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Check the appropriate box:
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☐
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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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Definitive Additional Materials
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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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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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(4) Date Filed:
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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.
|
|
|
Charles D. McCrary
Independent Chair of the Board
|
March 6, 2020
|
QUICK INFORMATION
|
|
|
|
DATE & TIME
|
LOCATION
|
RECORD DATE
|
Wednesday, April 22, 2020
9:00 A.M., local time
|
Regions Center Auditorium
1900 Fifth Avenue North
Birmingham, Alabama 35203
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February 24, 2020
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Proposal
|
Voting Options
|
Board
Recommendation
|
More
Information
|
PROPOSAL 1 –
Election of Directors
|
FOR, AGAINST, or ABSTAIN
for each Director nominee
|
FOR each nominee
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Page 15
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PROPOSAL 2 –
Ratification of Appointment of Independent Registered Public Accounting Firm
|
FOR, AGAINST, or ABSTAIN
|
FOR
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Page 28
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PROPOSAL 3 –
Advisory Vote on
Executive Compensation |
FOR, AGAINST, or ABSTAIN
|
FOR
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Page 32
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QUICK INFORMATION
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ESG or Compensation Matter
|
Regions’ Practice
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Annual Board, Committee, and Individual Director Self-Evaluation Process
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Yes
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Independent Directors Meet without Management Present
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Yes, at each Board meeting and most committee meetings
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Number of Board Meetings Held in 2019
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8
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Total Number of Board and Committee Meetings Held in 2019
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40
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Board Oversight of Company Strategy and Risks
|
Yes
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Shareholder Rights
|
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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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Shareholder Right to Call Special Meeting
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No
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Shareholder 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 plan is regularly submitted to the Federal Reserve for review
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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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Other Governance Practices
|
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ISG Corporate Governance Principles for U.S. Listed Companies Compliance
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Yes
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Commonsense Principles 2.0 Signatory
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Yes
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Council of Institutional Investors; International Corporate Governance Network
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Member
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Rooney Rule version for Director Candidate and Section 16 Executive Officer Searches, including CEO Succession
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Adopted
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Year-Round Shareholder Engagement
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Yes
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Director-Shareholder Engagement
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Yes
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Robust Stock Ownership Guidelines
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Yes
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Anti-Hedging and Anti-Pledging Policies
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Yes
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Hedging Agreements Entered into by Directors/Executive Officers/Associates
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None; hedging prohibited
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Shares Pledged by Directors and Executive Officers
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None; pledging prohibited
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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 Auditor
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Ernst & Young LLP
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Environmental and Social Practices
|
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Board Oversight of Corporate Culture and ESG Practices and Strategies
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Yes
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Codes of Conduct for Directors, Officers, and Associates
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Yes
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Vendor Code of Conduct and Human Rights Statement
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Yes
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No-Harassment and No-Retaliation Policies
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Yes
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ESG Report with Global Reporting Initiative (GRI) Content Index
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Yes
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Environmental Sustainability Policy Statement and Goals Established
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Yes
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SASB Disclosure
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Yes
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CDP Climate Change Questionnaire Response
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Yes
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Ceres Company Network Member
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Yes
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Political Contributions Disclosed
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Yes
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Compensation Practices
|
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CEO Pay Ratio / Alternative CEO Pay Ratio
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217:1 / 104:1
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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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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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NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS
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INDEX OF COMMONLY REFERENCED TOPICS/GLOSSARY OF TERMS & ACRONYMS
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Why does the Board recommend a vote “FOR” the nominees?
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What is the effect of this proposal?
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Why does the Board recommend a vote "FOR" this proposal?
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How does the Audit Committee evaluate and select the independent auditor?
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What services are provided by EY?
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How much did EY bill Regions for 2019 and 2018?
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Will a representative of EY be present at the annual meeting?
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How long has EY been Regions’ independent auditor?
|
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How is Regions assured that EY remains independent?
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Why does the Board recommend a vote "FOR" this proposal?
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
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Overview
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ESG Memberships and Affiliations
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2019-2020 ESG Timeline
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ESG Recognitions and Rankings
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Board Oversight of Environmental and Social Practices
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Environmental Sustainability
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Environmental and Social Practices in Financial Services
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Ethical Business Conduct
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Safety and Respect in the Workplace
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Human Capital Management
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Political Contributions
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|
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TABLE OF CONTENTS
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Codes of Ethics
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Board Leadership Structure
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Director Succession Planning and Board Refreshment; Appointment of New Directors
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Limitation on Other Board and Audit Committee Service
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Family Relationships
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Policies Governing Transactions with Related Persons
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Transactions with Directors
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Compensation Consultant Disclosure
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Compensation Committee Interlocks and Insider Participation
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Section 16(a) Reporting
|
|
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A-1
|
1.
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Election to our Board of Directors of the 12 nominees named in our proxy statement to serve as Directors until the next annual meeting of shareholders or in each case until their successors are duly elected and qualified;
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2.
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Ratification of the appointment of Ernst & Young LLP as Regions’ independent registered public accounting firm for the year 2020; and
|
3.
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Advisory vote on executive compensation.
|
Regions’ annual meeting, which falls on the 50th anniversary of Earth Day, will be a sustainability-inspired annual meeting.
Money saved as part of our holding such a meeting will be donated to the Freshwater Land Trust.
|
|
By Order of the Board of Directors
|
|
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Hope D. Mehlman
Chief Governance Officer and
Assistant Corporate Secretary
|
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March 6, 2020
|
|
2020 Proxy Statement
|
1
|
INDEX OF
COMMONLY REFERENCED TOPICS
|
|
Topic
|
Page
|
Admission to the Annual Meeting
|
117
|
Anti-Hedging and Anti-Pledging
|
77
|
Auditor Billing
|
29
|
Auditor Tenure
|
29
|
Board, Committee, and Individual Director Evaluation
|
|
Board Leadership Structure
|
|
Board Meeting Director Attendance
|
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Board Refreshment
|
62
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Board Risk Oversight
|
|
Board Skills and Composition Matrix
|
18
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Capital Planning Process
|
8
|
CEO Pay Ratio
|
|
Change-in-Control Agreements
|
100
|
Clawback Policy
|
97
|
Codes of Ethics
|
|
Committees of the Board
|
|
Communications with the Board
|
|
Compensation and Performance Peer Groups
|
95
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Compensation Consultant
|
|
Community Engagement
|
|
Contacting Regions
|
50
|
Corporate Governance Principles
|
48
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Corporate Governance Shareholder Engagement
|
|
Cyber and Information Security
|
|
Director Nominee Biographies
|
19
|
Director Education
|
|
Director Independence
|
|
Director Overboarding Policy
|
|
Director Retirement Age
|
14
|
Director Tenure
|
16
|
Environmental Sustainability
|
|
Human Capital Management
|
|
Independent Chair of the Board Duties
|
53
|
LTIP Grants
|
104
|
LTIP Performance Targets
|
91
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Pay-for-Performance
|
79
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Perks
|
93
|
Political Contributions Policy
|
|
Record Date
|
|
Related Person Transactions Policy
|
|
Rooney Rule
|
48
|
Say-on-Pay
|
|
Shareholder Proposals and Nominees for the 2021 Annual Meeting
|
118
|
Shareholder Recommendations for Director Candidates
|
118
|
Stock Ownership Guidelines
|
77
|
Stock Performance Graph
|
9
|
|
|
GLOSSARY OF
TERMS & ACRONYMS
|
|
Term
|
Meaning
|
401(k) Plan
|
Regions Financial Corporation 401(k) Plan
|
Board
|
Board of Directors, Regions Financial Corporation
|
Broker
|
Brokerage firms, banks, or similar entities
|
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
|
CDP
|
Formerly known as the Carbon Disclosure Project
|
CECL
|
Current Expected Credit Losses
|
CEO
|
Chief Executive Officer
|
CFO
|
Chief Financial Officer
|
CHR Committee
|
Compensation and Human Resources Committee
|
CII
|
Council of Institutional Investors
|
Code of Conduct
|
Code of Business Conduct and Ethics
|
Company
|
Regions Financial Corporation
|
Cook & Co.
|
Frederic W. Cook & Co.
|
CRO
|
Chief Risk Officer
|
D&I
|
Diversity and Inclusion
|
DDSIP
|
Directors’ Deferred Stock Incentive Plan
|
EPS Growth
|
Cumulative compounded growth in 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
|
GAAP
|
Generally Accepted Accounting Principles in the United States
|
GHG
|
Greenhouse Gas
|
HCM
|
Human Capital Management
|
ICGN
|
International Corporate Governance Network
|
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
|
NEO
|
Named Executive Officer
|
NYSE
|
New York Stock Exchange
|
OAC
|
Office of Associate Conduct
|
PCAOB
|
Public Company Accounting Oversight Board
|
PSUs
|
Performance Stock Units
|
Regions
|
Regions Financial Corporation
|
Retirement Plan
|
Regions Financial Corporation Retirement Plan for Associates
|
ROATCE
|
Return on Average Tangible Common Equity
|
RSUs
|
Restricted Stock Units
|
SASB
|
Sustainability Accounting Standards Board
|
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
|
|
2020 Proxy Statement
|
Please 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 annual meeting materials reduces Regions’ environmental impact and printing and mailing expenses. To enroll for electronic delivery you may also visit http://enroll.icsdelivery.com/rf.
|
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL MEETING:
The 2020 Proxy Statement and Notice of Annual Meeting of Shareholders; Annual Report on Form 10-K
for the year ended December 31, 2019; and the CEO’s Letter are available at ir.regions.com and proxyvote.com.
|
Alternatively, if you would like to receive a paper copy of the materials or if you received one copy of the proxy materials through our use of householding and would like to receive multiple copies, you may, at any time, email investors@regions.com, call 205-264-7040, or write to the following address, and we will deliver those documents to you promptly upon receiving the request.
|
Regions Financial Corporation
1900 Fifth Avenue North
Birmingham, Alabama 35203
Attn: Investor Relations
|
|
2020 Proxy Statement
|
3
|
PROXY SUMMARY
|
Date:
|
Wednesday, April 22, 2020
|
Time:
|
9:00 A.M., local time
|
Place:
|
Regions Center Auditorium
1900 Fifth Avenue North
Birmingham, Alabama 35203
|
Record Date:
|
February 24, 2020
|
Voting:
|
Common shareholders as of the Record Date are entitled to vote. Shareholders of record, as well as most beneficial shareholders, can vote by proxy using one of several methods.
|
Your vote is important!
Please submit your vote by proxy over the Internet or by telephone, or complete, sign, date, and return your proxy card or voting instruction form. |
4
|
|
2020 Proxy Statement
|
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 15
|
No effect
|
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 28
|
Abstentions have no effect
|
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 32
|
No effect
|
Affirmative “FOR” vote of a majority of the votes cast for or against this proposal.
|
Please submit your vote by proxy over the Internet or by telephone,
or complete, sign, date, and return your proxy card or voting instruction form. |
Last year, we committed to making a contribution of $1 to Junior Achievement USA for each retail shareholder account that voted electronically or signed up for electronic delivery of future meeting materials.
Regions contributed a total of $25,000 on behalf of our retail shareholders supporting the work of Junior Achievement USA to inspire and prepare young people to succeed in a global economy.
|
|
2020 Proxy Statement
|
5
|
PROXY SUMMARY
|
Regions Bank is ranked 16th in the U.S. in total deposits.
|
•
|
Make banking easier: meet our customer expectations for convenience, expediency, and simplicity to address all of their financial needs. Achieve this by re-thinking and streamlining processes, challenging the status quo, and deploying technology that delivers a seamless, convenient experience.
|
•
|
Focus on your customer: execute on our customer-centric approach to banking and put our customer needs at the center of every interaction.
|
•
|
Elevate our performance as a team: drive continuous improvement by expecting more from ourselves and our team, acting with a sense of urgency, and executing at a higher level to deliver innovative solutions and more consistent results.
|
6
|
|
2020 Proxy Statement
|
PROXY SUMMARY
|
•
|
Lean into our strengths, including our industry-acclaimed customer service, our ability to work as one team and deliver Regions360®, our culture, the markets and communities we serve, and our risk management.
|
•
|
Continuously improve by making banking easier, focusing on the customer, and elevating our performance as a team.
|
•
|
Growth through innovation by focusing on the customer experience; delivery optimization; core capabilities and infrastructure; data management and analytics; omni-channel delivery and recovery; protection and security; and holistic advice and guidance.
|
•
|
Make strategic and disciplined investments centered on growing our businesses both organically and through bolt-on acquisitions complementing existing products and services. This includes prudent capital management; inclusive prosperity in our communities; and investments in talent and technology that protect and build for our future.
|
|
“Our objective is to deliver consistent, sustainable, long-term performance.
The work we are doing today to foster a culture of continuous improvement,
our investments in digital capabilities, and our expansion in attractive sectors
and markets, are all oriented towards building increased franchise value
over the long term.”
|
John M. Turner, Jr.
President and Chief Executive Officer
Member of the Board of Directors
Regions Financial Corporation
|
|
2020 Proxy Statement
|
7
|
PROXY SUMMARY
|
Effectively managing and deploying capital is essential to meeting our strategic and financial objectives, as well as the expectations of our stakeholders.
|
1.
|
Growth and strategic investments
|
2.
|
Sustainable common stock dividend payout ratio
|
3.
|
Common stock repurchases
|
For more information on Regions’ Capital Planning and Stress Testing Framework, see our
|
Annual Report on Form 10-K dated February 21, 2020.
|
8
|
|
2020 Proxy Statement
|
PROXY SUMMARY
|
2019 Scorecard
|
|||
Category
|
FY 2019 Expectations (2)
|
FY 2019 Results
|
|
Net charge-offs/average loans
|
40-50 bps
|
43 bps
|
ü
|
Adjusted average loan growth (1)
|
Low to mid-single digits
|
4.1%
|
ü
|
Adjusted revenue growth (1)
|
Lower end of 2%-4%
|
2.3%
|
ü
|
Adjusted non-interest expense (1)
|
Relatively stable
|
+0.3%
|
ü
|
Effective tax rate
|
20%-21%
|
20.3%
|
ü
|
Adjusted operating leverage (1)
|
Positive
|
2.1%
|
ü
|
|
|
|
|
(1) Non-GAAP; see reconciliation in Regions’ Current Report on Form 8-K filed January 17, 2020, Exhibit 99.3, appendix.
|
|||
(2) Original FY 2019 expectations included adjusted average loan growth in the low single digits, adjusted revenue growth of 2%-4% and an effective tax rate of 20%-22%.
|
|
2020 Proxy Statement
|
9
|
PROXY SUMMARY
|
|
Age
|
Independent
|
Director
Since
|
Regions Board
Committee(s)
|
Principal Occupation
|
Other Public
Company Boards (1)
|
Carolyn H. Byrd (2)(4)
|
71
|
ü
|
2010
|
Audit Committee (Chair)
|
Chairman and CEO,
GlobalTech Financial, LLC
|
|
Don DeFosset (4)
|
71
|
ü
|
2005
|
CHR Committee (Chair)
NCG Committee
|
Retired Chairman,
President, and CEO,
Walter Industries, Inc.
|
ITT Corporation;
National Retail Properties;
Terex Corporation
|
Samuel A.
Di Piazza, Jr. (2)
|
69
|
ü
|
2016
|
Audit Committee
CHR Committee
|
Retired Global CEO, PricewaterhouseCoopers; Retired Vice Chairman, Citigroup Global Corporate and Investment Bank
|
AT&T Inc.;
Jones Lang LaSalle Incorporated;
ProAssurance Corporation
|
Zhanna Golodryga
|
64
|
ü
|
2019
|
CHR Committee
Risk Committee
|
Chief Digital and Administrative Officer, Phillips 66
|
|
John D. Johns (3)(4)
|
68
|
ü
|
2011
|
Risk Committee (Chair)
|
Chairman,
DLI North America Inc.
|
Genuine Parts Company;
Southern Company
|
Ruth Ann Marshall (4)
|
65
|
ü
|
2011
|
CHR Committee
NCG Committee (Chair)
|
Retired President,
The Americas, MasterCard International, Inc.
|
ConAgra Brands, Inc.;
Global Payments Inc.
|
Charles D. McCrary (4)
|
68
|
ü
|
2001
|
Independent Chair of the Board
|
Retired President and CEO, Alabama Power Company
|
|
James T. Prokopanko
|
66
|
ü
|
2016
|
NCG Committee
Risk Committee
|
Retired President and CEO, The Mosaic Company
|
Vulcan Materials Company;
Xcel Energy Inc.
|
Lee J. Styslinger III
|
59
|
ü
|
2003
|
NCG Committee
Risk Committee
|
Chairman and CEO,
Altec, Inc.
|
Vulcan Materials Company;
Workday, Inc.
|
José S. Suquet (2)(3)
|
63
|
ü
|
2017
|
Audit Committee
Risk Committee
|
Chairman, President, and CEO, Pan-American Life Insurance Group
|
|
John M. Turner, Jr. (4)
|
58
|
CEO
|
2018
|
|
President and CEO,
Regions Financial Corporation and Regions Bank
|
|
Timothy Vines (2)
|
54
|
ü
|
2018
|
Audit Committee
CHR Committee
|
President and CEO, Blue Cross and Blue Shield of Alabama
|
|
(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)
|
Member of Regions’ Executive Committee
|
10
|
|
2020 Proxy Statement
|
PROXY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
10
Directors
|
9
Directors
|
9
Directors
|
10
Directors
|
11
Directors
|
11
Directors
|
6
Directors
|
10
Directors
|
12
Directors
|
6
Directors
|
9
Directors
|
11
Directors
|
12
Directors
|
|
2019
|
|
2018
|
|
||
Audit fees
|
$
|
7,907,534
|
|
$
|
7,270,239
|
|
Audit-related fees
|
471,812
|
|
428,049
|
|
||
Tax fees
|
257,507
|
|
255,019
|
|
||
All other fees
|
1,188,024
|
|
453,884
|
|
||
Total fees
|
$
|
9,824,877
|
|
$
|
8,407,191
|
|
|
2020 Proxy Statement
|
11
|
PROXY SUMMARY
|
•
|
After reviewing NEO target pay levels in early 2019, the CHR Committee decided to make one base compensation change. Following a review of market compensation benchmarks for our compensation peers, and after consulting with its independent compensation consultant, the CHR Committee increased Mr. J. Turner’s base salary by 2.6 percent as a way of recognizing his contributions to the Company during his first six months as CEO. The CHR Committee did not change the base salaries for any of the remaining NEOs.
|
•
|
The annual short-term incentive target opportunity increased from 160% to 170% for Mr. J. Turner.
|
•
|
The CHR Committee increased the long-term incentive targets by $200,000 for Mr. D. Turner and Mr. Owen, resulting in new long-term incentive targets of $1,400,000 for each.
|
•
|
Diligent execution of our strategic plan in a challenging interest rate environment yielded corporate performance results of 106 percent of our annual incentive target expectations. Though slightly above target, this result is significantly lower than in previous years.
|
•
|
Long-term incentive grants issued for the year continue to constitute a large portion of direct compensation for our NEOs, which aligns with our philosophy to create a strong tie between NEO and shareholder financial interests through sustaining positive performance over a multi-year period. Consistent with prior grants, the long-term incentives granted in 2019 include three components that are subject to the Company meeting certain safety and soundness criteria:
|
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 equity and financial performance of the Company.
|
12
|
|
2020 Proxy Statement
|
PROXY SUMMARY
|
2.
|
Performance Cash Units that do not vest for three years and for which the ultimate value and amount are based on the future financial performance of the Company.
|
3.
|
Restricted Stock Units (“RSUs”) that do not vest for three years.
|
•
|
The above table summarizes the entire value of the long-term incentive grants made to NEOs in 2019 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) portions of the 2019 grant are reflected in this table and is considered 2019 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 2019 grant will not be reflected in the Summary Compensation Table until the year they are earned,
|
•
|
The Summary Compensation Table reports the following items that are not included in the table above: change in pension value, nonqualified deferred compensation earnings, and compensation associated with perks, benefits, and other miscellaneous items which is referred to as “all other compensation” in the Summary Compensation Table.
|
|
2020 Proxy Statement
|
13
|
PROXY SUMMARY
|
Independent
|
|
92%
|
|
Robust
|
|
50%
|
|
72 Years
|
Chair of the Board
|
|
Average member attendance at 2019 Board and committee meetings
|
|
Stock ownership guidelines
|
|
Standing Board committees chaired by women
|
|
Mandatory Director retirement age
|
Rooney Rule
|
|
Year-Round Engagement
|
|
No Overboarded Directors
|
|
No
|
Adopted a version for Director candidate and Section 16 Executive Officer searches, including CEO succession
|
|
With institutional shareholders, including Director-Shareholder Engagement
|
|
Under ISS’ and Glass Lewis’ Guidelines and market standards
|
|
Directors or executive officers have entered into hedging agreements or pledged stock
|
14
|
|
2020 Proxy Statement
|
PROPOSAL 1 — ELECTION OF DIRECTORS
|
|
2020 Proxy Statement
|
15
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Commitment to Board Diversity
|
The Board approved a version of the Rooney Rule for Director candidate searches in early 2019. Under these revisions, when searching for new candidates, the NCG Committee shall endeavor to include highly qualified candidates who reflect diverse backgrounds (including gender, race, and ethnicity) in the pool from which nominees are chosen. Further, any third-party firm or consultants used to compile a pool of candidates will be requested to include such individuals.
|
•
|
five of those nominees chair committees,
|
•
|
one serves as the non-executive chair of his outside board, and
|
•
|
one serves as the lead independent director of his outside board.
