UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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NOTICE OF 2020 ANNUAL MEETING AND PROXY STATEMENT HELD ON MAY 21, 2020
NOTICE OF 2022
STOCKHOLDERS
Dear Stockholders:
You are invited to attend Synchrony Financial’s
• To elect the
• To approve our named executive officers’ compensation in an advisory vote;
• To ratify the selection of KPMG LLP as our independent registered public accounting firm for
• To consider any other matters that may properly come before the meeting or any adjournments or postponements of the meeting.
The meeting will be held virtually to provide expanded access, improved communication and cost savings for our stockholders and Synchrony Financial. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location. We ensure that at our virtual meeting, all attendees are afforded the same rights and opportunities to participate as they would at anin-person meeting. During the live Q&A session of the meeting, we answer questions as they come in, and we commit to publishing each question received following the meeting. The live webcast is available to stockholders and the general public at the time of the meeting, and a replay of the meeting is made publicly available on the company’s website. The website address for the virtual meeting is: www.virtualshareholdermeeting.com/
To participate in the meeting, you will need the16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions that accompanied your proxy materials. The meeting will begin promptly at 11:00 a.m., Eastern Time. Onlinecheck-in will begin at 10:45 a.m., Eastern Time, and you should allow for time to complete the onlinecheck-in procedure. You are eligible to vote if you were a stockholder of record at the close of business on March
Sincerely,
Jonathan S. Mothner Executive Vice President, General Counsel and Secretary April |
| PROXY LOGISTICS AT A GLANCE DATE May 19, 2022 TIME 11:00 a.m. Eastern Time VIRTUAL MEETING WEBSITE ADDRESS www.virtualshareholder meeting.com/SYF2022 RECORD DATE March 24, 2022 IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE 2022 ANNUAL MEETING TO BE HELD ON MAY 19, 2022 Our proxy materials relating to our Annual Meeting (notice, proxy statement and annual report) are available at www.proxyvote.com. |
2022 ANNUAL MEETING AND PROXY STATEMENT / 1
CONTENTS
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2 Synchrony • 2020 Annual Meeting and Proxy Statement
2/ 2022 ANNUAL MEETING AND PROXY STATEMENT
Synchrony 2022 ANNUAL MEETING AND PROXY STATEMENT• / 2020 Annual Meeting and Proxy Statement 3
This summary highlights certain information in this proxy statement in connection with our 2020 Annual Meeting of Stockholders (the “Annual Meeting”). As it is only a summary and does not contain all of the information you should consider, please review the complete proxy statement before you vote. In this proxy statement, references to the “Company” and to “Synchrony” are to Synchrony Financial. For answers to frequently asked questions regarding the Annual Meeting, please refer to pages67-69 of this proxy statement. Proxy materials are being mailed or made available to stockholders on or about April 6, 2020.
This summary highlights certain information in this proxy statement in connection with our 2022 Annual Meeting of Stockholders (the “Annual Meeting”). As it is only a summary and does not contain all of the information you should consider, please review the complete proxy statement before you vote. In this proxy statement, references to the “Company” and to “Synchrony” are to Synchrony Financial. For answers to frequently asked questions regarding the Annual Meeting, please refer to pages 68-70 of this proxy statement. Proxy materials are being mailed or made available to stockholders on or about April 5, 2022. | ||||||||
LOGISTICS
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DATE
May | |||||||
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ELIGIBILITY TO VOTE
You are eligible to vote if you were a stockholder of record at the close of business on March 26, 2020.
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BY MAIL
You may date, sign and promptly return your proxy card by mail in a postage prepaid envelope (such proxy card must be received by May | ||||||||
TIME 11:00 a.m. Eastern Time | BY TELEPHONE | |||||||
WEBSITE ADDRESS
www.virtualshareholdermeeting.com/SYF2022 | You may use the toll-free telephone number shown on your Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy card up until 11:59 p.m., Eastern Time, on May | 18, 2022. | ||||||
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RECORD DATE March 24, 2022 |
BY THE INTERNET
In Advance | |||||||
You may vote online by visiting the internet website address indicated on your Notice or proxy card or scan the QR code indicated on your Notice or proxy card with your mobile device, and follow theon-screen instructions until 11:59 p.m., Eastern Time, on May | ||||||||
ELIGIBILITY TO VOTE | ||||||||
You are eligible to vote if you were a stockholder of record at the close of business on March 24, 2022. | ||||||||
At the Annual Meeting | ||||||||
You may attend the virtual Annual Meeting by visiting this internet website address: www.virtualshareholdermeeting.com/ |
AGENDA
AGENDA | |||||||||||||||
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Election of named in this proxy statement
Majority of votes cast Page Reference —
| Advisory approval of our named executive officers’ compensation
Majority of votes cast Page Reference
| Ratify the selection of KPMG LLP as our independent registered public accounting firm for
Majority of votes cast Page Reference —
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4 Synchrony • 2020 Annual Meeting and Proxy Statement
Synchrony •/ 2020 Annual Meeting and Proxy Statement 5 2022 ANNUAL MEETING AND PROXY STATEMENT
As the pandemic continued in 2021, Synchrony enacted strategic business changes to help ensure both short- and long-term success under this new business paradigm. Synchrony also successfully managed through a smooth CEO leadership transition while reorganizing the business to drive further growth for Synchrony’s partners and the Company. We also strived to be a best-in-class employer through increased transparency and support for our employees and the communities we serve. These changes and focused efforts coincided with some of our strongest business results since our IPO with record purchase volume of $166 billion and record net earnings of $4.2 billion.
STRATEGIC BUSINESS CHANGES
CEO Succession and other Leadership Changes— After leading Synchrony to become a publicly traded company and establishing the company’s culture and direction for more than a decade, Margaret Keane became Executive Chair and transitioned day-to-day leadership to Brian Doubles as President and CEO in April 2021. With the Board’s oversight and guidance, Margaret’s mentorship, and Brian’s background as President and prior to that as CFO, we believe the succession plan has been successful, as evidenced by our continued strong business results and feedback we’ve received from investors, employees, partners and other stakeholders.
Organizing for Growth—In June 2021, Synchrony announced organizational changes to further align our resources with our partners and evolving consumer expectations, while leveraging our innovation, data, expertise and scale to deliver products and capabilities to market faster. The changes are designed to help drive continued growth, execute our strategy, and deliver the right capabilities to partners and consumers through the industry’s most complete digitally enabled consumer financing and payments product suite. Based on their feedback, our partners have broadly embraced the reorganization and feel it will help better support their needs.
INCREASED TRANSPARENCY AND SUPPORT FOR EMPLOYEES AND COMMUNITIES
New Way of Working—By providing flexibility to employees on where they work, the company has embraced the wellness needs of the workforce. Turnover remains below pre-pandemic levels; 93% of employees are satisfied with our new way of working; applicant pools are up more than 25% and we have reduced the time to hire qualified applicants for our salaried roles.
EXECUTIVE COMPENSATION
2019Increased Transparency and Support for Diversity— With increased transparency on pay equity and representation, Synchrony is further embracing equity, diversity, and inclusion. In 2021, Synchrony worked with an independent 3rd party to continue our annual practice of reviewing the company’s pay equity for all employees globally with respect to base salary and bonus controlled for variables that impact pay including level, geography, function, and experience. Based on the analysis, Synchrony invested more than $5 million in pay adjustments, resulting in the company meeting its goal of 100% pay equity for employees across genders globally and across racial/ethnic groups in the United States. Synchrony is committed to continuing our global pay equity analysis and disclosing the results each year. Additionally, as further described below, both pay equity and increasing diverse representation year-over-year are now factors used by our Board of Directors in determining bonus funding for more than 3,500 leaders across the company. This focus has resulted in year-over-year improvement in diverse demographics by increasing representation of Blacks and Hispanics at the Vice President+ level in the U.S. and increasing the number of females in executive level roles globally. As of December 2021, our workforce in the U.S. comprised 46% SAY-ON-PAYnon-white, ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION20% Black, 16% Hispanic, 7% Asian and globally, 59% female.
AtSupporting our 2019 annual meetingEmployees—In 2021, we continued to invest in our people through enhancements in compensation, benefits, flexibility and career development. We gave our employees the choice to work from home permanently which allows our diverse workforce—with diverse needs—the ability to choose the option that works best for them and to reap the benefits of stockholders,greater work/life balance. We also raised our investors supportedstarting hourly wage to $20 per hour, increasing the compensationstandard of living for more than 5,000 full- and part-time employees in the U.S.
Supporting our named executive officers with over 90%Communities—Over the last three years, Synchrony’s new community development lending and investment activities totaled more than $1.2 billion. In 2021, Synchrony continued to support our communities in a variety of ways including (i) supplier diversity (ii) financial education (iii) skills and career development and (iv) investment in diverse startups. Synchrony was recognized as #7 on JUST Capital’s most recent list of U.S. Companies Supporting Healthy Communities and Families.
2022 ANNUAL MEETING AND PROXY STATEMENT / 5
PROXY SUMMARY
BUSINESS AND FINANCIAL RESULTS
Our core strategy to drive sustainable growth at attractive risk-adjusted returns is founded on three primary objectives of (i) Grow our existing partners and win new partners; (ii) Diversify our programs, products and markets; and (iii) Deliver best-in-class customer experiences.
While maintaining our focus on these objectives, we achieved the following strategic commercial results in 2021:
We accomplished all these commercial strategy successes while maintaining strong relative performance against our direct peers*, ranking first in efficiency ratio** and second in return on assets. Over the prior 3 years, several of whichour Total Shareholder Return (TSR) ranked first among direct peers. During 2021, the Company also operated with a strong balance sheet with a 30.8% Return on Equity. With both commercial and financial success, we believe the business has been performing well and has the foundation to sustain its performance into the future.
* | Direct peers include Alliance Data Systems, American Express Company, Capital One Financial Corporation and Discover Financial Services. |
** | Efficiency ratio represents (i) other expense, divided by (ii) sum of net interest income, plus other income, less retailer share arrangements. |
6/ 2022 ANNUAL MEETING AND PROXY STATEMENT
PROXY SUMMARY
FISCAL YEAR 2021 FINANCIAL PERFORMANCE HIGHLIGHTS
The charts below highlight our 2021 efficiency ratio, return on assets, and 3-year total shareholder return (TSR) performance against our direct peers. These are highlighted below.key metrics we believe reflect our overall performance and fundamental strengths.
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OUR NAMED EXECUTIVE OFFICERS
The executive officers whose compensation we discuss in this CD&A—our named executive officers (“NEOs”) for 2021—are Margaret M. Keane, Executive Chair and former CEO; Brian D. Doubles, President and CEO; Brian J. Wenzel, Sr., Executive Vice President, CFO; Thomas M. Quindlen, Executive Vice President and CEO—Diversified & Value and Lifestyle; Alberto B. Casellas, Executive Vice President and CEO—Health & Wellness; and Carol D. Juel, Executive Vice President and Chief Technology and Operating Officer.
On March 31, 2021, the Board approved the appointment of Margaret Keane to Executive Chair of the Board of Directors of the Company with continued participation in the Company’s employee benefit plans and arrangements, with the same level of benefits that Ms. Keane received prior to such transition in the case of executive arrangements. The Board also appointed Brian Doubles to President and CEO. Transition pay changes for both executives are detailed in the “Summary Compensation Table” below.
At its May meeting, the Board of the Company approved the following changes to roles and responsibilities of our NEOs effective June 14, 2021:
Thomas Quindlen previously served as Executive Vice President and CEO-Retail Card from February 2014 to June 2021. Carol Juel previously served as Executive Vice President and Chief Information Officer from October 2011 to June 2021.
• Changed the calculation of the severance payments to the CEO and other NEOs under the Change in Control Severance Plan to include average bonus paid for the three prior years instead of the current target to reflect a more representative amount
6 Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement/ 7
EXECUTIVE COMPENSATION PROXY SUMMARY
MIX OF PAYCOMPENSATION PHILOSOPHY
TARGET COMPENSATION
A majority of our NEOs’ compensation is performance-based and therefore at risk. The only fixed compensation paid is base salary, which represents approximately10% 12% of the CEO’s total direct compensation and no more than25% 22% of the other NEOs’ total direct compensation.
Below we illustrate the 2019 The 2021 mix of direct pay charts for our CEO and CFO andare shown below.
Below we illustrate the pay trend of our CEO pay.pay from 2017 through 2021 which reflects our consideration of market pay levels, performance, and transition to a newly appointed CEO in April 2021. CEO Direct Pay below for years 2017 through 2020 reflect target pay for Margaret Keane while CEO. The lower target pay in 2021 reflects Brian Doubles transition pay in his first year as CEO.
Synchrony8 •/ 2020 Annual Meeting and Proxy Statement 7
EXECUTIVE COMPENSATION
ALIGN INCENTIVES WITH STOCKHOLDERS
The MDCC evaluates recent and historical financial and operational achievements against our peers, including return measures, growth metrics, efficiency ratio and TSR, among others. Performance during 2019 against our peers ranked first or second out of our direct peers for Efficiency Ratio and Return on Assets—two key metrics we believe reflect our annual performance.
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The MDCC also considers multi-year historical performance that drives sustainable results and creates long-term stockholder value. During the five-year period from 2015 through 2019, our annualized earnings growth rate and annualized receivables growth rate ranked first and second, respectively, compared to our direct peers:
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8 Synchrony • 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
EXECUTIVE COMPENSATION PROXY SUMMARY
2021 SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION
At our 2021 annual meeting of stockholders, our investors supported the compensation for our named executive officers with more than 90% of the votes approving the advisory say-on-pay item. Our MDCC considers the results of our say-on-pay advisory vote as part of its review of our overall compensation programs and policies. In 2021, we continued our regular engagement with stakeholders regarding our compensation program. We also engaged with proxy advisory firms and sought regulatory perspectives.
BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES
The MDCC has implemented the following measures as part of our executive compensation programs:
WHAT WE | WHAT WE DON’T | |||||||
Substantial portion of executive pay based on performance against goals set by the MDCC | No hedging or pledging of Company stock | |||||||
Risk governance framework underlies compensation decisions | No employment agreements for executive officers | |||||||
Stock ownership requirements for executive officers | No taxgross-ups for executive officers | |||||||
Minimum vesting of 12 months for any options or stock appreciation rights | No discretion to accelerate the vesting of awards | |||||||
Minimum vesting of 12 months for any restricted stock units (“RSUs”) | No cash buyouts of stock options or stock appreciation rights with exercise prices that are notin-the-money | |||||||
No payout of dividends on unvested equity prior to the vesting date | ||||||||
No backdating or repricing of stock option awards | ||||||||
Peer company benchmarking, targeting median among peers with additional consideration based on the size, scope and impact of role, market data, leadership skills, length of service and both company and individual performance and contributions | ||||||||
Double-trigger vesting of equity and long-term incentive plan awards upon change in control | ||||||||
Independent compensation consultant advises the MDCC | ||||||||
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 9
CORPORATE GOVERNANCE
We believe that strong corporate governance is integral to building long-term value for our stockholders and enabling effective Board oversight. We are committed to governance policies and practices that serve the interests of the Company and its stockholders. The Board monitors emerging issues in the governance community and continually reviews our governance practices to incorporate evolving best practices and stockholder feedback.
We believe that strong corporate governance is integral to building long-term value for our stockholders and enabling effective Board oversight. We are committed to governance policies and practices that serve the interests of the Company and its stockholders. The Board monitors emerging issues in the governance community and regularly reviews our governance practices to incorporate evolving best practices and stockholder feedback. |
A FEW OF OUR CORPORATE GOVERNANCE BEST PRACTICES INCLUDE:
BOARD’S ROLE IN STRATEGY
The Board actively oversees the Company’s strategic direction and the performance of our business and management. On an annual basis, the Board conducts an intensive, multi-day review of the Company’s short-, medium- and long-term strategic plan, taking into consideration economic, consumer, technology and other significant trends, as well as developments in the industry and regulatory initiatives. The Board’s input is then incorporated into the strategic plan and approved at the subsequent Board meeting. The output of these meetings provides the strategic context for the Board’s discussions at its meetings throughout the next year, including regular updates and feedback from the Board on the Company’s progress on its strategic plan and deep dives on developments in important areas such as cyber security. In addition, the Board regularly discusses and reviews feedback on strategy from our stockholders and other stakeholders, and often engages with internal and external experts and advisors to ensure our strategy reflects the latest competitive landscape.
In 2021, the Board supported management’s execution of key strategic imperatives, focusing on growing the core, diversifying the business and expanding from three to five new sales platforms:
Winning and Growing Large Programs—In 2021, we signed 36 new partners and renewed 38 others, such as long-term partners American Eagle, Ashley HomeStore, and the TJX Companies. We continued to grow our digital partner programs, including Amazon, PayPal, which includes our Venmo program, and Verizon. We expanded our relationship with PayPal, establishing the PayPal Savings Program, whereby Synchrony will offer PayPal-branded savings accounts through PayPal’s mobile application and website.
Diversifying and Expanding With New Products and New Markets—In 2021, we launched a large-scale partner program with Walgreens with fully digital integration across all channels, completed our acquisition of Allegro Credit, announced our Clover partnership as a new distribution channel, and created a strategic partnership with Skipify to transform digital commerce with our retail partners.
Organizing for Growth—We expanded our sales platforms from three to five—Home & Auto, Digital, Diversified & Value, Health & Wellness, and Lifestyle—to better serve partners, deepen industry focus and enhance customer experiences. We created a growth organization to scale products, capabilities and services more quickly across these five platforms, and we combined the technology and operations teams to fuel digital innovation and drive operational excellence and efficiency.
Looking ahead, the Company remains focused on improving all aspects of the customer experience, starting with a quick, seamless account opening process all the way through account self-servicing features. We plan to continue to invest heavily in digital innovations to develop new products and services that drive deeper customer relationships.
BOARD COMMITMENT TO DIVERSITY
Since our IPO, the Board has consistently believed that sustainable, long-term stockholder value creation requires caring for our business, our customers, our partners, our employees, our communities, and the environment. We believe diversity makes our business stronger, more innovative and more successful. We have strong hiring practices for women, minorities, veterans, the LGBTQ community and people with disabilities. We promote this inclusive culture by sponsoring eight different employee D&I Networks. Our Board includes seven directors (out of 12)1 who are women and/or minorities, making us one of the most diverse
1As of April 1, 2022, when the Board appointed Kamila Chytil as a director, the Board consisted of 13 directors. As of the Annual Meeting on May 19, 2022, when Olympia Snowe retires, the Board will consist of 12 directors.
10/ 2022 ANNUAL MEETING AND PROXY STATEMENT
boards of directors among commercial banks and diversified financials in the Fortune 200.2 Ten of our 12 directors are independent; four are women; four are minorities; and one is a veteran. This diversity enables our Board to guide and oversee management more effectively, bringing strategically relevant, forward-looking and inclusive perspectives to our boardroom.
In 2021, our Board continued its elevated attention to, and further expanded its activities to support social justice and racial equity within Synchrony and in our communities. Our Board received regular updates on progress in Synchrony’s equity, diversity and inclusion efforts. Our directors hosted all-employee events on equity, diversity and inclusion in the workplace, participated in our annual Global Diversity Experience, and shared their thought leadership on equity, diversity and inclusion at conferences and in publications.
BOARD FOCUS ON OTHER ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
The pandemic and other recent social justice issues underscore the importance of Board engagement on diversity and other environmental, social and governance matters (ESG). To this end, our full Board actively engages on our most significant ESG topics throughout the year. Our Board delegates primary responsibility for oversight of our ESG strategy and performance to our Nominating and Corporate Governance Committee. All our Board committees engage in matters that impact our ESG strategy and performance. For example: our Audit and Risk Committees oversee compliance matters; our Risk Committee oversees cyber security and other operational risks; and our Management Development and Compensation Committee oversees human capital practices, including our equity, diversity and inclusion efforts. Our Nominating and Corporate Governance Committee regularly reports to the Board on the ESG-related activities of the Board committees. In 2021, our Nominating and Corporate Governance Committee expanded its ESG-related agenda items, and commenced holding an annual joint meeting with our Management Development and Compensation Committee in recognition of the significance of the human capital and community initiatives in our ESG strategy and performance.
You can read more about our ESG efforts in our ESG report at www.synchrony.com. Our ESG report is not, and will not be deemed to be, a part of this proxy statement or incorporated by reference into any of our other filings with the U.S. Securities and Exchange Commission (the “SEC”).
BOARD OVERSIGHT OF CYBER SECURITY AND TECHNOLOGY
The protection and security of financial and personal information of our consumers is one of the Company’s highest priorities. To that end, we have an extensive cyber security governance framework in place. The Board and its Risk Committee receive regular reports on cyber security and oversee a comprehensive information security program that includes administrative, technical and physical safeguards and provides an appropriate level of protection to maintain the confidentiality, integrity, and availability of our Company’s and our customers’ information. This includes protecting against any known or evolving threats to the security or integrity of customer records and information, and against unauthorized access to or use of customer records or information. Our information security program is continuously adapting to an evolving landscape of emerging threats and available technology, and we have developed a security strategy and implemented multiple layers of controls embedded throughout our technology environment that establish multiple control points between threats and our assets. We evaluate the effectiveness of the key security controls through ongoing assessment and measurement. When the Company’s employees shifted to working remotely due to the pandemic, this cyber security governance framework set the foundation for the Risk Committee to engage seamlessly with management and actively oversee and monitor the cyber risks of work from home.
2Based on publicly available information as of February 24, 2022.
2022 ANNUAL MEETING AND PROXY STATEMENT / 11
CORPORATE GOVERNANCE
A key part of our strategic focus is the continued development of innovative, efficient, and flexible technology to deliver products and services that meet the needs of our partners and enables us to operate our business efficiently. The integration of our technology with our partners is at the core of our value proposition, enabling us to help our partners anticipate and deliver the experiences and tools consumers want, while reducing fraud and enhancing customer service. Recognizing the importance of technology and innovation to our future success, the Company’s Technology Committee provides regular updates to the full Board on industry developments and best practices. The Chair of the Technology Committee is Art Coviello, a leader in the technology industry and former Executive Vice President of EMC Corporation and Executive Chairman of RSA Security, Inc.
STOCKHOLDER ENGAGEMENT
We continue to value our stockholders’ perspectives on our strategy and governance practices. We believe that maintaining a dialogue with our stockholders allows us to better understand and respond to their perspectives on matters of importance to them. In 2019,As part of our regular stockholder engagement in 2021, we engaged with representatives of a majority of our outstanding shares on a variety of topics, including our growth plans, business strategy, board composition, governance and compensation practices and environmental and socialESG issues.
BOARD’S ROLE IN STRATEGY
The Board actively oversees the Company’s strategic direction and the performance of We also hosted our business and management. On an annual basis, the Board conducts an intensive,multi-day review of the Company’s short-, medium- and long-term strategic plan, taking into consideration economic, consumer, technology and other significant trends, as well as developments in the industry and regulatory initiatives. The Board’s input is then incorporated into the strategic plan and approved at the subsequent Board meeting. The output of these meetings provides the strategic context for the Board’s discussions at its meetings throughout the next year, including regular updates and feedback from the Board on the Company’s progress on its strategic plan and deep dives on developments in important areas such as cyber security. In addition, the Board regularly discusses and reviews feedback on strategy from ourfirst Investor Day to provide stockholders and other stakeholders a deeper dive into our business model, long-term growth strategy and often engages with internal and external experts and advisors to ensure our strategy reflects the latest competitive landscape.
At the 2019 annualthree-day strategy meeting, the Board worked with management to build a strategic plan focusing on growing the core and diversifying the business. We are pleased to share the Company’s progress executing this plan:
Looking ahead, the Company remains focused on improving all aspects of the customer experience, starting with a quick, seamless account opening process all the way through account self-servicing features. We will continue to invest heavily in digital innovations to develop new products and services that drive deeper customer relationships.operating framework.
BOARD REFRESHMENT
The Nominating and Corporate Governance Committee routinely assesses the composition of our Board to ensure that we have the right mix of skills and experience to maximize our Board’s potential and align our Board’s strengths with our strategic direction. To this end, since 2019, the Board appointed Ellen Zanehas added four new directors with expertise in healthcare, the consumer sector, and Fernando Aguirre as new independent directors in February 2019 and July 2019, respectively. Ms. Zane has significant executive experiencerisk management in the consumer banking sector. As a group, our Board possesses expertise in areas directly relevant to our business and strategy—including accounting, consumer banking, credit cards, cyber security, government affairs, healthcare, industry, specifically asmarketing, retail, risk management, digital and technology.
BOARD OVERSIGHT OF COVID-19
In 2021, the former CEOBoard and its committees continued to engage with management on matters relating to the impact of the COVID-19 pandemic on our employees, operations, partners, customers, communities and overall financial performance. As part of this engagement, the Board oversaw the transformation of our organization to our new flexible work strategy, with the goal of being nimble and agile and with a large teaching and research medical center, and brings a wealth of financialfocus on cyber security and other expertiserisks that may be associated with our hybrid work from home and work from hub model. Our directors also continued to support efforts to promote the safety, wellness and well-being of our employees and their families.
THIRD-PARTY BOARD ASSESSMENT
Considering the changes in our Board composition and leadership in 2021, our Board determined to conduct its annual self-evaluation in 2021 with the assistance of an independent consultant, one year ahead of schedule. This third-party expert interviewed each director to obtain his or her assessment of the effectiveness of the Board, including director performance and Board culture. The individual assessments were then summarized and presented to the Board. Mr. Aguirre has significant executive experienceBoard for discussion. The results of the evaluation confirmed the Board’s view that the Company is performing well and expertise spanning leadership, strategy, digital marketing, branding,that the Board is delivering effective oversight and communications.governance of critically important business areas. Going forward, the Board intends to resume its practice of retaining an independent consultant to assist with its annual self-evaluation every third year.
