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☐ Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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2
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2018 Proxy Statement
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•
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Increasing the entry-level wage we pay our associates to $15 per hour by the end of 2018. This increase is part of Regions' ongoing effort to provide sustainable career paths and professional growth opportunities for all associates.
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•
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Contributing $40 million to the Company’s charitable foundation to support financial education, job training, economic development, and affordable housing, all of which help foster an environment of inclusive prosperity and create shared value for Regions' customers, communities, and stockholders.
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•
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Increasing the Company’s capital expenditures budget by approximately $100 million, or 50 percent, over 2017 to support investments in facilities, technology, product innovation, and personalized service to meet and anticipate customer needs.
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O. B. Grayson Hall, Jr.
Chairman and Chief Executive Officer
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Charles D. McCrary
Lead Independent Director
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QUICK INFORMATION
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Date and Time of Annual Meeting
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Wednesday, April 25, 2018
9:00 A.M., local time
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Location of Annual Meeting
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Regions Center Auditorium
1900 Fifth Avenue North
Birmingham, Alabama 35203
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Record Date
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February 26, 2018
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Proposal
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Voting Options
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Board
Recommendation
|
More
Information
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Effect of Abstentions
and Broker Non-Votes |
Votes Required
for Approval
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PROPOSAL 1 –
Election of Directors
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FOR, AGAINST, or ABSTAIN
for each Director nominee
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FOR
each Nominee
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Page 25
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Abstentions and Broker non-votes have no effect on the vote results for this proposal.
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Affirmative “FOR” vote of a majority of the votes cast for or against each Director nominee.
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PROPOSAL 2 –
Ratification of
Appointment of Independent Registered Public Accounting Firm |
FOR, AGAINST, or ABSTAIN
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FOR
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Page 65
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Abstentions have no effect on the vote results for this proposal.
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Affirmative “FOR” vote of a majority of the votes cast for or against this proposal.
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PROPOSAL 3 –
Advisory Vote on
Executive Compensation |
FOR, AGAINST, or ABSTAIN
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FOR
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Page 68
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Abstentions and Broker non-votes have no effect on the vote results for this proposal.
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Affirmative “FOR” vote of a majority of the votes cast for or against this proposal.
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PROPOSAL 4 –
Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
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Every Year,
Every TWO Years, Every THREE Years, or
ABSTAIN
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EVERY YEAR
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Page 69
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Abstentions and Broker non-votes have no effect on the vote results for this proposal.
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The option that receives the highest number of votes cast by stockholders will be considered the preferred frequency.
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Corporate Governance or Compensation Matter
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Regions
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Current Number of Directors
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14
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Director Independence
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Board of Directors - 93%
Audit Committee - 100%
CHR Committee - 100%
NCG Committee - 100%
Risk Committee - 100%
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Separate Board Chair and CEO
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No
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Lead Independent Director
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Yes
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Robust Responsibilities and Duties Assigned to Lead Independent Director
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Yes
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Voting Standard
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Majority with plurality carveout for contested elections
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Frequency of Director Elections
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Annual
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Resignation Policy
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Yes
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Classified Board
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No
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Mandatory Retirement Age
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72
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Mandatory Retirement Tenure
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No
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Average Director Age
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66
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QUICK INFORMATION
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Corporate Governance or Compensation Matter
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Regions
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Average Director Tenure
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9
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Gender Diversity on the Board
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21%
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Racial/Ethnic Diversity on the Board
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21%
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Directors Attending Fewer than 75% of Meetings
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0
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Number of Meetings Held in 2017
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Board of Directors: 8
Audit Committee: 12
CHR Committee: 6
NCG Committee: 5
Risk Committee: 4
Joint Audit Committee and Risk Committee: 1
Joint CHR Committee and Risk Committee: 1
Joint CHR Committee, NCG Committee and Board: 1
Total: 38
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Directors Overboarded Under ISS or Glass Lewis Voting Guidelines
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0
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One Share, One Vote Policy
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Yes
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Dual-Class Common Stock
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No
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Cumulative Voting
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No
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Vote Standard for Charter/By-Law Amendment
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75%
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Stockholder Right to Call Special Meeting
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No
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Stockholder Right to Act by Written Consent
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No
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Board Authorized to Issue Blank-Check Preferred Stock
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Yes; however, our capital actions are required to be included as part of our Capital Plan submitted to the Federal Reserve
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Poison Pill
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No
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Proxy Access By-Law
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Yes
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Exclusive Forum By-Law
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Yes
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Annual Board and Committee Self-Evaluation Process
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Yes
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Engage with our Stockholders
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Yes
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Political Contributions Disclosed
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Yes
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Anti-Hedging and Anti-Pledging Policies
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Yes
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Robust Stock Ownership Guidelines
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Yes
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Shares Pledged by Directors and Executive Officers
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0
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Codes of Conduct for Directors, Officers, and Associates
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Yes
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Material Related Party Transactions with Directors
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None
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Family Relationships
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None
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Director Onboarding and Ongoing Education Program
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Yes
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Independent Directors Meet Without Management Present
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Yes
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Independent Auditor
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Ernst & Young LLP
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Board Oversight of ESG
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Yes
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Board Oversight of Company Strategy and Risks
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Yes
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Board Oversight of Company Sexual Misconduct Policies
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Yes
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ISG Corporate Governance Principles for U.S. Listed Companies Compliance
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We believe Regions is in compliance
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CEO Pay Ratio
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202:1
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Clawback Policy
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Yes
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Incentive Plans that Encourage Excessive Risk Taking
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No
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Employment Agreements for Executive Officers
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No
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Repricing of Underwater Options
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No
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Excessive Perks
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No
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Pay-for-Performance
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Yes
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Frequency of Say-on-Pay Advisory Vote
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Annual
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Tax Gross-Ups
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No
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Double-Trigger Change-in-Control Provisions
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Yes
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Compensation Consultant
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Frederic W. Cook & Co.
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TABLE OF CONTENTS
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
& OTHER INFORMATION
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Security Ownership of Certain Beneficial Owners
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Security Ownership of Directors and Executive Officers
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Stock Ownership Guidelines and Holding Period Requirements
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Anti-Hedging and Anti-Pledging
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24
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Section 16(a) Beneficial Ownership Reporting Compliance
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24
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What am I voting on?
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25
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What vote is required to approve this proposal?
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25
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What does the Board recommend?
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25
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How often are the members elected, and what is the composition of the Board?
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25
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What if a nominee is unable or unwilling to serve?
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25
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What if a nominee does not receive a majority of votes cast?
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25
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What criteria were considered by the NCG Committee in selecting the nominees?
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26
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How is the Board membership refreshed?
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28
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What is the average tenure of the Directors?
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29
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Who are this year’s nominees?
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29
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How are Directors compensated?
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36
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Overview
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38
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Corporate Governance Stockholder Engagement
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Communications between Stockholders and Other Interested Parties and the Board of Directors
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41
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Economic Development and Community Outreach
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Corporate Environmental Sustainability
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43
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Meeting our Customers’ Needs
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43
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Conduct and Culture
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44
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Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers
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44
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Respect in the Workplace
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45
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Report It! Ethics Hotline
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46
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Talent Management and Associate Development & Well-Being
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46
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Diversity and Inclusion
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46
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Policy on Political Contributions
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47
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Board Leadership Structure
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Board, Committee, and Individual Director Evaluation Program
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49
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Director Onboarding and Ongoing Education
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50
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Director Independence
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50
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Family Relationships
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53
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Transactions with Directors
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Other Business Relationships and Transactions
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54
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Policies Relating to Transactions with Related Persons
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54
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Board’s Role in the Risk Management Process
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Cybersecurity
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Relationship of Compensation Policies and Practices to Risk Management
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Compensation Consultant Disclosure
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59
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Director Attendance at Board and Committee Meetings
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60
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Director Attendance at the Annual Meeting
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60
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Meetings of Independent Directors
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60
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Board and Committee Meetings in 2017
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60
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TABLE OF CONTENTS
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Committees of the Board of Directors
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61
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Committee Composition
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61
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Audit Committee
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Compensation and Human Resources Committee
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Compensation Committee Interlocks and Insider Participation
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63
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Nominating and Corporate Governance Committee
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Risk Committee
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What am I voting on?
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65
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What vote is required to approve this proposal?
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65
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What does the Board recommend?
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65
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What services are provided by EY?
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65
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How much was EY paid for 2017 and 2016?
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65
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Will a representative of EY be present at the meeting?
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66
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How long has EY been Regions’ independent auditor?
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66
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How is Regions assured that EY remains independent?
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66
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What am I voting on?
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68
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What vote is required to approve this proposal?
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68
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What does the Board recommend?
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68
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What is the effect of this resolution?
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68
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What am I voting on?
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69
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What vote is required to approve this proposal?
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69
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What does the Board recommend?
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69
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What is the effect of this resolution?
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69
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How Pay is Tied to Company Performance
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70
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Compensation Philosophy and Objectives
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Compensation-Setting Process and Timeline
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2017 Compensation Decisions — What We Paid and Why
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Other Benefits and Perks
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Compensation Framework, Policies, Processes, and Risk Considerations
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Other Policies and Practices Impacting Compensation Decisions
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Change-in-Control, Post-Termination, and Other Employment Arrangements
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Summary Compensation Table
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CEO Pay Ratio
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Grants of Plan-Based Awards
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Outstanding Equity Awards at December 31, 2017
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95
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Option Exercises and Stock Vested
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97
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Pension Benefits
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Nonqualified Deferred Compensation
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Potential Payments by Regions Upon Termination or Change-in-Control
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A-1
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1.
|
Election
to our Board of Directors of the
13
nominees
named in our proxy statement to serve as Directors until the next annual meeting of stockholders or in each case until their successors are duly elected and qualified;
|
2.
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Ratification
of the appointment of
Ernst & Young LLP
as Regions’ independent registered public accounting firm for the year
2018
;
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3.
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Advisory
vote
on
executive
compensation
; and
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4.
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Advisory
vote
on the
frequency
of future advisory votes on executive compensation.
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March 9, 2018
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By Order of the Board of Directors
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Fournier J. Gale, III
Corporate Secretary
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2018 Proxy Statement
|
1
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INDEX OF
COMMONLY REFERENCED TOPICS
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|
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Topic
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Page
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Admission to the Annual Meeting
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19
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Anti-Hedging and Anti-Pledging
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24
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Auditor Fees
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65
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Auditor Tenure
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66
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Board Leadership Structure
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47
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Board Meeting Director Attendance
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60
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Board Refreshment
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28
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Board Risk Oversight
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56
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Board, Committee, and Individual Director Evaluation
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49
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CEO Pay Ratio
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93
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Change-in-Control Agreements
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89
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Clawback Policy
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86
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Committees of the Board
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61
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Communications with the Board
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41
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Compensation Consultant
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59
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Compensation and Performance Peer Groups
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85
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Contacts at Regions
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41
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Corporate Governance Principles
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38
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Corporate Governance Stockholder Engagement
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39
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Culture
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44
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Cybersecurity
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58
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Director Biographies
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30
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Director Education
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50
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Director Independence
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50
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Director Qualifications and Skills
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26
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Director Retirement Age
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38
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Director Tenure
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29
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Economic Development and Community Outreach
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42
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Environmental Sustainability
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43
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Lead Independent Director Duties
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48
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LTIP Grants
|
80
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Pay-for-Performance
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70
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Perks
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83
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Political Contributions Policy
|
47
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Record Date
|
1
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Related Person Transactions Policy
|
54
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Say-on-Pay
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68
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Stock Ownership Guidelines
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24
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Stock Performance Graph
|
9
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Stockholder Nominations for the 2019 Annual Meeting
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20
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Stockholder Proposals for the 2019 Annual Meeting
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20
|
|
|
COMMONLY USED
TERMS AND ACRONYMS
|
|
|
|
Term
|
Meaning
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401(k) Plan
|
Regions Financial Corporation 401(k) Plan
|
Board
|
Board of Directors of Regions Financial Corporation
|
Broker
|
Brokerage firms, banks, or similar entities
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BSA/AML/OFAC
|
Bank Secrecy Act/Anti-Money Laundering/Office of Foreign Assets Control
|
CCAR
|
Comprehensive Capital Analysis and Review
|
CD&A
|
Compensation Discussion and Analysis
|
CEO
|
Chief Executive Officer
|
CFO
|
Chief Financial Officer
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CHR Committee
|
Compensation and Human Resources Committee
|
Code of Conduct
|
Code of Business Conduct and Ethics
|
Cook & Co.
|
Frederic W. Cook & Co.
|
CRO
|
Chief Risk Officer
|
CSR
|
Corporate Social Responsibility
|
DDSIP
|
Directors’ Deferred Stock Incentive Plan
|
EPS
|
Earnings Per Share
|
ESG
|
Environmental, Social, and Governance
|
Exchange Act
|
Securities Exchange Act of 1934, as amended
|
EY
|
Ernst & Young LLP
|
Federal Reserve
|
The Board of Governors of the Federal Reserve System
|
FDICIA
|
Federal Deposit Insurance Corporation Improvement Act of 1991
|
GAAP
|
Generally Accepted Accounting Principles in the United States
|
IRC
|
U.S. Internal Revenue Code of 1986, as amended
|
ISG
|
Investor Stewardship Group
|
LTIP
|
Long Term Incentive Plan
|
NCG Committee
|
Nominating and Corporate Governance Committee
|
NEOs
|
Named Executive Officers
|
NPL
|
Non-Performing Loan
|
NYSE
|
New York Stock Exchange
|
OAC
|
Office of Associate Conduct
|
OREO
|
Other Real Estate Owned
|
PCAOB
|
Public Company Accounting Oversight Board
|
PSUs
|
Performance Stock Units
|
Retirement Plan
|
Regions Financial Corporation Retirement Plan
|
ROATCE
|
Return on Average Tangible Common Equity
|
RSUs
|
Restricted Stock Units
|
SEC
|
U.S. Securities and Exchange Commission
|
Securities Act
|
Securities Act of 1933, as amended
|
SERP
|
Regions Financial Corporation Post 2006 Supplemental Executive Retirement Plan
|
SOX
|
Sarbanes–Oxley Act of 2002
|
2
|
|
2018 Proxy Statement
|
If you have not already done so, we ask you to consider signing up to receive these materials electronically in the future by following the instructions after you vote your shares over the Internet. Enrolling in future electronic delivery of these materials reduces Regions’ printing and mailing expenses and environmental impact. To enroll for electronic delivery you may also visit
http://enroll.icsdelivery.com/rf
.
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 25, 2018:
The Notice of Annual Meeting and Proxy Statement,
Annual Report on Form 10-K for the year ended December 31, 2017,
and Chairman’s Letter
are available at
www.regions.com
or
www.proxyvote.com
.
|
|
2018 Proxy Statement
|
3
|
Admission to the Annual Meeting
Admission to the 2018 Annual Meeting is limited to our registered and beneficial stockholders as of February 26, 2018, and persons holding valid proxies from stockholders of record. To be admitted to our annual meeting, you must bring a valid, government-issued photo identification and proof of your stock ownership as of the Record Date, such as:
1. If you are a stockholder of record, bring the Admission Ticket appearing on the top of your proxy card or the Notice of Internet Availability of Proxy Materials you received in the mail.
2. If your shares are held by a Broker, bring the Notice of Internet Availability of Proxy Materials you received in the mail or a brokerage statement evidencing ownership of Regions common stock as of the Record Date.
3. If you received our meeting materials electronically, bring a copy of the email notification.
Stockholders who do not present an Admission Ticket or other proof of stock ownership will be admitted only upon verification of ownership at the registration desk. See page 19 for additional information.
For security reasons, no large bags, backpacks, briefcases, or packages will be permitted in the annual meeting, and security measures will be in effect to provide for the safety of attendees. The use of any electronic devices such as cameras (including mobile phones with photographic capabilities), recording devices, smartphones, tablets, laptops, and other similar devices is strictly prohibited.
Individuals with a disability requesting assistance should contact Regions’ Americans with Disabilities Act Manager, Kathy Lovell, by email at kathy.lovell@regions.com, by phone at 205-264-7495 or toll-free at 1-800-370-5087, or by Regions’ Telecommunication Device for the Hearing Impaired and the Deaf (TTY/TDD) toll-free at 1-800-374-5791.
|
Rules and Procedures
Stockholder Question and Answer Session at the Annual Meeting
Following adjournment of the official business of the annual meeting, there will be a time for stockholders to present questions to our Chairman. We will proceed according to the following guidelines:
1. All questions should be directed to the podium. Please wait to address the meeting until after you have been recognized.
2. Upon being recognized, please wait for someone to bring a microphone to you. Clearly state your name, your city and state, and your status as either a stockholder or a proxy holder prior to presenting your question.
3. Each speaker is requested to limit questions to a total of no more than three (3) minutes.
4. Please permit each speaker the courtesy of concluding his or her remarks.
5. Questions are welcome and Regions will provide an opportunity for stockholders to ask appropriate questions; however, the purpose of the meeting will be observed and the following discussions are not appropriate:
• irrelevant to the business of the Company or the conduct of its operations;
• a request to vote on a proposal or nominee not properly submitted to the Company prior to the meeting;
• related to pending or threatened litigation;
• derogatory or defamatory remarks related to Regions, its management, Directors, associates, or customers;
• language that is profane, loud, threatening, abusive, or encouraging violence or disorder;
• substantially repetitious statements made by other stockholders;
• related to personal grievances or individual concerns; or
• continuing after the maximum time limit is reached.
|
4
|
|
2018 Proxy Statement
|
PROXY SUMMARY
|
Date:
|
Wednesday, April 25, 2018
|
Time:
|
9:00 A.M., local time
|
Place:
|
Regions Center Auditorium
1900 Fifth Avenue North
Birmingham, Alabama 35203
|
Record Date:
|
February 26, 2018
|
Voting:
|
Common stockholders as of the Record Date are entitled to vote. Stockholders of record, as well as most beneficial stockholders, can vote by proxy using one of several methods:
|
Each stockholder vote is important!
Please submit your vote by proxy over the Internet, by telephone,
or complete, sign, date, and return your proxy card or voting instruction form.
|
|
2018 Proxy Statement
|
5
|
PROXY SUMMARY
|
Proposal
|
Voting Options
|
Board Recommendation
|
More
Information
|
Effect of Abstentions
and Broker Non-Votes |
Votes Required for Approval
|
PROPOSAL 1 –
Election of Directors
|
FOR, AGAINST, or ABSTAIN
for each Director Nominee
|
FOR
each Nominee
|
Page 25
|
Abstentions and Broker non-votes have no effect on the vote results for this proposal.
|
Affirmative “FOR” vote of a majority of the votes cast for or against each Director Nominee.
|
PROPOSAL 2 –
Ratification of
Appointment of Independent Registered Public Accounting Firm |
FOR, AGAINST, or ABSTAIN
|
FOR
|
Page 65
|
Abstentions have no effect on the vote results for this proposal.
|
Affirmative “FOR” vote of a majority of the votes cast for or against this proposal.
|
PROPOSAL 3 –
Advisory Vote on
Executive Compensation |
FOR, AGAINST, or ABSTAIN
|
FOR
|
Page 68
|
Abstentions and Broker non-votes have no effect on the vote results for this proposal.
|
Affirmative “FOR” vote of a majority of the votes cast for or against this proposal.
|
PROPOSAL 4 –
Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
|
Every Year,
Every Two Years, Every Three Years, or ABSTAIN
|
EVERY YEAR
|
Page 69
|
Abstentions and Broker non-votes have no effect on the vote results for this proposal.
|
The option that receives the highest number of votes cast by stockholders will be considered the preferred frequency.
|
6
|
|
2018 Proxy Statement
|
PROXY SUMMARY
|
Our mission is to achieve superior economic value for our shareholders over time by
making life better for our customers, our associates, and our communities
and creating shared value as we help them meet their financial goals and aspirations.
|
OUR
VALUES
|
Put people
FIRST
|
Do what
IS RIGHT
|
Focus on your CUSTOMER
|
Reach
HIGHER
|
Enjoy
LIFE
|
•
|
Put People First:
Have respect for every person. Listen. Care. Serve others before yourself. Build the best team. Be inclusive. Work as one team. Balance work in a full life. Lead humanely. Set the good example. And remember to say thank you.
|
•
|
Do What is Right:
Always. Be honest. Do what you say. Use common sense. Stand for quality and integrity. Take the long view. Earn trust. Be responsible and accountable.
|
•
|
Focus on Your Customer:
Serving the customer as one team, in an exceptional way, is our business, our only business. Know your customer. Serve your customer. Be committed. Understand needs. Meet needs. Make your customer’s life better by what you do. Create shared value.
|
•
|
Reach Higher:
Grow. Our company must grow, and we must grow prudently. Raise the bar. Be energetic. Be innovative. Achieve excellence. Improve continuously. Inspire and enable others. Succeed the right way. Improve efficiency and effectiveness.
|
•
|
Enjoy Life:
Have fun. We are in the business of banking. But more importantly, we are in the business of life. Enjoy it. Laugh. Be creative. Celebrate. Recognize success.