|
16
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Skill
|
|
Description of the Skill and Explanation of Its Importance to Our Board
|
Audit/Accounting/Finance/Capital Allocation
|
|
As a public company, Regions is subject to certain auditing, financial accounting, and financial reporting requirements. The Board, particularly through its Audit Committee, is responsible for reviewing Regions’ complex financials, financial reporting and internal controls, and monitoring internal and external auditors. Additionally, Regions routinely enters into various forms of indebtedness and capital market transactions. The Board is responsible for reviewing the Company’s long-term capital plans for soundness. Therefore, it is important for the Board to have Directors who understand auditing, financial reporting, finance, and capital allocation.
|
Banking and Financial Services
|
|
The banking and financial services industry has inherent risks, challenges, and opportunities that are unique. Further, as a full-service financial holding company, we offer a wide range of products and services, some of which may be complex in nature. Experience in the financial services industry contributes to the Board's practical understanding in delivering and directing the Company's strategy. Further, Directors who understand the types of financial products and services we offer, as well as those we choose not to offer, are critical to our success.
|
Business Operations and Technology
|
|
The banking and financial services industry is a needs-driven business, and as such, it is important that Regions be able to provide market-leading client services, transaction processing, and innovation. Our customers expect efficient, quality services, many of which are becoming more mobile and technology driven. Further, it is important that we are able to appropriately gather, process, and analyze information to provide our customers with better banking solutions. Accordingly, 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 improve our processes, services, and products.
|
Continuous Improvement
|
|
One of our Strategic Priorities is to "Continuously Improve." As part of this priority, Regions is focused on making banking easier by being responsive to customer needs; growing revenue through improved effectiveness in generating prudent, profitable, and sustainable growth; making efficiency improvements in our processes that reduce costs and drive growth; and promoting innovation throughout the Company. The Board needs Directors with an understanding of how to foster an environment of continuous improvement to assist the Company in meeting its long-term strategic goals.
|
Corporate Governance
|
|
The Board is responsible for shaping the Company’s corporate governance priorities and structure, which must be transparent and responsive to our shareholders. Because corporate governance affects the fundamental operation of a company, it can have a significant impact on corporate operations. The Board must have Directors with experience in keeping up with and understanding constantly changing corporate governance expectations and practices. Having Directors with experience in corporate governance also better positions the Board to engage with shareholders on such matters.
|
Customer Focus and Community Engagement
|
|
One of our Strategic Priorities is to "Focus on the Customer." Regions is committed to helping our customers and our local communities achieve their financial goals. We are focused on understanding their needs and investing our resources to help them accomplish their goals. The Board should have Directors with experience to support these efforts. Having individuals on our Board with experience in making sure our external stakeholders succeed is important to Regions' success.
|
Environmental Sustainability Practices
|
|
As a public company, Regions must be cognizant of current and potential environmental risks and opportunities and how they can impact our long-term value. Our continuing focus remains on setting and achieving operational sustainability goals, deepening our environmental and social risk management, and pursuing opportunities in sustainable finance. When considering risks and opportunities related to environmental sustainability, the Board should have Directors with experience in these practices.
|
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 shareholder 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.
|
Human Capital Management
|
|
One of our Strategic Priorities is to "Build the Best Team." 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 capital management and talent management experience represented on the Board is important to ensuring smooth transitions and appropriate succession planning, as well as fostering a productive and safe working environment. This expertise also covers risks and opportunities associated with corporate culture, diversity and inclusion, as well as associate well-being and engagement, all areas that are drivers of long-term value.
|
Information/Cyber Security
|
|
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. Moreover, financial institutions are increasingly dependent on information technology and telecommunications to deliver services to consumers and businesses every day. Therefore, the Board should be made up of some Directors with experience in implementing, establishing, or overseeing information/cyber security systems and protocols.
|
Regulatory or Compliance
|
|
The banking and financial services industry is highly regulated. Regions is subject to both federal and state regulators, including the Alabama State Banking Department, the Federal Reserve, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Consumer Financial Protection Bureau, and the Financial Industry Regulatory Authority. Having Directors with experience in understanding the regulations promulgated by these authorities; the Company’s products and services; and how to effectively communicate with our regulators is critical to the Company.
|
Risk Management
|
|
One of our Strategic Priorities is to "Enhance Risk Management." Robust risk management is a critical aspect of operating within the financial sector and is embedded throughout our strategic plan. Having Directors with experience in overseeing risk management matters strengthens the Board's oversight of the risks facing Regions. The Board, therefore, must include Directors who are very familiar with risk management processes.
|
Strategic Planning and Strategy Development
|
|
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 and the connection to long-term value.
|
|
2020 Proxy Statement
|
17
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Director
|
Skills*
|
Age
|
Tenure
|
# of Other
Public Boards
|
Independent
|
Racially/Ethnically
Diverse
|
Gender Diverse
|
LGBTQ+
|
Non-US Born
|
Multi-lingual
|
Byrd
|
|
71
|
10
|
0
|
ü
|
ü1
|
ü3
|
|
|
|
DeFosset
|
|
71
|
15
|
3
|
ü
|
|
|
|
|
|
Di Piazza
|
|
69
|
4
|
3
|
ü
|
|
|
|
|
|
Golodryga
|
|
64
|
1
|
0
|
ü
|
|
ü3
|
|
ü4
|
ü7
|
Johns
|
|
68
|
9
|
2
|
ü
|
|
|
|
|
|
Marshall
|
|
65
|
9
|
2
|
ü
|
|
ü3
|
ü
|
|
|
McCrary
|
|
68
|
19
|
0
|
ü
|
|
|
|
|
|
Prokopanko
|
|
66
|
4
|
2
|
ü
|
|
|
|
ü5
|
|
Styslinger
|
|
59
|
17
|
2
|
ü
|
|
|
|
|
ü8
|
Suquet
|
|
63
|
3
|
0
|
ü
|
ü2
|
|
|
ü6
|
ü8
|
Turner
|
|
58
|
2
|
0
|
CEO
|
|
|
|
|
|
Vines
|
|
54
|
2
|
0
|
ü
|
ü1
|
|
|
|
|
Average/
Total
|
|
65
|
8
|
|
12
(92%)
|
3
(25%)
|
3
(25%)
|
1
(8%)
|
3
(25%)
|
3
(25%)
|
18
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
The Board believes that each one of the 12 nominees is well qualified to serve as a Director on Regions’ Board.
|
Each nominee’s key experiences, qualifications, attributes, or skills that led the Board to conclude that they should serve as a Director are described in the following biographies.
|
There are no family relationships among our Directors and executive officers.
|
|
2020 Proxy Statement
|
19
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
Carolyn H. Byrd
Independent
Director Since: 2010
Age: 71
Regions Committees
• Audit Committee (Chair; Audit Committee Financial Expert)
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Formed GlobalTech Financial, LLC, a private company specializing in business process outsourcing and financial consulting, in 2000 and has since served as its Chairman and CEO
•
Prior to forming GlobalTech, 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
•
Served as a Senior Account Officer at Citibank, N.A. prior to joining Coca-Cola
•
Throughout her career, held many positions in which she was responsible for key managerial, strategic, financial, and operational decisions and has served on the boards of directors of a variety of large public companies
Education
•
Bachelor’s degree (Economics and Business Administration), Fisk University
•
Master’s degree (Finance and Business Administration), University of Chicago Graduate School of Business
Honors and Recognition
•
2018 Most Influential Corporate Directors, WomenInc.
Former Public Directorships Held During Past Five Years
•
Federal Home Loan Mortgage Corporation (“Freddie Mac”)
•
Popeyes Louisiana Kitchen, Inc.
|
|
||
|
||
|
|
|
|
|
|
|
|
|
Don DeFosset
Independent
Director Since: 2005
Age: 71
Regions Committees
• CHR Committee (Chair)
• NCG Committee
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Retired as Chairman, President, and CEO of Walter Industries, Inc., which during his time of service was a diversified public company with businesses in water infrastructure products, metallurgical coal and natural gas, home building, and mortgage financing
•
Throughout his career, held significant leadership positions in major multinational corporations, including Dura Automotive Systems, Inc., Navistar International Corporation, and AlliedSignal, Inc.
•
Brings extensive management, business, and mortgage experience, as well as a deep understanding of complex issues concerning public companies
•
Service on the boards of directors of a variety of large public companies further augments his experience
Education
•
Bachelor’s degree (Industrial Engineering), Purdue University
•
Master of Business Administration degree, Harvard University
Other Public Directorships and Board Leadership/Committee Assignments
•
ITT Corporation: Audit Committee; Nominating and Governance Committee (Chair)
•
National Retail Properties: Non-Executive Chair of the Board; Compensation Committee (Chair); Governance and Nominating Committee
•
Terex Corporation: Audit Committee; Governance and Nominating Committee (Chair)
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
20
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
Samuel A.
Di Piazza, Jr.
Independent
Director Since: 2016
Age: 69
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• CHR Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Retired from Citigroup, Inc., where he served as Vice Chairman of the Global Corporate and Investment Bank
•
Prior to joining Citigroup, 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 and ultimately served as Global CEO of PricewaterhouseCoopers from 2002 to 2009
•
Possesses extensive audit and tax experience, leadership experience in civic and not-for-profit organizations, including sustainable development organizations, as well as many years in the banking industry
•
Extremely active in and serves on the boards of various nonprofit and professional organizations, including the Mayo Clinic and the National September 11th Memorial and Museum
•
Previously served as Trustee of both the Financial Accounting Foundation and the International Accounting Standards Committee Foundation and is a former director on the UN Global Compact Board and former Chairman of the World Business Council for Sustainable Development
Education
•
Bachelor’s degree (Accounting and Economics), University of Alabama
•
Master of Tax Accounting degree, University of Houston
Honors and Recognition
•
Accountant of the Year, Beta Alpha Psi Society
•
Ellis Island Medal of Honor
•
INROADS Leadership Award
•
Co-Author, Building Public Trust: The Future of Corporate Reporting
Other Public Directorships and Board Leadership/Committee Assignments
•
AT&T Inc.: Audit Committee (Chair); Executive Committee; Public Policy and Corporate Reputation Committee
•
Jones Lang LaSalle Incorporated: Compensation Committee; Nominating and Governance Committee
•
ProAssurance Corporation: Audit Committee (Chair)
Former Public Directorships Held During the Past Five Years
•
DirecTV
|
|
||
|
||
|
|
|
|
|
|
|
|
|
Zhanna Golodryga
Independent
Director Since: 2019
Age: 64
Regions Committees
• CHR Committee
• Risk Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Currently serves as the Senior Vice President and Chief Digital and Administrative Officer at Phillips 66, a diversified energy manufacturing and logistics company, and is responsible for driving digital change by developing and executing digital and technology strategies
•
Prior to joining Phillips 66, served as Chief Information Officer and Senior Vice President, Services at Hess Corporation, with responsibility for managing the company’s service organizations, including global supply chain, global business transformation program, and global office services, as well as information management, enterprise architecture, infrastructure, and cybersecurity across the business
•
Also previously served as Chief Information Officer at BHP Billiton Petroleum, Vice President of Information Technology at TeleCheck International, Manager of Information Systems at Baker Hughes, IT Services Manager at Marathon Oil, and Systems Analyst at 3D/International
•
Has over 30 years of experience in the energy industry and the information technology field
•
Serves on the board of the Memorial Hermann Foundation
Education
•
Master’s degree (Mechanical Engineering), Kiev Engineering and Construction Institute
Honors and Recognition
•
50 Most Powerful Women in Oil and Gas, National Diversity Council
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
|
2020 Proxy Statement
|
21
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
John D. Johns
Independent
Director Since: 2011
Age: 68
Regions Committees
• Risk Committee (Chair; Risk Management Expert)
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Serves as Chairman of DLI North America Inc., the North American regional headquarters for Dai-ichi Life Holdings
•
Until November 2019, served as Executive Chairman and Director at Protective Life Corporation, which in February 2015 became a wholly-owned subsidiary of Dai-ichi Life Insurance Company, Limited, a holding company with subsidiaries that provide insurance and other financial services
•
From 2003 until July 1, 2017, served as the Chairman and CEO of Protective
•
Prior to joining Protective in 1993, served as General Counsel at Sonat, Inc.
•
A founding partner of the Birmingham-based law firm of Maynard, Cooper & Gale, P.C.
•
Gained 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
Education
•
Bachelor’s degree (Psychology), University of Alabama
•
Master of Business Administration and Juris Doctor degrees, Harvard University
Honors and Recognition
•
2017 Inductee, Alabama Business Hall of Fame
•
Alabama Academy of Honor
Other Public Directorships and Board Leadership/Committee Assignments
•
Genuine Parts Company: Lead Independent Director; Compensation, Nominating and Governance Committee (Chair); Executive Committee
•
Southern Company: Compensation and Management Succession Committee (Chair); Finance Committee
Former Public Directorships Held During the Past Five Years
•
Protective Life Corporation
|
|
|
|
|
|
|
|
|
|
Ruth Ann Marshall
Independent
Director Since: 2011
Age: 65
Regions Committees
• CHR Committee
• NCG Committee (Chair)
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
From 2004 until retiring in 2006, served as President of The Americas, MasterCard International, Inc.
•
Previously served as President, MasterCard North America from 1999 to 2004 where she was responsible for building all aspects of MasterCard’s issuance and acceptance business in the United States, Canada, Latin America, and the Caribbean
•
Prior to joining MasterCard in 1999, served as Group Executive President of two electronic payment service companies, MAC Regional Network and Buypass Corporation, and upon acquisition of these companies by Concord EFS, became Senior Executive Vice President of the combined companies, where she oversaw marketing, account management, customer service, and product development
•
Started her career at IBM, where, for more than 18 years, she served in managerial and executive positions
•
Has broad marketing, account management, customer service, and product development experience, as well as significant domestic and international experience in growing business
Education
•
Bachelor’s (Finance) and Master of Business Administration degrees, Southern Methodist University
Honors and Recognition
•
2018 Most Influential Corporate Directors, WomenInc.
•
2004 and 2005 “World’s 100 Most Powerful Women,” Forbes.com
Other Public Directorships and Board Leadership/Committee Assignments
•
ConAgra Brands, Inc.: Executive Committee; Human Resources Committee (Chair); Nominating, Governance and Public Affairs Committee
•
Global Payments Inc.: Governance and Nominating Committee; Technology Committee
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
22
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
Charles D. McCrary
Independent
Director Since: 2001
Age: 68
Regions Committees
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
Independent Chair of the Board
Key Experience and Qualifications
•
From 2001 through February 2014, served as the President and CEO of Alabama Power Company, a public utility company
•
Also served as Chairman of Alabama Power Company until May 2014
•
Career spanning more than 40 years, over which he held various positions of increased responsibility within both Alabama Power and its parent company, Southern Company
•
Has served as the Board’s independent Chair since the beginning of 2019 and previously served as its Lead Independent Director and as the NCG Committee’s Chair
•
Serves as a director of the privately-held Great Southern Wood Preserving, Incorporated
•
Brings understanding of issues that are unique to companies operating in highly regulated industries
Education
•
Bachelor’s degree (Engineering), Auburn University
•
Juris Doctor degree, Birmingham School of Law
Honors and Recognition
•
2018 Inductee, Alabama Business Hall of Fame
Former Public Directorships Held During the Past Five Years
•
Protective Life Corporation
|
|
||
|
||
|
|
|
|
|
|
|
|
|
James T.
Prokopanko
Independent
Director Since: 2016
Age: 66
Regions Committees
• NCG Committee
• Risk Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Served as President and CEO of The Mosaic Company, one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients, from 2007 through 2015 and then as Senior Advisor until his retirement in January 2016
•
From 2006 through 2007, served as Executive Vice President and Chief Operating Officer of The Mosaic Company
•
Prior to joining The Mosaic Company, held various senior leadership positions at Cargill, Inc. from 1999 through 2006
•
Decade-long career at The Mosaic Company and previous service as lead director at Vulcan Materials Company have provided him with an in-depth knowledge of environmental risk management in regulated industries
Education
•
Bachelor’s degree (Computer Science), University of Manitoba
•
Master of Business Administration degree, Ivey Business School at the University of Western Ontario
Honors and Recognition
•
2015 Corporate Responsibility Lifetime Achievement Award, Corporate Responsibility Magazine
•
2013 Excellence Award, Center of Excellence in Corporate Philanthropy
•
Co-authored the article “Sustainability as a Compass for Leadership,” which appeared in the November 2017 edition of Supply Chain Management Review
Other Public Directorships and Board Leadership/Committee Assignments
•
Vulcan Materials Company: Compensation Committee; Governance Committee
•
Xcel Energy Inc.: Governance, Compensation and Nominating Committee; Operations, Nuclear, Environmental and Safety Committee
Former Public Directorships Held During the Past Five Years
•
The Mosaic Company
|
|
||
|
||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
|
2020 Proxy Statement
|
23
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
Lee J. Styslinger III
Independent
Director Since: 2003
Age: 59
Regions Committees
• NCG Committee
• Risk Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
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 in over 100 countries throughout the world
•
Actively serves on the boards of many educational, civic, and leadership organizations
•
Appointed to the President’s Export Council, advising the President of the United States on international trade policy, from 2006-2008
•
Served on the President’s Manufacturing Council in 2017
•
Appointed to the President’s Advisory Committee for Trade Policy and Negotiations established by the U.S. Trade Representative
•
Brings a wealth of management and business experience derived from running a large company in today’s global market
Education
•
Bachelor’s degree (Political Science), Northwestern University
•
Master of Business Administration degree, Harvard University
Other Public Directorships and Board Leadership/Committee Assignments
•
Vulcan Materials Company: Compensation Committee; Executive Committee; Safety, Health & Environmental Affairs Committee (Chair)
•
Workday, Inc.: Audit Committee
|
|
||
|
||
|
|
|
|
|
|
|
|
|
José S. Suquet
Independent
Director Since: 2017
Age: 63
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• Risk Committee (Risk Management Expert)
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
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 and whose flagship member is New Orleans-based Pan-American Life Insurance Company
•
Prior to joining PALIG, 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
•
In December 2016, completed his term as a member of the board of directors of the Federal Reserve Bank of Atlanta, for which he served as Chairman of the Retail Payments Office Oversight Committee
•
Previously served on the board for the Federal Reserve Bank of Atlanta, New Orleans Branch
•
Director at the privately-held Ochsner Health System, Louisiana’s largest nonprofit, academic healthcare system, where he serves on the Compensation Committee and the Audit and Oversight Committee
•
Completed his second and final term on the board of directors of The American Council of Life Insurers in 2019
•
Brings a strong background in enterprise risk management and a commitment to innovation and operational excellence
•
His dedication to the United States’ Hispanic community, as well as to the pursuit of product innovation and sales force expansion, have positioned PALIG as the company which Hispanics throughout the Americas rely on to protect their financial security and well-being
•
Involved in various professional and industry associations
Education
•
Bachelor’s degree, Fordham University
•
Master of Business Administration degree, University of Miami
Honors and Recognition
•
Included in the Special Boards Edition 2018 of Latino Leaders magazine
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
24
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
|
|
|
John M. Turner, Jr.
