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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)
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☒
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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STATE STREET CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
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Sincerely,
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Ronald P. O’Hanley
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Date
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May 19, 2021
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Time
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9:00 a.m. Eastern Time
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Location
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Virtual annual meeting of shareholders conducted via live audio webcast at: www.virtualshareholdermeeting.com/STT2021
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Purpose
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1.
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To elect 12 directors
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2.
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To approve an advisory proposal on executive compensation
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3.
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To ratify the selection of Ernst & Young LLP as State Street’s independent registered public accounting firm for the year ending December 31, 2021
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4.
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To vote on a shareholder proposal, if properly presented at the meeting and not previously withdrawn
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To act upon such other business as may properly come before the meeting and any adjournments thereof
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Record Date
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The directors have fixed the close of business on March 22, 2021, as the record date for determining shareholders entitled to notice of and to vote at the meeting.
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Meeting Admission
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If you wish to attend the annual meeting online, please enter the 16-digit control number included in your notice of Internet availability of the proxy materials or your proxy card, or by following the voting instructions that accompanied your proxy materials. A list of our registered holders as of the close of business on the record date will be made available to shareholders during the meeting at www.virtualshareholdermeeting.com/STT2021. To access such list of registered holders beginning April 8, 2021 and until the meeting, shareholders should email State Street Investor Relations at IR@statestreet.com.
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Voting by Proxy
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Please submit a proxy card or, for shares held in “street name” through a broker, bank or nominee, a voting instruction form, as soon as possible, so your shares can be voted at the meeting. You may submit your proxy card or voting instruction form by mail. If you are a registered shareholder, you may also vote electronically by telephone or over the Internet by following the instructions included with your proxy card or notice of Internet availability of proxy materials. If your shares are held in “street name,” you will receive instructions for the voting of your shares from your broker, bank or other nominee, which may permit telephone or Internet voting. Follow the instructions on the voting instruction form or notice of Internet availability of proxy materials that you receive from your broker, bank or other nominee to ensure that your shares are properly voted at the annual meeting.
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By Order of the Board of Directors,
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David C. Phelan
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Secretary
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2021 Annual Meeting of Shareholders
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Date:
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May 19, 2021
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Time:
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9:00 a.m. Eastern Time
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Location:
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Virtual annual meeting of shareholders conducted via live audio webcast at: www.virtualshareholdermeeting.com/STT2021
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Record date:
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March 22, 2021
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Item
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Board Recommendation
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Election of Directors (see “Item 1”)
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FOR Each Director
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Advisory Proposal on 2020 Executive Compensation (see “Item 2”)
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FOR
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Ratification of Ernst & Young LLP as Independent Registered Public Accounting Firm for 2021
(see “Item 3”)
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FOR
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Shareholder Proposal, if properly presented at the meeting and not previously withdrawn (see “Item 4”)
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AGAINST
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($ In millions, except per share data)
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2020
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2019
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Change
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Total fee revenue
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$9,499
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$9,147
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3.8%
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Total revenue
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11,703
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11,712
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(0.1)%
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Expenses
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8,542
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8,675
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(1.5)%
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Operating Margin
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27.0%
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25.9%
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1.1% pts
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EPS
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6.70
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6.17
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8.6%
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ROE (GAAP)
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10.0%
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9.4%
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0.6% pts
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(1)
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Financial results are presented on a non-GAAP basis, unless otherwise noted. Non-GAAP financial results adjust selected GAAP-basis financial results to exclude the impact of notable items outside of State Street’s normal course of business. For a reconciliation of non-GAAP measures presented in this proxy statement, see Appendix C.
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Director Nominee
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Principal Occupation
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Other Public Company
Boards (#)
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State Street Board Roles
and Committee Memberships
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Marie A. Chandoha*♀
Director Since 2019
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Retired President and Chief Executive Officer, Charles Schwab Investment Management, Inc.
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None
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•
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Examining and Audit
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•
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Technology and Operations
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Patrick de Saint-Aignan*
Director Since 2009
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Retired Managing Director and Advisory Director, Morgan Stanley
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None
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•
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Examining and Audit
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•
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Executive
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Risk (Chair)
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Technology and Operations
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Amelia C. Fawcett*♀
Director Since 2006
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Chairman, Kinnevik AB
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1
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•
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Lead Director
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•
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Executive
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Human Resources
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Nominating and Corporate Governance
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William C. Freda*
Director Since 2014
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Retired Senior Partner and Vice Chairman, Deloitte, LLP
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None
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•
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Examining and Audit (Chair)
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Executive
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Risk
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Sara Mathew*∞♀
Director Since 2018
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Retired Chairman and Chief Executive Officer, The Dun & Bradstreet Corporation
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3(1)
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•
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Executive
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Human Resources (Chair)
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Risk
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William L. Meaney*
Director Since 2018
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President, Chief Executive Officer and Director, Iron Mountain Inc.
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1
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•
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Human Resources
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•
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Technology and Operations
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Ronald P. O’Hanley
Director Since 2019
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Chairman, President and Chief Executive Officer, State Street Corporation
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1
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•
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Chairman
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Executive (Chair)
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Risk
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Technology and Operations
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Sean O’Sullivan*
Director Since 2017
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Retired Group Managing Director and Group Chief Operating Officer, HSBC Holdings, plc
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None
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•
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Executive
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Risk
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Technology and Operations (Chair)
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Julio A. Portalatin*^∞
Director Since 2021
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Retired, President and Chief Executive Officer, Mercer Consulting Group, Inc.
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None
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None
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John B. Rhea*^∞
Director Since 2021
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Partner, Centerview Partners
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1
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None
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Richard P. Sergel*
Director Since 1999
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Retired President and Chief Executive Officer, North American Electric Reliability Corporation
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1
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•
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Examining and Audit
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Human Resources
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Nominating and Corporate Governance
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Gregory L. Summe*
Director Since 2001
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Managing Partner and Founder, Glen Capital Partners, LLC
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4(1)
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•
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Executive
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Human Resources
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Nominating and Corporate Governance (Chair)
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* = Independent
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^ = First-Time Nominee
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∞ = Racially Diverse
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♀ = Gender Diverse
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(1)
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Ms. Mathew and Mr. Summe each serve on the board of NextGen Acquisition Corporation, a Nasdaq-listed special purpose acquisition company (SPAC). NextGen Acquisition Corporation has publicly announced a definitive business combination agreement with Xos, Inc. and that it expects the transaction to close in the second quarter of 2021. As disclosed in the publicly filed business combination agreement, upon closing of the acquisition Ms. Mathew and Mr. Summe will no longer serve as directors of the resulting company.
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Board of Directors
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Shareholders Rights and Engagement
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Strategy, Compensation and Risk
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• 11 of 12 director nominees are independent
• Annual director elections
• Annual assessment of effectiveness and qualifications of each director nominee
• 42% of director nominees are gender or racially diverse
• Active independent Lead Director elected annually by all independent directors
• Board and committees meet regularly in executive session without management present
• At least 75% attendance by each director at Board and committee meetings
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• Directors are elected by a majority of votes cast in uncontested elections and by plurality vote in contested elections
• Active shareholder outreach program, engagement or requested engagement with shareholders representing approximately 70% of our outstanding common stock in 2020
• No poison pill
• Proxy access by-law allows shareholders to include director nominees in State Street’s proxy materials
• No supermajority vote requirements relating to common stock
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• Board and Committee oversight of:
– strategy, financial performance, ethics and risk management
– succession planning for CEO and other executive officers
– alignment of culture and human capital management with strategy and long-term objectives
• Directors and executive officers(1) are subject to stock ownership guidelines and are prohibited from short selling, options trading, hedging or speculative transactions in State Street securities
• Incentive compensation subject to recourse mechanisms
• Monitor material activities and practices on environmental, social and governance (ESG) matters
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What’s New for 2021
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The Nominating and Corporate Governance Committee amended its charter to highlight its commitment to actively seek diverse candidates for the pool from which director candidates are chosen
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The Board updated its Corporate Governance Guidelines to explicitly set forth diversity characteristics considered when evaluating director nominees to include race/ethnicity, gender identity, sexual orientation and nationality
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We expanded our shareholder outreach to engage with more shareholders. Our Lead Director, Amelia C. Fawcett, and/or our new Human Resources Committee chair, Sara Mathew, participated in the majority of these shareholder meetings, which included discussion of our response to the COVID-19 pandemic, corporate governance, executive compensation design, inclusion and diversity and other human capital practices and initiatives, and other ESG topics
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(1)
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Stock ownership guidelines are applicable to executive officers who serve on State Street’s Management Committee.
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(1)
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Based on independently reviewed data and resultant investment in Renewable Energy Credits and carbon offset projects.
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What We Heard
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How We Responded
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We continued to receive general support for our executive compensation program, including for our high levels of deferral (90% of 2019 NEO incentive compensation was deferred), performance-based restricted stock unit (RSU) design, and appropriate use of discretion. Some shareholders requested more transparency regarding the factors the Committee considers in its discretionary performance assessment process, including individual performance expectations and how performance against those expectations links to pay decisions
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•
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We expanded the disclosure in this proxy statement to provide further detail on the factors the Committee considers in assessing financial performance, including how the Committee considers relative performance in determining the amount of incentive compensation to be awarded to our NEOs (see pp. 39 - 42)
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•
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The Committee maintained the basic design of our executive compensation program, including the high levels of deferral and significant use of performance-based equity used in prior years
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Several shareholders questioned the emphasis on individual performance relative to corporate performance in the determination of incentive awards
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•
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The Committee redesigned how it determines the amount of incentive compensation for our NEOs to emphasize corporate performance as the primary driver, while retaining the ability to differentiate for individual performance through the use of a modifier of up to +/- 30% (see p. 35)
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Most shareholders expressed continued support for our use of return on average common equity (ROE) and pre-tax margin as metrics in our long-term performance-based RSUs, though some shareholders requested we consider incorporating a relative metric in our long-term incentive design. Some shareholders also expressed a desire for additional disclosure regarding the role of relative financial performance in pay decisions
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•
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The performance-based RSUs granted for the 2020 performance year maintain ROE and pre-tax margin as metrics. In addition, the Committee added two new metrics: fee revenue growth and relative total shareholder return (TSR) (see p. 36)
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•
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(1)
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Excluding certain international assignment and relocation benefits.
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 19, 2021
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The proxy statement and annual report, and the means to vote electronically, are available at www.proxyvote.com. To view this material, you must have available the 16-digit control number located on the notice mailed on April 6, 2021, on the proxy card or, if shares are held in the name of a broker, bank or other nominee, on the voting instruction form.
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Independent Director Governance
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The independent directors meet in an executive session presided by the independent Lead Director at every regularly scheduled meeting of the Board and otherwise as needed
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The meetings of the independent directors promote additional opportunities, outside the presence of management, for the directors to engage together in discussion. The regularity of these meetings fosters continuity for these discussions and allows for a greater depth and scope to the matters discussed
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commercial or charitable relationships with an entity for which the State Street director or family member serves as a non-management director, and with respect to which the director was uninvolved in negotiating such relationship (Mses. Dugle and Mathew and Mr. Freda)
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commercial relationships with an entity for which the State Street director or family member serves as an employee, consultant or executive officer where the director does not receive any special benefits from the transaction and the annual payments to and from the entity are equal to or less than the greater of $1 million or 2% of the consolidated gross annual revenues of the other entity during the most recent completed fiscal year (Messrs. Freda, Meaney and Rhea)
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Director Nominee Characteristics and Qualifications
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The Board expects all director nominees to possess the following attributes or characteristics:
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unquestionable business ethics, irrefutable reputation and superior moral and ethical standards
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informed and independent judgment with a balanced perspective, financial literacy, mature confidence, high performance standards and incisiveness
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ability and commitment to attend Board and committee meetings and to invest sufficient time and energy in monitoring management’s conduct of the business and compliance with State Street’s operating and administrative procedures
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a global vision of business with the ability and willingness to work closely with the other Board members
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Taken as a whole, the Board expects one or more of its members to have the following skill sets, specific business background and global or international experience:
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experience in the financial services industry
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experience as a senior officer of a well-respected public company
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experience as a senior business leader of an organization active in our key international growth markets
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experience in key disciplines of significant importance to State Street’s overall operations
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qualification as an audit committee financial expert
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qualification as a risk management expert
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Role of the Independent Lead Director
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Elected annually by the independent directors to serve a one-year term
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Expected to participate in, and attend, meetings of all of the Board’s committees, providing valuable committee overlap to enable optimal agenda coordination, insight and consistency across all committees
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Presides at all meetings of the Board during which the Chairman is not present, including all executive sessions of independent directors occurring at every regularly scheduled Board meeting
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Serves as a liaison between the Chairman and the independent directors
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Authorized to call additional meetings of the independent directors
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Conducts an annual process for reviewing the Chief Executive Officer’s performance and reports the results of the process to the other independent directors
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Communicates frequently with the Chairman to provide feedback and implement the decisions and recommendations of the independent directors
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Represents the Board in discussions with stakeholders and communicates with regulators
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Approves, in consultation with the Chairman, the agendas for Board meetings and information sent to the Board and the matters voted on by the full Board
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as our Chief Executive Officer, and with his experience in various leadership roles at State Street, Mr. O’Hanley has extensive knowledge of our business and strategy and is well positioned to work with the independent Lead Director to focus our Board’s agenda on the key issues facing State Street
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oversight of State Street is the responsibility of our Board as a whole, which maintains a majority of independent directors (11 out of 12 director nominees), and this responsibility can be properly discharged with a strong, active and engaged independent Lead Director
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the Chairman and independent Lead Director work together to play a strong and active role in the oversight of State Street’s business strategy and operational management
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Primary Responsibilities:
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Current Members:
• William C. Freda, Chair
• Marie A. Chandoha
• Patrick de Saint-Aignan
• Lynn A. Dugle
• Richard P. Sergel
12 Meetings in 2020
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• Responsible for the appointment (including qualifications, performance, independence and periodic consideration of retaining a different firm), compensation, retention, evaluation and oversight of the work of State Street’s independent registered public accounting firm, including sole authority for the establishment of pre-approval policies and procedures for all audit engagements and any non-audit engagements
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• Discusses with the independent auditor critical accounting policies and practices, alternative treatments of financial information, the effect of regulatory and accounting initiatives and other relevant matters
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• Oversees the operation of our system of internal control covering the integrity of our consolidated financial statements and reports; compliance with laws, regulations and corporate policies; and the performance of corporate audit
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• Reviews the effectiveness of State Street’s compliance program and conducts an annual performance evaluation of the General Auditor, the Chief Compliance Officer and other senior members of management as appropriate
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• Oversees the Company’s efforts to promote and advance a culture of compliance and ethical business practices
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All members meet the independence requirements of the listing standards of the NYSE and the rules and regulations of the SEC and are considered audit committee financial experts (as defined by SEC rules).
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Primary Responsibilities:
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Current Members:
• Ronald P. O’Hanley, Chair
• Patrick de Saint-Aignan
• Amelia C. Fawcett
• William C. Freda
• Sara Mathew
• Sean O’Sullivan
• Gregory L. Summe
0 Meetings in 2020
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• Committee members are the Chairs of each Committee, the independent Lead Director and Chairman of the Board and are authorized to exercise all the powers of the Board, except as otherwise limited by Massachusetts law or the Committee’s charter
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• Reviews, approves and acts on matters on behalf of the Board at times when it is not practical to convene a meeting of the Board to address such matters
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• Depending on meeting activities, if any, periodically reports to the Board
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Primary Responsibilities:
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Current Members:
• Sara Mathew, Chair
• Amelia C. Fawcett
• William L. Meaney
• Richard P. Sergel
• Gregory L. Summe
9 Meetings in 2020
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• Oversees human capital management strategies, the operation of all compensation plans, policies and programs in which executive officers participate and certain other incentive, retirement, health and welfare and equity plans in which employees participate
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• Oversees the alignment of our incentive compensation arrangements with the safety and soundness of State Street, including the integration of risk management objectives and related policies, arrangements and control processes, consistent with applicable regulatory rules and guidance
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• Acting together with the other independent directors, annually reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation; evaluates the Chief Executive Officer’s performance; and reviews, determines and approves, in consultation with the other independent directors, the Chief Executive Officer’s compensation
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• Reviews, evaluates and approves the total compensation of all executive officers
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• Approves the terms and conditions of employment and any changes thereto, including any restrictive provisions, severance arrangements and special arrangements or benefits, of any executive officer
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• Adopts equity grant guidelines in connection with its overall responsibility for all equity plans and monitors stock ownership of executive officers who are members of the Management Committee
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• Appoints and oversees compensation consultants and other advisors retained by the Committee
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All members meet the independence requirements of the listing standards of the NYSE.
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Primary Responsibilities:
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Current Members:
• Gregory L. Summe, Chair
• Amelia C. Fawcett
• Richard P. Sergel
5 Meetings in 2020
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• Assists the Board with respect to issues and policies affecting our governance practices, including succession planning for executive officers, identifying and recommending director nominees and shareholder matters
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• Recommends each committee’s composition and leads the Board in its annual review of the Board’s and each committee’s performance
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• Reviews and approves State Street’s related person transactions, reviews the amount and form of director compensation and reviews reports on regulatory, political and lobbying activities of State Street
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All members meet the independence requirements of the listing standards of the NYSE.
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Primary Responsibilities:
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Current Members:
• Patrick de Saint-Aignan, Chair
• William C. Freda
• Sara Mathew
• Ronald P. O’Hanley
• Sean O’Sullivan
9 Meetings in 2020
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• Oversees the operation of our global risk management framework, including the risk management policies for our operations
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• Reviews the management of all risk applicable to our operations, including credit, market, interest rate, liquidity, operational, technology, business, compliance and reputation risks
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• Oversees our strategic capital governance principles and controls, monitors capital adequacy in relation to risk and discharges the duties and obligations of the Board under applicable Basel, Comprehensive Capital Analysis and Review, Comprehensive Liquidity Assessment and Review and resolution and recovery planning requirements
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• Conducts an annual performance evaluation of the Chief Risk Officer
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Primary Responsibilities:
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Current Members:
• Sean O’Sullivan, Chair
• Marie A. Chandoha
• Patrick de Saint-Aignan
• Lynn A. Dugle
• William L. Meaney
• Ronald P. O’Hanley
7 Meetings in 2020
|
| |
• Oversees technology and operational risk management and the role of these risks in executing the Company’s strategy in support of the Company’s global business requirements
|
|
|
• Reviews material strategic initiatives from a technology and operational risk perspective
|
| |||
|
• Reviews technology related risks, including corporate information security, cybersecurity, operational and technology resiliency and data management
|
|
|
Compensation Component(1)
|
| |
Value ($)(2)
|
| |
Vehicle(3)
|
|
|
Annual Retainer
|
| |
$90,000
|
| |
Cash or shares of State Street common stock
|
|
|
Annual Equity Award
|
| |
195,000
|
| |
Shares of State Street common stock
|
|
|
Additional Independent Lead Director Retainer
|
| |
125,000
|
| |
Cash or shares of State Street common stock
|
|
|
Examining and Audit Committee and Risk Committee Chair Retainers
|
| |
30,000
|
| |
Cash or shares of State Street common stock
|
|
|
Human Resources Committee Chair Retainer
|
| |
25,000
|
| |
Cash or shares of State Street common stock
|
|
|
Nominating and Corporate Governance Committee and Technology and Operations Committee Chair Retainers
|
| |
20,000
|
| |
Cash or shares of State Street common stock
|
|
|
Examining and Audit Committee and Risk Committee Member Retainers(4)
|
| |
20,000
|
| |
Cash or shares of State Street common stock
|
|
(1)
|
A Board meeting fee of $1,500 applies after the 10th Board meeting attended during the Board year. Non-management directors also receive reimbursement of expenses incurred as a result of Board service.
|
(2)
|
The annual retainer and annual equity award are pro-rated for any non-management director joining the Board after the annual meeting. Committee retainers are pro-rated for any non-management director joining a committee during the Board year.
|
(3)
|
Non-management directors may elect to receive their retainers in cash or shares of State Street common stock. For non-management directors elected at the annual meeting, all awards made in shares of State Street common stock are granted based on the closing price of our common stock on the NYSE on the date of the annual meeting that begins the period, rounded up to the nearest whole share. Under the 2017 Stock Incentive Plan, with limited exceptions, the total value of all compensation components to a non-management director cannot exceed $1.5 million in a calendar year.
|
(4)
|
The Examining and Audit Committee and Risk Committee member retainer is payable to each member of the respective committee, other than the Lead Director and the committee’s chair.
|
|
Name(1)
|
| |
Fees Earned
or Paid in
Cash
($)
|
| |
Stock Awards(2)
($)
|
| |
All Other
Compensation(3)
($)
|
| |
Total
($)
|
|
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(g)
|
| |
(h)
|
|
|
Kennett F. Burnes(4)
|
| |
$—
|
| |
$—
|
| |
$48,707
|
| |
$48,707
|
|
|
Marie A. Chandoha
|
| |
110,000
|
| |
195,048
|
| |
25,345
|
| |
330,393
|
|
|
Patrick de Saint-Aignan
|
| |
140,000
|
| |
195,048
|
| |
40,752
|
| |
375,800
|
|
|
Lynn A. Dugle
|
| |
110,000
|
| |
195,048
|
| |
40,486
|
| |
345,534
|
|
|
Amelia C. Fawcett
|
| |
215,000
|
| |
195,048
|
| |
—
|
| |
410,048
|
|
|
William C. Freda
|
| |
140,000
|
| |
195,048
|
| |
40,752
|
| |
375,800
|
|
|
Sara Mathew
|
| |
135,000
|
| |
195,048
|
| |
—
|
| |
330,048
|
|
|
William L. Meaney
|
| |
90,000
|
| |
195,048
|
| |
15,345
|
| |
300,393
|
|
|
Sean P. O’Sullivan
|
| |
130,000
|
| |
195,048
|
| |
—
|
| |
325,048
|
|
|
Richard P. Sergel
|
| |
110,000
|
| |
195,048
|
| |
—
|
| |
305,048
|
|
|
Gregory L. Summe
|
| |
110,000
|
| |
195,048
|
| |
25,486
|
| |
330,534
|
|
(1)
|
Messrs. Portalatin and Rhea were elected to the Board on March 5, 2021 and are therefore not included in the 2020 Director Compensation table.
