existing grandfathered pledge arrangements of certain membersfinancial capacity of the Holding family who are directors and officers – Frank B. Holding, Jr., Hope H. Bryant and Peter M. Bristow – are not reasonably likelyborrower to pose arepay the loan without resort to the pledged stock;
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| ● | | the loan-to-value ratio in the proposed pledge arrangement; |
| ● | | the nature of any other collateral in the proposed pledge arrangement; |
| ● | | the material risk to our company or the market for our common stock. Specifically, the Committee concluded that the risk of foreclosure and a resulting forced sale of common stock on the market that would result in a sudden and immediate decline in our stock price is remote based on, among other factors, the number of shares pledged, the trading volume in our Class A Common, the net worthterms of the pledgorsproposed pledge arrangement; and |
| ● | | the procedural safeguards to foreclosure, such as notice periods and the fact that the loan-to-stock value ratio in each of the grandfathered pledges was and remains very low. Audit Committee’s Rationale for the Policy. In formulating the policy and recommending itability to the Board, the Audit Committee considered the ownership structure of our company, including the fact that members of the Holding family own shares which, in the aggregate, currently amount to approximately 50%, and in the past have amounted to more than 50%, of the outstanding voting power of our stock. As a result of our ownership structure, FCB is one of the largest family-controlled banks in the United States. As described in this proxy statement under the headings “CORPORATE GOVERNANCE” and “COMMITTEESOFOUR BOARDS,” despite our ownership structure, historically we have adhered to Nasdaq’s governance requirements for non-controlled companies, including having a board consisting of a majority of independent directors, independent compensation and nominating committees, and approval of certain related person transactions by our Audit Committee, which consists solely of independent directors.substitute collateral.
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The policy requires a director or executive officer requesting an exception to submit the request in writing, with information addressing the factors listed above, and to supply any supporting documentation the Audit Committee requests. A request for an exception must be submitted with sufficient advance notice to enable the Committee to fully consider the request. No exceptions have been requested or approved by the Committee since the policy was first adopted. | | | | | | 80 | | The Audit Committee believes that our pledging policy is reasonable for a company with our ownership structure and that pledges of our stock permitted under the policy will not pose a material risk to our company or our shareholders. 2024 Annual Proxy Statement
Existing Pledge Arrangements.
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Beneficial Ownership of Our Equity Securities No Pledging of Equity Compensation Shares. Our pledging policy prohibits the Audit Committee from approving an exception for a pledge of shares granted to a director or executive officer as compensation. In the past we have had no equity-based compensation plans under which directors or executive officers receive compensation in the form of shares of our common stock, but the prohibition would apply to any future grants. The policy also will apply to shares of our stock issued to Ellen R. Alemany, who currently serves as a director, upon the vesting of stock awards originally granted to her by CIT which we assumed and converted into RSUs covering shares of our Class A Common in connection with the CIT Merger. Monitoring of Pledging Arrangements. The policy provides that the Audit Committee will review all outstanding pledging arrangements annually (or more frequently where circumstances warrant). As of the date of this proxy statement, the only outstanding pledging arrangements are the grandfathered pledges listed in the table below. If the Audit Committee determines, based on any new facts or changed circumstances, that the continuation of any pledge arrangement established through an exception to the policy (which does not include the grandfathered pledges) is reasonably likely to pose a material risk to us and the market for our common stock, then the Committee or its designee and the director or executive officer will work cooperatively (i) to modify the arrangement or take other action to mitigate or eliminate the risk, or (ii) where mitigation is not reasonably possible, to terminate the arrangement as soon as reasonably practicable. Grandfathered Pledges Pose No Material Risk. The Audit Committee has reviewed all grandfathered pledge arrangements that existed as of December 31, 2023. Based on its review and analysis, the Committee concluded that the pre-existing grandfathered pledge arrangements of certain members of the Holding family who are directors and executive officers — Frank B. Holding, Jr., Hope H. Bryant, and Peter M. Bristow — are not reasonably likely to pose a material risk to our company or the market for our common stock. Specifically, the Committee concluded that the risk of foreclosure and a resulting forced sale of common stock on the market that would result in a sudden and immediate decline in our stock price is remote based on, among other factors, the number of shares pledged, the trading volume in our Class A Common, the net worth of the pledgors, and the fact that the loan-to-stock value ratio in each of the grandfathered pledges was and remains very low. Audit Committee’s Rationale for the Policy. In formulating the policy and recommending it to the Board, the Audit Committee considered the ownership structure of our company, including the fact that members of the Holding family own shares which, in the aggregate, currently amount to approximately 50%, and in the past have amounted to more than 50%, of the outstanding voting power of our stock. As a result of our ownership structure, FCB is one of the largest family-controlled banks in the United States. As described in this proxy statement under the headings “CORPORATE GOVERNANCE” and “COMMITTEES OF OUR BOARDS,” despite our ownership structure, historically we have adhered to Nasdaq’s governance requirements for non-controlled companies, including having a board consisting of a majority of independent directors, independent compensation and nominating committees, and approval of certain related person transactions by our Audit Committee, which consists solely of independent directors. The Audit Committee believes that our pledging policy is reasonable for a company with our ownership structure and that pledges of our stock permitted under the policy will not pose a material risk to our company or our stockholders. Existing Pledge Arrangements.The following table lists the numbers of shares of our common stock beneficially owned by Mr. Holding, Mrs. Bryant and Mr. Bristow that are subject to grandfathered pledge arrangements on the date of this proxy statement. | | | | | | | | | | | | | | | | Name of Beneficial Owner | | Number of
Class A Common
Pledged Shares | | Number of
Class B Common
Pledged Shares | | Frank B. Holding, Jr. | | 198,052 | | -0- | | Hope H. Bryant | | 134,362 | | -0- | | Peter M. Bristow | | 30,000 | | -0- |
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Beneficial Ownership of Our Equity Securities Principal Stockholders The following table lists persons and entities who we believe owned, beneficially or of record, on the Record Date for the Annual Meeting, 5% or more of our voting Class A Common or Class B Common, and those persons’ and entities’ beneficial ownership of our nonvoting Depositary Shares. Similar to the director and executive officer table above, we consider a person to “beneficially own” shares held in the person’s name, or in the name of any other stockholder, if the person either directly, or indirectly through some agreement, arrangement, understanding or relationship, has or shares the right to vote or dispose of the shares, or to direct the voting or disposition of the shares. As a result, the same shares may be “beneficially owned” by more than one person. As described in footnotes to the table, portions of the shares listed as beneficially owned by certain of the individuals in the table also are listed as beneficially owned by other individuals named in the table. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Address of Beneficial Owner | | Beneficial Ownership | | Class A Common | | Class B Common | | Depositary Shares | | | | Number of
Shares (1) | | Percentage
of Class (2) | | Number of
Shares (1) | | Percentage
of Class (2) | | Number of
Shares (1) | | Percentage
of Class (2) | | Percentage of
Total Votes (2) | Carson H. Brice P.O. Box 1417 Smithfield, NC 27577 | | | | 507,643 | (3) | | | | 3.75 | % | | | | 117,523 | (3) | | | | 11.69 | % | | | | -0- | | | | | — | | | | | 8.07 | % | Claire H. Bristow P. O. Box 1417 Smithfield, NC 27577 | | | | 513,508 | (4) | | | | 3.80 | % | | | | 111,484 | (4) | | | | 11.09 | % | | | | 41,285 | (4) | | | | 0.30 | % | | | | 7.76 | % | Peter M. Bristow 4300 Six Forks Road Raleigh, NC 27609 | | | | 513,508 | (5) | | | | 3.80 | % | | | | 111,484 | (5) | | | | 11.09 | % | | | | 41,285 | (5) | | | | 0.30 | % | | | | 7.76 | % | Hope H. Bryant 4300 Six Forks Road Raleigh, NC 27609 | | | | 451,084 | (6) | | | | 3.34 | % | | | | 65,821 | (6) | | | | 6.55 | % | | | | 47,500 | (6) | | | | 0.34 | % | | | | 5.08 | % | Frank B. Holding, Jr. 4300 Six Forks Road Raleigh, NC 27609 | | | | 605,892 | (7) | | | | 4.48 | % | | | | 160,114 | (7) | | | | 15.93 | % | | | | 35,500 | (7) | | | | 0.26 | % | | | | 10.70 | % | Olivia B. Holding P. O. Box 1352 Smithfield, NC 27577 | | | | 707,967 | (8) | | | | 5.23 | % | | | | 169,273 | (8) | | | | 16.84 | % | | | | 57,500 | (8) | | | | 0.42 | % | | | | 11.54 | % | Lewis R. Holding II 4300 Six Forks Road Raleigh, NC 27609 | | | | 1,735 | (9) | | | | 0.01 | % | | | | 58,529 | (9) | | | | 5.82 | % | | | | -0- | | | | | — | | | | | 3.17 | % | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | | 1,285,183 | (10) | | | | 9.50 | % | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4.10 | % | The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | | | 1,017,655 | (11) | | | | 7.52 | % | | | | — | | | | | — | | | | | — | | | | | — | | | | | * | |
| (1) | Reflects shares which, to the best of our knowledge, are beneficially owned by the named individuals and entities as of March 4, 2024, or, in the case of BlackRock, Inc. and The Vanguard Group, December 31, 2023. Except as otherwise noted in the footnotes below, each named individual and entity exercises sole voting (in the case of voting securities) and investment power with respect to all listed shares. |
| (2) | “Percentage of Class” reflects each individual’s or entity’s listed shares as a percentage of the total number of outstanding shares of that class of stock on March 4, 2024. “Percentage of Total Votes” reflects the aggregate votes represented by each individual’s or entity’s listed shares of Class A Common and Class B Common beneficially ownedwith respect to which the individual or entity reports having sole or shared voting power, as a percentage of the aggregate votes represented by Mr. Holding, Mrs. Bryant and Mr. Bristow that are subject to grandfathered pledge arrangements on the date of this proxy statement. | | | | | Name of Beneficial Owner | | Number of
Class A Common
Pledged Shares | | Number of
Class B Common
Pledged Shares | | | | Frank B. Holding, Jr. | | 198,052 (1) | | -0- (1) | | | | | Hope H. Bryant | | 137,712 | | -0- | | | | Peter M. Bristow | | 30,000 | | -0- |
(1) | The change in the numbers of pledged Class A Common and Class B Commonall outstanding shares as compared to the numbers listed for Mr. Holding in our prior year’s proxy statement was due to an exchange of Class A Common shares for Class B Common shares under existing pledge arrangements. The aggregate number of pledged shares of both classes of stock decreased as compared to the prior year’s total.
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Principal Shareholders
The following table lists persons and entities who we believe owned, beneficially or of record, 5% or more of our voting securities on that date. Depositary Shares do not have voting rights and do not affect the percentages of total votes. An asterisk indicates less than .01%.
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| (3) | Mrs. Brice may be considered to exercise shared voting and investment power with respect to 430 of the listed shares of Class A Common orand 563 of the listed shares of Class B Common stock, and those persons’ and entities’which are held by her spouse. She disclaims beneficial ownership of our nonvotingan aggregate of 87,626 shares of Class A Common and 4,382 shares of Class B Common held by a family member as trustee in irrevocable trusts for the benefit of her children; an aggregate of 42,191 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares. Similar to theShares held by three charitable foundations, of which she serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain corporations of which Mrs. Brice and/or her spouse are stockholders but of which neither of them serves as a director and executive officer table above, we consider a person to “beneficially own”or officer. Those disclaimed shares heldare not included in the person’s name, or in the name of any other shareholder, if the person either directly, or indirectly through some agreement, arrangement, understanding or relationship, has or shares the right to vote or dispose of the shares, or to direct the voting or disposition of the shares. As a result, the same shares may be “beneficially owned” by more than one person. As described in footnotes to the table, portions of the shares listed as beneficially owned by certainfor her in the table. |
| (4) | Mrs. Bristow may be considered to exercise shared voting and investment power with respect to 132,765 of the individuals inlisted shares of Class A Common and 66,462 of the tablelisted shares of Class B Common, which are held by her spouse, Peter M. Bristow, individually, or by entities that he may be deemed to control; shared voting power only with respect to 6,004 of the listed shares of Class A Common and 78 of the listed shares of Class B Common held by trusts for unrelated persons; and shared investment power with respect to 12,152 of the listed shares of Class A Common held as co-trustee of a trust. All listed shares also are listed as beneficially owned by her spouse. Mrs. Bristow disclaims beneficial ownership of 46,136 shares of Class A Common and 7,051 shares of Class B Common held by her adult children; 3,231 shares of Class A Common, 200 shares of Class B Common and 20,000 Depositary Shares held by charitable foundations of which she serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other individuals named in the table. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beneficial Ownership | | | | | | | | Class A Common | | | Class B Common | | | Depositary Shares | | | | | Name and Address of Beneficial Owner | | Number
of Shares (1) | | | Percentage
of Class (2) | | | Number
of Shares (1) | | | Percentage
of Class (2) | | | Number
of Shares (1) | | | Percentage
of Class (2) | | | Percentage of
Total Votes (2) | | | | | | | | | | Carson H. Brice P.O. Box 1417 Smithfield, NC 27577 | | | 507,581 | (3) | | | 3.39 | % | | | 117,523 | (3) | | | 11.69 | % | | | -0- | | | | — | | | | 7.69 | % | | | | | | | | | Claire H. Bristow P. O. Box 1417 Smithfield, NC 27577 | | | 528,846 | (4) | | | 3.53 | % | | | 113,826 | (4) | | | 11.32 | % | | | 41,285 | (4) | | | 0.30 | % | | | 7.57 | % | | | | | | | | | Peter M. Bristow 4300 Six Forks Road Raleigh, NC 27609 | | | 528,846 | (5) | | | 3.53 | % | | | 113,826 | (5) | | | 11.32 | % | | | 41,285 | (5) | | | 0.30 | % | | | 7.57 | % | | | | | | | | | Hope H. Bryant 4300 Six Forks Road Raleigh, NC 27609 | | | 597,908 | (6) | | | 3.99 | % | | | 149,544 | (6) | | | 14.88 | % | | | 47,500 | (6) | | | 0.34 | % | | | 9.63 | % | | | | | | | | | Frank B. Holding, Jr. 4300 Six Forks Road Raleigh, NC 27609 | | | 629,736 | (7) | | | 4.21 | % | | | 164,135 | (7) | | | 16.33 | % | | | 35,500 | (7) | | | 0.26 | % | | | 10.48 | % | | | | | | | | | Olivia B. Holding P. O. Box 1352 Smithfield, NC 27577 | | | 712,904 | (8) | | | 4.76 | % | | | 168,420 | (8) | | | 16.76 | % | | | 57,500 | (8) | | | 0.42 | % | | | 10.97 | % | | | | | | | | | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | 1,472,633 | (9) | | | 9.84 | % | | | — | | | | — | | | | — | | | | — | | | | 4.57 | % | | | | | | | | | The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | | 1,140,775 | (10) | | | 7.62 | % | | | — | | | | — | | | | — | | | | — | | | | 0.03 | % |
(1) | Reflects shares which, to the best of our knowledge, are beneficially owned by the named individuals and entities as of February 28, 2022 or, in the case of BlackRock, Inc. and The Vanguard Group, December 31, 2021. Except as otherwise noted in the footnotes below, each named individual and entity exercises sole voting (in the case of voting securities) and investment power with respect to all listed shares.
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(2) | “Percentage of Class” reflects each individual’s or entity’s listed shares as a percentage of the total number of outstanding shares of that class of stock on February 28, 2022. “Percentage of Total Votes” reflects the aggregate votes represented by each individual’s or entity’s listed shares of Class A Common and Class B Common with respect to which the individual or entity reports having sole or shared voting power, as a percentage of the aggregate votes represented by all outstanding shares of our voting securities on that date. Depositary Shares do not have voting rights and do not affect the percentages of total votes.
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(3) | Mrs. Brice may be considered to exercise shared voting and investment power with respect to 383 of the listed shares of Class A Common and 563 of the listed shares of Class B Common which are held by her spouse. She disclaims beneficial ownership of an aggregate of 87,566 shares of Class A Common and 4,172 shares of Class B Common held by a family member as trustee in irrevocable trusts for the benefit of her children; an aggregate of 47,226 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares held by three charitable foundations, of which she serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654shares of Class B Common and 398,945 Depositary Shares held by certain corporations of which Mrs. Brice and/or her spouse are shareholderscorporations of which Mrs. Bristow and/or her spouse are stockholders but of which neither of them serves as a director or officer. Those disclaimed shares are not included in the shares listed for her in the table.