Management
Director Since: 2018
Age: 58
Regions Committees
• Executive Committee
Top 5 Skills Brought to Our Board
|
|
President and Chief Executive Officer
Key Experience and Qualifications
•
Currently serves as the President, CEO and Director of Regions Financial Corporation and Regions Bank, a wholly-owned subsidiary of the Company, and leads the Company’s Management Policymaking Committee and Executive Leadership Team
•
Named President in December 2017 and then CEO in July 2018
•
Before being named President, served as Head of the Corporate Bank, a role he took on in 2014
•
Joined Regions in 2011 as President of the South Region, leading banking operations in Alabama, Mississippi, South Louisiana and the Florida Panhandle
•
Before joining Regions, he was named president of Whitney National Bank and Whitney Holding Corporation in 2008 and was elected to the bank’s and holding company’s boards of directors
•
Before that, was responsible for all geographic line banking functions across Whitney and served as its Eastern Region President
•
Joined Whitney in 1994 as its Alabama Regional President after nine years at AmSouth Bank, where he held senior consumer, commercial and business positions
•
Serves on the Business Council of Alabama, Birmingham Business Alliance, Economic Development Partnership of Alabama, A Plus Education Foundation, United Way of Central Alabama, and Infirmary Health System boards. Mr. Turner is a former chairman of the Mobile Area Chamber of Commerce, the Mobile Area Education Foundation and the United Way of Southwest Alabama and is a former board member of Leadership Mobile
Education
•
Bachelor’s degree (Economics), University of Georgia
Honors and Recognition
•
Graduate, Leadership Alabama
|
|
||
|
||
|
|
|
|
|
|
|
|
|
Timothy Vines
Independent
Director Since: 2018
Age: 54
Regions Committees
• Audit Committee (Audit Committee Financial Expert)
• CHR Committee
Top 5 Skills Brought to Our Board
|
|
Key Experience and Qualifications
•
Currently serves as the President, CEO, and director of Blue Cross and Blue Shield of Alabama (“BCBSAL”), a nonprofit, independent licensee of the Blue Cross and Blue Shield Association and the largest provider of healthcare benefits in Alabama
•
Served as BCBSAL’s President and Chief Operating Officer from November 2017 through March 2018 before being named its President and CEO in April 2018
•
Held BCBSAL’s Executive Vice President position from March through November of 2017
•
Served as BCBSAL’s Chief Administrative Officer from August 2012 through March 2017
•
Serves as Vice Chair and on the Finance Committee and Governance Committee of the Board of Prime Therapeutics LLC, a pharmacy benefit management company owned jointly by several Blue Cross Blue Shield plans, including BCBSAL
•
Worked in banking for over five years after graduating college
•
Remains very active in the community through his involvement with multiple nonprofit and charitable organizations, including service on the boards of the American Red Cross, the Birmingham Business Alliance, Leadership Birmingham, Economic Development Partnership of Alabama, Mercy Deliverance Ministries, and American Character Builders
•
Serves as immediate past chair of the board of trustees at Samford University in Birmingham, Alabama
•
Possesses an extensive understanding of operating a large company within a highly regulated industry
Education
•
Bachelor’s degree (Finance), Auburn University
|
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit/Accounting/Finance/Capital Allocation
|
Banking and Financial Services
|
Business Operations and Technology
|
Continuous Improvement
|
Corporate Governance
|
Customer Focus and Community Engagement
|
Environmental Sustainability Practices
|
Executive Compensation and Benefits
|
Human Capital Management
|
Information/ Cyber Security
|
Regulatory or Compliance
|
Risk Management
|
Strategic Planning and Strategy Development
|
|
2020 Proxy Statement
|
25
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
•
|
Pay Directors fairly for the work required at a company of Regions’ size and scope;
|
•
|
Align Directors’ interests with the long-term interests of our shareholders; and
|
•
|
Be simple, transparent, and easy for shareholders to understand.
|
Compensation Element
|
Compensation Amount
|
Annual Cash Retainer
|
$100,000, which may be deferred, at the Director’s option
|
Annual Equity Retainer
|
$120,000 in restricted stock units granted three business days following the annual shareholder meeting and becoming vested at the next annual shareholder meeting; the receipt of which may be deferred, at the Director’s option
|
Additional Annual Fee for Independent Non-Executive Chair of the Board
|
$150,000, paid as follows:
$50,000 cash, which may be deferred, at the Chair’s option;
$100,000 equity in the form of restricted stock units granted three business days following the annual shareholder meeting and becoming vested at the next annual shareholder meeting, the receipt of which may be deferred, at the Chair’s option
|
Additional Annual Fee for Lead Independent Director
|
$50,000
|
Additional Annual Fee for Committee Chairs
|
$30,000 — Audit Committee
$25,000 — CHR Committee
$25,000 — NCG Committee
$30,000 — Risk Committee
$10,000 — Special Committees, as applicable
|
Additional Annual Fee for Audit Committee members (exclusive of the Audit Committee Chair)
|
$10,000
|
Additional Annual Fee for Special Committee
Members, as applicable |
$10,000
|
26
|
|
2020 Proxy Statement
|
PROPOSAL 1-ELECTION OF DIRECTORS
|
Name
|
Fees Earned or
Paid in Cash ($) |
Stock
Awards ($) (1) |
All Other
Compensation ($) (2) |
|
Total
($) |
Carolyn H. Byrd
|
130,000
|
119,999
|
5,000
|
|
254,999
|
Don DeFosset
|
125,000
|
119,999
|
5,000
|
|
249,999
|
Samuel A. Di Piazza, Jr.
|
110,000
|
119,999
|
3,500
|
|
233,499
|
Eric C. Fast
|
120,000
|
119,999
|
5,000
|
|
244,999
|
Zhanna Golodryga
|
100,000
|
159,997
|
—
|
|
259,997
|
John D. Johns
|
130,000
|
119,999
|
—
|
|
249,999
|
Charles D. McCrary
|
160,000
|
119,999
|
—
|
|
279,999
|
Ruth Ann Marshall
|
135,000
|
119,999
|
—
|
|
254,999
|
Susan W. Matlock
|
50,000
|
|
5,000
|
|
55,000
|
John E. Maupin, Jr.
|
56,500
|
|
—
|
|
56,500
|
James T. Prokopanko
|
100,000
|
119,999
|
—
|
|
219,999
|
Lee J. Styslinger III
|
105,000
|
119,999
|
5,000
|
|
229,999
|
José S. Suquet
|
107,500
|
119,999
|
5,000
|
|
232,499
|
Timothy Vines
|
110,000
|
119,999
|
—
|
|
229,999
|
(1)
|
The amounts presented in this column represent the grant date fair value of the 2019 restricted stock unit award made to all non-management Directors in service on April 29, 2019. The grant date fair value of the restricted stock units awarded April 29, 2019, was $15.68 per share. All restricted stock units awarded April 29, 2019 are scheduled to vest in one lump sum on the date of the 2020 Annual Meeting.
|
(2)
|
The amounts presented in this column reflect matching charitable gifts made through the Regions Matching Gifts Program. Regions matches Directors’ gifts up to $5,000 to qualifying organizations under this Program.
|
Name
|
Outstanding
Stock Options
(#) |
|
Outstanding
Restricted Stock Units
(#) (1) |
|
Carolyn H. Byrd
|
—
|
|
7,802
|
|
Don DeFosset
|
—
|
|
7,802
|
|
Samuel A. Di Piazza, Jr.
|
—
|
|
7,802
|
|
Eric C. Fast
|
—
|
|
7,802
|
|
Zhanna Golodryga
|
—
|
|
7,802
|
|
John D. Johns
|
—
|
|
7,802
|
|
Charles D. McCrary
|
—
|
|
7,802
|
|
Ruth Ann Marshall
|
—
|
|
7,802
|
|
Susan W. Matlock
|
—
|
|
—
|
|
John E. Maupin, Jr.
|
—
|
|
—
|
|
James T. Prokopanko
|
—
|
|
7,802
|
|
Lee J. Styslinger III
|
—
|
|
7,802
|
|
José S. Suquet
|
—
|
|
7,802
|
|
Timothy Vines
|
—
|
|
7,802
|
|
|
2020 Proxy Statement
|
27
|
PROPOSAL 2 — RATIFICATION OF
APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
|
•
|
EY’s qualifications; the quality and efficiency of services provided, including industry-specific knowledge and technical expertise; recent results of EY’s commitment to audit quality.
|
•
|
EY's independence, objectivity, and ability to communicate with the Audit Committee and key management stakeholders in a transparent, timely, and effective manner. See independence controls discussed in the subsection How is Regions assured that EY remains independent?
|
•
|
Appropriateness of audit fees for audit and non-audit services, both on an absolute basis and as compared to peers.
|
•
|
Recent results of inspection reports on the firm and EY’s Peer Review Report on the Firm’s System of Quality Control.
|
•
|
Known legal risks and any significant legal or regulatory proceedings.
|
•
|
Assessment of past performance of both the lead audit partner and the audit engagement team.
|
28
|
|
2020 Proxy Statement
|
PROPOSAL 2-RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
•
|
Tenure of the firm engaged, the benefits and drawbacks of longer tenure, the required rotation of the lead partner and engagement partner, and the impact of changing auditors.
|
|
2019
|
|
2018
|
|
||
Audit Fees (1)
|
$
|
7,907,534
|
|
$
|
7,270,239
|
|
Audit-Related Fees (2)
|
471,812
|
|
428,049
|
|
||
Tax Fees (3)
|
257,507
|
|
255,019
|
|
||
All Other Fees (4)
|
1,188,024
|
|
453,884
|
|
||
Total Fees
|
$
|
9,824,877
|
|
$
|
8,407,191
|
|
(1)
|
“Audit fees” include fees associated with the annual audit of Regions’ consolidated financial statements included in the Annual Report on Form 10-K and internal control over financial reporting, review of Regions’ quarterly reports on Form 10-Q, SEC regulatory filings and other matters, statutory audits, and audits of subsidiaries. The year-over-year increase in audit fees is largely attributable to 2019 procedures performed related to new accounting standards and additional testing of applications.
|
(2)
|
“Audit-related fees” include fees associated with audits of employee benefit plans and certain non-registered funds, as well as service organization reports.
|
(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. Other fees in both 2019 and 2018 include work performed related to regulatory compliance engagements spanning multiple years. The majority of this work was performed in 2019 resulting in the higher year-over-year fees.
|
|
2020 Proxy Statement
|
29
|
PROPOSAL 2-RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
30
|
|
2020 Proxy Statement
|
AUDIT COMMITTEE REPORT
|
(d)
|
the Company’s compliance with legal and regulatory requirements.
|
•
|
Reviewed and discussed with management and EY the Company’s earnings releases and Quarterly Reports on Form 10-Q and Annual Report on Form 10-K, including the audited financial statements, prior to filing with the SEC. Focus areas include; critical accounting policies and estimates; areas of audit emphasis; any changes to the initial audit plan; new accounting standards (e.g., the implementation and adoption of the current expected credit losses standard effective January 1, 2020); significant unusual transactions, and results of quarterly review procedures.
|
•
|
Reviewed with EY their judgments as to the quality, not just the acceptability, of Regions’ accounting principles and such
|
•
|
Reviewed and discussed with EY the new 2019 PCAOB requirement for the independent auditor’s report to include communication of Critical Accounting Matters (CAMs).
|
•
|
Discussed with EY the Company’s internal control assessment process, management’s assessment with respect thereto and the independent auditors’ evaluation of the Company’s system of internal control over financial reporting.
|
•
|
Received and reviewed the written disclosures and the letter from EY required by applicable requirements of the PCAOB regarding EY’s communications with the Audit Committee concerning independence, and has discussed with EY their independence in relation to Regions.
|
•
|
Reviewed the Company's analysis of significant risk exposures and the steps management has taken to monitor and control such exposures.
|
•
|
Received regular cybersecurity updates from senior management, including the CISO, as well as from cybersecurity experts in areas.
|
•
|
Discussed with Regions’ internal auditors and EY the overall scope and plans for their respective audits. The Audit Committee regularly meets with Regions’ internal auditors and EY, with and without management present, to discuss the results of their examinations, their evaluations of Regions’ internal accounting and financial reporting controls, and the overall quality of Regions’ financial reporting.
|
•
|
Received regular updates from management for significant Company initiatives.
|
•
|
Participated, with representatives of management and of the independent auditors, in educational sessions about topics requested by the Audit Committee.
|
|
|
|
|
|
Carolyn H. Byrd, Chair
|
Samuel A. Di Piazza, Jr.
|
Eric C. Fast
|
José S. Suquet
|
Timothy Vines
|
|
2020 Proxy Statement
|
31
|
PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY”)
|
32
|
|
2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
“We want to continue to create a culture where we get better at what we do every day. Our continuous improvement journey is one of the main reasons I am optimistic about our future.”
|
— John M. Turner, Jr.,
President and CEO
|
Environmental
|
2021 World Games Sustainability Committee • American Bankers Association ESG Working Group • Ceres Company Network • SASB Standards Advisory Group
|
Social
|
Association of Corporate Citizenship Professionals • CEO Action for Diversity & Inclusion™ • Congressional Black Caucus - Historically Black Colleges and Universities (“HBCU”) Partnership Challenge • Council on Foundations • Hiring Our Heroes • Initiative for a Competitive Inner City • Junior Achievement • MBA Vets • Men with Momentum • National Association of Minority Mortgage Bankers of America • National Black MBA Association • National Community Reinvestment Coalition • National LGBT Chamber of Commerce • National Urban League • Operation Hope • Opportunity Finance Network • United Way
|
Governance
|
Broadridge Independent Steering Committee • Commonsense Principles 2.0 (signatory) • CII • Society for Corporate Governance • Harvard Law School Corporate Governance Roundtable • ICGN • ISG (Corporate Governance Principles-compliant) • Stanford Law School Institutional Investors’ Forum
|
|
2020 Proxy Statement
|
33
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
|
First
Quarter 2020
è
|
• Joined ICGN as a Company member
|
|
|
Fourth
Quarter 2019
è
|
• Further incorporated ESG into strategic planning process
• Achieved 28% reduction in GHG emissions and 19% reduction in energy usage since 2015
• Incorporated Human Rights Statement and Vendor Code of Conduct into the 2020 Code of Conduct
• Initial SASB disclosure released
• Further enhanced the Board, committee, and individual Director self-evaluation process
|
|
|
Third
Quarter 2019
è
|
• Submitted annual CDP Climate Change disclosure
• Environmental & Social Risk Management Working Group formed to collaborate with Ceres on performing an independent, enterprise-wide assessment of our current environmental and social lending risk practices
|
|
|
Second
Quarter 2019
è
|
• 2018 ESG Report published
• Achieved 20% reduction in GHG emissions and 12% reduction in energy usage using a 2015 baseline
• Developed and produced the HCM Dashboard that is reviewed periodically by the CHR Committee. The dashboard includes a mixture of trending and point-in-time metrics designed to provide insight into human capital alignment with our corporate culture and long-term strategic priorities
• Board Executive Committee established to handle issues arising between Board meetings and engage with investors
|
|
|
First
Quarter 2019
è
|
• Became a Ceres Company Network member
• Adopted a version of the Rooney Rule for Director searches as set forth in Regions’ Corporate Governance Principles
• CHR Committee’s Charter revised to further expand oversight of HCM policies and practices
• Human Rights Statement and Vendor Code of Conduct adopted and disclosed
• 2019 Proxy Statement included Board Skills and Composition Matrix and revamped Corporate Purpose, Culture, and ESG section
|
|
Named in Barron’s 2019 and 2020 ranking of the 100 Most Sustainable Companies list
|
|
|
|
Named 2019 Great Place to Work-Certified™ Company (5th consecutive year)
|
|
|
|
Recognized by 2020 Women on Boards for having 20 percent or more gender diversity on our Board
(4th consecutive year)
|
|
|
|
Distinguished as a Best Place to Work for LGBTQ Equality by earning 100 on the Human Rights Campaign Foundation’s 2020 Corporate Equality Index
|
|
|
|
Earned 10 Greenwich Excellence Awards and 3 Greenwich Best Brand Awards
|
|
|
|
Recognized with Javelin Leader Awards in Online Banking and Mobile Banking for 2019
|
|
|
|
Placed 7th out of 47 banks on 3BL’s Best Corporate Citizens listing
|
|
|
|
State Street Global Advisors’ 2018-2019 Stewardship Report for adopting ISG Principles
|
|
|
|
Recognized in CII’s “Disclosure of Board Evaluations Processes” whitepaper
|
A
|
MSCI
ESG Rating
|
|
Sustainalytics
Low-Risk
ESG Risk Rating and Score
|
|
ISS E&S QualityScore
2: Environment
2: Social
|
||
|
|
||||||
|
|
||||||
|
|
|
|
|
|
|
|
JUST Capital
Index and ETF Inclusion
|
|
State Street Global Advisors
Outperformer
R-Factor Rating
|
|
FTSE4Good
Index Inclusion
|
|||
|
|
||||||
|
|
34
|
|
2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
NCG Committee
|
|
|
||
The NCG Committee is responsible for overseeing the Company’s practices and reporting with respect to environmental topics, such as climate change, and corporate social responsibilities that are of significance to the Company and its stakeholders - our customers, shareholders, associates, and communities. The NCG Committee also assists the Board in establishing and maintaining effective corporate governance policies and practices.
|
||||
|
|
|
||
CHR Committee
|
|
|
||
The CHR Committee oversees Regions’ strategies and policies regarding corporate culture and other HCM functions, including: (i) associate conduct, engagement, and career progression; (ii) diversity and inclusion initiatives and results; (iii) talent acquisition, development, and retention; (iv) performance management; and (v) employment practices.
|
||||
|
|
|
||
Risk Committee
|
|
|
||
The Risk Committee is responsible for the oversight of the Company’s risk management practices, including the review and approval of the Risk Management Framework, the Enterprise Risk Appetite Statement, and significant risk management policies and limits that guide the prudent pursuit of risk and reward across the Company. This includes environmental and social risk management topics, such as climate change.
|
||||
|
|
|
||
Audit Committee
|
|
|
||
The Audit Committee is responsible for ensuring that the Company’s policies, procedures, and controls that protect our customers and associates are functioning at an optimal level. The Audit Committee also oversees the disclosures of matters significant to our Company, including ESG-related matters, through our financial statements and reports.
|
Shareholders
|
|
Customers
|
|
Associates
|
|
Regulators and Policymakers
|
|
Communities and Nonprofit Organizations
|
|
|
|
|
|
|
|
|
|
v ESG Report
|
v GRI Content Index
|
v SASB Disclosure
|
v CDP Climate Change Disclosure
|
|
2020 Proxy Statement
|
35
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
30%
|
|
30%
|
reduction in greenhouse gas emissions (scope 1 and 2)
|
|
reduction in energy use(2)
|
|
|
|
PROGRESS(3)
|
|
PROGRESS(3)
|
28%
|
|
19%
|
(1) Compared against a 2015 baseline. These targets cover properties for which Regions is responsible for direct payment of utilities.
|
||
(2) Energy use goal applies to electricity and natural gas.
|
||
(3) Progress as of December 31, 2019.
|
|
Energy efficient lighting and automatic controls
|
|
HVAC and mechanical efficiency upgrades and improvements
|
|
Building intelligence and remote controls
|
|
High-performance building upgrades
|
|
Education and awareness for continuous improvement of control processes
|
|
Real estate portfolio optimization
|
|
Renewable energy
|
36
|
|
2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
•
|
A dedicated risk industry team, the Energy and Natural Resources Group (“ENRG”), that underwrites exposure to energy and natural resources clients. This enhanced effort
|
•
|
A dedicated industry team, the Natural Resource and Real Estate Group (“NRRE”), responsible for the prudent and sustainable management of natural resources assets held in a fiduciary capacity and/or owned by our banking clients.
|
•
|
Enhanced due diligence on energy sector loans for which real estate serves as collateral, including those clients with an indirect link to the energy sector (e.g., oil pipeline manufacturers).
|
•
|
Our Credit Moratoriums policy identifies industries, products and transaction types that present increased risk, including consideration of environmental and social risks, which we address by instituting a limited credit appetite and elevated approval and exception tracking requirements. The policy is reviewed, updated and approved at least biennially by the Credit Risk Committee.
|
•
|
Current lending moratorium for coal mining and coal-related activities and enhanced due diligence on high-risk loans.
|
•
|
A specialized Credit Portfolio Management team that serves as a second-line-of-defense function in Risk Management and assesses macroeconomic factors and other early warning indicators to establish a methodical approach to risk including limits, procedures, and scheduled reviews.
|
•
|
Designated resources to begin building out a dynamic scenario analysis related to environmental risks, including climate change, as relevant. By using a combination of technology and in-house associate talent, Regions can begin to better understand exposure to potential acute and chronic physical risks of climate change.
|
•
|
A cross-functional working group that is performing an enterprise-wide assessment of our environmental and social risk in lending practices.
|
Social Risk Management
|
Regions manages social risk as part of the Reputational Risk component of Regions’ overall Risk Management Framework approved each year by the Board’s Risk Committee. Regions’ definition of reputational risk emphasizes that reputational risk management is the responsibility of all associates, who are expected to conduct themselves in a manner that reflects positively on Regions. Associates identify social and reputational risks and refer issues to our Reputational Risk Management (“RRM”) team.
|
We take a deliberate, prescriptive approach to building long-lasting customer relationships. RRM has primary responsibility for assessing and escalating matters as needed and providing effective challenge to the first-line units’ assessment of reputational risk. RRM collaborates with enterprise partners to identify enterprise and industry trends and to respond to reputational risk events and issues. Depending on the issue, RRM will participate in customer site visits and other due diligence to develop an understanding of each identified problem. Quarterly, RRM reports significant issues, events, and trends to the Risk Committee.
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Additionally, the Regions Human Rights Statement helps provide direction for managing social risk and reiterates our mission and values, which are the foundation of our conceptualization of Reputational Risk. It also states that we expect the entities with which we do business to respect individual human rights and conduct business free from human rights abuses.
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2020 Proxy Statement
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37
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
•
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Regions adheres to all applicable state Best Management Practices for Forestry that contribute to water quality, carbon sequestration, and wildlife habitat protection.
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•
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A portion of the timberland acres managed by Regions' foresters is certified under the 2015-2019 Sustainable Forestry Initiative Standard or the 2015-2020 American Tree Farm Certification Standard. Both third-party certification systems promote sustainable forestry practices aimed at protecting water quality, biodiversity, wildlife habitat, species at risk, and forests with exceptional conservation value.
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•
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A majority of Regions’ farm tenants utilize advanced technologies and equipment in their farming practices known as “precision agriculture,” which maximizes crop yields while minimizing the use of pesticides, fertilizers, and water.
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38
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2020 Proxy Statement
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
•
|
Regions and its associates remain in compliance with all applicable laws and regulations;
|
•
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Regions is a safe and nondiscriminatory place to work and do business;
|
•
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Confidential and proprietary information is protected;
|
•
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Inappropriate gifts or favors are not accepted or given; and
|
•
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Conflicts of interest are avoided.
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Raising Issues and Reporting Violations
|
Regions encourages and expects all associates to raise ethical concerns about matters such as accounting, internal controls, auditing, discrimination, and harassment, as well as report violations or suspected violations of laws or regulations, the Code of Conduct, or other Regions policies or procedures. Regions offers several channels through which associates and others may raise ethical concerns and report associate misconduct: via online portal, telephone, or email; to our OAC; or anonymously by calling the Report It! Hotline or submitting a Report It! complaint online.
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The Report It! Hotline is a toll-free number that is available 24 hours a day, seven days a week, 365 days a year. The Report It! Hotline is highlighted in multiple annual training courses required to be taken by Regions’ associates. Regions uses an outside third party to receive and catalog Report It! complaints.
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Regions does not permit retaliation of any kind for good-faith reports of ethical violations or misconduct of others.