|
(2)
|
On May 20, 2020, each non-management director received 3,341 shares of State Street common stock valued at $195,048 based on the closing price of our common stock on the NYSE of $58.38. Stock awards to non-management directors vest immediately, and there were no unvested non-management director stock awards as of December 31, 2020.
|
(3)
|
Perquisites received in 2020 include director life insurance coverage and business travel accident insurance paid for by State Street ($752 for Messrs. de Saint-Aignan and Freda; $486 for Ms. Dugle and Mr. Summe; $345 for Ms. Chandoha and Mr. Meaney; and $313 for Mr. Burnes). Charitable contributions by non-management directors are eligible for a Company matching contribution of up to $40,000 per calendar year under the State Street matching gift program. Matching charitable contributions made on behalf of the non-management directors during 2020 were $40,000 for Messrs. Burnes, de Saint-Aignan and Freda and Ms. Dugle; $25,000 for Ms. Chandoha and Mr. Summe; and $15,000 for Mr. Meaney. Mr. Burnes’ perquisites also include a retirement gift ($8,394) in recognition of his 17 years of service as a member of the Board. The total amount of perquisites and other personal benefits for Dame Amelia, Ms. Mathew and Messrs. O'Sullivan and Sergel have not been reported because the total did not exceed $10,000.
|
(4)
|
Mr. Burnes retired from the Board effective May 20, 2020. “Fees Earned or Paid in Cash” and “Stock Awards” for Mr. Burnes' Board service during 2020 were paid during 2019 and reported in our proxy statement for the 2020 annual meeting of shareholders.
|
Considerations
|
|||
As appropriate for the circumstances, the Nominating and Corporate Governance Committee (or the Committee Chair) will review and consider:
|
|||
•
|
| |
the related person’s interest in the related-person transaction
|
•
|
| |
the approximate dollar value of the amount involved in the related-person transaction
|
•
|
| |
the approximate dollar value of the related person’s interest in the transaction without regard to any profit or loss
|
•
|
| |
whether the transaction was undertaken in the ordinary course of State Street’s business
|
•
|
| |
whether the transaction with the related person is on terms no less favorable to State Street than terms that could be reached with an unrelated third-party
|
•
|
| |
the purpose of the transaction and the potential benefits to State Street
|
•
|
| |
any other information regarding the related-person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction
|
•
|
interests arising solely from the related person’s position as an executive officer, employee or consultant of another entity (whether or not the person is also a director of such entity) that is a party to the transaction, where (1) the related person and his or her immediate family members do not receive any special benefits as a result of the transaction and (2) the annual amount involved in the transaction equals less than the greater of $1 million or 2% of the consolidated gross revenues of the other entity that is a party to the transaction during that entity’s last completed fiscal year; or
|
•
|
a transaction that involves discretionary charitable contributions from State Street to a tax-exempt organization where a related person is a director, trustee, employee or executive officer, provided the related person and his or her immediate family members do not receive any special benefits as a result of the transaction, and further provided that, where a related person is an executive officer of the
|
•
|
Providing development and learning opportunities to keep them engaged to reach their full potential
|
•
|
Promoting an inclusive and diverse workplace
|
•
|
Improving both individual and organizational effectiveness
|
|
Workforce Profile
|
| |
Inclusion, Diversity and Equity
|
| |
Employee Benefits and Wellbeing
|
| ||||||||||||
|
Managing and supporting approximately 39,000 employees located in 31 countries
|
| |
Working to accelerate progress against our diversity goals and build more equity in all of our talent processes
|
| |
Offering comprehensive and flexible benefit programs designed to meet the changing needs of our employees and their families
|
| ||||||||||||
|
U.S. Employee Profile
|
| |
• In 2020, launched 10 Actions Against Racism and Inequality
• 24+ Employee Networks with 100+ chapters globally facilitate courageous
conversations and drive engagement
|
| |
• Flexible work programs help employees manage the demands of their personal and professional lives
• Physical, emotional and financial wellness programs make for a happier and healthier workforce
• Parental and caretaker support benefits
provide aid through life’s important events
|
| ||||||||||||
|
|
| |
Women
|
| |
Employees of
Color
|
| ||||||||||||
|
Management (Senior Vice President+)
|
| |
31%
|
| |
14%
|
| ||||||||||||
|
Non-
Management
|
| |
41%
|
| |
35%
|
| ||||||||||||
|
Overall
|
| |
41%
|
| |
30%
|
| |
|
| |||||||||
|
Note: Employee data as of December 31, 2020
|
| |
|
| |
|
|
|
Culture and Engagement
|
| |
Learning and Development
|
| |
Stewardship and Community Leadership
|
| |||||||||
|
Leveraging shared traits and behaviors as a way to drive our business strategy and operating model
|
| |
Developing and training our workforce through professional development programs and a learner-centric approach to skills-training, including easily-accessible education options
|
| |
Impacting the global communities where we work and live through financial support, employee volunteerism and corporate responsibility
|
| |||||||||
|
•
|
| |
Defining aspirational culture traits enables identification of critical enterprise-wide behaviors to drive business strategy
|
| |
•
|
| |
Internship and rotational professional development programs for high-performing recent graduates to position them for early career success
|
| |
• Making grants for education and workforce development in line with State Street Foundation’s strategic focus
• Supporting local non-profit organizations and driving employee engagement through volunteering opportunities and matching gifts program
• Setting and working towards aggressive science-based environmental goals to reduce the environmental footprint of our business
|
| |||
|
•
|
| |
Encouraging integrity and ethical decision making and providing multiple avenues to speak up to address behavior inconsistent with our values fosters trust and accountability
|
| |
•
|
| |
Rotational leadership development program and tailored development opportunities for high potential middle managers to build internal pipeline of diverse talent for future leadership roles
|
| ||||||
|
•
|
| |
Frequent employee surveys provide insight into employee sentiment regarding engagement, development, alignment, agility, work/life balance, manager qualities and risk excellence
|
| |
•
|
| |
Developing and training the workforce of the future through enhanced learning curricula with modern, flexible learning options
|
|
|
Performance Management
|
| |
Other Recognition Opportunities
|
| |
Equitable Employment Practices
|
| |||||||||
|
Motivating and rewarding high-performing employees with competitive incentive opportunities, encouraging employees to learn and grow in their careers
|
| |
Providing monetary and non-monetary recognition for specific behaviors that drive our business strategy and culture and demonstrating what high performance looks like for State Street
|
| |
Supporting the concept of equal pay for equal work and working to increase the representation of women and employees of color throughout our organization and especially among our senior executives
|
| |||||||||
|
•
|
| |
We employ a pay-for-performance philosophy and differentiate pay by individual to reward our highest performers
|
| |
•
|
| |
In 2020, implemented a new recognition and rewards platform designed to acknowledge and reward employees who exhibit or role model our aspirational culture traits
|
| |
• Global policy to not ask for
compensation history for both internal and external hires
• For all management-level employees
(Senior Vice President+), require a diverse candidate slate and strongly encourage interview panels that consider demographic and geographic diversity
• Provide training on recognizing
unconscious bias, making fair and consistent compensation decisions, and developing and applying inclusive management behaviors |
| |||
|
•
|
| |
We align employee and shareholder interests by delivering a significant portion of incentive compensation in deferred equity-based pay to our senior executives
|
| |
•
|
| |
Risk Excellence Awards recognize employees who exhibit exemplary risk management performance, encouraging ethical behavior and courage in speaking up
|
| ||||||
|
• Performance management process involves collaborative planning and ongoing assessments, accounting for evolving business priorities and enabling better performance differentiation
• Culture priorities linked to performance management by encouraging performance priorities that connect to critical enterprise-wide behaviors that drive our culture and by adjusting senior executive compensation based on progress towards diversity goals
|
| |
• Hidden Heroes Awards recognize
employees who embody our culture
traits during the COVID-19 pandemic
• Volunteer of the Year Awards recognize
employees who have made outstanding volunteer contributions to charitable organizations in their communities |
|
•
|
age and period of service as a director of State Street
|
•
|
business experience during at least the past five years (including directorships at other public companies)
|
•
|
community activities
|
•
|
other experience, qualifications, attributes or skills that led the Board to conclude the director should serve or continue to serve as a director of State Street
|
MARIE A. CHANDOHA Age 59, Director since 2019 Board Roles and Committees
• Examining and Audit Committee
• Technology and Operations Committee
|
| |
Career Highlights
|
|
• Retired President and Chief Executive Officer, Charles Schwab Investment Management, Inc., the investment management subsidiary of Charles Schwab Corporation, an NYSE-listed brokerage and wealth management firm (2010 to 2019); Chief Investment Officer (2010)
|
||
|
• Former Managing Director, Head, ETF, Index and Model-Based Fixed Income Portfolio Management, BlackRock, Inc., an investment management company (2009 to 2010); Global Head, Fixed Income Business, Barclays Global Investors (2007 to 2009) prior to acquisition by BlackRock, Inc.
|
||
|
• Former Co-Head and Senior Portfolio Manager of the Montgomery Fixed Income Division, Wells Capital Management, an investment management company (1999 to 2007)
|
||
|
Qualifications and Attributes
|
||
|
In her prior role as President and Chief Executive Officer of Charles Schwab Investment Management, Inc., Ms. Chandoha implemented a new vision of the business by reorganizing the leadership team, adding strong governance and risk management and by delivering transparent, low-cost and straightforward investment products and solutions. In addition, Ms. Chandoha transformed the technology and operational platform to efficiently scale and grow the company and increased third-party distribution capabilities. Before joining Charles Schwab Investment Management, Inc., Ms. Chandoha was the Global Head of the Fixed Income Division of BlackRock, Inc. where she focused on commercialization, innovation and new product development. Ms. Chandoha’s more than 35 years of experience as a leader in the financial services industry and her record transforming businesses provides the Board with valuable expertise as State Street continues its technological innovation to continue exceeding client expectations. Ms. Chandoha is Vice Chair of the California chapter of the Nature Conservancy and previously served as member of the Board of Governors and Executive Committee of the Investment Company Institute. She received a B.A. degree in economics from Harvard University.
|
PATRICK DE SAINT-AIGNAN Age 72, Director Since 2009 Board Roles and Committees
• Examining and Audit
Committee
• Executive Committee
• Risk Committee (Chair)
• Technology and Operations
Committee |
| |
Career Highlights
|
|
• Retired Managing Director and Advisory Director, Morgan Stanley, an NYSE-listed global financial services company (1974 to 2007); firm-wide head of the company’s risk management function (1995 to 2002)
|
||
|
• Member of Supervisory Board, BH PHARMA, a private generic drug development company (2015 to present)
|
||
|
• Former Director, Allied World Assurance Company Holdings AG, a former NYSE-listed specialty insurance and reinsurance company acquired by Fairfax Financial Holdings in 2017 (2008 to 2017); member of the Enterprise Risk Committee (Chairman), Compensation Committee, Audit Committee and Investment Committee
|
||
|
• Former Director, Bank of China Limited (2006 to 2008); member of the Audit Committee (Chairman), the Risk Policy Committee and the Personnel and Remuneration Committee
|
||
|
Qualifications and Attributes
|
||
|
Mr. de Saint-Aignan’s extensive experience in risk management, corporate finance, capital markets and firm management brings to the Board a sophisticated understanding of risk, particularly with respect to the implementation of risk and monitoring programs within a global financial services organization. Mr. de Saint-Aignan’s service on the board of directors and committees of several other companies gives him additional perspective on global management and governance. A dual citizen of the United States and France, he was honored with Risk Magazine’s Lifetime Achievement Award in 2004. Mr. de Saint-Aignan holds his B.B.A. degree from the Ecole des Hautes Etudes Commerciales and an M.B.A. from Harvard University.
|
AMELIA C. FAWCETT Age 64, Director Since 2006 Board Roles and Committees Lead Director
• Executive Committee
• Human Resources Committee
• Nominating and Corporate Governance Committee
|
| |
Career Highlights
|
|
• Chairman, Kinnevik AB, a Nasdaq Stockholm-listed long-term oriented investment company (2018 to present); Deputy Chairman (2013 to 2018); Non-Executive Director (2011 to 2021); member of People and Remuneration Committee and Governance, Risk and Compliance Committee (Chair); Dame Amelia is not standing for re-election at Kinnevik AB’s Annual General Meeting in 2021
|
||
|
• Member, Financial Policy Council, Bermuda Monetary Authority (BMA), an advisory body to the BMA, focused on financial system stability (2016 to present)
|
||
|
• Former Chairman, Standards Board for Alternative Investments, (U.K.) (2011 to 2020), the global standard-setting body for the alternative investment industry
|
||
|
• Former Non-Executive Director, HM Treasury, the British Government’s Economic & Finance Ministry (2012 to 2018)
|
||
|
• Former Non-Executive Director, Millicom International Cellular S.A., an international telecommunications and media company (2014 to 2016); member of the Remuneration Committee (Chair) and Compliance and Business Practices Committee
|
||
|
• Former Non-Executive Chairman, Guardian Media Group plc, a privately held diversified multimedia business in London (2009 to 2013); Non-Executive Director (2007 to 2013)
|
||
|
• Former Vice Chairman and Chief Operating Officer of European, Middle East and Africa Operations, Morgan Stanley, an NYSE-listed global financial services company (2002 to 2006) and Morgan Stanley International Limited, London (2006 to 2007); Senior Adviser (2006 to 2007); Managing Director and Chief Administrative Officer for European Operations (1996 to 2002); Executive Director (1992 to 1996); Vice President (1990 to 1992)
|
||
|
Qualifications and Attributes
|
||
|
Dame Amelia Fawcett, a dual American and British citizen, has many years of extensive and diverse financial services experience. At Morgan Stanley, she served in many roles, including Vice Chairman and Chief Operating Officer of Morgan Stanley International, and had responsibility for development and implementation of the company’s business strategy (including business integration), as well as oversight of the company’s operational risk functions, infrastructure support and corporate affairs. Prior to joining Morgan Stanley, she was an attorney at the New York-based law firm of Sullivan & Cromwell, practicing primarily in the areas of corporate and banking law in both New York and Paris. Her service on both the Court of Directors of the Bank of England (the Board of the British Central Bank) and the British Treasury provided her with valuable experience with the complex regulatory and compliance frameworks of the financial industry, both in the U.K. and internationally. Dame Amelia was awarded a CBE (Commander of the Order of the British Empire) and a DBE (Dame Commander of the Order of the British Empire) by the Queen, in both instances for services to the finance industry and in 2018 the Queen made her a Commander of the Royal Victorian Order for services as Chairman of The Prince of Wales’s Charitable Foundation. In addition, in 2004, she received His Royal Highness The Prince of Wales’s Ambassador Award recognizing responsible business activities that have a positive impact on society and the environment. Dame Amelia’s public policy experience and experience in the European banking markets provide a valuable international financial markets perspective to State Street. She currently serves in the capacity as governor of the Wellcome Trust, chairman of the Royal Botanic Gardens (Kew) and a trustee of Project Hope. Dame Amelia was formerly chairman of The Prince of Wales’s Charitable Foundation, deputy chairman and governor of the London Business School, deputy chairman of the National Portrait Gallery, chairman of the American Friends of the National Portrait Gallery and a commissioner of the U.S.-U.K. Fulbright Commission. Dame Amelia received a B.A. degree from Wellesley College and a J.D. degree from the University of Virginia.
|
WILLIAM C. FREDA Age 68, Director Since 2014 Board Roles and Committees
• Examining and Audit Committee (Chair)
• Executive Committee
• Risk Committee
|
| |
Career Highlights
|
|
• Retired Senior Partner and Vice Chairman, Deloitte, LLP, a global professional services firm (2011 to 2014); Managing Partner of Client Initiatives (2007 to 2011); member of U.S. Executive Committee
|
||
|
• Chairman, Hamilton Insurance Group, a global insurance and reinsurance company (2014 to present); Director (2014 to 2017); Chairman (2017 to present)
|
||
|
• Director, Guardian Life Insurance Company, a mutual life insurance company (2014 to present)
|
||
|
• Former Director, Deloitte Touche Tohmatsu Limited (2007 to 2013); member of Risk Committee (Chairman) (2011 to 2013) and Audit Committee (Chairman) (2008 to 2011)
|
||
|
Qualifications and Attributes
|
||
|
As senior partner and vice chairman of Deloitte, LLP, Mr. Freda served Deloitte’s most significant clients and maintained key relationships, acting as a strategic liaison to the marketplace as well as to professional and community organizations. Mr. Freda joined Deloitte in 1974 and built a distinguished record of service during his 40-year career, having served on a wide range of multinational engagements for many of Deloitte’s largest and most strategic clients. Mr. Freda brings to the Board key insight and perspective on risk management, international expansion and client relationships gained through his extensive experience interacting with audit committees, boards of directors and senior management. He serves as a trustee of Bentley University. Previously, Mr. Freda has served as the chairman of Catholic Community Services, the United Way of Essex and West Hudson and the AICPA Insurance Companies Committee and was a U.S. Representative to the International Accounting Standards Committee’s Insurance Steering Committee. Mr. Freda received a B.S. in accounting from Bentley University.
|
SARA MATHEW Age 65, Director Since 2018 Board Roles and Committees
• Executive Committee
• Human Resources Committee (Chair)
• Risk Committee
|
| |
Career Highlights
|
|
• Retired Chairman and Chief Executive Officer, Dun & Bradstreet Corporation, an NYSE-listed international commercial data and analytics provider (2010 to 2013); President and Chief Operating Officer (2007 to 2009); Chief Financial Officer (2001 to 2007)
|
||
|
• Non-Executive Chairman, Federal Home Loan Mortgage Company, a government-sponsored firm operating in the secondary residential mortgage market (2019 to present); Director (2013 to present); member of Audit Committee (Chair), Executive Committee and Nominating and Governance Committee
|
||
|
• Director, Reckitt Benckiser Group plc, an FTSE-listed health and hygiene company (2019 to present); member of Audit Committee
|
||
|
• Director, NextGen Acquisition Corporation, a Nasdaq-listed special purpose acquisition company (SPAC) (2020 to present); member of the Audit Committee and Compensation Committee; NextGen Acquisition Corporation has publicly announced a definitive business combination agreement with Xos, Inc. and that it expects the transaction to close in the second quarter of 2021. Following the closing, Ms. Mathew will no longer serve as a Director of the resulting company
|
||
|
• Former Director, Campbell Soup Company, an NYSE-listed consumer food producer (2005 to 2019); member of Audit Committee (Chair) and Finance and Corporate Development Committee
|
||
|
• Former Director, Shire Plc, a Nasdaq-listed FTSE 25 biopharmaceutical company (2015 to 2019; prior to acquisition by Takeda Pharmaceutical Company Limited in 2019); Chair of Audit and Risk Committee and member of Compliance and Nomination and Governance Committee
|
||
|
• Former Director, Avon Products, Inc., an NYSE-listed beauty, household and personal care products manufacturer (2014 to 2016)
|
||
|
• Former Vice President of Finance, ASEAN, Australasia and India, Procter and Gamble Company, an NYSE-listed international manufacturer of consumer goods (2000 to 2001); Controller and Chief Financial Officer, Baby-Care and Paper Products (1998 to 2000); other various positions through her 18-year tenure
|
||
|
Qualifications and Attributes
|
||
|
In her prior role as chairman and chief executive officer of Dun & Bradstreet Corporation, Ms. Mathew led the company’s transformation from a data collection business into an innovative provider of data analytics and insights. Prior to her role as chairman and chief executive officer, she served as president and chief operating officer, overseeing the company’s consumer segments, and chief financial officer where she initiated and managed the redesign of the company’s accounting processes and controls. Before joining Dun & Bradstreet Corporation, Ms. Mathew held various positions at Procter and Gamble Company within finance, accounting, investor relations and brand management. Her deep background in finance, technology, corporate strategy and operations, combined with her experiences leading and overseeing a diverse assortment of international consumer-focused companies and transformational initiatives, allows Ms. Mathew to provide a unique, innovative and global perspective to State Street. Ms. Mathew received a B.S. degree in physics, mathematics and chemistry from the University of Madras, India and an M.B.A. from Xavier University.
|
WILLIAM L. MEANEY Age 60, Director Since 2018 Board Roles and Committees
• Human Resources Committee
• Technology and Operations Committee
|
| |
Career Highlights
|
|
• President, Chief Executive Officer and Director, Iron Mountain, Inc., an NYSE-listed information management and data backup and recovery company (2013 to present)
|
||
|
• Former Director, Qantas Airways, an Australian Securities Exchange-listed airline (2012 to 2018); member of the Safety, Health, Environment and Security Committee and the Remuneration Committee
|
||
|
• Former Chief Executive Officer, Zuellig Group, a privately owned long-term holding company based in Hong Kong (2004 to 2012)
|
||
|
Qualifications and Attributes
|
||
|
Mr. Meaney, a citizen of the United States, Switzerland and Ireland, has extensive domestic and international business experience across both established and emerging markets. As the president and chief executive officer of Iron Mountain, he has continued to lead the company as it evolves and expands its secure storage and digital transformation offerings. Before joining Iron Mountain, Mr. Meaney was the chief executive officer of Zuellig Group, where he was responsible for a diverse portfolio of Asia Pacific businesses that spanned a variety of heavily regulated and consumer-based industries, including health care, agriculture, pharmaceuticals and materials handling. He has held several senior positions throughout the airline industry, including chief commercial officer of Swiss International Airlines and executive vice president of South African Airways, founded and managed his own consulting firm and served as an operations officer with the U.S. Central Intelligence Agency. Mr. Meaney provides State Street’s Board with an acute global viewpoint on corporate strategy and business expansion founded upon his background in leading and developing large U.S. and international companies. Mr. Meaney is a member of the President’s Council of Massachusetts General Hospital and is a former trustee of Rensselaer Polytechnic Institute and Carnegie Mellon University. He holds a B.S. degree from Rensselaer Polytechnic Institute and an M.B.A. from Carnegie Mellon University.
