PROXY STATEMENT SUMMARY			1
2021 ANNUAL MEETING INFORMATION			1
MATTERS TO BE VOTED ON AT THE ANNUAL MEETING			1
HOW TO VOTE			2
OUR STRATEGIC PRIORITIES			3
OUR FINANCIAL PERFORMANCE			4
HOW WE’RE SUPPORTING OUR CUSTOMERS, COLLEAGUES AND COMMUNITIES DURING THE COVID-19 PANDEMIC			6
BOARD AND GOVERNANCE HIGHLIGHTS			7
COMPENSATION HIGHLIGHTS			12
CORPORATE GOVERNANCE MATTERS			14
PROPOSAL 1 – ELECTION OF DIRECTORS			14
-   Nominees			15
BOARD GOVERNANCE AND OVERSIGHT			21
-   Corporate Governance Guidelines, Committee Charters and Code of Business Conduct and Ethics			21
-   Board Selection, Nomination and Refreshment			22
-   Director Independence			24
-   Board Leadership			25
-   Meetings of the Board of Directors and Attendance at the Annual Meeting			25
-   Executive Sessions of our Non-Employee Directors			25
-   Board, Committee and Director Evaluations			26
-   Board Education			26
-   Board’s Role in Strategy			26
-   Board’s Role in Risk Oversight			27
-   Committees of the Board			28
RELATED PERSON TRANSACTIONS			31
-   Policies and Procedures for Related Person Transactions			31
-   Transactions with Executive Officers and Directors			31
-   Transactions with Other Related Persons			31
-   Indemnification of Directors and Officers			31
STOCKHOLDER ENGAGEMENT			32
-   Stockholder Outreach			32
-   Communications with the Board			32
EXECUTIVE OFFICERS			33

CORPORATE RESPONSIBILITY			37
OUR ESG PROGRESS			37
SUPPORTING SOCIAL EQUITY IN OUR COMMUNITIES			38
HUMAN CAPITAL MANAGEMENT			38
ENVIRONMENTAL SUSTAINABILITY			41
STRENGTHENING COMMUNITIES			41
COMPENSATION MATTERS			42
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION			42
COMPENSATION DISCUSSION AND ANALYSIS			42
COMPENSATION AND HR COMMITTEE REPORT			58
EXECUTIVE COMPENSATION			59
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL			64
ROLE OF RISK MANAGEMENT IN COMPENSATION			71
CEO PAY RATIO			72
DIRECTOR COMPENSATION			73
PROPOSAL 3 – ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION			75
AUDIT MATTERS			76
PROPOSAL 4 – RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			76
AUDIT COMMITTEE REPORT			76
PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES			77
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES			77
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			78
INFORMATION FOR STOCKHOLDERS			80
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING			80
OTHER BUSINESS			86
2022 ANNUAL MEETING AND STOCKHOLDER PROPOSALS			86
ANNUAL REPORT FOR 2020			88
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS			88
APPENDIX A- NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS			A-89

 

		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

 

2021 ANNUAL MEETING INFORMATION

 

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information that you should consider; accordingly, you should read the entire proxy statement carefully before voting.

 

 

MATTERS TO BE VOTED ON AT THE ANNUAL MEETING

 

 

PROPOSAL				BOARD VOTE RECOMMENDATION		REASON FOR VOTE RECOMMENDATION		PAGE
1.		Elect the following nominees as directors: Bruce Van Saun, Lee Alexander, Christine M. Cumming, William P. Hankowsky, Leo I. (“Lee”) Higdon, Edward J. (“Ned”) Kelly III, Charles J. (“Bud”) Koch, Robert G. Leary, Terrance J. Lillis, Shivan Subramaniam, Christopher J. Swift, Wendy A. Watson and Marita Zuraitis		FOR ALL		Our Board believes that its directors represent an appropriate mix of experience and skills relevant to the size and nature of our business			14

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

PROPOSAL				BOARD VOTE RECOMMENDATION		REASON FOR VOTE RECOMMENDATION		PAGE
2.		Approve, on a non-binding, advisory basis, the compensation of the Company’s executive officers named in the 2020 Summary Compensation Table, as disclosed in the Compensation Discussion and Analysis, the compensation tables and accompanying narrative		FOR		Our Board believes our executive compensation closely aligns the interests of our named executive officers with the interests of our stockholders			42
3.		Approve, on an advisory basis, the frequency of future advisory votes on executive compensation		EVERY YEAR		The Board believes in affording stockholders with an opportunity to provide the Company with prompt feedback regarding emerging trends in compensation as well as any changes to our compensation program on annual basis			75
4.		Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2021 fiscal year		FOR		Based on the Audit Committee’s most recent evaluation, the Board believes it is in the best interests of the Company and its stockholders to retain Deloitte & Touche LLP			76

 

HOW TO VOTE

 

Stockholders may vote by using the Internet, telephone, by mail or online at the meeting as described below. Please refer to your Notice, proxy card or other information forwarded by your bank or broker to see which voting options are available to you.

 

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

OUR STRATEGIC PRIORITIES

 

 

 

OUR MISSION   To help our customers, colleagues and communities reach their potential				OUR STRATEGIC PRIORITIES   1.  Maintain a high-performing, customer-centric organization   2.  Operate with financial discipline and a mindset of continuous improvement to self-fund investments   3.  Build excellent capabilities to help us delight our customers and compete effectively   4.  Prudently grow and optimize our balance sheet   5.  Modernize our technology and operational models to improve delivery, organizational agility and speed to market   6.  Embed risk management within our culture and operations   7.  Develop differentiated value propositions to acquire, deepen, and retain core customer segments

Our mission is to help each of our customers, colleagues and communities reach their potential, and our vision is to become a top-performing bank distinguished by our customer-centric culture, mindset of continuous improvement, and excellent capabilities. If we do this well, we will build long-term franchise value and stand out in a crowded banking landscape.

Our business strategy is designed to maximize the full potential of our businesses, drive sustainable growth, and enhance profitability. The COVID-19 pandemic, and resulting reactions such as lockdowns, safety protocols, unprecedented government measures to shore up the economy and drastic changes to daily life have been unique and remarkable. These stresses have required a new level of resilience and adaptability and Citizens has risen to meet the challenges we’ve faced, supporting all of our stakeholders during a time of great uncertainty and need. We also remain committed to balancing the need for investments that position us well for the future with the imperative that we deliver consistent earnings growth and attractive returns.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

OUR FINANCIAL PERFORMANCE

 

 

Over the past six years, we have consistently demonstrated the ability to set a course, develop a plan, and execute effectively while transforming virtually every aspect of the Company. Our 2020 results demonstrate the diversity and resilience of our business model, along with our ability to execute well, and key metrics compare favorably with our peers.

 

Positive operating leverage (Operating leverage) Efficiency improvement (Efficiency ratio change) Strong pre-provision net revenue(3) (Pre-provision profit)
Net interest margin, FTE(3) (NIM) Return on equity(3) (Return on average tangible common equity change) Robust common equity tier 1(3) (CET1 at December 31, 2020) 1) Underlying results exclude notable items. See important information on Non-GAAP Financial Measures in Appendix A, as applicable, for an explanation of our use on these metrics and non-GAAP measures and their reconciliation to GAAP financial measures. 2) Source: Company filings. Peers include CMA, FITB, HBAN, KEY, MTB, PNC, RF, TFC and USB. 3) Adjusted results exclude TFC due to merger related transaction between BBT and STI.

 

 

1 “Underlying” results exclude notable items. See important information on Non-GAAP Financial Measures in Appendix A for an explanation of our use of these measures and their reconciliation to GAAP financial measures.

2 Source: Company filings. Peers include CMA, FITB, HBAN, KEY, MTB, PNC, RF and USB; excludes TFC due to merger related transaction between BBT and STI.

3 Source: Company filings. Peers include CMA, FITB, HBAN, KEY, MTB, PNC, RF, TFC and USB.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

We continued to rise to the occasion as we met the unprecedented challenges of 2020, taking great care of customers, colleagues, and communities while posting strong results and we remain well-positioned as we head into 2021.

2020 Results

 

		Medium-     term targets				2020 GAAP     results				2020     Underlying     results1								4Q20 GAAP     results				GAAP     improvement     since 3Q13				4Q20     Underlying     Results1				Underlying     improvement     since 3Q131
ROTCE			~14-16	%			6.9	%			7.5	%							12.2	%			7.9	%			12.9	%			8.6	%
Efficiency Ratio			~55	%			57.8	%			56.0	%							59.3	%			9.2	%			56.8	%			11.7	%

Despite a challenging backdrop in 2020, we delivered record levels of pre-provision profit as we managed the risks on our balance sheet well while also preserving and making the strategic investments to position us for growth and success in the long term.

 

•

Generated net income available to common stockholders of $950 million compared with $1.7 billion for 2019, with diluted earnings per common share of $2.22 compared with $3.81 for 2019.

 

•

Record total revenue of $6.9 billion increased 6%, despite the challenging rate and yield curve environment, with record noninterest income of $2.3 billion, up 24% given record results across mortgage, capital markets and wealth, partially offset by a 1% decrease in net interest income given lower rates.

 

•

Noninterest expense increased 4%. On an Underlying basis(1), noninterest expense increased 2% reflecting the benefit of our TOP programs, which also allowed the funding of further investments to diversify our capabilities and drive future revenue growth.

 

•

Efficiency ratio improved 148 basis points to 57.8% compared with 2019, generating positive operating leverage of 3%. On an Underlying basis(1), the efficiency ratio improved 224 basis points to 56.0%, with positive operating leverage of 4% reflecting continued focus on top-line growth and expense management.

 

•

ROTCE of 6.9% compares with 12.6% in 2019; Underlying ROTCE(1) of 7.5% compares with 12.8% in 2019 reflecting the implementation of CECL and reserve increases tied to COVID-19 impacts. Reserve build in 2020 impacted ROTCE by 5.4%.

 

•

Allowance coverage for loans of 2.17%, or 2.24% excluding Paycheck Protection Program loans(1), compares with 1.09% as of December 31, 2019, reflecting the first quarter 2020 implementation of CECL and subsequent reserve increases in the second and third quarter 2020 primarily associated with COVID-19 impacts.

 

•

Tangible book value per common share was $32.72, up 2% from 2019.

 

•

Returned $942 million to common stockholders in 2020, including dividends and share repurchases.

 

•

Capital remains strong, with a CET1 risk-based capital ratio of 10.0%, stable with 10.0% at year-end 2019.

 

 

1 “Underlying” results exclude notable items. See important information on Non-GAAP Financial Measures in Appendix A for an explanation of our use of these measures and their reconciliation to GAAP financial measures.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

HOW WE’RE SUPPORTING OUR CUSTOMERS, COLLEAGUES AND COMMUNITIES DURING THE COVID-19 PANDEMIC

 

 

Below is a summary of key actions we undertook to protect our customers, colleagues and communities and provide flexibility and support throughout the crisis.

 

 