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Regions recognizes the importance our customers can play in ensuring we are meeting the obligations of our Code of Conduct. The Regions Centralized Customer Complaint Program is used to identify opportunities to enhance our products, services, and the customer experience. This enterprise-wide program helps us ensure that each individual customer complaint is addressed, and it also allows us to identify complaint trends and areas for improvement.
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2020 Proxy Statement
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39
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
•
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Workplace abusive conduct
|
•
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Threatening conduct, workplace violence, and prohibition of weapons
|
•
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Tobacco- and vapor-free workplace
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•
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No-retaliation
|
•
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No-harassment
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•
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Inclement weather and disasters
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•
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Drug-free workplace
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Regions does not require associates to sign mandatory arbitration agreements as a condition of employment or continued employment and does not require associates to arbitrate claims of discrimination or harassment.
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Continuous Improvement
|
|
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Our Board has set the “tone at the top” that we maintain a workplace culture where all associates are treated with dignity and respect.
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Our Board expanded the purpose of the CHR Committee to include oversight of human capital management.
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Our CEO communicates to all associates reinforcing the expectation of a strong, ethical culture and “doing the right thing.” This message is also reinforced during monthly Company-wide Officers’ Meetings.
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Our Board has reviewed each aspect of our successful anti-harassment program, which includes policies, training, and practices.
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The OAC oversees the handling, investigation, and resolution of associate complaints, and these findings are reported to the Board and its committees regularly.
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Management reviews our baseline of sound policies, including the No-Harassment Policy, No-Retaliation Policy, and Personal Relationships Policy, as well as our procedures and channels for raising complaints, to make certain they continue to be effective and clear.
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Management, including business and support units, regularly reviews our “Respect in the Workplace” training for enhancements to meet and exceed best practices.
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40
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2020 Proxy Statement
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
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2020 Proxy Statement
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41
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
We continue to invest in our associates’ well-being and financial wellness:
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2% 401(k) Plan company contribution for all eligible associates
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5% 401(k) Plan matching company contribution for all associates
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12 weeks of fully paid leave for birth mothers
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6 weeks of fully paid leave for all birth and adoptive parents
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$15/hour entry-level wages
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Free associate assistance program
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Free health and wellness programs
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Financial planning tools for financial goals and retirement
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•
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Workforce composition (diversity and inclusion, etc.)
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•
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Workforce stability (retention, turnover, etc.)
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•
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Associate engagement
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•
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Learning and development
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•
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Compensation
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•
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Benefit and wellness program utilization
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“Putting people first is one of our core values, and we’re proud that our efforts to be inclusive of all communities have resulted in earning a 100% in the Corporate Equality Index.”
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— Dave Keenan,
Chief Human Resources Officer
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42
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2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
Workforce Diversity Metrics
|
||||
Gender
|
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Race/Ethnicity
|
“Indeed, we believe a diverse and inclusive organization is better suited for meeting the needs of our communities. But it’s not only that. We also believe it is fundamentally the right thing to do. People deserve a workplace that appreciates them for who they are. We want our colleagues to know they are welcomed - and valued. And we believe a consistent focus on diversity and inclusion helps us better understand each other - and helps our organization grow stronger.”
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—Clara Green,
Head of Diversity and Inclusion
|
Commitment to Leadership Diversity
with a Version of the Rooney Rule
|
When searching for candidates for a Section 16 Executive Officer position, including a CEO successor, Regions shall endeavor to include candidates who reflect diverse backgrounds (including gender, race, and ethnicity) in the pool from which the candidate is chosen.
|
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2020 Proxy Statement
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43
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ENVIRONMENTAL AND SOCIAL PRACTICES
|
•
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The business groups’ strategic planning process includes diversity and inclusion discussion, which contributes to Regions’ overarching strategic plan.
|
•
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The Center holds bi-annual meetings with business group leaders to establish their diversity and inclusion goals for the year, and later holds follow-up discussions on progress they have made.
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•
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During 2019, nine Conversations with Clara were held, offering transparent dialogue on diversity and inclusion. These conversations have helped associates focus on understanding cultural similarities and differences, stereotypes, biases and more. Different conversations covered concepts and events like Black History Month, LGBTQ+ Pride, Hispanic Heritage Month, Female Leaders, and D&I as a business priority.
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•
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Hosting ten Diversity Networks, representing 11,000+ associates that play a critical role in associate engagement and driving the commitment to inclusion and belonging.
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•
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Focused learning and development, including comprehensive e-learning programming (both required and voluntary) and facilitated workshops focused on building an inclusive culture and eliminating unconscious bias.
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•
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Programming to provide development, mentoring, and exposure opportunities to associates.
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•
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Efforts to attract and retain military and differently-abled talent bases.
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•
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Engaged leaders in inclusion programs and training initiatives.
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BRAVE:
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Building Regions' Associate Veteran Experience
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v Targeted veteran transition development programs in Regions Edge, the Regions interactive training platform
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v Veteran-to-veteran mentoring through MentorcliQ, a new Regions mentoring platform
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v Easy access to military-specific resources, such as benefits, military leave and Employee Assistance Program
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v Support from Regions’ Diversity Networks
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v Community engagement opportunities
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v Veteran Jam page for networking and storytelling
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v New Military Careers Page on regions.com/about-regions
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9
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14
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7
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4
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Conversations with Clara
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Lunch & Learns
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New diversity networks launched (for a total of 10 in operation)
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“Don’t Judge What You See. Get to Know Me.” videos
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4
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19,000+
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Facilitated D&I advocate training sessions, resulting in 73 key stakeholders trained
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Associates trained on D&I via biennial training
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44
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2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
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Economic and
Community Development
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Education and
Workforce Readiness
|
Financial Wellness
|
||||||
Economic prosperity through:
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Career prosperity through:
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Financial prosperity through:
|
||||||
• Affordable housing
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• Student competency and skill-building
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• Financial education to youth, adults, and vulnerable populations
|
||||||
• Job creation
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• College and career readiness
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• Small business development
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• Educational access and success
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• Financial planning tools and resources
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• Homebuyer education and retention
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• Credentials and employment
|
|||||||
• Neighborhood revitalization and stabilization
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• Educator training and resources
|
• Integrated asset-building
|
||||||
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|
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2020 Proxy Statement
|
45
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
Regions' Financial Education Strategy: Regions Next Step®
|
Regions Next Step is a Company-wide financial wellness program designed to help people in all stages of life take strides toward achieving their unique financial goals. Through Next Step programming, Regions creates shared value by helping our associates, customers and the communities we serve achieve financial wellness and success.
|
Next Step serves as a unifying umbrella, connecting different audiences with our many financial education offerings. This holistic approach provides operational efficiencies, creating synergies and a common framework in programming. Next Step audience segments include students from kindergarten to college and adults at various life stages and income levels. Regions Next Step also provides resources for businesses of all sizes.
|
Delivering financial education with a customer-centric approach is what makes the Regions approach to financial education unique. During 2019, we continued to engage our audiences through in-person seminars at businesses and community organizations, as well as through relevant digital programming, including the launch of a new Next Step landing page and podcasts.
|
In 2020, we will continue our investment in Next Step programming through the following:
v Creation of a financial wellness webinar series
v Roll-out of enhanced financial wellness seminars, including seminars designed for those with cognitive disabilities
v Expansion on the podcast collection, including the introduction of topics for young professionals, entrepreneurs, and businesses
|
The open accessibility of our resources to all, regardless of whether they are a Regions customer, reinforces our dedication to inspiring, motivating and helping anyone who is beginning or continuing their individual financial wellness journey. More information on Regions Next Step content and tools are available at regions.com/nextstep.
|
2019 Community Engagement Highlights
|
ü $17.4 million in philanthropic and community giving by Regions Bank and Regions Foundation
w $8.8 million in grants and contributions by Regions Bank and Regions Foundation
w $8.6 million in corporate sponsorships by Regions Bank
|
ü $5.4 million donated to more than 150 United Way chapters in 15 states by Regions Bank and our associates
|
ü $4.1 million in support of local chambers of commerce and civic organizations
|
ü 1.3 million people received financial education from Regions
|
ü 164,000 in-person financial wellness workshops led by Regions associates
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ü 88,000 community service hours logged by Regions associates to make life better in our neighborhoods
|
All data as of December 31, 2019.
|
46
|
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2020 Proxy Statement
|
ENVIRONMENTAL AND SOCIAL PRACTICES
|
|
2020 Proxy Statement
|
47
|
CORPORATE GOVERNANCE
|
Commitment to Leadership Diversity
with a Version of the Rooney Rule
|
When searching for new Director candidates, the NCG Committee shall endeavor to include highly qualified candidates who reflect diverse backgrounds (including gender, race, and ethnicity) in the pool from which nominees are chosen.
|
When searching for candidates for a Section 16 Executive Officer position, including a CEO successor, Regions shall endeavor to include similarly diverse candidates in the pool from which the candidate is chosen.
|
•
|
Structure of the Board and its leadership
|
•
|
Director qualification standards
|
•
|
Nomination and selection of new Directors
|
•
|
Director responsibilities and expectations
|
•
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Board operations, including scheduling meetings and selecting agenda items for meetings
|
•
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Director access to management and independent advisors
|
•
|
Director orientation and continuing education
|
•
|
Management succession planning and CEO evaluation
|
•
|
Annual performance evaluation of the Board, committees, and individual Directors
|
•
|
Interaction with investment managers and the press and shareholder engagement
|
48
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
ISG Principle
|
Regions’ Practices
|
Where Shareholders Can Find
More Information
|
Principle 1: Boards are accountable to shareholders.
|
• All Directors are elected annually by a majority of votes cast.
• Proxy access provisions comport with market standards.
• The Company has robust corporate governance disclosures.
|
• Our Corporate Governance Principles
• Our By-Laws
• The Q&A and Corporate Governance sections
|
Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest.
|
• Shareholders are entitled to one vote per share of common stock held.
|
• Our By-Laws
• The Q&A section
|
Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives.
|
• The Company has a robust shareholder engagement program that includes shareholder engagement with both management and Directors.
• Topics have included ESG, executive compensation, and Board refreshment.
|
• Our Corporate Governance Principles
• The Corporate Governance Shareholder Engagement subsection of the Corporate Governance section
|
Principle 4: Boards should have a strong, independent leadership structure.
|
• The Chair of the Board is an independent Director.
• Each standing Board committee is chaired by an independent Director.
• The Board’s leadership structure is considered at least annually.
|
• Our Corporate Governance Principles
• The Board Leadership Structure subsection of the Corporate Governance section
|
Principle 5: Boards should adopt structures and practices that enhance their effectiveness.
|
• The Director nominees are 42% diverse and 92% independent.
• The Board has significantly refreshed its membership by adding six new Directors since 2016.
• Board committees have robust responsibilities.
• Directors are expected to commit sufficient time to Board duties, including attending meetings.
• The Company has enhanced its Director Onboarding and Ongoing Education Program over the last few years.
|
• Our Corporate Governance Principles
• The Proxy Summary, committee descriptions, and Proposal 1 sections
|
Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company.
|
• The Company has adopted compensation programs designed to encourage performance over the long term and mitigate unnecessary risk-taking.
• Shareholder approval of our Say-on-Pay proposal is consistently around 95%.
|
• The CD&A and Compensation of Executive Officers sections
|
Regions’ Code of Ethics for
Senior Financial Officers
may be found on the Investor Relations
section of our website at www.regions.com or ir.regions.com/governance.
|
|
2020 Proxy Statement
|
49
|
CORPORATE GOVERNANCE
|
Regions is committed to constructive and meaningful communications
with our shareholders and building ongoing relationships over time.
|
50
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
|
|
|
|
|
• Associates from the Chief Governance Officer’s group, Investor Relations, and Total Rewards formulate the corporate governance shareholder engagement plan, considering ways to enhance the process from the prior year’s engagements
• Board and committees conduct the annual self-evaluation process, which considers, among other topics, feedback from our prior corporate governance shareholder engagements
|
è
|
• Publish and make available our proxy statement, Annual Report on Form 10-K, CEO’s Letter, Government Affairs Annual Report, Community Engagement Highlights, ESG Report, and Annual Review
• Hold our annual shareholder meeting, which is open to all shareholders as of the Record Date and provides an opportunity to engage with the Company
|
||
é
|
Winter
|
|
Late Winter/Spring
|
ê
|
|
Regions Year-Round Engagement
|
|
||
Late Summer/Fall
|
|
Summer
|
||
• Engagement requests sent to certain institutional shareholders and meetings commence; shareholders are encouraged to candidly provide their views on corporate governance issues, including executive compensation practices and ESG
• Feedback from these engagements helps initiate the following year’s engagement plan
• Information obtained during these engagements is summarized and presented to senior management and the NCG Committee for discussion
|
ç
|
• Board reviews and discusses the Company’s various corporate governance documents to ensure they encompass corporate governance leading practices; support the Company’s goals and strategies; and maximize long-term shareholder value
• When making enhancements to our corporate governance documents, take into consideration the voting results from our annual meeting and other feedback from our corporate governance shareholder engagements
|
||
|
|
|
|
|
Ongoing Engagement
|
||||
• Engage with shareholders throughout the year at various events and conference
• These engagements are reported to and discussed by the NCG Committee at its next meeting following the engagement
• Additionally, Directors engage with various corporate governance representatives of our institutional shareholders throughout the year
• Review shareholders’ proxy voting guidelines, whitepapers, engagement priorities, and other documents, as well as any changes to proxy advisors’ voting guidelines to determine what enhancements, if any, should be considered for our practices and/or disclosures
|
What We Heard from Shareholders and Proxy Advisors in 2019
|
How We Responded
|
Support for an independent Chair of the Board
|
• When the Board considered its leadership structure, it took into consideration shareholders’ support for its current structure; the Chair and CEO roles are currently filled by different individuals
|
Increased emphasis on ESG practices and disclosures
|
• Continued enhancement of our ESG disclosures, e.g., published our first SASB disclosure; enhanced climate change risk disclosures in our 2019 CDP Climate Change disclosure
• Adopted new policies, e.g., modified Rooney Rule; Vendor Code of Conduct; and Human Rights Statement
• Further incorporated ESG as inherent consideration in business groups’ strategic plans
• Developed HCM Dashboard for regular review and discussion as part of CHR Committee oversight
|
Heightened focus on Director tenure and overboarding
|
• Board composition statistics, including tenure, are reviewed at each of the NCG Committee’s quarterly meetings
• Director overboarding policy aligns with those of ISS, Glass Lewis, and many of our shareholders
|
Support for our compensation plans
|
• Continuing to enhance compensation-related disclosures in the proxy statement
|
|
2020 Proxy Statement
|
51
|
CORPORATE GOVERNANCE
|
•
|
Appointed an independent Chair of the Board
|
•
|
Promoted diverse leadership on the Board, leading to half of the standing committees being chaired by women
|
•
|
Adopted a version of the Rooney Rule for Director candidate searches
|
•
|
Brought more balance among our newer, mid-tenured, and seasoned Directors by refreshing the Board and appointing six new Directors since 2016
|
•
|
Strengthened the Board’s self-evaluation process by including individual discussions with the Chair; committee Chairs holding individual conversations; focusing on peer Director evaluations; and emphasizing follow-up actions
|
•
|
Compliance with the ISG Corporate Governance Principles and signatory to the Commonsense Principles 2.0
|
•
|
Revised all committee charters to incorporate additional risk oversight
|
•
|
Reduced the number of other boards on which 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
|
•
|
Appointed a Chief Governance Officer focused on corporate governance shareholder engagement and ESG practices and disclosures
|
•
|
Adopted a proxy access by-law provision
|
•
|
Adopted an Environmental Sustainability Policy Statement and related environmental goals
|
•
|
Adopted a Human Rights Statement and Vendor Code of Conduct
|
•
|
Responded to the CDP Climate Change Questionnaire
|
•
|
Released SASB Disclosure
|
•
|
Significantly enhanced our ESG Report
|
•
|
Joined the Ceres Company Network
|
•
|
Hired a Head of D&I and established the Diversity and Inclusion Center of Expertise
|
•
|
Strengthened our internal ESG function by onboarding individual(s) to analyze and address environmental and social matters and engage with shareholders to understand their views
|
•
|
Leveraged cross-functional working groups to promote shared value and strategically advance our community engagement priorities: Economic and Community Development; Education and Workforce Readiness; and Financial Wellness
|
•
|
Assigned oversight for environmental and social responsibility to the NCG Committee
|
•
|
Amended name and purpose of the CHR Committee to include oversight of the Company’s HCM, which includes total rewards, corporate culture, talent management, management succession, and D&I practices
|
•
|
Established the OAC, which oversees complaints of harassment and misconduct
|
•
|
Included more detail in certain corporate governance proxy disclosures, such as the Board self-evaluation process, and included a Director-by-Director Board Skills and Composition Matrix and ESG highlights chart
|
•
|
Added a matrix demonstrating our compliance with the ISG Corporate Governance Principles
|
•
|
Included a summary of our strategy and added more detail to our overall performance in the Proxy Summary
|
•
|
Enhanced proxy disclosures related to capital planning and share repurchases, auditor billing, and executive compensation practices
|
•
|
Included significantly more information regarding our cyber and information security practices, including Board oversight
|
•
|
Provided supplemental information, beyond legal standards in our CEO pay ratio disclosure
|
•
|
Added more insight into the Board and committee meeting process
|
52
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
Chair of the Board’s Key Responsibilities
|
• Establishes the agenda and presides at executive sessions of the Board’s non-management and independent Directors
|
• Approves information sent to and meeting agendas for the Board
|
• Presides at meetings of shareholders
|
• Presides at Board meetings
|
• Calls special meetings of the Board
|
• Acts as a liaison and facilitates communication among Directors
|
• Engages with our institutional shareholders
|
• Provides leadership to the Board in a time of emergency or crisis
|
• Acts as a sounding board and advisor to our CEO
|
• In addition to ongoing discussions throughout the year, conducts formal one-on-one discussions as part of the annual Director self-evaluation process
|
|
2020 Proxy Statement
|
53
|
CORPORATE GOVERNANCE
|
During our 2019 corporate governance shareholder outreach calls, we discussed various aspects of the Board’s composition and structure, including its leadership structure. Shareholder feedback from these conversations was shared with and considered by the Directors when evaluating the Board’s leadership structure.
|
54
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
|
Who is responsible?
|
Primary Risk Oversight Responsibilities
|
|
Board of Directors
è
|
• Oversees processes for evaluating adequacy of internal controls, risk management, financial reporting, and compliance with laws and regulations
• Reviews, approves, and oversees management’s creation and implementation of short- and long-term strategic plans and objectives and advises management on achieving goals and objectives
• Reviews major financial objectives and monitors financial performance and condition
• Evaluates compensation and benefit programs applicable to CEO and executive officers
• Reviews management succession planning
|
|
2020 Proxy Statement
|
55
|
CORPORATE GOVERNANCE
|
|
Who is responsible?
|
Primary Risk Oversight Responsibilities
|
|
Audit Committee
è
|
• Monitors quality and integrity of Company’s financial statements and financial reporting process, including conformance to accounting principles and use of non-GAAP treatments
• Supervises and evaluates budget, staffing, work, and performance of the Internal Audit function
• Initiates and maintains Company’s relationship with independent auditor, including services, qualifications, performance, independence, compensation, and discussion of significant matters
• Reviews effectiveness of Company’s internal controls processes and systems
• Evaluates Company’s general compliance with legal and regulatory requirements and related matters, especially those with material impact on business, financial statements, or compliance policies
|
|
CHR Committee
è
|
• Reviews and approves compensation philosophy and oversees compensation plans and programs for alignment with strategic and financial objectives
• Evaluates terms of all compensation plans and incentives for alignment with Company’s risk appetite and ensures existence of corresponding controls and risk management processes
• Oversees effectiveness and continuous improvement of Company’s strategies and policies for human capital management, including corporate culture, talent management, diversity and inclusion, and management succession
• Approves executive compensation plans, including accordance with regulatory requirements
|
|
NCG Committee
è
|
• Monitors corporate governance practices
• Oversees practices and reporting on environmental stewardship and corporate social responsibility
• Reviews Board composition, leadership, independence, and structure
• Approves policies governing related person/parties transactions and insider trading
• Ensures Directors’ orientation and continuing education on current and emerging risks
|
|
Risk
Committee
è
|
• Approves and oversees execution of enterprise risk management framework and enterprise-wide risk management policies
• Reviews Board’s risk appetite parameters for Company operations and approves their articulation and execution through Enterprise Risk Appetite Statement
• Monitors critical metrics, key risk indicators, and performance against the Enterprise Risk Appetite Statement through enterprise risk assessments
• Routinely reviews credit performance and concentrations, operational issues, trading and derivatives, new and ongoing initiatives risk assessments, major projects and litigation, and open risk management issues (inclusive of remediation plans)
|
56
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Development, review, and approval of a strong clawback policy;
|
•
|
Institution of a policy providing guidance to business leadership as to the appropriate use of discretion in compensation decisions;
|
•
|
Establishment of a policy covering adverse risk events and how we consider those events in making compensation decisions;
|
•
|
Assembling a centralized group that assists the business groups and units with the design of their incentive plans, so that such plans align with the Company’s and groups’ business strategies, guiding principles for variable compensation, risk appetite, and all relevant guidelines and policies;
|
•
|
Establishment of a comprehensive internal governance process covering the administration of our incentive compensation programs;
|
•
|
Putting in place robust compliance, internal control, disclosure review, and reporting programs;
|
•
|
Developing and implementing long-term compensation awards that are subject to substantial future performance requirements; and
|
•
|
Institution of a policy that prohibits hedging strategies related to the ownership stakes our key associates have in Regions.
