| Item 7.01 | Regulation FD Disclosure |
Truist Financial Corporation (“Truist”) today announced that it has reached a definitive agreement to sell a 20% minority stake in its insurance brokerage subsidiary, Truist Insurance Holdings, Inc. (“TIH”), to an investor group led by Stone Point Capital LLC (the “Investor Group”). A copy of the news release issued by Truist announcing the transaction is furnished as Exhibit 99.1. In addition, Truist will host a conference call to discuss the transaction today at 9:00 a.m. eastern time. A copy of the presentation materials for the call is furnished as Exhibit 99.2.
The news release at Exhibit 99.1 and the presentation materials at Exhibit 99.2 are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing. All information in this Current Report on Form 8-K and in the exhibits hereto speaks as of the date hereof and thereof, respectively, and Truist does not assume any obligation to update such information in the future. In addition, Truist disclaims any inference regarding the materiality of such information which otherwise may arise as a result of its furnishing such information under Item 7.01 of this Current Report on Form 8-K.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Truist also announced that, in connection with this transaction, John M. Howard will continue as Chief Executive Officer of TIH, reporting to Truist Chief Executive Officer, William H. Rogers, Jr., but Truist will shift some of his enterprise-wide responsibilities in order to support focus on maximizing the success of TIH.
On February 15, 2023, the Compensation and Human Capital Committee of the Board of Directors of Truist approved the following adjustments to Mr. Howard’s compensation in connection with this transaction. Mr. Howard’s base salary will be increased to $1,000,000 per year effective immediately. Mr. Howard’s target annual cash incentive compensation opportunity under Truist’s Annual Incentive Performance award program for 2023 will be increased to 230% of his base salary effective for the entire 2023 performance period, and the payout will now be based 75% on performance metrics relating solely to TIH and 25% on performance criteria applicable to Truist as a whole. Mr. Howard will also be entitled to receive, subject to the closing of the investment by the Investor Group in TIH and the approval of TIH’s Board of Managers, a one-time equity award from TIH in the form of both time-vesting and event-vesting profits interests (50% of each) with an aggregate Black-Scholes value of approximately $17,500,000, which will provide value to Mr. Howard based only on any increase in value of TIH over the value of TIH as of the date that the profits interests are granted to Mr. Howard (taking into account the investment by the Investor Group). The time-vesting profits interests will vest pro-rata over the course of four years, and the profits interest grant will be in lieu of any other long-term incentive compensation grant that Mr. Howard would have otherwise been eligible to receive during this period. Mr. Howard will otherwise remain subject to the same terms and conditions of employment as prior to these changes.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