customers We are committed to supporting our customers and took a number of actions to support them. Highlights include: Consumer -Provided payment assistance for up to, and in some cases beyond 90 days, depending on product -Suspended foreclosure on property portfolios and repos on Auto, and offered new modification programs in addition to forbearance, going beyond the CARES Act -Late fees, overdraft fees, and service charges rebated upon request -Allowed early CD withdrawals without penalty and increased mobile deposit limits for personal and business accounts Small Business - In two rounds of funding for the Paycheck Protection Program ('PPP'), provided $4.8 billion in over 50,000 loans to small business customers - 93% of loans went to small businesses with 25 or fewer employees and 81% to those with 10 or fewer employees, supporting over 540,000 jobs - Facilitated small business referrals for SBA Economic Injury Disaster loans Commercial - Funded ~$7.2billion of advances on clients' lines of credit to support their liquidity at the start of the pandemic - Waived Cash Management service fee for up to 90 days - Provided payment flexibility to nearly 500 clients while prudently managing risk Colleagues We took a number actions to ensure colleague wellness and work-life balance, reward colleagues, and assist them to overcome personal challenges brought on by the crisis: - Provided personal protective equipment, a safe work environment, and free COVID-19 testing - Provided premium pay and increased overtime rates for colleagues serving customers in the branch or office -Increased overtime rates and provided recognition awards for colleagues supporting the PPP -Made changes to production-based incentive plan changes in the second quarter to address lower production - Enhanced recognition programs to reward extraordinary colleague efforts through the crisis - Provided additional paid time off to all colleagues at no employee cost to address circumstances such as lack of childcare or the need to care for a family member, required quarantine, and COVID-19 recovery - Enhanced wellness benefits, including virtual doctor visits, Health Advocate (providing free counseling sessions available 24/7), meQuilibrium (a resiliency tool to help deal with anxiety and stress), and parental resources through LifeCare. - Did not increase medical premiums for 2021. Communities we responded to the needs of our communities and the impacts of the pandemic. Highlights include: - Committed $5 million overall to help communities and small businesses across our footprint - Selected approximately 130 small business customers to receive one-time grants of $15,000 to help them, their employees, and their communities - Gave $860,000 in immediate financial help to community organizations that play a critical role in their neighborhoods - Committed $2 million to our small business recovery program, in partnership with local nonprofit organizations - Identified nonprofit organizations that support small businesses and implemented an avenue for credit card customers to donate Reward Points, resulting in an additional $150,000in support - Unrestricted our funding support to organizations across our footprint to provide flexibility - Worked with our community partners to reformat and facilitate ongoing colleague volunteerism -Committed $10 million to support minority-owned small businesses and support other initiatives aimed at promoting social equity. customers We are committed to supporting our customers and took a number of actions to support them. Highlights include: Consumer -Provided payment assistance for up to, and in some cases beyond 90 days, depending on product -Suspended foreclosure on property portfolios and repos on Auto, and offered new modification programs in addition to forbearance, going beyond the CARES Act -Late fees, overdraft fees, and service charges rebated upon request -Allowed early CD withdrawals without penalty and increased mobile deposit limits for personal and business accounts Small Business - In two rounds of funding for the Paycheck Protection Program ('PPP'), provided $4.8 billion in over 50,000 loans to small business customers - 93% of loans went to small businesses with 25 or fewer employees and 81% to those with 10 or fewer employees, supporting over 540,000 jobs - Facilitated small business referrals for SBA Economic Injury Disaster loans Commercial - Funded ~$7.2 billion of advances on clients' lines of credit to support their liquidity at the start of the pandemic - Waived Cash Management service fee for up to 90 days - Provided payment flexibility to nearly 500 clients while prudently managing risk Colleagues We took a number actions to ensure colleague wellness and work-life balance, reward colleagues, and assist them to overcome personal challenges brought on by the crisis: - Provided personal protective equipment, a safe work environment, and free COVID-19 testing - Provided premium pay and increased overtime rates for colleagues serving customers in the branch or office -Increased overtime rates and provided recognition awards for colleagues supporting the PPP -Made changes to production-based incentive plan changes in the second quarter to address lower production - Enhanced recognition programs to reward extraordinary colleague efforts through the crisis - Provided additional paid time off to all colleagues at no employee cost to address circumstances such as lack of childcare or the need to care for a family member, required quarantine, and COVID-19 recovery - Enhanced wellness benefits, including virtual doctor visits, Health Advocate (providing free counseling sessions available 24/7), meQuilibrium (a resiliency tool to help deal with anxiety and stress), and parental resources through LifeCare. - Did not increase medical premiums for 2021. Communities we responded to the needs of our communities and the impacts of the pandemic. Highlights include: - Committed $5 million overall to help communities and small businesses across our footprint - Selected approximately 130 small business customers to receive one-time grants of $15,000 to help them, their employees, and their communities - Gave $860,000 in immediate financial help to community organizations that play a critical role in their neighborhoods - Committed $2 million to our small business recovery program, in partnership with local nonprofit organizations - Identified nonprofit organizations that support small businesses and implemented an avenue for credit card customers to donate Reward Points, resulting in an additional $150,000in support - Unrestricted our funding support to organizations across our footprint to provide flexibility - Worked with our community partners to reformat and facilitate ongoing colleague volunteerism -Committed $10 million to support minority-owned small businesses and support other initiatives aimed at promoting social equity.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

BOARD AND GOVERNANCE HIGHLIGHTS

 

Board Nominees

Our board of directors (the “Board”) will consist of not less than five or more than twenty-five directors, excluding any directors elected by holders of preferred stock pursuant to provisions applicable only in the case of defaults under the terms of our preferred stock. The exact number of directors will be fixed from time to time by resolution of our Board and will decrease from 14 to 13 following the Annual Meeting. Citizens Financial Group, Inc. (the “Company” or “we” or “us” or “our”) currently has 14 directors. The terms of office of all directors expire at the Annual Meeting. Mr. Hanna will not be standing for re-election at the Annual Meeting. The nominees for director are as follows:

 

NAME

AGE

DIRECTOR     SINCE

OCCUPATION

BOARD COMMITTEE

INDEPENDENT1

Bruce Van Saun

63

2013

Chairman and CEO, Citizens Financial Group, Inc.

Executive (Chair) Equity

No

Lee Alexander

53

2021

Executive Vice President and Chief Information Officer, The Clearing House

Audit

Yes

Christine M. Cumming

68

2015

Retired First Vice President and COO, Federal Reserve Bank of New York

Risk

Yes

William P. Hankowsky

69

2006

Former Chairman, President and CEO, Liberty Property Trust

Audit Compensation & HR Executive

Yes

Leo I. (“Lee”) Higdon

74

2014

Past President, Connecticut College

Compensation & HR (Chair) Audit

Yes

Edward J. (“Ned”) Kelly III

67

2019

Former Chairman, Institutional Clients Group, Citigroup, Inc.

Compensation & HR Governance

Yes

Charles J. (“Bud”) Koch

74

2004

Retired Chairman, President and CEO, Charter One Financial

Risk (Chair) Audit

Yes

Robert G. Leary

59

2020

Former CEO, The Olayan Group

Risk

Yes

Terrance J. Lillis

68

2019

Retired CFO, Principal Financial Group, Inc.

Audit

Yes

Shivan Subramaniam

72

2005

Retired Chairman and CEO, FM Global

Governance (Chair) Risk Executive

Yes

Christopher J. Swift

60

2021

Chairman and CEO, The Hartford Financial Services Group, Inc.

Risk

Yes

Wendy A. Watson

72

2010

Retired Executive Vice President, Global Services, State Street Bank & Trust Company

Audit (Chair) Compensation & HR Risk

Yes

Marita Zuraitis

60

2011

Director, President and CEO, Horace Mann Educators Corporation

Governance Risk

Yes

Additional information about the director nominees can be found beginning on page 15

 

1

Under applicable NYSE and SEC independence standards

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

Board Skills and Demographics

We believe that our directors represent an appropriate and diverse mix of experience and skills relevant to the size and nature of our business. The following matrix reflects the composition, key skills and experience, and demographics of the Board nominees.

 

Van Saun Alexander Cumming Hankowsky Higdon Kelly Koch Leary Lillis Subramaniam Swift Watson Zuraitis

* Committee Chair

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

Board Diversity*   Over 53% of our Board represents diverse groups (three women, two people of color and two veterans).   The Board values diverse perspectives and experiences. When reviewing Board and Committee composition, the Nominating and Corporate Governance Committee considers self-identified diverse characteristics of directors and nominees in addition to each person’s background and experience.   As part of its commitment to diversity, the Board requests that any firms engaged in the director search process include individuals from underrepresented groups in its list of potential candidates.		3 WOMEN SERVE ON THE BOARD 2 DIRECTORS ARE RACIALLY DIVERS Board Diversity 66 AVERAGE AGE OF DIRECTORS 7 YEARS AVERAGE TENURE OF DIRECTORS

 

 

gender race age 3 23% women 2 15% racially diverse 66 age range: average age of directors 53-74 board tenure 5 <5 years 5 5-10 years 1 11-15 years 2 15+ years 7 years average tenure

* Board diversity statistics effective upon the conclusion of the Annual Meeting when Mr. Hanna leaves the Board.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

Corporate Governance Highlights

 

Board Independence and Oversight		– All director nominees are independent except for the Chairman who serves as the CEO of the Company – Non-classified board structure – Independent Lead Director with formally defined role and responsibilities – Executive sessions of independent directors held at every regularly scheduled meeting – Key committees are fully independent (Audit, Risk, Compensation and Human Resources and Nominating and Corporate Governance)
Board Qualifications and Evaluations		– Board skills and experience aligned to strategy – Board orientation and continuing education program supports ongoing director development – Board, committee and individual self-assessments conducted annually with an external facilitator – Board mentoring program and informal feedback sessions with senior management facilitates engagement and deeper understanding of the organization
Board Refreshment and Diversity		– Mandatory retirement age of 75 for directors triggers board refreshment – Gender and racial diversity represented on the Board – Diversity of tenure provides balance of historical knowledge and new perspectives – Diversity of age provides balance of extensive experience and fresh outlooks – Director recruitment and selection process prioritizes leadership, experience, skills, independence and diversity
Board Practices		– Service on other public company boards limited – Stock ownership guidelines for directors and executive officers support mandatory stock retention requirements and align directors’ and executives’ interests with those of stockholders – Annual review of Corporate Governance Guidelines ensures alignment with best practices – Succession planning discussions for CEO and senior management conducted throughout the year
Board Oversight of Risk		– Board oversight of risk led by the Risk and Audit Committees – Risk Committee responsible for reviewing and approving the Enterprise Risk Management Governance Framework and ensuring risks are properly managed to the risk appetites set for each material risk category
Stockholder Rights and Engagement		– Annual election of directors with majority vote standard for uncontested elections – Annual advisory vote on executive compensation – Capital structure with one vote per common share – Stockholders have proxy access – Stockholders have the right to call a special meeting – No poison pill – Annual Board review of Charter and Bylaw provisions – Annual stockholder outreach program with feedback from engagements shared with, and discussed by the Board
Commitment to ESG		– Board oversight of our commitment to ESG matters – Formal ESG governance structure with cross-functional executive steering committee established in 2020 – Annual corporate responsibility reporting which will be aligned to GRI and SASB in 2021 – Corporate responsibility efforts aligned to Credo and Diversity, Equity and Inclusion program – Commitment to pay equity
Culture and Ethics		– Code of Business Conduct and Ethics establishes the core standards of ethical conduct for the Company – Conduct Office overseen by the Audit Committee and provides the Board and Executive Management with an independent and objective view of the Citizen’s conduct risk profile – Participation in annual McKinsey Organizational Health Index survey – Strong Diversity, Equity and Inclusion program overseen by the Compensation and Human Resources Committee

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

Corporate Governance Journey

Our commitment to good corporate governance stems from our belief that a strong governance framework strengthens Board and management accountability and creates long-term value for our stockholders. The Board has adopted robust governance practices that support this belief and are foundational to its role in providing effective oversight. Since we became a public company in 2014, the Board has continued to demonstrate its commitment to further good governance practices:

 

 

2015 Became fully independent from former parent RBS Group plc Held first Annual Meeting of Stockholders 2017 Established a Conduct Office under the oversight of the Audit Committee 2019 Refreshed Board with two director retirements and appointment of two new directors Implemented proxy access Made public commitment to pay equity 2016 Implemented majority voting for election of directors Established a Board mentoring and engagement program Established an annual institutional shareholder-governance outreach program 2018 Published first Corporate Responsibility Report CDP report made public 2020 Provided stockholders with right to call a special meeting Established Board oversight of ESG Conducted ESG materiality assessment Amended Corporate Governance Guidelines to enhance diversity requirements in selection of directors

 

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

COMPENSATION HIGHLIGHTS

 

 

		How Do We Determine Compensation?   •   The Compensation and Human Resources Committee (the “Compensation and HR Committee”) continues to exercise structured discretion in making executive compensation determinations, with decisions informed by the review of a number of qualitative and quantitative performance metrics across various dimensions (including financial and business delivery, customer outcomes, strategic initiatives, human capital, and risk and control) through use of a scorecard.   •   Compensation decisions are also informed by peer data, compensation history, and input from the Compensation and HR Committee’s independent consultant.   •   We believe that reviewing multiple dimensions of performance in determining pay facilitates management’s focus on Company performance overall and mitigates the risk of disproportionate focus on certain elements of performance.
		How Do We Pay Our Executives?   •   Executive pay mix is aligned with stockholder interests by delivering 60%-70% of variable compensation in the form of long-term awards.   •   For our CEO, CFO, and the heads of our Consumer and Commercial businesses, 45% of variable compensation overall and nearly two-thirds of long-term awards are granted in the form of performance awards with a three-year performance period.
		How Do We Address Risk?   •   The risk performance of our executives is assessed annually by our Chief Risk Officer and the results of that assessment are considered in determining pay.   •   Incentive plan governance requires approval by all control partners for plan changes (including risk, legal, human resources, and finance) and an independent third-party risk review of our plans is conducted every three years (in addition to annual internal review).   •   We maintain a clawback process, through which events having a material adverse impact on the Company are reviewed for potential impact on compensation.
		Why Should You Approve our Say-on-Pay Vote?   •   We continue to evaluate our compensation program and related disclosure in light of stockholder feedback and peer and market practice. We introduced relative Total Shareholder Return as a metric for performance stock unit awards granted in March 2020 and have also enhanced our proxy disclosure to provide additional information regarding human capital matters, including pay equity and performance stock unit awards.   •   We believe our compensation program provides an appropriate balance of short-term and long-term compensation designed to align our executives’ interests with those of stockholders.   •   Executive compensation is aligned to performance. 2020 performance year variable compensation for all named executive officers (including Mr. Van Saun) is down -11.1% as compared to 2019, in recognition of COVID-19 and decreased earnings despite our strong relative performance. In addition, Mr. Van Saun’s 2020 performance year total compensation is down -9.5% as compared to 2019 and is also -9.0% below his target total compensation of $9.94 million. In comparison, variable compensation for all colleagues participating in our discretionary bonus program is down -6.3% on average. 2020 performance year compensation is illustrated in “Compensation Matters—Compensation Discussion & Analysis—Section 3. NEO Compensation for the 2020 Performance Year.”

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - PROXY STATEMENT SUMMARY

 

COVID-19 Related Compensation Decisions

Our compensation programs have been impacted by the pandemic beyond what was contemplated and addressed through the initial design. Throughout 2020, the Compensation and HR Committee regularly discussed how best to balance and fairly recognize management’s achievements in navigating the pandemic.