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(4) | Mrs. Bristow may be considered to exercise shared voting and investment power with respect to 105,941 of the listed shares of Class A Common and 28,698 of the listed shares of Class B Common, which are held by her spouse, Peter M. Bristow, individually, or for family members or other persons, or by entities that he may be deemed to control; shared voting power only with respect to 6,004 of the listed shares of Class A Common and 78 of the listed shares of Class B Common held by trusts for unrelated persons; and shared investment power with respect to 12,152 of the listed shares of Class A Common held as co-trustee of a trust. All listed
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| | | shares also are listed as beneficially owned by her spouse. Mrs. Bristow disclaims beneficial ownership of 30,772 shares of Class A Common and 4,499 shares of Class B Common held by her adult children; 3,231 shares of Class A Common, 200 shares of Class B Common and 22,000 Depositary Shares held by charitable foundations of which she serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other corporations of which Mrs. Bristow and/or her spouse are shareholders but of which neither of them serves as a director or officer. Those disclaimed shares are not included in the shares listed for her in the table.
Beneficial Ownership of Our Equity Securities | (5) | Mr. Bristow may be considered to exercise shared voting and investment power with respect to 432,046 of the listed shares of Class A Common and 87,300 of the listed shares of Class B Common held by or for his spouse, Claire H. Bristow, and by his child; sole voting power only with respect to 6,004 shares of Class A Common and 78 of the listed shares of Class B Common held by trusts for unrelated persons; and shared investment power only with respect to 41,285 of the listed Depositary Shares held by or for his spouse. All listed shares also are listed as beneficially owned by his spouse. Mr. Bristow disclaims beneficial ownership of an aggregate of 30,772 shares of Class A Common and 4,499 shares of Class B Common held by his adult children; 3,231 shares of Class A Common, 200 shares of Class B Common and 22,000 Depositary Shares held by charitable foundations of which his spouse serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other corporations of which Mr. Bristow and/or his spouse are shareholders but of which neither of them serves as a director or officer. Those disclaimed shares are not included in the shares listed for him in the table. |
(6) | Mrs. Bryant may be considered to exercise shared voting and investment power with respect to 90,632 of the listed shares of Class A Common, 46,766 of the listed shares of Class B Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, or by corporations or other entities that she may be deemed to control, and sole voting power only with respect to 1,494 of the listed shares of Class A Common and 255 shares of Class B Common held by a trusts for unrelated persons. The listed shares include an aggregate of 47,226 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Ms. O. Holding and Mr. F. Holding, Jr., and an aggregate of 13,357 shares of Class A Common and 1,555 shares of Class B Common held by two business entities which also are listed as beneficially owned by Ms. O. Holding. Mrs. Bryant disclaims beneficial ownership of an aggregate of 59,879 shares of Class A Common and 24,600 shares of Class B Common held by her adult children and by revocable trusts for the benefit of her children; an aggregate of 292,063 shares of Class A Common, 22,619 shares of Class B Common and 398,945 Depositary Shares held by two corporations of which Mrs. Bryant is a shareholder and a director, but not an officer; and 174,469 shares of Class A Common and 4,480 shares of Class B Common held by a corporation of which Mrs. Bryant is a shareholder but does not serve as a director or officer. Those disclaimed shares are not included in the shares listed for her in the table.
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(7) | Mr. F. Holding, Jr. may be considered to exercise shared voting and investment power with respect to 55,812 of the listed shares of Class A Common and 38,258 of the listed shares of Class B Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, or by corporations or other entities that he may be deemed to control. The listed shares include an aggregate of 47,226 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Voting Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Mrs. Bryant and Ms. O. Holding. Mr. F. Holding, Jr. disclaims beneficial ownership of an aggregate of 49,639 shares of Class A Common and 64,378 shares of Class B Common held by his adult children and trustees of irrevocable trusts for the benefit of his adult children; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other corporations of which Mr. Holding and/or his spouse are shareholders but of which neither he nor his spouse serve as a director or officer. Those disclaimed shares are not included in the shares listed for him in the table.
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(8) | Ms. O. Holding may be considered to exercise shared voting and investment power with respect to 60,583 of the listed shares of Class A Common and 38,280 of the listed shares of Class B Common, shared investment power only with respect to 12,152 of the listed shares of Class A Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, by her as co-trustee, or by corporations or other entities that she may be deemed to control. The listed shares include 47,226 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Mr. F. Holding, Jr. and Mrs. Bryant; and an aggregate of 13,357 shares of Class A Common and 1,555 shares of Class B Common held by two business entities which also are listed as beneficially owned by Mrs. Bryant. Ms. Holding disclaims beneficial ownership of an aggregate of 466,532 shares of Class A Common, 27,099 shares of Class B Common and 398,945 Depositary Shares held by three corporations of which Ms. Holding is a shareholder and director. Those disclaimed shares are not included in the shares listed for her in the table.
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(9) | BlackRock, Inc. has filed two Schedule 13Gs with the SEC showing the numbers of shares of our Class A Common and CIT’s common stock, respectively, that it beneficially owned as of December 31, 2021 (prior to the effective date of our merger with CIT, the conversion of CIT’s common stock into shares of our Class A Common, and the increase in the number of outstanding shares of our Class A Common to effect the merger). The number of shares of Class A Common listed in the table as beneficially owned by BlackRock, Inc. is the total of the number of shares of Class A Common it reported as beneficially owned as of December 31, 2021, plus the additional number of shares of Class A Common it would have received in the merger (at the merger exchange ratio) for the shares of CIT common stock it reported as beneficially owned as of December 31, 2021. The percentage of class is computed by dividing the total number of shares of Class A Common listed in the table by our increased total number of outstanding shares of Class A Common following the merger. Based on the same conversion and aggregation methodology as described above, the Schedule 13Gs would indicate that BlackRock, Inc. has sole power to vote or direct the vote of 1,420,302 shares, shared power to vote or direct the vote of -0- shares, sole power to dispose of or direct the disposition of 1,472,633 shares, and shared power to dispose of or direct the disposition of -0- shares, of the listed Class A Common. The Schedule 13Gs indicate that BlackRock, Inc. is a parent holding company or control person of a number of subsidiaries which acquired the listed shares.
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(10) | The Vanguard Group has filed two Schedule 13Gs with the SEC showing the numbers of shares of our Class A Common and CIT’s common stock, respectively, that it beneficially owned as of December 31, 2021 (prior to the effective date of our merger with CIT, the conversion of CIT’s common stock into shares of our Class A Common, and the increase in the number of outstanding shares of our Class A Common to effect the merger). The number of shares of Class A Common listed in the table as beneficially owned by The Vanguard Group is the total of the number of shares of Class A Common it reported as beneficially owned as of December 31, 2021, plus the additional number of shares of Class A Common it would have received in the merger (at the merger exchange ratio) for the shares of CIT common stock it reported as beneficially owned as of December 31, 2021. The percentage of class is computed by dividing the total number of shares of Class A Common listed in the table by our increased total number of outstanding shares of Class A Common following the merger. Based on the same conversion and aggregation methodology as described above, the Schedule 13Gs would indicate that The Vanguard Group has sole power to vote or direct the vote of -0- shares, shared power to vote or direct the vote of 8,410 shares, sole power to dispose of or direct the disposition of 1,121,393 shares, and shared power to dispose of or direct the disposition of 19,382 shares, of the listed Class A Common. The Schedule 13Gs indicate that The Vanguard Group, Inc.’s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Common.
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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Our Board of Directors unanimously recommends that you vote “FOR” Proposal 2.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), and rules adopted by the SEC under the Act, at least once every three years we are required to give our shareholders an opportunity to vote, on a non-binding advisory basis, on a resolution (a “say-on-pay” resolution) to approve the compensation of our NEOs whose compensation we are required by the SEC’s rules to disclose in our Annual Meeting proxy statements. Our Board has submitted a say-on-pay resolution to our shareholders at each of our Annual Meetings since 2011, and our shareholders have overwhelmingly approved those proposals, in each case with over 98% of the votes entitled to be cast on each proposal with respect to 374,739 of the listed shares presentof Class A Common and 44,944 of the listed shares of Class B Common held by or for his spouse, Claire H. Bristow; sole voting power only with respect to 6,004 shares of Class A Common and 78 of the listed shares of Class B Common held by trusts for unrelated persons; and shared investment power only with respect to 41,285 of the listed Depositary Shares held by or for his spouse. All listed shares also are listed as beneficially owned by his spouse. Mr. Bristow disclaims beneficial ownership of an aggregate of 46,136 shares of Class A Common and 7,051 shares of Class B Common held by his adult children; 3,231 shares of Class A Common, 200 shares of Class B Common and 20,000 Depositary Shares held by charitable foundations of which his spouse serves as a director; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other corporations of which Mr. Bristow and/or his spouse are stockholders but of which neither of them serves as a director or officer. Those disclaimed shares are not included in the shares listed for him in the table.
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| (6) | Mrs. Bryant may be considered to exercise shared voting and investment power with respect to 55,548 of the listed shares of Class A Common, 38,376 of the listed shares of Class B Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, or by corporations or other entities that she may be deemed to control, and sole voting power only with respect to 1,494 of the listed shares of Class A Common and 255 shares of Class B Common held by a trusts for unrelated persons. The listed shares include an aggregate of 42,191 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Ms. O. Holding and Mr. F. Holding, Jr., and an aggregate of 13,357 shares of Class A Common and 1,555 shares of Class B Common held by two business entities which also are listed as beneficially owned by Ms. O. Holding. Mrs. Bryant disclaims beneficial ownership of an aggregate of 201,194 shares of Class A Common and 109,583 shares of Class B Common held by her adult children and by revocable trusts for the benefit of her children; an aggregate of 292,063 shares of Class A Common, 22,619 shares of Class B Common and 398,945 Depositary Shares held by two corporations of which Mrs. Bryant is a stockholder and a director, but not an officer; and 174,469 shares of Class A Common and 4,480 shares of Class B Common held by a corporation of which Mrs. Bryant is a stockholder but does not serve as a director or officer. Those disclaimed shares are not included in the shares listed for her in the table. |
| (7) | Mr. F. Holding, Jr., may be considered to exercise shared voting and investment power with respect to 50,777 of the listed shares of Class A Common and 38,484 of the listed shares of Class B Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, or by corporations or other entities that he may be deemed to control. The listed shares include an aggregate of 42,191 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Voting Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Mrs. Bryant and Ms. O. Holding. Mr. F. Holding, Jr., disclaims beneficial ownership of an aggregate of 34,127 shares of Class A Common and 111,666 shares of Class B Common held by his adult children and trustees of irrevocable trusts for the benefit of his adult children; and an aggregate of 479,889 shares of Class A Common, 28,654 shares of Class B Common and 398,945 Depositary Shares held by certain other corporations of which Mr. Holding and/or his spouse are stockholders but of which neither he nor his spouse serve as a director or officer. Those disclaimed shares are not included in the shares listed for him in the table. |
| (8) | Ms. O. Holding may be considered to exercise shared voting and investment power with respect to 55,548 of the listed shares of Class A Common and 38,280 of the listed shares of Class B Common, shared investment power only with respect to 12,152 of the listed shares of Class A Common, and shared investment power only with respect to 35,500 of the listed Depositary Shares, which are held jointly, by family members or other persons, by her as co-trustee, or by corporations or other entities that she may be deemed to control. The listed shares include 42,191 shares of Class A Common and 36,725 shares of Class B Common held by two charitable foundations, and 35,500 Depositary Shares held by three charitable foundations, all of which also are listed as beneficially owned by Mr. F. Holding, Jr., and Mrs. Bryant; and an aggregate of 13,357 shares of Class A Common and 1,555 shares of Class B Common held by two business entities which also are listed as beneficially owned by Mrs. Bryant. Ms. Holding disclaims beneficial ownership of an aggregate of 466,532 shares of Class A Common, 27,099 shares of Class B Common and 398,945 Depositary Shares held by three corporations of which Ms. Holding is a stockholder and director. Those disclaimed shares are not included in the shares listed for her in the table. |
| (9) | Mr. L. Holding may be considered to exercise shared voting and investment power with respect to 154 of the listed shares of Class A Common and 255 shares of Class B Common which are held jointly with family members. Mr. Holding disclaims beneficial ownership of an aggregate of 13,704 shares of Class A Common held by his father as custodian, 1,084 shares of Class B Common held by a trust for his benefit for which he has no voting or dispositive power; and 466,532 shares of Class A Common, 27,009 shares of Class B Common and 398,945 Depositary Shares held by three corporations of which Mr. Holding is a stockholder, but of which he does not serve as a director or officer. |
| (10) | BlackRock, Inc. has filed an amended Schedule 13G with the SEC showing the number of shares of our Class A Common that it beneficially owned as of December 31, 2023. The Schedule 13G indicates that BlackRock, Inc. had sole power to vote or direct the vote of 1,215,172 shares, shared power to vote or direct the vote of -0- shares, sole power to dispose of or direct the disposition of 1,285,183 shares, and shared power to dispose of or direct the disposition of -0- shares, of the listed Class A Common. The Schedule 13G indicate that various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the listed shares (none of whose interest in the shares exceeded 5% of the total outstanding shares), and that BlackRock, Inc. is a parent holding company or control person of a number of subsidiaries which acquired the listed shares. |
| (11) | Vanguard Group has filed an amended Schedule 13G with the SEC showing the number of shares of our Class A Common that it beneficially owned as of December 29, 2023. The Schedule 13Gs indicates that The Vanguard Group has sole power to vote or represented by proxy,direct the vote of -0- shares, shared power to vote or direct the vote of 7,800 shares, sole power to dispose of or direct the disposition of 992,678 shares, and which were votedshared power to dispose of or abstained at each meeting, being cast for approval. Another say-on-pay resolution will be submitted for voting by our shareholders atdirect the disposition of 24,977 shares, of the listed Class A Common. The Schedule 13Gs indicate that The Vanguard Group, Inc.’s Schedule 13G is filed in its capacity as an investment adviser and that its clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Common.
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Delinquent Section 16(a) Reports Our directors, executive officers, and holders of more than 10% of a class of our equity securities are required by federal law to file reports with the SEC regarding the amounts of and changes in their beneficial ownership of shares. Based on our review of copies of those reports, our proxy statements are required to disclose failures to report shares beneficially owned or changes in beneficial ownership, and failures to timely file required reports, during previous years. While reviewing his beneficial ownership of our shares, it has come to the attention of Frank B. Holding, Jr., that, during 2020 through 2022, he inadvertently failed to file three reports, including two reports covering eight gifts of small numbers of shares by family members to custodial accounts he holds for his grandchildren, and one report covering one purchase of a small number of shares by his spouse. Those transactions were reported promptly after he discovered that they had been overlooked. | | | | | | | 2024 Annual Meeting. In connection with that proposal, the following resolution will be submitted for voting:Proxy Statement “RESOLVED, that the shareholders of First Citizens BancShares, Inc. (“BancShares”) hereby approve, on a non-binding
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Proposal 2: Advisory Vote on Executive Compensation PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION Our Board of Directors unanimously recommends that you vote “FOR” Proposal 2. In accordance with the requirements of Schedule 14A of the Exchange Act, and rules adopted by the SEC, at least once every three years we are required to give our stockholders an opportunity to vote, on a non-binding advisory basis, on a resolution (a “say-on-pay” resolution) to approve the compensation of our NEOs as disclosed in our Annual Meeting proxy statements. Our Board has submitted a proposal for our stockholders to approve a say-on-pay resolution at each of our Annual Meetings since 2011, and our stockholders have approved those proposals, in each case with over 95% of the votes entitled to be cast on each proposal with respect to shares present in person or represented by proxy, and which were voted or abstained at each meeting, being cast for approval. Another proposal to approve a say-on-pay resolution will be submitted for voting by our stockholders at the Annual Meeting as follows: “RESOLVED, that the stockholders of First Citizens BancShares, Inc. (“BancShares”) hereby approve, on a non-binding advisory basis, the compensation paid or provided to BancShares’ named executive officers, as that compensation has been disclosed in BancShares’ proxy statement for the 2024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including BancShares’ Compensation Discussion and Analysis, compensation tables, and the narrative discussion contained in the proxy statement.” The vote on the resolution is not intended to address any specific element of executive compensation. Rather, the vote will relate generally to the compensation described in this proxy statement that was paid or provided for 2023 to our NEOs listed in the Summary Compensation Table above under the heading “EXECUTIVE COMPENSATION.” Under Section 14A of the Exchange Act and the SEC’s related rules, the vote will be advisory in nature and will not be binding on our Boards or our CNG Committee, and it will not overrule or affect any previous action or decision by the Boards or Committee or any compensation previously paid or awarded. Neither will it obligate the Boards or Committee to any particular course of future action, nor create or imply any additional duty on the part of the Boards or Committee. However, our Boards and the Committee value the opinion of our stockholders and, in making future decisions on the compensation of our NEOs, will consider the voting results on the resolution and evaluate whether any actions are necessary to address any stockholder concerns. Our executive compensation philosophy and components are described in more detail in this proxy statement under the headings “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION.” As discussed in those sections, our Boards and CNG Committee attempt to align our executive officers’ compensation with our long-term business philosophy and to achieve our objectives of: | ● | | rewarding sustained long-term performance and long-term loyalty; |
| ● | | balancing business risk with sound financial policy and stockholders’ interests, and aligning the interests of our executive officers as that compensation has been disclosed in BancShares’ proxy statement forwith the 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including BancShares’ Compensation Discussion and Analysis, compensation tables, and the narrative discussion contained in the proxy statement.” The vote on the resolution is not intended to address any specific element of executive compensation. Rather, the vote will relate generally to the compensation described in this proxy statement that was paid or provided for 2021 to our NEOs listed in the Summary Compensation Table above under the heading “EXECUTIVE COMPENSATION.” Under the Act and the SEC’s rules, the vote will be advisory in nature and will not be binding on our Boards or our Compensation, Nominations and Governance Committee, and it will not overrule or affect any previous action or decision by the Boards or Committee or any compensation previously paid or awarded. Neither will it obligate the Boards or Committee to any particular course of future action, nor create or imply any additional duty on the part of the Boards or Committee. However, our Boards and the Committee value the opinionlong-term interests of our shareholders and, in making future decisions on the compensation of our NEOs, will consider the voting results on the resolution and evaluate whether any actions are necessary to address any shareholder concerns.