|
•
|
We leverage a robust risk management framework that incorporates cyber security risk as a key operational risk for the organization. In implementing the framework, information security owns the controls, risk management assesses and monitors the risk, and internal audit tests control effectiveness.
|
•
|
We have established an expansive Information Security Program, which establishes comprehensive technical, administrative, and physical controls directives to protect our informational assets against internally- or externally-originating threats. This program is designed to ensure the security and confidentiality of the corporate, customer, and associate information and related information systems we maintain against anticipated threats and hazards.
|
•
|
We maintain a Business Resilience Policy and governing framework that provides for resilience planning along with crisis management, cyber incident responses, and other emergency management.
|
•
|
Our Cybersecurity Program is a second-line-of-defense function that provides objective challenge, oversight, and independent assessment of the cyber security risk posture across Information Technology, Information Security, and business groups at Regions with exposure to cyber security risk. Results of this work are reported to the full Board.
|
•
|
We implemented a Privacy Program, which aims to ensure we comply with our legal and regulatory obligations related to information privacy and identity theft protection while simultaneously innovating and growing our business.
|
•
|
We monitor and respond to cyber events through a dedicated Security Operations Center, which protects information in our custody along with the integrity and availability of the Company’s information systems.
|
•
|
We have a defined physical security program with industry-accepted controls in place, which include monitored and
|
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2020 Proxy Statement
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57
|
CORPORATE GOVERNANCE
|
•
|
We invest heavily in our technology infrastructure to ensure appropriate capacity, incorporate more innovative systems, enhance customer capabilities, perform more comprehensive security analytics, assess and manage vulnerabilities, and establish strong cyber defenses.
|
•
|
We continuously develop and enhance controls, processes and systems to protect our networks, computers, systems, and data from attacks or unauthorized access. This includes internal auditing of our internal cyber security controls. These mechanisms also institute comprehensive due diligence and ongoing oversight of the Company’s third-party vendors.
|
•
|
We employ widely accepted cyber security guidance and seek to implement industry best practices, including the Cybersecurity Framework released by the U.S. Department of Commerce’s National Institute of Standards and Technology, to help us effectively define and measure our risk management efforts.
|
•
|
We regularly provide our associates with cyber security training and education opportunities, so that all members of our organization can effectuate our internal controls and risk management efforts.
|
•
|
Our system of internal controls incorporates organization-wide reporting and escalation of information security matters to management and the Board to ensure effective and efficient resolution and, if necessary, public disclosure of said matters.
|
•
|
Our Board considers cyber and information security and technological innovation, along with related risk considerations and mitigation efforts, as part of its annual review of the Company’s strategic plan.
|
•
|
The Board also receives an annual update on the Company’s enterprise services, which includes presentations on both information technology and information security. These presentations allow for direct communication between the Board and Regions’ key technology officers about the surrounding threat environment and the Company’s progress in addressing cyber risks.
|
•
|
The Risk Committee oversees operational risk, which includes information technology activities and risks, disaster recovery, operational resilience, crisis management, and other non-credit losses.
|
•
|
As part of its oversight responsibilities, the Risk Committee annually reviews and approves the Company’s Information Security Policy, as well as the Business Resilience Policy and Framework.
|
•
|
The Risk Committee receives an annual update dedicated to information technology risk management, which includes the results of risk assessments and a review of focused priorities.
|
•
|
The CRO provides a quarterly enterprise risk assessment to the Risk Committee that includes an assessment of operational risk incorporating information and cyber security considerations.
|
•
|
On a regular basis, the Audit Committee reviews our cyber security risk management practices, primarily by receiving reports on the Company’s cyber security risk management prepared by the Chief Information Security Officer, Risk Management, and Internal Audit.
|
•
|
As part of their annual self-evaluation, our Directors are asked to assess themselves individually on their respective cyber security expertise. Several of our Directors, including our newest Director, Ms. Golodryga, have considerable cyber security experience.
|
•
|
We employ several key technology officers at Regions, dedicated to and focused on protecting our information systems and data. These officers include our Head of Enterprise Technology and Operations; Chief Information Security Officer; Cyber Security Operations Officer; Security Architecture Officer; Cyber Risk Management Officer; Head of IT Risk Management; and Director of IT Audit.
|
•
|
Our insurance policies have been tailored to cover potential financial losses due to cyber events.
|
•
|
We keep a computer forensics firm and an industry-leading consulting firm on retainer in case of a breach event.
|
•
|
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 a member of BITS, the technology arm of the Bank Policy Institute. BITS serves the financial services community and its members by providing industry best practices on a variety of security and fraud topics.
|
•
|
The Board and management receive continuing education from external experts on information and cyber security and consult, from time to time, with outside parties with an expertise in cyber security.
|
•
|
Regions engages independent third parties to perform annual network penetration testing and more targeted assessments of our systems. Results and outcomes of these assessments are reported to management and the Board.
|
•
|
Our systems are regularly assessed by vulnerability scans.
|
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|
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2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Informal one-on-one discussions between the independent Chair and each independent Director;
|
•
|
Individual committee-level evaluations with committee-specific focused topics;
|
•
|
a Board-level evaluation;
|
•
|
Separate questions focused on the Board’s “operational” matters; and
|
•
|
Follow-up questions and action items.
|
Committee
|
Looking forward, is the committee well positioned to ensure that it...
|
Audit
|
...is satisfied that communications with the auditors are meaningful and occur often enough?
|
CHR
|
...is appropriately overseeing its expanded areas of responsibility with respect to corporate culture; human capital and talent management; and diversity and inclusion?
|
NCG
|
...is overseeing its expanded areas of responsibility with respect to environmental and social governance?
|
Risk
|
...is providing oversight and guidance to senior management to address Regions’ top risks?
|
Individual Director Evaluation
|
The one-on-one discussions with the Chair of the Board include a focus on Director peer evaluations. By providing Directors with additional opportunities to provide candid feedback on Board effectiveness, as well as on individual Directors, the Board is better positioned to strengthen itself and ensure proper oversight of the Company.
Some sample questions considered as part of this year’s evaluation include:
|
• What tangible and/or intangible qualities does each individual Director add to the Board?
• How has each individual Director added value in the past year?
• Does each individual Director consistently come to meetings prepared?
• Is it clear each individual Director has (and devotes) the time necessary to be an effective Board member?
• What should each individual Director continue doing, do more or less of, or do differently in the coming year to maximize his/her value contribution?
• Are there any other comments/suggestions you can offer about how each individual Director can contribute to the Board or his/her committee(s) going forward?
• If you were going to start your own company, which five of Regions’ Directors would you ask to join your board, and why?
|
•
|
The Board is embracing Regions’ strategic priority to Continuously Improve.
|
•
|
The NCG Committee will continue with Board and committee leadership succession planning and ensuring each committee has the appropriate skills represented.
|
•
|
A broader group of internal and external speakers will continue making presentations to the NCG Committee.
|
•
|
Directors will continue focusing on the Company’s ESG and HCM practices and disclosures.
|
•
|
The Risk Committee will continue to prioritize its agenda around Director-requested topics.
|
•
|
So that Directors can better focus on the most important topics and ask the right questions, management will continue working to reduce the length of meeting materials.
|
•
|
Management will provide additional training on critical industry topics.
|
|
2020 Proxy Statement
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59
|
CORPORATE GOVERNANCE
|
Step #
|
Process
|
Approximate Timing
|
|
Continually Enhanced Self-Evaluations
Prior to beginning the annual self-evaluation, the NCG Committee considers possible enhancements to the process to ensure robustness, including changes to the format or whether to use a third-party evaluator. Any feedback on the self-evaluation process from the prior year is incorporated.
|
Throughout the year and considered by the NCG Committee in October of each year
|
|
Board Operations
The Directors are provided a separate opportunity, outside of the formal evaluation process, to provide feedback on Board operational matters. These matters are included as part of the Company’s electronic Director and Officer Questionnaire that is distributed in the fourth quarter of each year. Although Directors are free to discuss any subject during the formal self-evaluation, these matters are typically discussed separately so that the Directors are better able to focus on more substantive matters during the self-evaluation executive sessions.
|
December of each year
|
|
One-on-One Discussions
Prior to the Board’s and committees’ full evaluations, the independent Chair of the Board holds individual discussions with each other independent Director to obtain his or her candid feedback on Board effectiveness and Directors’ performance.
Committee Chairs also hold one-on-one discussions with the members of their respective committees to candidly discuss committee-level topics prior to the full committee evaluation process.
|
December and January of each year
|
|
Reporting to the NCG Committee and Full Board
Following the one-on-one discussions, the independent Chair of the Board provides a verbal summary, as needed and appropriate, to the full Board prior to its evaluation.
|
February of each year
|
|
Committee Discussions
Each committee conducts its own self-evaluation on topics that are applicable only to that committee. Committee self-evaluations are facilitated by each committee’s Chair. These discussions are summarized for the full Board, as appropriate.
|
February of each year
|
|
Group Discussions
The self-evaluation program assesses the Board’s and committees’ performance in areas such as:
• Board and committee structure, composition, and oversight;
• Directors’ ability to carry out key Board responsibilities;
• Exchanges between the Board and management; and
• Interactions with key stakeholders.
Using these substantive topics as a springboard for discussion, the Chair of the NCG Committee and independent Chair of the Board facilitate the Board’s self-evaluation discussion, 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.
|
February of each year
|
|
Focus on Outcomes and Set the Slate of Directors
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.
The results of the self-evaluation process are also considered by the NCG Committee when setting the slate of Director nominees for the next annual meeting.
|
Beginning in February of each year
|
|
Incorporate Action Items
As appropriate, the follow-up action items are implemented.
|
Beginning in February and continuing throughout the year
|
|
Ongoing Evaluation
Notwithstanding that the formal self-evaluation process takes place in December through February each year, Directors are encouraged to raise any topics related thereto with the Chair of the NCG Committee, the Chair of an applicable committee, the Chair of the Board, or with the whole Board, as appropriate, at any point during the year.
|
Ongoing
|
60
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
Directors’ attendance at Board and committee meetings averaged 92% in 2019.
|
Meetings Held
|
|
Board of Directors
|
8
|
Audit Committee
|
12
|
CHR Committee
|
6
|
NCG Committee
|
5
|
Risk Committee
|
4
|
Joint Meetings of Audit Committee and Risk Committee
|
4
|
Joint Meeting of CHR Committee and Risk Committee
|
1
|
Total Board and Committee Meetings Held in 2019
|
40
|
|
2020 Proxy Statement
|
61
|
CORPORATE GOVERNANCE
|
Director Category
|
Limit on publicly-traded company board and audit committee service, including Regions
|
All Directors
|
4 boards maximum
|
Directors holding an executive officer position
at another public company
|
2 boards maximum
|
Directors who serve on Regions’ Audit Committee
|
3 audit committees maximum
|
62
|
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2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
Carolyn H. Byrd
|
Ruth Ann Marshall
|
Don DeFosset
|
Charles D. McCrary
|
Samuel A. Di Piazza, Jr.
|
James T. Prokopanko
|
Eric C. Fast
|
Lee J. Styslinger III
|
Zhanna Golodryga
|
José S. Suquet
|
John D. Johns
|
Timothy Vines
|
•
|
The Director is employed by Regions.
|
•
|
The Director has an immediate family member who is an executive officer of Regions.
|
|
2020 Proxy Statement
|
63
|
CORPORATE GOVERNANCE
|
•
|
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).
|
•
|
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 where 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 two percent of the applicable company’s consolidated gross revenues for that year.
|
•
|
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 made by Regions, 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 their immediate family member’s interest in a transaction involving Regions 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 ten percent of the other entity’s equity.
|
•
|
The transaction involving Regions 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.
|
•
|
Directors Byrd, Di Piazza, Golodryga, Johns, Marshall, McCrary, Styslinger and Vines, 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.
|
•
|
Directors Byrd, Johns, McCrary, Styslinger and Vines, either individually or through an affiliated entity, have bank loans or extensions of credit, including credit cards, 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
|
64
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
Directors DeFosset, Johns, McCrary, Styslinger and Vines each serve 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 two percent of such organization’s consolidated gross revenues in 2017, 2018, or 2019.
|
•
|
Director Di Piazza serves as a director of AT&T Inc. Regions paid AT&T approximately $493,000 for services in 2019. Regions’ relationships with AT&T commenced before Mr. Di Piazza was appointed to Regions’ Board and are expected to continue.
|
•
|
Directors Di Piazza, Marshall and McCrary serve only as a director of companies that, along with any of their subsidiaries, are customers of Regions for typical commercial banking products and services, including loans and leases, and on terms no more favorable than for other Regions customers, and for which Regions receives customary interest and fees.
|
•
|
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 $3.5 million for services in 2019. Regions’ relationship with Workday commenced before Mr. Styslinger was appointed to Workday’s board and is expected to continue.
|
•
|
Director Vines serves as President and CEO of BCBSAL. Regions and BCBSAL have an arm’s-length business relationship through which each provides products and services to the other in the ordinary course of business. BCBSAL conducts normal and customary banking business with Regions; Regions’ medical and dental benefits plans offered to associates are administered by BCBSAL. These relationships commenced before Mr. Vines was appointed to Regions’ Board and are expected to continue. The NCG Committee and the Board have determined that these relationships between Regions and BCBSAL do not impair Director Vines’ independence given that the transactions are:
|
–
|
Not material to BCBSAL in light of its annual income or gross revenues because the third-party administrative fees of approximately $8.7 million which Regions paid to BCBSAL annually fall well below two percent of BCBSAL’s consolidated 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 Vines as President and CEO of BCBSAL;
|
–
|
Not involving a personal stake of Director Vines in the transactions;
|
–
|
Not involving Director Vines in the negotiations or discussions leading to the transactions; and
|
–
|
Typical of transactions that BCBSAL conducts with other financial institutions.
|
•
|
Directors Prokopanko and Styslinger serve on the board of directors of Vulcan Materials Company.
|
|
2020 Proxy Statement
|
65
|
CORPORATE GOVERNANCE
|
Factors Used in Assessing Related
Person Transactions
|
• 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, shareholder, or executive officer;
|
• The availability of other sources for comparable products or services;
|
• The terms of the transaction;
|
• The terms of the transaction which are available to unrelated third parties or to associates generally; and
|
• Whether the related person transaction is consistent with the Code of Conduct.
|
•
|
Extensions of credit (including interest rates and collateral) to Directors, executive officers, principal shareholders, and their related interests must be made on substantially the same terms as those prevailing at the time for comparable transactions with persons or parties who are not covered.
|
66
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
•
|
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 persons or parties. 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.
|
•
|
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 collectability or present other unfavorable features.
|
•
|
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 2019, 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
|
None
|
Don DeFosset
|
None
|
None
|
●
|
None
|
None
|
Samuel A. Di Piazza, Jr.
|
●
|
None
|
None
|
●
|
None
|
Eric C. Fast
|
None
|
None
|
None
|
None
|
None
|
Zhanna Golodryga
|
●
|
None
|
None
|
None
|
None
|
John D. Johns
|
●
|
●
|
●
|
None
|
None
|
Ruth Ann Marshall
|
●
|
None
|
None
|
●
|
None
|
Charles D. McCrary
|
●
|
●
|
●
|
●
|
None
|
James T. Prokopanko
|
None
|
None
|
None
|
●
|
None
|
Lee J. Styslinger III
|
●
|
●
|
●
|
●
|
None
|
José S. Suquet
|
None
|
None
|
None
|
None
|
None
|
Timothy Vines
|
●
|
●
|
●
|
●
|
None
|
(1)
|
“Ordinary Course” customer relationships are transactions or relationships with Regions that are established and administered on terms and conditions no more favorable than those afforded to any similarly situated customer.
|
(2)
|
Includes a loan or extension of credit, including credit card accounts, 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; involves no more than the normal risk of collectability; and presents 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 Di Piazza at AT&T, Director Styslinger at Workday, and Directors Di Piazza, Marshall and McCrary at companies having ordinary course customer relationships; Regions’ arm’s-length business relationships with BCBSAL, for whom Director Vines serves as an executive officer; and Directors Prokopanko and Styslinger’s common service on the board at Vulcan Materials Company.
|
(5)
|
No immediate family relationship exists between any of our Directors or executive officers and any other Directors or executive officers.
|
|
2020 Proxy Statement
|
67
|
CORPORATE GOVERNANCE
|
68
|
|
2020 Proxy Statement
|
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.
|
CHR Committee Members During 2019
|
Don DeFosset
|
Samuel A. Di Piazza, Jr.
|
Zhanna Golodryga
|
Ruth Ann Marshall
|
Susan W. Matlock (until April 24, 2019)
|
José S. Suquet (until April 24, 2019)
|
Timothy Vines
|
Executive Committee
|
The Board’s Executive Committee has the authority and responsibility to exercise, during the intervals between meetings of the Board, all the powers and authority of the Board in its oversight of the business and affairs of the Company, to the extent permitted by applicable law and the Company’s By-Laws.
|
The Executive Committee is composed of the Independent Chair of the Board, each of the standing committee Chairs, and the CEO.
|
The Executive Committee meets on an as-needed basis between regular Board meetings.
|
|
2020 Proxy Statement
|
69
|
CORPORATE GOVERNANCE
|
|
Audit
|
CHR
|
NCG
|
Risk
|
Carolyn H. Byrd
|
Chair
|
|
|
|
Don DeFosset
|
|
Chair
|
Member
|
|
Samuel A. Di Piazza, Jr.
|
Member
|
Member
|
|
|
Eric C. Fast*
|
Member
|
|
Member
|
|
Zhanna Golodryga
|
|
Member
|
|
Member
|
John D. Johns
|
|
|
|
Chair
|
Ruth Ann Marshall
|
|
Member
|
Chair
|
|
Charles D. McCrary
|
Non-voting ex-officio participant of each Standing Committee
|
|||
James T. Prokopanko
|
|
|
Member
|
Member
|
Lee J. Styslinger III
|
|
|
Member
|
Member
|
José S. Suquet
|
Member
|
|
|
Member
|
John M. Turner, Jr.
|
|
|
|
|
Timothy Vines
|
Member
|
Member
|
|
|
Number of standalone meetings held in 2019
|
12
|
6
|
5
|
4
|
|
Audit Committee Financial Expert
|
|
Risk Committee Risk Management Expert
|
|
Independent Chair of the Board
|
|
Executive Committee Member
|
*
|
Eric C. Fast is not standing for re-election, due to personal reasons, and will retire from the Board as well as the Audit Committee and the NCG Committee as of the call to order of the 2020 Annual Meeting.
|
70
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
Message from the Audit Committee Chair
|
The Audit Committee remains committed to carrying out its critical responsibility to provide oversight of Regions’ financial reporting process, including assessing relevant risks and complying with legal and regulatory requirements. During 2019, the Audit Committee convened by itself 12 times, at three standalone meetings each quarter, in addition to a quarterly joint meeting with the Risk Committee. Each meeting followed a standardized agenda to ensure responsibilities were carried out in accordance with our Audit Committee Charter while also allowing sufficient time for specialty items. The Audit Committee Chair meets regularly with the leadership team from Internal Audit, executives, and other members of management, as well as the independent auditing firm to preview meeting topics and materials and to gain valuable insight on the scope and results of audit activities.
Critical industry topics such as information technology, cyber security, and business resiliency remained top of mind in Committee sessions. Additionally, regular updates were provided on the governance and monitoring of change management over Continuous Improvement initiatives. Other specialty or Board-requested presentations covered topics such as fraud, privacy, enterprise data and analytics, third-party risk management, and new accounting standards updates, specifically related to the Leasing and CECL standards. Additionally, the Committee received positive results from the third party engaged to review the quality of the Internal Audit Department.
Focused training was provided to Committee members to help the Committee with its oversight on current and emerging matters. Educational sessions included topics such as CECL, cyber risk oversight, cloud strategy & governance, enterprise resilience, and the new PCAOB Auditor’s reporting model for Critical Audit Matters.
– Carolyn Byrd
|
Meetings in 2019
|
|
Key Responsibilities:
|
12 plus 4 joint meetings 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 work and compensation of 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 disclosures that will be filed with the SEC and related matters and judgments
• Review and discuss non-GAAP treatment of financial information and the use of such treatment with management and the independent auditor
• Oversee, review, and evaluate the Company’s relationship with the independent auditor and the independent auditor’s performance and independence
• Consider whether, in order to assure continuing auditor independence, there should be regular rotation of the independent auditor and/or the lead audit partner(s)
• Oversee the Company’s internal audit function, including its planned activities, results of completed activities, budget, and staffing
|
Members
|
|
|
Carolyn H. Byrd (Chair)
|
|
|
Samuel A. Di Piazza, Jr.
|
|
|
Eric C. Fast
|
|
|
José Suquet
|
|
|
Timothy Vines
|
|
|
Each member of the Audit Committee has been determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
Each member of the Audit Committee has been determined to be financially literate and an audit committee financial expert.
|
|
|
The Audit Committee Report can be found on page 31.
|
|
|
2020 Proxy Statement
|
71
|
CORPORATE GOVERNANCE
|
Message from the CHR Committee Chair
|
In 2019, the CHR Committee continued its oversight of executive compensation and strengthened its oversight of the Company’s HCM. Regarding executive compensation, the CHR Committee worked with management to set appropriate, challenging corporate performance incentive goals that support the Company’s strategy and directly impact NEO compensation. The CHR Committee also continued its oversight of total rewards, corporate culture, diversity and inclusion, talent management, management succession planning, and associate conduct.