One impact of the economic downturn, which was exacerbated by the implementation of the Current Expected Credit Losses (“CECL”) accounting standards amidst the pandemic, was that the 2020-22 targets associated with our executive team’s 2020 performance stock units (“PSUs”) no longer represented the expected performance of our Company over the next three years and were also not in line with market expectations. As a result and because the largest component of our executives’ compensation is awarded in the form of PSUs, our 2020 compensation program no longer provided the appropriate incentive and target compensation levels for senior management.

Following discussion at four regularly scheduled meetings and two additional meetings on this topic over the course of eight months, in December 2020 the Compensation and HR Committee modified the Average Return on Tangible Common Equity and Cumulative Diluted Earnings Per Share targets for 2020 PSUs to be consistent with analyst consensus as of December 15, 2020 and instituted a payout cap of 100% of target (lowered from 150% of target). The revised targets are intended to provide a meaningful incentive for the Company’s leadership team that aligns rewards with stockholder interests. These modifications have been made for all 2020 PSU holders and the awards will not vest until March of 2023 as originally designed.

Our management team has executed well to deliver for stockholders, with Total Shareholder Return of 85% since our September 24, 2014 initial public offering through December 31, 2020, as compared to weighted peer average Total Shareholder Return of 62%.* The Compensation and HR Committee feels confident that the 2020 PSU modifications will help to effectively retain senior management and fairly reward them for their accomplishments in enabling the Company to emerge from this crisis and continue to deliver long-term value to stockholders. Further detail about this modification is discussed in “Compensation Matters—Compensation Discussion and Analysis—Section 1. Executive Compensation Overview—Variable Compensation Mix—2020 PSU Modification.”

 

 

*	Peer average is market cap weighted and includes CMA, FITB, HBAN, KEY, MTB, PNC, RF, TFC and USB.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

 

 

Our Certificate of Incorporation or Charter, and Bylaws provide that the Board shall consist of between five and twenty-five directors, excluding any directors elected by holders of preferred stock pursuant to provisions applicable only in the case of defaults under the terms of our preferred stock. The Board will fix the exact number of directors from time to time and has fixed the number at 14 until the conclusion of Annual Meeting when Mr. Hanna will retire following which it will decrease to 13. At each annual meeting, directors are elected to hold office for a term of one year expiring at the next annual meeting.

The Board has nominated 13 of the 14 directors currently serving on the Board for election at the Annual Meeting to serve until the 2022 annual meeting or until their respective successors are duly elected and qualified. If any nominee is unable to serve as a director, the Board by resolution may reduce the number of directors or choose a substitute nominee. We are not aware of any nominee who will be unable to or will not serve as a director.

Our Bylaws provide for the election of directors by a majority of the votes cast in an uncontested election. This means that the 13 individuals nominated for election to the Board must receive more “FOR” than “AGAINST” votes (among votes properly cast at the meeting, electronically or by proxy) to be elected. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the election of nominees. Proxies cannot be voted for a greater number of persons than the number of nominees named. There is no cumulative voting. If any nominee for any reason is unable to serve or will not serve, proxies may be voted for such substitute nominee as the proxy holder may determine. If the election of directors is a contested election, directors are elected by a plurality of the votes cast.

Our Bylaws also provide that directors may be removed, with or without cause, by an affirmative vote of shares representing a majority of the outstanding shares then entitled to vote at an election of directors. Any vacancy occurring on our Board and any newly created directorship may be filled only by a vote of a majority of the remaining directors in office.

Biographical information about the nominees for director, including information about their qualifications to serve as a director, is set forth below.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

Nominees

 

Bruce Van Saun   Chairman and Chief Executive Officer, Citizens  Financial Group, Inc.   Age: 63   Director Since: 2013   Committees: Executive (Chair); Equity				Experience, Skills and Qualifications ·  Executive in the financial services industry with over 30 years experience ·  Extensive financial background and service on the boards of other public companies ·  Additional role as our Chief Executive Officer brings management’s perspective to Board deliberations and provides valuable information about the status of day-to-day operations   Background Mr. Van Saun joined the Company as Chairman and CEO in October 2013 and also serves on the board of our primary subsidiary Citizens Bank, N.A. (“CBNA”). He previously served as The Royal Bank of Scotland Group plc Finance Director and was a member of its board of directors (from 2009 to 2013).   From 1997 to 2008, Mr. Van Saun held a number of senior positions with The Bank of New York Mellon, including Vice Chairman and Chief Financial Officer. Earlier in his career, he held senior positions with Deutsche Bank, Wasserstein Perella Group and Kidder Peabody & Co. Mr. Van Saun currently serves on the board of directors of Moody’s Corporation (since 2016). He also serves on the boards of the Federal Reserve Bank of Boston (since January 2019) and the Bank Policy Institute (since October 2018). He is a member of The Clearing House supervisory board (since 2013), and serves on the boards of Jobs for Massachusetts and the Partnership for Rhode Island. Previous directorships held by Mr. Van Saun in both the United Kingdom and United States include Lloyds of London (from 2012 to 2016), the Federal Advisory Council (from 2016 to 2018) and the National Constitution Center (from 2015 to January 2019).   Mr. Van Saun received a B.S. in Business Administration from Bucknell University in 1979 and an M.B.A. in Finance and General Management from the University of North Carolina in 1983.

 

Lee Alexander Executive Vice President       And Chief Information Officer, The Clearing House   Age: 53   Director Since: 2021   Committees: Audit				Experience, Skills and Qualifications ·  Extensive technology expertise with over 25 years of international management experience in the technology and financial services sectors ·  Experience in cyber security and incident response as Chief Information Officer, and Head of the Technology Group at the Federal Reserve Bank of New York (“FRBNY”)   Background Mr. Alexander joined the Board on February 1, 2021. He currently serves as the Executive Vice President and Chief Information Officer for The Clearing House (since April 2018) and is responsible for directing and coordinating all technology and operations across the company. Prior to joining The Clearing House, Mr. Alexander was Executive Vice President, Chief Information Officer, and Head of the Technology Group at the FRBNY (from 2012 to 2018), where he also served on the Bank’s Management Committee. Before being named Head of the Technology Group and CIO, Mr. Alexander led the Bank’s application development efforts, and was instrumental in the development of a Bank and System-wide architecture and for the development and completion of the Fedwire modernization project. Mr. Alexander also serves on the board of our primary subsidiary CBNA.   Mr. Alexander holds a B.Sc. in Computing Science and an M.B.A. from the University of Glasgow in Scotland.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

Christine M. Cumming Retired First Vice President and Chief Operating Officer, Federal Reserve Bank of       New York   Age: 68   Director Since: 2015   Committees: Risk				Experience, Skills and Qualifications ·  Seasoned bank regulatory executive with over 35 years at the Federal Reserve Bank of New York (“FRBNY”), including serving as First Vice President and Chief Operating Officer ·  Extensive background in risk management, technology, monetary policy and bank supervision ·  Experience in crisis management as chair of the Cross-Border Crisis Management Group for the Resolution Steering Group of the G-20’s Financial Stability Board   Background Until her retirement in 2015, Ms. Cumming was First Vice President of the FRBNY, its second highest ranking officer, and served as its Chief Operating Officer, as well as an alternate voting member of the Federal Open Market Committee.   Previously, Ms. Cumming was Executive Vice President and Director for the Research and Market Analysis Group and senior vice president for the Bank Supervision Group responsible for the Bank Analysis and Advisory and Technical Services Functions. She also chaired the Cross-Border Crisis Management Group, which coordinated recovery and resolution planning for large, global financial institutions for the Resolution Steering Group of the G-20’s Financial Stability Board.   Ms. Cumming currently serves on the board of American Family Insurance Mutual Holding Company (since 2016), and MIO Partners, Inc. (since February 2018). She previously served on the board of the Financial Accounting Foundation, completing her single five-year term in December 2020. Ms. Cumming teaches part time at Columbia University. She also serves on the board of our primary subsidiary CBNA.   Ms. Cumming holds both a B.S. and Ph.D in economics from the University of Minnesota.

 

William P. Hankowsky Former Chairman, President and Chief Executive Officer, Liberty Property Trust              Age: 69   Director Since: 2006   Committees: Audit; Compensation and HR; Executive				Experience, Skills and Qualifications ·  Extensive business and management expertise, particularly in the real estate sector from service as Chief Executive Officer of Liberty Property Trust and President of the Philadelphia Industrial Development Corporation ·  Experience serving on the boards of other public companies and numerous non-profit entities   Background Mr. Hankowsky was the Chairman, President & CEO of Liberty Property Trust until February 2020. He joined Liberty in January 2001 as Chief Investment Officer and was responsible for refining the company’s corporate strategy and investment process. In 2002, he was named President, and in 2003, was appointed Chief Executive Officer and elected Chairman of Liberty’s board of trustees.   Prior to joining Liberty, Mr. Hankowsky served for 11 years as President of the Philadelphia Industrial Development Corporation. Mr. Hankowsky currently serves on the boards of the Delaware River Waterfront Corporation, Greater Philadelphia Chamber of Commerce, Philadelphia Convention and Visitors Bureau, Pennsylvania Academy of the Fine Arts, Philadelphia Shipyard Development Corporation and the Philadelphia Foundation. He is also a Senior Advisor to the Alterra Property Group. He previously served on the board of Aqua America (NYSE:WTR) (from 2004 to 2019). Mr. Hankowksy also serves on the board of our primary subsidiary CBNA.   Mr. Hankowsky received a B.A. in economics from Brown University.

 

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Leo I. (“Lee”)       Higdon Past President, Connecticut College   Age: 74   Director Since: 2014   Committees: Compensation and HR (Chair); Audit				Experience, Skills and Qualifications ·  Experienced executive in the financial services industry, including serving as Managing Director and Vice Chairman of Salomon Brothers Inc. ·  Service on the boards of other public companies, including as non-executive Chairman of Encompass Health Corporation and as lead director of Eaton Vance Corporation ·  Experience in academic institutions, including as Past President of Connecticut College, Dean of the Darden Graduate School of Business Administration at the University of Virginia   Background Mr. Higdon was the President of Connecticut College from 2006 to 2013. He was the President of the College of Charleston from 2001 to 2006. Prior to that, he was the President of Babson College and the Dean of the Darden Graduate School of Business Administration at the University of Virginia. He spent over 20 years at Salomon Brothers Inc., holding various positions, including Managing Director and Vice Chairman.   Mr. Higdon serves on the board of Encompass Health Corporation (since 2004) where he is currently the non-executive Chairman. He previously served on the board of Eaton Vance Corporation (from 2000 to March 1, 2021) where he was also lead director. He serves on the board of Charleston Symphony Orchestra (since August 2016). Mr. Higdon also serves on the board of our primary subsidiary CBNA.   Mr. Higdon received a B.A. in history from Georgetown University and an M.B.A. in Finance from the University of Chicago.

 

Edward J. (“Ned”) Kelly III   Former Chairman, Institutional Clients Group, Citigroup, Inc.   Age: 67   Director Since: 2019   Committees: Compensation and HR; Nominating & Corporate Governance				Experience, Skills and Qualifications ·  Extensive experience in the financial services industry in various roles including Vice Chairman, Chief Financial Officer at Citigroup, Inc. and General Counsel at J.P. Morgan ·  Service on the boards of other public companies including MetLife and CSX Corporation   Background Mr. Kelly joined our Board on February 1, 2019. Until his retirement in 2014, he was Chairman of Citigroup Inc.’s Institutional Clients Group. He previously served as Chairman of Global Banking from April 2010 to January 2011, and as Vice Chairman of Citigroup from July 2009 to April 2010. He also served as Citigroup’s Chief Financial Officer during 2009, and was previously head of Global Banking and President and Chief Executive Officer of Citi Alternative Investments.   Mr. Kelly currently serves on the board of MetLife (since 2015) and was chairman of the board of directors at CSX Corporation until January 2019. He previously served on the board of XL Catlin (from 2014 to 2018). He also serves on the board of our primary subsidiary CBNA.   Mr. Kelly joined Citigroup in 2008 from The Carlyle Group, a private investment firm, where he was a managing director. Prior to joining Carlyle in 2007, he was a Vice Chairman at PNC Financial Services Group following PNC’s acquisition of Mercantile Bankshares Corporation in 2007. He was Chairman, Chief Executive and President of Mercantile from 2003 to 2007. Before Mercantile, he was at J.P. Morgan where he held various positions including General Counsel and Secretary and managing director within J.P. Morgan’s investment banking business. Prior to joining J.P. Morgan, Mr. Kelly was a partner at the law firm of Davis Polk & Wardwell, where he specialized in matters related to financial institutions.   Mr. Kelly received his J.D. from the University of Virginia School of Law in 1981 and A.B. from Princeton University in 1975.

 

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Charles J. (“Bud”) Koch         Retired Chairman, President and Chief Executive Officer, Charter   One Financial   Age: 74   Director Since: 2004   Committees: Risk (Chair); Audit				Experience, Skills and Qualifications ·  Veteran executive in the financial services industry, particularly in the retail banking sector, including position as Chief Executive Officer of Charter One Financial ·  Regulatory experience from service on the board of the Federal Home Loan Bank (“FHLB”) of Cincinnati ·  Experience serving on the boards of other public companies and academic institutions   Background Mr. Koch is the retired Chairman and Chief Executive Officer of Charter One Financial and its subsidiary Charter One Bank (“Charter One”). He served as Charter One’s Chief Executive Officer from 1987 to 2004 and as its Chairman from 1995 to 2004, when the bank was acquired by The Royal Bank of Scotland Group plc. Mr. Koch serves on the board of our primary subsidiary CBNA. He also served on the board of directors of our former affiliate, The Royal Bank of Scotland Group plc (from 2004 to 2009).   Mr. Koch previously served on the Board of Assurant Inc. (from August 2005 to May 2020). He was a director of the FHLB of Cincinnati (from 1990 through 2018) and was Chairman of the board from 2005 to 2006. His long tenure on the FHLB of Cincinnati board was interrupted twice, for a total of three years, due to term limitations. Mr. Koch serves as a trustee of Case Western Reserve University, and served as its Chairman of the board from 2008 to 2012. He is also a past Chairman of the board of John Carroll University.   Mr. Koch is a graduate of Lehigh University with a B.S. in Industrial Engineering and earned an M.B.A. from Loyola College in Baltimore, Maryland.