|
RONALD P. O’HANLEY Age 64, Director Since 2019 Board Roles and Committees Chairman of the Board
• Executive Committee (Chair)
• Risk Committee
• Technology and Operations
Committee |
| |
Career Highlights
|
|
• State Street Corporation, Chairman (2020 to present); President and Chief Executive Officer (2019 to present); President and Chief Operating Officer (2017 to 2019); Vice Chairman (2017); Chief Executive Officer and President, State Street Global Advisors (2015 to 2017)
|
||
|
• Director, Unum Group, an NYSE-listed provider of financial protection benefits in the United States and United Kingdom (2015 to present); member of the Human Capital Committee and Governance Committee
|
||
|
• Former President of Asset Management & Corporate Services, Fidelity Investments, Inc., a multinational financial services corporation (2010 to 2014)
|
||
|
• Former Chief Executive Officer and President, BNY Mellon Asset Management (2007 to 2010)
|
||
|
Qualifications and Attributes
|
||
|
Mr. O’Hanley joined State Street in 2015 to lead State Street’s investment management business as the Chief Executive Officer and President of State Street Global Advisors. Since that time, he has held several senior leadership positions within the Company, serving as Vice Chairman from January 2017 to November 2017 and President and Chief Operating Officer from November 2017 to February 2019. Effective January 1, 2019, Mr. O’Hanley began his service as Chief Executive Officer and as a member of the Board of Directors and effective January 1, 2020, he was appointed Chairman of the Board. His extensive leadership, executive management and operational experience over the last three decades in asset management and global financial services provides the Board with the experience necessary to help navigate the Company’s strategic priorities on data management, client experience and technology enhancement. Mr. O’Hanley received a B.A. degree from Syracuse University and an M.B.A. from Harvard Business School.
|
SEAN O’SULLIVAN Age 65, Director Since 2017 Board Roles and Committees
• Executive Committee
• Risk Committee
• Technology and Operations Committee (Chair)
|
| |
Career Highlights
|
|
• Retired Group Managing Director and Group Chief Operating Officer, HSBC Holdings, plc., an NYSE-listed banking and financial services organization (2011 to 2014); Executive Director and Chief Technology and Services Officer, HSBC Bank plc. (2007 to 2010); other various positions throughout his 34-year tenure
|
||
|
Qualifications and Attributes
|
||
|
As the Group Managing Director and Group Chief Operating Officer of HSBC Holdings, plc., Mr. O’Sullivan led the bank’s global operations and information technology functions, with worldwide responsibilities for business transformation, organizational restructuring and operational effectiveness. Prior to assuming the role of Group Managing Director and Group Chief Operating Officer, Mr. O’Sullivan held various positions throughout HSBC in the U.S., Canada and Europe. His long tenure at HSBC provided him with valuable experience with the operational and technology challenges faced by a large, global financial institution as well as the management of overall company effectiveness and efficiency, including development of a global approach to expense management and operational risk management. Mr. O’Sullivan is a member of the Information Technology Advisory Committee at the University of British Columbia and a former trustee of the York University Foundation. He is a dual citizen of Canada and the U.K. and received a B.A. degree from the Ivey School of Business at Western University.
|
JULIO A. PORTALATIN Age 61, Director Since 2021 Board Roles and Committees
None
|
| |
Career Highlights
|
|
• Retired Vice-Chair, Marsh & McLennan Companies, an NYSE-listed professional services firm (2019 to 2020); President and Chief Executive Officer, Mercer Consulting Group, Inc., a business of Marsh & McLennan Companies (2012 to 2019)
|
||
|
• Former President and Chief Executive Officer, Chartis Growth Economies, a division of American International Group (AIG), an NYSE-listed global finance and insurance company (2011 to 2012); President and Chief Executive Officer, Chartis Emerging Markets (2010 to 2011); President and Chief Executive Officer, AIG Europe S.A. (2008 to 2010); President, Worldwide Accident and Health, American International Underwriters (2003 to 2008)
|
||
|
• Former Director, DXC Technology, an NYSE-listed information technology company (2017 to 2020); member of the Compensation Committee
|
||
|
Qualifications and Attributes
|
||
|
As President and Chief Executive Officer of Mercer Consulting Group, Inc., Mr. Portalatin expanded Mercer’s global operations, increased revenue from emerging markets, executed transformative acquisitions and advised clients on $11 trillion of assets. He also led the reorganization of Mercer’s leadership team, established strong governance and risk management practices and developed transparent, low-cost and straightforward investment products and solutions. Prior to joining Mercer, Mr. Portalatin served in various senior leadership positions at American International Group (AIG), including as President and CEO of Chartis Growth Economies (now AIG Growth Economies), where he led the strategic global expansion of the business in several regions, including Asia-Pacific, Latin America, South Asia, Europe, Middle East and Africa. Mr. Portalatin also serves as a thought leader on the changing workforce and is a leading contributor on the dialogue of the future of work, human capital, diversity, global economic trends, financial wellness and pension systems. Mr. Portalatin’s strong international background and extensive experience in the strategic leadership and operation of complex global businesses provides the Board with valuable experience as the Company seeks to expand its global footprint and continue its risk excellence initiatives. Mr. Portalatin currently serves on the boards of AARP, Covenant House International and Hofstra University. He holds a B.S. degree in business management and an honorary doctorate from Hofstra University.
|
JOHN B. RHEA Age 55, Director Since 2021 Board Roles and Committees
None
|
| |
Career Highlights
|
|
• Partner, Centerview Partners LLC, an independent investment banking and advisory firm (2020 to present)
|
||
|
• Founder and Managing Partner, RHEAL Capital Management, LLC, a real estate development and investment firm (2014 to present)
|
||
|
• Director, Invitation Homes, Inc., an NYSE-listed Real Estate Investment Trust, publicly listed in January 2017 (2015 to present); member of the Compensation and Management Development Committee (Chair) and Nominating and Corporate Governance Committee
|
||
|
• Former Senior Advisor and President, Corporate Finance and Capital Markets, Siebert Williams Shank & Co., LLC, an independent non-bank financial services firm (2017 to 2020)
|
||
|
• Former Senior Advisor, Boston Consulting Group, a global management consulting firm (2014 to 2017)
|
||
|
• Former Chairman and Chief Executive Officer, New York City Housing Authority (2009 to 2014)
|
||
|
Qualifications and Attributes
|
||
|
| |
Mr. Rhea has more than 30 years of experience as a trusted advisor to senior management, boards of directors and regulatory agencies on a wide range of strategic and finance matters. In his current role as Partner at Centerview Partners, he advises clients with a focus on capital advisory, merger and acquisitions, real estate and corporate impact. Prior to joining Centerview Partners, Mr. Rhea served as Senior Advisor and President of Capital Markets and Corporate Finance at Siebert Williams Shank & Co., LLC, where he led all corporate advisory, underwriting and markets businesses. He also previously served as Senior Advisor to the Boston Consulting Group and Chairman and CEO for the New York City Housing Authority (NYCHA), the largest public housing authority in North America. Prior to NYCHA, Mr. Rhea spent more than 18 years as an investment banker and strategy consultant and was recognized by Black Enterprise as one of the Top 75 Blacks on Wall Street. Mr. Rhea’s significant experience in corporate finance, capital markets and advising large complex organizations on mergers and acquisitions and strategic planning provides the Board with valuable perspective on corporate strategy and financing transactions. Mr. Rhea has served on and chaired several non-profit boards and is currently a director of Wesleyan University, Red Cross Greater New York and University of Detroit Jesuit School. He received a B.A. degree from Wesleyan University and an M.B.A from Harvard Business School.
|
RICHARD P. SERGEL Age 71, Director Since 1999 Board Roles and Committees
• Examining and Audit Committee
• Human Resources Committee
• Nominating and Corporate Governance Committee
|
| |
Career Highlights
|
|
• Retired President and Chief Executive Officer, North American Electric Reliability Corporation (NERC), a self-regulatory organization for the bulk electricity system in North America (2005 to 2009)
|
||
|
• Director, Emera, Inc., a Toronto Stock Exchange-listed energy and services company (2010 to present)
|
||
|
• Former President and Chief Executive Officer, New England Electric System (and its successor company, National Grid USA), an NYSE-listed electric utility (1998 to 2004)
|
||
|
Qualifications and Attributes
|
||
|
Mr. Sergel’s responsibilities as chief executive officer of the North American Electric Reliability Corporation included imposing statutory responsibility and regulating the industry through adoption and enforcement of standards and practices. To do so, he led NERC to establish the first set of legally enforceable standards for the U.S. bulk power system. Prior to joining NERC, he spent 25 years with the New England Electric System, where he oversaw the merger with National Grid in 2000. His extensive practical and technical expertise in navigating the energy market through regulatory change and major transactions offers the Board important perspective on the evolving financial services industry and regulatory environment. Mr. Sergel served in the United States Air Force reserve from 1973 to 1979 and has served as a director of Jobs for Massachusetts and the Greater Boston Chamber of Commerce. He is a former trustee of the Merrimack Valley United Way and the Worcester Art Museum, prior chairman of the Consortium for Energy Efficiency and was a member of the Audit Committee for the Town of Wellesley, Massachusetts. Mr. Sergel received a B.S. degree from Florida State University, an M.S. from North Carolina State University and an M.B.A. from the University of Miami.
|
GREGORY L. SUMME Age 64, Director Since 2001 Board Roles and Committees
• Executive Committee
• Human Resources Committee
• Nominating and Corporate Governance Committee (Chair)
|
| |
Career Highlights
|
|
• Managing Partner and Founder, Glen Capital Partners, LLC, an alternative asset investment fund (2013 to present)
|
||
|
• Former Managing Director and Vice Chairman of Global Buyout, Carlyle Group, a Nasdaq-listed global asset manager (2009 to 2014)
|
||
|
• Former Chairman, Chief Executive Officer and President, PerkinElmer, Inc., an NYSE-listed developer and producer of life science equipment and services (1998-2009)
|
||
|
• Director, NXP Semiconductors, a Nasdaq-listed semiconductor manufacturer (2010 to present) (Director, 2010 to 2015 and Chairman, 2013 to 2015 as Freescale Semiconductor, Inc., prior to its acquisition by NXP Semiconductors in 2015; 2015 to present as NXP Semiconductors)
|
||
|
• Director, Avantor, Inc., an NYSE-listed chemical and materials company (2020 to present); member of the Nominating and Corporate Governance Committee (Chair) and Compensation and Human Resources Committee
|
||
|
• Co-Chairman and Co-Founder, NextGen Acquisition Corporation (2020 to present); NextGen Acquisition Corporation II (2021 to present), each a Nasdaq-listed special purpose acquisition company (SPAC); NextGen Acquisition Corporation has publicly announced a definitive business combination agreement with Xos, Inc. and that it expects the transaction to close in the second quarter of 2021. Following the closing, Mr. Summe will no longer serve as a Director of the resulting company
|
||
|
• Former Director, LMI Aerospace, a Nasdaq-listed designer and provider of aerospace structures (2014 to 2017)
|
||
|
Qualifications and Attributes
|
||
|
Mr. Summe has extensive management experience leading large and complex corporate organizations in evolving environments. While vice chairman of Carlyle Group, he was responsible for buyout funds in financial services, infrastructure, Japan, the Middle East and African markets and served on the firm’s operating and investment committees. His experience in private equity has afforded him a deepened exposure to understanding varied business models, practices, strategies and environments and assessing value in varied international regions. During his tenure as chairman and chief executive officer at PerkinElmer, Mr. Summe led the company’s transformation from a diversified defense contractor to a technology leader in health sciences. Prior to joining PerkinElmer, Mr. Summe held leadership positions at AlliedSignal (now Honeywell), General Electric and McKinsey & Co. Mr. Summe holds B.S. and M.S. degrees in electrical engineering from the University of Kentucky and the University of Cincinnati, respectively, and an M.B.A. with distinction from the Wharton School of the University of Pennsylvania. He is also in the Engineering Hall of Distinction at the University of Kentucky.
|
•
|
Ronald P. O’Hanley — President and Chief Executive Officer
|
•
|
Eric W. Aboaf — Executive Vice President and Chief Financial Officer
|
•
|
Francisco Aristeguieta — Executive Vice President and Chief Executive Officer of State Street Institutional Services
|
•
|
Andrew J. Erickson — Executive Vice President, Chief Productivity Officer and Head of International
|
•
|
Louis D. Maiuri — Executive Vice President and Chief Operating Officer
|
|
CD&A Table of Contents
|
| |
Page
|
|
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
|
Spring Outreach
|
| |
|
| |
Fall Outreach
|
|
|
|
| |
|
| |
|
|
|
What We Heard
|
| |
How We Responded
|
|
|
We continued to receive general support for our executive compensation program, including for our high levels of deferral (90% of 2019 NEO incentive compensation was deferred), performance-based restricted stock unit (RSU) design, and appropriate use of discretion. Some shareholders requested more transparency regarding the factors the Committee considers in its discretionary performance assessment process, including individual performance expectations and how performance against those expectations links to pay decisions
|
| |
• We expanded the disclosure in this proxy statement to provide further detail on the factors the Committee considers in assessing financial performance, including how the Committee considers relative performance in determining the amount of incentive compensation to be awarded to our NEOs (see pp. 39 - 42)
• This proxy statement also provides additional detail on how the Committee factored individual performance into each NEO’s incentive award decision, including more details on individual performance goals and how well each executive performed against those goals (see pp. 44 - 50)
• The Committee maintained the basic design of our executive compensation program, including the high levels of deferral and significant use of performance-based equity used in prior years
|
|
|
Several shareholders questioned the emphasis on individual performance relative to corporate performance in the determination of incentive awards
|
| |
• The Committee redesigned how it determines the amount of incentive compensation for our NEOs to emphasize corporate performance as the primary driver, while retaining the ability to differentiate for individual performance through the use of a modifier of up to +/- 30% (see p. 35)
|
|
|
Most shareholders expressed continued support for our use of return on average common equity (ROE) and pre-tax margin as metrics in our long-term performance-based RSUs, though some shareholders requested we consider incorporating a relative metric in our long-term incentive design. Some shareholders also expressed a desire for additional disclosure regarding the role of relative financial performance in pay decisions
|
| |
• The performance-based RSUs granted for the 2020 performance year maintain ROE and pre-tax margin as metrics. In addition, the Committee added two new metrics: fee revenue growth and relative total shareholder return (TSR) (see p. 36)
|
|
(1)
|
Relative performance is measured against the peers with whom we compete most directly, Northern Trust Corporation and The Bank of New York Mellon Corporation, our Direct Peers, as well as relevant indices, including the KBW Bank Index and the Capital Markets and Banks subsets of the S&P 500 Financial Index, which contained 23 and 37 constituents, respectively, as of December 31, 2020.
|
|
Total Shareholder Return (TSR)(1)
|
| |
State Street
|
| |
Rank vs. Two
Direct Peers
|
| |
Percentile vs.
KBW Bank
Index(2)
|
| |
Percentile vs.
S&P 500
Financial
Index(2)
|
|
|
1-Year (12/31/19-12/31/20)
|
| |
(4.8%)
|
| |
1
|
| |
80th
|
| |
50th
|
|
|
2-Year (12/31/18-12/31/20)
|
| |
23.2%
|
| |
1
|
| |
55th
|
| |
40th
|
|
|
3-Year (12/31/17-12/31/20)
|
| |
(18.7%)
|
| |
3
|
| |
25th
|
| |
15th
|
|
|
5-Year (12/31/15-12/31/20)
|
| |
24.5%
|
| |
2
|
| |
25th
|
| |
15th
|
|
(1)
|
TSR data reflects cumulative shareholder return between the dates shown, including reinvestment of dividends.
|
(2)
|
State Street percentile positioning rounded to the nearest 5th percentile.
|
•
|
assessments of performance against individual financial, business and risk management objectives; and
|
•
|
evaluation of performance against pre-defined leadership- and talent-related goals for each NEO. These goals are intended to promote a focus on factors such as inclusion and diversity, talent development, employee engagement and leadership behaviors.
|
•
|
100% of incentive awards for our CEO and 90% for our other NEOs were deferred, and
|
•
|
100% of incentive awards for our CEO and 65% for our other NEOs were equity-based:
|
(1)
|
Excluding certain international assignment and relocation benefits.
|
(1)
|
Realizable value reflects the value of Deferred Stock Awards, or DSAs, and performance-based RSUs based on State Street’s December 31, 2020 closing stock price of $72.78 (and assumes all shares are retained), plus the value of cash-based incentives awarded.
|
(2)
|
Reflects cumulative shareholder return, including reinvestment of dividends from respective grant dates through December 31, 2020.
|
(3)
|
Reflects incentive compensation targets for the performance year as approved by the Committee.
|
(4)
|
Reflects actual incentive compensation awarded based on year-end performance outcomes.
|
(5)
|
Includes pro forma realizable value of performance-based RSUs based on performance of relevant criteria only for completed fiscal years within the three-year performance period through 2020. This performance has not been certified and is therefore subject to adjustment based on the terms of the relevant awards. No estimate of performance for 2021 and beyond has been made. Final payout will be based on satisfaction of the performance criteria as certified by the Committee following the end of the performance period.
|
(6)
|
Current estimated realizable value of performance-based RSUs reflects performance results certified by the Committee.
|
•
|
attract, retain and motivate superior executives and drive strong leadership behaviors
|
•
|
reward those executives for meeting or exceeding company and individual financial, business and leadership- and talent-related objectives
|
•
|
drive long-term shareholder value and financial stability
|
•
|
align incentive compensation with the performance results experienced by our shareholders through the use of significant levels of deferred equity-based compensation
|
•
|
provide equal pay for work of equal value
|
•
|
achieve the preceding goals in a manner aligned with sound risk management and our corporate values
|
(1)
|
Financial results are presented on a non-GAAP basis in this section, unless otherwise noted. Non-GAAP financial results adjust selected GAAP-basis financial results to exclude the impact of notable items outside of State Street’s normal course of business. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in conformity with GAAP. For a reconciliation of non-GAAP measures presented in this CD&A, see Appendix C.
|
(2)
|
Achievement of ROE and pre-tax margin targets for the performance-based RSUs is calculated based on a simple average of the achievement in each year in the performance period. Achievement of the fee revenue target is calculated based on the compound annual growth rate (CAGR) during the performance period. All three of these metrics are subject to adjustment for pre-established, objectively determinable factors as described in more detail in footnote one to the “Compensation Vehicles” table.
|
(3)
|
Linear interpolation is used between the points shown above.
|
(4)
|
Relative TSR Modifier percentage is added to or subtracted from the payout outcome calculated based on the three weighted metrics to determine the final payout percentage, except that the final payout percentage may be no greater than 150%.
|
|
Vehicle
|
| |
Vehicle Description
|
| |
Considerations and Rationale
|
|
|
Equity-Based Incentive Compensation
(100% of incentive compensation for CEO; 65% for other NEOs)
|
| ||||||
|
Performance-Based RSUs
|
| |
• Number of performance-based RSUs ultimately earned is determined based on State Street’s performance on key metrics over the three-year performance period, as described under “Compensation Program Design Changes,” subject to adjustment for pre-established, objectively determinable factors(1)
• Performance-based RSUs ultimately earned vest in one installment in February 2024 and are paid in State Street shares upon vesting
|
| |
• Performance-based RSUs are aligned with our long-term performance and financial goals
• Equity-based compensation directly aligns the rewards and risks shared by our NEOs and our shareholders
|
|
|
Deferred Stock Awards (DSAs)
|
| |
• DSAs vest ratably in four equal annual installments beginning in February 2022
• Paid in State Street shares upon vesting
|
| |
• Subject to vesting requirements
• Equity-based compensation directly aligns the rewards and risks shared by our NEOs and our shareholders
|
|
|
Cash-settled restricted stock units (CRSUs)
(CEO Only)
|
| |
• CRSUs vest in 12 quarterly installments (50% in three equal installments beginning in May 2021 and the balance in nine equal installments from February 2022 to February 2024)
• Paid in cash upon vesting
|
| |
• For 2020, replaced cash-based incentives typically awarded to our CEO with a vehicle tied to our share price
• Incentivizes focus on our share price, while providing the CEO with liquidity over time
|
|
|
Cash-Based Incentive Compensation
(0% of incentive compensation for CEO; 35% for other NEOs)
|
| ||||||
|
Deferred Value Awards (DVAs)
|
| |
• DVAs are notionally invested in a money market fund
• DVAs vest ratably in 16 quarterly installments
beginning in May 2021
• Paid in cash upon vesting
|
| |
• Subject to vesting requirements
|
|
|
Immediate Cash (non-deferred)
|
| |
• Immediate cash award
|
| |
• Provides a limited immediate monetization of the executive’s incentive
|
|
(1)
|
Prior to granting the performance-based RSU award, the Committee establishes the factors that could affect the performance measures during the performance period and which are then excluded from the performance measure calculation, such as: acquisitions, dispositions and similar transactions and related securities issuances and expenses; changes in accounting principles, tax or banking law or regulations; litigation or regulatory settlements arising from events that occurred prior to the performance period; and restructuring charges and expenses. In addition, the Committee retains the discretionary right to disregard any calculation adjustment that would result in an increase to average ROE, average pre-tax margin or fee revenue growth measured on a CAGR basis, and to reduce the payout under the performance award for other material items or events.