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CORPORATE GOVERNANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS
Corporate and social responsibility demonstrates the kind of company we are and reflects how we build and maintain trust and credibility with our stakeholders, including our customers, partners, employees and stockholders. Recognizing the importance of Environmental, Social and Governance (ESG) matters, the Board formalized the ongoing oversight that the Nominating and Corporate Governance Committee exercises over ESG matters in its charter. In 2018, management launched a cross-functional team that will help to shape the Company’s ESG initiatives and strategy and report regularly to the Nominating and Corporate Governance Committee. You can read more about our ESG efforts in our Corporate Social Responsibility report at www.synchrony.com.
COMMITMENT TO DIVERSITY
We believe diversity makes our business stronger, more innovative and more successful. We have strong hiring practices for women, minorities, veterans, the LGBTQ community and people with disabilities. We promote this inclusive culture by sponsoring eight different employee Diversity & Inclusion Networks. We also have the most diverse board of directors of any financial services company or commercial bank in the Fortune 200 based on 2019 proxy statement disclosures. Our Board includes seven directors (out of 11) who are women and/or minorities, as well as cognitive diversity with expertise in consumer banking, credit cards, retail, technology, cyber security, risk management, marketing, government affairs, and accounting.
BOARD OVERSIGHT OF CYBER SECURITY
The protection and security of financial and personal information of our consumers is one of the Company’s highest priorities. To that end, we have an extensive cyber security governance framework in place. The Board and its Risk Committee receive regular reports on cyber security and oversee a comprehensive information security program that includes administrative, technical and physical safeguards and provides an appropriate level of protection to maintain the confidentiality, integrity, and availability of our Company’s and our customers’ information. This includes protecting against any known or evolving threats to the security or integrity of customer records and information, and against unauthorized access to or use of customer records or information. Our information security program is
continuously adapting to an evolving landscape of emerging threats and available technology, and we have developed a security strategy and implemented multiple layers of controls embedded throughout our technology environment that establish multiple control points between threats and our assets. We evaluate the effectiveness of the key security controls through ongoing assessment and measurement.
TECHNOLOGY COMMITTEE OF THE BOARD
A key part of our strategic focus is the continued development of innovative, efficient, and flexible technology to deliver products and services that meet the needs of our partners and enables us to operate our business efficiently. The integration of our technology with our partners is at the core of our value proposition, enabling us to help our partners anticipate and deliver the experiences and tools consumers want, while reducing fraud and enhancing customer service. Recognizing the importance of technology and innovation to our future success, and in order to better leverage the Board’s technology expertise, we have a committee of the Board devoted exclusively to technology and innovation. The Technology Committee reviews and advises the Board on major strategies and other subjects relating to the Company’s approach to technology-related innovation, the technology development process and existing and emerging technologies. The Chair of the Technology Committee is Art Coviello, a leader in the technology industry and former Executive Vice President of EMC Corporation and Executive Chairman of RSA Security, Inc.
Synchrony • 2020 Annual Meeting and Proxy Statement 11
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRACTICES
OUR GOVERNANCE HIGHLIGHTS INCLUDE:
10 out of |
Experienced Board members with a diversity of skills and experiences |
7 out of |
Two out of five Board committee chairs are women and/or minorities |
Each |
|
Regular meetings of independent directors in executive session without management |
Annual election of all directors |
Majority voting standard for directors in uncontested elections |
Stockholder special meetings may be called upon the request of a majority of stockholders |
Single-class voting structure (one share, one vote) |
No stockholder rights plan |
Stock ownership requirements for our executive officers and directors |
Stockholder proxy access |
Nominating and Corporate Governance Committee regularly reviews overall corporate governance framework and oversees the Company’s |
12 Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement/ 13
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
We believe that our directors possess the highest personal and professional ethics, deep industry knowledge and expertise, and are committed to representing the long-term interests of our stockholders. We deliberately and thoughtfully formed an independenta Board with diverse perspectives and experiences, which we believe is critical to effective corporate governance and to achieving our strategic goals. Today, 10Ten of the 1112 directors on our Board are independent, four of the directors are women and four of the directors are minorities. The composition of the Board reflects distinct and varied professional experience and cognitive diversity.
EXPERIENCESKILLS MATRIX
FERNANDO | PAGET ALVES | KAMILA CHYTIL | ARTHUR COVIELLO | BRIAN DOUBLES | WILLIAM GRAYLIN | ROY GUTHRIE | �� | MARGARET KEANE | JEFFREY NAYLOR | BILL PARKER | LAUREL RICHIE | ELLEN ZANE | ||||||||||||||
| RISK EXPERT | X | X | X | X | X | ||||||||||||||||||||
FINANCIAL EXPERT | X | X | X | X | X | X | X | X | X | |||||||||||||||||
CREDIT CARDS | X | X | X | X | X | X | ||||||||||||||||||||
CORE BANKING/ RETAIL LENDING | X | X | X | X | X | |||||||||||||||||||||
HEALTHCARE | X | X | ||||||||||||||||||||||||
GENDER DIVERSITY | X | X | X | X | ||||||||||||||||||||||
ETHNIC DIVERSITY | X | X | X | X | ||||||||||||||||||||||
DIRECT CONSUMER/ RETAILERS | X | X | X | X | X | X | ||||||||||||||||||||
TECH/ DIGITAL/ CYBER | X | X | X | X | ||||||||||||||||||||||
GOVERNMENT/ REGULATORY | X | X | X | X | X | X |
Synchrony14 •/ 2020 Annual Meeting and Proxy Statement 13
CORPORATE GOVERNANCE
BOARD QUALIFICATIONS
Name
| Age
| Director
| Independent
| Committee Membership
| ||||
Margaret M. Keane CEO of Synchrony Financial
| 60
| 2014
| ||||||
Fernando Aguirre Former Chairman, President and CEO of Chiquita Brands International, Inc.
| 62
| 2019
| Management Development and Compensation; Nominating and Corporate Governance
| |||||
Paget L. Alves Former Chief Sales Officer of Sprint Corporation
| 65
| 2015
| Audit; Technology
| |||||
Arthur W. Coviello, Jr. Former Executive Vice President of EMC Corporation; Former Executive Chairman of RSA Security, Inc.
| 66
| 2015
| Risk; Technology (Chair)
| |||||
William W. Graylin Chairman and CEO of OV Loop, Inc.; Executive Chairman and CEO of Indigo Technologies, Inc.; Former GlobalCo-General Manager of Samsung Pay, Samsung Electronics America, Inc.
| 51
| 2015
| Risk; Technology
| |||||
Roy A. Guthrie Former CEO of Renovate America Inc.; Former Executive Vice President and Chief Financial Officer of Discover Financial Services, Inc.
| 66
| 2014
| Risk (Chair)
| |||||
Richard C. Hartnack (Chair of the Board) Former Vice Chairman and Head, Consumer and Small Business Banking of U.S. Bancorp
| 74
| 2014
| Management Development and Compensation (Chair)
| |||||
Jeffrey G. Naylor Former CFO and Chief Administrative Officer of the TJX Companies, Inc.
| 61
| 2014
| Audit (Chair); Management Development and Compensation
| |||||
Laurel J. Richie Former President of the Women’s National Basketball Association LLC
| 61
| 2015
| Management Development and Compensation; Nominating and Corporate Governance
| |||||
Olympia J. Snowe Chairman and CEO of Olympia Snowe, LLC; U.S. Senator from 1995–2013 and Member of U.S. House of Representatives from
| 73
| 2015
| Audit; Nominating and Corporate Governance (Chair)
| |||||
Ellen M. Zane Former President and CEO of Tufts Medical Center and the Floating Hospital for Children
| 68
| 2019
| Audit; Technology
|
14 Synchrony • 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
2022 ANNUAL MEETING AND PROXY STATEMENT / 15
CORPORATE GOVERNANCE
BOARD QUALIFICATIONS
NAME | AGE | DIRECTOR SINCE | INDEPENDENT | COMMITTEE MEMBERSHIP | ||||
Margaret M. Keane Executive Chair of the Board; | 62 | 2014 | Technology | |||||
Brian D. Doubles President and CEO of Synchrony Financial | 46 | 2021 | ||||||
Fernando Aguirre Former Chairman, President and CEO of Chiquita Brands International, Inc. | 64 | 2019 | Management Development and Compensation; Nominating and Corporate Governance (Chair)3 | |||||
Paget L. Alves Former Chief Sales Officer of Sprint Corporation | 67 | 2015 | Audit; Nominating and Corporate Governance3 | |||||
Kamila Chytil Chief Operating Officer of DentaQuest LLC | 42 | 2022 | ||||||
Arthur W. Coviello, Jr. Former Executive Vice President of EMC Corporation; Former Executive Chairman of RSA Security, Inc. | 68 | 2015 | Risk; Technology (Chair) | |||||
William W. Graylin Chairman and CEO of OV Loop, Inc.; Chairman and CEO of Indigo Technologies, Inc.; Former Global Co-General Manager of Samsung Pay, Samsung Electronics America, Inc. | 53 | 2015 | Risk; Technology | |||||
Roy A. Guthrie Former CEO of Renovate America, Inc.; Former Executive Vice President and Chief Financial Officer of Discover Financial Services, Inc. | 68 | 2014 | Risk (Chair) | |||||
Jeffrey G. Naylor Lead Independent Director of the Board; | 63 | 2014 | Audit (Chair); Management Development and Compensation | |||||
P.W. “Bill” Parker Former Vice Chairman and Chief Risk Officer of U.S. Bancorp | 65 | 2020 | Nominating and Corporate Governance; Risk | |||||
Laurel J. Richie Former President of the Women’s National Basketball Association LLC | 63 | 2015 | Management Development and Compensation (Chair); Nominating and Corporate Governance | |||||
Ellen M. Zane Former President and CEO of Tufts Medical Center and Tufts Children’s Hospital | 70 | 2019 | Audit; Management Development and Compensation |
3In accordance with our Governance Principles, directors will not be nominated for election to the Board after their 75th birthday except in special circumstances. Accordingly, Olympia Snowe will not be nominated for election to the Board and will cease to be a director at the Annual Meeting. At that time, Mr. Aguirre will become Chair of the Nominating and Corporate Governance Committee and Mr. Alves will move from the Technology Committee to the Nominating and Corporate Governance Committee.
16/ 2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS Each of the The following biographies describe the business experience of each If elected, each of the THE BOARD RECOMMENDS A VOTE FOR the following nominees for election as directors. |
2022 ANNUAL MEETING AND PROXY STATEMENT / 17
CORPORATE GOVERNANCE
Name and present position, if any, with the Company Age, period served as a director and other business experience
We believe that Mr. Aguirre should serve as a member of the Board due to his significant knowledge and experience in the areas of leadership, strategy, digital marketing, branding, and communications, as well as his extensive experience as chair and CEO of a large publicly-traded company and Mr. Alves, 67, has been a director since We believe that Mr. Alves should serve as a member of the Board due to his executive management and leadership experience, including leadership roles with technology companies, his extensive background in sales, his financial expertise and his experience with strategic and business development. He also has experience with strategic corporate transactions, including mergers and acquisitions. The Board has determined that Mr. Alves qualifies as an “audit committee financial expert” as defined in Item 407(d) (5) of Regulation S-K. 20/ 2022 ANNUAL MEETING AND PROXY STATEMENT CORPORATE GOVERNANCE Name and present position, if any, with the Company Age, period served as a director and other business experience Ms. Chytil, 42, has been a director since April 2022. Ms. Chytil has been the Chief Operating Officer of DentaQuest LLC, a private equity backed oral health care company, since March 2021. From the University of Florida. We believe that Ms. Mr. Coviello, 68, has been a director since November 2015 and was a non-voting Board observer from July 2015 to November 2015. He has also been a member of the Board of Directors of the Bank since January 2017. Since 2015 he has been an independent cyber security consultant. He served as Executive Vice President of EMC Corporation, an IT infrastructure company, and Executive Chairman of RSA Security, Inc. (“RSA”), the Security Division of EMC Corporation and a provider of security, risk and compliance solutions, from 2011 to 2015, after serving as Executive Vice President and President of RSA from 2006 to 2011. Prior thereto, Mr. Coviello held various executive positions at RSA, including President and CEO from 2000 to 2006, and President from 1999 to 2000. Prior to RSA, he had extensive financial and operating management expertise in several technology companies. Mr. Coviello currently serves on the boards of directors of Tenable Holdings, Inc., a provider of Cyber Exposure solutions, which is a discipline for managing and measuring cyber security risk; Mandiant, Inc., a publicly traded cyber security company which develops cyber security solutions to help organizations protect against advanced persistent threats (APTs), malware, and other cyberattacks; Epiphany Technology Acquisition Corp., a special purpose acquisition company focused on the technology industry; and two private companies, SecZetta, a provider of identity management software for governing and managing third party risk; and Bugcrowd, Inc., which uses tens of thousands of independent researchers to assist its customers in finding security vulnerabilities in their software. Mr. Coviello previously served on the boards of directors of EnerNOC, Inc., Gigamon, Inc., AtHoc, RSA, Sana Security, Inc., ZeroNorth, Capsule8 and Cylance, Inc. He received a B.B.A. in Accounting from the University of Massachusetts. We believe that Mr. Coviello should serve as a member of the Board due to his leadership experience, including as CEO of a publicly-traded company, his extensive financial expertise and accounting background and his considerable experience in |
16 Synchrony • 2020 Annual Meeting and Proxy Statement
CORPORATE GOVERNANCE
cyber security.
2022 ANNUAL MEETING AND PROXY STATEMENT / 21
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Aguirre, 62, has been a director since July 2019. He served as President and CEO of Chiquita Brands International, Inc. from January 2004 to October 2012 and also served as Chairman from May 2004 to October 2012. Prior to that, Mr. Aguirre held various global marketing and management roles at Procter & Gamble from 1980 to 2004. Mr. Aguirre is currently on the boards of directors of CVS Health, a publicly-traded American healthcare company that owns CVS Pharmacy, CVS Caremark, and Aetna; and Barry Callebaut, a publicly-traded company which is one of the world’s largest cocoa processors and chocolate manufacturers. He previously served on other boards including Aetna, Inc., Coca-Cola Enterprises, and Levi Strauss & Co. Mr. Aguirre is currently the Owner & CEO of the Erie SeaWolves Minor League Baseball team, the double AA affiliate of the Detroit Tigers. He also owns a minority stake in the Myrtle Beach Pelicans, a high A affiliate of the Chicago Cubs. A native of Mexico, Mr. Aguirre is a prominent figure in the Hispanic community, recognized as one of the 100 Influentials by Hispanic Business Magazine and honored with the Hispanic Heritage Leadership Award by the NFL. Mr. Aguirre received a B.S. from Southern Illinois University Edwardsville.
We believe that Mr. Aguirre should serve as a member of the
Board due to his significant knowledge and experience in the areas of leadership, strategy, digital marketing, branding, and communications, as well as his extensive experience as a director of other publicly-traded companies.
Mr. Alves, 65, has been a director since November 2015 and was anon-voting Board observer from July 2015 to November 2015. He has also been a member of the board of directors of the Bank since January 2017. He served as Chief Sales Officer of Sprint Corporation, a wireless and wireline communications services provider, from January 2012 to September 2013 after serving as President of that company’s Business Markets Group from 2009 to 2012. Prior thereto, Mr. Alves held various positions at Sprint Corporation, including President, Sales and Distribution, from 2008 to 2009; President, South Region, from 2006 to 2008; Senior Vice President, Enterprise Markets, from 2005 to 2006; and President, Strategic Markets, from 2003 to 2005. Between 2002 and 2003, he served as President and Chief Operating Officer of Centennial Communications Corporation and from 2000 to 2001 served as President and CEO of PointOne Telecommunications, Inc. Mr. Alves currently serves on the boards of directors of Assurant, Inc., a publicly-traded global provider of risk management products and services; Yum! Brands, Inc., a company that develops, operates, franchises, and licenses a system of quick-service restaurants; and International Game Technology PLC, a manufacturer and distributor of microprocessor-based gaming and video lottery products and software systems. He previously served on the boards of directors of GTECH Holdings Corporation from 2005 to 2006, Herman Miller, Inc. from 2008 to 2010 and International Game Technology Inc. from 2010 to 2015. In 2017,Savoy magazine recognized Mr. Alves among Savoy’s 2017 Most Influential Black Corporate Directors. Mr. Alves received a B.S. in Industrial and Labor Relations and a J.D. from Cornell University.
We believe that Mr. Alves should serve as a member of the Board due to his executive management and leadership experience, including leadership roles with technology companies, his extensive background in sales, his financial expertise and his experience with strategic and business development. He also has experience with strategic corporate transactions, including mergers and acquisitions. The Board has determined that Mr. Alves qualifies as an “audit committee financial expert” as defined in Item 407(d) (5) of RegulationS-K.
Synchrony • 2020 Annual Meeting and Proxy Statement 17
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Coviello, 66, has been a director since November 2015 and was anon-voting Board observer from July 2015 to November 2015. He has also been a member of the board of directors of the Bank since January 2017. Since 2015 he has been an independent cyber security consultant. He served as Executive Vice President of EMC Corporation, a cloud computing and information security company, and Executive Chairman of RSA Security, Inc. (“RSA”), the Security Division of EMC Corporation and a provider of security, risk and compliance solutions, from 2011 to 2015, after serving as Executive Vice President and President of RSA from 2006 to 2011. Prior thereto, Mr. Coviello held various executive positions at RSA, including President and CEO from 2000 to 2006, and President from 1999 to 2000. Prior to RSA, he had extensive financial and operating management expertise in several technology companies. Mr. Coviello currently serves on the boards of directors of Tenable Holdings, Inc., a provider of Cyber Exposure solutions, which is a discipline for managing and measuring cyber security risk; and three private companies, ZeroNorth, a software and infrastructure security company that is the security industry’s first provider of orchestrated risk management; Capsule8, a security software platform for Linux, containers and micro-services; SecZetta, a provider of identity management software for governing and managing third party risk; and Bugcrowd, Inc., which uses tens of thousands of independent researchers to assist its customers in finding security vulnerabilities in their software. Mr. Coviello previously served on the boards of directors of EnerNOC, Inc., Gigamon, Inc., AtHoc, RSA, Sana Security, Inc. and Cylance, Inc. He received a B.B.A. in Accounting from the University of Massachusetts.
We believe that Mr. Coviello should serve as a member of the Board due to his leadership experience, including as CEO of a publicly-traded company, his extensive financial expertise and accounting background and his considerable experience in technology and cyber security.
Mr. Graylin, 51, has been a director since November 2015 and was anon-voting Board observer from July 2015 to November 2015. He has been Chairman and CEO of OV Loop, Inc., an Omni Commerce company with1-Tap or Handsfree Messaging & Payments on virtually any device, anywhere, since 2018. He is also Executive Chairman and CEO of Indigo Technologies, Inc., a provider of breakthrough Ultra-Efficient EV & Energy Management technologies. Prior thereto, Mr. Graylin was GlobalCo-General Manager of Samsung Pay, the mobile payment platform of Samsung Electronics America, Inc., from February 2015 to April 2018. From 2012 to 2015, he was Founder and CEO of LoopPay, Inc., a mobile payment company; from 2007 to 2012, he was Founder and CEO of Roam Data, Inc., a developer of mobile point of sale software; from 2002 to 2007, he was Founder, Chairman and CEO of Way Systems, Inc.; and from 2000 to 2001, he was Founder and CEO of Entitlenet, Inc. Mr. Graylin served in the United States Navy as a Nuclear Submarine Officer from 1992 to 1998. He currently serves on the boards of directors of several privately held high-tech startups including: People Power, Inc., an IoT (internet of things) services company managed by artificial intelligence for home automation, security and senior care; PayFi, Inc., a real-time payment company; and Global Unites, anon-profit organization training and equipping youths on conflict transformation and reconciliation in 15 countries. Mr. Graylin is currently a Connection Science Fellow with MIT’s Media Lab, where he teaches part time on FinTech and Entrepreneurship. He received a B.S. in Electrical Engineering and Computer Science and a B.A. in Chinese Linguistics and Literature from the University of Washington; an M.B.A. from the Sloan School of Management, Massachusetts Institute of Technology; and an M.S. in Electrical Engineering and Computer Science from Massachusetts Institute of Technology.
We believe that Mr. Graylin should serve as a member of the Board due to his executive management and leadership experience, and his extensive background as an entrepreneur and innovator in technology.
18 Synchrony • 2020 Annual Meeting and Proxy Statement
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Guthrie, 66, joined our Board and the board of directors of the Bank in connection with our initial public offering in July 2014 (the “IPO”). From October 2017 to September 2018, Mr. Guthrie served as CEO of Renovate America, Inc., a privately-owned financial services company. From July 2005 to January 2012, Mr. Guthrie served as Executive Vice President, and from July 2005 to May 2011 as CFO of Discover Financial Services, Inc., a direct banking and payments company. From September 2000 to July 2004, he served as President and CEO of various businesses of Citigroup Inc., including CitiFinancial International from 2000 to 2004 and CitiCapital from 2000 to 2001. From April 1978 to September 2000, Mr. Guthrie served in various roles of increasing responsibility at Associates First Capital Corporation. Mr. Guthrie serves on the boards of directors of Mr. Cooper Group, Inc., an originator and servicer of real estate mortgage loans; OneMain Holdings, Inc., a financial services company; and Renovate America Inc. He previously served on the boards of directors of LifeLock, Inc. and Garrison Capital Inc. During his tenure with Discover Financial Services, Inc., he also served on the board of directors of Discover Bank. Mr. Guthrie received a B.A. in Economics from Hanover College and an M.B.A. from Drake University.
We believe that Mr. Guthrie should serve as a member of the Board due to his leadership experience, including as CFO of two publicly-traded companies and as a director of other publicly-traded companies, financial expertise and accounting background, risk management experience and extensive experience in consumer finance (including the private-label credit card industry), including more than 30 years of experience in finance and/or operating roles.
Mr. Hartnack, 74, joined our Board and the board of directors of the Bank in connection with the IPO in July 2014 and serves as the nonexecutive Chair of the Board. From April 2005 to February 2013, Mr. Hartnack served as Vice Chairman and Head, Consumer and Small Business Banking of U.S. Bancorp, a financial services holding company. From June 1991 to March 2005, Mr. Hartnack served in various leadership roles at Union Bank, N.A. (formerly known as Union Bank of California, N.A.), including Vice Chairman, Director and Head, Community Banking and Investment Services from 1999 to 2005. From June 1982 to May 1991, Mr. Hartnack served in various leadership roles at First Chicago Corporation, including Executive Vice President and Head, Community Banking. Mr. Hartnack previously served on the boards of directors of Federal Home Loan Mortgage Corporation, Mastercard International, Inc. (U.S. Region) and UnionBanCal Corporation. Mr. Hartnack received a B.A. in Economics from the University of California, Los Angeles, and an M.B.A. from Stanford University.
We believe that Mr. Hartnack should serve as a member of the Board due to his leadership experience and extensive background in consumer finance, banking and financial services regulatory matters that he accumulated over the course of a40-year career in the banking industry.
Synchrony • 2020 Annual Meeting and Proxy Statement 19
CORPORATE GOVERNANCE
Age, period served as a director and other business experience |
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Mr. Naylor, 61,63, was appointed Lead Independent Director of the Board in April 2021. Mr. Naylor joined our Board and the board of directors of the Bank in connection with the IPO in July 2014. From February 2013 to April 2014, Mr. Naylor served as Senior Corporate Advisor of the TJX Companies, Inc., a retail company of apparel and home fashions. From January 2012 to February 2013, Mr. Naylor served as Senior Executive Vice President and CAO of the TJX Companies, Inc.; from February 2009 to January 2012, he served as its Senior Executive Vice President, Chief Financial and Administrative Officer; from June 2007 to February 2009, he served as its Senior Executive Vice President, Chief Administrative and Business Development Officer; from September 2006 to June 2007, he served as its Senior Executive Vice President, Chief Financial and Administrative Officer; and from February 2004 to September 2006, he served as its CFO. From September 2001 to January 2004, Mr. Naylor served as Senior Vice President and CFO of Big Lots, Inc. From September 2000 to September 2001, Mr. Naylor served as Senior Vice President, Chief Financial and Administrative Officer of Dade Behring, Inc. From November 1998 to September 2000, he served as Vice President, Controller of The Limited, Inc. Mr. Naylor serves on the boards of directors of three othertwo public companies: Dollar Tree, Inc., an operator of discount variety stores; and Wayfair, Inc., ane-commerce retailer of home furnishings and decor; and Emerald Expositions, a company that conducts business to business trade shows. He also serves on the board of directors of a private company:Save-A-Lot, a discount grocery retailer.decor. Mr. Naylor received a B.A. in Economics and Political Science from Northwestern University and an M.B.A. from the J.L. Kellogg Graduate School of Management, Northwestern University.Management.
We believe that Mr. Naylor should serve as a member of the Board due to his executive management and leadership experience, including as CFO of a publicly-traded company and as a director of other publicly-traded companies, his extensive financial expertise and accounting background, and his considerable experience accumulated over the course of 25 years in the retail and consumer goods industries. The Board has determined that Mr. Naylor qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of RegulationS-K.
Mr. Parker, 65, has been a director since July 2020. Mr. Parker served as Vice Chairman and Chief Risk Officer of U.S. Bancorp from December 2013 to September 2018. From October 2007 until December 2013 he served as Executive Vice President and Chief Credit Officer of U.S. Bancorp. From March 2005 until October 2007, he served as Executive Vice President of Credit Portfolio Management of U.S. Bancorp, having served as Senior Vice President of Credit Portfolio Management of U.S. Bancorp since January 2002. Mr. Parker served on the board of directors of U.S. Bank National Association from January 2011 to October 2018. Mr. Parker received a B.A. from Amherst College and an M.B.A. from the Tuck School of Business at Dartmouth.
We believe that Mr. Parker should serve as a member of the Board due to his leadership experience, and his extensive background in risk management and deep expertise in credit.