 

Robert G. Leary   Former Chief Executive Officer, The Olayan Group   Age: 59   Director Since: 2020   Committees: Risk				Experience, Skills and Qualifications ·  Extensive investment and leadership experience with over 30 years in the financial services industry ·  Expertise in business transformation and mergers and acquisitions   Background Mr. Leary was Chief Executive Officer of The Olayan Group, a global investment firm, from May 2017 until July 2019. Prior to joining The Olayan Group, he served as CEO of Nuveen, a U.S.-based investment management firm that was acquired in 2014 by Teachers Insurance & Annuity Association – College Retirement Equities Fund (“TIAA-CREF”). Mr. Leary joined TIAA-CREF in 2013 and was instrumental in the acquisition and invigoration of Nuveen as well as its integration with TIAA-CREF’s pre-existing asset management business.   Mr. Leary began his career as an associate at the law firm of White & Case in New York and in 1989 opened that firm’s office in Saudi Arabia. He then moved into the financial services arena with leadership roles at J.P. Morgan & Co. and AIG Financial Products, and as CEO of ING Investment Management Americas and ING Insurance U.S. Mr. Leary currently serves on the board of Intact Financial Corporation, a major insurer publicly listed in Canada, and the board of the non-profit National Forest Foundation, an organization that helps conserve and protect U.S. national forests. He also serves on the board of our primary subsidiary CBNA.   Mr. Leary holds a bachelor’s degree in political science from Union College and a law degree from Fordham University, both located in New York State.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

Terrance J. Lillis Retired Chief Financial Officer, Principal Financial Group,    Inc.   Age: 68   Director Since: 2019   Committees: Audit				Experience, Skills and Qualifications ·  Seasoned executive with 35 years experience in the financial services industry ·  Prior service as Executive Vice President and Chief Financial Officer of Principal Financial Group, Inc. ·  Experience in capital allocation, portfolio management and strategic transactions   Background Mr. Lillis joined our board on February 1, 2019. Until his retirement in 2017, he was the Chief Financial Officer of Principal Financial Group, Inc. He joined Principal in 1982 as an actuarial student and held various senior actuarial, risk management and product-pricing roles through 2008 when he was appointed Chief Financial Officer.   Mr. Lillis currently serves on the Board of American Enterprise Mutual holding Company (since May 2020). He also serves on the Mercy Medical Center Board of Directors and the Command and General Staff College Foundation Board of Trustees. He is Chair of the Simpson College Board of Trustees and serves as Trustee for the Diocese of Southwest Iowa. Mr. Lillis also serves on the board of our primary subsidiary CBNA. He is a member of the American Academy of Actuaries and a Fellow of the Society of Actuaries.   Mr. Lillis received a bachelor’s degree from Simpson College after serving in the U.S. Army in the Republic of Korea and an M.S. degree in actuarial science from the University of Iowa in 1982.

 

Shivan Subramaniam Retired Chairman and Chief Executive Officer, FM Global   Age: 72   Director Since: 2005   Lead Director   Committees: Nominating    & Corporate Governance (Chair); Risk; Executive				Experience, Skills and Qualifications ·  Extensive business and management expertise, including serving as Chairman and Chief Executive Officer of FM Global ·  Expertise in the Insurance sector with over 40 years industry experience ·  Service on the boards of directors of FM Global, Lifespan Corporation and LSC Communications   Background Mr. Subramaniam was Chairman of Factory Mutual Insurance Company, a commercial and industrial property insurer from 2002 until December 2017 and retired from the board in April 2018. He also served as President and Chief Executive Officer from 1999 until his retirement at the end of 2014. Previously, he served as Chairman and Chief Executive Officer at Allendale Insurance, a predecessor company of FM Global. Elected president of Allendale in 1992, he held a number of senior-level positions in finance and management after joining the company in 1974.   Mr. Subramaniam serves on the board of directors of LSC Communications (since October 2016) and Lifespan Corporation (since December 2006). He is also a director of the Rhode Island Public Expenditure Council. Mr. Subramaniam also serves on the board of our primary subsidiary CBNA.   Mr. Subramaniam received a bachelor’s degree in mechanical engineering from the Birla Institute of Technology, Pilani, India, and two master’s degrees—one in operations research from the Polytechnic at New York University, and another in management from the Sloan School of Management at the Massachusetts Institute of Technology.

 

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Christopher J. Swift Chairman and Chief Executive Officer, The Hartford Financial Services   Group, Inc.   Age: 60   Director Since: 2021   Committees: Risk				Experience, Skills and Qualifications ·  Seasoned executive with 35 years experience in the insurance industry ·  Extensive background and experience in global restructuring and mergers and acquisitions ·  Service as Chairman and CEO of The Hartford and on numerous industry associations and academic institutions   Background Mr. Swift joined the Board on February 1, 2021. He currently serves as chairman and chief executive officer of The Hartford Financial Services Group, Inc., a national leader in property & casualty insurance, group benefits and mutual funds. Mr. Swift joined The Hartford in March 2010 as Executive Vice President and Chief Financial Officer before being appointed as Chief Executive Officer in 2014 and Chairman in 2015. Prior to joining The Hartford, he held senior leadership and finance roles at American International Group (from 2003 to 2010). He began his career as a certified public accountant at KPMG LLP focused on financial services and was eventually appointed head of the Global Insurance Industry Practice.   Mr. Swift is on the executive committee and the board of directors of the American Property Casualty Insurance Association. He is also a member of The Business Council, Chief Executives for Corporate Purpose, Council on Foreign Relations, and The Geneva Association. He also serves on the board of our primary subsidiary CBNA.   Mr. Swift holds a bachelor’s degree in accounting from Marquette University, where he is also a trustee.

 

Wendy A. Watson Retired Executive Vice          President, Global Services, State Street Bank & Trust Company   Age: 72   Director Since: 2010   Committees: Audit (Chair); Compensation and HR; Risk				Experience, Skills and Qualifications ·  Experienced executive in the financial services industry and extensive financial background, including serving as Executive Vice President, Global Services for State Street Bank & Trust Company ·  Fellowship with the National Association of Corporate Directors and credentials as a CPA and Certified Fraud Examiner ·  Advanced Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization   Background Until her retirement in 2009, Ms. Watson was the Executive Vice President, Global Services for State Street Bank & Trust Company which she joined in 2000. Prior to that, she was with the Canadian Imperial Bank of Commerce where she served as Head of the Global Private Banking and Trust business and President & Chief Executive Officer, CIBC Finance. She also served as Chief Information Officer and as Head of Internal Audit for Confederation Life Insurance Company in Toronto.   Ms. Watson serves as a director of the Independent Order of the Foresters Life Insurance Company (since 2013) and MD Private Trust, a subsidiary of MD Financial Holdings (since 2015). She previously served on the boards of MD Financial Holdings (CMA Holdings) Canada and DAS Canada Insurance Company, a subsidiary of Munich Re (from 2010 to 2018). She serves on the Community Service Committee of Boston Children’s Hospital and the Advisory Board of Empathways. Ms. Watson also serves on the board of our primary subsidiary CBNA.   Ms. Watson is a magna cum laude graduate of McGill University in Montreal with a Bachelor of Commerce degree with majors in Accounting and Law.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

Marita Zuraitis Director, President and Chief Executive Officer, Horace Mann Educators Corporation   Age: 60   Director Since: 2011   Committees: Nominating     & Corporate Governance; Risk				Experience, Skills and Qualifications ·  Seasoned executive in the financial services industry including experience as Chief Executive Officer of Horace Mann Educators Corporation ·  Expertise in the Insurance sector with over 30 years industry experience ·  Service on the boards of other companies and academic institutions   Background Ms. Zuraitis is Director, President and Chief Executive Officer of Horace Mann Educators Corporation. Prior to joining Horace Mann in May 2013, she served as Executive Vice President and a member of the Executive Leadership Team for The Hanover Insurance Group, Inc. While at The Hanover Insurance Group, Ms. Zuraitis served as President, Property and Casualty Companies, a position she held since 2004. Previously, she was President and Chief Executive Officer, Commercial Lines for The St. Paul Travelers Companies.   Ms. Zuraitis serves as a member of the board of trustees for the American Institute for Chartered Property and Casualty Underwriters, and has been a member of the executive and the compensation committees since 2009, currently serving as vice chair. She also serves on the board of directors of our primary subsidiary CBNA. Ms. Zuraitis is a past chair of the board of trustees for NCCI Holdings, Inc., a provider of workers’ compensation data analytics and a past member of the board of Worcester Academy in Worcester, Massachusetts.   Ms. Zuraitis is a graduate of Fairfield University.

 

BOARD GOVERNANCE AND OVERSIGHT

 

The following sections provide an overview of our board governance structure and processes including how we select directors and consider their independence and key aspects of our Board operations and oversight, all of which provide a strong governance framework that supports the Board in discharging its duties.

Corporate Governance Guidelines, Committee Charters and Code of Business Conduct and Ethics

Our Board has adopted Corporate Governance Guidelines which outline the Board’s expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Corporate Governance Guidelines are reviewed annually and address:

 

 

Our Corporate Governance Guidelines are available on the corporate governance section of our website at www.citizensbank.com/investor-relations.

The charters for each of the Audit, Compensation and HR, Nominating and Corporate Governance, Risk and Executive Committees are also available on the corporate governance section of our website at www.citizensbank.com/investor-relations.

 

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Our Board has also adopted a Code of Business Conduct and Ethics (the “Code”), which sets forth key guiding principles concerning ethical conduct and is applicable to all of our directors, officers and employees. The Code addresses, among other things, conflicts of interest, protection of confidential information and compliance with laws, rules and regulations, and describes the process by which any concerns about violations should be reported.

The Code is available on the corporate governance section of our website at www.citizensbank.com/investor-relations. You may also obtain a copy, free of charge, by writing to our Corporate Secretary at 600 Washington Boulevard, Stamford, Connecticut 06901. Any amendments to the Code, or any waivers of its requirements, will be disclosed on our website.

Board Selection, Nomination and Refreshment

Our Board has delegated responsibility for the review and recommendation of director nominees to the Nominating and Corporate Governance Committee. Upon the Nominating and Corporate Governance Committee’s recommendation, a slate of directors is nominated by the Board and submitted to a stockholder vote annually. The Nominating and Corporate Governance Committee will also review and recommend candidates for the Board as vacancies or newly created positions occur.

 

 

EvaluateCandidates meet with the Nominating and Corporate Governance Committee. In their evaluation, the Committee looks for candidates to join the Board who:Have demonstrated leadership Have relevant background, experience and key skills Are financially literate Have risk management experience and other business experience and acumen Exhibit independent thought and judgement Have time availability and commitment RecommendThe Nominating and Corporate Governance Committee recommends candidates for Board and committee membership. Recommendations are based on:The candidates qualifications (including their independence taking into account any enhanced independence and expertise standards that may be required under law, regulation, or New York Stock Exchange guideline) The candidates performance and professional responsibilities The Board's collective skills and expertise, background and experience, and diversity, considering characteristics such as age, gender, race and ethnicityReviewThe Nominating and Corporate Governance Committee re-nominates directors annually. As part of the re-nomination process, the Committee considers each directors performance and reassesses their independence and expertise. The Committee also periodically reviews the composition of the Board and its committees in light of the current challenges and needs of the Board and the Company. In doing so, it considers each director's skills, expertise and experience and diverse characteristics as well as that of the Board as a whole. The most qualified candidates are sought for all open board positions based on the required criteria above. In addition, the Board values diverse perspectives and qualities and the Committee will consider self-identified diverse characteristics of directors and nominees in addition to each persons background and experience when recommending candidates for election to the Board, re-nominating current directors and reviewing Board and committee composition. Any firms engaged in the director search process are requested to include diverse individuals in its list of potential candidates.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

When reviewing the Board and committee composition during succession planning and in the recruitment and evaluation of directors, the Nominating and Corporate Governance Committee considers the skills and experience represented by the Board as a whole. The key skills and number of directors represented on our Board with each are outlined below.