|
|
Name
|
| |
Base Salary
Rate(1)
|
| |
Target Incentive
Compensation
|
| |
Target Total
Compensation
|
|
|
Ronald P. O’Hanley
|
| |
$1,000,000
|
| |
$13,500,000
|
| |
$14,500,000
|
|
|
Eric W. Aboaf
|
| |
700,000
|
| |
6,300,000
|
| |
7,000,000
|
|
|
Francisco Aristeguieta
|
| |
700,000
|
| |
6,300,000
|
| |
7,000,000
|
|
|
Andrew J. Erickson
|
| |
700,000
|
| |
6,300,000
|
| |
7,000,000
|
|
|
Louis D. Maiuri
|
| |
700,000
|
| |
6,300,000
|
| |
7,000,000
|
|
(1)
|
The base salary increases noted above for Messrs. O’Hanley and Maiuri were effective on March 29, 2020 and for Mr. Erickson on April 1, 2020.
|
(1)
|
Relative performance is measured against our direct peers (Northern Trust Corporation and The Bank of New York Mellon Corporation) as well as relevant indices, including the KBW Bank Index and the Capital Markets and Banks subsets of the S&P 500 Financial Index.
|
(2)
|
The Committee may change the incentive compensation mix at its discretion.
|
(3)
|
While performance-based RSUs represent the same proportion of the total incentive as last year, they represent a smaller proportion of equity delivered to the CEO than in prior years because all of his awards for 2020 were delivered in deferred equity-based vehicles.
|
(1)
|
Financial results are presented on a non-GAAP basis in this section, unless otherwise noted. Non-GAAP financial results adjust selected GAAP-basis financial results to exclude the impact of notable items outside of State Street’s normal course of business. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in conformity with GAAP. For a reconciliation of non-GAAP measures presented in this CD&A, see Appendix C.
|
(2)
|
Relative performance is measured against the peers with whom we compete most directly, Northern Trust Corporation and The Bank of New York Mellon Corporation, our Direct Peers, as well as relevant indices, including the KBW Bank Index and the Capital Markets and Banks subsets of the S&P 500 Financial Index, which contained 23 and 37 constituents, respectively, as of December 31, 2020.
|
(3)
|
Comparisons to peers are based on change relative to 2019 for all metrics other than operating margin and ROE, which are compared with peers based on one-year results for 2020. For the Direct Peers, the Committee reviewed financial results with similar adjustments to those made for State Street. Financial results reviewed by the Committee for constituents in the KBW Bank Index and the Capital Markets and Banks subsets of the S&P 500 Financial Index represented results from an external data provider with standardized adjustments. For some of the S&P 500 Financial Index (7 constituents), comparisons to 2019 were based on year-to-date September 30, 2020 vs. year-to-date September 30, 2019, as fourth quarter 2020 earnings were not released at the time the Committee reviewed this scorecard.
|
(4)
|
State Street percentile positioning rounded to the nearest 5th percentile.
|
(5)
|
TSR data reflects cumulative shareholder return between the dates shown, including reinvestment of dividends.
|
|
Ronald P. O’Hanley, President and Chief Executive Officer
|
| ||||||
|
Performance Area
|
| |
2020 Key Goals
|
| |
Performance Factors and Results
|
|
|
Financial
Performance
At Expectations
|
| |
Achieve our financial commitments
• Meet our 2020 budget, growing fee revenues and reducing expenses, and improve operating margin and ROE versus peers(1)
• Grow balance sheet and optimize capital and liquidity utilization to support business growth
|
| |
• Despite a global pandemic, which created a challenging operating environment, made meaningful progress versus prior year and effective progress versus budget. However, net interest income (NII) materially declined, largely driven by the historically low interest rate environment, and our three-year TSR was below Direct Peers and the median of relevant market indices (see pp. 40 - 42 for additional detail)
— Revenue down 0.1% but in line with budget
— Fee Revenue up 3.8% and above budget
— NII down 14.3% and below budget, driven by low interest rate environment
— Expenses down 1.5%, driven by net productivity initiatives, and in line with budget
— EPS up 8.6% but below budget
— Operating margin up 1.1% points and in line with budget
— ROE (GAAP) up 0.6% points and in line with budget
— Assets under custody and/or administration (AUC/A) increased 13% to $38.8 trillion and assets under management (AUM) increased 11% to $3.5 trillion as of December 31, 2020
|
|
|
Business
Performance
Above
Expectations
|
| |
Be an essential partner – trusted, strategic and proactive
• Develop and implement new, global client segment strategies and fill key roles to support new organization
• Improve client sentiment through consistent service quality across all products and services and embed key metrics in client account plans
• Further define, broaden and grow State Street Alpha platform along with relevant State Street products and services with clients and partners
|
| |
• Designed and implemented global client segment structure and expanded client coverage models with clear accountability for revenue generation and retention, client engagement and investment prioritization
• Achieved six new client wins for State Street Alpha and continued delivery of new functionality via partnerships with trading platforms and data and analytics providers
• Strengthened client partnerships through effective communication and service delivery during unprecedented volumes and market volatility demonstrated by improved client sentiment
• Operationalized several Federal Reserve program mandates to enable financial stability for our clients
• Fell short against our sales objectives, with lower than planned net new business
|
|
|
Develop a scalable, configurable, resilient end-to-end operating model
• Improve productivity and transform the cost base through process simplification, automation and organizational redesign
• Adopt new productivity measures to drive continuous improvement and service quality
• Execute against technology and operations resiliency plans
|
| |
• Rapidly adopted new, simplified operating and management models in a work from home environment reaching approximately 90% in April 2020 to deliver client commitments and accelerated decision-making
• Executed and scaled key automation efforts including increased funds on “driverless” NAV, improved straight-through-processing and reduced manual touchpoints
• Restructured technology organization to prioritize technology investments and growth with business outcomes while strengthening our technology resiliency and modernizing and rationalizing our infrastructure
|
|
(1)
|
Relative performance is measured against our direct peers (Northern Trust Corporation and The Bank of New York Mellon Corporation) as well as relevant indices, including the KBW Bank Index and the Capital Markets and Banks subsets of the S&P 500 Financial Index.
|
|
Business
Performance,
continued
|
| |
Implement Transformation and become a higher performing organization
• Drive desired culture traits throughout the organization and measure progress
• Align performance management and incentives with business and cultural objectives
|
| |
• Improved the employee experience through new communication channels, recognition and learning platforms to drive increased employee satisfaction and retention of top talent
• Operationalized an internal Talent Marketplace and strategically redeployed talent across the company
• Enhanced performance management process, which drove accountability for financial, business, risk management and leadership- and talent-related performance
• Publicly announced 10 actions to address racism and inequality, although more work is needed to meet diversity representation expectations
• Prioritized employee health, safety and security in light of COVID-19 by pausing workforce reductions and adjusting benefit plans to meet employee needs
|
|
|
Risk
Management
Performance
At Expectations
|
| |
Improve risk excellence outcomes
• Deliver on key enterprise programs (including regulatory initiatives) to improve risk profile and regulatory posture
• Apply a consistent, risk-based and outcome-oriented approach to business and technology initiatives
• Enhance risk culture and posture through greater accountability and transparency across all groups
|
| |
• Made significant progress in compliance and anti-money laundering measures and achieved successful conclusions to open regulatory matters
• Maintained strong financial risk performance in volatile markets, including in credit, liquidity and capital adequacy measures
• Completed the Federal Reserve’s 2020 CCAR and CCAR 2020 Resubmission, exceeding all minimum regulatory capital requirements throughout both tests
• Achieved improvements in technology and operational resilience measures, though continued focus is required
• Progress in some enterprise programs tracked below expectations due to prioritization or other delays
|
|
|
Compensation for 2020
|
| |
|
|
|
Individual Performance-Based Compensation Adjustments:
The Committee determined that Mr. O’Hanley met or exceeded individual performance expectations related to our 2020 corporate goals and he exhibited strong leadership in driving key strategic initiatives amidst the challenging operational and financial market conditions brought on by the COVID-19 pandemic, as well as improvement in key financial measures relative to 2019. However, sales, three-year TSR performance relative to peers and overall progress towards our diversity goals were all below expectations. Balancing these factors, Mr. O’Hanley’s individual incentive award was adjusted up slightly.
|
| |||
|
Given the corporate performance factor of 95% and the modest upward adjustment for individual performance noted above, Mr. O’Hanley’s total incentive compensation was awarded at approximately 96% of target for 2020, resulting in total compensation of $14,000,000.
|
|
|
Eric W. Aboaf, Chief Financial Officer
|
| ||||||
|
As Chief Financial Officer, Mr. Aboaf is responsible for our global financial strategy and finance functions, including treasury, controllership, tax, enterprise decision support, investor relations, procurement and real estate.
In determining individual performance-based compensation adjustments to Mr. Aboaf’s 2020 incentive award, the Committee focused on the most significant individual performance factors below:
|
| ||||||
|
Performance Area
|
| |
2020 Key Individual Goals
|
| |
Performance Factors and Results
|
|
|
Financial
Performance
At Expectations
|
| |
• Meet our 2020 budget, growing fee revenues and reducing expenses
• Expand client and balance sheet loan growth
• Drive next wave of deposit gathering initiatives aligned to effective balance sheet management
|
| |
• Made meaningful progress versus prior year and effective progress versus budget:
— Fee Revenue up 3.8% and above budget; Total Revenue down 0.1% from 2019, driven by the interest rate environment, and in
line with budget
— Expenses down 1.5% and in line with budget
— ROE (GAAP) up 0.6% points and in line with budget
• Actively managed expenses through new resource discipline, footprint optimization and expense management initiatives
• Throughout the challenging COVID-19 environment, partnered with senior leadership to manage the balance sheet, navigate market turmoil and support client lending
|
|
|
Business
Performance
Above
Expectations
|
| |
• Improve business planning and partnership to achieve better corporate outcomes
• Deliver new reporting aligned to organizational re-design and strategic outcomes
• Drive strategic change to improve procurement processes and outcomes
|
| |
• Delivered our 2021-2023 strategic plan, which significantly improved the linkage between State Street’s corporate strategy and the underlying investments and initiatives
• Delivered new financial transparency and improved existing reporting cycle times, driving greater accountability across all business lines to achieve financial outcomes
• Improved procurement cycle times and addressed savings priorities with robust savings pipeline in place for 2021
• Improved shareholder relations through greater transparency on key metrics to investors with detailed internal communications to senior leaders
|
|
|
Risk
Management
Performance
At Expectations
|
| |
• Deliver on key enterprise programs to improve risk profile and regulatory posture
• Successfully complete regulatory initiatives to reduce our risk exposure
|
| |
• Completed the Federal Reserve’s 2020 CCAR and CCAR 2020 Resubmission, exceeding all minimum regulatory capital requirements throughout both tests
• Delivered on critical milestones for key enterprise programs, resulting in risk reduction in impacted programs
• Maintained strong financial risk posture in volatile markets, including in credit, liquidity and capital adequacy measures
|
|
|
Compensation for 2020
|
| |
|
|
|
Individual Performance-Based Compensation Adjustments:
The Committee determined that Mr. Aboaf met or exceeded individual performance expectations related to his financial, business and risk management goals. Consequently, Mr. Aboaf’s individual incentive award was adjusted up by 5%, primarily reflecting his role in improving the linkage between our corporate strategy and required investments and initiatives and active expense management.
|
| |||
|
Given the corporate performance factor of 95% and the 5% upward adjustment for individual performance noted above, Mr. Aboaf’s total incentive compensation was awarded at 100% of target for 2020, resulting in total compensation of $7,000,000.
|
|
|
Compensation for 2020
|
| |
|
|
|
Individual Performance-Based Compensation Adjustments:
The Committee determined that Mr. Aristeguieta met or exceeded individual performance expectations related to his business and risk management goals and he exhibited strong leadership performance. Consequently, Mr. Aristeguieta’s individual incentive award was adjusted up by 2.5%, primarily reflecting his role in driving achievement of client-focused goals, balanced by disappointing sales and progress on diversity priorities.
|
| |||
|
Given the corporate performance factor of 95% and the 2.5% upward adjustment for individual performance noted above, Mr. Aristeguieta’s total incentive compensation was awarded at 97.5% of target for 2020, resulting in total compensation of $6,850,000.
|
|
|
Andrew J. Erickson, Chief Productivity Officer and Head of International
|
| ||||||
|
Since June 2020, Mr. Erickson has held the roles of Chief Productivity Officer and Head of State Street’s International business. In these roles, he oversees State Street’s Global Delivery, Productivity and Transformation teams, responsible for leading enterprise-wide change and State Street’s International business, providing regional and local entity focus for global business lines. Previously, he was the head of our Global Services business from November 2017 to June 2020.
In determining individual performance-based compensation adjustments to Mr. Erickson’s 2020 incentive award, the Committee focused on the most significant individual performance factors below:
|
| ||||||
|
Performance Area
|
| |
2020 Key Individual Goals
|
| |
Performance Factors and Results
|
|
|
Financial
Performance
Below Expectations
|
| |
• Meet our 2020 budget, growing fee revenues and reducing expenses
• Improve pipeline in key growth markets and segments
• Drive productivity improvements to reduce overall State Street expenses
|
| |
• As Chief Productivity Officer, amplified behavioral and cultural changes around productivity to support expense reduction
— State Street Expenses down 1.5% and in line with budget
• Meaningful progress for International teams in fee revenues versus prior year and against budget; faced challenges managing expenses
— International IS Fee Revenue improved from 2019 and above budget
— International IS Expenses above 2019 and above budget
• In prior role as head of Global Services, fell short against sales objectives, with lower than planned net new business
|
|
|
Business
Performance
Above Expectations
|
| |
• Execute global multi-year segment strategies to reignite revenue and expand business growth
• Improve client sentiment through consistent service quality across products and services
• Adopt new productivity measures to drive continuous improvement and improve service quality
|
| |
• Designed and initiated implementation of global client segment
structure; effectively transitioned to Francisco Aristeguieta
• Maintained client service and delivery quality and improved client
sentiment, despite virtual COVID-19 environment
• Operationalized several Federal Reserve program mandates to enable
financial stability for our clients
• Appointed to role as Chief Productivity Officer in June to drive
productivity and operational effectiveness; key accomplishments include:
— Redesigned operating models to eliminate silos and simplify the
organization to improve and accelerate decision-making
— Established individual employee productivity metrics to enable
improved performance management
— Launched an internal talent marketplace to enable strategic talent
redeployment across the company
— Executed on key initiatives to drive automation and reduce errors;
achieved reduction in manual touchpoints
• While some progress was made, fell short of diversity priorities
|
|
|
Risk
Management
Performance
Above
Expectations
|
| |
• Improve engagement with key regulatory authorities to maintain proactive, consistent and accountable regulatory relationships
|
| |
• Actively engaged with regulators and drove accountability across internal risk teams
• Aggressively pursued root cause issues to reduce risk and improve processes and controls
|
|
|
Compensation for 2020
|
| |
|
|
|
Individual Performance-Based Compensation Adjustments:
The Committee determined that Mr. Erickson exceeded individual performance expectations related to his business and risk management goals and exhibited strong leadership performance. However, Global Services financial performance was below expectations primarily due to disappointing sales. Additionally, while Mr. Erickson made some progress, he did not sufficiently achieve diversity priorities. Consequently, Mr. Erickson’s individual incentive award was adjusted down by 2.5%.
|
| |||
|
Given the corporate performance factor of 95% and the 2.5% downward adjustment for individual performance noted above, Mr. Erickson’s total incentive compensation was awarded at 92.5% of target for 2020, resulting in total compensation of $6,550,000.
|
|
|
Louis D. Maiuri, Chief Operating Officer
|
| ||||||
|
As Chief Operating Officer, Mr. Maiuri is responsible for our Information Technology, CRD, State Street Global Exchange and Global Markets organizations. This includes delivering on our “One State Street” vision in alignment with our State Street Alpha strategy to integrate our business, operational and technology investments to enrich our product portfolio and foster product innovation to meet our clients’ needs.
In determining individual performance-based compensation adjustments to Mr. Maiuri’s 2020 incentive award, the Committee focused on the most significant individual performance factors below:
|
| ||||||
|
Performance Area
|
| |
2020 Key Individual Goals
|
| |
Performance Factors and Results
|
|
|
Financial
Performance
At Expectations
|
| |
• Meet our 2020 budget, growing fee revenues and reducing expenses
• Grow balance sheet and optimize capital / liquidity utilization to support business growth
|
| |
• Meaningful progress versus prior year and effective progress versus
budget for the business activities he oversees:
— Global Markets Fee Revenue improved from 2019 and above
budget
— CRD Fee Revenue improved from 2019 and in line with budget
— Global Delivery Expenses flat from 2019 but above budget
— Technology Expenses declined from 2019 but above budget
• Effectively partnered with senior leadership to manage the balance
sheet, navigate market turmoil and manage credit exposures |
|
|
Business
Performance
Above
Expectations
|
| |
• Further define, broaden and grow our State Street Alpha platform along with relevant State Street products and services with clients and partners
• Develop and implement IT operating model to enhance talent management, operational efficiency, effectiveness and overall productivity
• Implement key automation initiatives to digitize manual activities, address the root cause of errors and issues, and drive productivity
• Improve service delivery quality for key client segments
|
| |
• Achieved six new client wins for State Street Alpha and continued delivery of new functionality via partnerships with trading platforms and data and analytics providers
• Restructured technology organization to prioritize technology investments and growth with business outcomes while strengthening our technology resiliency
• Executed and scaled key automation efforts, including increased funds on “driverless” NAV, improved straight-through-
processing and reduction of manual touchpoints
• Sustained client service and delivery during unprecedented volumes and market volatility, demonstrated by improved client sentiment
• Operationalized several Federal Reserve program mandates to enable financial stability for our clients
• While some progress was made, fell short of diversity priorities
|
|
|
Risk
Management
Performance
Significantly
Above
Expectations
|
| |
• Enhance security and controls and reduce technology risk using a risk-based approach
• Drive risk reduction for residual risk applications
|
| |
• Delivered on critical milestones for key enterprise programs, resulting in risk reduction
• Exceeded application rationalization target to reduce technology risk and maintenance costs
• Maintained operational and technology continuity through volatile market volumes
• Demonstrated exceptional leadership in coordinating our strategy for returning to the office with frequent and detailed internal communications, resulting in high employee satisfaction ratings
|
|
|
Compensation for 2020
|
| |
|
|
|
The Committee determined that Mr. Maiuri met or exceeded individual performance expectations related to his financial and business goals. He also significantly exceeded expectations related to his risk management goals and exhibited exceptional leadership performance. Consequently, Mr. Maiuri’s individual incentive award was adjusted up by 12.5%, primarily reflecting his restructuring of the technology organization and improvements in technology resiliency, as well as his leadership in coordinating our strategy for returning to the office.
|
| |||
|
Given the corporate performance factor of 95% and the 12.5% upward adjustment for individual performance noted above, Mr. Maiuri’s total incentive compensation was awarded at 107.5% of target for 2020, resulting in total compensation of $7,450,000.
|
|
|
|
| |
Cash-Based Incentive
|
| |
Equity-Based Incentive
|
| |
Total Incentive
|
| |||||||||
|
Named Executive Officer
|
| |
Actual
|
| |
Target
|
| |
Actual
|
| |
Target
|
| |
Actual
|
| |
Target
|
|
|
Ronald P. O’Hanley
|
| |
$0
|
| |
$3,375,000
|
| |
$13,000,000(1)
|
| |
$10,125,000
|
| |
$13,000,000
|
| |
$13,500,000
|
|
|
Eric W. Aboaf
|
| |
2,205,000
|
| |
2,205,000
|
| |
4,095,000
|
| |
4,095,000
|
| |
6,300,000
|
| |
6,300,000
|
|
|
Francisco Aristeguieta
|
| |
2,152,500
|
| |
2,205,000
|
| |
3,997,500
|
| |
4,095,000
|
| |
6,150,000
|
| |
6,300,000
|
|
|
Andrew J. Erickson
|
| |
2,047,500
|
| |
2,205,000
|
| |
3,802,500
|
| |
4,095,000
|
| |
5,850,000
|
| |
6,300,000
|
|
|
Louis D. Maiuri
|
| |
2,362,500
|
| |
2,205,000
|
| |
4,387,500
|
| |
4,095,000
|
| |
6,750,000
|
| |
6,300,000
|
|
(1)
|
Equity-based incentive is above target for 2020 due to the replacement of cash-based incentives typically awarded to our CEO with an equity-based vehicle, as described on p. 32. The total 2020 incentive awarded was below target.
|
|
|
| |
|
| |
Cash-Based Incentive
|
| |
Equity-Based Incentive
|
| |
|
| |||||||||
|
Named Executive Officer
|
| |
Annual Base
Salary
|
| |
Immediate
Cash
|
| |
DVAs
|
| |
CRSUs
|
| |
DSAs
|
| |
Performance-
Based RSUs
|
| |
Total
Compensation(1)
|
|
|
Ronald P. O’Hanley
|
| |
$1,000,000
|
| |
$0
|
| |
$0
|
| |
$3,250,000
|
| |
$3,250,000
|
| |
$6,500,000
|
| |
$14,000,000
|
|
|
Eric W. Aboaf
|
| |
700,000
|
| |
630,000
|
| |
1,575,000
|
| |
0
|
| |
1,575,000
|
| |
2,520,000
|
| |
7,000,000
|
|
|
Francisco Aristeguieta
|
| |
700,000
|
| |
615,000
|
| |
1,537,500
|
| |
0
|
| |
1,537,500
|
| |
2,460,000
|
| |
6,850,000
|
|
|
Andrew J. Erickson
|
| |
700,000
|
| |
585,000
|
| |
1,462,500
|
| |
0
|
| |
1,462,500
|
| |
2,340,000
|
| |
6,550,000
|
|
|
Louis D. Maiuri
|
| |
700,000
|
| |
675,000
|
| |
1,687,500
|
| |
0
|
| |
1,687,500
|
| |
2,700,000
|
| |
7,450,000
|
|
(1)
|
The 2020 compensation described in the table above, which summarizes how the Committee evaluates annual total compensation, differs from the compensation described in the Summary Compensation Table in the following respects:
|
—
|
Annual Base Salary. The table above reflects the year-end annual base salary rate applicable for each NEO. Column (c) in the Summary Compensation Table presents the amount of base salary actually earned by each NEO during the relevant year.