2022 ANNUAL MEETING AND PROXY STATEMENT / 23
CORPORATE GOVERNANCE
Name and present position, if any, with the Company
Age, period served as a director and other business experience
Ms. Richie, 61,63, has been a director since November 2015 and was anon-voting Board observer from July 2015 to November 2015. Ms. RichiRichie served as President of the Women’s National Basketball Association LLC, a professional sports league, from 2011 to 2015. From 2008 to 2011, Ms. Richie served as Chief Marketing Officer of Girl Scouts of the United States of America. From 1984 to 2008, she held various positions at Ogilvy & Mather, including Senior Partner and Executive Group Director and member of the agency’s Operating and Diversity Advisory Boards. Ms. Richie is currently engaged by several Fortune 100 companies to advisec-suite executives on matters of personal leadership and corporate culture. She also serves on the board of directors of Bright Horizons, a publicly-traded provider of high-quality child carechildcare and early education.education; and Hasbro, a global play and entertainment company committed to Creating the World’s Best Play and Entertainment Experiences. Ms. Richie has been recognized as one of the 25 Most Influential Women in Business by The Network Journal, one of the Most Influential African Americans in Sports by Black Enterprise and one of the Most Influential Black Corporate Directors bySavoy magazine. She is the recipient of numerous awards including Sports Business Journal’s Game Changer Award and Ebony magazine’s Outstanding Women in Marketing and Communications Award. Ms. Richie received a B.A. in Policy Studies from Dartmouth College. Ms. Richie is a former Trustee of the Naismith Basketball Hall of
Fame; she was named a Charter Trustee of Fame and her alma mater in 2012; and she became Chair of the Board of Trustees of Dartmouth College in 2017.
20 Synchrony • 2020 Annual Meeting and Proxy Statement
CORPORATE GOVERNANCE
| ||||
We believe that | Ms. Zane, We believe that Ms. Zane should serve as a member of the Board due to her executive experience in the healthcare industry, including as the CEO of a large medical center, in addition to her financial expertise and substantial experience as a director at other public companies. The Board has determined that Ms. Zane qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of RegulationS-K. |
Synchrony • 2020 Annual Meeting and Proxy Statement 21
24/ 2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
QUALIFICATIONS OF DIRECTORS
Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. The Company will endeavor to have a Board representing a range of experience at policy-making levels in areas that are relevant to the Company’s activities. Although the Board does not have a specific diversity policy, theThe Nominating and Corporate Governance Committee takes into account a candidate’s ability to contribute to the diversity on the Board. It considers each candidate’s and the existing Board members’ race, ethnicity, gender, age, cultural background and professional experience. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time. Our Governance Principles maintain that directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Company’s Board, and other directors should not serve on more than three boards of public companies in addition to the Company’s Board.
Pursuant to our Company’s Governance Principles, when a director’s principal occupation or job responsibilities change significantly during his or her tenure as a director, that director shall tender his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will recommend to the Board the action, if any, to be taken with respect to the resignation. The Board does not believe that arbitrary term limits on directors’ service are appropriate, nor does it believe that directors should expect to be renominated annually until they reach the mandatory retirement age. The Nominating and Corporate Governance Committee will evaluate each director in connection with his or her renomination for election at each annual meeting of stockholders. Except in special circumstances, directors will not be nominated for election to the Board after their 75th birthday.
PROCESS FOR REVIEWING, IDENTIFYING AND EVALUATING DIRECTOR NOMINEES
The Nominating and Corporate Governance Committee is responsible for reviewing, identifying, evaluating and recommending director nominees to the Board after considering the qualifications described above and set forth in the Company’s Governance Principles. Upon recommendation of the Nominating and Corporate Governance Committee, the Board proposes a slate of nominees to the stockholders for election to the Board. Between annual stockholder meetings, the Board may fill vacancies and newly created directorships on the Board with directors who will serve until the next annual meeting.
Other stockholders may also propose nominees for consideration by the Nominating and Corporate Governance Committee by submitting the names and other supporting information required under our Bylaws to: Corporate Secretary, Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902. The Nominating and Corporate Governance Committee will apply the same standards in considering director candidates recommended by stockholders that it applies to other candidates. In addition to recommending director candidates to the Nominating and Corporate Governance Committee, stockholders may also, pursuant to procedures established in our Bylaws, directly nominate one or more director candidates to stand for election by the stockholders. For information on how to nominate a person for election as a director at the 20212023 Annual Meeting of Stockholders, including through the proxy access right to include such nominees in the Company’s proxy materials, please see the discussion under the heading “Additional Information—Stockholder Proposals for the 20212023 Annual Meeting.”
22 Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement/ 25
CORPORATE GOVERNANCE
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board consist of the Audit Committee, the Nominating and Corporate Governance Committee, the MDCC, the Risk Committee, and the Technology Committee. The duties and responsibilities of these standing committees are set forth below. The Board may also establish various other committees to assist it in its responsibilities. Our Board has adopted charters for each of its standing committees. Copies of the committees’ charters are available on our website at http://investors.synchronyfinancial.com under “Corporate Governance.” Each of the standing committees reports to the Board as it deems appropriate and as the Board requests.
|
|
| #
| |||
Audit | Mr. Naylor (Chair)
| • Selecting, evaluating, compensating and overseeing the independent registered public accounting firm | ||||
Mr. Alves Ms. Zane | • Receiving reports from our internal audit, risk management and independent liquidity review functions on the results of risk management reviews and assessments, including the Company’s internal control system over operational and regulatory controls and of the adequacy of the processes for controlling the Company’s activities and managing its risk | |||||
• Reviewing the audit plan, changes in the audit plan, the nature, timing, scope and results of the audit, and any audit problems or difficulties and management’s response | ||||||
• Overseeing our financial reporting activities, including our annual report, and accounting standards and principles followed (including any significant changes in such standards and principles) | ||||||
• Reviewing and discussing with management and the independent auditor, as appropriate, the effectiveness of the Company’s internal control over financial reporting and the Company’s disclosure controls and procedures | ||||||
• Reviewing our major financial risk exposures, the Company’s risk assessment and risk management practices and the guidelines, policies and processes for risk assessment and risk management | ||||||
• In conjunction with the Risk Committee, overseeing our risk guidelines and policies relating to financial statements, financial systems, financial reporting processes, compliance and auditing, and allowance for | ||||||
• Approving audit andnon-audit services provided by the independent registered public accounting firm | ||||||
• Meeting with management and the independent registered public accounting firm to review and discuss our financial statements, any critical audit matters (CAMs) and other matters required to be reviewed under applicable legal, regulatory or NYSE requirements | ||||||
• Establishing and overseeing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters | ||||||
• Approving the appointment of, evaluating and, when appropriate, approving the replacement of the Chief Audit Executive | ||||||
• Overseeing our internal audit function, including reviewing its organization, performance and audit findings, and reviewing our disclosure and internal controls | ||||||
• Overseeing the Company’s compliance with legal, ethical and regulatory requirements (other than those assigned to other committees of the Board) and related processes and programs |
Synchrony26 •/ 2020 Annual Meeting and Proxy Statement 23 2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
|
|
| #
| |||
Nominating and Corporate Governance |
(Chair)
Mr. Mr. Parker
Ms. Richie | • Developing, and recommending to our Board for approval, qualifications for director candidates, taking into account applicable regulatory or legal requirements regarding experience, expertise or other qualifications for service on certain of our Board’s committees, as well as candidates’ ability to contribute to the diversity of the Board
• Considering potential director nominees properly recommended by the Company’s stockholders, leading the search for other individuals qualified to become members of the Board, recommending to our Board for approval the director nominees to be presented for stockholder approval at the annual meeting, and recommending to the Board nominations for any vacancies that may arise on the Board prior to the annual meeting | ||||
• Reviewing and making recommendations to our Board with respect to the Board’s leadership structure and the size and composition of the Board and the Board committees | 9 | |||||
• Developing and annually reviewing our corporate governance principles, including guidelines for determining the independence of directors | ||||||
• Annually reviewing director compensation and benefits | ||||||
• Developing and recommending to the Board for its approval an annual self-evaluation process of the Board and the Board’s committees and overseeing the annual self-evaluation of our Board and its committees | ||||||
• Reviewing and, if appropriate, approving or ratifying any “transaction” between the Company and a “related person” required to be disclosed under | ||||||
• Reviewing our policies and procedures with respect to political spending | ||||||
• Reviewing actions in furtherance of our corporate, environmental and social responsibility | ||||||
• Reviewing and resolving any conflicts of interest involving directors or executive officers | ||||||
• Overseeing the risks, if any, related to our corporate governance structure and practices | ||||||
• |
24 Synchrony • 2020 Annual Meeting and Proxy Statement
CORPORATE GOVERNANCE
|
|
| #
IN 2021 | ||||||
Management Development and Compensation |
(Chair)
Mr. Aguirre
Mr. Naylor
| • Assisting our Board in developing and evaluating potential candidates for executive positions, including the CEO, and overseeing our management resources, structure, succession planning, development and selection process
• Evaluating the CEO’s performance and approving and, where required, recommending for approval by the independent members of our Board, the CEO’s annual compensation, including salary, bonus and equity andnon-equity incentive compensation | 7 | ||||||
• Evaluating the performance of other senior executives and approving and, where required, recommending for approval by our Board, each senior executive’s annual compensation, including salary, bonus and equity andnon-equity incentive compensation, in each case, based on initial recommendations from the CEO | |||||||||
• Reviewing and overseeing incentive compensation arrangements with a view to appropriately balancing risk and financial results in a manner that does not encourage employees to expose us or any of our subsidiaries to imprudent risks, and are consistent with safety and soundness, and reviewing (with input from our Chief Risk Officer (“CRO”) and the CRO of the Bank) the relationship among risk management policies and practices, corporate strategies and senior executive compensation | |||||||||
• Reviewing and overseeing equity incentive plans and other stock-based plans | |||||||||
• Assisting our Board in its oversight of the development, implementation and effectiveness of the Company’s policies and strategies relating to its human capital management, including but not limited to those policies and strategies regarding recruiting, retention, career development and progression, management succession for key executives, corporate culture, diversity and employment practices |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement 25 / 27
CORPORATE GOVERNANCE
| # | |||||
MEETINGS IN 2021 | ||||||
Risk | Mr. Guthrie(Chair)
Mr. Coviello
Mr. Graylin Mr. Parker | • Assisting our Board in its oversight of our enterprise-wide risk management framework, including as it relates to credit, investment, market, liquidity, operational (including cyber security), compliance and strategic risks | ||||
• Reviewing and, at least annually, approving our risk governance framework, and our risk assessment and risk management practices, guidelines and policies, including significant policies that management uses to manage credit and investment, market, liquidity, operational, compliance and strategic risks | ||||||
• Reviewing and, at least annually, recommending to our Board for approval, our enterprise-wide risk appetite, including our liquidity risk tolerance, and reviewing and approving our strategy relating to managing key risks and other policies on the establishment of risk limits as well as the guidelines and policies for monitoring and mitigating such risks | 7 | |||||
• Meeting separately, at least quarterly, with our CRO and the Bank’s CRO to discuss the Company’s risk assessment and risk management practices and related guidelines and policies | ||||||
• Receiving periodic reports from management on the metrics used to measure, monitor and manage known and emerging risks, including management’s view on acceptable and appropriate levels of exposure | ||||||
• Receiving reports from our internal audit, risk management and independent liquidity review functions on the results of risk management reviews and assessments, including the Company’s internal control system over operational and regulatory controls and of the adequacy of the processes for controlling the Company’s activities and managing its risk | ||||||
• Reviewing and approving, at least annually, the Company’s enterprise-wide capital and liquidity framework (including our contingency funding plan) for addressing liquidity needs during liquidity stress events | ||||||
• Reviewing, at least quarterly, in coordination with the Bank’s Risk Committee, the Company’s allowance for | ||||||
• Reviewing, at least quarterly, information provided by senior management to determine whether we are operating within our established risk appetite | ||||||
• Reviewing the status of financial services regulatory examinations | ||||||
• Reviewing the independence, authority and effectiveness of our risk management function and independent liquidity review function | ||||||
• Approving the appointment of, evaluating and, when appropriate, approving the replacement of the CRO | ||||||
• Reviewing the disclosure regarding risk contained in our annual and quarterly reports filed with the SEC |
26 Synchrony • 2020 Annual Meeting and Proxy Statement
CORPORATE GOVERNANCE
|
|
| #
IN 2021 | ||||||
Technology |
| ||||||||
Mr.
Mr. Graylin
Ms. | • Reviewing the Company’s approach to technology-related innovation, including the Company’s competitive position and relevant trends in technology and innovation
• Reviewing the technology development process to assure ongoing business growth | ||||||||
• Providing a forum for dialogue on existing and emerging technologies which present opportunities or threats to the Company’s strategic agenda | 6 |
28/ 2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
AUDIT COMMITTEE
The Board has determined that each of Mr. Naylor, Mr. Alves and Ms. Zane qualifies as an “audit committee financial expert” as defined in Item 407(d) (5) of RegulationS-K, and the Board is satisfied that all members of our Audit Committee have sufficient expertise and business and financial experience necessary to effectively perform their duties as members of the Audit Committee.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
Each of Mr. Hartnack,Ms. Richie, Mr. Aguirre, Mr. Naylor and Ms. RichieZane qualifies as “outside directors” within the meaning of Section 162(m) (“Section 162(m)”) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and as“non-employee directors” within the meaning of Rule16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act).
Synchrony • 2020 Annual Meeting and Proxy Statement 27
CORPORATE GOVERNANCE
BOARD OF DIRECTORS’ LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT
The Board is led bySince ournon-executive Chair, Mr. Hartnack. We believe that having an independent director serve as thenon-executive IPO, we have chosen to elect a Chair of the Board is in the best interests ofseparate from our stockholders.CEO. The separation of roles allowshas allowed our Chair to focus on the organization and effectiveness of the Board. At the same time, it allowshas allowed our CEO to focus on executing our strategy and managing our operations, performance and risks.
In 2021, as part of a planned succession process, Margaret Keane transitioned roles from CEO to Executive Chair of the Board, Brian Doubles succeeded Ms. Keane as CEO and was appointed to the Board, and Jeffrey Naylor was appointed Lead Independent Director of the Board.
The Board thoroughly evaluated its leadership structure in the period leading up to this transition. The Board believes that Ms. Keane, as the former CEO and a long-time executive in the business, continues to be best situated to serve as Chair at this time because her deep understanding of our operations, our people and our strategic plan, along with her strong leadership skills, make her uniquely qualified to provide the continuity needed to continue to ensure a smooth transition of the CEO role, especially in the volatile and uncertain environment created by the COVID-19 pandemic.
The roles of Chair and CEO continue to be separate at the Company. The Board believes that the separation is in the best interests of the Company’s stockholders because it allows the Chair to focus on the organization and effectiveness of the Board and allows the CEO to focus on executing the Company’s strategy and managing its operations, performance and risk.
The Board believes that the Lead Independent Director brings to the Board experience, oversight, and expertise from outside the Company that will allow him to provide strong independent oversight of management. The responsibilities and authority of the Lead Independent Director include:
For these reasons, and after considering the perspectives of the independent directors, the views of our significant stockholders, and benchmarking and performance data, the Board determined that this leadership structure continues to be in the best interests of stockholders at this time because it strikes an appropriate balance; with a former CEO serving as Chair, there is unified leadership and continuity, while the Lead Independent Director holds management accountable for our continued success.
While the Board has determined that this leadership structure is best for the Company and its stockholders at this time, the Board will continue to monitor its effectiveness and appropriateness.
2022 ANNUAL MEETING AND PROXY STATEMENT / 29
CORPORATE GOVERNANCE
BOARD OF DIRECTORS’ ROLE IN RISK OVERSIGHT
We manage enterprise risk using an integrated framework that includes Board-level oversight, administration by a group of cross-functional management committees, andday-to-day implementation by a dedicated risk management team led by the CRO. The Board (with input from the Risk Committee) is responsible for approving the Company’s enterprise-wide risk appetite statement and framework, as well as certain other risk management policies, and oversees the Company’s strategic plan and enterprise-wide risk management program.
The Board regularly devotes time during its meetings to review and discuss the most significant risks facing the Company and management’s responses to those risks. During these discussions, the President and CEO, the CFO, the CRO, the General Counsel and other members of senior management present management’s assessment of risks, a description of the most significant risks facing the Company and any mitigating factors and plans or practices in place to address and monitor those risks. The Board has also delegated certain of its risk oversight responsibilities to its committees.
The Risk Committee of the Board has responsibility for the oversight of the risk management program, and the three other board committees have other oversight roles with respect to risk management within their respective oversight areas. Several management committees and subcommittees have important roles and responsibilities in administering the risk management program. This committee-focused governance structure provides a forum through which risk expertise is applied cross-functionally to all major decisions, including development of policies, processes and controls used by the CRO and risk management team to execute our risk management philosophy. The CRO manages our risk management team and is responsible for establishing and implementing standards for the identification, management, measurement, monitoring and reporting of risk on an enterprise-wide basis. The CRO regularly reports to the Board of Directors and the Risk Committee on risk management matters. The enterprise risk management philosophy is to ensure that all relevant risks are appropriately identified, measured, monitored and
controlled. The approach in executing this philosophy focuses on leveraging risk expertise to drive enterprise risk management using a strong governance framework structure, a comprehensive enterprise risk assessment program and an effective risk appetite framework.
Responsibility for risk management flows to individuals and entities throughout our Company, including the Board, various Board and management committees and senior management. The corporate culture and values, in conjunction with the risk management accountability incorporated into the integrated Enterprise Risk Government Framework, which includes a governance structure and three distinct “Lines of Defense” (as further described below), has facilitated, and will continue to facilitate, the evolution of an effective risk management presence across the Company.
The “First Line of Defense” is comprised of the business areas whoseday-to-day activities involve decision-making and associated risk taking for the Company. As the business owner, the first line is responsible for identifying, assessing, managing and controlling that risk, and for mitigating our overall risk exposure. The first line formulates strategy and operates within the risk appetite and risk governance framework. The “Second Line of Defense,” also known as the independent risk management organization, provides oversight of first line risk taking and management. The second line assists in determining risk capacity, risk appetite, and the strategies, policies and structure for managing risks. The second line owns the risk governance framework. The “Third Line of Defense” is comprised of Internal Audit. The third line provides independent and objective assurance to senior management and to the Board and Audit Committee that first and second line risk management and internal control systems and its governance processes are well-designed and working as intended.
It is our policy that each director is expected to dedicate sufficient time to the performance of his or her duties as a director, including by attending meetings of the stockholders, and meetings of the Board and Board committees of which he or she is a member.
In 2019,2021, the Board held nine10 meetings, including regularly scheduled and special meetings. All directors attended at least 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she has been a director); and (ii) the total number of meetings held by all committees on which he or she served (during the periods for which he or she has served). All directors attended the 20192021 Annual Meeting of Stockholders.
28 Synchrony30 •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE
MEETINGSEXECUTIVE SESSIONS OFNON-MANAGEMENT AND INDEPENDENT DIRECTORS
In accordance with our Governance Principles, at the conclusion of every Board meeting, the independent directors have an executive session without anynon-independent directors present. The ChairLead Independent Director of the Board, Mr. Hartnack,Naylor, presides at executive sessions. During executive sessions, the independent directors have complete access to Company personnel as they may request.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders and any interested parties who would like to communicate with the Board or its committees may do so by writing to them via the Company’s Corporate Secretary by email at corporate.secretary@ synchronyfinancial.comcorporate.secretary@synchronyfinancial.com or by mail at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 or by leaving a voicemail message at (800)275-3301.
All communications directed to the Board, the ChairLead Independent Director of the Board or any other members of the Board are initially reviewed by the Company’s Ombuds Leader. Any communications that allege or report fiscal improprieties or complaints about internal accounting controls or other accounting or auditing matters are immediately forwarded to the Chair of the Audit Committee, the General Counsel and the Chief Audit Executive, and after consultation with the Chair of the Audit Committee, may be sent to the other members of the Audit Committee. Any communications that raise legal, ethical or compliance concerns about the Company’s policies or practices are immediately forwarded to the General Counsel and the Chief Compliance Officer. The ChairLead Independent Director of the Board is advised promptly of any such communication that alleges misconduct on the part of the Company’s management or raises legal, ethical or compliance concerns about the Company’s policies or practices and that the General Counsel or the Chief Compliance Officer believes may be credible, and after consultation with the ChairLead Independent Director of the Board, such communication may be reported to the other members of the Board or to a committee of the Board.
Typically, the Ombuds Leader will not forward to the Company’s directors communications from stockholders or other communications that are
of a personal nature or not related to the duties and
responsibilities of the Board, including: junk mail and mass mailings; routine customer service complaints; human resources matters; service suggestions; resumesresumés and other forms of job inquiries; opinion surveys and polls; business solicitations; or advertisements.
We have adopted a Code of Conduct that applies to anyone who works for or represents Synchrony, including all directors, officers and employees. A copy of this code is available on our website at http://investors.synchronyfinancial.com under “Corporate Governance.” If we make any substantive amendments to this code or grant any waiver from a provision to our CEO, principal financial officer or principal accounting officer, we will disclose the nature of such amendment or waiver on our website or in a Current Report onForm 8-K.
Our Governance Principles provide the framework for the governance of the Company. The Nominating and Corporate Governance Committee is responsible for developing and implementing our Governance Principles, periodically reviewing such Governance Principles and recommending any proposed changes to the Board for approval. A copy of our Governance Principles is available on our website at http://investors. synchrony.cominvestors.synchronyfinancial.com under “Corporate Governance.”
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company’s MDCC are Mr. Hartnack,Ms. Richie, Mr. Aguirre, Mr. Naylor and Ms. Richie.Zane. None of Mr. Hartnack,Ms. Richie, Mr. Aguirre, Mr. Naylor and Ms. RichieZane was, during 20192021 or previously, an officer or employee of the Company or any of its subsidiaries. During 2019,2021, there were no compensation committee interlocks required to be disclosed. In addition, no member of the MDCC had any relationship requiring disclosure under Item 404 of RegulationS-K under the Exchange Act.
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement 29 / 31
Alberto Casellas Executive Vice President and CEO— Health & Wellness Mr. Casellas, ITEM 2—NAME AND
PRESENT POSITION
WITH THE COMPANY AGE, PERIOD SERVED IN PRESENT POSITION AND OTHER BUSINESS EXPERIENCE Name and present position with the Company Age, period served in present positionand other business experienceCareCredit 53,55, has been the Executive Vice President and CEO of our Health & Wellness platform since June 2021. Prior to that he served as CEO of Synchrony’s CareCredit platform sincefrom January 2019.2019 to June 2021. He previously served as our Executive Vice President and Chief Customer Engagement Officer from November 2016 to December 2018 and as our Senior Vice President, Retail Card Client Initiatives Group from March 2014 to November 2016. Mr. Casellas joined GE in 1990 and held various leadership roles of increasing responsibility in sales, operations, and P&L including Vice President & General Manager, Retail Card Portfolios, leading several client relationships out of the San Francisco Bay Area from 2004 to 2014; Site Operations Leader in Charlotte, NC under GE Capital’s Consumer Finance from 2002 to 2004; Leader of thee-Business initiative for GE Structured Services from 1999 to 2002; and General Manager, GE Supply South America Operations in Sao Paulo, Brazil and Buenos Aires, Argentina from 1997 to 1999. Mr. Casellas serves on the Board of Directors of Domus Kids, a Stamford, CTnon-profit organization that helps thousands of the Stamford area’s most vulnerable youth experience success. He is also the Executive Sponsor of Synchrony’s Hispanic Network. Mr. Casellas received a B.A. in Economics from Yale University.
30 Synchrony32 •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
|
| |||
WITH THE COMPANY |
| |||
Henry F. Greig Executive Vice President, Chief Credit Officer and Capital Management Leader | Mr. Greig, | |||
and CEO—Home & Auto | Mr. Howse, 58 has been our Executive Vice President | CEO of our Home & Auto platform since June 2021. Mr. | ||
Carol Juel Executive Vice President, Chief Technology and Operating Officer | Ms. Juel, 49, has been our Executive Vice President, Chief Technology & Operating Officer of Synchrony since | |||
David P. Melito Senior Vice President, Chief Accounting Officer and Controller | Mr. Melito, | |||
Jonathan S. Mothner Executive Vice President, General Counsel and Secretary | Mr. Mothner, |
Synchrony • 2020 Annual Meeting and Proxy Statement 31
COMPENSATION MATTERS
|
| |
Thomas M. QuindlenExecutive Vice President and CEO— | Mr. Quindlen, |
2022 ANNUAL MEETING AND PROXY STATEMENT / 33
COMPENSATION MATTERS
NAME AND PRESENT POSITION WITH THE COMPANY | AGE, PERIOD SERVED IN PRESENT POSITION AND OTHER BUSINESS EXPERIENCE | |
Bart Schaller Executive Vice President and CEO—Digital | Mr. Schaller, 53, has been our Executive Vice President and Chief Executive Officer of our Digital platform since June 2021. Prior to this role, Mr. Schaller was the Chief Marketing Officer of Synchrony from May of 2016 to June of 2021. From March of 2014 to May 2016 he led Synchrony’s Business Development team where he oversaw new partner programs, sales activities, strategic investments, and mergers and acquisitions opportunities, including Synchrony’s corporate venture team. Prior to Synchrony’s separation from GE, Mr. Schaller was Vice President and General Manager for GE Retail Consumer Finance from February of 2005 to March of 2014. Mr. Schaller is an executive sponsor of Synchrony’s People with Disabilities Network, one of eight Synchrony diversity networks that promote diversity and inclusion throughout the company. Mr. Schaller earned a bachelor’s degree in business administration from Southern Methodist University, where he serves on the Cox School of Business Alumni Board. | |
Brian J. Wenzel, Sr.