Our executive compensation philosophy and components are described in more detail in this proxy statement under the headings “COMPENSATION DISCUSSIONAND ANALYSIS” and “EXECUTIVE COMPENSATION.” As discussed in those sections, our Boards and Compensation, Nominations and Governance Committee attempt to align our executive officers’ compensation with our long-term business philosophy and to achieve our objectives of:
| ● | | rewarding sustained long-term performance and long-term loyalty;
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| ● | | balancing business risk with sound financial policy and shareholders’ interests, and aligning the interests of our executive officers with the long-term interests of our shareholdersstockholders by encouraging growth in the value of our company and our shareholders’ investments;
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| ● | | enabling us to attract, motivate and retain qualified executive officers; and
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| ● | | providing compensation to our executive officers that is competitive with comparable financial services companies.
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Consistent with that philosophy, our 2021 executive compensation program was primarily composed of the following elements:
| ● | | competitive base salaries;
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| ● | | performance-based long-term incentive awards payable in cash which may be earned based on the extent of growth in the tangible book value per share of our common stock plus cumulative dividends paid on the stock during stated three-year Performance Periods;
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| ● | | special “merger success” bonuses paid during 2022 for 2021 to certain of our executive officers, including our NEOs, to recognize the performance and contributions of and additional demands on our management team during late 2020 and through 2021 in connection with the successful completion of our transformational merger with CIT (which became effective on January 3, 2022, and which has doubled our assets to more than $100 billion);
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| ● | | retirement benefits in the form of defined benefit pension plans (for officers hired on or before specified dates during 2007), matching contributions to legacy and enhanced Section 401(k) defined contribution plan accounts, and additional profit-sharing contributions to enhanced Section 401(k) plan accounts;
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| ● | | individual non-qualified separation from service agreements with certain of our executive officers;
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| ● | | a non-qualified deferred compensation plan which was adopted during 2021 to permit plan participants to save for retirement and other long-term financial goals on a tax-deferred basis by electing to defer their receipt of a portion of their base salaries and certain eligible bonuses; and
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| ● | | limited personal benefits (or “perquisites”) for certain of our executive officers.
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We do not have employment agreements with any of our current NEOs, nor have we provided them with any equity-based compensation (such as stock options or stock awards) nor entered into any arrangements with them under which compensation would be paid to them, or the vesting of any of their benefits would be accelerated, as a result of a change in control of our company or FCB.
We believe the Committee’s and the Boards’ focus on performance-based compensation, including the substantial portion of our executive officers’ compensation that is composed of variable incentive compensation, have enhanced our pay and performance alignment. We are committed to maintaining a strong executive compensation governance framework with continuing monitoring, oversight and mitigation of compensation risks, and a compensation program that is both fair and effective for both our executives and our shareholders alike and aligned with the central objective of our strategic plan, which is to build the long-term value of our company and our shareholders’stockholders’ investments;
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| ● | | enabling us to attract, motivate, and retain qualified executive officers; and |
| ● | | providing compensation to our executive officers that is competitive with comparable financial services companies. |
Consistent with that philosophy, our 2023 executive compensation program was primarily composed of the following elements: | ● | | competitive base salaries; |
| ● | | performance-based LTIP awards payable in cash which may be earned based on the extent of growth in the tangible book value per share of our common stock plus cumulative dividends paid on the stock during stated three-year Performance Periods; |
| ● | | performance-based MPP awards payable in cash which could be earned based on the successful completion of performance objectives including integration and conversion milestones, cost savings and synergies, and risk management, as well as individual performance, relating to mergers and acquisitions; |
| ● | | retirement benefits in the form of defined benefit pension plans (for officers hired on or before specified dates), matching contributions to FCB’s Section 401(k) defined contribution plan accounts, and additional profit-sharing contributions to FCB 401(k) Plan accounts; |
| ● | | individual nonqualified separation from service agreements with certain of our executive officers; |
| | | | | | 84 | | 2024 Annual Proxy Statement | | |
Proposal 2: Advisory Vote on Executive Compensation | ● | | nonqualified deferred compensation plans, and the deemed investment returns accrued to the accounts of participants in the FCB 2021 Plan and interest accrued to the accounts of participants in the FCB-SC Plans; and |
| ● | | limited personal benefits (or “perquisites”) for certain of our executive officers. |
We do not have employment agreements with any of our current NEOs, nor have we provided them with any equity-based compensation (such as stock options or stock awards) nor entered into any arrangements with them under which compensation would be paid to them, or the vesting of any of their benefits would be accelerated, as a result of a change in control of our company or FCB. We believe the Committee’s and the Boards’ focus on performance-based compensation, including the substantial portion of our executive officers’ compensation that is composed of variable incentive compensation, have enhanced our pay and performance alignment. We are committed to maintaining a strong executive compensation governance framework with continuing monitoring, oversight, and mitigation of compensation risks, and a compensation program that is fair and effective for both our executives and our stockholders alike and aligned with the central objective of our strategic plan, which is to build the long-term value of our company and our stockholders’ investments. Our Board of Directors believes that our executive compensation policies and practices are aligned with our stockholders’ long-term interests, and it unanimously recommends that you vote “FOR” Proposal 2. To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares of our Class A Common and Class B Common present in person or represented by proxy at the Annual Meeting, and voting together as one class, must be cast in favor of the proposal. | | | | | | | 2024 Annual Proxy Statement | | 85 | Our Board of Directors believes that our executive compensation policies and practices are aligned with our
shareholders’ long-term interests, and it unanimously recommends that you vote “FOR” Proposal 2.
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Proposal 3: Ratification of Appointment of Independent Accountants PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS Our Board of Directors unanimously recommends that you vote “FOR” Proposal 3. Appointment of Independent Accountants Our Audit Committee has engaged our current independent accountants, KPMG LLP, to serve as our independent accountants and to audit our consolidated financial statements for 2024. The Audit Committee continuously reviews our independent accountants’ performance and independence. In connection with the Committee’s selection of our independent accountants for 2024, the Committee considered and discussed, among other factors: To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares present
in person or represented by proxy at the Annual Meeting must be cast in favor of the proposal.
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| ● | | PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Our Boardthe increased size and complexity of Directors unanimously recommends that you vote “FOR” Proposal 3.
Appointmentour business following the CIT Merger during 2022 and the SVB Acquisition during 2023 and the impact of Independent Accountants
Our Audit Committee has engagedthose transactions on our current independent accountants, KPMG LLP, to serve as our independent accountants and to audit our consolidated financial statements for 2022.
The Audit Committee continuously reviews our independent accountants’ performance and independence. In connection withinternal control over financial reporting;
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| ● | | KPMG LLP’s expertise in the banking industry, and the Committee’s selectionperception of KPMG LLP’s capabilities in handling issues related to financial institutions and, more specifically, to larger financial institutions with complex businesses; |
| ● | | the knowledge and experience of KPMG LLP’s lead audit partner and other key members proposed to be assigned to our independent accountants for 2022, the Committee considered and discussed, among other factors:audit service team; |
| ● | | the increased size and complexity of our business following our January 3, 2022 merger with CIT and the impact of the merger on our financial statements and internal control over financial reporting;
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| ● | | KPMG LLP’s expertise in the banking industry, and the Committee’s perception of KPMG LLP’s capabilities in handling issues related to financial institutions and, more specifically, to larger financial institutions with complex businesses;
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| ● | | the knowledge and experience of KPMG LLP’s lead audit partner and other key members proposed to be assigned to our audit service team;
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| | ● | | recent reports of the Public Company Accounting Oversight Board’s inspections of KPMG LLP; |
| ● | | the Committee’s perception of, and KPMG LLP’s statements regarding, its independence; and
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| ● | | KPMG LLP’s proposed fees.
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In connection with its selection of KPMG LLP as our independent accountants, the Audit Committee received the written disclosures and letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding that firm’s communications with the Committee concerning its independence. Based on its evaluation, the Audit Committee believes thatBoard’s inspections of KPMG LLP is independent and that it is in our and our shareholders’ best interests to appoint KPMG LLP as our independent accountants for 2022.LLP;
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| ● | | In order to maintain their independence with respect to their audit clients, the SEC’s rules require the partners of public accounting firms who are assigned as “lead audit partners” for audits of public companies to be subject to a mandatory rotation policy. As a result, a partner in our accounting firm may not serve as lead audit partner for the firm’s audit of our financial statements for more than five consecutive years. Our Audit Committee does not approve or disapprove the accounting firm’s assignment of a particular partner as lead audit partner, or its assignment of other members of the firm to its audit team, for audits of our financial statements. However, in connection with the Audit Committee’s selection of our independent accountants each year, the Committee meets with the proposed lead audit partner, considers the partner’s experience and performance on previous audits and any experience of the Committee with the partner, and seeks and considers the views of our executive management. The Committee then communicates its views regarding that partner to management of the accounting firm.
Our Audit Committee first engaged KPMG LLP as our independent accountants to audit our consolidated financial statements for 2021, and approved the terms of its engagement, on February 24, 2021. KPMG LLP replaced Dixon Hughes Goodman LLP which had audited our financial statements for 2020 and was dismissed as our independent accountants on February 24, 2021. It had served as our independent accountants since 2004. The change in accountants was approved by the Audit Committee following a competitive proposal process.
In connection with Dixon Hughes Goodman LLP’s audits of our financial statements during the two years ended December 31, 2020 and 2019, and through the date of the Committee’s action dismissing Dixon Hughes Goodman LLP, there were no (a) disagreements with Dixon Hughes Goodman LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Dixon Hughes Goodman LLP’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its reports on our financial statements, or (b) any “reportable events” requiring disclosure pursuant to Item 304(a)(1)(v) of Regulation S-K.
Dixon Hughes Goodman LLP’s audit reports on our consolidated financial statements asperception of, and for the years ended December 31, 2020KPMG LLP’s statements regarding, its independence; and 2019 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to
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| ● | | uncertainty, audit scope or accounting principles, except that the report for the year ended December 31, 2020 contained a paragraph explaining that we changed our method of accounting for credit losses effective January 1, 2020 due to the adoption of Accounting Standards Codification Topic 326 Financial Instruments – Credit Losses.
During 2020 and 2019, and through the date of the Committee’s action engaging KPMG LLP, neither we, nor anyone on our behalf, consulted with KPMG LLP regarding (a) either the application of accounting principles to a specified transaction, either completed orLLP’s proposed or the type of audit opinion that might be rendered on our consolidated financial statements, or (b) any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable event” as defined in Item 304(a)(1)(v) of Regulation S-K.fees.