|
—
|
DVAs. The table above, like the Summary Compensation Table, reflects the value of deferred cash compensation awarded by the Committee for the 2020 performance year. However, the table above does not reflect any dividends credited on DVAs outstanding during 2020, which are included in the Summary Compensation Table.
|
—
|
Equity-Based Incentive Awards. The Committee grants equity awards based on the prior year’s performance. In the table above, equity awards are shown for the year of performance (i.e., equity-based awards granted in 2021 for 2020 performance, including the CRSUs granted for the 2020 performance year, are shown as 2020 compensation). Under applicable SEC rules, the Summary Compensation Table presents equity awards in the year in which they are granted (e.g., equity granted in 2020 for 2019 performance is shown as 2020 compensation). Thus, the CRSUs and the other equity-based awards shown above for 2020 will be reported in the Summary Compensation Table for 2021.
|
—
|
Total Compensation. The amounts disclosed above differ from the amounts reported in column (j) of the Summary Compensation Table due to the different methodologies discussed in the notes above. Additionally, this table excludes items required to be included in column (i) of the Summary Compensation Table that State Street does not view as primary components of regular annual compensation and therefore were not considered in setting incentive targets or determining incentive awards, such as the value of international assignment benefits provided to Messrs. Aristeguieta and Erickson described in more detail in the section entitled “Other Elements of Compensation—Perquisites.”
|
|
Performance
Year(1)
|
| |
Year of
Grant
|
| |
Performance
Period
|
| |
Performance Metric Target
|
| |
Potential
Payout
|
| |
Actual/Estimated Payout(2)
|
|
|
2017
|
| |
2018
|
| |
2018 – 2020
|
| |
Average ROE of 13% for the 2018 to 2020 performance period
|
| |
0 – 150%
|
| |
Earned at 83% in February 2021 based on an average adjusted ROE of 11.3%
|
|
|
2018
|
| |
2019
|
| |
2019 – 2021
|
| |
Average ROE of 13% and average pre-tax margin of 29% for the 2019 to 2021 performance period
|
| |
0 – 150%
|
| |
Current estimated payout below target based on 2019 and 2020 ROE and pre-tax margin; any payout to be approved by the Committee in February/ March 2022(3)
|
|
|
2019
|
| |
2020
|
| |
2020 – 2022
|
| |
Average ROE of 13% and average pre-tax margin of 29% for the 2020 to 2022 performance period
|
| |
0 – 150%
|
| |
Current estimated payout below target based on 2020 ROE and pre-tax margin; any payout to be approved by the Committee in February/ March 2023(3)
|
|
(1)
|
For additional information about the terms of these awards, see the discussion under “Other Elements of Compensation—Adjustment and Recourse Mechanisms,” the narrative discussion following the “2020 Grants of Plan-Based Awards” table, the “Outstanding Equity Awards at Fiscal Year-End, December 31, 2020” table and our prior year proxy statements.
|
(2)
|
Achievement of ROE and pre-tax margin targets for performance-based RSUs is subject to adjustment for pre-established, objectively determinable factors. For the 2017 performance year awards, the Committee approved adjustments to the three-year average GAAP ROE of 10.5% to account for merger and integration expenses, restructuring expenses and legal and regulatory matters arising from prior performance periods, resulting in a three-year average adjusted ROE of 11.3%. See Appendix C for a reconciliation of the three-year average GAAP ROE to the three-year average adjusted ROE. In addition, all awards are subject to the Committee’s ability to exercise negative discretion in determining the payout achieved, as well as recourse mechanisms described in more detail under “Other Elements of Compensation—Adjustment and Recourse Mechanisms.”
|
(3)
|
Current estimated payouts based on estimated performance of relevant criteria only for completed fiscal years within the three-year performance period. This performance has not been certified and is therefore subject to adjustment based on the terms of the relevant awards. No estimate of performance for incomplete fiscal years within the performance period has been made. The final payout will be based on satisfaction of the performance criteria as certified by the Committee following the end of the full performance period.
|
•
|
if the executive’s actions exposed State Street to inappropriate risks that resulted in a “Significantly Below Expectations” rating on any of the factors on State Street’s corporate multi-factor risk scorecard, which guides State Street’s risk assessment process, or
|
•
|
if the executive incurred significant or repeated compliance or risk-related violations of State Street’s policies
|
•
|
if the executive’s actions exposed State Street to inappropriate risks, including in a supervisory capacity, that resulted or could reasonably be expected to result in material losses that are or would be substantial in relation to State Street’s or a relevant business unit’s revenue, capital and overall risk tolerance
|
•
|
if the executive engaged in fraud, gross negligence or any misconduct, including in a supervisory capacity, that was materially detrimental to the interests or business reputation of State Street or any of its businesses
|
•
|
if the executive engaged in conduct that constituted a violation of State Street policies and procedures or our Standard of Conduct in a manner which either caused or could have caused reputational harm that is material to State Street or either placed or could have placed State Street at material legal or financial risk, or
|
•
|
if, as a result of a material financial restatement contained in an SEC filing, or miscalculation or inaccuracy in the determination of performance metrics, financial results or other criteria used in determining the amount of the award, the executive would have received a smaller or no award
|
•
|
if the executive engaged in fraud or willful misconduct, including in a supervisory capacity, that resulted in financial or reputational harm that is material to State Street and resulted in termination of the executive’s employment
|
•
|
if, as a result of the occurrence of a material financial restatement by State Street contained in a filing with the SEC or miscalculation or inaccuracy in financial results, performance metrics, or other criteria used in determining the amount of the award, the executive would have received a smaller or no award, or
|
•
|
if the executive failed to comply with the terms of any covenant not to compete entered into with State Street
|
•
|
Human Resources Committee Interaction and Overlap with Risk Committee and Examining and Audit Committee. Members of the Committee regularly communicate with the Board’s Risk Committee and its Examining and Audit Committee to integrate input from these other committees into compensation decisions. In addition, the current Chair of the Human Resources Committee also serves on the Risk Committee and another member of the Human Resources Committee also serves on the Examining and Audit Committee. Our Lead Director, who serves as a member of the Committee, also participates in meetings of both the Risk Committee and the Examining and Audit Committee as part of her leadership role on the Board.
|
•
|
Corporate Risk Summary Review. The Human Resources Committee periodically reviews a corporate multi-factor risk scorecard, prepared by the Chief Risk Officer and confirmed by the Risk Committee, assessing firm-wide risk in several categories.
|
•
|
Annual Compensation Risk Review. The Committee annually meets with our Chief Human Resources Officer, Chief Risk Officer and Chief Compliance Officer to evaluate our compensation programs and review an assessment of the design and operation of State Street’s incentive compensation system in providing risk-taking incentives that are consistent with the organization’s safety and soundness, as described in more detail under the heading “Alignment of Incentive Compensation and Risk.”
|
•
|
Risk-Based Adjustments to Incentive Compensation. We use a two-pronged process for risk-based adjustments to incentive compensation awards for material risk-takers. This process allows for, as appropriate, both: (1) adjustments at the time awards are made (“ex ante” adjustments) and (2) adjustments after the awards are made (“ex post” adjustments) through recoupment of incentive compensation that has already been awarded via forfeiture (before vesting and delivery) or clawback (after vesting and delivery). For more information, see the discussion under “Other Elements of Compensation—Adjustment and Recourse Mechanisms.”
|
•
|
Emphasis on Deferral and Equity-Based Compensation. We maintain significant levels of deferred compensation and equity-based compensation for our executives, and we continue to deliver a higher percentage of our NEOs’ incentive compensation in the form of deferred compensation relative to our peer group. Combined, these elements align an executive’s compensation with the risks and performance results experienced by our shareholders. The high level of deferral places a significant amount of compensation at risk for ex post adjustments in specified circumstances.
|
•
|
Metrics and Targets for Performance-Based RSUs Aligned to Long-Term Goals. We deliver a substantial proportion of equity compensation for our executives in performance-based RSUs, aligning realized pay outcomes with our long-term strategy. Metrics used in our performance-based RSUs directly align NEO compensation with our goals. Each year, we assess target and payout ranges for new awards and set targets that the Committee believes are challenging, but achievable, which mitigates excessive risk-taking incentives. In setting targets and payout ranges, the Committee considers publicly stated guidance and projections, current-year results and peer company financial results, among other factors.
|
|
Name
|
| |
Common Stock Ownership
Guideline Multiple of
Annual Base Salary
|
| |
Executive Exceeds
Ownership
Guideline
|
|
|
Ronald P. O’Hanley
|
| |
7
|
| |
✔
|
|
|
Eric W. Aboaf
|
| |
5
|
| |
✔
|
|
|
Francisco Aristeguieta
|
| |
5
|
| |
✔
|
|
|
Andrew J. Erickson
|
| |
5
|
| |
✔
|
|
|
Louis D. Maiuri
|
| |
5
|
| |
✔
|
|
•
|
Annual Equity Award Grants. Annual grants of equity awards to our employees are typically made by the Committee on the date of a scheduled meeting of the Committee or the Board of Directors to be held in February or March of each year following the public release of financial results for the prior fiscal year. Pursuant to authority delegated by the Board, and subject to any limitations that the Board or Committee may establish, another committee of the Board (which may consist of a single member) may make annual grants to persons other than executive officers on the date of the scheduled meeting in February or March.
|
•
|
Other Equity Award Grants. Grants of equity awards to NEOs and other executive officers in connection with new hires, promotions, special recognition, retention or other special circumstances are made by the Committee. Awards to other individuals may be made either by the Committee or, subject to any limitations that the Board or the Committee may establish, a committee of the Board composed of (1) the Chairman of the Board, (2) the Chief Executive Officer, if a member of the Board, (3) the Committee Chair or (4) the Committee Chair along with any other member of the Committee. This type of award may be granted on the date of a scheduled meeting of the Committee, a scheduled meeting of the Board or the last business day of a calendar month.
|
•
|
The exercise price for any stock options and stock appreciation rights will be the NYSE closing price of State Street’s common stock on the date of grant. We did not award any stock options or stock appreciation rights as part of 2020 compensation.
|
|
Submitted by,
|
| |
|
|
|
Sara Mathew, Chair
Amelia C. Fawcett
William L. Meaney
|
| |
Richard P. Sergel
Gregory L. Summe
|
|
•
|
the estimated median of the annual total compensation of all employees of State Street (other than Mr. O’Hanley), was $59,199; and
|
•
|
the annual total compensation of Mr. O’Hanley was $9,309,980
|
•
|
conduct risk-based reviews of incentive plan design
|
•
|
identify individuals whose normal activities may involve material risk-taking
|
•
|
apply risk-based adjustments to compensation
|
•
|
implement specific Board committee review of selected control function compensation (e.g., Board-level Risk Committee review of Chief Risk Officer and Enterprise Risk Management department compensation)
|
|
Name and
Principal Position
|
| |
Year
|
| |
Salary(1)
($)
|
| |
Stock
Awards(2)
($)
|
| |
Non-Equity
Incentive Plan
Compensation(3)
($)
|
| |
All Other
Compensation(1)(4)
($)
|
| |
Total
($)
|
|
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(e)
|
| |
(g)
|
| |
(i)
|
| |
(j)
|
|
|
Ronald P. O’Hanley
President and Chief
Executive Officer
|
| |
2020
|
| |
$950,000
|
| |
$8,250,050
|
| |
$8,303
|
| |
$101,627
|
| |
$9,309,980
|
|
|
2019
|
| |
800,000
|
| |
4,926,560
|
| |
2,837,004
|
| |
135,837
|
| |
8,699,401
|
| |||
|
2018
|
| |
800,000
|
| |
5,034,952
|
| |
2,378,391
|
| |
123,322
|
| |
8,336,665
|
| |||
|
Eric W. Aboaf
Executive Vice President and Chief Financial Officer
|
| |
2020
|
| |
700,000
|
| |
3,656,248
|
| |
2,209,463
|
| |
62,956
|
| |
6,628,667
|
|
|
2019
|
| |
700,000
|
| |
2,584,015
|
| |
2,010,066
|
| |
82,925
|
| |
5,377,006
|
| |||
|
2018
|
| |
700,000
|
| |
5,099,903
|
| |
1,585,609
|
| |
52,711
|
| |
7,438,223
|
| |||
|
Francisco Aristeguieta
Executive Vice President and Chief Executive Officer of State Street Institutional Services
|
| |
2020
|
| |
709,500
|
| |
4,419,955
|
| |
2,152,500
|
| |
3,164,761
|
| |
10,446,716
|
|
|
2019
|
| |
325,505
|
| |
9,511,387
|
| |
2,380,000
|
| |
1,135,364
|
| |
13,352,256
|
| |||
|
Andrew J. Erickson
Executive Vice President, Chief Productivity Officer and Head of International
|
| |
2020
|
| |
658,223
|
| |
3,786,254
|
| |
2,050,654
|
| |
1,326,483
|
| |
7,821,614
|
|
|
2019
|
| |
500,480
|
| |
2,283,584
|
| |
2,070,122
|
| |
1,312,673
|
| |
6,166,859
|
| |||
|
2018
|
| |
487,040
|
| |
1,999,976
|
| |
1,111,299
|
| |
1,616,081
|
| |
5,214,396
|
| |||
|
Louis D. Maiuri
Executive Vice President and Chief Operating Officer
|
| |
2020
|
| |
637,500
|
| |
3,932,464
|
| |
2,366,074
|
| |
55,528
|
| |
6,991,566
|
|
(1)
|
Salaries and compensation included in the “All Other Compensation” column for Messrs. Aristeguieta and Erickson were converted from HK$ to US$ using an exchange rate of 0.129 for 2020 and 0.128 for 2019 and 2018. Mr. Aristeguieta’s 2019 salary reflects the pro-rated portion of his annual salary from commencement of his employment in July 2019 through December 31, 2019.
|
(2)
|
Amounts represent the grant date fair value of DSA and performance-based RSUs. The fair value of each award is computed in accordance with GAAP (FASB ASC 718), using the assumptions stated in note 18 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020. The amounts included for the 2020 performance-based RSUs reflect target level performance, as reflected in the “2020 Grants of Plan-Based Awards” table. Based on the grant date value and assuming that performance results in the maximum number of shares vesting, each NEO’s 2020 performance-based RSUs would have a maximum payout as follows: Mr. O’Hanley – 132,297 shares and value of $8,250,041; Mr. Aboaf – 54,122 shares and value of $3,375,048; Mr. Aristeguieta – 65,426 shares and value of $4,079,965; Mr. Erickson – 56,046 shares and value of $3,495,029; and Mr. Maiuri – 58,211 shares and value of $3,630,038. Based on the grant date value and assuming that performance results in the maximum number of shares vesting, each NEO’s 2019 performance-based RSUs would have a maximum payout as follows: Mr. O’Hanley – 66,666 shares and value of $4,433,956; Mr. Aboaf – 34,967 shares and value of $2,325,655; Mr. Aristeguieta – 67,017 shares and value of $3,527,105; and Mr. Erickson – 30,902 shares and value of $2,055,292. Based on the grant date value and assuming that performance results in the maximum number of shares vesting, the 2018 performance-based RSUs would have a maximum payout as follows: Mr. O’Hanley – 44,751 shares and value of $4,531,272; Mr. Aboaf – 57,179 shares and value of $5,789,672; and Mr. Erickson – 17,777 shares and value of $1,800,099.
|
(3)
|
Represents the immediate and deferred cash (granted in DVAs) portions of incentive compensation, as well as dividends credited on DVAs outstanding during 2020, as shown in the table below. DVAs are units that receive a notional investment return of a money market instrument. During the deferral period, DVAs are credited with additional notional units based on the return of the State Street Institutional U.S. Government Money Market Fund if the monthly dividend rate is at least equal to 0.001 per unit. These dividends vest and are paid at the same time and in the same form as the related DVA unit.
|
|
|
| |
2020 Non-Equity Incentive Plan Compensation
|
| |||||||||
|
Name
|
| |
Immediate Cash
($)
|
| |
DVAs
($)
|
| |
Dividends
Credited on
Outstanding
DVAs
($)
|
| |
Total
($)
|
|
|
Ronald P. O'Hanley
|
| |
$—
|
| |
$—
|
| |
$8,303
|
| |
$8,303
|
|
|
Eric W. Aboaf
|
| |
630,000
|
| |
1,575,000
|
| |
4,463
|
| |
2,209,463
|
|
|
Francisco Aristeguieta
|
| |
615,000
|
| |
1,537,500
|
| |
—
|
| |
2,152,500
|
|
|
Andrew J. Erickson
|
| |
585,000
|
| |
1,462,500
|
| |
3,154
|
| |
2,050,654
|
|
|
Louis D. Maiuri
|
| |
675,000
|
| |
1,687,500
|
| |
3,574
|
| |
2,366,074
|
|
(4)
|
The following table describes the amounts set forth for 2020 in the “All Other Compensation” column:
|
|
Name
|
| |
Executive
Security(A)
($)
|
| |
International
Assignment(B)
($)
|
| |
Company
Contributions
to Defined
Contribution
Plans(C)
($)
|
| |
Charitable
Donations and
Matching
Contributions(D)
($)
|
| |
Other
Benefits(E)
($)
|
| |
Total
($)
|
|
|
Ronald P. O'Hanley
|
| |
$30,871
|
| |
$—
|
| |
$27,850
|
| |
$25,000
|
| |
$17,906
|
| |
$101,627
|
|
|
Eric W. Aboaf
|
| |
—
|
| |
—
|
| |
27,850
|
| |
25,000
|
| |
10,106
|
| |
62,956
|
|
|
Francisco Aristeguieta
|
| |
—
|
| |
2,953,647
|
| |
70,950
|
| |
—
|
| |
140,164
|
| |
3,164,761
|
|
|
Andrew J. Erickson
|
| |
—
|
| |
1,252,005
|
| |
65,822
|
| |
—
|
| |
8,656
|
| |
1,326,483
|
|
|
Louis D. Maiuri
|
| |
—
|
| |
—
|
| |
17,100
|
| |
26,522
|
| |
11,906
|
| |
55,528
|
|
(A)
|
The Board approved an executive security package that provides a car and driver ($20,707) and residential security ($10,164) to Mr. O'Hanley. Car and driver values are calculated by allocating the total cost of the car and driver between non-business and business use by mileage traveled. The cost of security at Mr. O'Hanley's residence reflects the amounts invoiced for alarm monitoring and maintenance.
|
(B)
|
In connection with his offer of employment, State Street agreed to provide Mr. Aristeguieta international assignment benefits including: an allowance for goods and services ($1,045,623); funding of travel-related tax liabilities ($1,826,031); and funding for household and family expenses ($81,993). In connection with his international assignment, State Street provided Mr. Erickson benefits including: tax equalization payments ($1,185,976); and funding for household and family expenses ($66,029).
|
(C)
|
Company contributions to savings plans: (1) $17,100 to the Salary Savings Program (SSP) for Messrs. O'Hanley, Aboaf and Maiuri; (2) $10,750 to the Management Supplemental Savings Plan (MSSP) for Messrs. O'Hanley and Aboaf; (3) $2,322 to the Mandatory Provident Fund (MPF) for Messrs. Aristeguieta and Erickson; and (4) $68,628 and $63,500 for Messrs. Aristeguieta and Erickson, respectively, to the Occupational Retirement Schemes Ordinance (ORSO).
|
(D)
|
Messrs. O’Hanley and Aboaf each directed contributions of $25,000 under our Executive Leadership program, which allows Executive Vice Presidents and above serving on non-profit boards to annually recommend a financial contribution from the State Street Foundation to the non-profit of up to $25,000. In addition, matching contributions were made in the name of Mr. Maiuri ($26,522) under our matching gift program, which will match contributions made by employees to eligible charitable and educational organizations in accordance with specified annual limits.
|
(E)
|
Includes $6,000 for financial planning/ tax services for Messrs. O'Hanley and Aboaf; $7,800 for parking benefits for Messrs. O’Hanley and Maiuri and $4,550 for Mr. Erickson; $1,482 for personal liability coverage for each NEO; $2,624 for an executive health screening available to each NEO; and $131,324 for a car and driver and $4,734 for club memberships for Mr. Aristeguieta, which are customary benefits for leaders in the region that we agreed to provide in connection with his offer of employment.