President, Chief Financial Officer | Mr. Wenzel, | |
Paul Whynott Executive Vice President, Chief Risk Officer | Mr. Whynott, |
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
As the pandemic continued in 2021, Synchrony enacted strategic business changes to help ensure both short- and long-term success under this new business paradigm. Synchrony also successfully managed through a smooth CEO leadership transition while reorganizing the business to drive further growth for Synchrony’s partners and the Company. We also strived to be a best-in-class employer through increased transparency and support for our employees and the communities we serve. These changes and focused efforts coincided with some of our strongest business results since our IPO with record purchase volume of $166 billion and record net earnings of $4.2 billion.
Strategic Business Changes
CEO Succession and other Leadership Changes—After leading Synchrony to become a publicly traded company and establishing the company’s culture and direction for more than a decade, Margaret Keane became Executive Chair and transitioned day-to-day leadership to Brian Doubles as President and CEO in April 2021. With the Board’s oversight and guidance, Margaret’s mentorship, and Brian’s background as President and prior to that as CFO, we believe the succession plan has been successful, as evidenced by our continued strong business results and feedback we’ve received from investors, employees, partners and other stakeholders.
Organizing for Growth—In June 2021, Synchrony announced organizational changes to further align our resources with our partners and evolving consumer expectations, while leveraging our innovation, data, expertise and scale to deliver products and capabilities to market faster. The changes are designed to help drive continued growth, execute our strategy, and deliver the right capabilities to partners and consumers through the industry’s most complete digitally enabled consumer financing and payments product suite. Based on their feedback, our partners have broadly embraced the reorganization and feel it will help better support their needs.
32 Synchrony34 •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
Increased Transparency and Support for Employees and Communities
New Way of Working—By providing flexibility to employees on where they work, the company has embraced the wellness needs of the workforce. Turnover remains below pre-pandemic levels; 93% of employees are satisfied with our new way of working; applicant pools are up more than 25% and we have reduced the time to hire qualified applicants for our salaried roles.
Increased Transparency and Support for Diversity—With increased transparency on pay equity and representation, Synchrony is further embracing equity, diversity, and inclusion. In 2021, Synchrony worked with an independent 3rd party to continue our annual practice of reviewing the company’s pay equity for all employees globally with respect to base salary and bonus controlled for variables that impact pay including level, geography, function, and experience. Based on the analysis, Synchrony invested more than $5 million in pay adjustments, resulting in the company meeting its goal of 100% pay equity for employees across genders globally and across racial/ethnic groups in the United States. Synchrony is committed to continuing our global pay equity analysis and disclosing the results each year. Additionally, as further described below, both pay equity and increasing diverse representation year-over-year are now factors used by our Board of Directors in determining bonus funding for more than 3,500 leaders across the company. This focus has resulted in year-over-year improvement in diverse demographics by increasing representation of Blacks and Hispanics at the Vice President+ level in the U.S. and increasing the number of females in executive level roles globally. As of December 2021, our workforce in the U.S. comprised 46% non-white, 20% Black, 16% Hispanic, 7% Asian and globally, 59% female.
Supporting our Employees—In 2021, we continued to invest in our people through enhancements in compensation, benefits, flexibility and career development. We gave our employees the choice to work from home permanently which allows our diverse workforce—with diverse needs—the ability to choose the option that works best for them and to reap the benefits of greater work/life balance. We also raised our starting hourly wage to $20 per hour, increasing the standard of living for more than 5,000 full- and part-time employees in the U.S.
Supporting our Communities—Over the last three years, Synchrony’s new community development lending and investment activities totaled more than $1.2 billion. In 2021, Synchrony continued to support our communities in a variety of ways including (i) supplier diversity (ii) financial education (iii) skills and career development and (iv) investment in diverse startups. Synchrony was recognized as #7 on JUST Capital’s most recent list of U.S. Companies Supporting Healthy Communities and Families.
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement 33/ 35
COMPENSATION MATTERS
2019SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER
ENGAGEMENT ON EXECUTIVE COMPENSATION
At our 2019 annual meeting of stockholders, our investors supported the compensation for our named executive officers with over 90% of the votes approving the advisorysay-on-pay item. Our MDCC considers the results of oursay-on-pay advisory vote as part of its review of our overall compensation programs and policies. As part of our regular engagement with stakeholders regarding our compensation program, in 2018 and 2019, we reached out to our top 30 stockholders representing over 60% of our outstanding shares and had conversations with all stockholders who expressed interest in meeting with us. We also engaged with proxy advisory firms and sought regulatory perspectives. Richard Hartnack, Chair of the Board and Chair of the MDCC, participated in many of the meetings with stockholders, and feedback received was regularly shared and discussed with our full Board. The MDCC considered several potential changes to the compensation program and discussed them with the full Board and with investors during our stakeholder engagement. Following these helpful dialogues and the MDCC’s own discussions, a number of actions were taken over the last two years, several of which are highlighted below.
| Business and Financial Results
| |||||||||
While maintaining our focus on these objectives, we achieved the following strategic commercial results in 2021: •
• | ||||||||||
•
| ||||||||||
We accomplished all these commercial strategy successes while maintaining strong relative performance against our direct peers*, ranking first in efficiency ratio** and | second in return on assets. Over the prior 3 years, our Total Shareholder Return (TSR) ranked first among direct peers. During 2021, the Company also operated with a strong balance sheet with a 30.8% Return on Equity. With both commercial and financial success, we believe the business has been performing well and has the foundation to sustain its performance into the future.
• • 4.5% return on assets • $3.4 billion in capital returned to shareholders • $7.34 earnings per diluted common share • 38.9% Efficiency Ratio * Direct peers include Alliance Data Systems, American Express Company, Capital One Financial Corporation and Discover Financial Services. ** Efficiency ratio represents (i) other expense, divided by (ii) sum of | STRONG NET EARNINGS $4.2B
$7.34 DILUTED EARNINGS PER SHARE RETURNED CAPITAL TO STOCKHOLDERS $3.4B |
34 Synchrony36 •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
MIX OF PAYThe charts below highlight our 2021 efficiency ratio, return on assets, and 3-year total shareholder return (TSR) performance against our direct peers. These are key metrics we believe reflect our overall performance and fundamental strengths.
OUR NAMED EXECUTIVE OFFICERS
The executive officers whose compensation we discuss in this CD&A—our named executive officers (“NEOs”) for 2021—are Margaret M. Keane, Executive Chair and former CEO; Brian D. Doubles, President and CEO; Brian J. Wenzel, Sr., Executive Vice President, CFO; Thomas M. Quindlen, Executive Vice President and CEO—Diversified & Value and Lifestyle; Alberto B. Casellas, Executive Vice President and CEO—Health & Wellness; Carol D. Juel, Executive Vice President and Chief Technology and Operating Officer.
On March 31, 2021, the Board approved the appointment of Margaret Keane to Executive Chair of the Board of Directors of the Company with continued participation in the Company’s employee benefit plans and arrangements, with the same level of benefits that Ms. Keane received prior to such transition in the case of executive arrangements. The Board also appointed Brian Doubles to President and CEO. Transition pay changes for both executives are detailed in the “Summary Compensation Table” below.
At its May meeting, the Board of the Company approved the following changes to roles and responsibilities of our NEOs effective June 14, 2021:
��
Thomas Quindlen previously served as Executive Vice President and CEO-Retail Card from February 2014 to June 2021. Carol Juel previously served as Executive Vice President and Chief Information Officer from October 2011 to June 2021.
2022 ANNUAL MEETING AND PROXY STATEMENT / 37
COMPENSATION MATTERS
TARGET COMPENSATION
A majority of our NEOs’ compensation is performance-based and therefore at risk. The only fixed compensation paid is base salary, which represents approximately10% 12% of the CEO’s total direct compensation and no more than25% 22% of the other NEOs’ total direct compensation.
Below we illustrate the 2019 The 2021 mix of direct pay charts for our CEO and CFO andare shown below.
Below we illustrate the pay trend of our CEO pay.pay from 2017 through 2021 which reflects our consideration of market pay levels, performance, and transition to a newly appointed CEO in April 2021. CEO Direct Pay below for years 2017 through 2020 reflect target pay for Margaret Keane while CEO. The lower target pay in 2021 reflects Brian Doubles transition pay in his first year as CEO.
Synchrony • 2020 Annual Meeting and Proxy Statement 35
COMPENSATION MATTERS
ALIGN INCENTIVES WITH STOCKHOLDERS
The MDCC evaluates recent and historical financial and operational achievements against our peers, including return measures, growth metrics, efficiency ratio and TSR, among others. Performance during 2019 against our peers ranked first or second out of our direct peers for Efficiency Ratio and Return on Assets—two key metrics we believe reflect our annual performance.
|
The MDCC also considers multi-year historical performance that drives sustainable results and creates long-term stockholder value. During the five-year period from 2015 through 2019, our annualized earnings growth rate and annualized receivables growth rate ranked first and second, respectively, compared to our direct peers:
|
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36 Synchrony • 2020 Annual Meeting and Proxy Statement
COMPENSATION MATTERS
BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES
The MDCC has implemented the following measures as part of our executive compensation programs:
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Synchrony • 2020 Annual Meeting and Proxy Statement 37
COMPENSATION MATTERS
SYNCHRONY PROGRAM PRINCIPLES
Synchrony’s executive compensation program is intended to discourage excessive or imprudent risk taking while at the same time promoting and supporting the key principles outlined below. The program is also designed to be consistent with our safety and soundness and to identify, measure, monitor and control incentive compensation arrangements.
The key principles guiding this program and underlying the oversight of our program by Synchrony’s MDCC are:Management Development and Compensation Committee (“MDCC”) continue to be:
38/ 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
The consistent application of these design principles enables Synchrony to maintain compensation programs that are reasonable, balanced and effectively attract, retain, motivate and engage employees to achieve the mission, goals and objectives of Synchrony in a way that is compatiblealigned with effective risk management controls and long- termlong-term stockholder value. A robust performance review process is a critical element in all reward decisions.
KEY CONSIDERATIONS IN SETTING COMPENSATION
For 2019,During 2021, Synchrony’s compensation program—in conjunction with our culture, our flexibility in the way we usedwork, and new or expanded benefit programs supporting employees—withstood pressures of the followingtight labor market. While many companies experienced instability and untenable turnover in the second half of 2021, Synchrony’s turnover continued to remain below pre-pandemic levels.
The MDCC continued to use the considerations and philosophy outlined below in setting compensation for our NEOs:NEOs and did not change the overall philosophy for our pay programs. In light of the current labor market and to align NEO incentive pay in the context of 2021 performance the MDCC considered the substantial achievement of the Company’s improvement in cultural and strategic objectives as well as financial results when making decisions on pay for 2021. The details of the impact of these factors are provided in 2021 Compensation Elements, below.
Consistent and Sustainable Performance—Performance—
Our executive compensation program provides the greatest pay opportunity when executives demonstrate superior performance for sustained periods of time. It also rewards executives for executing our Company’s strategy through business cycles, so that the achievement of long-term strategic objectives is not compromised by short-term considerations. The emphasis on consistent performance affects annual salary and equity incentive compensation. With the prior year’s salary and grant serving as an initial basis for consideration, the final determinations for salary and grants are based on an assessment of an executive’s past performance and expected future contributions. Because current-year, past and sustainable performance are incorporated into compensation decisions, any percentage increase or decrease in the amount of total annual compensation tends to be more gradual than in a framework that is focused solely or largely on current-year performance.
Balanced Compensation ApproachMix—We strive to provide an appropriate mix of compensation elements to achieve a balance between short versus long-term compensation, cash versus equity incentive compensation and other features that cause the amounts ultimately received by the NEOs to appropriately reflect risk and risk outcomes. Cash payments primarily, but not exclusively, reward more recent performance, whereas equity awards encourage our NEOs to continue to deliver results over a longer period, of time, align our executives’ interests with the interests of our stockholders and serve as a retention tool. We believe that the compensation paid or awarded to our NEOs should be more heavily weighted toward rewards based on our Company’s sustained operating performance against both internal goals and relative to peers, as well as our stock price performance over the long-term.multiple years.
38 Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement/ 39
COMPENSATION MATTERS
Qualitative and Quantitative Factors—Quantitative formulas are not used exclusively in determining the amount of compensation. While quantitative calculations and formulas set the majority of funding and capmaximum award levels for our performance-based programs, the MDCC can use qualitative factors such as performance against cultural goals, improvement in the context ofcertain environmental, social and governance areas, the economic environment relative to other companies, risk considerations, execution of our strategic plan and leadership competencies/values. In 2021, the MDCC changed the annual incentive program to include 20% weighting on Strategy and Culture, the details of which are provided below.
Risk Mitigation—Our compensation program is balanced, focused on the long-term and takes into consideration the full range and duration of risks associated with an NEO’s activities. Under this structure, through clawbackclaw-back policies and other program features, the highest amount of compensation can be achieved through consistent superior performance but only within the limits of our stated risk appetite. In addition, significant portions of compensation are earned only over the longer term and may be adjusted during the vesting period for risk outcomes. This provides strong incentives for executives to manage our Company for the long-term while avoiding excessive risk takingrisk-taking in the short-term. As discussed further below under “Compensation Governance—Compensation and Risk,” Synchrony’s MDCC reviews the relationship between our risk management policies and practices and the incentive compensation provided to our NEOs.
Peer Company Pay—We also considered compensation levels and pay practices at our direct peers and other peer companies when setting target pay levels for 2019,2021, targeting median pay among peers with additional consideration based on the size, scope and impact of the executive’s role, market data, leadership skills, length of service and individual performance and contributions.performance. The peer group was selected to reflect publicly-tradedprovide a credible representation for assessing the competitiveness of executive compensation (both in amounts and structure) as well as for performance comparisons for annual and long-term incentives. Due to Synchrony’s unique business model, there are a limited number of direct peers (Alliance Data Systems, American Express, Discover, Capital One). Our peer group reflects publicly traded financial services companies headquartered in the United States considering assets, annual revenue and market capitalization equal to approximatelyone-half totwo-times Synchrony’s size. At the time of the peer group selection, Synchrony was at the peer 42nd40th percentile in assets, 52nd50th percentile in revenue and 45th42nd percentile in market capitalization, based on financial information from the most recent fiscal year prior to the meeting.capitalization.
For 2019,2021, upon the recommendation of Meridian Compensation Partners, LLC (“Meridian”), the MDCC’s new independent advisor,MDCC maintained the MDCC updated Synchrony’ssame peer group to include more data processors and consumer finance companies (Santander Consumer USA Holdings, Fidelity National Information Services, Alliance Data Systems, Fiserv, and Total System Services) and eliminate banks with limited consumer focus to help balance the mix of peers across the industry (i.e., The PNC Financial Services Group, Inc. and Comerica Incorporated). As a result, the list of peer companies used to set pay levels for 2019, as set forth below, better reflects our business model.2020, listed below.
CONSUMER FINANCE | DATA PROCESSING | COMMERCIAL BANKS | ||
American Express Company Capital One Financial Corporation Discover Financial Services | Alliance Data Fidelity National Information Services, Inc. Fiserv, Inc. Global Payments Inc. Mastercard Incorporated PayPal Holdings, Inc. Visa Inc. |
| ||
Citizens Financial Group, Inc. Fifth Third Bancorp Huntington Bancshares Incorporated KeyCorp M&T Bank Corporation Regions Financial Corporation |
40/ 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2021 SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION
At our 2021 annual meeting of stockholders, our investors supported the compensation for our named executive officers with 90% of the votes approving the advisory say-on-pay item. Our MDCC considers the results of our say-on-pay advisory vote as part of its review of our overall compensation programs and policies. In 2021, we continued our regular engagement with stakeholders regarding our compensation program. We also engaged with proxy advisory firms and sought regulatory perspectives.
BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES
The MDCC has implemented the following measures as part of our executive compensation programs:
Substantial portion of executive pay based on performance against goals set by the MDCC | No hedging or pledging of Company stock | |||||||||
Risk governance framework underlies compensation decisions | No employment agreements for executive officers | |||||||||
Stock ownership requirements for executive officers | No tax gross-ups for executive officers | |||||||||
Minimum vesting of 12 months for any options or stock appreciation rights | No discretion to accelerate the vesting of awards | |||||||||
Minimum vesting of 12 months for any restricted stock units (“RSUs”) | No cash buyouts of stock options or stock appreciation rights with exercise prices that are not in-the-money | |||||||||
Greater percent of equity grants in Performance Share Units (55%) which are performance-based over Restricted Stock Units (45%) | No payout of dividends on unvested equity prior to the vesting date | |||||||||
Compensation subject to claw-back in the event of misconduct, or due to “no fault” in the case of financial restatements for all NEOs | No backdating or repricing of stock option awards | |||||||||
Limited perquisites | ||||||||||
Peer company benchmarking, targeting median among peers with additional consideration based on the size, scope and impact of role, market data, leadership skills, length of service and both company and individual performance and contributions | ||||||||||
Double-trigger vesting of equity and long-term incentive plan awards upon change in control | ||||||||||
| Annual “Say-on-Pay” frequency | |||||||||
Independent compensation consultant advises the MDCC | ||||||||||
Include relative performance metric via Total Shareholder Return modifier on long-term performance awards linked to stockholder returns relative to peers |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement 39 / 41
COMPENSATION MATTERS
20192021 COMPENSATION ELEMENTS
The following summarizes the compensation elements used for 20192021 to reward and retain our NEOs.
BASE SALARY
Base salaries for our NEOs depend on a number ofseveral factors, including the size, scope and impact of their role, market data, leadership skills, length of service and individual performance and contributions.
The MDCC regularly reviews base salaries and benchmark data provided by the MDCC’s independent compensation consultant. In January 2019,During 2021, the MDCC determined to keep basekept salaries flat for all NEOs flat other than in connection with promotions. Promotion increases were granted topromotions for Brian Doubles to CEO and Brian Wenzel in connection with their appointmentsCarol Juel to Chief Technology and Operating Officer. Reflecting market for the CEO position and an appropriate transition from President to CEO, the MDCC increased Mr. Doubles salary from $800,000 to $1,000,000. With the increased responsibility for Ms. Juel leading the combined technology and CFO, respectively. Mr. Doubles’ annual baseoperations functions at Synchrony, the MDCC increased Ms. Juel’s salary was increased to $800,000 and Mr. Wenzel’s annual base salary was increasedfrom $625,000 to $650,000.
ANNUAL INCENTIVE PLAN
Annual incentive plan awards to our NEOs (and approximately 3,500 other employees) are made (or paid in cash) pursuant to Synchrony’s Annual Incentive Plan. The SynchronyPlan (“AIP”) with metric weightings and specific goals for threshold, target and maximum payout levels set in January or February each year. Target incentive opportunities are based on market practices for an officer’s role balanced against internal importance of the role.
In January 2021, the MDCC approved changes to the metrics for Synchrony’s Annual Incentive Plan is designedfrom prior years, adjusting the weighting slightly and removing efficiency ratio as a metric and adding a metric anchored to retainstrategy and motivate the officers and other employees of Synchrony by providing them with the opportunity to earn incentive payments based upon the extent to which specified performance goals have been achieved or exceeded during the year. Each NEO has a target incentive opportunity based on market practice for his/her role with range of payouts from 0% for below threshold performance to 150% of target for performance at or above goals set for maximum payout. culture.
Performance measures for 20192021 that were approved at the MDCC’s January meeting were based on threetwo weighted quantitative metrics each as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Theseand one qualitative metric outlined below. We believe, these metrics are designed to promote a balanced focus on profit, growth, risk, expenses, strategy and expenses:culture.
In 2019, the MDCC increased the weight Culture (20% weighting)—a qualitative metric that drives accountability to a framework focused on goals related to Synchrony’s culture and strategic results. The framework for this new metric for 2021 includes multiple areas of Net Earnings in our annual cash incentive awards under Synchrony’s Annual Incentive Planfocus including Strategic Impact, New Way of Working, Diversity, Equity and Inclusion, Employee Support and Engagement, and Social Responsibility which are closely aligned to 50% (from 45% in 2018 and 1/3 in 2017).
The MDCC established minimum, target and maximum performance levels based on Synchrony’s business plan and financial and economic outlook which are applied to an executive’s target annual incentive. After funding is calculated based onfor the industry. Additionally, goals considered (i) historical performance relative to the specific goals, the MDCC may adjust the funding or individual payouts based on views of Companyfor Synchrony and individual performance, risk outcomes and other considerations. The goals for target funding payout require (i) strong company performance in light of historical peer performance,our peers, (ii) achieving our operating plan and/or (iii) beating prior year performance after reflecting accounting or other governance changes.
The Annual Incentive Plan metrics, weights, and goals, actualapproved at the January 2021 MDCC meeting and performance and payouts for 2019against those goals are shown below.below:
Goals
|
Associated Payout
|
Calculation
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Metric
|
Weight
|
Min
|
Target
|
Max
|
Min
|
Target
|
Max
|
Performance
|
Payout
| |||||||||||||||||||||||||||||||||
Net
|
| 50%
|
|
| $2.5B
|
|
| $2.7B
|
|
| $2.9B
|
|
| 50%
|
|
| 100%
|
| 150%
| $2,905(3)
|
|
75
|
%
| |||||||||||||||||||
Receivables
|
| 25%
|
|
| 5%
|
|
| 7%
|
|
| 9%
|
|
| 50%
|
|
| 100%
|
| 150%
| 5.17%
|
| 13.6
| %
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Efficiency
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| 25%
|
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| 32%
|
|
| 31%
|
|
| 30%
|
|
| 50%
|
|
| 100%
|
| 150%
| 31.74%
|
| 15.7
| %
| |||||||||||||||||||
Funding Payout:
|
| 104.3
| %
|
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|
|
GOALS | ASSOCIATED PAYOUT | CALCULATION | ||||||||||||||||||
METRIC | WEIGHT | MIN | TARGET | MAX | MIN | TARGET | MAX | 2021 PERFORMANCE | 2021 PAYOUT | |||||||||||
PPNR minus Charge-Offs | 50% | 1,600 | 1,900 | 2,300 | 50% | 100% | 200% | $3,913 | 200% | |||||||||||
Average Receivables Growth | 30% | 0% | 1.5% | 4% | 50% | 100% | 200% | (1.55)% | 0% | |||||||||||
Strategy & Culture | 20% | Based on Framework | 50% | 100% | 200% | -- | 200% | |||||||||||||
Weighted Average: | 140% |
40 Synchrony42 •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
For 2019,The framework approved by the MDCC approved payouts atfor Strategy & Culture Metric and associated performance resulting in 40% funding for that metric is shown below:
EMPLOYEE AND COMMUNITY SUPPORT | EQUITY, DIVERSITY, AND INCLUSION | STRATEGIC IMPACT | NEW WAY OF WORKING | |||
• Great Places to Work Survey • Results—US #37, India #5, Philippines #2 • Pandemic Support for employees while maintaining customer service and employee safety • ESG Environmental Social and Governance continued investments and transparency resulting in media recognition • Education as an Equalizer to provide better opportunities in under-represented communities | • Pay Equity—annual 3rd party pay equity analysis of both base salary and bonus, along with targeted investments resulting in 100% pay equity for employees across genders globally and across racial/ethnic groups in the U.S. • VP and ExecutiveRepresentation improvement in Black, LatinX and Female groups • US VP Hiring—significant improvements in 2021 VP hiring in each of Black and LatinX, and Female groups, supporting pipeline for executive representation • Supplier Diversity—300% increase in diverse suppliers included in requests for proposal | • CEO Succession • Organizing for Growth company reorganization • Stakeholder Engagement first “Investor Day” • Expanded Products offered to include Buy-Now-Pay-Later options including “SetPay” • Renewals/New ProgramLaunches—TJX, AE, Ashley, Citgo, Google, ShopHQ • Cost Efficiencies—Completed planned strategic cost actions realizing approximately $200 million in productivity savings • Improved Capabilities in Fraud, Collections, and Authentication to support strong financial performance | • Employee Flexibility viewed as industry-leading approach • Hybrid working model enacted based on employee feedback supports both working from home and working in a physical location • Employee Satisfaction 93% satisfied with company approach • Expanded applicant pools by 25% |
Based on the funded amountcalculation of performance against the financial goals (i.e., 104.3%PPNR minus charge-offs and average receivables growth) as well as qualitative performance against the strategy and culture framework approved by the MDCC, the aggregate performance and payout for the annual incentive plan was 140% of target)target. The MDCC awarded each NEO 140% of their target annual incentive for five of the NEOs and at 120% for Mr. Greig in recognition of his performance.2021.
Name of Executive
| 2019
| 2019 Annual
| |||||||||||
NAME OF EXECUTIVE | 2021 ANNUAL INCENTIVE TARGET | 2021 ANNUAL INCENTIVE PAYOUT | |||||||||||
Margaret Keane
| $2,350,000
| $2,451,000
| $2,000,000 | $2,800,000 | |||||||||
Brian Doubles
| $1,200,000
| $1,251,600
| $1,750,000 | $2,450,000 | |||||||||
Henry Greig
| $625,000
| $750,000
| |||||||||||
Neeraj Mehta
| $735,000
| $766,600
| |||||||||||
Brian Wenzel | $700,000 | $980,000 | |||||||||||
Tom Quindlen
| $850,000
| $886,600
| $850,000 | $1,190,000 | |||||||||
Brian Wenzel
| $650,000
| $678,000
| |||||||||||
Alberto Casellas | $625,000 | $875,000 | |||||||||||
Carol Juel | $650,000 | $910,000 |
2021 LONG-TERM INCENTIVE (LTI) AWARDS
Our executives are eligible to receive long-term (equity) awards which are intended to provide compensation that supports multiple goals including: (i)including to: 1) motivate and reward long-term performance, (ii)2) reinforce an ownership mentality, (iii) align3) aligns our executives with stockholdershareholder interests, (iv) provide4) provides retention, and (v) mitigate5) mitigates risk through long-term ownership and stock holdings.