Additionally, as noted in the Human Capital Management subsection of Environmental and Social Practices, the CHR Committee oversaw HCM in many ways, including by monitoring the implementation of the HCM Dashboard for the committee. The dashboard includes a mixture of trending and point-in-time metrics that the Committee periodically reviews throughout the year.
Through its oversight, the CHR Committee strives to strengthen the effectiveness of our HCM strategies and alignment with our corporate culture and long-term strategic priorities.
– Don DeFosset
|
Meetings in 2019
|
|
Key Responsibilities:
|
6, plus 1 joint meeting with the Risk Committee.
|
|
• 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
• Regarding the Company’s compensation plans and programs:
- Oversee and monitor the plans and programs to determine whether they are properly aligned with the Company’s strategic and financial objectives
- Ensure that such plans and programs are supportive of the Company’s risk appetite and tolerances established by the Board
- 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
• Establish and administer performance goals and certify when performance goals have been attained
• 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 shareholder approval is not required
• Review and make recommendations as to the form and amount of Director compensation and the stock ownership guidelines for Directors
• Oversees the Company’s human capital management, including but not limited to total rewards, corporate culture, talent management, management succession and diversity and inclusion practices
• Oversee corporate culture with a focus on 1) the alignment of culture and human capital management with the Company’s corporate strategy and 2) ensure management’s efforts and programs foster and support a company-wide culture of ethical decision making
|
Members
|
|
|
Don DeFosset (Chair)
|
|
|
Samuel A. Di Piazza, Jr.
|
|
|
Zhanna Golodryga
|
|
|
Ruth Ann Marshall
|
|
|
Timothy Vines
|
|
|
Each member of the CHR Committee has been determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
Under its charter, the CHR Committee may delegate all or a portion of the authority, duties, and responsibilities assigned to it, other than those specifically assigned to the committee through rules and regulations, 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.
|
|
|
|
||
The CHR Committee Report can be found on page 78.
|
|
72
|
|
2020 Proxy Statement
|
CORPORATE GOVERNANCE
|
Message from the NCG Committee Chair
|
Throughout 2019, the NCG Committee has diligently exercised its oversight responsibilities, particularly in the areas of shareholder engagement and ESG. We believe shareholder engagement is central to good corporate governance practices; therefore, both the Board and management engaged with shareholders throughout the year. Independent Directors engaged with a number of institutional investors to listen to their perspectives on various corporate governance matters, as well as to discuss Regions’ and the Board’s practices. All but one of these Director-shareholder engagements were conducted in-person, including a shareholder presentation to the Board. We believe that these engagements were extremely beneficial for everyone involved.
Like last year, the Directors underwent a very thorough and thought-provoking self-evaluation process, which was overseen by the NCG Committee. The Chair of the Board continued holding individual conversations with each of the independent Directors. This year, however, each of the committees dug deeper into committee-specific topics during their separate evaluations. And these evaluations are all in addition to the full Board-level evaluation. As a result of the feedback from the evaluation process, the NCG Committee will continue focusing on Board and committee succession and skills.
ESG continues making its way to the forefront of more investors’ minds. In 2019, the NCG Committee oversaw Regions’ adoption and disclosure of a Human Rights Statement and Vendor Code of Conduct, both important elements of the Company’s operations. Regions also published its first SASB disclosure this year. These disclosures complement the Environmental Sustainability Policy Statement and Goals that were already in place. Further, the NCG Committee has received quarterly updates on Regions’ ESG ratings published by the primary ESG data providers. Finally, Regions became a Ceres Company Network Member in early 2019. We believe this collaboration will aid in the NCG Committee’s oversight of ESG, which is growing in both depth and breadth.
– Ruth Ann Marshall
|
Meetings in 2019
|
|
Key Responsibilities:
|
5
|
|
• 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
- Overseeing its succession planning process
• Oversees the Company’s and Directors’ engagement with institutional investors and other interested parties with respect to corporate governance and related matters
• Monitor Directors’ service on other boards to ensure that each Director has adequate time to appropriately serve on Regions’ Board
• Review and assess the Company’s Corporate Governance Principles and committee charters
• 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
• Review and oversee the Company’s CEO succession planning
• Oversee any amendment to the Company’s Certificate of Incorporation or By-Laws
|
Members
|
|
|
Ruth Ann Marshall (Chair)
|
|
|
Don DeFosset
|
|
|
Eric C. Fast
|
|
|
James T. Prokopanko
|
|
|
Lee J. Styslinger III
|
|
|
Each member of the NCG Committee has been determined to meet the independence requirements of applicable law, the NYSE, and Regions’ Corporate Governance Principles.
|
|
|
2020 Proxy Statement
|
73
|
CORPORATE GOVERNANCE
|
Message from the Risk Committee Chair
|
Consistent with the expectations set forth in its charter, the Risk Committee has effectively established parameters and tolerances for risk-taking by the Company. In alignment with our established risk appetite, the Risk Committee has effectively overseen the key risks to the Company over the last year by reviewing critical business functions, including, but not limited to, customer privacy and fair banking, interest rate risk management, credit policy and underwriting, data governance, cyber and information security, and third-party risk management, and recurring reviews of risk factors associated with business changes made in connection to the Company’s strategic priority to Continuously Improve.
The Risk Committee is benefiting from a strong membership with diverse backgrounds and skill sets that contribute to the effectiveness of the Committee overall. The Risk Committee also completed in 2019 its annual Committee self-evaluation process based on leading corporate governance principles to evaluate elements such as Committee structure, composition, and oversight.
The Risk Committee will continue to work with management and outside experts with the goal of ensuring prudent and effective risk oversight of the Company within the fast-paced and ever-changing financial services industry.
– Johnny Johns
|
74
|
|
2020 Proxy Statement
|
OWNERSHIP OF REGIONS COMMON STOCK
|
|
2020 Proxy Statement
|
75
|
OWNERSHIP OF REGIONS COMMON STOCK
|
No Director or executive officer
has shares that are pledged or otherwise available to a lender as security.
|
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
|
84,006
|
0
|
84,006
|
*
|
78,317
|
162,323
|
Don DeFosset
|
112,132
|
0
|
112,132
|
*
|
24,502
|
136,634
|
Samuel A. Di Piazza, Jr.
|
18,731
|
0
|
18,731
|
*
|
28,756
|
47,487
|
Eric C. Fast
|
97,997
|
0
|
97,997
|
*
|
128,434
|
226,431
|
Zhanna Golodryga
|
2,926
|
0
|
2,926
|
*
|
7,872
|
10,798
|
John D. Johns (3)
|
67,296
|
0
|
67,296
|
*
|
99,514
|
166,810
|
Ruth Ann Marshall
|
92,068
|
0
|
92,068
|
*
|
96,242
|
188,310
|
Charles D. McCrary
|
128,340
|
0
|
128,340
|
*
|
239,579
|
367,919
|
James T. Prokopanko
|
18,731
|
0
|
18,731
|
*
|
7,872
|
26,603
|
Lee J. Styslinger III
|
115,267
|
0
|
115,267
|
*
|
186,946
|
302,213
|
José S. Suquet
|
36,527
|
0
|
36,527
|
*
|
25,938
|
62,465
|
John M. Turner, Jr. (4)
|
280,377
|
118,650
|
399,027
|
*
|
314,415
|
713,442
|
Timothy Vines
|
5,590
|
0
|
5,590
|
*
|
15,047
|
20,637
|
Other Named Executive Officers
(See Summary Compensation Table on pages 101-103) |
|
|
|
|
|
|
David J. Turner, Jr. (5)
|
192,277
|
0
|
192,277
|
*
|
200,587
|
392,864
|
John B. Owen (6)
|
87,152
|
0
|
87,152
|
*
|
164,474
|
251,626
|
C. Matthew Lusco
|
167,922
|
0
|
167,922
|
*
|
158,610
|
326,532
|
Fournier J. Gale, III
|
59,730
|
0
|
59,730
|
*
|
148,726
|
208,456
|
Other executive officers as a group
|
466,776
|
0
|
466,776
|
*
|
450,754
|
917,530
|
Directors and executive officers as a group (22 persons)
|
2,033,845
|
118,650
|
2,152,495
|
*
|
2,376,585
|
4,529,080
|
*
|
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 1,349 shares held by his spouse, as to which he disclaims beneficial ownership, 19,506 shares held in a trust for children which his spouse is the trustee, and 1,661 shares held in an IRA.
|
(4)
|
Includes 276,186 shares held jointly with spouse.
|
(5)
|
Includes 1,935 shares held by his spouse, and 575 shares held for his children.
|
(6)
|
Includes 87,152 shares held jointly with spouse.
|
Name of Beneficial Owner
|
Title of Security
|
Depositary Shares of Preferred Stock
|
|
Percent
of Class
|
Fournier J. Gale, III
|
6.375% Non-Cumulative Perpetual Preferred Stock, Series A
|
8,000
|
|
*
|
Directors and executive officers as a group (22 persons)
|
6.375% Non-Cumulative Perpetual Preferred Stock, Series A
|
8,000
|
|
*
|
*
|
Less than 1 percent.
|
All Directors and executive officers are in full compliance with
Regions’ anti-hedging and
anti-pledging policies.
|
76
|
|
2020 Proxy Statement
|
OWNERSHIP OF REGIONS COMMON STOCK
|
|
2020 Proxy Statement
|
77
|
COMPENSATION AND HUMAN
RESOURCES COMMITTEE REPORT
|
|
|
|
Don DeFosset, Chair
|
Samuel A. Di Piazza, Jr.
|
Zhanna Golodryga
|
|
|
|
|
|
|
|
Ruth Ann Marshall
|
Timothy Vines
|
78
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Principal Position
|
John M. Turner, Jr.
|
President and CEO (“CEO”)
|
David J. Turner, Jr.
|
Chief Financial Officer (“CFO”)
|
John B. Owen
|
Chief Operating Officer (“COO”)
|
C. Matthew Lusco
|
Chief Risk Officer (“CRO”)
|
Fournier J. Gale, III
|
General Counsel and Corporate Secretary
|
•
|
Redesign of the Commercial Credit Process to improve speed of response;
|
•
|
Third party spend reductions;
|
•
|
Continued reductions in real estate square footage;
|
•
|
Digitization and automation of processes to improve the customer experience and enhance operational efficiency and effectiveness; and
|
•
|
Revenue growth initiatives including the acquisition of Highland Associates, an investment firm; expansion of mortgage bankers; and improvements to commercial banker productivity.
|
•
|
MarketForce Customer Experience Leadership Award Large Retail Banking Segment
|
•
|
Received 10 Greenwich Associates Greenwich Excellence Awards for Small Business and Middle Market Banking
|
•
|
Javelin Online Banking Award and Mobile Banking Award
|
•
|
Kantar 2018-2019 Highest Rated Traditional Banking in Customer Experience+ for Top 10 U.S. Retail Banks
|
•
|
Reported net income available to common shareholders from continuing operations of $1.5 billion and earnings per diluted share from continuing operations of $1.50, a 10 percent increase compared to 2018;
|
•
|
Generated the highest pre-tax pre-provision income (non-GAAP) since 2007 with a 9 percent increase compared to 2018 and a 5 percent increase on an adjusted basis (non-GAAP);
|
•
|
Generated positive operating leverage of approximately 4 percent on a reported basis and 2 percent on an adjusted basis (non-GAAP); and
|
•
|
Realized a 250 basis point improvement in our efficiency ratio from continuing operations to 59 percent; and a 130 basis point improvement in our adjusted efficiency ratio (non-GAAP) to 58 percent.
|
•
|
Investing in people, processes, and technology to continuously improve our risk management capabilities;
|
•
|
Leveraging technology, automation, innovation, data, and analytics to drive increased efficiency and effectiveness of our risk management tools, programs, and testing;
|
•
|
Promoting soundness, profitability, and growth through a disciplined credit culture; and
|
•
|
Maintaining focus on recruiting, developing and retaining key risk management associates.
|
|
2020 Proxy Statement
|
79
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
92 percent of associates agreed that when you join the company, you are made to feel welcome;
|
•
|
89 percent agreed that I am able to take time off from work when I think it's necessary;
|
•
|
89 percent said I'm proud to tell others I work here;
|
•
|
86 percent said people here are given a lot of responsibility; and
|
•
|
86 percent agreed that when I look at what we accomplish, I feel a sense of pride.
|
Compensation Component
|
Key Decisions Made and the Impact of Performance on Decisions
|
2019 Base Salaries
|
The only NEO to receive a base salary increase was our CEO, Mr. J. Turner. Mr. J. Turner was named CEO in July 2018. After consideration of CEO performance, market benchmark data for the role, and in consultation with its independent compensation consultant, the CHR Committee increased Mr. J. Turner’s base salary by 2.6 percent in early 2019.
|
Annual Cash Incentive Compensation Awards
|
Our performance against stretch goals set at the beginning of 2019 generated annual incentive payments slightly above target, but significantly lower than 2018. In connection with his new role as CEO, the short-term incentive target opportunity increased for Mr. J. Turner. The target incentive opportunity for other NEOs remained at the prior year’s level. Additionally, the CHR Committee reviewed corporate performance, noting that diligent execution of our strategic plan in a challenging interest rate environment yielded a result of 106 percent of target expectations.
|
Long-Term Incentives
|
The long-term incentive grants made in 2019 were consistent in structure to those granted in 2018 and were granted in the forms of restricted stock units, performance share units, and performance cash units. With consideration given to performance, individual contribution, and benchmark data, the CHR Committee approved a $200,000 increase to the long-term incentive targets for Mr. D. Turner and Mr. Owen. Long-term incentive performance continues to be measured on the two metrics we consider most important to sustained shareholder value: cumulative compounded diluted Earnings Per Share Growth (“EPS Growth”) and Return on Average Tangible Common Equity (“ROATCE”). While the CHR Committee considers the grants made in 2019 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 2017 for the three-year performance period ending December 31, 2019, will pay out at 114 percent of target expectations. These payout levels evidence the steady improvement in our corporate performance related to EPS Growth and ROATCE over the period.
|
80
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
2020 Proxy Statement
|
81
|
COMPENSATION DISCUSSION AND ANALYSIS
|
1.
|
Compensation targets should be transparent and set at competitive levels.
|
2.
|
Actual compensation should pay for performance based on goals that are clear and focused. As an associate’s business responsibilities increase, the mix of compensation should be more heavily weighted toward variable compensation that is considered “at-risk,” based on corporate and individual results.
|
3.
|
Compensation programs should promote shared value through alignment of the long-term interests of our shareholders, customers, and associates.
|
4.
|
Compensation programs should be balanced, incenting sustainable, profitable growth without encouraging associates to take unreasonable risks that may damage the long-term value of the Company. To ensure programs remain consistent with the safety and soundness of the Company, compensation programs will be subject to robust risk management and governance frameworks, including oversight by the CHR Committee of the Board.
|
5.
|
Compensation programs should be fair, equitable, and align with our corporate values.
|
What We Do
|
||
ü
|
Pay for Performance (pages 86-92)
|
Executive pay decisions are made to ensure that the majority of total direct compensation is at-risk and not guaranteed. For example, 66 percent of our CEO’s actual 2019 compensation is performance based with 61 percent of Mr. J. Turner’s compensation 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 86-92)
|
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. 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 (pages 98-99)
|
The Board established robust stock ownership guidelines that each of our Directors and NEOs must meet in order to assure that Directors’ and executives’ interests are tied to those of our shareholders. The guidelines include a rigorous 6x base pay ownership requirement for our CEO and a 3x ownership requirement for the remaining NEOs.
|
ü
|
Provide for a Strong Clawback Policy (page 97)
|
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 shareholders. The policy governing clawbacks is reviewed at least annually by the CHR Committee.
|
ü
|
Require Double Trigger Change-in-Control Provisions (page 110)
|
Our change-in-control agreements and long-term incentive awards require both a change-in-control and termination of employment (so-called “double trigger”) to trigger payment. No awards or benefits are paid only upon a change-in-control.
|
ü
|
Use an Independent Compensation Consultant (page 95)
|
The CHR Committee determined its compensation consultant to be independent under both Securities and Exchange Commission (“SEC”) and New York Stock Exchange (“NYSE”) rules. The compensation consultant does no other work for the Company.
|
ü
|
Listen to and Engage with Our Shareholders (pages 51-52 and 85)
|
We conduct an annual advisory Say-on-Pay vote, as recommended by our shareholders, and actively review the results of these votes as we make program decisions. In 2019, shareholders voiced substantial support for our executive compensation plans and programs, with 94.7 percent of votes cast in approval. Additionally, as a part of our corporate governance shareholder engagement program, we solicit feedback regarding our compensation programs from shareholders and proxy advisors and consider any other shareholder comments we receive. Shareholders are also invited to share their views with the CHR Committee as described on page 52.
|
82
|
|
2020 Proxy Statement
|
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 by our Risk Management Group, including our CRO, 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 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.
|
|
2020 Proxy Statement
|
83
|
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 Market Competitiveness of Pay
|
|
Review 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 we compete with for both business and potential talent.
|
|
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 shareholder 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.
|
84
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
3. Assess Risks and Shareholder and Other Stakeholder Feedback
|
||
During the second and third quarters, the CHR Committee focuses on internal performance assessments, risk assessments of compensation, audits of pay practices, pay-for-performance evaluations, as well as shareholder and other stakeholder feedback related to compensation practices:
|
||
Internal Assessments
|
|
External Feedback Reviews
|
During the annual joint meeting of the CHR Committee and the Risk Committee, a comprehensive risk analysis of incentive compensation plans is presented by the CRO and is reviewed and discussed. The risk assessment is based on a thorough and comprehensive multi-disciplinary review of incentive compensation plans to ensure they do not encourage executive officers or other associates of the Company to take excessive risks in order to achieve certain compensation levels.
The CHR Committee reviews a current assessment of corporate performance against the performance goals set at the beginning of the year for both the short-term performance plans and any long-term performance grants currently outstanding.
With the assistance of its independent compensation consultant, the CHR Committee evaluates the effectiveness of the prior year compensation programs in achieving established goals and adhering to program principles.
|
|
With the assistance of its independent compensation consultant, the CHR Committee considers feedback from external stakeholders, including feedback from shareholders related to the annual Say-on-Pay vote. The CHR Committee reviews compensation assessments from Institutional Shareholder Services, Glass Lewis, and other external sources and feedback from individual shareholders that is received through our corporate governance shareholder engagement program.