|
|
2018 Proxy Statement
|
7
|
PROXY SUMMARY
|
•
|
Grow and diversify revenue streams
|
•
|
Maintain disciplined expense management
|
•
|
Optimize and effectively deploy capital
|
|
|
2017 Targets
|
|
2017 Results
|
Grow and Diversity Revenue
|
Net Interest Income and other financing income
|
+ 3%-5%
|
|
+ 4.2%
|
Adjusted non-interest income*
|
relatively stable
|
|
- 0.3%
|
|
Disciplined Expense Management
|
Adjusted non-interest expense*
|
+ 0%-1%
|
|
+ 0.9%
|
Adjusted efficiency ratio*
|
~ 62%
|
|
62.2%
|
|
Other Key Metrics
|
Adjusted operating leverage*
|
~ 2%
|
|
+ 1.8%
|
Net charge-offs
|
35-50 bps
|
|
38 bps
|
8
|
|
2018 Proxy Statement
|
PROXY SUMMARY
|
|
Cumulative Total Return
|
|||||||||||||||||
|
12/31/12
|
|
12/31/13
|
|
12/31/14
|
|
12/31/15
|
|
12/31/16
|
|
12/31/17
|
|
||||||
Regions
|
$
|
100.00
|
|
$
|
140.22
|
|
$
|
152.32
|
|
$
|
141.78
|
|
$
|
217.49
|
|
$
|
267.40
|
|
S&P 500 Index
|
$
|
100.00
|
|
$
|
132.37
|
|
$
|
150.48
|
|
$
|
152.55
|
|
$
|
170.78
|
|
$
|
208.05
|
|
S&P 500 Banks Index
|
$
|
100.00
|
|
$
|
135.72
|
|
$
|
156.78
|
|
$
|
158.10
|
|
$
|
196.54
|
|
$
|
240.87
|
|
•
|
Ranked number one in customer satisfaction in the 2017 American Customer Satisfaction Index
|
•
|
Named 2017 Gallup Great Workplace Award Winner for the third consecutive year
|
•
|
Recognized by 2020 Women on Boards for having 20 percent or more gender diversity on our Board
|
•
|
Regions stock continues to make up part of the Pax Ellevate Global Women’s Index Fund, which is the first mutual fund to invest in the highest rated companies in the world for advancing women’s leadership
|
•
|
Regions stock named a Top Socially Responsible Dividend Stock by Dividend Channel
|
•
|
Corporate Secretary
’s Corporate Governance Awards: Finalist for Best Proxy Statement, Large Cap for the third year in a row
|
•
|
Received 2017 Javelin Trust in Banking Leaders Award
|
•
|
Recognized by the Temkin Group, for the fourth straight year, as a top performer in its Customer Experience Rankings
|
•
|
Recognized, for the third consecutive year, by Greenwich Associates for Private Wealth Management’s commitment to quality service in Middle Market and Small Business Banking
|
•
|
Received 22 additional Greenwich Excellence Awards in middle market and small business banking at the beginning of 2018
|
•
|
Regions’ Directors Carolyn H. Byrd and John E. Maupin Jr. were recognized in
Black Enterprise
’s Registry of Corporate Directors, an exclusive roster of African Americans who serve on the boards of directors among the nation’s 500 largest publicly-traded companies
|
•
|
Earned the Junior Achievement President’s Bronze Award for providing more than 8,000 volunteer hours
|
|
2018 Proxy Statement
|
9
|
PROXY SUMMARY
|
(1)
|
Corporations subject to the registration or reporting requirements of the Exchange Act, or registered under the Investment Company Act of 1940.
|
(2)
|
Audit Committee Financial Expert.
|
(3)
|
Risk management expert.
|
(4)
|
Lead Independent Director.
|
*
|
Alabama Power Company has no publicly traded common stock but does issue public debt and preferred stock.
|
**
|
Protective Life Corporation has no publicly traded common stock but does issue public debt.
|
10
|
|
2018 Proxy Statement
|
PROXY SUMMARY
|
|
2018 Proxy Statement
|
11
|
PROXY SUMMARY
|
|
2017
|
|
2016
|
|
||
Audit fees
|
$
|
6,728,474
|
|
$
|
6,148,610
|
|
Audit related fees
|
391,273
|
|
397,708
|
|
||
Tax fees
|
249,310
|
|
78,811
|
|
||
All other fees
|
303,815
|
|
235,506
|
|
||
Total fees
|
$
|
7,672,872
|
|
$
|
6,860,635
|
|
Name
|
Age
|
Position
|
O. B. Grayson Hall, Jr.
|
60
|
Chairman and Chief Executive Officer
|
David J. Turner, Jr.
|
54
|
Chief Financial Officer
|
Fournier J. Gale, III
|
73
|
General Counsel and Corporate Secretary
|
C. Matthew Lusco
|
60
|
Chief Risk Officer
|
John B. Owen
|
57
|
Head of Enterprise Services and Consumer Banking
|
John M. Turner, Jr.
|
56
|
President
|
Brett D. Couch
|
54
|
Head of Corporate Real Estate and Procurement
|
Barb Godin
|
64
|
Chief Credit Officer
|
C. Keith Herron
|
54
|
Head of Corporate Responsibility and Community Engagement
|
William E. Horton
|
66
|
Head of Commercial Banking
|
Ellen S. Jones
|
59
|
Head of Strategic Performance and Alignment
|
David R. Keenan
|
50
|
Head of Human Resources
|
Scott M. Peters
|
56
|
Head of Consumer Banking Group
|
William D. Ritter
|
47
|
Head of Wealth Management Group
|
Ronald G. Smith
|
57
|
Head of Corporate Banking Group
|
12
|
|
2018 Proxy Statement
|
PROXY SUMMARY
|
•
|
In December 2017, Regions named Mr. John Turner President of the Company. Mr. Turner is now included in this proxy statement as an NEO. Mr. Turner joined Regions in 2011 after serving as president for another financial institution and led our South Region before assuming responsibility for our Corporate Banking Group over three years ago. Mr. Turner, while serving as Head of Corporate Banking Group, did an exemplary job of diversifying the Corporate Banking Group’s revenue through investments in people, products, and capabilities; fostering teamwork and the execution of our relationship strategies; and reshaping the business to improve profitability returns and effective use of capital while strengthening credit quality and overall risk management. This promotion is an example of Regions’ ongoing talent management process, which ensures our Company develops its executives to assume greater responsibility and provides continuity of management.
|
•
|
After reviewing NEO target pay levels in early 2017, the CHR Committee decided to leave our CEO’s base salary and short term incentive target unchanged from the previous year. Other compensation decisions for our NEOs are described in the CD&A.
|
•
|
Annual short term incentive target opportunities for our NEOs remained consistent, with no change from 2016 to 2017. Diligent execution of our strategic plan yielded above-target corporate results for the year at 158 percent of our target expectations. Accordingly, the 2017 annual cash bonus payments for each of our NEOs increased over payments made in 2016.
|
•
|
While long-term incentive targets remained unchanged for three of our NEOs, Mr. Hall and Mr. J. Turner each received an increase to their individual long-term incentive targets.
|
•
|
Long-term incentive grants issued for the year continue to constitute the largest portion of direct compensation for our NEOs, which is consistent with our philosophy to create a strong tie between NEO and stockholder financial interests through sustaining positive performance over a multi-year period. Consistent with prior grants, the long-term incentives granted in 2017 include three components:
|
1.
|
Performance Stock Units
(“PSUs”) that do not vest for three years and for which the ultimate value and amount are based on the future performance of the Company.
|
2.
|
Performance Cash Units
that do not vest for three years and for which the ultimate value and amount are based on the future performance of the Company.
|
3.
|
Restricted Stock Units
(“RSUs”) that do not vest for three years and are subject to maintaining certain safety and soundness criteria.
|
|
2018 Proxy Statement
|
13
|
PROXY SUMMARY
|
2017 Compensation Overview Table
|
||||||||||||||||
|
|
|
Long-Term Awards($)
|
|
|
|||||||||||
Name
|
Principal Position
|
Salary
|
Stock
Awards
|
Non Equity
LTI Granted (Cash) |
Annual
Incentive |
Total
|
||||||||||
O. B. Grayson Hall, Jr.
|
Chairman and Chief Executive Officer
|
$
|
1,000,000
|
|
$
|
3,558,511
|
|
$
|
1,800,000
|
|
$
|
2,985,500
|
|
$
|
9,344,011
|
|
David J. Turner, Jr.
|
Chief Financial Officer
|
$
|
664,200
|
|
$
|
790,790
|
|
$
|
400,000
|
|
$
|
1,140,806
|
|
$
|
2,995,796
|
|
John B. Owen
|
Head of Enterprise Services and Consumer Banking
|
$
|
680,600
|
|
$
|
790,900
|
|
$
|
400,000
|
|
$
|
1,191,297
|
|
$
|
3,062,797
|
|
John M. Turner, Jr.
|
President
|
$
|
600,000
|
|
$
|
790,790
|
|
$
|
400,000
|
|
$
|
1,039,896
|
|
$
|
2,830,686
|
|
C. Matthew Lusco
|
Chief Risk Officer
|
$
|
584,250
|
|
$
|
790,790
|
|
$
|
400,000
|
|
$
|
1,003,486
|
|
$
|
2,778,526
|
|
•
|
The table above provides the entire value of the long-term incentive grants made to NEOs in
2017
through the “Long-Term Award” section. The annual grant consisted of three equal parts, RSUs, PSUs, and Performance Cash Units. Both the stock and non-equity (cash) portion of the 2017 grant is reflected in this table and is considered 2017 compensation by the CHR Committee.
|
•
|
Under rules established by the SEC, the Summary Compensation Table required to be included with our CD&A reports only the portion of the long-term incentive grant delivered in the form of stock equivalents in the year granted. Cash awards from the 2017 grant will not be
|
•
|
The Summary Compensation Table reports the change in pension value and nonqualified deferred compensation earnings, as well as all other compensation.
|
14
|
|
2018 Proxy Statement
|
QUESTIONS AND ANSWERS
|
Since 2012, when we started distributing our annual meeting materials under the SEC’s “Notice and Access” rule, we have printed roughly 90 percent fewer Proxy Statements and Annual Reports on Form 10-K each year, helping us reduce our carbon footprint and impact on the environment.
|
|
2018 Proxy Statement
|
15
|
QUESTIONS AND ANSWERS
|
16
|
|
2018 Proxy Statement
|
QUESTIONS AND ANSWERS
|
|
To vote with your mobile device (tablet or smartphone), scan the
Quick Response Code
that appears on your proxy card or Notice of Internet Availability of Proxy Materials (may require free software).
|
|
To vote over the Internet, visit
www.proxyvote.com
and enter your 16-digit control number that appears on your proxy card, email notification, or Notice of Internet Availability of Proxy Materials.
|
|
To vote by telephone, call
1-800-690-6903
and follow the recorded instructions. If you vote by telephone, you also will need your 16-digit control number that appears on your proxy card.
|
|
If you request printed copies of the proxy materials be sent to you by mail, vote by proxy by filling out the proxy card and return it in the envelope provided to:
Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717
.
|
|
Additionally, you may vote
in person
at the annual meeting. We will collect the ballots prior to the vote being finalized.
|
|
2018 Proxy Statement
|
17
|
QUESTIONS AND ANSWERS
|
|
Innisfree M&A Incorporated, 501 Madison Avenue, 20
th
Floor, New York, NY 10022.
|
|
Stockholders may call Innisfree toll-free: 1-888-750-5834.
|
|
Brokers may call Innisfree collect: 1-212-750-5833.
|
Eligible Votes
|
1,205,568,693
|
|
|
Total Voted
|
1,040,221,395
|
86
|
%
|
Broker Non-Votes
|
157,036,812
|
13
|
%
|
18
|
|
2018 Proxy Statement
|
QUESTIONS AND ANSWERS
|
Proposal
|
Votes “For”
|
|
|
Proposal
|
Votes “For”
|
|
Carolyn H. Byrd
|
99.24
|
%
|
|
Susan W. Matlock
|
98.61
|
%
|
David J. Cooper, Sr.
|
98.21
|
%
|
|
John E. Maupin, Jr.
|
98.41
|
%
|
Don DeFosset
|
98.04
|
%
|
|
Charles D. McCrary
|
97.01
|
%
|
Samuel A. Di Piazza, Jr.
|
99.15
|
%
|
|
James T. Prokopanko
|
99.62
|
%
|
Eric C. Fast
|
99.69
|
%
|
|
Lee J. Styslinger III
|
97.54
|
%
|
O. B. Grayson Hall, Jr.
|
96.19
|
%
|
|
José S. Suquet
|
99.26
|
%
|
John D. Johns
|
98.95
|
%
|
|
Ratification of Selection of Auditors
|
98.43
|
%
|
Ruth Ann Marshall
|
99.61
|
%
|
|
Say-on-Pay
|
96.49
|
%
|
Stockholder of
Record
|
Beneficial (Street
Name) Holder
|
Proxy for Stockholder
of Record
|
Proxy for Street
Name/Beneficial Holder
|
Admission Ticket appearing on your proxy card or the Notice of Internet Availability of Proxy Materials;
OR
|
Your Notice of Internet Availability of Proxy Materials;
OR
|
A valid, written legal proxy naming you as proxy, signed by the stockholder of record;
AND
|
A valid and assignable written legal proxy naming you as proxy;
AND
|
The electronic e-mail addressed to you from ProxyVote.com;
OR
|
Your Voting Instruction Form for the 2018 Annual Meeting from your Broker;
OR
|
The stockholder of records’ admission ticket appearing on the proxy card or Notice of Internet Availability of Proxy Materials;
OR
|
The legal proxy is signed by the street name holder’s Broker;
AND
|
Verification at the registration desk that your name is listed in Regions’ list of stockholders of record as of the Record Date.
|
A letter from your Broker confirming you owned Regions’ common stock as of the Record Date.
|
Verification at the registration desk that the stockholder is listed in Regions’ list of stockholders as of the Record Date.
|
One of the forms of meeting admission documentation in the name of the street holder that would be required to admit the street holder to the annual meeting.
|
|
2018 Proxy Statement
|
19
|
QUESTIONS AND ANSWERS
|
•
|
All information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act.
|
•
|
A statement signed by the candidate confirming that the candidate:
|
–
|
will serve if nominated by the Board and elected by the stockholders;
|
–
|
consents to being named in the proxy statement as a nominee;
|
–
|
will comply with the Company’s Code of Business Conduct and Ethics, General Policy on Insider Trading, Corporate Governance Principles, and any
|
–
|
will provide any information required or requested by the Company or its subsidiaries, or banking or other regulators, including, without limitation, all information requested by the form of Directors questionnaire used by the Company.
|
•
|
Whether each nominee is eligible for consideration as an independent director under the relevant standards contemplated by Item 407(a) of Regulation S-K under the Securities Act, and the relevant listing standards of any exchange where the Company’s equity securities are listed.
|
20
|
|
2018 Proxy Statement
|
QUESTIONS AND ANSWERS
|
•
|
The text of the proposal to be presented, including the text of any resolutions to be proposed for consideration by stockholders;
|
•
|
A brief written statement of the reasons why such stockholder favors the proposal; and
|
•
|
Any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made.
|
•
|
As to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:
|
–
|
The name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner;
|
–
|
A representation that the stockholder is a holder of the Company’s voting stock (including the number and class or series of shares held);
|
–
|
With respect to nominations, a disclosure of any hedging or other arrangement with respect to any
|
–
|
With respect to nominations, a description of all arrangements or understandings among the stockholder and the candidate and any other person or persons (naming such person or persons and including any person that may be deemed to be acting in concert with such stockholder under applicable federal or state securities or banking laws) pursuant to which the proposal is made by the stockholder.
|
•
|
The names and addresses of any other stockholders or beneficial owners known to be supporting such nomination or proposal of business by the proposing stockholder on whose behalf the nomination or proposal is made.
|
|
2018 Proxy Statement
|
21
|
OWNERSHIP OF REGIONS COMMON STOCK
|
(1)
|
This information was derived from the Schedule 13G/A filed on January 23, 2018, by BlackRock, Inc. and subsidiaries, which states that BlackRock, Inc. has sole voting power over 79,425,082 shares and sole dispositive power over 90,160,203 shares as of
December 31, 2017
, which constitutes 7.8% of our outstanding common stock as of the Record Date.
|
(2)
|
This information was derived from the Schedule 13G filed on February 14, 2018, by State Street Corporation and subsidiaries, which states that State Street Corporation has shared voting and shared dispositive power over 65,106,339 shares as of
December 31, 2017
, which constitutes 5.61% of our outstanding common stock as of the Record Date.
|
(3)
|
This information was derived from the Schedule 13G/A filed on February 12, 2018, by The Vanguard Group, Inc. and subsidiaries, which states that The Vanguard Group, Inc. has sole voting power over 1,632,580 shares, shared voting power over 251,289 shares, sole dispositive power over 128,605,602 shares, and shared dispositive power over 1,854,630 shares as of
December 31, 2017
, which constitutes 11.24% of our outstanding common stock as of the Record Date.
|
22
|
|
2018 Proxy Statement
|
OWNERSHIP OF REGIONS COMMON STOCK
|
Name of Beneficial Owner
|
Shares of
Common Stock (1) |
Number of
Shares Subject to Exercisable Options |
Total Number
of Shares Beneficially Owned |
Percent
of Class |
Additional
Underlying Units (2) |
Total Shares
Beneficially Owned Plus Additional
Underlying
Units |
Current Directors including
Nominees for Director |
|
|
|
|
|
|
Carolyn H. Byrd
|
72,534
|
0
|
72,534
|
*
|
54,367
|
126,901
|
David J. Cooper, Sr.
|
196,364
|
7,000
|
203,364
|
*
|
19,382
|
222,746
|
Don DeFosset
|
99,127
|
7,000
|
106,127
|
*
|
15,570
|
121,697
|
Samuel A. Di Piazza, Jr.
|
12,314
|
0
|
12,314
|
*
|
6,621
|
18,935
|
Eric C. Fast
(3)
|
105,637
|
0
|
105,637
|
*
|
98,756
|
204,393
|
O. B. Grayson Hall, Jr.
|
449,945
|
282,019
|
731,964
|
*
|
1,104,168
|
1,836,132
|
John D. Johns
(4)
|
41,373
|
0
|
41,373
|
*
|
70,418
|
111,791
|
Ruth Ann Marshall
|
80,084
|
0
|
80,084
|
*
|
67,026
|
147,110
|
Susan W. Matlock
|
32,453
|
7,000
|
39,453
|
*
|
112,089
|
151,542
|
John E. Maupin, Jr.
|
59,512
|
7,000
|
66,512
|
*
|
70,461
|
136,973
|
Charles D. McCrary
|
115,335
|
7,000
|
122,335
|
*
|
197,496
|
319,831
|
James T. Prokopanko
|
12,314
|
0
|
12,314
|
*
|
0
|
12,314
|
Lee J. Styslinger III
|
101,810
|
7,000
|
108,810
|
*
|
155,031
|
263,841
|
José S. Suquet
|
30,110
|
0
|
30,110
|
*
|
4,618
|
34,728
|
Other Named Executive Officers
(See Summary Compensation Table on pages 91-93) |
|
|
|
|
|
|
David J. Turner, Jr.
(5)
|
135,219
|
59,822
|
195,041
|
*
|
269,809
|
464,850
|
John B. Owen
(6)
|
180,778
|
128,191
|
308,969
|
*
|
236,216
|
545,185
|
John M. Turner, Jr.