In 2018,2021, NEOs received 35% RSUs, 15% stock options,45% Restricted Stock Units (RSUs) and 50% PSUs. For 2019,55% Performance Share Units (PSUs). Based on industry trends and stakeholder feedback, starting in 2020 the MDCC increased the mix of PSUs to 55% to further align the interest of management with metrics designed to reflect long-term incentives was 50% RSUs and 50% PSUs.success of the Company beyond increasing stock price.
RESTRICTED STOCK UNITS (RSUs)(RSU)—50%45% OF LTI GRANT
The NEOs received annual grants of RSUs in 2019.early 2021. The amount of RSUs awarded to each NEO is based on target incentive levels for each executive, based on the competitive market for their role and subject to adjustment by the MDCC. In 2019, to reflect market practices,2021, the MDCC changedmaintained the vesting period for RSUs from five years to three years. Accordingly, the 2019 RSU awards each vestat 1/3 per year over three years. Synchrony grants RSUs to reward and retain executives by offering them the opportunity to receive shares of Synchrony stock on the date the restrictions lapse as long as they continue to be employed by the Company.
2022 ANNUAL MEETING AND PROXY STATEMENT / 43
COMPENSATION MATTERS
PERFORMANCE SHARE UNITS (PSUs)(PSU)—50%55% OF LTI GRANT
Under the Synchrony Financial 2014 Long-Term Incentive Plan, we issued performance-based, long-term PSUs in 20192021 that vest based on financial performance over the 2019–2021 (three-year)2021-2023 (3-year) performance period. The PSUs will be paid in shares of common stock if we achievepre-defined goals relating to our cumulative annual diluted earnings per common share (EPS) and average return on equity (ROE), each weighted 50%. The MDCC selected and approved the metrics and the goals for threshold, target and stretch with the ultimate award ranging from 0% (if threshold performance is not achieved) up to 150% for achieving stretch performance levels.
Target payout levels set for the 2019–20212021–2023 performance period require increased normalized EPS growth over the three-year3-year PSU grant period and above median return on equity performance relative to recent historical peer performance levels. Performance below threshold results in forfeiture of the share units allocated to the corresponding performance measure. Dividend equivalents are accrued but not paid until the end of the performance period based on the actual number of shares earned. These performance metrics align the interests of our executives with the interests of stockholders by encouraging growth while ensuring that growth does not come at the cost of lower returns on assets. Grants of PSUs will vest at the end of the three-year period in the event performance conditions are met.
In 2019, the MDCC also addedThe 2021 PSU grants continue to include a TSRTotal Shareholder Return (TSR) modifier to the PSUsof +/-20% based on our 2019TSR performance relative to peers in responsepeers. The peer group used to stakeholder feedback.determine the modifier is the same peer group used to set executive pay levels. The details of how the modifier impacts the final payout calculations are shown below:
PERFORMANCE | MODIFIER* | |||
Bottom Quartile | 80% | |||
Median | No Impact | |||
Top Quartile | 120% |
* Any performance between bottom quartile and median or median and top quartile is linearly interpolated.
Below is a summary of the equity grants made to NEOsexecutives in 2019:2021:
Name of Executive
| Restricted
| Performance
| Total
| |||
Margaret Keane
| $4,000,013
| $4,000,014
| $8,000,027
| |||
Brian Doubles
| $1,200,044
| $1,200,044
| $2,400,088
| |||
Henry Greig
| $625,017
| $625,018
| $1,250,035
| |||
Neeraj Mehta
| $978,831
| $588,013
| $1,566,844
| |||
Tom Quindlen
| $717,820
| $680,005
| $1,397,825
| |||
Brian Wenzel
| $642,530
| $642,531
| $1,285,061
|
Synchrony • 2020 Annual Meeting and Proxy Statement 41
COMPENSATION MATTERS
LONG-TERM PERFORMANCE AWARDS (PSUs)—2017–2019
In 2017, the MDCC granted performance-based, long-term PSUs that vested based on financial performance over the 2017–2019 performance period. The metrics used during the three-year cycle were chosen to balance executives’ focus on profitability, returning capital to investors, and growing the company. Target payouts set for the 2017–2019 performance period required 6.5% growth of EPS over the period which was above historical peer growth levels at that time and 2.3% return on assets which was approximately 75th percentile of historical peer performance at that time.
The charts below show (i) the performance over the last three years against goals approved at the beginning of the period and (ii) adjustments to GAAP that neutralize the impact of extraordinary items (such as the favorable corporate tax rate change for 2018):
2017–2019 Performance
| ||||||||||||||||||||
Goals
| Associated Payout
| Calculation
| ||||||||||||||||||
Metric
| Weight
| Min
| Target
| Max
| Min
| Target
| Max
| 2019
| Payout
| |||||||||||
Cumulative EPS | 50% | $8.13 | $9.23 | $10.43 | 50% | 100% | 150% | $9.26 | 50.5% | |||||||||||
Return on Assets
| 50% | 1.8% | 2.3% | 2.8% | 50% | 100% | 150% | 2.3% | 52.1% | |||||||||||
Weighted Average:
| 102.6% |
Adjustments to GAAP
| ||||||||
Metric | GAAP | Tax Impact | Walmart Impact(1) | Adjusted
| ||||
Cumulative EPS | $11.72 | ($1.19) | ($1.27) | $9.26 | ||||
Return on Assets
| 2.8%
| (0.3%)
| (0.2%)
| 2.3%
|
|
NAMED EXECUTIVE OFFICER PROMOTIONS FOR 2019
In connection with Mr. Doubles’ appointment as President, his annual base salary was increased to $800,000 and his target incentive level for purposes of annual awards, includingnon-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan, as well as RSUs and PSUs awarded under the Synchrony Financial 2014 Long-Term Incentive Plan, was increased, in each case, to 150% of his base salary.
In connection with Mr. Wenzel’s appointment as Executive Vice President and CFO, his annual base salary was increased to $650,000 and his target incentive level for purposes of annual awards, includingnon-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan, as well as RSUs and PSUs awarded under the Synchrony Financial 2014 Long-Term Incentive Plan, was increased, in each case, to 100% of his base salary.
In addition, and also in connection with their promotions, Mr. Doubles and Mr. Wenzel each received equity grants that resulted in total 2019 awards consistent with their new roles. The grants were made on the same terms and conditions as the grants that were made to Mr. Doubles and Mr. Wenzel on March 1, 2019.
42 Synchrony • 2020 Annual Meeting and Proxy Statement
COMPENSATION MATTERS
NAME OF EXECUTIVE
| RESTRICTED STOCK UNITS
| PERFORMANCE
|
| |||||||||||||||
Margaret Keane | $4,050,000 | $4,950,000 | $9,000,000 | |||||||||||||||
Brian Doubles | $2,362,505 | $2,887,510 | $5,250,015 | |||||||||||||||
Brian Wenzel | $1,170,000 | $1,430,000 | $2,600,000 | |||||||||||||||
| $1,035,000 | $1,265,000 | $2,300,000 | |||||||||||||||
Alberto Casellas | $945,000 | $1,155,000 | $2,100,000 | |||||||||||||||
Carol Juel | $900,068 | $1,100,040 | $2,000,108 |
44/ 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
2019-2021 LONG-TERM PERFORMANCE AWARDS (PSUS) PAYOUTS
In 2019, the MDCC granted performance-based, long-term Performance Share Units (PSUs) that vested based on financial performance over the 2019–2021 performance period. The metrics used during the 3-year cycle were chosen to balance executives’ focus on profitability, returning capital to investors, and growing the Company. Target payouts set for the 2019–2021 performance period required a 6.5% annualized growth in EPS over the period excluding the impact of a new accounting standard called the current expected credit losses methodology (CECL) which estimates allowances for credit losses. Target payouts also required a 17.5% return on equity which was top quartile of historical peer performance at that time. The charts below show (i) the performance over the last three years against goals approved at the beginning of the period and (ii) overall negative adjustments to GAAP that neutralized the impact of Walmart, Gap, and BP reserve releases and (iii) neutralizing the impact of new portfolios Verizon and Venmo and (iv) impact of other one-time items including restructuring savings and new deals.
GOALS | ASSOCIATED PAYOUT | CALCULATION | ||||||||||||||||
METRIC | WEIGHT | MIN | TARGET | MAX | MIN | TARGET | MAX | 2019-2021 PERFORMANCE | 2019-2021 PAYOUT | |||||||||
Cumulative EPS | 50% | $10.50 | $12.00 | $13.50 | 50% | 100% | 150% | $13.86 | 150% | |||||||||
Return on Equity | 50% | 15.0% | 17.5% | 20.0% | 50% | 100% | 150% | 20.5% | 150% | |||||||||
Weighted Average: | 150% | |||||||||||||||||
TSR Adjustment Factor: | 120% | |||||||||||||||||
Total Payout: | 180% |
TSR ADJUSTMENT FACTOR CALCULATION
For the 2019-2021 three-year performance period, the Company’s Total Shareholder Return was at the 80th percentile of peers, resulting in a TSR adjustment factor of 120%.
2021 CEO PERFORMANCE AND OTHER COMPANY ACHIEVEMENTS
In April 2021, Brian Doubles took over as President and CEO after the Company successfully completed the CEO succession process and he subsequently led the Company through substantial re-organization to better align company resources with evolving partner and customer expectations. During 2021, the Company delivered very strong performance across key financial metrics, including record Purchase volume of $166 billion, Net earnings of $4.2 billion / EPS of $7.34, ROA of 4.5% and strong credit performance, all while completing our planned strategic cost actions which realized approximately $200 million in productivity savings. Under his leadership, the company launched a new first-of-its-kind health and wellness credit card program with Walgreens and drove significant growth in the Company’s Venmo and Verizon programs. We also completed our first large-scale investor day and received very positive feedback from stakeholders. Synchrony’s leadership drove the company’s priorities for 2021 by (i) expanding our business (ii) transforming how we work and (iii) delivering outstanding customer experience, as outlined below.
Expanding our Business—Last year we launched 36 new partnership programs and signed 38 renewals at attractive returns, launched a large-scale partner program with Walgreens with fully digital integration across all channels, completed the acquisition of Allegro Credit in the healthcare space, entered into partnerships with Clover and Epic Systems as new distribution channels for our products and created a strategic partnership with Skipify to transform digital commerce with our partners.
2022 ANNUAL MEETING AND PROXY STATEMENT / 45
COMPENSATION MATTERS
Transforming How We Work—The company completed a re-organization to better align company resources with evolving partner and customer expectations. Our CEO and his leadership team also continued to ensure we are a truly great place to work for all evidenced by our Great Place to Work ranking of 37th on the Fortune 100 Best Places to Work including top 100 results in areas of (i) Best Companies for Multicultural Women, (ii) Best Companies for Executive Women, (iii) Best Companies for Dads, (iv) Best Place to Work for Disability Inclusion and LGBTQ Equality, and (v) Great Place to Work for India Women. During 2021, Synchrony sustained award-winning financial wellness focused on diversity and inclusion with Payday winning the 2021 Adweek Best Short-Form Fiction award, the America Saves Designation of Savings Excellence Award for America Saves Week, and our executive sponsorships of Millie magazine and Little Women. We also achieved our year-over-year improvement goal for our target demographics by increasing representation of Blacks and Hispanics at the Vice President+ level in the U.S. and increasing the number of females in executive level roles globally.
Delivering Outstanding Customer Experience— In 2021, Synchrony had a number of digitally-driven enhancements to its customer servicing, including account alerts, expedited registration and several other customer service features. Our enhanced digital experience handled approximately 65% of payments in 2021. We leveraged our smart and flexible technology foundation to drive significant advancements in customer experience through the continued expansion of Synchrony’s Application Programming Interface capabilities including both dApply and digital Buy functionalities. This is transforming how we interact and innovate with our partners and is enabling us to quickly launch new product and capabilities as customer needs evolve and opportunities arise.
OTHER COMPENSATION PROGRAMS AND PRACTICES
MR. DOUBLES
In addition to Mr. Doubles’ contributions toward our Company’s objectives described above, Mr. Doubles effectively transitioned to his new role as President and his impact in this role was positively felt across the Company. Mr. Doubles immersed himself in his new responsibilities and played a key leadership role in driving growth, new deals and making key investment decisions, positively impacting all three platforms. Mr. Doubles has had significant influence over our strategic growth initiatives and direct to consumer strategy, leading investment decisions to support diversification and launch the Synchrony Mastercard program. Beyond his impacts to the business results, Mr. Doubles led efforts to improve talent and strengthen our culture, focusing on diverse talent recruitment, performance management and driving adoption of “Acting as An Owners” mindset. Mr. Doubles created and executed a robust development plan to ensure he continued building relationships with key external stakeholders (partners, regulators, stockholders, government relations) and employees across the Company.
MR. WENZEL
Mr. Wenzel transitioned from Deputy CFO to CFO very well. In addition to his contributions toward our Company’s objectives described above, Mr. Wenzel provided strong leadership of our finance organization, including driving excellent financial discipline across the business and leading his team to add value in new ways; playing a key role in new program wins and renewals; supporting growth and strategic investment opportunities; maintaining strong controllership and risk management; driving strong deposit growth; increasing Synchrony’s dividend and share repurchase program; maintaining strong investor relations; further expanding his relationships with our key customers; and promoting career development and diversity.
MR. GREIG
In addition to Mr. Greig’s contributions toward our Company’s objectives described above, Mr. Greig provided strong leadership of the Credit and Capital Management organization, including delivering on critical credit loss and fraud metrics while supporting strategic business initiatives to drive smart growth and enhance the consumer experience. This performance led to improved net losses and reserve metrics compared to the operating plan, which had a direct positive impact on the Company’s net earnings in 2019.
44 Synchrony • 2020 Annual Meeting and Proxy Statement
COMPENSATION MATTERS
Mr. Greig led initiatives to acquire new data and apply machine learning to improve underwriting. He and his team launched and executed more than 1,000 fraud, authentication, account acquisition, account management, and collections strategies. Mr. Greig continues to work cross-functionally with IT, Enterprise Customer Engagement, and Marketing to leverage new technology to transform credit lending and improve the experience for the customer. Mr. Greig also helped prepare the Company to implement the Current Expected Credit Losses (CECL) model, a new credit loss accounting standard.
MR. MEHTA
In addition to Mr. Mehta’s contributions toward our Company’s objectives described above, Mr. Mehta provided strong leadership of the Payment Solutions platform, including growing the platform within approved risk tolerances and delivering on critical growth metrics; retaining and deepening key partnerships and adding new relationships with major retailers and merchants; and continuing to drive transformation, optimization and commercial discipline. Mr. Mehta is also responsible for leading innovative new products and markets like unsecured installment lending,e-commerce solutions, gifting and more. He contributes as an external thought leader across the industry. He is a champion for diversity inclusion, talent development, and recruitment inside and outside the Company.
MR. QUINDLEN
In addition to Mr. Quindlen’s contributions toward our Company’s objectives described above, Mr. Quindlen provided strong leadership of the Retail Card sales platform, including growing the platform within approved risk tolerances and delivering on critical growth metrics; building strong relationships with existing Retail Card partners and adding new partnerships as well, including with Venmo and Verizon; leading Retail Card’s risk culture and tone at the top; driving engagement with and the development of the Retail Card organization’s talent; and driving diversity through hiring and promotion practices.
OTHER COMPENSATION PROGRAMS
SYNCHRONY FINANCIAL
RESTORATION PLAN
NEOs participate in the Synchrony Financial Restoration Plan, which provides retirement benefits that mirror the Company’s qualified 401(k) plan. The plan provides a continuation of Company contributions on salary and bonus that would have been made to our 401(k) plan
but for various limitations imposed by the Internal Revenue Code of 1986 (the “Code”), along with additional Company contributions that cannot be made to the 401(k) plan. The plans include Company contributions of (i) a 3% core contribution, (ii) a 4% match, and (iii) as of December 31, 2019, up to 4% additional contribution in 2019 for former participants of GE pension plans. The Restoration Plan account is forfeited if an executive leaves voluntarily prior to age 60. For 2019, each of our NEOs received contributions to his or her Restoration Plan account, which are reported in the “All Other Compensation” column in the 2019 Summary Compensation Table.
OTHER COMPENSATION
In 2019, Synchrony provided certain executive officers with (i) financial counseling and/or tax preparation services, (ii) supplementary life insurance, and (iii) annual physical examinations, which are reported in the “All Other Compensation” column in the 2019 Summary Compensation Table. The supplementary life insurance policies are intended to maintain benefits that existed for certain executives as GE employees prior to the completion of oursplit-off from GE and in lieu of life insurance benefits that are provided to other Synchrony employees. These policies were frozen in value and participation upon Synchrony’s IPO. While Synchrony could have “bought out” the value of these polices upon IPO, the Company chose to freeze the insurance amount and maintain the policies to help retain senior management through Synchrony’s transition away from GE. The policies require an executive to stay with Synchrony through age 60 to receive the full value of the benefit. The face value of the supplementary life insurance policies for all participants is less than the value of the standard life insurance program for Synchrony employees.
SYNCHRONY DEFERRED COMPENSATION PLAN
Our Deferred Compensation Plan does not pay an “above-market” rate of interest and is available to a select group of management and highly compensated employees of Synchrony and any of its participating affiliates. Under the plan, eligible employees may elect to defer up to 80% of their base salary and bonus. The plan administrator will designate two or more investment benchmarks which participants can choose between to determine the rate of return or loss applicable to their deferred compensation amounts. Participants can also make elections regarding the time and form of payment of their deferral under the plan, in accordance with Section 409A of the Code.Internal Revenue Code (the “Code”). We have established notional unfunded accounts attributable to participants’ deferrals, which will be adjusted based on participants’ investment elections.
OTHER BENEFITS
In addition to standard health and welfare benefits available to other Synchrony employees, in 2021, Synchrony provided certain executive officers with (i) financial counseling and/or tax preparation services, (ii) supplementary life insurance, and (iii) annual physical examinations, which are reported in the “All Other Compensation” column in the 2021 Summary Compensation Table. The supplementary life insurance policies maintain benefits that existed for certain executives as GE employees prior to the completion of our split-off from GE and in lieu of life insurance benefits that are provided to other Synchrony employees. These policies were frozen in value and participation upon Synchrony’s IPO. While Synchrony could have “bought out” the value of these polices upon IPO, the Company chose to freeze the insurance amount and maintain the policies to help retain senior management through Synchrony’s transition away from GE. The policies require an executive to stay with Synchrony through age 60 to receive the full value of the benefit. The face value of the supplementary life insurance policies for all participants is less than the value of the standard life insurance program for Synchrony employees. Brian Doubles voluntarily forfeited the supplementary life insurance program and transitioned to the standard group term life plan offered to other employees when he became CEO in 2021.
Synchrony46/ • 2020 Annual Meeting and Proxy Statement 45 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
OTHER COMPENSATION PRACTICES
STOCK OWNERSHIP GUIDELINES
Our Stock Ownership Guidelines require the Company’s Executive Chair, President & CEO President and Executive Vice Presidents to own significant amounts of our common stock, helping to ensure alignment of executives’ interests with those of our stockholders. The enhanced stock ownership guideline for our President & CEO and our Executive Chair, is six times base salary and for our President is five times base salary. The stock ownership guideline for Executive Vice Presidents, including the other four NEOs, is three times base salary. The guidelines are to be met within five years of being subject to the policy and/or promotion. For the purposes of our stock ownership guidelines, all shares of common stock, RSUs and phantom stock units held by our executives are credited toward ownership levels. All of our NEOs’ stock ownership far exceeds the ownership guidelines, aligning our executive team with our stockholders.guidelines. Based on our closing stock price on February 28, 2020March 2, 2022 of $29.10,$39.76, our NEOs had the following ownership base-salary multiples:
EXECUTIVE |
MULTIPLE |
AS OF MARCH 2, 2022 | ||||||||
Margaret Keane | 6.0X | 30.8X | ||||||||
Brian Doubles | 6.0X | 13.9X | ||||||||
Brian Wenzel | 3.0X | |||||||||
| ||||||||||
| 6.3X | |||||||||
Tom Quindlen | 3.0X | 7.9X | ||||||||
Alberto Casellas | 3.0X | |||||||||
Carol Juel | 3.0X | 6.5X |
ANTI-HEDGING AND
ANTI-PLEDGING RESTRICTIONS
Our Code of Conduct, which applies to all of our employees (including officers) and directors, includes anti-hedging provisions that prohibit all employees and directors from engaging in transactions in derivatives of or short-selling of Synchrony securities, including buying and writing options. We also maintain an anti-pledging policy that prohibits employees and directors from pledging activity in Synchrony securities.
CLAWBACK POLICY
In 2018, the MDCC expanded the existing clawback policy beyond conduct detrimental to the Company, to include “no fault” financial restatements for all of our named executive officers. Under the revised policy, in the event that the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will take action to recover from any current or former executive officer who received any annual or long-term incentive compensation paid, awarded, or granted during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous data, in excess of what would have been paid to the executive officer under the accounting restatement.
Additionally, under the Company’s policy, if it is determined that an employee at or above a designated executive grade under the Company’s compensation structure has engaged in conduct detrimental to the Company, the Bank or any of the Company’s other subsidiaries, the MDCC or, in the case of a Bank employee, the Bank’s Development and Compensation Committee, may take a range of actions to remedy the misconduct, prevent its recurrence, and impose such discipline as would be appropriate. Discipline may vary depending on the facts and circumstances, and may include, without limitation, (a) termination of employment, (b) initiating an action for breach of fiduciary duty, (c) reducing, cancelling or seeking reimbursement of any paid or awarded compensation, and (d) if the conduct resulted in a material inaccuracy in the Company’s financial statements or performance metrics that affects the executive’s compensation, seeking reimbursement of any portion of incentive compensation paid or awarded to the executive that is greater than what would have been paid or awarded if calculated based on the accurate financial statements or performance metrics. If it is determined that an executive engaged in fraudulent misconduct, the MDCC or, in the case of a Bank employee, the Bank’s Development and Compensation Committee, will seek such reimbursement. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities, or as otherwise required by any agreement with a stock exchange on which the Company’s securities are listed.
46 Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement/ 47
COMPENSATION MATTERS
2019 RISK REVIEW PROCESS
Synchrony’s risk management culture is strongly supported by a thorough risk review process that focuses on whether the risks we take are within our risk appetite framework. In 2019,2021, working cross-functionally, our CEO and senior executives from our risk and human resourceresources teams identified the individuals considered to be Material Risk Takers (“MRTs”) or Material Risk Controllers (“MRCs”). These individuals wereare required to have annual goals and objectives specifically tied to risk and compliance standards. As part of the annual process, our Control Function Leaders, our CEO, our Audit Committee, MDCC and Risk Committee conducted assessments on MRTs and MRCs, which took into consideration MRT/MRC behavior in relation to their annual goals and objectives as well as any adverse risk outcomes during the year. These assessments are included in each MRT/MRC’s annual performance evaluation.evaluations. By conducting these risk review processes as well as maintaining full transparency on all of our risk management policies and procedures, we believe that we have been able to discourage inappropriate risk taking.
REVIEW OF NEO INCENTIVE COMPENSATION TO NEOs RELATED TO RISK MANAGEMENT
In 2019,2021, the MDCC reviewed the relationship between our risk management policies and practices and the incentive compensation provided to our NEOs to confirm that their incentive compensation appropriately balances risk and reward and determined that our compensation policies and practices are not reasonably likely to have a material adverse effect on our Company. The MDCC met with the CRO to discuss the annual risk assessment conducted with respect to incentive compensation plans in which all employees (including the NEOs) participate, including whether these arrangements had any features that might encourage excessive risk taking that could threaten the value of the Company. The CRO also discussed the risk mitigation factors reviewed in the annual risk assessment, including the balance between financial andnon-financial measures as well as the short-term and long-term oriented measures. The MDCC also continues to monitor a separate, ongoing risk assessment by senior management of our broader employee compensation practices consistent with the federal banking regulators’ guidance on sound incentive compensation policies.practices.
RISK REVIEW OF INCENTIVE PLANS
Each year, we conduct a risk analysis on each of our incentive plans using aplans. In 2021, we hired an outside independent consultant to conduct this risk analysis tool. Thisassessment. The analysis covered 100% of our incentive eligible population and allowed us to gaugeunderstand the degree to which our plans contribute to excessive risk taking. The tool looks at six assessment categories (incentive design, strategic alignment/goal setting, pay opportunity, process, monitoring and administration) for each plan and assigns a rating score basedBased on results. All ofthis review, all our incentive plans were rated such that they conform to or exceed key standards for risk management. Additionally, all incentive plans including any changes are reviewed each year and approved by our Chief Risk and Chief Human Resource Officers.
We also conduct a risk analysis of third-party incentive plans at our clients and vendors related to our credit products. This assessment also covers design, strategic alignment/goal setting, pay opportunity, process, monitoring and administration. Each of the third-party incentive plans reviewed were rated such that they exceed risk management standards.
ROLE OF INDEPENDENT
COMPENSATION CONSULTANT
Under its charter, the MDCC has the authority to retain such compensation consultants, outside counsel and other advisors as the MDCC may deem appropriate in its sole discretion. In 2019,2021, the MDCC engaged Meridian to provide advice regarding market pay levels, strong pay practices and other executive compensation matters. Meridian also provided advice to the Nominating and Corporate Governance Committee regarding director compensation. Meridian does not provide any other services to the MDCC or to Synchrony. The MDCC has determined that Meridian is independent and does not have any conflicts of interest.
Synchrony • 2020 Annual Meeting and Proxy Statement 47
COMPENSATION MATTERS
TAX CONSIDERATIONS
Prior to December 22, 2017 when the Tax Act was signed into law, Section 162(m) of the Code provided that no U.S. income tax deduction was allowable to a publicly held corporation fornon-performance-based compensation in excess of $1 million paid to a “covered employee” (generally, the NEOs other than the CFO).