The Audit Committee’s charter gives it the responsibility and authority to select and appoint our independent accountants each year and to approve their fees and the terms of the engagement under which they provide services to us. Our shareholders are not required by our Bylaws or the law to ratify the Committee’s selection. However, we will submit a proposal for shareholders
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In connection with its selection of KPMG LLP as our independent accountants, the Audit Committee received the written disclosures and letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding that firm’s communications with the Committee concerning its independence. Based on its evaluation, the Audit Committee believes that KPMG LLP is independent and that it is in our and our stockholders’ best interests to appoint KPMG LLP as our independent accountants for 2024. In order to maintain their independence with respect to their audit clients, the SEC’s rules require the partners of public accounting firms who are assigned as “lead audit partners” for audits of public companies to be subject to a mandatory rotation policy. As a result, a partner in our accounting firm may not serve as lead audit partner for the firm’s audit of our financial statements for more than five consecutive years. Our Audit Committee does not approve or disapprove the accounting firm’s assignment of a particular partner as lead audit partner, or its assignment of other members of the firm to its audit team, for audits of our financial statements. However, in connection with the Audit Committee’s selection of our independent accountants each year, the Committee meets with the proposed lead audit partner, considers the partner’s experience and performance on previous audits and any experience of the Committee with the partner, and seeks and considers the views of our executive management. The Committee then communicates its views regarding that partner to management of the accounting firm. Our Audit Committee first engaged KPMG LLP as our independent accountants to audit our consolidated financial statements for 2021, and it approved the terms of KPMG LLP’s engagement on February 24, 2021. The Audit Committee’s charter gives it the responsibility and authority to select and appoint our independent accountants each year and to approve their fees and the terms of the engagement under which they provide services to us. Our stockholders are not required by our Bylaws or the law to ratify the Committee’s selection. However, we will submit a proposal for stockholders to ratify the appointment of KPMG LLP at the Annual Meeting to allow stockholders to be heard in that selection process. The outcome of voting on the proposal will not be binding on the Committee. If our stockholders do not ratify the Committee’s selection, the Committee will reconsider its decision, but it could choose to reaffirm its appointment of KPMG LLP. If our stockholders ratify the Committee’s selection, the Committee could, in its discretion, appoint different independent accountants during the year if it determines that such a change would be in our best interests. Representatives of KPMG LLP are expected to participate remotely in our virtual Annual Meeting and be available to respond to appropriate questions, and they will have an opportunity to make a statement if they desire to do so. | | | | | | 86 | | 2024 Annual Proxy Statement | | |
Proposal 3: Ratification of Appointment of Independent Accountants Services and Fees during 2023 and 2022 Our Audit Committee pre-approves all audit services and other services provided by our accountants. While the entire Audit Committee generally participates in the pre-approval of services, the Committee delegates authority to its Chairman to approve requests for non-audit services. Any such approval by the Chairman is communicated to the full Committee at its next regularly scheduled meeting. All audit and permissible non-audit services provided by KPMG LLP during 2023 were approved under the above procedure. As our independent accountants for 2023 and 2022, KPMG LLP provided us with various audit and other services for which we and FCB were billed or expect to be billed for fees as described below. Our Audit Committee has considered whether the provision of non-audit services by KPMG LLP during 2023 was compatible with maintaining its independence, and it believes that the provision of non-audit services by KPMG LLP during 2023 did not affect its independence. The following table lists the aggregate amounts of fees paid to KPMG LLP for audit services for 2023 and 2022 and for other services they provided during 2023 and 2022. | | | | | | | | | | | | | | Type of Fees and Description of Services | | 2023 | | | 2022 | | | Audit Fees, including fees for professional services rendered for the annual integrated audit of our consolidated financial statements for the fiscal year (including services relating to the audit of internal control over financial reporting), reviews of the financial statements included in our Quarterly Reports on Form 10-Q, and, for 2022 only, services in connection with securities offerings | | $ | 6,411,565 | | | $ | 3,881,441 | | | Audit-Related Fees, including fees for services reasonably related to performance of the audit of the annual consolidated financial statements for the fiscal year, other than Audit Fees, such as compliance exams, agreed upon procedures attestations, internal control reviews, other attestation services, and, for 2023 only, service organization reports on internal controls | | | 501,000 | | | | 60,000 | | | Tax Fees, including fees for tax return preparation, tax compliance, and tax advice | | | 409,056 | | | | 202,743 | | | All Other Fees, consisting of a subscription fee for access to an online accounting research tool | | | 3,560 | | | | 5,680 | |
Our Board of Directors unanimously recommends that you vote “FOR” Proposal 3. To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares of our Class A Common and Class B Common present in person or represented by proxy at the Annual Meeting, and voting together as one class, must be cast in favor of the proposal. | | | | | | | 2024 Annual Proxy Statement | | 87 |
Proposal 4: Stockholder Proposal Requesting Report on Risks of Politicized De-banking PROPOSAL 4: STOCKHOLDER PROPOSAL REQUESTING REPORT ON RISKS OF POLITICIZED DE-BANKING Our Board of Directors unanimously recommends that you vote “AGAINST” Proposal 4. Inspire Investing, LLC (“Inspire”), has advised us that it intends to present the following stockholder proposal at the Annual Meeting and has provided verification that it beneficially owns a sufficient number of shares of our voting securities to meet the requirements of Rule 14a-8 promulgated by the SEC. The text of the proposal and supporting statement appear below exactly as received by us. All statements contained in the proposal and supporting statements are the sole responsibility of Inspire and will be voted on at the Annual Meeting only if properly presented by or on behalf of Inspire. Upon receipt by our Corporate Secretary of a written or oral request from a stockholder, we will promptly provide Inspire’s address and the class and number of voting securities it holds. Report on Risks of Politicized De-banking Supporting Statement Financial institutions are essential pillars of the marketplace. On account of their unique and pivotal role in America’s economy, many federal and state laws already prohibit them from discriminating against customers. And the UN Declaration of Human Rights recognizes that “everyone has the right to freedom of thought, conscience, and religion.”1 These are an important part of protecting every American’s right to free speech and free exercise of religion. As shareholders of First Citizens BancShares, we believe it is essential for the company to provide financial services on an equal basis without regard to factors such as race, color, religion, sex, national origin, or social, political, or religious views. We are concerned with recent evidence of religious and political discrimination against customers by companies in the financial services industry, as seen in recent examples2 and the 2022 Statement on Debanking and Free Speech.3 The 2023 edition of the Viewpoint Diversity Business Index4 shows that many of the largest financial institutions include vague and subjective grounds to deny service like “reputational risk,” “social risk,” “misinformation,” “hate speech” or “intolerance.” These kinds of terms allow financial institutions to deny or restrict service for arbitrary or discriminatory reasons. They also give fringe activists and governments a foothold to demand that private financial institutions deny service under the sweeping, unfettered discretion that such policies provide. When companies engage in this kind of discrimination, they hinder the ability of Americans to access the marketplace and instead become de facto regulators and censors. This undermines the fundamental freedoms of our country and is an affront to the public trust. Politicized debanking can also damage the company’s reputation and ability to operate in favorable regulatory environments. In early 2023 ,shareholders called for Chase, Mastercard, PayPal, Capital One, and Charles Schwab to assess whether they have adequate safeguards to prevent politicized de-banking.5 Nineteen state attorneys general and fourteen state financial officers specifically called out Chase for their de-banking of a non-profit committed to advancing religious freedom and demanded action from the company to show good faith in addressing these widespread concerns.6 Resolved: Shareholders request the Board of Directors of First Citizens BancShares conduct an evaluation and issue a report within the next year, at reasonable cost and excluding proprietary information and disclosure of anything that would constitute an admission of pending litigation, evaluating how it oversees risks related to discrimination against individuals based on their race, color, religion (including religious views), sex, national origin, or political views, and whether such discrimination may impact individuals’ exercise of their constitutionally protected civil rights. | 1 | https://www.un.org/en/about-us/universal-declaration-of-human-rights. |
| 2 | https://adflegal.org/press-release/bank-america-boots-charity-serving-impoverished-ugandans-under-vague-risk-tolerance;
https://www.newsweek.com/stop-troubling-trend-politically-motivated-debanking-opinion-1787639;https://www.dailymail.co.uk/news/article-12314423/The-Coutts-Farage-dossier-bank-admitted-ex-Ukip-leader-DID-meet-commercial-criteria-used-tweet-Ricky-Gervais
-trans-joke-Novak-Djokovic-ties-decide-odds-position-inclusive-organisation.html; https://familycouncil.org/?p=25159 |
| 3 | https://storage.googleapis.com/vds_storage/document/Statement%20on%20Debanking%20and%20Free%20Speech.pdf. |
| 4 | https://viewpointdiversityscore.org/business-index |
| 5 | https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/proxy-statement2023.pdf pg. 100-101;https://s201.q4cdn.com/231198771/files/doc_financials/2023/ar/PayPal-Holdings-Inc-Combined-2023-Proxy-Statement-and-2022-Annual-Report.pdf pg. 105-106;https://ir-capitalone.gcs-web.com/static-files/8de8dcce-b518-491d-bd78-b01a8a66028c page 149-153; https://content.schwab.com/web/retail/public/about-schwab/Charles_Schwab_2023_Proxy.pdf pg. 83-85. |
| 6 | https://www.wsj.com/articles/jpmorgan-targeted-by-republican-states-over-accusations-of-religious-bias-903c8b26 |
| | | | | | 88 | | 2024 Annual Proxy Statement | | |
Proposal 4: Stockholder Proposal Requesting Report on Risks of Politicized De-banking Our Statement in Opposition to the Proposal Our Board unanimously recommends that stockholders vote AGAINST this proposal for the following reasons: | ● | | We believe the requested report is based on general allegations about the financial services industry that are not true about or applicable to us. It is not our policy or practice to terminate a relationship with a customer because of their political views or religion (including religious views), nor because of their race, color, religion, sex, national origin, or other factors further discussed below. This would be inconsistent with one of the three values in our statement of purpose: dedication to helping the people, companies, and institutions that rely on us, acting always with integrity, transparency, and respect. |
| ● | | We have in place anti-discrimination and anti-harassment policies that are intended to promote equal opportunity and prevent discrimination and harassment. This prohibition covers not only the relationships between our associates, but also each associate’s relationships with our customers. |
| ● | | The maintenance of accounts is subject to extensive applicable law and regulation. Adherence to these legal obligations may, under certain circumstances, require us to close accounts. Account closures that we determine are required by applicable law and regulations may give rise to false allegations that such account closures result from a policy or practice to terminate relationships with a customer because of their political views, religion or religious views. We have no such policy or practice. |
One relevant policy is our Associate Code of Ethics (the “Code”),7 which includes our commitment to maintaining a diverse, equitable, and inclusive work environment free of discrimination, harassment, retaliation, coercion, interference, and intimidation. It also reinforces our respect for the right to engage in personal political activity. At the same time, it makes it clear that personal political activities must be lawful and consistent with our values and policies and may not involve the use of Company time or resources. The Code applies to the associates of the Company and our direct and indirect subsidiaries, including FCB, and these associates are required to annually acknowledge compliance with the Code. The Code strictly prohibits “harassment,” the scope of which includes discrimination, retaliation, coercion, interference, or intimidation of an associate due to the associate’s race (including traits historically associated with race, such as hair texture and protective hairstyles), color, religion, national origin, sex, age, disability, protected veteran status, sexual orientation, gender identity, genetic information, military membership, application, or obligation, protected activity (e.g., opposition to prohibited discrimination), or any other legally protected status established by applicable federal, state, or local laws. This prohibition on harassment covers not only the relationships between our associates, but also each associate’s relationships with our customers and other business partners. Any associate who discriminates to cause a customer account to be closed or a customer relationship to be otherwise terminated on a basis prohibited by the Code would be in violation thereof and be subject to disciplinary action which may include unpaid disciplinary leave or immediate termination of employment. Further, the statement of purpose for the Code provides our associates with values to help guide their conduct and relationships with our customers and others. The statement of purpose provides that “We’re dedicated to helping the people, companies, and institutions that rely on us, acting always with integrity, transparency, and respect.” Pursuant to its charter, the joint Audit Committee of our and FCB’s Boards annually reviews the Code, recommends to the Boards changes from time to time that it considers necessary or advisable and oversees management’s processes and procedures for enforcement of the Code. Periodic training and awareness programs for associates are also designed to promote a workplace free of discrimination and harassment. Under the Code, each associate must promptly report: (i) any act or omission the associate knows or suspects to be illegal, dishonest, fraudulent, or unethical that may affect or involve FCB; (ii) any act or omission the associate knows or suspects to be in violation of the Code or our policies, standards, or procedures to which the associate is subject; and (iii) any concerns, complaints, or activities that are inconsistent with the Code or any of our policies, standards, or procedures, including, but not limited to, questionable accounting or auditing matters, or sales practices. Associates may make these reports to their manager, to our Human Resources department using an intranet portal, or anonymously via a third-party service on line or by toll-free telephone call. Lastly, we are subject to comprehensive consolidated supervision, regulation, and examination by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the North Carolina Commissioner of Banks, and the Consumer Financial Protection Bureau, among others, including customer due diligence guidance and the Bank Secrecy Act/Anti-Money Laundering legal and regulatory requirements. Adherence to these obligations sometimes requires denial of service or closure of accounts. Decisions to terminate or not terminate any accounts are made with management’s careful consideration of legal, regulatory, and operational and other factors, and are handled with scrutiny and confidentiality. Account closures that we determine are required by applicable law and | 7 | https://s201.q4cdn.com/792406973/files/doc_gov/gov/2024/01/associates-code-of-ethics-2024-vf.pdf |
| | | | | | | 2024 Annual Proxy Statement | | 89 |
Proposal 4: Stockholder Proposal Requesting Report on Risks of Politicized De-banking regulations may give rise to false allegations that such account closures result from a policy or practice to terminate relationships with a customer because of their political views, religion, or religious views. We have no such policy or practice. The requested report would not provide our stockholders with meaningful additional information. We believe we have policies and procedures in place, supported by robust oversight and enforcement, to provide for effective accountability. Our Board of Directors unanimously recommends that you vote “AGAINST” Proposal 4. To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares of our Class A Common and Class B Common present in person or represented by proxy at the Annual Meeting, and voting together as one class, must be cast in favor of the proposal. | | | | | | 90 | | 2024 Annual Proxy Statement | | |
Frequently Asked Questions About the Virtual Annual Meeting FREQUENTLY ASKED QUESTIONS ABOUT THE VIRTUAL ANNUAL MEETING The following are some questions that you, as a stockholder, may have regarding the Annual Meeting, and brief answers to those questions. We urge you to carefully read the entire proxy statement because the information in these questions and answers does not provide all of the information that will be important to you with respect to the Annual Meeting and proposals to be voted on at the meeting. | Q. | Where will the Annual Meeting to allow shareholders to be heard in that selection process. The outcome of voting on the proposal will not be binding on the Committee. If our shareholders do not ratify the Committee’s selection, the Committee will reconsider its decision, but it could choose to reaffirm its appointment of KPMG LLP. If our shareholders ratify the Committee’s selection, the Committee could, in its discretion, appoint different independent accountants during the year if it determines that such a change would be in our best interests.held? Representatives of KPMG LLP are expected to participate remotely in our virtual Annual Meeting and be available to answer appropriate questions, and they will have an opportunity to make a statement if they desire to do so.
Services and Fees during 2021
Our Audit Committee pre-approves all audit services and other services provided by our accountants. While the entire Audit Committee generally participates in the pre-approval of services, the Committee delegates authority to its Chairman to approve requests for non-audit services. Any such approval by the Chairman is communicated to the full Committee at its next regularly scheduled meeting. All audit and permissible non-audit services provided by KPMG LLP during 2021 were approved under the above procedure.
As our independent accountants for 2021, KPMG LLP provided us with various audit and other services for which we and FCB were billed or expect to be billed for fees as described below. Our Audit Committee has considered whether the provision of non-audit services by KPMG LLP during 2021 was compatible with maintaining its independence, and it believes that the provision of non-audit services by KPMG LLP during 2021 did not affect its independence.
The following table lists the aggregate amounts of fees paid to KPMG LLP for audit services for 2021 and for other services they provided during 2021.
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| | | | | Type of Fees and Description of Services | | 2021 | | | | Audit Fees, including fees for professional services rendered for the annual integrated audit of our consolidated financial statements for the fiscal year (including services relating to the audit of internal control over financial reporting), audits of subsidiary financial statements, reviews of the financial statements included in our Quarterly Reports on Form 10-Q, and services in connection with securities offering. | | $ | 4,378,308 | | | | Audit-Related Fees, including fees for services reasonably related to performance of the audit of the annual consolidated financial statements for the fiscal year, other than Audit Fees, such as compliance exams, agreed upon procedures attestations, internal control reviews, and other attestation services. | | | 55,000 | | | | Tax Fees, including fees for tax return preparation, tax compliance and tax advice. | | | 376,027 | | | | All Other Fees, consisting of a subscription fee for access to an online accounting research tool. | | | 1,780 | |
| A: | | Our Board of Directors unanimously recommends that you vote “FOR” Proposal 3.
To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares present in person
or represented by proxy at the Annual Meeting must be cast in favor of the proposal.
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FREQUENTLY ASKED QUESTIONS ABOUT THE VIRTUAL ANNUAL MEETING
The followingWe are some questions that you, as a shareholder, may have regardingholding the Annual Meeting and brief answersin a virtual format in order to those questions. We urge youprovide convenient access to carefully read the entire proxy statement because the information in these questions and answers does not providemeeting for all of the information thatour stockholders. There will be importantno physical meeting location for stockholders to you with respectattend. The only way to attend the Annual Meeting and proposals to be voted on at the meeting.
Q. | Why will the Annual Meeting be held virtually?
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A: | We are holding the Annual Meeting in a virtual format due to the public health impact of the COVID-19 pandemic and to protect the health and well-being of our management, directors, associates, shareholders and community. There will be no physical meeting location for shareholders to attend. The only way to attend the Annual Meeting will be via the Internet.
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The virtual meeting platform is designed such that record holders of our voting shares, as well as beneficial holders of voting shares that are held for them in “street name” by a broker, bank or other nominee, will be affordedvia the Internet.
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The virtual meeting platform is designed such that record holders of our voting shares, as well as beneficial holders of voting shares that are held for them in “street name” by a broker, bank, or other nominee, will be afforded the same rights and opportunities to participate as they would have at an in-person meeting. | Q: | How can I participate as they would have at an in-person meeting.in the virtual Annual Meeting? |
Q: | How can I participate in the virtual Annual Meeting?
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| A: | To participate in the Annual Meeting remotely, go to www.virtualshareholdermeeting.com/FCNCA2022on April 26, 2022, and enter your unique 16-digit “Control Number” which is printed on the proxy card you received with your copy of our proxy statement or, if you are the beneficial owner of shares held in street name, on the voting instruction form you received from your bank, broker or other nominee that is the record holder of your shares. The Control Number appears on the portion of your proxy card or voting instruction form that you retain. |
Record holders of our voting shares who participate in the Annual Meeting remotely, will be consideredgo to be present,www.virtualshareholdermeeting.com/FCNCA2024 on May 1, 2024, and shares they holdenter your unique 16-digit “Control Number” which is printed on the proxy card you received with your copy of record to be represented, “in person” atour proxy statement or, if you are the meeting. During the Annual Meeting, you may listen to the proceedings, submit written questions and vote yourbeneficial owner of shares held of record. If your shares are held in street name, on the voting instruction form you received from your bank, broker, or other nominee that is the record holder of your shares. The Control Number appears on the portion of your proxy card or voting instruction form that you retain.