(7)
|
195,997
|
134,523
|
330,520
|
*
|
196,685
|
527,205
|
C. Matthew Lusco
|
89,475
|
0
|
89,475
|
*
|
245,626
|
335,101
|
Directors and executive officers as a group (28 persons)
|
3,167,130
|
1,935,200
|
5,102,330
|
*
|
4,312,780
|
9,415,110
|
*
|
Less than 1 percent
|
(1)
|
Includes share equivalents held in the Regions 401(k) Plan.
|
(2)
|
Additional underlying units may include notional shares allocated under the DDSIP, share equivalents held in the Regions Supplemental 401(k) Plan, RSUs, or PSUs.
|
(3)
|
Includes 20,000 shares held in a grantor retained annuity trust.
|
(4)
|
Includes 1,349 shares held by his spouse, as to which he disclaims beneficial ownership, and 1,661 shares held in an IRA.
|
(5)
|
Includes 1,808 shares held by his spouse, and 575 shares held for his children.
|
(6)
|
Includes 180,778 shares held jointly with spouse.
|
(7)
|
Includes 192,089 shares held jointly with spouse.
|
|
2018 Proxy Statement
|
23
|
OWNERSHIP OF REGIONS COMMON STOCK
|
24
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Carolyn H. Byrd
|
Susan W. Matlock
|
Don DeFosset
|
John E. Maupin, Jr.
|
Samuel A. Di Piazza, Jr.
|
Charles D. McCrary
|
Eric C. Fast
|
James T. Prokopanko
|
O. B. Grayson Hall, Jr.
|
Lee J. Styslinger III
|
John D. Johns
|
José S. Suquet
|
Ruth Ann Marshall
|
|
|
2018 Proxy Statement
|
25
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
The Corporate Governance Principles affirm that the Board will seek members from diverse professional and demographic backgrounds, who combine a broad spectrum of experience and expertise with a reputation for integrity, to ensure that the Board maintains an appropriate mix of skills and characteristics to meet the needs of the Company.
|
26
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Experience or
Acumen
|
Description
|
Banking and financial services
|
The banking and financial services industry has inherent risks, challenges, and opportunities that are unique to this industry. It is important that the Board have Directors who understand these facets of our industry.
|
Business operations and technology
|
It is important to have members on the Board who are knowledgeable and possess experience in business operations and technology so that we are able to improve our processes, services, and products to provide the best customer experience possible, as well as reduce operational risk as we meet the challenges of the fast-moving digital environment.
|
Corporate governance
|
The Board is responsible for shaping the Company’s corporate governance priorities and structure, which must be transparent and responsive to our stockholders. The Board must have Directors with experience in keeping up with and understanding constantly changing corporate governance trends and policies.
|
Environmental and sustainability practices
|
As a public company, Regions must be cognizant of the environmental footprint we leave and continue our efforts to reduce the environmental impacts of our operations. Directors who have a significant understanding of environmental issues or issues involving sustainability are better situated to oversee and advise management with respect to these important issues.
|
Executive compensation and benefits
|
When properly structured, executive compensation and benefits discourage imprudent risk taking that could harm the Company and/or customers, while simultaneously acting as a business driver and ensuring alignment with long-term stockholder interests. It is important for the Board to have Directors who understand and have experience with the various types of executive compensation and benefits options that may be employed to achieve this balance.
|
External affairs, public relations or marketing and/or stockholder engagement
|
As a customer-centric public company, Regions regularly communicates with our customer base. In addition, from time to time, the Board may need to engage with stockholders and investors. This may take the form of one-to-many types of communications, or it may involve one-on-one engagements. It is important for us to have Directors who are adept at communicating on a large scale, as well as individually.
|
Growth and innovation
|
As part of our strategic planning process, we must continually consider ways to expand our customer base, reach underserved areas, and develop new products and services that could best serve our customers’ needs. The Board must have Directors with an understanding of how to foster growth and innovation.
|
Human
resources/human capital management
|
Talent management is important at all levels of an organization, but it is particularly critical with respect to succession planning for senior executives. Having human resources and human capital management experience represented on the Board is important to ensuring appropriate succession planning.
|
Information/cybersecurity
|
As a financial institution, we are trusted with sensitive nonpublic information, which we are expected to protect. The safekeeping of our customer, associate, and Company data is of paramount importance. Directors with experience in implementing, establishing, or overseeing information security systems and protocols are better able to guide the Company through this constantly changing landscape.
|
Regulatory or compliance
|
The banking and financial services industry is highly regulated. Regions is subject to both federal and state regulators. Having Directors who understand the regulatory environment and with experience engaging with regulators is critical to the Company.
|
Risk management
|
Robust risk management is a critical aspect of operating within the financial sector, and the Board must include Directors who are very familiar with risk management processes.
|
Strategic planning or strategy development experience
|
Directors who understand how to strategically plan for the future of the Company, both in the short- and long-term, are better able to oversee and advise management with respect to the formulation and execution of the Company’s strategic planning.
|
|
2018 Proxy Statement
|
27
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
28
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
NCG Committee Oversight
|
||||||
|
|
|
|
|
|
|
Identification of Candidates
|
|
Assessment, Interviews, and Discussions
|
|
Recommendation and Appointment
|
|
Onboarding
|
The NCG Committee reviews candidates identified by:
• Independent Directors,
• An independent search firm,
• Stockholders,
• Our people, and
• Other sources.
The independent search firm uses criteria given by the Board as a basis to locate candidates that complement the skills currently represented on the Board.
|
ð
|
The NCG Committee considers:
• The key qualifications and personal attributes expected of Directors,
• Due diligence research conducted on the candidate,
• Input from other independent Directors following interviews with the candidate, and
• The candidate’s availability for Board service.
|
ð
|
Upon recommendations from the NCG Committee, the Board determines whether to appoint the candidate and optimal Committee placement.
The NCG Committee, in making its Committee assignment recommendation, typically considers assigning new Directors to the Audit Committee or the Risk Committee within the first two years of joining the Board.
|
ð
|
Regions’ comprehensive onboarding program begins with a thorough orientation process that acclimates new Directors to Regions, the Board, and management and involves a combination of written materials, oral presentations, and meetings.
All of this is to provide an understanding of our business, risks, regulatory framework, opportunities, and challenges.
|
|
2018 Proxy Statement
|
29
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
Carolyn H. Byrd
Independent
Director Since: 2010
Age: 69
Top Skills
•
Banking and Financial Services
•
Corporate Governance
•
Information/Cybersecurity
•
Risk Management
•
Strategic Planning
|
|
Regions Committees
• Audit Committee (Chair; Audit Committee Financial Expert)
Public Directorships
• Federal Home Loan Mortgage Corporation (“Freddie Mac”)
Former Public Directorships Held During Past Five Years
• Popeyes Louisiana Kitchen, Inc.
Ms. Byrd is the Chairman and CEO of GlobalTech Financial, LLC, in Atlanta, Georgia, which she founded in 2000. GlobalTech specializes in business process outsourcing and financial consulting.
|
|
|
|
|
Skills and Qualifications
Prior to forming GlobalTech in 2000, Ms. Byrd had a long career with The Coca-Cola Company, where she was ultimately appointed Vice President, Chief of Internal Audits and Director of the Corporate Auditing Department. In this position, she provided leadership for the worldwide audits of The Coca-Cola Company. Ms. Byrd served as Senior Account Officer with Citibank, N.A. in New York before joining The Coca-Cola Company.
At Freddie Mac, Ms. Byrd serves on the Compensation Committee and the Risk Committee. She formerly served as Chair of the Audit Committee and as a member of the Nominating and Governance Committee and the Executive Committee at Freddie Mac. She previously served on the Audit Committee and Executive Committee and as Chair of the Corporate Governance and Nominating Committee at Popeyes Louisiana Kitchen, Inc. and on the Audit Committees of Circuit City Stores, Inc., RARE Hospitality International, Inc., and The St. Paul Travelers Companies. Ms. Byrd earned her Bachelor of Science degree from Fisk University and a Masters in Finance and Business Administration from the University of Chicago Graduate School of Business. Ms. Byrd has held many positions in which she was responsible for key managerial, strategic, financial, and operational decisions, and such positions provide significant experience to draw upon in her capacity as a Director of Regions. Her service on the boards of directors of a variety of large public companies, including Freddie Mac, further augments her experience. All of these qualifications make her well qualified to be a member of Regions’ Board.
|
|
|
|
|
Don DeFosset
Independent
Director Since: 2005
Age: 69
Top Skills
•
Business Operations and
Technology
•
Corporate Governance
•
Executive Compensation
and Benefits
•
Information/Cybersecurity
•
Strategic
Planning
|
|
Regions Committees
• CHR Committee (Chair)
• Risk Committee
Public Directorships
• Terex Corporation
• National Retail Properties
• ITT Corporation
Mr. DeFosset served on the board of directors of AmSouth Bancorporation from 2005 to 2006. He is the former Chairman, President, and CEO of Walter Industries, Inc. During the time of his service, Walter was a diversified public company with businesses in water infrastructure products, metallurgical coal and natural gas, home building, and mortgage financing.
|
|
|
|
|
Skills and Qualifications
Throughout his career, Mr. DeFosset held significant leadership positions in major multinational corporations, including Dura Automotive Systems, Inc., Navistar International Corporation, and AlliedSignal, Inc. Mr. DeFosset is also active in civic and charitable organizations. He formerly served on Regions’ Audit Committee and was, during his tenure, determined to be an Audit Committee Financial Expert.
At Terex Corporation, Mr. DeFosset Chairs the Governance and Nominating Committee and serves on the Audit Committee. At National Retail Properties, he Chairs the Compensation Committee and serves on the Governance and Nominating Committee. At ITT Corporation, Mr. DeFosset serves on the Compensation and Personnel Committee and Chairs the Nominating and Governance Committee. In addition, he also served on the Audit and Risk Management, Compensation and Human Resources, and Nominating and Corporate Governance Committees of EnPro Industries, Inc. Mr. DeFosset has an Industrial Engineering degree from Purdue University and a Master of Business Administration degree from Harvard University. Having served as Chairman, CEO, and President of Walter, Mr. DeFosset brings extensive management and business experience to Regions’ Board as well as a deep understanding of complex issues concerning public companies. Mr. DeFosset is also able to draw upon his knowledge of the mortgage industry acquired during his tenure at Walter. His service on the boards of directors of a variety of large public companies further augments his experience. All of these credentials make him well qualified to be a member of Regions’ Board.
|
|
|
|
|
30
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Samuel A.
Di Piazza, Jr.
Independent
Director Since: 2016
Age: 67
Top Skills
•
Business Operations and Technology
•
Banking and Financial Services
•
Environmental and Sustainability Practices
•
Regulatory Compliance
•
Strategic Planning
|
|
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• CHR Committee
Public Directorships
• AT&T Inc.
• ProAssurance Corporation
• Jones Lang LaSalle Incorporated
Former Public Directorships Held During the Past Five Years
• DirecTV
Mr. Di Piazza is retired from Citigroup, Inc., where he served as Vice Chairman of the Global Corporate and Investment Bank. Prior to joining Citigroup, Mr. Di Piazza was a partner at PricewaterhouseCoopers, where he served as Chairman and Senior Partner at PwC US and as a member of the firm’s Global Leadership Team. He ultimately served as Global CEO of PricewaterhouseCoopers from 2002 to 2009.
|
|
|
|
|
Skills and Qualifications
Mr. Di Piazza serves as the Chair of the Audit Committee at ProAssurance Corporation. At Jones Lang LaSalle Incorporated, he serves on the Compensation Committee and the Nominating and Governance Committee. He serves as Chair of the Audit Committee and as a member of the Executive Committee and the Public Policy and Corporate Reputation Committee at AT&T Inc.
Mr. Di Piazza is extremely active in and serves on the boards of various nonprofit and professional organizations, including the UN Global Compact Board, The Mayo Clinic, and the National September 11th Memorial and Museum. Mr. Di Piazza is a former Trustee of both the Financial Accounting Foundation and the International Accounting Standards Committee Foundation and former Chairman of the World Business Council for Sustainable Development. He has been awarded the Accountant of the Year by the Beta Alpha Psi Society, the Ellis Island Medal of Honor, and the INROADS Leadership Award. Mr. Di Piazza is also co-author of the book,
Building Public Trust: The Future of Corporate Reporting
. He earned his Bachelor of Science in Accounting and Economics from the University of Alabama and received a Master of Tax Accounting degree from the University of Houston. Mr. Di Piazza’s extensive audit and tax experience, leadership in civic and not-for-profit organizations, including sustainable development organizations, together with his years in banking and other credentials, make him well qualified to be a member of Regions’ Board.
|
|
|
|
|
Eric C. Fast
Independent
Director Since: 2010
Age: 68
Top Skills
•
Corporate Governance
•
External Affairs, PR or Marketing and/or Stockholder Engagement
•
Growth and Innovation
•
Human Resources/Capital Management
•
Strategic Planning
|
|
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• Risk Committee
Public Directorships
• Automatic Data Processing, Inc.
• Lord Abbett Family of Funds
Former Public Directorships Held During the Past Five Years
• Crane Co.
From 2001 through January 2014, Mr. Fast served as the CEO for Crane Co., a diversified manufacturer of engineered industrial products. He also served as President of Crane Co. from 1999 through January 2013.
|
|
Skills and Qualifications
Prior to joining Crane Co., Mr. Fast worked for Salomon Brothers and later Salomon Smith Barney, where he ultimately was co-head of Global Investment Banking and a member of the firm’s Management Committee. He previously served as Treasurer of MacMillan Inc. and began his career as a commercial lending officer at The Bank of New York.
Mr. Fast currently serves as Chair of the Audit Committee and serves on the Compensation Committee of Automatic Data Processing, Inc.; is a member of the Audit Committee at the privately held National Integrity Life Insurance Company; and is a member of the Proxy Committee, Nominating and Governance Committee, and Contract Committee at The Lord Abbett Family of Funds. He earned a political science degree from the University of North Carolina, Chapel Hill and received a Master of Business Administration in Finance degree from New York University Graduate School of Business. Mr. Fast brings extensive management and business experience to our Board, as well as a deep understanding of complex issues concerning public companies. His service as President and CEO of a large public company further augments his experience. All of these qualifications make him well qualified to be a member of Regions’ Board.
|
|
|
||
|
|
|
|
2018 Proxy Statement
|
31
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
John D. Johns
Independent
Director Since: 2011
Age: 66
Top Skills
•
Banking and Financial Services
•
Growth and Innovation
•
Regulatory Compliance
•
Risk Management
•
Strategic Planning
|
|
Regions Committees
• Risk Committee (Chair; Risk Management Expert)
Public Directorships
• Genuine Parts Company
• The Southern Company
Former Public Directorships Held During the Past Five Years
• Protective Life Corporation
Mr. Johns serves as the Executive Chairman at Protective Life Corporation. From 2003 until July 1, 2017, he served as the Chairman and CEO of Protective. In February 2015, Protective became a wholly-owned subsidiary of Dai-ichi Life Insurance Company, Limited, a kabushiki kaisha organized under the laws of Japan, a holding company with subsidiaries that provide insurance and other financial services. Mr. Johns continues to serve on the board at Protective, which is no longer a publicly traded company. (Protective is still a registrant under the securities laws but has no publicly traded common stock.)
|
|
|
|
|
Skills and Qualifications
Prior to joining Protective in 1993, Mr. Johns was Executive Vice President and General Counsel at Sonat, Inc. and was a founding partner of the Birmingham-based law firm of Maynard, Cooper & Gale, P.C. He was inducted into the Alabama Business Hall of Fame in 2017.
Mr. Johns Chairs the Audit Committee at The Southern Company. At Genuine Parts Company, he serves as the Lead Independent Director; Chair of the Compensation, Nominating and Governance Committee; and a member of the Executive Committee. At the privately held Protective, he Chairs the Risk, Finance & Investments Committee. Mr. Johns graduated from the University of Alabama and received his Master of Business Administration and Juris Doctorate degrees from Harvard University. Mr. Johns’ background and considerable experience as a senior executive of a large insurance corporation; extensive exposure to complex financial issues at large public companies; leadership in other business, economic development, civic, educational, and not-for-profit organizations; and seasoned business judgment are valuable and make him well qualified to be a member of Regions’ Board.
|
|
|
|
|
32
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
2018 Proxy Statement
|
33
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
34
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
James T. Prokopanko
Independent
Director Since: 2016
Age: 64
Top Skills
•
Business Operations and
Technology
•
Environmental and
Sustainability Practices
•
Growth and Innovation
•
Risk Management
•
Strategic Planning
|
|
Regions Committees
• NCG Committee
• Risk Committee
Public Directorships
• Vulcan Materials Company
• Xcel Energy Inc.
Former Public Directorships Held During the Past Five Years
• The Mosaic Company
Mr. Prokopanko served as Executive Vice President and Chief Operating Officer of The Mosaic Company, one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients, from 2006 through 2007 and then as President and CEO from 2007 through 2015. He served as Senior Advisor until his retirement in January 2016.
|
|
|
|
|
Skills and Qualifications
Mr. Prokopanko was awarded the Corporate Responsibility Lifetime Achievement Award from the Corporate Responsibility Magazine in 2015 and the Excellence Award from the Center of Excellence in Corporate Philanthropy in 2013. Mr. Prokopanko also co-authored the article “Sustainability as a Compass for Leadership,” which appeared in the November 2017 edition of
Supply Chain Management Review
.
Prior to joining The Mosaic Company, he served in various senior leadership positions at Cargill, Inc. from 1999 through 2006. At Vulcan Materials Company, he serves as Chair of the Compensation Committee and as a member of the Executive Committee and the Governance Committee, in addition to serving as the lead director. At Xcel Energy Inc., he serves on the Governance, Compensation and Nominating Committee and the Operations, Nuclear, Environmental and Safety Committee. Mr. Prokopanko earned his bachelor’s degree in computer science from the University of Manitoba and a Master of Business Administration from the Ivey Business School at the University of Western Ontario. Mr. Prokopanko’s decade-long career at The Mosaic Company and service as lead director at Vulcan Materials Company have provided him with an in-depth knowledge of environmental risk management in regulated industries. Mr. Prokopanko’s experience in environmental risk management and his various leadership roles make him well qualified to be a member of Regions’ Board.
|
|
|
|
|
Lee J. Styslinger III
Independent
Director Since: 2003
Age: 57
Top Skills
•
Corporate Governance
•
Growth and Innovation
•
Human Resources/Capital
Management
•
Risk Management
•
Strategic Planning
|
|
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• Risk Committee
Public Directorships
• Vulcan Materials Company
• Workday, Inc.
Mr. Styslinger served on the board of directors of the former Regions Financial Corporation from 2003 to 2004. He currently serves as the Chairman and CEO of the privately held Altec, Inc., a leading equipment and service provider for the electric utility, telecommunications, and contractor markets. Altec, which was founded in 1929, provides products and services in over 100 countries throughout the world.
|
|
|
|
|
Skills and Qualifications
Mr. Styslinger actively serves on the boards of many educational, civic, and leadership organizations. He was appointed to the President’s Export Council, advising the President of the United States on international trade policy, from 2006-2008 and reappointed beginning in 2017.
At Vulcan Materials Company, he serves on the Finance Committee and the Governance Committee and formerly served on the Compensation Committee and the Safety, Health & Environmental Affairs Committee; at Workday, Inc., he serves on the Audit Committee. Mr. Styslinger received his Bachelor of Arts degree from Northwestern University and earned a Master of Business Administration degree from Harvard University. As Chairman and CEO of Altec, Inc., Mr. Styslinger brings a wealth of management and business experience running a large company in today’s global market. The foregoing qualifications make him well qualified to be a member of Regions’ Board.
|
|
|
|
|
|
2018 Proxy Statement
|
35
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
José S. Suquet
Independent
Director Since: 2017
Age: 61
Top Skills
•
Corporate Governance
•
Executive Compensation and Benefits
•
Regulatory Compliance
•
Risk Management
•
Strategic Planning
|
|
Regions Committees
• CHR Committee
• Risk Committee (Risk Management Expert)
Mr. Suquet currently serves as the Chairman, President, and CEO of the privately held Pan-American Life Insurance Group (“PALIG”), a leading provider of insurance and financial services throughout the Americas. PALIG’s flagship member is New Orleans-based Pan-American Life Insurance Company.
|
|
|
|
|
Skills and Qualifications
In December 2016, Mr. Suquet completed his term as a member of the board of directors of the Federal Reserve Bank of Atlanta, where he served as Chairman of the Retail Payments Office Oversight Committee. He also previously served on the board of directors for the Federal Reserve Bank of Atlanta, New Orleans Branch. He is a director at the privately held Ochsner Health System, Louisiana’s largest non-profit, academic healthcare system, where he serves on the Compensation Committee and the Audit and Oversight Committee. He is also on the board of directors of The American Council of Life Insurers.