The Tax Act includes numerous changes to existing law, including (1) eliminating the exclusions for commissions or performance-based compensation paid to “covered employees” under Code Section 162(m), (2) expanding the definition of “covered employee” to include anyone serving as CFO or CEO at any point during the year, as well as the three most highly compensated officers, and (3) providing that status as a covered employee continues to apply if the person was ever a covered employee for years ending after December 31, 2016. The Act is effective for tax years beginning after 2017, though it includes a transition rule for compensation paid pursuant to certain written binding contracts in place on November 2, 2017 which are not materially modified. Where we believe awards or payments are eligible for relief under this transition rule, our policy generally is to preserve that eligibility.
Our policy generally had been to seek to qualify various elements of the compensation payable to executives as “performance-based compensation” to the extent possible. However, as described above, the exemptions from Section 162(m)’s deduction limit have been eliminated as a result of the Tax Act, effective for taxable years beginning after December 31, 2017, such that all compensation paid to our covered executive officers (including the CFO) in excess of $1 million will not be deductible unless it qualifies for the transition relief referenced above.
Although the MDCC has historically intended to structure various elements of the compensation payable to executives in a manner intended to qualify as “performance-based compensation” for purposes of Section 162(m), because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the proposed regulations issued thereunder, including the uncertain scope of the transition relief under the Tax Act, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) in fact will satisfy such requirements. Further, the MDCC reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with our business needs.
The MDCC of the Board of Directors of Synchrony have reviewed and discussed the Compensation Discussion and Analysis with Synchrony’s management, and based on our review and discussions with management, we recommend to Synchrony’s Board of Directors that this Compensation Discussion and Analysis be included in this proxy statement.
Respectfully submitted by the MDCC of the Board.
Richard C. Hartnack,Laurel J. Richie, Chair
Fernando Aguirre
Jeffrey G. Naylor
Laurel J. RichieEllen M. Zane
48 Synchrony/ • 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
20192021 EXECUTIVE COMPENSATION
The following table contains 20192021 compensation information for our NEOs.
20192021 SUMMARY COMPENSATION TABLE
Name | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Comp.(3) | All Other Comp.(4) | Total | ||||||||||||||||||||||||||||||||
Margaret | 2019 | $ | 1,175,000 | $0 | $ | 8,000,027 | $0 | $ | 2,451,000 | $ | 543,281 | $ | 12,169,308 | |||||||||||||||||||||||||||
Keane | 2018 | $ | 1,175,000 | $0 | $ | 6,800,052 | $ | 1,200,023 | $ | 2,681,400 | $ | 592,663 | $ | 12,449,138 | ||||||||||||||||||||||||||
2017 | $ | 1,168,654 | $0 | $ | 7,800,060 | $ | 1,199,408 | $ | 2,655,500 | $ | 701,881 | $ | 13,525,503 | |||||||||||||||||||||||||||
Brian | 2019 | $ | 766,575 | $0 | $ | 2,400,088 | $0 | $ | 1,251,600 | $ | 198,117 | $ | 4,616,381 | |||||||||||||||||||||||||||
Doubles | 2018 | $ | 750,000 | $0 | $ | 1,700,038 | $ | 300,006 | $ | 855,800 | $ | 262,794 | $ | 3,868,638 | ||||||||||||||||||||||||||
2017 | $ | 750,000 | $0 | $ | 2,164,536 | $ | 205,402 | $ | 847,500 | $ | 228,046 | $ | 4,195,484 | |||||||||||||||||||||||||||
Henry | 2019 | $ | 625,000 | $0 | $ | 1,250,035 | $0 | $ | 750,000 | $ | 147,191 | $ | 2,772,226 | |||||||||||||||||||||||||||
Greig | 2018 | $ | 625,000 | $0 | $ | 1,062,566 | $ | 187,506 | $ | 713,100 | $ | 173,069 | $ | 2,761,241 | ||||||||||||||||||||||||||
Neeraj | 2019 | $ | 735,000 | $0 | $ | 1,566,844 | $0 | $ | 766,600 | $ | 226,793 | $ | 3,295,237 | |||||||||||||||||||||||||||
Mehta | 2018 | $ | 735,000 | $0 | $ | 1,245,204 | $ | 293,646 | $ | 827,200 | $ | 237,802 | $ | 3,338,852 | ||||||||||||||||||||||||||
Tom | 2019 | $ | 850,000 | $0 | $ | 1,397,825 | $0 | $ | 886,600 | $ | 266,319 | $ | 3,400,744 | |||||||||||||||||||||||||||
Quindlen | 2018 | $ | 850,000 | $0 | $ | 1,182,503 | $ | 215,347 | $ | 941,300 | $ | 281,976 | $ | 3,471,126 | ||||||||||||||||||||||||||
2017 | $ | 840,500 | $0 | $ | 1,152,068 | $ | 215,235 | $ | 932,300 | $ | 342,842 | $ | 3,482,945 | |||||||||||||||||||||||||||
Brian | 2019 | $ | 526,329 | $0 | $ | 1,285,061 | $0 | $ | 678,000 | $ | 101,632 | $ | 2,591,022 | |||||||||||||||||||||||||||
Wenzel |
NAME | YEAR | SALARY | BONUS(1) | STOCK AWARDS(2) | OPTION AWARDS(3) | NON- EQUITY INCENTIVE PLAN COMP. (4) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMP. EARNINGS (5) | ALL OTHER COMP. (6) | TOTAL | |||||||||||||||||||||||
Margaret Keane(7) | 2021 | $1,175,000 | $0 | $9,000,000 | $0 | $2,800,000 | $0 | $525,981 | $13,500,981 | |||||||||||||||||||||||
2020 | $1,175,000 | $2,232,500 | $9,000,048 | $0 | $0 | $0 | $532,965 | $12,940,513 | ||||||||||||||||||||||||
2019 | $1,175,000 | $0 | $8,000,027 | $0 | $2,451,000 | $0 | $543,281 | $12,169,308 | ||||||||||||||||||||||||
Brian Doubles | 2021 | $950,685 | $0 | $5,250,015 | $0 | $2,450,000 | $0 | $229,647 | $8,880,347 | |||||||||||||||||||||||
2020 | $800,000 | $1,140,000 | $3,000,035 | $0 | $0 | $0 | $241,676 | $5,181,711 | ||||||||||||||||||||||||
2019 | $766,575 | $0 | $2,400,088 | $0 | $1,251,600 | $0 | $198,117 | $4,616,381 | ||||||||||||||||||||||||
Brian Wenzel | 2021 | $700,000 | $0 | $2,600,000 | $0 | $980,000 | $0 | $150,151 | $4,430,151 | |||||||||||||||||||||||
2020 | $653,005 | $665,000 | $1,800,039 | $0 | $0 | $0 | $146,334 | $3,264,378 | ||||||||||||||||||||||||
2019 | $526,329 | $0 | $1,285,061 | $0 | $678,000 | $0 | $101,632 | $2,591,022 | ||||||||||||||||||||||||
Tom Quindlen | 2021 | $850,000 | $0 | $2,300,000 | $0 | $1,190,000 | $0 | $269,666 | $4,609,666 | |||||||||||||||||||||||
2020 | $850,000 | $807,500 | $2,300,035 | $0 | $0 | $0 | $286,984 | $4,244,519 | ||||||||||||||||||||||||
2019 | $850,000 | $0 | $1,397,825 | $0 | $886,600 | $0 | $266,319 | $3,400,744 | ||||||||||||||||||||||||
Alberto Casellas | 2021 | $625,000 | $0 | $2,100,000 | $0 | $875,000 | $0 | $149,018 | $3,749,018 | |||||||||||||||||||||||
Carol Juel | 2021 | $639,658 | $0 | $2,000,108 | $0 | $910,000 | $0 | $160,589 | $3,710,355 |
(1) | Amounts shown under “bonus” for 2020 reflect incentive paid under refocused discretionary incentive framework in 2020; amounts shown in 2021 and 2019 under “Non-Equity Incentive Plan Awards” reflect incentive paid under the Annual Incentive Plan metrics for the respective years. |
(2) | For |
This column represents the aggregate grant date fair value of stock options. Synchrony measures the fair value of each stock option |
|
(4) | This column represents amounts paid under Synchrony’s Annual Incentive Plan. The MDCC awarded a final payout of 140% for the 2021 performance year. |
(5) | Synchrony does not have a pension plan, and our non-qualified defined contribution plans do not provide above market earnings. |
(6) | See the |
(7) | For 2021, total compensation for Ms. Keane reflects equity awards granted March 1, 2021 while CEO, prior to appointment to Executive Chair. On April 1, 2021, Ms. Keane’s target pay was reduced in connection with her transition from CEO to Executive Chair, including a reduction in annual target equity from $9,000,000 to $6,000,000. |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 49
COMPENSATION MATTERS
20192021 ALL OTHER COMPENSATION
In 2019,2021, our NEOs received additional benefits, reflected in the table below, which Synchrony believed to be reasonable, competitive and consistent with its overall executive compensation program. The costs of these benefits are shown below after giving effect to any reimbursements by the NEOs.
20192021 ALL OTHER COMPENSATION TABLE
Name of Executive | Perquisites & Other Personal Benefits (1) | Value of Supplementary Life Insurance Premiums(2) | Payments Relating to Employee Savings Plan (3) | Amounts Credited to Restoration Plan Account (4) | Total | ||||||||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | PERQUISITES & OTHER PERSONAL BENEFITS (1) | VALUE OF SUPPLEMENTARY LIFE INSURANCE PREMIUMS (2) | PAYMENTS RELATING TO EMPLOYEE SAVINGS PLAN (3) | AMOUNTS CREDITED TO RESTORATION PLAN ACCOUNT (4) | TOTAL | ||||||||||||||||||||||||||||||||||||
Margaret Keane | $12,000 | $107,121 | $30,800 | $393,360 | $543,281 | $12,000 | $139,156 | $31,900 | $342,925 | $525,981 | |||||||||||||||||||||||||||||||
Brian Doubles | $15,500 | $2,340 | $30,800 | $149,477 | $198,117 | $0 | $0 | $31,900 | $197,747 | $229,647 | |||||||||||||||||||||||||||||||
Henry Greig | $0 | $0 | $30,800 | $116,391 | $147,191 | ||||||||||||||||||||||||||||||||||||
Neeraj Mehta | $12,000 | $20,098 | $30,800 | $163,895 | $226,793 | ||||||||||||||||||||||||||||||||||||
Brian Wenzel | $0 | $0 | $31,900 | $118,251 | $150,151 | ||||||||||||||||||||||||||||||||||||
Tom Quindlen | $0 | $69,276 | $30,800 | $166,243 | $266,319 | $0 | $87,341 | $31,900 | $150,425 | $269,666 | |||||||||||||||||||||||||||||||
Brian Wenzel | $0 | $0 | $30,800 | $70,832 | $101,632 | ||||||||||||||||||||||||||||||||||||
Alberto Casellas | $14,950 | $0 | $31,900 | $102,168 | $149,018 | ||||||||||||||||||||||||||||||||||||
Carol Juel | $22,767 | $2,178 | $31,900 | $103,744 | $160,589 |
(1) | Amounts in this column include financial counseling and annual physical |
(2) | This column reports taxable payments made to the NEOs to cover premiums for universal life insurance policies owned by the executives. The NEOs receive these payments in lieu of the higher standard life insurance coverage available to other employees. These policies include: (a) for Ms. Keane and |
(3) | This column reports Company core contributions, matching contributions and additional contributions to the NEOs’ 401(k) savings accounts up to the limitations imposed under IRS rules, and the plan. |
(4) | This column reports Company |
50 Synchrony •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
20192021 GRANTS OF PLAN-BASED AWARDS
The following table provides information about Synchrony plan-based awards granted to the NEOs in 2019,2021, including the annualnon-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan and the equity awards granted under the Synchrony Financial 2014 Long-Term Incentive Plan.
In regard to the annualnon-equity incentive plan awards granted pursuant to Synchrony’s Annual Incentive Plan, the table below provides: (i) the grant date, and (ii)provides the threshold, target and maximum cash awards linked to Synchrony’s performance over the 20182021 performance period. Cash awards are payableperiod based on equally weighted quantitativethe following metrics: net earnings (50%), receivables growth (30%), and efficiency ratio.
strategy and culture (20%). In regard to the equity incentive plan awards granted pursuant to the Synchrony Financial 2014 Long-Term Incentive Plan, the table below provides: (i) the grant date, (ii) the number of shares or stock units underlying stock awards, (iii) the number of other securities underlying option awards granted, (iv) the exercise or base price of the stock option grants, which reflects the closing price of Synchrony common stock on the date of grant, and (v) the grant date fair value of each option grant computed in accordance with applicable SEC rules.
20192021 GRANTS OF SYNCHRONY PLAN-BASED AWARDS TABLE
All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (1) | ALL OTHER STOCK AWARDS (# UNITS)(2) | GRANT PRICE | TOTAL STOCK AWARDS (# UNITS) | VALUE OF TOTAL STOCK AWARDS(3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Awards; | Total | Value of All | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards | Equity Incentive Plan Awards(1) | Number | Stock | Other Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | Awards; | Awards; | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Stock | Number of | Number of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
or Units | Shares of | Shares of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | —RSU | Stock or | Grant | Stock or | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive | Date | ($) | ($) | ($) | (# units) | (# units) | (# units) | Awards (2) | Units | Price AEG | Units(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (# UNITS) | TARGET (# UNITS) |
MAXIMUM (# UNITS) | ALL OTHER STOCK AWARDS (# UNITS)(2) | GRANT PRICE | TOTAL STOCK AWARDS (# UNITS) | VALUE OF TOTAL STOCK AWARDS(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Keane | 3/1/19 | 2,000,000 | 4,000,000 | 6,000,000 | 61,615 | 123,229 | 184,844 | 123,229 | 246,458 | $32.46 | $8,000,027 | 3/1/21 | 1,000,000 | 2,000,000 | 4,000,000 | 61,875 | 123,750 | 185,625 | 101,250 | $40.00 | 225,000 | $9,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubles | 3/1/19 | 600,000 | 1,200,000 | 1,800,000 | 15,404 | 30,808 | 46,212 | 30,808 | 73,330 | $32.46 | td,400,088 | 3/1/21 |
|
875,000 |
|
|
1,750,000 |
|
|
3,500,000 |
| 20,625 | 41,250 | 61,875 | 33,750 | $40.00 |
|
129,009 |
|
|
$5,250,015 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5/2/19 | (4) | — | — | — | 2,929 | 5,857 | 8,786 | 5,857 | $34.15 |
|
4/1/21 |
|
|
14,853 |
|
|
29,705 |
|
|
44,558 |
|
|
24,304 |
|
|
$41.66 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greig | 3/1/19 | 312,500 | 625,000 | 937,500 | 9,628 | 19,255 | 28,883 | 19,255 | 38,510 | $32.46 | $1,250,035 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mehta | 3/1/19 | 489,500 | 979,000 | 1,468,500 | 9,058 | 18,115 | 27,173 | 30,155 | 48,270 | $32.46 | $1,566,844 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wenzel | 3/1/21 | 350,000 | 700,000 | 1,400,000 | 17,875 | 35,750 | 53,625 | 29,250 | $40.00 | 65,000 | $2,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quindlen | 3/1/19 | 359,000 | 718,000 | 1,077,100 | 10,475 | 20,949 | 31,424 | 22,114 | 43,063 | $32.46 | $1,397,825 | 3/1/21 | 425,000 | 850,000 | 1,700,000 | 15,813 | 31,625 | 47,438 | 25,875 | $40.00 | 57,500 | $2,300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wenzel | 3/1/19 | 325,000 | 650,000 | 975,000 | 3,466 | 6,932 | 10,398 | 6,932 | 38,316 | $32.46 | td,285,061 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5/1/19 | (4) | — | — | — | 6,113 | 12,226 | 18,339 | 12,226 | $34.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Casellas | 3/1/21 | 312,500 | 625,000 | 1,250,000 | 14,438 | 28,875 | 43,313 | 23,625 | $40.00 | 52,500 | $2,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Juel |
| 3/1/21
|
|
|
325,000 |
|
|
650,000 |
|
|
1,300,000 |
|
| 12,032
|
|
| 24,063
|
|
| 36,095
|
|
| 19,688
|
|
| $40.00
|
|
|
48,868 |
|
|
td,000,108 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
7/1/21 |
|
|
1,407 |
|
|
2,814 |
|
|
4,221 |
|
|
2,303 |
|
|
$48.87 |
|
(1) | These columns show the number of PSUs granted as long-term performance awards that are linked to Synchrony’s performance over the |
(2) | This column shows the number of RSUs granted as part of the annual equity incentive grant in March |
(3) | This column shows the aggregate grant date fair value of PSUs and RSUs granted to the NEOs |
|
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 51
COMPENSATION MATTERS
20192021 OUTSTANDING SYNCHRONY EQUITY AWARDS AT FISCALYEAR-END
The following table provides information on the current holdings of Synchrony common stock and Synchrony equity awards by the NEOs.NEOs as of the 2021 fiscal year-end. This table includes unexercised (both vested and unvested) option grants and unvested RSUs and PSUs with vesting conditions that were not yet satisfied as of December 31, 2019.2021. Each equity grant is shown separately for each NEO.separately. The vesting schedule for each outstanding award is shown following this table.
20192021 OUTSTANDING SYNCHRONY EQUITY AWARDS AT FISCALYEAR-END TABLE
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
Name of Executive | Option Grant Date | Number of (Exercisable) | Number of (Unexercisable) | Option Exercise | Option Expiration Date | Stock Award Grant Date | Number of Stock That Have Not Vested | Market (YE 2019) Vested | Equity Incentive Other Rights That Have Not Vested | Equity Incentive or Other Rights Vested(2) | |||||||||||||||||||||||||||||||||||||
Keane | 7/31/14 | 198,218 | 0 | $23.00 | 7/31/24 | 7/31/14 | 0 | $0 | |||||||||||||||||||||||||||||||||||||||
9/17/14 | 53,205 | 0 | $24.55 | 9/17/24 | 9/17/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 50,825 | 12,707 | $30.41 | 4/1/25 | 4/1/15 | 9,926 | $357,417 | ||||||||||||||||||||||||||||||||||||||||
4/1/16 | 70,852 | 47,235 | $29.33 | 4/1/26 | 4/1/16 | 28,300 | $1,019,095 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/16 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 66,449 | 99,674 | $34.30 | 4/1/27 | 4/1/17 | 52,156 | $1,878,154 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 31,046 | $1,117,983 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 31,284 | 125,136 | $33.53 | 4/1/28 | 4/1/18 | 44,899 | $1,616,819 | ||||||||||||||||||||||||||||||||||||||||
4/1/18 | 124,719 | $4,491,134 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 125,543 | $4,520,814 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 125,543 | $4,520,814 | |||||||||||||||||||||||||||||||||||||||||||||
Doubles | 7/31/14 | 184,696 | 0 | $23.00 | 7/31/24 | 7/31/14 | 0 | $0 | |||||||||||||||||||||||||||||||||||||||
9/17/14 | 11,610 | 0 | $24.55 | 9/17/24 | 9/17/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 16,582 | 4,146 | $30.41 | 4/1/25 | 4/1/15 | 3,238 | $116,592 | ||||||||||||||||||||||||||||||||||||||||
4/1/16 | 16,811 | 11,208 | $29.33 | 4/1/26 | 4/1/16 | 6,715 | $241,805 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/16 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 11,379 | 17,070 | $34.30 | 4/1/27 | 4/1/17 | 8,931 | $321,615 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 31,046 | $1,117,983 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 7,821 | 31,284 | $33.53 | 4/1/28 | 4/1/18 | 17,461 | $628,775 | ||||||||||||||||||||||||||||||||||||||||
4/1/18 | 31,181 | $1,122,812 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 31,387 | $1,130,231 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 31,387 | $1,130,231 | |||||||||||||||||||||||||||||||||||||||||||||
5/2/19 | 5,967 | $214,872 | |||||||||||||||||||||||||||||||||||||||||||||
5/2/19 | 5,967 | $214,872 | |||||||||||||||||||||||||||||||||||||||||||||
7/31/14 | 111,609 | 0 | $23.00 | 7/31/24 | 7/31/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
9/17/14 | 14,512 | 0 | $24.55 | 9/17/24 | 9/17/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 13,342 | 3,336 | $30.41 | 4/1/25 | 4/1/15 | 2,604 | $93,778 | ||||||||||||||||||||||||||||||||||||||||
Greig | 4/1/16 | 13,810 | 9,207 | $29.33 | 4/1/26 | 4/1/16 | 5,516 | $198,624 | |||||||||||||||||||||||||||||||||||||||
0 | 4/1/16 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 9,635 | 14,453 | $34.30 | 4/1/27 | 4/1/17 | 7,563 | $272,336 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 4,888 | 19,553 | $33.53 | 4/1/28 | 4/1/18 | 10,915 | $393,031 | ||||||||||||||||||||||||||||||||||||||||
4/1/18 | 19,488 | $701,772 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 19,617 | $706,394 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 19,617 | $706,394 | |||||||||||||||||||||||||||||||||||||||||||||
Mehta | 7/31/14 | 0 | 0 | $23.00 | 7/31/24 | 7/31/14 | 0 | $0 | |||||||||||||||||||||||||||||||||||||||
9/17/14 | 0 | 0 | $24.55 | 9/17/24 | 9/17/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 24,872 | 6,219 | $30.41 | 4/1/25 | 4/1/15 | 4,856 | $174,869 | ||||||||||||||||||||||||||||||||||||||||
4/1/16 | 25,218 | 16,813 | $29.33 | 4/1/26 | 4/1/16 | 10,073 | $362,726 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/16 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 16,260 | 24,391 | $34.30 | 4/1/27 | 4/1/17 | 12,763 | $459,590 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 7,655 | 30,621 | $33.53 | 4/1/28 | 4/1/18 | 17,091 | $615,448 | ||||||||||||||||||||||||||||||||||||||||
4/1/18 | 17,461 | $628,775 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 30,721 | $1,106,275 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 18,455 | $664,572 |
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | OPTION GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (EXERCISABLE) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (UNEXERCISABLE) | OPTION EXERCISE PRICE | OPTION EXPIRATION DATE | STOCK AWARD GRANT DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED | MARKET VALUE OF SHARES OF STOCK THAT HAVE NOT YET VESTED(1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(2) | ||||||||||||||||||||||||||||
Keane | 4/1/2015 | 63,532 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||||||||
4/1/2017 | 132,898 | 33,225 | $34.30 | 4/1/2027 | 4/1/2017 | 18,368 | $852,088 | |||||||||||||||||||||||||||||||
4/1/2018 | 93,852 | 62,568 | $33.53 | 4/1/2028 | 4/1/2018 | 23,718 | $1,100,264 | |||||||||||||||||||||||||||||||
3/1/2019 | 44,212 | $2,051,012 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 97,392 | $4,517,996 | 178,551 | $8,282,993 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 102,624 | $4,760,710 | 125,429 | $5,818,646 | ||||||||||||||||||||||||||||||||||
Doubles | 7/31/2014 | 84,696 | 0 | $23.00 | 7/31/2024 | |||||||||||||||||||||||||||||||||
9/17/2014 | 11,610 | 0 | $24.55 | 9/17/2024 | ||||||||||||||||||||||||||||||||||
4/1/2015 | 20,728 | 0 | $30.41 | 4/1/2025 | ||||||||||||||||||||||||||||||||||
4/1/2016 | 28,019 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||||||||
4/1/2017 | 22,759 | 5,690 | $34.30 | 4/1/2027 | 4/1/2017 | 3,145 | $145,874 | |||||||||||||||||||||||||||||||
4/1/2018 | 23,463 | 15,642 | $33.53 | 4/1/2028 | 4/1/2018 | 9,224 | $427,888 | |||||||||||||||||||||||||||||||
3/1/2019 | 11,054 | $512,790 | ||||||||||||||||||||||||||||||||||||
5/2/2019 | 2,102 | $97,515 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 32,464 | $1,505,999 | 59,518 | $2,761,030 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 34,208 | $1,586,903 | 41,810 | $1,939,549 | ||||||||||||||||||||||||||||||||||
4/1/2021 | 24,634 | $1,142,759 | 30,108 | $1,396,710 | ||||||||||||||||||||||||||||||||||
Wenzel | 4/1/2015 | 6,281 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||||||||
4/1/2016 | 8,490 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||||||||
4/1/2017 | 6,811 | 1,703 | $34.30 | 4/1/2027 | 4/1/2017 | 941 | $43,654 | |||||||||||||||||||||||||||||||
4/1/2018 | 5,279 | 3,520 | $33.53 | 4/1/2028 | 4/1/2018 | 2,076 | $96,327 | |||||||||||||||||||||||||||||||
3/1/2019 | 2,487 | $115,390 | ||||||||||||||||||||||||||||||||||||
5/2/2019 | 4,387 | $203,518 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 19,480 | $903,658 | 35,710 | $1,656,609 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 29,647 | $1,375,316 | 36,235 | $1,680,942 | ||||||||||||||||||||||||||||||||||
Quindlen | 4/1/2015 | 18,240 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||||||||
4/1/2016 | 24,659 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||||||||
4/1/2017 | 23,848 | 5,963 | $34.30 | 4/1/2027 | 4/1/2017 | 3,296 | $152,894 | |||||||||||||||||||||||||||||||
4/1/2018 | 16,842 | 11,228 | $33.53 | 4/1/2028 | 4/1/2018 | 6,621 | $307,171 | |||||||||||||||||||||||||||||||
3/1/2019 | 7,935 | $368,090 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 24,890 | $1,154,625 | 45,630 | $2,116,764 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 26,226 | $1,216,626 | 32,054 | $1,486,987 |
52 Synchrony •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
Name of Executive | Option Grant Date | Number of (Exercisable) | Number of (Unexercisable) | Option Exercise | Option Expiration Date | Stock Award Grant Date | Number of Stock That Have Not Vested | Market (YE 2019) Vested | Equity Incentive Other Rights That Have Not Vested | Equity Incentive or Other Rights Vested(2) | |||||||||||||||||||||||||||||||||||||
7/31/14 | 124,307 | 0 | $23.00 | 7/31/24 | 7/31/2014 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
9/17/14 | 12,771 | 0 | $24.55 | 9/17/24 | 9/17/2014 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 13,680 | 4,560 | $30.41 | 4/1/25 | 4/1/2015 | 3,562 | $128,262 | ||||||||||||||||||||||||||||||||||||||||
4/1/16 | 12,329 | 12,330 | $29.33 | 4/1/26 | 4/1/2016 | 7,386 | $265,974 | ||||||||||||||||||||||||||||||||||||||||
Quindlen | |||||||||||||||||||||||||||||||||||||||||||||||
0 | 4/1/2016 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 11,924 | 17,887 | $34.30 | 4/1/27 | 4/1/2017 | 9,359 | $337,013 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/2017 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 5,614 | 22,456 | $33.53 | 4/1/28 | 4/1/2018 | 12,534 | $451,346 | ||||||||||||||||||||||||||||||||||||||||
4/1/2018 | 21,203 | $763,512 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/2019 | 22,529 | $811,281 | 21,342 | $768,541 | |||||||||||||||||||||||||||||||||||||||||||
Wenzel | 7/31/14 | 40,864 | 0 | $23.00 | 7/31/24 | 3/1/2019 | |||||||||||||||||||||||||||||||||||||||||
9/17/14 | 4,935 | 0 | $24.55 | 9/17/24 | 9/17/14 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||
4/1/15 | 5,024 | 1,257 | $30.41 | 4/1/25 | 4/1/15 | 982 | $35,350 | ||||||||||||||||||||||||||||||||||||||||
4/1/16 | 5,094 | 3,396 | $29.33 | 4/1/26 | 4/1/16 | 2,034 | $73,260 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/16 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/17 | 3,405 | 5,109 | $34.30 | 4/1/27 | 4/1/17 | 2,672 | $96,225 | ||||||||||||||||||||||||||||||||||||||||
0 | 4/1/17 | 0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||
0 | 1/1/18 | 136 | $4,894 | ||||||||||||||||||||||||||||||||||||||||||||
4/1/18 | 1,759 | 7,040 | $33.53 | 4/1/28 | 4/1/18 | 3,930 | $141,514 | ||||||||||||||||||||||||||||||||||||||||
4/1/18 | 7,016 | $252,647 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 7,062 | $254,309 | |||||||||||||||||||||||||||||||||||||||||||||
3/1/19 | 7,062 | $254,309 | |||||||||||||||||||||||||||||||||||||||||||||
5/2/19 | 12,456 | $448,527 | |||||||||||||||||||||||||||||||||||||||||||||
| 5/2/19
|
|
| 12,456
|
| $448,527
|
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | OPTION GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (EXERCISABLE) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (UNEXERCISABLE) | OPTION EXERCISE PRICE | OPTION EXPIRATION DATE | STOCK AWARD GRANT DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED | MARKET VALUE OF SHARES OF STOCK THAT HAVE NOT YET VESTED(1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(2) | ||||||||||||||||||||||||||||
Casellas | 7/31/2014 | 23 | 0 | $23.00 | 7/31/2024 | |||||||||||||||||||||||||||||||||
9/17/2014 | 3,774 | 0 | $24.55 | 9/17/2024 | ||||||||||||||||||||||||||||||||||
4/1/2015 | 6,632 | 0 | $30.41 | 4/1/2025 | ||||||||||||||||||||||||||||||||||
4/1/2016 | 8,964 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||||||||
4/1/2017 | 9,270 | 2,318 | $34.30 | 4/1/2027 | 4/1/2017 | 1,281 | $59,436 | |||||||||||||||||||||||||||||||
4/1/2018 | 6,546 | 4,365 | $33.53 | 4/1/2028 | 4/1/2018 | 2,573 | $119,384 | |||||||||||||||||||||||||||||||
3/1/2019 | 5,129 | $237,921 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 19,480 | $903,658 | 35,710 | $1,656,609 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 23,946 | $1,110,832 | 29,267 | $1,357,684 | ||||||||||||||||||||||||||||||||||
Juel | 4/1/2015 | 11,436 | 0 | $30.41 | 4/1/2025 | |||||||||||||||||||||||||||||||||
4/1/2016 | 17,177 | 0 | $29.33 | 4/1/2026 | ||||||||||||||||||||||||||||||||||
4/1/2017 | 13,290 | 3,323 | $34.30 | 4/1/2027 | 4/1/2017 | 1,837 | $85,208 | |||||||||||||||||||||||||||||||
4/1/2018 | 10,887 | 7,258 | $33.53 | 4/1/2028 | 4/1/2018 | 4,280 | $198,547 | |||||||||||||||||||||||||||||||
3/1/2019 | 5,129 | $237,921 | ||||||||||||||||||||||||||||||||||||
3/1/2020 | 16,232 | $752,999 | 29,759 | $1,380,515 | ||||||||||||||||||||||||||||||||||
3/1/2021 | 19,955 | $925,717 | 24,389 | $1,131,427 | ||||||||||||||||||||||||||||||||||
7/1/2021 | 2,323 | $107,762 | 2,838 | $131,673 |
(1) | The market value of the stock awards represents the product of the closing price of Synchrony common stock as of December 31, |
(2) | PSUs granted in |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 53
COMPENSATION MATTERS
20192021 OUTSTANDING SYNCHRONY EQUITY AWARDS VESTING SCHEDULE
|
|
| EQUITY INCENTIVE PLAN VESTING SCHEDULE (3) | |||||||||||
All Executives | ||||||||||||||
|
| |||||||||||||
| 4/1/17 | 20% vests
| 4/1/17 | 20% vests 2022 | ||||||||||
| ||||||||||||||
4/1/18 | 20% vests
| 4/1/18 | 20% vests
| |||||||||||
All Executives | 3/1/19 | 33.3% vests
| ||||||||||||
Doubles, Wenzel | 5/2/19 | 33.3% vests
| ||||||||||||
All Executives | 33.3% vests 2022 and 2023 | 100% vests | ||||||||||||
All Executives | 3/1/21 | 33.3% vests 2022, 2023, 2024 | 100% vests December 31, 2023 | |||||||||||
Doubles | 4/1/21 | 33.3% vests 2022, 2023, 2024 | 100% vests December 31, 2023 | |||||||||||
Juel | 7/1/21 | 33.3% vests 2022, 2023, 2024 | 100% vests December 31, 2023 |
(1) | This column shows the vesting schedule of unexercisable or unearned options reported in the “Number of Securities Underlying Unexercised Options (Unexercisable)” column of the |
(2) | This column shows the vesting schedule of unvested RSUs reported in the “Number of Shares or Units of Stock That Have Not Vested” column |
(3) | This |
|
column shows the vesting schedule of the unvested PSUs |
|
|
54 Synchrony •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
20192021 SYNCHRONY NONQUALIFIED DEFERRED COMPENSATION
The table below provides information on the nonqualified deferred compensation of the NEOs in 2019, including:2021, including our Deferred Compensation and Restoration Plans:
SYNCHRONY DEFERREDSYNCHRONY-DEFERRED COMPENSATION PLAN
As discussed above, ourOur Deferred Compensation Plan does not pay an “above-market” rate of interest and is available to a select group of management and highly compensated employees of Synchrony and any of its participating affiliates. Under the plan, eligible employees may, to the extent permitted by the administrator of the plan, elect to defer up to 80% (or such lower percentage, as determined by the plan administrator) of their base salary and bonus, and all or a portion of any other type of compensation, as determined by the plan administrator.