|
|
|
| |
|
| |
|
| |
Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards(1)
|
| |
Estimated Future
Payouts Under Equity
Incentive Plan Awards
|
| |
All Other Stock
Awards:
Number of
Shares of
Stock or Units
(#)
|
| |
Grant Date
Fair Value of
Stock
Awards(2)
($)
|
| ||||||||||||
|
Name
|
| |
Award
|
| |
Grant
Date
|
| |
Threshold
($)
|
| |
Target
($)
|
| |
Maximum
($)
|
| |
Threshold
(#)
|
| |
Target
(#)
|
| |
Maximum
(#)
|
| ||||||
|
(a)
|
| |
(b)
|
| |
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
|
|
Ronald P. O'Hanley
|
| |
2020 Cash-Based Incentive
|
| |
|
| |
$ —
|
| |
$3,375,000
|
| |
$6,750,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$—
|
|
|
Performance-Based RSU(3)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
44,099
|
| |
88,198
|
| |
132,297
|
| |
—
|
| |
5,500,027
|
| |||
|
DSA(4)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
43,287
|
| |
2,750,023
|
| |||
|
Eric W. Aboaf
|
| |
2020 Cash-Based Incentive
|
| |
|
| |
—
|
| |
2,205,000
|
| |
4,410,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Performance-Based RSU(3)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
18,041
|
| |
36,081
|
| |
54,122
|
| |
—
|
| |
2,250,011
|
| |||
|
DSA(4)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
22,135
|
| |
1,406,237
|
| |||
|
Francisco Aristeguieta
|
| |
2020 Cash-Based Incentive
|
| |
|
| |
—
|
| |
2,205,000
|
| |
4,410,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Performance-Based RSU(3)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
21,809
|
| |
43,617
|
| |
65,426
|
| |
—
|
| |
2,719,956
|
| |||
|
DSA(4)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
26,759
|
| |
1,699,999
|
| |||
|
Andrew J. Erickson
|
| |
2020 Cash-Based Incentive
|
| |
|
| |
—
|
| |
2,205,000
|
| |
4,410,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Performance-Based RSU(3)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
18,682
|
| |
37,364
|
| |
56,046
|
| |
—
|
| |
2,330,019
|
| |||
|
DSA(4)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
22,922
|
| |
1,456,235
|
| |||
|
Louis D. Maiuri
|
| |
2020 Cash-Based Incentive
|
| |
|
| |
—
|
| |
2,205,000
|
| |
4,410,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Performance-Based RSU(3)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
19,404
|
| |
38,807
|
| |
58,211
|
| |
—
|
| |
2,420,005
|
| |||
|
DSA(4)
|
| |
2/27/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
23,807
|
| |
1,512,459
|
|
(1)
|
For 2020, cash-based incentive amounts were awarded in the form of immediate cash and DVAs, as described below. The actual cash-based incentive awards earned are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 61. For the 2020 performance year, the Committee did not award cash-based incentives to Mr. O’Hanley, but instead made an equity grant in the form of cash-settled restricted stock units, referred to as CRSUs. These CRSUs will be reported in the Summary Compensation Table as 2021 compensation and in the 2021 Grants of Plan-Based Awards Table.
|
(2)
|
Fair value of the awards is computed in accordance with FASB ASC Topic 718, using the assumptions stated in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.
|
(3)
|
Performance-based RSUs granted as a part of 2019 compensation.
|
(4)
|
DSAs granted as a part of 2019 compensation.
|
|
|
| |
Pre-tax Margin
|
| ||||||||||||||||||||||||||||||||||||
|
|
| |
|
| |
Less than
24%
|
| |
24%
|
| |
25%
|
| |
26%
|
| |
27%
|
| |
28%
|
| |
29%
|
| |
30%
|
| |
31%
|
| |
32%
|
| |
33%
|
| |
34% or
Above
|
|
|
ROE
|
| |||||||||||||||||||||||||||||||||||||||
|
Less than 8%
|
| |
0%
|
| |
25%
|
| |
35%
|
| |
43%
|
| |
45%
|
| |
48%
|
| |
50%
|
| |
53%
|
| |
55%
|
| |
58%
|
| |
65%
|
| |
75%
|
| |||
|
8%
|
| |
25%
|
| |
50%
|
| |
60%
|
| |
68%
|
| |
70%
|
| |
73%
|
| |
75%
|
| |
78%
|
| |
80%
|
| |
83%
|
| |
90%
|
| |
100%
|
| |||
|
9%
|
| |
35%
|
| |
60%
|
| |
70%
|
| |
78%
|
| |
80%
|
| |
83%
|
| |
85%
|
| |
88%
|
| |
90%
|
| |
93%
|
| |
100%
|
| |
110%
|
| |||
|
10%
|
| |
43%
|
| |
68%
|
| |
78%
|
| |
85%
|
| |
88%
|
| |
90%
|
| |
93%
|
| |
95%
|
| |
98%
|
| |
100%
|
| |
108%
|
| |
118%
|
| |||
|
11%
|
| |
45%
|
| |
70%
|
| |
80%
|
| |
88%
|
| |
90%
|
| |
93%
|
| |
95%
|
| |
98%
|
| |
100%
|
| |
103%
|
| |
110%
|
| |
120%
|
| |||
|
12%
|
| |
48%
|
| |
73%
|
| |
83%
|
| |
90%
|
| |
93%
|
| |
95%
|
| |
98%
|
| |
100%
|
| |
103%
|
| |
105%
|
| |
113%
|
| |
123%
|
| |||
|
13%
|
| |
50%
|
| |
75%
|
| |
85%
|
| |
93%
|
| |
95%
|
| |
98%
|
| |
100%
|
| |
103%
|
| |
105%
|
| |
108%
|
| |
115%
|
| |
125%
|
| |||
|
14%
|
| |
53%
|
| |
78%
|
| |
88%
|
| |
95%
|
| |
98%
|
| |
100%
|
| |
103%
|
| |
105%
|
| |
108%
|
| |
110%
|
| |
118%
|
| |
128%
|
| |||
|
15%
|
| |
55%
|
| |
80%
|
| |
90%
|
| |
98%
|
| |
100%
|
| |
103%
|
| |
105%
|
| |
108%
|
| |
110%
|
| |
113%
|
| |
120%
|
| |
130%
|
| |||
|
16%
|
| |
58%
|
| |
83%
|
| |
93%
|
| |
100%
|
| |
103%
|
| |
105%
|
| |
108%
|
| |
110%
|
| |
113%
|
| |
115%
|
| |
123%
|
| |
133%
|
| |||
|
17%
|
| |
65%
|
| |
90%
|
| |
100%
|
| |
108%
|
| |
110%
|
| |
113%
|
| |
115%
|
| |
118%
|
| |
120%
|
| |
123%
|
| |
130%
|
| |
140%
|
| |||
|
18% and Above
|
| |
75%
|
| |
100%
|
| |
110%
|
| |
118%
|
| |
120%
|
| |
123%
|
| |
125%
|
| |
128%
|
| |
130%
|
| |
133%
|
| |
140%
|
| |
150%
|
|
|
|
| |
Stock Awards(2)
|
| ||||||||||||
|
Name
|
| |
Grant Date
|
| |
Number of
Shares or Units
of Stock That
Have Not Vested
(#)
|
| |
Market Value of
Shares or Units
of Stock That
Have Not Vested
($)
|
| |
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
($)
|
|
|
(a)
|
| |
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
|
|
Ronald P. O'Hanley
|
| |
02/27/17(3)
|
| |
7,075
|
| |
$514,918
|
| |
|
| |
|
|
|
02/26/18(4)
|
| |
9,854
|
| |
717,174
|
| |
|
| |
|
| |||
|
02/26/18(5)
|
| |
24,762
|
| |
1,802,178
|
| |
|
| |
|
| |||
|
03/01/19(6)
|
| |
21,876
|
| |
1,592,135
|
| |
|
| |
|
| |||
|
03/01/19(7)
|
| |
|
| |
|
| |
44,444
|
| |
3,234,634
|
| |||
|
02/27/20(8)
|
| |
43,287
|
| |
3,150,428
|
| |
|
| |
|
| |||
|
02/27/20(9)
|
| |
|
| |
|
| |
88,198
|
| |
6,419,050
|
| |||
|
Eric W. Aboaf
|
| |
02/27/17(3)
|
| |
2,213
|
| |
161,062
|
| |
|
| |
|
|
|
02/26/18(4)
|
| |
6,067
|
| |
441,556
|
| |
|
| |
|
| |||
|
02/26/18(5)
|
| |
15,245
|
| |
1,109,531
|
| |
|
| |
|
| |||
|
02/26/18(10)
|
| |
16,393
|
| |
1,193,083
|
| |
|
| |
|
| |||
|
03/01/19(6)
|
| |
11,475
|
| |
835,150
|
| |
|
| |
|
| |||
|
03/01/19(7)
|
| |
|
| |
|
| |
23,311
|
| |
1,696,575
|
| |||
|
02/27/20(8)
|
| |
22,135
|
| |
1,610,985
|
| |
|
| |
|
| |||
|
02/27/20(9)
|
| |
|
| |
|
| |
36,081
|
| |
2,625,975
|
| |||
|
Francisco Aristeguieta
|
| |
07/31/19(11)
|
| |
19,078
|
| |
1,388,497
|
| |
|
| |
|
|
|
07/31/19(12)
|
| |
15,570
|
| |
1,133,185
|
| |
|
| |
|
| |||
|
07/31/19(13)
|
| |
32,841
|
| |
2,390,168
|
| |
|
| |
|
| |||
|
07/31/19(14)
|
| |
|
| |
|
| |
44,678
|
| |
3,251,665
|
| |||
|
02/27/20(8)
|
| |
26,759
|
| |
1,947,520
|
| |
|
| |
|
| |||
|
02/27/20(9)
|
| |
|
| |
|
| |
43,617
|
| |
3,174,445
|
| |||
|
Andrew J. Erickson
|
| |
02/27/17(3)
|
| |
1,909
|
| |
138,937
|
| |
|
| |
|
|
|
11/30/17(15)
|
| |
37,153
|
| |
2,703,995
|
| |
|
| |
|
| |||
|
02/26/18(4)
|
| |
3,914
|
| |
284,861
|
| |
|
| |
|
| |||
|
02/26/18(5)
|
| |
9,836
|
| |
715,864
|
| |
|
| |
|
| |||
|
03/01/19(6)
|
| |
10,140
|
| |
737,989
|
| |
|
| |
|
| |||
|
03/01/19(7)
|
| |
|
| |
|
| |
20,601
|
| |
1,499,341
|
| |||
|
02/27/20(8)
|
| |
22,922
|
| |
1,668,263
|
| |
|
| |
|
| |||
|
02/27/20(9)
|
| |
|
| |
|
| |
37,364
|
| |
2,719,352
|
| |||
|
Louis D. Maiuri
|
| |
02/27/17(3)
|
| |
2,387
|
| |
173,726
|
| |
|
| |
|
|
|
02/26/18(4)
|
| |
4,277
|
| |
311,280
|
| |
|
| |
|
| |||
|
02/26/18(5)
|
| |
10,746
|
| |
782,094
|
| |
|
| |
|
| |||
|
02/26/18(10)
|
| |
16,393
|
| |
1,193,083
|
| |
|
| |
|
| |||
|
03/01/19(6)
|
| |
9,723
|
| |
707,640
|
| |
|
| |
|
| |||
|
03/01/19(7)
|
| |
|
| |
|
| |
19,753
|
| |
1,437,623
|
| |||
|
02/27/20(8)
|
| |
23,807
|
| |
1,732,673
|
| |
|
| |
|
| |||
|
02/27/20(9)
|
| |
|
| |
|
| |
38,807
|
| |
2,824,373
|
|
(1)
|
All outstanding equity awards are subject to recourse mechanisms, including clawback and forfeiture, as described under the heading “Compensation Discussion and Analysis—Other Elements of Compensation.”
|
(2)
|
Stock award values in the table above are based on the closing share price of our common stock on the NYSE on December 31, 2020 ($72.78).
|
(3)
|
DSAs vest in four equal annual installments (25% per year) starting on February 15, 2018. The last installment vested on February 15, 2021.
|
(4)
|
DSAs vest in four equal annual installments (25% per year) starting on February 15, 2019. The balance of the award will vest in two equal installments, one of which vested on February 15, 2021; the remaining installment will vest on February 15, 2022.
|
(5)
|
Performance-based RSUs with a three-year performance measurement period (January 1, 2018-December 31, 2020). The awards were earned at 83.0% of target and vested in one installment on February 26, 2021.
|
(6)
|
DSAs vest in four equal annual installments (25% per year) starting on February 15, 2020. The balance of the award will vest in three equal installments, one of which vested on February 15, 2021; the remaining two installments will vest on February 15, 2022 and 2023.
|
(7)
|
Performance-based RSUs with a three-year performance measurement period (January 1, 2019-December 31, 2021) that will vest in one installment based on the satisfaction of applicable performance criteria and on certification by the Human Resources Committee following the end of the performance period.
|
(8)
|
DSAs vest in four equal annual installments (25% per year). The first installment vested on February 15, 2021; the remaining three installments will vest on February 15, 2022, 2023 and 2024.
|
(9)
|
Performance-based RSUs with a three-year performance measurement period (January 1, 2020-December 31, 2022) that will vest in one installment based on the satisfaction of applicable performance criteria and on certification by the Human Resources Committee following the end of the performance period.
|
(10)
|
Performance-based RSUs with a three-year performance measurement period (January 1, 2018-December 31, 2020) granted to Messrs. Aboaf and Maiuri as promotion awards. The awards were earned at 83.0% of target and vested in one installment on February 26, 2021.
|
(11)
|
DSAs granted to Mr. Aristeguieta in connection with his commencement of employment at State Street; these DSAs vest in two equal installments starting on February 15, 2020. The last installment vested on February 15, 2021.
|
(12)
|
DSAs granted to Mr. Aristeguieta in connection with his commencement of employment at State Street; these DSAs vest in three equal installments starting on February 15, 2020. The balance of the award will vest in two equal installments, one of which vested on February 15, 2021; the remaining installment will vest on February 15, 2022.
|
(13)
|
DSAs granted to Mr. Aristeguieta in connection with his commencement of employment at State Street; these DSAs vest in four equal installments starting on February 15, 2020. The balance of the award will vest in three equal installments, one of which vested on February 15, 2021; the remaining two installments will vest on February 15, 2022 and 2023.
|
(14)
|
Performance-based RSUs granted to Mr. Aristeguieta in connection with his commencement of employment at State Street with a three-year performance measurement period (January 1, 2019-December 31, 2021) that will vest in one installment based on the satisfaction of applicable performance criteria and on certification by the Human Resources Committee following the end of the performance period.
|
(15)
|
Performance-based RSUs with a three-year performance measurement period (January 1, 2018-December 31, 2020) granted to Mr. Erickson as a promotion award. The awards were earned at 83.0% of target and vested in one installment on February 26, 2021.
|
|
|
| |
Stock Awards
|
| |||
|
Name
|
| |
Number of Shares
Acquired on
Vesting(1)
(#)
|
| |
Value Realized on
Vesting(2)
($)
|
|
|
(a)
|
| |
(d)
|
| |
(e)
|
|
|
Ronald P. O'Hanley
|
| |
74,940
|
| |
$5,442,231
|
|
|
Eric W. Aboaf
|
| |
23,537
|
| |
1,709,820
|
|
|
Francisco Aristeguieta
|
| |
62,183
|
| |
4,840,947
|
|
|
Andrew J. Erickson
|
| |
20,132
|
| |
1,461,554
|
|
|
Louis D. Maiuri
|
| |
24,492
|
| |
1,774,553
|
|
(1)
|
Includes DSAs and performance-based RSUs as follows:
|
—
|
The number of shares underlying DSAs that vested in 2020: Mr. O’Hanley: 28,677, Mr. Aboaf: 9,070, Mr. Aristeguieta: 62,183, Mr. Erickson: 7,650 and Mr. Maiuri: 8,890.
|
—
|
The number of performance-based RSUs earned for the performance period ending in 2019 and vested in 2020: Mr. O'Hanley: 46,263, Mr. Aboaf: 14,467, Mr. Erickson: 12,482 and Mr. Maiuri: 15,602.
|
(2)
|
The value realized on vesting is based on the closing price of our common stock on the NYSE on the relevant vesting date.
|
|
Name
|
| |
Executive
Contributions in
Last FY(1)
($)
|
| |
Registrant
Contributions in
Last FY(2)
($)
|
| |
Aggregate
Earnings in Last
FY
($)
|
| |
Aggregate
Withdrawals/
Distributions(3)
($)
|
| |
Aggregate
Balance at
Last FYE(4)
($)
|
|
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
|
|
Ronald P. O'Hanley
|
| |
$248,385
|
| |
$10,750
|
| |
$25,038
|
| |
$—
|
| |
$320,489
|
|
|
Eric W. Aboaf
|
| |
14,000
|
| |
10,750
|
| |
11,432
|
| |
—
|
| |
101,142
|
|
|
Francisco Aristeguieta
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Andrew J. Erickson
|
| |
—
|
| |
—
|
| |
65,136
|
| |
—
|
| |
419,902
|
|
|
Louis D. Maiuri
|
| |
—
|
| |
—
|
| |
53,461
|
| |
(2,874)
|
| |
375,099
|
|
(1)
|
Employee deferrals under the Management Supplemental Savings Plan (MSSP).
|
(2)
|
Employer matching contributions made under the MSSP for the 2020 plan year. These amounts are included in the Summary Compensation Table.
|
(3)
|
Employer adjustment for tax withholding obligations on the portion of the ESRP-DC that vested during 2020.
|
(4)
|
Includes each NEO’s outstanding MSSP or ESRP-DC plan balances. Of the total amounts shown in this column, which are further broken out by plan in the table below, MSSP employer contributions of $22,000 for Mr. O’Hanley and $33,000 for Mr. Aboaf have been reported in the Summary Compensation Table in this proxy statement and prior years' proxy statements.