Mr. Suquet brings a strong background in enterprise risk management and a commitment to innovation and operational excellence. His commitment to the United States’ Hispanic community, product innovation, and sales force expansion have positioned PALIG as the company Hispanics throughout the Americas rely on to protect their financial security and well-being. Prior to joining PALIG, Mr. Suquet held senior management posts in the insurance industry for more than three decades, including serving as Senior Executive Vice President and Chief Distribution Officer of AXA Financial. He is also involved in various professional and industry associations. Mr. Suquet graduated from Fordham University with a Bachelor of Science degree and holds a Master of Business Administration degree from the University of Miami. All of these qualifications make him well qualified to be a member of Regions’ Board.
|
Compensation Element
|
Compensation Amount
|
Annual Cash Retainer
|
$95,000, which may be deferred, at the Director’s option
|
Annual Equity Retainer
|
$115,000 in restricted stock granted three business days following the annual stockholder meeting that vests at the next annual stockholder meeting
|
Board and Committee Meeting Fees
|
None; However, a meeting fee of $1,500 per meeting will be paid if the number of annual meetings exceeds the threshold of:
Board — 12 meetings
Audit Committee — 10 meetings
CHR Committee — 8 meetings
NCG Committee — 6 meetings
Risk Committee — 6 meetings
|
Additional Annual Fee for Lead Independent Director
|
$50,000
|
Additional Annual Fee for Committee Chairs
|
$30,000 — Audit Committee
$25,000 — CHR Committee
$15,000 — NCG Committee
$25,000 — Risk Committee
$10,000 — Special Committees, as applicable
|
Additional Annual Fee for Special Committee
Members, as applicable |
$10,000
|
36
|
|
2018 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Name
|
Fees Earned or
Paid in Cash ($) |
Stock
Awards ($) (1) |
All Other
Compensation ($) (2) |
|
Total
($) |
Carolyn H. Byrd
|
128,750
|
115,000
|
5,000
|
|
248,750
|
David J. Cooper, Sr.
|
95,250
|
115,000
|
5,000
|
|
215,250
|
Don DeFosset
|
120,500
|
115,000
|
5,000
|
|
240,500
|
Samuel A. Di Piazza, Jr.
|
99,750
|
115,000
|
5,000
|
|
219,750
|
Eric C. Fast
|
105,250
|
115,000
|
2,500
|
|
222,750
|
John D. Johns
|
114,500
|
115,000
|
—
|
|
229,500
|
Charles D. McCrary
|
176,250
|
115,000
|
—
|
|
291,250
|
Ruth Ann Marshall
|
105,250
|
115,000
|
5,000
|
|
225,250
|
Susan W. Matlock
|
95,250
|
115,000
|
5,000
|
|
215,250
|
John E. Maupin, Jr.
|
99,750
|
115,000
|
—
|
|
214,750
|
James T. Prokopanko
|
93,750
|
115,000
|
5,000
|
|
213,750
|
Lee J. Styslinger III
|
96,750
|
115,000
|
—
|
|
211,750
|
José S. Suquet
|
96,750
|
141,250
|
5,000
|
|
243,000
|
(1)
|
The amounts presented in this column represent the grant date fair value of the 2017 restricted stock award made to all non-management Directors in service on April 25, 2017. The grant date fair value of the restricted stock granted April 25, 2017, was $13.86 per share, for a total grant date fair value of $115,000. All restricted stock awarded April 25, 2017 are scheduled to vest in one lump sum on the date of the 2018 Annual Meeting. Mr. Suquet was appointed to Regions’ Board on January 5, 2017, and received a restricted stock award on January 6, 2017. The grant date fair value of the restricted stock granted on January 6, 2017 was $14.48 per share, for a total grant date fair value of $26,250. The restricted stock awarded January 6, 2017 vested in one lump sum on the date of the 2017 Annual Meeting.
|
(2)
|
The amounts presented in this column reflect matching charitable gifts made through the Regions Matching Gifts Program.
|
Name
|
Outstanding
Stock Options
(#) |
|
Outstanding
Restricted Stock
(#) |
Carolyn H. Byrd
|
—
|
|
8,297
|
David J. Cooper, Sr.
|
7,000
|
|
8,297
|
Don DeFosset
|
7,000
|
|
8,297
|
Samuel A. Di Piazza, Jr.
|
—
|
|
8,297
|
Eric C. Fast
|
—
|
|
8,297
|
John D. Johns
|
—
|
|
8,297
|
Charles D. McCrary
|
7,000
|
|
8,297
|
Ruth Ann Marshall
|
—
|
|
8,297
|
Susan W. Matlock
|
7,000
|
|
8,297
|
John E. Maupin, Jr.
|
7,000
|
|
8,297
|
James T. Prokopanko
|
—
|
|
8,297
|
Lee J. Styslinger III
|
7,000
|
|
8,297
|
José S. Suquet
|
—
|
|
8,297
|
|
2018 Proxy Statement
|
37
|
CORPORATE GOVERNANCE
|
•
|
Code of Ethics for Senior Financial Officers
|
•
|
Code of Conduct
|
•
|
Corporate Governance Principles
|
•
|
Audit Committee Charter
|
•
|
CHR Committee Charter
|
•
|
NCG Committee Charter
|
•
|
Risk Committee Charter
|
•
|
Director-Stockholder Engagement Framework Summary
|
•
|
Government Affairs Annual Report
|
•
|
Corporate Sustainability Report
|
•
|
Social Responsibility Report
|
•
|
Fair Disclosure Policy Summary
|
•
|
Structure of the Board and its leadership, and the responsibilities and duties of the Lead Independent Director.
|
•
|
Director qualification standards, including:
|
–
|
Board membership criteria, including the NCG Committee’s consideration of diversity in its recruitment and nomination of individuals for directorship;
|
–
|
A description of ordinary course relationships that will not be deemed to impair a Director’s independence;
|
–
|
A limit on the number of other public company boards and other audit committees on which Directors may serve; and
|
–
|
Our mandatory retirement age of 72.
|
•
|
Nomination and selection of new Directors.
|
•
|
Director responsibilities and expectations.
|
•
|
Board operations, including scheduling meetings and selecting agenda items for meetings.
|
•
|
Director access to management and independent advisors.
|
•
|
Director compensation.
|
•
|
Director orientation and continuing education.
|
•
|
Management succession planning.
|
•
|
Strategic planning.
|
•
|
Annual performance evaluation of the Board, Committees, and individual Directors.
|
•
|
Board interaction with stockholders, investment managers, and the press.
|
•
|
Communications with the Board.
|
38
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
Winter
Associates from the Chief Governance Officer’s group, Investor Relations, and Executive Compensation formulate the corporate governance stockholder engagement plan. We consider ways to enhance the corporate governance stockholder engagement process for both Regions and our stockholders.
The Board and Committees conduct the annual self-evaluation process, which considers, among other topics, feedback from our corporate governance stockholder engagements.
|
ð
|
Late Winter/Spring
We publish and make available our proxy statement, Annual Report on Form 10-K, Chairman’s Letter,
Government Affairs Annual Report,
Social Responsibility Report, Corporate Sustainability Report
, and Annual Review.
We hold our annual meeting, which is open to all stockholders as of the Record Date and provides an opportunity to engage with the Company.
|
ñ
|
Year-Round In-Person Engagemen
t
In addition to our “formal” engagement process, we engage with stockholders throughout the year at various governance-related events. These engagements are reported to and discussed by the NCG Committee at its next meeting following the engagement.
|
ò
|
Summer/Early Fall
Engagement requests are sent to certain institutional stockholders and meetings commence. We encourage stockholders to candidly provide their views on corporate governance issues, including executive compensation practices and ESG. Feedback from these engagements help initiate the following year’s corporate governance stockholder engagement plan.
Information obtained during these engagements is summarized and presented to senior management and the Board for discussion.
|
ï
|
Summer
Our Board reviews and discusses the Corporate Governance Principles and the Director-Stockholder Engagement Framework, among other corporate governance documents, to ensure they encompass corporate governance leading practices; support the Company’s goals and strategies; and maximize long-term stockholder value. When making enhancements to our corporate governance documents, we take into consideration the voting results from our annual meeting and other feedback from our corporate governance stockholder engagements.
|
|
2018 Proxy Statement
|
39
|
CORPORATE GOVERNANCE
|
•
|
Strengthened our CSR function to ensure that we have the appropriate expertise for analyzing and addressing environmental and social matters and engaging with stockholders to understand their views.
|
•
|
Assigned oversight for environmental and social responsibility to the NCG Committee.
|
•
|
Brought more balance among our newer, mid-tenured, and seasoned Directors by refreshing the Board and appointing two new Directors at the end of 2016 and one new Director at the beginning of 2017.
|
•
|
Adopted proxy access.
|
•
|
Established the Office of Associate Conduct, which oversees complaints of harassment and misconduct.
|
•
|
Amended the purpose of the Compensation Committee, which was renamed to the “Compensation and Human Resources” Committee, to oversee the development,
|
•
|
Appointed a Chief Governance Officer in early 2017, who is primarily focused on corporate governance stockholder engagement and Regions’ corporate governance practices.
|
•
|
Strengthened the Board’s self-evaluation process by (i) including confidential, individual discussions between the Chair of the NCG Committee, who also serves as the Board’s Lead Independent Director, and each of the other Directors and (ii) placing additional emphasis on follow-up action plans.
|
•
|
Revised all Committee charters to incorporate additional risk oversight.
|
•
|
Reduced the number of other boards on which certain Directors are permitted to serve to ensure they are able to devote sufficient time and attention to their responsibilities as a Director on our Board.
|
•
|
Strengthened the Lead Independent Director’s responsibilities and duties.
|
•
|
Made our political spending publicly available.
|
40
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Enhanced the Director recruitment criteria to incorporate the consideration of diversity, including gender and ethnic diversity, when searching for and evaluating candidates.
|
•
|
Created the Director-Stockholder Engagement Framework and provided a summary on our website.
|
•
|
Included more detail in certain corporate governance proxy disclosures, such as the Board self-evaluation process, the structure of the Board, and the skills represented on the Board.
|
•
|
Included a summary of our strategy and added more detail to our overall performance in the
Proxy Summary.
|
•
|
Enhanced proxy disclosures with respect to our independent auditor.
|
•
|
Enhanced proxy disclosures around executive compensation practices.
|
Chief Governance Officer
|
Regions Financial Corporation
1900 Fifth Avenue North, Birmingham, Alabama 35203
Attention: Chief Governance Officer
|
Investor Relations
|
Regions Financial Corporation
1900 Fifth Avenue North, Birmingham, Alabama 35203
Attention: Investor Relations
Investors@regions.com
|
Corporate Social Responsibility
|
Regions Financial Corporation
1900 Fifth Avenue North, Birmingham, Alabama 35203
Attention: Corporate Social Responsibility
|
Board of Directors
|
Regions Financial Corporation
c/o Office of the Corporate Secretary
1900 Fifth Avenue North, Birmingham, Alabama 35203
|
Lead Independent Director
|
Regions Financial Corporation
c/o Office of the Corporate Secretary
1900 Fifth Avenue North, Birmingham, Alabama 35203
Attention: Charles D. McCrary, Lead Independent Director
|
Audit Committee of the Board of Directors
|
Regions Financial Corporation
c/o Office of the Corporate Secretary
1900 Fifth Avenue North, Birmingham, Alabama 35203
Attention: Ms. Carolyn H. Byrd, Chair, Audit Committee
|
|
2018 Proxy Statement
|
41
|
CORPORATE GOVERNANCE
|
•
|
Sponsored an
Inner City Capital Connections
(“ICCC”) conference in Memphis, Tennessee, which serves to educate companies in or near city centers, at no cost to them, on how to access capital to expand their businesses. The event drew over 130 local entrepreneurs for an all-day training designed to help them grow their companies, serve more customers, and hire more people. Regions has been a major sponsor of ICCC programs since 2014.
|
•
|
Provided more than 77,000 hours of
volunteer work
, including approximately 14,000 volunteer hours on financial education.
|
•
|
Delivered in-person financial education in classrooms, workplaces, and communities. With more than 1,480 trained facilitators, the
Regions at Work
®
team presented more than 90,000 financial education seminars during the year throughout our footprint.
|
•
|
Reached 12,275 high school students and 15,220 college students through the
Regions Financial Scholars Program
, powered by EverFi. In addition, the Regions Collegiate Financial Education Program provided financial education to 1,125 student athletes.
|
•
|
Regions Financial Learning Center
, also powered by EverFi, had 15,270 new customers and associates enroll in the online adult financial education.
|
•
|
Provided more than 8,000 volunteer hours with
Junior Achievement
, earning us the President’s Bronze Award.
|
•
|
Provided more than 5,400 hours of
technical assistance
to non-profit organizations across our footprint.
|
•
|
Contributed $11.4 million in
charitable giving
.
|
•
|
Contributed $40 million to the
Regions Financial Corporation Foundation
to support financial education, job training, economic development, and affordable housing.
|
•
|
Provided $210,000 in assistance to more than 200 associates through the
Regions
Associate Relief Program
.
|
•
|
Working with Operation HOPE, we expanded the number of our
HOPE Inside
financial empowerment centers that provide cost-free financial education, as well as credit and money management counseling to underserved residents and small-business owners. In 2017, we announced plans to expand our HOPE Inside commitment to 100 locations across our footprint.
|
•
|
Continued our
What A Difference A Day Makes
program, offering every associate an annual day of Company-paid time off to volunteer in his or her community.
|
•
|
Continued our annual
Share the Good
®
program, which encourages local Regions’ offices to identify volunteer service opportunities in which we can make a positive difference.
|
•
|
Sponsored the 2017
Riding Forward Scholarship
SM
Essay Contest, where students submitted essays about an inspirational African American of the student’s choosing. Since 2012, Regions has awarded $764,000 in scholarships to high school and college students who submitted winning essays.
|
•
|
Continued expanding our
Doing More Today
SM
website, regions.doingmoretoday.com, to share stories about the communities we serve and the nonprofit organizations we help.
|
42
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
In 2017, we reduced our electricity consumption by more than 14 percent (34.4 million kWh), using a 2013 baseline*. We achieved this reduction through the implementation of our Energy Management Program and branch/office consolidation. (*This is based on properties where utilities are paid directly by Regions, roughly 83 percent of our portfolio.
)
|
•
|
The Regions Center in Birmingham, our corporate headquarters, has been Energy Star certified since 2012 after undergoing a full infrastructure upgrade. We continue to adopt energy efficiency best practices, which have reduced the building’s energy consumption by 50 percent and greenhouse gas emissions by 45 percent since 2010.
|
•
|
Through office and branch consolidations, and the continued roll out of open floor plan reconfigurations, we reduced our real estate portfolio by approximately 655,000 square feet.
|
•
|
During
2017
, our associates’ participation in CommuteSmart reduced vehicle miles traveled by 460,589, which reduced air pollution by approximately 230 tons and carbon dioxide emissions by over 280 tons.
|
•
|
Our confidential trash program collected approximately 11.4 million pounds of paper and other confidential material. After the paper was shredded, it was recycled in U.S. mills.
|
•
|
We are continuously evaluating opportunities to reduce paper use, both by our associates and our customers. Our Print Optimization program and other efforts have resulted in a 25 percent reduction in internal copy paper use since
|
Our bankers bring
Regions360
to life every day by:
|
Identifying customers' financial goals and needs through quality conversations
|
Providing practical and balanced solutions to help meet those goals
|
Offering financial advice and guidance to help customers make better financial decisions
|
Introducing expertise by bringing in the right bank partners to help meet complex needs with a “one bank, one team” approach
|
Offering customers the best client experience possible through relationship teams who are committed and engaged
|
|
2018 Proxy Statement
|
43
|
CORPORATE GOVERNANCE
|
•
|
Regions and its associates remain in compliance with all applicable laws and regulations;
|
•
|
Regions is a safe and nondiscriminatory place to work and do business;
|
•
|
Confidential and proprietary information is protected;
|
•
|
Inappropriate gifts or favors are not accepted or given; and
|
•
|
Conflicts of interest are avoided.
|
44
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
What We Have Done
|
• Our Board has set the “tone at the top” that we maintain a workplace culture where all associates are treated with dignity and respect.
|
• Expanded the purpose of and renamed the Compensation Committee to the CHR Committee to include human capital management and diversity and inclusion practices.
|
• Our CEO periodically sends notices to all associates with messages reinforcing the expectation of a strong, ethical culture and “doing the right thing.” In December 2017, a message was sent to all associates reminding them that our highest priority is to maintain a respectful workplace in which everyone feels free from discrimination, harassment, and inappropriate or unprofessional behavior.
|
• Our Board has challenged each aspect of our successful anti-harassment program—which includes policies, training, and practices.
|
• Our newly established OAC will oversee the handling, investigation, and resolution of associate complaints and our Associate Conduct Officer has met with our Directors.
|
• We reviewed our baseline of sound policies including No-Harassment, No-Retaliation, and Personal Relationships.
|
• We reviewed our procedures for raising complaints, including our reporting channels to make certain that they will continue to be effective and clear.
|
• We reviewed our “Respect in the Workplace” training. This training, which all associates are required to take, supplements our “Business Conduct and Ethics” annual training and explains, among other things, what constitutes sexual harassment and how to report it.
|
|
2018 Proxy Statement
|
45
|
CORPORATE GOVERNANCE
|
Better Life Award.
Regions’ Better Life Award is the top honor given to associates at Regions for outstanding dedication and job performance. It is awarded monthly to an associate who is a role model of our values, both at work and in their community. The recipient goes beyond what is required to make life better for a co-worker or customer in a work-related situation and impacts an internal or external customer’s life by providing superior service and the right solution the first time… and every time.
|
46
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
In 2017, we created a
Human Resources (HR) Diversity Recruiting, Retention, and Development Strategy
focusing on ethnic and gender representation throughout our Company and in leadership positions. As part of this strategy, our HR partners developed action plans identifying areas of opportunities with recruiting, retaining, and development while creating measurable goals and increasing accountability.
|
•
|
Regions Diversity Network
is a cross-section of associates from all levels who work together to advance our comprehensive diversity strategy and create greater multicultural awareness inside Regions. In 2016, we formed four Diversity Network chapters in the Midwest, Texas, South Florida areas, and within the Consumer Lending group. We are preparing to form new chapters across our footprint in 2018.
|
•
|
Regions Diversity Advisory Council
, composed of academic, community, and business leaders, offers an objective perspective on matters of diversity and inclusion in our workplace and marketplace.
|
•
|
We have continued partnerships with the United Negro College Fund and Historically Black Colleges and Universities, providing scholarships and financial education.
|
•
|
We publish
A Bank for All
, our internal newsletter, which focuses on diversity and inclusion.
|
|
2018 Proxy Statement
|
47
|
CORPORATE GOVERNANCE
|
Key Lead Independent Director Duties
|
•
Establishes the agenda and presides at executive sessions of the non-management and independent Directors
|
•
Approves meeting agendas for the Board
|
•
Approves meeting schedules to assure that there is sufficient time for discussion of all agenda items
|
•
Follows up on meeting outcomes and management deliverables
|
•
If requested by major stockholders, ensures that he or she is available for consultation and direct communication
|
•
Provides leadership to the Board in a time of emergency or crisis
|
For a complete list of responsibilities and duties, see our Corporate Governance Principles, which are available on the Investor Relations section of the Company’s website.
|
48
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Created a Board refreshment and recruitment plan to ensure the Board has the necessary skills to support the Company’s strategy.
|
•
|
Instructed management to enhance Board and Committee meeting materials so as to better facilitate robust communication and discussion among the Directors and with management so that the meetings are more interactive and discussion-based rather than report-oriented.
|
•
|
Began scheduling regular joint meetings of the Board’s Risk Committee and Audit Committee to review and discuss overlapping reporting that was being made to each Committee separately.
|
•
|
Suggested enhancements to the Director Orientation and Ongoing Education Program.
|
①
|
One-on-One Discussions
Prior to the Board’s and Committees’ full evaluation, the Chair of the NCG Committee, who also serves as the Board’s Lead Independent Director, holds individual discussions with each Director to obtain their candid feedback on Board operations and Directors’ performance.
|
②
|
Committee Discussions
Each Committee conducts its own self-evaluation on topics that are applicable only to the Committee. Committee self-evaluations are facilitated by each Committee’s Chair.
|
③
|
Reporting to the NCG Committee and full Board
Following the one-on-one discussions, the Chair of the NCG Committee provides a verbal summary, as needed and appropriate, to the NCG Committee and full Board prior to its evaluation.
|
④
|
Group Discussions
The self-evaluation program assesses the Board’s and Committees’ performance in areas such as:
• Board and Committee structure, composition, and efficiency;
• Directors’ ability to carry out key Board responsibilities;
• Exchanges between the Board and management;
• Interactions with key stakeholders; and
• Assessing Board member performance and Committee-level assessment.
Using these topics as a springboard for discussion, the Chair of the NCG Committee facilitates the self-evaluation discussions, during which Directors bring their individual expertise and experience to bear on topics raised. The self-evaluation pays particular attention to the Board’s oversight of Regions’ risk management framework, Board refreshment, and the Board’s ability to take actions and make decisions efficiently and independently from Regions’ management.
|
⑤
|
Focus on Outcomes
In 2017, the NCG Committee enhanced the self-evaluation program by placing additional emphasis on outcomes. Following the completion of the self-evaluation process, the Chair of the NCG Committee has the opportunity to meet with the General Counsel and Chief Governance Officer to discuss follow-up items. The NCG Committee and its Chair track follow-up actions, as applicable.
|
⑥
|
Incorporate Action Items
As appropriate, the follow-up action items are implemented.
|
⑦
|
Continually Enhanced Self-Evaluations
Any feedback on the self-evaluation process is incorporated into the following year’s evaluation.
|
|
2018 Proxy Statement
|
49
|
CORPORATE GOVERNANCE
|
Carolyn H. Byrd
|
Susan W. Matlock
|
David J. Cooper, Sr.
|
John E. Maupin, Jr.
|
Don DeFosset
|
Charles D. McCrary
|
Samuel A. Di Piazza, Jr.
|
James T. Prokopanko
|
Eric C. Fast
|
Lee J. Styslinger III
|
John D. Johns
|
José S. Suquet
|
Ruth Ann Marshall
|
|
•
|
The Director is employed by Regions.
|
•
|
The Director has an immediate family member who is an executive officer of Regions.
|
•
|
The Director or an immediate family member has received in a year more than $120,000 in direct compensation from Regions (not including certain permitted payments such as Director and Committee fees).
|
50
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
The Director or an immediate family member has certain relationships with Regions’ external or internal auditors.
|
•
|
The Director or an immediate family member is employed as an executive officer of another company and a Regions executive officer serves on that other company’s compensation committee.
|
•
|
The Director is a current employee, or an immediate family member is a current executive officer, of a company that made payments to, or received payments from, Regions in an amount that exceeds the greater of $1 million or 2 percent of the applicable company’s consolidated gross revenues.
|
•
|
The Director or an immediate family member has a customer relationship with Regions that is established and administered by Regions in the ordinary course of business, on terms and conditions not more favorable than those afforded by Regions to other similarly situated customers.
|
•
|
If the Director or immediate family member has a loan or extension of credit, and that loan was made or credit was extended on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and involved no more than the normal risk of collectability and presented no other unfavorable features.
|
•
|
If Regions employs an adult family member of the Director in the ordinary course of business in a capacity other than as an executive officer.
|
•
|
The Director’s or immediate family member’s interest in a transaction results solely from service as a director (or comparable position) of another company that is a party to the transaction or from the beneficial ownership of less than 10 percent of the other entity’s equity.
|
•
|
The transaction is one where the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.
|
•
|
All of the Directors, except Directors DeFosset, Fast, Prokopanko, and Suquet, either individually or through an affiliated entity or an immediate family member, have customer relationships with Regions’ subsidiaries, such as a deposit, brokerage, trust, or other financial services relationship in the ordinary course of Regions’ banking and/or brokerage business, on terms and conditions not more favorable than those afforded by Regions or its subsidiaries to other similarly situated customers.