 

 

Executive Leadership Experience operating in an executive leadership position demonstrates the abilities required to understand and direct business operations, analyze risk, manage human capital, oversee implementation of organizational change and deliver strategic plans. Financial Services IndustryUnderstanding the products and services we offer, our competitive environment and the regulatory framework in which we operate gives directors the ability to challenge and guide management, effectively overseeing the operation of our business and implementation of our strategic plan. Financial Reporting/Audit/Capital PlanningAn understanding of financial reporting structures and internal controls to ensure accuracy and transparency in reporting, coupled with the ability to understand capital market transactions and strategic capital plans allows for robust challenge and oversight. Risk ManagementRisk is inherent in the operation of our business. Having directors with experience and expertise in risk management allows the Board to provide challenge and guidance in its independent oversight of the design and implementation of the Companys risk management framework.Compliance/RegulatoryOperating in a heavily regulated industry, we value directors with legal and/or regulatory expertise as it assists the Boards understanding of the applicable requirements and how they pertain to the Company.Technology/Information Security/CybersecurityTechnology is critical to all aspects of our business operations from delivery of our products and services to our customers, to making investments, to maximizing our human capital, and to delivering key strategic initiatives. As a financial services company with reliance on technology, we are exposed to information and cybersecurity risk on an ongoing basis. We value directors with technology, information security and/or cybersecurity expertise.Mergers and Acquisitions Experience of mergers and acquisitions is valuable in making strategic decisions and executing them effectively. Having directors with this experience assists in the strong execution of mergers and acquisitions.Human Capital Management Directors with an understanding of the impact of a companys employees and culture on productivity as well as experience in talent management and mobilizing strategic organizational change provide valuable insight to the Board and management.Environmental, Social & Governance We demonstrate our commitment to the communities in which we do business by serving our customers well, managing our operations responsibly, building a diverse culture and providing a great place for colleagues to work. Experience in ESG matters will help us deliver on the different dimensions of our corporate responsibility strategy.13/13 13/13 12/13 10/13 12/13 8/13 11/13 11/13 10/13

 

New candidates may be identified to serve on the board of directors through recommendations from independent directors or members of management, search firms or other sources, and stockholders. Evaluations of prospective candidates typically include a review of the candidate’s background and qualifications by the Nominating and Corporate Governance Committee, interviews with the Committee as a whole, one or more members of the Committee, or one or more other Board members, and discussions within the Committee and the full Board.

The Board anticipates that three directors, starting with Mr. Hanna, will leave the Board over the next three years given mandatory retirement age considerations under our Corporate Governance Guidelines. In conjunction with the Board’s succession plans, two new directors, Mr. Alexander and Mr. Swift, were recently appointed to the Board. To assist the Board in identifying and evaluating potential new Board members, the Board engaged a highly regarded leadership consulting firm, Spencer Stuart which provided a slate of candidates based on the

 

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criteria outlined. After a review of a range of highly qualified candidates, the Nominating and Corporate Governance Committee submitted its recommendation to nominate Mr. Alexander and Mr. Swift, both of whom joined the Board effective February 1, 2021.

 

Any stockholder who wishes to recommend a prospective candidate for the board of directors for consideration by the Nominating and Corporate Governance Committee may do so by submitting the name and qualifications of the prospective candidate in writing to the following address: Corporate Secretary, 600 Washington Boulevard, Stamford, Connecticut 06901. Stockholders must propose nominees for consideration by the Nominating and Corporate Governance Committee in accordance with the procedures and other requirements set forth in our Bylaws. See “Information for Stockholders—2022 Annual Meeting and Stockholder Proposals.”

Director Independence

Our Board utilizes the Securities and Exchange Commission (“SEC”) and New York Stock Exchange (“NYSE”) criteria to determine our director independence. Under the NYSE rules, the Board also broadly considers all other relevant facts and circumstances that bear on the materiality of each director’s relationship with the Company, including the potential for conflicts of interest. In addition, the Board considers whether the Company or one of its subsidiaries has a lending relationship, deposit relationship, or other banking or commercial relationship with a director, an immediate family member, or an entity with which the director or a family member is affiliated by reason of being a director, an officer or a significant stockholder thereof. Any such relationship must meet the following criteria: (i) it must be in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons; and (ii) with respect to extensions of credit by the Company or its subsidiaries to such entity: (a) such extensions of credit have been made in compliance with applicable law, including Federal Reserve Regulation O and Section 13(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (b) no event of default has occurred and is continuing beyond any period of cure.

To assist the Board in its determination of director independence, the Nominating and Corporate Governance Committee annually evaluates each prospective and incumbent director using the foregoing standards and other factors as the Nominating and Corporate Governance Committee deems appropriate, and makes a recommendation to the Board regarding the independence or non-independence of each person. As a part of this evaluation process, the Nominating and Corporate Governance Committee considers all relevant facts and circumstances and, in particular, the independence requirements of the SEC and NYSE. Banking with the Company or any of its subsidiaries (including deposit, investment, lending, fiduciary) that are conducted in the ordinary course of business on substantially the same terms and conditions as are otherwise available to non-affiliated customers for comparable transactions are not considered material in determining independence.

We have determined that each of Mr. Alexander, Ms. Cumming, Mr. Hankowsky, Mr. Hanna, Mr. Higdon, Mr. Kelly, Mr. Koch, Mr. Leary, Mr. Lillis, Mr. Subramaniam, Mr. Swift, Ms. Watson and Ms. Zuraitis is an independent director within the meaning of the applicable rules of the SEC and NYSE. In addition, we have determined each committee member meets the independence requirements within the meaning of the applicable rules of the SEC and NYSE for the committees on which they serve. Our Board has also determined that each of Ms. Watson, Mr. Hankowsky, Mr. Hanna, Mr. Higdon, Mr. Koch and Mr. Lillis is an audit committee financial expert within the meaning of the applicable rules of the SEC and NYSE. For further information see “Corporate Governance Matters—Board Governance and Oversight—Committees of the Board.”

 

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KEY RESPONSIBILITIES OF THE LEAD DIRECTOR FACILITATOR Presides at Board and stockholder meetings where the Chairman is not present, including executive sessions of the independent directors Serves as a liaison, facilitating communication between independent directors and the Chairman Provides advice and guidance to the Chairman on board leadership, executive management and corporate strategy matters COLLABORATOR Reviews and approves agendas/agenda planners and materials for Board meetings in coordination with the Chairman, adding items to the agenda as appropriate Calls meetings of the independent directors as required Communicates with major stockholders and regulators upon request INDEPENDENT ADVOCATE Independent advocate and ensures accountability to investors when potential conflicts of interest arise between management and investors COMMUNICATOR Discusses with the CEO, together with the Chair of the Compensation and HR Committee, the results of the Boards annual evaluation of the CEOs performance		Board Leadership   Our Chief Executive Officer shall serve as Chairman of the Board, while an independent director serves as Lead Director. The Board’s view is that having a combined Chairman and Chief Executive Officer enables it to:   Ø   provide efficient and effective governance and leadership to the Company;   Ø   be apprised of current risks and issues that may impact the Company in a timely manner; and   Ø   present a single point of leadership to all Company stakeholders.   Accordingly, the Board has determined that a combined Chairman and Chief Executive Officer position, with an independent Lead Director, is the most appropriate Board leadership structure for the Company.   The Board periodically reviews its leadership structure in light of the composition of the Board, the needs of the Company and its stockholders, peer company practices, and other factors and retains the flexibility to allocate the responsibilities of the offices of the Chairman and Chief Executive Officer in any manner that serves the best interests of the Company.   The Lead Director is an independent director designated by the Board, based on the recommendation of the Nominating and Corporate Governance Committee. Currently, Mr. Van Saun serves as our Chairman of the Board and Chief Executive Officer and Mr. Subramaniam serves as our Lead Director.   Meetings of the Board of Directors and Attendance at the Annual Meeting   Our Board held 14 meetings during fiscal 2020. Every member attended at least 75 percent of the Board and committee meetings on which the member sits. All directors are expected to attend our annual meetings and the 13 directors who served during 2020, including Mark Casady who left the Board at the conclusion of the meeting, attended the annual meeting held on April 23, 2020.

Executive Sessions of our Non-Employee Directors

The Company’s non-employee directors, who are all independent, participate in regularly scheduled executive sessions in which management does not participate. In addition, each of the Board committees, which are comprised solely of independent directors, hold regularly scheduled executive sessions. Our Lead Director, Mr. Subramaniam, presides at each executive session of the Board. Interested persons may make their concerns known directly to Mr. Subramaniam, his successor or the non-employee directors as a group by submitting their written correspondence to the Company’s Corporate Secretary located at 600 Washington Boulevard, Stamford, Connecticut 06901. The Corporate Secretary may facilitate such direct communication to the Lead Director or the non-employee directors as a group by reviewing, sorting and summarizing such communications.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

The Nominating and Corporate Governance Committee reviews the self-assessment process annually and approves the form of evaluation. SELF-ASSESSMENT QUESTIONNAIRE An external facilitator is engaged and the questionnaire is distributed to the Board, each of the committees and individual directors. QUESTIONNAIRE COMPLETED Each director completes the questionnaire providing their feedback. INDIVIDUAL DISCUSSIONS External facilitator holds interview with each director to expand on the questionnaires. RESULTS COMPILED Results are anonymously compiled by the external facilitator. REVIEW OF RESULTS Results are discussed with the Chairman, the Lead Director and the Nominating and Corporate Governance Committee Chair. RESULTS PRESENTED Results are presented to the Board and each of its committees and action plans are developed. ACTIONS Action plans inform agenda planning and are used to enhance current practices and Board operations MONITORING The Nominating and Corporate Governance Committee monitors the completion of action plans throughout the year. Strategy Culture Roles & Relationship with Membership & Responsibilities Management Structure Subjects Considered as Part of the Evaluation Process Include:

Board, Committee and Director Evaluations

The Board, led by the Nominating and Corporate Governance Committee, conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. Under each committee’s charter, the committee evaluates and assesses its performance, skills and resources required to meet its obligations under its charter at least annually. In addition, all directors complete a self-evaluation. At least every three years, an independent third party is used to conduct the Board and committee evaluations.

Results of the evaluations are then presented to the Board and its committees and used to determine actions designed to enhance the operations of the Board and its committees going forward. Periodically, the Board will also complete peer evaluations. The results of all peer evaluations are reviewed by the Chairman, Lead Director and Chair of the Nominating and Corporate Governance Committee and each director receives a copy of their individual report.

Board Education

Each of our Board members participates in an annual training and continuing education program which includes both full board training and board committee training. Management incorporates director input to develop an annual schedule that covers a broad range of topics to enhance and strengthen the skills, knowledge and competencies of directors, both individually and collectively. Topics covered during 2020 included cybersecurity, regulatory developments, industry trends, consumer compliance and anti-money laundering. The program encompasses presentations from internal and external speakers as well as site visits to key locations and regular meetings with management. In addition, directors are encouraged to avail themselves of educational programs offered through recognized independent providers.

Board’s Role in Strategy

The Board is responsible for guiding and ultimately approving the strategic direction of the Company and overseeing execution of the Company’s strategic plan. Every year the Board holds an offsite meeting dedicated to reviewing the Company’s long-term strategy which includes detailed discussions with management, investors, securities analysts and industry experts. In addition, the Board assesses the Company’s strategic, competitive and financial performance at each of its meetings to ensure continued alignment with the long-term strategy. The Company’s strategy of investing in the end-to-end digitization of the bank, strengthening fee-based businesses and expanding its solutions and capabilities over the past six years has positioned it for the future and placed it on the front foot when facing the challenges arising from the COVID-19 pandemic. During its 2020 strategy session, the Board evaluated the Company’s strategy in the context of the current economic environment and longer-term challenges and will continue to guide the Company through disciplined execution of its strategic plan.

 

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Board’s Role in Risk Oversight

The Board is responsible for oversight of the Company’s internal controls and risk management framework. This oversight includes evaluation of management’s systems of internal control, financial reporting and public disclosure, confirming the accuracy and completeness of financial results, reviewing and approving the Company’s enterprise-wide risk management governance framework and ensuring that risks to the Company are properly managed. A key element of Citizens enterprise-wide risk management governance framework is building and maintaining a strong risk management culture throughout the Company, a culture that is foundational to delivering the best possible banking experience for our customers and providing a great workplace for our colleagues.

The Board has delegated certain risk oversight duties to the Risk Committee, and with respect to financial controls, the Audit Committee, but each of the Board’s committees have risk oversight responsibilities and the Board receives independent reports from each of its key committees at its meetings.

 

 

BOARD OF DIRECTORS Nominating & Corporate Governance Committee Compensation & HR Committee Audit Committee Risk Committee Oversees design, implementation and operation of the enterprise-wide risk management governance framework which sets standards for the identification, assessment, monitoring and control of material risks and related governance. Reviews and, as it deems appropriate, recommends to the Board the design and implementation of the Companys risk strategy and policy, risk appetite framework and specific risk appetites and limits. Serves as primary point of contact between the Board and management committees that have responsibility for risk management. Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk. Regular reporting on cybersecurity and cyber threats as they continue to evolve is provided to both committees and the Board. Oversees evaluation of systems of internal control, financial reporting and public disclosure. Reviews the accuracy and completeness of financial results. Oversees our Conduct Office, which monitors colleague behavior in relation to our Code of Business Conduct and Ethics, Sales Practices and other key policy considerations. Evaluates executive performance and reviews and approves executive compensation. Oversees and reviews compensation policies and practices, including an annual review of director compensation with assistance from its independent consultant and with any changes also approved by the Nominating and Corporate Governance Committee and the Board. Oversees talent management and succession planning at the executive level and for the organization overall, as well as the Companys Diversity, Equity and inclusion program. Oversees governance practices, independence and effectiveness of the Board. Oversees the Companys commitment to environmental, social and governance matters. Oversees the development and implementation of the board annual training and continuing education program.