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Record holders of our voting shares who participate in the Annual Meeting remotely will be considered to be present, and shares they hold of record to be represented, “in person” at the meeting. During the Annual Meeting, you may listen to the proceedings, submit written questions, and vote your shares held of record. If your shares are held in street name, you also may listen to the proceedings and submit written questions and, during the meeting, you may submit your voting instructions to your broker or nominee by following the instructions available on the meeting website. The Annual Meeting will begin at 9:00 a.m. EDT on the meeting date. However, you may begin to log in to the meeting website at 8:45 a.m. and we encourage you to do that. The virtual meeting platform will be supported across most Internet browsers and devices (including desktop and laptop computers, tablets, and smart phones) running updated versions of applicable software and plugins. | Q: | What can I do if I no longer have my Control Number? |
| A: | If you are a record holder of shares and wish to participate in the Annual Meeting but you no longer have your Control Number, you may obtain your Control Number by calling Broadridge Corporate Issuer Solutions at 855-449-0981 for assistance. If you are a beneficial holder of shares held in street name and no longer have the Control Number printed on your voting instruction form, you should call your bank, broker, or other nominee. |
| Q: | Will there be help available if I have trouble logging in to the Annual Meeting website? |
| A: | Yes. If you have trouble accessing the meeting website while trying to login or during the meeting, you may submit your voting instructions to your broker or nominee by following the instructions available on the meeting website. A list of our shareholders of record on the February 28, 2022 Record Date for the Annual Meetinghelp and technical support will be available on the day of the meeting websiteby calling 844-986-0822 (U.S.) or 303-562-9302 (International). |
| Q: | Will I be able to ask questions during the meeting. Thevirtual Annual Meeting will begin at 9:00 a.m. EDTMeeting?
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| A: | Yes. You may submit written questions during the meeting by following the directions on the meeting date. However, youwebsite and typing your question in the “Ask a Question” box. We will try to answer all questions, subject to time constraints. If we receive substantially similar questions, we may begingroup them together and provide a single response to log inavoid repetition. Also, we reserve the right to edit inappropriate language and to exclude questions that are personal matters, are not pertinent to meeting matters, do not comply with the meeting websiterules of conduct, or otherwise are inappropriate. |
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Frequently Asked Questions About the Virtual Annual Meeting | Q: | How can I vote at 8:45 a.m. and we encourage you to do that. The virtual meeting platform will be supported across most Internet browsers and devices (including desktop and laptop computers, tablets and smart phones) running updated versionsthe Annual Meeting? |
| A: | Record Holders. You are a record holder if your shares of applicable software and plugins. Q: | What can I do if I no longer have my Control Number?
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A: | If you are a record holder of shares and wish to participate in the Annual Meeting but you no longer have your Control Number, you may obtain your Control Number by calling Broadridge Corporate Issuer Solutions at 855-449-0981 for assistance. If you are a beneficial holder of shares held in street name and no longer have the Control Number printed on your voting instruction form, you should call your bank, broker or other nominee.
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Q: | Will there be help available if I have trouble logging in to the Annual Meeting website?
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A: | Yes. If you have trouble accessing the meeting website while trying to login or during the meeting, help and technical support will be available on the day of the meeting by calling 844-986-0822 (U.S.) or 303-562-9302 (International).
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Q: | Will I be able to ask questions during the virtual Annual Meeting?
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A: | Yes. You may submit written questions during the meeting by following the directions on the meeting website and typing your question in the “Ask a Question” box. We will try to answer all questions, subject to time constraints. If we receive substantially similar questions, we may group them together and provide a single response to avoid repetition. Also, we reserve the right to edit inappropriate language and to exclude questions that are personal matters, not pertinent to meeting matters, do not comply with the meeting rules of conduct or otherwise are inappropriate.
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Q: | How can I vote at the Annual Meeting?
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A: | Record Holders.If your shares of our common stock are held of record in your name, you can vote your shares in eitherour common stock are registered in your name on our stock records (either in certificated or uncertificated book entry form). You can vote your shares in one of the following ways.
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| ● | | You can participate in the virtual Annual Meeting remotely and, using the 16-Digit
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Voting Methods | | Record Holder | | In Person During the Meeting | | You can participate in the virtual Annual Meeting remotely and, using the 16-Digit Control Number printed on your proxy card, follow the instructions on the meeting website to vote your shares during the meeting. |
| ● | | Before the meeting, you can appoint four of our directors (Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr. and Robert T. Newcomb) or any substitutes appointed by them, individually and as a group, in either of the ways described below to act as your “Proxies” to vote your shares for you at the meeting.
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| ● | | Mark your voting instructions on the proxy card enclosed with this proxy statement and sign, date and return it in the enclosed pre-addressed envelope.
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| ● | | Before 11:59 p.m. EDT on April 25, 2022 (the day before the Annual Meeting), call 1-800-690-6903 or log on to the Internet voting website www.proxyvote.com. Have your enclosed proxy card in hand when you call or access the website. When you are prompted for your “Control Number,” enter the 16-digit number that is printed in the box on your proxy card, and then follow the instructions you will be given to instruct the Proxies on how to vote your shares.
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If you are the record holder of shares of both Class A Common and Class B Common, or if you hold shares of record in different forms of your name, then you should have received two or more proxy cards, each containing a unique 16-digit Control Number for the shares represented by that proxy card. If you wish to appoint the Proxies to vote your shares during the meeting.
| | By Proxy | | Before the meeting, you can appoint four of our directors (Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr., and Robert T. Newcomb) or any substitutes appointed by them, individually and as a group, in either of the ways described below to act as your “Proxies” to vote your shares for you at the meeting. | | In Writing. Mark your voting instructions on the proxy card enclosed with this proxy statement, sign and date it, and return it in the enclosed pre-addressed envelope. | | By Internet. Before 11:59 p.m. EDT on April 30, 2024 (the day before the Annual Meeting), log on to the Internet voting website www.proxyvote.com. Have your enclosed proxy card in hand when you access the website. When you are prompted for your “Control Number,” enter the 16-digit number that is printed in the box on your proxy card, and then follow the instructions you will needbe given to mark, signinstruct the Proxies on how to vote your shares. | | By Telephone. Before 11:59 p.m. EDT on April 30, 2024 (the day before the Annual Meeting), call 1-800-690-6903. Have your enclosed proxy card in hand when you call. When you are prompted for your “Control Number,” enter the 16-digit number that is printed in the box on your proxy card, and return allthen follow the instructions you will be given to instruct the Proxies on how to vote your shares. |
If you are the record holder of shares of both Class A Common and Class B Common, or if you hold shares of record in different forms of your name, then you should have received two or more proxy cards, each containing a unique 16-digit Control Number for the shares represented by that proxy card. If you wish to appoint the Proxies to vote all your shares, you will need to mark, sign, date, and return all proxy cards you received or appoint the Proxies by telephone or Internet separately for shares represented by each card. Or, if you participate in the Annual Meeting remotely and want to vote your shares on the meeting website, you will need to vote shares represented by each card separately on the Annual Meeting website. If you appoint the Proxies by telephone or Internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote your shares on the same terms and with the same authority as if you marked, signed, and returned a proxy card. Whether you return a proxy card or appoint the Proxies by telephone or Internet, the authority you will be giving the Proxies is described below and in the proxy card enclosed with this proxy statement. Even if you plan to participate in the virtual Annual Meeting, we ask that you mark your proxy card to indicate how your shares should be voted, sign and date it, and return it in the enclosed envelope, or follow the instructions above for appointing the Proxies and giving your voting instructions by telephone or Internet. Doing that will ensure that your shares will be represented and voted at the meeting. Street Name Holders. You are a “street name” holder if your shares are held for you in an account at a brokerage firm, bank, custodian, or other similar nominee. Only the record holders of shares of our common stock or their appointed proxies may vote those shares, and your brokerage firm, bank, or other similar nominee is considered the record holder of shares it holds for you and must vote them for you, or appoint the proxies to vote them for you, at the Annual Meeting. As a result, for your shares to be voted, you will need to give instructions to your brokerage firm, bank, custodian, or other nominee on how you want it to vote the shares it holds for you. You can do that in one of the following ways. | | | | |
Voting Methods | | Street Name Holder | | Mail | | Follow the directions contained in the voting instruction form your broker or nominee sends you with this proxy statement and give it instructions as to how it should vote your shares by marking and returning to it the voting instruction form. | | Internet | | Follow the directions contained in the voting instruction form your broker or nominee sends you with this proxy statement and give it instructions by Internet as to how it should vote your shares. | | Telephone | | Follow the directions contained in the voting instruction form your broker or nominee sends you with this proxy statement and give it instructions by telephone as to how it should vote your shares. | | During the Meeting | | You can participate in the Annual Meeting and, using the 16-digit Control Number printed on the voting instruction form you received from your broker or nominee with this proxy statement, follow the instructions on the meeting website to give your voting instructions. |
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Frequently Asked Questions About the Virtual Annual Meeting If you hold shares in more than one brokerage or nominee account, each of your brokers or nominees will have sent you a separate voting instruction form, each containing a unique 16-digit Control Number for shares held in your account that it holds. If you wish to give your brokers or nominees voting instructions before the meeting for all shares they hold for you, you should mark all voting instruction forms you received and return them to your brokers or nominees. Or, if you participate in the Annual Meeting remotely, you will need to give your voting instructions for shares covered by each voting instruction form separately on the Annual Meeting website. Rules of the New York Stock Exchange (which also are applicable to Nasdaq-listed companies) generally permit brokers, banks, and other securities intermediaries that are subject to those rules to use their discretion to vote shares they hold for their customers on “routine” matters when no voting instructions are received from the beneficial owners of the shares. However, those rules prohibit brokers, banks, and other securities intermediaries from voting their customers’ shares on matters designated by the rules as “non-routine” unless the beneficial owners of the shares provide voting instructions. As a result, if your shares are held by a broker, bank, or other financial intermediary and you do not provide it with your voting instructions, it may still vote your shares at the Annual Meeting at its discretion on Proposal 3 to ratify the appointment of our independent accountants. However, your broker, bank, or other financial intermediary may not vote your shares at the Annual Meeting in the election of our directors or on Proposals 2 or 4 (which are considered “non-routine” matters) unless you provide it with your voting instructions. To ensure that your shares held by a broker, bank, or other financial intermediary are represented at the Annual Meeting and voted as you desire on all matters, it is important that you instruct it as to how it should vote your shares. | Q: | Who is soliciting proxies, and who is paying solicitation expenses? |
| A: | Our Board of Directors is asking you to appoint the Proxies to vote your shares at the Annual Meeting. In addition to solicitation by mail, our and FCB’s directors, officers, and associates may solicit proxy appointments, personally or by telephone, electronic mail, or other methods of communication, but they will not receive any additional compensation from us for doing so. |
We will pay all costs of our solicitation of proxy appointments for the Annual Meeting, including costs of preparing and mailing this proxy statement and expenses associated with the telephone and Internet voting facilities. We are requesting banks, brokers, custodians, and other nominees and fiduciaries to forward copies of our proxy solicitation materials to the beneficial holders of the shares they hold and request the beneficial holders’ voting instructions, and we will reimburse them for their expenses in doing so. | Q: | What authority will the Proxies have, and how will they vote at the Annual Meeting? |
| A: | | ● | | If you sign a proxy card and return it so that we receive it before the Annual Meeting, or you appoint the Proxies by telephone or Internet, you will be appointing the Proxies to vote your shares for you, and they will vote, or abstain from voting, according to the instructions you give them. |
| ● | | If you sign and return a proxy card or appoint the Proxies by telephone or Internet, but you do not give voting instructions on a matter to be voted on, then the Proxies will be authorized to vote your shares “FOR” the election of each of the nominees for director named in Proposal 1, “FOR” each of Proposals 2 and 3, and “AGAINST” Proposal 4. |
| ● | | If before the Annual Meeting any nominee named in Proposal 1 becomes unable or unwilling to serve as a director for any reason, including without limitation death, resignation, withdrawal of his or her nomination, or removal, your proxy card or telephone or Internet voting instructions will give the Proxies discretion to vote your shares for a substitute nominee named by our Board of Directors. If no substitute nominee is named by our Board of Directors, then the number of directors to be elected at the Annual Meeting will be reduced accordingly. |
| ● | | We are not aware of any other business that will be brought before the Annual Meeting other than the election of directors and the proposals described in this proxy statement. However, if any other matter is properly presented for action by our stockholders, your proxy card or telephone or Internet voting instructions will authorize the Proxies to vote your shares according to their best judgment. The Proxies also will be authorized to vote your shares according to their best judgment on matters incident to the conduct of the meeting, including motions to adjourn the meeting. |
| ● | | If you are the record holder of your shares and you do not return a proxy card or appoint the Proxies by telephone or Internet, the Proxies will not have authority to vote for you and your shares will not be givingrepresented or voted at the Proxies is described below and in the proxy card enclosed with this proxy statement. Even ifAnnual Meeting unless you plan to participate in the virtual Annual Meeting, we ask that you mark your proxy card to indicate howmeeting remotely and vote your shares should be voted, sign and date it, and return it inon the enclosed envelope,meeting website or follow the instructions above for appointing the Proxies and giving your voting instructions by telephone or Internet. Doing that will ensure thatvalidly appoint another person to vote your shares will be represented and voted at the meeting. Shares Held in Street Name. Only the record holders of shares of our common stock or their appointed proxies may vote those shares. As a result,for you. Similarly, if your shares are held for you in street name by a broker or other nomineefinancial intermediary (such as a bank or custodian), your broker or nominee (i.e., the record holder) must vote them for and you or appoint the Proxies to vote them for you, unless you make arrangements for your broker or nominee to assign its voting rights to you or for you to be recognized as the person entitled to vote your shares. You may give your broker or nominee instructions for the voting of your shares held in street name in either of the following ways.
| ● | | Before the Annual Meeting, you can follow the directions your broker or nominee provides you and givedo not provide it instructions as to how it should vote your shares by completing and returning to it the voting instruction form you received from your broker or nominee with this proxy statement, or by giving voting instructions electronically as directed by your broker or nominee.
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| ● | | You can participate in the virtual Annual Meeting and, using the 16-digit Control Number printed on the voting instruction form you received from your broker or nominee with this proxy statement, follow the instructions on the meeting website to give your voting instructions.
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If you hold shares in more than one brokerage or nominee account, each of your brokers or nominees will have sent you a separate voting instruction form, each containing a unique 16-digit Control Number for shares held in your account that it holds. If you wish to give your brokers or nominees voting instructions before the meeting, you should mark all voting instruction forms you received and return them to your brokers or nominees. Or, if you participate in the Annual Meeting remotely, you will need to give your voting instructions, for shares covered by each voting instruction form separately on the Annual Meeting website.
Brokers and other such nominees typically have the discretionary authority to vote shares they hold for their customers on routine matters, such as proposals to ratify the appointment of independent accountants, when no instructions are received from beneficial owners of the shares. However, applicable rules generally prohibit brokers from voting their customers’ shares on matters designated by the rules as “non-routine” unless the beneficial owners of the shares provide voting instructions. As a result, if your shares are held by a broker, it may notuse its discretion to vote your shares at the Annual Meeting inon Proposal 3, but it may not vote your shares on “non-routine” matters (including the election of our directors or any other non-routine matterand Proposals 2 and 4) unless you providegive it voting instructions. To ensure thatinstructions by marking and returning to it the voting instruction form you received (or following its instructions to give your shares heldvoting instructions by a broker are represented at the Annual Meeting and votedInternet or telephone), or by participating in the manner you desire, it is important that you instructmeeting remotely and giving your broker as to how it should vote your shares.
Q: | Who is soliciting proxies, and who is paying solicitation expenses?
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A: | Our Board of Directors is asking you to appoint the Proxies to vote your shares at the Annual Meeting. In addition to solicitation by mail, our and FCB’s directors, officers and associates may solicit proxy appointments, personally or by telephone, electronic mail or other methods of communication, but they will not receive any additional compensation from us for doing so.
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We will pay all costs of our solicitation of proxy appointments for the Annual Meeting, including costs of preparing and mailing this proxy statement and expenses associated with the telephone and Internet voting facilities. We are requesting banks, brokers, custodians and other nominees and fiduciaries to forward copies of our proxy solicitation materials to the beneficial holders of the shares they hold and request the beneficial holders’ voting instructions and we will reimburse them for their expenses in doing so.on the meeting website.
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| | | | | | | 2024 Annual Proxy Statement Q: | How will proxies be voted at the Annual Meeting?
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Frequently Asked Questions About the Virtual Annual Meeting |
| Q: | How can I change or revoke my voting instructions after I appoint the Proxies by proxy card, telephone, or Internet or after I give voting instructions to my broker or nominee? | A: | | If you sign a proxy card and return it so that we receive it before the Annual Meeting, or you appoint the Proxies by telephone or Internet, you will be appointing the Proxies to vote your shares for you, and they will vote, or abstain from voting, according to the instructions you give them. |
| ● | | If you sign and return a proxy card or appoint the Proxies by telephone or Internet, but you do not give voting instructions on a matter to be voted on, then the Proxies will be authorized to vote your shares “FOR” in the case of the election of each of the nominees for director named in Proposal 1, and “FOR” in the case of each of Proposals 2 and 3.