SYNCHRONY FINANCIAL RESTORATION PLAN
As discussed above, theThe Restoration Plan mirrors the Company’s qualified 401(k) plan. The plan provides a continuation of Company contributions on salary and bonus that would have been made to our 401(k) plan but for various limitations imposed by the Code, along with additional Company contributions that cannot be made to the 401(k) plan. The plans include Company contributions of (i) a 3% core contribution, (ii) a 4% match, and (iii) 4% additional contribution for former participants of GE pension plans. The Restoration Plan account is forfeited if an executive leaves voluntarily prior to age 60. For 2019,2021, each of our NEOs received contributions to his or her Restoration Plan account, which are reported in the “All Other Compensation” column in the 20192021 Summary Compensation Table.
20192021 SYNCHRONY NONQUALIFIED DEFERRED COMPENSATION
Name of Executive | Type of Plan | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year(1) | Aggregate Balance at Last Fiscal Year-End | |||||||||||||||||||||||||||||||||||
NAME OF EXECUTIVE | TYPE OF PLAN | EXECUTIVE CONTRIBUTIONS IN LAST FISCAL YEAR | REGISTRANT CONTRIBUTIONS IN LAST FISCAL YEAR | AGGREGATE EARNINGS IN LAST FISCAL YEAR (1) | AGGREGATE BALANCE AT LAST FISCAL YEAR-END | |||||||||||||||||||||||||||||||||||
Keane | Restoration Plan | $0 | $393,360 | $ | 437,887 | $ | 2,580,547 | Restoration Plan | $0 | $342,925 | $483,814 | $4,009,352 | ||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Doubles | Restoration Plan | $0 | td49,477 | $ | 205,876 | $ | 1,008,246 | Restoration Plan | $0 | td97,747 | td98,821 | td,973,346 | ||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Greig | Restoration Plan | $0 | td16,391 | $ | 13,012 | $ | 631,626 | |||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Mehta | Restoration Plan | $0 | td63,895 | $ | 74,022 | $ | 691,692 | |||||||||||||||||||||||||||||||||
Deferred Comp Plan | $82,720 | $0 | $ | 237,876 | $ | 702,255 | ||||||||||||||||||||||||||||||||||
Wenzel | Restoration Plan | $0 | $118,251 | $143,835 | $881,441 | |||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Quindlen | Restoration Plan | $0 | td66,243 | $ | 271,036 | $ | 1,273,869 | Restoration Plan | $0 | td50,425 | $415,859 | td,291,002 | ||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Wenzel | Restoration Plan | $0 | $70,832 | $ | 74,990 | $ | 389,803 | |||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||
Casellas | Restoration Plan | $0 | $102,168 | $215,845 | $898,377 | |||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $2,071 | $7,784 | ||||||||||||||||||||||||||||||||||||
Juel | Restoration Plan | $0 | $103,744 | $280,314 | $1,125,724 | |||||||||||||||||||||||||||||||||||
Deferred Comp Plan | $0 | $0 | $0 | $0 |
(1) | The earnings on amounts contributed to the Restoration Plan may be positive or negative, depending on the NEO’s market-based investment choice. |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 55
COMPENSATION MATTERS
20192021 POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL AT FISCALYEAR-END
The information below describes and quantifies certain compensation that would have become payable under existing plans and arrangements if the NEO’s employment had terminated on December 31, 2019,2021, given the NEO’s compensation and service levels as of such date and based on Synchrony’s closing stock price on December 31, 2019,2021 as applicable. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any amounts actually paid or distributed may be different. Factors that could affect these amounts include the time during the year of any such event, Synchrony’s stock price, as applicable, and the executive’s age.
EXECUTIVE SEVERANCE PLAN
The purpose of the Executive Severance Plan is to secure the continued services and ensure the continued dedication of our NEOs and other executives. The Executive Severance Plan provides that if a participating executive is laid off, part of a redundancy or reorganization, or terminated for “for the good of the Company,” such executive will be entitled to the following:following cash payment:
CIC SEVERANCE PLAN
The purpose of the CIC Severance Plan is to secure the continued services and ensure the continued dedication and objectivity of these executives in the event of any occurrence of, threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a change in control of the Company. The CIC Severance Plan provides for the following severance benefits upon a “double-trigger” qualifying termination of employment within 30 months following a change in control:
CEO—lump sumCash payment equal to the sum of (1) the CEO’s prorated bonus for the year of termination, (2) a severance benefit equal to the product oftwo-and-one-half three multiplied by the sum of the CEO’s annual base salary and average target bonus for the three prior years, and (3) an amount equal to 3036 months of the employer portion of the monthly premium or cost of coverage for the health benefits elected by the CEO, based on the rates for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“Healthcare Premiums”). In addition, for 3036 months following the CEO’s termination of employment, the CEO will be entitled to reasonable executive outplacement services.
SYNCHRONY EQUITY AWARDS
If one of the NEOs were to dieretire (voluntarily terminating after reaching age 60 with three years of service) or become disabled, anyun-exercisable stock options become exercisable and remain exercisable until their expiration date. Ininvoluntarily terminate with over 20 years of service, all awards held for a least one year will continue to vest according to the eventoriginal vesting schedule. For involuntary termination with less than 20 years of disability, this provision applies only to options that have beenservice, all awards held for at least one year.year continue to vest on a pro-rata basis according to the original vesting schedule. For death and disability, all awards immediately vest and any unvested performance share units pay out at target levels. For these purposes, “disability” generally means disability resulting in the NEO being unable to perform his or hertheir job. Remaining restrictions on RSUs that were awarded prior to death or disability lapse immediately. In addition, any unvested options or RSUs held for at least one year become fully vested upon becoming retirement-eligible (reaching age 60 with three years of service), depending on the terms of the particular award. For involuntary termination, awards are eitherpro-rated (if under age 60 and less than 20 years of service) or fully vest if over 20 years of service.
56/ 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
PAYMENT UPON TERMINATION AS OFYEAR-END TABLES
The following tables show the payments that each of our NEOs would have received under various termination scenarios on December 31, 2019.2021. Termination upon a change in control reflects amounts assuming each NEO’s employment was terminated by the Company without “cause” or by the executive for “good reason” within 30 months of the specified time period prior to or following the change in control. Of the NEOs, only Ms. Keane was eligible to retire as of
56 Synchrony • 2020 Annual Meeting and Proxy Statement
COMPENSATION MATTERS
December 31, 2019;2021; therefore, other than Ms. Keane and Deferred Compensation for Mr. Casellas, the NEOs do not have any values in the voluntary or retirement termination columns below. The tables below assume a stock price of $36.01,$46.39, the closing price of a share of our common stock on December 31, 2019.2021.
MARGARET KEANE
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||
Severance | $0 | $0 | $ | 1,762,500 | $0 | $0 | $ | 9,821,083 | ||||||||||||||||||||||
Restricted Stock Units | $0 | $ | 4,871,486 | $ | 5,896,303 | $ | 4,871,486 | $ | 10,510,283 | $ | 10,510,283 | |||||||||||||||||||
Stock Options | $0 | $ | 867,469 | $ | 867,469 | $ | 867,469 | $ | 867,469 | $ | 867,469 | |||||||||||||||||||
Long-Term Performance Plan | $0 | $ | 4,491,134 | $ | 4,491,134 | $ | 4,491,134 | $ | 9,011,948 | $ | 9,011,948 | |||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $ | 2,451,000 | $ | 2,451,000 | $ | 2,451,000 | $ | 2,451,000 | ||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $ | 28,797 | |||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $ | 14,750 | |||||||||||||||||||||||
Restoration Plan | $0 | $ | 2,580,547 | $ | 2,580,547 | $ | 2,580,547 | $ | 2,580,547 | $ | 2,580,547 | |||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||
Total Value to Executive | $0 | $ | 12,810,636 | $ | 18,048,953 | $ | 15,261,636 | $ | 25,421,247 | $ | 35,285,877 |
BRIAN DOUBLES
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||
Severance | $0 | $0 | $766,575 | $0 | $0 | $3,275,617 | ||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $2,333,604 | $0 | $3,771,872 | $3,771,872 | ||||||||||||||||||||||||
Stock Options | $0 | $0 | $204,861 | $0 | $204,861 | $204,861 | ||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $1,122,812 | $0 | $2,467,915 | $2,467,915 | ||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $1,251,600 | $0 | $1,251,600 | $1,251,600 | ||||||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $33,944 | ||||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $11,800 | ||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $1,008,246 | $0 | $1,008,246 | $1,008,246 | ||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $6,687,698 | $0 | $8,704,494 | $12,025,855 |
HENRY GREIG
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT (2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $625,000 | $0 | $0 | $2,710,133 | $0 | $0 | $1,762,500 | $0 | $0 | $10,889,500 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $957,769 | $0 | $1,664,163 | $1,664,163 | $0 | $8,521,360 | $8,521,360 | $8,521,360 | $13,282,070 | $13,282,070 | ||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $153,390 | $0 | $153,390 | $153,390 | $0 | $1,206,315 | $1,206,315 | $1,206,315 | $1,206,315 | $1,206,315 | ||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $701,772 | $0 | $1,408,166 | $1,408,166 | $0 | $8,282,993 | $8,282,993 | $8,282,993 | $14,101,639 | $14,101,639 | ||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $750,000 | $0 | $750,000 | $750,000 | $0 | $2,800,000 | $2,800,000 | $2,800,000 | $2,800,000 | $2,800,000 | ||||||||||||||||||||||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $36,287 | ||||||||||||||||||||||||||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $11,800 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $36,702 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $631,626 | $0 | $631,626 | $631,626 | $0 | $4,009,352 | $4,009,352 | $4,009,352 | $4,009,352 | $4,009,352 | ||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $3,819,557 | $0 | $4,607,345 | $7,365,565 | $0 | $24,820,020 | $26,582,520 | $24,820,020 | $35,399,376 | $46,325,578 | ||||||||||||||||||||||||||||||||||||||||
BRIAN DOUBLES | ||||||||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT (2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $1,426,027 | $0 | $0 | $6,099,455 | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $2,690,066 | $0 | $5,419,728 | $5,419,728 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $269,948 | $0 | $269,948 | $269,948 | ||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $2,761,030 | $0 | $6,097,289 | $6,097,289 | ||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $2,450,000 | $0 | $2,450,000 | $2,450,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $59,427 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $1,973,346 | $0 | $1,973,346 | $1,973,346 | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $11,570,417 | $0 | $16,210,311 | $22,369,193 | ||||||||||||||||||||||||||||||||||||||||||||||
BRIAN WENZEL | ||||||||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT (2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $700,000 | $0 | $0 | $3,152,500 | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $1,362,548 | $0 | $2,737,864 | $2,737,864 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $65,856 | $0 | $65,856 | $65,856 | ||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $1,656,609 | $0 | $3,337,551 | $3,337,551 | ||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $980,000 | $0 | $980,000 | $980,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $50,877 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $881,441 | $0 | $881,441 | $881,441 | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $5,646,454 | $0 | $8,002,712 | $11,206,089 |
Synchrony •2022 ANNUAL MEETING AND PROXY STATEMENT 2020 Annual Meeting and Proxy Statement / 57
COMPENSATION MATTERS
NEERAJ MEHTA
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||
Severance | $0 | $0 | $735,000 | $0 | $0 | $3,210,000 | ||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $1,612,633 | $0 | $2,718,908 | $2,718,908 | ||||||||||||||||||||||||
Stock Options | $0 | $0 | $264,786 | $0 | $264,786 | $264,786 | ||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $628,775 | $0 | $1,293,347 | $1,293,347 | ||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $766,600 | $0 | $766,600 | $766,600 | ||||||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $35,926 | ||||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $11,800 | ||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $691,692 | $0 | $691,692 | $691,692 | ||||||||||||||||||||||||
Deferred Compensation | $0 | $702,255 | $702,255 | $702,255 | $702,255 | $702,255 | ||||||||||||||||||||||||
Total Value to Executive | $0 | $702,255 | $5,401,741 | $702,255 | $6,437,588 | $9,695,314 |
TOM QUINDLEN
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||
Severance | $0 | $0 | $850,000 | $0 | $0 | $3,680,000 | ||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $1,182,595 | $0 | $1,993,875 | $1,993,875 | ||||||||||||||||||||||||
Stock Options | $0 | $0 | $194,178 | $0 | $194,178 | $194,178 | ||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $763,512 | $0 | $1,532,053 | $1,532,053 | ||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $886,600 | $0 | $886,600 | $886,600 | ||||||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $36,287 | ||||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $11,800 | ||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $1,273,869 | $0 | $1,273,869 | $1,273,869 | ||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $5,150,753 | $0 | $5,880,575 | $9,608,662 |
BRIAN WENZEL
Element of Pay | For Cause | Voluntary Termination | Involuntary Termination(1) | Retirement (2) | Death or Disability | Change-in- Control | ||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT(2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $526,329 | $0 | $0 | $1,719,324 | $0 | $0 | $850,000 | $0 | $0 | $4,321,167 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $351,243 | $0 | $1,054,079 | $1,054,079 | $0 | $0 | $1,982,780 | $0 | $3,199,406 | $3,199,406 | ||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $55,920 | $0 | $55,920 | $55,920 | $0 | $0 | $216,485 | $0 | $216,485 | $216,485 | ||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $252,647 | $0 | $955,483 | $955,483 | $0 | $0 | $2,116,764 | $0 | $3,603,751 | $3,603,751 | ||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $678,000 | $0 | $678,000 | $678,000 | $0 | $0 | $1,190,000 | $0 | $1,190,000 | $1,190,000 | ||||||||||||||||||||||||||||||||||||||||
Medical Benefits | $0 | $0 | $0 | $0 | $0 | $53,438 | ||||||||||||||||||||||||||||||||||||||||||||||
Outplacement | $0 | $0 | $0 | $0 | $0 | $11,800 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $49,337 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $389,803 | $0 | $389,803 | $389,803 | $0 | $0 | $2,291,002 | $0 | $2,291,002 | $2,291,002 | ||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $2,253,942 | $0 | $3,133,285 | $4,917,847 | $0 | $0 | $8,647,031 | $0 | $10,500,644 | $14,871,148 | ||||||||||||||||||||||||||||||||||||||||
ALBERTO CASELLAS | ||||||||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT (2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $625,000 | $0 | $0 | $3,020,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $1,320,398 | $0 | $2,431,231 | $2,431,231 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $84,159 | $0 | $84,159 | $84,159 | ||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $1,656,609 | $0 | $3,014,293 | $3,014,293 | ||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $875,000 | $0 | $875,000 | $875,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $49,523 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $898,377 | $0 | $898,377 | $898,377 | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $7,784 | $7,784 | $7,784 | $7,784 | $7,784 | $7,784 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $7,784 | $7,784 | $5,467,327 | $7,784 | $7,310,844 | $10,380,367 | ||||||||||||||||||||||||||||||||||||||||||||||
CAROL JUEL | ||||||||||||||||||||||||||||||||||||||||||||||||||||
ELEMENT OF PAY | FOR CAUSE | VOLUNTARY TERMINATION | INVOLUNTARY TERMINATION(1) | RETIREMENT (2) | DEATH OR DISABILITY | CHANGE-IN- CONTROL | ||||||||||||||||||||||||||||||||||||||||||||||
Severance | $0 | $0 | $639,658 | $0 | $0 | $3,056,644 | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | $0 | $0 | $637,338 | $0 | $2,308,155 | $2,308,155 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | $0 | $0 | $66,756 | $0 | $133,513 | $133,513 | ||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Performance Plan | $0 | $0 | $690,258 | $0 | $2,643,615 | $2,643,615 | ||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | $0 | $0 | $910,000 | $0 | $910,000 | $910,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Health Benefits Payment | $0 | $0 | $0 | $0 | $0 | $50,691 | ||||||||||||||||||||||||||||||||||||||||||||||
Restoration Plan | $0 | $0 | $1,125,724 | $0 | $1,125,724 | $1,125,724 | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Value to Executive | $0 | $0 | $4,069,734 | $0 | $7,121,007 | $10,228,342 |
(1) | All of our NEO’s except Ms. Juel are eligible for continued vesting at 100% for awards held at least one year under our equity plans due to having more than 20 years of service. Ms. Juel would be eligible for continued vesting at 50% for unvested RSUs and Stock Options held at least one year, and pro-rata vesting for any PSUs held at least one year based on the number of whole or partial months completed in the performance period. |
(2) |
|
58 Synchrony •/ 2020 Annual Meeting and Proxy Statement2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
INDEPENDENT DIRECTORS’ COMPENSATION
Our compensation program for independent directors is designed to achieve the following goals: (a) fairly pay directors for work required at a company of our size and scope of operations; (b) align directors’ interests with the long-term interests of our stockholders; and (c) have a compensation structure that is simple, transparent and easy for stockholders to understand. Our Nominating and Corporate Governance Committee reviews director compensation annually. In connection with these reviews, the Nominating and Corporate Governance Committee receives advice regarding director compensation, including peer company benchmarking.
Effective with the retirement of Mr. Hartnack, former Chair of the Board, and appointment of Ms. Keane as Executive Chair, Mr. Naylor became Lead Independent Director of the Board. In connection with Mr. Naylor’s new responsibilities, the Nominating and Corporate Governance Committee approved an additional annual Lead Independent Director cash retainer of $75,000.
EachDuring the July 2021 meeting, the Nominating and Corporate Governance Committee reviewed and approved proposals for changes to the compensation program for independent directors based on analysis of Synchrony’s peer group performed by the Board’s outside independent compensation consultant. Effective with the third quarter of 2021, the following changes were made: (1) the per meeting cash payment for committee members was replaced with an annual cash retainer of $20,000 for each member of the Audit and Risk Committees, and $15,000 for each member of other committees; (2) the chair cash retainer was increased to $40,000 for each Chair of the Audit and Risk Committees, and $25,000 for each Chair of other committees; and (3) annual compensation for each independent director currently receives annual compensation of $210,000,was increased to $265,000, of which $75,000$100,000 is paid in cash and $135,000$165,000 is paid in RSUs. The RSUs are subject to aone-year vesting period and will be credited with amounts equivalent to any regular quarterly dividends paid on our common stock, which amounts will be reinvested in additional RSUs. In light of the workload and broad responsibilities of their positions, certain independent directors currently receive additional compensation as follows: the Chair of our Board receives an additional $235,000, of which $110,000 is paid in cash and $125,000 is paid in RSUs, the Chairs of the Audit Committee and Risk Committee each receive an additional $35,000 in annual cash compensation and the Chairs of the Nominating and Corporate Governance Committee, the MDCC and the Technology Committee each receive an additional $20,000 in annual compensation. Separately, for each Board committee meeting attended, an independent director receives $2,000 in cash. If an independent director is also a director of the Bank and attends a meeting of a Bank committee that takes place on a day when the analogous Board committee is not meeting, the independent director receives $2,000 in cash for such meeting.