 

 

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Cybersecurity Risk Oversight

Both the Risk and Audit Committees have oversight of the management of our cybersecurity risk. The Audit Committee is responsible for overseeing our cybersecurity program under its risk oversight responsibilities as it relates to financial controls. The Risk Committee is responsible for oversight of management of cybersecurity risk consistent with the Company’s enterprise-wide risk management governance framework. Regular reporting on cybersecurity is provided to both committees as well as the Board.

COVID-19 Risk Oversight

During 2020, the Board took additional actions to ensure effective oversight of the Company’s management of the COVID-19 crisis and its resulting risks encompassing all aspects of the Company’s operations and stakeholders. In responding to the crisis, the Board’s oversight included management of risk associated with the health and safety of our customers and colleagues, provision of financial support to our customers and communities, the administration of the U.S. government’s Paycheck Protection and Small Business Administration programs, management of human capital, supply chain, fraud, cyber and technology, and capital allocation and management.

Actions taken at the peak of the crisis included holding weekly Board meetings with key members of management and two additional meetings of the Risk Committee. The additional meetings provided the Board with updates on issues and actions related to the pandemic and the Company’s response. Monitoring the risks associated with the ongoing COVID-19 pandemic continues to be a key focus of the Board’s risk oversight activity which includes discussion of macro-economic assumptions affecting models and credit risk management in addition to understanding, evaluating and monitoring new risks arising as the way of life and working adjusts to a new normal and presents different challenges and opportunities.

Committees of the Board

Our Board has six standing committees. Four of these committees (Audit, Compensation and HR, Nominating and Corporate Governance and Risk) meet on a regular basis. The Executive Committee meets as needed and is composed of our Chairman and Chief Executive Officer, Mr. Van Saun, our Lead Director and Chair of our Nominating and Corporate Governance Committee, Mr. Subramaniam, and Audit and Compensation and HR Committee member, Mr. Hankowsky. The Executive Committee may act on behalf of the Board and reports its actions to the full Board. The Equity Committee is composed of our Chairman and Chief Executive Officer and acts as needed to make equity grants (subject to certain limitations determined by the Compensation and HR Committee) between annual grant cycles and reports its actions to the Compensation and HR Committee. See “Compensation Matters—Compensation Discussion and Analysis—Section 5. Governance Policies and Practices— Process for Approval of Equity Grants.” In carrying out their duties, each committee of the Board is authorized to select, retain, terminate and approve fees and other retention terms of independent legal or other advisors as it deems appropriate without seeking approval of management or the full Board. The following table shows the current members of each of the four primary standing committees and the number of meetings held during fiscal 2020.

 

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DIRECTOR		AUDIT		COMPENSATION & HR		NOMINATING & CORPORATE GOVERNANCE		RISK
Lee Alexander(1)
Christine M. Cumming
William P. Hankowsky
Howard W. Hanna III
Leo I. Higdon
Edward J. Kelly III
Charles J. Koch
Robert G. Leary
Terrance J. Lillis
Shivan Subramaniam
Christopher J. Swift(1)
Wendy A. Watson
Marita Zuraitis
Number of meetings		12		9		4		8

 

Committee member

Committee chair

(1)	Appointment effective February 1, 2021

 

Audit Committee    Members:    Wendy A. Watson (Chair)    Lee Alexander(1)    William P. Hankowsky    Howard W. Hanna III    Leo I. Higdon    Charles J. Koch    Terrance J. Lillis    Meetings held in 2020: 12      (1) joined February 1, 2021		The Audit Committee reviews, and, as it deems appropriate, recommends to the Board our internal accounting and financial controls, and the accounting principles and auditing practices and procedures to be employed in preparation and review of our financial statements. The Audit Committee is also directly responsible for the appointment, compensation, retention and evaluation of the qualifications, independence and performance of our independent public auditors.   Each member of the Audit Committee meets the independence requirements of the NYSE, is financially literate and each member of the Audit Committee is an independent director under Rule 10A-3 under the Exchange Act. In addition, each of Ms. Watson, Mr. Hankowsky, Mr. Hanna, Mr. Higdon, Mr. Koch and Mr. Lillis is an audit committee financial expert.   The Audit Committee charter is available on the corporate governance section of our website at www.citizensbank.com/investor-relations.

 

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Compensation & HR Committee    Members:    Leo I. Higdon (Chair)    William P. Hankowsky    Edward J. Kelly III    Wendy A. Watson    Meetings held in 2020: 9		The Compensation and HR Committee establishes, implements and monitors our executive compensation plans and programs and determines compensation for our CEO and other executives. The Compensation and HR Committee also oversees our material compensation and benefit plans, makes recommendations to the Board on non-employee director compensation, and reviews talent management and succession plans, as well as diversity, equity and inclusion programs.   Each member of the Compensation and HR Committee meets the independence requirements of the NYSE and Rule 10C-1 of the Exchange Act and is a “non-employee director” under Exchange Act Rule 16b-3. If, at any time, any director serving on the Compensation and HR Committee does not meet the “non-employee director” requirements of Exchange Act Rule 16b-3, the Compensation and HR Committee will delegate to a special Section 16b-3 subcommittee consisting of those Compensation and HR Committee members who meet such requirements the authority to approve grants of equity-based compensation subject to Section 16(b) of the Exchange Act. Compensation Advisory Partners, LLC provides guidance and advice to the Compensation and HR Committee on compensation-related matters. See “Compensation Matters—Compensation Discussion and Analysis—Section 5. Governance Policies and Practices—Compensation Consultants”   The Compensation and HR Committee charter is available on the corporate governance section of our website at www.citizensbank.com/investor-relations.

 

Nominating & Corporate Governance Committee    Members:    Shivan Subramaniam (Chair)    Howard W. Hanna III    Edward J. Kelly III    Marita Zuraitis    Meetings held in 2020: 4		The Nominating and Corporate Governance Committee reviews and, as it deems appropriate, recommends to the Board policies and procedures relating to director and board committee nominations and corporate governance. It also oversees the development and implementation of the board annual training and continuing education program, the annual Board and committee self-evaluation process and the Company’s commitment to environmental, social and governance matters and reporting.   Each member of the Nominating and Corporate Governance Committee meets the independence requirements of the NYSE.   The Nominating and Corporate Governance Committee charter is available on the corporate governance section of our website at www.citizensbank.com/investor- relations.

 

Risk Committee      Members:    Charles J. Koch (Chair)    Christine M. Cumming    Robert G. Leary    Shivan Subramaniam    Christopher J. Swift(1)    Wendy A. Watson    Marita Zuraitis      Meetings held in 2020: 8      (1) joined February 1, 2021		The Risk Committee reviews and, as it deems appropriate, recommends to the Board the design and implementation of our risk strategy and policy, risk appetite framework and specific risk appetites and limits. The Risk Committee also oversees our enterprise risk management governance framework and reviews the due diligence of any proposed strategic transaction. In addition, the Risk Committee oversees the Chief Risk Officer and the internal risk management function of the Company.   Each member of the Risk Committee meets the independence requirements of the NYSE. Mr. Koch qualifies as an expert, as required by federal banking regulations, having the experience in identifying, assessing and managing large, complex financial firms’ risk exposures relevant to the Company’s particular risks and commensurate with the Company’s structure, risk profile, complexity, activities and size. As required by the Risk Committee charter, the chair of the committee, Mr. Koch, is also a non-executive director who meets the criteria for independence specified by the Federal Reserve Board’s Enhanced Prudential Standards (12 CFR 252.33(a)(4)(ii)).   The Risk Committee charter is available on the corporate governance section of our website at www.citizensbank.com/investor-relations.

 

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RELATED PERSON TRANSACTIONS

 

Policies and Procedures for Related Person Transactions

We have adopted a written related person transaction policy. Under this policy our executive officers, directors and significant stockholders, including their immediate family members, are not permitted to enter into a related person transaction with us without the consent of our Nominating and Corporate Governance Committee. Subject to certain transactions pre-approved by the Nominating and Corporate Governance Committee in accordance with the policy, any request for us to enter into a transaction with an executive officer, director, significant stockholder or any of such persons’ immediate family members, in which the amount involved exceeds $120,000, is required to be presented to our Nominating and Corporate Governance Committee for review, consideration and approval. All of our directors, director nominees, executive officers and significant stockholders are required to report to our Nominating and Corporate Governance Committee any such related person transaction. In approving or rejecting the proposed transaction, our Nominating and Corporate Governance Committee will take into account, among other factors it deems appropriate, the commercial reasonableness of the terms, the benefit or perceived benefit, or lack thereof, to the Company, opportunity costs of alternate transactions, the materiality and character of the related person’s direct or indirect interest and the actual or perceived conflict of interest of the related person.

Transactions with Executive Officers and Directors

We provide credit facilities from time to time to certain directors and executive officers and their immediate family members, as well as their affiliated companies. These credit facilities (i) complied with our Regulation O policies and procedures, (ii) were made in the ordinary course of business, (iii) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender, and (iv) did not involve more than a normal risk of collectability or did not present other features unfavorable to the Company.

Under supplemental retirement arrangements relating to their prior service to Charter One, which we acquired in 2004, Mr. Charles Koch, a director, as well as his brother, Mr. John Koch, are entitled to receive monthly payments. Mr. Charles Koch and Mr. John Koch received approximately $877,500 and $744,900, respectively, under this arrangement during 2020.

Transactions with Other Related Persons

Based solely on Schedule 13G filings made with the SEC, BlackRock, Inc. (“BlackRock”), The Vanguard Group (“Vanguard”), State Street Corporation (“State Street”) and their affiliates are each considered a “Related Person” under our related person transaction policy because they each beneficially owned more than 5% of our outstanding common stock as of December 31, 2020.

Our company pension plan uses BlackRock and its affiliates to provide investment management services. In connection with these services, we paid BlackRock approximately $280,000 in fees during 2020. In addition, we have certain other ordinary course commercial relationships with BlackRock, Vanguard and State Street. All such relationships have been reviewed and determined not to be material in accordance with our related person transaction policy.

Indemnification of Directors and Officers

We indemnify our directors and officers to the fullest extent permitted by Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.

There is currently no pending material litigation or proceeding involving any of our directors and executive officers for which indemnification is sought or which is adverse to the Company.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

STOCKHOLDER ENGAGEMENT

 

 

STOCKHOLDER OUTREACH WHAT WE DISCUSSED & WHAT WE DID Provision of stockholder rights to call a special meeting Diversity disclosures Board Composition Oversight of environmental, social and governance matters Executive compensation design Pay equity Human capital Provided stockholders the right to call a special meeting Increased colleague demographic disclosures and enhanced board disclosures to identify more diversity characteristics of individual directors Refreshed the Board with two new directors one of whom is racially diverse Completed a ESG materiality assessment and established an ESG governance framework with GRI and SASB aligned reporting to follow Introduced a relative metric for our PSU awards Made a formal commitment to pay equity and subsequently disclosed the results of our third party analysis Provided additional disclosure highlighting key elements of how we manage human capital

Stockholder Outreach

Throughout the year we interact and communicate with our stockholders in a number of forums, including quarterly earnings presentations, investor conferences, press releases and SEC filings, stockholder dialogue, our proxy statement and the annual meeting of stockholders.

On an annual basis, we proactively reach out to our largest stockholders to solicit feedback on corporate governance and executive compensation which we use to enhance our current practices. We also hold discussions with additional stockholders at their request. Feedback received is shared with the Board which discusses follow-up actions as appropriate.

As we continued to navigate through these exceptional times it was more important than ever to hear from our investors. Accordingly, we expanded our annual outreach program in 2020 to encompass our top 50 stockholders, who hold over 75 percent of our outstanding stock, and during the course of 2020 held meetings with multiple stockholders representing over 25 percent of our outstanding stock.

These discussions focused on the impact of the COVID-19 pandemic including how we have supported customers, colleagues and communities, human capital management, board and workforce diversity, our progress on ESG matters, and executive compensation.

As a result of stockholder feedback in recent years as well as ongoing reviews of market and peer practice, we have made several enhancements to our governance and compensation practices and related disclosure.

Communications with the Board

Stockholders who wish to contact our Board may send written correspondence, in care of the Corporate Secretary, to Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut 06901. Communications may be addressed to the Lead Director or any alternate director, marked as confidential or otherwise. Communications which are addressed to the Board, an individual director or group of directors will be processed by the Office of the Corporate Secretary. Communications received that discuss business or other matters relevant to the activities of our Board, as determined by the Corporate Secretary, will be distributed to the addressees either in summary form or by delivering a copy of the communication. With respect to other correspondence received by the Company on behalf of one or more directors, the Board has requested that certain items, including the following, not be distributed to directors, because they generally fall into the purview of management, rather than the Board: junk mail and mass mailings, product and services complaints, product and services inquiries, resumes and other forms of job inquiries, solicitations for charitable donations, surveys, business solicitations and advertisements.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

EXECUTIVE OFFICERS

 

Our executive officers are designated by, and serve at the discretion of, our Board. There are no family relationships among any of our directors or executive officers. Our executive officers are as follows:

 

EXECUTIVE OFFICER		AGE		POSITION
Bruce Van Saun		63		Chairman and Chief Executive Officer
Mary Ellen Baker		62		Executive Vice President and Head of Business Services
Brendan Coughlin		41		Executive Vice President and Head of Consumer Banking
Stephen T. Gannon		68		Executive Vice President, General Counsel and Chief Legal Officer
Malcolm Griggs		60		Executive Vice President and Chief Risk Officer
Beth Johnson		49		Executive Vice President and Chief Experience Officer
Susan LaMonica		59		Executive Vice President and Chief Human Resources Officer
Donald H. McCree III		59		Vice Chairman, Head of Commercial Banking
C. Jack Read		52		Executive Vice President and Controller
John F. Woods		56		Vice Chairman and Chief Financial Officer

 

Bruce Van Saun    Chairman and Chief  Executive Officer		Bruce Van Saun’s biography and related information may be found above under “Corporate Governance Matters—Proposal 1—Election of Directors-Nominees”

 

Mary Ellen Baker    Executive Vice  President and Head  of Business Services		Mary Ellen Baker has responsibility for Technology, Information and Corporate Security, Property Services, Vendor Management and Enterprise Information. Ms. Baker joined the Company in August 2016 from PNC Financial Services Group, Inc. where she most recently held the title of Executive Vice President of Enterprise Services. She previously worked for Bank of America Corporation as Head of Enterprise Resiliency and Corporate Services and Head of Technology and Operations for the Consumer and Small Business Bank. Throughout her career, Ms. Baker has led numerous strategic projects in the areas of technology and operations, including supply chain, risk management, new technology implementation, and crisis response initiatives.