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| ● | | If before the Annual Meeting any nominee named in Proposal 1 becomes unable or unwilling to serve as a director for any reason, including without limitation death, resignation, withdrawal or removal, your proxy card or telephone or Internet voting instructions will give the Proxies discretion to vote your shares for a substitute nominee named by our Board of Directors. If no substitute nominee is named by our Board of Directors, then the number of directors to be elected at the Annual Meeting will be reduced accordingly.
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| ● | | We are not aware of any other business that will be brought before the Annual Meeting other than the election of directors and the proposals described in this proxy statement. However, if any other matter is properly presented for action by our shareholders, your proxy card or telephone or Internet voting instructions will authorize the Proxies to vote your shares according to their best judgment. The Proxies also will be authorized to vote your shares according to their best judgment on matters incident to the conduct of the meeting, including motions to adjourn the meeting.
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| ● | | If you are the record holder of your shares and you do not return a proxy card or appoint the Proxies by telephone or Internet, the Proxies will not have authority to vote for you and your shares will not be represented or voted at the Annual Meeting unless you participate in the meeting remotely and vote your shares on the meeting website or validly appoint another person to vote your shares for you. Similarly, if your shares are held for you in street name by a broker or other nominee (such as a bank or custodian), your shares may not be voted by your broker or nominee on “non-routine” matters unless you give it voting instructions by marking the voting instruction form you received and returning it to your broker or nominee or by participating in the meeting remotely and giving your voting instructions on the meeting website.
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Q: | How can I change or revoke my voting instructions after I appoint the Proxies by proxy card, telephone or Internet or after I give voting instructions to my broker or nominee?
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A: | Record Holders. Record Holders.If you are the record holder of your shares and you sign and return a proxy card or appoint the Proxies by telephone or Internet, and you later wish to change the voting instructions or revoke the authority you gave the Proxies, you can do so by taking the appropriate action described below.
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To change the voting instructions you gave the Proxies, whether by returning a proxy card or appointing the Proxies by telephone or Internet, you can:
| ● | | before the Annual Meeting, sign a new proxy card, dated after the date of your original proxy card or after you appointed the Proxies by telephone or Internet, which contains your new voting instructions, and submit it to our proxy tabulator, Broadridge Corporate Issuer Solutions, Inc., at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, so that your new proxy card is received by our proxy tabulator before the voting takes place at the meeting; or
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| ● | | before 11:59 p.m. EDT on April 25, 2022 (the day before the Annual Meeting), call 1-800-690-6903 (the same number used to appoint the Proxies by telephone), or go to the same voting website (www.proxyvote.com) used to appoint the Proxies by Internet, enter your 16-digit Control Number (printed in the box on the enclosed proxy card), and then give your new voting instructions.
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Whether you return a proxy card or appoint the Proxies by telephone or Internet, and you later wish to change the voting instructions or revoke the authority you gave the Proxies, will followyou can do so by taking the lastappropriate action described below.
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To change the voting instructions you gave the Proxies, whether by returning a proxy card or appointing the Proxies by telephone or Internet, you can: | ● | | before the Annual Meeting, sign a new proxy card, dated after the date of your original proxy card or after you appointed the Proxies by telephone or Internet, which contains your new voting instructions, and submit it to our proxy tabulator, Broadridge Corporate Issuer Solutions, Inc., at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, so that your new proxy card is received from youby our proxy tabulator before the voting takes place at the meeting; or |
| ● | | before 11:59 p.m. EDT on April 30, 2024 (the day before the Annual Meeting. To revoke your proxy card or your appointment ofMeeting), call 1-800-690-6903 (the same number used to appoint the Proxies by telephonetelephone), or go to the same voting website (www.proxyvote.com) used to appoint the Proxies by Internet, you can:enter your 16-digit Control Number (printed in the box on the enclosed proxy card), and then give your new voting instructions.
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Whether you return a proxy card, or appoint the Proxies by telephone or Internet, the Proxies will follow the last voting instructions received from you before the voting takes place at the Annual Meeting. To revoke your proxy card or your appointment of the Proxies by telephone or Internet, you can: | | ● | | give Broadridge Corporate Issuer Solutions, Inc. a written notice at its address listed above, which must be received before the voting takes place at the Annual Meeting, that you want to revoke your proxy card or telephone or Internet appointment; or |
| ● | | participate in the Annual Meeting remotely and vote your shares on the meeting website. Simply participating in the Annual Meeting will not revoke your proxy card or telephone or Internet appointment unless you also vote your shares during the meeting on the meeting website.
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Shares Held in Street Name. If your shares are held in street name and you want to change voting instructions you have given to your broker or other nominee you may participate remotely in the Annual Meeting and give your new voting instructions on the meeting website during the meeting. Otherwise, you must contact your broker or nominee and follow its directions. To revoke voting instructions you have given to your broker or other nominee, you must contact your broker or nominee and follow its directions.
Q: | How can I obtain another proxy card or voting instruction form?
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A: | If you have lost your proxy card or after returning it you want to change your voting instructions, you may obtain another proxy card by calling Broadridge Corporate Issuer Solutions, Inc. at 855-449-0981. To receive another copy of the voting instruction form you received from your broker or other nominee, you must call that broker or nominee.
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Q: | What is required in order to have a quorum for the Annual Meeting?
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A: | A quorum must be present for business to be conducted at the Annual Meeting. For all matters to be voted on at the meeting, a quorum will consist of shares representing a majority of the aggregate votes entitled to be cast by holders of outstanding shares of Class A Common and Class B Common that may be voted at the meeting.
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Shares represented by proxy at the Annual Meeting, or held by shareholders who participate in the meeting remotely, will be counted for the purpose of determining whether a quorum exists. Once a share is represented for any purpose at the meeting, it will be treated as present for quorum purposes for the remainder of the meeting and for any adjournments. If you return a valid proxy card, appoint the Proxies by telephone or Internet, or participate in the meeting remotely, your shares will be counted as present for purposes of determining whether there is a quorum, even if you abstain or instruct the Proxies to abstain from voting on one or more matters voted on. Broker non-votes also will be counted as present in determining whether there is a quorum. Broker non-votes will occur if your shares are held by a broker and are voted by the broker on one or more “routine” matters at the meeting on which the broker has discretionary voting authority, but are not voted by the broker on a “non-routine” matter because the broker does not have discretionary voting authority with respect to that particular matter and you have not given the broker voting instructions on that matter. If your shares are represented at the meeting with respect to any matter voted on, they will be treated as present with respect to all matters voted on, even if they are not voted on all matters.
Q: | Could the Annual Meeting be adjourned?
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A: | If a quorum is not present at the Annual Meeting, or for other reasons, the meeting may be adjourned to a different date, time or place. If an announcement is made at the meeting of the date, time and place for the adjourned meeting, no further notice of the adjourned meeting will be given unless the adjournment is for more than 30 days or the Record Date is changed.
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Q: | What vote is required to elect directors and on Proposals 2 and 3?
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A:● | Election of Directors. Our directors are elected by a plurality of the votes cast in elections. In the election of directors at the Annual Meeting, the 14 nominees who receive the highest numbers of votes will be elected.
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You may:
| ● | | vote for all of the nominees by voting “FOR ALL;”
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| ● | | withhold your vote for all of the nominees by voting “WITHHOLD ALL;” or
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| ● | | vote for all of the nominees except for certain nominees by voting “FOR ALL EXCEPT” and then indicating the nominee(s) for whom you want your vote withheld.
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Withheld votes and broker non-votes will have no effect on the election of directors. Shareholders may not vote cumulatively for directors. Our Board of Directors’ nominees for election as directors are listed under the heading “PROPOSAL 1: ELECTIONOF DIRECTORS.”
| ● | | Proposal 2.Proposal 2 calls for a non-binding, advisory vote of our shareholders to approve compensation paid or provided to our NEOs, as described under the heading “PROPOSAL 2: ADVISORY VOTEON EXECUTIVE COMPENSATION.” You may vote “FOR” or “AGAINST” the proposal, or you may “ABSTAIN” from voting on the proposal. To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares represented by proxy at the Annual Meeting or held by shareholders who participate in the meeting remotely must be cast in favor of the proposal. Broker non-votes will have no effect in the voting on Proposal 2, but abstentions will have the same effect as votes against Proposal 2.
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| ● | | Proposal 3.Proposal 3 is a vote on ratification of our Audit Committee’s appointment of our independent accountants for 2022 as described under the heading “PROPOSAL 3. RATIFICATIONOF APPOINTMENTOF INDEPENDENT ACCOUNTANTS.” You may vote “FOR” or “AGAINST” the proposal, or you may “ABSTAIN” from voting on the proposal. To be approved, a majority of the votes entitled to be cast on the proposal with respect to all shares represented by proxy at the Annual Meeting or held by shareholders who participate in the meeting remotely must be cast in favor of the proposal. Broker non-votes will have no effect in the voting on Proposal 3, but abstentions will have the same effect as votes against Proposal 3.
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Q: | How can I find out the results of the voting at the Annual Meeting?
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A: | We will file a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting to announce the voting results. FCB’s Internet website (www.firstcitizens.com/investor-relations/corporate-profile) contains a link to the SEC’s website (www.sec.gov) where you may review and print copies of that report.
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Q: | Who can help answer my questions?
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A: | If you have any questions about the Annual Meeting, the proposals to be voted upon at the meeting, or how to submit your proxy, contact us at 919-716-7000.
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RECOMMENDATIONS OF NOMINEES
As described above under the caption “COMMITTEESOF OUR BOARDS – Compensation, Nominations and Governance Committee,” in identifying potential Board nominee candidates the Committee considers incumbent directors as well as candidates who may be suggested by our management, other directors or shareholders. Shareholders who wish to recommend candidates to the Committee should send their recommendations in writing to:
Compensation, Nominations and Governance Committee
First Citizens BancShares, Inc.
Attention: Corporate Secretary (FCC22)
Post Office Box 27131
Raleigh, North Carolina 27611-7131
Each recommendation should be accompanied by:
| ● | | the full name, address and telephone number of the person making the recommendation, a statement that the person making the recommendation is a shareholder of record (or, if the person is a beneficial owner of shares of our stock but not a record holder, a statement from the record holder of the shares verifying the number of shares the person beneficially owns), and a statement as to whether the person making the recommendation has a good faith intention to continue to hold those shares through the date of our next Annual Meeting;
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| ● | | the full name, address and telephone number of the candidate being recommended, and information regarding the candidate’s beneficial ownership of our stock and any business or personal relationship between the candidate and the person making the recommendation;
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| ● | | a statement signed by the candidate that he or she is aware of and consents to being recommended to the Committee and will provide information that the Committee may request in connection with its evaluation of candidates;
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| ● | | a description of the candidate’s current principal occupation, business or professional experience, previous employment history, educational background, and any particular skills, experience or areas of expertise, and information regarding the candidate’s current positions or experience during the past 10 years as a director of any other public corporation;
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| ● | | a description of any potential contributions to the Board that the candidate might make that are unusual or unique;
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| ● | | a description of the candidate’s current positions and experience as a community leader;
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| ● | | information regarding any business or personal relationships between the candidate and any of our or FCB’s customers, suppliers, vendors, competitors, directors or officers, affiliated companies, or other persons with any special interest regarding our company, FCB, or any of our affiliated companies, and any transactions between the candidate and our company, FCB, or any of our affiliated companies;
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| ● | | any additional information regarding the candidate that would be required to be included in our proxy statement pursuant to the SEC’s Regulation 14A (including information about legal proceedings in which the candidate has been involved within the past 10 years); and
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| ● | | an explanation of the value or benefit that the person making the recommendation believes the candidate would provide us as a director.
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Candidates recommended by shareholders as nominees must qualify to serve as directors of our company and FCB under applicable state and federal banking laws and regulations, including without limitation the requirements of Section 19 of the Federal Deposit Insurance Act, and own at least 100 shares of our common stock, individually in his or her own name, jointly with his or her spouse, or in an account for his or her direct benefit. Recommendations must be received by the Committee not later than the 120th day prior to the first anniversary of the date that our proxy statement was first mailed to our shareholders in conjunction with our preceding year’s Annual Meeting. Recommendations submitted by shareholders other than in accordance with these procedures will not be considered by the Committee. The Committee will evaluate candidates recommended by shareholders in a manner similar to its evaluation of other candidates.
PROPOSALS FOR 2023 ANNUAL MEETING
Any proposal of a shareholder, other than a nomination for election as a director, that is intended to be presented for action at our 2023 Annual Meeting and included in the proxy statement and proxy card that we will distribute in connection with that meeting must be received by our Corporate Secretary in writing at our address listed below no later than November 9, 2022, to be considered timely received for inclusion in the proxy statement. In order to be included in our proxy materials for a particular meeting, the proposal and the shareholder submitting it must satisfy and comply with certain eligibility and procedural requirements contained in rules of the SEC.
Under our Bylaws, written notice of a shareholder proposal (other than a nomination) intended to be presented from the floor at our 2023 Annual Meeting but which is not intended to be included in our proxy statement and proxy card, or of a shareholder’s intent to nominate a person from the floor for election as a director at our 2023 Annual Meeting, must be received by our Corporate Secretary at our address listed below no earlier than December 9, 2022, and no later than January 23, 2023, in order for that proposal or nomination to be brought before that Annual Meeting. The same notice requirements apply in the case of a shareholder proposal other than a nomination in order for that proposal to be considered timely received for purposes of the Proxies’ discretionary authority to vote on other matters presented for action by shareholders at our 2023 Annual Meeting. However, if, after the January 23, 2023 deadline for notice of a proposed nomination, our Board of Directors increases the number of our directors, thereby creating an unfilled vacancy that will be filled at our 2023 Annual Meeting, and if there is no public announcement naming the nominee to fill the vacancy at least 100 days prior to the first anniversary of our 2022 Annual Meeting, then a shareholder’s written notice of a nomination to fill the vacancy will be treated as timely if it is received by us not later than the close of business on the tenth day following the day on which such a public announcement actually is made. To be effective, notices of shareholder proposals or nominations are required to contain certain information specified in our Bylaws. Shareholder proposals or nominations not made as provided in our Bylaws will not be considered at Annual Meetings.
The notices described above should be mailed to:
First Citizens BancShares, Inc.
Attention: Corporate Secretary
Post Office Box 27131 (Mail Code FCC22)
Raleigh, North Carolina 27611-7131
ANNUAL REPORT ON FORM 10-K
We are subject to the reporting requirements of the Securities Exchange Act of 1934, and we file periodic reports and other information, including proxy statements, annual reports, quarterly reports and current reports, with the SEC. FCB’s Internet website (www.firstcitizens.com/investor-relations/corporate-profile) contains a link to the SEC’s website (www.sec.gov) where you may review and print copies of information that we file electronically.
A copy of our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, is being mailed to our shareholders with this proxy statement, and a copy is posted with this proxy statement at www.proxyvote.com. An additional copy will be provided without charge to any shareholder upon written request directed to our Corporate Secretary, Matthew G. T. Martin, at the above address.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Meeting, Proxy Statement, and Annual Report on Form 10-K are available at www.proxyvote.com.
The Annual Meeting will be held in a virtual format only, and there will be no physical meeting location for stockholders to attend. The only way to participate in the Annual Meeting will be via the Internet. Instructions for participating in the virtual Annual Meeting are contained in the proxy statement which accompanies this proxy card.
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D67170-P67511
FIRST CITIZENS BANCSHARES, INC.
Virtual Annual Meeting of Stockholders
April 26, 2022 - 9:00 a.m.
APPOINTMENTOF PROXY SOLICITEDBY BOARDOF DIRECTORS
The undersigned hereby appoints Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr., and Robert T. Newcomb (the “Proxies”), or any substitute appointed by them, as the undersigned’s attorneys and proxies, and authorizes any one or more of them to represent and vote, as directed on the reverse side of this proxy card, all of the outstanding shares of the Class A Common Stock of First Citizens BancShares, Inc. (“BancShares”) held of record by the undersigned on February 28, 2022, at the Annual Meeting of BancShares’ Stockholders (the “Annual Meeting”) to be held in a virtual meeting format only at 9:00 a.m. EDT on Tuesday, April 26, 2022, and at any postponements or adjournments of the Annual Meeting.