|
|
|
| |
Aggregate Balance at Last FYE
|
| ||||||
|
Name
|
| |
MSSP
($)
|
| |
ESRP-DC
($)
|
| |
Total
($)
|
|
|
Ronald P. O'Hanley
|
| |
$320,489
|
| |
$—
|
| |
$320,489
|
|
|
Eric W. Aboaf
|
| |
101,142
|
| |
—
|
| |
101,142
|
|
|
Francisco Aristeguieta
|
| |
—
|
| |
—
|
| |
—
|
|
|
Andrew J. Erickson
|
| |
—
|
| |
419,902
|
| |
419,902
|
|
|
Louis D. Maiuri
|
| |
—
|
| |
375,099
|
| |
375,099
|
|
|
Notional Investment
|
| |
2020 Rate of Return
|
|
|
MSSP and ESRP-DC Investments
|
| |
|
|
|
SSGA U.S. Bond Index Fund
|
| |
7.67%
|
|
|
Vanguard Prime Money Market Fund
|
| |
0.45%
|
|
|
SSGA International Index Fund
|
| |
8.12%
|
|
|
SSGA S&P 500 Index Fund
|
| |
18.36%
|
|
|
Ronald P. O'Hanley
|
| |
Retirement(1)(2)
($)
|
| |
Death(1)(3)
($)
|
| |
Disability(1)(4)
($)
|
| |
Involuntary
Termination
without Cause(1)(5)
($)
|
| |
Termination in
Connection
with Change of
Control(6)
($)
|
|
|
Cash Severance
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$288,462
|
| |
$7,500,000
|
|
|
Accelerated Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accelerated Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
—
|
| |
7,776,833
|
| |
3,150,428
|
| |
—
|
| |
5,974,656
|
|
|
Accelerated Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
12,014,764
|
|
|
Accelerated Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
—
|
| |
3,171,854
|
| |
3,171,854
|
| |
—
|
| |
3,171,854
|
|
|
Continued Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Continued Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
7,776,833
|
| |
—
|
| |
4,626,405
|
| |
7,776,833
|
| |
—
|
|
|
Continued Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
9,102,667
|
| |
9,102,667
|
| |
9,102,667
|
| |
9,102,667
|
| |
—
|
|
|
Continued Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
3,171,854
|
| |
—
|
| |
—
|
| |
3,171,854
|
| |
—
|
|
|
Additional Benefits
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Current Year Incentive Compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
2,750,000
|
| |
2,750,000
|
|
|
Defined Contribution Retirement Cash Equivalent
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
55,700
|
|
|
Health & Welfare Benefits
|
| |
—
|
| |
7,731
|
| |
—
|
| |
4,454
|
| |
30,880
|
|
|
Salary Continuation
|
| |
—
|
| |
83,333
|
| |
—
|
| |
—
|
| |
—
|
|
|
Outplacement Services
|
| |
—
|
| |
—
|
| |
—
|
| |
40,000
|
| |
40,000
|
|
|
Total Value
|
| |
20,051,354
|
| |
20,142,418
|
| |
20,051,354
|
| |
23,134,270
|
| |
31,537,854
|
|
|
Eric W. Aboaf
|
| |
Death(1)(3)
($)
|
| |
Disability(1)(4)
($)
|
| |
Involuntary
Termination without
Cause(1)(5)
($)
|
| |
Termination in
Connection with
Change of
Control(6)
($)
|
|
|
Cash Severance
|
| |
$—
|
| |
$—
|
| |
$161,538
|
| |
$5,337,500
|
|
|
Accelerated Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Accelerated Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
5,351,367
|
| |
1,610,985
|
| |
—
|
| |
3,048,754
|
|
|
Accelerated Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
—
|
| |
—
|
| |
—
|
| |
7,099,388
|
|
|
Accelerated Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
2,303,867
|
| |
2,303,867
|
| |
—
|
| |
2,303,867
|
|
|
Continued Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Continued Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
—
|
| |
3,740,382
|
| |
5,351,367
|
| |
—
|
|
|
Continued Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
4,064,690
|
| |
4,064,690
|
| |
4,064,690
|
| |
—
|
|
|
Continued Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
—
|
| |
—
|
| |
2,303,867
|
| |
—
|
|
|
Additional Benefits
|
| |
|
| |
|
| |
|
| |
|
|
|
Current Year Incentive Compensation
|
| |
—
|
| |
—
|
| |
1,406,250
|
| |
1,968,750
|
|
|
Defined Contribution Retirement Cash Equivalent
|
| |
—
|
| |
—
|
| |
—
|
| |
55,700
|
|
|
Health & Welfare Benefits
|
| |
14,870
|
| |
—
|
| |
3,982
|
| |
34,508
|
|
|
Salary Continuation
|
| |
58,333
|
| |
—
|
| |
—
|
| |
—
|
|
|
Outplacement Services
|
| |
—
|
| |
—
|
| |
40,000
|
| |
40,000
|
|
|
Total Value
|
| |
11,793,127
|
| |
11,719,924
|
| |
13,331,694
|
| |
19,888,467
|
|
|
Francisco Aristeguieta
|
| |
Death(1)(3)
($)
|
| |
Disability(1)(4)
($)
|
| |
Involuntary
Termination without
Cause(1)(5)
($)
|
| |
Termination in
Connection with
Change of Control(6)
($)
|
|
|
Cash Severance
|
| |
$—
|
| |
$—
|
| |
$163,731
|
| |
$6,179,000
|
|
|
Accelerated Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Accelerated Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
6,859,370
|
| |
1,947,520
|
| |
—
|
| |
6,859,370
|
|
|
Accelerated Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
—
|
| |
—
|
| |
—
|
| |
6,557,584
|
|
|
Accelerated Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
1,105,000
|
| |
1,105,000
|
| |
—
|
| |
1,105,000
|
|
|
Continued Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Continued Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
—
|
| |
4,911,850
|
| |
6,859,370
|
| |
—
|
|
|
Continued Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
6,009,881
|
| |
6,009,881
|
| |
6,009,881
|
| |
—
|
|
|
Continued Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
—
|
| |
—
|
| |
1,105,000
|
| |
—
|
|
|
Additional Benefits
|
| |
|
| |
|
| |
|
| |
|
|
|
Current Year Incentive Compensation
|
| |
—
|
| |
—
|
| |
1,700,000
|
| |
2,380,000
|
|
|
Defined Contribution Retirement Cash Equivalent
|
| |
—
|
| |
—
|
| |
—
|
| |
141,900
|
|
|
Health & Welfare Benefits
|
| |
13,433
|
| |
—
|
| |
3,318
|
| |
28,753
|
|
|
Salary Continuation
|
| |
59,125
|
| |
—
|
| |
—
|
| |
—
|
|
|
Outplacement Services
|
| |
—
|
| |
—
|
| |
40,000
|
| |
40,000
|
|
|
Total Value
|
| |
14,046,809
|
| |
13,974,251
|
| |
15,881,300
|
| |
23,291,607
|
|
|
Andrew J. Erickson
|
| |
Death(1)(3)
($)
|
| |
Disability(1)(4)
($)
|
| |
Involuntary
Termination without
Cause(1)(5)
($)
|
| |
Termination in
Connection with
Change of Control(6)
($)
|
|
|
Cash Severance
|
| |
$—
|
| |
$—
|
| |
$709,500
|
| |
$5,496,500
|
|
|
Accelerated Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Accelerated Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
6,249,909
|
| |
1,668,263
|
| |
—
|
| |
2,830,050
|
|
|
Accelerated Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
—
|
| |
—
|
| |
—
|
| |
8,293,348
|
|
|
Accelerated Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
1,938,248
|
| |
1,938,248
|
| |
—
|
| |
1,938,248
|
|
|
Continued Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
|
|
Continued Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
—
|
| |
4,581,646
|
| |
6,249,909
|
| |
—
|
|
|
Continued Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
3,974,079
|
| |
3,974,079
|
| |
3,974,079
|
| |
—
|
|
|
Continued Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
—
|
| |
—
|
| |
1,938,248
|
| |
—
|
|
|
Additional Benefits
|
| |
|
| |
|
| |
|
| |
|
|
|
Current Year Incentive Compensation
|
| |
—
|
| |
—
|
| |
1,456,250
|
| |
2,038,750
|
|
|
Defined Contribution Retirement Cash Equivalent
|
| |
—
|
| |
—
|
| |
—
|
| |
131,644
|
|
|
Continued Vesting of ESRP-DC
|
| |
—
|
| |
—
|
| |
—
|
| |
419,902
|
|
|
Health & Welfare Benefits
|
| |
5,924
|
| |
—
|
| |
—
|
| |
13,734
|
|
|
Salary Continuation
|
| |
59,125
|
| |
—
|
| |
—
|
| |
—
|
|
|
Tax Equalization Benefit
|
| |
2,023,600
|
| |
1,993,928
|
| |
1,964,269
|
| |
2,047,994
|
|
|
Outplacement Services
|
| |
—
|
| |
—
|
| |
15,000
|
| |
40,000
|
|
|
Total Value
|
| |
14,250,885
|
| |
14,156,164
|
| |
16,307,255
|
| |
23,250,170
|
|
|
Louis D. Maiuri
|
| |
Retirement(1)(2)
($)
|
| |
Death(1)(3)
($)
|
| |
Disability(1)(4)
($)
|
| |
Involuntary
Termination
without
Cause(1)(5)
($)
|
| |
Termination in
Connection
with Change
of Control(6)
($)
|
|
|
Cash Severance
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$282,692
|
| |
$5,635,000
|
|
|
Accelerated Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accelerated Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
—
|
| |
4,900,496
|
| |
1,732,673
|
| |
—
|
| |
2,925,319
|
|
|
Accelerated Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
6,669,228
|
|
|
Accelerated Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
—
|
| |
2,048,018
|
| |
2,048,018
|
| |
—
|
| |
2,048,018
|
|
|
Continued Vesting of Deferred Incentive Awards
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Continued Vesting and Payment of Deferred Stock Awards (DSAs)
|
| |
4,900,496
|
| |
—
|
| |
3,167,823
|
| |
4,900,496
|
| |
—
|
|
|
Continued Vesting and Payment of Performance-Based RSUs (RSUs)
|
| |
4,018,257
|
| |
4,018,257
|
| |
4,018,257
|
| |
4,018,257
|
| |
—
|
|
|
Continued Vesting and Payment of Deferred Value Awards (DVAs)
|
| |
2,048,018
|
| |
—
|
| |
—
|
| |
2,048,018
|
| |
—
|
|
|
Additional Benefits
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Current Year Incentive Compensation
|
| |
—
|
| |
—
|
| |
—
|
| |
1,512,500
|
| |
2,117,500
|
|
|
Defined Contribution Retirement Cash Equivalent
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
34,200
|
|
|
Continued Vesting of ESRP-DC
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
125,033
|
|
|
Health & Welfare Benefits
|
| |
—
|
| |
7,559
|
| |
—
|
| |
5,146
|
| |
25,484
|
|
|
Salary Continuation
|
| |
—
|
| |
58,333
|
| |
—
|
| |
—
|
| |
—
|
|
|
Outplacement Services
|
| |
—
|
| |
—
|
| |
—
|
| |
40,000
|
| |
40,000
|
|
|
Total Value
|
| |
10,966,771
|
| |
11,032,663
|
| |
10,966,771
|
| |
12,807,109
|
| |
19,619,782
|
|
(1)
|
The DSAs, unearned performance-based RSUs and DVAs shown in the columns for Retirement, Death, Disability and Involuntary Termination without Cause are valued as follows:
|
•
|
DSAs: Represents the value of DSAs and 2018 performance-based RSUs (which were earned at 83.0% of target) based on the closing share price of our common stock on the NYSE on December 31, 2020 ($72.78).
|
•
|
Performance–based RSUs: Represents the estimated value of unearned performance-based RSUs granted in 2019 and 2020 based on Company ROE performance and pre-tax margin performance, as applicable, through December 31, 2020 and performance at 100% of target for future years based on the closing share price of our common stock on the NYSE on December 31, 2020 ($72.78). The percent at which these awards will actually be earned will be determined at the end of the three-year performance period.
|
•
|
DVAs: Represents the value of outstanding DVAs as of December 31, 2020.
|
•
|
Outstanding DSAs, unearned performance-based RSUs and outstanding DVAs include post-termination restrictive covenants concerning: non-competition, for a period of six to 12 months; non-solicitation for a period of six to 18 months; and, for U.S. participants, ongoing obligations of confidentiality and non-disparagement.
|
(2)
|
Retirement: For purposes of the deferred awards (DSAs, performance-based RSUs and DVAs), a qualifying retirement requires attainment of age 55 and completion of 5 years of service at State Street.
|
•
|
Deferred awards: Service-based restrictions lapse on outstanding DSAs, unearned performance-based RSUs with qualifying retirement provisions and outstanding DVAs. These awards all continue to vest according to their original terms.
|
(3)
|
Death:
|
•
|
Deferred awards: Service-based restrictions lapse on outstanding DSAs, unearned performance-based RSUs and outstanding DVAs. The vesting of outstanding DSAs and DVAs accelerates upon death, while unearned performance-based RSUs continue to vest according to their original terms.
|
•
|
Health & welfare benefits: State Street will bear the full cost of health and welfare insurance for the NEO’s spouse/ domestic partner and/ or dependents for a one-year period if the NEO and family were participating in State Street’s health and welfare plans at the time of death.
|
•
|
Salary continuation: State Street pays salary continuation of one month’s base pay to the spouse/ domestic partner or the deceased NEO’s estate.
|
•
|
Tax equalization benefit: Estimated tax equalization payments to be made for awards granted to Mr. Erickson during his international assignment for which host country taxes are due and exceed his estimated home country taxes.
|
(4)
|
Termination due to Disability:
|
•
|
Deferred incentive awards: Service-based restrictions lapse on outstanding DSAs, unearned performance-based RSUs and outstanding DVAs. Vesting is accelerated for outstanding DVAs and outstanding DSAs granted in 2020 on disability while outstanding DSAs granted prior to 2020 and performance-based RSUs continue to vest according to their original terms.
|
•
|
Tax equalization benefit: Estimated tax equalization payments to be made for awards granted to Mr. Erickson during his international assignment for which host country taxes are due and exceed his estimated home country taxes.
|
(5)
|
Involuntary Termination without Cause: Our NEOs are covered by State Street’s U.S. severance plan, with the exception of Mr. Erickson who is covered by the Hong Kong severance plan. The U.S. and Hong Kong severance plans provide benefits to all eligible employees upon specified involuntary separations from service due to an organizational change, such as a reduction in force. Both the U.S. and Hong Kong severance plans require employees to execute a separation agreement and release acceptable to State Street in order to receive benefits under the plan. Amounts above assume a qualifying termination of employment on December 31, 2020. For these purposes, the severance amounts are not discounted for payment over time, and health and welfare benefits are valued at 2020 rates.
|
•
|
Cash severance: The U.S. severance plan provides for a cash payment amount equal to a specified number of weeks of base salary based on employment title. These severance benefits are subject to the employee’s compliance with restrictive covenants that are determined at the time of separation, but typically include non-solicitation for a period of 18 months following termination and an ongoing obligation of confidentiality and non-disparagement. For all eligible U.S. employees who hold an Executive Vice President title, including our NEOs, the plan provides for a severance period equal to three weeks of base salary per completed year of service with a minimum of 12 weeks of base pay and a maximum of 52 weeks of base salary. The Hong Kong severance plan provides eligible employees with a severance period equal to one month of base pay per completed year of service with a maximum of 12 months of base salary. These severance benefits are subject to the employee’s compliance with restrictive covenants that are determined at the time of separation, but typically include non-solicitation for a period of six-months following termination and an ongoing obligation of confidentiality and non-disparagement.
|
•
|
Deferred incentive awards: Service-based restrictions lapse on outstanding DSAs, unearned performance-based RSUs and outstanding DVAs. These awards all continue to vest according to their original terms.
|
•
|
Current year incentive compensation: Employees, including our NEOs, are also eligible to receive an additional lump sum cash severance payment equal to 25% of the employee’s prior year incentive compensation award for a termination occurring on December 31, 2020. As a result, the tables above include an amount equal to 25% of the NEO’s prior year incentive compensation award, based on the assumed December 31, 2020 termination date.
|
•
|
Health & welfare benefits: The U.S. severance plan provides for continued participation in State Street’s health and welfare benefit plan for the severance period at active employee rates and with continued coverage after the severance period, paid in full by the employee, subject to timely enrollment in COBRA. In Hong Kong, health and welfare benefits end when the employee is terminated.
|
•
|
Tax equalization benefit: Estimated tax equalization payments to be made for awards granted to Mr. Erickson during his international assignment for which host country taxes are due and exceed his estimated home country taxes.
|
•
|
Outplacement services: Personal outplacement services by a third-party provider.
|
(6)
|
Termination in Connection with Change of Control: Calculations assume a change of control occurred on December 31, 2020 and a qualifying termination of employment entitling the NEO to the specified benefits occurred on that date (double–trigger mechanism). For additional description of a termination in connection with change of control, refer to the “Change of Control” section.
|
•
|
Cash Severance: a lump sum payment equal to two times the sum of base salary and the prior year’s cash-based incentive (immediate cash and DVAs), subject to a maximum of $10 million. Severance is reduced in the event that reducing parachute payments to the 280G safe harbor level would result in a higher after-tax payment. Assuming a change of control occurred on December 31, 2020, no NEO had a severance reduction upon a qualifying termination of employment.
|
•
|
DSAs: Service-based restrictions lapse on outstanding DSAs and vesting is accelerated. The value of DSAs is based on the closing share price of our common stock on the NYSE on December 31, 2020 ($72.78).
|
•
|
Performance-based RSUs: Service-based restrictions lapse on unearned performance-based RSUs and vesting is accelerated. The estimated value of unearned performance-based RSUs is calculated as follows:
|
i)
|
Performance-based RSUs granted in 2018 is based on actual Company ROE performance for 2018 and 2019 and 100% of target for 2020.
|
ii)
|
Performance-based RSUs granted in 2019 is based on actual Company ROE performance and pre-tax margin performance for 2019 and 100% of target for 2020 and 2021.
|
iii)
|
Performance-based RSUs granted in 2020 is based on 100% of target.
|
•
|
Performance-based RSUs granted in 2018, 2019 and 2020 are valued using an “adjusted fair market value” ($76.00), which is the highest average of the reported daily high and low prices per share of our common stock on the NYSE during the sixty (60)-day period prior to the first date of actual knowledge by the Board of the circumstances that resulted in a change in control, which is assumed to be December 31, 2020.
|
•
|
DVAs: Service-based restrictions lapse on outstanding DVAs and vesting is accelerated.
|
•
|
Current year incentive compensation: The prior year’s cash-based incentive award (immediate cash and DVA) paid to each NEO in February 2020 for the 2019 performance year.
|
•
|
Defined contribution retirement cash equivalent: A lump sum payment equal to two times State Street’s annual contributions to the defined contribution retirement plans applicable to the NEO.
|
•
|
Continued vesting of ESRP-DC: Service-based restrictions lapse on all outstanding benefits. These contributions continue to vest according to the plan terms.
|
•
|
Health & welfare benefits: Continued employee health and welfare benefits for two years after the date of termination.
|
•
|
Tax equalization benefit: Estimated tax equalization payments to be made for awards granted to Mr. Erickson during his international assignment for which host country taxes are due and exceed his estimated home country taxes.
|
•
|
Outplacement services: Personal outplacement services by a third-party provider.
|
•
|
Assumes zero for the legal fee benefit in connection with the enforcement of the NEO’s rights under the agreement.
|
•
|
The acquisition of 25% or more of our outstanding stock;
|
•
|
The failure of incumbent directors (or their designated successors) to constitute a majority of the Board of Directors;
|
•
|
A reorganization, merger, consolidation, sale or other disposition of all or substantially all of our assets in which State Street shareholders do not retain a majority of the voting power of the surviving or successor corporation and incumbent directors do not constitute a majority of the Board; or
|
•
|
Approval by shareholders of a complete liquidation or dissolution of the Company.
|
VOTED:
|
That the compensation of State Street’s executives, as disclosed pursuant to the SEC’s compensation disclosure rules, as set forth in this proxy statement under the heading “Executive Compensation,” including the Compensation Discussion and Analysis, the compensation tables and related material, is approved; provided, that, this resolution shall not be binding on State Street’s Board of Directors or any of its committees and may not be construed as overruling any decision by the Board of Directors or any of its committees.
|
|
Description
(In millions)
|
| |
2020
|
| |
2019
|
|
|
Audit Fees
|
| |
$14.5
|
| |
$14.2
|
|
|
Audit-Related Fees
|
| |
18.4
|
| |
15.2
|
|
|
Tax Fees
|
| |
4.4
|
| |
5.8
|
|
|
All Other Fees
|
| |
0.0
|
| |
0.0
|
|
•
|
Whether the retention of EY is in the best interests of State Street and its shareholders
|
•
|
The results of an annual survey prepared by management on the performance of EY
|
•
|
EY’s technical expertise, geographical footprint, knowledge level and quality of service
|
•
|
The recent performance of EY and the lead audit partner, including quality of communication, competence and responsiveness
|
•
|
The independence of EY
|
•
|
Known legal risks and significant proceedings involving EY
|
•
|
The fees incurred by State Street for the services rendered
|
(1)
|
https://www.statestreet.com/ideas/articles/racism-degrades-all.html.
|
(2)
|
https://www.bostonglobe.com/2020/08/08/business/many-massachusettss-biggest-companies-do-not-have-single-black-board-member/.
|
(3)
|
https://www.statestreet.com/executive-leaders.html.
|
(4)
|
https://www.pionline.com/article/20171006/ONLINE/171009852/state-street-to-pay-5-million-in-back-pay-to-settle-charges-of-compensation-discrimination.
|
(5)
|
https://www.ssga.com/us/en/institutional/etfs/insights/diversity-strategy-goals-disclosure-our-expectations-for-public-companies.
|
(6)
|
https://investors.statestreet.com/corporate-governance/lobbying-activities/default.aspx.
|
(7)
|
https://www.opensecrets.org/orgs//summary?id=D000000229.
|
(8)
|
E.g., https://thehill.com/blogs/congress-blog/economy-budget/463361-a-wall-street-tax-can-help-pay-for-bold-policy-solutions; https://www.cfo.com/tax/2019/05/bernie-sanders-introduces-plans-for-wall-street-speculation-tax/.
|
(9)
|
See https://www.marketwatch.com/story/you-have-a-degree-but-who-do-you-know-why-student-debt-is-a-racial-justice-issue-2020-06-05; https://www.cjr.org/covering_climate_now/green-new-deal-climate-justice.php.
|
•
|
MLT’s Black Equity at Work Certification. In February 2021 we were announced as one of 25 companies joining the inaugural cohort in the newly launched Black Equity at Work Certification offered by Management Leadership for Tomorrow, a national non-profit working to transform the leadership pipeline and increase access to the American Dream. This results-driven program establishes a clear and comprehensive standard for certification and provides a rigorous, results-oriented approach toward addressing the persistent inequities faced by Black professionals across corporate America.
|
•
|
State Street Foundation Audit. We have engaged an external consultant to audit the State Street Foundation’s current grants portfolio to assess the impact and demographic makeup of grant recipients. In connection with this effort, we plan to update the Foundation’s grantmaking guidelines during 2021 to establish combatting racism as a clear funding priority, building upon our longstanding philanthropic focus of addressing socioeconomic and racial inequities in education.
|
•
|
We are taking steps to enhance our own transparency regarding racial equity and to improve our corporate governance.
|
•
|
Board Composition and New Director Recruitment. We recently amended the charter for our Board’s Nominating and Corporate Governance Committee and our Corporate Governance Guidelines to formally reflect our existing practices of selecting director candidates from a diverse pool and considering diverse perspectives, experiences and other characteristics such as race/ ethnicity, gender identity, sexual orientation and nationality for new director candidates. Detailed information regarding the diverse composition of our director nominees is included on page 7 of this proxy statement.
|
•
|
Public Disclosure of EEO-1 Data. We publicly disclose our EEO-1 survey data in our annual ESG Report (formerly the Corporate Responsibility Report), available on our website at https://www.statestreet.com/values/corporate-responsibility.html.
|
•
|
SSGA is building on the success of its prior engagement efforts to improve gender diversity at portfolio companies to address racial and ethnic diversity.
|
•
|
Expansion of Voting Guidelines to Address Racial and Ethnic Diversity. Following a letter it sent to portfolio companies in August 2020, in January 2021 SSGA outlined its enhanced expectations around racial and ethnic diversity. Under its new voting guidelines:
|
•
|
In 2021, SSGA will vote against the Chair of the Nominating & Governance Committee at companies in the S&P 500 and FTSE 100 that do not disclose the racial and ethnic composition of their boards.
|
•
|
Beginning in 2022, SSGA will vote against the Chair of the Compensation Committee at companies in the S&P 500 that do not disclose their EEO-1 Survey responses.
|
•
|
Beginning in 2022, SSGA will vote against the Chair of the Nominating & Governance Committee at companies in the S&P 500 and FTSE 100 that do not have at least one director from an underrepresented community on their boards.
|
•
|
Increased Transparency Regarding Shareholder Proposals. In the third quarter of 2020, SSGA published a voting framework describing how it will analyze and vote on racial diversity-related shareholder proposals.
|
•
|
Targeted Engagement Campaign. SSGA has identified the largest U.S.- and UK-based employers in a targeted engagement campaign to monitor human capital management disclosures and risk management practices, including racial and ethnic diversity practices.
|
•
|
We are expanding our partnerships with other organizations dedicated to addressing diversity, equity and inclusion.
|
•
|
CEO Pledge for Diversity. In 2019 we renewed our CEO Pledge for Diversity, an initiative we initially joined in 2017 relating to diversity and inclusion initiatives.
|
•
|
Best Practices for Board Oversight. SSGA has expanded its focus to include the governance of social risks and has partnered with external firms to identify best practices for board oversight of racial diversity and equity.
|
•
|
Item 1—FOR election of the 12 nominees named herein as directors (page 19)
|
•
|
Item 2—FOR approval of the advisory proposal on executive compensation (page 75)
|
•
|
Item 3—FOR ratification of the selection of the independent registered public accounting firm (page 78)
|
•
|
Item 4—AGAINST the shareholder proposal (page 79)
|
|
Name and Address of Beneficial Owner
|
| |
Amount and Nature of
Beneficial Ownership
|
| |
Percent
of Class
|
|
|
The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355
|
| |
33,084,054(1)
|
| |
9.3%
|
|
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
| |
24,702,594(2)
|
| |
7.0%
|
|
|
Capital International Investors
333 South Hope Street, 55th Floor
Los Angeles, CA 90071
|
| |
20,422,166(3)
|
| |
5.8%
|
|
|
Dodge & Cox
555 California Street, 40th Floor
San Francisco, CA 94104
|
| |
20,327,224(4)
|
| |
5.8%
|
|
(1)
|
This information is based solely on a Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group, in which it reported sole dispositive power of 31,528,401 shares, shared voting power of 567,248 shares and shared dispositive power of 1,555,653 shares.
