| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b)
On August 13, 2023, the Board of Directors (the “Board”) of Discover Financial Services (the “Company”) accepted the resignation of Roger C. Hochschild from his positions as Chief Executive Officer and President of the Company, a member of the Board and a director and officer of Discover Bank (the “Bank”), each effective August 14, 2023 (the “Effective Date”). To assist with the transition, Mr. Hochschild will continue to be employed by the Company as an advisor to the Chair of the Board from the Effective Date through December 31, 2023, pursuant to the terms of a transition employment letter (the “Transition Letter”), described below.
The Board has established a special search committee to conduct a search for a permanent successor to Mr. Hochschild.
(c)
On August 13, 2023, the Board appointed John B. Owen as Interim Chief Executive Officer and Interim President of the Company and as Interim President of the Bank, effective August 14, 2023. Mr. Owen will continue to serve as a director of the Company, but is resigning as a member of the Risk Oversight Committee of the Board during his term as Interim Chief Executive Officer and Interim President.
John Owen, a financial services veteran with more than 38 years of experience in banking and information technology that spans multiple industries including banking, insurance, airlines, and the defense industry, was elected to the Board and appointed to the Board’s Risk Oversight Committee on June 6, 2022. Prior to joining the Company, Mr. Owen retired from Regions Financial Corp., one of the nation’s largest full-service providers of consumer and commercial banking, wealth management and mortgage products and services, in March 2021, where he had been Chief Operating Officer since 2018. Prior thereto, Mr. Owen served in various senior management roles at the bank, including head of Operations and Technology, head of Consumer Services Group, head of Regional Banking group, and head of Enterprise Services and Consumer Banking. Active in the community, Mr. Owen has served on the board of directors for the Birmingham Business Alliance, Innovation Depot and the United Way of Central Alabama, as well as the advisory board for the UAB Collat School of Business. Under his leadership at Regions, the bank consistently evolved how it served its customers, such as unveiling an overhauled and upgraded mobile app for both iOS and Android devices. He brings valuable leadership experience and has a clear understanding of the overall governance structure associated with a highly regulated industry such as banking.
Mr. Owen has no family relationships with any director or executive officer of the Company. There are no arrangements or understandings between Mr. Owen and any other person pursuant to which Mr. Owen was selected as the Company’s Interim Chief Executive Officer and Interim President, and there are no transactions involving Mr. Owen that would be required to be reported under Item 404(a) of Regulation S-K.
In connection with his appointment, Mr. Owen will receive an annual base salary of $950,000, to be paid in accordance with the Company’s ordinary payroll practices beginning August 15, 2023. Mr. Owen will also receive a special restricted stock unit award with a value of $500,000, to vest on the earlier of (1) the date on which the Company’s permanent successor to Mr. Hochschild begins employment and (2) the one year anniversary of the award’s grant date.
(d)
On August 13, 2023, the Board appointed J. Michael Shepherd as a director of the Company and as a member of the Board of Directors of the Bank, effective August 14, 2023. In connection with his appointment to the Board, Mr. Shepherd is being named to the Risk Oversight Committee of the Board.