I (We) direct that the shares represented by this appointment of proxy be voted as directed on the reverse side. If no voting directions are given on a matter, the Proxies may vote those shares “FOR” in the case of the election of each nominee named in Proposal 1 and “FOR” in the case of Proposals 2 and 3. If, before the Annual Meeting, any nominee listed in Proposal 1 becomes unable or unwilling to serve as a director for any reason, the Proxies are authorized to vote for a substitute nominee named by the Board of Directors. On any other matters properly presented for action by stockholders at the Annual Meeting, and on matters incident to the conduct of the meeting, including motions to adjourn, the Proxies are authorized to vote the shares represented by this appointment of proxy according to their best judgment. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Annual Meeting, by filing with BancShares’that you want to revoke your proxy tabulator, Broadridge Corporate Issuer Solutions, Inc.,card or BancShares’ Corporate Secretary, a written instrument revoking ittelephone or a duly executed appointment of proxy bearing a later date,Internet appointment; or by
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| ● | | participate in the Annual Meeting remotely and vote your shares on the meeting website. Simply participating in the virtual Annual Meeting and following the instructions on the meeting website to vote during the meeting.
FIRST CITIZENS BANCSHARES, INC.
ATTN: CORPORATE SECRETARY
4300 SIX FORKS ROAD (FCC22)
RALEIGH, NC 27609
VOTING CLASS A COMMON STOCK BY PROXY
Read our proxy statement before you vote by proxy. Then, to ensure that the shares are represented at the Annual Meeting, we ask that you appoint the Proxies to vote the shares for you in one of the following ways.
To Vote by Mail
Mark, date and sign thiswill not revoke your proxy card and return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A postage-prepaid envelope has been provided for your convenience.
To Vote by Telephone
Call 1-800-690-6903
To Vote by Internet
Go to the Internet website www.proxyvote.comor scan the QR Barcode above.
If voting by telephone or Internet haveappointment unless you also vote your proxy card in hand when you call or access the website. When you are prompted for the “control number,” enter the 16-digit number printed in the box below and then follow the instructions provided to appoint the Proxies and give your voting instructions.
If you vote by telephone or Internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote the shares for you on the same terms and with the same authority as if you marked, signed and returned a proxy card.
You may appoint the Proxies by telephone or Internet only until 11:59 p.m. EDT on April 25, 2022, which is the day before the Annual Meeting date.
You also may participate in the virtual Annual Meeting via the internet and vote during the meeting on the meeting website using your 16-digit “control number” printed in the box below. Instructions for voting during the meeting will be available on the meeting website. To participate in the virtual Annual Meeting, go to the Internet website www.virtualshareholdermeeting.com/FCNCA2022 on the meeting date. Instructions for participating in the virtual meeting are contained in the proxy statement which accompanies this proxy card.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| | | | | | | D67169-P67511 | | KEEP THIS PORTION FOR YOUR RECORDS |
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| | | | | | | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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Street Name Holders. If your shares are held in street name and you want to change voting instructions you have given to your broker or other nominee, you may participate remotely in the Annual Meeting and give your new voting instructions on the meeting website during the meeting. Otherwise, you must contact your broker or nominee and follow its directions to change or revoke your voting instructions. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q: | How can I obtain another proxy card or voting instruction form? | FIRST CITIZENS BANCSHARES, INC. | | | | |
| A: | If you have lost your proxy card or after returning it you want to change your voting instructions, you may obtain another proxy card by calling Broadridge Corporate Issuer Solutions, Inc. at 855-449-0981. To receive another copy of the voting instruction form you received from your broker or other nominee, you must call that broker or nominee. |
For
All
| Q: | | Withhold
All
| | For All
Except
| | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
| | | | | | | | | | | | | | | BancShares’ Board of Directors recommends that stockholders vote FOR each of the14 nominees named below. | | | | | | | | | | | | | | | | | | | | | 1.
| | Election of 14 directors for one-year terms.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | Nominees:
| | | | | | | | | | | | | | | | | | | | | | | 01) Ellen R. Alemany
02) John M. Alexander, Jr.
03) Victor E. Bell III
04) Peter M. Bristow
05) Hope H. Bryant
| | 06) Michael A. Carpenter
07) H. Lee Durham, Jr.
08) Daniel L. Heavner
09) Frank B. Holding, Jr.
10) Robert R. Hoppe
| | 11) Floyd L. Keels
12) Robert E. Mason IV
13) Robert T. Newcomb
14) Vice Admiral John R. Ryan, USN (Ret)
| | | | | | | | | | | | | | | | | | | | | BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 2.
| | For | | Against | | Abstain | | | | | 2.
| | Non-binding advisory resolution (“say-on-pay” resolution) to approve compensation paid or provided to BancShares’ named executive officers as disclosed in the proxy statement for the Annual Meeting.
| | ☐
| | ☐
| | ☐
| | | | | BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 3.
| | For
| | Against
| | Abstain
| | | | | 3.
| | Proposal to ratify the appointment of BancShares’ independent accountants for 2022.
| | ☐
| | ☐
| | ☐
| | | | | | | | | | | Instruction: Please sign exactly as your preprinted name(s) appear(s) above. All holders of shares must sign. Joint owners should both sign personally. When signing as attorney, administrator or other fiduciary, please indicate the capacity in which you are signing. In the case of a corporation or partnership or other entity, please sign in the full corporate, partnership or entity name by an authorized officer or other representative. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX]
| | Date
| | | | Signature (Joint Owners)
| | Date
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Important Notice Regarding the Availability of Proxy MaterialsWhat is required in order to have a quorum for the Annual Meeting:Meeting?
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| A: | A quorum must be present for business to be conducted at the Annual Meeting. The following table describes the quorum requirements for each proposal. |
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The NoticeProposal
| | Quorum Requirement | | Proposals 1, 2, 3, and 4. | | Majority of the votes entitled to be cast by holders of outstanding shares of Class A Common and Class B Common as a group |
Shares represented by proxy at the Annual Meeting, or held by record holders who participate in the meeting remotely, will be counted for the purpose of determining whether a quorum exists. Once a share is represented for any purpose at the meeting, it will be treated as present for quorum purposes for the remainder of the meeting and for any adjournments. If you are a record holder and you return a valid proxy card, appoint the Proxies by telephone or Internet, or participate in the meeting remotely, your shares will be counted as present for purposes of determining whether there is a quorum, even if you abstain or instruct the Proxies to abstain from voting on one or more matters voted on. Broker “non-votes” also will be counted as present in determining whether there is a quorum. Broker non-votes will occur if your shares are held by a broker and are voted by the broker on one or more “routine” matters at the meeting on which the broker has discretionary voting authority, but are not voted by the broker on a “non-routine” matter because the broker does not have discretionary voting authority with respect to that particular matter and you have not given the broker voting instructions on that matter. If your shares are represented at the meeting with respect to any matter voted on, they will be treated as present with respect to all matters voted on, even if they are not voted on all matters. | | | | | | 94 | | 2024 Annual Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com. | | |
Frequently Asked Questions About the Virtual Annual Meeting | Q: | The Annual Meeting will be held in a virtual format only, and there will be no physical meeting location for stockholders to attend. The only way to participate inCould the Annual Meeting will be via the Internet. Instructions for participating in the virtual Annual Meeting are contained in the proxy statement which accompanies this proxy card.adjourned?
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D67172-P67511
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| A: | FIRST CITIZENS BANCSHARES, INC.
Virtual Annual Meeting of Stockholders
April 26, 2022 - 9:00 a.m.
APPOINTMENTOF PROXY SOLICITEDBY BOARDOF DIRECTORS
The undersigned hereby appoints Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr., and Robert T. Newcomb (the “Proxies”), or any substitute appointed by them, as the undersigned’s attorneys and proxies, and authorizes any one or more of them to represent and vote, as directed on the reverse side of this proxy card, all of the outstanding shares of the Class B Common Stock of First Citizens BancShares, Inc. (“BancShares”) held of record by the undersigned on February 28, 2022,If a quorum is not present at the Annual Meeting, or for other reasons, the meeting may be adjourned to a different date, time, or place. If an announcement is made during the meeting of BancShares’ Stockholders (the “Annual Meeting”)the date, time, and place for the adjourned meeting, no further notice of the adjourned meeting will be given unless the adjournment is for more than 30 days or the Record Date is changed.
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In the unlikely event that, for any reason, we are not able to convene the Annual Meeting, or if, after being convened, the meeting is interrupted and cannot be continued, including due to loss of internet connectivity or communications capabilities, power failure, or other technical difficulties, the meeting will be adjourned. If a verbal or written announcement of a later date and time for reconvening the meeting is made during the meeting or on the meeting website during the scheduled time for the meeting, the meeting will be reconvened on that date and at that time in a virtual meeting format at the same web address listed above (www.virtualshareholdermeeting.com/FCNCA2024). If such a notice is given, no further notice of the date and time of the reconvened meeting will be given unless the adjournment is for more than 30 days or the Record Date is changed. The instructions described above for accessing, participating in, and voting at the original meeting will apply to any reconvened meeting. | Q: | What vote is required to elect directors and on Proposals 2, 3, and 4? |
| | | | | | | | | | | | | | | Proposals for your vote | | Voting Options | | Votes Required | |
Effect of
Abstentions | | Effect of broker
non-votes | Proposal 1:
Election of Directors | | ● Vote for all nominees by voting “FOR ALL” ● Withhold your vote for all nominees by voting “WITHHOLD ALL” ● Vote for all of the nominees except for certain nominees by voting “FOR ALL EXCEPT” and then indicating the nominee(s) for whom you want your vote withheld ● You may not vote cumulatively for directors | | Plurality of votes cast in election by holders of Class A Common and Class B Common represented at the meeting and voting together as one class | | Will have no effect | | Will have no effect | Proposal 2:
Advisory Vote on Executive Compensation | | Vote For, Against, or Abstain | | Majority of votes entitled to be held incast with respect to shares of Class A Common and Class B Common represented at the meeting and voting together as one class | | Will count as a virtualvote against Proposal 2 | | Will have no effect | Proposal 3:
Ratification of Appointment of Independent Accountants | | Vote For, Against, or Abstain | | Majority of votes entitled to be cast with respect to shares of Class A Common and Class B Common represented at the meeting format onlyand voting together as one class | | Will count as a vote against Proposal 3 | | Will have no effect | Proposal 4:
Stockholder Proposal Requesting Report on Risks of Politicized De-banking | | Vote For, Against, or Abstain | | Majority of votes entitled to be cast with respect to shares of Class A Common and Class B Common represented at 9:00 a.m. EDT on Tuesday, April 26, 2022,the meeting and at any postponements or adjournmentsvoting together as one class | | Will count as a vote against Proposal 4 | | Will have no effect |
| Q: | How can I find out the results of the voting at the Annual Meeting.Meeting? |
| A: | I (We) direct thatWe will announce the shares represented by this appointment of proxy be voted as directed on the reverse side. If no voting directions are given on a matter, the Proxies may vote those shares “FOR” in the casepreliminary results of the election of each nominee named in Proposal 1 and “FOR” in the case of Proposals 2 and 3. If, before the Annual Meeting, any nominee listed in Proposal 1 becomes unable or unwilling to serve as a director for any reason, the Proxies are authorized to vote for a substitute nominee named by the Board of Directors. On any other matters properly presented for action by stockholders atvoting during the Annual Meeting, and we will file a Current Report on matters incident toForm 8-K with the conductSEC within four business days after the conclusion of the meeting, including motions to adjourn, the Proxies are authorized to vote the shares represented by this appointment of proxy according to their best judgment. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Annual Meeting by filing with BancShares’ proxy tabulator, Broadridge Corporate Issuer Solutions, Inc., or BancShares’ Corporate Secretary,to announce the final voting results. FCB’s Internet website (ir.firstcitizens.com/financial-information/sec-filings) contains a written instrument revoking it or a duly executed appointmentlink to the SEC’s website (www.sec.gov) where you may review and print copies of proxy bearing a later date, or by participating inthat report.
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| Q: | Who can help answer my questions? |
| A: | If you have any questions about the virtual Annual Meeting, and following the instructions onproposals to be voted upon at the meeting, websiteor how to votesubmit your proxy, contact us at 919-716-7000. |
| | | | | | | 2024 Annual Proxy Statement | | 95 |
Recommendations of Nominees RECOMMENDATIONS OF NOMINEES As described above under the caption “COMMITTEES OF OUR BOARDS — Compensation, Nominations and Governance Committee,” in identifying potential Board nominee candidates the CNG Committee considers incumbent directors as well as candidates who may be suggested by our management, other directors, or stockholders. Stockholders who wish to recommend candidates to the Committee should send their recommendations in writing to: Compensation, Nominations and Governance Committee First Citizens BancShares, Inc. Attention: Corporate Secretary (FCC22) Post Office Box 27131 Raleigh, North Carolina 27611-7131 Each recommendation should be accompanied by: | ● | | the full name, address, and telephone number of the person making the recommendation, an affirmation that the person making the recommendation is a stockholder of record (or, if the person is a beneficial owner of shares of our stock but not a record holder, a statement from the record holder of the shares verifying the number of shares beneficially owned by the person making the recommendation), and a statement as to whether the person making the recommendation has a good faith intention to continue to hold those shares through the date of our next annual meeting of stockholders; |
| ● | | the full name, address, and telephone number of the candidate being recommended, and information regarding the candidate’s beneficial ownership of shares of our voting securities and any business or personal relationship between the candidate and the person making the recommendation; |
| ● | | a statement signed by the candidate that he or she is aware of and consents to being recommended to the Committee and will provide information that the Committee may request in connection with its evaluation of candidates; |
| ● | | a description of the candidate’s current principal occupation, business or professional experience, previous employment history, educational background, and any particular skills, experience, or areas of expertise; |
| ● | | a description of any potential contributions to the Board that the candidate might make that are unusual or unique; |
| ● | | a description of the candidate’s current positions and experience as a community leader; |
| ● | | a description of the candidate’s current positions or experience during the meeting.previous 10 years as the director of any public corporation; |
| ● | |
information regarding any business or personal relationships between the candidate and any of our or our subsidiaries’ customers, suppliers, vendors, competitors, directors or officers, affiliated companies, or other persons with any special interest regarding our company, or any of our affiliated companies, and any transactions between the candidate and our company, or any of our affiliated companies; |
| ● | |
FIRST CITIZENS BANCSHARES, INC.
ATTN: CORPORATE SECRETARY
4300 SIX FORKS ROAD (FCC22)
RALEIGH, NC 27609
VOTING CLASS B COMMON STOCK BY PROXY
Readany information in addition to the above regarding the candidate that would be required to be included in our proxy statement before you vote by proxy. Then,pursuant to ensurethe SEC’s Regulation 14A (including without limitation information regarding legal proceedings in which the candidate has been involved within the past 10 years); and
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| ● | | an explanation of the value or benefit that the shares are represented atperson making the Annual Meeting, we askrecommendation believes that you appoint the Proxies to vote the shares for you in one of the following ways. To Vote by Mail
Mark, date and sign this proxy card and return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A postage-prepaid envelope has been provided for your convenience.
To Vote by Telephone
Call 1-800-690-6903
To Vote by Internet
Go to the Internet website www.proxyvote.comor scan the QR Barcode above.
If voting by telephone or Internet, have your proxy card in hand when you call or access the website. When you are prompted for the “control number,” enter the 16-digit number printed in the box below and then follow the instructions provided to appoint the Proxies and give your voting instructions.
If you vote by telephone or Internet, you need not sign and returncandidate would provide us as a proxy card. You will be appointing the Proxies to vote the shares for you on the same terms and with the same authority as if you marked, signed and returned a proxy card.director.
You may appoint the Proxies by telephone or Internet only until 11:59 p.m. EDT on April 25, 2022, which is the day before the Annual Meeting date.