|
•
|
All of the Directors, except Directors DeFosset, Di Piazza, Fast, Marshall, Prokopanko, and Suquet, either individually or through an affiliated entity, have bank loans from Regions’ subsidiaries on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans by Regions’ subsidiaries to unrelated persons, and involving no more than the normal risk of collectability and no other unfavorable features.
|
•
|
Directors Cooper, DeFosset, Johns, Maupin, McCrary, and Styslinger serve solely as a member of the board of directors of a charitable organization to which Regions or its subsidiaries made charitable contributions of less than the greater of $1 million or 2 percent of such organization’s consolidated gross revenues in 2015,
2016
, or
2017
.
|
•
|
Director Byrd serves as a director of the Federal Home Loan Mortgage Corporation (“Freddie Mac”). The $21 million in revenue Regions’ subsidiaries received from servicing loans for Freddie Mac is not a material portion of Regions’ total revenues. Additionally, Regions’ subsidiaries are not dependent solely on Freddie Mac as a purchaser of loans. Regions’ relationships with Freddie Mac commenced before Ms. Byrd joined Regions’ Board and are expected to continue.
|
•
|
Director Di Piazza serves as a director of AT&T Inc. Regions paid AT&T approximately $1.8 million for services in
2017
. Regions’ relationships with AT&T commenced before Mr. Di Piazza was appointed to Regions’ Board and are expected to continue.
|
•
|
Director McCrary serves as a director of Great Southern Wood Preserving, Incorporated. Great Southern Wood and subsidiaries are customers of Regions for typical commercial banking products and services, including
|
|
2018 Proxy Statement
|
51
|
CORPORATE GOVERNANCE
|
•
|
Director Styslinger serves as a director of Workday, Inc., a leading provider of enterprise cloud applications for finance and human resources. Workday helps Regions effectively manage its workforce through the use of its human capital application focused on talent management, compensation and benefits administration, payroll and timekeeping, as well as human resources data management. Regions paid Workday approximately $3.3 million for services in
2017
. Regions’ relationship with Workday commenced before Mr. Styslinger was appointed to Workday’s board and is expected to continue.
|
•
|
Director Johns currently serves as Executive Chairman of Protective Life Corporation, a wholly-owned subsidiary of Dai-ichi Life Insurance Company, Limited. The NCG Committee and the Board have determined that the relationships between Regions and Protective do not impair Director Johns’ independence given that the transactions are:
|
–
|
Not material to Protective in light of its annual income or gross revenues because the payments to or received from Protective of approximately $6.5 million were well below 2 percent of Protective’s consolidated gross revenues and were approximately 0.14 percent in
2017
, 0.08 percent in
2016
, and 0.1 percent in
2015
;
|
–
|
Not material to Regions in light of its annual income or gross revenues;
|
–
|
Conducted at arm’s length in the ordinary course of business of each party to the transactions;
|
–
|
Not material to Director Johns as Executive Chairman of Protective;
|
–
|
Not involving a personal stake of Director Johns in the transactions;
|
–
|
Not involving Director Johns in the negotiations or discussions leading to the transactions; and
|
–
|
Typical of transactions that Protective conducts with other financial institutions.
|
•
|
Director Suquet serves as Chairman, President, and CEO of Pan-American Life Insurance Group and its subsidiaries (“PALIG”). Regions Insurance, through normal course of business, received commissions from PALIG from the procurement of insurance for customers in the amounts of approximately $14,300 in
2017
; $28,000 in
2016
, and $36,000 in
2015
. These relationships commenced before Mr. Suquet was appointed to Regions’ Board and are expected to continue.
|
•
|
The NCG Committee and the Board have determined that the relationships between Regions and PALIG do not impair Director Suquet’s independence given that the
|
–
|
Not material to PALIG in light of its annual income or gross revenues;
|
–
|
Not material to Regions in light of its annual income or gross revenues;
|
–
|
Conducted at arm’s length in the ordinary course of business of each party to the transactions;
|
–
|
Not material to Director Suquet as Chairman, President, and CEO of PALIG;
|
–
|
Not involving a personal stake of Director Suquet in the transactions;
|
–
|
Not involving Director Suquet in the negotiations or discussions leading to the transactions; and
|
–
|
Typical of transactions that PALIG conducts with other financial institutions.
|
•
|
Director Maupin serves as Chair of the Board of Directors of Regions Community Development Corporation, a non-profit corporation sponsored by Regions that is dedicated to providing technical assistance for affordable housing, small business, and community development initiatives.
|
•
|
Directors Cooper and Hall serve on the board of directors of Alabama Power Company (a subsidiary of The Southern Company), where Director McCrary previously served as President and CEO. Alabama Power Company’s common stock is not publicly traded. Director Johns serves on the board of directors of The Southern Company. C. Dowd Ritter, the father of Regions executive officer William D. Ritter, serves on the board of directors of Alabama Power Company.
|
•
|
Prior to the February 2015 acquisition of Protective, Directors Johns and McCrary served on its board of directors, where Director Johns continues to serve as Executive Chairman. C. Dowd Ritter, the father of Regions executive officer William D. Ritter, served on the board of directors of Protective prior to its acquisition.
|
•
|
Directors Hall, Prokopanko, and Styslinger also serve on the board of directors of Vulcan Materials Company.
|
52
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
our non-management Directors or their immediate family members;
|
•
|
a company or charitable organization of which the non-management Director or the Director’s immediate family member is, or was during
2017
, a partner, officer, or employee; or
|
•
|
a company in which the non-management Director or the Director’s immediate family member holds a significant ownership position.
|
|
“Ordinary
Course” Customer
Relationships (1) |
Loans or
Extensions
of Credit (2) |
Charitable
Contributions (3) |
Nonmaterial
Relationships (4)
|
Family
Relationships (5)
|
Carolyn H. Byrd
|
●
|
●
|
None
|
●
|
None
|
David J. Cooper, Sr.
|
●
|
●
|
●
|
●
|
None
|
Don DeFosset
|
None
|
None
|
●
|
None
|
None
|
Samuel A. Di Piazza, Jr.
|
●
|
None
|
None
|
●
|
None
|
Eric C. Fast
|
None
|
None
|
None
|
None
|
None
|
John D. Johns
|
●
|
●
|
●
|
●
|
None
|
Ruth Ann Marshall
|
●
|
None
|
None
|
None
|
None
|
Susan W. Matlock
|
●
|
●
|
None
|
●
|
None
|
John E. Maupin, Jr.
|
●
|
●
|
●
|
●
|
None
|
Charles D. McCrary
|
●
|
●
|
●
|
●
|
None
|
James T. Prokopanko
|
None
|
None
|
None
|
●
|
None
|
Lee J. Styslinger III
|
●
|
●
|
●
|
●
|
None
|
José S. Suquet
|
None
|
None
|
None
|
●
|
None
|
(1)
|
“Ordinary Course” customer relationships are transactions or relationships that Regions would enter into on the same terms and conditions with any similarly situated customer.
|
(2)
|
Includes a loan or extension of credit that was made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated persons, and involve no more than the normal risk of collectability and present no other unfavorable features.
|
(3)
|
Directors serve solely as a member of the board of directors of a charitable organization to which Regions or its subsidiaries made charitable contributions of less than the greater of $1 million or 2% of such organization’s consolidated gross revenues.
|
(4)
|
Nonmaterial relationships include service as only a director by Director Byrd at Freddie Mac, Director Di Piazza at AT&T, Director McCrary at Great Southern Wood, and Director Styslinger at Workday; arm’s-length business relationships with Protective and PALIG; Director Maupin’s service as Chairman of Regions’ non-profit corporation, Regions Community Development Corporation; and outside Directors’ service on a board of directors (i) where a Regions Director serves or recently served as President and/or CEO and/or (ii) where C. Dowd Ritter, the father of Regions executive officer William D. Ritter, serves on the board of directors; or common service on boards at Alabama Power Company or Vulcan Materials Company.
|
(5)
|
No immediate family relationship exists between any of our Directors or executive officers and any other Directors or executive officers.
|
|
2018 Proxy Statement
|
53
|
CORPORATE GOVERNANCE
|
54
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
the related person’s relationship to Regions and their interest in the transaction;
|
•
|
the significant facts of the potential transaction, including the proposed aggregate value of the transaction;
|
•
|
the benefits to Regions of the potential transaction;
|
•
|
if applicable, the availability of other sources of comparable products or services;
|
•
|
an assessment of whether the potential transaction is on terms that are comparable to the terms available to an unrelated third party or to associates generally; and
|
•
|
an assessment of whether the potential related person transaction is consistent with our Code of Conduct.
|
•
|
the benefits to Regions;
|
•
|
the impact on a Director’s independence in the event the related person is a Director, an immediate family member of a Director or an entity in which a Director is a partner, significant stockholder or executive officer;
|
•
|
the availability of other sources for comparable products or services;
|
•
|
the terms of the transaction;
|
•
|
the terms available to unrelated third parties or to associates generally; and
|
•
|
whether the potential related person transaction is consistent with the Code of Conduct.
|
•
|
Extensions of credit (including interest rates and collateral) to covered individuals or entities must be made on substantially the same terms as those prevailing at the time for comparable transactions with those who are not covered.
|
•
|
The covered extension of credit must be made following credit underwriting procedures no less stringent than those prevailing at the time for comparable transactions with non-covered individuals or entities. The extension of credit may not involve more than the normal risk of repayment or present other unfavorable features.
|
•
|
The amount of covered extensions of credit do not exceed individual and aggregate lending limits, depending on the identity of the borrower and the nature of the loan.
|
|
2018 Proxy Statement
|
55
|
CORPORATE GOVERNANCE
|
•
|
Comply with our Regulation O policies and procedures;
|
•
|
Are made in the ordinary course of business;
|
•
|
Are 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 Regions; and
|
•
|
Do not involve more than the normal risk of collectibility or present other unfavorable features.
|
56
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
|
2018 Proxy Statement
|
57
|
CORPORATE GOVERNANCE
|
•
|
The Risk Committee oversees operational risk, which includes information technology activities and risks associated with development, infrastructure, and information/cyber security; approval and oversight of information security risk assessment, strategy, policy, and program framework; disaster recovery, business continuity, and incident response.
|
•
|
On a regular basis, the Audit Committee reviews our cybersecurity risk management practices, primarily by receiving reports on the Company’s cybersecurity management program prepared by the Chief Information Security Officer, risk management, and Internal Audit.
|
•
|
The Company regularly provides cybersecurity education and training to our associates to mitigate, among other things, social engineering attempts.
|
•
|
Mr. Hall, our current Chairman and CEO, has extensive technology and operations expertise, including information security and cybersecurity experience. His background as the former head of the Operations and Technology Group at Regions for eleven years, affords Regions with a leader who has comprehensive knowledge and experience in this area. Furthermore, in addition to Mr. Hall, certain other Directors on the Board have considerable cybersecurity experience.
|
•
|
Regions employs widely accepted cybersecurity guidance, policies, and best practices to help us effectively define and measure our program and its components, including the National Institute of Standards and Technology framework.
|
•
|
Several key technology officers at Regions, who are actively engaged in protecting our information systems and data, include: Enterprise Chief Information Officer; Chief Information Security Officer; Threat Intelligence Officer; Cyber Security Operations Officer; Vulnerability Management Officer; Cyber Risk Management Officer; Head of Innovation and IT Risk; and Director of IT Audit.
|
•
|
We have a dedicated Security Operations Center for monitoring and responding to cyber events to protect the information of our customers, associates, and the Company and the availability and integrity of our information systems.
|
•
|
Our Information Security Program includes multiple layers of security controls as part of our in-depth defense strategy and security measures to reliably authenticate customers accessing the Company’s Internet-based services.
|
•
|
We continuously develop and enhance controls, processes and systems to protect our networks, computers, systems, and data from attacks or unauthorized access. This includes comprehensive due diligence and ongoing oversight of third-party relationships, involving vendors.
|
•
|
Regions has a defined physical security program with industry accepted controls in place that include monitored and defended perimeters, badge restricted access, video surveillance, and biometric readers to access the data center raised floor.
|
•
|
We keep a computer forensics firm and an industry-leading consulting firm on retainer in case of a breach event.
|
•
|
Regions has a Business Continuity/Disaster Recovery program in place that is tested at least annually.
|
•
|
We continuously make investments in our technology infrastructure to ensure appropriate capacity and replace older systems.
|
•
|
Our insurance policies have been tailored to cover potential financial losses due to cyber events.
|
•
|
Regions has contracts with vendors to provide denial of service mitigation. These vendors have also committed the necessary resources to support Regions in the event of an attack.
|
•
|
We are a member of the Financial Services Information Sharing and Analysis Center (“FS-ISAC”), a nonprofit organization funded entirely by its member firms and sponsors. The overall objective of FS-ISAC is to protect the financial services sector against cyber and physical threats and risk. It acts as a trusted third party that provides anonymity to allow members to submit threat, vulnerability, and incident information in a non-attributable and trusted manner so information that would normally not be shared is instead provided to other members for the good of the membership.
|
•
|
We are also a member of BITS, the technology arm of the Financial Services Roundtable. BITS serves the financial community and its members by providing industry best practices on a variety of security and fraud topics.
|
•
|
We leverage a robust risk management framework to address cyber risk: information security owns the controls, risk management assesses and monitors the risk, and internal audit tests control effectiveness.
|
•
|
Our Cyber Risk Management Program is a second line of defense that provides objective challenge, oversight, and independent assessment of the cybersecurity risk posture across Information Technology, Information Security, and business units at Regions with exposure to cybersecurity risk.
|
•
|
The Board consults, from time to time, with outside parties with an expertise in cybersecurity.
|
•
|
Our Information Security group performs ongoing social engineering assessments and engages independent third parties to perform annual network penetration tests.
|
58
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Strong clawback policy;
|
•
|
Policy providing guidance to business leadership as to the appropriate use of discretion in compensation decisions;
|
•
|
Policy covering adverse risk events and how we consider those events in making compensation decisions;
|
•
|
A centralized group that assists the businesses with the design of incentive plans so that they are in alignment with the business strategies, guiding principles for variable compensation, risk appetite statements, and all relevant guidelines and policies;
|
•
|
A comprehensive internal governance process covering the administration of our incentive compensation programs;
|
•
|
Robust compliance, internal control, disclosure review, and reporting programs;
|
•
|
Long-term compensation awards that are subject to substantial future performance requirements; and
|
•
|
Policy that prohibits hedging strategies related to the ownership stakes our key associates have in Regions.
|
|
2018 Proxy Statement
|
59
|
CORPORATE GOVERNANCE
|
•
|
other services provided to Regions by Cook & Co.;
|
•
|
fees paid by Regions as a percentage of Cook & Co.’s total revenue;
|
•
|
policies or procedures maintained by Cook & Co. that are designed to prevent a conflict of interest;
|
•
|
any business or personal relationships between the individual consultants involved in the engagement and a member of the CHR Committee;
|
•
|
any Regions equity securities owned by the individual consultants involved in the engagement and certain of their family members; and
|
•
|
any business or personal relationships between Regions’ executive officers and Cook & Co. or the individual consultants involved in the engagement.
|
Meetings Held
|
|
Board of Directors
|
8
|
Audit Committee
|
12
|
CHR Committee
|
6
|
NCG Committee
|
5
|
Risk Committee
|
4
|
Joint Meeting of Audit Committee and Risk Committee
|
1
|
Joint Meeting of CHR Committee and Risk Committee
|
1
|
Joint Meeting of NCG Committee, CHR Committee, and the Board
|
1
|
Total
|
38
|
60
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
|
2018 Proxy Statement
|
61
|
CORPORATE GOVERNANCE
|
|
Audit
Committee
|
CHR
Committee
|
NCG
Committee
|
Risk
Committee
|
Carolyn H. Byrd
4
|
Chair
|
|
|
|
David J. Cooper, Sr.
|
|
Member
|
Member
|
|
Don DeFosset
|
|
Chair
|
|
Member
|
Samuel A. Di Piazza, Jr.
4
|
Member
|
Member
|
|
|
Eric C. Fast
4
|
Member
|
|
|
Member
|
John D. Johns †
|
|
|
|
Chair
|
Ruth Ann Marshall
|
|
Member
|
Member
|
|
Susan W. Matlock
|
|
Member
|
|
Member
|
John E. Maupin, Jr.
|
Member
|
|
Member
|
|
Charles D. McCrary *
|
|
|
Chair
|
|
James T. Prokopanko
|
|
|
Member
|
Member
|
Lee J. Styslinger III
4
|
Member
|
|
|
Member
|
José S. Suquet †
|
|
Member
|
|
Member
|
†
|
Risk Committee Risk Management Expert
|
*
|
Lead Independent Director
|
Meetings in 2017
|
|
Key Responsibilities:
|
12 plus 1 joint meeting with the Risk Committee
|
|
• Assist and advise the Board in monitoring:
- Integrity of the Company’s financial statements and the financial reporting process, including matters relating to internal accounting and financial controls
- Independent auditor’s qualifications and independence
- Performance of the Company’s internal audit function and independent auditor
- Compliance with legal and regulatory requirements
• Appoint or replace and oversee the independent auditor
• Pre-approve all auditing services, internal control-related services, and, subject to certain
de minimis
exceptions, permitted non-audit services to be performed by the independent auditor
• Discuss with management the (i) Company’s major financial risk exposures and (ii) steps management has taken to monitor and control such exposures
• Review and discuss financial statements and disclosure matters that will be filed with the SEC
• Review and discuss with management non-GAAP information
• Oversee, review, and evaluate the Company’s relationship with the independent auditor and the independent auditor’s performance and independence
• Oversee the Company’s internal audit function
|
Members
|
|
|
Carolyn H. Byrd (Chair)
|
|
|
Samuel A. Di Piazza, Jr.
|
|
|
Eric C. Fast
|
|
|
John E. Maupin, Jr.
|
|
|
Lee J. Styslinger III
|
|
|
Each member of the Audit Committee was determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
Each member of the Audit Committee was determined to be financially literate, and Directors Byrd, Di Piazza, Fast, and Styslinger were each determined to be an Audit Committee Financial Expert.
|
|
|
The Audit Committee Report can be found on page 67.
|
|
62
|
|
2018 Proxy Statement
|
CORPORATE GOVERNANCE
|
Meetings in 2017
|
|
Key Responsibilities:
|
6 plus 1 joint meeting with the Risk Committee and 1 joint meeting with the NCG Committee and Board
|
|
• Assist and advise the Board in:
- Fulfilling its responsibilities relating to the compensation of the executive officers
- Ensuring that all executive compensation is fair, appropriate, reasonable, and in compliance with all relevant regulations
• Oversee and monitor the Company’s compensation plans and programs to determine whether they are properly aligned with the Company’s strategic and financial objectives and ensure that such employee compensation plans and programs are supportive of the Company’s risk appetite and tolerances established by the Board and establish and maintain the appropriate processes and procedures and engage sufficient personnel to manage compensation-related risks
• Review and approve all Company goals and objectives relevant to the CEO’s compensation and evaluate the CEO’s performance in light of those goals and objectives
• Determine and approve the CEO’s compensation; approve the compensation of the executive officers and certain senior officers
• Review and approve any employment agreement, new hire award or payment proposed to be made with any proposed or current executive officer
• Ensure that the compensation and other incentives granted to the CRO are consistent with providing an objective assessment of the risks taken by the Company, in consultation with the Risk Committee
• Review and approve any severance; change-in-control; or similar termination agreement, award, or payment proposed to be made to any current or former executive officer
• Approve any new equity compensation plan or any material change to an existing plan where stockholder approval is not required
• Review and make recommendations as to the form and amount of Director compensation in coordination with the NCG Committee
• Assist the Board in overseeing the development, implementation, and effectiveness of the Company’s strategies and policies regarding its human resources management function, including, but not limited to, human capital and talent management, management succession (in coordination with the NCG Committee), and diversity and inclusion practices
|
Members
|
|
|
Don DeFosset (Chair)
|
|
|
David J. Cooper, Sr.
|
|
|
Samuel A. Di Piazza, Jr.
|
|
|
Ruth Ann Marshall
|
|
|
Susan W. Matlock
|
|
|
José S. Suquet
|
|
|
Each member of the CHR Committee was determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
The CHR Committee Report can be found on page 90.
|
|
|
Under its Charter, the CHR Committee may delegate all or a portion of its authority, duties, and responsibilities to the CEO or a subcommittee.
|
|
|
|
||
With respect to the management and administration of the Company’s employee benefit plans, the CHR Committee has delegated certain responsibilities to management’s Benefits Management and Human Resources Committee. Further, the CEO has delegated authority to determine and approve annual grants to key associates under the LTIP, subject to annual grant program guidelines.
|
|
CHR Committee Members During 2017
|
David J. Cooper, Sr.
|
Don DeFosset
|
Samuel A. Di Piazza, Jr.
|
Ruth Ann Marshall
|
Susan W. Matlock
|
José S. Suquet
|
|
2018 Proxy Statement
|
63
|
CORPORATE GOVERNANCE
|
Meetings in 2017
|
|
Key Responsibilities:
|
5 plus
1 joint meeting with the CHR Committee and Board
|
|
• Assist and advise the Board in:
- Identifying, considering, and evaluating individuals qualified to become Board members
- Establishing and maintaining effective corporate governance policies and practices
• Monitor Directors’ service on other boards to ensure that each Director has adequate time to appropriately serve on Regions’ Board
• Make recommendations as to the appropriate stock ownership and compensation of non-employee Directors, in consultation with the CHR Committee
• Review and assess the Company’s Corporate Governance Principles, Code of Conduct, and Director-Stockholder Engagement Framework
• Oversee the Company’s significant practices and reporting with respect to environmental stewardship and corporate social responsibility
• Facilitate and oversee the Board’s self-evaluation process
• Oversee the Company’s management succession plan
• Oversee any amendment to the Company’s Certificate of Incorporation or By-Laws
|
Members
|
|
|
Charles D. McCrary (Chair)
|
|
|
David J. Cooper, Sr.