In addition to shareholder and investor community feedback, the CHR Committee evaluates any regulatory reviews and matters and, with the assistance of its independent compensation consultant, considers compensation best practices and governance improvements as a part of its continuous improvement process.
|
|
2020 Proxy Statement
|
85
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
Base Salary Change
|
2019 Annualized Base Salary
|
2019 Annual Incentive(1)
|
2019 Long-Term Incentive
|
2019 Total Target
Compensation
(2)
|
|||||||||||||||||||
Name
|
Previous Target
|
2019 Target
|
Target Annual Incentive
|
Target Change
|
Target
|
|||||||||||||||||||
John M. Turner, Jr.
|
ñ
|
2.6
|
%
|
$
|
975,000
|
|
ñ
|
160
|
%
|
170
|
%
|
$
|
1,657,500
|
|
ó
|
$
|
—
|
|
$
|
4,375,000
|
|
$
|
7,007,500
|
|
David J. Turner, Jr.
|
ó
|
—
|
%
|
$
|
664,200
|
|
ó
|
115
|
%
|
115
|
%
|
$
|
763,830
|
|
ñ
|
$
|
200,000
|
|
$
|
1,400,000
|
|
$
|
2,828,030
|
|
John B. Owen
|
ó
|
—
|
%
|
$
|
700,000
|
|
ó
|
115
|
%
|
115
|
%
|
$
|
805,000
|
|
ñ
|
$
|
200,000
|
|
$
|
1,400,000
|
|
$
|
2,905,000
|
|
C. Matthew Lusco
|
ó
|
—
|
%
|
$
|
584,250
|
|
ó
|
115
|
%
|
115
|
%
|
$
|
671,888
|
|
ó
|
$
|
—
|
|
$
|
1,200,000
|
|
$
|
2,456,138
|
|
Fournier J. Gale, III
|
ó
|
—
|
%
|
$
|
584,045
|
|
ó
|
115
|
%
|
115
|
%
|
$
|
671,652
|
|
ó
|
$
|
—
|
|
$
|
1,200,000
|
|
$
|
2,455,697
|
|
(1)
|
The 2019 annual incentive target is based on multiplying the NEO’s target bonus opportunity percentage by the annualized 2019 base salary for each NEO (based on annualizing base salary rates as determined by the CHR Committee). Calculating the annual target incentive in this manner does not take into consideration the timing of changes in base salary, should any change occur, throughout the year.
|
86
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
2020 Proxy Statement
|
87
|
COMPENSATION DISCUSSION AND ANALYSIS
|
(1)
|
Non-GAAP measures — see reconciliation in Appendix A.
|
(2)
|
Non-GAAP measure — see reconciliation in Regions’ Annual Report on Form 10-K for the year ended December 31, 2019, on page 44.
|
Required Reductions
|
|
Goal
|
|
Result
|
|
Required Reduction Indicated?
|
|
|
|
|
|
|
|
Primary Liquidity Risk Factor
|
|
Low Risk or Better
|
|
Low Risk
|
|
NO
|
Capital Action Status
|
|
Monitoring or Deploy
|
|
Deploy
|
|
NO
|
88
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Individual
Performance Rating |
Comments
|
John M. Turner, Jr.
|
125%
|
- Set a vision and direction for the Company that was well understood, widely supported, consistently applied, and effectively implemented and proved his adaptability in adjusting to changing economic expectations throughout 2019
- Successfully led the Company through a challenging economic environment due to the slowing economy and unexpected declines in interest rates. Despite missing some of the financial goals set at the beginning of the year, the Company delivered the highest level of pre-tax pre-provision income in over a decade due in no small part to Mr. Turner’s leadership
- Meaningfully and successfully engaged with shareholders, customers, and associates
- Strengthened executive management through the addition of strong, diverse talent and continued development of the current team of seasoned leaders
- Continues to demonstrate strong and effective communication with the investment community as evidenced through Regions’ 2019 Investor Day and other shareholder engagement initiatives
|
David J. Turner, Jr.
|
130%
|
- Successfully executed a well run and well received Investor Day in early 2019, as well as other important shareholder and investor community engagement programs
- Showed foresight and vision in developing and implementing a strategic interest rate hedging strategy designed to protect Company performance during a declining, low interest rate environment
- Strengthened the senior leadership team, adding additional leaders in key positions and strengthening internal relationships with business partners
- Continued outreach efforts with credit rating agencies, resulting in a rating outlook upgrade in late 2019
|
John B. Owen
|
135%
|
- Led diligent execution of continuous improvement programs; 17 continuous improvement initiatives were completed in 2019, bringing the two-year total to 27
- Reduced occupancy by over 650,000 square feet
- Successful implementation of new fraud reduction strategies
- Exceeded expectations related to strategic human resources initiatives, including establishing a highly diverse senior leadership team and creating leadership development opportunities for senior and mid-level management associates resulting in a notable increase in talent depth and diversity
- Successfully completed projects in both our digital and consumer banking areas, automating manual processes and deploying artificial intelligence capabilities in support of our strategic initiatives to enhance the customer experience
|
C. Matthew Lusco
|
120%
|
- Successfully implemented a new governance risk compliance platform including seven modules supporting third party risk management, control testing, integrated risk assessments, loss events, and issues tracking; this implementation resulted in cost savings, process efficiencies, and improvements to the first and second lines of defense documentation production
- Through Risk’s Greenhouse Initiative, presented over 52 continuous improvement initiatives for consideration and/or implementation; the Greenhouse Initiative fosters and advances a continuous improvement mindset and culture within the Risk organization
- Partnered with fraud operations and provided challenge and analytical support in successful implementation of new fraud reduction strategies
- Successfully completed several leadership initiatives, including diversity and inclusion workshops and activities, that resulted in increased associate engagement results across the entire Risk organization
|
Fournier J. Gale, III
|
100%
|
- Led the company’s continued focus on providing our stakeholders comparable and decision-useful ESG disclosures in alignment with our strategic focus on continuously improving, including publishing a SASB disclosure, CDP Climate Change Response, Human Rights Statement, and Vendor Code of Conduct
- Enhanced our approach to shareholder engagement by significantly increasing the number of engagements arranged between institutional shareholders and Regions’ independent Directors
- Championed board effectiveness, board diversity, and governance processes, including the Board’s adoption of a version of the “Rooney Rule” for director searches
- Promoted a culture of compliance and oversight of legal risks, while serving as a point of contact with our prudential regulators on a range of legal matters facing the banking industry and the company
- Deployed successful legal expense management initiatives
|
|
2020 Proxy Statement
|
89
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
2019 Target Incentive(1)
|
|
Total Incentive Received
|
|
||
John M. Turner, Jr.
|
|
$1,646,875
|
|
|
$1,839,559
|
|
David J. Turner, Jr.
|
|
$763,830
|
|
|
$864,656
|
|
John B. Owen
|
|
$805,000
|
|
|
$923,335
|
|
C. Matthew Lusco
|
|
$671,888
|
|
|
$740,420
|
|
Fournier J. Gale, III
|
|
$671,652
|
|
|
$699,861
|
|
(1)
|
The 2019 target incentive is based on multiplying the NEO’s bonus opportunity percentage achieved by the actual salary paid to the NEO during 2019. Using the actual salary paid accommodates changes in base salary, should any change occur, throughout the year.
|
Name
|
|
Total Targeted LTIP
Economic Value
|
|
Value of RSUs
|
|
Value of PSUs
|
|
Value of Performance-
Based Cash Units |
|
||||
John M. Turner, Jr.
|
ñ
|
|
$4,375,000
|
|
|
$1,458,334
|
|
|
$1,458,334
|
|
|
$1,458,333
|
|
David J. Turner, Jr.
|
ñ
|
|
$1,400,000
|
|
|
$466,667
|
|
|
$466,667
|
|
|
$466,666
|
|
John B. Owen
|
ñ
|
|
$1,400,000
|
|
|
$466,667
|
|
|
$466,667
|
|
|
$466,666
|
|
C. Matthew Lusco
|
ó
|
|
$1,200,000
|
|
|
$400,000
|
|
|
$400,000
|
|
|
$400,000
|
|
Fournier J. Gale, III
|
ó
|
|
$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: 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 shareholders and the NEOs, and (iii) create healthy tension between profitability and the quality of earnings, which is important to shareholder value and protecting the safety and soundness of the
|
90
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
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 a 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 peer group using these same measures.
|
•
|
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 by executive officers and avoids the “best of the worst” outcome that is possible with the exclusive use of relative measurement.
|
–
|
Relative Performance. In addition to absolute performance, the CHR Committee also considers our EPS Growth and ROATCE performance relative to other banking competitors. Though relative measurement mitigates the inherent difficulties of setting long-term goals, if it was used as the single performance measurement, it could inappropriately reward the outcome of being the “best of the worst.” The following chart sets forth the matrices used for measuring performance and the ultimate payout level of the PSUs and performance-based cash awards granted in 2019:
|
LTIP PERFORMANCE TARGET DISCLOSURE
|
Performance targets and the payout percentages generated for each level of long-term incentive performance are determined each year by the CHR Committee based on Company budgets and goals, as well as known prevailing economic conditions. We do not disclose the internal absolute performance targets set for the three-year performance period in the above matrices because such disclosure could be construed as earnings guidance. The CHR Committee believes the target levels for absolute performance are challenging, yet achievable. While we do not disclose forward looking goals, we commit to disclosing target performance and performance achievement in the CD&A each year as performance awards vest. Though the matrices above do not include goals, they demonstrate the expectation of a zero percent payment if we do not meet approximately one-half of the cumulative amount projected, as part of our strategic planning process, for the three-year period ending December 31, 2021.
|
|
2020 Proxy Statement
|
91
|
COMPENSATION DISCUSSION AND ANALYSIS
|
92
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Specifically with respect to our CEO, Mr. J. Turner’s pay in the last two years has been appropriately increased to an amount commiserate with his new role and responsibilities. Our retirement benefit formula is a “final average earnings” formula using the highest three consecutive years of pay. As
|
|
2020 Proxy Statement
|
93
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Other executives have also benefited from increased pay as the result of annual bonuses in two of the past three years that have been above target.
|
94
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Attending all CHR Committee meetings;
|
•
|
Advising the CHR Committee regarding matters related to executive succession planning, retirement, and transition;
|
•
|
Providing the CHR Committee with competitive market data to assist in establishing target levels for compensation components, such as base salary levels, annual incentives, long-term performance awards, and benefit levels for executive management;
|
•
|
Assisting the CHR Committee with the evaluation and establishment of the design and construct of the short-term and long-term incentive programs for 2019, 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;
|
•
|
Advising the CHR Committee with respect to year-end compensation determinations based on performance evaluations and other factors, including succession planning and related considerations;
|
•
|
Providing competitive market practices regarding Director compensation targets and programs;
|
•
|
Advising 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
|
•
|
Providing current trend information on industry and executive compensation issues.
|
|
2020 Proxy Statement
|
95
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Compensation Peer Group
|
||
Company
|
12/31/2019
Assets
($ in millions)
|
12/31/2019
Market Cap
($ in millions)
|
U.S. Bancorp
|
495,426
|
90,951
|
BB&T Corporation (remains in peer group as Truist Financial Corporation)
|
473,078
|
75,591
|
The PNC Financial Services Group, Inc.
|
410,295
|
69,120
|
Capital One Financial Corporation
|
390,365
|
46,989
|
SunTrust Banks, Inc. (removed from peer group following merger with BB&T)
|
|
|
Fifth Third Bancorp
|
169,369
|
21,792
|
Citizens Financial Group
|
165,733
|
17,589
|
KeyCorp
|
144,988
|
19,778
|
Regions Financial Corporation
|
126,240
|
16,422
|
M&T Bank Corporation
|
119,873
|
22,167
|
Huntington Bancshares Incorporated
|
109,002
|
15,382
|
Comerica Incorporated
|
73,402
|
10,195
|
Zions Bancorporation
|
69,172
|
8,570
|
96
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Performance Peer Group
|
||
Company
|
12/31/2019
Assets
($ in millions)
|
12/31/2019
Market Cap
($ in millions)
|
U.S. Bancorp
|
495,426
|
90,951
|
BB&T Corporation (remains in peer group as Truist Financial Corporation)
|
473,078
|
75,591
|
The PNC Financial Services Group, Inc.
|
410,295
|
69,120
|
SunTrust Banks, Inc. (removed from peer group as a result of the merger with BB&T)
|
|
|
Fifth Third Bancorp
|
169,369
|
21,792
|
Citizens Financial Group
|
165,733
|
17,589
|
KeyCorp
|
144,988
|
19,778
|
Regions Financial Corporation
|
126,240
|
16,422
|
M&T Bank Corporation
|
119,873
|
22,167
|
Huntington Bancshares Incorporated
|
109,002
|
15,382
|
Comerica Incorporated
|
73,402
|
10,195
|
Zions Bancorporation
|
69,172
|
8,570
|
Synovus Financial Corp.
|
48,203
|
5,769
|
First Horizon National Corporation
|
43,311
|
5,158
|
Hancock Whitney Corporation
|
30,601
|
3,840
|
Regions’ Clawback Policy is
reviewed at least annually by the CHR Committee. |
|
2020 Proxy Statement
|
97
|
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; and
|
•
|
Banking organizations should have strong and effective corporate governance to help ensure sound compensation practices including effective oversight by the Board.
|
The risks arising from our compensation plans, policies, and practices are not reasonably likely
to have a material adverse
effect on the Company.
|
•
|
Shares directly owned by the executive officer or Director without restriction;
|
•
|
Restricted stock and 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
|
98
|
|
2020 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
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 |
|
|
John M. Turner, Jr.
|
6 X Base Pay
|
$
|
5,850,000
|
|
Yes
|
116
|
%
|
David J. Turner, Jr.
|
3 X Base Pay
|
$
|
1,992,600
|
|
Yes
|
245
|
%
|
John B. Owen
|
3 X Base Pay
|
$
|
2,100,000
|
|
Yes
|
127
|
%
|
C. Matthew Lusco
|
3 X Base Pay
|
$
|
1,752,750
|
|
Yes
|
226
|
%
|
Fournier J. Gale, III
|
3 X Base Pay
|
$
|
1,752,135
|
|
Yes
|
120
|
%
|
Regions’ policy prohibits hedging
and the pledging of Regions equity securities as collateral. |
|
2020 Proxy Statement
|
99
|
COMPENSATION DISCUSSION AND ANALYSIS
|
100
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
•
|
Specifically with respect to our CEO, Mr. J. Turner’s pay in the last two years has been appropriately increased to an amount commiserate with his new role and responsibilities. Our retirement benefit formula is a “final average earnings” formula using the highest three consecutive years of pay. As a result, increases in pay can have a significant impact on the change in pension value when the years of higher pay replace lower values in the three year average calculation.
|
•
|
Other executives have also benefited from increased pay as the result of annual bonuses in two of the past three years that have been above target.
|
|
2020 Proxy Statement
|
101
|
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
($) (4)
|
|
Total
($)
|
|
John M. Turner, Jr.
President and Chief Executive Officer
|
2019
|
968,750
|
—
|
|
2,835,476
|
—
|
|
2,295,559
|
6,821,591
|
193,891
|
13,115,267
|
||||||
2018
|
806,250
|
—
|
|
1,098,317
|
—
|
|
2,230,019
|
3,142,908
|
120,129
|
7,397,623
|
|||||||
2017
|
585,000
|
|
—
|
|
790,790
|
|
—
|
|
1,339,896
|
|
152,783
|
|
101,214
|
|
4,344,738
|
|
|
David J. Turner, Jr.
Chief Financial Officer
|
2019
|
664,200
|
—
|
|
907,369
|
—
|
|
1,320,656
|
1,526,566
|
120,101
|
4,538,892
|
||||||
2018
|
664,200
|
—
|
|
878,653
|
—
|
|
1,683,937
|
140,855
|
92,790
|
3,460,436
|
|||||||
2017
|
660,150
|
—
|
|
790,790
|
—
|
|
1,540,806
|
885,279
|
97,843
|
3,974,868
|
|||||||
John B. Owen
Chief Operating Officer
|
2019
|
700,000
|
—
|
|
907,369
|
—
|
|
1,379,335
|
3,333,674
|
125,670
|
6,446,048
|
||||||
2018
|
695,150
|
—
|
|
878,653
|
—
|
|
1,763,088
|
1,172,687
|
106,756
|
4,616,334
|
|||||||
2017
|
676,450
|
|
—
|
|
790,790
|
|
—
|
|
1,540,806
|
|
885,279
|
|
97,843
|
|
3,974,868
|
|
|
C. Matthew Lusco
Chief Risk Officer
|
2019
|
584,250
|
—
|
|
777,745
|
—
|
|
1,196,420
|
1,263,719
|
|
121,882
|
3,944,016
|
|||||
2018
|
584,250
|
—
|
|
753,132
|
—
|
|
1,541,426
|
756,268
|
|
99,485
|
3,734,560
|
||||||
2017
|
580,688
|
—
|
|
790,790
|
—
|
|
1,403,486
|
403,527
|
|
100,628
|
3,279,119
|
||||||
Fournier J. Gale, III
General Counsel and Corporate Secretary
|
2019
|
584,045
|
—
|
|
777,745
|
—
|
|
1,155,861
|
—
|
|
132,912
|
2,650,563
|
|||||
2018
|
584,045
|
—
|
|
753,132
|
—
|
|
1,395,911
|
—
|
|
120,646
|
2,853,734
|
||||||
2017
|
581,534
|
|
—
|
|
790,790
|
|
—
|
|
1,285,758
|
|
—
|
|
124,564
|
|
2,782,646
|
|
(1)
|
As reflected in the following table, amounts in this column are the grant date fair value of awards computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation - Stock Compensation. See Note 17, “Share-Based Payments,” to the consolidated financial statements included in our Annual Report on Form 10-K filed February 21, 2020, for additional information about how the grant date fair value of these awards is determined.
|
(a)
|
The amounts in this column reflect the number of units granted and the grant date fair value of PSUs based on the probable outcome of the performance conditions. Actual payout under these awards can range from 0% to 150% of target based on performance metrics of absolute and relative Earnings Per Share Growth (“EPS Growth”) and Return on Average Tangible Common Equity (“ROATCE”) established at grant. The maximum award value for the PSUs (determined as described on pages 90-92) is $2,126,607 for Mr. J. Turner, $680,527 each for Mr. D. Turner and Mr. Owen, and $583,309 each for Mr. Lusco and Mr. Gale.
|
(b)
|
The amounts in this column represent the number of units granted and the grant date fair value of RSUs that cliff vest at the end of the three-year vesting period ending April 1, 2022.
|
102
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
(2)
|
This amount represents annual cash incentives for 2019 performance plus the value of the 2017 Performance Cash Units based on certification of performance goals as of the three-year period ending on December 31, 2019, and will be vested based on service effective April 3, 2020. The following table sets forth the details of these awards:
|
(a)
|
This column reflects 114% of target earned at December 31, 2019. Grants to Mr. J. Turner and Mr. Lusco are subject to service vesting requirements until April 1, 2020 (the third anniversary of the date of grant).
|
(3)
|
This amount includes benefits for Mr. J. Turner and Mr. Owen described on pages 93-94 and 107-109, which are subject to significant vesting requirements that have not yet been met. Therefore, all of the change in benefit for Mr. J. Turner and Mr. Owen would not be payable at the present time if they left the Company. Mr. D. Turner and Mr. Lusco are fully vested in their benefits.
|
Name
|
Life Insurance,
Perquisites and Other
Personal Benefits
($)(a)
|
Matching Contributions
Under Qualified
Savings Plans
($)
|
Matching Contributions
Under Nonqualified
Savings Plans
($)
|
Non-Elective
Contributions
under the
Qualified and Nonqualified 401(k) plans
($)
|
|
Total All Other
Compensation
($)
|
John M. Turner, Jr.
|
47,103
|
14,000
|
127,188
|
5,600
|
|
193,891
|
David J. Turner, Jr.
|
27,694
|
14,000
|
78,407
|
—
|
|
120,101
|
John B. Owen
|
21,915
|
15,200
|
82,955
|
5,600
|
|
125,670
|
C. Matthew Lusco
|
37,030
|
18,000
|
61,252
|
5,600
|
|
121,882
|
Fournier J. Gale, III
|
22,390
|
15,200
|
63,223
|
32,099
|
|
132,912
|
(a)
|
The 2019 amount includes the value of items such as financial planning services, personal use of the corporate aircraft, an enhanced executive physical, home security, and matching charitable gift contributions. For Mr. J. Turner, the value for personal use of the corporate aircraft in 2019 was $16,500, and the value of personal financial planning services was $16,915.
|
|
2020 Proxy Statement
|
103
|
COMPENSATION OF EXECUTIVE OFFICERS
|
104
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Grant
Date |
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards |
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) (1)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($/sh)
|
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(4)
|
||||||
Threshold
($)
|
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
|
Target
(#)
|
Maximum
(#)
|
||||||||
John M. Turner, Jr.
|
(2)
|
—
|
|
1,646,875
|
3,293,750
|
|
|
|
|
|
|
|
|||
|
04/01/19 (3)
|
—
|
|
1,458,333
|
2,187,500
|
—
|
|
96,642
|
144,963
|
96,642
|
—
|
|
—
|
|
2,835,476
|
David J. Turner, Jr.
|
(2)
|
—
|
|
763,830
|
1,527,660
|
|
|
|
|
|
|
|
|||
|
04/01/19 (3)
|
—
|
|
466,667
|
700,001
|
—
|
|
30,926
|
46,389
|
30,926
|
—
|
|
—
|
|
907,369
|
John B. Owen
|
(2)
|
—
|
|
805,000
|
1,610,000
|
|
|
|
|
|
|
|
|||
|
04/01/19 (3)
|
—
|
|
466,667
|
700,001
|
—
|
|
30,926
|
46,389
|
30,926
|
—
|
|
—
|
|
907,369
|
C. Matthew Lusco
|
(2)
|
—
|
|
671,888
|
1,343,776
|
|
|
|
|
|
|
|
|||
|
04/01/19 (3)
|
—
|
|
400,000
|
600,000
|
—
|
|
26,508
|
39,762
|
26,508
|
—
|
|
—
|
|
777,745
|
Fournier J. Gale, III
|
(2)
|
—
|
|
671,652
|
1,343,304
|
|
|
|
|
|
|
|
|||
|
04/01/19 (3)
|
—
|
|
400,000
|
600,000
|
—
|
|
26,508
|
39,762
|
26,508
|
—
|
|
—
|
|
777,745
|
(1)
|
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, 2019, to December 31, 2019; January 1, 2020, to December 31, 2020; and January 1, 2021, to December 31, 2021. 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.
|
|
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 1, 2022, except in the case of death, disability, retirement, or certain terminations following a change-in-control.
|
(2)
|
Amounts included in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column reflect the range of possible annual cash incentive payouts for 2019 performance. Actual amounts earned, as determined by the CHR Committee in the first quarter of 2020, are reflected in the 2019 Summary Compensation Table under the Non-Equity Incentive Plan Compensation column.
|
(3)
|
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 EPS Growth and ROATCE. In addition, in the event the achievement of the performance criteria for Diluted EPS Growth is less than or equal to 0% on an absolute basis and in the bottom twenty-fifth percentile of the peer group on a relative basis and the achievement of the performance criteria for ROATCE is less than or equal to 9% on an absolute basis and in the bottom twenty-fifth percentile of the peer group on a relative basis, the payout will be zero. The performance period for these awards is January 1, 2019, through December 31, 2021, and will fully vest on April 1, 2022. Notwithstanding the achievement of the performance requirements, in order 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 1, 2022, except in the case of death, disability, retirement, or certain terminations following a change-in-control.
|
(4)
|
The grant date fair value is determined under FASB ASC Topic 718.
|
|
2020 Proxy Statement
|
105
|
COMPENSATION OF EXECUTIVE OFFICERS
|
•
|
Grants of stock options made over time that are exercisable and unexercisable;
|
•
|
Grants of restricted stock and RSUs;
|
•
|
Grants of PSUs made in 2017, 2018, and 2019 that may be paid if Regions achieves specific performance criteria and meets certain capital performance and liquidity performance thresholds; and
|
•
|
Grants of RSUs made in 2017, 2018, and 2019 that will pay in full if Regions meets certain capital performance and liquidity performance thresholds.
|
|
|
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)
|
|
John M. Turner, Jr.
|
07/01/11
|
118,650
|
|
—
|
|
—
|
|
6.30
|
|
06/30/21
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
465,362
|
|
30,916
|
|
530,513
|
|
|
04/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
30,240
|
|
518,918
|
|
30,240
|
|
518,918
|
|
|
04/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
96,642
|
|
1,658,377
|
|
96,642
|
|
1,658,377
|
|
|
David J. Turner, Jr.