You also may participate in the virtual Annual Meeting via the Internet and vote during the meeting on the meeting website using your 16-digit “control number” printed in the box below. Instructions for voting during the meeting will be available on the meeting website. To participate in the virtual Annual Meeting, go to the Internet website www.virtualshareholdermeeting.com/FCNCA2022 on the meeting date. Instructions for participating in the virtual meeting are contained in the proxy statement which accompanies this proxy card.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| | | | | | | D67171-P67511 | | KEEP THIS PORTION FOR YOUR RECORDS |
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
| | | | | | | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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Candidates recommended by stockholders as nominees must qualify to serve as directors of our company and FCB under applicable state and federal banking laws and regulations, including without limitation the requirements of Section 19 of the Federal Deposit Insurance Act, and must comply with any ownership requirements with respect to ownership by directors of shares of our voting securities. Currently, our directors are encouraged to own an amount of our stock that is significant in light of their financial means. Recommendations by stockholders of candidates for consideration by the Committee in its selection of nominees for our 2025 Annual Meeting must be received by the Committee no later than November 15, 2024. Recommendations submitted by stockholders other than in accordance with these procedures will not be considered by the Committee. The Committee will evaluate candidates recommended by stockholders in a manner similar to its evaluation of other candidates. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FIRST CITIZENS BANCSHARES, INC. | | | | | | | | 96 | | 2024 Annual Proxy Statement | | |
Proposals for 2025 Annual Meeting PROPOSALS FOR 2025 ANNUAL MEETING Any proposal of a stockholder, other than a nomination for election as a director, that is intended to be presented for action at our 2025 Annual Meeting and included in the proxy statement and proxy card that we will distribute in connection with that meeting must be received by our Corporate Secretary in writing at our address listed below no later than November 15, 2024, to be considered timely received for inclusion in those proxy materials. In order to be included in our proxy materials for a particular meeting, the proposal and the stockholder submitting it must satisfy and comply with certain eligibility and procedural requirements contained in rules of the SEC. Under our Bylaws, written notice of a stockholder proposal (other than a nomination) intended to be presented from the floor at our 2025 Annual Meeting but which is not intended to be included in our proxy statement and proxy card, or of a stockholder’s intent to nominate a person from the floor for election as a director at our 2025 Annual Meeting, must be received by our Corporate Secretary at our address listed below no earlier than December 15, 2024, and no later than January 29, 2025, in order for that proposal or nomination to be brought before that Annual Meeting. The same notice requirements apply in the case of a stockholder proposal other than a nomination in order for that proposal to be considered timely received for purposes of the Proxies’ discretionary authority to vote on other matters presented for action by stockholders at our 2025 Annual Meeting. However, if, effective after the January 29, 2025 deadline for notice of a proposed nomination, our Board of Directors increases the number of our directors to be elected at our 2025 Annual Meeting, and if there is no public announcement naming the nominee to fill the vacancy at least 100 days prior to the first anniversary of the Annual Meeting, then a stockholder’s written notice of a nomination to fill the vacancy will be treated as timely if it is received by us not later than the close of business on the tenth day following the day on which such a public announcement actually is made. To be effective, notices of stockholder proposals or nominations are required to strictly comply with the requirements of Article II, Section 11 of our Bylaws, which specify the procedures, information, and statements that must be included in any stockholder director nomination. Stockholder proposals or nominations not made as provided in our Bylaws will not be considered at Annual Meetings. A copy of our most recent Bylaws have been filed with the SEC as an exhibit to our 2023 Annual Report and they also are available on our website at ir.firstcitizens.com/corporate-governance/governance-documents. The notices described above should be mailed to: First Citizens BancShares, Inc. Attention: Corporate Secretary Post Office Box 27131 (Mail Code FCC22) Raleigh, North Carolina 27611-7131 ANNUAL REPORT ON FORM 10-K We are subject to the reporting requirements of the Exchange Act, and we file periodic reports and other information, including proxy statements, annual reports, quarterly reports, and current reports, with the SEC. FCB’s Internet website (ir.firstcitizens.com/financial-information/sec-filings) contains a link to the SEC’s website (www.sec.gov) where you may review and print copies of information that we file electronically. A copy of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC, is being mailed to our stockholders with this proxy statement, and a copy is posted with this proxy statement at www.proxyvote.com. An additional copy will be provided without charge to any stockholder upon written request directed to our Corporate Secretary, Matthew G. T. Martin, at the address listed above for notices. For
All
| | | | | | | Withhold
All
| | For All
Except
| | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
| | | | | | 2024 Annual Proxy Statement | | 97 | | | BancShares’ Board of Directors recommends that stockholders vote FOR each of the14 nominees named below. | | | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Meeting, Proxy Statement, and Annual Report on Form 10-K are available at www.proxyvote.com. The Annual Meeting will be held in a virtual format only, and there will be no physical meeting location for stockholders to attend. The only way to participate in the Annual Meeting will be via the Internet. Instructions for participating in the virtual Annual Meeting are contained in the proxy statement which accompanies this proxy card. V32372-P04954 FIRST CITIZENS BANCSHARES, INC. Virtual Annual Meeting of Stockholders May 1, 2024—9:00 a.m. EDT APPOINTMENT OF PROXY SOLICITED BY BOARD OF DIRECTORS The undersigned hereby appoints Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr., and Robert T. Newcomb (the “Proxies”), or any substitute appointed by them, as the undersigned’s attorneys and proxies, and authorizes any one or more of them to represent and vote, as directed on the reverse side of this proxy card, all of the outstanding shares of the Class A Common Stock of First Citizens BancShares, Inc. (“BancShares”) held of record by the undersigned on March 4, 2024, at the Annual Meeting of BancShares’ Stockholders (the “Annual Meeting”) to be held in a virtual meeting format only at 9:00 a.m. EDT on Wednesday, May 1, 2024, and at any postponements or adjournments of the Annual Meeting. I (We) direct that the shares represented by this appointment of proxy be voted as directed on the reverse side. If, before the Annual Meeting, any nominee listed in Proposal 1 becomes unable or unwilling to serve as a director for any reason, the Proxies will have discretion to vote for a substitute nominee named by the Board of Directors. On any other matters properly presented for action by stockholders at the Annual Meeting, and on matters incident to the conduct of the meeting, including motions to adjourn, the Proxies are authorized to vote the shares represented by this appointment of proxy according to their best judgment. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Annual Meeting by filing with BancShares’ proxy tabulator, Broadridge Corporate Issuer Solutions, Inc., a written instrument revoking it, or by participating in the virtual Annual Meeting and following the instructions on the meeting website to vote during the meeting.
SCAN TO VIEW MATERIALS & VOTE w FIRST CITIZENS BANCSHARES, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS VOTING CLASS A COMMON STOCK BY PROXY P.O. BOX 1342 Read our proxy statement before you vote by proxy. Then, to ensure that your shares are represented at the BRENTWOOD, NY 11717 Annual Meeting, we ask that you appoint the Proxies to vote the shares for you in one of the following ways. To Vote by Mail Mark, date and sign this proxy card and return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A postage-prepaid envelope has been provided for your convenience. To Vote by Telephone Call 1-800-690-6903 To Vote by Internet Go to the Internet website www.proxyvote.com or scan the QR Barcode above. If voting by telephone or Internet, have your proxy card in hand when you call or access the website. When you are prompted for the “control number,” enter the 16-digit number printed in the box below and then follow the instructions provided to appoint the Proxies and give your voting instructions. If you vote by telephone or Internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote the shares for you on the same terms and with the same authority as if you marked, signed and returned a proxy card. You may appoint the Proxies by telephone or Internet only until 11:59 p.m. EDT on April 30, 2024, which is the day before the Annual Meeting date. You also may participate in the virtual Annual Meeting via the Internet and vote during the meeting on the meeting website using your 16-digit “control number” printed in the box below. Instructions for voting during the meeting will be available on the meeting website. To participate in the virtual Annual Meeting, go to the Internet website www.virtualshareholdermeeting.com/FCNCA2024 on the meeting date. Instructions for participating in the virtual meeting are contained in the proxy statement which accompanies this proxy card. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V32371-P04954 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY FIRST CITIZENS BANCSHARES, INC. For Withhold For All To withhold authority to vote for any individual PROPOSALS SUBMITTED BY BOARD OF DIRECTORS All All Except nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. BancShares’ vote FOR each Board of the of 13 Directors nominees recommends named below. that stockholders 1. Election of 13 directors for one-year terms. ! ! ! Nominees: 01) Ellen R. Alemany 06) Michael A. Carpenter 11) David G. Leitch 02) John M. Alexander, Jr. 07) H. Lee Durham, Jr. 12) Robert E. Mason IV 03) Victor E. Bell III 08) Dr. Eugene Flood, Jr. 13) Robert T. Newcomb 04) Peter M. Bristow 09) Frank B. Holding, Jr. 05) Hope H. Bryant 10) Robert R. Hoppe BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 2. For Against Abstain 2. Non-binding advisory resolution (“say-on-pay” resolution) to approve compensation paid or provided to BancShares’ named executive officers as disclosed in the ! ! ! proxy statement for the Annual Meeting. BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 3. For Against Abstain 3. Proposal to ratify the appointment of KPMG LLP as BancShares’ independent accountants for 2024. ! ! ! PROPOSAL SUBMITTED BY A STOCKHOLDER BancShares’ Board of Directors recommends that stockholders vote AGAINST Proposal 4. For Against Abstain 4. Proposal requesting a report on the risks of politicized de-banking, if properly presented during the meeting by or on behalf of the stockholder. ! ! ! of If this each proxy nominee card is named signed in and Proposal returned 1, “FOR” but no in voting the case directions of Proposals are given 2 and on 3, a and matter, “AGAINST” the Proxies in the may case vote of those Proposal shares 4. “FOR” in the case of the election Instruction: Please sign exactly as your preprinted name(s) appear(s) above. All holders of shares must sign. Joint owners should both sign personally. When signing as attorney, administrator or other fiduciary, please indicate the capacity in which you are signing. In the case of a corporation or partnership or other entity, please sign in the full corporate, partnership or entity name by an authorized officer or other representative. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Meeting, Proxy Statement, and Annual Report on Form 10-K are available at www.proxyvote.com. The Annual Meeting will be held in a virtual format only, and there will be no physical meeting location for stockholders to attend. The only way to participate in the Annual Meeting will be via the Internet. Instructions for participating in the virtual Annual Meeting are contained in the proxy statement which accompanies this proxy card. V32374-P04954 FIRST CITIZENS BANCSHARES, INC. Virtual Annual Meeting of Stockholders May 1, 2024—9:00 a.m. EDT APPOINTMENT OF PROXY SOLICITED BY BOARD OF DIRECTORS The undersigned hereby appoints Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding, Jr., and Robert T. Newcomb (the “Proxies”), or any substitute appointed by them, as the undersigned’s attorneys and proxies, and authorizes any one or more of them to represent and vote, as directed on the reverse side of this proxy card, all of the outstanding shares of the Class B Common Stock of First Citizens BancShares, Inc. (“BancShares”) held of record by the undersigned on March 4, 2024, at the Annual Meeting of BancShares’ Stockholders (the “Annual Meeting”) to be held in a virtual meeting format only at 9:00 a.m. EDT on Wednesday, May 1, 2024, and at any postponements or adjournments of the Annual Meeting. I (We) direct that the shares represented by this appointment of proxy be voted as directed on the reverse side. If, before the Annual Meeting, any nominee listed in Proposal 1 becomes unable or unwilling to serve as a director for any reason, the Proxies will have discretion to vote for a substitute nominee named by the Board of Directors. On any other matters properly presented for action by stockholders at the Annual Meeting, and on matters incident to the conduct of the meeting, including motions to adjourn, the Proxies are authorized to vote the shares represented by this appointment of proxy according to their best judgment. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Annual Meeting by filing with BancShares’ proxy tabulator, Broadridge Corporate Issuer Solutions, Inc., a written instrument revoking it, or by participating in the virtual Annual Meeting and following the instructions on the meeting website to vote during the meeting.
SCAN TO VIEW MATERIALS & VOTE w FIRST CITIZENS BANCSHARES, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS VOTING CLASS B COMMON STOCK BY PROXY P.O. BOX 1342 Read our proxy statement before you vote by proxy. Then, to ensure that your shares are represented at the BRENTWOOD, NY 11717 Annual Meeting, we ask that you appoint the Proxies to vote the shares for you in one of the following ways. To Vote by Mail Mark, date and sign this proxy card and return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A postage-prepaid envelope has been provided for your convenience. To Vote by Telephone Call 1-800-690-6903 To Vote by Internet Go to the Internet website www.proxyvote.com or scan the QR Barcode above. If voting by telephone or Internet, have your proxy card in hand when you call or access the website. When you are prompted for the “control number,” enter the 16-digit number printed in the box below and then follow the instructions provided to appoint the Proxies and give your voting instructions. If you vote by telephone or Internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote the shares for you on the same terms and with the same authority as if you marked, signed and returned a proxy card. You may appoint the Proxies by telephone or Internet only until 11:59 p.m. EDT on April 30, 2024, which is the day before the Annual Meeting date. You also may participate in the virtual Annual Meeting via the Internet and vote during the meeting on the meeting website using your 16-digit “control number” printed in the box below. Instructions for voting during the meeting will be available on the meeting website. To participate in the virtual Annual Meeting, go to the Internet website www.virtualshareholdermeeting.com/FCNCA2024 on the meeting date. Instructions for participating in the virtual meeting are contained in the proxy statement which accompanies this proxy card. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V32373-P04954 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY FIRST CITIZENS BANCSHARES, INC. For Withhold For All To withhold authority to vote for any individual PROPOSALS SUBMITTED BY BOARD OF DIRECTORS All All Except nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. vote BancShares’ FOR each Board of the of 13 Directors nominees recommends named below. that stockholders 1. Election of 13 directors for one-year terms. ! ! ! Nominees: 01) Ellen R. Alemany 06) Michael A. Carpenter 11) David G. Leitch 02) John M. Alexander, Jr. 07) H. Lee Durham, Jr. 12) Robert E. Mason IV 03) Victor E. Bell III 08) Dr. Eugene Flood, Jr. 13) Robert T. Newcomb 04) Peter M. Bristow 09) Frank B. Holding, Jr. 05) Hope H. Bryant 10) Robert R. Hoppe BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 2. For Against Abstain 2. Non-binding advisory resolution (“say-on-pay” resolution) to approve compensation paid or provided to BancShares’ named executive officers as disclosed in the ! ! ! proxy statement for the Annual Meeting. BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 3. For Against Abstain 3. Proposal to ratify the appointment of KPMG LLP as BancShares’ independent accountants for 2024. ! ! ! PROPOSAL SUBMITTED BY A STOCKHOLDER BancShares’ Board of Directors recommends that stockholders vote AGAINST Proposal 4. For Against Abstain 4. Proposal requesting a report on the risks of politicized de-banking, if properly presented during the meeting by or on behalf of the stockholder. ! ! ! of If this each proxy nominee card is named signed in and Proposal returned 1, “FOR” but no in voting the case directions of Proposals are given 2 and on 3, a and matter, “AGAINST” the Proxies in the may case vote of those Proposal shares 4. “FOR” in the case of the election Instruction: Please sign exactly as your preprinted name(s) appear(s) above. All holders of shares must sign. Joint owners should both sign personally. When signing as attorney, administrator or other fiduciary, please indicate the capacity in which you are signing. In the case of a corporation or partnership or other entity, please sign in the full corporate, partnership or entity name by an authorized officer or other representative. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 1.
| Election of 14 directors for one-year terms.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | Nominees:
| | | | | | | | | | | | | | | | | | | | | | | 01) Ellen R. Alemany
02) John M. Alexander, Jr.
03) Victor E. Bell III
04) Peter M. Bristow
05) Hope H. Bryant
| | 06) Michael A. Carpenter
07) H. Lee Durham, Jr.
08) Daniel L. Heavner
09) Frank B. Holding, Jr.
10) Robert R. Hoppe
| | 11) Floyd L. Keels
12) Robert E. Mason IV 13) Robert T. Newcomb
14) Vice Admiral John R. Ryan, USN (Ret)
| | | | | | | | | | | | | | | | | | | | | BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 2.
| | For | | Against | | Abstain | | | | | 2.
| | Non-binding advisory resolution (“say-on-pay” resolution) to approve compensation paid or provided to BancShares’ named executive officers as disclosed in the proxy statement for the Annual Meeting.
| | ☐
| | ☐
| | ☐
| | | | | | | | | | | BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 3. | | For | | Against | | Abstain | | | | | 3.
| | Proposal to ratify the appointment of BancShares’ independent accountants for 2022.
| | ☐
| | ☐
| | ☐
| | | | | | | | | | | Instruction: Please sign exactly as your preprinted name(s) appear(s) above. All holders of shares must sign. Joint owners should both sign
personally. When signing as attorney, administrator or other fiduciary, please indicate the capacity in which you are signing. In the case of a corporation or partnership or other entity, please sign in the full corporate, partnership or entity name by an authorized officer or other representative.
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| | Date
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