Independent directors can defer up to 80% of their annual cash compensation and RSUs into deferred stock units, which will be paid out after they leave our Board.
We require each independent director to own at least $375,000 in our common stock, RSUs or deferred stock units while a member of our Board. Each independent director has four years to satisfy this requirement. Individual and joint holdings of our common stock with immediate family members, including unvested time-based restricted stock, RSUs and deferred stock units count toward this requirement.
20192022 ANNUAL MEETING AND PROXY STATEMENT / 59
COMPENSATION MATTERS
2021 INDEPENDENT DIRECTORS’ COMPENSATION TABLE
Name of Director | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total | |||||||||
NAME OF DIRECTOR | FEES EARNED OR PAID IN CASH (1) | STOCK AWARDS (2)(3) | TOTAL | |||||||||
Aguirre | $38,608 | $59,311 | $97,919 | |||||||||
Hartnack(4) | $57,250 | $65,056 | $122,306 | |||||||||
Naylor | $214,750 | $150,100 | $364,850 | |||||||||
Guthrie | $143,000 | $150,100 | $293,100 | |||||||||
Snowe | $145,500 | $150,100 | $295,600 | |||||||||
Alves | $107,000 | $135,079 | $242,079 | $117,000 | $150,100 | $267,100 | ||||||
Coviello | $106,611 | $135,079 | $241,690 | $139,500 | $150,100 | $289,600 | ||||||
Graylin | $ 91,000 | $135,079 | $226,079 | $117,000 | $150,100 | $267,100 | ||||||
Guthrie | $122,000 | $135,079 | $257,079 | |||||||||
Hartnack | $217,000 | $260,131 | $477,131 | |||||||||
Naylor | $144,000 | $135,079 | $279,079 | |||||||||
Richie | $ 99,000 | $135,079 | $234,079 | $138,000 | $150,100 | $288,100 | ||||||
Snowe | $129,000 | $135,079 | $264,079 | |||||||||
Zane | $119,000 | $150,100 | $269,100 | |||||||||
Zane | $ 84,750 | $123,468 | $208,218 | |||||||||
Aguirre | $120,500 | $150,100 | $270,600 | |||||||||
Parker | $119,000 | $150,100 | $269,100 |
(1) | Amount of cash compensation received in |
(2) | Aggregate grant date fair value of RSUs granted in |
(3) | As of December 31, |
(4) | Mr. Hartnack retired from the Board on April 1, 2021. |
Synchrony60 •/ 2020 Annual Meeting and Proxy Statement 59 2022 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION MATTERS
EQUITY COMPENSATION PLAN INFORMATION
20192021 EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 20192021 regarding the number of shares of our common stock that may be issued under our equity compensation plans.
A | B | C | A | B | C | |||||||
Number of securities to be issued upon exercise of | Weighted-average exercise options, warrants and | Number of securities remaining available for future issuance under equity compensation plans (excluding securities | ||||||||||
Plan Category | warrants and rights(1) | rights | reflected in column A) | |||||||||
PLAN CATEGORY | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) | WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS | |||||||||
Equity compensation plans approved by security holders | 12,048,777 | $28.98 | 43,581,766 | 10,236,830 | $32.36 | 39,895,916 | ||||||
Equity compensation plans not approved by security holders | — | — | — | — | ||||||||
Total | 12,048,777 | $28.98 | 43,581,766 | 10,236,830 | $32.36 | 39,895,916 |
(1) | This column includes |
2022 ANNUAL MEETING AND PROXY STATEMENT / 61
COMPENSATION MATTERS
As of December 31, 2019,2021, the weighted-average term of outstanding stock options was 6.25.46 years.
For the Years Ended December 31,
| ||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018(1) | 2019(1) | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||||||||||||||||||
Beginning of the period available shares | 16,605,417 | 7,414,644 | 5,699,056 | 3,340,083 | 46,839,931 | 45,115,124 | 3,340,083 | 46,839,931 | 45,115,124 | 43,581,766 | 41,798,948 | |||||||||||||||||||||||||||||||||||||
2017 Amended Plan Additional Shares | 0 | 0 | 0 | 46,000,000 | 0 | 0 | 46,000,000 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
New Shares Available | 16,605,417 | 7,414,644 | 5,699,056 | 49,340,083 | 46,839,931 | 45,115,124 | 49,340,083 | 46,839,931 | 45,115,124 | 43,581,766 | 41,798,948 | |||||||||||||||||||||||||||||||||||||
Granted: Stock Based (RSUs/PSUs) and NQSOs | ||||||||||||||||||||||||||||||||||||||||||||||||
Granted: Stock Based (RSUs/PSUs)(1) and NQSOs | ||||||||||||||||||||||||||||||||||||||||||||||||
– RSUs | 3,704,535 | 793,585 | 1,000,900 | 1,034,299 | 1,069,882 | 1,802,996 | 1,034,299 | 1,069,882 | 1,802,996 | 1,713,183 | 1,259,255 | |||||||||||||||||||||||||||||||||||||
– PSUs | 523,646 | 502,022 | 616,673 | 606,006 | 502,022 | 616,673 | 606,006 | 923,997 | 728,696 | |||||||||||||||||||||||||||||||||||||||
– NQSOs | 5,553,815 | 984,086 | 1,272,897 | 1,369,269 | 1,782,601 | 0 | 1,369,269 | 1,782,601 | 0 | 0 | 847,500 | |||||||||||||||||||||||||||||||||||||
Total | 9,258,350 | 1,777,671 | 2,797,443 | 2,905,590 | 3,469,156 | 2,409,002 | 2,905,590 | 3,469,156 | 2,409,002 | 2,637,180 | 2,835,451 | |||||||||||||||||||||||||||||||||||||
Cancelled: Stock Based (RSUs/PSUs) and NQSOs | ||||||||||||||||||||||||||||||||||||||||||||||||
– RSUs(2) | 26,806 | 45,484 | 226,407 | 271,981 | 1,499,331 | 440,084 | 271,981 | 1,499,331 | 440,084 | 554,713 | 602,180 | |||||||||||||||||||||||||||||||||||||
– PSUs | 0 | 0 | 0 | 11,001 | 62,704 | 271,478 | 11,001 | 62,704 | 271,478 | 245,407 | 265,550 | |||||||||||||||||||||||||||||||||||||
– NQSOs | 40,771 | 16,599 | 212,063 | 122,456 | 182,313 | 164,082 | 122,456 | 182,313 | 164,082 | 54,242 | 64,690 | |||||||||||||||||||||||||||||||||||||
Total | 67,577 | 62,083 | 438,470 | 405,438 | 1,744,349 | 875,644 | 405,438 | 1,744,349 | 875,644 | 854,362 | 932,420 | |||||||||||||||||||||||||||||||||||||
End of the period available shares | 7,414,644 | 5,699,056 | 3,340,083 | 46,839,931 | 45,115,124 | 43,581,766 | 46,839,931 | 45,115,124 | 43,581,766 | 41,798,948 | 39,895,916 |
(1) | Includes |
(2) | Includes |
60 Synchrony • 2020 Annual Meeting and Proxy Statement
COMPENSATION MATTERS
As required by the SEC and in accordance with its regulations and guidance, we determined the ratio of the annual total compensation of our CEO and the annual total compensation of our median employee using the following methodology. We note that the pay ratio and annual total compensation amounts we disclose are reasonable estimates that have been calculated using methodologies and assumptions permitted by the SEC, which may differ from those used by other companies.
We identified our median employee by using the target annual total compensation including retirement contributions from our global Human Resources Information System for all employees globally. Based on our CEO’s annual total compensation compared to the annual total compensation for our median employee, our estimated pay ratio for 2019 was 268:1.globally as of December 31, 2021.
We calculated the median employee’s annual total compensation in accordance with the SEC rules used to calculate the amount set forth in the “total” column of the Summary Compensation Table and added the value of benefits. Accordingly, our median employee’s total annual compensation was calculated as $45,407,$50,316 including benefits.
With respect to the annual total compensation of our CEO, we used the amount reported in the “total” column of our Summary Compensation Table for 20192021 and added the value of benefits. Accordingly, our CEO’s annual total compensation for purposes of the pay ratio determination was $12,181,183$8,903,000 including benefits.
Based on our CEO’s annual total compensation compared to the annual total compensation for our median employee, our estimated pay ratio for 2021 was 177:1.
Synchrony62 •/ 2020 Annual Meeting and Proxy Statement 61 2022 ANNUAL MEETING AND PROXY STATEMENT
The Audit Committee retained KPMG LLP (“KPMG”) to audit our consolidated financial statements for 2021. In addition, the Audit Committee retained KPMG to provide other auditing and advisory services in 2021. In selecting KPMG as the independent auditor for 2022, the Audit Committee considered, among other factors, KPMG’s performance during 2021, including that of the lead audit partner, its independence and its attention to quality control matters. We understand the need for KPMG to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of KPMG, our Audit Committee has restricted the non-audit services that KPMG may provide to us primarily to tax services and merger and acquisition due diligence and integration services. The Audit Committee also requires key KPMG partners assigned to our audit to be rotated at least every five years.
PRE-APPROVAL PROCESSES
The Audit Committee approves all audit engagement fees and terms. It is the Audit Committee’s policy to review and pre-approve all audit and non-audit services provided to the Company by KPMG on an engagement-by-engagement basis. To minimize relationships that could appear to impair KPMG’s objectivity, it is the Audit Committee’s practice to restrict the non-audit services that may be provided to the Company by KPMG primarily to tax services and merger and acquisition due diligence and integration services. The Chair of the Audit Committee is authorized to pre-approve any audit or non-audit service on behalf of the Audit Committee, provided such decisions are presented to the full committee at its next regularly scheduled meeting.
ACCOUNTING FEES AND SERVICES
The following table presents fees paid for the audit of our annual consolidated financial statements and all other professional services rendered by KPMG for the years ended December 31, 2021 and 2020.
FOR THE YEARS ENDED DECEMBER 31, | ||||||
2021 | 2020 | |||||
Audit fees | $ | 4,610,321 | $4,327,683 | |||
Audit-related fees | 528,627 | 538,000 | ||||
Tax fees | — | — | ||||
All other fees | — | — | ||||
Total fees | $ | 5,138,948 | $4,865,683 |
In the above table, in accordance with SEC rules, “Audit” fees are fees that we paid to KPMG for (i) the audit of the Company’s annual financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and review of financial statements included in the Quarterly Reports on Form 10-Q for the first, second and third quarters of 2021, and (ii) services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements, including comfort letter procedures and consent-related procedures. “Audit-related” fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including agreed-upon procedures. “Tax” fees are fees for tax compliance, tax advice and tax planning, and “All other” fees are fees for any services not included in the first three categories.
HIRING RESTRICTIONS
The Audit Committee has adopted restrictions on our hiring of any KPMG partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having responsibility for providing audit assurance on any aspect of KPMG’s certification of the Company’s financial statements. These restrictions are contained in our Audit Committee Key Practices, which are published on the Company’s website at http://investors.synchrony.com under “Corporate Governance.”
2022 ANNUAL MEETING AND PROXY STATEMENT /63
AUDIT MATTERS
MATTERS
The Audit Committee retained KPMG LLP (“KPMG”) to audit our consolidated financial statements for 2019. In addition, the Audit Committee retained KPMG to provide other auditing and advisory services in 2019. In selecting KPMG as the independent auditor for 2020, the Audit Committee considered, among other factors, KPMG’s performance during 2019, including that of the lead audit partner, its independence and its attention to quality control matters. We understand the need for KPMG to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of KPMG, our Audit Committee has restricted thenon-audit services that KPMG may provide to us primarily to tax services and merger and acquisition due diligence and integration services. The Audit Committee also requires key KPMG partners assigned to our audit to be rotated at least every five years.
PRE-APPROVAL PROCESSES
The Audit Committee approves all audit engagement fees and terms. It is the Audit Committee’s policy to review andpre-approve all audit andnon-audit services provided to the Company by KPMG on anengagement-by-engagement basis. To minimize relationships that could appear to impair KPMG’s objectivity, it is the Audit Committee’s practice to restrict thenon-audit services that may be provided to the Company by KPMG primarily to tax services and merger and acquisition due diligence and integration services. The Chair of the Audit Committee is authorized topre-approve any audit ornon-audit service on behalf of the Audit Committee, provided such decisions are presented to the full committee at its next regularly scheduled meeting.
ACCOUNTING FEES AND SERVICES
The following table presents fees paid for the audit of our annual consolidated financial statements and all other professional services rendered by KPMG for the years ended December 31, 2019 and 2018.
For the Years Ended December 31, | ||||||||
2019 | 2018 | |||||||
Audit fees | $5,249,495 | $4,726,603 | ||||||
Audit-related | 556,600 | 597,956 | ||||||
fees | ||||||||
Tax fees | — | — | ||||||
All other fees |
| — |
|
| — |
| ||
Total fees |
| $5,805,995 |
|
| $5,324,559 |
|
In the above table, in accordance with SEC rules, “Audit” fees are fees that we paid to KPMG for (i) the audit of the Company’s annual financial statements included in the Annual Report on Form10-K for fiscal year ended December 31, 2019, and review of financial statements included in the Quarterly Reports on Form10-Q for the first, second and third quarters of 2019, and (ii) services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements, including comfort letter procedures and consent-related procedures. “Audit-related” fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including agreed-upon procedures. “Tax” fees are fees for tax compliance, tax advice and tax planning, and “All other” fees are fees for any services not included in the first three categories.
HIRING RESTRICTIONS
The Audit Committee has adopted restrictions on our hiring of any KPMG partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having responsibility for providing audit assurance on any aspect of KPMG’s certification of the Company’s financial statements. These restrictions are contained in our Audit Committee Key Practices, which are published on the Company’s website at http://investors.synchrony.com under “Corporate Governance.”
62 Synchrony • 2020 Annual Meeting and Proxy Statement
AUDIT MATTERS
ITEM 3—RATIFICATION OF SELECTION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 20202022
We are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2022. The Audit Committee has approved the selection of KPMG as our independent registered public accounting firm for 2022. KPMG is currently our independent registered public accounting firm.
Although the Company is not required to seek stockholder approval of this appointment, the Board believes that doing so is consistent with good corporate governance practices. If the selection is not ratified, the Audit Committee will explore the reasons for stockholder rejection and whether it is appropriate to select another independent auditor. We have been advised that representatives of KPMG will attend the Annual Meeting. They will have an opportunity to make a statement if they wish to do so and will be available to respond to appropriate questions. The Audit Committee reviews and oversees the Company’s financial reporting process on behalf of the Board, including the selection, evaluation, compensation and oversight of our independent auditor. Management has the primary responsibility for the Company’s financial statements and overall financial reporting process, including the Company’s internal control over financial reporting. KPMG, our independent auditor for In this context, the Audit Committee:
Has reviewed and discussed with management the Company’s audited consolidated financial statements for the year ended December 31,
Has discussed with KPMG the matters required to be discussed by Auditing Standard No. 1301: Communications with Audit Committees;
Has discussed with KPMG its assessment of the effectiveness of the Company’s internal control over financial reporting;
Has received from KPMG the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence; and
Has discussed with KPMG its independence, taking into consideration the amount and nature of the fees paid to the firm for audit andnon-audit services. Based on the review and discussions described above, the Audit Committee has recommended to the Board that the audited consolidated financial statements for the year ended December 31, Respectfully submitted by the Audit Committee of the Board. Jeffrey G. Naylor, Chair Paget L. Alves Olympia J. Snowe Ellen M. Zane
At March 16, 2022, we had 506,222,525 shares of common stock outstanding. The following table shows information regarding the beneficial ownership of our common stock by:
Our CEO and each of our named executive officers; Each of our directors; and All directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Synchrony common stock subject to options or RSUs held by that person that are currently exercisable or exercisable (or in the case of RSUs, vested or vest) within 60 days of the date of this proxy statement are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of each other stockholder. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Except as noted by footnote, all stockholdings are as of March 16, 2022, and the percentage of beneficial ownership is based on 506,222,525 shares of common stock outstanding as of March 16, 2022.
2022 ANNUAL MEETING AND PROXY STATEMENT / 65
BENEFICIAL OWNERSHIP
66/ 2022 ANNUAL MEETING AND PROXY STATEMENT BENEFICIAL OWNERSHIP There were no transactions or proposed transactions between the Company and any officer, director or nominee for director, any stockholder beneficially owning more than 5% of any class of our voting stock or any immediate family member of any of them, since January 1, RELATED PERSON TRANSACTIONS POLICY Our Board has adopted a written policy for the review, approval or ratification of transactions (known as “related person transactions”) between us or any of our subsidiaries and any related person, in which the amount involved since the beginning of our last completed fiscal year will or may be expected to exceed $120,000 and in which one of our executive officers, directors or nominees for director, or stockholders beneficially owning more than 5% of any class of our voting stock (or an immediate family member of any of the foregoing has a direct or indirect material interest). Since January 1, The policy calls for related person transactions to be reported to, reviewed and, if deemed appropriate, approved or ratified by, the Nominating and Corporate Governance Committee. In determining whether or not to approve or ratify a related person transaction, the Nominating and Corporate Governance Committee will take into account, among other factors it deems important, whether the related person transaction is in our best interests and whether the transaction is on terms no less favorable than terms generally available to us from an unaffiliated third party under the same or similar circumstances. In the event a member of the Nominating and Corporate Governance Committee is not disinterested with respect to the related person transaction under review, that member may not participate in the review, approval or ratification of that related person transaction. Certain decisions and transactions are not subject to the related person transaction approval policy, including: (i) decisions on compensation or benefits relating to our directors or executive officers or the hiring or retention of our executive officers, (ii) decisions relating to pro rata distributions to all our stockholders, (iii) indebtedness transactions with the Bank made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to the lender and not presenting more than the normal risk of collectability or other unfavorable features, and (iv) deposit transactions with the Bank made in the ordinary course of business and not paying a greater rate of interest on the deposits of a related person than the rate paid to other depositors on similar deposits with the Bank. Certain of our directors and executive officers and certain members of their immediate families have received extensions of credit from us in connection with credit card transactions. The extensions of credit were made in the ordinary course of business on substantially the same terms, including interest rates, as those prevailing at the time for comparable transactions with other persons not related to us and did not involve more than the normal risk of collectability or present other unfavorable terms. Future extensions of credit of this nature are not subject to the related person transaction approval policy.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? Holders of our common stock as of the close of business on the record date, which is March HOW DO I VOTE AT THE ANNUAL MEETING? Stockholders of record can vote in one of four ways:
Voting instructions (including instructions for both telephonic and internet voting) are provided on the Notice and the proxy card. The telephone and internet voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly. A control number, located on the Notice and the proxy card, will identify stockholders and allow them to submit their proxies and confirm that their voting instructions have been properly recorded. If your shares are held through a bank, broker, fiduciary or custodian (which we refer to in this proxy statement as a “broker”), please follow the voting instructions on the form you receive from such institution. WHAT IF MY SHARES OF THE COMPANY’S COMMON STOCK ARE HELD FOR ME BY A BROKER? If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares in accordance with your instructions. If you do not provide your broker with instructions as to how to vote such shares, your broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by NYSE rules. The proposal to ratify the appointment of KPMG is the only proposal considered a routine matter to be presented at the Annual Meeting. Brokers will not be permitted to vote your shares on any of the other matters presented at the Annual Meeting. If you do not provide voting instructions on these matters, including the election of the
FREQUENTLY ASKED QUESTIONS (“FAQS”)
WHAT IF I DO NOT VOTE OR DO NOT INDICATE HOW MY SHARES SHOULD BE VOTED ON MY PROXY CARD? If a stockholder does not return a signed proxy card or submit a proxy by telephone or the internet, and does not attend the meeting and vote, his or her shares will not be voted or counted as present for purposes of establishing a quorum at the Annual Meeting. Shares of our common stock represented by properly executed proxies received by us and not subsequently revoked will be voted at the Annual Meeting in accordance with the instructions contained therein. If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Board recommends on such proposal.In addition, if any other matter is properly presented at the Annual Meeting, the persons named in the accompanying proxy card will have discretion to vote your shares in their best judgment on such matter. HOW CAN I CHANGE MY VOTES OR REVOKE MY PROXY AFTER I HAVE VOTED? Any proxy signed and returned by a stockholder or submitted by telephone or via the internet may be revoked or changed at any time before it is exercised by mailing a written notice of revocation or change to our Corporate Secretary at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902 or by executing and delivering a later-dated proxy (either in writing, by telephone or via the internet). WILL MY VOTES BE PUBLICLY DISCLOSED? No. Stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed and are available only to the inspector of election and certain employees, who are obligated to keep such information confidential. WHAT IF OTHER MATTERS COME UP DURING THE ANNUAL MEETING? If any other matters properly come before the meeting, including a question of adjourning or postponing the meeting, the persons named in the proxies or their substitutes acting thereunder will have discretion to vote your shares on such matters in accordance with their best judgment. WHAT CONSTITUTES A QUORUM AT THE ANNUAL MEETING? The presence at the Annual Meeting, in person or represented by proxy, of the holders of a majority in voting power of the outstanding capital stock issued and entitled to vote at the Annual Meeting is required to constitute a quorum to transact business at the Annual Meeting. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under “What if my shares of the Company’s common stock are held for me by a broker?,” if brokers exercise their discretionary voting authority on the ratification of the appointment of KPMG, such shares will be considered present at the Annual Meeting for quorum purposes and brokernon-votes will occur as to each of the other proposals presented at the Annual Meeting.
FREQUENTLY ASKED QUESTIONS (“FAQS”) WHO WILL COUNT THE VOTE? Votes will be tabulated by Broadridge. The Board has appointed a representative of Broadridge to serve as the Inspector of Elections. WILL A LIST OF STOCKHOLDERS BE MADE AVAILABLE? We will make a list of stockholders available for 10 days prior to the Annual Meeting at our offices located at 777 Long Ridge Road, Stamford, Connecticut 06902. Please contact Synchrony’s Corporate Secretary by telephone at (203) PROXY SOLICITATION AND DOCUMENT REQUEST INFORMATION WHY DID I RECEIVE A NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF PRINTED PROXY MATERIALS? The SEC permits companies to furnish proxy materials to stockholders by providing access to these documents over the internet instead of mailing printed copies, which can reduce costs of printing and impact on the environment. Accordingly, we have mailed a Notice to some of our stockholders. All stockholders can access our proxy materials on the internet website referred to in the Notice. If you received a Notice and would like to receive a printed copy of our proxy materials, you should follow the instructions for obtaining such materials included in the Notice. MULTIPLE INDIVIDUALS RESIDING AT MY ADDRESS ARE BENEFICIAL OWNERS OF THE COMPANY’S COMMON STOCK, SO WHY DID WE RECEIVE ONLY ONE MAILING? The SEC permits companies to deliver a single Notice or set of Annual Meeting materials to an address shared by two or more stockholders. This delivery method is referred to as “householding.” We have delivered only one such Notice or set of Annual Meeting materials to some stockholders who share an address unless we received contrary instructions from the affected stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of such Notice or Annual Meeting materials to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of such Notice or Annual Meeting materials, please contact our Corporate Secretary by telephone at (203)585-2400 or in writing at Synchrony Financial, 777 Long Ridge Road, Stamford, Connecticut 06902. If you are currently a stockholder sharing an address with another stockholder receiving multiple copies of Notices or Annual Meeting materials and wish to receive only one copy for your household, please contact the Company at the above phone number or address. WHO IS SOLICITING MY PROXY AND WHO PAYS TO PREPARE, MAIL AND SOLICIT THE PROXIES? The Board is soliciting proxies from the Company’s stockholders for the Annual Meeting. We will bear the costs of solicitation of proxies for the Annual Meeting, including preparation, assembly, printing and mailing of the Notice, this proxy statement, the annual report, the proxy card and any additional information furnished to stockholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any solicitation materials to such beneficial owners. However, we do not reimburse or pay additional compensation to our own directors, officers or other employees for soliciting proxies. In addition, we have retained Innisfree M&A Incorporated to assist us in the solicitation of proxies for an aggregate fee of $20,000, plus reasonableout-of-pocket expenses. INFORMATION ABOUT ATTENDING THE HOW CAN I ATTEND THE ANNUAL MEETING? Stockholders as of the record date and/or their authorized representatives are permitted to attend our Annual Meeting. The Annual Meeting will be conducted entirely over an internet website, at the following address: www.virtualshareholdermeeting. com/
The Board has no knowledge of any other matter to be submitted at the Annual Meeting. If any other matter shall properly come before the Annual Meeting, including a question of adjourning or postponing the meeting, the persons named in this proxy statement will have discretionary authority to vote the shares thereby represented in accordance with their best judgment. ANNUAL REPORT AND COMPANY INFORMATION A copy of our STOCKHOLDER PROPOSALS FOR THE Proposals that stockholders wish to submit for inclusion in our proxy statement for our With respect to proposals submitted by a stockholder for consideration at our Stockholders who intend to submit director nominees for inclusion in our proxy statement for the IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE Our proxy materials relating to our Annual Meeting (Notice, proxy statement and annual report) are available at www.proxyvote.com.
SYNCHRONY FINANCIAL 777 LONG RIDGE ROAD STAMFORD, CT 06902
SYNCHRONY FINANCIAL
MAY 11:00 A.M., EASTERN TIME www.virtualshareholdermeeting.com/ WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING. BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK. Internet and telephone voting is available through 11:59 P.M., Eastern Time on May Your internet or telephone vote authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — D74600-P64935
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