|
(2)
|
This information is based solely on a Schedule 13G filed with the SEC on February 1, 2021 by BlackRock, Inc., in which it reported sole voting power of 21,058,998 shares and sole dispositive power of 24,702,594 shares.
|
(3)
|
This information is based solely on a Schedule 13G filed with the SEC on February 16, 2021 by Capital International Investors, in which it reported sole voting power of 20,414,377 shares and sole dispositive power of 20,422,166 shares.
|
(4)
|
This information is based solely on a Schedule 13G filed with the SEC on February 11, 2021 by Dodge & Cox, in which it reported sole voting power of 19,129,924 shares and sole dispositive power of 20,327,224 shares.
|
|
Name
|
| |
Amount and Nature of
Beneficial Ownership(1)
|
|
|
Eric W. Aboaf
|
| |
64,407
|
|
|
Francisco Aristeguieta
|
| |
44,499
|
|
|
Marie A. Chandoha
|
| |
5,469
|
|
|
Patrick de Saint-Aignan
|
| |
35,134
|
|
|
Lynn A. Dugle
|
| |
14,715
|
|
|
Andrew J. Erickson
|
| |
80,077
|
|
|
Amelia C. Fawcett
|
| |
42,690
|
|
|
William C. Freda
|
| |
16,687
|
|
|
Sara Mathew
|
| |
8,626
|
|
|
Louis D. Maiuri
|
| |
53,704(2)
|
|
|
William L. Meaney
|
| |
8,974
|
|
|
Ronald P. O’Hanley
|
| |
127,756
|
|
|
Sean O’Sullivan
|
| |
10,904
|
|
|
Julio A. Portalatin
|
| |
410
|
|
|
John B. Rhea
|
| |
599
|
|
|
Richard P. Sergel
|
| |
63,464(3)
|
|
|
Gregory L. Summe
|
| |
91,780(4)
|
|
|
All directors and executive officers as a group (23 persons)
|
| |
943,693(2)(3)(4)(5)
|
|
(1)
|
Information in this table includes shares that the individual or group has the right to acquire within 60 days of March 8, 2021. Also included are 19,057 shares that have vested under the Executive Supplemental Retirement Plan for an executive officer and other deferred retirement benefits. Shares granted to non-management directors vest immediately and are included in the total amounts above, and are not subject to a vesting schedule, even if deferred.
|
(2)
|
Includes 10,355 shares held in trust for which Mr. Maiuri disclaims beneficial ownership except to the extent of his pecuniary interest therein.
|
(3)
|
Includes 3,111 shares held by a family member.
|
(4)
|
Includes 3,000 shares held in trust for which Mr. Summe disclaims beneficial ownership except to the extent of his pecuniary interest therein.
|
(5)
|
Includes 547 shares held by a domestic partner of an executive officer.
|
a.
|
A director will not be independent if he or she does not satisfy any of the bright-line tests set forth in Section 303A.02(b) of the NYSE Listed Company Manual.
|
b.
|
The following commercial or charitable relationships will not be considered to be material relationships that would impair a director’s independence: (i) if the State Street director or a member of such director’s immediate family (as defined in Section 303A of the NYSE Listed Company Manual) is a director or owner of less than a 10% ownership interest of another company (including a tax-exempt organization) that does business with the Company; provided such State Street director is not involved in negotiating the transaction; (ii) if the State Street director or a member of such director’s immediate family is a current employee, consultant or executive officer of another company (including a tax-exempt organization) that does business with the Company; provided that, (x) where the State Street director is an employee, consultant or executive officer of the other company, neither the director nor any of his or her immediate family members receives any special benefits as a result of the transaction and (y) the annual payments to, or payments from, the Company from, or to, the other company, for property or services in any completed fiscal year in the last three fiscal years are equal to or less than the greater of $1 million, or two percent of the consolidated gross annual revenues of the other company during the last completed fiscal year of the other company; and (iii) if the State Street director or member of such director’s immediate family is a director, trustee, employee or executive officer of a tax-exempt organization that receives discretionary charitable contributions from the Company; provided such State Street director and his or her Immediate Family Members do not receive any special benefits as a result of the transaction; and further provided that, where the director or immediate family member is an executive officer of the tax-exempt organization, the amount of discretionary charitable contributions in any completed fiscal year in the last three fiscal years are not more than the greater of $1 million, or two percent of that organization’s consolidated gross revenues in the last completed fiscal year of that organization (in applying this test, State Street’s automatic matching of employee charitable contributions to a charitable organization will not be included in the amount of State Street’s discretionary contributions).
|
c.
|
The following commercial relationships will not be considered to be a material relationship that would impair a director’s independence: lending relationships, deposit relationships or other banking relationships (such as depository, transfer, registrar, indenture trustee, trusts and estates, private banking, investment management, custodial, securities brokerage, cash management and similar services) between State Street and its subsidiaries, on the one hand, and a company with which the director or such director’s immediate family member is affiliated by reason of being a director, employee, consultant, executive officer, general partner or an equity holder thereof, on the other, provided that: (i) such relationships are in the ordinary course of the Company’s business and are on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons; (ii) with respect to a loan by the Company to such company or its subsidiaries, such loan has been made in compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve and Section 13(k) of the Securities Exchange Act of 1934, such loan did not involve more than the normal risk of collectability or present other unfavorable features, and no event of default has occurred under the loan; and (iii) payments to the Company for property or services (including fees and interest on loans but not including principal repayments) from such company does not exceed the limit provided in (b)(ii) above.
|
|
ISG Principle (for U.S. Listed Companies)
|
| |
State Street’s Governance Standards
|
| ||||||
|
Principle 1
Boards are accountable to shareholders
|
| |
•
|
| |
All directors stand for shareholder election annually
|
| |||
|
•
|
| |
Majority voting standard in uncontested director elections, and incumbent directors not receiving majority support must tender their resignation for consideration by the Board
|
| ||||||
|
•
|
| |
Proxy access for shareholders
|
| ||||||
|
•
|
| |
Board annually reviews and approves Corporate Governance Guidelines to assist in the exercise of duties and responsibilities. These Guidelines, along with Board committee charters, standards of conduct and other governance information, are posted on State Street’s website
|
| ||||||
|
Principle 2
Shareholders should be entitled to voting rights in proportion to their economic interest
|
| |
•
|
| |
One class of common stock, with each share carrying equal voting rights (a “one-share, one-vote” standard)
|
| |||
|
Principle 3
Boards should be responsive to shareholders and be proactive in order to understand their perspectives
|
| |
•
|
| |
Process in place for shareholders and interested parties to communicate with independent Lead Director
|
| |||
|
•
|
| |
Proactive annual shareholder engagement provides feedback to participating directors and relevant Board committees
|
| ||||||
|
Principle 4
Boards should have a strong, independent leadership structure
|
| |
•
|
| |
Strong independent Lead Director with clearly defined duties that are disclosed to shareholders
|
| |||
|
•
|
| |
Annual public disclosure of the Board’s reasoning underlying its leadership structure and affirmation that the current leadership structure is appropriate
|
| ||||||
|
•
|
| |
Each of the Board’s Examining and Audit, Human Resources, Nominating and Corporate Governance, Risk and Technology and Operations Committees has an independent chair
|
| ||||||
|
Principle 5
Boards should adapt structures and practices that enhance their effectiveness
|
| |
•
|
| |
11 of 12 director nominees are independent
|
| |||
|
•
|
| |
Directors reflect a diverse mix of industry, regulatory, management, technology, risk and other backgrounds, experience and skills relevant to State Street’s businesses and strategies
|
| ||||||
|
•
|
| |
5 out of 12 director nominees are gender or racially diverse
|
| ||||||
|
•
|
| |
Active Board refreshment with 7 new directors in the last 5 years
|
| ||||||
|
•
|
| |
Key Board committees (Examining and Audit Committee; Human Resources Committee; and Nominating and Corporate Governance Committee) are fully independent. State Street also has a Risk Committee, on which the Chairman serves along with 4 independent directors and a Technology and Operations Committee, on which the Chairman serves along with 5 independent directors
|
| ||||||
|
•
|
| |
Annual Board-level assessment of each director’s contributions, skills, committee assignments and tenure when analyzing the overall composition and effectiveness of the Board
|
| ||||||
|
•
|
| |
Board has full and free access to officers and employees
|
| ||||||
|
•
|
| |
During 2020, each of the incumbent directors attended at least 75% of the total of all meetings of the Board and committees on which the director served during his or her service as a director, and each of the 11 nominees who were then a director attended the 2020 annual shareholder meeting
|
| ||||||
|
Principle 6
Boards should develop management incentive structures that are aligned with the long-term strategy of the company
|
| |
•
|
| |
Human Resource Committee evaluates corporate performance, individual performance and market compensation levels and expected trends when making total compensation determinations for the executive officers
|
| |||
|
|
| |
-
|
| |
Corporate performance is determined by assessing the company’s financial, business and risk management performance relative to corporate goals set at the beginning of each year to drive our long-term strategy
|
| |||
|
|
| |
-
|
| |
Individual performance is determined by assessing each executive’s financial, business and risk management performance relative to individual goals derived from the associated corporate goals, and based on each executive’s role and responsibilities. Individual performance assessments also include an evaluation of each executive’s leadership and talent-related performance, including performance against our diversity priorities
|
| |||
|
•
|
| |
Corporate and individual performance assessments for Named Executive Officers are described under the heading “Compensation Discussion and Analysis”
|
|
(1)
|
ISG is an investor-led effort that includes some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts. State Street Global Advisors, State Street’s investment management line of business, is a member of ISG. The corporate governance framework articulates six principles that ISG believes are fundamental to good corporate governance at U.S. listed companies. The Principles reflect the common corporate governance beliefs of each ISG member and are designed to establish a foundational set of investor expectations about corporate governance practices in U.S. publicly-listed companies.
|
|
(Dollars in millions)
|
| |
|
| |
|
| |
% Change
|
|
|
2020
|
| |
2019
|
| |
2020 vs. 2019
|
| |||
|
Total Revenue:
|
| |
|
| |
|
| |
|
|
|
Total revenue, GAAP-basis
|
| |
$11,703
|
| |
$11,756
|
| |
(0.5)%
|
|
|
Less: other income
|
| |
—
|
| |
(44)
|
| |
|
|
|
Total revenue, excluding notable items
|
| |
$11,703
|
| |
$11,712
|
| |
(0.1)%
|
|
|
|
| |||||||||
|
Fee Revenue:
|
| |
|
| |
|
| |
|
|
|
Total fee revenue, GAAP-basis
|
| |
$9,499
|
| |
$9,147
|
| |
3.8%
|
|
|
Total fee revenue, excluding notable items
|
| |
$9,499
|
| |
$9,147
|
| |
3.8%
|
|
|
|
| |||||||||
|
Servicing Fee Revenue:
|
| |
|
| |
|
| |
|
|
|
Total servicing fees revenue, GAAP-basis
|
| |
$5,167
|
| |
$5,074
|
| |
1.8%
|
|
|
Total servicing fees, excluding notable items
|
| |
$5,167
|
| |
$5,074
|
| |
1.8%
|
|
|
|
| |||||||||
|
Net Interest Income:
|
| |
|
| |
|
| |
|
|
|
Total net interest income, GAAP-basis
|
| |
$2,200
|
| |
$2,566
|
| |
(14.3)%
|
|
|
Total net interest income, excluding notable items
|
| |
$2,200
|
| |
$2,566
|
| |
(14.3)%
|
|
|
|
| |||||||||
|
Expenses:
|
| |
|
| |
|
| |
|
|
|
Total expenses, GAAP-basis
|
| |
$8,716
|
| |
$9,034
|
| |
(3.5)%
|
|
|
Less: Notable expense items:
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
(50)
|
| |
(77)
|
| |
|
|
|
Repositioning charges
|
| |
(133)
|
| |
(110)
|
| |
|
|
|
Legal and related
|
| |
9
|
| |
(172)
|
| |
|
|
|
Total expenses, excluding notable items
|
| |
$8,542
|
| |
$8,675
|
| |
(1.5)%
|
|
|
|
|
|
|
| |
|
| |
|
| |
% Change
|
|
|
|
| |
2019
|
| |
2018
|
| |
2019 vs. 2018
|
|
|
Servicing Fee Revenue:
|
| |
|
| |
|
| |
|
|
|
Total servicing fees revenue, GAAP-basis
|
| |
$5,074
|
| |
$5,421
|
| |
(6.4)%
|
|
|
Add: Legal and related
|
| |
—
|
| |
8
|
| |
|
|
|
Total servicing fees, excluding notable items
|
| |
$5,074
|
| |
$5,429
|
| |
(6.5)%
|
|
|
(Dollars in millions, except earnings per share, or where otherwise noted)
|
| |
|
| |
|
| |
% Change
|
|
|
2020
|
| |
2019
|
| |
2020 vs. 2019
|
| |||
|
Net Income Available to Common Shareholders:
|
| |
|
| |
|
| |
|
|
|
Net Income Available to Common Shareholders, GAAP-basis
|
| |
$2,257
|
| |
$2,009
|
| |
12.3%
|
|
|
Less: Notable items
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
50
|
| |
77
|
| |
|
|
|
Repositioning charges
|
| |
133
|
| |
110
|
| |
|
|
|
Legal and related
|
| |
(9)
|
| |
172
|
| |
|
|
|
Other income
|
| |
—
|
| |
(44)
|
| |
|
|
|
Preferred securities redemption(2)(3)
|
| |
9
|
| |
22
|
| |
|
|
|
Tax impact of notable items
|
| |
(47)
|
| |
(42)
|
| |
|
|
|
Net Income Available to Common Shareholders, excluding notable items
|
| |
$2,393
|
| |
$2,304
|
| |
3.9%
|
|
|
|
| |||||||||
|
Diluted Earnings per Share:
|
| |
|
| |
|
| |
|
|
|
Diluted earnings per share, GAAP-basis
|
| |
$6.32
|
| |
$5.38
|
| |
17.5%
|
|
|
Less: Notable items
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
0.10
|
| |
0.16
|
| |
|
|
|
Repositioning charges
|
| |
0.27
|
| |
0.22
|
| |||
|
Legal and related
|
| |
(0.02)
|
| |
0.44
|
| |
|
|
|
Other income
|
| |
—
|
| |
(0.09)
|
| |
|
|
|
Preferred securities redemption(2)(3)
|
| |
0.03
|
| |
0.06
|
| |
|
|
|
Diluted earnings per share, excluding notable items
|
| |
$6.70
|
| |
$6.17
|
| |
8.6%
|
|
|
|
| |||||||||
|
Return on Average Common Equity:
|
| |
|
| |
|
| |
|
|
|
Return on average common equity, GAAP-basis
|
| |
10.0%
|
| |
9.4%
|
| |
60 bps
|
|
|
Less: Notable items
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
0.2
|
| |
0.4
|
| |
|
|
|
Repositioning charges
|
| |
0.6
|
| |
0.5
|
| |
|
|
|
Legal and related
|
| |
—
|
| |
0.7
|
| |
|
|
|
Other income
|
| |
—
|
| |
(0.2)
|
| |
|
|
|
Preferred securities redemption(2)(3)
|
| |
—
|
| |
0.1
|
| |
|
|
|
Tax impact of notable items
|
| |
(0.2)
|
| |
(0.1)
|
| |
|
|
|
Return on average common equity, excluding notable items
|
| |
10.6%
|
| |
10.8%
|
| |
(20) bps
|
|
|
(Dollars in millions)
|
| |
|
| |
|
| |
% Change
|
|
|
2020
|
| |
2019
|
| |
2020 vs. 2019
|
| |||
|
Total Revenue:
|
| |
|
| |
|
| |
|
|
|
Total revenue, GAAP-basis
|
| |
$11,703
|
| |
$11,756
|
| |
(0.5)%
|
|
|
Less: other income
|
| |
—
|
| |
(44)
|
| |
|
|
|
Total revenue, excluding notable items
|
| |
11,703
|
| |
11,712
|
| |
(0.1)
|
|
|
|
| |
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
|
|
Expenses:
|
| |
|
| |
|
| |
|
|
|
Total expenses, GAAP-basis
|
| |
8,716
|
| |
9,034
|
| |
(3.5)
|
|
|
Less: Notable expense items:
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
(50)
|
| |
(77)
|
| |
|
|
|
Repositioning charges
|
| |
(133)
|
| |
(110)
|
| |
|
|
|
Legal and related
|
| |
9
|
| |
(172)
|
| |
|
|
|
Total expenses, excluding notable items
|
| |
8,542
|
| |
8,675
|
| |
(1.5)
|
|
|
Income before provision for credit losses and income tax expense, excluding notable items
|
| |
$3,161
|
| |
$3,037
|
| |
4.1%
|
|
|
|
| |
|
| |
|
| |
|
|
|
Income before provision for credit losses and income tax expense, GAAP-basis
|
| |
$2,987
|
| |
$2,722
|
| |
9.7%
|
|
|
|
| |
|
| |
|
| |
|
|
|
Operating margin, excluding notable items
|
| |
27.0%
|
| |
25.9%
|
| |
110 bps
|
|
|
Operating margin, GAAP-basis
|
| |
25.5%
|
| |
23.2%
|
| |
230 bps
|
|
|
|
| |
|
| |
|
| |
|
|
|
Operating Margin:
|
| |
|
| |
|
| |
|
|
|
Operating margin, GAAP-basis
|
| |
25.5%
|
| |
23.2%
|
| |
230 bps
|
|
|
Less: Notable items
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
0.4
|
| |
0.7
|
| |
|
|
|
Repositioning charges
|
| |
1.2
|
| |
0.9
|
| |
|
|
|
Legal and related
|
| |
(0.1)
|
| |
1.5
|
| |
|
|
|
Other income
|
| |
—
|
| |
(0.4)
|
| |
|
|
|
Operating margin, excluding notable items
|
| |
27.0%
|
| |
25.9%
|
| |
110 bps
|
|
|
(Dollars in millions)
|
| |
|
| |
|
| |
% Change
|
|
|
2020
|
| |
2019
|
| |
2020 vs. 2019
|
| |||
|
Total Revenue:
|
| |
|
| |
|
| |
|
|
|
Total revenue, GAAP-basis
|
| |
$11,703
|
| |
$11,756
|
| |
(0.5)%
|
|
|
Less: other income
|
| |
—
|
| |
(44)
|
| |
|
|
|
Total revenue, excluding notable items
|
| |
11,703
|
| |
11,712
|
| |
(0.1)
|
|
|
|
| |
|
| |
|
| |
|
|
|
Provision for credit losses
|
| |
88
|
| |
10
|
| |
nm
|
|
|
Expenses:
|
| |
|
| |
|
| |
|
|
|
Total expenses, GAAP-basis
|
| |
8,716
|
| |
9,034
|
| |
(3.5)
|
|
|
Less: Notable expense items:
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
(50)
|
| |
(77)
|
| |
|
|
|
Repositioning charges
|
| |
(133)
|
| |
(110)
|
| |
|
|
|
Legal and related
|
| |
9
|
| |
(172)
|
| |
|
|
|
Total expenses, excluding notable items
|
| |
8,542
|
| |
8,675
|
| |
(1.5)
|
|
|
Income before income tax expense, excluding notable items
|
| |
$3,073
|
| |
$3,027
|
| |
1.5%
|
|
|
|
| |
|
| |
|
| |
|
|
|
Income before income tax expense, GAAP-basis
|
| |
$2,899
|
| |
$2,712
|
| |
6.9%
|
|
|
|
| |
|
| |
|
| |
|
|
|
Pre-tax margin, excluding notable items
|
| |
26.3%
|
| |
25.8%
|
| |
50 bps
|
|
|
Pre-tax margin, GAAP-basis
|
| |
24.8%
|
| |
23.1%
|
| |
170 bps
|
|
|
|
| |
|
| |
|
| |
|
|
|
Pre-tax Margin:
|
| |
|
| |
|
| |
|
|
|
Pre-tax margin, GAAP-basis
|
| |
24.8%
|
| |
23.1%
|
| |
170 bps
|
|
|
Less: Notable items
|
| |
|
| |
|
| |
|
|
|
Acquisition and restructuring costs(1)
|
| |
0.4
|
| |
0.7
|
| |
|
|
|
Repositioning charges
|
| |
1.2
|
| |
0.9
|
| |
|
|
|
Legal and related
|
| |
(0.1)
|
| |
1.5
|
| |
|
|
|
Other income
|
| |
—
|
| |
(0.4)
|
| |
|
|
|
Pre-tax margin, excluding notable items
|
| |
26.3%
|
| |
25.8%
|
| |
50 bps
|
|
(1)
|
Acquisition and restructuring costs consist primarily of acquisition costs related to CRD.
|
(2)
|
We redeemed all outstanding Series C noncumulative perpetual preferred stock on March 15, 2020 at a redemption price of $500 million ($100,000 per share equivalent to $25.00 per depositary share) plus accrued and unpaid dividends. The difference between the redemption value and the net carrying value of approximately $9 million resulted in an EPS impact of approximately ($.03) per share in 2020.
|
(3)
|
We redeemed all outstanding Series E noncumulative perpetual preferred stock on December 15, 2019 at a redemption price of $750 million ($100,000 per share equivalent to $25.00 per depositary share) plus accrued and unpaid dividends. The difference between the redemption value and the net carrying value of approximately $22 million resulted in an EPS impact of approximately ($.06) per share in 2019.
|
nm
|
Denotes not meaningful
|
2018-2020 ROE - 3 year average, GAAP basis
|
| |
10.5%
|
Less: Pre-established Performance-based RSU adjustments:
|
| |
|
Merger and integration expenses
|
| |
0.2
|
Restructuring expenses
|
| |
0.3
|
Legal and regulatory – matters arising from prior periods
|
| |
0.3
|
2018-2020 ROE - 3 year average, Adjusted ROE
|
| |
11.3%
|