|
|
|
Ruth Ann Marshall
|
|
|
John E. Maupin, Jr.
|
|
|
James T. Prokopanko
|
|
|
Each member of the NCG Committee was determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
Meetings in 2017
|
|
Key Responsibilities:
|
4 plus 1 joint meeting with the Audit Committee and 1 joint meeting with the CHR Committee
|
|
• Oversees the Company’s enterprise-wide risk-management framework, including policies, procedures, strategies, and systems established by management to identify, mitigate, monitor, and report major risks, including emerging risks and other enterprise risks
• Establishes the Board’s risk appetite parameters to be used by management to operate the Company within the Enterprise Risk Appetite Statement
• Monitors the Company’s performance to ensure alignment with the tolerance levels articulated in the Enterprise Risk Appetite Statement
• Ensures that the compensation of the Chief Risk Officer is consistent with providing an objective assessment of the risks taken by the Company
• Approves, at least annually, the contingency funding plan that sets out the Company’s strategies for addressing liquidity needs during liquidity stress events
• Oversees the Company’s fiduciary activities, including oversight of trust powers exercised by Regions Bank
• Oversees the Company’s Credit Review function, including approving the appointment of the Director of Credit Review and reviewing his or her performance and compensation
|
Members
|
|
|
John D. Johns (Chair)
|
|
|
Don DeFosset
|
|
|
Eric C. Fast
|
|
|
Susan W. Matlock
|
|
|
James T. Prokopanko
|
|
|
Lee. J. Styslinger III
|
|
|
José S. Suquet
|
|
|
Each member of the Risk Committee was determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
Directors Johns and Suquet were each determined to be a “risk managements expert” within the meaning of the Federal Reserve’s Regulation YY.
|
|
64
|
|
2018 Proxy Statement
|
PROPOSAL 2-RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
2017
|
|
2016
|
|
||
Audit Fees
(1)
|
$
|
6,728,474
|
|
$
|
6,148,610
|
|
Audit-Related fees
(2)
|
391,273
|
|
397,708
|
|
||
Tax Fees
(3)
|
249,310
|
|
78,811
|
|
||
All Other Fees
(4)
|
303,815
|
|
235,506
|
|
||
Total Fees
|
$
|
7,672,872
|
|
$
|
6,860,635
|
|
(1)
|
Audit fees include fees associated with the annual audit of Regions’ consolidated financial statements and internal control over financial reporting, reviews of Regions’ quarterly reports on Form 10-Q, SEC regulatory filings and other matters, statutory audits, and audits of subsidiaries.
|
(2)
|
Audit-related fees include fees associated with audits of employee benefit plans and certain non-registered funds, as well as service organization reports.
|
|
2018 Proxy Statement
|
65
|
PROPOSAL 2-RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
(3)
|
Tax fees include fees associated with tax compliance services, including the preparation, review and filing of tax returns, tax advice, and tax planning.
|
(4)
|
All other fees principally include fees associated with advisory services related to regulatory compliance reporting.
|
66
|
|
2018 Proxy Statement
|
AUDIT COMMITTEE REPORT
|
|
|
|
Carolyn H. Byrd, Chair
|
Samuel A. Di Piazza, Jr.
|
Eric C. Fast
|
|
|
|
|
|
|
|
John E. Maupin, Jr.
|
Lee J. Styslinger III
|
|
2018 Proxy Statement
|
67
|
PROPOSAL 3-ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY”)
|
68
|
|
2018 Proxy Statement
|
PROPOSAL 4–ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
|
|
2018 Proxy Statement
|
69
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Principal Position
|
O. B. Grayson Hall, Jr.
|
Chairman and Chief Executive Officer (“CEO”)
|
David J. Turner, Jr.
|
Chief Financial Officer (“CFO”)
|
John B. Owen
|
Head of Enterprise Services and Consumer Banking
|
John M. Turner, Jr.
|
President
|
C. Matthew Lusco
|
Chief Risk Officer (“CRO”)
|
•
|
Regions was the winner of the 2017 American Customer Satisfaction Index for super regional Banks, and tied for first with Citibank among all named financial institutions.
|
•
|
For the fourth year in a row, Regions was recognized by the Temkin Group as a top decile performer in their annual Temkin Retail Banking Experience Rankings. Regions placed 4th out of over 300 companies across 20 industries and was the top rated bank.
|
•
|
Regions won nine 2017 Greenwich Excellence for Small Business/Middle Market Banking awards in our Commercial Banking Group.
|
•
|
Regions won the 2017 Greenwich Excellence award for Overall Satisfaction in Private Wealth.
|
•
|
Regions was recognized as a 2017 Trust in Banking Leader by Javelin Research, a wholly owned subsidiary of Greenwich Associates. Regions was among the top three financial institutions.
|
•
|
2017 Net Income from Continuing Operations Available to Common Shareholders was $1.193 billion, or $1.00 per diluted share, which is a 15 percent increase over the $0.87 per diluted share realized in 2016.
|
•
|
Expenses were relatively unchanged with a full-year adjusted efficiency ratio of 62.2 percent.
|
•
|
Executed a strategic reduction of high-cost deposits and improved credit metrics.
|
•
|
Consolidated 59 branches, which brings our two-year total of consolidated branches to 162.
|
70
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Compensation Component
|
Key Decisions Made and the Impact of Performance on Decisions
|
2017 Base Salaries
|
Keeping with the principle that pay should largely be performance-based, there was little change in base salary. In early 2017, the CHR Committee approved the following:
–
CEO base salary remained unchanged from previous years; and
–
Most NEOs received a modest base salary increase of 2.5 percent in recognition of solid individual performance.
|
Annual Cash Incentive Compensation Awards
|
The short-term incentive target opportunities remained consistent with no changes from 2016 to 2017. Diligent execution of our strategic plan yielded above-target corporate results for the year, at 158 percent of target expectations. Individual performance was also strong for the year. Accordingly, the 2017 annual cash incentive payment for each NEO increased over payments made for 2016.
|
Long-Term Incentives
|
The long-term incentive grants made in 2017 were consistent in structure to those granted in 2016. We continue to measure long-term performance on the two metrics we consider most important to sustained stockholder value, diluted Earnings Per Share (“EPS”) growth and Return on Average Tangible Common Equity (“ROATCE”). While the CHR Committee considers the grants made in 2017 to be current-year compensation, it is important to also recognize and evaluate the impact of performance on prior years’ awards in ensuring executive compensation is in line with performance. To that end, the CHR Committee noted that long-term compensation awarded in 2015 for the three-year performance period ending December 31, 2017, will pay out at 100 percent of target. These payout levels evidence the steady improvement in our corporate performance related to diluted EPS growth and ROATCE over the long-term.
|
|
2018 Proxy Statement
|
71
|
COMPENSATION DISCUSSION AND ANALYSIS
|
72
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
1.
|
Compensation targets should be set at competitive levels.
|
2.
|
Actual compensation levels should be related to performance, with at-risk incentive compensation playing a greater role in the total compensation for more senior officers.
|
3.
|
Compensation should be aligned with the long-term interests of stockholders and consistent with the safety and soundness of the Company.
|
4.
|
Compensation programs and levels should not encourage associates to take unreasonable risks that may damage the long-term value of the Company.
|
5.
|
Compensation programs should align with our corporate values.
|
What We Do
|
||
ü
|
Pay for Performance (pages 76-82)
|
Executive pay decisions are made to ensure that the majority of total direct compensation is at-risk and not guaranteed. For example, 89 percent of our CEO’s target compensation is performance-based with 64 percent of that performance-based pay subject to deferral and the requirement for sustained performance over a multi-year period.
|
ü
|
Evaluate Performance Using a Combination of Balanced Performance Metrics (pages 76-82)
|
We evaluate corporate performance in our annual incentive plans by using a diverse set of performance metrics to ensure that no single measure can inappropriately impact compensation. Our performance is evaluated compared to internal expectations, budgets, and plans and balanced with evaluations on a relative basis by comparing our results to those of similar financial institutions. Plans also include a degree of discretion allowing for the exercise of sound business judgment by the CHR Committee when assessing performance and corresponding pay decisions.
|
ü
|
Require Strong Stock Ownership and Retention of Equity (page 88)
|
The Board established robust stock ownership guidelines that each of our NEOs must meet in order to assure that executives’ interests are tied to those of our stockholders.
|
ü
|
Provide for a Strong Clawback Policy (pages 86-87)
|
In the event previously paid incentive compensation is determined to be based on materially inaccurate performance metrics or an executive has engaged in excessively risky or other detrimental conduct, the CHR Committee has wide latitude to cancel or reduce any current or future incentive compensation. In addition, the CHR Committee has further authority to recapture incentive compensation that has been paid if determined to be in the best interests of the Company and our stockholders.
|
ü
|
Require Double Trigger Change-in-Control Provisions (page 89)
|
Our change-in-control agreements and long-term incentive awards require both a change-in-control and termination of employment to trigger vesting and/or payment. No awards or benefits vest only upon a change-in-control.
|
ü
|
Use an Independent Compensation Consultant (pages 84-85)
|
The CHR Committee determined its compensation consultant to be independent under SEC and NYSE rules.
|
ü
|
Listen to and Engage with Our Stockholders (pages 74-75)
|
We conduct an annual advisory Say-on-Pay vote, as recommended by our stockholders, and actively review the results of these votes as we make program decisions. In 2017, stockholders voiced substantial support for our executive compensation plans and programs, with over 96 percent of votes cast in approval. Additionally, as a part of our corporate governance and stockholder engagement program, we solicit feedback regarding our compensation programs from our largest investors and consider any stockholder comments we receive. Stockholders are also invited to express their views to the CHR Committee as described on page 41 of this proxy statement.
|
|
2018 Proxy Statement
|
73
|
COMPENSATION DISCUSSION AND ANALYSIS
|
What We Don’t Do
|
||
X
|
No Incentive Plans that Encourage Excessive Risk Taking
|
Protecting against unreasonable risk is a core guiding principle of our compensation philosophy and is demonstrated in numerous ways, including balanced program design; the use of multiple and competing performance measures; the adoption of a clawback and other enterprise-wide risk-related policies; and robust governance and oversight processes to identify, monitor, mitigate, and manage risk. Our comprehensive risk assessment of incentive-based compensation plans validates our belief that none of our compensation programs create risks that are reasonably likely to have a material adverse impact on the Company.
|
X
|
No Employment Agreements for Executive Officers
|
Our executive officers are at-will employees with no employment contracts.
|
X
|
No Tax Gross-Ups on Perquisites (“Perks”)
|
We do not provide tax gross-ups to our NEOs for any taxable perks provided to them. In addition, we have not entered into any new agreements that permit excise tax gross-ups on change-in-control payments since 2011.
|
X
|
No Repricing of Underwater Options
|
We do not reprice “out-of-the-money” stock options.
|
X
|
No Hedging, Pledging, or Short Sales
|
We do not permit our associates or Directors to hedge or short-sell Regions securities. Additionally, our executive officers and Directors are prohibited from pledging Regions securities.
|
X
|
No Dividends or Dividend Equivalents on Unearned Grants
|
We do not pay dividends or dividend equivalents on shares or units that are not earned. We issue dividend and dividend equivalent payments at the end of a performance period only on shares and units that ultimately vest.
|
X
|
No Excessive Perks
|
While the CHR Committee has eliminated most perks, those that remain are monitored to ensure they continue to be based on sound business rationale.
|
74
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
1. Review Competitiveness and Business Objectives
|
||
Prior to the start of each calendar year, the CHR Committee focuses on two areas related to upcoming compensation decisions:
|
||
Review of Market Competitiveness of Pay
|
|
Review of Potential Plan Changes, Business Plans,
Budgets, and Expected Results
|
The CHR Committee evaluates the market competitiveness of compensation for each of our executive officers in order to guide target compensation decisions for the coming year. With the assistance of its independent compensation consultant, the CHR Committee reviews the compensation of our executive officers against that of the Company’s compensation peer group, as well as a larger group of diversified financial institutions that compete for business.
|
|
The CHR Committee begins its discussions about compensation plan design for the coming year. Potential plan changes are discussed based on previous effectiveness evaluations. In addition, members of the executive management team advise the Board with respect to business plans, business risks, expected financial results, and stockholder return expectations. The CHR Committee uses these discussions to facilitate the goal setting process for both our short- and long-term performance-based compensation plans.
|
|
2018 Proxy Statement
|
75
|
COMPENSATION DISCUSSION AND ANALYSIS
|
4. Evaluate and Certify Company Performance and NEO Compensation
|
||
During the fourth quarter and the first quarter of the following year, the CHR Committee considers items related to current year compensation, as well as looks forward to compensation decisions for the following year. Decisions related to NEO compensation and current year performance can be summarized as follows:
|
||
Evaluate Company Performance
|
|
Certify Company Performance and Calculate Compensation
|
The CHR Committee previews Company forecasts with regard to performance under the short-term and long-term plans to prepare for payment discussions in the first quarter. Forecasts of performance include financial results based on GAAP, as well as a thorough review of adjustments to earnings and any unanticipated or extraordinary events that may have occurred during the year. The CHR Committee begins to evaluate qualitative performance factors and separately, in executive session with only CHR Committee members present, participates in a detailed performance review of the CEO.
|
|
After performance results are known and calculated, the CHR Committee reviews final performance results and determines the need to apply discretion, flexibility, and judgment in order to balance the objective evaluations of performance with near-term performance and progress toward our longer-term objectives. After decisions are made, the CHR Committee certifies the performance results that executive officers have earned for the period.
|
|
Base Salary Change
|
Annualized Base Salary
|
Annual Incentive Target*
|
Long-Term Incentive
|
Total Target
Compensation
|
||||||||||||||||
Name
|
Percentage of Base Salary (unchanged)
|
Target Annual Incentive
|
Target Change
|
Target
|
|||||||||||||||||
O. B. Grayson Hall, Jr.
|
ó
|
—
|
%
|
$
|
1,000,000
|
|
ó
|
175%
|
$
|
1,750,000
|
|
ñ
|
$
|
400,000
|
|
$
|
5,000,000
|
|
$
|
7,500,000
|
|
David J. Turner, Jr.
|
ñ
|
2.5%
|
|
$
|
664,200
|
|
ó
|
110%
|
$
|
712,800
|
|
ó
|
$
|
—
|
|
$
|
1,200,000
|
|
$
|
2,560,800
|
|
John B. Owen
|
ñ
|
2.5%
|
|
$
|
680,600
|
|
ó
|
110%
|
$
|
730,400
|
|
ó
|
$
|
—
|
|
$
|
1,200,000
|
|
$
|
2,594,400
|
|
John M. Turner, Jr.
|
ñ
|
11%
|
|
$
|
600,000
|
|
ó
|
110%
|
$
|
627,000
|
|
ñ
|
$
|
300,000
|
|
$
|
1,200,000
|
|
$
|
2,397,000
|
|
C. Matthew Lusco
|
ñ
|
2.5%
|
|
$
|
584,250
|
|
ó
|
110%
|
$
|
631,400
|
|
ó
|
$
|
—
|
|
$
|
900,000
|
|
$
|
2,105,400
|
|
*
|
Annualized incentive target is the product of the target incentive percentage times base pay approved by the CHR Committee for
2018
and does not take into account that the base pay changes are not effective until April 1, 2018.
|
76
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
2018 Proxy Statement
|
77
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Absolute Performance Against Internal Targets 75%
|
Relative Performance
Against
Peers - 25% Weighting
|
||||||||||
|
|
|
Weighting (Customer Service - 100%)
|
|||||||||
|
|
Sub-metric
Weighting
|
2017 Goal Achievements
|
2017 Achievements
|
||||||||
|
Performance Metric
|
Threshold
|
Target
|
Maximum
|
Attainment
|
% of Goal
|
|
|
Peer Rank
|
|
% of Goal
|
|
50%
|
Profitability Metrics (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Average Tangible Common Equity (2)
|
40%
|
7.95%
|
9.65%
|
10.68%
|
11.52%
|
200.0%
|
|
|
11/15
|
|
|
|
Adjusted Net Income Available to Common Shareholders ($ millions) (2)
|
30%
|
$900
|
$1,096
|
$1,212
|
$1,255
|
200.0%
|
170.1%
|
|
62.5%
|
||
|
Adjusted Efficiency Ratio (3)
|
30%
|
64.5%
|
62.2%
|
60.7%
|
62.2%
|
100.4%
|
|
11/15
|
|
||
25%
|
Credit Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
Criticized and Classified Loans/Loans (4)
|
50%
|
7.16%
|
5.72%
|
4.86%
|
3.83%
|
200.0%
|
|
200%
|
11/15
|
|
56.3%
|
|
NPAs/Loans + OREO + NPLs Held For Sale (5)
|
50%
|
2.03%
|
1.55%
|
1.24%
|
0.92%
|
200.0%
|
12/15
|
|
|||
25%
|
Customer Service Metrics (Percentile achievement)
|
|
25th
|
75th
|
93rd
|
89th
|
179.7%
|
|
179.7%
|
|
|
|
(1)
|
From continuing operations on an as adjusted basis. For non-GAAP measures, see the reconciliation in
Appendix A
unless otherwise indicated.
|
(2)
|
Non-GAAP measures — see reconciliation in
Appendix A.
|
(3)
|
Non-GAAP measures — see reconciliation in Regions’ Annual Report on Form 10-K for the year ended
December 31, 2017
on page 42.
|
(4)
|
See reconciliation in
Appendix A.
|
(5)
|
See reconciliation in Regions’ Annual Report on Form 10-K for the year ended
December 31, 2017
on page 66.
|
|
|
Metric
|
Overall Metric Weighting
|
Results
(Percent of Goal) |
Weighting (Internal Goals vs. Against
Peers)
|
Performance
Results
|
|
|
Profitability – Internal Targets
|
50%
|
170.1%
|
75%
|
63.8%
|
|
|
Profitability Performance – Peers
|
50%
|
62.5%
|
25%
|
7.8%
|
|
|
Credit – Internal Targets
|
25%
|
200.0%
|
75%
|
37.5%
|
|
|
Credit Performance – Peers
|
25%
|
56.3%
|
25%
|
3.5%
|
|
|
Customer Service – Internal Targets
|
25%
|
179.7%
|
N/A
|
44.9%
|
|
|
Sum of Results
|
|
|
|
158%
|
Potential Negative Modifiers
|
|
Goal
|
|
Result
|
|
Negative Modifier Indicated?
|
|
|
|
|
|
|
|
Primary Liquidity Risk Factor
|
|
Low Risk or Better
|
|
Low Risk
|
|
NO
|
Capital Action Status
|
|
Monitoring or Deploy
|
|
Deploy
|
|
NO
|
78
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Individual
Performance Rating |
Comments
|
O. B. Grayson Hall, Jr.
|
200%
|
–
Leadership in developing and executing the strategic planning process
–
Active development and inclusivity of executive management
–
Tactical execution
–
Focus as a customer advocate
–
Engagement, experience, and direct contribution to improvement in financial performance
|
David J. Turner, Jr.
|
155%
|
–
Successful CCAR submission allowing the Company to return 137 percent of earnings to stockholders
–
Successful repurchase of 85 million shares of common stock
–
Heightened emphasis on associate engagement, resulting in improved associate engagement scores
–
Enhanced investor and rating agency outreach programs and increase debt ratings from various rating agencies
|
John B. Owen
|
165%
|
–
Regional Banking group delivered strong results in 2017 by growing revenue by 3 percent, Pre-tax income by 12 percent, Assets under management by 17 percent, and positive operating leverage by 3 percent
–
Introduction of new products, rebalancing and expansion of product mix to adopt to changing market needs and diversity of risks
–
Successful deployment of new product offerings and product diversification
–
Meaningful progress in short- and long-term leadership, talent, and succession planning with an emphasis on diversity; successfully recruited a new Chief Information Officer to Regions
–
Continued focus on associate engagement with scores in the top quartile
|
John M. Turner, Jr.
|
170%
|
–
Successfully executed investments in non-interest revenue generating capabilities in the Corporate Bank
–
Capital Markets revenue grew by 6 percent year over year while Treasury Management and Corporate Card revenue grew 2.5 percent
–
Effectively deployed capital by reviewing existing capital commitments, exiting certain obligations and adding others
–
Increased exposure in areas that have produced 44 percent more revenue, 67 percent more non-interest revenue, and over 109 basis points of additional risk adjusted return on capital
–
Improved credit quality year-over-year
–
Criticized credits moved from 7.6 percent to 5.7 percent, which is below our target of 6 percent for the year
–
Classified credits moved from 4.9 percent to 3.9 percent, which is below our target of 4 percent
–
Non Performing Loans (“NPLs”) reached their lowest level in over 10 years at 1.1 percent
–
Net charge-offs declined to 35 basis points
|
C. Matthew Lusco
|
155%
|
–
Robust credit improvement by using a series of proactive steps to manage through issues ultimately leading to reductions in NPLs and Non Performing Assets (“NPAs”) to 0.81 percent and 0.92 percent, respectively
–
Successful reduction of issues inventory to a post financial crisis low
–
Rating agency upgrades citing improvement in risk management for the basis of change
–
Made significant progress in strengthening the senior leadership team with the addition of key hires and talent movement that both enhanced team skills and improved diverse representation in senior leadership ranks
|
|
2018 Proxy Statement
|
79
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
2017 Target Incentive*
|
|
Total Incentive Received
|
|
||
O. B. Grayson Hall, Jr.
|
|
$1,750,000
|
|
|
$2,985,500
|
|
David J. Turner, Jr.
|
|
$730,620
|
|
|
$1,140,806
|
|
John B. Owen
|
|
$748,660
|
|
|
$1,191,297
|
|
John M. Turner, Jr.
|
|
$660,000
|
|
|
$1,039,896
|
|
C. Matthew Lusco
|
|
$642,675
|
|
|
$1,003,486
|
|
*
|
The actual target incentive for
2017
is based on a target percentage multiplied by actual salary paid for the year and considers that annual increases in base pay did not become effective until April 1 of the year.
|
Name
|
Total Target LTIP Economic Value
|
|
Value of Time Vested RSUs
|
|
Value of PSUs
|
|
Value of Performance-
Based Cash Units |
|
||||
O. B. Grayson Hall, Jr.
|
|
$5,400,000
|
|
|
$1,800,000
|
|
|
$1,800,000
|
|
|
$1,800,000
|
|
David J. Turner, Jr.
|
|
$1,200,000
|
|
|
$400,000
|
|
|
$400,000
|
|
|
$400,000
|
|
John B. Owen
|
|
$1,200,000
|
|
|
$400,000
|
|
|
$400,000
|
|
|
$400,000
|
|
John M. Turner, Jr.
|
|
$1,200,000
|
|
|
$400,000
|
|
|
$400,000
|
|
|
$400,000
|
|
C. Matthew Lusco
|
|
$1,200,000
|
|
|
$400,000
|
|
|
$400,000
|
|
|
$400,000
|
|
•
|
Performance measures.