 

Brendan Coughlin    Executive Vice  President and Head  of Consumer Banking		Brendan Coughlin was appointed to the role of Head of Consumer Banking at Citizens Bank with responsibility for both national and regional banking on January 27, 2020. This includes the branch and call center distribution, business banking, mortgage banking, wealth management, product lines including checking, savings, debit and credit cards, auto finance, home equity, student and personal unsecured lending. Mr. Coughlin has been with Citizens for more than 15 years and has held numerous positions in Consumer Banking product management and consumer finance. He was named president of Consumer Lending in June 2015. Previously, he was the head of marketing for Consumer Finance. Prior to joining Citizens, Mr. Coughlin worked at Bank of America and FleetBoston Financial in a variety of business areas, including corporate strategy, mortgage product management and retail distribution /M&A. Mr. Coughlin serves on the board of directors of uAspire, a national nonprofit aimed at increasing access to higher education among inner-city youth and actively represents the bank on the CBA Education Funding Committee, the nation’s most influential financial services trade organization for student lending. Mr. Coughlin received his bachelor’s degree from Boston College in finance and marketing and an M.B.A. from Babson College.

 

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Stephen T. Gannon    Executive Vice  President, General  Counsel and Chief  Legal Officer		Stephen T. Gannon is responsible for overseeing our legal department, providing strategic leadership to the management of legal risk and overseeing an integrated legal function which includes regulatory relations and government relations. Prior to joining the Company in August 2014, Mr. Gannon was the Executive Vice President and Deputy General Counsel of Capital One Financial Corporation. In his seven years at Capital One Financial Corporation, Mr. Gannon was responsible for advising on litigation and regulatory matters, transactional and product line matters as well as policy affairs and governance and, in January 2014, was appointed to serve as Market President for Central Virginia. Mr. Gannon was previously the General Counsel—Retail Brokerage Group at Wachovia Securities LLC, a partner and head of the securities litigation practice at LeClair Ryan, P.C., as well as a Staff Attorney and Branch Chief at the Securities and Exchange Commission. Mr. Gannon earned an A.B. in History and a J.D. from Georgetown University.

 

Malcolm Griggs    Executive Vice  President and Chief  Risk Officer		Malcolm Griggs has been Executive Vice President and Chief Risk Officer since April 2016. Mr. Griggs joined the Company in December 2014 as Executive Vice President and Chief Credit Officer. He is responsible for all credit, market, regulatory, compliance and operational risk management for the Company. Prior to joining Citizens, Mr. Griggs was head of business risk and controls for the U.S. Consumer and Commercial Banking business at Citigroup. Mr. Griggs has had a wide range of risk management responsibility over his banking career, including senior risk positions at Morgan Stanley Private Bank, Bank of America, Wachovia, and as the first Chief Risk Officer at Fifth Third Bank. He also served on the national Board of Directors of the Risk Management Association, including serving as Chairman. He currently serves as President of the Board of the Rhode Island Philharmonic Orchestra and Music School. Mr. Griggs received his undergraduate and law degrees from the University of North Carolina at Chapel Hill.

 

Beth Johnson    Executive Vice  President and Chief  Experience Officer		Beth Johnson was appointed to the role of Chief Experience Officer on January 27, 2020. In this role, Ms. Johnson leads an organization focused on improving the customer experience by advancing the bank’s overall capabilities in customer analytics, digital, marketing and payments. She previously served as chief marketing officer and head of virtual channels, and was responsible for corporate-wide marketing activities and for advancing Consumer Banking growth and profitability by leading and aligning the business’ strategy, brand, customer experience and data analytics efforts. Prior to joining Citizens in 2013 as head of Corporate Strategy, Ms. Johnson was a senior leader at Bain and Company. She served as a partner and leader of its customer strategy and marketing practice, specializing in financial services and regularly co-authored Bain’s annual Customer Loyalty in Banking study. Prior to that, Ms. Johnson also held roles at J.P. Morgan and Goldman Sachs, where she focused on fixed income and derivatives products for commercial banking clients as well as risk management. She earned a bachelor’s degree in economics from Northwestern University and a M.B.A. from Stanford.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

Susan LaMonica    Executive Vice  President and Chief  Human Resources  Officer		Susan LaMonica has been Chief Human Resources Officer since 2011 and is responsible for developing and driving people strategies to support Citizens’ business plans. She has responsibility for culture, leadership and talent development, learning, diversity, compensation and benefits, employee relations and the human resource service center. Ms. LaMonica is also responsible for corporate affairs including the Company’s corporate social responsibility activities and ESG reporting. Prior to joining Citizens in 2011, Ms. LaMonica held senior leadership roles at J.P. Morgan Chase. She served as the head of human resources for the investment banking and markets division globally, and before that served as the head of human resources for the consumer and commercial banking division. She also served as global head of development for the bank, leading the firm’s efforts around talent, leadership, learning, diversity, culture and organizational change. During her tenure she played a key role for human resources in a number of bank mergers. Before moving into human resources, Ms. LaMonica began her career with Chase Manhattan Bank, holding a number of roles in operations, risk and retail banking. Ms. LaMonica earned a B.S. in finance from Boston College and an M.B.A. in finance from New York University.

 

Donald H. McCree III    Vice Chairman, Head  of Commercial  Banking		Donald H. McCree III has been Vice Chairman of our Commercial Banking Division since August 2015. Prior to joining the Company, Mr. McCree served in a number of senior leadership positions over the course of 31 years at J.P. Morgan Chase & Co. and its predecessor companies. Most recently, Mr. McCree was Head of Corporate Banking and Chief Executive Officer of Global Treasury Services at J.P. Morgan, where he was responsible for providing relationship banking services to commercial clients as well as treasury and trade finance solutions to small businesses, multinational corporations, financial services firms and government entities worldwide. Prior to becoming Head of Corporate Banking, Mr. McCree’s roles at J.P. Morgan included Head of Global Credit Markets, North American Co-Head of Fixed Income and Head of Wholesale Risk Management. He also served as Head of Treasury and Corporate Development and was based in London for several years, where he served as European Co-Head of Investment Banking and Head of European and Asian Syndicated Finance. Mr. McCree received his B.A. from the University of Vermont.

 

C. Jack Read    Executive Vice  President and  Controller		C. Jack Read joined the Company in July 2018 as Executive Vice President and Controller, and assumed the position of Chief Accounting Officer in August 2018. Mr. Read’s responsibilities include oversight of SEC and Regulatory reporting, Corporate Tax, Finance Risk and Sarbanes Oxley. Mr. Read joined the Company from Mitsubishi UFJ Financial Group, Inc. (MUFG), where he served as Managing Director, Head of Operational Risk for the Americas from 2016 to 2018, Head of Financial Operations for the Americas from 2013 to 2015 and Corporate Tax Director from 2010 to 2012. Prior to joining MUFG, Mr. Read was a Managing Director in the Corporate Tax Department at J.P. Morgan Chase and at Washington Mutual, a predecessor entity. Mr. Read began his career in 1993 with KPMG becoming partner in the Tax Advisory division. Mr. Read holds a J.D. from Temple University Law School and a B.B.A. from the University of Massachusetts at Amherst.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE GOVERNANCE MATTERS

 

John F. Woods    Vice Chairman and  Chief Financial  Officer		John F. Woods joined the Company in February 2017. He assumed the position of Chief Financial Officer in March 2017 and was appointed Vice Chairman in February 2019. Mr. Woods has responsibility for our Financial Planning and Analysis, Controller, Investor Relations, Strategy and Corporate Development, Treasury and Tax functions as well as for the business line finance groups. Mr. Woods joined the Company from Mitsubishi UFJ Financial Group, Inc. (“MUFG”), where he served as Chief Financial Officer of the MUFG Americas Holdings Corporation, which operates MUFG Union Bank, since 2013. He previously served as Vice Chairman and Chief Financial Officer for the predecessor company of MUFG Union Bank since December 2009. Prior to that, Mr. Woods was Chief Financial Officer of the Home Lending business at J.P. Morgan Chase and at Washington Mutual, a predecessor entity. Before that he held senior financial positions at the Federal Home Loan Mortgage Corporation (“Freddie Mac”), including Chief Financial Officer of the Funding & Investment Division and Corporate Controller. Mr. Woods began his financial career in 1986 with Arthur Andersen in Washington, D.C., where he rose to partner in the financial and risk consulting group during his 16 years with the firm. Mr. Woods holds a Bachelor of Science degree in Commerce from the University of Virginia at Charlottesville.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE RESPONSIBILITY

 

We view our corporate responsibility efforts as a journey and continued to make strong progress during 2020 – fulfilling our responsibility as a bank to serve our customers well, provide a great place to work and build a career, strengthen our communities, and operate responsibly and sustainably, backed by strong governance. Our corporate responsibility framework aligns to our Credo and operates across six dimensions:

 

 

OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PROGRESS

 

Strengthening ESG Governance

The Board is committed to overseeing our corporate responsibility efforts. While environmental, social and governance matters fall under the purview of each of the Board committees as it relates to their individual oversight responsibilities, in 2020 the Nominating and Corporate Governance Committee undertook formal responsibility for providing oversight of the Company’s commitment to ESG matters, including providing overall strategic direction on corporate responsibility and reporting. We also established an internal governance structure with an executive steering committee to guide our strategies, help integrate our efforts across lines of business, and monitor our progress.

Refining Our ESG Priorities Through a Materiality Assessment

During 2020, we further enhanced our corporate responsibility efforts by completing our first ESG materiality assessment to identify the issues that represent the most significant opportunities and risks for the Company. The outcome of that assessment will be published in our 2020 Corporate Responsibility Report and will guide our strategies and reporting as we move forward on our journey.

Engaging Our Stakeholders

In addition to engaging various stakeholder groups in the materiality assessment we conducted in 2020, we regularly engage with our stakeholders throughout the year to inform our corporate responsibility efforts and priorities. This engagement includes regular dialogue with our colleagues, customers, community groups, stockholders, and policymakers.    

Aligning Our Reporting To Standard Frameworks

In 2021, we will publish our 2020 Corporate Responsibility Report which will highlight our progress on a variety of ESG topics and will be aligned with GRI and SASB frameworks. In addition to our annual Corporate Responsibility Report, we disclose our environmental performance each year through a response to the CDP.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE RESPONSIBILITY

 

SUPPORTING SOCIAL EQUITY IN OUR COMMUNITIES

 

Greater awareness and concern over racial equity and social justice, driven in part by the disparate impacts of the pandemic, have come to the forefront of 2020. Our commitment to help drive social equity and economic opportunity extends internally as well as to our communities and in 2020 we announced a $10 million investment to help drive social equity and economic advancement in underserved communities across our footprint, which includes grants and charitable support for immediate and longer-term initiatives aimed at supporting minority-owned small businesses, increasing awareness of racial disparities and supporting underserved communities through technology, education and digital literacy initiatives. Our commitment also includes more than $500 million in incremental financing and capital for small businesses, housing and other developments in predominately minority communities.

 

HUMAN CAPITAL MANAGEMENT

 

Citizens’ colleagues are at the heart of our Credo and our ultimate goal is to create an environment where colleagues feel valued and would like to build their careers, thereby contributing to the creation of long-term stockholder value. Citizens’ journey over the past few years has been one of accelerated progress and change, in step with rapidly evolving market and talent expectations. We have been on the path to digitization, transforming how we work, and establishing a different mix of necessary capabilities for the future, while at the same time facilitating continued evolution of our culture.

Health, Safety, and Wellness

Colleague wellness has always been central to our consciousness and strategy and it was a priority when we were designing our Johnston, RI campus, which opened in 2018 and includes onsite fitness and wellness centers, as well as walking paths and various sports and recreation facilities. Our commitment to colleagues’ wellness – including physical, financial, and mental wellness – has continued to be a central focus during the COVID-19 crisis. In addition to ensuring that our colleagues had the necessary tools and resources to continue to serve our customers safely, we shifted approximately 10,000 of our colleagues to a work-from-home environment and implemented several programs to support their wellness and their ability to maintain work-life balance, including the below.