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
465,362
|
|
30,916
|
|
530,513
|
|
04/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
24,192
|
|
415,135
|
|
24,192
|
|
415,135
|
|
|
04/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
30,926
|
|
530,690
|
|
30,926
|
|
530,690
|
|
|
John B. Owen
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
465,362
|
|
30,916
|
|
530,513
|
|
04/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
24,192
|
|
415,135
|
|
24,192
|
|
415,135
|
|
|
04/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
30,926
|
|
530,690
|
|
30,926
|
|
530,690
|
|
|
C. Matthew Lusco
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
465,362
|
|
30,916
|
|
530,513
|
|
04/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
20,736
|
|
355,830
|
|
20,736
|
|
355,830
|
|
|
04/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
26,508
|
|
454,877
|
|
26,508
|
|
454,877
|
|
|
Fournier J. Gale, III
|
04/03/17
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
27,119
|
|
465,362
|
|
30,916
|
|
530,513
|
|
04/02/18
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
20,736
|
|
355,830
|
|
20,736
|
|
355,830
|
|
|
04/01/19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
26,508
|
|
454,877
|
|
26,508
|
|
454,877
|
|
(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, 2019, are all fully vested.
|
(2)
|
As Company performance at December 31, 2019, is not projected at levels higher than target, amounts reported for 2018 and 2019 are calculated at 100% of target. The stock value used to determine the market value of shares is the fair market value of Regions common stock of $17.16 per share on December 31, 2019. In addition to service-vesting requirements, RSUs and PSUs are subject to additional vesting requirements as follows:
|
106
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
Option Awards
|
Stock Awards
|
||||
Name
|
Number of Shares
Acquired on Exercise (#) |
|
Value Realized
on Exercise
($)
|
|
Number of Shares
Acquired on Vesting
(#)
|
Value
Realized on Vesting
($)(1)
|
John M. Turner, Jr.
|
—
|
|
—
|
|
83,230
|
1,220,984
|
David J. Turner, Jr.
|
—
|
|
—
|
|
110,975
|
1,628,003
|
John B. Owen
|
—
|
|
—
|
|
110,975
|
1,628,003
|
C. Matthew Lusco
|
—
|
|
—
|
|
110,975
|
1,628,003
|
Fournier J. Gale, III
|
—
|
|
—
|
|
83,230
|
1,220,984
|
(1)
|
The value realized on vesting is determined by multiplying the number of vested units granted on April 1, 2016, by Regions’ April 1, 2019, closing stock price of $14.67.
|
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
|
|
2020 Proxy Statement
|
107
|
COMPENSATION OF EXECUTIVE OFFICERS
|
(1)
|
Mr. Owen and Mr. Lusco do not participate in the Retirement Plan, and Mr. Gale does not participate in the Retirement Plan or the SERP. Mr. J. Turner’s years of credited service in the Retirement Plan are from a previous period of employment; he is not currently accruing additional benefits 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, 2019, and was determined using a 3.50% discount rate and the Pri-2012 employee (or retiree) and non-disabled annuitant mortality tables, no collar, with generational projection based on scale MSS-2019 for participants and for future beneficiaries respectively. The present value of the accumulated SERP benefits is calculated as of December 31, 2019, and was determined using a 3.07% discount rate (PPA segment rates as of September 2019 reduced by 100 basis points (1.13% for the first 5 years, 2.07% for the next 15 years, and 2.65% thereafter) to calculate expected lump sum distributions), and the 2020 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)
|
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.
|
(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, disability or change-in-control, he will forfeit the entire benefit noted.
|
(5)
|
Mr. Lusco must complete a minimum of 10 years of service and attain at least age 60 or must attain age 62 before benefits are fully vested. As Mr. Lusco recently attained the age of 62, he is now fully vested in his SERP benefit.
|
108
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
Nonqualified Deferred Compensation
|
|||||
Name
|
|
Executive
Contributions in 2019
($)(1)
|
Company
Contributions in 2019
($)(2)
|
Aggregate
Earnings in 2019
($)(3)
|
Aggregate
Withdrawals/ Distributions ($)(4) |
|
Aggregate
Balance at December 31, 2019
($)(5)
|
John M. Turner, Jr.
|
Supplemental 401(k) Plan
|
137,085
|
127,188
|
252,246
|
—
|
|
1,290,348
|
David J. Turner, Jr.
|
Supplemental 401(k) Plan
|
103,224
|
78,407
|
485,104
|
—
|
|
2,103,492
|
John B. Owen
|
Supplemental 401(k) Plan
|
274,271
|
84,155
|
45,029
|
—
|
|
2,268,236
|
C. Matthew Lusco
|
Supplemental 401(k) Plan
|
74,690
|
67,284
|
152,759
|
—
|
|
928,265
|
Fournier J. Gale, III
|
Supplemental 401(k) Plan
|
64,423
|
92,747
|
90,410
|
—
|
|
1,083,064
|
(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.
|
(5)
|
The December 31, 2019, balances do not include true-up Company contributions that were made in early 2020 based on 2019 deferral elections. These contributions are included, however, in the column “Company Contributions in 2019.” The aggregate balance at December 31, 2019, reflects the balance in the Supplemental 401(k) Plan.
|
|
2020 Proxy Statement
|
109
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Voluntary
($) |
|
Involuntary
Without Cause
($)
|
|
Early
Retirement ($) |
|
For
Cause ($) |
|
Involuntary
for Good Reason Following a CIC
($)(1)
|
|
Death
($)(2) |
|
Disability
($) |
|
John M. Turner, Jr.
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
7,897,500
|
|
—
|
|
—
|
|
Long-Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units(4)
|
—
|
|
856,960
|
|
—
|
|
—
|
|
2,642,657
|
|
2,642,657
|
|
1,771,739
|
|
Performance Stock Units(4)
|
—
|
|
486,303
|
|
—
|
|
—
|
|
2,707,808
|
|
2,707,808
|
|
530,513
|
|
Performance Cash Units
|
—
|
|
418,000
|
|
—
|
|
—
|
|
2,497,666
|
|
2,497,666
|
|
456,000
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning(5)
|
—
|
|
33,830
|
|
—
|
|
—
|
|
33,830
|
|
33,830
|
|
33,830
|
|
Outplacement(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
30,233
|
|
—
|
|
—
|
|
Value of additional retirement benefits(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
17,432,098
|
|
—
|
|
—
|
|
Total:
|
—
|
|
1,795,093
|
|
—
|
|
—
|
|
33,301,792
|
|
7,881,961
|
|
2,792,082
|
|
David J. Turner, Jr.(3)
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
3,429,889
|
|
—
|
|
—
|
|
Long-Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units(4)
|
1,032,857
|
|
1,032,857
|
|
1,032,857
|
|
—
|
|
1,411,187
|
|
1,411,187
|
|
1,032,857
|
|
Performance Stock Units(4)
|
530,513
|
|
530,513
|
|
530,513
|
|
—
|
|
1,476,338
|
|
1,476,338
|
|
530,513
|
|
Performance Cash Units
|
456,000
|
|
456,000
|
|
456,000
|
|
—
|
|
1,389,334
|
|
1,389,334
|
|
456,000
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning(5)
|
33,830
|
|
33,830
|
|
33,830
|
|
—
|
|
33,830
|
|
33,830
|
|
33,830
|
|
110
|
|
2020 Proxy Statement
|
COMPENSATION OF EXECUTIVE OFFICERS
|
Name
|
Voluntary
($) |
|
Involuntary
Without Cause
($)
|
|
Early
Retirement ($) |
|
For
Cause ($) |
|
Involuntary
for Good Reason Following a CIC
($)(1)
|
|
Death
($)(2) |
|
Disability
($) |
|
Outplacement(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
280G Tax Gross-up(7)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
17,370
|
|
—
|
|
—
|
|
Value of additional retirement benefits(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
1,413,135
|
|
—
|
|
—
|
|
Total:
|
2,053,200
|
|
2,053,200
|
|
2,053,200
|
|
—
|
|
9,231,083
|
|
4,310,689
|
|
2,053,200
|
|
John B. Owen(3)
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
5,413,003
|
|
—
|
|
—
|
|
Long-Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units(4)
|
1,032,857
|
|
1,032,857
|
|
1,032,857
|
|
—
|
|
1,411,187
|
|
1,411,187
|
|
1,032,857
|
|
Performance Stock Units(4)
|
530,513
|
|
530,513
|
|
530,513
|
|
—
|
|
1,476,338
|
|
1,476,338
|
|
530,513
|
|
Performance Cash Units
|
456,000
|
|
456,000
|
|
456,000
|
|
—
|
|
1,389,334
|
|
1,389,334
|
|
456,000
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning(5)
|
33,830
|
|
33,830
|
|
33,830
|
|
—
|
|
33,830
|
|
33,830
|
|
33,830
|
|
Outplacement(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
280G Tax Gross-up(7)
|
—
|
|
—
|
|
—
|
|
—
|
|
11,403,423
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
22,519
|
|
—
|
|
—
|
|
Value of additional retirement benefits(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
14,028,982
|
|
—
|
|
—
|
|
Total:
|
2,053,200
|
|
2,053,200
|
|
2,053,200
|
|
—
|
|
35,238,616
|
|
4,310,689
|
|
2,053,200
|
|
C. Matthew Lusco
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
3,016,836
|
|
—
|
|
—
|
|
Long-Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units(4)
|
—
|
|
619,354
|
|
—
|
|
—
|
|
1,276,069
|
|
1,276,069
|
|
951,786
|
|
Performance Stock Units(4)
|
—
|
|
486,303
|
|
—
|
|
—
|
|
1,341,220
|
|
1,341,220
|
|
530,513
|
|
Performance Cash Units
|
—
|
|
418,000
|
|
—
|
|
—
|
|
1,256,000
|
|
1,256,000
|
|
456,000
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning(5)
|
—
|
|
33,830
|
|
—
|
|
—
|
|
33,830
|
|
33,830
|
|
33,830
|
|
Outplacement(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
15,013
|
|
—
|
|
—
|
|
Value of additional retirement benefits(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
633,610
|
|
—
|
|
—
|
|
Total:
|
—
|
|
1,557,487
|
|
—
|
|
—
|
|
7,632,578
|
|
3,907,119
|
|
1,972,129
|
|
Fournier J. Gale, III
|
|
|
|
|
|
|
|
|||||||
Compensation:
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
—
|
|
—
|
|
—
|
|
—
|
|
4,045,572
|
|
—
|
|
—
|
|
Long-Term Incentive
|
|
|
|
|
|
|
|
|||||||
Restricted Stock Units(4)
|
951,786
|
|
951,786
|
|
951,786
|
|
—
|
|
1,276,069
|
|
1,276,069
|
|
951,786
|
|
Performance Stock Units(4)
|
530,513
|
|
530,513
|
|
530,513
|
|
—
|
|
1,341,220
|
|
1,341,220
|
|
530,513
|
|
Performance Cash Units
|
456,000
|
|
456,000
|
|
456,000
|
|
—
|
|
1,256,000
|
|
1,256,000
|
|
456,000
|
|
Perquisites:
|
|
|
|
|
|
|
|
|||||||
Financial Planning(5)
|
33,830
|
|
33,830
|
|
33,830
|
|
—
|
|
33,830
|
|
33,830
|
|
33,830
|
|
Outplacement(6)
|
—
|
|
—
|
|
—
|
|
—
|
|
60,000
|
|
—
|
|
—
|
|
Benefits:
|
|
|
|
|
|
|
|
|||||||
Value of continued welfare benefits(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
22,519
|
|
—
|
|
—
|
|
Total:
|
1,972,129
|
|
1,972,129
|
|
1,972,129
|
|
—
|
|
8,035,210
|
|
3,907,119
|
|
1,972,129
|
|
|
2020 Proxy Statement
|
111
|
COMPENSATION OF EXECUTIVE OFFICERS
|
(1)
|
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:
|
“cause”
|
(i) willful and continued failure to substantially perform reasonably assigned duties; (ii) breach of fiduciary duty involving personal profit or commission of a felony or a crime involving fraud or moral turpitude, material breach of the agreement; (iii) engaging in illegal conduct or gross misconduct that materially injures Regions; (iv) failure to materially cooperate with an investigation authorized by the Board, a regulatory body, or a governmental department or agency; or (v) disqualification or bar by any governmental or regulatory authority from carrying out duties and responsibilities, or loss of any required licenses.
|
“good reason” and
“without cause”
|
(i) an adverse change in responsibilities as in effect immediately before the change-in-control; (ii) a material diminution in the budget over which the executive has control; (iii) a material breach of the compensation provisions of the agreement; or (iv) requiring the executive to move his principal place of work by more than 50 miles.
|
“change-in-control”
|
(i) an acquisition of 20% or more of the combined voting power of Regions voting securities; (ii) a change in a majority of the members of the Board; (iii) the consummation of a merger (unless voting securities of Regions outstanding immediately prior to the merger continued to represent at least 55% of the combined voting power of the voting securities of the surviving company outstanding immediately after such merger); or (iv) shareholder approval of a complete liquidation or dissolution of Regions.
|
(2)
|
Death would result in vesting in the enhanced portion of the benefit for Mr. J. Turner and Mr. Owen as is displayed in the chart in footnote (9) below.
|
(3)
|
Mr. Owen and Mr. D. Turner 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.
|
(4)
|
Based on a fair market value of Regions common stock of $17.16 per share on December 31, 2019.
|
(5)
|
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.
|
(6)
|
The change-in-control agreement provides for reasonable outplacement services for up to two years.
|
(7)
|
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). The change-in-control agreements covering Mr. Owen, and Mr. D. Turner provide for a gross up payment in the event the change-in-control benefits exceed their 280G limit by more than 110% (otherwise benefits are automatically cut back to their 280G limit). The change-in-control agreements covering Mr. J. Turner, Mr. Lusco, and Mr. Gale provide only for a cut back of change-in-control payments to their 280G limit if the executive’s change-in-control benefits exceed their 280G limit and a cut back in benefits would result in a greater net after-tax payment to the executive.
|
(8)
|
For Mr. J. Turner, Mr. Owen, and Mr. Gale, 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. D. Turner and Mr. Lusco, the agreement provides for a period of two years.
|
(9)
|
Mr. J. Turner, Mr. D. Turner, Mr. Owen, 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. 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 108 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
($)
|
|
Total Additional Value
($)
|
|
John M. Turner, Jr.
|
2,745,907
|
|
14,686,191
|
|
17,432,098
|
|
David J. Turner, Jr.
|
1,413,135
|
|
—
|
|
1,413,135
|
|
John B. Owen
|
737,733
|
|
13,291,249
|
|
14,028,982
|
|
C. Matthew Lusco
|
633,610
|
|
—
|
|
633,610
|
|
Fournier J. Gale, III
|
—
|
|
—
|
|
—
|
|
112
|
|
2020 Proxy Statement
|
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING & OTHER INFORMATION
|
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 each year, helping us reduce our impact on the environment and printing and mailing expenses.
|
|
2020 Proxy Statement
|
113
|
QUESTIONS AND ANSWERS
|
If You Are:
|
And You Are Voting by:
|
Your Vote Must Be Received:
|
A shareholder of record
|
Mail
|
By April 21, 2020
|
Internet, mobile device, or telephone
|
By 11:59 P.M. ET on April 21, 2020
|
|
A street name holder
|
Mail
|
By April 21, 2020
|
Internet, mobile device, or telephone
|
By 11:59 P.M. ET on April 21, 2020
|
|
A participant in Regions 401(k) Plan
|
Internet, mobile device, or telephone
|
By 11:59 P.M. ET on April 19, 2020
|
Your 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. |
114
|
|
2020 Proxy Statement
|
QUESTIONS AND ANSWERS
|
•
|
voting again over the Internet or by telephone before 11:59 P.M., Eastern Time on April 21, 2020;
|
•
|
signing and returning a new proxy card with a later date;
|
•
|
attending the annual meeting in person and voting again; or
|
•
|
delivering a written revocation to our Corporate Secretary, Regions Financial Corporation, 1900 Fifth Avenue North, Birmingham, Alabama 35203.
|
|
2020 Proxy Statement
|
115
|
QUESTIONS AND ANSWERS
|
|
Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022.
|
|
Shareholders may call Innisfree toll-free: 1-888-750-5834.
|
|
Brokers may call Innisfree collect: 1-212-750-5833.
|
Eligible Votes
|
1,017,735,266
|
|
|
|
Total Voted
|
876,674,297
|
|
86
|
%
|
Broker Non-Votes
|
153,166,267
|
|
14
|
%
|
Proposal
|
Votes “For”
|
|
|
Proposal
|
Votes “For”
|
|
Carolyn H. Byrd
|
99.59
|
%
|
|
James T. Prokopanko
|
98.94
|
%
|
Don DeFosset
|
92.89
|
%
|
|
Lee J. Styslinger III
|
96.87
|
%
|
Samuel A. Di Piazza, Jr.
|
95.02
|
%
|
|
José S. Suquet
|
99.55
|
%
|
Eric C. Fast
|
99.62
|
%
|
|
John M. Turner, Jr.
|
99.59
|
%
|
Zhanna Golodryga
|
99.50
|
%
|
|
Timothy Vines
|
99.55
|
%
|
John D. Johns
|
98.01
|
%
|
|
|
|
|
Ruth Ann Marshall
|
99.48
|
%
|
|
Ratification of Selection of Auditors
|
95.14
|
%
|
Charles D. McCrary
|
97.29
|
%
|
|
Say-on-Pay
|
94.70
|
%
|
116
|
|
2020 Proxy Statement
|
QUESTIONS AND ANSWERS
|
Shareholder of
Record
|
Beneficial (Street
Name) Holder
|
Proxy for Shareholder
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 shareholder of record; AND
|
A valid and assignable written legal proxy naming you as proxy; AND
|
The electronic email addressed to you from ProxyVote.com; OR
|
Your Voting Instruction Form for the 2020 Annual Meeting from your Broker; OR
|
The shareholder of record’s Admission Ticket appearing on the proxy card or the 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 shareholders 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 shareholder is listed in Regions’ list of shareholders of record as of the Record Date.
|
One of the forms of meeting admission documentation in the name of the street name holder that would be required to admit the street name holder to the annual meeting.
|
|
2020 Proxy Statement
|
117
|
QUESTIONS AND ANSWERS
|
118
|
|
2020 Proxy Statement
|
QUESTIONS AND ANSWERS
|
|
2020 Proxy Statement
|
119
|
APPENDIX A
|
|
2020 Proxy Statement
|
A-1
|
APPENDIX A
|
(Unaudited)
($ amounts in millions)
|
|
Year Ended
December 31, 2019 |
||
Net income from continuing operations available to common shareholders (GAAP)
|
|
$
|
1,503
|
|
Adjustments:
|
|
|
||
Branch consolidation, property and equipment charges, net of tax(1)
|
|
(3)
|
|
|
Salary and employee benefits - severance charges, net of tax(2)
|
|
4
|
|
|
Loss on early extinguishment of debt, net of tax(2)
|
|
12
|
|
|
Securities losses, net of tax(2)
|
|
21
|
|
|
Leveraged lease termination gains, net of tax(2)
|
|
(1)
|
|
|
Gain on sale of affordable housing residential mortgage loans, net of tax(2)
|
|
(6
|
)
|
|
Adjusted income from continuing operations available to common shareholders for incentive purposes (non-GAAP)
|
A
|
$
|
1,530
|
|
Average stockholders’ equity from continuing operations (GAAP)
|
|
$
|
16,082
|
|
Adjustments:
|
|
|
||
Average intangible assets (GAAP)
|
|
(4,943)
|
|
|
Average deferred tax liability related to intangibles (GAAP)
|
|
94
|
|
|
Average preferred equity (GAAP)
|
|
(1,151)
|
|
|
Average accumulated other comprehensive income (non-GAAP)(3)
|
|
(1,291
|
)
|
|
Adjusted average tangible common stockholders’ equity from continuing operations for incentive purposes (non-GAAP)
|
B
|
$
|
8,791
|
|
Adjusted return on average tangible common stockholders’ equity from continuing operations for incentive purposes(non-GAAP)
|
A/B
|
17.40
|
%
|
(1)
|
Certain charges related to this item were included in the 2019 target. This adjustment reflects the difference in the charges included in the 2019 target compared to the actual financial results, net of taxes.
|
(2)
|
No charges related to this item were included in the 2019 target. Therefore, this adjustment reflects the charges included in the actual financial results, net of taxes.
|
(3)
|
This item reflects the difference in the average accumulated other comprehensive income amount included in the 2019 target compared to the actual financial results, which relates primarily to unrealized gains/losses on investment securities and derivatives designated as cash flow hedges.
|
A-2
|
|
2020 Proxy Statement
|
v
|
We will hold the meeting at Regions Center,* an ENERGY STAR®-certified building outfitted with smart technology that enhances our energy efficiency; water-conserving fixtures; and a recycling program.
|
v
|
We will minimize use of single-use containers and waste.
|
v
|
We will provide recycling opportunities for attendees.
|
v
|
We will reuse signs created for past meetings to the extent possible and/or save new signs for future meetings.
|
v
|
We will provide the meeting’s agenda and rules of conduct via electronic display.
|
v
|
We do not anticipate providing paper copies of the proxy materials unless specifically requested. Paper copies of our proxy materials continue to be printed on recycled paper.
|