Vesting of both PSUs and performance-based cash units are based on two measures: cumulative compounded growth in Diluted EPS Growth and ROATCE. Each measure carries a 50 percent weight in determining the final value of the performance award. These operating measures were chosen because they (i) are critical to the long-term success of the Company, (ii) are transparent to stockholders and the NEOs, and (iii) create healthy tension between profitability and the quality of earnings, which is important to stockholder value and protecting the safety and soundness of the Company.
|
•
|
Weighting of Metrics.
Each metric is weighted equally and is measured based upon both absolute performance against Company goals over the three-year performance period and an evaluation of relative performance as compared to our peers. We do this through the use of the matrix where the “X” axis represents our performance against the absolute goals we set for ourselves over the performance period, and where the “Y” axis represents our performance against banks selected as our performance
|
80
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Balancing of Absolute and Relative Performance.
By establishing absolute goals within a range of outcomes, coupled with performance against banks in our performance peer group, a matrix mitigates some of the challenges associated with setting precise goals that could incent imprudent risk taking on behalf of executive officers and avoids the “best of the worst” outcome that is possible with the exclusive use of relative measurement.
|
–
|
Absolute Performance:
Absolute Diluted EPS Growth and ROATCE goals provide NEOs with a goal to strive for. However, given ongoing marketplace volatility and a
changing regulatory environment, establishing
absolute goal targets for a multi-year time period is challenging. The CHR Committee
|
–
|
Relative Performance.
In addition to absolute performance, the CHR Committee also considers our Diluted EPS Growth and ROATCE performance relative to other banking competitors. Though relative measurement mitigates the inherent difficulties of setting long-term goals in a volatile and uncertain environment, if it was used as the single performance measurement, it could allow for the outcome of being the “best of the worst.”
|
|
2018 Proxy Statement
|
81
|
COMPENSATION DISCUSSION AND ANALYSIS
|
2) The SEC rules require that companies report the value of equity-denominated awards in the”Stock Awards” column of the Summary Compensation Table in the year they are granted. This is the same way the CHR Committee considered these awards. Nevertheless, there is a difference in the values noted in the table above and the values noted in the Summary Compensation Table due to the way we determine the number of shares each NEO will receive after the CHR Committee has established the economic value of an award. To determine the number of PSUs and RSUs, we divide the award value granted by the 30-day average closing price of Regions common stock prior to the grant date to minimize any impact of day-to-day stock price changes on the number of shares granted. The 30-day average for 2017 was $14.75. SEC rules require us to report the grant date fair value of shares, which is the closing price of Regions common stock on the date of the grant. The value of share units granted on April 3, 2017, was $14.58 per share.
For further information, page 14 of this proxy statement includes an alternative compensation table that details the way the CHR Committee views the compensation decisions made for 2017.
|
82
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
2018 Proxy Statement
|
83
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Attended all CHR Committee meetings;
|
84
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Provided the CHR Committee with competitive market data to assist in establishing target levels for compensation components, such as base salary levels, annual incentives, and long-term performance awards, as well as benefit levels for executive management;
|
•
|
Assisted the CHR Committee with the evaluation and establishment of the design and construct of the short-term and long-term incentive programs for 2017, including values, opportunity levels, performance metrics, targets (including thresholds and maximums), performance curves, peer group comparisons, and risk mitigants to be included in the plan;
|
•
|
Advised the CHR Committee with respect to year-end compensation determinations based on performance evaluations and other factors, including succession planning and related considerations;
|
•
|
Reviewed the Company’s change-in-control practices and provided competitive market practices for severance payments in the event of a change-in-control;
|
•
|
Advised the CHR Committee regarding regulatory and compliance issues and the development of leading best practices and market competitive information with respect to compensation guidelines established by the SEC, the Federal Reserve, and other banking regulatory bodies; and
|
•
|
Provided current trend information on industry and executive compensation issues.
|
|
2018 Proxy Statement
|
85
|
COMPENSATION DISCUSSION AND ANALYSIS
|
86
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Incentive compensation arrangements should balance risk and financial results in a manner that does not provide employees with incentives to take excessive risks on behalf of the banking organization.
|
•
|
A banking organization’s risk-management processes and internal controls should reinforce and support the development and maintenance of balanced incentive compensation arrangements.
|
•
|
Banking organizations should have strong and effective corporate governance to help ensure sound compensation practices including effective oversight by the Board.
|
|
2018 Proxy Statement
|
87
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
shares directly owned by the executive officer or Director without restriction;
|
•
|
restricted stock, stock units (except for those that may be subject to future performance requirements);
|
•
|
stock equivalents allocated through any deferred stock investment plan, as well as an executive officer’s shares held in a 401(k) Plan account and notionally held in a Supplemental 401(k) Plan account; and
|
•
|
shares held in trust for the benefit of the executive officer or his or her immediate family members.
|
Name
|
Ownership
Requirement |
Approximate Stock Value
Required to be Held |
|
Holds
Required Amount |
Percent of Required
Amount Owned |
|
|
O. B. Grayson Hall, Jr.
|
6 X Base Pay
|
$
|
6,000,000
|
|
Yes
|
347
|
%
|
David J. Turner, Jr.
|
3 X Base Pay
|
$
|
1,992,600
|
|
Yes
|
285
|
%
|
John B. Owen
|
3 X Base Pay
|
$
|
2,041,800
|
|
Yes
|
290
|
%
|
John M. Turner, Jr.
|
3 X Base Pay
|
$
|
1,800,000
|
|
Yes
|
327
|
%
|
C. Matthew Lusco
|
3 X Base Pay
|
$
|
1,752,750
|
|
Yes
|
245
|
%
|
88
|
|
2018 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
2018 Proxy Statement
|
89
|
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
|
|
|
|
Don DeFosset, Chair
|
David J. Cooper, Sr.
|
Samuel A. Di Piazza, Jr.
|
|
|
|
|
|
|
Ruth Ann Marshall
|
Susan W. Matlock
|
José S. Suquet
|
90
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
2018 Proxy Statement
|
91
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name & Principal Position
|
Year
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($) (1)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($) (2)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) (3)
|
|
All Other
Compensation
($) (4)
|
|
Total
($)
|
|
O. B. Grayson Hall, Jr.
Chairman and Chief Executive Officer
|
2017
|
1,000,000
|
—
|
|
3,558,511
|
—
|
|
4,652,167
|
3,282,717
|
227,964
|
12,721,359
|
||||||
2016
|
1,000,000
|
—
|
|
3,242,916
|
—
|
|
3,528,584
|
6,102,983
|
188,941
|
14,063,424
|
|||||||
2015
|
1,007,692
|
—
|
|
3,284,720
|
—
|
|
2,506,546
|
3,764,852
|
220,857
|
10,784,667
|
|||||||
David J. Turner, Jr.
Chief Financial Officer
|
2017
|
660,150
|
—
|
|
790,790
|
—
|
|
1,540,806
|
885,279
|
97,843
|
3,974,868
|
||||||
2016
|
644,062
|
—
|
|
778,301
|
—
|
|
1,177,490
|
513,593
|
86,787
|
3,200,233
|
|||||||
2015
|
636,862
|
—
|
|
788,340
|
—
|
|
883,295
|
314,975
|
98,948
|
2,722,420
|
|||||||
John B. Owen
Head of Enterprise Services and Consumer Banking
|
2017
|
676,450
|
—
|
|
790,790
|
—
|
|
1,591,297
|
1,459,534
|
93,121
|
4,611,192
|
||||||
2016
|
659,816
|
—
|
|
778,301
|
—
|
|
1,208,618
|
1,158,093
|
83,148
|
3,887,976
|
|||||||
2015
|
651,977
|
—
|
|
788,340
|
—
|
|
905,498
|
1,096,867
|
100,552
|
3,543,234
|
|||||||
John M. Turner, Jr.*
President
|
2017
|
585,000
|
—
|
|
790,790
|
—
|
|
1,339,896
|
1,527,838
|
101,214
|
4,344,738
|
||||||
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2015
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
C. Matthew Lusco
Chief Risk Officer
|
2017
|
580,688
|
—
|
|
790,790
|
—
|
|
1,403,486
|
403,527
|
|
100,628
|
3,279,119
|
|||||
2016
|
566,308
|
—
|
|
778,301
|
—
|
|
990,092
|
383,462
|
|
77,508
|
2,795,671
|
||||||
2015
|
559,269
|
—
|
|
788,340
|
—
|
|
687,487
|
304,689
|
|
83,165
|
2,422,950
|
*
|
Mr. John Turner was not an NEO in 2016 or 2015.
|
(1)
|
As reflected in the following table, amounts in this column are the grant date fair value of awards computed in accordance with FASB ASC Topic 718.
|
(a)
|
The amounts in this column reflect the number of units granted and the grant date fair value of PSUs. Actual awards can range from 0% to 150% of target based on performance metrics of absolute and relative Diluted EPS growth and ROATCE established at grant. The maximum award value for the PSUs (determined as described on pages 80-82) is $2,668,884 for Mr. Hall, $593,093 each for Mr. D. Turner, Mr. Owen, Mr. J. Turner, and Mr. Lusco.
|
(b)
|
The amounts in this column represent the number of units granted and the grant date fair value of RSUs that cliff vest at the end of the three-year vesting period ending April 3, 2020.
|
|
Non-equity Incentive Plan Compensation
|
||
Name
|
2017 Annual
Cash Incentive
($)
|
Value of 2015
Performance
Cash Units
at 12/31/17
($) (a)
|
Total
($)
|
O. B. Grayson Hall, Jr.
|
2,985,500
|
1,666,667
|
4,652,167
|
David J. Turner, Jr.
|
1,140,806
|
400,000
|
1,540,806
|
John B. Owen
|
1,191,297
|
400,000
|
1,591,297
|
John M. Turner, Jr.
|
1,039,896
|
300,000
|
1,339,896
|
C. Matthew Lusco
|
1,003,486
|
400,000
|
1,403,486
|
(a)
|
This column reflects 100% of target earned at
December 31, 2017
. Grants to Mr. D. Turner, Mr. J. Turner, and Mr. Lusco are subject to service vesting requirements until April 1, 2018 (the third anniversary of the date of grant).
|
(3)
|
This amount includes benefits for Mr. Owen, Mr. J. Turner, and Mr. Lusco described on pages 82-84 and 97-98, which are subject to significant vesting requirements that have not yet been met. Therefore, all of the change in benefit for Mr. Owen, Mr. J. Turner, and Mr. Lusco would not be payable at the present time if they left the Company. Mr. D. Turner is fully vested in his benefit.
|
92
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
(4)
|
All other compensation consists of the following:
|
Name
|
Life Insurance,
Perquisites and Other
Personal Benefits
(a) ($)
|
Matching Contributions
Under Qualified
Savings Plans
($)
|
Matching Contributions
Under Nonqualified
Savings Plans
($)
|
Non-Elective
Contributions
under the
Qualified and Nonqualified 401(k) plans
(b) ($)
|
|
Total All Other
Compensation
($)
|
O. B. Grayson Hall, Jr.
|
105,154
|
10,800
|
112,010
|
—
|
|
227,964
|
David J. Turner, Jr.
|
38,338
|
10,800
|
48,706
|
—
|
|
97,843
|
John B. Owen
|
26,318
|
10,800
|
50,603
|
5,400
|
|
93,121
|
John M. Turner, Jr.
|
44,498
|
10,800
|
40,516
|
5,400
|
|
101,214
|
C. Matthew Lusco
|
42,897
|
10,800
|
41,531
|
5,400
|
|
100,628
|
(a)
|
The
2017
amount includes the value of items such as group term life insurance premiums, excess group liability coverage, financial planning services, personal use of the corporate aircraft, an enhanced executive physical, home security, and matching charitable gift contributions. The total value for personal use of the corporate aircraft by Mr. Hall in
2017
was $69,500.
|
(b)
|
The table above does not reflect the 2017 lump sum value of Mr. Hall’s accrued benefits from the Company’s defined benefit SERP transferred to the Supplemental 401(k) Plan as described above on page 83 of the CD&A and below in the Pension Benefits and Nonqualified Deferred Compensation Tables and accompanying narrative. As Mr. Hall’s benefit under the defined benefit SERP accrued over the years, the value of that benefit was reflected in the Change in Pension Value and Non Qualified Deferred Compensation Earnings column of the Summary Compensation Table.
|
|
2018 Proxy Statement
|
93
|
COMPENSATION OF EXECUTIVE OFFICERS
|
94
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Grant
Date |
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards |
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) (3)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($/sh)
|
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)
|
||||||
Threshold
($)
|
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
|
Target
(#)
|
Maximum
(#)
|
||||||||
O. B. Grayson Hall, Jr.
|
(1)
|
—
|
|
1,750,000
|
3,500,000
|
|
|
|
|
|
|
|
|||
|
04/03/17 (2)
|
—
|
|
1,800,000
|
2,700,000
|
—
|
|
122,034
|
183,051
|
122,034
|
—
|
|
—
|
|
3,558,511
|
David J. Turner, Jr.
|
(1)
|
—
|
|
730,620
|
1,461,240
|
|
|
|
|
|
|
|
|||
|
04/03/17 (2)
|
—
|
|
400,000
|
600,000
|
—
|
|
27,119
|
40,679
|
27,119
|
—
|
|
—
|
|
790,790
|
John B. Owen
|
(1)
|
—
|
|
748,660
|
1,497,320
|
|
|
|
|
|
|
|
|||
|
04/03/17 (2)
|
—
|
|
400,000
|
600,000
|
—
|
|
27,119
|
40,679
|
27,119
|
—
|
|
—
|
|
790,790
|
John M. Turner, Jr.
|
(1)
|
—
|
|
660,000
|
1,320,000
|
|
|
|
|
|
|
|
|||
|
04/03/17 (2)
|
—
|
|
400,000
|
600,000
|
—
|
|
27,119
|
40,679
|
27,119
|
—
|
|
—
|
|
790,790
|
C. Matthew Lusco
|
(1)
|
—
|
|
642,675
|
1,285,350
|
|
|
|
|
|
|
|
|||
|
04/03/17 (2)
|
—
|
|
400,000
|
600,000
|
—
|
|
27,119
|
40,679
|
27,119
|
—
|
|
—
|
|
790,790
|
(1)
|
Amounts included in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column reflect the range of possible annual cash incentive payouts for
2017
performance. Actual amounts earned, as determined by the CHR Committee in the first quarter of
2018
, are reflected in the
2017
Summary Compensation Table under the Non-Equity Incentive Plan Compensation column.
|
(2)
|
The Performance-Based Cash Unit awards included in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column and PSUs included in the Estimated Future Payouts Under Equity Incentive Plan Awards column have equally weighted performance requirements based on absolute and relative Diluted EPS growth and ROATCE. In addition, in the event the achievement of the performance criteria for Diluted EPS growth is equal to or less than 0% on an absolute basis and in the bottom one-third of the peer group on a relative basis or the achievement of the performance criteria for ROATCE is less than 5% on an absolute basis and in the bottom one-third of the peer group on a relative basis, the payout will be zero if cumulative net income from continuing operations is less than one-half of the projection for the three-year performance period. The performance period for these awards is January 1, 2017, through December 31, 2019, and will fully vest on April 3, 2020. Notwithstanding the achievement of the performance requirements, in order to be eligible to receive any cash payout or shares of stock under these awards, employment must continue through the third anniversary of the grant date, which is April 3, 2020, except in the case of death, disability, retirement, or certain terminations following a change-in-control.
|
(3)
|
In addition to service-vesting requirements, the RSUs included in this column are subject to performance-vesting requirements based on the Company’s achievement of certain capital and liquidity performance thresholds during each of the periods from January 1, 2017 to December 31, 2017; January 1, 2018 to December 31, 2018; and January 1, 2019 to December 31, 2019. To the extent that the capital performance threshold and/or the liquidity performance threshold has not been satisfied for each performance period, 20% for each requirement (up to a maximum of 40% total) of the RSUs awarded will be forfeited. For purposes of this award, the Company’s performance will be measured relative to the following capital and liquidity performance thresholds as certified by the CHR Committee:
|
(i)
|
“Capital Performance Threshold”: Capital Action Decision Tree Status as defined in the Capital Policy must remain in either “Monitor Capital” or “Capital Deployment” status; and
|
(ii)
|
“Liquidity Performance Threshold”: Risk for Primary Liquidity Level must remain at “Moderate” or better as established in the Market & Liquidity Risk Framework document.
|
|
Notwithstanding the achievement of the capital and liquidity performance thresholds, in order to be eligible to receive any shares of stock under this award, employment must continue through the third anniversary of the grant date, which is April 3, 2020, except in the case of death, disability, retirement, or certain terminations following a change-in-control.
|
•
|
Grants of stock options made over time that are exercisable and unexercisable;
|
•
|
Grants of restricted stock and RSUs;
|
•
|
Grants of PSUs made in
2015
,
2016
, and
2017
that may be paid if Regions achieves specific performance criteria; and
|
•
|
RSU grants made in
2015
,
2016
, and
2017
will pay in full if Regions meets certain capital and liquidity thresholds.
|
|
2018 Proxy Statement
|
95
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
Option Awards
(1)
|
|
Stock Awards
(2)
|
||||||||||||||||
Name
|
Grant
Date |
Number of
Securities Underlying Unexercised Options Exercisable (#) |
|
Number of
Securities Underlying Unexercised Options Unexercisable (#) |
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
|
|
Option
Exercise Price
($)
|
|
Option
Expiration Date |
|
|
Number of
Shares or Units of Stock That Have Not Vested
(a) (#)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested (a) ($) |
|
Equity
Incentive Plan Awards:
# of
Unearned Shares, Units, or Other Rights That Have Not Vested
(b) (#)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested
(b) ($)
|
|
O. B. Grayson
Hall, Jr. |
02/28/08
|
282,019
|
|
—
|
|
—
|
|
21.94
|
|
02/27/18
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04/01/15
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
173,611
|
|
2,999,998
|
|
173,611
|
|
2,999,998
|
|
|
04/01/16
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
205,508
|
|
3,551,178
|
|
256,885
|
|
4,438,973
|
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
122,034
|
|
2,108,748
|
|
152,543
|
|
2,635,934
|
|
|
David J. Turner, Jr.
|
02/28/08
|
59,822
|
|
—
|
|
—
|
|
21.94
|
|
02/27/18
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04/01/15
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
41,667
|
|
720,006
|
|
41,667
|
|
720,006
|
|
|
04/01/16
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
49,322
|
|
852,284
|
|
61,653
|
|
1,065,355
|
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
468,616
|
|
33,899
|
|
585,770
|
|
|
John B. Owen
|
02/28/08
|
128,191
|
|
—
|
|
—
|
|
21.94
|
|
02/27/18
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04/01/15
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
41,667
|
|
720,006
|
|
41,667
|
|
720,006
|
|
|
04/01/16
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
49,322
|
|
852,284
|
|
61,653
|
|
1,065,355
|
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
468,616
|
|
33,899
|
|
585,770
|
|
|
John M. Turner, Jr.