 

 

Physical & mental wellness financial support Family support provision of necessary personal protective equipment and a safe work environment free covid-19 testing additional paid time off at no employee cost for required quarantine (up to 14 days) and recovery from covid-19 (up to 14 days) Virtual doctor visits Health Adocate - free counseling sessions available 24/7 meQuilibrium - online resiliency tool to help manage anxiety and stress No increases in medical premiums for 2021 Premium pay and increased overtime rates for colleagues who continued to serve customers in the branch or office Production-based incentive plan changes made for the second quarter to address lower production Increased overtime rates and provided recognition awards for colleagues supporting the Paycheck Protection Program Enhanced recognition programs to reward extraordinary colleague efforts through the crisis Five additional days of paid time off to address personal circumstances such as lack of childcare or the need to care for a family member Parental resources through LifeCare, including homework/ tutoring support for children Flexible work arrangements

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE RESPONSIBILITY

 

In addition, our comprehensive total rewards package includes competitive pay opportunities and benefits designed to support colleague wellness from various perspectives. This offering is regularly evaluated to ensure it continues to meet the needs of our colleagues. Through our comprehensive myWELLNESS hub, we provide resources to help our colleagues get and stay healthy and also provide incentives for completing wellness activities.

Talent Management and Succession Planning

The Board reviews the Company’s talent management and succession plans regularly. Talent management and succession plans for the CEO, including evaluations of successors and related development plans, are provided to the Compensation and HR Committee and to the Board at least annually. A similarly detailed review of talent management and succession plans for the CEO’s management team also occurs annually by the Compensation and HR Committee. The Board’s and Committee’s focus on this topic also extends below the senior executive level. To that end, the Compensation and HR Committee reviews talent management and succession plans for our primary businesses and functions on a regular basis. In addition to focusing on potential successors and team strength, these deep dives also focus on the identification of emerging talent deeper in the organization. Board members also serve as formal mentors to certain members of our executive team, and meet in small group sessions with high-potential leaders across the Company throughout the year.

Diversity, Equity and Inclusion

Citizens is committed to building deep partnerships among our customers, colleagues, and communities and fostering a culture where all stakeholders feel respected, valued, and heard and have a sense of belonging. A core tenet of our business strategy is growth and innovation and a hallmark of that strategy is to focus on the diversity of our colleagues, customers, and communities and the inclusivity of our culture. To that end, we have been on a multi-year journey to enhance awareness and improve capabilities and opportunities within the bank and in our communities, which has accelerated since we became an independent public company in 2015. Our Compensation and HR Committee directly oversees our diversity, equity and inclusion (“DE&I”) program.

As part of that journey we have conducted a third-party audit to de-bias our people practices, have put into place several recruiting and development initiatives, and provide unconscious bias training. Information regarding colleague demographics can be found on our website. We acknowledge that there is an opportunity to further increase the representation of women and people of color at all levels of our organization, in particular in senior roles. To enable further progress, we have implemented partnerships with community organizations to help identify qualified diverse candidates and have expanded our diverse hire commitment, through which we interview a slate of at least 50% diverse candidates for senior openings. In addition, our development programs are designed to build a strong pipeline of diverse emerging talent internally. A key catalyst for change within our organization is our six business resource groups (“BRGs”), each of which is sponsored by senior leaders and which include the following: Citizens WIN (Women); Citizens Elev8 (Rising Professionals); Prism (Multi-Cultural); Citizens Pride (LGBTQ); Citizens Veterans; and Citizens Awake (Disability Awareness). 17% of our population was a member of at least one BRG as of 2020 year-end. BRG members serve as cultural ambassadors within the business to help formulate and influence our DE&I strategy and to identify and solve related issues. Our commitment to diversity, equity and inclusion also extends to our communities. Additional information regarding related initiatives can be found above in “—Supporting Social Equity in our Communities.”

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE RESPONSIBILITY

 

Commitment to Pay Equity

Part of our commitment to building a diverse, inclusive, and high-performing culture includes ensuring our compensation and benefits are fair and competitive for all colleagues. We continuously evaluate our practices and are committed to identifying opportunities to help ensure that all colleagues have equal opportunity to maximize their potential. Compensation decisions are based on a “pay-for-performance” philosophy, with decisions based on a blend of individual performance, business unit performance and Citizens’ overall performance across various dimensions, including customer, risk and control, financial, and people. Managers also receive annual training that includes tools and resources to help them make appropriate compensation decisions during our annual review process. Rating and compensation recommendations submitted by managers are reviewed to ensure they are fair and equitable.

We engage an independent third-party to regularly review colleague pay to ensure that equal pay is received for equal work throughout our organization, accounting for factors that appropriately explain differences in pay such as performance, time in role, and experience. In the case that job-related factors do not explain a disparity, a pay adjustment is made. The results of our most recent analysis indicate that women are paid 99% of what men are paid and there is no pay disparity for people of color. Although these are strong results, we understand that the opportunity gap for women and people of color continues to exist and the programs described above in “—Diversity, Equity and Inclusion” have been designed to help facilitate, among other things, increasing the representation of women and people of color in senior and leadership roles over time.

Growth and Development

The world in which our business operates is changing rapidly in nearly every dimension, and the skills required of our colleagues to meet the evolving needs of customers are changing at an accelerated pace. The Company is in the midst of executing on a large-scale transformation agenda and as part of the path to end-to-end digitization and transforming how we work, we are working to ensure colleagues are reframing their mindsets, behaviors, and capabilities for the future. We invest significant resources in colleague development and offer various programs aimed at equipping colleagues with the skills necessary to not only excel in their current roles, but to build competencies that will enable them to be highly valuable contributors now and in the future and ensure they are in step with changes in the market. Our programs build relevant critical skills such as leadership, agile, digital, innovation, data and analytics, and coaching and advising in order to effectively strengthen the necessary workforce capabilities for our organization. To enable development of these skills we have implemented resources, experiences, and technologies to facilitate quick consumption of new bodies of knowledge and skills. One example of this is learning academies which are enabled by our new learning experience platform to offer a collection of specifically curated learning experiences and content for a particular area of expertise, such as engineering. We have also reframed our performance management process in order to further enable colleague success with ongoing check-ins and feedback as another step toward colleagues being able to contribute at their highest potential.

Engagement and Communication

We use McKinsey & Company’s Organizational Health Index (“OHI”) survey to understand colleagues’ viewpoints about the Company on a wide range of factors to inform decisions regarding initiatives that will drive sustained top-tier performance and growth. In 2020, our OHI overall score reached the top quartile, reflecting a 15-point improvement since 2014. Our success depends on employees understanding how their work contributes to the Company’s overall strategy and we use a variety of platforms and forums to facilitate open and direct communication. These include communications from our CEO and management team through live stream forums, Let’s Connect sessions hosted by members of the management team, and engagement through our BRGs.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - CORPORATE RESPONSIBILITY

 

ENVIRONMENTAL SUSTAINABILITY

 

We are mindful of our impact on the environment and natural resources and we measure sustainability with a goal of continual improvement. We are working to reduce our energy consumption and the amount of waste that enters landfill. We report our performance each year through the CDP.

Through Citizens Asset Finance we have provided equity investments in renewable energy. We have participated in the funding of eight U.S.-based wind farm projects since mid-2015, with our investments totaling approximately $403 million as of December 31, 2020.

 

STRENGTHENING COMMUNITIES

 

Through our Citizens Helping Citizens program, we invest our time, resources and energy to support the communities where we live and work. Across our communities, we establish partnerships, volunteer our time and expertise and support initiatives to strengthen resources.

We focus on three specific areas that we believe fortify the overall well-being of our communities: Fighting Hunger, Financial Empowerment and Strengthening Communities. Across our footprint we support food banks, pantries, and meal sites and invest in partnerships with hunger relief organizations like Feeding America to combat hunger issues throughout our communities. Our Citizens Helping Citizens Manage Money initiative is our financial empowerment program dedicated to providing our communities with the resources and tools to make informed financial decisions. And lastly, we support programs and organizations that strengthen communities through economic development, job training and small business development.

We also work to strengthen our communities by providing financial resources that enable development. Our Community Development loans and investments allow organizations to advance their plans to expand affordable housing and community services, revitalize communities and fuel economic development.

While the pandemic put some limitations on our colleagues’ ability to do in person volunteerism, we found innovative ways to volunteer virtually during 2020. To support our national partnership with Feeding America, we engaged colleagues in a wellness challenge that allowed our colleagues to translate steps into meals donated to those facing hunger. Through our “Step Up to Fight Hunger” challenge our colleagues logged more than 540 million steps which generated a donation equivalent to 837,000 meals.

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS

 

 

 

The Company provides this vote under Section 14A of the Exchange Act and in recognition of our stockholders’ vote in 2015 recommending that we hold a non-binding, advisory vote on executive compensation each year. Following that vote, the Board affirmed that recommendation and elected to hold future “say-on-pay” advisory votes on an annual basis.

With this item, stockholders may submit an advisory vote on the compensation of our CEO and other named executive officers listed in the 2020 Summary Compensation Table. We encourage stockholders to review the complete description of our executive compensation program provided in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables and accompanying narrative, which describe the ways we seek to align the interests of our executives with those of our stockholders.

We ask our stockholders to vote on the following resolution at the Annual Meeting.

RESOLVED, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers in the 2020 Summary Compensation Table, as disclosed pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and accompanying narrative).

Although the vote on this proposal is advisory and therefore non-binding, the Compensation and HR Committee will carefully consider the results of this vote when making future compensation decisions.

 

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program and how we paid our named executive officers (“NEOs”) for 2020. The Company’s NEOs for the 2020 year are as follows:

 

Name of Executive		Position
Bruce Van Saun		Chairman and Chief Executive Officer
John F. Woods		Vice Chairman and Chief Financial Officer
Donald H. McCree III		Vice Chairman, Head of Commercial Banking
Malcolm Griggs		Executive Vice President and Chief Risk Officer
Susan LaMonica		Executive Vice President and Chief Human Resources Officer

The CD&A is divided into five sections:

 

•

Section 1:  Executive Compensation Overview

•

Section 2:  Determining Executive Compensation

•

Section 3:  NEO Compensation for the 2020 Performance Year

•

Section 4:  Other Compensation and Benefits

•

Section 5:  Governance Policies and Practices

 

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		2021		CITIZENS FINANCIAL GROUP, INC. PROXY STATEMENT - COMPENSATION MATTERS

 

SECTION 1. EXECUTIVE COMPENSATION OVERVIEW

Executive Compensation Philosophy

The fundamental principles that guide the design and implementation of compensation programs for our NEOs include:

 

		Attract, retain, motivate and reward high-caliber executives to deliver long-term business performance.
		Provide alignment between annual and long-term compensation for executives and the Company’s strategic plan.
		Support a culture where colleagues recognize the importance of serving customers well and are rewarded for superior performance.
		Encourage the creation of value over the long-term and align the rewards received by executives with returns to stockholders.
		Design compensation in a manner that promotes a culture of risk management and accountability.

Alignment of Pay and Performance & Material Changes during 2020

Our executive compensation program is designed to ensure that executive pay is aligned with Company performance and delivery to stockholders. Over the past six years, we have consistently demonstrated the ability to set a course, develop a plan, and execute well. This execution, led by our CEO, Bruce Van Saun, has resulted in consistently improving financial results and strong returns for our stockholders with Total Shareholder Return of 85% since our September 24, 2014 initial public offering through December 31, 2020, as compared to weighted peer average Total Shareholder Return of 62%.^* We feel that the compensation for Mr. Van Saun and his team has been commensurate with this performance.

2020 has been a challenging year for the Company as it has been for most companies due to the economic impact of the COVID-19 pandemic, which was exacerbated by the implementation of the CECL accounting standards amidst the pandemic. Our management team has responded nimbly to the challenges presented, pivoting our strategy to best serve customers during this time and to ensure the safety and continued support of our colleagues and communities. Despite the challenges, our financial performance has continued to be solid, with strong performance relative to our peers on key metrics. Please see the earlier section titled “Proxy Statement Summary—Our Financial Performance.” Despite our strong 2020 relative performance, 2020 performance year variable compensation for all NEOs (including Mr. Van Saun) is down -11.1% as compared to 2019, in recognition of COVID-19 and decreased earnings. In addition, Mr. Van Saun’s 2020 performance year total compensation is down -9.5% as compared to 2019 and is also -9.0% below his target total compensation of $9.94 million. In comparison, variable compensation for all colleagues participating in our discretionary bonus program is down -6.3% on average. 2020 performance year compensation is illustrated in “—Section 3. NEO Compensation for the 2020 Performance Year.”

Within weeks following the March 2020 grant of our 2020 performance stock units (“PSUs”), the Average Return on Average Tangible Common Equity (“ROTCE”) and Cumulative Diluted Earnings Per Share (“Diluted EPS”) targets established for these awards no longer represented the expected performance of our Company over the next three years and were also not in line with market expectations. As a result and because the largest component of our executives’ compensation is awarded in the form of PSUs, our 2020 compensation program no longer provided the appropriate incentive and target compensation levels for our senior management team.

Following extensive discussions by the Compensation and HR Committee over the course of an eight-month period, on December 16, 2020, the Compensation and HR Committee modified the targets for the 2020 PSU awards consistent with analyst expectations as of December 15, 2020 and imposed a maximum payout of 100% of target (reduced from 150%).

 

 

* Peer average is market cap weighted and includes CMA, FITB, HBAN, KEY, MTB, PNC, RF, TFC and USB.

 

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