|
07/01/11
|
134,523
|
|
—
|
|
—
|
|
6.30
|
|
06/30/21
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04/01/15
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
31,250
|
|
540,000
|
|
31,250
|
|
540,000
|
|
|
04/01/16
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
36,991
|
|
639,204
|
|
46,239
|
|
799,006
|
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
468,616
|
|
33,899
|
|
585,770
|
|
|
C. Matthew Lusco
|
04/01/15
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
41,667
|
|
720,006
|
|
41,667
|
|
720,006
|
|
04/01/16
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
49,322
|
|
852,284
|
|
61,653
|
|
1,065,355
|
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
468,616
|
|
33,899
|
|
585,770
|
|
(1)
|
All outstanding stock options vest in equal annual installments on each of the first three anniversaries of the date of grant and, as of
December 31, 2017
, are all fully vested.
|
(2)
|
Because Company performance, as of the end of the last completed fiscal year, is projected at levels higher than target, amounts reported for 2016 and 2017 are calculated at 125% of target, which is the next higher stated performance level under the terms of each grant. The stock value used to determine the market value of shares is the fair market value of Regions common stock of $17.28 per share on December 29, 2017. In addition to service-vesting requirements, RSUs and PSUs are subject to additional vesting requirements as follows:
|
96
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
Option Awards
|
Stock Awards
|
||||
Name
|
Number of Shares
Acquired on Exercise (#) |
|
Value Realized
on Exercise
($)
|
|
Number of Shares
Acquired on Vesting
(#)
|
Value
Realized on Vesting
($)
|
O. B. Grayson Hall, Jr.
|
—
|
|
—
|
|
286,961
|
4,169,543
|
David J. Turner, Jr.
|
—
|
|
—
|
|
68,871
|
1,000,696
|
John B. Owen
|
—
|
|
—
|
|
68,871
|
1,000,696
|
John M. Turner, Jr.
|
—
|
|
—
|
|
34,434
|
500,326
|
C. Matthew Lusco
|
—
|
|
—
|
|
51,652
|
750,504
|
1.3% of
“Average
Monthly
Earnings” up to
Covered
Compensation
|
+
|
1.8% of
“Average
Monthly
Earnings” in
excess of
Covered
Compensation
|
X
|
Years of
Service up to a
maximum of 30
total years
|
|
2018 Proxy Statement
|
97
|
COMPENSATION OF EXECUTIVE OFFICERS
|
4% of “Average
Monthly
Earnings” for the first
10 Years of Service
|
+
|
1% of “Average
Monthly
Earnings” for every year in
excess of 10 Years of
Service up to a maximum of
an additional 25 years of
service (for a maximum
benefit of 65% of
“Average
Monthly Earnings” with
35 Years of Service)
|
For purposes of this formula, “Average Monthly Earnings”
has the same definition as the regular SERP benefit.
|
|
|
|
Pension Benefits
|
||||
Name
|
Plan Name
|
Number of
Years Credited Service
(#) (1)
|
|
Present Value
of Accumulated Benefit
($) (2)
|
|
Payments During
Last Fiscal Year ($) (3) |
|
O. B. Grayson Hall, Jr.
|
Regions Financial Corporation Retirement Plan
|
30
|
|
1,840,174
|
|
—
|
|
|
Regions Financial Corporation Post 2006 SERP
|
35
|
|
—
|
|
(37,374,045
|
)
|
David J. Turner, Jr.
|
Regions Financial Corporation Retirement Plan
|
12
|
|
564,578
|
|
—
|
|
|
Regions Financial Corporation Post 2006 SERP
|
12
|
|
3,551,151
|
|
—
|
|
John B. Owen
|
Regions Financial Corporation Retirement Plan
|
N/A
|
|
—
|
|
—
|
|
|
Regions Financial Corporation Post 2006 SERP (4)
|
10
|
|
8,540,727
|
|
—
|
|
John M. Turner, Jr.
|
Regions Financial Corporation Retirement Plan
|
9
|
|
86,268
|
|
—
|
|
|
Regions Financial Corporation Post 2006 SERP (5)
|
7
|
|
4,416,537
|
|
—
|
|
C. Matthew Lusco
|
Regions Financial Corporation Retirement Plan
|
N/A
|
|
—
|
|
—
|
|
|
Regions Financial Corporation Post 2006 SERP
|
7
|
|
2,194,197
|
|
—
|
|
(1)
|
The Retirement Plan (a qualified pension plan) caps the number of years of credited service for purposes of benefit accrual at 30 years. The SERP (a nonqualified plan) caps the number of years of credited service at 35 years. Mr. Owen and Mr. Lusco do not participate in the Retirement Plan. Mr. J. Turner’s years of credited service are from a previous period of employment; he is not currently accruing a benefit under the Retirement Plan.
|
(2)
|
In 2009, future benefit accruals under the Retirement Plan and the SERP were suspended for all participants. Even during the suspension, participants continued to earn service toward vesting and eligibility for early retirement benefits. Effective January 1, 2010, benefit accruals were resumed for Retirement Plan and SERP participants. The present value of the accumulated Retirement Plan benefits is calculated as of
December 31, 2017
, and was determined using a 3.82% discount rate and the RP-2014 employee and retiree mortality tables for males and females, backed off to 2006, no collar, with generational projection based on scale MSS-2017. The present value of the accumulated SERP benefits is calculated as of
December 31, 2017
, was determined using a 3.52% discount rate (4% to calculate expected lump sum distributions, except for Mr. Hall’s which reflects the actual transfer during 2017 based on plan provisions), and the 2018 Pension Protection Act lump sum mortality table. For purposes of the present value calculation, no pre-retirement mortality was assumed, and the payment date was assumed to be the earliest unreduced retirement date under both plans. The payment age of 62 (life only) was assumed for the Retirement Plan and the payment age of 60 was assumed for the SERP for Mr. Owen and Mr. J. Turner and age 62 for Mr. D. Turner and Mr. Lusco.
|
(3)
|
On May 31, 2017, the accrued benefit for Mr. Hall under the SERP was converted to a lump sum amount of $37,374,045, in accordance to the applicable terms of the SERP, and was credited to an account under the Supplemental 401(k) Plan. The accrued benefit will be payable to Mr. Hall in a lump sum following his retirement from Regions in the same manner as it would have been payable under the SERP.
|
(4)
|
Mr. Owen must complete a minimum of 10 years of service and attain at least age 60 before benefits are fully vested. In the event he terminates employment prior to vesting, for reasons other than death or disability, he will forfeit the entire benefit noted.
|
(5)
|
Mr. J. Turner must complete a minimum of 10 years of service and attain at least age 60 before benefits are fully vested. Mr. J. Turner’s benefit includes partial vesting at age 55 and 10 years of service, which will occur approximately one year prior to full vesting.
|
98
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
Nonqualified Deferred Compensation
|
|||||
Name
|
|
Executive
Contributions in 2017
($) (1)
|
Company
Contributions in 2017
($) (2)
|
Aggregate
Earnings in 2017
($) (3)
|
Aggregate
Withdrawals/ Distributions ($) (4) |
|
Aggregate
Balance at December 31, 2017
($) (5) (6)
|
O. B. Grayson Hall, Jr.
|
Supplemental 401(k)
|
116,656
|
112,010
|
612,242
|
1,512,989
|
|
40,831,320
|
David J. Turner, Jr.
|
Supplemental 401(k)
|
72,068
|
48,706
|
270,604
|
—
|
|
1,472,054
|
John B. Owen
|
Supplemental 401(k)
|
214,937
|
50,603
|
23,706
|
—
|
|
1,659,538
|
John M. Turner, Jr.
|
Supplemental 401(k)
|
94,886
|
40,516
|
113,646
|
—
|
|
642,184
|
C. Matthew Lusco
|
Supplemental 401(k)
|
48,824
|
41,531
|
81,347
|
—
|
|
588,317
|
(1)
|
This column represents amounts deferred from base salary and annual incentive, if applicable. Although deferred, these amounts are included in the “Salary” and “Non-Equity Incentive Plan Compensation,” if applicable, columns of the Summary Compensation Table.
|
(2)
|
This column includes Company contributions under the Supplemental 401(k) Plan. These amounts are included in the “All Other Compensation” column of the Summary Compensation Table.
|
(3)
|
This column includes total earnings/losses on amounts held in the Supplemental 401(k) Plan.
|
(4)
|
This column includes withdrawals/distributions from the Supplemental 401(k) Plan. The distribution for Mr. Hall was to pay Medicare taxes on the lump sum transfer from the SERP, which was credited to his account in the Supplemental 401(k) Plan.
|
(5)
|
The
December 31, 2017
balances do not include true-up Company contributions that were made in early
2018
based on
2017
deferral elections. These contributions are included, however, in the column “Company Contributions in
2017
.” The aggregate balance at
December 31, 2017
reflects the balance in the Supplemental 401(k) Plan.
|
(6)
|
The aggregate balance at December 31, 2017 for Mr. Hall includes a transfer of $37,374,045 which represents the accrued benefit for Mr. Hall under the SERP which was converted to a lump sum on May 31, 2017, in accordance to the applicable terms of the SERP, and was credited to his account under the Supplemental 401(k) Plan. The accrued benefit will be payable to Mr. Hall in a lump sum following his retirement from Regions in the same manner as it would have been payable under the SERP.
|
|
2018 Proxy Statement
|
99
|
COMPENSATION OF EXECUTIVE OFFICERS
|
100
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Voluntary
($) |
|
Involuntary
Without Cause
($)
|
|
Early
Retirement ($) |
|
For
Cause ($) |
|
Involuntary
for Good Reason Following a CIC
($) (8)
|
|
Death
($) (9) |
|
Disability
($) |
|
O. B. Grayson Hall, Jr. (1)
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
8,250,000
|
|
—
|
|
—
|
|
Long Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units (2)
|
5,195,954
|
|
5,195,954
|
|
5,195,954
|
|
—
|
|
8,659,924
|
|
8,659,924
|
|
5,195,954
|
|
Performance Stock Units (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
8,659,924
|
|
8,659,924
|
|
—
|
|
Performance Cash Units
|
—
|
|
—
|
|
—
|
|
—
|
|
5,133,334
|
|
5,133,334
|
|
—
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning (3)
|
31,630
|
|
31,630
|
|
31,630
|
|
—
|
|
31,630
|
|
31,630
|
|
31,630
|
|
Outplacement (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
280G Tax Gross-up (5)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits (6)
|
—
|
|
—
|
|
—
|
|
—
|
|
21,551
|
|
—
|
|
—
|
|
Value of additional retirement benefits (7)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total:
|
5,227,584
|
|
5,227,584
|
|
5,227,584
|
|
—
|
|
30,816,363
|
|
22,484,812
|
|
5,227,584
|
|
David J. Turner, Jr.
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
2,829,397
|
|
—
|
|
—
|
|
Long Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units (2)
|
—
|
|
764,595
|
|
—
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
1,224,544
|
|
Performance Stock Units (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
—
|
|
Performance Cash Units
|
—
|
|
—
|
|
—
|
|
—
|
|
1,200,000
|
|
1,200,000
|
|
—
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning (3)
|
—
|
|
31,630
|
|
N/A
|
|
—
|
|
31,630
|
|
31,630
|
|
31,630
|
|
Outplacement (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
280G Tax Gross-up (5)
|
—
|
|
—
|
|
—
|
|
—
|
|
3,426,489
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits (6)
|
—
|
|
—
|
|
—
|
|
—
|
|
18,146
|
|
—
|
|
—
|
|
Value of additional retirement benefits (7)
|
—
|
|
—
|
|
—
|
|
—
|
|
1,521,132
|
|
—
|
|
—
|
|
Total:
|
—
|
|
796,225
|
|
—
|
|
—
|
|
13,168,606
|
|
5,313,442
|
|
1,256,174
|
|
John B. Owen
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
4,378,704
|
|
—
|
|
—
|
|
Long Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units (2)
|
1,224,544
|
|
1,224,544
|
|
1,224,544
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
1,224,544
|
|
Performance Stock Units (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
—
|
|
Performance Cash Units
|
—
|
|
—
|
|
—
|
|
—
|
|
1,200,000
|
|
1,200,000
|
|
—
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning (3)
|
31,630
|
|
31,630
|
|
31,630
|
|
—
|
|
31,630
|
|
31,630
|
|
31,630
|
|
Outplacement (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
280G Tax Gross-up (5)
|
—
|
|
—
|
|
—
|
|
—
|
|
9,778,038
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits (6)
|
—
|
|
—
|
|
—
|
|
—
|
|
22,270
|
|
—
|
|
—
|
|
Value of additional retirement benefits (7)
|
—
|
|
—
|
|
—
|
|
—
|
|
11,063,240
|
|
—
|
|
—
|
|
Total:
|
1,256,174
|
|
1,256,174
|
|
1,256,174
|
|
—
|
|
30,615,694
|
|
5,313,442
|
|
1,256,174
|
|
|
2018 Proxy Statement
|
101
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Voluntary
($) |
|
Involuntary
Without Cause
($)
|
|
Early
Retirement ($) |
|
For
Cause ($) |
|
Involuntary
for Good Reason Following a CIC
($) (8)
|
|
Death
($) (9) |
|
Disability
($) |
|
John M. Turner, Jr.
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
2,520,000
|
|
—
|
|
—
|
|
Long Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units (2)
|
—
|
|
591,014
|
|
—
|
|
—
|
|
1,647,821
|
|
1,647,821
|
|
988,692
|
|
Performance Stock Units (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
1,647,821
|
|
1,647,821
|
|
—
|
|
Performance Cash Units
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000,000
|
|
1,000,000
|
|
—
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning (3)
|
—
|
|
31,630
|
|
N/A
|
|
—
|
|
31,630
|
|
31,630
|
|
31,630
|
|
Outplacement (4)
|
|
|
|
|
60,000
|
|
|
|
||||||
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits (6)
|
—
|
|
—
|
|
—
|
|
—
|
|
18,598
|
|
—
|
|
—
|
|
Value of additional retirement benefits (7)
|
—
|
|
—
|
|
—
|
|
—
|
|
7,146,029
|
|
—
|
|
—
|
|
Total:
|
—
|
|
622,644
|
|
—
|
|
—
|
|
14,071,899
|
|
4,327,272
|
|
1,020,322
|
|
C. Matthew Lusco
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
2,453,850
|
|
—
|
|
—
|
|
Long Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units (2)
|
—
|
|
764,595
|
|
—
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
1,224,544
|
|
Performance Stock Units (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
2,040,906
|
|
2,040,906
|
|
—
|
|
Performance Cash Units
|
—
|
|
—
|
|
—
|
|
—
|
|
1,200,000
|
|
1,200,000
|
|
—
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning (3)
|
—
|
|
31,630
|
|
N/A
|
|
—
|
|
31,630
|
|
31,630
|
|
31,630
|
|
Outplacement (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits (6)
|
—
|
|
—
|
|
—
|
|
—
|
|
14,736
|
|
—
|
|
—
|
|
Value of additional retirement benefits (7)
|
—
|
|
—
|
|
—
|
|
—
|
|
3,434,453
|
|
—
|
|
—
|
|
Total:
|
—
|
|
796,225
|
|
—
|
|
—
|
|
11,276,481
|
|
5,313,442
|
|
1,256,174
|
|
(1)
|
Mr. Hall and Mr. Owen are eligible for early retirement. For purposes of the various termination columns in the table, with the exception of the “For Cause” column, they are assumed to have taken early/normal retirement and, therefore, are entitled to receive the benefits shown.
|
(2)
|
Based on a fair market value of Regions common stock of $17.28 per share on December 29, 2017.
|
(3)
|
The service agreement with Regions’ financial planning provider allows for continuation of financial planning services for two years following termination due to retirement, death, disability, change-in-control, and involuntary termination without cause.
|
(4)
|
The change-in-control agreement provides for reasonable outplacement services for up to two years.
|
(5)
|
280G Tax Gross-up represents the amount of the excise tax and related gross-up for excise taxes levied under Section 4999 of the IRC on payment and benefits following a change-in-control (otherwise referred to as “excess parachute payments” under Section 280G of the IRC).
|
(6)
|
The change-in-control agreement provides for continuation of medical and dental coverage equal under Regions’ medical and dental plans for a period of three years for Mr. Hall and Mr. Owen and for a period of two years for Mr. D. Turner, Mr. J. Turner, and Mr. Lusco.
|
102
|
|
2018 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
(7)
|
Mr. D. Turner, Mr. Owen, Mr. J. Turner, and Mr. Lusco participate in the Retirement Plan and/or the SERP. The change-in-control agreement provides for additional years’ credit for age and service under the Retirement Plan and the SERP that the NEO would have accrued had he remained employed through the second anniversary of the change-in-control. In addition, Mr. J. Turner and Mr. Owen are each eligible for the alternative target benefit under the SERP, which would normally require the NEO to reach age 60 and have a minimum of 10 years of service. Mr. Lusco is eligible for the regular SERP, which, in his case, would require service to age 62. Under the SERP, in the event of an involuntary termination of employment without cause (or termination for good reason) within 24 months following a change-in-control, unvested benefits become fully vested. Because these benefits are already accrued, they are reflected in the Pension Benefits table on page 98 and do not represent additional expense to the Company. The following chart details the value of the SERP benefit attributable to the additional years of age and service, as well as the amounts already accrued that will vest upon involuntary termination of employment without cause (or termination with good reason) within 24-months of a change-in-control:
|
Name
|
Value for Targeted/Regular
Years of Age and Service Credit
($)
|
|
Value for Vesting in
Targeted/Regular
Benefit
($)
|
|
Total Additional Value
($)
|
|
O. B. Grayson Hall, Jr.*
|
—
|
|
—
|
|
—
|
|
David J. Turner, Jr.
|
1,521,132
|
|
—
|
|
1,521,132
|
|
John B. Owen
|
1,172,985
|
|
9,890,225
|
|
11,063,240
|
|
John M. Turner, Jr.
|
2,017,774
|
|
5,218,255
|
|
7,146,029
|
|
C. Matthew Lusco
|
938,252
|
|
2,496,201
|
|
3,434,453
|
|
*
|
At December 31, 2017, Mr. Hall was not a participant in the plan.
|
(8)
|
The following chart summarizes the meaning of “cause,” “good reason/without cause,” and “change-in-control” under the change-in-control agreements of the NEOs:
|
(9)
|
Death would result in vesting in the enhanced portion of the benefit for Mr. Owen and Mr. Lusco as is displayed in the chart in footnote (7) above.
|
|
2018 Proxy Statement
|
103
|
APPENDIX A
|
A-1
|
|
2018 Proxy Statement
|
APPENDIX A
|
(Unaudited)
($ amounts in millions)
|
|
Year Ended
December 31, 2017 |
||
Net income from continuing operations available to common shareholders (GAAP)
|
|
$
|
1,193
|
|
Adjustments:
|
|
|
||
Salary and employee benefits - severance charges, net of tax
(1)
|
|
4
|
|
|
Tax law change, net of tax
|
|
55
|
|
|
Contribution of foundation, net of tax
|
|
25
|
|
|
Branch consolidation, property and equipment charges, net of tax
(2)
|
|
(6)
|
|
|
Securities gains, net of tax
(3)
|
|
(13)
|
|
|
Gain on Sale of mortgage securitization, net of tax
|
|
(3)
|
|
|
Adjusted income from continuing operations available to common shareholders for incentive purposes (non-GAAP)
|
A
|
$
|
1,255
|
|
Average stockholders’ equity from continuing operations (GAAP)
|
|
$
|
16,665
|
|
Adjustments:
|
|
|
||
Average intangible assets (GAAP)
|
|
(5,103)
|
|
|
Average deferred tax liability related to intangibles (GAAP)
|
|
148
|
|
|
Average preferred equity (GAAP)
|
|
(820)
|
|
|
Average tangible common stockholders’ equity (non-GAAP)
|
B
|
$
|
10,890
|
|
Adjusted return on average tangible common stockholders’ equity from continuing operations (non-GAAP)
|
A/B
|
11.52
|
%
|
(1)
|
Certain charges related to this item were included in the
2017
target. This adjustment reflects the portion of the charges included in the actual financial results but not included in the target, net of taxes.
|
(2)
|
Certain charges related to this item were included in the
2017
target. This adjustment reflects the shortfall of the actual financial results compared to the charges included in the
2017
target, net of taxes.
|
(3)
|
No charges related to this item were included in the
2017
target. Therefore, this adjustment reflects the charges included in the actual financial results, net of taxes.
|
(Unaudited)
($ amounts in millions)
|
|
Year Ended
December 31, 2017 |
||
Total commercial
(1)
|
|
$
|
2,233
|
|
Total investor real estate
(1)
|
|
223
|
|
|
Total consumer
(2)
|
|
606
|
|
|
Total criticized and classified loans
|
A
|
$
|
3,062
|
|
Total loans, net of unearned income
|
B
|
79,947
|
|
|
Criticized and classified loans/loans
|
A/B
|
3.83
|
%
|
(1)
|
Amount can be obtained from page 119 of the Regions Annual Report on Form 10-K for the year ended
December 31, 2017
as the sum of the applicable subtotals of the special mention, substandard accrual and non-accrual columns.
|
(2)
|
Amount is from internal management reports.
|
|
2018 Proxy Statement
|
A-2
|
Regions360
|
100%
of our associates completed
Fair and Responsible Banking training
|
approach to customer relationships
|
|
|
|
#1
|
|
in customer satisfaction in the 2017
American Customer Satisfaction Index
|
77,700+
|
$291 million
invested in affordable housing
|
volunteer hours
|
|
|
|
90,000+
|
|
financial education seminars
|
-7%
reduction in energy consumption
from prior year
|
|
|
$347 million
|
|
in financing for solar power
|
|
|